we are covering stories from washington to london to beijing. a mixed picture for the u.s. jobs report. 170,000 jobs added in november. wages unexpectedly decline in, so what does that mean for the fed and the markets? donald trump's team continues to make with goldman sachs and gary cohen as he plans to move from wall street to washington. -- an interview with the we are halfway into the trading day on this job's day. abigail doolittle is here with the latest. >> we are looking at largely unchanged markets. the dow is slightly lower. the s&p and nasdaq are up slightly. tired trading with these unchanged percentages, telling us to some degree that nonfarm

payroll report is being viewed as somewhat of a nonfactor by investors. as for the weekly performance, a big switch up. we are looking at the dow having the only weekly gain on the week. the s&p 500 is down more than half a percent. the nasdaq is down the most by 2.5%. when we look at sector performance on the week, else helps to explain that huge divergence in weekly performance . helping this week, the energy complex and the banks. energy getting a boost from opec's decision to cut supply for the first time in eight years helping oil have its best week since august of 2015. the financials getting a nice tailwind from rates trading higher. consumer discretionary and tech down to some degree funded this, so a bit of a sector rotation. one trader told us yesterday that this is the biggest sector wise rotation, an acid wise,

that he can remember in his career. from an asset class standpoint, it's interesting. this is a longer-term chart of globalomberg barclays aggregate bond index. in the month of november, $1.7 trillion fell out of the global bond market, the biggest drop on record going back to 1990. interestingly, it appears much of this money went into u.s. stocks. when we look at overall market one trillion went into u.s. stocks. what's interesting, we have a roughly $700 billion gap. as for where that money went, the big move up in industrial metals, but also the strong possibility that there is a lot of money on the sidelines in cash, especially ahead of the fed decision. thank you. let's check in on the first word news this afternoon. supporters of donald trump

have filed a suit to stop the election recount in wisconsin. the suit claims the recount threatens the due process of people who voted for trump. wisconsin and the recount was requested by gil stein. a top aide to donald trump says law enforcement officials may continue investigations into hillary clinton's private emails. kellyanne conway said he still prefers not to pursue a case against clinton but says law enforcement officials may take a look at it. shooters unleash terror on san bernardino year ago and county employees will remember their colleagues with a moment of silence today. community members will gather to remember 14 people killed and 22 wounded with speeches from religious leaders and the law enforcement. they will hold a 14-mile bicycle ride that will end near the shooting. visit to poked a

france's at the vatican. the two met in the study and he also met with the russian foreign minister sergey lavrov. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm emma chandra. this is bloomberg. david: let's get back to our big story of the day, jobs data from the limited part. joining us now is chris hyzy from bank of america. great to have you with us. you saw the numbers. what stood out to you the most? wages, on a plumbing rate? isthe unemployment rate driven more by the participation rate in this particular cycle. of course, the extrapolation now is, weight growth is slowing down which means inflation may slow down a little bit, so maybe december is still in play but not as much.

i would simply say they are very noisy numbers. much of what come through this month was through last month. the trend is up in wages, inflation, the federal reserve knows this, it's time to normalize interest rates. vonnie: you say we are moving from secular stagnation into cyclical growth. ?hat gives you the conviction >> part of it is that there is nowhere else to go. we have been in this monetary regime for many years. it work for a while after the credit crisis, was designed to stabilize asset prices. once you get to negative interest rates in one third of the world, i would venture to say that is a bottoming in rates. there is a lot of talk of whether the bull market is over. bonds are very different, but as it relates to the secular stagnation, fiscal stimulus is vastly needed to run the world.

less austerity, less regulation needed overall. the only way to combat all of that is to move there. difficult part is everyone wants it tomorrow, they want to see the growth come in the first half of next year. the reality is it is more second half and 2018 when a growth will show up. equities and managing money today is a much greater and accelerated discounting mechanism than ever before, so we are seeing that now. david: we have seen movement in the bonds since that report came out. let's take a broader view of that how bonds are doing. what do you make of the moves we have seen? >> certainly that buffalo is sort of stampeding down. across turn into a roam the prairie. so many people across the world were so over allocated to long dated fixed income for obvious reasons. once you are overexposed, any hetalyst that that is not t

best place to be, that is the start of the stampede. happening in one, money already allocated. next year you will see phase two and three, new money coming into the marketplace. vonnie: where does it go? higher nominal growth, you get a take-up in the yield curve. you are looking at more cyclical value areas. thosere so under owned, should continue to come through. it is pro-equity, pro-value, pro areas that have not participated. understand the interplay with the decision to fed is facing in a couple of weeks. 100% possibility of a hike, which has been there for a couple of weeks. are you looking ahead to february, what will you be listening for from janet yellen after the announcement in a couple of weeks? >> we have to see what words have changed in the communication. we are very much looking at

inflation right now. that would be a change. within the communication coming from the fed, probably not. within the communication coming from the fed, probably not. that will come afterwards as we move toward the february meeting , in terms of the speeches. i would say this, the federal reserve has basically a tough go here. they know they need to normalize. the window opens and closes so quickly. the window is now open. the question is will it remain open for february? probably not. in order for this to work, in order for growth to get going and remain sustainable, you have to have somewhat loose fiscal and you need to maintain somewhat loose monetary until you start to see inflation get up to levels that are concerning. vonnie: is it still an interesting environment domestically for investors, or is it time to look abroad, at some of the emerging markets that have seen these major selloffs? >> great point.

you almost always swing the other way too quickly. technology and emerging markets are classic samples. those areas vastly outperformed this past year. particularly in the six months leading up to the election. knee-jerk reaction, higher dollar, higher rates. then if you look at technology, they are a source of funds to feed the under ownership. i think they have gone too far. -- still out on emerging markets. you could build a good upside case but you can also build a downside case on a potential policy impact out there. a neutral to overweight position in emerging markets is probably appropriate. technology has gone too far. you have the u.k., u.s., italy this weekend. how are you approaching that in light of the last two? managingou are portfolios across the world, you

don't always have to be fully allocated and you need to make regional decisions. right now, decisions around the world seem to be more like a barbell. growth in the emerging markets, the u.s. for high-quality. in europe especially, the political cloud, we just don't know. we can hypothesize, but investors do not make decisions on hypotheses in this type of cycle. we are going to need to see all of that play out. when you are putting global money to work, japan is an easier store to grab onto right now in terms of cyclical value. europe will take a little bit of a backseat. the surprises economically will be in europe. vonnie: we are on our way to dow 20,000 is what you are saying. >> yes, s&p 2400 next year. david: chris hyzy, thank you for being here. vonnie: coming up, the truck transition team is scheduled to

schedule a meeting with goldman sachs gary cohen and this weekend. this is bloomberg. ♪

vonnie: this is "bloomberg markets." i'm vonnie quinn. david: i'm david gura. it is time now for the bloomberg business flash, some of the biggest stories in the news right now. pandora media is willing to engage in talks with suitors including sirius xm. and pandora spokesperson declined to comment. did not respond to immediate comment from bloomberg news.

the international association of athletics federation track and field governing body says it will end its commercial agreement with the date is this early.ree years the original partnership deal with began in 2008 had granted the sports maker rights until 2019. the fashion industry is poised to recover in 2017 after one of its toughest years on record. a report predicts overall industry sales will rise 3.5%. the reasons for that, and improving global economy and measuresring by brand like burberry and ralph lauren. let's turn to politics and president-elect donald trump announcing last night that he has picked james mattis for secretary of defense. the transition team will continue to be busy this weekend. they are meeting with goldman sachs president gary cohn. it's not clear what job he could be up for.

joining us now is kevin cirilli. so much to talk about. hard to know where to start. let's start with gary cohn. what would he want to do? >> that is the million-dollar question right now, particularly after steve nugent was named to be the secretary position, already facing some progressive backlash. but the goldman sachs issue, some within the trunk political orbit are a little concerned that goldman is having too much of an influence within this new administration. vonnie: how many already appointed? >> at least two or three. with this meeting in particular, i think it shows president-elect ofmp is really valuing some these business folks. last night in cincinnati at his rally he said, why is everybody criticizing folks with business experience? that work for him on the campaign trail. will it work in the senate confirmations? david: quite an event last

night, you would be forgiven thinking that this was november and not december. he intends to nominate general mattis to be the secretary of defense. how tricky will it be to get him approved in light of the fact that there is this rule in the books that you have to be out of uniform seven years before taking a civilian position? >> if there is one thing donald trump is good at is bending political rules. this was an announcement that he wanted to save until monday, -- david: but he couldn't resist. >> it seemed like he had a lot to get off of his chest. he talked about the protesters who did not even vote in the election, he talked about madoff matus, and he also talked about flagburning. the overarching theme was that he wanted to unify the country. so it was classic trumpet in many ways. a speech that stood out over the past couple of months.

a pretty hawkish cabinet so far assuming they get through senate confirmation hearings and are nominated to their post. is there any post left that may balance out this hawkishness? >> i don't think so, and that's a great question. a point that i would make is donald trump ran on populist rhetoric, but the positions he is appointing on the economy, if you look at their past, have adopted a more globalist type of financial policy. so i'm intrigued to see what happens with the fed board, especially that key federal reserve vice president for supervision. that has not been filled in some time. a lot of the names being discussed have really adopted a more globalist economic worldview. david: every four years, a group of reporters, strategists, managers get together to talk

about what has happened. yesterday, that happened in cambridge. a tenseccounts, meeting, some interesting words exchanged by the clinton and trump caps. in light of what we heard, it seems like the campaign itself is not a far of memory for a lot of people in these inner circles. >> it really isn't. it will take some time. there is still about a month and a half before he is sworn in. especially when you look at the popular vote, this is someone who lost the popular vote by about 2.5 million votes, but he did win the midwest. so i think both sides, both political orbits, sources i speak with, acknowledges is a very divisive and polarizing time for our country. hillary clinton has made frequent appearances. she has not been signaling that she will disappear. yesterday she was partying with katy perry at a charity event. it is a very divisive time. vonnie: you are in d.c.

typically. i don't want to ask what the mood is like, but people moving out, people moving in, so what is the mood like? >> i was talking with a top friends this week and they were saying this is unprecedented. the banks and financial institutions knew exactly what hillary clinton's legislative agenda would be like. there is a lot of uncertainty with what president-elect trump's agenda would be. there were not many details. if you look at the market reaction, if you look at these names, the meetings he is taking, mnuchin being nominated, that has provided a lot of certainty for these folks. vonnie: kevin cirilli, thank you. david: shares of aixtron are lower on talks about a deal could be blocked because of national security concerns. this is bloomberg. ♪

vonnie: this is "bloomberg markets." i'm vonnie quinn. david: i'm david gura. president obama expected to block a chinese company from germany,xtron in according to bloomberg sources. it would mark the third time in a quarter-century the white house has rejected an overseas buyer because of security risks. erin crutchfield is in london. the basics first, why are they rejecting this? >> even though it's a german they do have a, business in the u.s. and they have some applications that are used in the defense industry. the authority in the u.s. that looks into these deals when it comes to having an impact on national security, they have raised concerns and have recommended that the obama administration reject it.

