trump's. the fbi feeds by clearing clinton's handling of e-mails. global stocks rise as campaigning enters the final days. hsbc beats. europe's biggest bank jumps as rising revenue, delivered through a tweet, boosts profits. i am pressing like right in london, getting you started on election week. we have a great show lined up for you this week. washington links to the final day of campaigning in the u.s. presidential race.

a full week of election coverage. the dollar first. u.s. stock futures are higher after the fbi cleared hillary clinton of committing a crime as rival donald trump implored his followers to overcome a "rigged system" that he said protected clinton. joining me is a london school of economics fellow, the author of "desperate's accomplice." michael mckee also joins us with all the news that matters. he will talk trade and brexit with the ceo of british-american business, jefferies group shock, as well. let's get straight to the bloomberg first world news with nejra cehic. a third quarter before hsbc, adjusted pretax profit, which excludes one-time items. it rose 7% from a year earlier to $5.59 billion, ahead of estimates of $5.29 billion. it was helped by stuart sullivan's cost-cutting plan.

ukip prime minister theresa may is in india to lay the groundwork for a post-brexit trade deal. the following pictures contain flash photography. may has promised to smooth the path to the u.k. for india's wealthiest investors. she unveiled what she called a bespoke fast-track visa service for high net worth indians and their families. she promised quicker border checks for all travelers from the country to britain. the house of commons holds its first full-scale debate on brexit later. attorney general jeremy wright will appear to answer questions about last week's high court ruling that the government must hold a vote in parliament before triggering article 50 of the lisbon treaty. china has ruled that anyone who supports independence for hong kong cannot hold public office. the decision by the national people's congress standing committee was only its second unilateral interpretation of hong kong law since the former british colony's return to china in 1997.

police coupled with protesters in the run-up to the decision as thousands of people took to the streets in support of two pro-independence legislators. china has replaced the finance minister. according to the news agency, the new top finance official is a 59-year-old who has worked for three years as vice secretary-general of the state council and an important aide to the premier. global news powered by more than 2600 journalists and analysts, i am nejra cehic. francine: we are here in new york because of the elections. we have to look at what the markets are doing over this clearing from the fbi. european shares rebounding. markets rebounding after their worst week since february. the fbi reissuing its assertion that candidate hillary clinton did not break any laws in her handling of e-mail. we are clearly in a selling mood. gold is down 2%. when you look at the s&p 600

over in europe, we are gaining a touch. the mexican peso, 18.6. you could always see a reversal. frome only 17 hours away the election. as the presidential campaign enters the final day, the fbi decision to stick by its finding that hillary clinton did not commit a crime as secretary of state has roiled the markets. here is what the candidates have been saying over the final weekend of campaigning. mr. trump: right now, she is being protected by a rigged system. 650,000ot review e-mails in eight days. you can't do it, folks. clinton is guilty. she knows it. the fbi knows it. the people -- the people know it. to the american people to deliver justice at the ballot. mrs. clinton: i want us to have an ongoing discussion about how

we are all going to contribute to making our country all it should be. that america'se best years are still ahead of us, if we all do our part. [applause] and i think it is fair to say, after all the months of this campaign, my opponent has a very dark and divisive view of our country. francine: those were the two candidates. ryan is the fellow of comparative politics at the london school of economics. he is in london. and here in new york is bloomberg editor michael mckee. i want to show very quickly, if we can, the electoral map. this is what people are watching. let's bring it up. i have it on my bloomberg right now. this is the u.s. election special. if you are a terminal user, go to lxgo.

it looks very red, but it depends what votes they get. michael: the polls have hillary clinton ahead in most firewall states. you can see where we have gray boxes. in many cases, those are considered too close to call. right now, pennsylvania definitely is in the clinton camp. so would michigan be. nevada early vote totals, about have alreadyns voted. according to the experts in nevada, she has an almost insurmountable lead. there is going to be more blue on the screen than people think. she is, at this point, unless the polls are wrong, poised to win. francine: if you look at the fbi clearing hillary clinton, i was watching u.s. coverage yesterday, and i do not know if the voter is that sophisticated, or whether they just a maybe there is a concern with an issue and i do not want to vote for the old establishment. will it actually impact, like it has impacted the markets, the voters? aren: the people who

hesitant to support hillary clinton will likely come back to the democratic full. this was a mistake for james comey to have sent the letter a week ago, politics this close to the election. the whole thing was a debacle, and nobody should praise his handling of the situation. last week, he sent an e-mail saying, there are no e-mails, and we do not know what they say. it sent clinton tumbling in the polls. as most people predicted, these were duplicate e-mails. this was all for nothing. leadmaged hillary clinton' over what turned out to be a wild goose chase. i think she does have a solid lead in the states where she needs to win. francine: we were talking on her with mike and i want to ask him this question in a section -- in the second. do you think there are silent aumpers, where we could see brexit effect were at the last minute people come in and vote for trump? brian: i do not think so. there has been a huge amount of analysis by pull through his, and they looked at response rates for online polls and phone polls, and you tend to see what is being called the shy trump

effect, as if people would not respond to live callers -- would not say to another person, i am voting for them. that we have not seen a stark split in the polls, i do not think there is evidence for this. what we're seeing is a hispanic wave. latino voters are coming out at unprecedented levels, likely to repudiate the politics of donald trump. that is likely to be more of a concern tuesday night for the trump campaign than shy trump voters or inhibited white voters they keep talking about. francine: do the next couple of days actually matter in terms of the undecided voters? how many are there? michael: not really. there is a frantic effort by the candidates to go state to state to figure out how they can get one or two more votes out of them. you probably do not get a lot. this election, people made up their minds quite some time ago. there has not been a lot of movement in the polls. you get a little bit every time there is a new story like the james comey letter.

