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tv   Bloomberg Markets Americas  Bloomberg  December 7, 2016 12:00pm-3:31pm EST

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david: from bloomberg's world headquarters in new york, covering stories from washington to rome and taipei this hour, we are watching lawmakers grill the ceos of at&t and time warner over whether their tieups would help consumers. stocks-- pharmaceutical have rallied but now the president-elect is vowing to bring down drug crisis. -- drug prices. halfway through the trading day, abigail doolittle is here with a look at the markets. >> the gains may not be large but we are looking at gains. we now have the dow and the s&p 500 trading at record highs. now, one pocket of extreme strength for u.s. stocks, we're looking at some of the telecom stocks, at&t of course. donald trump yesterday said that softbank has pledged a $50
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billion investment in the u.s.. it is the majority owner of sprint. the best way to play such a wave of consolidation within the telecom space was through t-mobile. area of weakness among the financial markets, we have oil and gasoline and natural gas all lower. gasoline and natural gas are not showing. we have oil supplies rising to the highest levels is 2009. it is higher on a big inventory bill. gasoline, natural gas is higher on warmer weather. for the dollar index and the 10 year yield, the dollar is down slightly. this could be as yields are also dropping. a rise in yields helps the index. this could be a consolidation if the move last months.
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since 2014, the 10 year yield had its biggest spike in yields ever. just a bit of a breather here today. david: thanks so much. let's check in with first word news. taylor riggs has more. donald trumpelect says mitt romney is in the running to be secretary of state. trump said he and the 2012 nominee have come a long way together despite romney's harsh criticism of trump. the president-elect told nbc he will announce his choice next week. >> next week will be the time i announce it and i have other big announcements coming up today and tomorrow. with verye been met good reviews of the people i have chosen. >> meanwhile, he has been named person of the year by time magazine. time gives the person -- give the title to the person who has had the greatest influence on events. he has tapped general john kelly
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to have the department of homeland security according to reports by multiple media outlets. this selection will be reportedly announced in the coming days. he is the third general picked to serve in the them in a straight and. -- serve in the administration. the prosecution for a white man who killed my black churchgoers is underway. dylan roof will face the death penalty in south carolina. authorities say he spare the lives of three people that could explain everything. italy is minister of ending that he will resign today. -- ending the speculation that he will resign today. president asked him to offer on hold until the senate give the budget final approval. that happened earlier today. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
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i am taylor riggs. this is bloomberg. bought an $85 million deal for time warner today to help challenge cable in the face of the development of five g networks. they will testify before a senate and judiciary committee on competition. >> the benefits of combining at&t's distribution with a world-class content of warner bros., hbo and turner. we believe the benefits are straightforward and substantial. they will get more choices and lower-priced options but that means more nationwide competition. david: that was the global m&a manager. this is the first time the merger aired publicly in washington but what powers does the system have going forward?
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>> they could raise concerns that the regulators might get into a show. it is a little theater. i don't take anyone in the market believes this is going to get blocked despite what trump said in october that he was going to block it. i talked to the bankers and the lawyers around this deal. i talked to the investors and none of them really feel like this is going to get blocked. i think there is a 90% likelihood that it is going to go through. nothing that randall said today would have convince anyone otherwise. -- convinced anyone otherwise. david: we spoke with senator mike leigh from utah, the chair of the subcommittee today. he made the point that a decision is going to have to be made and i wonder how much the definition of competitiveness -- how much these demonstrations -- these definitions change from one administration to the
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next. antitrust lawyers feel like the next the ministration is going to be like the administration before obama, b w administration -- the w administration. this is not a horizontal deal. at&t is trying to buy t-mobile. they tried and they got blocked. if you are frightened by the concentration of the media power that is a different thing but this isn't like cigna anthem somewhere all the health insurance companies are merging. is a company in one industry buying a media company so it seems highly unlikely the regulators are really going to have any fears. they will probably for some restrictions but it seems unlikely they will block it. david: we are going to talk with somebody in public knowledge in the next hour who also testified about the deal. of thes not the fear
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deal itself, which might not matter much, what our opponent saying in terms of regulatory risk. >> they are saying at&t will make time warner content more expensive for the companies and they will be up on the comcast and charter communications and such but the push back was that we are not in the business of trying to restrict the time warner content. if anything we want more people taking the content. part of the reason is the directv asset. they are down on 100,000 or more this year so a lot of the complaints are raising costs and i think at&t can argue that. i was struck by randall stephenson's testimony. david: he was talking about whether those undulations are better, if the combination goes
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through. >> he has talked about how they are going to accelerate the 5g and i think that is realistic and live streaming -- i believe it was earlier this year -- time warner bought hulu -- or a 10% stake in hulu. that is the way of the world. i am paying attention to what kind of deals come after this. those were deals that were drafting after each other. you wonder what follows up on this. talking, andbs are comcast is probably going to do another deal david:. what is the timetable going forward? the sec was going to weigh in here. >> a year from now i think this deal will be done. the question is whether or not cc gets involved. if the fcc starts to look into
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it, that will concern the companies. at&t has been down this road when they were trying to buy t-mobile and that cost them $6 billion in termination fees. they have their fingers crossed. third or fourth quarter is when this is going to get approved. david: jeff mccracken is bloomberg's managing editor. could trump medicine -- a trump presidency be bad medicine? this is bloomberg. ♪
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david: this is bloomberg markets. breaking news out of italy.
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italy's former prime minister is speaking in rome. he is making his speech on the leadership of the democratic party. he says a government crisis is about to start. office, thees that president will have to appoint a caretaker to take control of the italian government. the former prime minister addressing his party in rome. time for the bloomberg business flash. abbott is suing to terminate nearly $6 billion purchase of alere. they delayed filing financial results in china and africa. that was just the start of a slate of bad news regarding bribery investigations. americans are paying apple millions to shelter its overseas profits. apple has become the poster
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child for multinationals accused of keeping the earnings overseas to avoid paying taxes. the company has legally stashed much of those tax-free in the u.s.. apple withy has paid at least $600 million in interest over the last five years. some power is settling more jobs. cutting 2500ker is employees and losing results in the structuring charts this quarter, 75 million to 125 million next year. that is your business flash update. the pharmaceutical industry feeling under the weather today as donald trump railed against high drug prices in an interview with time magazine. after trumpy surged was elected. here is jerod hopkins. .et's start with this interview donald trump named person of the
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year. how much detail did he give up pharmaceuticals. >> it was two sentences that said he is going to bring down drug prices and that he doesn't like where drug crisis -- what has happened with them. you had hillary clinton, who did speak about this quite a bit. she tweeted about it and she made known that it was her opinion that drug prices had to be curbed. what was his history? >> he didn't get into details in the campaign. that is why, after the election, the market surged under him. , thedeas he did back reimportation of drugs from foreign countries like canada as well as renegotiating medicare directly with drug companies. two ideas which republicans have long opposed and the drug industry has long opposed. since the election, there was some wild swings with hope
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rested and pharmaceuticals. then, iigh but since should point out that a couple of ceos, including greg saunders up,llergan have said "hold donald trump could be more vicious than hillary clinton with regards to this because of his power and command on twitter." we saw that today, where he didn't name a specific company but brett went online and tweeted, what happens if he goes after a specific drug price? we saw that with boeing yesterday. i wonder if the x factor is are the policies in coed? david: there is this fluidity there. i have talked to analysts. when it comes to donald trump, there is a sense of on foot -- unpredictably.
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he did appoint point or he is going to appoint tom price who has come out in the past in a position to directly negotiation with medicare prices. , it isappoint someone unclear going forward. what has david: happened since the testimony we saw some months ago about the epipen bill? i was talking to senator chuck grassley about the need to do something but he was unclear on what that might be. when you look at drug prices, what seems like the most likely thing to happen policy wise? >> it is interesting. the medicare negotiation, some people believe that is the next step. let's remember that for the last 18 months the drug industry has been through these tough criticisms. you mentioned mylan. shkreli.ly -- martin
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there was supposed to be a hearing on mylan. but where that is, we have to see. the basic mathematics, how are these drugs priced? david: when you see a change, how much effort goes into doing that? >> arbitrary might not be a processvote but it is a that takes years of research. some of these things that go into not only market research but competitive pricing and stuff like that, if you do see the benefit managers, the pbm's, it is very opaque so the pricing that we are talking about is the list price. prices not the actual that the patient or consumer
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pays at the cash register. that is what is different. we do not regulate drug prices. david: in light of the controversy surrounding mylan have we seen companies recognize the fact that there is a populist outcry in they need to explain their position more clearly? aco came out and said they are going to cap pricing and rent has actually given a pricing pledge. other companies have come out and defended their prices as well. .hey have restrained we saw last week at a health care conference, we saw ceos
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sparring over drug prices and why their reputation has improved. him -- hed said accused of a lack of innovation. david: great to talk to you. that is jerod hopkins from bloomberg. coming up, donald trump is set to pick i will governor terry branstad to be ambassador to china. that story coming up next. this is bloomberg. ♪
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david: this is bloomberg markets. let's turn to politics and another key decision from president-elect donald trump. he has selected terry branstad
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as u.s. ambassador to china. joining us now from a washington bureau is white house correspondent mike the warning. -- mike dornin g. how did they meet and how have they kept this relationship going? to iowa onident went an exchange and after he spent time with i would families, when he was a lower-level communist party official, governor branstad met him then and they kept in touch and it has been great for both president shi and for branstad. on the president's first trip to the united states after becoming president he went back to iowa. david: why does i will remain so port and -- important to china?
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--iowa has a huge act gri agriculture business, a huge export of grains and i believe president shi grew up in a rural community. it is important for export of manufactured goods to china and also just food supply. david: in light of what we have seen over these last few days, donald trump's call with the president of taiwan and the tweets he has written about china, what does this say about his attitude towards china? shows that it helps to have a good relationship with the country. i would not necessarily read how trump islay on going to relate to china. you always want an ambassador that can represent your views well to the top leadership in
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the country and represent that country back to you. you are the president, you are going to make strategic decisions regardless of that. trump hasdent-elect signaled is that he is going to take a hard line on trade issues with china and try to negotiate leverage with them and that will probably be conducted at a higher level. david: that phone call between the president of taiwan and the president-elect, what is the latest we know on that? >> the new york times had a story that bob dole and his lobbying firm with the ones who set up the groundwork. improved relations between taiwan and the campaign. it looks like lobbyists employed by taiwan laid the groundwork
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for that. this was more than some impromptu decision by trump. we don't know his intent. one of the possibilities is to put pressure on china by doing something they don't like early on to see what has happened there. he is someone in the business world who could be on bass take asa negotiator -- bombastic a negotiator. david: we are now speaking with did he sayon, anything today? what is he looking for? >> he said that would be coming soon and that he is looking for someone who will know well with him. separate choice the new york times had today that mitt romney is still in the running and that would be, if he
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chose romney, one of the biggest splash appointments he has made so far. ,n the national security side retired generals up to now. david: that is mike dorney who covers the white house for us. coming up, capital founder tom barrick joins us with a look at cabinetlatest picks with his thoughts on boeing and iran. this is bloomberg. ♪
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live from bloomberg world headquarters in new york, i'm david gura. this is "bloomberg markets." taylor riggs has more from our newsroom.
