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tv   Bloomberg Markets  Bloomberg  November 11, 2016 10:00am-11:01am EST

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julie: we are going to take you to new york and shanghai, covering stories of new mexico and -- i've mexico and washington. michiganrsity of consumer confidence reading is coming in better than estimates. and the expectations part of at 82 point five. it should be noted, i was talking with a bloomberg intelligence reporter, and he said the results were tabulated on wednesday. this doesn't necessarily capture the sentiment following the election. the first read we will get that will be empire and manufacturing.
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high in a five-month this confidence reading. we had this rally in the wake of the election. abigail doolittle has more. dang -- abigail: with the s&p 500 and the nasdaq down more, really being weighed on vital stake -- weighed on by those big internet companies -- the dow yesterday finished at a new record high. is on pace for its best weekly performance since 2011. what is interesting is the divergence of the nasdaq, finishing lower yesterday.
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as for the sector action within 500, attic bit of red. -- we are at a bit of red. markets close with yields moving up so much this week. looking atom we are health care, a little bit of a reversal. the rally has been a big one. we take a look at u.s. market cap function. it reflects the best week for the dow since 2011. the best week for the s&p 500 since 2014. we are seeing slides in oil and car -- oil and copper. this could be iran saying that not only are they going to join
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some supply opec deal, but they 'sve reported record output international sanctions have lifted. >> you have the real estate, the utilities. those sectors are falling for they've all benefited in recent days as they have in the united states. we are on track for the biggest weekly gain. this is global stocks, this is global bond. the white line, as measured by the bloomberg world exchange market capitalize nation, is the capitalize nation of the global it has lost via the
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over run -- over $1 trillion in value. $1 trillion wiped off the value of global on markets of according to merrill lynch indices. trump spending will boost inflation. emerging-market assets have been hit hard. msci emerging markets currency index is the white line. 5%, that is the most since 2015. there is concern about capital outflows. withinishing off industrial metals, what a story.
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we are up 6.8% for the week. the story of the day, story of the week. best week ever for copper. this is the subprime index. >> that 14 session rally going into today's session. more from our newsroom. portland oregon a demonstration turned violent overnight. thousands of protesters smashed windows and set a fire. it was the second night of anti-trump demonstrations across the country. trump tweeted the demonstrators were professional protesters. later he said they have passion for our great country.
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the british government has outlined the case on brands it. according to the ministry three wrong to the government must get parliamentary approval before starting the process of leaving the eu. taliban at -- launched an attack at the consulate. militants armed killed at least six people. steinmeyer says german forces eventually pushed the tele-bond -- pushed the taliban back. bloomberg news, berlin. authorities are urging protesters to show restraint tomorrow at a demonstration against the president. organizers expect up to half a million people demanding the president resign. south korea's government says it
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is concerned protests may turn violent and illegal. 100 -- this is bloomberg. julie: this wild week starts to wind down. here to share his insight is .loomberg columnist mike regan you have had a job trying to make sense of what is going on. one of the trends is the dow jones industrial average outperformance, particularly versus the nasdaq. we were looking for the best performers in terms of contributions. at the top, goldman sachs is the biggest contributor. >> goldman was cast as the villain so many times. hillary clinton getting paid to speak there was a big criticism.
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blankfeinmp had lloyd portrayed as one of the big corporate villains. we see far and away goldman being the biggest contributor, i think adding 170 points. julie: there is goldman at the -- the top. united health on talk about whether or not we are going to see a repeal of the aca. up, on talk ofg the dodd-frank being repealed. what is the danger in all of these -- essentially trying to forecast what will be happening. mike: i think you need to look at donald trump's wish list and figure out exactly what he's going to be able to get.
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the main question they are getting from their clients is about the corporate tax cuts. goldman is saying that alone could double the growth in s&p 500 earnings next year from 10% through 30%. that tax issue explains a lot about what is going on in the markets, even in if trump doesn't get the infrastructure he wants, a chance of a greater deficit and treasury yields rising this week, longer terms. financial shares are far and away the leaders of this market. it does beg the question what is that -- what does that mean for the economy?
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in this honeymoon period -- markets getting it wrong, commentators getting it wrong, that is just on the election result. let's not forget about how they would have sold the markets -- how do you approach the next big political event? >> i think everybody in the media and polling industry is going to be taking a hard look at how this was run. mostly what people looked at was the popular vote opinion polls. there would be a lot of introspection and figuring out how to get this again.