that had an effect on some of the national polls. but hillary clinton, for most of the year, especially since the conventions, has been ahead by 3% or 4%, and she is ahead by 3% or 4% right now, depending on what paul you look at. the polls have been relatively said -- relatively consistent. the hispanic vote, from the early vote totals, it does not seem to be any indication of a hidden trump vote. the people who demographically have been supporting him have been coming out in about the percentages the polls suggested. the only outlier -- the hispanic vote is way up. the african-american vote is down from 2008 and 2012, but you would sort of expect that without the first black president running this time. francine: what are the five states you are looking out for? there is a concern because the markets are calling a clinton win, they get it wrong. michael: there is always the problem with the polls. you are concerned they will be wrong, that some of the polls seem to be matching up with what the early vote totals are

showing us. you have got to watch florida. that is always the big, controversial state. the early vote totals have clinton ahead, but only by a few thousand votes. it looks like that will stay very close. watch north carolina. that is a must a linchpin state right now. if north carolina goes for clinton, it is going to be very hard for donald trump to win. pennsylvania another firewall state. he has looked to win that. he is behind in all the polls. they do not have early voting there, so we do not have data from that. new hampshire has been very close. there was some thinking that if she lost that it could be trouble, she seems to have picked up votto. -- picked up nevada. if she wins in the midwest, it is going to be hard for trump to find a path to victory. francine: thank you so much, michael mckee and brian class. both stay with us. we will get on to move on the markets later on. stay with surveillance.

parliament holds its first full-scale debate on leaving the e.u., we will discuss how business is planning for brexit. plus, ahead of its final full day of campaigning, before the polls opened, we bring you the latest analysis from our panel of just. a jump in profits for europe's largest bank. we break down the numbers from hsbc. ♪

francine: this is "bloomberg surveillance," live in new york. if household its first debate on brexit. jeremy wright appears before lawmakers to answer questions

about last week's high court ruling that the government must hold a vote in parliament before triggering article 50 of the lisbon treaty. that is as theresa may reiterates that her government has a strong legal case to appeal the ruling. for more on how british businesses are dealing with brexit uncertainty, i am joined by jeffrey grimshaw. thank you for joining us. it looks like a bit of a mix. we start another leg of uncertainty for britain. what do american companies based in the u.k. tell you? jeffrey: continuing uncertainty, and that is not great. uncertainty on uncertainty. last week's ruling does not help. there was already uncertainty and this probably makes it more complicated for the government to deliver on their promises. meanwhile, businesses are coming to think into what the future shape of their businesses will look like, whether they can access the same talent, whether market access has been damaged. that obviously has an effect on

confidence. people are naturally thinking about what they are going to do about these things. manyine: i wonder how times you have been asked this since thursday, that brexit will not happen. is this looking for a sense of security? jeffries: there is still a lot of political conviction behind the following of the referendum vote. that political conviction, particularly in the governing party, has not changed. you have to say the path to brexit got more complicated last week. there must be some doubt that in the end you could deliver such a complicated set of circumstances. they must be thinking, that just proves the point. politics is still pretty sure of the outcome. question, whether you can deliver that on the timescale that article 50 would want, and more broadly. our business is

thinking of leaving london? it is unclear whether they move somewhere in europe. states,move back to the even if they have a trump penalty? there has been no apocalyptic march for the exit. people consider their business footprint. they look at all kinds of things from access to talent, access to markets, to even motivational aspects of, how do people feel about working in a place that does not seem to want to be as open as it had been before? no march for the exits, but lots of detailed planning as to other potential ways of doing business. i think we have seen that not just in the banking community, but more broadly, where currency, access to talent, market rules -- all play their role in thinking about future business footprints. francine: the fall in the pound must tell. if you are a north american company, if i add a next her 50 million at this point, i get more from my money because of the rolling pound. jeffries: certainly, currency is

a factor. but we have seen in some supply chains that where you are flying things across borders to put into your process, that can have a negative effect as well. currency can work both ways. broadly, sending stuff out of the country, you are going to win benefits from that. whether that is a long-term benefit, i think most investors do not make decisions on the basis of a medium more short-term currency movement. broader looking for things they really need to have right for confidence in a place of business. francine: there is something we were discussing in the newsroom, whether it is stock power -- what is one thing that would make your ceo jobs easier? if you are american/british, do thinksd reassurance that about trying to have access to a single market, or is it a little bit softer? jeffries: that is a great question and a difficult one. i do not think ceo's are really looking for that at the moment. i think that really thinking

about what they are going to have to do about it -- they are not going to get the certainty they are looking for. that is not great. it is what it is. ofuess that any suggestions a real and bracing for the need for talent would be very welcome. i think that is more likely to be helpful than trying to guess their way through, on the government's part, of what may or may not be the passporting availability, or the availability of markets through passporting. the migration thing i think is the thing we have most been surprised by, that we really do need talent to drive the innovation economy. if you are going to respect that, that can be a real blow. soft language of on talent and access to talent would go a long way. that is right up against migration. but you can see that would be very helpful. francine: i certainly can. jeffries briginshaw, ceo of britishamerican business. the world counts

down to tomorrow's u.s. election, we ask how and if the u.s. president will be able to heal the divided nation. we are talking u.s. this is bloomberg.

francine: this is "bloomberg surveillance." it is time for the morning must-read, and we pick up something from the ft. he says --

we are on set in london. my guest to talk about u.s. politics, brian klaas, and also jeffries briginshaw. brian, you have an important piece coming out on reconciliation. what does happen depending on who wins in congress? brian: i wrote this piece for "foreign policy," and it says we need a reconciliation plan modeled on post-conflict reconciliation. it is that bad in the u.s. right now, where democrats and republicans cannot talk. if clinton wins, she needs to do something bold. i would suggest she should appoint a republican lawyer to head up her white house ethics advisory council, to make clear to everyone that she wants to be the most transparent politician in american history, and the

whole listening sessions in deep red areas. these people feel left behind, and they need to have a reason to buy into the political system. if they feel shut out, they are not going to work with the system. they are going to work to undermine it. francine: re: surprised we have not talked that much about politics? we understand how each candidate is. but there are certain points we find out more of, this is fiscal spending. we know how much hillary clinton wants to spend. we do not exactly known donald trump. this is debt to gdp under different administrations, since the 1970's. what is one thing you need to understand about the u.s. election? it can be about the environment, but why have we focused so much on personalities and not policies? jeffries: i think it is a good question. we need to wait and see when the rhetoric peels away. owing back to the point about bipartisanship and whether there is a middle ground that politics can discover, i agree you have to find a new narrative. you have to build behind that. you have got to hope the