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>> this probably is not a huge surprise. president-elect donald trump is "time magazine" person of the year. in an interview on nbc, trump said being named person of the year is a great honor. of americans say president-elect donald trump should not have to sell his business empire to avoid conflicts of interest. that's according to the first bloomberg national poll since the election. 69% of those surveyed say it goes too far to force trump and his family to get rid of hotels, buildings, and golf courses. more than half of those polled p's actions and statements since the election make him more up -- them more optimistic about his presidency. proposing a cease-fire in the eastern part of aleppo. they want the sick and other civilians to be evacuated. the rebels are forcing -- facing a punishing defeat.
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the defense -- their defenses have collapsed in the face of massive government assaults. it's the 75th anniversary of the date which will live in and for me. on december 7, 1941, japanese warplanes attacked the u.s. fleet -- will live in infamy. 19 41, japanese warplanes attacked the u.s. fleet. hand full of survivors are attending the memorial center -- a handful of survivors are attending the memorial ceremony. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. david: looking at the s&p,. -- s&p, up. let's go down to abigail doolittle.
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abigail: stocks may be higher in the u.s. overall, but one sector that is really suffering, truly underperforming today is health care. the s&p 500 health care index is down sharply. the nasdaq ballot -- biotech index is down nearly 4%, on pace for its worst day since brexit. this follows an interview in which president-elect donald trump did say he is an opponent of high drug prices. he said, "i'm going to bring down drug prices." this may come as a bit of a surprise. to some, there was expectation going into the election that it could be the reverse. imap in thehe bloomberg. health care is by far the worst sector, down more than 1.5%. the only other sector drag at this point is energy. the worst hit area is some of the big biotech names. this includes celgene, biogen, and insight. celgene is the worst on paper since the middle of january. to one ofid reach out
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our analysts, who said that right now these comments from trump are the "trump threat." it's the uncertainty that trump will perhaps come through and pressure drug prices that creates so much uncertainty. we go to the bloomberg and take a look at the one year chart, a little more than a one-year chart. index is still mired in a bear market, down about 35% from the peak in july of 2015. on the weakness today, we have the biotech index back below the 200 day moving average. the sellers are really in charge. we could see the biotech index dropback down to the bottom of the range for more than a 5% decline. we have the s&p 500 on the year up more than 7%, the biotech index down more than 20% on the year. that's the3% -- nasdaq, up more than 7%. will that 13% weighting of health care on the nasdaq start
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to weigh on the broader index question mark time will tell -- on the broader index? time will tell. david: president-elect donald trump may be softening his stance on china, picking terry branstad, republican governor of iowa, to serve as his ambassador to china. branstad has extensive ties to the country, a 30 year friendship to chinese president she jinping. we spoke to tom barrack -- jinping. xi we spoke to tom barrack and asked him what he thought of the choice. think what you read into it is another very considered, thoughtful, calculated choice. governor branstad is the longest standing governor, i think, in u.s. history. he's had almost a thirty-year relationship with china. curate with china is to politics and business in a very subtle, long-term, culturally sensitive way.
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i think this signal of taking somebody who already understands the hardware, who has reputational capital within thea, with a setting that trump administration has already sending sound waves, saying, "by the way, the discussions that we are going to have need to be really bilateral, and we want a great relationship with china, but we need it open in both ways, and if it isn't, we are going to have a stronger set of discussions," is a perfectly balanced hand in glove. i think china is encouraged and excited about having the governor as a representative and having an experienced hand on helm is kind of a signal of what this president-elect is doing, and i think you see it also with the general he is putting in place today. isid: as you say, tom, it someone in terry branstad who knows china well, also knows president xi personally well,
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who has had a personal relationship with him since 1995. and not least, comes from a state that has a substantial trading relationship with china. how much of that is an olive branch or build -- bridge building to president xi? tom: i think it's both an olive branch, bridgeview building, and a hammer -- bridge building, and a hammer. the oriental concept of faith and confucian dialogue is romantic, but they can now wait you for a century. having somebody who has already been to that rodeo, who understands the program, that has a stature and the prestige of the office, i think, is a brilliant move. i think it will be terrific. >> president-elect trump thiis still putting together his foreign relations team. from what we've seen so far, he does see value in delivering what he said he would. he has said he will declare china a currency manipulator. would you expect, given what you
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know of him, that will happen? tom: yes, but we have to put skin on the bones. china is a currency manipulator. let's define what that is. currency the relation is, if the chinese are using one to buy to buynds -- using won u.s. bonds or securities, they can add them flow the value of their currency -- can ebb and f low the value of their currency and they can also ebb and flow the value of our currency. there have been two enforcement acts in the last 10 years. the currency fluctuation by the central banks can be more impactive. in actuality today, the currency fluctuation has gone the other way. they have fullback their central bank -- pulled back their central bank functions. a restricted the flow of capital. but having an understanding what's happening in currency is essential. i think that discussion is also critical. saying the central bank
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interventions here have to also be balanced. and all he is saying is what he is saying in all of these instances, which america is not used to, having a president who is curating rather than a steward. that is not a criticism of president obama. you have a businessman who, when a problem comes up, he addresses it. is he picking on somebody? is he admiring somebody that he shouldn't? the softbank transaction, declaring we have $50 billion of new investment and 50,000 new jobs? this is a man who is going to take the agenda and get things done. rather than starting thematically in a bureaucracy, which is a slow-moving train that doesn't go anywhere, middle east foreign policy, the same thing -- america has lost procedure around the world as we do not act. -- lost prestige around the world as we do not act. it is getting used to the man and giving him an opportunity. remember, he's president-elect, so he doesn't really have any
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power. congress, by the way, 535 individuals him and who are protecting their own territory, and 19 federal agencies that are dealing with trade issues every day. >> from what you know of donald trump, how does he cut his way through both of those things, congress and bureaucracy question mark we have some republicans in the house making noise about tariffs -- and bureaucracy? we have some republicans in the house making noise about tariffs. what can he do to cut through the bureaucracy and congress? tom: he is mending the wounds and bridging the divide. inclusive rather than exclusive. see,of these things you his discussions with china that seem to be drawing lines. on the other hand, his reaching out to every constituency who is there and saying it is we america, who will make great again. what you don't see is this reach to the other side, saying we
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need to do this in harmony. so, let's find the low hanging fruit together, let's figure out what's important and not important. let's take a stance to the outside world that's america first. in his mind, you are at 50,000 feet and you are losing altitude. andthe oxygen drops down the pilot tells you, first put the oxygen mask on yourself. you don't reach across to your neighbor and say, are you ok, how do you feel come as you are as you- how do you feel, are dying. markets read what's good for them financially or not -- x policytion, a ta that encourages investment and entrepreneurism, and policy that is certain for our allies, even n formeaningfully certai those who are not our allies. david: that was david west talking with tom barrett earlier this morning. -- tom barrack earlier this morning.
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we are looking at silver oak winery, next. this is bloomberg. ♪
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>> you are watching bloomberg. i'm julie hyman. mark: and i mark barton -- and rton.ark ba rates unchanged ahead of next week's fed decision. we will hear from the central bank's governor. julie: iran is getting ready to sign its first oil deal since sanctions were eased earlier this year. mark: and a closer look at taiwan following president-elect donald trump's conversation with
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the elected leader. why the united nations does not recognize it as a country. centraln india, the bank kept interest rates unchanged before a possible increase in u.s. borrowing costs. the reserve bank of india is also meeting to see the impact of the government's decision to ban 86% of the currency that is in circulation. here is the central bank governor on that decision. >> efficient outcomes in september and october as well as the latest projections for q4, 2016-2017, indicates this stance. you may recall that, in october, the trajectory took hedges on inflation towards 5% by march, 2017, with risks to the upside. mark: iran is about to sign its first european oil deal since sanctions were eased earlier this year. an iranian oil official says that they will agree to develop
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oil and gas fields. last month, total signed a separate $4.8 billion deal to develop an iranian gas project. the u.s.olidation in airline industry. the justice department has approved alaska air's $2.6 billion acquisition of virgin america. that will expand alaska's access to the lucrative cross-country market. the settlement still requires court approval. the best place in the u.s. to work, according to an annual andey by glassdoor, is bain company. that's the third time bain has topped the list since it began in 2009. employees talk about great salaries, benefits, and mentorships. others in the top five are facebook, boston consulting, google, alphabet, and worldwide technology.
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julie: it's time for our "bloomberg quick take." taiwan is a country, right? sort of. it does have a constitution, army, elected government, yet the united nations does not recognize it. china considers the island one of its provinces and its government as illegitimate. the leader of the independence leaning democratic progressive party says she will seek peaceful ties with china while resisting pressure to technology the idea that they are part of the single nation. china has stepped up pressure on her to openly endorse the one china principle, the understanding that both sides belong to one china. chinathe u.s. election, launched a complaint after president-elect trump flouted almost four decades of the grammatic protocol by directly phone.g with -- on the victory by the communists in the
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chinese civil war in 1949 forced the nationalist government to flee the mainland to taiwan. tensions erupted into chinese military action twice, in the 1950's and mid-1990's. only a handful of nations recognize taiwan, even the u.s., which is bound by law to safeguard taiwan's democracy, does not have official diplomatic relations. nonetheless, taiwan has built its economy into a technology and manufacturing powerhouse. much of apple's iphone is made by taiwanese companies. china aims more than 1200 missiles at taiwan. no peace treaty has been signed in the seven decades since the governments split. many china watchers say there is too much at stake for military action. others interpret china's action in asia's disputed waters as evidence of a more expansionist and aggressive regional stance. keep theters want to peace while building international ties with a view to a future less dependent on the mainline. read more about taiwan and all of our quick takes on the bloomberg.
