has no authority. japan is japan. europe each day more like japan. what does it mean for american investors? 'tis the season for reach of america. everything the season must go. everyone, this is "bloomberg surveillance." is thursday, november 20. i am tom keene with scarlet fu and brendan greeley. time for our top headlines. presidentt with obama. he will be outlining the biggest changes in immigration policy in a generation. the political firestorm has a ready begun. the president is expected to remove the immediate risk of deportation for up to 5 million undocumented immigrants. he may also extend visas for high-tech workers. republicans accuse him of exceeding his authority. here is new jug -- new jersey governor chris christie. >> the president who has been

pumping on this for six years in a partly for whatever he is going to do tomorrow night, continues to refuse to deal with congress. >> shameless plug, you can watch the president speech right here on bloomberg television. coverage begins at 8:00 p.m. eastern time. florida, there was a shooting early this morning on the florida state campus. three students were wounded at the university's library. police shot and killed the suspected gunman. officials sent an alert to students to seek shelter. >> another sign that china may need more economic stimulus to hold a slowdown. one gauge of chinese factory int to a six-month low november's adjusted monetary easing is failing to boost growth. china's economy is headed for its lowest full-year growth in more than two decades. wants answers from the japanese company that made faulty air bags. senate committee holds a hearing

today on air blamed the number of deaths, more than 8 million cars equipped with takata airbags in the u.s. have been recalled. so far, only recalling high humidity areas. safety regulators want to make the recall nationwide. >> the weather is bad and getting worse. there could be as much as seven feet of snow in some areas before it stops. that is two hockey goals. miles from rochester, new york to pennsylvania. when the temperatures start to rise this weekend, the big problem will be flooding. business as usual. >> are you nostalgic? >> i am the stall took for this. i cannot convey how we have seen this before. it is the blizzard of 1966 them and when men were men and your father was out shoveling the driveway.

eight people have died. the big difference, it is like donner pass snow in nevada, except it is heavy and very dangerous for people shoveling it. wet, lake heavy, effect snow. >> and without the lake effect, it would be -- >> it is an intensity of the snowfall because of the water. >> but the houses are to withstand that, right? >> this is totally business as usual. in austria go, this tree signs are three feet above my hands. the band is -- >> the band has been stuck on its tour bus outside buffalo. >> it is unusual. it is unusual that it is early in the year. data check. stocks, bonds, currencies, commodities. futures, negative eight. 10 year yield, 2.31%.

oil, 74.32. let's go on to the second screen. under 17.ill yen and all ofn our hours of "surveillance" this morning. yen not a major story for you? >> it is a huge story -- >> in it will continue to be. decades.s two this has been the stronger word weaker japanese yen and we have taken a new, abrupt abenomics down here all of the sudden, we deviations --rd >> that would be the blue line. >> it is way, way off. i'm just doing this for jim fancy map degree. this is the new leg down to show that persistency.

taiwan, korea,r singapore -- >> all of the country's second feet with japan for exports. math for thehe day. the president speaks this evening. , deeplyand texas divided in america. the chief executive office of this principle group spent more time in america than his native scotland, that is probably frightening, and particular interest in retail and what it does for the melting pot of america as they aspire at places like macy's and bloomingdale's and others. it is an honor to have both of you here as the president speaks. how will the rest of the world look at the interesting argument that is unique to american immigration? >> edge of the world will be looking at what he does on

skilled immigrants, visas for tech workers. that may not be the biggest political issue, but it is the issue inusiness immigration. those who cannot get the right people here because a lot of them are immigrants. >> we know principle group and we associate that with iowa, do you employ people in india to answer your telephones? >> not to enter the telephones, but to do that ground services. with a decent sized this business in-- india. it happens to be, you go for people's competitive advantages. in the 7:00 hour, and it in company with business affairs. >> moving up the ladder. i was struck by what you just said thomas speaking in the high-tech thesis alongside broader immigration reform, this

seems like the companies out west of facebook, google, they have really found their lobbying feet. they have become obsessed with this. when i was in the d.c. bureau a year ago, they were showing up all the time making the same point, high-tech thesis, high-tech pieces. i wonder for the president is doing tonight is not a way to sneak that in? >> i would hope so. those companies have already employed every american that of come to work for them. it is not just for copies out west. companieske us -- like us, it is a major challenge. it is not that it is a huge number. it is more about growing businesses and employ people here in america. >> you said before we went on air that macy's is the second-largest attraction for tourists in new york city. i going to macy's and it doesn't

play well in arizona and other states. it plays well in new york city. >> absolutely. your question earlier about what the world things about obama will say this evening, it is about the aspirational quality of america. every country i travel around the world have some aspiration of coming here or living here. they seeltimately, these kinds of conversations as a natural progression. andhat is frightening, jim i are related like four times. his were royalty, mine were trunks -- drunks. >> mine were in trouble for stealing sheep. >> maybe you are in fact related. jim, what can a country like japan went from our immigration policy gekko japan facing the democratic -- needing to address the lack of available workers. >> the response of japanese business, partly to that effect you mentioned and partly to the

very prolonged period of high yen tom talked about, the reaction has been to move reduction offshore. 20 years ago, they built cars in japan. now the japanese companies build cars here or in europe. their design and headquarters remains in japan. that is intractable unless at some point they liberalize immigration policy. but they are going to do it a lot slower than we are. it is culturally very difficult for them. >> are we talking about cultural problems? >> the germans not running deficits is why you have this impasse between fiscal and monetary policy in europe, which is one of the two main reasons why europe won't grow in the next year or two don't. they have a tight fiscal policy to go with an appropriately loose monetary policy, and that is an impasse that makes the economy week. , thumb up oringer

thumbs down on this regional season? >> thumbs up. plural, two. >> they were at 90 degrees. >> cheaper oil does it. >> this is great. with all due respect, the president tonight at 8:00 p.m. >> our twitter question of the day -- likes to do it from the east wing. >> tweet us. we will be right back on "bloomberg surveillance." ♪