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hillary clinton's odds were heavily -- yes the odds were in favor of hillary clinton. donald trump had way more individual bets. >> and now is the same as brexit. >> it was the same issue, there were bigger money that's being placed, but way more bets being placed on exit. >> thank you so much. we are going to talk more about the difficulty and prediction with the bloomberg world view columnist with in the next hour. we have to watch jcp shares today after the -- whatnt store chain
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they figured out for the holiday season ahead.
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mark: from london i am mark barton. julie: and i am julie hyman in new york. jcpenney, the department store chain is falling in early training. this year's low is 1% growth. the forecast highlights the struggle that the ceo faces in trying to rebuild jcpenney. joining me is head of research at -- he just reiterated his buy rating.
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jcpenney has been an interesting one to follow, because it had been doing so poorly and really has bounced back. >> sales growth was down 28% for the quarter. some of that had to do with weak apparel sales. some of that had to do with .isruption rolling out julie: this is a same-store sales chart. this calf is the big decline companies have seen in same-store sales. what do you think jcpenney needs to do to get the momentum going
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strongly? >> they are focusing on three strategies. theirre focusing on private label, which has been differentiated in the past. looking to take that up to 70%. forwardmake that march it will help the gross profit margins. for -- revenue per customer, and they refer to as -- buy online, pick up and stored. mark: department store retailers use an excuse -- use any excuse.
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we now have a new president elect. for futurehat mean spending? guest: i believe it is about consumer confidence and that is yet to be seen. situationis is a where we have lower gasoline prices in the pump. a jcp targeted customer. very her -- very early to tell but there are factors that complain to the consumer.
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mark: can these retailers get through the holiday season without heavy discounting? guest: a couple of things. inventories are very much in line. there are some competitors. down 9% year-over-year. macy has controlled their inventory and reduce them. that puts left of our promotional potential for the quarter. weather is unpredictable and could be as warm this year as it was last year. and then the final point on the margin ads some value.
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28 versus 26, 1 of which is a saturday paid julie: amazon has strengthened its portion into apparel. how much of a nation is that going to be? decent chunkken it of their business to other areas. guest: i think it does play to jcpenney's priorities to increase their private label i think it will give them a differentiating point. amazon is truly a major competitor. they can show some skews at a slightly different price point. in jcpenney's case they are truly differentiated because of the private label they continue to focus on.
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julie: thank you so much. mark: still ahead, reacting to donald trump's presidential victory. etf portfolios.
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barton alongrk with julie hyman. julie: time for our weekly etf friday segment. a new catalyst in town to --mp's shocking when has catalyst in town. chumps shocking win has -- trump's shocking win has -- there have been ripple effects
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across the market. you have seen a move in the major averages. the groups have been much larger, both to the up and down side. thanking shares have been among the biggest winners. -- thanking shares have been among the biggest winners. ing shares have been among the biggest winners. >> banking, -- there two etf's. kay re: is the most juiced up. if -- kre has been the most juiced up. >> they are less diversified than the big banks. -- kre traded over
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$1 million. that is how much investors are tuned into what is going on. julie: another one we have been watching as the biotech sector. you are looking at it from the etf side of the equation. guest: four months ago we did a segment on how the biotech etf was the one most correlated with trump's poll numbers. they had priced in a clinton win. what you are seeing is a bounce back. they have taken in a billion dollars. there is a lot of heat around biotech. inre are other variables biotech people should be considering as well. julie: and the individual stocks are more volatile.
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copper has been one of the monster winners this week. and there is actually an index fund and etf. know, it is important to it was already going up. but it really had a rough five years. it doesn't store physical copper. the cost is 30% per year, it is only one or two you percent. it is not going to be that much of a surprise in terms of corroding futures etf's. there is one copper etf in registration from j.p. morgan. people thought it would be too expensive or too high. >> on one hand you have infrastructure spending and on the other hand you have relations ships with china. -- relationships with china.
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there have been losers in the days. guest: this is the big loser. first you have this america first trade policy under trump. then you have the rising rates. we were always wondering whether this rally would blast rising rates. em debt getting killed and the mexico etf getting destroyed. $500 million in new creations. julie: still ahead alibaba president joins us for a look at single stay. -- singles day.
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mark: i am mark barton. julie: i'm julie hyman and this is "bloomberg markets." vonnie: we have more from new
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york. >> donald trump promising a busy day, but isn't sharing any details. will soon behat he making some very important decisions on the people who will be running our government, but trump staff has not offered any guidance on what is on the schedule in the coming days. repealing obama care is the top priority for republican voters. that is according to a new postelection poll. 70 4% of republicans want donald trump to rescind the law once he takes office. building the wall is the lowest priority for voters with just 30% saying its top priority. the uk may be in the middle of its biggest insider trading case ever. three employees from major banks have been arrested in an insider probe and more arrests are planned.