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that is your "global bloomberg raises -- "global business report." ♪
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david g.: this is "bloomberg markets." i'm david gura. is the only american winery to own its own cooperage. joining us to discuss the future of the wine industry is silver duncan.david let's start with the definition of a cooperage and how you got the idea to do this side project
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to making wine. whered.: the cooperage is they make barrels. producing a barrel is like making a piece of furniture. we use american oakwood that has for years. it's a very labor intensive process. i like to relate it to making a piece of furniture. david g.: when you look at your competitors, why haven't they gotten into this? why are you the first to break in? david d.: it's a very detailed, specialized business. most wineries -- in the old construct of wineries, people grew grapes, made wine and barrels. that's changing. we talk about growing wine. for our brands, we really want to focus on quality and excellence. we had an opportunity to partner with our -- the owners of the cooperage almost 20 years ago. then we acquired their interest to couple years ago. we now own that cooperage outright. david g.: were the motivations purely economic, or was it to
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have more control over the final product? david d.: i can sure you none of the motivation was economic. it's all about quality and try and deliver -- trying to deliver our promise in a bottle of silver oak that people enjoy. the construction of the barrels -- we want to make sure they don't leak. all of that is something we can control every step of the way. david g.: you are known for being innovative, for looking at technology. what is the technological innovation that you can point to as the biggest change? david d.: most recently, what we are seeing is technology in the vineyards. a lot of the technology in the winery has been applied over the , where the25 years vineyard technology that is out there now is really in the last five years. we are monitoring leaf water essential in the vines, the soil profiles, using drones for monitoring how the stress areas water vineyard -- our
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management has changed dramatically. we use significantly less water than we have in the past. david g.: as you evangelize for that kind of technology, is there tension with those who say there is a purity to winemaking that it should be unencumbered with the innovations like you are describing? david d.: i think for some people. some of the old-timers, they like to do it the way they have for a long time, but i think everybody is embracing. as you see the improvement in quality in the winds, which is something we are really noticing. we started in 2009, just about to release our 2012 vintage. this is the time where that practice and the things we have been doing with technology are really starting to show in a bottle. i'm very excited about that and think there is a lot to it. david g.: how is demand for american wine going question mark there is a bit of a boom. people are looking at it with real seriousness. david d.: things are going well with a good economy. people are spending on that luxury product. they know our healthy -- holiday
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sales are going up. we got picked to be on oprah favorite list. oprah's favorite list. people enjoy the wine. they know what they're going to get. that's something we try to deliver on every single bottle. david g.: what sets you apart from other winemakers? how do you like to think of yourself in northern california? david d.: we only make one now napaabernet and one -- one cabernet. we don't have reserves or second labels. which isnother brand, a explanation of bridal's at another level. that is something unique -- of varietals at another level. that is something unique about silver oak. david g.: do you have aspirations to grow bigger? you are making the varietals. do you see opportunities for expansion further? david g.: if you look at our production history from 1972 when we were founded to today,
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we've had a steady incline. there is more demand than we can produce wine. yes, i hope we can grow, but securing quality fruit, being sure that we continue to deliver on that promise, and sell the bottles, is all the hard work and things we've got to keep doing. david g.: you've got a great story. how did you get from colorado to the west coast and get into winemaking? david d.: my father went to california in 1970, discovered the wine business, and founded silver oak in 1972, so i am a second-generation bittner -- then there -- vintner. i've been at the winery now for 15 years full-time. it's great fun. we have a great group of people we work with. everybody is happy that comes and sees us. david g.: how important is tourism? are you getting people to come to the vineyards question mark that something where you could grow the business -- you getting people to come to the vineyards? is that something where you
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could grow the business? david d.: it's a little bit contentious in different areas because the number of people who come visit napa or sonoma where we are, but we love people. we have a very welcoming attitude, whether you are a wine expert or if it is your first taste of wine. we welcome you. david g.: thank you very much. silver oak ceo david duncan joining us in new york. ipursuitsgo on the bloomberg. still ahead on "bloomberg markets," mark mobius would give us his thoughts on what the dollar will do in 2017. this is bloomberg. ♪
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>> it's 1:00 p.m. in new york. good afternoon. i'm david gura. welcome to "bloomberg markets."
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from bloomberg's world headquarters in new york, from san francisco to london and rome this hour, here's what we are watching. the at&t/time warner deal draws a tough grilling from lawmakers. what could the deal mean for consumers. plus, an executive from alibaba's payment arm is sizing up deposit -- possible investments as the company prepares to go public. franklin templeton emerging markets group executive chairman mark mobius joins us. julie hyman is here with the latest on the markets. -- stocks areh strengthening into the afternoon. part of it has to do with the drops and yield rappelling interest groups -- interest rates -- drops in yield propelling interest rates
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higher. the nasdaq is playing a little bit of a catch up with a gain of 0.4%. are bouncings back. telecom stocks are higher by 1.5%. consumer discretionary, which has not necessarily been a alongd, is rising today, with staples. utilities also on the waiting list. the big laggard is with health care. you heard abigail talk about that about 30 minutes ago. these patterns we've seen in the wake of the election are sort of day,ng rejiggered day by if you will. if you look at the one-month performance in a number of groups, financials and industrials are up the most. utilities and staples are down the most. in today's session, this rotation is not necessarily intact. one of the other interesting phenomena we have been watching in the wake of the election is how companies perform based on their tax rate. this is a chart on the bloomberg that is fascinating.
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we look at the highest effective tax rate companies and the lowest effective tax rate companies. you've seen a big divergence. theory, these, in highest taxed companies have the most to gain if the trumpet administration is successful at cutting taxes for those companies. these lowest effective tax companies have just not performed as well. g#btv 1821 if you want to check it out on the bloomberg. inventories in the u.s. contracted last week by more than anticipated. there was a bill in the main hub in cushing, oklahoma, and a build in distillate inventory. down 1.7 percent. already, we were seen oil prices wane going into that report. finally, a check on rates. the dollar is down by one/five of 1% -- by 1/5 of 1%.
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are seeing a- we pullback in yields helping propel some of the gains and things like real estate. much.g.: thank you very let's check on the "bloomberg first word news." >> president-elect donald trump has tapped general john kelly to head the department of homeland security, according to reports by multiple media outlets. this will reportedly be announced in the coming days. kelly is the third general picked by the president-elect to serve in his administration. -elect donald trump's transition team is considering a silicon valley investor, someone close to billionaire peter thiel, to head the fda. that's according to people familiar with the matter. jim o'neill has served at the department of health and human services during the george w. bush administration. the trump team could still go in another direction. donald trump tells nbc news that
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he consults with president obama and values his views. from says that he has asked mr. obama about some of his appointments -- trump says that he has asked mr. obama about some of his appointments. the battle over brexit inside the u.k. supreme court went on for a third day as judges decide whether government or parliament has the power to leave britain out of the eu. the supreme court is hearing an appeal against a ruling last month in favor of parliamentary approval. by ministers plan -- prime plans to begin exit measures in march. lawmakers believe the exit is not legally binding. the court decides tomorrow. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. david g.: thanks very much. on capitol hill today, u.s. lawmakers grilled the ceos of at&t and time warner about how their proposed tieups up could help or hurt consumers.
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it would own much of the programming. joining us is phillip berenbroick, who was in the room at today's antitrust hearing. peopleed with one of the who testified today. what is the argument you are making against this deal? there is a technological motive for doing it. this will help these companies pioneer new technology. what does your group say to that? phillip: thanks for having me. mr. stevenson's argument is largely that at&t and time warner will be able to deliver content in new ways to consumers. is that time warner and at&t can largely do what they are proposing to do via contract. time warner already does that with many content distributors. bring the timely warner content in-house for at&t, which will give at&t, one
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of the largest distribution companies in the country, access and control over time warner, one of the largest content creators in the country. it will give them market power as a vertically integrated firm to harm programming rivals, potentially, and distribution ,ivals, both in the pay-tv broadband, and wireless, and in the online video space. thee are the harms competition we are worried about. eventually those harms do trickle down and harm consumers through either higher prices or loss of access to that must have time warner content. david g.: how much harder is it to make the argument against the deal because of the vertical nature of it? it is different than the comcast deal. does that make it more difficult for groups like yours to argue against it? phillip: it makes the arguments a little bit more complex.
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i think i would be remiss if i didn't say that, while this deal, largely the most valuable assets in the deal are there are integrated, horizontal integration components here. for instance, at&t has just recently rolled out a directv now online video service that competes with netflix and playstation and sling tv, whereas time warner has online distribution components as well, cnngo, hbo now. those products compete head-to-head with one another. you will be reducing the access to -- you will be reducing the competition from the time warner online video service content to the directv content. those online video services are nascent and e-voting deportment -- and evolving important players in the pay-tv market place. david g.: you and your colleagues have looked at all the facets of this deal.
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are there things that could change that would make it more palatable to you? are there things that could be spun off or not part of the deal that is in the public's interest to have it go forward? phillip: that's a good question. given that nothing has been merger,t regarding the i don't believe that any paperwork has been filed at the fcc or the doj, it's really hard to speculate. of allpast, with mergers types, there have been merger conditions that are meant to deal with the potential harms that the doj might spot or that the fcc or other regulators might spot. but there is sort of a difficult track record in actually enforcing those conditions. for instance, in the nbc-comcast merger, bloomberg itself was worried about being able to have access to comcast customers. and the competition with cnbc, which would have been owned by comcast.
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it took bloomberg three years to litigate that case to actually get carriage in the same neighborhood as comcast cnbc channel. are conditions that can work to address some of the potential competitive harms to both programmers and just readers, but, at the end of the day, they have to be litigated, they have to be enforced. we will have to see what the appetite for imposing those conditions is and enforcing would be with the incoming administration. david g.: they are alluding to legal action that the bloomberg parent company took in the wake of that merger. in your colleagues's testimony, he referred to cable 2.0, topped about the nascent nature of this -- talked about the nascent nature of this sector right now, how fast things are moving and changing. do you have any sense that the horse is out of the barn, that it's hard to stop movement toward mergers like these going
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forward? phillip: that's an important question that was raised at the hearing. there is some argument that this merger is the first of what could be many mergers. there was an analyst note last week that proposed a verizon-comcast, nation and the potential -- verizon-comcast combination and the potential synergies that could have. we are evaluating the merger on its merit, but we are aware and ,oncerned this could be perhaps, the first of many media and telecom mergers to come. david g.: phillip berenbroick, senior policy council at public knowledge. alibaba's finance arm is moving closer to an ipo. we will look at when and where. this is bloomberg. ♪
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david g.: this is "bloomberg markets." i'm david gura. it's time now for the "bloomberg business flash." opec will not insist that all players act to cut production. naturalel will accept output declines from some nations. opec has pledged to cut 1.2 million barrels per day to eliminate a persistent glut, but the deal hinges on cooperation from outside producers. berkshire hathaway cutting its holding in walmart. the move is an apparent nod to holloway -- holiday prowess.