republican party thinks its way through its current divisions, and can be confident in itself enough to know what it wants, and to build a basis for the kind of congressional you talked that about. but why are we where we are? many questions. peel away the rhetoric and look at the programs and see what legislative agendas would materialize. -- aan see a sense centerleft agenda materializing from clinton. question for business would be whether that is a practical one rather than a rhetorical one. i think it is packed, whether the chances of structural tax reform come through. that seems to be unlikely, etc. , we hope,c peels away to a pragmatic, sensible approach. francine: i have another chart, poverty rate under u.s. presidents. poverty is not the same as -- incomequality

inequality. which president is better for poverty? brian: i think clinton takes property solidly and i do not think donald trump does. he has managed to co-opt deeply impoverished americans with racially divisive politics, and those people are buying into his candidacy, which is ironic because a lot of his policies on taxes are giveaways to the wealthiest in society. i think linton is the clear choice for people who are voting in their economic interest, if they are the victims of harsh economic inequality. i hope that whoever wins is able to fix that problem. it is a deep problem in the united states. thank you for joining us. brian klaas from the london school of economics stays with us. these are your markets. ♪

francine: this is bloomberg

surveillance. the. it's a third quarter

has risen to $5.9 billion. europe's biggest letter was helped by cost-cutting. the uk's prime minister is in india to lay the groundwork for print brexit trade deal the following pictures contain flash photography. foris smooth and the way india's wealthiest investors. for high visa service net worth indian businessmen and their families. back in london, the house of commons holds its first debate on brexit later. jeremy wright will answer questions about last week's high court ruling that the government must hold a vote in parliament before triggering article 50. the world's largest foreign

currency board erodes. fellsaid china's reserves to 3.12 trillion dollars in october. that triggered capital outflow and changed the value of the stockpile. supportss anyone who independence for hong kong, police scuffled with protesters in the run up to the decision is thousands of people took to the street in support of pro-independence legislatures. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. francine: as the markets and the world await the out come of the most divisive and hotly contested u.s. elections ever, let's get analysis from our

guest. he's the -- teaches comparative politics. michael, i want to show you some charts. let's go straight to the bloomberg terminal. is some of the havens that we are looking at. you can see in red, since the fbi came back and said she is clear. inhael: markets have priced the possibility of a trump when after the polls reacted to his first letter. now there is a feeling that it's irrelevant and it's not going to matter. it still matters because so many people have voted in early voting in the united states. some places have been voting since september. they would have reacted to the first letter. the second letter comes late and you wonder if it has a major effect. it's taken some of the hedging out of the markets. francine: guide me through what

markets we are watching. this is something we watched yesterday. let's bring that up. blue one is if clinton wins, what her stocks do or what would benefit from infrastructure. read is the trump basket of stocks. it hasn't moved as much as we were looking at. michael: people were less likely to believe the trump would be elected and the fact that it's hard to know what his policies are. you are sort of guessing what stocks would be impacted. clinton has laid out in detail what she would do. if you think she's going to win, you are going to go up. it you have seen the impact there. francine: how do you look at the markets? i don't know if they are concerned because of what happened with brexit and they were calling a clear favorite. i think the markets are

overreacting to short-term news. this race has been largely stable with a clinton lead for almost the entire cycle. i think we are going to see a clinton victory on tuesday. the long-term is what we talked about before, how divisive politics of income in the united states. republicans are talking about not considering nominees to the supreme court. if that happens, that can hurt the economic outlook for the u.s.. we saw what happened with the government shut down and the degrading of credit rating for the united states. all this plays into a narrative where republicans and democrats can talk to each other. we assumed we started the we started with 40% of the vote and we knew we were going to lose 40% of the vote. remarkablylitics is stable. i don't think this does is much

damage when he comes back and says we're not pressing charges. francine: what worries me, we had a chance with michael mckee before coming on air. was talking a year ago, does donald trump have a chance of getting the republican nomination, 2016 is different. brian: this is something that surprised me. donald trump to get this close to the white house if you asked me a year ago. i think the demographic reality of the united states electric is opposed to a donald trump presidency. mitt romney commissioned the report on why he lost. out to womenreach more and to hispanic voters more. it's hard to imagine a candidate who could've alienated those voting blocs more than donald trump. where do you see this

going? i understand the polls always give a clinton when. we were not a perspective him to go this far. michael: this is why people were nervous about him. looking at the polls, ryan makes a very good point. you have this divided electorate donald trump is never gotten over 45% in the polls. he stayed around 42% for the entire campaign, which tells you what his ceiling is. even after the james comey letter he was not able to break through that. it's hard to see how he gets elected. the markets can probably price in clinton now that the comey 2 letter has come out. do they come back to what they were doing before? tiredis an excuse for a target to correct?

that will be interesting to see come wednesday. francine: if donald trump becomes president, if he were, does his rhetoric calm down? does he shift to policy that is not all that bad for the economy? brian: i don't think so. i think there would be a way to block his agenda. what you see is what you get with donald trump. there is a lot of policy on the table that would wreak havoc on the economy. he would face resistance, even if republicans maintained control of congress. we will see stocks tumble on wednesday if he wins. it's going to be difficult for him to back off the policies like building a wall with mexico. francine: that's not bad news. michael: that would be stimulative to the economy.

over the longer term, it blows a big hole in the budget. you have a reaction in the bond market the other direction. markets have reason to be nervous in part because of what he has said and what he has not said. he has not said how he would deal with a budget deficit. francine: when we look at the key issues, and we know where the candidates stand on others, i would also add what happens to the fed chairwoman janet yellen, what would you be most worried about if trump wins? brian: i think the foreign policy aspect is the most of the to stop. there is a new tilt to u.s. isolationism that would make it difficult for businesses to be competitive. we know that markets do not respond well to volatility. if you have a candidate who is willing to play fast and loose with nuclear weapons or treaties

with nato that hold the global order together, there is reason to be nervous on of level that's unprecedented in modern history. francine: thank you. us, two daysing until the u.s. elections. you can follow all of the election results by going on your bloomberg. that starts tomorrow evening. stay with surveillance. we will bring you more interviews next. of we will break down the numbers after a surprise jump in profits from europe's largest bank. ahead of the final full day of campaigning, we will bring you the latest polling and analysis. this is bloomberg. ♪

francine: this is a bloomberg surveillance live from your. reiner shares are up after they reported a rise in travelers. it was a record 64 million pushing after-tax profits higher for the time. they are lifting their passenger targets. he is pessimistic about business and the u.k. after brexit. >> we pivot growth away from the u.k.. we had planned to grow in the u.k. by 12%. we have cut that by more than 15%. there is real meaningful decisions. the u.k. is losing out on significant growth.

