back oil production and force prices up. and the fate of obamacare. congress is still pushing for repeal, but i'll -- while the woman in charge wants to make sure it survives. "bloombergome to ." i'm david westin. stephanie: i am stephanie ruhle. we have the jobs number. if we get a strong number out of d.c., we can see a shift in the euro and the dollar. some of these investors lost money yesterday. david: it was a rough day. stephanie: it is not going to be a rough morning because we have bloomberg and mertes matt winkler with us. good morning. and carl riccadonna is with us. -- first,eak down

first where news from vonnie quinn. vonnie: the coalition that has been a attacking islamic state is about to get a new member. -- it is in germany the most dangerous deployment of forces for angela merkel, who has been in power for a decade. four years ago, she kept germany out of international intervention in libya's civil war. firebomb attack earlier today in egypt, according to news reports. firebomb a deadly attack earlier today in egypt, according to news reports. a molotov cocktail was thrown into a nightclub. police say the attackers were young men who were not able to enter the club. the california gunman, syed farook, was reportedly in contact with islamic extremists on social media. authorities are still searching for a motive a day after two shooters killed 14 people. police say they found 12 pipe

bombs at the suspect's home, and the two had more than 1600 rounds of ammunition. when they died in a police shootout or you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. matt miller on the markets. matt: first, breaking news. rejectinguthern is the offer from canadian pacific. norfolk southern says the offer is grossly inadequate. remember, it was unsolicited, a hostile bid. face toothey would much regulatory scrutiny, on top of the fact that they do not think it values the company fairly. taking a look at european stocks a mario draghi hangover continuing after the big losses yesterday, not as dax is down half a percent. the cac is down half a percent as well. as u.s. futures, we are

back, coming off the worst day since late september. the dow over the last two sessions, was down 410 points, and stocks had moved within 1% or 2% of record highs, depending on the major indexes. futures are solidly up this morning. g, you take a look at sea know i like this terminal function. i have put it up for the s&p index and drag it out to the last 14 years. points to look at is that we are currently down sorry, 1.5%1% -- for december. it is the worst start to a december since 14 years ago, back in 2002. everybody talks about a santa claus rally, and it is only

december 4. is it december for right now? david: we had a ways to go. have time to go, but it is not a great start. stephanie: you know who else is having a bad morning? hunter harrison of canadian pacific. he sat with us two weeks ago, and he said he is not having direct conversations with the ceo of norfolk. but he said it is a stagnant board, they are not doing anything. even if this does not go through, you are going to get so much attention from investors, this could cause potential activists, maybe bill ackman, to knock on the door. david: it is not a good day for them but it is not a surprise. they were getting no love whatsoever. but i wonder if this rejection opens the door for him to go forward with the shareholders and the board?

may note: carl icahn have even been thinking about norfolk southern, but now hunter has put them in focus. we are going to follow this all morning long. we will reach out to hunter -- if you are awake yet, we would love to have you. david: we want to start with julie hyman, who will be breaking the jobs news for us in about an hour and 25 minutes. set the stage for us in washington. julie: 200,000 jobs is the headline number we are looking for, the addition last month, 5.0% is the unemployment rate we're looking at. average hourly earnings, .2 of 1%. month, it would have to be darned terrible for the fed to not raise rates at its meeting. that is something we are hearing from a number of different economist and strategists, so

the bar is relatively low. atording to one economist, bnp paribas, she said it would have to be a large surprise not just for september, but a downward revision in october. that said, one of the other scenes running through the commentary this morning that i have been going through, is that after this jobs report, going into next year we could start to see a moderation of gains. david: thanks very much, julie hyman. we look forward to talking to you in about an hour and 24 minutes from now. matt, give us your thoughts. we are focused on these numbers. but there are a lot of other indicators that come out of the jobs numbers about how strong our economy is. matt: one very big and very important indicator is the auto industry, and we have seen record sales the past three months. that is going to continue. one of the things that is very

good as far as the jobs outlook is that auto jobs are increasing. that is going to continue well into 2016. stephanie: you have to think about inflation, though. i do not want to say it is a foregone conclusion, but when i think of market participants, is it going to happen? it is the pace at which it happens and wage increases. while we are still seeing wages stagnant, that is the price of labor. carl: we got a little bit of a -- we shouldwith have confidence because it looks like we are barreling through 5%, which is probably the neutral level of unemployment, and that means wage pressures will be coming in 2016. that will help auto sales and a range of indicators. even if job gains moderate next year, it is headline payrolls changed today, we need to see what it has for liftoff. going forward, that is not going to matter as much because if the

140 million workers out there start to see wage pressure, that is more relevant for household income growth and consumer spending than the variations of monthly payroll changes. today, watch the headline change. going forward, we have to watch income creation, aggregating growth. take workers times hours times earnings, and that tells you. matt: here are some other variables -- amazon, lowe's, home depot, netflix -- these are all stocks that are doing really well. what are they telling you? the consumer is very healthy. these stocks would not be very healthy. it should put pressure on wages to go up, but they have not. i do not understand the disconnect. att: wage inflation is

lagging economic indicator, so we have to go through unemployment and then we will get the wage pressure. if you look back six months ago, we were not at full employment. david: and we will have a better sense in an hour and 20 minutes. year, as i year over recall. so this is an exciting speculative time before we know what the numbers are. while we speculate, matt miller has a great function off when berg. matt: on the bloomberg terminal, his-go. type in w here i have u.s. nonfarm payrolls up. against can you put in all the other bloomberg users, you can see how you did in the last jobs report.

who is the best forecaster in the last year? i just found this function. i think it is amazing. the thing is here, do we not all love competition? we would not be in the industry if we did not, and especially people in finance. it is pretty cool. wwhis go. also have tou think about today pass market reaction and what we got out of the ecb yesterday. -- you also have to think about today's market reaction and what we got out of the ecb yesterday. not so sure that yesterday was an accident. the ecb knows full well how the market is going to react to their announcements. they talk to people behind the scenes and whatnot. if they came out and dramatically expanded monthly purchases, we have -- we would have seen a much weaker dollar.

the dollar is giving people paul pa-- is giving people use. if we look at the bigger picture, we got more europe qe, which is what we needed. we also did not have the reaction in the exchange market, which gives janet yellen free run for liftoff. stephanie: are you saying the central banks -- now we have to take you to paris for breaking news from the climate change summit taking place there, and how it is affecting bloomberg and our founder. francine lacqua is there with more. francine: thank you so much, stephanie. we just heard the news that our founder, michael bloomberg, the former mayor of new york city, has been appointed in this new role. there is this news conference going between mark carney and our founder, mayor bloomberg.

so basically, governor carney, who has -- who is in charge of the financial stability board, has put mayor bloomberg in charge of finding a way for companies to be more transparent. so he will have to find a way that companies will disclose the risks they face from climate change. aboutoes into a debate transparency. we are trying to find an agreement. we have 500 mayors, 150 liters. at the end of the day, it is difficult for -- shareholders and investors cannot figure out the liabilities of exxon and other companies around the world related to climate change comes into effect. david: this is really interesting news. come back to the overall

agreement in paris, which as i understand has not been reached yet. what do we know about that? how specific will that be? francine: we know that, of course, leaders will be here for another six days. the last of the leaders summit on climate change, copenhagen. copenhagen was a disaster. after meeting for two weeks, they did not have an agreement at all. now we are so much more aware of climate change, at least there is much more hope when you look at participants and talk to participants, that we will get some kind of agreement. first of all, how do you finance it? nations giving $100 billion to the poorer nations -- where do you get the money? there are some things that they need to work on. and then it is whether they have two-degree figure on climate

change. it may be watered down. it will all depend on the u.s., on whether barack obama really wants to make a standing. he may have to go through the fed to get approval. it depends on how gutsy he is. stephanie: francine, thank you for joining us. this is a very big announcement from our founder, michael bloomberg. my bloomberg terminal was on fire with some people who are possibly thinking he had a ,ifferent kind of announcement running for president. we are going to have a very special presentation, "changing climate, changing business," around mike's announcement. 8:00 p.m. this evening.

now, m.v.p. go -- most viewed person. mario draghi being researched on the bloomberg terminal. number one.ugh, is more people are checking out what that morgan stanley banker is up to than his dad. up next, more on how the ecb policy is rippling through the market. we will have that and more. matt winkler is here, and carl raqqa donna. -- carl riccadonna. this is "bloomberg ." ♪

vonnie: welcome back to "bloomberg ." tofolk southern has said no the $28 billion offer from canadian pacific railway. northern southern ash norfolk southern calls the -- norfolk southern calls the offer grossly inadequate. members of opec battled over oil