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berkshire had reduced its position to 13 million shares, the third straight quarter berkshire has lowered its stake. buffett has long highlighted the vulnerability to retailers. hollywood is pushing for faster access to movies. confirmedudios have they are looking to offer high priced home video rentals of new movies shortly after they open in theaters. that is the "bloomberg business flash." a team of executives from ant financial has been visiting silicon valley to decide on potential investments as the company prepares to go public. bloombergs selina wang -- bloomberg's selina wang got an exclusive interview with lucy peng. what did she have to say about the company's aspirations here in the u.s. and even farther afield? selina: this is the first time they have public we spoken about
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their ipo, first time lucy peng has spoken with international media. i think the biggest reason they want to go public is for global recognition. this company is already a behemoth in china. they have 450 million users. they do everything from consumer loans, credit checks, online payments, worth almost 75 billion dollars. so much of the world still does not understand what this company actually does hear it as they push a broad need the confidence of multinational corporations, lawmakers, and that they are disclosing everything they need to about their business. the other part is, obviously, dealmaking, they would get a warchest of funds. as ing.: alibaba listed new york -- listed in new york. could they list in new york? sources told me that they are still figuring out where they should list. the u.s. is an unlikely option
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even the regulatory they would have to overcome. alibaba got around some regulations through their structure, but ant financial has a different structure, so they would need some other waivers from the government. asia,ms of locations in the vice president of corporate finance told me that they no longer think they need to list offshore to get the global recognition and awareness and that china's market is definitely a possibility. somema has expressed reservations about hong kong as an ipo location, but sources have told us that is another likely option, maybe even a dual listing. david g.: you describe the company as a behemoth in china. how easily transferable is the stuff that it supplies to other places around the world? selina: in emerging markets, i localthink they would go alone. they would definitely want to partner with an existing player. in india, we saw them do that with a leading payments provider. they know they don't have the local expertise, as a chinese
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company. they need to link up with someone. they do eventually want to hit all of those regions. they are trying to serve the under banked, underserved areas in africa, latin america. they are already studying those areas and eventually do want to go local in all those places. david g.: the backdrop to this is a conversation about it -- about transparency. lucy peng talked with you about that. that is a motivating factor as well. going public would perhaps lead to more transparency. selina: definitely. public doesn't necessarily solve all their problems. alibaba, since they've gone public, there have a more questions raised from investors about transparency, numbers, quarterly reports. there is an sec probe going into their financial accounting practices right now in terms of how they consolidate all their businesses. ant financial -- i'm sure that are hoping -- that they are hoping they won't run into all these issues once they go public. david g.: you mentioned the potential warchest they could get to do deals.
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what kind of deals would they be interested in doing? selina: they made their first investment in the u.s. earlier this year. scanning security startup. they are looking for technologies they can integrate. we are not going to see them try to target u.s. consumers anytime soon. i think they will also be looking for more deals in emerging markets, so that they can acquire leading payments tech companies, and try to accelerate their rate of expansion globally as many competitors are nipping at their heels. david g.: congratulations on the interview. that is selina wang. get more on today's top tech headlines on "bloomberg technology" with emily chang. still ahead, some of the nation's biggest financial institutions are being targeted by a trio of activists. this is bloomberg. ♪
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david g.: breaking news. they have terminated the $5.8 billion deal. deal to -- filed suit to terminate that purchase. the stock is moving once again. the trio of activist investors is targeting goldman, bank of america, and wells fargo, demanding they release gender and race data about their employees. with thealk about this bloomberg reporter who wrote this story. who are these activist investors and what are they requesting? the activist investors are small money management firms that focus on sustainable investing. they each of them only manage a couple of billion dollars, but
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they punch waves with their weight. one of the things they are focusing on is diversity in all its forms at these companies. they want to know, what is the company's diversity polities what -- policies, what does the company's workforce look like, position -- particularly as you go up from entry level positions, and what our men making versus women -- what are men making versus women? david g.: you said they are punching up from their weight. are they trying to force the companies to do this by generating attention? >> they have a successful track record over the past year of approaching silicon valley companies. very few of these proposals actually do go to a vote. when they are voted on, even fewer are actually passed. messageproposals send a to the companies and kind of put them on notice that this is something that matters to investors. even though each of these companies only has a couple of
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billion dollars, there is more than $700 billion of institutional assets that look at diversity as one of the key screening criteria. david g.: what could happen here? you have companies like google and facebook releasing reports kind of regularly now. have we seen marked improvement as a result of that? did the transparency lead to improvements in gender and racial diversity? laura: by having to disclose these numbers, quite a few of the companies have had a mea culpa, said we have a long way to go, than they actually go out and say we have a gender pay gap within a certain percentage, and they take steps to close it. data exist? these is it work for these companies to come up with data about the workforce, or is it there and it is not simply made public? laura: it's there. all the companies have to file every year with eeoc all sorts of data about the race and
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genders of their employees and at various levels of management. that information is reported to the government, led its consolidated -- but its consolidated. -- but it is consolidated. david g.: is there awareness of this -- more awareness of the importance of these issues? awareness, but the financial sector has really been one of the big laggards in this area. when you look at the large banks, 50% of their workforce's women, but they tend to be at the teller level and the entry-level. when you go up to the top ranks, it is less than 20%. they also have one of the highest gender pay gap's. -- gaps. david g.: when you look at the arguments these three activist investors are making, does it center in part on performance him a or is it something different entirely? laura: it is both a performance and sort of a moral argument. this is the right thing to do, but that's not really the argument they are pushing.
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there has been a lot of research over the past few years that have shown companies that are more diverse, that have a group of different people making decisions, tend to make better decisions than company that are led by a bunch of white men. david g.: help us with the timetable. what comes next? we have seen this sort of action levied at three financial institutions. could we see this campaign broadened? laura: there are at least half a dozen fouled. the companies have the possible -- half a dozen filed. the companies have the possibility to oppose them. they can go to the sec. the sec can make a provisional ruling on that. to happen is that the companies will call up the activists, engage with them, and they will withdraw the proposal. visa, the critical company, has already done that. david g.: thank you very much, laura colby, with bloomberg news. financial and
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gender equality index on the bloomberg. president-elect donald trump has selected the attorney general of oklahoma to be the head of the environmental protection agency. up next, a focus on rising interest rates and the future of housing markets. this is bloomberg. ♪ . . seeing is believing, and that's why
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visit an xfinity store today and see for yourself. xfinity, the future of awesome. speed always wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. live from bloomberg world headquarters in new york, i'm david gura. this is bloomberg markets. let's start with the headlines with taylor riggs in our newsroom. taylor: the michigan election
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board will decide whether to end the recount when it sees what a federal judge does. the michigan court of appeals ordered it to dismiss joel stein's petition. meanwhile, a recount in wisconsin shows donald trump gaining votes over hillary clinton. president-elect donald trump's approval ratings have improved tremendously since august. according to a bloomberg national poll, half of adults see him favorably. in august, only one third dead. 49% say the country is headed in the wrong direction. in august, that number was 68%. is calling it or quits, tweeting he will be resigning today. he said on sunday he would quit after voters rejected a constitutional reform referendum. the italian president asked him to put his resignation offer on
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hold until his budget gain final approval. that happened earlier today. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. up and thats are may be good for banks, but what about people looking to buy homes? the applications index fell last week, after falling almost 10% the week before. , david westin asked the quicken loans ceo how the mortgage business is doing given increasing yields. guest: as you have seen the numbers come down, when rates go up, that impacts refinances, but our business continues to be strong. the home purchase market has been strong and people communicate and connect with us differently than they do a lot of lenders, so they are still interacting with us about the
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opportunity to refinance, given where rates are because they have gone up .5%. you will see a little movement, but not much. does it cutat point into the desire to buy new homes? bill: that's a great question. i don't think it's going to a home.yone harm buying i've never seen anyone make a decision about whether they are or not going to buy a home based on where the market is from an interest rate perspective. it's going to impact the mortgage rate somewhere between 30 and 50 -- $30 and $50 a month. if you are really tight, it might cause a problem but it should not cause any problems for people buying a home. in 2008 and 2009, home owning took a big hit. how far are we from building back to where we were before the crisis? : case-shiller would tell
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you home price values are back to where they were before, pre-crash. with anything, that is a national average and we know real estate is regional and local. the western part of the country sees home price appreciation and a lot of that is a result of lack of inventory. one of the things we have to focus on is where does that new inventory come from? how does it become possible for builders to build homes again so that the supply and demand issue starts to get more in line with where we would see it historically. loans is a little different from the way most of us would think about loans when you go down to your bank and sit down with a banker. how is your business faring in this new world? bill: our business is faring tremendously well. if you think about the shifting demographics of this country and the way people communicate,
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whether it's social media, the advent of the smartphone and the ability for people to do complex transactions through technology, we have been on that cutting edge for a long time. most folks are coming to us online or because of some advertising we are doing. with the rollout of rocket mortgage and the ability for someone to start online and go all the way through the process, to import their income and asset information directly from the source, cutting out the need for paper and being able to provide it, when you think about the way people transact, that's the future and we are bullish about what that looks like. rockettell us about what mortgage is. bill: rocket mortgage will probably wind up this year, just to that channel, after being rolled out in february, will probably be 10% of our closing, which is a tremendous number when you think about something brand-new in the marketplace. david: a lot of the talk these
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days is about donald trump. ast does donald trump mean president for your business and more specific than that, there's lots of talk about the regulation with some of your more traditional competitors, the banks. does that for you up to do things in the marketplace that could take business away from you? : the devil is in the details. what is really going to change, there's been a lot of euphoria and the marketplace and you've seen rates go up a little bit. we will see what happens when the administration actually gets in their. i think there's an opportunity to cut back on some of the regulation. wilbanks benefit from that? i think we will -- i think they will. will we benefit from that, i think we will. some of the dodd-frank stuff they are talking about pulling back, having a clear underwriting standard is
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important for our industry and that's going to cascade across the industry, not just the big institutions. i think they have an opportunity .o clean up fha i'm excited about the opportunity that will exist as far as with the doj will do and move away from the crazy stuff they have been doing in our industry. there is a lot of optimism but we have to see what that comes down to. when americans hear about deregulating the industry, they get a little nervous. what's going to prevent abuse in the system? bill: it's having a clear underwriting standard. one thing that came out of dodd-frank was a qualified mortgage rule. you have to fully document income and assets. i agree that needs to be in place. if we have a clear underwriting standard that says you have to document income and assets, it is going to cause the industry
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to keep those guardrails in place and you are not going to see a race to the bottom. that's the number one thing that's important about safeguarding the future. david: that was built emerson earlier today. coming up, uncertainty pushed the bank of canada to keep rates unchanged. we will discuss impediments to the country's growth. this is bloomberg. ♪
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david: this is bloomberg markets. i'm david gura. let's head to julie hyman for our chart of the day. julie: i'm looking at china here. there's been so much talk about the incoming trump administration and what the
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relationship will be like with china. the latest news is president electron is going to nominate terry branstad as his ambassador to china. meanwhile, chinese currency reserves fell the most since january. it is the fifth straight monthly decline and brings the reduction of those reserves to almost one trillion from a record 4 trillion in june of 2014. the chart behind me is essentially the chart of those foreign reserves and what has been happening. we have a chart of what has been happening with the currency. gaining andas been the yuan has been the climbing. there's still a question of whether trump will, as promised on the campaign trail, will label china a currency manipulative. china has taken steps to affect the price and level of its currency and that is one of the things that has helped support the economy.