the costs are lower in italy and spain and we have lyrical certainty. francine: the biggest european bank is trying to combat the brexit effect. shares rallied after a 7% rise in adjusted profit from the year earlier. michael moore joins us. thank you so much for coming on. how much is this down to cost cuts? michael: a lot of this is due to cost cutting efforts and lower loan impairments. you saw a revenue come in where people expected. this has been a continuing theme for european banks. they have a lot of jobs and businesses that close the sale of its brazilian business. hsbc is getting smaller. francine: does this mean the bank will maintain it?

michael: they did have a couple of capital one offs that is to be capital ratio. you had the brazilian sale we knew was coming. they also got a favorable ruling from the u.k. regulators on how it treats estate and eight -- stake in a chinese bank. those two together made management more confident in talking about the dividend at this level. francine: how much did they talk ?bout brexit a lot said it won't be affected so much. michael: hsbc has talked about their -- they are among the least affected because of the large operational bank in france already. ,f they had to move operations other banks would have to determine where they were going to move and how they would set things up. hsbc already has that business in place. they can just move the

operations to their french bank. they can take more of a wait-and-see approach, they know they have that option. francine: he will probably trim a headcount modestly next year. they have already gone through a restructuring. how many job losses? michael: the have done the bulk of their major restructuring. they still have some units to sell off. i think from here you will see it be a little bit more modest and it will be some of the secular changes we see across the industry which is moving toward automation and getting rid of some back-office jobs and that i think over a longer time frame than the hsbc restructuring we have seen in the last couple of years. francine: thank you so much. he heads our finance team in london. let's get to your markets. this is the last day of trading before the election. has: appetite for risk

returned. this is the stoxx 600. every group is rising after the fbi affirmed that the private e-mail server was not a crime. this is the largest gain in 12 days. we fall to the lowest in four months. this is the first gain since june. this has to be one of the most popular charts on the bloomberg. the red line is the trump hold standings from early july. the white line is pesos per dollar. you can see the peso rising as much as 2.5%. that's the most since february. consider the barometer for he will beews on how in the election. emerging market currency is

gaining after a two-week loss. chances rise, the peso tends to decline. we see gold falling today. that's been a real haven in recent weeks. this is after the fbi clinton news. the metal surged last week under concern that trump would win. there could be a rally to $1400 an ounce. leon's price has been traded recently. the barometer of him winning the fed raiseould the rates in december, that is the longest winning spread since july. silver is outperforming gold this year. big gold and silver miners this year. brazil is up. both are falling today and

coming back to hsbc, shares are up 4% today. surprise jump in adjusted profits. the ceo showed his efforts to combat low growth environment and revenue is rising faster than cost. that is the measure he calls revenues rising faster than cost for the first time in a year. shares were rallying by 4%. francine: thank you so much. we are just getting some headlines. the indian prime minister, we know that the u.k. prime minister is currently visiting india. she failed to arrange a meeting with senior people. he had called on britain to support more indian students who want to enroll at universities

in the u.k. he has appeared along beside her in new delhi. the prime minister says he is conveyed to the u.k. his concern over cross-border terror. migration andout security partnerships. that is the very latest from india. we will let you know if there is any news. up next, wall street and washington dc. what to watch as the presidential race enters its final day. tom keene joins me here. this is bloomberg. ♪

francine: this is bloomberg surveillance. i am in new york the week. let's get to bloomberg business flash. >> opec is told bloomberg that the organization remains committed to its board to stabilize the oil market. he is speaking today in abu dhabi. remain committed to the idea that weise painstakingly put together in algiers.

committed to its ample mentation. >> shares of follow this morning after britain's biggest retailer confirmed the accounts of summits bank customers have been subject to online criminal activity. in some cases, money has been withdrawn fraudulently. tesco as stopped withdrawals. boardlkswagen supervisory has been added to a german probe of the company's omissions scandal. thecarmaker says prosecutor's office had extended its investigation. meanwhile, a newspaper has reported that they found software cheat air-quality in audi cars. that is the bloomberg business flash. francine: we are getting some breaking news. i went through most of the

headlines. we know that theresa may just landed. let's look at pictures of the two of them. we may have live pictures. the conference just wrapped up. we know that theresa may has clashed with her indian counterpart over migration rules and failed to have a meeting with senior officials. let's look at more on tomorrow's election. york is mye in new cohost tom keene. i know we will be talking about productivity and job growth. that's what the selection should be about. tom: it's not been about the economy. it's amazing the cultural exhaustion of the nation as we go to the polls. we do that at 12:00 midnight in new hampshire. on we go. before that, we've got that desperation.

that desperation is always there. it's part of the american tradition. there is a frenzy in the last 24 hours and we are in the midst of that frenzy right now. francine: the globe and the world is always watched u.s. elections, nothing like this year. it goes back to the supreme court in foreign policy and trade. trade is something that is moving the markets. tom: it's been there and it was decided very early on as both candidates had a clear opinion against free trade. we saw that mostly through tpp. the atlantic agreement is going nowhere. i would suggest that economics are completely secondary to the issues at hand of some of that signaled by the fbi and announcement yesterday. francine: i wonder what your take on the markets is. this is a markets flip-flop in. it.e is an expectation for

that hasn't moved in 10 days. tom: they are gaining the immediacy from thursday and friday. dow futures are up 252 points. i would say all of that is within a range. it goes back to the voting, mr. company florida and mrs. clinton in philadelphia today. francine: bloomberg surveillance continues in the next hour. we will kick off the conversation. this is the peso rally that starts after the fbi said hillary clinton's handling of e-mails was in a crime. ♪

francine: clinton cleared. the fbi itself the candidate over her handling of e-mail.