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british regulators are not commenting. the philippine president says the shift toward china will continue despite donald trump selection. he vowed not to go back on his word after announcing what he called a separation from the u.s. he is promised to end joint military exercises with the u.s. and he cursed president obama. global news story for hours a day, powered by more than 2600 journalists in more than 120 countries, i am alisa prunty. mark: breaking a single day sales record topping billions in promotionts online could emily chang joins us now from san francisco. mike evans joining us now from the heart of festivities in china. great to speak with you again. $15 billion rung up so far.
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can you give us any more details on the latest that you announced a few hours ago. first of all, welcome to shenzhen and to you and all your viewers. it is about 17.4 billion u.s. dollars now. it has improved a little bit since you last look at it. it has been a tremendous day for singles that. we have about 40 minutes left. we have surpassed last year's record by substantial margin. jack is speaking behind me and he is addressing the chinese media. he is making the point that i want to make to people, which is the absolute dollar value of what we are selling on the platform today is not the most important thing. are we're really focused on the hundreds of thousands of brands that are selling products on the platform and the experience that they are having
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in connecting directly to consumers. we are also very focused on consumers. we are experiencing with new ways for them to interact with brands through ar, vr, live all sorts ofd different ways that we are not tried in the past. this has been fun for consumers. it has been in gauging and cement is the educational for brands. andus, we are realizing having the opportunity to see the strength and resilience of our platform, whether in payments or logistics, we are going to have to deliver more than 6 million packages per we are processing orders at hundred thousand per second. this is a great test of the resiliency. my responsibilities for building alibaba globally, we are going to need a platform with this capability in order to make that happen. emily: let's talk about your global ambitions. one of the goals was not just to attract international brands but to attract consumers from
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outside of china. how much did they make up of sales this year? this year for the first time, we are making a big push outside of china to markets like taiwan and hong kong, but also in southeast asia where we bought a platform. that is going very well. we have our l.a. express business which continues to sell products from chinese small businesses to more than 200 countries globally. that is also going well. this is not about brands from over the well selling things just to china. it is about chinese companies selling their products to consumers all over the world . emily: last time we spoke, you said the chinese economy is slowing but not slow. to has alibaba continued buck the trend of a slowing chinese economy? sales grew by 16%. can you keep that up? mike: it is highly unlikely that
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60%ill continue to grow at each year because the absolute numbers are becoming so large that that would be very difficult to do. as you can see, we are at least 30 plus percent higher than we were last year. it looks like we will end up between $17 billion in $18 billion of total gmb. that is against the 9% depreciation in the renminbi. that takes a lot out of the dollar number. it will be more like 33 percent or 34% from a revenunminbi standpoint. we are only penetrating 10% of the china retail market online. there is huge potential growth in that china market together with everything we are plenty to do as part of our globalization initiative. we see substantial further opportunities for growth in the future. emily: president-elect trump has said he is going to end trade
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agreements around the world. the alibaba chair has urged him not to adopt an isolationist doctrine. you worked at goldman sachs for many years and travel the world. what would a trump presidency and some of these policies indicating, what would that mean for alibaba and for china? look, i approach this from a fairly pragmatic standpoint. china is a great country. the united states is a great country. that is speaking as a canadian. i'm not a citizen or resident of either. these are the two largest economies in the world. for them to work together is what will be necessary not only for the benefit of the two countries but for the rest of the world. i'm highly confident that is the direction those countries will head. emily: bloomberg reported that trumps trade policy might pose the biggest threat to alibaba of all the chinese tech giants. how would alibaba respond to
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potential trade tariffs, sanctions, and in extreme case a trade war? remember, emily, the way that we are currently set up is that we do not actually sell that much products into the united states. if you want to know who the ourer one beneficiary is of global shopping festival this year, the u.s. has the largest number of brands that are selling products to the chinese consumer and to other consumers around the world. number one -- ahead of all other countries. it is hard for me to understand or imagine a reason why we would not want that to continue. it is great for brands. it is great for retailers like macy's and cosco. it is fantastic for job creation , wealth creation, and all the things that trump and many presidents are focused on. emily: the sec has been looking into singles day data that you reported last year. how are you changing your
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accounting practices as a result of that? we are not changing our accounting practices. we think of the way we present our numbers, whether in singles day or in our regular quarter reports, is accurate and in accordance with the rules and regulations. the sec sent us a letter some time ago. we are fully cooperating with the sec. we improved our disclosure because investors find it useful. we covered that in a very large investor day presentation several months ago. we feel very good about what we are doing. how do we count the gmb that is generated on 1111? we have procedure by independent authors where we record the sales through financial and ali pay and any sales is in the numbers. we follow procedures that have
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been put in place by twc. we feel very good about her numbers. emily: you are the guy who is in charge of increasing alibaba's global presence. to hold single stay outside of china as early as next year? mike: jack was just ask that question a few minutes ago when he was addressing the chinese media. he said that in some point in the future he fully expects to do that. emily, we have a huge job ahead of us to connect so many great brands from developed markets and from around the world to chinese consumers. as you know, one of my big focuses is the rest of asia -- india and southeast asia. we are virtually connecting the world today. what you see here in shenzhen, what you see on the data screens behind me is the world participating in a global shopping festival being hosted by alibaba.
