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tv   Bloomberg Markets Americas  Bloomberg  December 27, 2016 12:00pm-3:31pm EST

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>> from bloomberg world headquarters in new york, this coming story is from washington and for perrigo and berlin and road -- rome. stocks are trading at an all-time high as the stocks continue its march for 20,000. treasuries in the u.s. are falling. all this action looking ahead to 2017. onocrats are already working a plan to thwart the president-elect's tax plan which they say goes against the campaign promise to fight for working americans. we will look at this year's holiday winners and losers and why the shopping seasons are far from over. we are hobbling into the trading day. abigail doolittle is here to talk about the markets. abigail: we are looking at gains for stocks but the s&p 500 has been on pace for a record closing high.
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the nasdaq has managed to hang onto its strength on pace for a record closing high. .he dow is the big lagger not far, but further than it was earlier. certainly not making a huge step up at milestone today. all this comes with trading. we have used a great function. the s&p 500 is called the average volume at time. this is the average trading volume over the last 20 days. blue line's show where we are today and the orange lines show what is projected. otherwise, we see that blue below the average trading value. again, a bit of a sleepy day. one market that is on fire is oil. oil is up 15% on the month of
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december. fort my percent -- 9% april. opec suppliers have agreed to cut supply. that is this sunday at 1.8 million barrels per day. look at this two-year yield. we have the yield popping up the most in two weeks. this is represented in red. allbonds are selling off ahead of a $26 billion treasury auction. today at 1:00 p.m., conditions are thin. vonnie: we will keep an eye on those treasury option results. let's check in on the first word news. courtney donohoe has more. >> in a few hours the leader of japan will visit the place where a japanese sneak attack brought the u.s. into a war. prime minister shinzo abe will go to the uss arizona memorial at pearl harbor with president obama. he began by placing a wreath at
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a military cemetery. is noccain says there doubt that russia try to influence the presidential election by hacking. he spoke today on a trip to estonia. >> there is no doubt that the russians were hacking. there is doubt whether it had any affect on the outcome of the election. there is no evidence right now that that, indeed, the russian cyber attacks had leaking of had any tangible effect on the outcome of the american election. mccain, who served as chairman of the senate committee on armed services is traveling with u.s. senator lindsey graham. israel plans to build more apartments in areas that the united nations security council recently declared as occupied palestinian territory. the planning committee in jerusalem will review a request
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to build hundreds of apartments in the eastern part of the city. a long-standing resolution demands that israel stop building in territory captured in the war. india's jet airways says 12 passengers were injured during an emergency evacuation after one of its planes they are off the runway. eered off the runway. none of the injuries were serious. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. oliver: with just a few days left in 2016, market indexes are hovering around record highs. tournament out is doug ramsey, chief investment officer in minneapolis, minnesota. you were once the bear in the north. now you are somewhat of able it still in the north. what changed your mind?
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>> the evidence changed. a year ago we were very bearish coming into early 2016. it had to do with overvaluation, a tradition we still have. but the tape -- market conditions are very different than what they were a year ago. not asurned bullish quickly as i would have liked to , but march, april, may we boosted agriculture exposure and we are about 65% equities in our tactical funds and that is on a continuum of 30 to 70%. extraordinarily -- extraordinary, coming up on the eighth birthday of the bull market. go ahead. withe: is it a market conviction, doug? do you feel comfortable with
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your outlook or is there an ease there? >> valuations have been a problem for more than a year. we can go back to last two or three years on certain measures and they look pretty alarming, not back to march of 2000 but we are getting there. this cheapay valuation and weak economic anditions at the bottom of recession or just coming out, those are the things that give us conviction for the longer-term. this is more of a speculative market. if we had a five to 10 year horizon, i don't think with terms of the s&p we are all that attractive. that doesn't mean we can't squeeze another inning or two. that is our outlook for 2017. the conviction is certainly not as high as we would like. oliver: one of the elements of your thesis and a few others as
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that there the idea is strength of the beginning of the year and some backend weakness. what is that that is making it part of the call? because youse it is had what i call a broad new momentum high in the market just a couple of weeks ago. groups,er of disparate subgroups and indices and small caps and transports and financials, all of these groups making a high at the same time is just very unlikely that you will see a major market top formed. that is uniformity across the start\ -- stock market. that has an intermediate term forecast. by intermediate term i say 4-6 months. that is why we are in the camp on this first half. we will have to see.
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every time we make one of these broad new highs which is confirmed by most leading groups , you reset the clock on the life expectancy of the bull market. horizont now, my time is for-six months and it has more to do with the market action argument than an expectation for the economy and it is certainly not valuation. oliver: i got a question about market breadth. basically, what i am showing our viewers here is looking at the market breadth in terms of relative strength index. the s&p 500, what you are looking at is a prolonged. where there period are overbought conditions. models, how to your do you balance that against valuation?
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with respect to overbought , there is such a thing as a good overbought condition. the word, itself, suggests that things are overdone. see a condition of overbought markets or individual stocks as you suggested, it lasts for a prolonged. oftime -- prolonged period time, that doesn't bother me so much. overbought markets can remain overbought for a very long. period. a figure that i would take some hurricane is the fact that the average stock in the market is not as expensive as it was three years ago. median pe on that universe is not as high as what it was in
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january of 14. that was coming to the tapering cycle. broad valuations are not a problem. the s&p 500 is looking pretty rich. vonnie: how much are these stocks trading on their own and how much are they trading in relation to other asset classes? >> i like to think the stock market has become -- has begun to disentangle itself from the bond market. here, we have lifted the long-term yield 120-130 basis points in the last five months. and stocks are somewhat higher. i think it is a sign of confidence. quite frankly, the resumption of a more normal rate structure -- maybe we get a 10 year bond yield with a free handle above 1% -- that could sort of infuse confidence into the market. we are getting back to a state of interest rate policy
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normalcy. oliver: there are definitely a lot of ideas and a lot of thought out there. thanks a lot for joining. capital bank chief investment officer for minnesota. vonnie: coming up, what will it take to save the italian lender? this is bloomberg. ♪
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vonnie: this is bloomberg markets. i am vonnie quinn. oliver: and i am oliver renick. let's look at the business stories in the news right now. amazon is calling it the best holiday ever. the world's largest online
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retailer is set to ship more than a million items -- more than a billion items. it echoes record sales for echoes speakers based on its own voice recognition software. shares are higher today after the maker of wearable health post on the app store. they are struggling to maintain top spots facing slower demand and heavier competition. it cut its forecast for the holiday season. us home prices in 20 american inies were up more than 5% october from a year ago according to the s&p index. home prices rose double digits in seattle and portland, oregon. that is your bloomberg business flash update. vonnie: the european central -- 8.8 billion euros.
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that is twice what the italian lender has tried to raise. what is ahead for the italian lender? author.k bloomberg's we're looking at a whole new potential zombie banks. >> the problem is they don't dive like in the movies and the zombie movies. whatever you do, they come back to life. italy is the worst place for zombie banks. trying topaschi is raise capital and it petered out last week. but it has been trying since july. they couldn't succeed. their ecb first rejected deadline request and said now you need more money.
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vonnie: if they can't raise capital from investors why should italian investors trust them? >> that is what we have been doing since the crisis. having new keep rules that says we are never going to bail out banks again, we end up bailing them out again. europe has multiple sets of rules, that taxpayers shouldn't pay for banks when they are in trouble. creditors along with shareholders been a cost. -- bear the cost. but there are always some exceptions claimed. we come back to the taxpayer paying them. oliver: let's talk about the dollar amounts and what is going to happen with monte dei paschi. now, they are going to get some money for the government. but is that going to be enough?
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>> it is never enough when you are a zombie. euros that 5 billion they try to raise, they came from the ecb. --t was the test results stress test results by the end of july. but before they could even figure out they could raise their own in six months, the ecb said now you need more money. this is what happens with banks that are in trouble. they are slowly bleeding. they are losing money and losing customers and losing depositors and companies that put their money in them or borrowed from them. , by aa slow death thousand cuts, but meanwhile the money keeps increasing. in six months they might come back for more. vonnie: the ecb is saying to deutsche bank that you don't have to hold as much.
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>> that is a very good one. lots of banks are going to get lower capital demands from the ecb. there are certain requirements that you have to meet and some that regulators say "we would love you to do this but you don't have to do this. " it is giving rise to the notion of zombie banks once again. this is what happened in the 90's in japan. regulators kept allowing banks to go ahead with very weak capital levels. didn't force the capital requirement on japanese banks and japanese banks kept bleeding money and not being capitalized and it took 10 years and that is a lost decade in japan's economic history. then, finally, they cleaned up.
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but 10 years and the costs go up so the same with european banks. more say "we will let you get away with this week capital but we will let you survive a little longer when you finally in the cleaning." it ends up being a bigger cost. vonnie: thank you for that. shares are still suspended. there has been a suspension. oliver: also, they might not be falling yet but we will be back with more. this is bloomberg. ♪
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vonnie: this is bloomberg markets. i am vonnie quinn. oliver: and i am oliver renick.
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president-elect donald trump has promised to overhaul the tax code that democrats have new ideas. they will try to sort those plans because they put -- they betray trumps promise to fight for working americans. from washington dc, marty, welcome. how can you go about blocking a plan if you don't know what it is? >> there is a general consensus. there are similarities between his plan and paul ryan's plans such as consolidating tax brackets down to three with the top tax bracket going down to 33%. it is generally acknowledged that is probably where they are going to go and emma kratz are going to attack that -- democrats are going to attack that. >> they weren't listened to during the campaign so why should they be now and who is the spokesperson? >> it will be interesting to see who takes up the mantle.