putting money on a democratic win. global stocks rise as campaigning enters its final day. jumpsrope's biggest banks as profits boost. this is "bloomberg surveillance." markets, thet the wild move, it is a little bit binary. tom: it is binary. that theestly say nation has never seen an election like this. -- takes it right back to jefferson and adams in the 1800s. when you look at the -- n key policy issues

tom: stopped trying. it is not about policy. let's get to someone who we trust. taylor riggs. taylor: two days before the election, james comey told congress that it sticks by its findings that hillary clinton did not commit a crime in her e-mails as secretary of state. on october 20, james comey rocked the election by saying they were examining new e-mails. donald trump says clinton is being protected by a rigged system. china has felt a blow to independence in hong kong. the independence activists who were rules can told office. thousands of demonstrators gathered outside the highest court to protest the move. hurtrs warn it could international confidence in hong kong. to reason may is in india where

she clashed with an indian leader over immigration. modi wants the u.k. to take in more indian students. may supports the move of students moving home after completing their courses. hasel ortega in nicaragua completed a third term as president. he won with about 70% of the candidate. his vice president is his wife. the first woman to serve as u.s. attorney general has died. janet reno served underneath president clinton. she got involved in some of the administration's other controversies including whitewater and monica lewinsky. janet reno was 78 years old.

tom: amazing to see this announcement, of course, after what we have observed. currencies and commodities, we will get through to a chart. and then we have a conversation with marty schenker to get us going. so much of what we have seen with futures up 31 and they do advance in the last half hour. yields are higher and the dollar is stronger. onto the next screen, if you would. the vix, you see that come in with a vengeance. the dollar-peso has a stronger peso and stronger dollar and the yield is higher. we will have pimco joining us to give us a stronger story. this is a picture of the stocks zero 600, gaining, it is binary.

is can see the mexican peso 18.66. the expectations of a fed hike having changed. the havens are the only one that are moving. the short manywn times but after tomorrow it will be history. forget about it. the yellow line, structural weakness over the last nine months. here are the three debates that we see with the dollar-peso. you have this latest massive donald trump surge. the last couple of days with the clinton recovery and the sharp movement that we see down here. what do you have this morning? francine: this is a simple chart that i talked about last week but you can see the movement downwards. so this is as we normalize.

the goals and yen. -- can see the fbi tom: i like this chart. francine: yes, it is a good chart. and the market is pricing and a clinton win for the moment. i think the polling this weekend was pretty much towards but there istory schenker,ty congratulations on the coverage we have done this year. let's take a look back. what is the distinctive feature of the political coverage that we have seen? marty: expect the unexpected. the most unconventional campaign and anyone's memory. and we adopted the approach that if it is impossible, it probably will happen. tom: bloomberg and the new york

times really featured the latino vote over the last 24 hours. marty: one of the interesting things in the polling is that latino voters have been difficult to reach in the polling numbers. so a lot of people think that the latino voters have been undercounted. and perhaps over the last week they have taken some accommodation for that and you the hillary clinton national lead stay as it was. it still points to a clinton victory. is north carolina the one state we need to watch out for? marty: not just the one. north carolina looks like it is fairly certain for clinton but florida and ohio are completely different stories. looks like the john kasich republicans have come home. it will be tough for her. francine: we are trying to track

the markets. foraccused me of studying this. but i do have seven key issues. we do worry about foreign policy. the poverty rate that has risen up under various presidents. i brought this back to 1975. the poverty rate is going down but inequality is going up? marty: i do think inequality is a prism to look through with this election. donald trump has stayed positively at 40%. and that represents people who feel that the economy has left them behind. same time, hillary clinton has kept the national lead. so it really isn't about the economy, it is about character. and ultimately the election will fall into that category. who do people trust?

francine: the chart i was looking at were people, the percentage under the poverty rate. in red you can see the recessionary times back to 1975. tom: yes, i think this has been .art of the campaign marty schenker, this has been a cultural election the likes of which we have not seen. marty: that's right. i think everyone is trying to figure out where they belong. will we be wednesday morning at 5:00 a.m. or 9:00 a.m.? the state of the nation. do you expect some kind of uproar over trump? , people lot of times are having a hard time getting their head around a concession from trump.

wednesday morning, i think he will will be focused over the constitution of the house and the senate. theuse that will define administration more than anything else. as well thisus morning is anthony crescenzi. about libor but it isn't something to talk about now. that we canrt later show which is the financial repression of the nation. do we enjoy a continued financial repression? anthony: the federal reserve is part of the repression. it is a global phenomenon. --re is a lack of government things that reduce economic growth. over the long run, that is human and the investments and

strategy. think about president eisenhower. miles of roadway that we still use today. but where is today's highway system? tom: marty schenker actually remember when i four-lane highway were turned into a two lane highway, we know that as kids. but what is fascinating here, tony, is the idea of where we are here on wednesday and tuesday. how do you get after the election? anthony: it is very difficult because of the composition of the electorate. are 80 million americans aged 55 and older. in the 2012 election, 70% went out. there is a lot of power in the hands of older people. and we want the benefits we have been promised in terms of medicare and social security. the third wheel

of politics to move money from areas where we wanted to areas where we need it. francine: i want to start with this chart which is fiscal spending. 1917.ht it back to so this is fiscal spending. and here we have gdp to the debt ratio chart. the problem is that they both promise more fiscal spending. but how do they fund it? anthony: it is difficult. we have a lot of money increasingly moving towards the older cohorts and they should be the case, because we have made promises to the older generations. generations have all the trajectory. so it is one thing to note in the chart that we have had weakness in spending. you on chart to show capital intensity going back to 1952 and it declined on a