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another trend we are watching has to do with the gdp of the two nations, u.s. and china. we are seeing china catch up -- this comes to us from the world bank. gainings indeed been steam, although there are concerns about what happens to china over the next several years. head of global rate and currency research at bank of america merrill lynch spoke today and said the biggest risk in his mind is indeed china. he recommends buying dollar china options and says korea would likely be the first u.s.-chinafor fallout under a trump presidency. a quick check on u.s. bonds held by china -- this is the five-year chart and we have seen declining chinese ownership of u.s. treasuries. that is another dynamic to the relationship. david: thank you very much.
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mark mobius sees a weaker dollar next year. currently, the currency has surged to the highest in a decade. in an exclusive interview at the most influential summit in abu dhabi, he was asked what a donald trump presidency would mean for the dollar. it a short-term, the dollar has been getting stronger, but in the longer term, medium to longer term, i he isthat heavy spending going to embark on, spending that only in infrastructure but defense will result in people starting to think this dollar should not be a strong as it is now and we are going to probably see a weaker dollar. 'sd you must remember trump objective is to help american industry. what does that mean? it means they have to export. to export, you need a competitive dollar. down the road, i think you will see a weaker dollar.
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>> the ecb has been very accommodating. the ecb is expected to extend its program. what are they going to do with rising political risk around the world? mark: i think they are beginning to realize their policies are not working. systemstitative easing have to be given up. they cannot continue them. you will see japan and europe move in the direction of the u.s. >> you have been an investor in this part of the world -- how are you navigating the middle east at the moment? we have to assume we'll prices will probably go to $60, but probably not much more than that. have tot price base, we calculate what the budget of
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these countries are going to do and they all realize they cannot continue the kind of spending they have been embarking on without substantial change in the way they run their economies. that means more diversified economies and of course, abu dhabi, united arab emirates arab emirates have begun to move in that direction. >> where else would you recommend investors put their money to work in the middle east? international asset management, what's your view on the kingdom as it tries to make a switch away from oil? mark: we are positive in the sense they are trying to make that switch. how successful they will be remains to be seen, so we have to because is. -- 15% or 20% successful, that would be exciting. >> what about egypt? are you putting money to work there? mark: the question is getting it
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out. the problem with these countries that restrict outflows of for exchange mean that people who want to put money in will not come in until they are able to get it out. trump about told head into the white house and clinical risk in europe. where is the emerging market story? with a stronger dollar, it's not necessarily good. whichit depends on countries you are talking about. the stronger dollar means the weaker currency companies exporting will do very well. you are not only exporting to the u.s., you are exporting to other parts of the world. there will be a great many bright spots in emerging markets. emerging markets have been outperforming, even with the downturn recently. >> talk us through some bright spots. what are you excited about? mark: i would save yet not as of
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the bright spots. thailand continues to be exciting despite all the problems they have had. indonesia is a great growth story. if you look at india, india is tremendous. , with the programs in shanghai, we will get access there. >> which ones are you steering clear of as we go into 2017? not really steering clear of any except we have restrictions on foreign exchange. nigeria is an example. we would love to put more money into nigeria. >> is russia on your list? not only the rise in oil prices, but hopefully some accommodation with trump now. if trump opens up and says we will do away with the sanctions to russia, that will be very exciting. mobius,hat was mark
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templeton markets executive. canada cap get key interest rate .nchanged, citing key exports joining us now is our managing editor for canada. i suppose the word is divergence . you see what happened in canada today and look at what is likely to happen with the federal reserve. these banks could be on different pages. really have a tale of two central banks here, looking at my favorite bloomberg function this morning. it shows the expectations and the swaps market and shows a 0% chance of a hike by the bank of canada. contrast that with the fed next week where there's a 100% chance of an increase. not really surprising, the canadian economy is not growing the unitedit is in states. we still see the impact of falling oil prices.
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its long-awaited export recovery which we are expected to see has not materialized. 100% probability of a hike at that meeting taking place next week in washington, and looking at canada going forward, still no probability of a hike in the next two meetings. what did the governor have to say about slack in the canadian economy today? guest: it was a pretty downbeat script for sure and very brief. one of the shortest we have seen in a long time. but let's look at some of the words he used. he said business investment in non-energy exports continue to disappoint. uncertainty remains undiminished. a certain amount of slack remains in contrast to the united states. not a lot to get excited about.
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interesting isis he talked about infrastructure the government spending on infrastructure has not shown up in the gdp data yet. , pledging to spend more infrastructure and cut taxes, not unlike what we are hearing from donald trump. still no real impact on the economy, so let's not hold our breath too much to anticipate a real boost in infrastructure as well. editorit is our managing in toronto during us today. if you are struggling to figure out how to market your products to america youngest consumers, we have something for you. this is bloomberg. ♪
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david: this is bloomberg markets. i'm david gura. americans born after 1996 are quickly becoming a major force in the u.s. economy. we are talking about teenagers. while their tastes may seem fickle, there are consultants who can help. carol massar and oliver ran it spoke about generations he. anyone warn after the year 1996. all teenagers and anyone younger than that. carol: a group. carol: big group. about $44y have billion in buying power. david: that dollar amount makes them a big target among companies and advertisers. definitely.
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a lot of people looking at millennials in terms of what they can do and how they can spend their money, but as time goes on, marketing executives are looking at teenagers because they have an i-4 the future in that respect. us to someh leads teenagers who got together and created a consulting firm. guest: these three kids all met up at this cornell business camp for high school kids. one is from california and the new jersey. from they had always been entrepreneurial and that was the starting point. firm? what is this e.est: it is called juv basically it's a consulting agency that focuses on themselves.
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their whole shtick was why are their teen experts when you can just come directly to teens. there there -- oliver: has always been teenagers. a hard timee having targeting where the startup can really provide some value? guest: you are looking at teenagers having a much different upbringing. social media to them is like oxygen. they communicate through these last forms more often than anything else. executives look to target kids of this age, they have a hard time understanding social media or the internet in general because it changes so quickly. wasl: what i thought fascinating was targeting generation z, they created something called the vine. tell us about that. guest: when you have three kids come together and say we can
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speak for our generation, there's a lot of holes in that. you can't speak unilaterally for a lot of kids around the country or around the world. that they arelly unusual teens. guest: so it is basically a focus group for hire and kind of a crowd sourced -- oliver: the participants are not paid. guest: they are not. these three kids have a lot of what they call human capital around the world. they put out a blast like we are three kids representing generation z in the is this fear. does anyone want to be part of this in a focus group capacity? so the vine is a collection of 200 plus kids around the world. a company can submit an idea like an incubator and the kids can bounce around their views on
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it and maybe you want to focus on europe or east asia and that gets submitted to the company and they say we want to do this or we don't. can check more of the story out on "bloomberg business week." coming up, ralph mclaughlin joins us with his take on what next week's fed rate hike could mean for the housing market. that's coming up next. this is bloomberg. ♪
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scarlet: it is 2 p.m. in new york, 11 a.m. in san francisco. i'm scarlet fu. oliver: i'm oliver run it. welcome to bloomberg markets.
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-- i'm oliver renick. welcome to bloomberg markets. scarlet: we are live at bloomberg world headquarters in new york. we're covering striatum -- stories and iowa, washington and shanghai. president-elect donald trump plus latest target is drug companies. if has nominated the governor of iowa to be ambassador to china. as the fed gets ready to raise rates, will that hurt momentum in the housing market? truly a has news on housing market in the year ahead. and how iron ore defied expectations. the iron -- the or sword despite overwhelmingly bearish protections. the u.s. markets close in two hours time. let's check on how stocks are trading with julie hyman. julie: all of the son, today became a big rallying day. bed nasdaq, not quite a record
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level, but the russell 2000 is. rally that has resumed today and even taken legs higher. climb been a slow, steady all day and there was a germanic leg higher that sent the s&p 500 up toward its highs of the day. we are again in record territory for most of these major averages that we track. a lot of that having to do with rotation back into interest-rate sensitive groups. the only group really lagging is health care. we are watching a couple of movers on that front. some late breaking news today that abbott labs has filed a purchaseerminate its of a company signed back in january. there has been sparring between
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the companies after some revenue recognition issues in china disclosed by the company. into's also a u.s. probe billing practices which created some issues. now it is down by 7%. have been monitoring capitol hill because there has been a congressional hearing over the at&t proposed acquisition of time warner. both of those stocks are trading higher even amidst what was tough rhetoric from the senate judicial subcommittee grilling the executives involved. at the same time, there appears to be some optimism over the treatment of the telecom industry in a trump administration. yesterday, randall stephenson that would be favorable and analyststalk among about getting rid of net neutrality rules which could be positive for these types of companies.
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, we are watching tesla. they took a leg up around 12:45 today. this is after a lawsuit involving tesla was delayed into 2017. a delaware judge said he would rule sometime next year on a request for internal records about production was that caused the carmaker to miss sales forecasts. that appears to be what is propelling these shares higher today. volume shot up on the etf's, let'sat the check on the bloomberg first word news with, chandra in the newsroom. a: the italian prime minister has officially resign. resignation tended just moments ago.