we are waiting for the government to make a final decision to announce that. that is the concern, the exposure to the u.s. defense industry. we are not there yet, we are not at the point where we can complete trust other countries with our defense systems? is there anything to question here? >> if you look at it from the german company standpoint and a chinese buyer, they were willing to negotiate a settlement that would have eased the defense concerns in the u.s. they would discuss things like selling the u.s. exposure, etc. is thatall concern people in the u.s. government are very sensitive about any the of pass on know-how to chinese in a semiconductor space and technology in general. we have seen other deals that have raised concerns as well. that is the big issue here. the u.s. government has a bigger worry about ip and technology getting transferred, that may not end up in the hands that the

government wants to see. david: i remember hearing from an executive in china, making inroads in the u.s., and he was detailing how difficult the struggle had been to get it done, all of the appeals, the lobbying the company had done in the u.s.. you mention the regulatory group that oversees deals like that one. what recourse does this company any? if >> when they review these transactions, that is when most of the work is done. ,he legal teams may proposals they hold negotiations behind other government organizations. they propose remedies. but once they come out with a recommendation and the u.s. government makes the decision, and if they decide to block it, it would only be obama second time doing it, it would pretty much be a done deal. after the story came out, aixtron shares are sharply down

because investors and shareholders are assuming that this is a dead deal. vonnie: now with the , the perceived wisdom is it would be even harder for china to do deals like this in the future. seenat's right, we have all of the political rhetoric during the campaign. he was very tough on china. this probably only make things worse for chinese investors. the interesting aspect, chinese companies have focused more on buying in europe, hoping to avoid the u.s. issues, but because many of these european companies have u.s. exposure, the u.s. government has become almost a de facto regulator when it comes to security issues. give us a sense of what kind of chinese companies are interested in buying, this is the semiconductor space, but if we see an uptick in m&a, what kind of companies is china looking at? >> anything technology-related or manufacturing they have shown

appetite for. the biggest deal of all time was the chemchina purchase of syngenta. about food supply, agricultural, chemicals. that fit their strategy of wanting to improve farming and other things in china. anything that fits the big, strategic questions in china is what they want. you may have seen recently, the chinese government is looking to block $10 billion-plus deals. they are a little bit concerned about too much capital leaving china, and other companies making purchases that are not that smart. david: thank you for that story. vonnie: the irish prime minister. this is bloomberg. ♪

david: live from bloomberg headquarters in new york. vonnie: let's start with headlines on first word news. more meetings are set

today a trump tower as the president-elect fills out his cabinet and senior staff. donald trump will talk to former defense secretary robert gates, david malpass and former yuan ambassador john bolton and democratic senator heidi heitkamp of north dakota. the goldman sachs president returned for a second meeting and he is being mentioned as a possibility for several jobs including. $611 billion defense policy bill has been proposed for managing the nation's military. lawmakers pass the passage friday by a wide margin. goes to the senate where a vote is expected early next week. the legislation would prohibit closing the prison at guantanamo bay and would deny the pentagon to start a new round of military base closings. the british man sentenced to life in prison for trying to

detonate explosives in his shoe and a transatlantic flight says he cannot afford the $250,000 fine that was part of his sentence. tohas asked a federal judge declare him bankrupt. he tried to set up the bomb on a paris to miami american airlines flight in 2001. the ireland prime minister says the decision to you leave the european union stands in stark -- contrast to a player on international stage and he sat down with our editor-in-chief and recalled his reaction to the brexit vote. >> britain was always an important member of the european union and was a voice for change and a vision for the future. the decision of brexit came as a shock. it's something i did not want to see an something i did not want but i have to respect because it's a democratic decision and we have to get on with it. emma: he said the u.k. won't be

able to pick and choose which aspects of the eu it wants to keep. global news, 24 hours a day, powered by more than 20 is caused -- more than 2600 journalists. this is bloomberg. vonnie: thank you. let's check on u.s. stocks. the secondg it to half of the u.s. equity session and we see a turnaround with the down down -- with the dow and the s&p 500 is barely holding on to a gain and the nasdaq's job -- is just up 1/10 of 1%. let's get some more detail from abigail doolittle. majorl: we have the averages in the u.s. mixed on the day. it's a reverse from what you just described. the dow was one of the three major averages down on the day. as for the week, the dow is the that is upaverage

ever so slightly but the s&p 500 and the nasdaq are lower on the week. significantly lower as technology weighed on the s&p 500 and the nasdaq. the reason we are looking at a role reversal, technology weighed on the week but we are in technology.ry facebook is snapping back from a two day fullback of 5%. a j.p. morgan analyst said of the big internet names that he covers that are down significantly since the election, facebook is the only one at fair valuation. qualcomm and apple appear to be recovering from eight -- from a report saying apple suppliers may be pulling back -- apple may be pulling back on his orders from apple suppliers. qualcomm is bouncing back as well as apple.

as for the dow this week, the financials are dragging. the banks are lower in that includes the major banks. this is as yields are falling back and we have a date -- a bit of a pause in the spike higher and it represents a breather for the bank sector overall. is financial etf for banks up more than 10% since the election and investors are consolidating their gains. vonnie: thank you. more of the interview with the ireland prime minister. he says the u.k. could continue to pay into the eu budget. he was asked if the u.k. would be allowed to cherry pick what it wants from the eu. >> certainly not. one of the fundamental principles of participating in the european union is if you want access to the most developed market on the planet,

have freedom of movement of people. there would be no concession in that regard from europe. >> you have said that two years is not enough and it will go on longer. if you had to guess about the eventual face of the british living would be, what would it be? >> it's impossible to say. no one has left the european union before. you've got 50 years of regulations and directives dealing with the relationship between europe and the united kingdom. we joined on the same day to -- so too in that in two years is probably impossible. i think you'll have a transition time be on the negotiations. britain remains a member of the european union. that means it accepts responsibilities and will pay its way as it should. thatawkward in the sense

all the members of the european arrangementsing without formal negotiations as to the contingencies that would have to be considered. a plan ourselves dealing with the particular circumstances. us in termsyou see of positives and negatives. the huge negative is a major trading partner separating but you are talking to bankers and seeing a lot of people who might conceivably move jobs from london. >> i spent my time on the european council. britain was always an important member of the european union. it was a voice for change and a voice for a vision for the future. the decision of brexit came as a shock. it's something i did not want to see and something i did not want but i have to respect because it's a democratic decision.

leaving with intense negotiations it will spark. come outdoes ireland of this? how many jobs do you think you can get? in every political issue like this, there are always opportunities. we have a stream of inquiries from britain about the financial houses or banks and others moving to different locations. ireland will compete for business fairly and hard with other countries. you see european banking authority and medical agencies, decisions have been made that they should move from london. >> you would like to get them? >> we will compete with them and we offer a range of effectiveness as an english-speaking country within the eurozone one hour away from london. we are staying as a central part

of the european union. >> i think i am hearing your pitch. >> you cannot make the decisions for these entities. what we will do in ireland in terms of relocation is to say we a specialyou arrangement and you can see we measure up. it's important to say what companies and financial institutions want is certainty and clarity about that future. when you have confusion arising from rumors and allegations, it's tough to get into negotiations about what we are talking about. you did not mention the 12.5% tax. britonsn issue and the say they will lower their tax. >> and they are entitled. it is a matter of national confidence as to what level a country wants to set it corporate -- set its corporate tax rate.

we have been 12.5% for many years and we are transparent and absolutely accountable so we are now moving from that. other countries can move up and down as we could but we won't. some countries have set a higher rate but when you examine it, it might be much lower than what the headline rate would be. this sets thek stage in the long term for some kind of reunification of ireland? northern ireland voted to remain. >> ireland has a particular set of circumstances. the northeastern portion of of the arose out partition of the country back in the 1920's after civil war. it was a difficult period over the years. there is a devolved administration in belfast. we work very closely with them.

one element is that the peace process was brought about with the conclusion of the good friday agreement 40 years ago. as the head of government, i am a guarantor of that internationally binding agreement. with the negotiations irrespective of where they lead will have to include the core guarantor ship of that agreement and what it means for the people. that agreement allows for the people if they want to vote -- >> it means it's written in their that if at some time in the future it might arise, the people north and south will vote to have a united ireland and that's allowed under the good friday agreement. the negotiations at the european level will include recognition of that fact which is a legally binding international agreement and i tend to see -- and i intend to see that applies. >> do you worry that what might

happen in italy over the weekend could mean that job is not possible? >> my focus is on achieving our in trade and the peace process in the border with northern ireland and our relationships with the united kingdom then our place in europe. say that when to the brexit negotiations are concluded, within ireland, we will be the only land border within the european union. that's an issue that the prime minister and i have agreed on that there should not be a to customs post a military equipment and all of that. vonnie: that was the irish prime minister. you are watching bloomberg markets. ♪

vonnie: you are watching bloomberg. >> this is your global business report. u.s. payrolls rose and the jobless rate fell in november but the report may not be as good as it looks at first glance. the fallout from the brexit boats and a look at how it's impacting the holiday shopping season. >> china has been on a shopping spree in the u.s. and europe but regulators may be getting ready to put it to a stop. the november u.s. jobs report was a mixed bag with hiring that picked up last month with the economy adding 178,000 jobs in

the unemployment rate dropped to 4.6% but some are urging caution. here's bill gross. >> 4.6% is a headline grabbing number that's getting close to the lowest numbers we have seen in the early part of the century. but well be the headline are certainly not in the clear. wage number.1 22.5, down from 2.8 things are not as hunky-dory as the stock market seems to think. >> brexit is bringing. christmas gloom for a number of britons according to a survey, about a quarter say their holiday spending will be affected by the country's decision to leave the european union. the survey found britons will spend slightly less on christmas gifts this year. is time for our

bloomberg quick take. corporate china has been on an spreeedented shopping snapping up companies across the united states and europe. not everyone is happy and regulators are stepping in. here's is a look at what's behind all of this. all of these businesses have something in common. they are now owned, part owned, or about to be owned by chinese companies. been's dealmakers have buying up american. and european companiesat a record rate for the first time, china is running neck and neck with the u.s. as the biggest buyer of overseas companies. and that's making some lawmakers very nervous. situation, in 2016, chinese companies more than doubled the record $106 billion of deals they did the year before putting them close to the

u.s. for the most overseas deals. among the main concerns of lawmakers is whether chinese firms with their close ties to the chinese government pose a national security threat. the american regulator charged with monitoring the manner has been paying attention to technology deals. its involvement led to the collapse of the chinese investments in western digital. europe does not have a regulator and became a more popular target for chinese deals. china has been snapping up german companies at a rate of more than one every two weeks this year. germany's economy minister is demanding the european union strengthen powers to makes deals or impose conditions on outside companies. the argument is that free-market proponents say it's unfair that chinese regulations make it harder for foreign companies to buy chinese firms by chinese companies are much more free to shop around another countries. gains ane that china