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i think paul ryan, the obvious leader in the house is going to be the one who is going to push for this tax reform which he has been doing for years. so i assume donald trump and paul ryan will get in on the same page but a lot of that remains to be seen. >> when you look at the leadership on the democrats side , is there going to be a very specific alternative proposed or will it depend on who is picking up the mantle on their end? that is interesting democrats have said they will come up with their alternative plans although there are no specifics about that and the republicans can basically make a to have awe continue very specific plan to cut taxes for everyone. that has a very compelling message for the rest of the population. vonnie: is there going to be
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gridlock or is there some room for some kind of bipartisan deal? is anyone on the republican side wanting that? >> it is very interesting as we contemplate the beginning of the trump presidency just how this is going to play out. on the face of it paul ryan and donald trump are on the same page but the devil is in the details. we are going to have to wait and see after january 20 whether or not they really are going to have a common message on tax reform and whether or not the republicans can put up a united front. if they do we are likely to get a conference of tax bill. vonnie: my point is even more than that. even if a look and's come together, is there any hope that there might be a bipartisan approach as they look for democratic support in this? >> some democratic leaders like chuck schumer, the minority leader in the senate, have expressed willingness to work with donald trump some of these bringingke
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repatriating profits held overseas and using some of those proceeds to fund infrastructure. mcconnell, the pronouncement that he will do everything to fight obama, that message is not coming through from the democrats yet. oliver: i'm glad you said the devil is in the details. paul ryan is a very detailed guide. andp has made big claims paul ryan carried around his book everywhere. what are your reporters in d.c. assessing so far? as far as middle ground? >> the consensus, the narrative out of the trump camp is that yes. who doesn'ta guy get bogged down in the details and he may very well leave this to a surrogate. and designate the minutia paul ryan and he have a history together and it is quite
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possible donald trump to just let the others do the dirty work. vonnie: trump has been tweeting out, complaining that he is going to leave his foundation -- or generally saying it is not a good thing that the foundation has to get passed along to someone else's hands or whatever . is this going to be a problem? the whole issue of conflicts is going to be a problem for him and for his cabinet members. so it is going to be a narrative we're going to continue to hear. vonnie: we are getting deeper into that. thank you for joining us as bloomberg's senior executive editor of global economics and government. ♪
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oliver: i am oliver renick. vonnie: this is bloomberg. let's start our headlines. in our newsroom, we have --
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>> president-elect donald trump has nominated -- for counterterrorism. an advisor for george w. bush. his responsibilities will include cyber security matters. french authorities are considered a main suspect in the berlin deadly attack. they do not know how he made into france. anri was shot and killed in italy. the secretary-general of the united nations will it end his tenure term in new york times square. park will push a button to start the ball drop that signals the beginning of the year, december 31 is his last day in office.
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global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am courtney donohoe. this is bloomberg. vonnie: thank you for that. a quick check on you as stocks now. you can see we are just above 10% on the dow jones. 500 is 22 69. the nasdaq is up more than half a percent. let's head over to abigail doolittle with more details. abigail: we have many movers and the tech sector. biogenic, higher off the highs. quite a nice, biogenic is up 1.6%. ionis is up more than 3%. it's a drug was approved by the fda. it is upon therefore bio jim, they have marketing rights to the drug. -- it is good news for biogen,
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they have marketing rights to the drug. they raised their price target. uptick.ould have a nice as for two losers, we are more than 50% on the worst day in five years on the news that fda did halt several of the blood cancer drugs considering there were 4 patient deaths involved. endologics shares of eu stopped their shipment. it is been a wild ride for biotech. we look at #etv. biotech itself is down 90% on the year on pace for the worst year since 2002. here we have a chart in white,
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the bio chart index. we see this massive divergence which is interesting considering health care is 13%-four 2% of the nasdaq. we see it is much more on the printing --3%-for 14% of the nasdaq. -- you see is much more the downside. there's not really an end in sight. we have the nasdaq at all time highs. howill be interested to see it resolves in the new year. vonnie: absolutely, if it does. abigail, thank you. alexa generated revenue, according to amazon. the rest of the landscape is not as cheery. we are joined by shelly banjo. i had to get my amazon joke in there. >> and that is pretty good.
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oliver: adco did good. there is still room to grow. -- echo did good. shelly: a divergence between how people are feeling and how they are spending. spending, personal spending, it is not growing as fast. vonnie: what hard data do we have about the holiday period? we have the november numbers which are good, but not great. less well people were expecting. the first half of the holidays reason. we have december and also january which is increasing in importance as more and more people go to the store and returned things and pick up things for themselves. oliver: what was the breakdown between the confidence and actual spending? confidence more forward-looking and not cash in their pocket yet? or not finding the stuff they want? what can we determine? shelly banjo: it is the idea
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that things will going to get better, but it is a not enough yet. i do not feel these things happening in reality is that will really allow me to spend extra. instead, i am saving more. we used to have the department store heads to say that everything was great and rosie. year,s happening this ceos, seeing the same things and we trusted them. are pretty cheery and they think people are coming out to spend. a lot of retailers and that will have the ok christmas. things are coming along. nothing amazing or horrible. thate: we used to hear people spend on themselves. do department stores and adjust to that an offer that stuff a higher prices? shelly banjo: the good retailers, the good department stores, started including all things.
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you think the beauty, a big standout. of people posted on instagram and snapchat and want to look pretty. , it has been one of their biggest revenue drivers has been abusive for them. the same for appliances. things for your home. -- revenue drivers has been big for them. you want to upgrade your home. apparel, people buying fewer holiday sweaters and things like that. you see the shift in the retailers that have really put the stuff out the consumers want will see an uptick. the retailers that puts the same holiday sweaters like the gap and j.crew, have not really kept up. oliver: you mentioned the gap and j.crew. give us other names, some kind of inside if they will be doing this next year, what are some the companies jumping out? shelly banjo: specialty apparel
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like gap and j.crew, arable ale, those arepost not going to do as well. if they have a huge percentage of sales and the fourth quarter and based on apparel, not super excited about. companies like home depot, thatn, tj maxx, companies have catered to people depending on their homes will do well. amazon continues to be the standout as more and more shoppers head online. vonnie: luxury was suffering greatly. even moving forward, the cycle when it comes to clothing, and also jewelry is having a difficult time. what has been the outlook? shelly banjo: high-end luxury, it is interesting to see how people are spending in the u.s. and china. you see some of that coming back in china. though more interesting story is
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michael kors, ralph lauren, the second tier, affordable luxury area, which has been doing pretty well. oliver: you mentioned the correlation to our first point between the consumer confidence and what actually happens in real time. new year, ware are you going to be looking to to know if people are feeling that? shelly banjo: i want to see if it actually plays out. how this holiday season played out. people are excited about the 12 year highs. they will playn out. oliver: it seems like the same principle behind the market and economist' projections. what a bank if you look into the figures, the expectations. -- vonnie: if you look at the figures, the expectations for apple, the barometer. what was the story of apple sales? shelly banjo: people are still
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coming out and spending on things like phones. apple watch. technology. those things are going strong. there was a bit of a muted response to the macbook computers. incrediblystill important and they will continue to be so. oliver: i was just listening to our editor lament he had to go out and buy in ipad for his kid for his kid. still high price points. shelly banjo: more storage. oliver: shelly banjo. on the terminal. vonnie: only one place in the u.s. you can legally buy and sell ivory. check going to alaska to it out. this is bloomberg. ♪
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vonnie: you're watching bloomberg. i am vonnie quinn. getting a break from regulators. the imf is lowering the capital requirement for 2017. tesla is getting a boost from panasonic. the companies will work on a new project. , in today's quick take, we look at the challenges faced by puerto rico as a debt hold of $70 billion. have twobank will carry a lower capital. the lenders a minimum tier one ratio will be set at 9.1% down from current requirement of 10.6 percent.
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this outcome could help with concerns although capital strength. tesla and panasonic will start modulesolar cells and in buffalo, new york. panasonic will invest more than a quarter billion dollars. the company already has a lithium factory in nevada. is going to deploy services that will allow shortselling till boost trade to attract foreign investment. adx is the local exchange is conducting meetings and the united arab emirates. imf managing director is calling on the u.s. to clean up banks. he spoke to bloomberg television about why the major economy is not living up to their potential. reason for sluggish growth in the advanced communities and my view is week of business investment. of the across all
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advanced economies including in the united states. to say thatent on banks cannot lend aggressively when their balance sheets are clogged and they are laboring under heavy fines. clicks time for quick -- clicks time for court -- >> time for quick takes. puerto rico has a population in oklahoma and kansas and more any, $70 billion, more than state except for california and new york. here is the situation. to federal oversight board manage puerto rico's finances is reaching closer to restructuring debt. debtors whiler to saying substantial debt reduction is native. when the president-elect takes office, he will have considerably less power than any of his predecessors. his plasmas be approved by the
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u.s. appointees who can rewrite them if they fail to end of the chronic budget debt. it is the largest intervention. here is some background. wall street moved the island past debt debacle. $126 billion in bond the sales. when it adopted a sales tax in sent one towork and create a new bonds backed by a portion of the proceeds. this helped to the government which supports a quarter of the government. the financial board made up of four republicans and three is supposed to help puerto rico make the politically unpalatable decision needed to repair its public finances. the restructuring will have to balance the obligations to bondholders against those of workers and retirees. it will have to make hard
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decisions. the idea of additional service cuts is not popular. when the board heard its first meeting in november, it was met by protesters. you can read more on the bloomberg. that is your business report. head to bloomberg.com for more stories. ♪
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oliver: this is "bloomberg markets." alaska is one of the few places in the united days with an active in legal -- united states with an active and legal ivory market. carvings are made. a look at the unique market for bloomberg pursuits. >> this does not like the postcards of alaska. signature mountains are hundreds of miles away. every worry you -- everywhere you look, tundra stretches. this flat bramble's paradise.