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back in the u.s., president-elect donald trump says mitt romney is still in the running to be secretary of state. trump said he and the 2012 republican presidential nominee have come a long way together criticismmney's harsh of trump. the president-elect said he will be announcing his choice soon. mr. trump: i think next week will be the time i announce it and our other big announcements coming up today and tomorrow. we have been met with very good reviews of the people i have chosen. emma: meanwhile, trump has been person time magazine's of the year. and donald trump has selected oklahoma attorney general scott pruitt to had the epa according to a report from reuters. he's been a tough critic of the agency under the obama administration, suing over its water and climate change
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regulations. the driver of a baltimore school a -- thatrive into crashed had a history of seizures. the driver was going nearly twice the speed limit when he struck a's -- struck a ford mustang from behind and then struck the transit bus. global news for the four hours a day powered by more than 2600 or lists analysts in more than 120 countries. trump: president-elect may be softening his stance on china by picking terry branstad, the republican governor of iowa to serve as ambassador to the country. he has extensive ties to china. david westin spoke to tom barrick, a longtime business partner and friend of trump and asked what he thought of the choice. think what you are reading into it is another
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considered, thoughtful, calculate a choice. governor branstad is the longest standing governor i think in u.s. history. he's had an almost thirty-year relationship with china. the key with china is to curate politics and business in a subtle, long-term, culturally sensitive way. i think the signal of taking someone who already understands the hardware, who has reputational capital in china with a setting the trump is alreadyion sending soundwaves and saying the discussions we are going to have need to be bilateral and we want a great relationship with china but we needed open both ways and we are going to have a stronger set of discussions is balanced hand in glove. is encouraged and excited
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about having the governor as a representative and having an experienced hand on the helmet is a signal of what this president-elect is doing. it is someone who knows china well and knows the president well and has had a relationship with him since 1985. state withmes from a a trading relationship with china. how much of that is and all of branch or bridge building? tom: i think it's an all of aanch, bridge building, and hammer. the chinese think in a 100 year terms. is romantic but they can outwit you for a century. alreadyomeone who has been to that rodeo and
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understands the program and has the stature and prestige of the office, i think is a brilliant move. david: he is still putting together his foreign relations team. below we have seen so far as he puts a value on delivering things he said he would. take the carrier example. he said he would declare china a currency manipulator. would you expect that would actually happen? we have to put skin on the bones. china it is a currency manipulator. let's define what that is. if the chinese are using the yuan to buy u.s. bonds or securities, they can and then flow the value of their own currency and our currency. trade hand, while we have regulations, which are thousands and thousands of pages and mostly unenforceable, the currency fluctuation by the central banks can be more
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impacted. they have pulled back their central bank function and taken half a billion out of the marketplace and restricted the flow of capital. having an understanding of the accelerator and the break and what is happening is essential. .he discussion is critical central bank interventions also have to be balanced. is saying is america is not used to having a president who is curating and not a steward. you have a businessman who is a problem comes up, he addresses it. is he signaling to an industry, is he picking on somebody? is he admiring somebody he shouldn't? a softbank transaction? is a man who's going to take the agenda and it things done. rather than starting
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semantically in a bureaucracy, which is a slow moving train that doesn't go anywhere, middle east policy, the same thing. america has lost prestige because we do not act. we do not act for our allies and we do not act around those who are not. anding used to the man giving him the opportunity. remember, he is president-elect, so he doesn't have any power. and congress, 535 individuals protecting their own territory and 19 agencies dealing with trade issues every day also have a significant voice here. donald trump cut his way through congress and the bureaucracy? we have some republicans in house making noise about tariffs, saying they don't like that idea very much. what can he do to cut through that bureaucracy and cut through the congress? thing isink the first what he's doing now -- mending the words and bridging the
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divide. some of these things you see in discussions with china that seem to be drawn lines. on the other hand, he's reaching out to every constituency there and saying it is we together, with the people that we will make america great again. what you don't see is this reach to the other side, saying we need to do this in harmony. out what is important and not important and take a stance that it is america first. i've used this example before -- you are at 50,000 feet and losing altitude. the oxygen drops down and the pilot says put the oxygen mask on yourself. you don't reach across to your neighbor and ask how you are doing while you are dying. flow.ng markets and then thatulation, a tax policy
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encourages investment and entrepreneurism and a military policy that is certain for our allies, even more meaningful than for those who are not our allies. oliver: that was david westin was tom barrick on bloomberg markets earlier today. scarlet: coming up, the outlook for housing in 2017. we will speak with the chief economist at truly a. a. at truli ♪
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oliver: this is bloomberg markets. scarlet: there has been age met shift in confidence that the housing market since the election of donald trump.
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, beforeg to research november 8, republicans were bearish across the board on housing, but when their candidate one, they became bullish thing 2017 would be than 2016 for renting, refinancing and buying and selling a home. meanwhile, democrats became pessimistic on four out of the five listed housing actions. joining us to make sense of these results is ralph mclaughlin, chief economist at trulia that commission this survey. what does that mean, this turnaround in confidence? ralph: it reflects what we saw with the election. many republican households live in what we call the bargain belt. markets in the affordable southern and midwestern markets. the costly coasts predominately have democrat households. see this changing of confidence after the election,
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we think the bargain belt might start to catch up with the costly coast. for the most part, since the recovery, it has been the blue, coastal markets that have led the recovery. now because of the sentiment change and if it last, it might help those areas catch up. sentimentw much can drive the real estate market? what are the changes that need to happen to get them to catch up? ralph: it's going to be about job growth. that's why trump had a surprise victory. the middle part of the country that tends to lean right felt left behind. the bargain belt is cheap and it is cheap for a reason. there's not a lot of great paying jobs, and if there is the sentiment now that trump is going to come in and boost jobs,
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having that confidence could be heading intoeholds 2017. but we don't know if this is the monday morning after a hail mary victory when or whether it is a strong sentiment that will carry into 2017. scarlet: you found that millennials took a step back. they are not as optimistic or hopeful. how far along are we in seeing these millennial homeownership rates rise? ralph: that was probably the most surprising thing from our research. the share of millennials who say homeownership is part of the american dream is falling. it is still high but signs are on the decline. there are some troubling stats. homeownership rates among 35% stills, about live with their parents and if you look at the share that live
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with their parents or other relative, it is as high as 40%. we think there is this embodied energy in the market that rests with millennials. oliver: how much of that is not ismuch a negative thing -- there a change in philosophy or the style of workforce where people actually remain at home or have a decent life without having to include homeownership as part of the goal? ralph: it could be part of it. millennials are an interesting bunch. they tend to be more mobile than other generations. if you are thinking about homeownership, you want to stay put because that's where the real benefits weight. if they are moving around a lot, maybe it's not a good idea to buy their home jet. scarlet: now that donald trump has nominated ben carson to be secretary of hud, what kind of impact do you see that on housing -- see that having on housing?
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ralph: it is an interesting pick. leading had is certainly no brain surgery, but it is different. housing is very complex. the problems in housing market are very complex. it's going to be very different. certainly, there are programs we think he could help in many of the largest markets that are unaffordable. there's a vast undersupply of affordable housing and hud could boost programs to help developers build affordable homes where we need them most. i want to show a chart that i think is interesting. what happened with the yields on the 10 year rising compared to what happened in 13. is this overblown? say what istough to going to happen. we think it will settle out at about 4.5% or 5%.
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for the average homebuyer, it's not going to matter much. interest rate's be between 7% and 10% to equate the cost. it's a good deal even if interest rates go up. that said, there are markets like san jose and new york where rates are upward of 5%, it's going to be a tough call and it comes down to individual circumstances. scarlet: we will keep an eye out for that. thank you very much. still ahead, the chief executives at time warner and at&t get a grilling before congress as senators question whether there in pending merger will benefit consumers. this is bloomberg. ♪
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oliver: this is bloomberg markets. i'm oliver run it. scarlet: senators had the chance
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to grill time warner today. that included randall stephenson . here are some of the highlights. >> the potential anti-competitiveness favoritism that the combined firm could bestow on its own products is not limited to price or access. it extends to the quality of the offerings as well. >> there is concern that this acquisition will concentrate too much power into one conglomerate , resulting in higher prices and fewer programming options for consumers. there's also concerned about the mergers implication for a free and diverse media. >> for your constituents, we believe the benefits are straightforward and substantial. they will get more choices and lower-priced options and that means more nationwide competition against the cable companies in each of your respective states. >> combining time warner's video content with at&t's distribution
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will accelerate the development and delivery of the next generation of video services providing consumers with greater choice, convenience, value and importantly, better afford ability. and google, amazon and facebook are five of the seven most valuable companies and all have established dominant decisions. that's exactly what the time warner -- why the time warner acquisition for at&t is an important strategic contact acquisition. it would be difficult if not impossible to compete with the companies i mentioned. >> the american consumer will be the one worse off from the consolidation in this industry. if we learned anything from this last election it is that the american people are angry about the growing divide between the haves and the have-nots. independent programmers are the have-nots in the media landscape. diversity of content is in the public's best interest. >> it is essential we have the
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life blood of our company to be able to attract the best talent and best directors. these come from independent producers. they come to us because we have the resources and distribution reach to put their product in every home. >> why would it make economic sense for at&t and its ownership of time owner -- time warner content to freeze out competitors and why wouldn't it make sense for at&t to degrade service feeds for not affiliated content? >> one could argue it might disadvantage our distribution business to get proprietary access to time warner. it would impair the value of that business. >> would it make sense for at&t to use its leverage to charge comcast more? not havecause we do the market power to do something
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like that either at at&t or hbo. the market is way too competitive. think mr. kimmelman might disagree. >> i'm not worried about comcast not eating time warner content. i'm worried about the online distribution it would compete with that is growing right now, not being able to get exactly what it needs to be a player or competitor. scarlet: that was some of the highlights from the at&t and time warner hearing in washington today. the marketslower as and equity action is doing well. boiled down about 2%. this is bloomberg. about 2%.n this is bloomberg. ♪
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private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. scarlet: from bloomberg world headquarters in midtown manhattan, this is bloomberg markets. i'm scarlet fu. oliver: i'm oliver and it. commodity markets are closing in
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new york. with the latest from julie hyman. heading lowerces as we see crude dropping. part of this as we are approaching an opec meeting with non-opec nations to hammer out and get them on board with this production agreement. only russia and oman have signed on, so there appears to be concerned about that. then there is the effect of u.s. inventories and the change there and what affect it's having on oil prices. here's the weekly change on inventory. i want you to focus on the most current part of this chart because what we had this week was a drop in u.s. inventories. cushing of 3.8 million barrels and this led inventories is what is putting pressure on those oil prices and concern over that.
