estate for folio. -- portfolio. vonnie: an interview with morgan stanley did we will get his views on donald trump and the banking industry. taking decisive act him to shore up its problems. it is cutting costs and will it be enough? mark: looking at where a couple of equities are trading, this is your function, the left-hand column of course is those equities. there you have it. switzerland, italy, spain, ftse here in london rising 1%. the top three currencies are game against the dollar ahead of the fed meeting. it's widely expected to raise rates did the yield is coming down in europe. the final two columns, so much to tell you about. let's start with media set. the shares are rising the most on record. look at though shares, 35% higher today. the purchase represents what could be seen as a show of force. that is the billionaire chairman the premium to buy pay-tv service. what's interesting is the former italian prime minister isn't waiting to counter the hostile attempt to loosen his control over media set. more, addinge 5% to its current holding of about 35% according to people f

its key products, iron or not so great. morgan stanley adding its voice bearish others in a outlook for iron ore. it is $83 per 10 that morgan sees it averaging $58 per 10 next year and the year after. australianes the treasurer scott morrison will address a banking conference. he is expected to address the budget repair laying out a case for australia to retain its aaa credit rating. plenty of data out today, november jobless figures from south korea are steady at 3.7%. and the survey from japan. more from "bloomberg technology" next. ♪ emily: stocks are pushing higher ahead of wednesday's fed meeting with the dow inching closer to 20,000. tech led the way with apple and intel leading gains in the blue chip index in tuesday trading as it cap to seventh day of record losses. the s&p 500 rose 17% to an all-time high. advancing to its first record since october. many major tech names making up .ost ground since the election will other companies take the plunge and go public? us, alex and olivia. i will start with you. tech is catching up in this rally. what does it mean for ipo's? t

. including morgan stanley reported $9.5 billion in gaming companies. the proposal may spark a bidding ar for cap corp. activists moving from the hong kong legislature for abuse plan to take their appeal to the city's court. they say they need to raise $200,000 for the hearing and fromdy have 56,000 raise crowdfunding. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. let signal to the markets. afternoon trading getting underway in hong kong and china. it is a mixed markets. a sideline move as we await the fed. this is bloomberg. ♪ emily: i am emily chang in this is "bloomberg technology." another day of records high for u.s. stocks, but tomorrow investors turn their attention to the fed meeting. plus, googles self driving car unit hits the road and gets a new name. we will bring you the details. in a senate fight looms over president-elect trump pick for a prominent diplomat. we will dive into the impact. now to a story we continue to watch. alphabet is announcing it is separating itself driving car

twice. what do the analysts have to say for themselves? morgan stanley put it out the election results were a big positive for the analysts. they said bb&t had less cost savings acquisitions. national penn they snapped up for $1.8 billion. we liked all that stuff on our show. how about bmo? they downgraded bbt after trump's victory. they raised the target from $43 to $45. now it's just under $47. they argue "bbt has run out of catalyst to outperform in the new rate environment." the stock has run up 10% since the election. all i can say is, oops. bb&t is rising another 12%. it's up more than 9% since the downgrade. these guys missed the fact this market is seeing a wholesale what's known as rerating on the financial sector. all the banks are ready to roar in advance of this week's fed meeting. pretty much everyone expects a rate hike that will let the group make even more money. turns out this market doesn't care about nit-picking when it comes to the bull market and financials. this is one powerful move. how about fifth third bank? the ohio-based bank has 1,200 locations in th

for bay area families" food drive. davis lawrence from morgan stanley joins us an juan joins us from the alameda county food bank. thanks for joining us. >> thank you. >> dave, start with you, check comes from the morgan stanley foundation. tell us about that. >> the foundation for over 50 years has been a proud supporter of healthy starts for children and also a solid education. this partnership with the alameda county food bank is an extension with that effort. >> it's a sizable check. $50,000 coming from the foundation. and it's -- thank you very much. that's very generous [ applause ] >> our pleasure. >> it's for a specific cause. it's for children. tell us why. >> yes, sir. so right now one in six children face some type of food insecurity and so for morgan stanley and the foundation our passion is for the children and certainly partnering with feeding america and the food bank all across the country is a way for us to help fight hunger. >> certainly appreciated, juan. i know you can tell us how this is going to be put to use. >> this is incredible. probably provide over 10

forward? gary: to get some answers chris toomey joining us now from morgan stanley. you and your partner manage $3.5 billion. you are going to be talking to your clients his week and early after the new year and telling them to reflect on what has been a difficult year even for long-term investors. what are you going to tell them? >> if you look at this year, we had two referendums, u.k. and italy which threw out two heads of state. we had 40 different elections. we had a huge election here in the united states. all sorts of concern and pressure on the market. yet we are basally where strategists thought we would be at the independent of the year. we are up 10%. if you want to look at what happened in 2016, you have to look back to 2015. oil prices and china drove 2015. we had a supply side correction. we had a lot of production primarily driven by opec and saudi not cutting. we saw a situation where oil prices dropped below $30. and we saw china initiate a hard landing. they cut back only corruption and lending. they let their currency devalue and that created an industrial rece