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it is a legendary fishing reservation. these are the rivers where so fiercely that grizzlies snatching them from the air. small industry of logical pilots has grown to support the seasonal tourism. one of these is filled with the declaration cement to -- meant to the adornment patient. the one that gets of the most attention hangs in the corner. >> to walk into the lodge and see a walrus head is a very striking think. longese are three foot walrus tusks. and right in the hallway is a were jewelry can be
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bought made of ivory. >> ivory has such a unique look to it. shining, in him will surface of a two that keeps a certain level -- enamel surface that keeps a look of translucence. >> as dan flies his gas, he keeps one i -- his guests, he keeps one eye on trying to spot a dead walrus. iver is having controlled in the united states. to buy andy illegal sell. in alaska, however, there is an exception. >> a lot of people when it they hear the word "ivory" they think of elements and poaching and endangered african animals. yet here in alaska, it is when the last legal ivories. it is something a lot of people
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are aware of. the walrus population is stable at 35,000. that is the historic average. they have been illegal to hunt since 1971. if i were to see a dead walrus, i could take his tusks and take them on my own but i cannot trade them or sell them. it is mine for the rest of my life. ♪ >> there are about 200-300 animals. they are all males. they are well rested. as the groups get larger and tighter, everybody has to shift
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eventually. you see a lot of uneasiness. they want to cross. this loose that the dominant one. look at that. [laughter] >> telling him to move. [laughter] >> ivory is still bought and sold illegally in alaska but only to people native in the area. ♪ >> all of your knives and guns -- put all of your walruses. wow. >> he is a friend of mine.
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an ivory carver that lives in alaska. >> alaska natives can legally buy and sell ivory. they can sell it to a non-native person as long as the tusk is manipulated in some form to create a piece of art. ♪ -like quality.earl shades i ames and shaping this jory. -- jewelry. ♪ >> strange to hear the ivory trade is still legal inside of the united states. that if anyse
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corner of the country were to keep old traditions alive, it would be here in alaska, and miles of ancient tundra. drew reporting. check out bloomberg pursuits for the finer things in life. just head to pursuits go on bloomberg. look at the markets and where they are trading on this very quiet day in the u.s. your markets -- europe markets were closed for boxing day. our global, mapper movers. some european markets are open including the german dax which is up. the russian is up. marcus in russia are really cheering at the moment. as they are having a rally. the ruble is strengthening.
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the yen not so much. it is trading above 117. above seven as well. that asian currencies are trading at the hands of a stronger u.s. currency. down foryields moving basis points in germany. up about two basis point here in the u.s. thanks to the stronger than forecasted economic data. a look at the dollar index above 103. still ahead -- we would be talking more markets and exclusive interview with bank of america's brian moynihan. this is bloomberg. ♪
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it is 1:00 in new york, 6:00 in london and 2:00 in hong kong. good afternoon, i'm oliver renick. vonnie: i'm vonnie quinn. welcome to "bloomberg markets."
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from bloomberg world headquarters in new york, we are covering stories from los angeles to moscow and tokyo. starting his holiday shortened week in the green. starting his holiday shortened week in the green. all three major averages on track to close at new highs. parker asnley's adam the most accurate forecasts of the s&p 500 this year. we will hear his outlook for the year ahead. and our exclusive interview with brian moynihan. he tells us where the bank is done on winding some of the damage from its controversial deals, such parker as the purchf countrywide and merrill lynch. disney was the big winner at the holiday box office with the latest star wars installment. a look at how ticket sales are adding up for the year. we are halfway into the trading day. abigail doolittle has the latest.
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abigail: we have the dow, s&p, and nasdaq trading higher but we have stopped trading off of their highs. was on pace to set a new record high but now is off of that pace. the dow jones now hitting a new intraday high. -- the nasdaq now hitting a new intraday high. the dow jones close to the 20,000 psychological milestone but we are well off of our highs. the downtrend continues but there are some suggestions that we could break higher. pot hardly a watched boils. that seems to be the case. 20,000,ow data achieve it would've have been the fastest on record, but now the best we can do is perhaps a tie tying theays,
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record from 1999. it is after today, if it happens, it will no longer be the fastest on record. as for the fang stocks, we have a nice intraday chart. amazon is higher, the company saying it was their best holiday ever. facebook is higher but on the have been down about 9% on the quarter, on pace for its worst courtly performance since september 2012. that was not long after the ipo, when facebook dipped below $20. this is the worst quarterly performance since then. facebook is, on pace for its worst courtly performance since september down around 8% t now. not often do you see red
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on the facebook figure. thank you. let's check in on the first word news. taylor riggs has more from the newsroom. and argentine judge has indicted cristina fernandez in a corruption case. the judge also prove charges for a business man whose company allegedly benefited from a regular contract. the cabinet ministers were also named. today, shinzo abe becomes the first japanese leader to visit the memorial to american sailors and marines killed in pearl harbor. he began his visit in hawaii by laying a wreath at a military ceremony -- cemetery. he will be joined today by president obama. john mccain says there is no doubt russia tried to influence the election by hacking. insists itonsists -- had an impact on the results.
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president obama said if he had been allowed to run again, he could have beaten donald trump. with formert spoke adviser david axelrod in a podcast. >> i am confident in this vision that ife i am confident i had run again, and articulated it, i think i could've mobilized a majority of the american people to rally behind it. withnversations i have had people around the country, even some people who disagreed with say the vision, the direction that you point towards is the right one. taylor: trump responded on twitter, writing no way. carrie fisher, who played princess leia, has died. that is according to her publicist. she suffered a medical emergency on a flight and was admitted on
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friday to a los angeles hospital. she was 60 years old. dayal news 24 hours a powered by more than 2600 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg. oliver: let's get more on the year on the markets. the s&p 500 expected to hit 2500 over the next few months. for us, the election cycle and the fed have changed our views quite a bit. havehe past four years we enable us look on u.s. equities but with low earnings growth and higher multiples to we change that call. we think there will be a lot more earnings growth. we think the tension will be that that will be partially or ultimately all offset during price declines because you have a more active fed, more
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uncertainty and volatility as well. >> so the fed will be a factor on share prices. a lot of people have noted that the fed was taking a backseat, monetary policy was no longer the driver and we would than to the fiscal side for catalyst. >> it is multivariable, but i would say this. there was definitely a notion where you have bad economic news which was good for the markets because the fed was there. i think we have transitioned now ounds insane to say it now -- but good is good and bad is bad. if the fed continues to act and we hiked twice in 2017, 3 times in 2018, if that unfolds, you will be talking about more -- lower multiples and even good news is bad and bad news is bad, and everything is bad mentality sometime in 2017. >> we talked about this cycle
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being a reflation story. as we look at past reflationary cycles, how will this differ from the past, what is different this time? >> there are a ton of things that are different. normally, when you have growth picking up more than inflation, it is bullish for markets and multiples. the problem is the starting point for p/e ratios is way higher before you had low real yields. one, evaluation is stressed versus history. two, profit margins are stretched. three, and most importantly, the fed, in part, created a trillion dollars to buy its own securities across the curve. there has been a lot of unconventional policies that need to be unwound. multifaceted and multi
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variable. you had record low rates nominally. an unusual cycle, to say the least. my sense multifaceted and multi variable. is if people want to be 10-year yields of backing off, you should be normal with p/e ratios. >> one thing that you do that i researcht is the quant where you determine what percentage of the moon will be based on date use a traffic stock specific verse on the macro. as we look at the market, what are those models telling you in terms of why stocks are moving? >> we try to break down returns and say how much came from macro factors, like you said, and how much left over is for stock specifics. like stockent would specifics to explain a higher percentage of return. a lot of them are organized as bottom-up stock pickers. it is really hard, if not impossible, to consistently forecast dollar rates, oil, etc. believe is that people
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it will get more idiosyncratic. are you seeing that happening as market start to break apart a little bit? >> or context, it depends on how are youmuch history you want tk at, but if you look at the 1980's, 1990's, i can only explain about 20% of the macro stock moves. from that level now, down around 50%. we are just off of the lows from a month ago. very recently it is up a little bit, but against the broader context, it is not a stock pickers market yet. or waiting inved financials 15% so it's not equal weight against the benchmark. do you think jpmorgan, goldman citigroup, benefit disproportionately from the decline in regulation story, the higher yield story that has been
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percolating, do they benefit this proportionally versus mid and small cap financials? >> we have had two that's in the financial sector. bet against the credit card companies. we just don't own any assets. no insurers. it has been more lopsided to the rate sensitive securities. you are right, you have a number of things that work for the large-cap banks, you have the specter and reality of less regulation, huge growth in shareholder return. you have potentially the benefit from lower taxes on an incremental basis versus other companies. then you have the move in the interest rate environment. it feels like there are a lot of positives there. it doesn't mean that activity is amazing or that the big banks will show great quarters from that regard, but ultimately, what is being discounted is uniquely higher roe's than other
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companies are achieving right now. oliver: 80% of move driven by idiosyncratic nature seems like such a far cry from her we are right now. >> you have more hedge funds now that you have stocks. it is a different world. also back then, right now it is basically illegal to know anything that is not known by others. the the all pre regulatory environment. oliver: so that level is unreachable at this point. >> i believe so. oliver: another at the medic thing that has emerged is people buying up the value companies, companies that identify more with value than growth. -- you is the case here see in other equity markets around the world -- but in terms of money shifting into the more emerging marketplaces where you would think you see the value, that has not happened yet, and
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those markets are lacking. is there a shift waiting to happen? on thehouse call institutional side is overweight japan equities. our biggest overweight was u.s. to neutral. we are also neutral in europe. if you believe rates are backing up and dollar is strengthening, those him. progress for em as a whole. there will still be some countries that we like as others, but we think the stronger dollar pat and rising rates are generally going to result in the inability for relative multiple expansions in em as a whole. we are bullish on japan and then after that, your u.s. and europe. oliver: that was adam parker at morgan stanley. moynihan's toan do list. more of our exclusive conversation with the chairman of bank of america.