>> good morning, "bloomberg surveillance." comingretary of commerce

up in the 8:00 hour. global entrepreneur summit in rocco. this is "bloomberg surveillance." i am tom keene with scarlet fu and brendan greeley. >>'tis the season to take stock of the retail industry. reporting earnings today with thanksgiving just a week away in a holidays around the corner, it is do or die time for the industry. our guest host, mortimer singer, which consults on business to government for the fashion retail industry. you were just saying this holiday season is to thumbs up. we chimed in and said six thumbs up. what is different this season? which isxury piece, booming still come all of the brands themselves are focusing their energy on the u.s. luxury customer. in the midmarket, the camilla to affect of these discounts at the top -- cumulative effect of these discounts at the pump.

when you get up to thanksgiving or christmas time with maybe that sitting in your checking account, it makes people feel better. >> is interesting you brought up the luxury brands focusing on the west market. we hear about how consumers are less and less brand loyal than ever. do you not see that in the high-end? >> last quarter, the report of the rep for the 7% in the united 47% in- they were up the united states. ,> that money saved at the pump utica go straight into the economy? >> it does. gas is something that people buy every week. they see it as very visible. in a way it is better than a tax cut because the tax cut comes through withholding and injects money to the consumer. but gas is something people feel every day. >> this is something the obama and administration try to do,

sneak it in. we learn that is not the way to do it. >> it's not. --ple see the money second sitting in a checking account, they're going to spend it. also, the employment position is so much better. there was a feeling, hey, this is a jobless recovery the last two or three holiday season. maybe my job is still precarious. with unemployment below 6%, the economy generating 200,000 jobs a month, that actually is a very nice background for consumer confidence. >> we know there will be a lot of jobs available on thanksgiving day because more more retailers are opening. does it really matter if a store is actually open? yet a couple of retailers that have declared it a non-shopping .oliday >> you have those who think it is fun and interesting for everyone to open and others who are stating family values and saying we're going to shut on principle. the more time you're open, it does help. no question about it. whether or not it moves the

needle completely, i don't know. >> are you going to be pressured into shopping? >> i'm not, because i spend thanksgiving eating roasted oysters -- >> and watching football. but a significant number of americans want to shop, it is part of their expected activities. >> i'm calling it mobile thursday. 50% more will be shopping on mobile. >> because they are sitting on their couch waiting for their turkey and shopping. >> someone was a scarf and a bite under the table with her mobile. one dollar on mobile, that is one dollar taken away from bricks and mortar. to agree with that concept or is it a ratio, a portion of it? ultimately, the mobile customer becomes an on the channel customer and their five times more valuable. >> gap stores as mentioned she day by day -- managing day by day for the on the customer? >> five times more valuable and

pushing it all day long. >> macy's encapsulates that because they have been ahead of the curve. you advised a deal that is bringing macy's to abu dhabi. what kind of value is in a macy's or bloomingdale's brand when what they're selling is essentially what you can find elsewhere in the middle east? >> on the on the channel front, one reason they did this abu dhabi announcement was because they wanted to capture those who went to the uae from russia and china and all of the world who would then go home and shop on macy's.com. it is a billboard for them in the middle east. >> capture the tourist dollar. >> what did tesco get wrong? versus the excitement here? >> tesco is basic foods. macy's is for luxury goods. that is one big difference. what tesco's strategy in the western out to be was whole

foods, and whole foods has that sorted. insight.s an important me, too doesn't work. >> it has to be differentiated from the market. >> how come we don't have a harrods in new york? >> we have so many department stores here. we are getting the nordstrom and human marcus and hudson yards downtown. >> do they make money on watches? watches inreally six the paper. >> they're making a huge amount of money because of the gross margins on watches are off the charts. >> i think you just told me i got taken. >> we all did. >> mortimer singer and jim mccaughan. coming up, and investment opportunities in mexico next on "bloomberg surveillance."

♪

>> good morning, "bloomberg surveillance." negative eight, nine negative seven, dow futures at -53. yields coming a little bit over the last hour. we need to get to a morning must-read. >> my morning must-read is on yesterday's fed minutes, which was released in the afternoon. contributor to bloomberg view. you essentially says, the fed is still pushing ahead because the fiscal policy is not filling in the gap --

once again, it all rests on janet yellen's shoulders. >> the word there, experiment. jim mccaughan with us. i look at united kingdom, back to 1936, none of this is his -- is in the textbooks, is it? >> no. if you look at the u.s. fiscal policy after the crisis, there was a big stimulus to the economy by running a deficit for a while. for some people's taste, it tightened too quickly. i do think the continued growth in the u.s. is quite rebuffed. >> the financial times did an outstanding piece on what sweden got wrong, raising rates to quickly. fed being risk of the too early and raising rates?