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it is really geographic agnostic because it involves everybody, brands, small businesses, course, allnd, of the chinese consumers and consumers that participate internationally. emily: mike evans, president of alibaba, having flashbacks to being there with you all last year. thanks so much for joining us from shenzhen, the heart of singles day festivities. i will send it back to you. julie: thanks so much. bloomberg technologies emily chang. alibaba shares are off by 2% at the moment. coming up, we will hear from a ceo about the company's better than estimate or quarter results. europe's biggest insurer saw its profit rise by 36%. this is bloomberg. ♪
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julie: you are watching bloomberg. i'm julie hyman. mark: i'm mark barton this is your global business report. u.s. regulations tried to impose limits on wall street pay, but they are racing against the clock and time is running out. julie: a recorder for rosner. if they'll even as oil output grew. quick take,ay's white americans spend more on prescription drugs than anyone else in the world. the world's largest entertainment company had a rare stumble in its fiscal fourth quarter. still, disney is predicting growth will pick up next year. the company posted lower revenue and profit in the most recent quarter. part of that was due to lower at sales and a drop in cable subscribers to networks like espn. bloomberg spoke with ceo bob iger. bob: there were a couple of thewinds like the cost of
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new mba contract for espn and the fact that we do not have a "star wars" saga film in 2017. we think the company is headed in the right direction. we talked the fact that 17 is an anomaly and a lower growth year. julie: this he said it was also hurt by its fiscal calendar and the quarter ended one week short er. mark: another record-breaking singles day for alibaba. they said that sales had reached over $18 billion. that easily beats last year's record total. singles day is the biggest online shopping day of the year in china. u.s. regulators are rushing to impose limits on wall street pay before donald trump becomes president. the rule on finance industry bonuses is the last major unfinished piece of the dodd frank act, which was passed in the wake of the 2008 economic crisis. trump has vowed to tear up the law.
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russia's largest oil producer says third-quarter profit fell 71% even though crude output rebounded. it missed estimates and oil and gas production rose 1%. they have taken advantage of a weak ruble that have cut down russia's tax system protects against low oil prices. julie: timeout for a bloomberg quick take, where we provide context and background on issues of interest. americans spend more on perception drugs than anywhere else in the world. what sets the u.s. apart from most other countries is high prices. on average, about $1100 per person per year is spent on prescription drugs. cancer drugs in the u.s. routinely cost $10,000 a month. recently drug companies have become the subject of public outrage and scrutiny. bro015, so-called pharma march grilli became a symbol of
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greed when the coupling bought rights to an old drug and raise the price more than 50 fold. 2015 and.5% in specialty drugs accounted for the majority of spending growth. here's the background. unlike other nations, the u.s. does not regulate prices for medicine. in europe, governments negotiate directly with drugmakers. however, u.s. private payers typically rely on third parties like express scripts to negotiate discounts. these third parties make exclusive deals with big pharma. this limits the choice of drugs that patients have. in a 2013 survey, one in five u.s. adults said they failed to complete a prescribed course of medicine because they could not afford the cost. companies could argue that they bankrollst profits to future medical advances, but critics say that they are exaggerating the cost of r&d. they are worried that vital medicines may become unaffordable. punishinginton post
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companies that raise price excessively. more than three quarters of americans feel that the federal government should make drug affordability its first health care priority. you can read more about drug pricing and all of our quick takes at and i quick on bloomberg. that is your global business reports. had to for more business stories. allianz saw profits rise 36% in the third quarter. earlier today on daybreak europe, dieter spoke to anna edwards about the results. dieter: we started to realize the year end was a very strong third-quarter and we saw it 36% up in net income. the economy is supported by the life and health segment, but
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asset management and our pmc business both contributed nicely. it is really and all area positive development. good ins actually quite terms of overall flat growth. we are looking for a good year. anna: good morning to you. how happy argue with the performance ucf pimco right now? in report some utter numbers terms of positive net flows. do you have something less to achieve there by the end of the year? what are the new year and targets for pimco? dieter: thank you for asking. positivet is the first inflow quarter for pimco -- 4.5 billion net in euros. sends a tapering start as
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the first positive. i think customers are really valuing the strong franchise and performance of pimco and i think it is paying off and we are turning the corner. yes? >> sorry to interrupt, but i just want to extrapolate what you are saying. what happens to pimco in 2017? what are your expectations? dieter: i think the stabilization and growth continues. it's 4.5 billion and flows -- inflows. it's not the full story. we have done very successful placement on private funds and less liquid alternatives where it only counts as inflow when we call the money from investors, but the commitment is already there. i think we are really on a good track. anna: can i ask you about the implication of trump's victory in the u.s. election?