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this is bloomberg. ♪
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oliver: this is "bloomberg markets." i'm oliver renick. vonnie: i'm vonnie quinn. when brian moynihan took the helm of bank of america, yet a lot to clean up. so how much has he done and how much is left to do? he spoke about his progress and prospects with david westin. when i interviewed for the job to be ceo in 2009, i had a list, i had a list of all the things that did not fit with the core franchise, the core consumer franchise, wealth management franchise, commercial banking franchise and commercial
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banking franchise. we needed to deal with that overtime. the showed the board and idea was if we took the risk out of those businesses, took the complexity out of those businesses you could tighten the company down. we went from 2.7 trillion in assets to about 2.2. we sold 60 operating divisions. we went from credit card operations in five or six countries -- and if we complete it will be down- to one country. our basic business model was all of our businesses operate in we areates and ou also around the world serving large companies. that list is done now. we are largely done with it. it has taken a long time to finish.
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david: but nothing left. brian: we cannot buy deposits in the u.s., it has nothing to do with dodd-frank. if you have more than 10% of deposits, you cannot buy. it makes my life easier. to grow our banking business, it has to be organic. that is why we are opening up in places like denver, minneapolis, why we will be opening up in other markets. this is why we built new branches in new york, where our structure is not as strong. it is all organic. more financial advisors, more private bankers, more commercial bankers, more people in the branches serving customers, and more branches. we're also adding a ton of money in technology. we cannot buy anything, so think about a company that has been around 200-plus years, and all -- acquisitions that arrived
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now i have to think of how we can make the company better organically. it is an interesting place to be. it's a very easy question to answer. vonnie: bank of america has rallied more than 30% this year. he says there is still room for improvement. here is what he had to say about the stock performance. brian: our stock price is always too low. [laughter] our job is, we have a lot of firepower to put in the stock. approval in the last process to buy back a lot of that stock. we continue to do that and we think it's a great deal. vonnie: that was brian moynihan speaking with david westin. still ahead, it was a happy holiday forfeit it.
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shares of the company are surging after its mobile app placed first in the apple store. this is bloomberg. ♪
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oliver: this is "bloomberg markets." i'm oliver renick. vonnie: i'm vonnie quinn. fitbit shares are surging after thehealth tracker topped charts in the mobile app store over the weekend. the company has been slowing due fromsing demand competitors and cheaper knockoffs. cory johnson is with us from san francisco. i think the narrative about what will happen with fitbit has overpower the actual results. to be sure, year over year slowing, as you would expect with any companies are fresh out of the gate.
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but the company is having remarkable success when it comes to markets. when you talk about competitors and cheap knockoffs, you see that this company has more than twice the sales of its nearest competitor. it's been dominant in this fitness category, this exercise category, because they been so focused on it. there is an estimate that growth will only be 4%, but the upside of downloads suggested could be better than that. perhapsions are so low, there is room for the company to outperform. that is why the app metric is so closely watched. oliver: 4% growth does that seem like a whole lot. what are people getting excited about, the competitive position they have relative to their peers? the: let's temper excitement here. when you look at the performance of the stock, since the ipo, it has taken a face plant. that has been a difficult thing for the employees, they hoped
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they would make money on an exciting company to work for. but also because the company has done well with market share, and they have outperformed their rivals. that 4% predicted growth is belied by the fact that they have grown so much faster than their actual reported results. it's also interesting that their focus on fitness, activity has shown that the use case, the killer app for these fitness devices, has been fitness. watchou look at the apple , it didn't knock the socks off. the second iteration was focused on fitness and the things that fitbit figured out all along with be popular. we will see what the results look like after the quarter, but those app downloads are promising. vonnie: what does this mean when it comes to margins? cory: that was one of the narratives when the business
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launched. one of the interesting things about this business is not only have they dominated in the category, their margins have held up. last quarter, the and holding strong. even as they have gained market share and are twice as big as their nearest competitor, you can also see margins remain strong, which is not what you would have predicted for a company that sells consumer electronics. the consumer electronics show in las vegas in a week, for the last few years, has been dominant by these companies coming with activity trackers, yet, fitbit continues to grow, while others are struggling. vonnie: what is in the pipeline for fitbit, is that is what is making investors nervous? it has been interesting watching the way they have added features and kept the cost the same. it is not different from what apple does with its phones. the price stays the same, the
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older versions get markdown, and then the company gained market share. but when you have seen from this company is not that the devices are so different. one thing that is interesting is all the partnerships that they ore struck, giving discounts the devices out to their employees, trying to lower their insurance costs. dozens of companies have signed deals with their hr program to get their employees more healthy, lower their insurance costs. you see this change in people because they lose weight, they get in better shape, and fitbit has been very clever about its health initiatives. there is a team devoted to not only making the products better, but to build these partnerships with fortune 500 companies, insurance companies, to get the device in the hands of users. you see it in the market share and also now in the app downloads. thank you for that, cory
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johnson. we have a long way to go. you can hear more from him in about 30 minutes when he is joined by carol massar for bloomberg markets on bloomberg radio. coming up, the midas touch that goldman sachs seems to have, no matter who wins the election. the dow jones is about 10% higher. the s&p is up .3%. the 10-year 2.56%. this is bloomberg. ♪ wow, x1 has netflix?
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hey, drop a beat. ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how about bojack, luke cage ♪ oh, dj tanner maybe show me lilyhammer ♪ ♪ stranger things, marseille, the fall ♪ ♪ in the same place as my basketball? ♪ ♪ narcos, fearless, cooked ♪ the crown, marco polo, lost and found ♪ ♪ grace and frankie, hemlock grove, season one of...! ♪
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show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. oliver: live from bloomberg world headquarters in new york, i'm oliver renick. vonnie: i'm vonnie quinn.
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taylor riggs has more from the newsroom. an investigation blames whichn series of errors killed & soccer team. officials say the plane should have not been allowed to take off without enough fuel. senator john mccain is pledging support to the security of russia's three baltic neighbors. he says washington could consider basing troops permanently in the area. he says that while washington remains committed to strong nato u.s. ands, bilateral estonian military corporations could be made more effective by upgrading u.s. troop status. resident electrons is questioning the effectiveness of the united nations. in a tweet, he wrote the u.n. has great potential but has become a club for people to have a good time. his remarks came days after they voted down is really settlements in the west bank.
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hass. navy program that become a target for critics is prepared to commission a new ship named after a well-known shooting survivor. is u.s. is gabriel giffords scheduled to be commissioned in 2017. the ship will be the ninth in the series of high-speed vessels designed to navigate in shallow coastal regions. john mccain has cited the combat ship as the first example of wasteful pentagon spending. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg. coming goldman sachs is out on top in incoming trumpet ministration despite the fact that trump targeted the bank and said that the executives supported hillary clinton. carol massar and i spoke to dakin campbell. been quite remarkable
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actually, their stock is up 35% since donald trump won the u.s. presidential elections. some of that -- a lot of that 's policies,th trump a lot of people thinking he will roll back regulations on wall street. he talked about repealing dodd-frank. that is at least 1000 pages. it is unlikely all of that will get rolled back but some of the that particularly hurt goldman, such as the volcker rule, will certainly be first in line. carol: this has a do with hedge funds, investing banks, using personal money to invest in things like hedge funds and private equity. >> it is two things, a ban on aop trading, and another is limitation on stakes in hedge funds and private equity funds. both businesses were very big for goldman before the financial crisis.
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in hedge funds and private equity remains big. they still have roughly 700 billion left that they have been working to sell down but have not sold yet. trading, they have been subject to the dan, to -- ban, too. it is not clear how tightly that dan has been enforced in the last couple of years. theer: this has been one of most fascinating stories, after the election, all of these financial companies are leading the markets, but as carol out, into the election, they were not portrayed in the best light, not only by the public, but by trump specifically. they endorsed hillary clinton, they said she would be a good president, specifically at goldman. there is a relationship between renton speaking at some of these places which trump supporters
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put out in the limelight. ad whered trump did an he specifically targeted lloyd blankfein and said how terrible they are. oliver: so how does this work? did wall street want trump to win all along? had answers for you. i'm surprised, as well as a lot of our viewers and listeners are. i think some of it has to do with the fact that a lot of trump supporters are not that closely monitoring who his appointments are. i don't know, but my suspicion came off of a conversation with somebody in d.c. who has been watching this pretty closely. , ifpoint he made to me was the goldman guys at the top of administration created
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jobs, brings manufacturing back, nobody will care that they were goldman guys. they just want their economic livelihood restored and brought back. so you have a president-elect who is making appointments and serve the holiday season, may the people who voted for him who really got behind trump are not watching closely. come january and february, the rubber will hit the road and they will see, we have a couple of goldman guys, trump was railing against these guys. let's see what they can do for me. reporter, i cannot think of anyone more ingrained with your sources. when you talk to people on wall street, was their reaction to the way that their own sector had been so favorable to investors the past couple of weeks? >> it has been an amazingly facile. ,t was hours after the election the results came in, and we were
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already talking to people who were saying, this could be good for us. we could get behind this guy. the ability for them to quickly switch and sort of get behind the winner, even though i have been doing it a while, was pretty remarkable. oliver: you can read that story in the latest bloomberg businessweek. fantasticre from the reporters, every saturday and sunday on bloomberg television. look at howng up, a the food and beverage industry will fare next year. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. oliver: i'm oliver renick. let's go to julie hyman for her chart of the day. >> it is actually abigail doolittle. we are looking at the bloomberg. , in is a long-term chart orange, the s&p 500, in white, the conference board of whether or not stocks will rise. right now for the month we are looking at the biggest pop in the aspect tatian that stocks will continue to rise since all the way back to 1998. it's worth noting we had stocks climb into the peaks in 2000, and then that was preceded by a fall down. so this chart may address the question of whether stocks have gone too far too fast. the trump trade continue?
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it is worth noting that these gains you to be backed up by some of the fundamentals. we look at the consumer confidence. it is at the highest level since 2001. down a little bit from the peak but this is a massive climb off the bottom from 2009, up more than 300%. consumer confidence has really rebounded. not surprisingly, this has been great for the stock market. since the election of donald 1.6 trillion dollars has been added to the value of u.s. stocks. i guess the question is how long will it last, and will it last? oliver: thank you, abigail doolittle. vonnie: it is time for the bloomberg business flash, some of the biggest stories in the news right now. the argentina peso is stronger today.