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finally, i want to talk about copper. we have a pullback of more than 1.25%. orper has been an outperform since the election but it looks like we are seeing a general commodity downdraft with oil leading the way downward. oliver: let's stay on commodities and jump on the bloomberg. iron ore continuing to surge despite the bearish calls on the street. that was after an analyst pricked it is not over the final two months of the year that the market was a death knell for iron ore. prices were expected to fall supply in china fails to grow. joining us now is our metals news.er from bloomberg
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why the surprise rally here? is this come a dare i say, trump-related? this year had not been trump-related. the rise was due to infrastructure and property investment from china. you have the upside rally and if you look at iron ore moving into it's hard toper, get these analysts to say anything other than there did seem to be a trump effect after the election. scarlet: but they had gotten the call wrong and 2016. why are inventories in china hot? guest: you can have a little of both. there have been speculative plays but china is not necessarily using up as much iron ore and steel as a hat of the past. this property investment is in
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as much as the infrastructure people expected. people at citibank are saying things are fine but next year, we can't see things being as bullish as they have been. comingt see that demand online. a lot of analysts say they are expecting a pullback in demand and when you look at iron ore and steel, no matter how much infrastructure is implemented over the next 10 years, china is still the big driver. 5%.l demand is only 3% to we were talking to an analyst at couple of weeks ago to set even if you get that infrastructure project, you are only talking about a couple of percentage points. oliver: despite the fact that some of the gains are on speculation that the infrastructure might broaden out in there might be more use for iron ore, it's going to be a china-driven market? guest: a good example is one
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analyst said at a copper conference a few weeks ago, if you look at the oversupply in the copper market, for the u.s. to use up the oversupply, demand has to increase 25%. for china to use it up, it's about 3%. scarlet: you talked to a lot of minor ceos and they can't get the price right. aboutoes that tell you the dynamics between what they see on the ground and how the market actually works? of thingsre are a lot to throw in there but one is the speculative trading. the question is whether or not are we seeing fundamentals trading or are we seeing people putting on buys because of other extraneous situations in the market? i think that's one thing people are saying, it's difficult to
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make these calls here and there. things have been so one-sided that playing against it has been tough. oliver: i'm looking at the bloomberg commodity index overall and a little bump in the past 20 days that overall, it has been pretty flat. if iron ore peels off, is there something that people can watch in terms of a surge here? where theyerms of are going to move their money, that is the classic question. whether it's gold, steel or copper, the rotation would go more into equities. one of the reasons this has been attractive is because this has been the first time they seem commodities really forefront. the past two years, that has changed, covering metals. it's not a glamorous and happy group of people, but talking to these people in the past month, they are saying that for the
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first time we are looking at the space because we feel like there are fundamentals that could be put into place for us to buy. whether that will sustain the rally is the next question a lot of people have to answer. maybe not always glamorous but some of the shiny ones are pretty glamorous. scarlet: we have much more coming up. this is bloomberg. ♪
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oliver: this is bloomberg markets. scarlet: we have breaking news in politics. president-elect donald trump is said to have chosen scott pruitt, oklahoma pasta attorney
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general and a close ally of the fossil fuel industry. joining us with reaction on the phone is carl icahn. thank you for taking time to speak with us. were you considered for this role? did president trump ask your opinion on the matter? carl: yes. he asked my opinion and i have been involved with the epa another agencies. some are ok and some are not ok. too far andgone way has run amok with these crazy regulations. is regulation that completely absurd, and i've seen many absurd things in my career is this obligated body where they obligate refineries to blend and you can't buy a blend of gasoline so you've had a tremendous transfer of wealth from the obligated party, which oil andefinery for big
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these gas station chains. i think this hopefully will come to an end. i've spoken to scott pruitt, i would say four or five times. i've gotten to know him and i think he's a great pick. i told donald that i think he away withhat will do many of the problems at the epa, and they have many of them. scott, but i for have spoken to him and i do think he feels pretty strongly about the absurdity of these obligations. that these should be done immediately. period goingomment
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on now and we should save three or four refineries. i own one for full disclosure, but it is strongly capitalized and doesn't have a fear of bankruptcy, i don't believe, but that's not the issue for me. of companiesber that's not a major holding, but it's bad in this country to have more than several good refineries on the brink of disaster which the epa has made to come about. think they are necessarily cognizant of the damage they are doing and my hope is scott pruitt is going to be a breath of fresh air. i think it was a great pick and i think donald has made some strong, good picks so far. i'm proud of donald and i think was an excellent
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pick. oliver: what do you want to see out of the gates as far as epa and the fossil fuel industry as , doesift to clean energy it have momentum of or are there changes that can be made to reinvigorate the industry? carl: we invigorate which industry? i do think there will be more in the fossil fuel area but i want to make it clear that what i'm talking better some of the regulations that are literally insane. it gets a little arcane. talking about has nothing to do with the rfs. the renewable fuel standard. i've beenmething
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arguing about. i can understand there are arguments to be made, so you're not even talking about that. we are talking about getting rid obligation putting refineries out of business. never meantnt was to ruin companies for no reason because there were some people in ann arbor at the epa that andde in their great wisdom now they are going to put some of these refineries out of business and for no reason in rich these gas station change. -- asked station chains. a -- i get a raise by some of these things and make millions of dollars not only for myself but all shareholders and i think here, i think it is so outrageous that i hope i can be
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part of a team that does away with these crazy regulations .hat you have through the epa i'm not even talking that the big picture question. the epa is throwing out the baby with the bathwater. if they want the rfs, this is the stupidest way to try to keep it. i guess i can't be clearer than that. scarlet: that is pre-clear. i want to pivot and ask your thoughts about what donald trump comesid and done when it to other companies. are you comfortable with him calling out companies like carrier or boeing? carl: i think donald wants to create jobs in america and he's going to do what he can to do that. again, i say one of the best ways is to let business know the
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government is not at war with them. what he is trying to do is say don't leave our country so fast because we are not at war with you. i think what he told carrier right on his saying regulations are going to change. it's going to be a new world, so don't leave so quickly. these regulatory agencies, some are ok, and i'm -- saying every regulation there are good regulations and you need them. but they've gone almost insane and what donald is trying to say is don't leave our country. we are going to get rid of a lot of these regulations. this crazy obligated rule, they should change that. howdy obligate so many to do something they can't do? concerned, donald is coming in and saying we have
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to get jobs back in this country, good jobs. with carrier and all that, i think he's saying don't leave this country, stay here, we are going to help you with regulation. is the case, is he picking winners and losers? carrier don'tling leave the country. he's not taking anybody. is, is ite question sustainable? he's picking out companies and saying here's the work we want done to keep workers in the u.s., but is that a sustainable policy to keep jobs in america? pass we may be talking each other. what the president can do and do business that we
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are getting rid of a lot of the regulations that are strangulated and you. the way you are going to get cash invested, which they are to get rid ofis number of what i considered to be crazy regulations. if you do that, business will invest. i'm a microcosm of this. businesses and i would tell you we would invest in many of these businesses if we did not have these insane regulations. donald, i believe will do this and i think pruitt is a good example of his first major pick in the regulatory area. i think scott pruitt believes that. show business we are serious. we are not going to obligate you
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to do things you can do. pruitt.why i supported i've met him three or four times. i think he's a strong personality. i studied some of what he did in oklahoma and he did the right things there. therefore, this is a major step, more than you think. that is what i believe and we should be telling them that now. are not even talking about the environment. we are not talking about clean air. we are talking about idiotic rules. the rfs is a different question. donald has said, i have said, scott pruitt have said that we don't like the rfs. are looking at the environment and we are cognizant
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of it. we are not changing the rfs, we are changing and insane rule they've done nothing about four five or six years. what you have seen so far from mr. trump and when you assess what he's going to do, his involvement with his misses, are you more of an equity bulls and you were before? carl: i've said before and i guess if they knock it down a thousand points, i went and bought stock that night. i think that's crazy. now, the market has run a little ahead of itself. i'm not going to say run out and buy stocks today. i think it has run a little ahead of where maybe it should be. it's hard to pick the market and there are too many variables. i've made money picking stock
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here and there, being an i sayst and being in what our unique situations. this is a unique situation because you find something that is insane, but when you ask me what the market is going to do, like asking what the farmer's wife is going to shoot in vegas. oliver: let me ask you about shareholder friendly activity. unless the company has lot of cash on hand, you're not a fan of the buyback that has proliferated throughout the market. would you like to see president-elect trump take a roll and see what they can do? >> i don't think he's going to have to. i have been a critic of ceos but i think the ceo means well for the most part. do what is good for
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their company by and large. therefore, today, they get money, the ceo gets money, he has low interest rates, but that cannot harry the economy because that gives them the ability to borrow money and then he has two choices. but money into machinery and factories so the work can become more productive. todayll street journal had an article about how productivity is at the bottom of the basement. i hope you get rid of a lot of this craziness and then, it's going to happen by itself. they work,, when they happen because of an economic reason. we talked about ceos and how they have the leeway to make a decision. i want to ask you about rex tillerson. his name has been floated as a possible secretary of state candidate.
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should he be next secretary of state? carl: i'm not going to comment on something like that. this is a choice donald makes with his advisory group and i'm not going to run ahead of donald on who he should take were not take. he got elected president, not me. oliver: how about -- scarlet: how about minutia and as secretary? mnuchin ast secretary? good i think it is a choice. i know him and i know wilbur ross and i think they are very, very smart guys and they will do very well but donald makes the last choice. scarlet: they are very smart guys and very capable. some might argue that optics lies it might not be the best choice because you have a billionaire president-elect bringing on billionaires in his cabinet.
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the optics of that do not look so great. time we spend too much concentrated on political correctness, optics, what have you. let's spend time getting jobs back to middle-class america. for eight years, there's been a drought of good jobs and we live in a bubble of manhattan island and what i'm saying is it's time to forget about the optics, forget about the clinical correctness and get the job done. i could go on and on, but i'm not going to keep going about what the optics are. you a questionk -- if the optics are so bad, how come the market has run up 15%? it doesn't seem that bad to stock buyers or to middle america. there was a lot of support for hillary clinton on
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wall street, but at the end of the day, trump gets elected and financial stocks are doing great. did wall street want trump all along? carl: [laughter] i don't think wall street knows what it wants. don't ask me about wall street. but been successful there there are friends of mine, they go one way or the other. a number are smart guys and the number are not so smart. the last thing i can tell you about is what wall street wants. they change very, very dramatically. it's not just wall street that's changing here. me, iaid, if you ask don't take markets and whether the market is going up and down. run ahead ofhey
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themselves but i don't think anyone has any idea on that. scarlet: fair enough. wall street is pragmatic. i wonder if you think the president-elect has any conflicts of interest as the owner of his own company with so many different interests around the world? how would you advise him to resolve those conflicts? not going to get into that. i think he's a smart guy and i think he will figure that out. i could advise him on stuff we are talking about of how to get jobs back in the economy. these regulatory agencies are like companies that are badly run. experienced through how to change that and maybe i could be of some help there, but i'm not going to get into areas
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i'm no expert in? i'm not even going to think of answering that. scarlet: you were a big investor in apple. oliver: we have a story about apple eating in talks with film studios about getting its products out earlier. applei haven't been in for a while. we sold the stock eight months or a year ago. i have enough to do. i'm not right on top of what apple is doing right now. oliver: apple has been rallying in an interesting way, where there has been some bifurcation. is there any industry you want to revisit as these prices move around a little bit? carl: i don't want to get into it now.
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it might be overpriced in this market. i don't think it's the right time. that's another interview concerning groups i think our overpriced. but at this time, i'm not prepared to get into that. willing tould you be answer whether it's time to buy refiners or producers given the change in the industry? karl: i'm somewhat involved in that industry. saying i some articles own a refinery, but that's -- i would say small part of my portfolio to begin with. i will tell you and i really believe this, what is going on here is great for the free .nterprise system
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it's not that i have an agenda on that. i really do not. but again, it's like saying i own stocks in many companies, so i made money on them. when you get rid of the ceo or get them to do things, get them split up like ebay and paypal, own ebay and-- i made money on it, but what i think i have done has been salutary for many shareholders around the world. it made billions and billions and i hope i can replay that here with what we are going to do with these regulatory agencies. they just run amok. people should understand that what's going to happen by hasging obligated parties nothing to do with the rfs.
