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tv   Bloomberg Markets Americas  Bloomberg  December 29, 2016 10:00am-11:01am EST

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♪ we are going to take you from new york to london and covering stories out of milan and macau. president-elect donald trump says he is taking credit for bringing 5000 jobs back to the united states and patching things up with president obama. year's selling season has been less for companies like amazon? we will talk to helane becker. the italian prime minister delivers his year-end news conference. we will tell you about what he said about the future of italy's troubled banks. we are about 19 minutes into the close in europe. the stoxx 600 is down one
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quarter of one percentage point. the ftse 100 is intending on keeping its high in terms of sterling. just a point higher. germany down about 2/10 of 1%. makro movers, the column with all the economic data is very quiet in europe. is taking up much of the room for the forex. swedish krona is having a great day. bonds, yieldsto are rising in the likes of germany and france as well. a little bit of selling in germany. the two-year yield -18 basis points in germany right now.
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that is for the european markets. let's take a look at the u.s. markets. abigail: we are looking at modest gains for the major u.s. averages and seb dow and s&p 500 slipping between very small gains and losses. yesterday, the s&p 500 on the close did have its worst day since october 11. a little bit of weakness there, but looking at modest gains. also trading higher today are the small caps. --similarlook at story to what is happening on the year. this is a six month charge. and the blue, we had the s&p 500. cap index.te, small this on helps that the trumpet administration protectionist
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policy will be good for small-cap companies. this story is true on the year. the s&p 500 up about 10%. not so shabby either way you slice it. taking a look at the bloomberg dollar index. seeing it drop for the first time in many days. lowering the weighting of the dollar and seeing modest gains. this is giving a small tailwind to the economy. we look at the bloomberg commodity index. it is up ever so slightly. gold is higher for its fourth day in a row. oil though is down ever so slightly. its first down day in nine days. we will be talking about the inventories in an hour. hopefully those inventories well
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find -- hopefully those inventories will help gold. it was a build of 4.2 billion barrels a day -- million dollars a day -- million barrels a day. syria willfire in take effect at midnight local time. arranged byas russia which backs the syrian government and turkey, which supports the rebel forces. syrian tv says the agreement pays the way for talks aimed at ending the conflict. russia says is an electronic says's -- russia president-elect donald trump can help once he takes office. they have provided crucial supporting government forces. putin did not specify how many troops and weapons will be withdrawn. german prosecutors in the have released a tunisian man who was detained and determined he was not in contact with the main
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suspect in the berlin truck attack. prosecutors say his telephone number was saved in the suspects -- suspect's cell phone and suspected he may have been involved. -- anis oh is believed amri's fingerprints were found in the truck. u.s. is warning the against leading taiwan's president pass through the united states and route to latin america. suspicious of the taiwan president and says her intentions of stopping in the u.s. is unclear. president-elect donald trump says the u.s. should move on rather than sanction russia for interfering in the 2016 election. the obama administration is expected to take action against russia soon. russia has tonight allegations that orchestrated cyber attacks. trump says, i think we ought to get on with our lives.
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global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. vonnie: thank you for that. getting back to the top transition, the president-elect has been making public statements in the process --in the comfort of his mar-a-lago resort. closely tracking trump's transition. gentlemen, thanks for joining. the headline, if you can call it that as a 5000 jobs sprint is keeping in the u.s. reallyf all, is sprint creating 5000 jobs that were in another country? 5000 jobs does not seem like a lot.