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the finance minister was on the job for a year. he and the president have had disagreements over economic policy. toshiba could have a write-down of several billion dollars on its u.s. nuclear operations. the company says it will disclose earnings as soon as possible. the write-down has to do with their westinghouse electric unit. the toshiba president says it may reconsider the future of the nuclear business. labor unions bracing for potential challenges during the trump presidency. the services employee international union is planning for a 30% budget cut over the next year, according to an internal memo. the sei you says it anticipate the farthreats because o right will control all three branches of the government. tesla and panasonic will start making solar cells and modules
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in buffalo, new york. panasonic will invest a quarter million dollars in the project. the two companies are already working on a gigafactory in nevada to make batteries for electronic cars and energy pots for homes and utilities. the financial ministry announced a 40% jump in unleaded petrol today. hike for premium gas as well. mexico has limited price gains to 3% over last year. it plans are losing control over prices next year to help drive development of the private fuel markets. that is your bloomberg business flash update. oliver: bloomberg intelligence is out with their 2017 outlook, where analyst breakdown various sectors. discussedis month, we global consumer staples. the discussion began with donald plans forated
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deregulation, trade policy, immigration reform, and how all of that will affect global consumer staples. >> a lot of investors are showing caution toward this sector right now. it had been a good performer the last couple of months. immigration reform is a big one in the food and beverage industry. we know the agricultural sector in the u.s. has a lot of undocumented immigrants. if there is a policy to deport them, that could raise costs on , a significant inflationary challenge for food and beverage companies. look at staples, we typically think about it as some thing that does well when there is risk out there, particularly, we got a good grips of that in january and february. when the market was falling off, staples were doing decently. can they escape that label as a safety stock if money is being
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pumped into the economy? great question to operationally, i think it will be a tough year. strong dollar will be a headwind. that has a lot of large multinational companies, many in the u.s., think:, procter and gamble. operationally, you will see pressure on profits and sales going forward. that said, these companies are all doing screaming -- sweeping cost-cutting initiatives. they have really accelerated or the last couple of quarters to hedge stabilization, and maybe a fear someone of percolating cost inflation for raw materials. second, they have been getting heat from activists, shareholder activists, m&a activity, a lot of these companies feel like they have to caught -- cut costs quickly. >> one industry that has done
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incredibly well over the long-term is tobacco. this, despite all sorts of regulations, lawsuits, the industry has been in the crosshairs but has done incredibly well. now it has the new threat, the liberalization of their water laws in the u.s., among our neighbors. tobacco has a new competitor in the form of marijuana. in canada, marijuana stocks have exploded higher. how big of a threat is this, are people going to be switching to a different drug of choice? there is a significant threat over time. obviously, the u.s. food and beverage industry is large, alcohol is a large industry. although the marijuana business, where it is legal, it is a nascent industry, only about $700 billion. nevertheless, the growth rates are compelling. when you consider this industry in the u.s., legal cells could move from 7 billion to 30
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billion by the year 2021. as you mentioned, canada is looking to legalize it next year. even mexico is looking at legalizing it. au are seeing perhaps legalization of marijuana over the next few years in north america. that could be a threat to alcohol and tobacco companies. >> tobacco is an obvious competitor, the same with alcohol. a similar industry under threat. we have seen some evidence that there is a substitution effect. cigarettes and marijuana, that is reasonable to think. but even low-price alcoholic namely beer, we think there is some evidence that there is a substitution as well. >> you don't have to choose between all three, right? industry because more prominent, marijuana, aren't these tobacco companies going to say, here is an industry growing, we have a ton of money. we can put them right into our
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structural pipeline. is there going to be a lot of transactional stuff going on? >> i think so, but i think the tobacco industry will almost certainly wait until it is legalized at the federal level before they do anything on that front. i would expect, shareholders, amongst others, would expect the company to look into it. until that happens, tobacco companies will remain at bay. ander: for more reports data from bloomberg intelligence, check out the bloomberg. "rogue one"ext, holding its grasp over the box office this weekend. we are going to ask what the secret of disney's success is. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. oliver: i'm oliver renick. one: a star wars story" kept its grip over the box office this weekend. it became the first video to break $7 billion globally. we are joined by lucas shaw in los angeles. this movie doing
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pretty well. i was wondering whether they would reach the revenue needed, kind of an offshoot, but our fears quelled at this point? >> yes, more than $500 million worldwide, 11 biggest movie of the year, night biggest in the u.s.. it just won the holiday weekend, beating a pretty popular holiday animation movie. any fears about their ability to create these independent or stand-alone movies outside of is quelled fores now. of course, there will always be doubts when you have a movie that is this extensive that doesn't work in the future, but for now they are sitting pretty. oliver: it is awesome, by the way, but vonnie has not seen it. vonnie: i was given instructions to wait. give us the hard data, what did it bring in, what was anticipated that it would bring in? toit has been open for two
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view a weekends. this latest weekend, a little over 90 million. now were 500 million worldwide, which is a pretty big number for a movie that has been open for less than two weeks, at this point. last weekend, it scored the biggest december opening, other than the previous star wars, the force awakens. this weekend it beat out "sing." i did manage to see, however, "manchester by the sea" which is not in the same vein, but where there other movies that attracted audiences, or was star wars the big one of the year? >> the biggest movies of the year, as you talked about earlier, are largely from disney. topia" and a bunch of marvel movies that did great,
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dr. strange, captain america, that were big.s if you look at the top 20 movies of the year, they are pretty much all comic books, sequels based on some sort of pre-existing ip. movied a new harry potter . if you look worldwide, you have to go all the way down to a y" which is"sull about 31st to find a movie which is not animated or in chinese. oliver: one interesting fact this year is that hollywood is setting a new gross for high sales but the actual number of tickets is not. does that mean on average ticket prices are moving higher, and you are seeing theaters charge people more? >> that is exactly what it means. if you look historically, there will be i think 11.3 billion in gross worldwide. i forget the number domestically. that beats the record set last year.
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least since the 90's, are at their lowest since prices are going up, and movie theaters -- it is becoming more of a premium experience. if you go to the theater, there is an expectation that you will by not only the soda and popcorn, but maybe you will get a meal, beer. oliver: here in new york, you have a lot of places having reserved seating, $40 a ticket, and you get a waiter. it seems like there is a bit of a seachange. vonnie: what is the goal for next year? when 3d came in, that was the wast hope and then 4d supposed to be the next thing, where you had sensations in your seat. what is next? think you will see other studios and companies try to replicate the success of disney has had with lucasfilms, marvel, pixar. movies,ros. has the dc
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the lego movies, harry potter. these bulletproof brand that will bring people to the theaters regardless of who is in frankly, whether it is any good or as good as the previous one. for the theater owners, they will be continuing to upgrade their chains. bought another company, will be upgrading those theaters because they want to squeeze more out of every customer. see a big fight over when movies are made available at home. my colleague has broken a bunch of news about the possibility of shrinking windows, where you can buy a new movie at home within two weeks of its release in theaters. vonnie: does it depend on star quality anymore? it doesn't seem as important as it once was. >> it is certainly not the only factor and certainly not the most important. oliver: thank you so much, lucas
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shaw in los angeles. today, looking at the markets, concerns about china and the rise of population\/\ -- populism. taking a look at the markets now, looking at the biggest movers in the g 10 space. %.rway and sweden are up .3 of course, u.k. markets are still close for the boxing day holiday. the 10-year at 2.65%. this is bloomberg. ♪
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>> it is 2:00 p.m. in new york. .'m julie hyman "bloombergme to
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markets." we are covering stories out of san francisco come in, argentina and israel. the nasdaq hits a new intraday record as the dow tries once again to get closer to 20,000. we will look into why the trump rally has no signs of stopping. case-shiller index finds another 5% gain in october while in national home price in next posts its biggest gain since 2014. trumpsident-elect prepares to take up this, what will his impact beyond the renewable energy industry? we will hear from todd becker. in two hours.lose let's check on where stocks are trading with abigail doolittle. we have a little more movement today.
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abigail: we are looking at gains today, looking at the nasdaq, and all-time intraday high on the day come also on pace to close any record high. 500 had been on pace to close at a record high earlier but is off of that market just -- mark just slightly. technology helping the s&p 500. the dow is the laggard and off of the highest. early this morning, the dow had just below 20,000. if it happens today, it will be a tie for the best thousand point climb on record. remaining in is effect whether this can break to the upside, we will be watching to see whether or not that does happen. it is thiswhether week or next week, the dow may in fact pullback.
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this is a five-year chart of the dow. the dow is an white, yellow is the 200 day moving average. -- the dow is about 10% above its 200 day moving average. that's only happened to other times over the last five years. that's two other times over the last five years. week,s this week or next we could see a move down. if that does happen, will the dow achieved 20,000 or not? take a look at the two year yield, we do have a two year yield up about three basis points. this follows a $26 billion auction today. one that went off at the highest yields 2008. but the lowest bid to cover also since 2008. jeffries is saying all of this has to do with holiday week trading.
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ramy: abigail doolittle on the markets. thank you very much. let's check on the first word news this afternoon. taylor riggs has more from our newsroom. taylor: president-elect donald has nominated tom parker to be his response -- abilities will include advising trump on cyber security matters. one of donald trump's main advisers on u.s. foreign relations will be his special representative for international negotiations. fortwo decades, he's worked the trump organization, he currently serves as his executive vice president and chief legal officer. president obama has offered his que of hillaryriti clinton's campaign -- he spoke to david axelrod. >> hillary clinton performed
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wonderfully under really tough circumstances. ,f you think you are winning you have a tendency to play it safe for. r. play it safe has diedarrie fisher fisher had been hospitalized since friday when to separate a medical emergency on board a flight to los angeles she made her feature film debut in the 1970 hit shampoo. she was 60 years old. 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. ramy: u.s. home prices keep rising at a steady pace. , we see a 5%t data
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gain in october versus one year ago. now with more. let's walk through these numbers here. we have been teasing the word "bubble " a couple times. >> i don't think we are in a third -- in a bubblel yet. most of the cities are still below the mark. we are not in a bubble yet. pickup in mortgage rates could put a dent in housing demand going into the first half of next year. ramy: looking ahead, we have at least a three rate hike cycle by the fed. there could be some dampening there. how bad could it be for the housing market if those all come to fruition?