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that'sanother decision going to be made by donald trump and maybe i would advise him a little but there are a lot of people deciding that. about is veryng good, sending a message, and i hope he continues to do it. i think carrier sends the message that we are not at war with business anymore. the government and business are going to work with each other and not against each other. i think that's one of the lost to sayary you're going to have eight more years of the same as opposed to saying i want to encourage investment and good jobs for people. that's one of the things that hurt her. thank you so much for joining us. we will have you on next time to get back into those sectors that might the getting a little
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pricey. that's carl icahn speaking with us here on bloomberg markets. we are about one hour from the close of trading. let's go check on the markets with julie hyman. julie: this is in part a reflection of julie: the confidence of all street and of the business community. , as they haveure been through changeable if you will. people want to buy stocks. the dow and the s&p on a closing basis. the nasdaq is coming up strong though not at record levels yet. a sharps not been catalyst that has driven stocks higher. we have seen searches in volume one stocks have taken a leg up. this is what oliver appointed to earlier. this is average volume over the past 22 days.
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the blue lines are today. around 1:00, 1:15, there was a surge in volume that happened around 1:00 hour that we saw the searches. the red lines according to the bloomberg volume, is where it will be we will see how it shakes out as the day continues. it is interesting it is heavying on relatively volume. what are people buying specifically today? these stocks are contributing most individually to the gains we are seeing today. microsoft, a come back to technology shares. ceo and the ceo of time warner, facing down a subcommittee over the deal. consumert along with discretionary. healthit has to do with care and that is the donald trump tweeted about keeping a
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cap on drug pricing. it is not clear whether or how that will happen but here is a stock happening. as we talk about the haselection rally, colin interesting perspective highlighted by dave wilson today. this one says stocks and bonds, four different measures, not around the globe, by this measure, we have seen markets go sideways. an interesting perspective not just focusing on the u.s. but looking around the globe, looking across assets, that perhaps although we talk about euphoria in the stock market, that euphoria has not extended around the globe and to every other asset. that -- can view
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thank you. let's get to your news headlines. m a has those. >> a humiliating defeat on constitutional reform last weekend. essential to the nearly 3.5 year government. he was asked to stay on as a caretaker role. he will start consultations late tomorrow to see where support lies for a new government. the transition team is considering a silicon valley fdastor to head the according to people familiar with the matter. jim o'neill served the department of health and human services in george w. bush's administration.
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syriza may passes timetable to leave the european union. the u.k. plans to trigger article 60, which formally ofins proceeding at the end march. also agreed to publish her exit plan for lawmakers consideration before beginning proceedings. the far right presidential candidate will organize a referendum on the country's european union membership if she wins. the party chief spoke today where she also promised to challenge france's use of the euro. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. scarlet: we want to turn to retail. a segment traditionally ignored by companies. the sales growth has outpaced the overall market for women's clothing or joining us now is
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the president and ceo of the plus size for a retail group. great to see you and thank you for joining us. withst had a conversation carl icahn about donald trump, the changes he is making for his company and for the economy. given his stance on trade and threatening to impose tariffs on holding offou guys on overseas expansion, or making changes? >> we are assessing all operations on how we test source products. there are many things and play to take it vantage of whatever may happen so yes. >> is there anything in particular that resonates with you at all? >> it is evolving for me and for many of us. >> the industry you are in has come quite a ways.
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burgeoning competition. >> size 12 to 14 or larger. if retailers can incite her and make her heart is a little faster, in going after the fashion she should have or deserve, we think there is greater potential. >> you get more sizes, talk about your strategy and what you're doing to bring those through the door so they can take a look at what is available on the floor? >> i'm excited about the strategy that is what in place.
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making sure we will win in that part of the experience. touchabout all of those points. cannot wait to activate a new platform next year. it is not just mobile, it is not just digital. blessed that we have been pushing the on the channel experience for a number of years. she can consult with a stylist. for us, it is about evolving the whole experience for her, and you front of it. we are positioned well to win in that space. >> hard to find something with more mixed performance the retail. household names are struggling a lot. they're doing very well.
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how do you build out a type of clothing but still be wary of macro trends? we are mindful of how we do that. i think value is a bit elusive. it can be. meaningful -- meaningful to her like a stylist. are finding it is definitely a tough time and retail. can win by providing services and other types of offering. definitely that emotional and unique product. we are very proud of it. uplifting elevated, that she struggles to find elsewhere. this has been an audience overlooked for a number of years. we agree. it is about changing the conversation, helping women to change how they see themselves and the world and how the world sees women and feeling they are part of a community. her.e right there with
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i wonder with twitter, facebook, snapchat, it has put more of a premium on authenticity over aspiration. authenticity limit your price point because you can't pursue pricing? >> we can do both. we hook it on the emotion and also provide a great fit. the technology we are delivering , the sports active wear line as well as the intimate line. that is where i think we can win. takes on ain, value different meaning. it is not just about price. component critical but if we design the product well and make it emotional, it is trend right and fits beautifully, then we know we can win. quickly, you were formally the ceo, and now they are going through a tough time. what do you make of them having
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to be shut down? it is severe at this point paired any thoughts? on that. many thoughts tough in retail. limited is one of the number struggling. my heart goes out to the us to see its and their families. associates and their families. i wish them well. it continues to be tough headwinds ahead. that intoas to bring your own? >> not at the present. what we doto drive well for that client. scarlet: thank you for joining us, linda. oliver: coming up, apple is making a push into movies. this is bloomberg. ♪
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oliver: welcome back. scarlet: for years, apple has been held up as the poster child for companies that have sheltered profits overseas to avoid the irs. apple has been paid more than half $1 billion by the u.s. government to follow that strategy. andrew wong -- andrea long has been writing this story. she joins us now. -- interactiveic graphics be a walk us through how this works. how is it that taxpayers pay apple to look at profits overseas. right now you have a map. >> the stories can originate in california.
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most of the profits go to ireland. the royalties belong to ireland as opposed to the company. now apple claims the money is offshore and we cannot really bring it act. or we will be subject to a 35% taxpayer the reality is the money is right in this country all along. a reno-basede is firm that apple runs that manages all of the money and they invested. >> they put a lot of money in the u.s. treasury. somewhere inx code the u.s.. u.s. treasuries in the assets, the money can be held in the
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u.s. though they have not paid the tax, the money is living here. oliver: once it is there, it eventually makes its way back to ireland. >> yes, or under irish account anyway. treasuries, the money that it generates lost to ireland so it goes back to ireland. oliver: taxpayers are paying millions, that is in the form of interest they are making on treasuries. >> yes. the irony is, apple and all of these are trying to avoid the tax system from the u.s. government. the u.s. government issues probably the most wanted, u.s. treasury. in the end, it is inevitable that they end up buying u.s. treasuries. what apple is doing is
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legal. there is not wrong with it. they are not breaking any laws. >> it is the most polarizing written. have ever the people who can see the irony of why this is getting paid by us, actually, we did. everything is legal. they are taking advantage of gigantic loopholes in the tax code. oliver: how does this change the testing the about money overseas and getting them back and whatnot? >> donald trump, when he is campaigning, a tax on all of this money and how to build infrastructure and all of that. election, but that is
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our hope. thank you so much. you can check out her story on bloomberg.com. oliver: let's stay with apple. pressing hollywood studios for big change for movie rentals on itunes. joining us now, what is the new they will start putting out movies a little earlier? >> one of the big red lines in hollywood is your movie in the about what they have currently, that people go and pay a lot of popcorn and drinks, and that is where they get their money. on and nowhas moved
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they want to watch movies. and warnerch at fox bros. studios, is now they are having talks about bringing a new window, a new surface, to viewers. .ou can rent a movie at home one of the big proponents is apple. they are behind the scenes and have been for a wild. studios giving early, helping the iphone business. the big question is how do you prevent piracy in this context? >> that is the big thing. not only do theaters on the back of the story today, we saw the ,tocks fall on this progression
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grabbed the camcorder or iphone and licet online. nothing -- not only to but also that they -- do it >> what exactly is going to be the push back? to sooner something goes rental, the less incentive i have to pay to watch it on the big screen. >> to step back and give context, this is something struggling for several years now, going back to 2011, university, another studio was tried to put one of its newer releases online available through comcast and the theater said we will just not show your
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movie, is devastation for a studio. that is how they make big money. ande then, the talks pressure to find a solution has been gone. the huge margin business is concessions. that is how they make money. oliver: great stuff. stickingstill ahead, with technology because tech stocks have been bouncing around . is it ready for a breakout? that is the question. this is bloomberg. ♪
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scarlet: time now for options insight with julie hyman. is dan,oining me manager at kkm financial,
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joining me in chicago. is going on? maybe you could help explain it to us. dow,ighs for the s&p, the the curious searches in volume throughout the day. from your perspective, what is going on? think initially this morning after the consolidation, we started the week slowly. the secondary markets, were the catalyst when you look at utilities, even consumer staples, an area that had not participated over the last couple of weeks, showed some strength. you saw the leadership kick in and now you're seeing all the major averages look at all-time highs. particular, the tech etf and tech has been one
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of the groups lagging since the election. it has been coming back a little bit in recent days. newnasdaq has not made a record along with the dow and the s&p. do you think it will catch up? >> i do. as we rolled through this rotation, we see some sectors viewed as a positive reaction, some of those valuations are stretched here. i believe there will be an abstract here and we will see another sector starting to kick in. i like the tech sector moving in to the first quarter next year. this, we seee of the tech sector kick in and push higher. i know it is for march but you get a little room to come to fruition here.
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>> timing is everything on these trades as you know and the market has moved away in the morning, i still like this sector. a few hours ago, you put that on, now it is up about $.60. it allows youis to find a direction. you participate through the upside. you can look at other risk reversals in the area and participate to the upside. you put the stock at a much better level. scarlet: thank you. we will watch tech and the other groups. back to you guys. the dow is at a record high and the s&p 500 has joined in on the activities. it is not clear what the
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catalyst is. oliver: nothing really popped out, a surge in volume, and then 500, 500 companies are up, the nasdaq, a lot of companies up as well. a surge in the small stocks and the tech stocks. also, dividend payers, it is interesting. something to watch for. this might be the next catalyst. 7:45 eastern time. this is bloomberg. ♪
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em president-electma: -- >> president-elect donald trump nominating -- the chinese prime minister
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spoke, an old friend of china's. when china pauses leader made his first trip to iowa in 1985 during an exchange. philippines president roderigo sharing more details of his conversation. facess trump controversial campaign and he assured trump the philippines will maintain their ties with the u.s. the president-elect passes approval ratings have improved grammatically since august. 22 a national poll, half of u.s. -- heading in the wrong direction. in august, the number is 68. sick and

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