unfair advantage from easy financing provided by government-backed banks. on the other hand, one report found the chinese takeovers have saved many american firms from bankruptcy. and most had resulted in expansion. a study in germany drew similar conclusions. chinese overseas investments could turn into a trojan horse that introduces the country's policy and values, critics respond that's a cold war mentality. china's companies face a new uncertainty, donald trump. >> think of this, they take our money, they take our jobs, and we owed them $1.6 trillion. >> the u.s. regulator with the power to kill chinese deals will be headed by his treasury secretary. vonnie: you can read more about china on the bloomberg. that is your global business report. ♪

vonnie: this is bloomberg markets. miami may be on the verge of an environmental crisis is rising tides and groundwater a threatening the city but that does not scare away the developers. they are pouring billions of dollars into large projects. joining me now to discuss this is the author who wrote about this in the latest bloomberg. billions of dollars are pouring into miami but the water could

possibly be pouring in as well. >> and there's very little to do to stop it because the water is coming up through the ground as manhattan isat dealing with with joe's potentially building a seawall. all miami can do is pump out the ocean constantly. that is what they have been doing with these underground parking garages. vonnie: there are new buildings going up. dude new buildings have any kind of architecture designed to get rid of water? >> some of them do. a lot of developers are finding it's quite easy to build an extra three feet above the ground and not have underground facilities like parking garages or basements. some pretty conservative studies have shown that sea levels rise just one foot, then you will

have seven foot storm surge is on a regularity of 20 years or so. there will be extreme flooding but what we already see in miami beach is people raising roads. you walk down collins avenue on miami beach when it has been raining or when there is a high tide, you will get wet. vonnie: who is buying? >> that's a great question. people who are simultaneously very optimistic and people who assume the city will do something about this in the near, mid, and long-range. who is going to do what and how and how much money will it cost? miami beach was built by the army corps of engineers in the 70's and expanded with sand and potentially they could do that again. the question is who was going to pay for and how prohibitive will

it the to continue building? there are high taxes, that's not an incentive for people to continue to invest in the city. vonnie: who is building? maybe that own care about 50 years down the road. the builders presumably are looking for a return. >> investment cycles are perhaps shorter than the long-term outlook you might expect from these developers. once they sell the units in their building, they are out. i don't think it's as cynical as that. i think people have land and have these development strikenities and want to while the iron is hot or dry. there is this widespread perception that someone is going to do something. vonnie: are there any

precedents? has anyone done anything anywhere else in the world? >> we are on shaky ground here. climate change is obviously evolving. the way people respond to climate change is evolving. in miami beach, it's a profound moment where we can see the effect of climate change and rising sea levels and we also see huge amounts of money pouring in regardless. vonnie: our prices still going up instead of -- in spite of this? >> up until recently, they were. in the past few months, we have seen a plummet in sales in high-end development. ofther or not that is a sign apocalyptic times or that's a dip in the luxury second and third home investment property remains to be seen. vonnie: are people moving in

from the coastline a little bit? being, some buildings built or not on miami beach. they are in miami proper and some are a few blocks inland. we will see if people continue to steer away from the ocean. vonnie: maybe we can look at it humanestament to optimism. thank you very much. for more, check out pursuits. still i had, the interview with lagarde.tor christine this is bloomberg. ♪

>> good afternoon. i'm vonnie quinn. welcome to "bloomberg markets." ♪

from bloomberg world headquarters in new york, we are covering stories out of mexico city, toronto, and paris this hour. a mixed picture for the u.s. , 178,000 added in november. wages declining month over month. what does this mean for the federal reserve and market? fed chair janet yellen's future has been in question since donald trump was elected president. but the two could become allies rather than enemies. an exclusive interview with te imf managing director christine lagarde. john nichols suite will ask her about everything from women's economic contributions to the world to u.s.-china relations. we are halfway into the trading day. economic contributions to the world to>> not a lot of action . stocks.

investors are weighing in, saying the nonfarm payrolls report is pretty much a nonfactor. we are seeing more trading action, looking at the commodity complex. investors are is higher today. on the week oil is up more than 11%, >> we have gold rebounding a little bit with gold hitting a nine-month low but trading higher today. these commodities could be trading on a little bit of dollar weakness. as for the currency market, it's a tell of risk on, risk off. the british pound is trading higher. brexit process appears to be

slowing. we have the yen rallying a little bit and the south african rand is rallying. the s&p kept its rating above junk and take a look at the mexican peso, it's holding on within the post election range despite the fact that the country's central bank chief has quit. an interesting picture within currencies. absolutely, thank you for that. let's check in on first word news. matilda: house speaker paul ryan says he plans to propose policies that will focus on simplifying the tax code. he says the plan could fit on a we don'tand he says look at the economy as if it is

fixed and we have to re-slice the pie. the michigan elections board has deadlocked on president-elect donald trump's request to prevent a recount. unless the court intervenes, it will start next week. general isn attorney asking the state to intervene and stop the recount. that motion is pending. the wisconsin recount is underway and trump supporters have filed a federal lawsuit to try to stop it. pennsylvania, donald trump is asking a court to dismiss jill stein's recount request. trump is named blackstone group ceo steve schwarzman to chair his strategic policy forum. it will be made to business leaders who will advise the white house and how government policy affects growth, job creation, and productivity. other ceos include general motors and others. soldiers in italy

in italy mayister resign if a constitutional reform is not approved. the proposal would reduce the size and powers of the senate. the prime minister argues it will make it easier to pass legislation. opponents say it could give the prime minister to much power. global news, 20 four hours per day, powered by more than 2600 journalists and analysts in more than 120 countries. vonnie: thank you. a little bit of a mixed picture on the job front. the unemployment rate has dropped to its lowest since 2008 at 4.6% and we saw a climb in wages month over month. let's bring in our international policy consultant michael mckee from washington. he was at the labor department this morning. 4.6% is now below what the federal reserve has considered for full employment for the united states. are we all clear?

michael: you are never all clear but it is a nice coda to where we have come from. 4.6%,7 when we were at the financial crisis was just beginning. hedge fundsple of that froze up and that was the tipoff to the financial crisis. nine years later, we are where we are back down to 4.6% unemployment. we have now passed through the crisis and maybe we are starting a new economy, a new kind of move forward. we have the concern about inflation. the fed will have to watch that. thank you for that. let's look at the broader global economic backdrop with one of the most important players, speaking with imf managing director christine lagarde.

the second is women in power across the world. you know the statistics better than i do with a report saying you can increase global gdp by maybe $12 trillion. there is a huge game to be had there and you have talked about it being the great economic no-brainer. why hasn't it happened? that's the trillion dollar question, actually. when we look at what is needed for everyone, we tend to say we want more growth. tend to say we want more diversification of the economies so they don't rely on one single source of resources. we tend to say we want less inequality because we are really demonstrating that excessive inequality is a source of

instability and is not conducive to sustainability of growth. you have more growth, less inequality, more diversification including women in the economy addresses those three issues. it increases growth significantly and you know the numbers. many in the room have the numbers as well. you can increase u.s. gdp by 5% but you can increase indian gdp by 27%. if you look at diversification, we have non-documented evidence when women participate in the economy and labor market as much as men, you have a more diverse economy. to the laboromen market and giving them access to finance, you reduce the inequality. extensivelymented

that you can actually reduce diversification by 10 points. about the corporate side but it is completely obvious. i have said it's an economic no-brainer it yet it is happening very gradually. it is only happening a little when there are quotas, incentives in order to push women into both the labor market, access to finance, circles of decision-makers, parliaments. when you look at the number of women in parliaments, it's about 20%. toshould happen so we have ask why is it not happening and you just did. what is preventing women from achieving what they can achieve? presidentabe in japan and has tried to do some

things but not much has happened. even president obama, people feel he did something toward pushing money toward low income workers but as far as diversity, has he done enough to specifically help women? i'm a very optimistic person by nature. i think i see -- and i hope this will last with some momentum in this field. when i was at the last u.n. general assembly, the un's secretary-general said i am a feminist. justin trudeau said i am a feminist. the prime minister of jamaica heading that group says i am a feminist. great, i think it is up to us women and men who have vested joint interests in this turning to them and saying you are the leaders in your respective countries. you form the leadership of the

world. show us how you will be feminists. who are you going to hire, who are you going to promote, what policy measures will you have in place? what infrastructure programs will be helpful for women and eradicate violence against women? how will you put in place inclusive finance a women are not the victims of the middleman, the violence that happens in developing countries and gets in the way of them being in the economy. how will 90% of the countries thenstrate and eliminate legal discrimination that is embedded in their constitution or their legal system? a huge to me is surprise, 90% of the countries of the world have in their legal system a provision or an article in the constitution that is

actually a discrimination against women. byre's plenty to be done those in leadership who can demonstrate that they are feminists. using barack obama as an example, he would have said that as well. >> he actually did. >> he got more pay for low income workers and some degree of pay within companies. it would be hard to claim he has pushed the cause of women forward. there are a few things he would have liked to do in on -- and has not been able to do for some reason. country,rly in this there was a serious parental leave. it's one of the few countries in the world where it does not exist except in great companies like bloomberg. [laughter] we can come back to the issue of donald trump.

are twoes me that there arguments for how to change the role of women in the economy. mores that we need diversity programs but on the other hand, the main effect in terms of pushing women forward is to simply and no bling and enriching low income workers. do you think the bigger game will come from general economic policies? >> absolutely both. minimum salaries, yes, absolutely. earned income tax credit, yes, absolutely but this will not be sufficiently focused on women. i think the combination of a serious and well-funded parental money.ombined with at the end of the day, you need money and you get your return on assets or return on investment.