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how has he changed the investment strategy with this in mind? are you protecting yourself through more inflation? do you see that as one of the key developments in a trump presidency? general, insurance easiers is having an ride in a more inflationary environment because interest rates are up and our life liabilities are certainly performing better with higher inflation. at the moment, i would say we see a lot of technical reactions in the market. the interest rate curves started to steepen in the u.s. and the last month. when you look at the difference between the 10 year and two-year for example, that seems to be that the market is currently pricing in a change from
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monetary policy to fiscal policy. mark: julie, that was dieter wemmer on bluebird television earlier this morning could julie. julie: much more on disney's third-quarter earnings. ceo bob iger on what went wrong. this is bloomberg. ♪
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julie: disney reported a rare miss in its third-quarter earnings, but shares are rallying as the company predicts new growth next year. david westin spoke to ceo bob eiger and asked how the new shanghai theme park is performing. ambitious project we ever embarked on was building disneyland and shanghai. i'm proud to say that after four months of operation, 4 million people visited the park and they are loving what they have experienced and the prospects for that park in the most
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populous country in the world are really bright. as we moved to 17, we feel great about will be accomplished and 16. there is momentum and most of our businesses. we have a couple of headwinds as it relates to comparability factors like the cost of the new forbnba contractor espn and the fact that we do not have a new "star wars" saga film. we talked about the fact that 17 is an anomaly and a lower growth year than we have experienced since 2013, for instance. david: the media networks have gotten a lot of attention, frankly in part because it is so successful and so large, but there are questions about the subscriber level for espn and the reduction in subscribers. can you bring us up to speed? at what rate are you losing subscribers and is that continuing? bob: we have been wives i open -- i'd lie open on what has been -- eyes wide open on what is
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going on in the television business. people have been consuming tv on new platforms in very different ways and new places as well. mobile has become really important, for instance. we were candid a year ago of what we were seeing at the time regarding espn subs. we have been seeing losses. a lot of it came from the adoption of cable light bundles that did not have espn in them. we decided we would embark on a campaign says it speak to make sure that espn was included in any new light bundles. david: what are your first thought about how president trump could affect the walt disney company? predictis too early to what the policies of a new administration would mean for this company. believe me, i've got briefed on how they might affect us, but way too early to speculate publicly. when i can say though is that we have been talking a lot as a
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company and lobbying a lot about the need for new tax policy. the corporate tax rate in the united states is the highest in the world. it is not competitive. it needs to get fixed. it needs to get lowered and loopholes need to get close. we definitely believe we would benefit from that happening and the sooner the better. julie: that was disney ceo speaking to our david westin. mark: more than a trillion dollars is being wiped off the value of global bonds after donald trump gets elected. have a look at european stocks. we are 34 mins away from the end of the friday session. we are still on track for the biggest weekly game since july. the european close his next. -- is next. ♪
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mark: 11:00 a.m. in new york and 11:00 p.m. in hong kong. there are 30 minutes left in the trading day in europe today. julie: i'm julie hyman and for vonnie quinn. this is the european close on bloomberg markets. ♪
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mark: we are going to take you from berlin to china. we are going to cover stories out of wall street today. here's what we are watching today. inald trump temper tantrum markets as they take a beating. more than a trillion dollars have been wiped off the value of global bonds this week. julie: then we talked to an investor who says there are market lessons we all should learn from big surprises like trump's election win this week. we will get a critical view on forecasting models and what is just plain luck. tradeerging-market carry to the losers of a trump presidency. they are set to intervene in support of an exchange rate.


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