.utput --ting cash, they want to the oil's biggest producer, saudi arabia, is holding the line, wanting to maintain market share. and bankers are not -- beer makers are not happy about the deal between ab inbev and sab miller. the acquisition would create a monopoly in violation of u.s. antitrust law. ab inbev says the suit has no merit. stephanie: now it is time for "global go." markets are still measures announced by the ecb and mario draghi. equities in europe and china are falling today, and the euro is dollar lower on the after its best day since 2009. mark barton joins a spirit let's

take a minute. before we can really dump on mario draghi, he stayed the course. he extended. he just did not pull the bazooka out. the guy has one tool left, a hammer and a bunch of nails. does it make sense not to use all of them in one shot? mark: he is in danger of use it -- of losing his super mario moniker. throughas been extended march 2017. yes, it has not been expanded. they are going to reinvest principal maturities, extend the scope of qe as well, stephanie. he certainly did something, but he did not market -- but he did not match market expectations. that is the big disappointment. do you know i feel the most sad for today? -- thebrooks, the keefe chief currency strategist at goldman sachs. yesterday morning he said the euro could move three ticks if

the ecb goes dovish. 3%, but notmove by to the downside, it moved 3% to the upside. check out the stock 600. stoxx 600. coming back to the euro, biggest move yesterday since 2009. we are seeing some retracement today, but mario draghi definitely did not deliver whatever you say. stephanie: he did not deliver to a bunch of traders who just one big returns in the month of december. i guess what, he has a bigger job than that. mark art and, thank you for joining us this morning. that is it for "global go." voted u.s. senate yesterday to repeal most of obamacare, but the president said he would veto the measure. matt winkler spoke with health and human services secretary

burwell. this is not the first time they had tried to repeal obamacare. stephanie: so productive. just a political exercise. it is not going to affect obamacare in any way. it is really nothing more than politics as usual. david: putting aside the politics, obamacare is a major piece of legislation. 13 months left in the obama administration to what do they need to a cop as now and then to lock it in? -- what do they need to , between now and then to lock it in? that: my colleague who has studied this issue probably more than anyone can provide details on that. that is essentially it. carl: what they want to do is to get people signed up the most important thing they can do in

the next year -- they want 10 million people, to get those 10 million people in. the more people who have health insurance, the tougher it is to take it away from that. david: how many do they have now? >> it is a low goal, and they do not want to disappoint people. 10y had a little over million at the start of this year. it has come down to about 9.1 million at the end of the year. stephanie: when you see health insurers pull back and say they do not want to participate, what does that mean? how much does the government need to pay attention to that. insurer --ealth, the they are big, the biggest in the u.s.. they are not that big in obamacare at this point. us whatatt miller, tell they have to say. matt: investors are nervous about health care, but more nervous about hospitals than anything else here.

i have put up. the hospital index in white. it's volatility versus the general s&p health care index in orange. you can see that the volatility of hospitals is much higher, and on the bottom panel you can see the spread. it just climbs up. david: i would have thought obamacare in general would be good for health care stocks. matt: it is. the health care industry, since the rocky rollout in 2013, has outperformed every other industry. what you are seeing in hospitals is anxiety about cost, and the cost of taking care of people who do not have the money to pay. stephanie: the chart is right up there. matt: there is a dichotomy here. the health care providers are doing great. why are they doing great? there are all these new customers for health care, and they are paying for services that they were not paying for before.

on the other hand, hospitals are taking care of more people who theot necessarily pay price. stephanie: i never actually met anything with the word "obama" in it that matt winkler did not take as positive. david: wow. stephanie: the day united announced that they would be pulling out, we talk to johnny bush. of anthem. johnny: the product was so tightly regulated that you could not do any product management. you could not build a differentiated product. who the hell wants to play a commodity magnet game, especially for a small number of that are happening with individual customer service? stephanie: when you hear someone like johnny bush saying fine, let them stop out just let him step out, it will make them more competitive?

>> there is much greater demand in -- economy 101 tells us that if you have an expansion of demand, watch your price component because that is going to move. the trick is to have a lot more demand for health insurance, but manage the price in a way that you do not see rampant health care inflation. that is the risk over the next two years. that is pretty much right, and we have seen health care costs pick up a little bit over the last year. stephanie: thank you so much. thank you so much. we are going to be back with more "bloomberg ." ♪

stephanie: welcome back to bloomberg "." less than an hour of the jobs number coming out. nbc will be breaking it down.

now is our bloomberg editor in chief. welcome back. david: we also have vonnie quinn with us for first work. vonnie: grace has gotten criticism over their flocks refugee program. they are calling on european controls and workers to monit or their borders. someone to kick greece out of the passport-free travel zone. republicans and democrats teamed $305 pass a five-year billion highway funding bill. some lawmakers are unhappy it is partially paid for with dividend payments to large banks. also the export/import bank. speaker ryan is warning there might not be a deal of a must-have spending bill by next friday. ryan and other republican leaders insist that they will not shut down the government.

if it goes past the deadline, they will pass a temporary spending bill. you could get more at the new bloomberg.com. stephanie: tom keene joins us from paris at the conference with his own morning must-read. it is the morning must watch. you and francine interviewed jeff sachs earlier. thoughts on the 500 plus mayors in attendance. >> mayors are key. at the end of the day, the lights have to go on depending on if the mayors get it right. the streets have to not be blocked. they have to have the infrastructure for the next generation of electric vehicles. it is here, the 500 mayors or so in a room, that will be driving the change on the ground level in the most practical way. this is what jeff sachs and the 500 mayors need to

do. let's get realistic, what is the game plan? tom: what is really happening is that first of all, they are meeting the key goal to move on after the disaster in copenhagen. down in saw how it went flames a number of years ago. a to use this word, but it is accurate, there has been a on climatec shift change and all parties. thisumber one question on thursday into friday is the idea of how will we finance climate 10-years, andars, in 30-years. david: it is interesting. it is important, that is our own mayor, mike bloomberg, but there are other people who say that this needs to be like the space program.

that we need massive investment at the government level to change the entire science. >> the seventh largest economy in the world was california. two things are happening. policy and people's preferences. california is putting more energy into clean energy in more than anywhere in the world. california is bigger than brazil right now. you have some sense on how this is shaping up on a global scale. another thing we are seeing is that clean energy companies, compared to energy companies, are outperforming energy companies as an investment. you have never seen that before. they are subsidized, but this is something that an investor is making the decision. an investor is deciding a clean energy company is a better investment than a traditional energy company.

stephanie: is it a challenge to make it clear that clean energy has effects beyond just doing the right thing. doing the right thing does not get people to move enough or vote enough in that way. tom: that is an important question. speaking to the head of the sierra club, he made it very sm is that do-gooderi done. there must be a linkage between climatearming, change, whatever you want to call it, with raw capitalism. even the sierra club understands there must be a co-equal decision-making that there must not be a cash benefit, but a societal benefit or business. we are at that point closer now than we were five years ago. stephanie: things are worse than they were five years ago. tom?

maybe we have lost tom. tom: i think that -- ,tephanie: in terms of impact things need to be addressed more now. we have made progress in terms of making this a top issue, but look at the smog in beijing. before 2010, there was not a company on the horizon that was perceived to be disruptive and industry -- disrupting an industry like tesla is. tesla comes out in 2010 with an ipo. the stock is up 1200% since 2010. was voted the best car in the world by consumer reports two years in a row. this is an example of an industry that is just beginning. you have not seen anything yet.

usid: tom, please stay with in paris. we will stay talking about fossil fuels. opec energy ministers are meeting in vienna to discuss the slump in oil prices. , please take us into what is going on. i'm seeing conflicting reports. yesterday, the saudi suggested that they would consider a cut in production. not at this meeting but in 2016, and countriesopec outside of opec joint in the cuts with them and share the pain. one analyst said that was a red herring. an offer that the saudi's could make knowing they would not have to make good on it. i've been talking to the russians, they have no intentions of cutting productions.

the iranian minister says we have been out of the market because of the sanctions, we want to come back to the market. only after that would we be willing to discuss a production ceiling. that a anothert example that the opec meeting is a lot of pomp and circumstance. the people participating -- there are so many different motivators in terms of his news, economic politics, religion -- they will not be getting anything done. not get anything done because they do not want to get anything done. the most influential member of opec already saudi's. saudis.ec is the they're saying let's try to drive out the producers and maybe prices will recover. they think they are making a little progress in knocking out

producers. shale it is not happening fast enough for most of the members. six or seven say let's cut, but they think they are doing the right thing. they are concerned about demand economy. they look at demand in the united states and china, and they are worried if production cut could cut things. david: why don't you show us? are using the bloomberg oil, it gives you a wealth of information. brentutput versus crude, continues to climb. it is fascinating to look at the chart as brent crude comes down. they are not cutting, and it is not helping the price action if you want it to be higher.

david: talking about whether opec wants to do something, i wonder if they can? there are a lot of producers outside of opec, including shale in the united states and the russians that are not in opec anyway. matthew: we stopped using the word "cartel" a long time ago. that is the answer to your question. it is not a cartel, it is a real market. we are seeing a real market play out, and it is not comfortable for the producers. stephanie: what is the real value of the opec meeting. i do not agree that it is a whole lot of nothing. a cartel that opec is that incorrectly states that when the price goes it falls apart. opec is geopolitically, important.

americans underestimate the amount of production coming from 2 fractures nations in iran and iraq. we need to watch opec, monitor have a dialogue with the different flavors of opec as we see although this production, on her no other reason than political stability. , youanie: ryan chilcote have a final thought for us? ryan: it is very trendy, i think , to say that opec does not matter. not only do they control 42% of the world's production, they of thee vast majority world's reserves. think of it as the central bank of oil. while they almost certainly will cut production today, the market will be looking at the mood and tone out of this meeting, and that will change the price of oil today and in 2016. these guys have real weight.