but if you have a sufficient orget to cut childcare costs whatever system people resort to, reduced by half, you automatically encourage women to join the job market. i think it's a combination of measures intended for low income earners but it's also specific measures, for cultural or historical reasons, are targeted to women. of women get it at the moment. if donald trump was to support this, would that be a revolutionary step? >> i think many women would actually welcome a parental leave that would be financed properly and that would be legally prescribed. that was certainly be a big plus. >> do you have any explanation why america is a long way behind

europe in that regard? > [laughter] >> that's a really broad question. if i look back at my own country for instance in france, a lot of those measures and policies and programs that were put in place in 1936 at a time when the socialists came into power and change the course of things. if you look at american history, the major shift that occurred was fdr. that was a bit later on with no clear focus on welfare benefits and social security to the same extent it had been in many european countries. their and people get health and security in that domain can become part of people's entitlement and rights. >> let me ask you about

corporate boards. do you think that is an area where quotas are justified? >> i do think that quotas are justified in many areas but on as elsewhere, quotas are needed and are helpful. if you look at a country like norway, there has been a jump in women's participation on boards as of the time when quotas were put in place. any europe thanks to the european directive, it is also now getting close are above the 20% threshold. that threshold will go up to 30% so there is clearly attention paid by existing board members and by shareholders to the fact that it is better. there is plenty of documented evidence that there is a better return on assets and those

companies that have one or more than one woman on the board. it's even more true in those companies that are based on knowledge. i think it's really important. when you see how the service industry is and its expanding into the field of knowledge and use, it women are clearly contribute more so in those --tors than these stored of than the sort of manufacturing sectors. >> a word that has terrified people, is there a case for having quotas for a limited amount of time? joined the bank i thought because i was such a brilliant lawyer -- [laughter] i would make partnership and i did not need anything but then i looked around. i realized i was not such a bright person first of all. i looked around and there were so few women that if you

calculate over the course of time and based on historical data, it would've taken more than when a to 20 years before they would have been closed to parity between male and female partners. yes, quotas are the needed step in order to reach an objective. once the objective has been reached, you need to reset the parameters of what you want to do. then you want to keep people. any consulting firms, i think the work has been particularly done and professional firms, you lose talented women at a particular point in time in their lives because they carry through with development and their biological cycle coincides at the time when you need to be when when young and will be super creative. >> i remember reading something about your first job interview.

you were told you would get paid less because you were a woman. >> it was worse than that. maybe you don't have as many diplomas. was worth the because what i was told was please join. you have all the credentials and the book -- and the good background and we will give you some interesting work but don't ever expect to make partnership. i asked why is that. they said because you are a woman. maybe things have improved a bit. [laughter] >> what do you think has been the big gain or the big thing you expected to happen that hasn't? all, in my position as head of the international monetary fund, i am cautious about passing general judgments about women and what is needed and what would help because it is different with you look at piru or namibia or the united states or sweden. >> just look at the west maybe. >> advanced economies.

in most of these advanced economies including japan and we can come back to that, there is a clear general consensus that certain things have to be done, certain things have to not be done, certain things have to be said and certain things have not to be said. i hope it stays that way. there is a momentum. force aboutolitical women sharing that objective, sharing those views and being prepared to close ranks. they need to claim their place in the economy and finance and in the world. that is the positive. enough self-awareness and

probably a bit more solidarity among women which was not a given in the mid-to late 70's. is very not improved often the perception of others back goes to the cultural elements. you talked about japan and many women there, including his wife, have convince prime minister abe that it was critically important to improve the position of japanese women and welcome them to the workforce and make it equal for them, to facilitate the guardianship, the caring of the children while they were at work. it is not changing massively yet. the perception, the cultural environment, the misrepresentation, the apprehension which is often the result of how other people perceive women, not so much how women perceive themselves, that has not changed.

speaking of how women perceive themselves, there is a lovely book by kathy kay and her friend about the confidence factor. i think it is still true today. i wondered why acumen to this room with my notes. it was because of my insecurity. >> i have notes as well. [laughter] you talk about women closing ranks. in america, there is an obvious thing where you had a woman running for president who was externally well-qualified and a man running against her who was less qualified. >> he was not a woman, that's for sure. >> he had also been called out saying things that were called misogynist. and yet most white women voted for donald trump. what does that tell you about the idea of women in power? thatwould hope

irrespective of what happened in dignity,that respect, elegance in dealing with people, not in the way people are wearing clothes, would prevail over low instinct and disparaging comments. misogyny does not matter as much as some people say? >>. i hope not. it's each and i think and every one of us responsibility to make sure it is not. it is more of a human dignity issue. [applause] staying on donald trump for a second, >> my comments are not addressed to him. my comments are general because

there are many corners of the world where women are suffering an attitude which puts them in a lower position or in a subordinated situation or in a state of dependency and humiliation which is acceptable. >> on the issue of donald trump, we talked about parental leave and what he could do. are there other things despite what he said in the past, he could reverse that representation? >> when i hear the words inclusive, i listen very carefully. growthve means inclusive , it means inclusive finance, it to all andng up making sure there are opportunities for all. if that is the intention, then i think that is important for women and for those who are and

have been excluded. parental leave is one. credit at income tax the lower end of the income range. i think inclusive finances are critically important. there are 60 million american people today who are either under-banked or not thinking at all because they have no access to finance. those are good positions if they can be delivered upon. it certainly would make a difference including women. >> on the issue of the economy -- >> parental leave is a big issue. >> would that conceivably make donald trump a better president for women than of president obama is? >> we are not commenting on that. >> more broadly on trump and the economy, you and many of us have said that the world has got to

change from relying on central banks and governments have to start doing things. donald trump is talking about spending money on infrastructure and pumping money into the economy. is it possible that's another area where he could surprisingly upside? are you optimistic? >> i would preface any comment with we are a bit lost at the moment. there are certain things that are coming back whether it's spending and infrastructure or whether it's a tax reform. that are things we hear have been a firm such as the trade policies. it's very premature to draw conclusions at the moment. saide have consistently that the tax system in this country needs to be reformed, needs to be simplified. the corporate tax needs to be lowered and tax loopholes in

limited. -- eliminated. at the lower end of the income range, less taxation would be beneficial for growth. if what wefront, hear is going in that direction, this is beneficial on two fronts. one is on growth because it was certainly boost growth and it's also beneficial on the risk of a very divided society with the elite of the haves and the others, the have-nots. it is a question of how the type of reform is designed and how many jobs are created as a result. is in the area of infrastructure. infrastructure is badly needed whether itstry supports, roads, railroads, airports. there has been reduced public

spending on even the maintenance of what exists. this is needed. how will be financed whether it be public funding or incentive to the private sector will matter in terms of output. if you only take those two blocks of proposals, it is rather positive for the united states. but it needs to be factored into a longer-term proposition. clearly, with entitlements so, withn in 2021 or baby boomers retiring, with interest rates likely to rise and certainly interest repayment time, at around the same decisions are often made to the extent that they possibly , that theyflation make financing more expensive, that they strengthen the dollar. all of that will have an effect.

>> you see a stronger dollar as a given over the next few years? >> it's very likely. if those policies are implemented, it's very likely and it will have both -- it will have downside and upside and consequences. good that is the obvious thing about donald trump, presumably the worry is trade in the idea of a trade war with china. there have recently been more noises about that. the more moderate approach to trade is probably predicated on the fact that trade has been beneficial and has been beneficial not just for the hundreds of millions of people who have been taken about -- who have been taken out of poverty around the world that has also been beneficial in terms of improved competition, better allocation of production including capital, certainly

lower prices for consumers and the advanced economies which have generally benefited in particular people at the low income level. that,ou realize all of you consider whether trade is a reasonably good thing. that's where i would be interested to hear what will be. in needs to be associated with clear measures that will benefit people who have been left out. if you combine international trade and the massive increase we have had in the last 30 years, the technology improvements and it's difficult to disassociate the effect of one versus the other but they are combined and have created pockets of unemployment, people left out of their jobs, factories that have closed and regions devastated. that needs to be addressed.

it cannot be just about trade is products, more consumption, better allocation of the factors of production. it needs to be trade that benefits all and for the moment, the second part which is addressing the issues of dislocation of supply chains, people displaced, people out of their jobs and out of any training, that's critically important. >> trade benefits different people in different ways. there are a lot of poor consumers in america but there would also be people who are frightened about it. or whose children are not able to get a job in the same vicinity as their parents have been because of change in supply in the manufacturing supply fight thatse of the

is a lot cheaper to produce elsewhere than such a state in the united states. so that social safety net by way ,f earned income type credit and a focus on, you lost your job, but there are other jobs that are coming up. the u.s. economy is constantly creating jobs. be question is, how can they helped towards these jobs in a more efficient way that has been tried so far? >> with china there is an issue about whether the yuan is being held down. the imf has tended to say that china is not a currency manipulator. you have stated that vision -- position? >> we evaluate the status of a currency on an annual basis, every year. with most economies of the world we determine whether it is underappreciated, overappreciated, or broadly in

line with the fundamentals. latest was an article 4 act in june or july. time, -- was broadly in line with fundamentals, after having been probably held up for more than wasme required by the economy. in the last few weeks, the remnant be has depreciated because the banking authorities are not lining the determination of their currency relative to a basket of currencies. when the dollar appreciates, which is one of the components in the basket, clearly other currencies around the world are declining because it is a zero sum game. when one goes up, others go down. >> the joys of the italian

referendum, how frightened are you buy that? you have lived through several versions of the euro crisis. couldzi were to lose, he lose badly. thee tend to look at italian economy irrespective of the outcome of the referendum. so far we have really forecast,d polls, absolutely determined view as to what the outcome will be and we have seen how wrong they were. we look at the italian economy irrespective of the outcome of the referendum and matteo renzi's decision to stay as president of the council are not . a lot needs to be done on the italian economy, irrespective of the referendum, even if there is a yes vote and the italian senate seized power reduced.

it needs to be done, on the banking sector, as we know. recapitaqlization is needed. strength of the book by elimination and dealing with the nonperforming loans that are stuck in some of these banks. a lot needs to be done on the productivity front, which has not improved by far. the italian economy needs a lot of reforms. largere is another country just above italy where you might say it has needed a lot of reforms. this new generation of people think france you is more likely to think france is more likely to be reformed now? -- lagarde: we at the imf

>> even the french people. ms. lagarde: we certainly view france as a country that needs to continue seriously in depth reforms of its economy. is elected, comes next may, will have to tackle head on the need for structural hasrms, the labor market begun reform but it needs to be faster and deeper. -- >>project markets have begun to reform a little bit. we need a bit more than that. it has to be a bit of this accommodating monetary policy by the ecb, which presumably will continue for a while. the price ofit has to be a bit s accommodating monetary policy by oil is still low, around 50. the euro is 105, 106 to the dollar. it's not bad when you are an exporting country and you buy

oil at a reasonably low price per barrel. oil isthe whole scenery, the we landscape should be really favorable to build structural reforms, and admitted use of collect -- can only be used appropriately to support the structural reforms. it cannot be an invitation to increase public spending. there is plenty of public spending in france at the moment collectgreat it needs to be re, which is being talked about. he a big enough personality in your view to be the margaret thatcher type of france? ms. lagarde: what i know of him is he is certainly a determined reformist. also fiscally prudent, but

i think i've seen him, i've worked with him for 4 years. he is certainly very lucid in terms of the diagnosis of the french economy. he said, i'm the prime minister of a bankrupt country, which did not please very much the president then. >> he's now running against a man who described france very ln terms of the as cuba without the sunshine. ms. lagarde: that's right. we don't have to compare holiday destinations together. >> we have probably done enough dashing of france. ms. lagarde: i'm not bashing my country. >> but you have often said there beforems. lagarde: that reform o slow and now you have said there is a chance of it changing. ms. lagarde: i should think so. when i joined the government as , ource minister

determination was to reform. unfortunately the financial crisis just came to hit us, six job, and we had to back up and go about rescuing the financial sector and job, ao trying to make sure the economy would not contract too much as opposed to what we were preparing to do. >> in your mind, is it moving a brexitbit away from hard to soft brexit? or is it still going to be a very short negotiation? ms. lagarde: all the noises, all the comments, all the little

posturing here and there seem to indicate we are still looking at the hard brexit. you brexit to soft brexit? the imf is shareholders will want to know whether or not there is a passport to continue to act.