it. >> ed rawlins, joe trippi, good to see you both. i'm maria bartiromo. for all of us have a very merry christmas and wonderful new year. "media buzz" begins now. that's all we got for tonight. good night from new york. thank you so much for joining us. >> announcer: from fox business head quartr quarters in new york city, the new "wall street week." anthony: welcome to "wall street week." trish: investors are riding the trump rally. the dow has posted over 15 record closes since the election. is this a classic case and will much of these gains evaporate if donald trump doesn't deliver on the promises he put forward? gary: to get some answers chris toomey joining us now from morgan stanley. you and your partner manage $3.5 billion. you are going to be talking to your clients his week and early after the new year and telling them to reflect on what has been a difficult year even for long-term investors. what are you going to tell them? >> if you look at this year, we had two referendums, u.k. and italy which threw out two heads of state. we had 40 different elections. we had a huge election here in the united states. all sorts of concern and pressure on the market. yet we are basically where strategists thought we would be at the independent of the year. we are up 10%. if you want to look at what happened in 2016, you have to look back to 2015. oil prices and china drove 2015. we had a supply side correction. we had a lot of production primarily driven by opec and saudi not cutting. we saw a situation where oil prices dropped below $30. and we saw china initiate a hard landing. they cut back only corruption and lending. they let their currency devalue and that created an industrial recession spipt went through 2016 into the first part of 2015 which created a lot of angst besides the stuff we talked about before. subsequent to that we started to get what wee think is a global recovery. sow the things that did poorly in 2015 did well in 2016. industrials. term companies, all of those companies down in 2015 did well in 2016. trish: nobody on wall street thought he was going to win. they woke up and said we need to reverse all of this. they went out and bought industrials and sold tech and bought financials. we are living compared to 2016, we are living in a different world because we are going to see different economic policy? >> no question. i think if you look at performance within second towards, most of the performance we are talking about, these all-time highs was driven up into the election. there was a lot of pressure on the underlying investor. we actually saw the markets start to sell off again. when we got the certainty with regards to who is going to be the next president of the united states. we immediately got a pushup in the market and wall we think happened is that the donald trump election focusing in on tax reform and infrastructure spending and deregulation, basically turbo charged this recovery. >> a lot of people in the beginning of this year were incredibly scared to touch energy, to touch high yield bonds, to touch commodities. you put your clients in these assets. i wants to know, what are you doing now in a similar way to what you did in 2016 for 2017? because that's the key in terms investing for the long term. >> i think you hit the nail on the head. to be a long-term investor you have to be patient and have a strong stomach. >> where do you want to be right now? where is it you want to start to invest? >> we are overweight equities versus credits. i think this secular growth story with regards top industries and financials will continue to ride out. you want to start look at growth at a reasonable price and look at technology and consumer discretionary. places that look interesting in the equity market is small cap. the places he can execute immediately with regard to deregulation and reducing some of the tax oath code, that helps small cap companies. >> you mentioned financials. they have been on a tear. can that continue? isn't it time to say, okay, i made some money in financials? >> let's look at environment for financials. we are in a situation where financials went through the credit crisis. they came through with the regulators. they put a lost regulation on top of the banks. we have a low interest rate environment and a flat yield curve. in those situations those are three things that affect financials in a negative way. now the economy is growing, the yield curve is moving up. all niece things help financials. so in our view financials still have some room to run going forward. gary: in terms of bonds, should long-term investors be allocating money to bonds? >> bonds are a critical con poem tonlts asset allocation. but if you look at bond market. we saw $1.5 trillion go into bond funds and bond etfs since the credit crisis. if you look at what they are benchmarked to, 2.5% yield. an 8-year average maturity and a duration of 7. what that means to the investor. if rates start to normalize and you see rates go up 100, 200 basis points, the bound vestors will see their portfolios go down 200%. places that we do like in the bond market preferred where you are getting a yield pickup. you have a bond, but you are able to participate in the equity market. gary: excellent insight, chris. thanks for joining us. "wall street week" will be right back. >> announcer: if the market keeps surging, why arage americans shying away. how one ceo is arming americans with the tools needed to make martyr money decisions. i' i was wondering if an electric toothbrush really cleans... ...better than a manual, and my hygienist says it does. but... ...they're not all the same. turns out, they're really... ...different. who knew? i had no idea. so, she said look for... ...one that's shaped like a dental tool with a round... ...brush head. go pro with oral-b. oral-b's rounded brush head surrounds each tooth to... ...gently remove more plaque and... ...oral-b crossaction is clinically proven to... ...remove more plaque than sonicare diamondclean. my mouth feels so clean. i'll only use an oral-b! the #1 brand used by dentists worldwide. oral-b. brush like a pro. gary: as the market continues to rally, americans are starting to dip their toes back into stock. one company is trying to revolutionize the way americans get their financial advice. >> we saw in the marketplaces there is a lack of an ability for young investors to wrap their heads around to how to save for long-term financial goals. we wanted to help them set at financial journey and help them become aware of their financial situation to make better financial decisions for better financial outcomes in the it's about engage the user. the idea of sitting across a mahogany table has gone to the wayside with this generation. gary: what you have said i have heard across the industry for the last few years. does it mean they don't want a financial advisor in the traditional sense? >> they want to know what to do. they want to be told what to do and they want it personalized in their situation. people have given them general ideas of what to do. they haven't given them the idea specific to their situation. someone with $50,000 in credit card debt can read all these blogs about how to pay off credit card debt. trish: you plug in your information and get a digital feedback? >> it's artificial intelligence we have been able to build. we analyze that information and provide a financial journey for you based on setting core financial goals. trish: a lot of people want that personal connection. they go to their financial advisor because it's a relationship. the person becomes your advisor for many, many years. and is an interest gral part of your decision make. you want to outsource that to a digital platform? >> that's where we are unique. the digital platform and the technology and algorithms can do the analysis to get you started. but what technology can't deal with is the emotional as expect od --aspect of it. we connect them with one of our financial advisers when there needs to be a judgment call. we are making it more efficient for the advisor. the under $million investor, it's hard to make money in that space. we have to create relationships with individuals while the technologies do the tracking. gary: a lot of traditional advisors will say when the market has a serious correction which it has not had since 2008-2009, that the whole roboadvisor industry will blow up because people have not found what to do in a 20-95% correction. how do you respond to that? >> that's fair argument. time will tell how that will go. we put a lot of time into it. how do we be proactive and learn about the individuals based on spending decisions and insurance decisions they make, and that allows us to have insight into how they will react in certain situation. we will try to predict how they are going to react and how they like to be managed. >> based on your spending you can figure out if trish is going to freak out if the market is in decline 20%? trish: i would think everybody would freak out when the market is down 25%. >> do they want a human to be talking to them or do they want to know how the market is going to react to their long-term goals. trish: there was a new study that came out showing there is little upward mobility in society. we hope that changes. but we are looking at effectively the worst level in 70 years for young people. more people are living at home with their parents than we have seen since the 1940s. these young kids don't have money to rent an apartment let alone invest in the stock market. how does that start to change? do you think this economy is getting bert and more young people will go to work and have money to invest? >> i think the beautiful thing with our technology is one our main features is this angel on your shoulder. ability of technology to allow to us scale to individuals can allow for them to engage with us whether they are able to invest now or not and they are able to have a partner on their side. trish: financial angel. gary: i can't wait to see how the algorithm will be able to decide whether you are the person who will get upset. >> announcer: when it comes to tax reform, donald trump and jack lew apparently see eye to eye. >> we need to get rid of the loopholes in the deductions and lower the rates. >> announcer: why is the treasury secretary telling fox treasury secretary telling fox news afoot and light-hearted i take to the open road. healthy, free, the world before me, the long brown path before me leading wherever i choose. the east and the west are mine. the north and the south are mine. all seems beautiful to me. trish: president-elect trump could not have been more clear on the campaign trail. he said it over and over again web wants to cut tax and let the economic boom that follows help bring back the deficit and get more americans back to work. but when currents treasury secretary jack lew sat down with maria bartiromo he sounded sceptical. >> we need to get rid of the loopholes in the deductions and lower the rates. but we can't spends a lot of money having a tax cut that loses revenue because that will shift the burdensome where else. gary: connell, can you cut taxes and growth economy to pay count deficit? >> technically. this will be our job to ask tough questions. to the extent we can have a press honeymoon with donald trump, we are tonight now. business-friendly policies that will be put in place. he's trying to do both at the same time, have lower taxes and have more spending, especially infrastructure spending. there will be some part of this that has devil in the detail components to it. but the short answer to your question is yift can be done. i'll be interested to see if rich people do get a tax cut out of this. or if you get rid of the deductions, are they paying a similar rate to what they are paying now. >> the theory being you will grow the economy and take in more revenue it's sort of classic econ101. it's a chance to see if the policies can start to play out in a meaningful way. the fear and all this. this is what the bears worry about. with all this spending, lauren, the interest rates are going to go up faster perhaps than anyone thinks, and they are fearful of that. >> let's say they go up a square points each of the three redictd rate hikes, they are still historically low. if we get the historic tax cut. mnuchin says this will be the biggest tax cut since ronald reagan. if we get that, and americans will use that tax savings on the economy, and the richer americans will feel confident using that money grow their businesses. the economy has grown 1.8% on average. they take off the red tape and we can see huge potential which we are craving. gary: i think that's the priority for this administration. there will be questions brought up about how we pay for is there but at least initially for all the talk about everything else in the campaign that donald trump can come back in a year or two years and say this was the growth then, this is the growth now, i win. trish: everybody is going to know what a gdp number is. >> a tax hike for everybody. it's been tough. gary: the stock market has clearly reflected the fact that they expect the economic growth to, at 3.5 to 4% in 2017, and interest rates will remain low and the regulatory environment will be such that all these companies are going to to go out and hire. is the stock market ahead of itself? >> i think it is. but we have been asking for this runup and hovering around dow 20,000. you are getting opinions on all sides. there is a reasonable argument that things shifted to an environment that is more business friendly. it's a stock market that's done pretty well under president obama. what is the next step? a change in environment that allows thed the growth to continue and be stronger. >> we all hope so. trish: you saw him his week in mar-a-lago meeting with the ceos of boeing and lockheed martin, and he has what he hopes will be a bidding war for the f-35 program. because it's $400 billion. so this is a guy that's going in there -- i can't remember when we last had a president that said we need to get costs down. this is important. when we talk about the infrastructure spend, people are worried he's going to spend money willy-nilly. we are seeing evidence of discipline when it comes to boeing and lockheed martin. >> he's a deal maker. he will do negotiations with everybody he needs to. he also has an ego. he wants to go down as a good president. we are seeing resistance around 20,000. i know the stock market the last couple days not going up and up. but there is an n we haven't seen in a while. i have been reading we have been buying more christmas trees and saying merry christmas and having holiday parties again. donald trump ignited something in america we haven't seen in a long time. >> i think that's why he cares about growth first and everything else. not even second or third. everything else way down the line, we'll worry about everything else afterwards. if he can come back and make that argument. hold up a piece of paper and say here is the growth where i started. and i win. but we have to answer questions. how do you pay for it? there are important questions in there that shouldn't get lost. >> as a long-term investor myself. growth is great. but you have got to remember how you actually get the growth. and if we get to the point where it's just about government spending, and government infrastructure projects, i think the stock market is going to be looking at that in a very concerned way. i think it's important that people remember that. it's good, it's great. the animal spirits are great. the christmas trees, the parties. you are not demonized to be a banker. trish: just a journalist. gary: but growth is great but you have got to be able to pay for it. trish: that doiltsd for this week's show. merry christmas. happy hanukkah. we'll see you next week right back here. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? 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that from you coming from morgan stanley because it sounds like you're talking pete, jon and i, trader guys. are you saying you're taking it down 5% or 10%? i try to beat the s&p. i have an inflation, overweight credit cards or industrials, big positions in the portfolio i know -- i know that i have to start figuring out when to fade. the arrogance in what i'm say ing you to you, hey, i'll tell you when it is. it's not now. since i know it, i'm worried about it. is it a euphoria to you what is the sign, what is the time to sell? >> i think the sign is the market. i don't think there's one specific indicator that you could say, okay, this is the moment to sell. it's a deep liquid market. you all know -- pete and jon's world, volatility is cheap. how could you not go buy some puts for protection. there's a reason. >> i think there's a lot more dreaming going on. those dreams are regrowing, there's stimulus. to me it's not just price momentum you. if earnings expectations turn out to be disappointing, i think that's the key thing. >> the market may be hitting new highs daily now.