year-over-year basis for the first time ever. capital intensity is the amount of capital in place over labor. so five years ago, 100 employees and 50 computers. so the nation has to tilt its resources. going to tiltou the resources today? what is the to do list that you look for? a staff of 50 or 60 people dissenting on new york to cover the election. we look at the latest polls coming out this morning. to betimately, it will be reliable and cover this. tom: reliable is a good idea. marty schenker, thank you so much. you are trying to avoid the hysteria that we have seen on the reporting. later today, i believe he goes back to martin van buren or james garfield, alan greenspan

today. this is bloomberg. ♪

francine: only markets are globally looking to capitol hill and washington, d.c. after the fbi decision to look by its decision that hillary clinton did not commit a crime and her handling of e-mail. do they have that in the united kingdom? francine: yes, a new concept. look at the way the markets are swinging and the polls, and you firmly believe that hillary clinton will win but the polls are closed. are close but hillary

clinton has maintained throughout the campaign a three percentage, four percentage point edge. it has gone up and down a little bit with the james comey letter the campaign, donald trump has not gotten as high. when you break it down state-by-state, it looks really good for hillary clinton, not only in the polls but also in the early votes. take a look at the early vote that has come in and a couple of states. they haven't canted the votes. numbery do tell you in a of states have the party registration has voted. florida and north carolina, key early reporting states, and then you got wes to colorado and nevada, all four of the states, democrats lead in the number of people who have come out to vote. mean they necessarily will win when everyone votes tomorrow but it does look better for hillary clinton. read about aave

million notes on equities and treasuries and the campaign. what is the one certainty if clinton wins, dollar strength? how quickly do we get back to fundamentals? the fed is still in play for december and how does that affect the dollar? the question i've been asking is, did the last nine days come about because people are afraid of donald trump or is it an excuse for a tired market to do a correction? wednesday morning we will get an answer. tom: floating interview is michigan. i thought of michigan was done and gone. but it isn't anymore. all of a sudden, michigan matters? michigan is in play even though donald trump has not lead in the polls. it has been buffeted by trade. theres into his issues so

is some feeling and the trump campaign they might be able to break through. tom: what can you take into the pre-voting and roll it into the resumes turnout? thingl: the interesting is that this is like the growth of electronic filing. it has been exponentially larger every year. we have seen huge growth. almostow we see about one million people vote in nevada, early voting. in 2012, the total turnout was just over one million. get is perhapso the change on election day because of those who haven't voted, they may be the older and more likely to vote republican. but it does show that there is strength out there for clinton to tap into. are a user, you map ando the electoral

see what states are most important. but tom alsorminal has a great chart. [laughter] this is my electoral map. the problem, you have to make a bet. do you just hedge in case anything happens? or do you wait for the polls tomorrow and then go strong? it is tohow comforting be a long-term investor this week. big picture. it is time to move up to 35,000 feet and we think about the election and the investment implication. but first and foremost, we are a democratic society. and michael spoke to the presidential election and that is what we're focused on but we should also be focused on the senate race. and whether there will be a filibuster proof majority. absent, the 60 seat majority, neither president

clinton nor trump could push through anything big. so we will probably have a center-right or centerleft government. francine: foreign policy, everything is up in the air. anthony: some of the things that people are fearful about, they shouldn't be. of example, the imposition -- there would be suits against them. there would be more and more trade over the long run and not less and less. perhaps alan greenspan later on will speak to this. callednd i wrote a book "risk and uncertainty. " capitalist and democratic society, we get clarity and we have to stay, and be patient. tom: do you think florida has gone -- [laughter] tom: i had to do that.

an election joke. crescenzi and michael mckee. stay with us for the latest as we bring you the special election coverage through the night beginning at 7:00 p.m. in new york. this is bloomberg. ♪

tom: on the election, economics, politics and interest rates. bloomberg. we are thrilled you are with us. this is the four year moving

average of the two year yield. it is absolutely unprecedented. tony crescenzi, what does it take to get that white line to migrate back to normal? : productivity is probably the answer to that question. viewers tong for speak to but it is what the election is about. to have a greater increase in the amount of income growth for people. and that is what productivity ultimately brings about. can a fiscal strategy works if president clinton comes in and she has a big first-year program and she gets us through our gridlocked congress? will that assist in getting the two-year up? yes. but there are numerous things. the fed listed five as reasons to reason the neutral rate is declining. is where theate

fed does not put its foot on the gas or the break. hadfed in september said we 2.9%. quickly, people save more than they used to and they are not spending as much. there are numerous reasons why that is likely to continue and globally, -- tom: we have to go. a question back to 2008. this the paradox of our policies. coming up, wendy schiller of round university. more than vocal about your american politics. this is bloomberg. ♪

francine: european stocks are rebounding and gold is down. we are in new york and let's get to the first word news with taylor riggs. taylor: for the second time and

a little more than a week the fbi has shaken up the u.s. presidential campaign. two days before the election, james comey told congress the fbi sticks by its findings that hillary clinton did not commit a crime with her e-mails as secretary of state. he toldoctober 28, congress they were examining new e-mails. that news gave donald trump campaign a boost. trump says campaign -- trump says clinton is being rejected by a rigged system. an earthquake has struck. the epicenter was located one mile from the cushing oil farm. not damagedis were but some buildings were in cushing. earthquakes inin oklahoma has been linked to fracking. iraqi special forces are trying

to clear it islamic state forces from neighborhoods in mosul. iraqis can't rely on airstrikes. theresa may insists that brexit won't be obstructed by judges or lawmakers. to limiters may seek negotiations, the government will get on the job with delivering the decision of the british people. it was her first public remark since the high court rule that parliament should work on the leave from the european union. security law that gives unprecedented access to technology companies. internet operators must involve reports.stigative there will be certification of computer equipment. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. tom: thank you.