when they speak in one voice, they do it well, in a way that can'tproducers and russia . we don't see that unless they are cutting. they do have the ability to move the market in the direction that they want. they cannot move it as much as they want, but they can move it in a direction that they want. david: tom keene in paris, thank you for joining us. we will talk about one of my and matt's favorite subjects, automobiles, next on bloomberg "." ♪

vonnie: welcome back to bloomberg "." passed a highway funding bill to revive the export/import bank after republican leaders try to kill it. they lack board members to

approve big loans. three of the five spots on the board are bank and -- i think it -- are vacant. a new rule for an old atlantic jet. they will launch rockets from the 747. they have been trying to grab a share of the market are putting commercial satellites into office. a restaurant trade group is suing new york city over rules on salt content. they require them to post warnings on food high in salt. the restaurant say the city has overstepped its authority. autoanie: returning to the industry. booming. sales have doubled in six years and american carmakers are the most profitable. this is good news for the u.s. economy. as our editor has been writing

about in his newest piece, what is good for general motors has been good for the u.s. economy. they have expanded their work for such january 2010. the automobile factories have greatestates with the growth in grabs are those with automobile factories. number.a big how far can it go at this point when we look at states like michigan -- they have -- yes they have recovered -- we have not seen a recovery that one would think would be in line. matthew: how far can it go? the best is yet to come. this is a taste of what you will get. you have low energy costs, we just talked about that, and an economy that will only get stronger in 2016. , in employment increase

may be 12% since 2009, but the auto industry is up 65%. that is a staggering contrast. that is repeated in state after state where the auto industry for thenot only american 3 in detroit, but every car company building in the united states is expanding his workforce -- more than the employment growing in that state. david: show us the employment. ge.: let me pull up can you bring up 16 first then we will go back to 15. these are codes. you can see at the bottom of your screen what you can type into bloomberg to see these charts. bottom, hours worked. the green line is the auto industry. purple is everybody else. hours worked has soared over the

rest of the jobs hours worked in the u.s. blue is the jobs that ford has added and white is gm. tod has added more than 20% its work force. those additions keep coming. last wednesday, ford announced they are adding 2000 workers to the plant in kentucky. let's go back to 15. this is auto sales going back to 1976. you can see the pink line is the 50 day moving average. we have out the 50 day moving average by a ton, more than any other period going back 40 years. ofphanie: if you look at 82% the workforce in the united states, they are service jobs. even though manufacturing jobs have done well, they are not a

picture of what the u.s. labor force looks like. let me push back a little. you mentioned in expensive gas and a strengthened economy, but not cheap financing for cars. there is concerned there is cheap financing that could be a problem down the road. matthew: interest rates are not likely even with the fed raising them any time now to go of any time like we have seen in the past. it will not be a repeat of what did in the first decade of the 21st century. the cost of financing an automobile and purchasing an automobile will not change materially any time soon. that is not a significant variable. as weher point is that get healthier as an economy, the

unemployment rate will dip below 5% soon, stay below 5%. consumers will have more money because more people will have jobs, and consumer spending will increase. stephanie: one reason autoworkers have done so well, they renegotiated the pay scale. they used to be paying $65 an hour, now they pay $30 an hour. they have jobs, more people have jobs, that they are not the same jobs at the same price points. matt: the uaw is negotiating some of that back. that is why you see such rich contracts with ford. itollow this industry like is my life, why aren't they worth more on the stock market? you can see the valuation of the automakers -- the white line. the orange is the valuation of the s&p, this is the spread

between them. it continues to grow. and such incredible sales products, the products are getting so much more efficient and better performing, why aren't the automakers doing better in the market? matthew: they will. 2012, an investor called warren buffett decided he was going to buy general motors. picks up 25 million shares. today it is 50 million shares. when someone like warren buffett that's on a company, it is something that we should pay attention to. he is saying that this is an industry, general motors particularly as a company, that is on a relative value basis very cheap. when you look at the performance of general motors it is profitable and returning more money to which shareholders then

it probably ever has. you are just seeing the beginning of this story. it will run for some time. stephanie: the two most interest-rate sensitive industries are auto and housing. with the interest rate hike ahead of us, it could be crep - it could be crimpted. matthew: when you look at janet yellen's commentary, she is not arecasting anything like series of rate increases like we have seen in the past. i would be careful of thinking of the fed move like something that will be traumatic and significant in a way that has an impact on industry, it is highly unlikely. stephanie: it is impossible to rain on matt winkler's parade. it has not come back to

nearly what it was. 65 up is not enough to make up the difference. but the companies in detroit right now are performing better than they ever have. that is the surprise. the car companies have twice the market share in 1994 than they .o today, the three the three are more profitable and more successful, selling more vehicles, then they did then. that is the flipside. you walk the streets of detroit and spoke to people, the income inequality and divide in detroit is among one of the worst cities of the country. you have a great governor and rick schneider, dan gilbert is doing so much, but this is a city that was in crisis six years ago. david: i am originally from

flint. detroit is a mecca compared to flint. matthew: you have to give it time. stephanie: you've got to give it time. when we look at the auto industry it has been a huge positive, but we need to put it into perspective where it came from. are as matt mentioned, you seeing uaw renegotiate the contracts, they are just being .enegotiated not put in place six years ago if you were getting paid $65 an hour, then for the last six years, $30 an hour, it has been a tough road and being patient is not easy. matthew: ford just opened an office in palo alto, it is one of the many car companies that are lining up next to apple, google, all of these companies. the car industry is not only

manufacturing, it is increasingly technology. that willhuge aspect unfold in the years to come. you are not only talking about a manufacturing renaissance -- stephanie: you're talking about jobs for highly educated skilled workers. david: i worked for the board assembly line. you did not have to go through high school. now, you need training and sophistication. stephanie: it is those people have lost their jobs, whose wages have gone down, that will not get jobs again. that is one reason donald trump has gotten such a big hacking. ,atthew: guess who is behind increasingly, education in america? they are increasingly training workers, both the big three and the non-us manufacturers in the u.s.. they are setting up the equivalent of colleges to teach people to man their plants.

david: doing the jobs that the public schools are not doing? stephanie: because they do not have the funding. david: they do not know how to do it. matthew: the auto industry is now.ing we have an amazing analyst in bloomberg intelligence that studies this. he is saying that now it is the best ever. matt winkler, the bloomberg editor-in-chief. an hour, the november payroll report, followed by an interview with bill gross. i am saying 200-5000. we will be back. ♪

stephanie: counting down to the jobs report. in 30 minutes we will be getting the crucial data that will determine if the fed will raise interest rates in december.

the field to have been driving -- the medical field has been trading growth for years. can it stay that healthy? ♪ stephanie: welcome aboard. it is the second hour of bloomberg "." i am stephanie ruhle. jobs they.y, about 30 are excited minutes, the jobs numbers. we have alan krueger, our princeton economist. we also have our own bloomberg economist, carl riccadonna. got the ecbe just announcement yesterday. we saw a selloff. many felt it was not about on the mental's, it was because of

a run up going into that number. .e could get a quick stock drop it could be short-lived because it would be a positive sentiment about the u.s. economy. there are so many moving parts. david: it is time for first word from vonnie quinn. vonnie: a new study indicates progress in the fight against pollution. countries and cities will cut total thatgases by a exceeds india's annual omissions. is bank of england governor backing a global effort on companies in climate change to have greater transparency. mike bloomberg will lead a panel on voluntary company founders. like bloomberg is the founder and majority holder of the founder of bloomberg news. passed byplan

congress. republicans and democrats passed a five-year or a hundred $5 billion highway funding bill. some are unhappy it is partially paid for by cuts in dividend payments from large banks and revives the export/import bank. you can get more 24-hours a day on bloomberg.com. matt: a half-hour ahead of the jobs number. of theire coming off worst day since late september. the dow is down 410 points. 17,517 right now. it has moved within 2% of record highs, but pulled back. the record high is 18,300. look at wrip. it is a big favorite going into meeting. december 16 it shows you would futures are

betting the chances of a rate hike are. we are seeing 74%. that has continued to climb. move, ifghi's anything, gives janet yellen ratesiggle room to raise this month. i want to point out what we are expecting for the jobs numbers. this will have a huge effect on what janet yellen decides. it has to miss you a lot for her a lot for her not to want to raise rates. in the range of 130 to 275. the unemployment rate could kick up, but it would be for good reason. or people coming into the vapor force. our really -- hourly of -- .2%.y wages up

it is at least a step in the right direction. if you have a terminal, you can put in your guess on what the payrolls will be. i want to plug this more, because i want more to participate. who the best forecasters have been for the last 10 reports. the highest score here. masumi is the second highest. if you get the closest of any bloomberg user, i have 231 penciled in, but erik schatzker -- do nott get your make your guess official yet, because if i get it right, the fed will investigate me. stephanie: our next guest joins us from stamford. an economist from the hoover

institute. , we are basically expecting a positive number here. janetill incentivize yellen to raise rates. we have been watching this charlie brown game for years, and lucy keeps pulling away the football. >> 231, for the record, is my guess. it is a go. matt: i am submitting. the unemployment rate has been coming down steadily. i expect we will be 4.9% if it keeps up with trend. janet yellen has been promising to get off of the zero rate policy. in march see said it would happen mid-december. -- mid summer. i think we are down to the last excuse. i think you would be good policy to get that number up a little.

david: are there some aberrations in a november numbers that might drive it up, for example, retail? we looked overseas and the other countries dropping their rates, and we feel there is so but uncertainty global, they are responding to the third having its rate low. we are in an international context and can help other banks if the u.s. central bank gets off the reserve. the other things, even the payroll-jobs number is a lot of numbers. the payroll rates may be one of the best barometers for a full employment economy, and it looks strong. david: alan, what are you looking at beyond that number? alan: the establishment payroll survey number, the industry detail, particularly manufacturing given what has

happened to the value of the dollar. contemporary health is an indicator. the unemployment rate is a good indicator, not so much month-to-month compared to the establishment survey, but the labor force survey is indicating we are getting close to full employment. david: if it goes up to 5.1%, will you be disappointed? alan: no, it is within the margin of error. >> given the other indicators we have seen in this report, but it is the pace of job creation that matters. we will come in slower than the blowout number last month. my vote is to 15. stephanie: there's confusion about the actual number? >> labor participation has been sliding. it is the lowest level since 1977. next year will be an interesting

experiment for policymakers. folks like janet yellen, they laid out the case where if they see wage inflation they will back intotain workers the labor force. other individuals, here at the table, suggest otherwise. mr. krueger, you suggested there's not as much slack in the labor market and workers are not on the potential cusp of coming back in? is janet yellen wrong? alan: i hope she is right. in 2011i predicted we would see labor force participation decline. since then, we have seen labor force which is the patient declining. the reason has been a long-term unemployed have been withdrawn from the labor force. there's not much of a tendency to rejoin after they have exited . they may retire or move on. carl: what you say to the folks