>> the two-year deadline -- it takes two years. it is going to take longer than two years. most people who are close to the preparation and on both sides, they are preparing and they are trying to move along the curve, they are all saying it will take longer than two years. than 60ng to be longer different bilateral trade treaties that will have to be negotiated. if only that to begin with. and then you have to disentangle the systems. said, let'sis being keep it as it is and we will gradually remove what we don't like. the british can't cherry pick what they would like from europe. it is arde: negotiation. you have 2 parties. the strongest

position, but i'm not sure. >> one last question. [laughter] i think i get the message. [laughter] one last question to do with globalization. if you think of all the things we have spoken about today, we talk about trade with china, europe. at one time, the whole future of trade very much tied up with the imf, tied up with what you think about, towards these big, global trade deals. of deglobalelement ization beginning to happen? is there a way through with these different deals? ms. lagarde: i certainly hope there is not a move towards deglobalization. i equally think we have to move towards globalization that has a different face and which is not excluding people along the way improvingeeds towards

the development of those developing countries. up to the emerging market economies. i hope it is not deglobalization. i hope it is a different globalization, from a purely institutional point of view, i would hope the wto continues to do the hard work that is required to do a framework within which other arrangements can be had. it is clearly taking a different form. the value agreement is not yet been ratified. the doha agreement is a bit of a story of the past now. a new framework has to be invented, and i hope it can be invented, and i hope it can be

proposed in a sufficiently attractive way that are compatible with regional or well,ral agreements as which is clearly the road it is taking. [applause] that was john nichols suite with christine lagarde, managing director of the imf. bloomberg world headquarters in new york. now, the event was enterprising women, any discussion of women's

issues in the u.s. and around the world. does makeys it sense to have quotas. she spoke about the italian economy, saying it needs a lot of reform, a routing within the banking sector. the french labor market, making it a faster, deeper labor market let's have a look at what the markets are doing on this friday as we head towards the middle of the afternoon session. you can see the dow jones industrial average is down about 2/10 of 1%. loweronly about 32 points

and has made nine record high since the election. is unchanged2190, on the nasdaq composite index just holding onto a three-point gain. the vix has been moving around and is currently above 14. this was discussed by john nichols suite and christine lagarde traded us below 101 again. 12694. stronger british pound today. it is worth mentioning the south african rand -- rand. outlook.he negative stronger by 2.2% on the day. crude, i'm looking at brent.

the yield at 3.04%. as 2.04. high it is now back to 1.9. you are watching "bloomberg markets." ♪

vonnie: live from bloomberg world had in new york, i'm vonnie quinn and mrs. "bloomberg markets." mexico's central bank minister announced he is aligning his post next year to run the bank for international settlements. outons lead in mexico was his best-known policymaker amidst new economic challenges from the trump administration. in an exclusive interview in mexico city was bloomberg's erik schatzker.

carson tried to ease any concerns surrounding his departure. >> on the face of the bank. that gives me certainly more presence, t. my vote counts the same as the others. our communications are established by consensus. obviously that gives me tranquility. the bank will be in good hands when i leave. at thisonce more exclusive interview with the outgoing bank of mexico governor at the top of the next hour. some news that just broken the last hour, the saudi central-bank computers are said to be damaged by iranian malware. joining us with the latest is a cyber security reporter. how extensive is the damage? >> this attack started on

november 17, and it looks like it has hit multiple agencies, government ministries and saudi arabia. a very destructive type of malware which destroys computers, making them datarable, and erases the on them. there are at least six targets. we know the aviation ministry and transportation industry has been hit. we don't know how extensive it has been inside the central bank. any kind of damage in a network like that will be significant. vonnie: we know saudi arabia has been making huge efforts to sort of shift its economy in a different direction. how much information with the iranians -- would the iranians have gotten from this hack? what good would it be to them? thehis is an unusual hack, sort of counts under the category of cyber war rather than espionage.

the hackers did not go in and take information. the fact that investigators have been trying to track whether information was taken before these digital bombs were released. they have not found traces of that. this is more like throwing a grenade into a network than a spy sneaking into a network and stealing information. vonnie: will the saudi's have to rebuild from scratch? do they have the firepower, the manpower and intelligence power? >> that is the question, the only way -- this malware basically destroys the computers and the data that is on it. it depends on whether or not that data was backed up and saved someplace else. during initial indication is the saudi's at least at some of these ministries had active to recoverythat will make smoother. but effectively you have to rebuild it, you have to replace all these machines. if that data was not backed up, it's lost forever. vonnie: will there be retaliation?

a big question. the middle east has been a tit-for-tat cyber war over the last several years. the iranians have been hit by attacks on their nuclear facilities, they have been hit by attacks on their natural gas facilities, the saudi arabians attacks on their nuclear have been hit by attacks on its oil facilities and now a widespread attack on its governing ministry. you can almost bet it will not stop here. the question is, what is the next level of escalation. vonnie: why do this? is this just mischief on the part of iran? kidd it be just some somewhere discovered a way in here? >> the malware that was used is --theiated with iranian same malware used to destroy 35,000 computers in aramco. may be nationstate trying to make itself look like iran. this could affect the nuclear

cord. all fingers at this point, at least the evidence at this point points back to tehran. if it turns out to be iran, the question is why. is it related to the election and donald trump? if it turns out tois it related? vonnie: thank you for that update. this is bloomberg. ♪

vonnie: time for the latest bloomberg business flash. the biggest news stories in the news right now. deutsche bank is reducing some coverage for about 3400 actively stating clients. that is according to "the wall street journal," citing a bank memo that says the move is, quote, with medium effect. bank has confirmed the content. u.s. and brazilian regulators

will hit latin america's biggest construction company, and affiliated with a $2.5 billion fine. people familiar with the discussion still bloomberg all of this. prosecutors say they paid to win contracts of the state run oil producer petrobras. reported 60loomberg executives resigning plea deals. that is your bloomberg business update. coming up, an exclusive interview with the outgoing bank of new mexico -- mexico governor. this is bloomberg. ♪ update.

>> i'm oliver renick. >> and scarlet fu. welcome to "bloomberg markets."

scarlet: we are live at bloomberg world headquarters in new york. here is what we are watching. withank of mexico governor an exclusive interview. why he's leaving the central bank to take a new position at the bank for international settlements trade he tells us how mr. partridge will impact mexico's economy. with an exclusive interview. opec delivered an early present. whether oil can build on its huge rally this week. hasident-elect donald trump named steve schwarzman s chairman of the advisory panel on jobs. joining it is jamie dimon and bob iger. how is business changed influence from his policy. u.s. markets close in two hour'' time. let's look at where equities are trading. i was surprised when i realized the s&p is holding up a two-week low. know that.ly don't

the s&p 500 is on pace for a weekly decline to first and i've. that would probably make sense. offor the markets, a lot action. really flipping between small gains and losses. the dow down the most. the dow had been earlier higher on the week. right now even on the week, where the s&p 500 is down on the week, as is the tech heavy nasdaq. technology really weighing on the s&p 500 and nasdaq. as for what is moving today, relatively calm service. we have a few big movers here, a running and doria -- pandora and sirius. sirius on pace for his worst day since february. cnbc did earlier report that pandora is in talks with sirius. writers also said pandora is looking to sell itself. the ceo to the company's core marketplace looks

stronger than expected, so investors are clearly liking it. as for one market really on the move in a noticeable way today, we are looking at the 10-year treasury yield having its worst to client since september 6. we see that in green. this tells us the big bond seller in november -- selloff has a bit of pause here. a massive strike higher in yield. typically you will see some consolidation of that. plus, bonds are a safe haven asset trade we have the italian referendum coming up this weekend. investors are taking a bit of a restocking here and supporting the idea that we may continue to see the rally in rates may be tapered down a bit, the bloomberg dollar index. we go into the bloomberg and look at g #btv. this is a chart of the bloomberg dollar index, and we see that into the first aderholt reserve

raising rates last december for the first time since 2006. investors really traded right up into that. a little bit of waffling now into the next time investors are expecting the federal reserve to potentially raise rates trade for supporting the idea that the dollar index is about to fall, the relative stress index hitting that overbought level of 70 coming back down, perhaps suggesting -- raising rates support a rising dollar. it may suggest we will see the rally. oliver:suggesting great stuff. let's check on bloomberg first word news or eight more from our newsroom. >> michigan's elections board has deadlocked on president-elect donald trump's request to block a recount. ishigan's attorney general asking the state supreme court to intervene and stop the recount. that motion is pending.

a wisconsin recount is underway, although trop supporters have filed a federal lawsuit to try to stop it. in pennsylvania, trump is asking a court to dismiss green party candidate's jill stein's request. the uk's and asked as decision to leave the european union stands in stark contrast to its history as a forward-looking player on the international stage. caught his reaction to the brexit news. >> britain was always an important member of the european union. it was a voice for change and the future. obviously the decision in brexit came as a shock. it is something i do not want to see, but i have to respect it. he also said the uk's won't be allowed to pick and choose which aspects of the eu it wants to keep as it repairs to lead the world's biggest trading -- leave the world's biggest

trading block trade in new jersey judge denied a request for a special prosecutor in a criminal misconduct complaint against this christy in the george washington bridge lane closing trial. notionge dismissed the by a former firefighter who brought the complaint in october. he alleges christie failed to order support and's bridge active lanes in 2013. the state-sponsored hackers who unleashed a digital bomb against the parts of saudi arabia's government over the last two weeks have damaged computer systems at the saudi central bank. that is according to people briefed on the strike. the attacks targeted at least six government entities with a computer killing malware. it appeared to come from iran, but the investigation is still in its early stages. that determination could change. . global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. you so much.k coming up, an exclusive

interview with mexico's central bank governor. he is leavingit appeared to comy for a new job. we will hear from him next. this is bloomberg. ♪

scarlet: -- oliver: yesterday mexico's central bank announced that the governor believe his post next year to run the bank for international settlements. the news was another blow to the peso, which is now down nearly 20% this year, making it the world's worst performing major currency. bloomberg's erik schatzker sat rtsten for an

exclusive interview in mexico city. erik: -- >> i will say two things. thesomething.

but i'm sure there is a good sample of people, a good group of people in mexico that can step in. banklso going to leave the in 7 months. that will provide good time to organize smooth transition. erik: if it were up to you, who would your successor be? i know it's not your decision. i don't think it's fair for anybody for me to say anything. i don't want to leave anybody them, soithout naming they might feel themselves discriminated. i will not get into that. naming names, at

least one of the potential candidates to succeed you as governor doesn't meet the legal criteria. we both know who this individual is. is it appropriate for the bank of mexico to impose these age restrictions and birth restrictions on the people who could most capably service the country? agustin: for me the most are thet restrictions ones of technical and political and organizational capacity. erik: if the person who had those technical and organizational capacities were not born here but was the best person for the job. agustin: that's not for me to decide. erik: would you like to see those restrictions changed? i think the bank of mexico is fine the way it is. erik: whoever takes that

position is going to have a lot of work to do. the future isn't just uncertain. the future as of today might be described as grim. economists in your own bank of mexico survey just reduce their gdp growth forecast by 1/2 a percentage point in 2017. agustin: yes. have said -- i mean also the ministry of finance. just after we found out the result of the u.s. election, we gave a press conference. mexico has the commitment to adjust its policies to the environment we will face. now the big thing is that we still have to know exactly what this environment will face as we move forward.

the bank of mexico has already acted. just two weeks ago we increased rate because we have seen some reactions already in the market. that goes for monetary policy adjustment. ofte becausei can't say if othe hollis the adjustments are needed, i'm sure we will respond. erik: what kinds of policy adjustments are you talking about? what contingency plan do you place should there be turmoil in financial markets? agustin: first of all, we have cushions. we have very large place shoulde internationalancial reserves. the minister of finance has a very responsible policy of hedg ing exposures in the markets. they have a stabilization fund that is sizable. l, we have a limit to

respond in the short term. what policies can be adjustment -- adjusted in given time, will certainly monetary is one. that's -- that's the first commitment in fiscal policy. trade policy will also have to be reviewed, was the full information is on the table. for: let's go back to rates a moment. you have a mandate. how can the bank of mexico keep raising rates in its attempt to stave off weakening the peso, while the economy is weakening? it seems you are in a difficult position. the threat of trump, the economy weakening already, and inflation expectations running above 4% in the same survey published today.

agustin: mexico has a big advantage to many other countries. we have done structural reforms. structural reforms have a lot of potential. that is a way to increase growth wit time, with stronger implementation, and that in a wa y can allow us to concentrate on stabilization efforts, which is a necessary condition for further growth, to have stability. and on the other hand we are tackling the issue of growth. obviously we cannot smoothly everything movement in the business cycle but i would say the expectations towards medium and long-term growth in mexico are good. erik: is the bank prepared to raise rates further, should

inflation expectations continue to run well above your 3% target? agustin: absolutely. erik: because that's the mandate. agustin: yes. and also because we have the conviction that the best way the bank can continue to grow is by keeping financial stability and inflation expectations in line. erik: you have been prepared to raise rates. most of the central banks in the world have not. once you take this new position will your position towards the low rate environment be? know, i don't have an automatic view. what do you have to be aware when you are in the mood -- international environment, each country faces its own problems. there is no one size fits all.

objectives are different. what i would say, the bis can do, and i think has done a good job, is to write good for getussion, to try to coordination and cooperation, and also to provide, i would say , a view for other central bankers, for central bankers to take the best position possible, looking at the whole picture of the global economy. erik: should central banks and begin toankers normalize policy in the absence of structural reform or fiscal stimulus? is perpetuating this low rate environment, tatives with extra quanti easing, adding too many economic risks?

agustin: i would say all my the tradeoffs of different policies. obviously there is an aspect, very low rate environment. it can affect financial stability. also as an international community, we have fact in that regard. reactions have been taken. that each oneou of my colleagues have been looking into this aspect carefully. erik: we have a situation among developed economies where toloyment levels are close -- unemployment levels are close to what people normally associate with slow employment. and yet, even with some pickup in the united states, wage levels are still comparatively

and relatively speaking subdued. what is it going to take to break out of this? agustin: here, i would say from -- and that is to coordinate and make consistent policy packages. is doing itscy job. certainly whenever there is a space, fiscal policy would be important, and also have to say, many other countries have not made the progress that we would like to see in terms of structural reforms. a role for banks to play as well, not just central banks. banks pull global back from any of the markets in which they have been active. is that a hindrance to the global economy? is that making it harder to break out of this pattern? agustin: we are coming from a

global financial crisis, from a that wen, from a crisis haven't really gotten out of it. we are still in this environment. it's undeniable that some accidents took place. banks and that the financial institutions should a asfer attitude, -- safer attitude, i think that would be a good combination. erik: there has been unanimity among regulators on that point for the past few years. what do you think of the or a significant

rollback of post crisis regulation in the united states under the trump administration? agustin: or a significant rollback of post crisis regulation in the united states under the the devil is in the details. from what i heard, if you allow me heard, if you allow me that expression, from the president-elect -- what he mentioned, he is stressed a lot from watching his interviews. on the fact that he has many institutions -- i am also pro-simplicity. you know, there is a certain amount. i mean, you have to make sure that the prudential levels you want are there in the regulation.

even that, if we can simplify the regulation, and that way enhance compliance, i'm more for it. erik: so we don't necessarily need to call it afraid of changes. agustin: we have to see what the wants tot is, what he do. ofm completely supportive his attitude towards making regulation more understandable, less expensive from the point of view of its administrative costs, but obviously keeping an adequate safety level. oliver: that was agustin carstens, outgoing governor of the bank of america, speaking exclusively with bloomberg's erik schatzker in mexico city. ♪

this is "bloomberg markets." i'm oliver renick. scarlet: donna november is in the rearview mirror, let's chart what's ahead for global markets. oliver: i'm looking way ahead. i'm looking at the end of next year. scarlet: this is "bloomberg markets." i'm oliver renick. scarlet: end of 2017. oliver: we have been putting together the strategist table, which is on the bloomberg terminal. we have 11 estimates in so far from wall street strategists. dear feeling pretty bullish. this is largely after the sort of rotation we have seen here postelection, and a lot of people thinking some of these fiscal policies by areident-elect donald trump going to do pretty well, boost the s&p 500. they are predicting it will go

to a 6% gain from where it is now. however, let's flip it over to my other chart. if you look at what is going on the volatility curve, traders not as convinced that the good news is here to stay. we'll -- look at the curve, the orange line. it is just as deep as it was before the election. we are looking at volatility, still getting higher as we go ahead. scarlet: i'm looking a little more short-term here. peso's the worst performer here. the town with the big loser in the month of october following the brexit vote. we've got more coming up. this is bloomberg. ♪

scarlet: from bloomberg world headquarters in manhattan, this is "bloomberg markets." i'm scarlet fu. oliver: i'm oliver renick. commodity markets are closing in new york. what a week it has been in oil. a week, indeed.

oil is up 12%, on pace for its best week since february 2011, on the opec supply cut deal that first in eight years. investors are liking the fact that one million or more barrels will come off the market every day starting next year. we see this absolutely huge spreadn price and it has out into the oil complex in terms of stocks, transocean, newfield exploration, marathon. these are the best oil and energy boosts this week. is doing well. investors think that they will be getting back to work. u.s. shale producers also benefiting. hassurprisingly, volatility flown out of the oil market. take a look at the oil of vix. massive move down 30%.

this is the worst weekly decline on record. vix supporting the idea that volatility in the oil market may continue to decline as oil moves higher. ,s we look at the bloomberg this is a long-term chart of oil in white, the energy sector etf in orange, and in blue, that is when opec cuts apply by one million barrels or more in the past. we see there are massive gains up out of those other supply cuts. lots of volatility as well but it suggests there could be more upside ahead for oil and the energy stocks. oliver: a lot going on with oil and energy. not enough to hold of the s&p but still doing well. for more, let's hear from bills on a born. there is a bunch of news clearly with respect to a cut of 1.2 million barrels announced i

opec, tough thought negotiations. when we look at is not what happened to the short end of the commodities current which is where bloomberg reports. earlier in your show, you send this was the highest arising week for oil since 2009. we look at three to five years out, what happens in the context of prices of oil. in may have had a 14% rise january delivery's, but three years january delivery only increased about 4%, so it had a very small impact in the long-term investments we like to make. >> we are still talking about roughly $50 a barrel. we have the opec deal, we have a new trump administration beginning to form. we do not have an energy sector yet. -- secretary yet. what looks attractive to you given the changing landscape? youecause of this opec deal

have seen a rapid increase in prices of u.s. oil and gas prices, up on average 14% so far this week. that creates an interesting private public arbitrage. if you own oil and gas assets in north america, i would expect you see a lot of near-term filings for ipos over the next three months as private managers take advantage of very euphoric rush in equity prices to exit .ertain investments >> can you give us some details, where we can look for those ipos? couple of theen a filings in the case of natural gas producers in wyoming, a number of operators preparing for filings. double eagle has been in the news. i would expect to see those in the markets. typically like to make private investments and then sell to the public markets. >> i want to ask you about the

longer-term. you say you are looking three to five years out. if i could bring your attention to this chart on the bloomberg which is showing the w ti 2018ber 20 tea17 to spread. people reacting prematurely thinking there are constraints? with what we are seeing with the oil price, you would expect shale producers to move in. >> it's a good question, but that is interesting. that will harm commodity traders that have been assembling a lots of storage. the cost of storing oil is going up pretty substantially. a number of financial players have been doing that arbitrage will be going out. the near-term impact is more oil coming into the system that could put short-term pressure on prices. at the same time, the long end

of the curve, that's an indication of two things. one, people don't think the opec deal will stick long-term. the second, people are starting to think about substitution risk with respect to oil and gasoline , which is driven by fuel standards globally, as well as the potential for growth and more electric ev's around the world. because someesting are saying opec may have a deeper motive, pushing a bump now but looking to drive down the future price of oil. i'm wondering what your longer-term perspective is as well for natural gas and lng despite the near-term noon and risk. are bullish on natural gas. we see it as the bridge fuel for the environmental standards set by the paris accords. you are seeing lots of substitution in diesel power in places like the caribbean and

africa. becoming a is globally traded commodity like oil. when you look at investment we have made over the past year, it's indicative of that. we made investments in the marcellus shale in the u.s., drilling for natural gas. we made a private preferred with rice energy, a u.s. energy company that operates in the marsalis, financing their pipelines to get the gas out of the northeast. we made an investment in a pipeline that will connect that same natural gas gathering system to the gulf coast of the u.s.. we made a billion-dollar investment in a subsidiary of cheniere for a facility, to take those natural gas molecules and export them to london, as they move off of coal.

and to places like latin america, where we have now made investments building a regasification facility and we are building a gas-fired power plant near santiago. it is kind of thinking of the value tamed -- chain of where energy exists in abundance, needs to go where there is less of it. oliver: that was bill sonneborn. let's get the headlines on first word news. emma chandra has more. ryan tells cbs he plans to propose policy that will focus on simplifying the tax code. he says the plan could fit on a postcard. he also says our thinking is not how to redistribute income in america. we don't look at the economy as if it was a fixed pie him and we need to re-slice the pie. the house has agreed to a 611 billion-dollar defense bill that would reject a number of

president obama's proposals to manage the military. lawmakers passed the package on friday by a wide margin. 375-34. the bill now goes to the senate were a vote is expected next week. this would for him at closing the prison in guantanamo bay, cuba and would deny the pentagon of starting a new round of military base closings. in san bernardino one year ago and colleagues are remembering their fallen employees with a moment of silence. community members will gather to remember the team killed and 22 .ounded thousands of cyclists have embarked on a 40-mile bike ride through the city marking one mile for each of the victims killed in last week's attack -- last year's attack. voters in austria will get a do over on sunday. the green party's candidate won the election by .6%, but austria's constitutional court overturn the results. now the freedom parties hofer is to be -- hoping to become the

first right-wing head of state since world war ii. the post is largely ceremonial but both have pledged to assert more power is elected. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm emma chandra. this is bloomberg. scarlet: coming up, president-elect donald trump's views on business. we will explore what that means. this is bloomberg. ♪

oliver: this is "bloomberg markets." i'm oliver renick. scarlet: i'm scarlet fu. it is time now for the bloomberg

business flash, some of the biggest stories in the news right now. and deutsche bank is reducing covered for 3700 active trading clients in the global markets. the memo says the action is aimed at balancing risk, revenue, and profitability. deutsche bank confirmed the memos contents. cars,is recalling 680,000 mostly in north america. there are potential seatbelt problems in the ford fusion and the lincoln mk z. ford says there have been to accidents and to injuries look to the problem. the fashion industry is poised to recover in 2017 after one of its toughest years on record. overall industry sales are expected to rise 3.5%. the reasons, and improving global economy and restructuring measures by brands like her very and ralph lauren. president-elect donald trump named steve schwarzman to

chair his president strategic and policy for him. it will be made up of business leaders to advise the white house on how government policy affects growth, job creation, and productivity. membersos who are include mary barra, jamie dimon, and bob iger. for more on who trump is around to consult with is margaret from d.c. more and more every day from trump and now we are finding out there are more wall street folks that will be surrounding him. what is the purpose of this group he is assembling now? let's talk about politics first. it's a really important part of his group. this is very early, just days into his presidency. this is all about assuring mainstream americans for whom all of these businesses and ceos are familiar names, disney, walmart, etc., and also about assuring wall street that donald trump has the economy front and

center on his mind. very interesting collection of people and timing of the announcement. scarlet: didn't president obama had something similar, he put together a group of people he consulted with on the economy and jobs? do we remember if it resulted in anything actionable? >> the purpose was very much the same but the context is different. as we remember, president obama taking office, winning elections during the massive financial crisis in 2008. his idea was twofold. number 12 sure the economy and to assure that he was not just out there, a liberal democrat in left field not willing to work with wall street. donald trump comes from a different perspective, but so much of the campaign was about economic populism, what is not

fair, curbing wall street. so to that extent, it's very much a coming home for donald trump and a reconciliation with wall street to show that he is serious about tackling the economy. oliver: i want to talk about another store that was interesting in the past 48 hours, which is a clash at the -- a harvard form between clinton campaign manager's and some trump folks as well. while trump did win the currency byte, the which we elect our president, the term that he used, he does not have the mandate. what does that mean? course, the way you win presidential elections is through the electoral college, but the popular vote matters when it comes to mandate. if you are hillary clinton or one of her supporters, you will always point to the fact that she won the race in terms of the

popular vote. it's just not how you win the race for president. what that exchange at harvard showed how raw these emotions still are, to the extent they reflect how divided the country is, we will see. hartley in campaign world, that world of democratic and republican strategist, and particularly in these two camps, there is still a tremendous amount of tension and bad feelings, not just about the outcome of the race but some of the tactics and appeals to voters used in those closing weeks. scarlet: perhaps the most notable is who was not there, steve bannon. six clinton staffers versus five from trump and steve bannon was the elephant in the room come in that he was not there. thatto us about the role steve bannon plays now. are we expecting to hear from him publicly, or is he only whispering in donald trump's ear? >> fascinating question.

yesterday, there was a recognition that he could become a real lightning rod, and some protesters on campus, regardless of whether or not he would come. -- fromphen bennett steve bannon's perspective, he wins either way. be advising trump about communication, but for many of us covering the white house, a real interest in how much of a public figure he will be and how much he remains behind the scenes, either way he will exert a lot of influence helping donald trump understand what is incoming and how he should deal with this outward facing approach. a of questions will be whether he brings a breitbart approach, it certainly in terms of a new toia approach, but one thing run a campaign, another thing to govern a country. when you say you want to unite, we will see. oliver: thank you so much, talev.et

scarlet: pandora has been approached by the sirius xm board for a possible takeover. this is to express renewed interest in a takeover of pandora, according to people familiar. this is really a follow-up on an offer from earlier this year. the sirius xm chairman approaching the pandora board to express their renewed interest of a takeover. shares are down 6%. oliver: pandora doing the inverse of that. originally shot up, but coming down now a little bit. kind of the typical takeover versus target price moves. scarlet: sirius had offered about $15 a share earlier on this year. no word on whether they came up with that same price tag. coming up, we are digging into the november jobs report.

our u.s. workers about to see faster wage growth as the market gets tighter? this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. oliver: i'm oliver renick. recap thee want to breaking is we brought your earlier. the pandora board had been approached by sirius xm for a takeover possibility. expressing renewed interest in a takeover of the internet radio company, according to people familiar with the matter. alex sherman is here with us now. this is following up on an offer from earlier this year. day --port earlier from today from cnbc as well. pandora has not gotten back to sirius yet.

all we know is that very recently, sirius chairman greg pandorapproached the board and said we are still takenwe realize you had steps to retool your business, what you are referencing, scarlet am aware there was chatter about an offer at $15 a share. that is something we have confirmed independently. obviously, pandora did not go for that price. there was no price attached to the most recent approach, but a part of this that is certainly worth highlighting, part of the reason shares are up on this news is that advisors for pandora have actually started to solicit interest from other parties -- scarlet: to drive up the offer price? >> to see if other companies are willing to acquire pandora. perhaps they are willing to pay more than sirius. oliver: does i'm oliver renick. wantpandora -- does sirius

pandora because they have something that they do not have? >> this has been rumored for years. sirius has their legacy business, they made great inroads into getting into new and used cars. moving into streaming -- streaming has long thought to be the biggest threat for sirius satellite radio. why do i need satellite radio when i can get all of my music and podcasts online, particularly as connected cars become enabled with wi-fi. if you can acquire pandora, you can take out a competitor. pandora is huge in terms of users. accommodation does make some strategic sense. scarlet: let's say they move ahead or explore the possibility. will there be antitrust concerns? big at this is so

point, in terms of apple, spotify, google, the barrier to entry into this is only somewhat high. i'm sure there will be mild antitrust concerns. would athink regulators look at this one at the top of the list and say that is one we cannot let go through. i'm not an antitrust lawyer, so it certainly possible there are concerns are not thinking of. but just on the face of it and does not strike me as one that i would put the top of the warning list. oliver: it seems like pandora is reticent to jump into a deal before may be getting other offers, ironing out the number. pandora itself, it is not all rosy there. competition, although they were first in the space, you have all kinds of products popping up. is there any risk that if sirius wants to get into streaming, there are other ways to do it. >> there are other ways. theoretically, there are different ways that not only can

sirius go into streaming, but other ways sirius could expand our business. andorra has so many users at this point, there are so many ice range in sirius' pr that are viable targets. i suppose they could go after spotify, which is a private company. that is another one that could theoretically be out there if they go that route. but the dialogue between sirius and pandora has been going on a little while. greg moffat, the chairman of sirius, and the liberty media owns about half of sirius, has been vocal about his interest in acquiring pandora. this seemed to be the most logical combination. is there antion is apple or google or somebody out there that might be willing to pay up even more? that is what their advisors will try to find out now. oliver: great reporting as always.

we will have you back as we get more information on that. speaking of antitrust, we will dig into how president-elect trump will deal with antitrust concerns in just a moment. scarlet: in the meantime, christine lagarde is next in an exclusive interview. she discusses the outlook for rebuilding roads and rails. the infrastructure revival. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. oliver: i'm oliver renick.

we are covering stories in chicago, washington, germany, and saudi arabia. markets getting ready to close for the week, stocks are mixed. financials are the laggards of the day as real estate and utilities lead the gainers today. also what kind of president will donald trump be when it comes to competition and antitrust? in moments, an exclusive interview with imf director christine lagarde. she will address plans to talk about infrastructure and the president-elect's views on trade. we are one hour from the close of trading here in new york. let's get a check on the markets with abigail doolittle. abigail: not a lot of

action for stocks in the u.s.. this may suggest investors are considering the jobs report for the month of november. a bit of a non-factor despite the fact that there are some mixed signals there, but probably gives the fed to go ahead with this rate hike that everyone is expecting later this month. we appear to have been going through a bit of a sector rotation. take a look at the bloomberg. is a month-long chart of various sectors. in white we have technology. we have this massive decline down. in orange we have the energy sector, getting that big pop on oil rising on the opec supply cut deal. it appears money has gone out of technology into energy and trading well out of the election . not so much this week, but we have financials. prettye appears to be a interesting sector rotation.

this is influencing the major averages. when you look at the dow, s&p 500, nasdaq, and russell 2000, the dow is the only one that's on pace for a slim gain on the week. that reflect some of that energy strength. the s&p 500, nasdaq, and russell 2000 are all trading lower on the big declines that we just saw in technology. finally news on eli lilly, shares of the pharmaceutical company are higher on new the fda has approved a drug for new indications for patients with diabetes. the record isi is bullish on this as well. oliver: thank you. scarlet: let's get to the first word news. emma: more meetings today at trump tower as the president-elect bills at his senior cabinet and staff. among the agenda, robert gates, david malpass, former u.s.