her class, the american presidency, is packed at brown university. wendy schiller has served the nation. she joins us now from brown university. tony crescenzi is with us from emco as well. professor, wonderful to have you on. i look at the turnout of the african-american vote and turnout of the latinos and asians as being decisive. give us nuance? even and florida alone, apparently more than a third of the people who voted early already in the latino community did not vote in 2012. early voting in the latino community has surpassed all turn out in 2012. when you're seeing is an enormous activation of the latino community, particularly in florida. latino nationwide turnout 48%. if you get to 52%, this is in

states that have gop congressman. this is not changing the nation of the pressure on the gop in the house, in particular. and that to me might be the story. tom: is very mystery to agent turnout? is this the first election when there is an asian voice? 30 years ago, you would have thought asian was korean or japanese to chinese. andindians, pakistanis indonesians are in that category. and they usually immigrated on a work visa. voting process has changed and gotten bigger. and it is also represented by a different diversity of educational levels which is getting people out the door and to vote. that is another dynamic. and that group is supposed to grow as large as the latinos in the next 30 years. that block goes to the

democrats and stays there, they can build up companies and against the gop. schiller, dody believe that the polls are so close, something we saw with brexit, that people say they are not voting for trump put on the day of the election they put his name down? it's always possible. i think you have that on both sides. i think you have a men in liberal households where women let'sinton supporters -- say, stereo typically, they may vote for trump. but on the other hand, in conservative households, you may have women who say they will vote for trump and go in the door and vote for clinton. that if yourtant is go vote for trump, why haven't you already? voter, 40te male five-60, i understand it states were you don't have early voting but around the country, we haven't seen a surge in voter

registration. and in turn out early among that demographic that trump needs to equal the other demographics -- we haven't seen them get out the door yet. is it undeniable that a trump presidency would be better for wall street because of deregulation? ofy: in the early stages whoever wins there will be a market reaction. it over extrapolates the investment education. focused onend we are a filibuster maturity. so there will be a center-right or centerleft government. is that most means economic trends are likely to stay intact. this is another way for the federal reserve to continue to raise interest rates. rates on raise december 14, highly likely. probably twice in 2017.

so the economic trends probably won't be disrupted. professor wendy schiller, take us in your classroom. -- was on recently and he took the election back to the 1800s. i know you have covered that in number of times with jefferson-adams. this an unprecedented election? or have you seen this before? wendy: i think this is a more full girder -- this is a more vulgar election. i don't think it is really different. the point about the american politics is that you can do all that in the campaign and hopefully, once somebody wins, you concede and there is no danger or violence. so in that case, i think we do have to take a step back and

say, what makes this different? people go home to their parties. this election is as partisan as any other election. people are loyal to their parties. tony, i want to bring you to my chart. the jet to gdp ratio. everything in blue is democrats. debt to gdpthe ratio going up. you believe that the economy is on a track. what if donald trump replaces janet yellen? the change of a federal reserve chairman matters but in the end, there is still a committee to contend with. alan greenspan will be on here later and has spoken to us when he was a consultant and he described to us the fact that when he entered federal office ofa chair, he had a group

200 phd's working as full-time staffers that work in the interest of a nation. is willhair, whoever it work with the committee. and back to 1979 -- not liked because he took on policy. so in the end, the fed chair will have to deliver whoever it is. and they will have to hold up to the mandate. so i wouldn't worry too much about that. although the markets will worry about that for a time. it seems for me, it like a seismic shift. if donald trump is president, we have new policies and possibly attracting foreign investment? issue for donald

trump is that the constitution is a separated power system. and it is unclear whether republicans in the house will be on donald trump. he could do a lot of things on the regulatory side which is what obama has done. but something he can't get around congress is shifting trade policy. much he cannow how actually do. he can replace people but how much can he actually shift our economic policies without congress? i think it will be difficult. i am the hockey player in the back of the room. i have one question. is this election race? wendyigged? wendy: no. it is not. the majority of the states are run by republicans. so if it was rigged, you would expect donald trump to walk away with that.

states collected ballots and federalism kind of helps prevent any federal rigging but this election is not rigged and it is important for everyone on every side of the aisle to keep repeating that. tom: wendy schiller, thank you so much from brown university. tomorrow, picking up the debris of the election. -- will join us who has been absolutely superb to "bloomberg surveillance." he was way out front on the recent trump search. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i am in new york with tom keene.

we were talking about the merits of the economy on track in the u.s.. tony crescenzi believes it won't take a turning for the worse or the better but i point out to the fact that the eu commissioner of monetary affairs is finally weighing in on this. has refusedmuncie to talk about a possible trump administration and now says look, it would be difficult to work with the administration headed by trump the cosi is populist. talking about populist, theresa may is in india today meeting with the prime minister modi about immigration and trade. and in the u.k., jeremy wright will face mps. the house of commons will hold the first full-scale debate on exit. simon kennedy leads that coverage and joins us from london. great to have you on the program. the first time theresa may is

overseas. she has chosen india. to try to look at trade negotiations. and it seems they are giving her a hard time. is this a wake-up call? she has actually been abroad a couple of times but this is the first trip to the subcontinent. these are the difficulties that may come. there is a big spiel over the subjects of questions about the future. she has been unable to meet executives which is a bit of a snob. and prime minister modi malcolm turnbull they message that she needs to do more to allow indians into britain if she is going to get the trade deal at she wants to get with india down the road. so bit of a lukewarm welcome. francine: how do she walk the tightrope? it is a hard one but it is the crux of the cranks it --

the crux of the brexit debate. his third -- why should they likely give that up? it is a tight rope walk for her to walk. she is sticking to her guns on the current limit on non-eu immigration into britain although she was offering last night a kind of deal for a high net worth individual from india where they could get visas a little bit faster in the hopes that it would keep them investing in britain. we hear fromer on the high court decision on article 50. we have never really seen it u.k. that is more divided or populous. what is the tone that we will here today? i think maybe you will see the tone over the weekend, the lord chancellor coming out to talk about the importance of

an independent judiciary and you may hear that again in the comments as they try to take a .it tom: is on the essay that got the most traction and i felt it was extraordinary. you mentioned the telegraph and how they came out in support of the court. form a large majority. they are in implicit alliance over the nature of brexit if only they could stop arguing over factions like those of the 16 90's. relitigating the bloodless revolution. how alone is ambrose evans?