that believe if we see higher wages they could be coaxed back into the labor market? alan: i think it would be a small number compared to the demographic trend. it may be a small recovery, we have not seen any yet. any recovery we see going forward will be offset by the fact the labor force is getting older and we will see more retirement. carl: structural outweighs the cyclical? david: janet yellen talks about unemployment, the wage growth being important. what do you focus on? alan: part-time workers is important. more and more people are getting jobs because they want it or it is the only job they can find. that is another factor. there are a lot of things going on increasing the number of people working part-time. we are concerned about the

people doing that involuntarily. janet yellen thinks there are more people, although we have structural changes, there is a structural versus cyclical question. that people are looking for part-time work because they currently cannot get full-time work. stephanie: whether we talk about or job creation, looking at in new york, l.a., miami, chicago -- you may have bright spots, but we have to look at the entire country. matt: it is silly to look at the national price, you only care about what effects you. you can put in a number of data sources and look at how it spreads across the region. job creation is not good at all in north dakota. there is an energy problem. wyoming, louisiana, west

virginia having real problems -- again, probably an energy thing. alaska, also having issues. isn't the regional breakdown more important, to some extent? california now has a bigger economy than brazil. david: the hoover institution, it reacting to the point about regional unemployment. more globally, how strong of an indicator are the job numbers about the health of the economy? on the regional point, the first thing it makes a think of is minimum wages. some are pushing the $15 minimum wage. will that draw more people into the economy? it may have more people want to have those jobs, but it will depress the ability to create jobs. we are looking for real wage

growth. over regulating the economy has been a bigger impact than the demographic shift were driving down labor force participation. we need to look at policies. states and cities are creating these regional environments. that is important, but there are policies, and obamacare is one, that have hurt workforce purchase a patient. >> the problem is it is inconsistent with fax. -- with facts. if you look at those that have embraced minimum wage, we have negative affect on unemployment. for obamacare, we have seen jobs created. the previous eight years, the previous regulation under the bush administration, we lost jobs. there is no proof that regulation is having an adverse

respect. i can jump in, the folks in the demographic that is earning near the minimum wage tend to have a low savings rate. meaning as soon as they get more money they spend it. money. money saved the there's less of an economic multiplier that quickly translates into economic activity. stephanie: employment is the number one data point. you are defined by what your job is. the more people that are employed, the more positive sentiment, the more they are spending. it affects everything about how we live our lives. tim kaine, josh wright, thank you for joining us. alan, we not letting you go anywhere. packers ruled thursday night football with a stunning first down.

61-yard hail mary against the big d, detroit lions. , gay ending hail mary. .t is a miracle in motown i love that headline. coldplaynnounced that will perform at the super bowl. i like chris martin, but this is way better than a british pop band. thed: i do not know if lions will be there listening to coldplay. stephanie: off the charts. when we come back, manufacturing, energy, and mining have been losing jobs, balanced by gains in health care. but, with the drug deals, our health jobs at risk? ♪

vonnie: welcome back. i am vonnie quinn.

rejected athern has takeover offer. they called the bid grossly inadequate. that is opening the door for taking it to norfolk southern's shareholders. a.b.ser-busch and inbev miller filed suit in oregon, claiming the deal caused them to pay more for worse quality of beer, creating a monopoly in violation of u.s. antitrust law. ab inbev says that the lawsuit has no merit. have job numbers and 11 or 12 minutes. one engine of job creation has been health care. with mergers and acquisitions, is that engine at risk? we are joined by princeton alan krueger, and

tim kaine from the hoover institution in california. what is going on in terms of employment? >> health care is one of the biggest industries out there. there is a lot of m&a at 1050. -- m&a activity. companies formed, they now have new institutions, and they used to get bought up by big pharmaceutical companies. the level of m&a has been almost unprecedented. what happens to the people they get bought in? obviously, companies want to have synergy. 10, before, we were talking with alan about job despite or because of obamacare. i want to give you a chance to respond to what alan had to say.

tim: any law that restricts the flexibility of an employer is a problem. the $15 minimum wage is an easy way to think about it, but obamacare put restrictions for companies that had over a certain number of employees. 50 employees. that creates a real incentive to have 49. we saw a traumatic shift toward part-time employment and away from full-time employment. that is not demographic, that is caused by policy. that is something economists will fight about, but we are seeing evidence that settles the debate. >> i look at the evidence differently. virtually all of the job growth has been full-time. act is manyle care things, it has probably slowed the growth of health care costs, leading to structural changes in the health care

industry, but it could have an effect on wages and job growth. we are not seeing signs in the aggregate of smaller job growth after the affordable care act has passed. evidencee we seeing talking about the data of job loss in the industry because of the mergers and acquisitions? >> it depends on the type of deal. let's look at a big deal, pfizer buying allergan. they had 129,000 people. they trimmed it. they also divested a couple of his missed units. there were definitely job losses. i will temper it. when you lay off a lab of scientists, they usually go somewhere else or start their own company. biotech has had a lot of ipo went away,cause labs

and they said we could get angel investors and start our own company. stephanie: those losses can be backfilled with entrepreneurship. industries, given oil prices, have gone away and there are no other jobs for those people in the cities that they live in? >> that is true. health care is my industry, but they can move over to other sectors. energy is not that big of an employer. the oil sector is maybe 2% of total employment. it has a bigger multiplier on the economy because it is wider used, but it is not as big as the health care sector. retail is very important. what will continue to try the recovery is personal consumption and housing.

those are the two sectors that .ave been relatively weak as job growth and income growth continues, that will support the recovery. david: i understand your concern of overregulation, but it is hard to argue with the numbers. there have been a lot of jobs added. the i would come back to discussion of which sectors matter. a better way to analyze the economy is looking at the size of employers. this is why the obama white house has been calling importance to entrepreneurship. to jimmy carter, every president has seen fewer startups. it has gone from one in six under carter to one in 12. that is what we want to get away from. we do not want to have an economy that is so overregulated you cannot start a company. the risks thatof

we face with entrepreneurship is much of it is textbased. many would say that technology is a tech killer. going back to walmart, that was an amazing start up. we are frozen in thinking that tech is where startup is happening, we need to have it in all of the sectors. regulation makes the margin so much smaller that you can only do a groundbreaking google to have people invest. stephanie: it seems that algorithms are replacing loan officers. >> in some you're seeing technology replacing workers, and in some it is raising demand, like in uber. the factors that has been affecting the growth in entrepreneurship is the phantom prices. it is harder for startups to get a loan, people to get a second

mortgage on their house. the affordable care act can help because another barrier is health insurance. to theividuals can go health care exchange, good coverage, and get a subsidy, which was not available before. we all seem to agree startups are important. what is the problem with financing? we are seeing a collapse of small banks across the country. big companies go to big banks. some of our regulation affecting the financial industry, we are seeing a dry of of credit unions and small banks . that goes back to too much regulation. david: alan? alan: it is mainly a fallout from the financial crisis. credit makes it harder for them to get a loan.

thanks did so poorly in the financial crisis, they are the more conservative. stephanie: entrepreneurship, people starting their own labs, that sounds great -- but those are the people we are worried about. the people we are worried about are unskilled workers that have lost their jobs, potentially in manufacturing. they have massive amounts of job loss that has not been backfilled. >> you are right, but we are starting to back fill. some of the complaints are that they are in low-paying industries. thank you, tim kaine. we'll be back with more. ♪ . .

>> welcome back to "bloomberg " we are under 30 seconds away from the big job numbers we have been waiting for. we are joined by alan krueger. stephanie: we were talking about

how we have become a service-based economy terms of jobs. all about service. we saw a decline in the payroll number in august and september. this number is big. what is it, julie hyman, 200? 211,000 was the number for last night. going up in rate, line with estimates. where do the gains come from? 211,000. construction rising the most since january 2014, up 36,000 technical and service jobs, adding 28,000. health care adding, food service and office strong. losses in the mining sector continuing. losses in that sector, that includes energy, now amounting total to 123,000. manufacturing down 1000.

the overall number, 211,000. there were some revisions higher for the prior two months. october going to 298,000. september rising to 245,000. that leaves a net gain over those months of 35,000. and a three month average of 218,000. getting to other numbers. 6 rateolks look at the u that includes the unemployment rate but also the long-term unemployed people who say they cannot find jobs or are not looking at the moment for various reasons. slightly month over month. the labor force participation rate at 62.5%. with these headline numbers, the three most important being nonfarm payroll, the unemployment rate of 0.5%, average hourly earnings at 0.2%,

nothing appears to dissuade the fact from raising rates. david: thank you very much, julie. alan, i am going to go out on a limb. unlike mario draghi, these numbers do not disappoint. alan: this was a solid report. did you have a chance to look at what happened to the workweek, weekly hours? stephanie: average hourly earnings look ok. julie: i will give you the average work week as i sort through my many papers. i will take a look. average work week for all employees, going down by 0.1 hours to 34.5 hours in november for private, nonfarm payroll. stephanie: i'm going to give you more data. november average hourly earnings for all u.s. workers rose .2%. we know payrolls were better than expected. u.s. november jobless rate at

5.046 versus 5.036 in the prior month and average hourly earnings ok. you cannot say anything but this is solid. how janet yellen could not raise, i don't know. i think it was a little bit warm. now we are going to take you to bloomberg radio where tom keene and michael mckee are speaking with the bond king. this one is in train now. >> they are set to go. it is something i have been encouraging for a while. not because of the tightness of the labor market or the fact wages are increasing. as a matter of fact, wages were up .2%. yoy's three-point sent relative to 2.5%. there is no pressure from the standpoint of wages. i think the fed will go because of concerns on the real economy.