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hadna: second 2013, we mortgage rates rising by a full percentage point. declineulted in a 10% in existing home sales over the next several months. we have a chart that shows the taper tantrum and the effect we saw on rates at that point. >> as you can see on the chart, the most recent increase in mortgage rates is approaching where two thirds of that increase in mortgage rates. we are nearing the same situation right now. julie: earlier, we talked to professor shiller about the effect of mortgage rates. he did not express a lot of concern. seen a 1% increase in the mortgage rate this year. that is not extremely exciting
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right now. not a big deal yet. would not talking about major further increases in 2017. i don't think it is a major question right now. julie: yet, the increase seems to have been enough to drive some buying in the housing market. >> sure. people jump in just to lock in the mortgage rate before it goes up even further. we saw a big increase in mortgage applications just one week after the presidential election when rates started rising rapidly. we might see some increasing home sales -- the data released tomorrow before we see a decline in home sales going forward. musing this phenomenon of the bump up sales at an interest rate increase, it is not new-home sales being generated.
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it's just a question of moving them around. >> absolutely. it borrows the man from the future. -- demand from the future. that is what we will see going into 2017. in the first half of next year, we may see declines in home sales. this could be slightly offset by new demand coming from better economic conditions overall. we are finally starting to see wage pressures. it will be which one wins. if personal income increases enough and people feel great about the economic situation, that might be helpful and might offset some low demand from lower affordability. julie: in terms of the diversity of price appreciation, we are
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looking at things that are as high as 11% in seattle. walk us through the differentiation. >> it depends on where demand is. the labor market is hot in the west, that is where home sales are and people are going there and they are looking for homes over there because they have great jobs over there. is not surprising. whereas in the rest of the country, the price appreciation has in much lower that has been much slower. peak in homea prices yet. we might see some slowing appreciation going into the next year, driven by low housing demand. overall, prices should be ok. home price of appreciation. julie: the last time home prices -- will wewas 2007 get back to that?
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>> it is not in sight just yet. ramy: thank you very much. julie: coming up, will 2017 bring a big boost for the ipo market? we will hear from tom farley. this is bloomberg. ♪
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ramy: this is "bloomberg markets." stockthen you are exchange still holds the global leader in capital raising. raising $13.1 billion in ipos including the largest u.s. ipo of the year now, we are watching
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2017. tom farley spoke with me about the outlook for the public market. 2017, look, i don't want to predict, but it feels really good. volatility is low and stable, asset prices at all-time highs. interest rates are low and stable and we have a lot of ipos in the backlog. this 40 companies that have filed publicly. many more have filed in a private manner. --r $8.5 billion in proceeds we are doing more pitching and more planning for ipos than we have at any point in 2016. ramy: what about technology in particular? seen venture capital funding dry up, we've seen a lot of big companies that are so private go back and work over whether they wanted to go public. will that change? tom: 2016 was not a total washout or technology. we had a couple really exciting technology ipos that did well.
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japaneseveloper and a messaging app. many give stop to their ago and now,ecade those employees have grown up and they have a house and a mortgage and kids and they're looking for more liquidity. those large more of tech companies come to market in 2017. a couple more in 2018. it will be exciting down here on the floor of the new york stock exchange. julie: we've all been talking about the incoming administration, the effect it policies could have on the market. do you think until things are that there is still going to be that indecision? is there a level of unpredictability on the part of the administration that will cause folks to delay their ipo's
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until later in the year? tom: i will tell you what i'm hearing. they are optimistic. optimism itself is self-perpetuating. when consumers are more optimistic, they spend more. what we've seen in this trump bump is going to be real and will manifest into a healthier economy. that said, we need to see some execution. the believe is that taxes will come down, corporate income taxes. some regulations that don't make as much sense will be rolled back. but those things need to happen. we need to see them take effect for pe to increase. that was tom farley on the outlook for the public market. will havel ahead, we more on ipo's and what is in store for 2017, including a look
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at whether venture capital funding will improve in the coming year. this is bloomberg. ♪
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ramy: this is "bloomberg markets ." julie: you heard from tom farley earlier, but now, our discussion about what's ahead for the ipo market and venture capital funding in the coming year. for more, let's turn over to carol massar and cory johnson. they are joined by a special guest to discuss the ipo outlook. >> jeff, when you look at the world of vc and what we may see
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in 2017, you said don't be surprised if you see some kind of high-profile vc firms actually close down. isf: what we meant to say you will see high-profile venture backed companies go under. ,t's important to remember companies are funded and go out of business every day in venture capital. that is not unusual. we might see a bit of an increase in shutdowns and 2017. -- in 2017. we've seen so much activity in so much run-up of venture capital over the last years. what we expect to see in 2017 is a continued pullback as we've seen throughout 2016 and we revert to the norm. corey: there's been a greater push of more money in early rounds and they are able to gain profile even though their businesses are essentially failures? you have a longer shelf life or
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-- jeff: what i think you will see it is time to see where the best play out. some bets will play out as expected and some won't. that is not unusual. we may have some countries that have raised a significant amount of cash that all of a sudden decide we are not hitting the metrics, the landscape is not there, so we will just hold off and move on. we will see adventures make that move. i was no meeting a couple weeks ago with some people working on a few of those wind downs. has nothe appeal market been a great one -- the ipo market has not been a great one. you still see money going into does 2017 change things because there was so much private money going in this year that 2017 becomes a more heated
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ipo market? jeff: we expect to see a robust liquidity apartment or venture backed companies and 2017. a lot of ipos and m&a. that is driven by a couple factors. it is very healthy for investors. this recycles capital and that is something we have not had. they have been raising money and there needs to be a recycling of capital. from a company perspective come it brands those companies to go public and gives them freshly minted capital. cory: as you look at that, i'm torn by the statistic that we've seen some new venture funds raised lot of new capital or get commitments of capital and i cannot decide which will be deployed ultimately. maybe that is a sign that whatever boom we've seen in startups will continue because the capital is there.
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jeff: it's interesting. i put this in a piece i wrote a couple weeks ago. i don't remember in my career but we've ever seen a time where capitalbeen so much deployed into venture backed companies and so little liquidity and yet they remain so much optimism. cory: the roach motel is what you're describing? the money goes in but cannot get out. jeff: we are seeing a technology enabled industry -- mainstream industries manufacturing, and automotive, financial services tap them. they need to figure out where they can compete or not compete. that opportunity has not existed before. --t provides the opportunity
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carroll: we've all been tried to figure out what the trump administration means for the technology community. to thef attention paid high-tech companies that met with trump what could it mean? what discussions are you having within the industry? jeff: if you are to get repatriation of capital at favorable rate what that could open up and m&a opportunity for large companies bringing on mountains of cash that could go out and buy companies or customers or employees to fill in strategy gaps within their platforms. been on thehas table. as possible as it was once thought. challenged to deal
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with the issue of diversity by having to think outside the box. ry: do you think we will see more than 10 unicorn companies go public in 2017? jeff: under. because? >> these companies will need to grow under valuations. there's a lot of companies in the pipeline that have metrics that are very capable of doing that's being public companies. i would put it at much greater than 10. >> will the snap ipo be one of the big ones? >> everyone is looking for a great company to go out and when we get the first one that goes out, that will open the doors. >> but that could be one of the big ones. he will not commit. thank you so much. we will send it back to
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bloomberg tv. ramy: that was carol massar and cory johnson speaking about the outlook for venture capital funding in the new year. julie: time for the business flash. airbus says it will put off a agreementollowing an with emirates deliveries of planes for 2017 and 2018 will be shipped two years later. amazon is calling it the best holiday ever. the world's largest online retailer says it shipped more than eight lien items -- 8 billion items. amazon reported record sales for echo speakers based on its own alexa was recognition software. this voice recognition software. worst year be the
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-- they put $429 billion in two exchange traded funds. -- into exchange traded funds. , the still ahead commodities close. we will take a look at oil, surging for a seventh day. sinceup by 6% ever december 15 of this year. streak sinceinning august. this is bloomberg. ♪
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julie: this is "bloomberg markets." i'm julie hyman. commodity markets are closing in new york. let's look at the big movers. we have been watching oil,
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having its biggest gain in two weeks. 1.6% higher, at its highest ends july. that's since july. $53.87. their only been for dow closes for oil prices in december. it has been an interesting divergence between oil prices u.s. etf's.t of the as oil prices have gone up, we have still seen fund flows out of that etf. yearly inflows going back to 2006. number of years have been week. 2014 14 and 2015 were strong, making this the steepest outflow year going back to when he 13.
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curious because we have had oil prices going higher. we are seeing a bounceback in these metals. gold has been one of the weaker performers since the u.s. election. we have silver and platinum also gaining some ground in today's .ession ramy: crude prices have doubled this year after bottoming out at the lowest price in more than a decade. davidre, i'm joined by from our texas bureau. oil up for the seventh straight day. opec?just optimism off of david: it is optimism from a number of rockets all around the energy industry. you have saudi arabia's oil saying he is very
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optimistic that the output cuts that everyone agreed to will actually lead to a better oil market recovery next year. pricescally, he sees oil stabilizing somewhere between 50 and 100 dollars. he has seen stability above $50 at all is just a nice psychological hurdle the market is happy to look at. , optimism just from last week alone. 50-100 dollars is huge. what closing number is out there? goldman sachs is saying $62 or so. david: somewhere around that range. hovering closer to the 50 side than the 100 side. 50-60 is what i hear everyone saying. it is optimistic to go any higher than 60.