consortium, including morgan stanley, offered as much is $5.5 billion for a takeover. >> what are the details? >> this offer has been brought by the pacific consortium, 30% share for morgan stanley, kkr, and macquarie group taking up 10%. the consortium is offering $40 to $45 per share. that is $5.5 billion. they would separately sell their wagering and gaming business. the investors would get cash and a stake in that new business. that would be valued between $1 and $1.60 per share. the consortium will hang on to the lotteries part of that business, which generates two thirds of revenue. >> where does that leave the bid made a couple months ago by tabcorp? >> where indeed. this offer was made in october, $4.5 billion, which it was valued as not as appealing. the fact that there are now two bids on the table illustrates how attractive the space is. >> billionaire rupert murdoch may finally get what he has wanted for years, complete control of sky. 21st century fox has agreed to take over the european broadcaster for $14.6 billion. no premium to the preliminary offer. what is going on?

matter. morgan stanley >>> sporting morgan stanley with the trust cohort because this bond market alternative stocks could get a lot less attractive than the federal reserve raises interest rate tomorrow. something everybody is expecting. and commending a few places to hide this environment and some could work better with higher rates. doesn't matter. i'm talking about the data center reads. that's what they singled out. these are the fastest growing reads out there and building real estate under them is a good one. this is it. the in the last six months it's been difficult which brings me to digital trust, dlr. a company that owns and manages 156 data centers and four different continent and there aren't enough data centers out there to meet the demand from businesses that want to he is secure places from digital information particularly now that everyone is embracing the cloud. whenever you hear that some piece of software is in the cloud and that is in the data center and that's among the reasons why they've been buying up property hand over fist. and in the position of a eight