it is going to be an interesting experiment over the next three months as they shift to a new policy in terms of determining the fed's funds rate. using the excess reserves in terms of interest rate is a top -- as a top and using reverse repos as a bottom, they will have to work with that. they will meet at least three months to make sure it is smooth. iley you wrote about w coyote. i don't think that translates in france well. address for the international audience how janet wallin -- janet yellen can avoid the challenges mario draghi has. fed has dropped off their qe almost 12 months ago. draghi continues. jackie's ellis --mario draghi's

policy statement yesterday was interesting because he gave the market most of what they wanted. he is still in "whatever it takes" mode. he did give them quantitative easing for six more months and included additional assets. it seemed like a stimulative forward statement. the since the had amount was not increased -- sense the amount was not increased. perhaps the e.c.b. is the last bastion of easy monetary policy and add its limits. tom: this is an important question. bill gross, how many billions to julie's yesterday? bill gross: oh, no. made money yesterday. had lots of calls, sold lots of germann five and 10 year bunds. made a lot of money. making a lot of money today on

the streets. i think the u.s. is in a better position in terms of their yields relative to germany and the e.u. if $60h to be fair, billion a month has been extended by six months with 18 months to go, that is one trillion euros to go and puts their balance sheet close to 4 trillion relative to the fed's sheet of 4 trillion with a larger economy. there is a lot of firepower left. it pays to be careful when a central bank employees martin get strategy -- martingale strategy, which is to double up to catch up. michael: we thought until the mario draghi press conference yesterday we had a narrative. they were stimulating. we were going to start raising rates. you would see the divergent trades in place. it could be predicted. now it seems he has brought back a lot of volatility. we cannot say we will see a big and selloff in the united states -- bond selloff in the united

states and the opposite overseas as the dollar get stronger and the euro gets weaker. we are not sure what will happen. gross: the united states has been talking about the new, neutral interest rate. forward funds is forecasting 85 basis points higher a year from now and another 60 or so two years from now. another 40 or so three years from now. 75, 50/50.d pace is that takes us close to 2%, which i think is the neutral level given normal economic conditions. andkeene: one more question want to get to alan krueger. bill gross, i'm sitting in the city hall of paris. the basic idea is this of the land of opportunity -- perpetuity bonds. is the thing american missing

that we need longer duration bonds? do they make sense for investors? not really at these levels. let's talk about pension funds. i know you mean individual investors. but they are basically the same thing. do they want to lock in future liabilities at a 3% level for a 30-year treasury or 2.69% for a 30-year swap to get esoteric? does that pay the bills going forward? i don't think so. you know for sure by looking at the pension estimates, they 50/ct 7.5% in terms of a 50 stock and bond mix. investors get that from a 3% long bond? i don't think so. i think it pays the treasuries of these countries to issue long debt as opposed to individuals and corporations to buy them. michael mckee: bill, we have

alan krueger here. we have time for a quick question for bill if you have one. alan: i was confused among bonds. if you don't think there will be demand, wouldn't interest rates be higher than 3%? bill gross: there will not be a lot of issuance. next year from the treasury will be mild in terms of issuance. there is still accumulation from japan and china. we are not quite sure what china does. but there is demand. there is demand from corporations, surprisingly. i don't think there should be, but there is demand because they issued debt and hedge it out and turn it into short-term debt by receiving or buying long-term swaps. it is a strange situation these days in terms of financial markets and the varying interest. it seems to me if caps on speak peek at 2% the

cycle, there's not much downside in price and not much of citing yield for u.s. treasuries -- not much upside yield for u.s. treasuries. europe is still in a negative camp for up to five years. michael: bill gross is with us with alan krueger. tom keene is with us in paris. will continue our discussion of the jobs report for november. david: that was bill gross and alan krueger. let's check out how markets are reacting to the news. matt: markets are showing a strong reaction. s&p futures, you can see this spike. in will see similar spikes -- year will see similar spikes on all the charts. the two year, the front end of the curve is most sensitive to interest rate moves. that is why you see a giant

toke in the two-year, up 1.0.9. across the pond spectrum, you will see -- across the pond spectrum, you will see investors selling of u.s. debt. they will come out with a higher amount. is going to take time for this news to door. clearly, the u.s. economy is growing. the to see insurance companies buyingnger product -- longer products. they will buy the longer dated stuff so they can hold on to it. it will take time. we got the e.c.b. number yesterday and had short-term profit taking. now we are going to see that pullback. back --eeing gold hair pair back.

before we saw this number, it has pulled back just 1%. you have to factor in the market technicals. the market disappointed by mario draghi. now is trading on the screws. you have to step back and give it some time. important to point out a lot of trading on wall street is done with algorithms, computer trading. they turn those off around announcements like this because the information is too sensitive for algorithms to deal with. ll aroundsee a lu trading, especially premarket. were you don't see a lull is in the euro. we saw it temporarily spike up $ 1.57.ollar -- what this number does is highlights the divergence in policy. mario draghi failed to deliver yesterday. janet yellen is more likely to

raise rates. that is evidence. we are looking at a probability of move in december of 78%. that rose moments after this number came out to 8%. it was 70% before the number came out. stephanie: you have to think about the overall effect on the economy. clearly saying it is growing, we are having short-term trades that will likely be corrected. david: the dollar should strengthen on this news. stephanie: the dollar -- matt: the dollar is strengthening. the dollar against a basket of 10 currencies, you do see dollar strength. just not against the euro. alan: that makes sense. stephanie: it furthers the expectation the fomc is going to raise rates on december 16. we are going to see the steady increase. we had the trade going into the announcement yesterday. once we got it, profit-taking

and a reversal. alan: now the focus shifts to next year. stephanie: we are going to continue to see mario draghi stepping in. the kills me when the think about qe as a one-time event. qe took place over and over. mario draghi put himself in position to keep serving punch. i refuse to say disappointed. it is short-term traders who needed to deliver returns on december 1. that is what he did. matt: let me quickly correct one point. the dollar is up against the euro. the dollar has strengthened against the euro. there is a temporary spike if you do euro-dollar or current see that allows you to see a 1.0957.ry spike up to $ but then it came back. alan: that makes sense. whether you want him to or not, he has put himself in the

position of guarantor of global economic growth because janet yellen is stepping back. stephanie: i am not seeing janet yellen whispered the number to him. but they have to be somewhat coordinated. janet yellen finally has clearance. there is nothing apparent why she would not raise rates. in question is going to be, 2016, the rate it happens. sectors like housing and autos, julie mentioned the sector with the most job creation as construction. if we see rate-sensitive housing sector affected, all those jobs created in construction could slow. alan: as i recall, we should check this, dan to relevant -- dan turillo talked about two or three rate hikes. stephanie: there is a lot more to cover. we have breaking down the jobs number. he said 175.

matt said 203. we have more to cover. this is "bloomberg " ♪

david: welcome back to "bloomberg " november payrolls rise more than forecast coming in at 211,000 new jobs. for more perspective, we've year with peter and paula. thank you for coming. peter, tell us what you are focused on in these numbers. >> i looked at the broad measure of underemployment in the economy. it includes discouraged workers, marginally attached, people working part time when they would rather full-time. some have jobs, some don't.

the point is it is the broadest measure of slack in the labor market. were happy slack when the number finally got under 10%. but in november, it kicked up to 9.9. this is a number janet yellen pays attention to. we want to pay attention to the 5%. but we want to see the biggest measure. david: here is the chart. >> it shows in 2004-5, we were down around 8%. shot up to 17% and then trended nicely down. but we are still above the levels of slack we had before the recession. that shows the labor market has not completely healed. david: with a slight uptick at the very end. this is something janet yellen has talked about. >> she pays attention to a lot of numbers. i think what she really wanted the takeaway to be from her testimony yesterday and what we

expect you will do in december is the u.s. economy is starting to hit on all cylinders. the zero interest rate, the lower bound, is an artificial plate fruit -- place for the economy to be. she wants to get back to a so it is not that big of a deal if the european central bank is going to be loosening as the u.s. is tightening. the european economy is going in a different direction. she has to manage the u.s. economy, so don't pay that much attention to the divergence. the u.s. economy if you look at all sorts of measures, the economy is doing quite well. if you look at where the fiscal picture is, it is feeling. what paul ryan said yesterday as saying.ds to what i am he thinks the government should continue. we will have a budget deal even

though there is still some doubt. we will have a budget deal. that certainty is what is giving employers the assurance they should hire and invest. stephanie: as we look at the market, it appears things are working. i'm looking at bonds recovering. it was the immediate selloff of payroll. already, they are almost flat, unchanged and before the number. stock futures are up in the dollar is getting stronger. matt: i mentioned as i walked over to the desk. it was more interesting watching mario draghi pull the rug out from under investors yesterday than it is watching the number come in and not everything is going to happen. stephanie: it is not his job to feed investors. sorry charlie. matt: he did. stephanie: the best we ever, he did. they don't just want to be fed. they want chocolate sauce and a cherry. that is not his job. matt: think it is reminiscent of the swiss franc move.

mario draghi told everybody he would pull out a giant bazooka and blow the market up, and that he did not -- then he did not. stephanie: he is not a dictator. david: we need to go to vienna and ryan chilcote because i think we have breaking news out of the opec meetings. ryan? ryan: we just got word from one of the opec delegates that opec has decided to increase, this is a surprise, their production target from 30 million barrels a day to 31.5 million a day. that does not include room for indonesia. in other words, this is a significant surprise. one of the reasons we are seeing wti and brent fall. far from a production cut. we have an increase in the ceiling. one thing relevant to point out is opec was already producing more than 31.5 million barrels

going into this meeting because quite frankly they cheat. they already produce more than their target amount. they are really just moving to target him out line with what they are actually producing. nonetheless, this is a surprise for the market and one of the reasons we are seeing oil fall. that is based on one opec delegate talking to bloomberg from inside the meeting. back to you. david: thank you for clarifying that. we have reports from one opec delegate saying that. we are not sure it is true. if it were true, that is two days and two surprises out of europe. the u.s. may not be surprising, but europe is holding up its end of the bargain. stephanie: you have so many competing interests and voices. there is not one message. mario draghi made it clear he would pull out a bazooka. knows? maybe at the 11th hour. whereeople have said going to need you to pull it

back. matt: you are saying investors who put their trust in mario draghi's word? serves them right for listening to him. stephanie: no, no. matt: i'm not saying he promised, that he telegraphed to the market he was going to do something big. stephanie: if you are a long-term investor, tea leaf reading is not in your mission statement or mandate. think the mistake mario draghi made was in signaling he would do more. as we know, in the central bank world, the key is to communicate. he communicated more than he was able to deliver. that is probably a problem within the central bank. he has a lot of dissenters on his side. i think he is going to have to deal with that. learned a lesson, don't always take for granted central

bankers will do a telegraph. >> modern central banking is supposed to be all about forward guidance. the forward guidance should give you enough confidence -- stephanie: did is not a science. >> that is the mistake he made. david: it is not up to one person. janet yellen has got to bring along the fmo see -- fomc. matt: she would be -- stephanie: she would be afforded to make decisions that don't deliver to investors. in the next hour, we are going to be job -- joined by her texan investor weighing in on -- ♪

david: we are just under 30 minutes from the opening bell in new york. welcome to "bloomberg " i am david westin.