"bloomberg surveillance." there is a risk of this we get it way before now. sweden did it when unemployment was still up around 8%. their mistake was to do it so prematurely, i think if the fed is going to raise rates in the next two or three quarters, it is going to be -- it is not going to be much. i would not be shocked if any years time the fed funds rate is 1% after two races. to me, that is ok in this economy. i feel the probability of choking off the economy by premature rate rise is actually quite low. >> is this a problem which a mcafee -- democracy? you left with central banks that can make decisions on their own. >> decisions get made in a crisis. we saw that in 2009. we saw that in britain and japan and other places. the central banks can do it with her modest degree of independence, but the ecb hasn't been able to because it is not

really politically independent. there's a very strong german government contingent slowing the ecb down. the end has between fiscal and monetary policy is way deeper in europe than it is here. we still have tight fiscal policies in europe with inappropriately monetary policy. -- with an appropriate monetary policy. >> with the fed versus the ecb, the boj, bank of england, which central bank are you looking at the most to set the tone for next year? >> i think it is still the fed. -- imodest tightening think we are looking very closely at the ecb to see if they can get more accommodative in terms of military policy, can they get the rates to zero and get asset purchases going? the politics appear to be stopping them, and that is problematic for europe. >> your world doesn't give a damn about this, does it?

it is just business as usual. >> as long as they continue spending >> "bloomberg surveillance." . >> i like it. we will continue these discussions tonight. our calpine will be hosting our special coverage -- mark halperin will be hosting our special of the presidents prime time speech to the nation. ♪

>> good morning, "bloomberg surveillance." tom keene with brendan greeley and scarlet fu. >> president obama making big changes in immigration policy tonight. he said he is issuing an executive order because lawmakers refuse to tackle the issue. he is expected to remove the meat at risk of deportation front of five million undocumented immigrants. republicans accuse president obama of exceeding his authority. goldman sachs fires a junior brought confidential information from the fed into the firm. he joined the company in july and was dismissed a week after the discovery in late september. another employee who failed to

escalate the issue was also let go. they were not identified. the buffalo bills want to make you an offer. $10 an hour and tickets to sunday's game against the new york jets -- >> i know where this is going. >> you have to estimate -- you .ave to shovel snow they will also have to wait for a driving ban to be lifted before they can even start. the bills are planning to play the game as scheduled, but the nfl will have the final say. those are your top headlines this morning. to see an option instead of an offer. i do not know the jets or the bills are good enough for either of that. >> there they are. >> mated mohammed el-erian will volunteer. >> we hope you will shovel snow. >> maybe he is the one making the offer. >> based on the news we got earlier this week. first, get a degree in mathematics and become an actuary, a good story to

understanding the deviation crash that we all enjoyed in mid-october. visible global investors suggests a clearing of markets as well for 2015. that was sport, wasn't it? >> last month was the most fun in trading since about 2009. >> like an insurance guy that doesn't have real money -- >> we have real money, tom. >> pension obligations hammered here as we enjoyed bond voluntary -- volatility. >> they will smooth it. they did not really notice. remember, the pension liability can't be withdrawn like a bank deposit. part of the deal is they have to stay there. >> the next time you consult a retailer, just say that. "all you have to do is smooth it." deals everyto do

day. it is very different. >> there was a time in nearly 2000's when "smoothing those quotes scared regulators -- "smoothing" scared regulators. >> the problem and the confusion is, banks have liquid liabilities, the deposits can be withdrawn any time, which is what causes a run on the bank. that is why banks need to really look at the the quiddity on their assets very different from a life insurance company. >> you attribute the pledge in october and the recovery to technical reasons. are those technical reasons going to put us in a similar tailspin again? >> yes. markets will stay volatile. when i say technical, what does that mean? ks of howental, quir the market structure operates. >> it had nothing to do with your poor japan. >> not a lot. there were headlines

in october. i don't know any investors who reassess growth prospects. they haven't really had time to do so. there were a couple of triggers. there was some hedge fun shorting at of the results. there was the escalation of trouble in hong kong with ebola in america. that could've been 2% or 3% down on the market. then you have the running of high-frequency traders, the markets selling or particular retail investors are using. it led to a bit of a spiral. jim, what i want to know, what is the second derivative going to be in the two-year yield? is it manager for fancy guys like you? >> it is hard to tell. for the fancy guys, they will have to be prepared to go either way. but i expect rates to stay low. i do not see the factors that

will drive rates up anytime soon. >> photos. important photos we go on storm watch. >> should i be outside wearing a hat? first shot of the day, we've got a lot of snow! theproblem in buffalo, first snowstorm of the season has articulated five feet. that is real snow. those are real trucks buried in it. i'm just off camera there adjusting my mic. four deaths have been blamed on the snowstorm, seven nationwide. in the possible cancellation of the jets versus the bills. >> my childhood was sport. this is a family photo. my father took us in the blizzard of 1966 -- >> which one are you? tie.e one wearing the bow

he is taking the photo. he is a five-year-old just waiting for instagram to happen. he knew it was coming. >> i was tweeting. there's a 15 foot roof, i say, they're jumping into 3, 4, 5 feet of snow. >> and you had to dig them out afterwards. >> we did. >> this -- what we're looking at is a necessary relation of real-time carbon dioxide emissions. this is amazing animation. you can see it online. what you see is in the northern hemisphere, that is in the winter when the trees don't have leaves and they can process the carbon dioxide. the first shot -- can we go back to summer? you really see the geography. a huge footprint in the u.s. in the industrial heartland and another footprint in china. >> industrial china.

>> it is really something. i put this on my facebook page. terrific work by nasa. >> you really see the difference in the hemispheres. you see the emitters up north and you see the problem receivers down south. >> and this is from 2006. it has only gotten worse. >> what i noticed with the video, everything north. thes much more moving up to north. >> the circulation of the wind to start this out. it is the coriolis effect that brings it -- >> i wanted to bring that word out. i'm sorry, who just said second-order derivatives? >> that was a great band. >> later on, i have actuary jokes. our number one photo -- >> bring it. >> president obama working on the immigration speech. what you see behind is director of speechwriting, next to him is

david let, the oval office -- did not say cody keeton? >> all we need to know, they are -- >> they are trying to figure out how to sell immigration reform to the united states. that is happening tonight. >> also, abraham lincoln to the left. >> you're not getting much help from the television networks because abc has the fall finale for "grey's anatomy." >> mark halperin will give us important -- >> shameless plug. it is significant the president speech is to longer an event for network television. >> proliferation of media, fragmentation. >> does it happen in the united kingdom? >> they don't all shut down when cameron speaks, but i think it would be on one channel rather than all of them. >> the networks are not carrying

it. suggest this is a perfect night for mark halperin -- >> oh, my god, shameless plug. interruptworks don't their prime time. it is the fall finales. they have november sweeps taking place. >> cbs has "the big bang theory." >> does retail terror about big tv anymore -- care about big tv anymore to sell stuff? >> technologies allow people to get an audible sounds coming from the advertisements on television which wake up the app. >> a dog whistle from your television. >> exactly. >> does the parade matter? >> it is fun. retail is the header. you bring that theater into the city -- >> theater. if i said it like that -- >> say alchemy again. >> alchemy.

>> those are very good photos. week, photos. >> we have more theater and alchemy coming up. gift buying is ramping up. our single best chart is next. ♪

>> good morning, "bloomberg surveillance." let's get to our single best chart. retail. new highsocks making yesterday looking at seasonal patterns, there may be more upside ahead for these stocks. our single best chart looks at how retail stocks in the s&p 500 trade historically legitimate to the broader market covering october through march and goes back to 1989. it is a ratio. the line moves up, it means retail stocks are outperforming the broader market. what you see is an outperformance in november am a stalling out in december in january, then a move higher once again in february and march. the strength we're seen in say walmart and target may be reflective of this historical trend. , you know retail

left and right, inside and out. holiday outfactured of november 11, singles day. because of the publicly traded company wants to go global, it wants to bring that to other markets. does it have a chance of doing that in the u.s.? >> absolutely. the wanamaker's would tell you, manufacturing of holidays in retail, every retailer wants to do it. they will piggyback off of this. there are no borders of holidays. i think next year in the years going forward, you will see this as a global holiday. >> november 11 in the u.s. is veterans day. it is and shopping go hand-in-hand for the next generation? >> singles day is probably a millenial holiday. i think they care deeply for the veterans, but they also care about themselves more than generations before. i think you will see this proliferate. >> are your children going to shop on veterans day in the future? >> i don't think that is appropriate. president's day, because they've

been gone for a long time. george washington doesn't care what i do on his holiday. describing, we're it is cyclical and the data goes all the way back 30 years, 20 years. are there any secular trends that will change that in the meantime or are we seeing the same cycle? >> it is the same cycle. if you look at it, it feels as though nothing happened until the results come out anyway. all that happens. around the holidays doesn't actually move the needle until the results come out. alchemy, day he said theater, and sturman john. >> i think the chart shows inrehensive -- apprehension october, then, it's in thanksgiving on, then they really only believe it when the fourth quarter results are in. very interesting chart. successes like ralph lauren have been just a moonshot.

p.m., mark8:00 halperin, special coverage of the president's speech. we will carry it live: by analysis from bloomberg politics -- followed by analysis from bloomberg politics. or twitter question of the day -- this is "bloomberg surveillance." good morning. ♪

>> good morning, "bloomberg surveillance." surge.n storm this is buffalo, new york, with more snow expected. oswego, where you cross into canada, at the southeast corner of lake ontario, more than two feet tonight. then they move onto another three to five inches on friday. >> brendan greeley is on assignment there. >> i am bundling up as we speak. >> it is going to get to 63 degrees on monday, which means -- >> melting. >> let's get to our top headlines. coming soon to jetblue, back fees and seats squeezed a bit

closer together. trying to boost profit and will create three ticket classes starting next year. only the top two will include bag.ree checked italy's southwest as the only major u.s. airline to check back for free. shares of jetblue rose one and 4% on the announcement. a warning from the founder of alibaba, facing his most "dangerous moment" after his record-setting ipo just two months ago. steering alibaba interdigital to attainment and health care as it adjusts to life as the 10th biggest company by market value. amazon.com moving robot army into place just in time for the holidays. the online rich ellerson to outfit several u.s. housewares with the robot. they bring stock shelves to employees. the robots entered amazon's world with the company's 2012 for 775 million dollars.

those are your top headlines. in 20 years, maybe amazon won't need to hire seasonal workers. they won't have the labor issues. >> robots don't steal things. -- that isxico, 3.5% how much the imf projects mexico's gdp will grow in 2015. it has passed education and financial reform, made the party for the 20th century seem confident. blackrock spent 14 years working in mexico's ministry of finance and was in charge of securing finance for the country's government. i read a lot of imf reports and like thisldom gush one. the imf has a crush on mexico right now. >> it is justified. what is going on a mexico is a once in a generation opportunity to transform the economy. mexico's productivity growth has been an zero for the past 20, 25

years and it is because the lack of new investment opportunities in the sectors, because of constitutional constraint, and political constraints have not unable to receive all the to a more productive investments. what the government has done, first, it was constitutional reform on competition, telecoms and energy. the delivering second round of legislation basically to allow for the private sector to participate in a more important matter. >> this wasn't easy. last night, right when the legislation passes, it drops. this was not priced in. this was not easy to do. this structural reform we've been waiting for generation four, this was hard work. >> it is hard work. it is something that hasn't been possible in the past 20 years. the government has been able to construct a majority in congress and actually get through their program.

>> what is the biggest risk to mexican growth? has two realities from an economic activity perspective. one is a short-term cyclical dynamics relation to the global cycle and the other is medium-term for next 215 years, but are interesting growth years,t -- next 10 to 15 interesting growth prospect. the challenges are more in the execution side. opportunities are huge. i would say medium-term -- there is an important challenge in establishing a shoretel reform for the rule of law -- short-term reform for the rule of law. now the stakes are much higher on the private sector.

ample timing. let's rip up the script. it is been an ugly 13 weeks for mexico. in terms of rule of law. just beginning with the student's death. is it a game changer? doesn't mince words. a fragile rule of law in mexico. do you agree? >> for all the success the government has had an instrument thing shoretel reform agenda through congress, the government is being tested because of what is going on. mexico ranks well among the universe. from the overall ability to do business, financial market development. once you get to the quality of institutional transparency, corruptions, the overall rule of law, mexico rings below average. hopefully, what is going on right now may trigger a social movement that ultimately has an

expression in congress to improve the institutional's and improve the rule of law and medium-term. >> i think jim mccaughan wants to jump in here. >> to me, the rule of law and security issues are a future problem that might turn serious given the positiveness of a structural reform. to me, the other concern is, everybody loves mexico right now. what is the next change? can it outperform even these positive expectations? it is only about performing expectations that will still be a good investment. >> i think it can, but not in the short-term term. in the short term, even for open up an economy it is, mexico will be the global cycle driving the reality for economic activity in mexico. >> it can basically beat market expectations -- >> i want to set up the polarity between brazil and mexico. what i'm hearing is mexico is the new brazil.

we had the election in brazil. it did not go that well. i'm going to put my marginal capital in mexico. is that true? >> the challenge with capturing -- >> how come mexico did not do better in the world cup? from anhallenge investment perspective, you want to participate in this nice story of reform. the way to do that is equity markets. the equity market in structure and mexico is not that great. concentration and certain names, not much liquidity. you have to go down the liquidity spectrum in much earlier stage projects if you want to capture that, and that is not for all investors. >> i was in the stadium when mexico lost. truly tragic. i saw a lot of mexican spinning travel -- spending power traveling. next year, it will depend on

the global cycle. jan that, it will be the structural reform. >> thank you so much. greatly appreciate it. ♪

>> the president speaks tonight and immigration and health care policy collided without congress . republicans say the president has little authority. what does it mean for american investors and'tis the season for retail america, retail consumers and the stock market. this is bloomberg surveillance and we are live from our world headquarters in new york and it is thursday, november 20. joining me is scarlet fu and brendan greeley. >> before we get to the top headlines best buy results just came across the wire, $9.3 billion topping the consensus of $9.11 billion, the earnings are share are $.32 per share. better than expected earnings report from best buy as they

head into the holiday shopping season or the heart of the holiday shopping season. when was a last time you walk into a best buy? >> never. it is probably been two years. >> the stock has been a struggle for a decade. >> i look in and everything and then go home and buy it online. >> they have too much of a footprint and too little activity inside. let's talk top headlines, the biggest reprieve for undocumented immigrants since 1986, president obama outlining his plan tonight in an address to the nation. his expected to remove the immediate risk for 5 million undocumented immigrants and may also extend visas for workers. republicans charge he is exceeding his authority and they may cut off money he needs to implement these orders. >> the president of united states who has punted on this issue for six years in dealing

with congress and apparently whatever he will do tomorrow night continues to refuse to deal with congress in an effective way. >> be sure to watch the president's speech live as bloomberg politics will be anchoring our coverage. temperatures million air

are set to rise this weekend and that could lead to flooding winter. those are the top headlines this morning, a quick data check to deterioration.

interest rates come in this morning. we have lots to talk about of course the immigration speech tonight and mark halperin with full coverage jim you're from scotland and we have you coming here and it is hard to get smart people.

the market is doing well but we say things good for them u.s. and the consumer but there was a lot of pressure on profitability. not even globally people are worried about the possibility of a problem session. what is different going into next year? >> everybody thinks it's a single digit world and will all make 5% or 6% if we're lucky, it

has been a david b uncle market, what is different going into next year? things going around will interest rates go up and how much will they go up? >> but you don't agree with that. given i't think it is a think the funds rate will go up by that can be accommodated yield curve flattening and that is not unhealthy when the continued maybe 2.5% growth in the economy. and if pretty healthy that persists for multiple years that is good business. thewrite about uncomfortable math of above average multiples for below average investors and they will continue to chase that is that something you are seeing on your end? >> long-term if we do see persistently low interest rates for multiple years just on comparative grounds that will tend to push up multiples because if you have a 2.5% 10 year yield maybe a 5% earnings

yield is not that bad. isthe money question to you our stodgy us boring portfolios, tol you be forced to shift riskier investment and heaven for bid invest in the equity markets? not on the insurance general account, the insurance general account for annuities and life insurance policies needs the fixed income because it has fixed commitments, however a lot of our business is associated with equity investing. that is i think a very attractive place to be right now. >> is oil part of that david bianco? can you load up on oil? >> we have interest rates that are persistently low and i think if they do go up they will go slowly and moderately.

i have to agree that interest rates will not go anywhere near where they were historically and we have reasons for that which include weak inflation and being led by things like commodity is puttingthis pressure on certain parts of the to get and energy and that pe still high above history but we need his companies to and show healthier growth despite some of these profit gouges. inwe will discuss this later the hour, thank you for staying with us. willter on, mark halperin be hosting said special coverage of the president's runtime edge rests and he will be speaking on immigration.

>> good morning everyone, bloomberg 'surveillance." our guest host the writer of a cute research report and david bianco, and with his greater granularity he looks at use of cash. it is it a theme? boy has that been a theme for a number of years when does it end? >> it will be with us forever,

investors always want to get paid. preferably it is important for me to state -- say upfront we want companies to invest. it is been very anemic lately and less because of concerns about stability but difficult to find places to add capacity and grow internationally and even here at home. rule with theeral use of cash will we see an additional cash build next year? u.s.at we find because of tax code that cash still accumulates off core but -- offshore but on sure they use about all of their available cash flow to mystically for dividends and buyback activity. do this so great with your report, if you start the year knowing you'll make x 8%cent in stock, let's say

would you do it that? sharethink that the buyback contribute into the earnings growth and i have 5% for next year and i'm thinking of multiples the same where it is now -- >> 8% and you know where you are going. you have a killer chart that america used to be europe. we used to have a higher dividend payout and now we have a lower one is it because of taxes? >> the further you go back in time if you want to go to the early as part of the 20th century you will find two thirds of index earnings paid out of dividends and out of the past several decades that has come down to between 30 and 45% right now only a third of earnings are paid out of dividends and i think over the next 30 years dividend payout ratios will decline led by technology a little get to about a 40% payout ratio. >>

we excel at networks. i want to talk about the work you're doing out of mumbai. >> how do you see india 12 months from now. where will india be in 12 months. >> the indications are very is back to adia friendly economy and number two the growth rates are only climbing up in the trajectory is we are not talking 7% growth rate.

whatre the expert on this, is the business distinction right now, the business practice that will change? >> two fundamental changes. number one is quick decision-making. taking the end begin woody out of the season. we have tax rates and retrospective tax rates. that is the hallmark of the administration. theodine has approved situation and we are seeing it in delhi and everyone has their own laundry list of things he needs to do what is the one policy he needs now? thatpersonally believe

majendra which is 95% of business globally, for us where we wanted a friendly tax regime, more cooperation between the governments both on immigration and labor movements as well as tax harmonization. >> david bianco here from deutsche bank, talking about technology being this $80 billion industry, tech earnings and telecom earnings in particular how does it look. >> the technology sector is almost a high teams perspective. let's of the tech sector are both a slow acceleration in spending. we think corporate amp or ties -- enterprise continues. that the dollar had

wins. you so much. congratulations on your acquisition. our twitter question of the day is the president speaks tonight, what do you want to hear from obama?

>> let's get to our top headlines, the president is making big changes in immigration policy. he said he is issuing an

executive order because lawmakers refuse to tackle the issue. he plants remove the immediate risk of deportation for 5 million undocumented immigrants and republicans accuse him of exceeding his authority. students are looking at a possible 28 percent tuition increase and they are not happy about it. 2800 protesters stormed barricades and broke glass. that is where the board committee approved a plan to raise to wish and as much as 5% annually for five years and a final vote is expected later today. bailingctures reportedly on a new film about steve jobs. christian bale was said to be on board and then not. leonardo dicaprio could get a second wind in the industry website says universal pictures is in talks to acquire the project. it is based on the jobs biography published after his death in 2011.

>> scarlet fu/story? >> the back story is aaron sorkin may have spoken to early, it turns out christian bale was looking at and decided against it. >> also, how do you find an active to and have it the earthly vessel of state -- saint stephen from cupertino. >> catholic good enough electoral step one. have to look good in a black turtleneck so that would be cap one. >> the christian bale is right david? >> identifies and most of my time with financial charts. [laughter]

>> for all of you listening on radio we love david bianco. you say you prefer health care over consumers and tech over commodities and -- >> especially the idea that there will be more daylight when they looked for the end of that tunnel because a litigation charges are truly extraordinary. over $20 billion worth of litigation for the big banks in 2014 and our belief is it will be far less in 2015. there is still a very difficult the interest margin and very slow loan growth. the underlying earnings growth trends are uneven. >> i am reading for your november 7 note, employee stock

options as an expense. god love you for doing the hard work of that accounting, how did the world change? anfirst stock auctions are expense and proper dock reporting and there are some companies that somehow the members are not in the non-cap measures, we always go find out which companies are doing that and put it on the earnings, there is a good 1.5% invested earnings not in the non-gap earnings. >> would you corrected? >> largely technology companies, some old tech and some new tech. we are mindful of this when we compare technology to the rest of the market and industrials. when i think of tech versus industrials they have bigger challenges. >> you'll have to think office culture for a second there was a bloomberg piece about

investments and bankers and they had to flip the result of them are more on us after they talked about homes and then talk about work, bank employees are basically honest but it is the cultural norms of the workplace making them dishonest. is there something in your culture making you dishonest? >> at my home there is lots of honesty -- [laughter] i believe especially might immediate environment and at work as well. i think a lot of people appreciate how much integrity there is an corporate banking america. there is always decisions to be made. >> you could run for office during -- office. >> that was a well tuned answer. sayingf retailers are their earnings for dollar tree, $.64 in the first quarter and when you account for one-time items the adjusted eps is $.69

and the consensus was for $.59. fourth-quarter sales and the outlook is anywhere from $2.4 billion to $2.5 billion, consensus about $2.5 billion, that is in line as well. the first quarter has low single digits. >> good morning everyone, somberg "surveillance" much for the post election, the president will speak and act on immigration and he will infuriate republicans, philip mattingly is in washington and it is 36 degrees and temperatures aren't rising tonight, what is the back story on this? is this a set up to get the real negotiations or is this a white house truly acting on its own? >> this is the white house truly

acting on its own. from their perspective what you hear when you talk to officials is we have given them time, we of work at them in the senate on a bill that passed in a bipartisan way we have given john boehner space and they firmly believe if that sanibel -- senate bill was put on the house floor today it would pass and they feel like they don't have any other action. republicans disagree strongly and some democrats disagree strongly but this will not start negotiations if anything it will put an end to them. >> was there any negotiation before the speech tonight and its announcement or is this a unilateral president? >> this is a unilateral president when it comes to the opposite party is about to control both chambers of congress. i spoken to aids in leadership on both sides -- i've spoken to aides in leadership on both sides and none of them have heard from the white house, the president invited 16 democrats last night to walk through and

no republicans were informed. what the white house decided is we of given you all the time you can have an we let them know everything we can and now we are going on their own and nothing will stop us. >> john boehner said exactly this move would poison the well is that a threat or reality? >> i think it is the reality in the house republican conference, and the senate where mr. mcconnell is about to become the leader there is a recognition that they need to show they can govern and they'd to prove to people that they can pass legislation and send it to the president and show that washington is at least somewhat functional. it wasn't necessarily that this was a big victory for republicans but this was a big vote against what is going on in washington, that has benefited republicans but there is a strong recognition amongst leadership that they need to make something work. >> let's sit with politics because the president makes this announcement and flying -- flies straight to las vegas to sign

it. >> he is going to del sol high school where he laid out the big principles for what he wanted in congressional immigration reform in 2013 and he is going back to that school, another interesting thing to pay attention to is nevada. harry reid's hometown the soon-to-be senate minority leader twice i percent of the population is hispanic and if harry reid wants to win he has the lockdown major majorities in the hispanic community and a lot of people are pointing to this beach whether it was intended to do so or happened to do so it has started harry reid's reelection campaign. >> phil mentioned the exit polls in the latest election, a 2% of americans in the latest poll disapprove of the president taking executive action but a majority of them want a pathway to succeed. >> i need scope and scale, how far removed are we from carlos

gutierrez and ted kennedy from eight years ago, is this a continuum or is there something truly new? >> i think there is something truly new him a what we thought -- saw through the legislative process was a continuum, they were building on principles from 2004 and 2005 and figuring out pathways to move forward. now granted, what the president and his people will continue to other presidents have had deferred action on immigration, ronald reagan and george h w bush so what he's doing tonight is unseen before and it could be undone and that is the big concern. >> phil mattingly, thank you so much. secretary guiterrez will be on "in the loop" this morning. >> and mark halperin hosting

prime time coverage of the presidential address, you want to tune in to hear the speech live on bloomberg television and radio. our twitter question of the day ties it altogether, what do you want to hear from president obama tonight during his address. tweet us. ♪

the president will be delivering his speech on immigration tonight in a prime time address. betty liu has been looking into this and we talk about the policy implications and you've been researching the economic implications. >> kind of lost in this debate in the hyperbole around immigration is the question what is the economic benefit and the economic cost? we will be talking about that with several of our guests later on in the program. our expert has done lots of research on what this would mean and he says he is come up with a calculation that if we were to defer deportation to undocumented immigrants that would be a short-term increase of about $18 billion in labor income.

some of these illegal immigrants would come out of the woodwork, i hate to say, and start to compete for wages that are on board and those wages would go up in value. it would also at $6.6 billion in 553that is where we have our concerns. we are a little concerned about the adversarial nature of what is going on. >> once this happens no

corporate tax reform? >> what would you like to see from the president tonight, as he hedges? we would like to see a little give-and-take. e> i think the keystone pipelin would be a good give. >> he has that in his back pocket. >> these are some of the realities of actually a conversation between the executives. >> we are talking as if any negotiation is possible in any sphere and we have not seen that in six years. >> they had not tackle the harder questions which is the pathway to citizenship and that is a more difficult question to answer, we are talking about that with carlos guitierrez. >> what would he want to hear from the president? >> he wants to see negotiation,

i was with him when the immigration bill collapsed. it was ugly. there were tears. it was ugly. this was a huge deal. it was not funny. it was ugly. when this collapsed. "> betty liu on "in the loop with carlos guiterrez and who else? >> will be right back on bloomberg surveillance.