don't start a war you know you're going to lose. finally you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. guy: good morning. welcome to bloomberg markets the european open. i am guy johnson alongside matt miller who is in berlin this morning. what are we watching? take a hike. the market is ready for the fed to raise rates but what will the fomc deliver in 2017, that is the big weston. we will hear from three former central bankers, alan greenspan, philip hildebrandt, jean-claude trichet a all coming up. presidential pain. can your treasuries talking 3% will punish the market if financial repression finally over and is that -- that such a bad thing? for ropping the bid actelion. a fascinating deal. we will explore that. we will take a look at where futures are trading. it looks like a weaker start for stocks. you can see that the ftse is indicated down .3 of 1% as is .he cap -- cac there is a lot of earnings and equities. it will be an interesting day to see what happens at the open. guy: maybe a slight negative start. maybe the reason is we had a solid day yesterday. spain am a the, main european markets trading higher. of jewsst a little bit coming out of that trade. the dollar is weak or going into the fed. index down by .1 of 1%. on's generally better. the yields coming down the little bit. we will keep an eye on that and the other thing to watch out for his oil. giving back a bit of ground. trading down by 1.1% right now. we're seeing a little bit of dollar related trade going into that oil story. maybe some of the exuberance coming out of it. plus the non-opec transitions we -- transactions we have seen. here is the bloomberg first word news. hsbc's chairman has said he does not expect president-elect donald trump to dismantle the regulatory since theput in place financial crisis. speaking exclusively to bloomberg, douglas flint cautioned that returning to an "light touch approach was quote could spell disaster for the banking industry. >> you do not want to bash a part of the world where people are able to do things with much less capital that is economically advisable. we are all exposed to each other. one touch regulation of the lowered standard is bad banking i do not will happen. juliette: we will bring you more of our exclusive interview with chairman douglas flint throughout the day. goldman sachs plans to appoint harvey schwartz and david silliman. the bank to leaving take a job in the trumpet -- trump administration. goldman is likely to name zechnology chief martin chave to replace shorts. interest rates may climb to 3% on 10 year treasuries by next year as deficits and inflation rise under a donald trump presidency. the move that would hurt markets. the chief investment officer who called the president elect's policies bond unfriendly said the effect could be felt across the u.s. economy. benchmark treasuries are closing at two point 5%. confidence among japan's large manufacturers improved the first time since june last year. the week improved prospects for company earnings. sentiment rose to 10 from 63 months ago. with the outlook up to eight from six. if 5.5% increase in plan to business investment for the current year was below estimates. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. bloomberg. has been 12 months since the federal reserve began its liftoff. since then there has been a lot of talk but no action and while the fed stresses it's due to dependency, releases have been topping estimates at the fastest rate in two years. various measures of inflation arcola sing around 2%, the target while employment figures are trending higher. unemployment well below 5% all year. alan greenspan said the unemployment rate cannot fall much further. greenspan: the labor force is running out of extra workers. the on employment rate now is under 5%. -- unemployment rate is under 5%. you cannot go much lower than the 152 200,000 increase in payrolls a month. it will not continue on because we are running out of people. lou have special coverage of the fed starting at 6 p.m. london time. the press conference something you want to watch out for. the projections something you want to watch out for. what will those dots deliver for us this time around. what are you looking for tonight? are all most certain there would be a rate hike. guy: what are we expecting? guest: we will get a couple of hikes next year but the commentary will remain dovish because we are going through this time of uncertainty. that may need to change in the next year now that oil is doing well. the headline will be in creasing. i think at this stage we are erring on the side of caution. guy: you have been onset talking about carrier the way to make money. is that still work? guest: carrier is difficult. trump has -- trump's election has put a spanner in the works. it makes my job easier and is quite a lot of change to analyze and interpret and incorporate into investment strategies. it is not really the best environment for holding positions. we have always got a mix of positions. there are positions that are less valuable than others and we have new ones that we're coming on because they offer a premium. but there is a variety of strategies the have done poorly. we can keep those on, things like australian duration which has rebounded very hard. rebounding from low levels much like that in the u.s.. that is a position that is likely to perform well because the us trillion reserve bank will find it difficult to raise rates even if the rest of the world is. what do you expect to hear from the fed today or what would surprise you, what are you looking for? best: if the fed were to less dovish than the market expects and really say that they do want to be ahead of the curve on keeping inflation under control, then that would be a shock to markets, quite a hawkish shock and feeds into one of the concerns i have got with the trump optimism that is coming through in a lot of acid market prices and that is the circularity. we're not entirely sure which of his policies will affect asset classes before other asset classes and the fed is critical because of the come out with a slightly more hawkish tone i would expect it to be more bullish for the dollar than anything else. we have seen in the last 18 months consequences of an excessively strong dollar. what is going to be good for asset prices and good for the market stability in the short to medium term is the fed managing to get its hike on to suggest that there will be a moderate hiking cycle, but doing it in such a way that they do not cause excessive dollar appreciation which really upsets the global financial stability, basically. att: which would because, more hawkish tone in one sense? do you expect them to indicate in some way trump's policies are causing an upward risk, upward bias? just: yeah. they might talk about the one side of trump's policies that are inflationary that might caution against the pace at which inflation has been increasing or could increase. i think all of these things are relatively unlikely given that things are still trundling along. ee have not had a blowout in th participation rate. it could improve. some of his policies are designed to allow women to stay and reenter the workforce more easily. there is some room for the fed , it is aght wait-and-see approach. the airport -- administration has not been inaugurated yet. there is still a lot of people to be confirmed in their positions. i would be surprised if they are on the hawkish side. there is the possibility step away from the optimal control thesis that yellen has been pushing and take a more cautious tone. guy: the labor market is tightening. the philips curve is going to work and we have seen evidence for that. levers, early earnings and the trajectory is undoubtedly up in the united states. the fed has fulfilled its 's picking many, pce up toward target. the idea you could run a hot economy, we are in that phase right now. guest: the unemployment rate is low but so is the participation rate. you read the research that the fed has written themselves and it looks like maybe three quarters of that is demographic and you want to get this people back in the workforce but there is still a quarter that is not. perhaps more cyclical and can come back into the workforce. we have been talking about the outward gap in the u.s. that would close material in the last couple of years and inflationary pressures should be tilting. we have been talking about it for 18 months. guy: it is one of those things that you will know when you see it. by then it is a must too late. guest: you come to the end of the road and you are getting help from inflation from oil at the headline level