stephanie: i'm stephanie ruhle. schatzker in the house. anti-guessin the camp. stephanie: it is a fun game and erik does not want to play. david: i play and lose every time. i am a good sport about it. erik: i'm here on a friday. we are going to live in things up with greg taxin. welcome. runs an activist hedge fund that focuses on mid-caps. we will be getting into that talking about yahoo! and other things. let's also address the fact you are here for only a few minutes. stephanie: let's make it count. david: good minutes. good minutes those

with vonnie quinn and the "first word." >> another strong reading is moving the path for higher interest rates. u.s. companies added 211,000 jobs in november. september and october were revised upward. it indicates the economy is strong enough for the first interest rate increase in seven years should the fed decide to do so. germany is joining the fight against islamic state. the parliament today voted to let a small force join the coalition. includes surveillance planes, ship, and up to 1200 troops. the soldiers will be used only in support roles. the u.s. is pledging $24 million for refugees in europe. the money will go to a u.n. agency feeding and housing refugees. officials say the cold weather is worsening the crisis. you can get more on these and other breaking stories 24 hours a day at bloomberg.com. i am vonnie quinn. here is matt miller with a check on the markets. matt: thanks. look at market reaction after the jobs number came out

slightly higher than the consensus. 211,000. futures are up. we are not seeing the strength we were earlier. lead to the decision being more positive it rates will rise in december. futures show a 78% chance. here are the s&p futures. we saw a big spike in the two-year yield. the yield down now and people buying two-your debt. in the 10-year, we see a similar pattern. a big spike as investors sold and now are buying. 2.30 the yield now. oil is the most fascinating story among the asset classes having nothing to do with the jobs number. you see a big drop in nymex crude. of theate has come out opec meeting and said opec raised its production to 31.5

million barrels from 30 million. when you look into it, and i have looked at opec on the bloomberg terminal, opec already puts out 32.1 million barrels. they don't stick to their production targets. but it is interesting a delegate but they would have raised, we have not confirmed that the rest of opec. opec go is a great resource. check out the gold picture. we got a spike in gold, came down, and is now back up. wantould not necessarily to own gold if you thought the fed was going to raise rates. that is an interesting move. check out the dollar. we saw strength in the dollar against a basket of currencies. we saw strengthen the dollar against the euro even after the euro moved. the dollar index rose to its

highs. a bit ofing off a bit, selling as we get closer to the open. david: thanks very much. numbers.he jobs julie hyman broke them for us. she is at the department of labor in washington. give us an overview. julie: to recap the numbers, 211,000 jobs added to the u.s. economy, nonfarm payroll. last month because of revisions in september and october, we saw a net additional gain of 35,000. that takes the three-month average to 218,000 jobs. the unemployment rate at 5.0%. average hourly earnings going up month over month at 0.2%. all these numbers roughly in line with estimates. the nonfarm payroll better than estimated. the gains coming from the construction industry, professional and technical

services, health care, food services, and retail. losses continuing in the mining category which includes energy jobs where we have been seeing a pullback. information also seeing job losses. that includes motion picture jobs as well as sound recording. those jobs pulling back. one of the other numbers that stood out to me is involuntary part-time. these are people who cannot get full-time jobs for economic reasons. that number going up for the first time in three months, rising by 319,000 to 6.1 million. otherwise, in the commentary in the wake of the numbers, neil dudda saying no more excuses, referring to the fed and rate increase cycle. back to you. stephanie: thank you, julie hyman outside the labor department. while julie was speaking, the norfolk southern c.e.o. on a public call. they had a clear reaction to the

possible takeover -- what is the word i want to look for? david: position? stephanie: he's not helping me. the norfolk southern c.e.o. saying a merger has no basis in terms of public interest. it would not help the company. there would be heavy regulation in terms of scrutiny. he is saying this would be a lengthy process and not do any good for the shareholders and company. really rebuffing this potential offer that they would be taken over. erik: i cannot speak for hunter harrison, the c.e.o. of canadian pacific. i think he would call this a red herring. he has proposed a structure, a trust, that would insulate shareholders from the regulatory question mark and allow for the process to proceed in a way that does not leave shareholders exposed to what nsc says they would be facing.

david: is it in the public interest? here you have the c.e.o. of one of the companies going on record saying it is against public interest. it is a bit like a poison pill. stephanie: it does not make sense. erik: there is no way jim squires will not be talking. he is the chief executive of a firm under attack. i would point this out as well. again, we are not spokespeople for canadian pacific. but we talked to hunter harrison days ago and he said in his case there is a public interest because he wants to open the railroads to the equivalent of public access or open access. that other railroads would be tracks,use the combined which is something that does not exist. stephanie: we talked about opec earlier. we have seen a drop over 3%. i'm talking to a commodity investor now saying this was

kabuki theater. the opec announcement was a bruce almost -- ruse almost. now we are seeing a significant drop. what was it going to do in terms of positive impact? just to show it is the same story about maximizing election volume. texas i'm watching intermediate crude hovering around $40. i think this is the lowest price since august. stephanie: do you look at oil prices? greg: i do because it matters for the economy. it helps manufacturers and hurts others. i think opec is largely a show. justifying the output they are intending to produce and getting closer to the benchmark of what we are producing and what is already priced into the market. david: i'm not sure this will stop them from cheating. if they are cheating one million barrels a day, why not change it to 32?

greg: at least you get closer to reality for now. erik: that is the kabuki theater point. stephanie: matt, you have something? matt: i think it is interesting, the idea opec is going to produce as much as it can makes sense for the poor countries but is not the case for the richer countries. this shows you saudi arabia has the lion's share of production, 32%. iran at 9%. venezuela at 8%. these countries want to produce more, sell more, make more money. they need it. billionabia with $700 in reserves does not need it. saudi has the most spare capacity as well. this chart shows spare capacity. the only ones that have it are libya and saudi arabia. everybody else is pumping as much as they can. this is why all of the opec members are sort of begging the

house of saud to cut back production. david: the house of saud has its own problems. they are running a deficit. they have had to go back into the markets to issue bonds. stephanie: you have somebody competing forces with their own interests. i want to bring in johnson & brynjolfssonhn from irvine, california. it seems like the jobs number on the screws. we are seeing the dollar rise, the euro go down. yesterday, many said they were disappointed by mario draghi. were they really? we knew how fundamentally weak europe was. we have more confidence today the u.s. economy is doing well. was itho got burned, that they did not know what was happening in terms of fundamentals or trying to play for a trade? announcement was

somewhat on the screws. i think most were positioned for him doing a whatever it takes type of move which would have been bigger and put those people back on sides. the general trends, as confirmed by today's job report, is there is global divergence. the u.s. economy is relatively strong moving forward into a tightening cycle now. europe, whether they did not easy enough yesterday or not, europe is weakening. the globe is weakening. india and china are weakening. brazil is in a basket. the global situation is to virgin from the u.s. situation. the main opportunity i see now is continuation of the strong dollar trend. represents a buying opportunity for those who want to get long the dollar. stephanie: the announcement and trend seem to support what

most investors feel the global economy looks like. the dollar has rallied over the last year of 15% or more. the euro has fallen. andtrend for the euro perhaps the goal of the e.c.b. is to get the euro to parity or below. that is probably something your needs -- europe's needs. the u.s. is focused on its to mystic situation. currency markets do not affect the dynamics much. they do create headwinds for u.s. earnings on the stock market so there is pressure on the start market on the downside. investors are looking forward to a tightening cycle and therefore higher rates in the u.s., stronger dollar in the u.s. and weakness continuing

overseas. low inflation means you will have easy money overseas while the u.s. is in a tightening cycle. what if you are right, mario draghi did or did not do yesterday does not matter much and europe is still weakening, the economy not in a good place. at wheree euro-dollar it is today? shouldn't it be lower? john: a lot of people have been positioning for this trend so the trade is crowded. when you have a minor disappointment like yesterday, you get a sharp move the other way. that does not counter the trend and fundamentals which are driving the euro lower. perhaps somebody from the e.c.b. will say the market got it wrong yesterday, that the market did not understand the intent of the mario draghi announcement.

ease yesterday, 10 basis points. maybe that was not as much as people were hoping for. they did extend qe. they are doing qe now. the -- the u.s. stopped a year ago. not a macroe investor the way john is. but you are looking at many of the same things. you are looking at the performance around the globe. what is your perspective? greg: my concern is the u.s. economy is not strong when you look at the unemployment rate and consumer spending we are seeing in retail during the holiday season. if we continue to show that weakness, we are going to start to show vulnerabilities in corporate earnings. we are at a point in the cycle

where we have got a stock market that has done very well over six years. lots of big deals which often are the last vestige of people with a high valuation having trouble finding organic growth. my concern is the economy is at the apex potentially of where it has been for a long time. erik: john, i'm putting a couple of words in your mouth, but i think i know how you feel. do you like cash now? neither of you is obliged to be fully invested. are you putting more money in cash? more money in cash, more on the short side of the market. worrying about valuations that economyrinflated in an that has had a great run in the stock market price for perfection. erik: john, what is the right asset allocation now? where would you be?