>> tomorrow, one of my favorite people out of cornell university, a mechanical engineer, he studied under the legendary carl sagan, william nye, the science guy. i love him. he is great. he will be with us tomorrow. we'll spend five hours talking about the state of science in this nation. bill knight is joining us tomorrow in support of his new book, "undeniable." i am really looking forward to that. >> and he wears a bowtie. just in time for the

holidays. the retailer has outfitted several warehouses with the robots. for an -- requiring employees to walk long miles for merchandise. a purchase for 75 million dollars. aboutairport, complaining drones. three reports of drones flying near passenger planes, trying to land at jfk. the latest occurrence came yesterday. the faa is investigating and tom says it is a matter of time. mike nichols passed away. a movie "therd for graduate."

he is the husband of diane cymer -- diane sawyer. >> that is extraordinary that he did that. >> i think "working girl" was the best made about the business. the victories that she is on the 43rd floor at management and she made it. >> it was riveting how he talked .bout the state of cinema >> he a combo shallot. >> let's get back to the world .f business let me give you a number to show you what i'm talking about, share buyback. 29% fewer shares over the last

20 years. down to 5.1 billion. dave is joining us. get us started. this is one of the key ideas. it just continues. it is a new religion. >> buybacks are definitely one of the major sources. or -- standard operating procedure. it will continue for a long time. i tend to prefer dividend growth. they are a lot more transparent. you can use things like dividends per share, your numerator, and your denominator will be costed capital. cost to capital, we are

accepting as being lower because of interest rates. gross. worry about you can make the math a lot easier by tilting toward the tech,y is, health care, >> this was in your note and we believe dividend growth should be earlier. you do not see it buybacks and a. you do not see buybacks test companies coming up with cash for a long time. >> i do think i backs, i think it is a process of plateauing because companies do not have access to cash and cash flow. i think buybacks will stay at high and strong levels and instead, strong dividend growth. i think double-digit dividend growth in 2050 nine 2000 16.

>> speaking about access to foreign cash, health care companies involved a lot of m&a how much of atly headwind is that? as some of those deals are still finding ways to get done. that is because globally ambitious business want to make sure they can grow abroad and have full access to their earnings and cash flow abroad. will they have access to future earnings? , thee heart of the matter double-digit reality we live, how do you go into next year knowing we have got to have some form of reversion on equities? >> that is true. that is right here and i am constructive on the equity market. i tell people, do not expect double-digit returns. in an inflation

and interest-rate environment that is on lower. dividend is terrific in this world. >> that is cultural. that is a real change. you have to change the way people think about investing. >> yes. in that is why it is important to find which country. >> we have allergan in the m&a world. with the federal reserve set to raise interest rates sometime this year, -- getting a deal done? >> no. is the question of whether companies will have as low a i'm nancy available as now. interest rates are going up for quite some time. >> they will stay persistently low. that will continue to support m&a.

let's get to the agenda. on my agenda, retail earnings. we mentioned dollar tree and best buy. cap will report after the close as well as gamestop. a lot of questions as to what kind of outlook they anticipate. >> i agree. >> it is where tom gets his basic things. >> but there it is, a pop-up store on fifth avenue. >> you get your white the next -- v-necks. he missed the trend years ago. >> i think joe biden gets a bad rap as a politician. he makes everybody laugh and he remember his everybody's names. he is going to turkey, he will , so it is always

interesting to see what he can quietly get out of meetings. >> he is a throwback. you wonder what he and others of his generation will think of executive authority. mark within important analysis tonightg at 5:00 p.m. on radio and television across all of them are. look for that. has to importantly, this be the top of the agenda. this is some original politics in washington. you spend more time in washington than me. >> i am listening but they're deciding there is no way forward and will be combative for the next few does years. i doubt if anything can get done. >> i think john boehner has already written his response. >> i think it has been pretty clear. >> our twitter western today, what do you want to hear from

president obama? >> many of these, we could not and use -- not use. >> here is 1 -- how about this one? fairness for all. >> someone wants to go watch "the big a theory." >> the speech does not have to be long. >> and what other issues with people into it? will he mention the keystone pipeline? >> i don't expect to hear it. >> you are not expecting much. >> you wonder how much. executive authority. >> this is not reassuring the nation. speech is used to be about a national security situation at prime time.

this is a domestic agenda he is trying to push. >> thank you so much. i hate your make them a bigger font. with betty liu. carla is forecast in the hour. the hour.guest in ♪

>> good morning. it is thursday, november 20. we are alive.

i am betty liu. the president gets set to announce one of the most sweeping overhaul's. thisll dig deeper into how will impact the american economy. carl is a prominent republican and advocate for reform. we will head to morocco for an exclusive interview where she will be speaking on global entrepreneurship. look at the top headlines this morning. the battle for immigration will be fully joint tomorrow -- tonight. president obama will use executive orders to bypass congress. up to 5 million undocumented immigrants. more visas forow high-tech workers. republicans are not happy with his move, including the new jersey governor chris christie, who says the president is exceeding his authority. issue for six