which and creases inflation expectations which has a self fulfilling action to it. there are elements that are putting upward pressure on inflation but i think that when you have had inflation running low and with such negative pressures, a lot of those negative pressures still exist, to which debt, demographics still apply by a lot of pressure to inflation and dictations. it is quite possible to let things run just much like the bank of england did post crisis and probably will in the next two years because it may be assisting in permanently changing expectations. guy: jerry fowler joining us this morning. coming up we will bring our interview with the chairman of hsbc. find out what he thinks about bank elevation -- consolidation in europe. u.s. rate hike a foregone conclusion and are there still trades to be done? all that still to come. we are 18 minutes from the market open. this is bloomberg. ♪ matt: welcome back to the european market open. 15 minutes to go before we see equity markets start to trade. looks like they may move to the downside this morning after a pretty decent day yesterday. let's get the bloomberg business flash. is in talkstelion with another party after johnson & johnson and it talks for a deal. it was worth over $27 billion for the drugmaker. it is now in talks with sanofi. clothingorld's biggest retailer is reporting higher revenue. consortium including kkr and morgan stanley has offered 5.5 billion u.s. dollars. the move sets up a potential bidding war with tatts corp holding. failed for the explantime this year to to regulate or's that he could unwind its business without wreaking havoc on the broader financial system. the lender is banned from buying non-bank companies are setting of international. if wells fargo does not, with an acceptable so-called living will by april, assets and its broker-dealer and non-bank units will be capped. that is your bloomberg business flash. guy and matt. guy: thank you. the hsbc chairman douglas flint has told lumber got there are too many banks in europe. he spoke exclusively to francine lacqua. at itynt: yes, looking from mars, why do have some a banks and the business model has --ome less often because profitable because of lower rates and lower margins which is has -- it has. assuming you're not going into risky places, then you need to tie up the cost space. either much more technology which is happening or consolidation. consolidation is difficult because cross-border consolidation has not been particularly successful. jerry fowler still with us. in terms of the risk reward and as you look around the world and work out how different investment stack up, where do european banks said? got veryropean banks cheap and are rapidly raising some of that cheapness. those reasonable rooms make money out of european banks in a variety of ways. if you are tactical you could treat them. that is not our style. we have much more strategic views. on a strategic time from there is opportunity to sell up the downside and you could receive premium given that the banks in europe are very volatile and well protected by the political and financial system in europe to some extent. what i worry about in terms of the long-term out -- outlook is you are getting a deregulatory push that is more specific to u.s. banks which includes the dollar repatriation. if dollars are taken out of the market, the cost of dollar lending goes up in optional markets and that is a risk to any bank that needs access to the dollars in that system. to provide to their corporate clients and trade. you think european banks need to fund the working capital of multinational corporate's which are priced in dollars, the axis that historically had free levels, at 50 basis points in the cross currency basis web and there is a reasonable chance that has just -- settle at a higher level if you take trapped dollars out of the optional market and put them back in the u.s. it is one of a series of competitive risks that impacted non-u.s. banks rather than u.s. banks. do european banks have the right business model? erry: it is a good question and that they are still enter me -- intermediate in business. it will allow corporate's to issue bonds. in europe the lending is direct to the bank. direct from a bank rather than securitized. there is a element that banks could be facilitating of transactions. it is hard to say they have a poor business model when they have negative rates to contend with and that is one of the headwinds, the negative rate environment is not likely to change anytime soon whereas u.s. banks should all must immediately benefit from an expanding deposit versus lending rates. at least give them some stability from contraction. while european banks are doing right well and my -- there are questions round the business model and concerned about capital, it is hard for them to perform with a little bit of a steepening curve area -- curve. matt: does that have to do with the european culture? not sure.m real specialist in european banks and i have a conversation about what we should do for our macro perspective. it is usually a fairly short conversation. our conclusion is european ranks require stockpicking. there are good banks and bad banks and there is a lot of dispersion between the two. we prefer not to put our typical multiyear strategic trade in european banks at the moment and to actually leave that to the stock pickers because there is quite a lot of differentiation in the european markets. we do have a macro position in area thereu.s. banks is a yield curve in dollar traded at the long and but rising rates trade and the do regulation trade and that trade has made one and 50% in the second half of this year and the managers [inaudible] did a good job of waiting through a fairly turbulent first quarter to access that quite superior return on trump's election that made it a very useful macro strategy. in europe, it is hard to trade from a macro perspective and you do need to go into a lot more stockpicking. you have to look into this banks from the bottom up. next, we take a look at the movers in today's trading area including actelion. the rug company wants to say independent -- drug company wants to stay independent or maybe they have another better. we are nine minutes away from the open. this is bloomberg. ♪ matt: it is five minutes until the open. it 50 5 a.m. in berlin. some 50 5 a.m. in london. i am matt miller alongside guy johnson. let's look at the stocks that are on the move. an interesting swiss biotech that a lot of people have been trying to take over for years. johnson & johnson went in with a bid of more than $250 per share. more than 27 billion and the main shareholders said no, that is too low. it is possible that they have drugmakers, other have been circling around this country for a long time. you could see them trying to take it out again. notfounder says they do need the money. guy: it will be fascinating to fi canther -- if sano change their mind and what price they need to deliver. there is a long way to go on this one. johnson & johnson walks away. we will light -- wait and watch. it will be interesting story for the pharma sector. that is the story for the market open. tes away frominu the open. ♪ guy: good morning. welcome, you are watching "bloomberg markets: european open." i am guy johnson. matt miller is in berlin. we are away from the start of european trading and matt have your morning brief. matt: going to be interesting today. int will the flm see deliver 2017? alanivering greenspan and jean-claude trichet. plus, presidential pain? treasuries topping 3% would punish the markets. is financial repression finally over and is that such a bad thing? j&j one play. we have been talking about this deal. is the way clear? guy: we will watch that stock very carefully. it has cooled down sharply. let us take a look at the european open. the ftse is opening unchanged. we are anticipating the market is going to be a little bit more skeptical and cautious. 6962 is where we are. c eur on the back foot. i'm watching antillean, waiting for it to open. the boj unexpectedly increasing its super long bond purchases has put downward pressure on yields globally. 10 year yield down on treasuries and german bonds. nejra: it looks i be same is happening in the gilt market. down three or four basis points. very much following the trend of what is happening in global debt market. moving over to have a look at what is happening on the stock gets hundred and the sector breakdown. down 36 of a percent. stoxx 600 and the sector breakdown. 0.6%. really, pretty much every industry group here is in the red. i want to bring your attention to this chart, looking a