john: cash is king. idiom, but keep your gun powder dry now so you can buy equities at lower prices when the valuations are better. i want to make some quick comments on oil because i focus heavily on oil. arguably, the opec cartel broke up in 1986 when saudi arabia cut their production by 80%. yet oil prices collapsed because of the cheating within opec. the oil market is a globally competitive market with anybody who wants to enter who can enter it. there are a lot of non-opec players. opec cannot change geology. you cannot change engineering -- it cannot change engineering. in the past five years, we have had incredible changes in the engineering oil production bringing on north dakota and the

u.s. shale production and fracking. that is a global phenomenon. thererices have fallen, are huge incentives for all of the opec members to pump more oil because they are trying to maintain their revenues. the price collapse is supposed to take out those marginal producers, the people who have high cost of production. because the banks have denied the reality, they have been assuming there would be a bounce back from the $50 level. the high-cost producers have stayed in business. they continue to oversupply the market by 1.8 million barrels a day. even if there are cuts, they will still be overproducing by 700,000 or 800,000 barrels per day. that means inventories are building. inventories are currently about 100 million barrels higher than normal, ever than before. we have got the situation were tankerseing stored in

outside of harbors. and more oil is being produced with the excess production high-cost producers gets taken out. there will continue to be more pressure from opec members and new members like indonesia and non-opec members like russia to continue to produce. that is what is going to happen. i am bearish on oil. stephanie: you are not alone. the market is moving in the right direction for you. thank you for joining us, johnson & johnson -- john brings john -- john brooks off -- brynjolfsson. greg taxin is staying with us. we are going to be joined again by ryan chilcote in vienna giving us the latest on opec. i'm going to be leaving. i'm going to miami. erik, david, greg, he will be

here as well as matt following breaking news. we got the jobs number and the markets like it. you are watching "bloomberg " lots more to cover. happy monday. ♪

david: welcome back to "bloomberg o>" we are following the surprise out of vienna. there is breaking news from opec. ryan chilcote is in vienna with the latest. ryan: a bit of a surprise is exactly right. we have learned from one delegate inside the meeting that opec has raised its production ceiling from 30 million barrels a day to 31.5 million a day. many people were talking about a cut in proction. clearly, we have not gott that. it is worth pointing out opec was already producing about 31.5 anyway by their own count. in a november 12 report, they said they were producing 31.4.

many outside think they are producing more. this was a big surprise for the market. we have seen oil go down. have eti below $40 a barrel. we have seen swift reaction from non-opec countries like russia. the largely public -- the largest public traded crude producer saying this is more evidence they are dumping oil on the market. they have been involved in the spat with opec for a while. they are saying they could continue to produce oil at low prices. feeling compelled to come out and say we can handle this new era with oil possibly going below $40 a barrel. david: i think it came up just above $40. more than a verbal spat between russia and saudi arabia. there are reports here that they are fighting one another for market share in europe. that they are catching price to gain market share.

have you seen that over there? yes.ryan: the saudis have moved into the european market because we have softness in asian markets. the russians rely on european markets to sell their oil. that has been their traditional buyers, especially in eastern europe. they have new competition and it is not helpful for them. david: ryan chilcote indiana, thanks very much. on a here is an update conference call being held by norfold southern chief executive officer jim squires responding to the merger proposal by canadian pacific. he said it would place a great deal of regulatory scrutiny and he is attacking the rationale made for the, nation. he says only one train a day could be rerouted out of chicago. there are detrimental aspects of

open access to railroads. he is committing to cost cuts. more coming from the norfold southern call. we will be right back on "bloomberg " ♪

david: welcome back to "bloomberg ." the u.s. jobless rate holds at 5%. does this position the federal reserve to make a move? joining us now is rick reader. give us your reaction to these numbers. rick: they are solid. we are talking about 12 months on average of 220,000 jobs. these are very solid numbers. people were concerned that you august and september and a week season that goes beyond the seasonal adjustment. get a catch-upou in to the numbers from construction were pretty solid. people said retail was a bit soft, but it is really powerful

. that gives the fed the window to move for we think that window was there for a long time, but they certainly are ready to go. erik: it is worth reminding everybody that rick has been able on the economy and bowl on employment for some time. over the summer months, there were some pretty choppy jobs thists, but rick, at point, with employment growth solid and unemployment at 5%, where do you look for improvement in future jobs reports? rick: i think we are now cresting. i think -- first of all, you taken out a huge number. you are now starting to see manufacturing clearly saw you today. that burst in retail was a massive shipping dynamic during the summer and the short-handed i've been pretty optimistic. the things that you can measure

our salespeople hired, hotel revenues, etc. and the numbers are pretty darn good. i think with global growth being is cresting.d it i think it is ironic that the fed is starting the normalization process now, which is right, but it could've happened earlier. david: greg, do you agree with that? what does that mean for your business? greg: i do broadly agree with that. we have seen good job creation. we may see some wage inflation and hourly wage growth, which would be nice to put money back into the hands of consumers. my concern and the thing that i think is a bit of a disconnect from these numbers is that retail sales have been pretty soft this holiday season. cap reported numbers last night and showed real weakness in year-over-year sales. we have seen that and a lot of other retail places. to me, that is a sign that the

consumer is not out at the mall in this holiday season shopping. that tempers my enthusiasm for where the u.s. economy is. david: they may be at home with the computer buying and not at the mall. greg: gap and other retailers are in that marketplace is as well to the fact that they are not seeing that growth is troubling. it makes they want to ask about the notion of teeth unemployment. past abouted in the structural changes in the u.s. economy and whether that means unemployment won't be able to get down as low as it has in previous cycles. also, given the perplexing outlook for inflation, what is noninflationary unemployment rate that we could reach independent of what structural things might say about it? rick: do i think you can trend down another half a percent or so? i do think you can do that.

reallythings that is important and there's not a lot of productivity changes altered if you look at what the equity market did this year and what is happening in terms of the fabric of this economy, you're seeing part of why i think employment is really going to be hard to grow from here. you're going to take out a lot of jobs going forward that go to automation and robotics, which i think is a concern. it is part of why we are cresting today in terms of these umbers and practically with global growth being sluggish. david: we look at the revisions for the prior month. now we have something terminal that shows us that. been the trend has not good for 2015 as far as revisions are concerned. the u.s. revised down for seven of the first nine months. up top, you see the jobs data. down here is revisions. they were historically not as bad as they have been recently. the revisions that we got today were good.

we had 35,000 jobs over the past three months. this year, revisions have proven weaker. alan krueger said that when i look at our whisper number to see who can get the closest guess to the number, we should look at the revisions number later to see both people really did well like rick. [laughter] erik: we cannot talk about jobs and the u.s. employment picture and monetary policy without going back to what we discussed briefly with john earlier in this hour on which is ecb policy. we learn from mario draghi and what this does to that notion of the to speak -- to speed monetary policy. rick: i've a different view than many. i think what mario draghi did yesterday was pretty darn smart and i would argue close to brilliant. we can debate the communication into it. we can debate how the market was

set up and we can talk about that. take the deposit rate down, which was aggressive. how much do you want the currency down immediately when you have a set that can clearly pull back in the fed has talked about how the dollar would influence where they would move policy? you talk about keeping a balance sheet higher for longer. in march 2017,ds which by the way i'm not sure he is going to and i would argue he probably won't. he's not going to cut it off. maybe they can indication was not perfect, but by the way the economy is improving. you can take the foot off the gas a little bit and that is what policymakers are supposed to do. erik: when you talk about the currency, do you think he was deliberately trying to give janet yellen cover to raise rates? rick: whether he was trying to are not, i think there's a real strategy. let's say the currency cap

moving aggressively and you got down to parity do you want to move in their that quickly? you want to keep pressing on things. my guess is that the fed's job is a lot easier now. do i think the euro will continue to drift down? i do. move the base up a little bit, i do not think that is a crisis at all and i think it makes it a little bit easier. erik: rick and greg, let us return our focus to the u.s. jobs report. we going to take everybody to washington right now at the department of labor. we have christopher lea from the labor department could deputy secretary, thank you very much for spending time with us. ask you questions like opposed to rick. what are the biggest priorities for the labor department now that the growth this of study and the unemployment rate is down to 5%.

? christopher: thank you for having me. we should look at these numbers. these suggest strong widespread growth. 211,000 jobs created this month. we are on track between this year and last year to have the best two years since 1998 and 1999. the unemployment rate is 5%, the lowest since 2008. we have had very impressive growth and construction and some really positive growth in professional business services and health care. you're right. not all sectors have performed as well as they should. manufacturing was flat this month. we always say every month that wages are really the unfinished business of this recovery. we are averaging 2% growth in wages right now. as a long-term trend, but is not enough to help most middle-class americans. erik: what then are the priorities for the labor department? christopher: obviously to keep

this job growth going, and that we never take any month for granted. we always say that we are not going to rest until everybody wants a job has a job. it is also raising wages. it's on the reasons why the president and secretary perez has pushed for the increase in minimum wage. it is one of the reasons why we are overhauling our overtime regulations. we are also trying to help ensure that more people have an opportunity to participate in the job force. that is one of the reasons that we have been pushing patently -- paid sick leave and paid family leave to encourage more women to enter the job market. david: it's not just a matter of entering the job market, but also what jobs they get when they get there. our economy has changed to an economy that requires much more training and sophistication as force. our work o what can the government due to give us that? christopher: the u.s. department of labor is in the middle of a

lamenting our overhaul the workforce training system. we spend billions of dollars for training for jobs in the 21st century with things like health care and information technology. the president has made a commitment to double the number of apprenticeships over the next five years, which is a tried-and-true way to train people for those high-paying jobs. millionw, we have 5.5 unfilled jobs in this country right now. about 10% of them are in the i.t. sectors -- about 500,000 jobs in the i.t. sector. some of those require a four-year degree and many don't. many require a community college degree and many can be done through coding boot camp. it is really across the board and not only helping people find jobs and helping them find good paying jobs that they can raise a family on. seemed veryf this impressive with the growth that you are seeing and it comes with lower skill. it's tremendous growth of low skill jobs. the question i have -- is that durable? you had a cyclical recovery.