ambassador john bolton, and democratic senator heidi heitkamp of north dakota. this weekend, goldman sachs president gary cohn returns for a second meeting, who has been mentioned as the budget chief. the michigan board is deadlocked on president-elect trump's request to prevent a recount. unless the court intervenes, it will start next week. michigan's attorney general is asking the state supreme court to intervene and stop the recount. that motion is pending. a wisconsin recount is underway although trump supporters have filed a lawsuit to try to stop it. in pennsylvania, trump is asking a court to dismiss jill stein's recount request. minister sayse the uk's decision can leave the european union stands in stark contrast as a forward-looking player on the international stage. nda kenny sat down today and we

caught his reaction to the brexit news. was always an important member of the european union and was a voice for change , a voice for the vision of the future. the decision of brexit came as a shock. something i did not want to see, something i did not want, but i have to respect. if the democratic decision so we get on with it. also said the u.k. would not be allowed to pick and choose which aspects it wants to keep as it prepares to leave the world's largest trading block. in south carolina, jurors have failed to reach the verdict of a former white police officer arched with killing a black motorist during a traffic stop. a judge asked them to resume deliberations. video shows michael slicker shooting walter scott several times in the back after scott left his car and try to run. swigert testified he feared for his life after scott got hold of his taser. global news 24 hours a day

powered by more than 2600 journalists and analysts in over 120 countries. i'm emma chandra. this is bloomberg. now to a bloomberg's exclusive. imf managing director christine lagarde spoke today with our editor in chief john nichols with as part of our enterprising women series. we asked about president-elect trump's spans on boosting the economy. wei would preface any, that are a bit lost in conjecture at the moment. there are certain things that are coming back, whether spending on infrastructure, the tax reform, things that we hear that are hinted more than a firmed such as the trade policies. it is very premature to draw conclusions at the moment. but we have consistently said that the tax system in this

country needs to be reformed, neat to be simple if i'd. corporate tax needs to be lowered and tax loopholes eliminated. at the lower end of the income range, less taxation would be extremely beneficial for growth. on the tax front, if what we hear is heading in that direction, this is beneficial on two fronts, one on growth, because it would boost growth, and it's also beneficial on the risk of a very divided society with the elite of the house and the elites of the others, the have-nots. it is how that tax reform is designed and how many jobs are created as a result. is beginning of proposals also welcome is in the area of infrastructure.

infrastructure is badly needed in this country, whether it is ports, railroads, airports, there has been reduced public spending on even the maintenance. this is needed. how it will be financed, whether public funding or incentives to the private sector is also going to matter in terms of output. in the short-term, if you only take those two blocks of proposals, it is rather positive for the united states. but it needs to be factored into a longer-term proposition. clearly, with entitlements , withg in in 2021 or so baby boomers retiring, with interest rates likely to rise, and certainly interest repayment ,ising at around the same time the decisions made today to the extent they possibly increase inflation, that they make

financing more expensive, that they strengthen the dollar, all of that will have an effect. you see a stronger dollar as a given over the next few years? likely.e: it is very if those policies are implemented, it's very likely. it will have downside and upside consequences. john: that is the obvious good thing from trump from your perspective. the worrying thing is trade. recently, there have been somewhat more clement noises about that. more clement noises about that. christine: the more moderate approach to trade is probably predicated on the fact that trade has not been beneficial, not just for the hundreds of millions of people who have been taken out of poverty around the world, particularly in asia but around the world, but has also been beneficial in terms of

improved competition, better allocation of the factors of reduction including capital, certainly lower prices for consumers in the advanced economies, which have generally benefited in particular people at the low income level. ,hen you realize all of that you consider whether trade is not actually a reasonably good thing, but -- and that is where i'd be interested to hear what it will be -- it needs to be associated with clear measures that will benefit people who have been left out. because if you combine international trade and the massive increase we have had in the last 30 years, the technology improvements, and is very difficult to disuse see it -- disassociate one from the other, but they are combined, they have created pockets of

unemployment, people left out of their jobs, factories that have closed, and regions that have been devastated. that needs to be addressed. it cannot just be about trade is great, cheaper products, more consumption, better allocation of the factors of production. it needs to be trade that benefits all. for the moment, that second part, addressing the issues of dislocation of supply chains, people displaced, people out of their jobs and out of any training, that is critically important. oliver: that was christine lagarde in an exclusive interview earlier on bloomberg. scarlet: coming up, we look at approach to m&a, antitrust issues, and whether he will block the merger of at&t and time warner, as he indicated. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. oliver: i'm oliver renick. let's turn to mergers and acquisitions under a donald trump administration. the president-elect took a hard line against one high profile deal, at&t's led to buy time warner. of the powerple structure on fighting, at&t is buying time warner and thus cnn, a deal we will not approve in my administration because it is too much concentration of power in the hands of too few. oliver: so has his mind changed? let's get more insight from john butler, telecoms analyst or ,loomberg, and jennifer reese

who focuses on antitrust. jennifer, i want to start with you. looking at the notes you said before the segment, you send donald trump had no power to stop the deal. i'm a little dubious on that phrase, the president has no power. bei suppose it should praised, has little power but not the ultimate say in antitrust laws. there is a deep decision-making process and the tw antitrust agencies that oversee mergers, the federal trade commission and the department of justice, the decision-maker there decide whether they want to sue to block a deal that they think and violate antitrust laws. the important thing to understand, even those agencies come even though they've given antitrust authority, don't have the ability to stop to companies that have entered a deal from closing the deal. they had to go to a court, than to seek an injunction and a george order the injunction. they have to win in court. a president can say, i don't like the deal.

inc. about this deal, you know what my agenda is. but those enforcers are usually people who are antitrust thinkers who apply a fact-based analysis and if they don't have the evidence to support the fact that the deal violates the law, they will not go before a judge. even if they do, this judge could be an obama appointed judge or a bush appointed judge. they may not be pushing the new president's agenda. there is what the president-elect said and what he can do. john, what about the companies , at&t and time warner, have you heard a noise from them, are they positioning themselves one way or another now that we have a trump administration coming? >> i think they are working and behind the scenes, as a lot of companies do when there is a deal pending. the president's power really resides with the fcc. .e has appointees there frankly, i'm surprised we are even talking about this. this fcc is changing from a

democrat controlled agency now to a republican-controlled agency, which i imagine will be very pro-deal. scarlet: even though donald trump said that he would not approve this sort of deal. >> he hates the media, that was part of the rhetoric, but the reality is, the people he has in place really want to see , notations pulled back just in telecom, but overall in the business landscape. they want to see less regulation. that tends to favor approval of the deal. i think at&t and time warner are probably working some back room deals to see how they can get this done. oliver: it sounds like a situation where trump has said a lot of things but sometimes the people he even surrounds himself with are not in line with that. let's take a look at the situation under the obama presidency. a number of deals coming under

scrutiny. how is that poised to change, and has there been more of a spotlight put on these big deals? >> i think that is the case, we have seen more aggressive enforcement in the obama administration. ultimately, at one level 11 for smith. seen the obama administration appointees at the department of justice and federal trade commission as people who are more willing to go to court to try to block a deal. what we saw in the george w. bush administration was just as much investigation, skepticism of these big deals, but less willingness to go to court. backing off, allowing them to go ahead and enter a remedy selloff set that they would not agree on today. but i agree, what we are seeing not just at the fcc but possibly the ftc and doj under donald trump, are people who are much more friendly to business, later on regulation, more likely to think in terms of the deficiencies that come from these deals rather than the harm. we don't know yet who trump will

be appointing at the ftc or doj, but we know the people in charge of the transition effort. they are what you may think after additional republicans, but the markets handle themselves. scarlet: that would suggest deals are allowed to go ahead. john, you have written about certain deals that could be resuscitated or could come together as a result of the trump presidency. and itsd be sprint possible rethinking of a merger with t-mobile. talk about how you see this possibly playing out. >> let's start with the fact that if you look at the wireless market, in any given large country, but particularly in the u.s., i think it favors three carriers and not four. scarlet: that is something the obama administration has been stuck on. that's right, you are always left with one that is struggling, it was great or years, they have been recovering a bit.

the one that has been seeding share a little bit is at&t. they could afford to do it a while.- for a scale matters most in telecom, so a combination of sprint and t-mobile would make for a cap powerful combination, one that could compete with at&t and verizon, where today, they are sort of living in their shadow. they cannot do the big deals like going out and buying a time warner. if you look at the market for media now -- for telecom, there is a convergence happening between cable and media. once again, i go back to how important scale is in being able to get that done. oliver: i want to close by getting your take, jennifer, on what this may mean for corporations that are now prior tot antitrust -- bloomberg, this was the space that you worked. if you are a dealmaker, the unique to start thinking about bringing people on board to

send. potential antitrust scrutiny? >> the advice would be that you have a better chance now. we might already be seeing in the market some of that reaction. we had seen talk of a somenation between companies and people said that there was a problem there. now there could be talks again. that,ou tell them is think about the efficiencies and the innovation that could come from the combination. these are areas that some of the thedecision-makers and antitrust agencies may focus on more than in the past. have a betteray chance of crafting some kind of a remedy that could be acceptable, getting cleared with the vested shares, that may not have been acceptable before. big is not to forget in a global deal is you are still in front of the eu and possibly china. you are deal could be blocked in those jurisdictions. it is not a done deal, even a you are getting to the u.s. more

easily. oliver: i will add in markets there is a lot of m&a premium baked into them. thank you, jennifer and john. still ahead, with stocks at record highs, are there any bargains left? we look to germany for some options insights. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. oliver: i'm oliver renick. it is time for options inside with abigail doolittle. abigail: joining me from the cboe is alan, chief strategist at bullseye option. thanks for joining us. the week we have the s&p 500 set for his first weekly decline , possibly a week are close, what do you make of this? >> very significant.

new all-time highs and a new weekly close. we are also seeing the vix bottom out. what's interesting, the vix never went below 12 and never made new relative lows even though stocks made relative highs. this may be a sign of caution in the near term. two different markets right now. you have the dow and the s&p together continuing to make new highs and then you have tech, which is not even get close to its october 25 top. abigail: a lot of talk about asset class rotation. right now, according to the rsi, we are looking at an oversold signal on gold, overbought on the dollar and the u.s. treasury yield. what do you make of this? >> we are seeing some positive -- possible reversals in these markets. treasuries over done to the downside here, new relative lows. yields have really spiked up, but is this for real? i don't think so.

a chance we will raise rates in december. they are pricing in another rate hike in may and that number -- another in december. if you look at gold, new lows yesterday and a higher close. that could be the sign of a new bottom. a critical number, the halfway point between the low and the recent highs. it looks like we are finally finding support as the dollar stopped going higher. abigail: speaking of reversals, you have an interesting trade around german stocks, slipping down over the last two weeks as the s&p 500 has carved out new highs. take us through your trade. >> we are seeing markets move in opposite directions. typically they are very correlated, the dax and the s&p. in the last couple of years, the dax has declined, down 8% this year, where the s&p is up 8%. catch-upng to play over a long period of time, buying a long option. the 22 call, going

for about 3.75. the breakeven is about a dollar away from where we are right now. abigail: great stuff, alan. we appreciate it. back to you. scarlet: still ahead, perspective on the job report from bill gross of janus capital. this is bloomberg. ♪

♪ >> let's get to bloomberg first word news. the state-sponsored hackers who unleashed a digital bomb against saudi arabia's government has damaged computer systems at the central bank. that is according to people who were briefed on the strike, it

targeted six government entities. it appears to have come from iran, but the investigation is in its early stages. the determination could change. the u.s. has hit north korea with a fresh round of sanctions, what they call continued provocative behavior. freedead assets -- assets and the new penalties including u.n. sanctions on it revenue per trade. they called it an abuse of power and north korea is promising to retaliate. a judge has denied a request for a special prosecutor in a complaint against chris christie. the complaint is tied to the george washington bridge scandal, in which two of his former top aide were convicted on felony charges. the judge dismissed the motion by a former firefighter is said that chris christie failed to access the