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you hover around that 50-60 range. even 50 had 55 is realistic or the shorter-term. i was u.s. supply playing into the outlook 2017? supplies are still ample by historical standards. provide some sort of cap on how high oil prices might go? david: you have to you the food that is on your plate before you can take more food. plate the food on your take more food.at more foo it, but youing into still have just over 100 million barrels to go. it will work itself off over time. especially production is actually coming down.
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julie: take it back to oil -- opec for just a minute. what has been remarkable to me isthe past couple of months the optimism you talk about has not come with as much skepticism as usual. opec has not had a good history of keeping to its target. what is different this time? if you look at it, because of what the downturn was over the last two years and how serious and significant it was, it's "of eyes. eyes. opened up a lot of it shot back up with production again and caused oil prices to come back down again. it was an awakening that opec cannot just do whatever they want to do. there has to be some skin in the game here. it's caused everyone to open up their eyes and say you need to commit if you want oil prices higher.
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you cannot just talk a good game and then do something else. with this monitoring committee next week, they are trying to put some action behind the words they are saying. to hold tight to these cuts. ramy: in terms of holding tight to these cuts, if there were a country that might be on radar to be the outlier, who is on radar or who has had a history of pulling the plug on a deal as we get closer? david: any of the big names out there. russia on the non-opec side of a but iran is well that's russia on the non-opec side, but iran as well. a lot of them are being watched. ramy: think you very much. julie: from oil to ethanol, the energy industry has been booming. the stocks have certainly.
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regulation could ease restrictions -- todd becker spoke to bloomberg daybreak. he joins us from denver. >> for us, we are very optimistic about a trump presidency. he came out in strong support of our industry and what we do every day. we are homegrown energy, we provide one million barrels of ethanol every single day for the fuel supply. bright future we've got great demand for our product domestically and globally. we are expanding our share in the gas tank today with you 15 starting to hit stations across the states. blend.n expanded a trump presidency is very good for the industry. >> the epa did announce record biofuel code is for next year that quotas for next year.
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pruitt has been out saying ethanol threatens car engines, it by brits corn usage him our ts corn usageer into our mouths. think about what the president-elect has said, even recently with what governor branstad has said the president trump has assured them that they will be a supporter of ethanol. 15 billion gallons is a good number. cars today can handle up to 15% without any problems. when we look at that and we think when they come into this administration, it is a cornerstone of agricultural policy and the midwestern economy. there's more constituents to
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serve than just the state of oklahoma or just carl icahn. the midwestern states delivered for president-elect trump. he won iowa by bigger margins than ronald reagan. it's very important to the farm economy to have a strong ethanol policy. credits these renewable wind up going away under a trump presidency? there's more demand for ethanol. do you think these credits wind up going away? todd: we are at the point of obligation, whether it's with the refiner or the blender. that is a discussion that will have to take place over the next couple of years. .oday, it is a zero-sum game while you might be on the wrong side of investment, everyone else on the other side of this but whether it is a big integrated refiner or a retailer or somebody who uses a system --
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there's a lot of constituents. if you are on the wrong side of the table, you will complain about it. but a lot of people are making plenty of money in the system. there will be some rationalization for that to take place. we think that is an open discussion. anything that takes place will have to take place over the next couple of years and there will be lots of discussion and you have to put out her full review -- for full review. i don't think you can take one view of one person on the wrong side of the trade to reform a system that doesn't need to be reformed today. it is a zero-sum game. we don't get any benefit. it is typically in the blend margin. we do see expanded demand. you are seeing people invest downstream. e 15 is coming up because of strong policies. you are seeing a lot of infrastructure and a lot of jobs being created. a lot of people are on the right side of that.
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you blend 15% ethanol and so the 10%. you've been buying plants. are you interested in buying more mills? todd: we've been continuing to expand our business. we started with two plants in 2007. now, we are up to 17 plants. we are looking at everything that comes up on the market for sale. while we cannot comment on what adm is doing, you can assume we will continue to grow our business and look at assets when they come on the market. it all comes down to the right place, right technology and right location. does it fit well into our? arm do we match up well? -- does it fit well into our
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system? some things we buy and some things we don't buy. julie: that was todd becker. ramy: let's check the headlines. taylor riggs has more from the newsroom. taylor: an argentine judge has invited cristina fernandez in a judge --n case -- the whose company and a fitted from the contracts. two former cabinet ministers were also named. french authorities are conceding in aew suspect stopped french city but they don't know how he made it into france. amri was shot and killed in milan. berlinck rampage in .illed 12 people
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israel plans to build more importance in areas declared as occupied palestinian territory. the municipal planning committee will review requests to build hundreds of apartments in the eastern part of the city. a long-standing u.s. resolution demands that israel stop building your territory captured in the 1967 war. 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. up, the nasdaq hitting a new intraday record as the close of trading now about 75 minutes or so away. the nasdaq is also the outperform in the session, catching up a bit. it has been underperforming since the election. with the small caps being the big winners and spend. this is bloomberg. winners sinceig then.
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this is bloomberg. ♪
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julie: this is "bloomberg markets." ramy: time for the latest bloomberg business flash. first up, three chinese hikers made more than $4 million in illegal profits after breaking into the servers of top new york law firms. they bought shares in five companies before deals were announced. some of the transactions involved intel and pitney bowes. hulu and walt disney studios have reached licensing agreements for feature films, a first for the companies. hulu will get exclusive
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-- recentrights releases will not be part of that deal. fitbit chairs are higher today after the maker of wearable health trackers reached first place on apple's app store during the holiday weekend. struggling to maintain its top spot, facing slowing demand and have your competition. competition.r that is your business flash update. julie: let's get a check on markets now. abigail doolittle is looking at that sector in today's sectors bite report. reportctor spider abigail: we do see that it is nicely higher today, up .5% off the highs, but nonetheless, tech is the best sector for the s&p 500 today along with the nasdaq. the nasdaq carving a new record high today. behind the strength in tech, we likea lot of the biggies
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apple and facebook -- apple is only modestly higher. earlier today, they hit another record high. facebook snapping a six-day losing streak. says these high ubs names tend to react -- is saying apple is one of the most underrated stocks globally. that tends to be somewhat bullish. at a ahead, we take a look longer-term chart of apple in and orangehe yellow -- apple has had a tendency to consolidate down to those moving averages. weaknessntly on the around the election, apple did in fact move down.
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put in a beautiful test to tradet that apple could higher. as for facebook on the quarter, apple is having a nice quarter. but facebook on the quarter not .o much, down 8% on pace for its worst quarter since december 2012. surely after facebook did ipo when the stock dipped below $20. that's shortly after facebook did ipo. the bar is set so high for facebook. abigail.anks, coming up, consumer confidence from the conference board comes in strong for december, hitting its highest level since 2001. is the u.s. economy running hot? this is bloomberg. ♪
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ramy: this is "bloomberg markets ." julie: this morning, we are u.s. consumer confidence jumped the highest level since 2001. americans outlook for the next six months hit a 13 year high as well. here to dig into this optimist outlook is joe weisenthal. i guess this is not that shocking. we are seeing this climbed to these high levels. is: every survey measure surging right now. there are a lot of consumer confidence surveys that try to capture the mood of the consumer in various ways. they are all shooting higher. ahb tracks homebuilder is a gap -- there opening up between how companies see the future and how they see the present.
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the future expectations are rising faster. this is also about converting this good feeling right now to some kind of fact as the president-elect comes into office. with the gop in the white house and controlling congress, what are you hearing in terms of turning this to fact? joe: that is the key question. data matched the survey willtch the these sentiment measures matchup? there's this big metro picture -- macro picture in the hopes are pretty high for those to happen. that is another way the reality could disappoint.
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there's two different questions. either way, lots of optimism? julie: what is so fascinating to me about that, if you look on certain sectors of social media must certain sectors of the press, there is still quite a theof hammering in over election. there's the disconnect between the political depression, sentiment and the economic sentiment on the other hand. joe: some say they are in their own bubble -- the press gets all worked up about this or that, in the real world, people tilde from a. there are a lot of people with anxiety over what the new in ministration will mean. is a good demonstration of how wrong people can be. it was not just the press, it was people on wall street who said if donald trump one won, it
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would bring this era of uncertainty. ramy: one interesting thing out of this, sentiment rose the highest since 2007 among older folks. but fell among the 35 and younger. this strikes me as pulling along the lines. lightslling along photo -- voter lines. joe: you see instantly in the reaction to the election in terms of how people are feeling about the economy, surging numbers for people older than 55. it is a good reminder that sentiment data is not as much a reflection of who is being asked as it is about the hard economic data. for years, we've had this recovery in the stock market and recovery in the job market a lot of people did not believe it. the hard data does not always align. julie: we will talk to george
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later on. he looks at the investor sentiment that is out there. joe: they've been constructing their own models of sentiment. this is the big question. -- can wephoria stage go higher if everybody is bullish? where theguring out sentiment of your investors are will be a big question. heatedit was the most rally for so long. then we pivoted so quickly. joe: a lot of politics gets pulled into this question. it is the fed and its artificial
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-- we heard these comments for years. people trying to excuse the rally or come up with some reason why they did not like it. now, you have a lot of people feeling really good. even something that should be kind of objective, stocks going up or down, becomes shaded by political bias. julie: looking forward to sitting down with you for "what did you miss?" checking the markets as we head to the close, we've got green across the screen. this is bloomberg. ♪
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ramy: i ramy inocencio. i am julie hyman.