with manufacturing being tougher , how do you take that to the next level? raising minimum wage can even be trickier to bring more people . how do you do that and how to keep that progress going? christopher: it's what we talked about. it's about increasing skills. whether its construction jobs, which are good strong middle-class jobs, those are the things we need to grow on. the president signing a long-term highway bill will help on both of those respects. the push that the president is making on the transpacific partnership will help u.s. businesses export more products overseas. it is the job-training efforts that we are spearheading here at the department that help people compete for those jobs in the 21st century. what is interesting that you obscene though is that the initial parts of this recovery is that there was a more significant increase in jobs among lower wage jobs. havest couple of years shown, much of that growth has

been happening in middle wage jobs, which is an encouraging sign. there's much more that we can do. pointed to certain aspects of the u.s. economy and there's plenty for sure. erik: there's a lot of weakness in mining and resources right now with the oil price low $40 this morning and low prices for gold and copper and other base metals. to what degree does that concern you? government and not just the labor department, but is the government concerned about the erosion of jobs in those industries in america? christopher: we are always concerned about loss in any sector, but i think the reverse or the flipside of the loss in mining jobs is the decrease in gas prices for americans. over the last 12 months, gas prices have fallen about 28%. that is essentially a tax rebate to most american consumers. not to put words in your

mouth, but you make it sound like for the u.s. economy and citizen that is a fair trade. christopher: i would not say it is a fair trade. we are always concerned about losses in any job sector, but with respect to the mining industry, we need to be cognizant about the positive effects of lower gas prices. greg: i wonder if you might comment on the increase in and the increase in the u six rate, which is somewhat unusual at this point in the cycle. that is the number of people who wish they were more employed than they are and do not want to be part-time employees but full-time employees. it seems to be going up. christopher: you're right. there was a slight pickup last month, but at the overall trend over the last three months and this year, there has been a steady decline in that. as we say this month, we do not to one particular month statistics and the overall trend is certainly positive. david: thank you very much,

christopher lu. we are 12 minutes into the trading day. why don't you catch us up? vonnie: looking at gains across the board. matt: if you want to take a look of the terminal, you can look at arerrip, and the futures taking the chances of raising rates at 74%. we have seen the swing this morning from 74 back up to 78. we are at 74%. the basic message is that market still expect janet yellen to raise interest rates. is the two at what year. we saw the front of the curve react more strongly to the jobs number in the back end of the curve. , a spike up and a little bit of a drop in yields, which shows that investors are buying at the front end of the curve right now. i also want to show you the groups that are moving.

energy is the only loser as far as of the stocks right now. if you look the imac function coming can see that energy is down. consumer staples and health care very interesting to see apple and microsoft. johnson & johnson of pfizer and all these companies are putting up big gains on the s&p this one. oil is the reason that you see the energy sector fall. crude is down more than 2% at $40.23 a barrel. as we getown as well the news out of opec that they are actually going to lift their production ceiling. if you look the oil companies that are benefiting or i should say losing because of the drop in price, exxon mobil is down 1.26%. candor morgan is down almost 7%. southern has got to get a portion of its revenue.

erik schatzker knows better than i do from moving energy around. around 7%. more than likely, it has to do with its concerned that the canadian pacific takeover is not a good idea. erik: well, yes, i think officially rejecting the takeover proposal from cp has something to do with that. plus, what some shareholders might find underwhelming promises from the ceo about the cost-cutting that norfolk southern can do on its own in 2016 and 2017. breaking news for you out of brazil -- president dilma rousseff is defending herself from the initiation of impeachment proceedings. she says she did not commit a crime. she says she does not secret accounts in switzerland and that she is not misused public accounts. this is in response to specific allegations from some of her fellow lawmakers and other brazilians. rick reader at black rock a man who oversees $700 billion in

bonds and fixed income investments, he is active around the world. he has investments in brazil and is constantly looking at latin america. brazil point can you say has bottomed? is there further to go from here? rick: there are some facets to brazil. where this investigation goes is uncertain, but beyond that, you see a dynamic coming off. about the world shifting from a commodity orientation to a service orientation. i spent the first three days of this week in the meat east and you see how the world is changing. you can see how these countries were commodity oriented and the cash flow is different. the cash flow in brazil is different. the cash flow and china is different. you see it and things change quicker than people give it credit. david: soybeans, and major driver for brazil.

the latest number is that exports do not go up given the currency change. that is what was really disturbing to me. rick: the view of the world to live monetary policy gets too aggressive is that you think you can export your way out. you're talking about very structurally different trade dynamics that we have ever seen before. that is disappointing that you do not see exports when your currency comes under such pressure take up. david: rick, thank you for joining us. right, stay with us. we will talk about activism, wanted your favorite subject. as activism reached a peak? we will find out when we come back on "bloomberg ." ♪

vonnie: welcome back to "bloomberg ." i'm vonnie quinn. better-than-expected jobs report

may leave the federal reserve to raise interest rates this month. employers added 211,000 jobs in november and the october game was revised upward. the fed will meet 11 days from now. experts at a four-year low in october as the u.s. trade deficit rose. it reached nearly $34 billion. the strong dollar and week overseas demand are combining to widen the gap you norfolk southern is rejecting a $28 billion takeover bid. railroad set the author was grossly inadequate. they could take it directly to shareholders. that is your latest bloomberg business flash. erik: it is time for the value proposition. this is the part of the show where david and i will stoke a little debate. greg is with us and he is an activist investor who focuses on mid-cap companies. greg, more and more corporate america is figuring out the activist game.

the way that corporate america is figuring it out is that boardrooms and the chairman of the board are becoming the own activist. have we reached peak activism? greg: i think that is a fantastic outcome for the capital markets. i think you're are exactly right that more and more boards are focused on how they can create value for shareholders. they do not need the pumping of an activist. erik: will that put you out of business? greg: no, thankfully. they are thinking hard and independently about the ways that business can be better run or capitalize or pursue a different strategy. the lawyers and the corporate world and the bankers in the corporate world that i talked to are telling me that nearly every public company at some point this year are having discussions about activism and what strategies companies should be on and what they can do to make themselves and me and -- and me and from attacks from activist investors. david: you dealt with these and

a lot of it is people. it's one thing to have a playbook and another to say i'm willing to do that. the reason that i' they are there in the first place is the culture. greg: there is board room culture and a corporate culture that has been collegial and go along, get along. directors that speak up or speak out are often put in a broom closet or not told about the next meeting are not shown the men's room. david: or just not renewed. greg: i think that is less and less true. i think boards today understand that they are going to be held accountable for strategies which are suboptimal. nobody wants to be on the other end of an activist led file. erik: you're heading toward an important question though. grams complain about four , but as a matter of principle,

ance be boardme centric or shareholder centric? greg: i'm not sure i understand the difference. erik: the owner should not be the one running the company, should they? or overseeing management for that matter? know.i don't boards have a place for sure. the places to sit between the owners of the business and the day-to-day operations of the business. hey know more than shareholders know about machinations and trends and manage that on behalf of the shareholders. they serve in the important agency function. their interests have not been very well aligned with shareholders. today, we see boards that do not own enough stop themselves. they don't think like owners. i think that is being remedied by the activist movement and i

think it's healthy for the capital market. david: the matter how good the board, they cannot know how to run the company as was the manager desperate and yet almost -- the manager does. and yet almost by definition, they had certain interest of their own to them from taking management action. can know enough to really know what is really going on. greg: one of the challenges that boards have recognized now is that they do not have the resources necessarily as independent directors to do the full of valuation -- evaluation and comparison to peers and analysis strategy that frankly investors can sometimes do. activist firms and investment firms generally have teams of people and bloomberg terminals and the ability to do all this analysis. we went to a boardroom and spoke to the independent directors and show them the short interest in the stock and where the analyst targets were.

the disappointments quarter after accordance on guidance. the director said that this is news to us. these information sources and the ability to analyze our business as well as some of the outside investors can. david: the ceo and the cfo has no incentive to make sure their board knows that. greg: one would hope they are doing a better service and that further -- than that for their court. i'm not to saying that this is the case for corporate america. i think most companies are very well run and most ceos are very well-meaning and most boards try very hard. this is a small segment of the capital markets, but it is one where we are operating sub optimally and there is a chance to really improve returns. erik: we are about to run out of time. are some activist to short-term? greg: i sure that some are. erik: some notable ones? greg: i do not think mostar and frankly it's a complaint that gets made a lot. i think it is a com canard.

you get the company on a better long-term path. .he improvement gets discounted erik: we are seeing an increase in net present value. greg: before activist got involved, boards were taking their advice from investment bankers and lawyers who have no interest in the stock for the long-term appreciation and that share price. the bankers care about doing a deal and banking the fee. erik: greg, thank you so much. he is the chief investment officer at luma asset management. that will do it for us today. have yourselves a great weekend. ♪

betty: it is 10:00 a.m. in new york and 11:00 p.m. in hong kong. welcome to "bloomberg markets." ♪

betty: from bloomberg world headquarters, good morning. i'm betty liu. here's what we are watching at this hour. it is all about the jobs market. adding. job market 211,000 jobs. clearing the way for the fed left off later this month. we have oil prices falling as well. oil prices set to be raising outputs in the face of a loyal -- global oil glut. and we will take you to the paris climate conference. mike bloomberg will be on with us about creating a cleaner planet. we have that happen hour into the trading session. i want to head to the market desk where matt miller has his eye on this rally on the back of the jobs data. matt: