mark: we will take you from new york to rome. we will cover stories out of brussels, the u.k. and washington. are watchinge today. italy's prime minister plans to quit after suffering a heavy defeat in his referendum for constitutional reform. also look at whether renewed instability gives the ecb more cause to extend qe this week. julie: the government's case against holding a vote in parliament. we will look at all of the arguments ahead. acceptson president-elect trump's offer.

he is expanding his search for secretary of state to names like jon huntsman and the exxon ceo. we are 30 minutes away from the end of the monday session. check it out on the left-hand column. equities fell earlier. look at the gains for currency against the dollar. the euro earlier was down against the dollar to a 20 month low. these are bond yields. falling.es are we are looking ahead to next week's federal and market committee rate decision. investors penciling in a rate hike which isn't good for the a lower of the precious metal.

3.4% higher today. it's a french investment firm exclusive -- in exclusive talks to buy a global asset management unit. business may be valued at 3.5 billion euros. a purchase would propel it into the top ranks of global money managers with almost $1.4 trillion in assets. austriat to talk about over theustrians weekend elected a green party economic professor as their next president. spurning the appeal of an anti-immigrant nationalist who campaigned to weaken ties with the eu.

we comparing the austrian and german 10 year. yielding 23 basis points more. the spread has narrowed from roughly 32 basis points. he defeated the freedom party by 51.7 to 48.3%. one populist movement that didn't succeed. let's look at gold. overnightmuch as .9% after the italian referendum result. looking ahead to the fed meeting next week. investors are exiting gold etf funds. since marchstretch 2015. hedge funds and other large speculators boosting by 13%. gold has fallen 15% since reaching the 28 month high in

july. let's go over to abigail for all the details. we are looking at nice games for the three major averages in the u.s. including the dow, s&p 500 and the nasdaq. the dow is carving out another record high. we also have the s&p 500 and the nasdaq close to their record highs. we have some could place and see on the part of investors. there's a relatively big reaction to the brexit. the italian referendum really not one at all. area we are also seeing more complacency is around technology. we have the nasdaq absolutely plummeting on this down about 5% at this point.

well off ofix is its lows over the last year around third teen. investors may be complacent right now but it doesn't match the slump we saw in august. shares of chesapeake up very nicely as the company has decided to sell $450 million of its shale gas assets. on paper its best year since 2005. we also have some weakness in energy transfer partners and sunoco logistics as the operators of the dakota type line and the obama administration denied a permit. is said to that trump actually supports the dakota pipeline. it could be a different story

next year. julie: hundreds of protesters are in north kona protesting that extension. let's check in with courtney collins in london with more from the newsroom. italy has fallen into political limbo. the prime minister is resigning after voters overwhelmingly reject it a constitutional reform referendum he supported. that could open the door to the antiestablishment five-star movement. the eu commissioner spoke to bloomberg about the italian vote. it's a referendum on italian politics, the italian constitution. was a strong prime minister who led important reforms economically, politically and socially. i'm confident italy has the means to address this situation. downplayed the

importance of the vote on democracy. case will determine whether theresa may need to vote from parliament before beginning talks to leave the european union. says sheney general has a compelling need to control terms of the brexit negotiation. donald has filled another spot in his cabinet. donald has filled another spot in his cabinet. carson ran for the republican presidential nomination before dropping out and backing trump. president-elect says they have discussed economic revival in the inner cities. a sitting japanese prime minister will visit pearl harbor. he will go to the hawaiian naval base with president obama at the end of the month. wednesday is the 75th anniversary of japan's attack on pearl harbor.

mark: let's dig deeper into that italian vote. joining us now is john stopped ford.- john stoppe markets bear the brunt of these political events? of equity markets the broader market is focused on what appears to be a much more constructive go the environment versus what we have seen in recent times. data pointing to an acceleration in growth. trump is seen as being something that might supercharge that in the u.s.

are of the equities that performing well also benefit to some extent from high bond yield. financials doing well on the back of steeper yield curves and the ability of banks to make more money in a positive yield environment. in the case of italy clearly there's a lot of uncertainty about where italy is going in the short-term and the medium-term. the market needs a larger risk premium despite the fact the ecb are to some extent supporting that -- mark: how much of a risk premium? roughly 1.9 only a few weeks ago. >> i would say that's adequate in the context of italy having a number of the issues that are going to take potentially a long

and may notlve ultimately be resolvable. a sort of relatively optimistic feeling on the eurozone over the medium-term. 2014u go back prior to spreads versus germany were out at 5%, 6%. are atshorter term we the wider spread we have been at for some time. this is still a market which is helped by the fact that draghi .tands behind the market italy the problems to one -- to some extent, what exactly their mandate is. in all likelihood we are going to just push the problem out until probably later next year or 2018 before we have a serious electoral contest which could set the tone for the medium-term.

what would be attractive to you asset wise in europe at this point? what level of hedging is appropriate at this stage? >> are we talking bonds, equities? julie: a bit of everything. we are fairly cautious on european assets in general. where we get a little bit more excited in terms of financials probably not particularly directly in the eurozone. we got exposure to some of the swedish and scandinavian banking sector. it doesn't have the same issues as the bigger banks in mainstream europe and will benefit from a somewhat more positive environment.

we're cautious on the euro. we are not particularly excited by european bonds. we don't think there's a huge risk premium in things like italy. to be honest we are looking for opportunities in other regions. in the u.s. where trump has obviously created some excitement selectively within emerging markets. selectively in other equity markets and to some extent other fixed income markets. julie: in the u.s. given that we have seen a pretty consistent trump trade since the election with groups like financials benefiting, energy has certainly done well with oil prices. is there anywhere in the u.s. you think is undervalued and attract at this point?

>> clearly real estate was a big than a fishery of the declining yield environment. think it's also to some extent a trade that is still supported by economic expansion. we are looking for reasonable income over the next years but also growth. on better valuations we think that's an interesting sector. generally the environment is more supportive for cyclicals versus defenses. you can be selective and there are some areas being hit too hard. would prefer real estate to utilities where we think utilities are not really a growth area but are going to be only badly affected if yields back up a lot further. me this i had shown

chart just before the trump election you might have thought is global stocks and the blue line is global bonds. you would probably think it was the inverse. just before the election. you were brave. you said if trump wins bond markets are going to rally and a trump presidency would be akin to exit. -- brexit. why did most people get the bond market so wrong? we meant it would have a short sharp reaction and then we would potentially get some sort of rebound. the initial reaction is all about the uncertainty and the fear. we did get that very briefly. the reason people got things the mantra is markets

eight uncertainty. trump said a lot of things on the campaign trail. not all of them were consistent. some of them were quite negative. i think people focused on the negatives and assumed hillary clinton was the continuity candidate in the markets would deal with that well but would struggle to absorb the uncertainty that came with trump. he would have a risk off. going into the election we did sell some equities but we didn't buy any bond duration because we recognize that if trump won it was a double-edged sword. a lot of what he was saying was quite reflationary. surprised by how vicious it has been. maybe less convinced that it was

going to rally into an election. mark: great to see you. the head of multi-asset income. julie. julie: the battle over brexit moves to the uk's up record. and the government win the case claiming theresa may has executive privilege? this is bloomberg. ♪

julie: live from london and new york, i'm julie hyman. mark: i'm mark barton. this is the european close. under 12 minutes until the end of the mondays session. let's bond to brexit.

the u.k. supreme court is hearing arguments all we. get themay must approval of parliament before triggering the exit cause. jeremy wright laid out the government case saying executive privilege gives ms. may the power she needs to go forward. arguments madehe by the attorney general today. i think it was quite a tough day today. there was quite a grilling from the justices. jeremy wright had to insist that was not aprerogative relic and in fact an important part of a functioning state. moreustices wanted to know than the government lawyers were able to give.

theresa may's bill that will replace all eu law with another pill. hamstringy might be -- hamstringing her own lawyers. he said it's the best way of getting the worst possible deal. we will set out eric negotiating position once we have trickled article 50. the elephant in the room is whether article 50 could be withdrawn. is that what it's all about? >> i think so. the justices are going to really want to pick apart these issues. the government said that triggering article 50 was like firing the bullet of a gun. once you have fired it it will

hit the target. there has been a lot of ambiguity since. see that point be clarified legally in real time. if theresa may loses how long is it going to take to push the legislation through parliament? >> it's getting more and more difficult to say. them -- there were reports that she could get a short bill through in as little as five days. jeremy corbyn wood table an amendment which would almost certainly slow things down. mark: thanks for joining us. you can watch all of the arguments in this case on the bloomberg using live go. ahead, reaction

from other eu leaders on that italian vote. this is number. -- this is bloomberg. ♪

julie: live from london and new york, i'm julie hyman. mark: i'm mark barton. five minutes until the end of the monday session. there is plenty of global reaction to italian prime minister renzi's resignation. bloomberg television caught up with some of the most notable leaders in the eu. a strong primes minister who led important reforms economically, politically, socially. i'm confident italy has the means to address this situation. shouldn't analyze the

referendum other than a referendum on constitutional reform. question about a europe they are fiercely in favor of the european construction and want to italy in europe. it is one of the largest economies in the eurozone. it is a country with strong institutions. they will have to deal with the economic situation in italy. the reaction to markets are pretty relaxed. solution andasy italy urgently needs a government capable of acting. they fulfilled their under 3%.s to deficit the situation is better today than it was two years ago. mark: take a look at where european equity markets are trading.

what a day it has been. stocks fell and they shrugged off the news of the italian no vote. stoxx 600 up by .6%. i have a look at what's happening in the currency. the euro initially following -- falling 1.5% against the dollar. with the bond board. on will see the yields europe's main bond markets rising. seeing thee we are big impact of the no vote in italy. the italian 10 year yield. the close is five minutes away. this is bloomberg. ♪

london, this is the european close. stocks finishing up today, investors shrugging off the italian no vote. constitutional referendum at

one stage in the stoxx 600 is up a mere two thirds of a percent. basic andd by autos after the best winning run since july. love this chart. this is the euro against the dollar. the red dotted line is parity and questions were asked when is euro fell as low as 1.05 a sense rebounded. questions have been asked when the euro will hit parity. the odds of the euro weakening to the dollar in the months are roughly 50% versus 45% on friday. bye of the 53 forecasts bloomberg predict the euro will be at parity or less by the end of next year. up from two this time in november.

topen puts parity among its forecasts. keep a look at that dotted red on thursday. is interesting move in bond markets. european bond yields rising today. the italian 10 year yield gaining as much as 16 basis points after it fell for two straight weeks. on november the 24th, the yield %, the highest in 16 months. it is rising right across the board today. this is the difference between italy and germany. it is going back to the sovereign debt crisis. it is pointed out just 20 minutes ago he said yes the 1.9% is 1.66% and we are percent a couple of weeks ago to the highest and two years. this is nothing compared to the spread differentials we had of the height of the sovereign debt

crisis. italian yields were 5% more than german yields. a little bit different that it without we would focus on the u.k. because the services sector grew at the fastest pace in 10 months keeping the economy on track to maintain momentum in the third quarter. index including manufacturing and services also rose to a 10 month high. that indicates the economy will grow by .5% in the third quarter. confidence among services fell to the lowest level since july. you have to say the economy remains in good shape post-brexit. julie: here as well we got an ism report that also showed the fact that the expansion since last october. here are the economic readings that have been more positive. we're seeing gains based in part on that.

that is helping the financials in particular. the nasdaq is bouncing back the most after it fared the worst to last week. andlso have energy shares consumer discretionary stocks that are helping to power some of the gains we are seeing. lets now check in on the bloomberg first world news -- first word news. courtney has more. courtney: thought the hour, where rival political parties are jockeying for power. the prime minister ren announced he will -- renzi announced he will resign. italian saw this as a chance to get rid of renzi, after he said he would quit if the referendum loss. a finance minister told bloomberg not to read too much into the result. it is not the brexit referendum or even the vote in the united states which did signal much more fundamental

political change. thertney: polls show antiestablishment movement is not in a neck with renzi's democratic -- neck and neck with renzi's democratic party. voters in austria have endorsed a pro-european union path. theerbilin defeated candidate from the far right. that opponent advocated limits on the eu power. prime minister theresa may's cabinet has split over whether union for european access to its markets over brexit. boris johnson that declined to endorsed the idea. that suggests that may is struggling to develop a brexit strategy. in north carolina, the undecided election for governor could be decided today.

democrat roy cooper currently leads the incumbent by more than 10,000 votes. a review of more than 94,000 votes cast in derne county is expected to finish today. ory says he will not ask for a recount if that shows the same results. global news 24 hours a day powered by more than 2600 journalists in more than 120 countries. this is bloomberg. mark: thank you very much. financial markets reversing a selloff once they realize that might be my -- might not be much contagion from italy's vote. it does signal worries about italy's growth. >> this raises concerns of the growth path for italy. does this mean that perhaps italian growth and maybe more broadly european growth are looking less sanguine compared

to a week ago? that is something we should consider. now, directorus of global business and economic and a former executive director of the imf and former director in italy. how long will italy be in political limbo? >> there is a process going on. it is not a dramatic moment. poweresent republic, the to go through consultations with all the political parties. it will take 2-3 days at least to understand if there is a that willary majority support the government. if there is, and in particular if the central right and left decides to have a coalition

together, there could be a new prime minister. that will run the country likely electionsnext general in the spring of 2018. other alternatives, and early general election is in a possibility. it is something we've seen several times in italy. it is not a dramatic moment as we experienced in late 2011 when president monti took over. it was quite different. a to medical but in the world perception of italy's ability to implement much-needed reforms? it can be a leader in leading the reform process within the eu, how much of a setback is it when it comes to those things? >> i mean, it is certain that prime minister renzi tried to

push reforms. ofsucceeded in a number important changes. there are some reforms that are halfway, the civil justice department administration for instance. we don't know whether this reform will go forward or not. caretaker government will not have the strength to push forward reforms. a more political government can do better. that is why one should look carefully at whether a full process would be better to have an early general election right away. andrea, where do you place the chances of the five-star movement ability to now rise in power? andrea: the five star movement 30% of the italian vote.

it does not have the majority. according to the electoral law, it is unlikely that they can become the majority in parliament in the next general elections. i am quite -- confident they will be and important political role in the country, but very difficult that they could be able to be the government. youcially because in italy need a coalition government and they don't want to be in a coalition with anybody else. i see a very remote possibility for the five-star movement to be in the government. julie: as we have been talking about, even though in general markets have had a fairly benign reaction to this, the banks in italy have not. they have been falling. when you look at the potential leadership in italy following

this referendum, what is going to be their ability to deal with the italian banks and it potentially to rescue them? the italian banks are probably not in such a good shape. we all know about monte dei paschi.-- monte in the short term, i see some difficulties for monte paschi, and there might be the need for some public intervention which was foreseen. i don't see anything dramatic in that. whoever will be the next prime minister of the next government they can deal with the italian banks because all of the systems are regulated by european laws. the process to go through is already weakened by rules. i do not see genetically risks

for finding a solution. of course, it depends whether the next government will have the ability and the strength if needed to rescue the banks with public money. mark: andrea, austria didn't vote in a populist president first of italy voted no. we have three massive election in europe next year the netherlands, france, and germany. how do you foresee those going? andrea: i would say i am more worried about those elections you mentioned rather than the italian referendum. france and the netherlands might face a big win of anti- euro movements. for two important countries in it will ben context tough for the european project to move forward if these two countries you have strong

populist and anti-euro governments. i would say we have to watch carefully what will happen in the netherlands first and in france later. mark: thank you for joining us, great to chat with you. atlantic council director of global business and economics. discoveryk, communications continue to navigate a map of the eve ali media landscape in the u.s. the company has seen a 2% annual decline in that works as scrubbers and weight expressed -- in that work describ subscribers. david westin is standing by now. david: thank you very much i'm joined here by the president and ceo of discovery. welcome. all, we are towards the end of 2016 now. take a minute to tell us about how 2016 went for discovery and what you're trying to

accomplish. yearre, 2016 was a record for us. eps, cashdjusted flow, it was our best year ever. more importantly i think it was a real pivot year to get ready for 2017. discovery is the number one network in america for men, we shows.ne of the top 10 it was also in almost every country we are in. we were able to really build on that as the number one network now for african-american women. manys a top 10 network for of the last 10 months in america. it is the number one or two network for women, we spend a lot of money on our channels for men called velocity which would take around the world. our portfolio so

got stronger. maybe most importantly we got all of our affiliate distribution deals of the u.s. this year. it is but a three-year process. we have been able to get a significant increase about double digits for the next couple of years that will drop a little bit with the decline. to reallyen able solidify our affiliate revenue in the u.s. as well as internationally. internationally we look like a very different company. where the largest media company. we make over $1 billion. discovery is very strong for us so is tlc and some of our women's brains. david: a lot of sports in europe. slav: we are the leader in sports in europe. we have been able to drive our affiliates you will see continued double-digit or better growth of our international and all thene

sports iq we have step in latin america we invested a lot in kids. we are bigger than disney with the young kid population in latin america. the world has started to change as people are consuming content differently. we have been honest this three-year journey saying how do we move from just being a leader theonfiction to have in content to support and a world where people can watch anything? this was a big year that we end of the year is the leader of sports in europe and the leader in latin america. we shored up a lot of our brand and tightened them. we think in the long run that could be more valuable than people picking and choosing content for smaller bundles. is a lot sports, there of concern about sports viewership is an nfl is down substantially. up, do youights go have any of those concerns in

europe? are you seeing a trailing off of viewership? viewership inorts europe is still growing. it looks a lot like the u.s. did 10 years ago. risingl has gotten costs. we have been able to get all of our ip. -- the the cycling tennis majors, track and field, footballics, we have in some markets. we have been able to get it all for low single-digit increases for the our real strategy in europe is we're the espn of europe. there's only one pan-european sports player and that is euro sports. when we bought it two years ago it had 100 million subscribers now it is 250. the real drive for us is to use leverage toip and

get our whole package of 10 channels in every country which we have been able to do. taking our sports content directly to consumers as well with other sports networks. david: that is where i want to go because i know that is a thing for you going forward. this is been brought about by mobile and video. what do you make of that deal what does it say for the content company like yours? zaslav: there was no question if you close your eyes and open them up almost every provider the person that gives you your mobile is going to give you your broadband and giving to your multi channel. iss idea of the quad play playing out across europe much more aggressively. aery cable operator will need mobile solution what they own it or not. you see in latin america that as well. this pipe became hard phone, the broadband, they will sell

you everything for stuff i think the at&t deal stands for the power of that. the second thing that is more important for us as a content company is it talks about the and how important content is. the problem as this consolidation of the pipe happens around the world, is that the ability to get margin if you are in france and can get three different versions of those with different speed and good mobile signal. what is the difference? price,le is to reduce it's what is going on now around the world and is why most of the mobile players have no margin. or do you commoditize that pipe. we come in in a big way. being the leader in sports in

europe. sky is getting into mobile and they own sports. deutsche telekom is looking at getting into sports. if you're going to -- if you just have a pipe it is not going to be enough. david: is it enough for a content company? have time warner and at&t, can a content company like discovery exist on its own? do you need to team up? zaslav: i think our feature has never been to writer. you been fighting to call back our content and investment that people want with the best case what the people when they can watch anything? what would they pay for before they pay for dinner. before it was how do we put shows on people want to watch. the prism led us to being leader in sports to all of europe. now as these distributors whether it is cable guys getting into phone or phone guys getting

into cable as a look for content the rules in europe are different than here in the u.s. we did the deal with canal in force and provided content him so he carries our traditional a channels than them he gave him additional content. the only way get that is if you buy canal plus. competitor by some exclusive content. the difference is that the u.s. is one market of 340 million distributionne big system. at&t can afford to buy time warner and advertise it. in europe, it is 55 countries. if you're in poland or germany or france you will not want to buy a massive company. we think we have the answer to science content and good sports content and great crime content and discovery content. we have the working with building that and that helps the

commoditize that. david: and global ties that as well thank you for speaking with us. mark: a great interview the you are watching bloomberg television coming up in battle of the charts on the heels of the italian referendum vote how bad has the italian economy fared since the financial crisis with the exception of greece it is had the worst performance of any euros on country. i have the charts to prove it. ♪

it is time now for our global battle of the charts. at the bottom of your screen and kicking things off today is mr. oliver ran a. at the i just glanced economic stuff. this is about making money. maybe not that much money about

5% on an annual basis. if you trust the strategists opinion is in the s&p 500 will go to 27 -- 2317. 9 analysts enough to come in but basically he was what we are at, s&p trading currently at 2206 at the close on front of us to we have for -- about 5% growth the average estimate is right. we predict earnings around 7% or so. look at the bottom, that is me showing you help oldish that is relative to history. you can see it is quite a bit of a tick up here. this is the idea that can be more dispersion in the markets. i'm trying to think of how take points off on the end of your title. oliver: 5257. julie: people can check it out. mark what do you have? mark: this is a chart about

economics but this is a wonderful macro chart. i love this chart. country of gdp of four since the inception of the euro in 1999. very relevant on the day of the italian referendum post of the white line is italian gdp. is is normalized at 100. look at how much italy has grown, 6%. it is grown a cumulative 6% since 1999. this chart has so many nuggets. 2006 italy was outgoing germany. the blue line, since 1999 germany has risen by 26%. what is more interesting is france has outperformed germany. i bet you wouldn't have guessed that since the inception of the euro it has grown a cumulative what is fascinating coming

back to italy since the financial crisis in 2008 it is -- has yet to make a back of the growth it has lost unlike france and unlike germany. nugget ofmarket, the brilliance for this chart is the u.k. line, cumulative growth since the inception of the euro 39% all those skeptics saying that is why we never join the euro. mark, i haveght, to good for you for all of those nuggets thank you for playing. we will see you tomorrow. they give for watching bloomberg markets. ♪

david: welcome to bloomberg markets. ♪

from bloomberg's world headquarters in new york where covering stories from washington to rome and taipei this hour. u.s. and european stocks gaining as investors looked past political turmoil in italy after a referendum there. china overp takes on the weekend saying he won't be told who he should talk to or who we shouldn't. amid concerns china could be named a currency manipulator. a restaurant tour tells us about his new show on vice network's munchies channel. d nes wh first world -- news with courtney collins for the courtney: authorities now say 36 people have died in a fire. they expect to find re