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welcome to "bloomberg markets." we're live from rolled headquarters in new york for the next hour. covering stories in washington, argentina, and london. the dow is stuck in a narrow range after getting 20 points of 20 earlier today. we will hit the symbolic milestone before the end of the year. donald trump wants to cut the corporate tax rate but might face opposition from democrats and republicans. we will look at whether mr. trump has enough pull in washington in a later hour. we will hear from the bank of an exclusiven interview where he talks out whether the bank will finally put the problems from merrill lynch acquisitions behind him. we are an hour from the close of trade. check on the markets with abigail doolittle.
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still cannot get to the 20,000 scale. >> it is like watching a pot of water oil. we have the dow, s&p 500, and matt that all higher. not have the important psychological milestone of the dead 20,000. the dow will not tie the current record for the fastest climate history back in 19 and nine, but .e have record highs the s&p 500 earlier when the stock were at highs were also on the pace for record high but not so much right now, two points away from the marker. we take a look within the bloomberg. these are the daily trading ranges. we see around the brexit, a massive spike higher. we have another small trading
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range. not a lot of participation or enthusiasm. volume was 50% of the 20 day moving average. strength but not a lot of volume to back it up. stocks higher at today. up a whopping 253%. 320%, being boosted by its strength in gaming, moving with autos, and investors like the fact the company is staging a turnaround. the stock is on pace for its best year since 2009. as for strength coming out of the holiday, amazon is having its best day in a few weeks come up more than 1.5% after the company said it had its best holiday ever.
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fitbit is having its best day in more than three months after the app was rated the top in the apple store. encouraging news for a stock having a rough run. julie: let's get a check of the headlines. more from the newsroom. >> president-elect donald trump has nominated tom to be the assistant or homeland security and town -- counterterrorism. homeland security as her for president george w. bush. responsibilities included five in trump on cyber security matters. one of president-elect donald advisers will be his special representative for international negotiation. same for trump's transition team. what he does decades, they have worked for the trump organization. he serves as executive print -- vice president and chief legal officer. president obama says if he had
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been allowed to run again, he would have beaten donald trump. the president spoke on a podcast. i am confident: in this vision because i am that if i had run again and articulated it, i think i could have mobilized a majority of the american people to rally behind me. i know in conversations i have people around the country, even people who they would saye, the vision and direction that you point toward is the right one. i is fun on twitter and no way. who hadcarrie fisher fame as princess leia in the star wars movies has died. onher had been hospitalized board a flight to los angeles.
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carrie fisher was 60 years old. global news 24 hours a day powered by more than 2600 journalists and analysts more than 120 countries. this is bloomberg. back to the get market and the nasdaq composite hitting a new record highs. volume.d, very low volumes about 32%. reporter dan berger, the trade still count. were just talking about the consumer confidence numbers with all in how we saw a big surge in confidence. it concern them you tend to see high confidence levels? when you think about the people this is serving, these are the mom and pop retail investors, so-called dumb money. i would not say that but that is
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what they are known for. shows a chart that consumer confidence. upthe very end, it spikes and in that one month, it is the biggest again we have seen since the 1980's. >> why don't we pop it in and go to my terminal. there it is. >> look at that. exactly. that is the biggest one-month gain since 1998. toppys looking a little here. looking for the bears out there but not many. group still short on u.s. stocks as far as we can tell,
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are hedge funds and large regulators. they've had a position for the past four weeks or so. even when people were very, then, this group wanted to see how the rally plays out. even the bears are bullish. they are adding on to their positions. i think we can see this if we look into your terminal. the end over there is a short position i was just talking about. it is giving up almost at a net long position. when we look and see what the goldman sachs stocks have been doing, it has been doing pretty well today. maybe short covering is going on. perhaps the last there shall doubt is starting to buy. perhaps they are not. you talk to people about what we isl see going into january,
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there a continued optimism there will be a push that will get us o that level? >> they still take the optimism as a sign but there is still room to run looking at the hedge funds. we continue to push higher. volume is light and it if you have an opinion, you can make the market go further. the doubts 27 -- 20,000, there is a lot of argument about whether this is an orton or not. said it is like a rusty door you have to try a few times. you could say we are not going to get to the level, or people are ready to jump in. they are waiting to see how far that door will swing. it is psychological.
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looking at that function right now on bloomberg, we're looking at the broad rally. is flipping in as well. we see some positivity especially because of the holiday sale. walk me through the retail section. wasast week, there skepticism. report saying the week of september 10, sales were about 5% lower. there is an especially strong internet retailer. amazon is really leading the gains today. they are doing pretty well and that might have something to do with consumer confidence. older shoppers and people who might buy those items, not necessarily going to walmart. it seems like specialty
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companies today. >> i was looking at the heat map going back the past several years. december and january do not tend that month.arily december is the last column. it is pretty shopping. -- choppy. it will be interesting to see what happens with the retailers as we see more of the numbers. fascinating and it has fallen so low. not quite this low, but you look three months out into the future, there is still a chance we will see an increase. >> it depends. their bets are falling and they think we will continue to see
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this disgrace. see what thend dollar has done, the positioning has increased. these two typically do not divert. they are both risk on an risk off. if they move in the other direction, one of them has to be wrong. those tradersly placing bets on the dollar would see a drastic change. typically when the dollar goes up, the vix false. there is potential to see choppiness. >> maybe some of the policies will come to fruition. thanks so much. training us to give some perspective. president-elect donald trump's taxed lance could mean for the economy in the year ahead.
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will he get his plans through congress? just about two hours time, a visit for mr. abe is the first for japanese leader since the surprise tack on pearl harbor. this is bloomberg. ♪
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ramy: this is "bloomberg markets." julie: times square look at the biggest business stories and it is right now. one billion surprise compromised personal accounts not be in the $4.8 billion acquisition of yahoo!
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americans are becoming increasingly desensitized. damage to thecant bottom line. center. theft resource $9.2 billion in capital, as much , receiving about six points sought -- $6.5 billion. the potential they'll gives more than 67% control of the lender. pricing for potential challenges for a trump residency. planning for a 30% budget cut over the next year. anticipates serious threats because the far right will control altering ranches of that open government.
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that is your update. >> president trump promised tax reforms including lowering the rate of bringing overseas profits back home. >> we still have more than $1 trillion coming back onshore here with a lower tax rate. we will get more buybacks. >> 2004, a repatriation. all of that money did not get spent on the money -- it got shifted into shareholders pockets. >> what we saw was a big increase in dividend income and things like that.
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it is not a reason not to do it. a corporate tax code in the u.s. could use some refinement to put it mildly. have a beneficial impact. corporate earnings will be helped by stronger capital investment. rising, that is a signal to companies to invest now. we know 25% is. that space. i think that will support the corporate earnings environment. >> it goes back to the fact that if companies keep on piling buybacks, it does not help with
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doing good for the economy or helping. trump not buy back shares in the investment economy? >> i believe there was a prohibition or prescription against buying back shares, but it was not affected because it is very hard to trace dollars. there was a net decline in jobs for some time. a lot of them a day occurred at the time which caused companies to lay off people because of the natural course of what happens. your question is will last. on the other hand, nick was
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, earnings would be the beneficiary, not so much jobs as you pointed out. ,> if we like all of the money is there anyway that president-elect trump can link it to job creation in the united states? >> they can put in a provision where they spend it on capital spending or investment or hiring. there has been chatter around these see around that. i understand why they do it, politically, but i do not think it is necessary. is in need ofcode reform and lower rates. it helps boost potential growth. in 1980.at last time
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mother naturep from keeping its course. we had a big corporate tax reform and we were in a recession years later. it does not mean you do not try to do it. it would be helpful and the bigger story is this is the stuff we should be doing. given where the economy is, going for the big bang stimulus plan is not necessarily -- is not necessary. around the edges, that is what you should do. >> that was neil and michael earlier on bloomberg. julie: still ahead, offshore deepwater drilling service is. a company trading higher since the opec deal. we will see what is in store. this is bloomberg.
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ramy: this is "bloomberg markets." abigail: let's turn to the trade. we are looking for the stock today. nasdaq for high spirit no doubt 20,000. what are your thoughts? think the catalyst for that can be crude oil, stuck in a range or a month of december between 50 and 55. it could carry up a lot of energy stocks people catalysts on that if you look at chevron and exxon. >> interesting. it is a holiday week and i am sure it is quiet there. what is everyone talking about?
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what is ahead? give us the chatter. >> the thing is really dragging out. the focus for me is last week we finally had the event, the vix making you and you will you we made new lows at 1093. that is something that happened here we see new highs and not new lows. hit positive in the big picture. >> you do not think there will be able -- a divergence between the vix and the s&p? >> who knows? but if you are a traitor, your leverage has been taken. in the lasth up month and a half. i know you were talking about earnings season in the previous segment. looking for the double-digit growth, that drives the markets. i think the energy stock
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stabilizing moving higher with crude oil more than doubling since the january lows, earnings being positive, i think the banks are doing well because they are not as exposed to energy stock losses were exposure they had to bankruptcy that they did earlier in the year. this relief rally continues. >> turning to energy stocks, can you talk us through this? >> we are seeing drillers come back. we still the journal count continue to increase. 16% growth last week. like, 2-4 dollars for most of the year. option we'll strategy to generate high probability revenue, it would give me the obligation at three dollars if the stock went down, i am taking it in.
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it is a 7% return on risk and if it gets put to me, uncomfortable buying the shares with cash on the 20% or lower, it is a win-win situation. loan for aant to price. >> thank you for joining us. back to you. >> trades for currencies for the next year. of the half-hour ahead close of trading, rallying, in particular the nasdaq looking like it will close. this is bloomberg. ♪
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>> a judge indicted christine fernandez in a corruption case. more than 600 million dollars of
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hernandez asset. also charged the businessman whose company allegedly from the regular contact. two were also named. aircraft carrier into the contested waters pure challenge trump.ident elect donald leaving phil of japan and taiwan. these resident -- trump. rhetoric since the election has raised concerns in beijing. united airlines reached a settlement over working conditions at the international airport. installas agreed to conveyor belts so they do not .ave to manually list and lower global news 24 hours a day powered by more than 2600
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