morgan stanley to help takeover, after publisher was approached by media investors. this one, half of all 30-year-olds earn more than their parents did. enormous decline from early 70's and rapid economic growth will not do to reverse the trend. finally, scientists have discovered 99 million-year-old dinosaur tail feater trapped in amber. look at that, it's widely accepted that some dinosaurs, nicole, did have featers, now you know. >> we used to only do 350 pair a week and now we are doing 2,000 a day. nicole: keep those boots handy. snow blankets much of the nation. fbn:am, keep it right here daisy is six years old and she is my very best friend. i couldn't live alone without her. i spend a lot of time in my backyard. i feed the birds and the bees. i love my flowers. the color in my garden keeps the pink in my cheeks. i was very independent and thought i could take care of myself. i fell and i had to have meals on wheels. i love them. they're my savior. and i look forward to the volunteers because they've all become my friends. my name is lola silvestri. america, let's do lunch.

onhares are what morgan stanley is calling a sector rotation. up 15% on the week after a bullish investor day. upgrade out there as well. under armour shares are higher -- he news that investors clearly like in that. all the stocks up more than 15% pay it after what -- as for what is boosting stocks, a big boost for all three averages. for theve some sympathy apple supplier broadcom. fourth --raised the raised the first quarter and it seems investors like those results. apple is now reverse the decline it had during the election. julie: thank you so much, we appreciate it. let's take a look at the bloomberg first word news. >> the president of south korea has been him p. -- akers voted to remove the prime minister steps in his acting president. the court has up to 180 days. on capitol hill senate democrats are threatening a government shutdown over benefits from retired miners. congress needs to pass a stopgap spending, or else some government operations will have to cease. extension --ar instead of the four-month fix in the bill right now. goldman a report that sachs chief opera

sophie. a consortium including kkr, morgan stanley has made a $5.5 billion takeover bid. they will set up a bidding war which made a lower offer in october. they plan to sell or -- are a step closer in japan after an upper house committee approved new legislation. the bill is expected to pass a final debate which begins anytime now. it could open the door to billions of investment. >> confidence among japan's manufacturer is improved for the first time since june last year as the weaker yen improved prospects. sentiments rose to 10 from six. the outlook as up to 8-6. a planned 5.5% increase in business investments was below estimates. shareholders approved him as chairman. he has a machine capable of trading 10 million cars a year. nissan bought a stake in october after the fuel economy scandal threatened to hand mitsubishi its first annual loss in eight years. this is bloomberg. president-elect donald trump has signaled the beginning of a new pro-fossil fuel era with his choice of exxon tillerson. -- rex tillerson. how would that differ from some of the values projected from the obama

now in an exclusive interview is greg fleming, former president at morgan stanley wealth management. a senior research scholar at yale law school. you are unshackled by the confines of wall street. you can speak very freely now. >> great conversation. >> first of all, is your jaw just dropping at what is happening with the financial snz. >> i think the financials are benefitting fraup a couple of things including the prospect or promise of deregulation which is clearly something that the president-elect has pointed towards. and at the same time you have higher rates finally and as rick santelli said if anything i think the fed has been slow on raising rates and maybe following the bond market a little bit now. i think you have at least three more rate increases next year and the steepening yield curve will help earnings a lot. >> thinking about deregulation and the tussle between big banks and small banks they often have different political views and different -- in a way there seems to be almost a war of words sometimes. so if the idea is that trump will div deregulation does that fav

big change. i have been very bullish on your show from valuation. morgan stanley and goldman sachs were trading at 80% as recently as june. with this move morgan stanley has gone from 23 to 43. it is trading at 1.3 times. that's not outrageously overpriced but gone from being objectively cheap to fair value. sometimes things go from cheap to rich stopping only briefly at fair value. at this point i don't see how you can say banks are cheap. >> what would you say? >> i think bank stocks make a lot of sense today. i am bullish for three reasons. one is the potential for regulatory improvement, rolling back of dodd-frank or limiting regulatory exposures. banks are offering a lot of products at a loss because they can't invest the assets with the fed bumping interest rates up and committing to doing it more that could be a big improvement to banks, as well. >> and you don't -- to charles point you doint hg that is already in the stock and then some right now of the financials? >> we had a big move since november. if you look at a longer chart most banks are where they were in early 201

with morgan stanley. andy, it's great to have you. it's great to have you here as well. josh, what's going on here? we certainly have a little bit of a breather today. haven't had much movement in the last couple of hours at all. >> well, look, volume is light. a lot of people have made their big decisions already for the year. seasonally the second half of december tends to be strong. people mockingly call it the santa claus rally, but, in fact, there is some statistic altruth to it, where you've got people that are trying to get a jump on what they think might happen for next year. my message right now is not to get too worked up about all of this. there are a lot of things happening in january that could just as easily reverse some of the positive sentiment that we've seen in december. it happened bigley last year, and in any case there are a lot of new things like the inauguration, like an earnings season that we've seen estimates go up into rather than down. >> i'm looking into 2017. i'm a little nervous about the dollar as weave talked about for a long time now, and so

morning is the financial advisor with morgan stanley. good morning, george. >> do we expect to see hikes going up 3%. >> janet and her team have suggested three raises next year. okay. at morgan stanley, we think it will be two. one in september and one in december. it is contingent upon the economy. with president-elect trump with his promises, if that's delivered on, that's going to hit the economy and maybe cause the third increase. >> these are things that the fed wants to do to stop the economy from heating up too fast. >> yeah. the fed is responsible for the supply of money. so if they're too liberal, that creates inflation. if tour too conservative, that slows down the economy. the fed is like a big train going down the track. if has a raise and another raise, it is hard to pull back on it. they are cautious. unlike the stock market which is euphoric right now. >> if i'm looking to buy a house in the next year or two or need a vehicle, should i speed up my purse. >> rates have been low for an incredibly long time. the party is over. we have time. but we're going to start to

conviction list. >> upgrades. >> and then they got morgan stanley today. >> it is interesting we got a negative preannouncement or negative news from caterpillar. we got negative from he honeywell. both of those stocks are higher. honeywell is up today on news, and cat is where it was. maybe people are willing to look through 4q and look through -- >> not make. >> the uncertainty. let's see. >> the point of it is that maybe there's stuff that can look forward to in 2017 and you buy on any pullback. >> we're talking about the rotation into the industrials. ge rises 8%. now one firm sees another 25% gain from here. >> welcome back. >> thanks very much. >> we're talking about some of the industrials that seem to be throwing up some red flags. yet, you are giving the green light on this unwith, where why? >> i also point out your prior conversation on honeywell and their numbers today. their fourth quarter is actually at the low end of their range, and the only difference is 1 cent was fully tax rate at 1%. their actual operational expectations, nothing has changed for them, and that's one

run, there is a big question about the oil market. morgan stanley said that while higher oil prices are good now, it will lead to more investment, which down the road might lead to further instability and oil price this time next year. haidi: while opec was putting the finishing touches on this deal, indonesia suspended its membership in the group. what happen this time? >> indonesia was a longtime member of opec. in 2008, it suspended its membership saying we are no longer a big oil exporter. then last year after president -- came into office, they came back and got to this meeting and saw again, realizing higher oil production cuts come higher oil prices benefit them, so they decided to bow out again. long time coming to the reunion to only last a year, but indonesia back at the net importers table instead of the net exporters table now. haidi: thank you so much for that. the oil priceurse has gone up so much, energy companies are on a tear. let's get the latest. juliette: it was the first cut in eight years. you are seeing australia's energy sector have its biggest 7% inn eight y

insight person to person, on what matters to you. morgan stanley. when whirlpool builds an appliance, they put everything they know into it. but once it's sold, there usually isn't a way to keep improving that product. today, whirlpool can analyze iot sensor data from connected appliances on the ibm cloud. so they can continuously learn how customers are using their products. and how the machines respond. harnessing data to make great products better - that's what the ibm cloud is built for. harnessing data to make greatadirectv now.ter - stream all your entertainment! anywhere! anytime! can we lose the 'all'. there's no cbs and we don't have a ton of sports. anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. >>> welcome back. the wall street setup, stocks searching for direction, dow futures higher this morning, up 17 points. s&p up 1.5. nasdaq

. morgan stanley >>> you nailed it. >> that's amazing. >> run dmc, a very special christmas, came out parole in '82. your favorite christmas song. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) i won't. i'ts your tv, take it with you. with directv and at&t, stream live tv anywhere data-free. join directv today starting at $35/month. no extra monthly fees. ♪ >>> welcome back to "fast money." the trump rally stalling again today as indices were in the red. in the second half of the show, could virtual reality be a virtual bust? 2016 was supposed to be the year of er with everyone from facebook to playstation rushing to put our their own devices. the numbers suggest consumers aren't taking to the hype. we'll tell you why. >>> plus the biotech breakdown continues. three stocks could double next year. we'll give you the names. >>> the index tracking for its longest winning streak since 1984 is cre

woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley >>> welcome back. let's get you up to speed with the markets. futured called fractionally higher after a selloff yesterday following the fed decision. lost about 0.6% for the dow. the s&p was down a bit more. 0.8%. called 0.2% higher this morning. eurozone composite pmi unchanged. 53.9. adds up to the strongest quarter of the year according to the survey. hasn't done too much to the currency markets, which remain a strong dollar this morning. extending a strong dollar yesterday. >>> let's move on. the major banks have wasted tho time no time in hiking their lending rates. all will have hiked the prime lending rate from 3.5% to 3.75%. the banks move the rates for borrowers immediately and in full. the prime rate is what banks lend to their most credit worthy customers at, but similar increases in all floating rate loans will take place today including credit cards and mortgages. the credrate increase for saver slower to start. of the large universal banks, bank of america was the best performer ye

value of capital is to create, not just wealth, but things that matter. morgan stanley girl: you're going to need me. you're going to need us. all of us. you're going to need our help with your water... your air, your food. you're going to need our determination, our compassion. you're going to need the next generation of leaders to face the challenges the future will bring. and we promise we'll be there when you need us. ♪ deutsche bank says it reached a $7.2 billion deal with the u.s. department of justice. italy looks to backstop its troubled lender. >>> the march to 20,000. will santa claus come to wall street. >>> amazon counting on a final flurry this holiday season. it's friday, december 23, 2016. you're watching "worldwide exchange" on cnbc. ♪ >>> good morning. welcome back to "worldwide exchange" on cnbc, i'm sara eisen with dom chu in for wilfred frost. >> happy holidays. this is the procrastinator's time to go shopping. it will be because i will be doing some. >> the national retail federation found that most people wait until december 23rd to buy their last gift. >>

, and, can deliver insight person to person, on what matters to you. morgan stanley. >>> just a few trading days left in 2016. joining us with the economic and market outlook is michelle meyer from bank of america merrill lynch. welcome. >> thank you. >> are you skeptical of the rally that it's matching up with the economic reality? >> i think there's a question of timing. stock market participants in general are always forward looking, thinking about what's happening next. for the data, the hard data has been weaker. q4 is tracking high. q1, we think something comparable. if you look at survey measures, consumer confidence, things forward looking, they all skyrocketed high. >> is it fair to say that from an economics perspective that there are tangible forecasted benefits for what could happen in a trump administration? there's been a lot of surveys, consumer sentiment, maybe that plays into this idea that americans are feeling better about the future. could the economic fundamentals live up to some of those expectations? >> that's an excellent question. time will tell. clearly con

wt matters to you. morgan stanley. anything with a screen is a tv. stream 130 live channels. plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. >>> welcome back to "worldwide exchange." good morning. let's get you up to speed on the market action. some softness after a selloff yesterday. second triple digit decline for the dow since the election. dow futures down a little more than nine points. nasdaq futures down around six. s&p about flat line. the dollar pulled back in overseas trading action. dollar is weaker for a change against the japanese yen. 116.32. the euro is stronger. 1.0474. and the british pound is stronger, which looks like we're getting a reversal of the trades. also seeing some buying of u.s. treasuries, pushing yields lower. potentially profit taking on those winning post election trades. >> even the british pound is stronger. not that much of a surprise. great currency. any way. moving on. we are just he day

deliver insight person to person, on what matters to you. morgan stanley. >>> we're back now with the billionaire investor carl icahn. carl, thank you for taking the quick break. do you want to answer that question now about how investors should be thinking about that very topic? >> well, look, you know, nobody can pick what the market is going to do in the short term. too many variables. i do believe that this market has been very surprising in that it's run ahead so quickly. i think the s&p interest that night when donald was elected is up over 10%. so, you know, i would tell you that you have to be -- i believe that you have to be very wary because there are so many uncertainties around now. indeed, i was waiting to go on and i watched art cashin speaking a bit and i think he said pretty much the same thing. that obviously if you have a trade war with china, by definition, i remember the day something like that would really knock the hell out of the market but maybe if you're going to do it you should get it over with, right? and so that's a consideration. i mean, you have to just

. morgan stanley >>> dow up 81 off the highs, but still on track for its best quarter since and best quarter ever. we're back after a short break. there are many things you don't want in industrial strength- (smash!) like an administrative assistant. your 3 o'clock is here. but there's one thing you do. it's called predix from ge. the cloud-based development platform that's industrial-strength strength! >>> hello, everybody. i am sue herera. syrian television broadcasting footage, which showed the vast destruction of aleppo as government forces are expected to take the last rebel holdout. it would be president assad's biggest victory in the civil war. >>> bill cosby back in the courtroom for his sexual assault case. he smiled, nodded, wave aid little bit as he arrived at the courthouse. his attorneys are trying to limit the number of other accusers that can testify at his trial. >>> cuisnart is recalling food processors, blades can crack over time, causing small metal pieces to break off into food. there have been 69 reports of those types of incidents. 30 mouth lacerations or tooth

just wealth, but things that matter. morgan stanley this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests... or not in vests. sign up at etrade.com and get up to six hundred dollars. >>> discretionary does not outperform. >> we're in an environment we haven't seen inflation for a decade. >> real debate. >>> i want to welcome you back to "the halftime report." there's your picture of the dow. starting to make a move a little bit later earlier today but late in the morning, paused a little bit and we've been sitting in this range for the better part of the last 25 minutes. >> your scoffing is not helping. >> i'm trying not to scoff as much. >> i try and thread the needle there. doc just drops names all over the place. sue herera, help me out. >> hand it over to me, i'll take it. thank you. >>> all right. here is what's happening this h

goments and thrtune 500, and,an delivernsight pson to person, on what maers to you. morgan stanley. and,an delivernsight pson to person, >>> welcome back to "the halftime report." i'm contessa brewer. a new report shows the number of law enforcement fatalities rose to a five-year high in 2016. 135 police officers were killed in the line of duty. that represents a 10% increase from a year ago. ambush-style killings also spiked, up 250%. >>> china has completed two new high-speed rail links. the ambitious project is going to expand by the end of the decade. burger king and tim horton's will use only antibiotic free chicken. restaurant brands international which runs both restaurants says the switch will happen next year. >>> an ohio state band member may have a new role next season as a kicker. the junior nailed a 55-yard field goal when he was out governing around on the field this week. the band tweeted the video of the kick and now ohio state says they're inviting him to try out for the football team. the guy has never even played high school football. now he's got some kind of hail ma

: morgan stanley president says it is too early to declare a lasting rebound on wall street trading revenue. global investment banks on pace for the first annual on trading revenue increase in 4 eyars, after donald trump's surprise election win sparked a massive shift from fixed income to equities. morgan stanley shares slipped after colorist -- shares flipped after he spoke to bloomberg. >> yes, the low picked up since the election, but the overall seed pool related to fix equities is related on the margin each year. i don't think this is a significant pickup inactivity since last quarter. host: one rate hike on wednesday, two the most next year. that is what the fed expects to announce after a two-day meeting wraps up. could the expectations of a trump spending boost change that timeline? bloomberg's kathleen hays is more on that. there is certainly uncertainty. >> there are signs that some entities are taking donald trump seriously. it is a done deal. meetingwraps up its hours from now. janet yellen said the case for a rate hike has continued to strengthen. other fed speakers has said it

matters to you. morgan stanley. >> remember when i told you that this market has not one but two fangs? not just my acronym for some of the best products around, facebook, apple, netflix and goggle. it trades under the symbol fang. today they gave us a secondary offering, something that's become a pattern with these production places with the company selling 10.5 million shares of the red hot stock for $97 each to pay for acreage in the permian basin. it's still one more stop for an oil deal. while these have all worked out so far, including this one, which closed up four points from the offering price, if you got in, you know what? i think we need to be a little more wary. a little more sir couple spec. oil has had such a big run. i don't know how much more upside it will have. diamondback are buying and shrewdly priced its offering down 13 points from its highs and down 4 bucks from yesterday's close. they gave you a nice discount. it's a part of a 2.4 billion deal to buy 76,000 acres, making diamondback a bigger player in the permian when people see the chinks in opec's cut ag

is to create, not just wealth, but things that matter. morgan stanley we're opening more xfinity stores closer to you. visit us today and learn how to get the most out of all your services, like xfinity x1. we'll put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. there's more in store than you imagine. visit an xfinity store today and see for yourself. xfinity, the future of awesome. >>> we have breaking news on barclays. eamon javers with the news for us. >> something unusual here the department of justice saying it is suing barclays to recover civil penalties for fraud in the sale of residential mortgage backed securities. this dates back to the great recession that looked like settlement talks have broken down and now the department of justice is taking action. they say they are alleging that barclays engaged in fraudulent scheme supported by misrepresented mortgage loans. according to the press release the department of justice put out. unusual here they are naming

person to person, on what matters to you. morgan stanley. >>> welcome back. more china news today, the chinese government promising to return an underwater u.s. naval drone it seized last week. donald trump saying the move saying let them keep it. how do rising tensions between the u.s. and china impact your portfolio? let's get to seema mody, here on set with more. >> sharp rhetoric by both sides. trump bears no sense of how to lead a superpower. the big concern here for wall street is that so many american firms for a long time had benefitted from stable relations between china and the united states. and that any setback or retaliation that we see could hurt some big companies that either do business in china or lie heavily on their consumer. companies like walmart, according to facts that deride over $50 billion in revenue from china over the past 12 months, that proposed tariff by the president-elect could hurt walmart's bottom line and result in driving up u.s. retail prices of chinese made goods. but the sector with the highest exposure to china is the tech sector. with half

stock. shares in thee second quarter. airbnb declined to comment. morgan stanley did not them easily respond for comments. apples wireless headphones are available. they will be an apple stores starting next week. ♪ this is bloomberg. . david: in new york, i am david gura. vonnie: this is bloomberg markets. let's start with headlines. first word news, courtney donohoe. courtney: transition team of president-elect has requested names of contractors who worked to advance president obama's climate agenda but at the agency said it will not identify individuals. request hasam's left many people unsettled. u.s. defense secretary said three leaders have been killed in syria, among the dead were two tied to the 2015 attack that killed 230 people. there were killed in an airstrike. cosby will bill battle to limit the numbers of accusers who can testify at his sexual assault trial. call 13ecution hope to other women. willefense will credit -- discredited the credibility. rex tillerson's nomination to be secretary of state is being credited by someone who held the position. condoleezza rice c

value of capital is to create, not just wealth, but things that matter. morgan stanley ♪ >>> attention shoppers. there's two days left until christmas. for the executive edge let's bring in dana telsey from telsey advisory group. good to see you. >> good to see you, too. >> it's busy. >> yes. it's busy. what is wrong with retailing stocks. got hammered yesterday. they did so well in the wake of the election, boom. underperforming dramatically. what's going on? >> fears of border attacks coming is driving retail stocks down. our retailers, they produce a lot of goods in asia. you can't bring things over here to the united states. you can't give consumers a 30% to 35% price hike when we've had pricing on apparel come down. competition from the international fast fashion retailers, h&h, prime mark all in the u.s., their prices are competitive. we have to be competitive. >> the border tax, the house gop plan they want to change the way we do corporate taxes in america. no longer on profits, want to do it on cash flows. and if you export, you get all your taxes back. so you get a tax rate o

recommendations on big banks. you've got on citi, on morgan stanley and some of the regionals. so, put this in perspective. are you buying them now or what are you doing with them? >> generally speaking, i would argue that the space broadly is now certainly at the top end of our range of fair value. within that, we continue to fight for the names where there is an i hdiosyncratic reason wh we think the rallies go higher rather than just a macro environment. which we find at this point an uncompelling case, given the run in the stock. >> what about earnings? you mention that had. and, you knows, one of the issues for the market has been the expectations that earnings are going to continue to deliver on perhaps the top end of estimates. would you fall into that camp, or are you equally as cautious on the earnings front? >> well, i think you have to sort of parse a bit what the drivers of earnings may be. so probably the most significant one, of course, is the net interest margin, which responds to the shape of the yield curve. the yield curve has steepened, so that's positive for ba

a few more firms and did not know a lot about them, but i had a job interview at morgan stanley, dean witter was a separate firm, goldman sachs was one of them. i got turned down by all of them and probably for good reason. a lot of people -- there was no reason to grab onto me. it was a separate company and managed separately and eventually as a result of joining j. aron i started getting integrated into goldman sachs. david: have you met the person who turned you down? lloyd: i knew who it was. david: is that person still here? lloyd: this is several years ago. it took me a while to work my way up the letterhead. david: did you feel like you are ready to be the ceo? lloyd: i never felt like i was ready to be a ceo. ♪ david: you wound up as the vice chair of goldman sachs. lloyd: it was not so quick. i got more involved in the equity business and sales and trading and over time i became a vice chairman of the firm, one of several, but my particular coverage was over all of the sales and trading businesses at the time. david: the trading business is where you can lose a lot of money