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>> it is a little unclear where the jobs are coming from because a have not determined what the nature will be. we don't know if this is some of that funny coming from -- we don't know if this is coming from that. president-elect taking credit for this. this is something softbank and sprint have been talking about. it is important to him during these quieter days while he is in residence in florida. vonnie: can we expect the president-elect to make an announcement when there are 5000 jobs created? we would have been hearing from obama every single day if that was the case. >> that is barely a drop in the bucket. is he going to make a rose garden ceremony every day? i don't think so, but he could be tweeting about it everyday. they say they are not going to
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take away his keyboard and phone. this will be a part of his press strategy. this'll will be the trump fireside chats going into this administration. vonnie: we know that president-elect donald trump and president obama had a phone call. what what president obama have told the president-elect as it relates to some of the tweets? himhe president-elect yesterday saying suddenly the transition was not going smoothly and this was president obama's provocation now. both sides have been relatively mom on what was said -- mum on what was said. they said it is important to soious staffs work together the transition will go as smooth as possible. surprised if he
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rebuked him a little bit and told him that he is in fact the president. vonnie: peter, for him to become any ofng president, congress to help them out. the point is there are people he needs to get confirmed. wants to repeal obama care, overturn dodd-frank, phyllis see in the supreme court -- fill a seat on the supreme court. >> there are a lot of things we do not knowing the new year, but one thing we know is there will be brawls. be just between republicans and democrats, but between trump and parts of his own party. trump andly between members of his own cabinet. the one i would point out is mike mulvaney, who he is picked to be ahead of the office of the
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budget. vonnie: he is a freedom caucus guy. trump is-elect desperate to spend money. how will that work? >> there is a story that mulvaney is a gold bug and has invested a lot into gold mining stock. he wanted to shut down the government. he said that should take precedent. whatever you do, you have to the deficit and he wants to attack social security and medicare, which donald trump has promised to protect. the fact that trump picked him, we don't know why. some of it is trump has this amazing willingness to embrace chaos and conflict. he almost enjoys it. he will get plenty of it. vonnie: what was the reaction nbc -- in d.c.? relations be watching
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between the white house and capitol hill. in some ways, i aimed that has signaled the president-elect is hoping to reach out to some of those deficit -- some of those freedom caucus people and bring them on board. thatow is he going to do while trying to help medicaid and cut spending? it is not exactly clear to me. --portends a big conference a big conflict we will see. vonnie: i want to bring out the terminal charts that show the bloomberg dollar index. onereason i am showing this is because, peter, you are making the point that the dollar has not appreciated as much as we thought. they --that may not be the whole story.
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>> i don't tonight the dollar has depreciated. it will hurt u.s. manufacturers. it will also hurt people in other countries who have borrowed money in dollars. developing -- that could be a big problem in the sec signs of stress -- that could be a big stress.seeing signs of if you think it is bad now, imagine how worse it will be at the dollar continues to appreciate, which is. possible -- which is possible. again, the november advanced trade deficit widened. we are seeing a little bit of an impact, but the dollar has been appreciating quiet substantially -- quite substantially. >> but it had fallen.
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the third quarter, it was lower than the third quarter of 2015. a lot of companies were talking about that in their earnings call. that it was having a negative translation effect. yes, the dollar has gone up, but it is possible that we have not seen nothing yet. vonnie: if that is the case, there will be upside and downside. in d.c., how much are people talking about the bayou of the dollar as it relates to other currencies --how much of people talking about the value of the dollar as it relates to other currencies? >> he would love to see a strong dollar. he wants to see that trade deficit going back down. it is a number he watches so carefully, even if we look at it with more nuance. people are not talking about the ways there will be ramifications. it is one of the situations
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where the policies are so complex and the way in which the us economy in u.s. politics affect the world economy. politics, they are not looking at the complexity of that situation. vonnie: peter, you said in one of your articles, the heart hard for the president-elect is when he stopped attacking the washington establishment and starts working with them? does he have to? katie get his cabinet appointments to work on their caucuses -- can he get his cabinet appointments to work on their caucuses? cannot do anything without congress, that is why he has to make nice with mitch mcconnell and paul ryan all -- and paul ryan. both of whom he has had issues with. you can only go so far. barack obama well knows this. you can only go so far with a
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"do-it-yourself" strategy. the question is, this he choose to be more conciliatory, which would offend some people, or will he bulldoze ahead and energize some of the people who voted for him. it is going to be fascinating. vonnie: we will be covering it here and both of you will be helping us with that. thank you very much to you both. coming up, italy's finance chief is criticizing the central bank. we are live in milan. this is bloomberg. ♪
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♪ quinn. i'm vonnie this is "bloomberg markets." financey, the country's minister is asking to boost its capital the lender failed to raise in the markets. for more, let's bring bloomberg's elan financial chief. -- financial chief. why now? what is he saying? >> it is a further sign that the italian government were not expecting this decision by the ecb to request a larger capital increase, about twice as much as they were trying to raise on the markets. and his interview,
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saying essentially the ecb, sort of contesting the way they went about this. they put out a statement referring to the ecb statement, saying they would have to raise additional amount of capital. that process, that way of communicating, they give the impression that things are not under control. a sign of weakness, etc. we could be entering italy versus germany spat peering be sought comment yesterday from germany's finance minister morning italy to make sure this rescue operation needs e.u. competition rules. vonnie: it is so complicated. minister, heinance has only so much power. who ultimately will make the
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decision? is it him? they are paying regulators, european commission, as well as european central bank will have the last word on the amount that the italian government once to put a price tag on missile operation. -- italian minister prime minister reiterated this be a long process. vonnie: there is only so much the italians can decide upon. what did he say? what does long and drawnout mean? months in the word particular, given the fact that the bank, he will have to do yet again and a business plan i will be presented. the mechanism of this
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will have to be drawn up and approved by the european authorities. are looking ate weeks if not months. vonnie: we have a great piece by our own markets -- worth who proposes that you get all the retail subordinated bondholders out of the equation by raising their holdings to senior debt. and that's all the big political problem. is that doable? doable? yes, i think so. however, there again, i think the european commission wants to that, youimpression know, some investors, whether they be retailers, institutions, are escaping scot-free. clearly, retail investors present a very complicated problem for the time government
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for italy because we are probably going to see elections again next year, and this government does not want to anger, upset the small investors for the umpteenth time. vonnie: all right. we have to leave it there. thank you for joining us. still ahead, bank of america chairman brian moynahan and how he is preparing for a trump presidency? this is bloomberg. ♪
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♪ things thatof the thirst of the obama administration's environment to social governance. bank of america has been aggressively pursuing it, too. >> if you think about the fourth platform, the fourth pillar of responsibility, is being sustainable. it means we have to save money.
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we cannot take out costs. we have to have a great employer-based -- employee base and be a great environment for people to work. increased our lowest entry-level pay, change our health care plans, and driven down the cost. it is how he pay-for-performance and diversity. and then you have the traditional environment of sustainability and volunteer work and community support. these are critical to why people want to work for our company and my clients want to do business with us. when we think about our environmental commitments, it and doubled to 50 it to 50. now it is 125. .t is a business opportunity the second is a responsibility on our behalf to lower our usage, whether it is the amount
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of paper and lights we use. that is good for the country in the world. these things are critical. and also how we govern ourselves. the way be govern ourselves internally and the way greek error ties -- and the way we prioritize risk. these are all critical things. there are a lot of studies that have been done. it because it is i for our customers, communities, and our shareholders. vonnie: bank of american -- of brian moynahan. we are talking fedex next. ♪
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♪ live from bloomberg headquarters in new york, i'm vonnie quinn. this is "bloomberg markets." let's check in now with first word news. alisa parenti has more. >> thank you.
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after a two-week lull, iraqi troops have resumed their efforts in mosul to retake the city from islamic terrorists backed by airstrikes and special at my airstrikes, they lost a push in neighborhoods. smoke the load across -- smoke billowed across the sky. north korean dictator has ordered the execution of 340 people since he came to power in 2011. that is according to a new report from the national security strategy, a south korean think tank. about 140 of those killed were senior officers. kim has reportedly executed ordinary citizens for watching south korean soap operas helping others defect. in russia, there is indication of a crash of a military transport playing was not an act of terrorism. they said that it show there was
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no explosions on board. the plane crashed into the black sea trophy after take off and on 92 people on board were killed. the scottish national party wants theresa may to give citizen surging over their future. may has rebuffed certain calls. may says the matter will be resolved and formal brexit talks in march. movie icon debbie reynolds has died one day after the death of her daughter actress carrie fisher. reynolds rose to stardom and the 1952 hit "singing in the rain." later she was nominated for an oscar. debbie reynolds was 84 years old. global news 24 hours a day powered by more than 126 -- i'm
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alisa parenti. vonnie: thanks. let's check in now on ended year market action. abigail doolittle is here looking at movers. abigail: we are looking at the telecoms. haver the telecoms, we t-mobile, at&t, verizon, and spread trading higher. all trading higher. sprint is up the most. this after president-elect donald trump did say yesterday that sprint will be bringing back 5000 jobs to the u.s. shareholders are certainly liking this news. metals, gold is trading higher on the session up for 10th of 1%. -- this isd's day gold's fourth day up.
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up on the year, both of these stocks are on pace for their best years ever with newmont mining finishing up on the year. taking a look at retail, we have sears surging on the day. we see this nice spike higher. day.d been up 9% on the -- we seewith sears that sears has posted its biggest loss of about $750 million in four years. shareholders are not liking that in the stocks is down more than 70%. you never know. thank you.
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the holiday season is important not only for retailers, but for shipping and cargo companies. fedex up about 26% in the past year. just a little bit of weakness in the last month. we don't want to overstated. aesthetics beginning to fail to deliver? joining us now is helane becker. that's not concentrate too much on the weakness in the last month, nevertheless, there is a little bit of selling. >> clearly, the stock has had a really great run your today. -- really great run year to date. there comes that the shipping season were below expectations. you probably have too much capacity, which they highlighted on a conference call going into
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the peak shipping season. there is some selling related to that. vonnie: they also said that if trump plans go ahead, it will be good for the company. why isn't the company included in the trump rally we have heard about? >> after the election, it did really well. it did hit over 200. off, people and investors concerned with the fact that some of their customers may have overpromised and under delivered. we don't know what happened in the last week of the peach shipping season leading up to christmas. seasonhe peak shipping leading up to christmas. what is the difference between ups and fedex? >> upses like moving a
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battleship. it is such a big company. marketas been taking share on the ground business for the last couple of years. that is to be expected since ups was the only game in town. ups is a little more leveraged to amazon then fedex is. fedex is more leveraged to the postal service. we definitely see holders in both. has more leveraged to air. than upsuld do better in that instance. vonnie: how much can they depend on the likes of amazon? how much power and leverage as amazon have? >> remember, amazon is delivering one million fts per day and need help. service, the postal ups and fedex and all the providers they can get.
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lowhink the margins are so from amazon, that a while it would be optically to lose amazon as a customer, but the cost associated with that are not necessarily being offset by the revenues. vonnie: it is also walmart affect, right? just be a little bit of a burden to have something that big margin so little. >> well said. exactly. everybody benefits when amazon does well. amazon needs everybody right now. vonnie: let me guide you into the bloomberg because the of charts here. what is the outlook given that prices are starting to rise again? quarterll be the first were costs are up again until i'm companies such report earnings.
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fedex and ups are not as leveraged as the airline companies would be. u.s. airlines don't believe hedge anymore given the volatility we have seen. hedges everybody else. most of the other airlines have not put any hedges on in the past year. vonnie: what are other airline to our liking the most? it is a very volatile industry. >> delta is our top pick for 2017 and is down 2%. united and american are up? --e -- quite dramatically united and american are up quite dramatically. we think that delta will catch up to the other two. american was all about latin america turning around.
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united is all about self-help with a whole new management team. there is a lot of good stuff going on in the industry. we are seeing strong traffic from millennials. well.nk that should bode vonnie: the merger and consolidations have gone well so far. is that done now? there is potential for more. we do not think it is over. it is over when the big guys -- it is over for the big guys for down. what the new transport head, we could get another round of m&a activity especially among the smaller, low-cost carriers. vonnie: such as? >> we have talked about allegiant and spirit. about jetblue being a leader in the consolidation field. just because alaska merged with version america, there is still
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some stuff to be done in the regional airline space where skywest and republic airways switch to privately held companies and having consolidators in the past. vonnie: it is been a great year for the airline spirits. up 46% year to date. jetblue -- it is up as well. fell for jetblue percent. that is interesting. >> rather tough year. people penalize them for not version/american war. rin/american war. now.ould start to straight it is another stock underperformed the thing cannot perform next year. vonnie: if you take the
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two-year, it is up 41%. becker, research analyst. thank you. coming up, but to some of the world's top --think the biggest risk are for 2017? we will hear from some of them next. this is bloomberg. ♪
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♪ vonnie: you are watching bloomberg. i'm a vonnie quinn. here is what we are following -- italy prime minister makes comments about the future of the country's troubled banks. then home prices in london are falling behind. we will tell you why price gains in the capital are lagging.
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today's quick take, we will take a look at the upcoming battle over immigration once president-elect trump takes office. will he be able to build the wall with the support of congress? minister the prime talked about migrants, the banking system, and a wide range of other topics. he held an interview year news conference. he says that fixing italy's struggling banks will be long and complicated. key financial officers of britain's companies are optimistic. they said ceos will remain controversial -- they said ceos will remain cautious. it has picked up, but it has not picked up. in the long-term, we remained quiet -- quite concerned about
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the effects of brexit. some uncertainty around brexit continue to exercise a dampening effect on transfer expenditures. vonnie: for the first time in eight years, london's housing market has underperformed the rest of the u.k.. home prices rose. across the country, housing prices were up. nationwide said in london and a south of england, more people have found themselves priced out of the market. macau has tried to reinvent itself been more than a mecca for gambling resulting in a surge for tourists. is the world's largest playing help -- playing hub. >> time now for a bloomberg quick take her we provide
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context and background issues and interests. immigration in the u.s. is broken. illegally -- here is a situation. the newly elected republican president made cracking down on illegal immigration the centerpiece of his campaign bowing to build a wall between mexico and the u.s. he has said he will terminate executive orders of his democratic predecessor barack obama, which look to shield as many as 4 million unauthorized immigrants from deportation. here is a background -- ronald reagan was the last president to win passage of major immigration reform back in 1986. president george w. bush pushed for a bill and 27 -- 2007 that would have tightened the border.
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but it was killed by conservatives in congress. republican candidates focused on deporting the undocumented. mitt romney opposed a path to legal residency over citizenship. that november, hispanic voters cast 40% of their ballots for president obama. democrats are more or less united on immigration. congressional republicans had been split. they were unmoved by an amendment to the 2013 senate bill that would have hired about 20,000 more border security guards, and required an additional 350 miles of fencing. there are conservatives who approve for a path to legal status, but not citizenship. thepublicans feared continued fight over immigration more hispanicing
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voters in the arms of democrats. you can read more about immigration on the bloomberg. i'm courtney collins. that is your global business report. had to for more stories. vonnie: philip kent -- still ahead, the looming exit from the european union. is u.k. real estate arena staggering. this is bloomberg. ♪
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♪ live from new york. i'm vonnie quinn and this is "bloomberg markets." turning to brexit, and report finds many of britain's chief financial officers are turning optimistic as a head into 2017, however, uncertainty remains. chiefhear what the u.k.'s analyst said. it has picked up, but it is
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not picked up in the same way. long-term, they remain quiet concerned of the business environment. there is some uncertainty that centers around brexit. it continues to exercise a dampening effect on plans for expenditure. vonnie: for more on this, i want to bring in simon kennedy in london. jobn, it is to be the cfos to because she is. what is happened and a last few weeks to make the more optimistic? seeing a are continuation of the theme and that the economy has not struggled as much as some predicted in response to the referendum. to continue --m
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hopefully to see stronger growth. vonnie: what else did some of the deloitte answers tell us? are they spending to invest? simon: there is still a great deal of uncertainty. it is not surprising. we have the referendum which was a shock to the system to matter how you voted. a big surprise there, and that ruffled feathers. then you have to accept the fact that the trade has not been made to invoke article 50. theresa may has not given a plan yet. and the response to the european union leaders to whatever she wants. a lot of still up in the air, so expect to see continued concern for the cfos going forward, even if the economy gives them some reason to be more confident. vonnie: let's take a look at the
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chart of the british pound. to can see we are right down 122 and change. it is been the lowest annual average since 1985. simon: it might get a bit of publicity from the weaker pound -- you may get a little bit of a lift from the british pound. ahead, what does the roadmap look like for theresa may? you say she has not given one. how has the thinking evolved? simon: the first thing we need to look at in the early days of 2017 is a supreme court judgment whether the prime minister or parliament has the power to invoke article 50?
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moving on, regardless of that result, they continue to see that march 31 is the deadline for invoking article 50 regardless whether it is parliament or the prime minister who has the power to invoke it. those other two big dates. early january for the supreme court and on what to march and whether theresa may can trigger the talks. vonnie: one of your recent brexit will attendance, and we should mention you can subscribe and be those bulletins daily, mentions theresa may is now being seen as somebody with an all controlling management style and a bit of an iron lady. going across europe? simon: there is an criticism of theresa may's leadership style. while some kind of consolidation
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and stability to the political field and certainly looks in better shape party-wise and the opposition. but some criticism of lawmakers within her own party talking to bloomberg just prior to the christmas break saying the people around her are trying to consolidate power, and prevent cabinet officials to talk to the prime minister. there have been some policy mistakes. often the treasury not being able to edit things beforehand and having to backpedal afterwards. mistakes.ome rookie vonnie: but there has been no suggestion that perhaps her term might be cut short? she is going to be given leeway to govern for the next several years? having made inroads to a public lack of regard for her? simon: it has been a shocking your politically for britain. you don't want to rule anything out in 2017.
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but the power seems to be with theresa may at the moment. she willment, she says not pull a general election one do by 2020. perhaps, she will be forced -- teresa they it's here to stay for a while -- theresa may is here to stay for a while. vonnie: this is simon kennedy from our london bureau. the ftse 100 is now unchanged. it is at a record though, and also have the british pound trading pretty much flat on the day. this is the "european close."
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in new it is 11:00 a.m. york. midnight in hong kong. i am vonnie quinn in new york. this is "the european close" on bloomberg market.
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s. ♪ we will start this hour with breaking news on the energy front. we are waiting for the department of energy to release -- there they are. i bill with 614,000 barrels. we were looking for a drawdown of 1.2 billion. that is a big difference. inventory fell 1.9 billion barrels. the american petroleum institute showed a bill of 2 million barrels yesterday, reinforcing that we have more oil in stockpiles. abigail doolittle has more on how they are trading. >> we have oil trading down ever so's lately. oil has started to trade higher, oil's nice day in a row.


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