alone on twitter and the zeitgeist this weekend. i don't think he is alone. there is a good majority or split britain that has talked in recent months about a split britain. there were people who felt that the media coverage of friday was too harsh and i think others are , theing out that again high court as a set at the time, they were working above politics. it was clearly a constitutional matter. but does theresa may have the right to trigger article 50? she said over the weekend that she still thinks it is a big argument. but it will be up to the supreme court to decide whether that is the case. francine: help -- tom: help our global audience. do they go back and listen to constituencies and consultants? as they gore to do

through the appeals process? split party.ve a david cameron wanted to unite britain and the conservative policy. but there are people within the conservative party, as much as in the opposition party who you would expect to be critical who picksat the brexit vote the departure but they don't know the destination. they don't quite know what that means. there is a great feeling within her own party, that they would help shape or they want more information on theresa may for what she is planning. and perhaps they want to shape that? so when they go back to the constituency, many of them voted for brexit. they want to explain to them that while they are back in brexit, they want to have a better feel for what it actually means. so that is something that theresa may has run into criticism for. holding back information on what

she is planning. francine: and at the same time, she has come over extreme criticism because she didn't come in full support of the courts. the judiciary should be respected. but it is unclear as to whether brexit is blocked? brexit, i would assume in the markets, you plan this as no access. tony: one thing to think about is whether the populist movement will actually cause change in the way the markets behave? francine: how do they not? smiththink of the adam ideal. people wanting to change her allies for the common good. so because england and the united states are capitalist and democratic societies we should expect individuals to a debt to change and do thanks to better their lives and in the long run -- they may get it wrong first time

around so it may be a multistage populist movement where voters, for example in england, they decided they wanted brexit but then they decide, maybe we didn't do it right. the destination seems like it is 20 years out. simon kennedy you are on the brexit watch for at least two decades. good luck. simon kennedy, very good with the brexit coverage. there is an election tomorrow. we would like to speak to someone with the wisdom of decades. alan greenspan this morning. this is bloomberg. ♪

tom: official "bloomberg urveillance," everyone looking east. francine: how beautiful. let's head to,

the bloomberg business flash with taylor riggs. hsbc reported third-quarter earnings that beat estimates. profit was up 7%. the ceo has been cutting costs and bolstering the banks capital cushion. he has been trying to redeploy more assets into asia. that has been, located by the slowing economy in china. that is the bloomberg business flash. much better than expected. and you look at brexit, because it is so skewed towards emerging markets, climbing for it hsbc. tom: i think it is a bull market at hsbc. and they are finally seeing the fruits of what they have done. tony: banks generally are looking to raise capital.

the december meeting will be pulled up at some point. do we have a breakout? do we have escape velocity? because the focus would be to keep negative through 2000 21. highly unlikely. the same for the bank of japan.

tom: thank you so much for joining us. we are getting our coverage started on a very busy monday. francine: is it fun? tom: tuesday. tell me about the tone in london on the election? francine lacqua is joining us. and guy johnson is here.

tom: the fbi says clinton did not commit terrible crimes.

trump visits florida. clinton in philadelphia. new hampshire votes at midnight. clear from the fbi, the mexican peso strengthens. america's place within a 2017 global economy. in thisnberg is with us hour. good morning, this is "bloomberg surveillance." what were you thinking about flying over here about this crazy process? clear thatt is very the markets want a clinton presidency. but i wonder whether this is to binary? it isn't as clear cut. tom: i will make a choice tuesday night or wednesday morning into where the market goes. to the first word news and a new bloomberg poll, here is taylor riggs. a new bloomberg politics

poll shows hillary clinton with a narrow lead. the nationwide survey shows her head of donald trump in a race involving third-party candidates. it is within the poll margin of error. the poll was taken friday-sunday. china has told supporters of independence in hong kong that members elected to legislature can't hold office. thousands of demonstrators gathered outside the highest court to protest the move. lawyers warn this could hurt international confidence in hong kong. theresa may is in india where she clashed with narendra modi over immigration. the u.k. to take in more students who want to study there but theresa may supports the students returning home after their courses. it has caused the number of students studying there to fall by 50%. janet reno has died. she served under resident

clinton. she was criticized in her first year for ordering a deadly raid on the davidian compound in texas. she also got involved in some of the administration's other controversies involving whitewater. janet reno was 78 years old. tom: let's get a data check. the day before the election and extraordinary process we have been through the last few months. higher yields this morning. and even crude oil finally got the bid after finding it difficult. the next screen here quickly. the dollar is stronger. the mexican peso moves for secretary clinton. francine: similar to what i have. the mexican peso is rallying. you can see the stocks go up to 2%.

again, that is on the news of the fbi. tom: marty schenker joins us. editor and icutive want to go where i was with wendy schiller on turnout. what is the knowledge of what turnout will be? turnout actually will be influenced by early voting. we have 35 million people who their ballot.ast this'll be a dynamic that will play out with the undecided voters who will come out in the last days. the fbi clearing of clinton may have an impact on the number of voters. tom: what is the margin of him are in the new poll, is it another poll and we move on from this one to the next one? marty: a three percentage point margin of error so it could be trump even with hillary. but the trends in the major polls are basically showing after hillary took the hit on the james comey letter, she

seemed to be bouncing back in national polls. and it will be a tight race but in the battleground states, she could actually pull off significant victory if these numbers hold. francine: this poll, the last bloomberg politics poll, conducted on friday. do you assume the lead actually gets bigger? marty: it's possible. don't forget a lot of people cast their ballots in early voting before the latest letter from director comey. those people have already decided. but it doesn't hurt her, it helps her. there's only a small number of people for whom this is an issue. francine: what are the three states you will watch tomorrow? terminal, i'm looking at the graph right now. it looks like north carolina and florida -- marty: those are the two main

ones. and don't forget new hampshire. if donald trump hold out is a prize victory in new hampshire it could cause a long one. saturday night live was great at the end of it when they hug the supporters. will we be hugging on wednesday morning? somehow, i don't think so. it is hard to think of a trump concession. we have wonderful guests. jonathan golub and carl weinberg. coming in from the north and look what he brought. these are perfect apples. these are apples of the orchard. an american idea. new york apples. tom: it speaks to the nostalgia

of america. probably will not be there in matter who is president. more growth or less growth as he move forward. down theill bringing unemployment rate. which means that we do have cause to think that the fed will be tightening, no matter who gets it this week. fiscal policy, is that what we understand the most? what about donald trump? carl: we don't really have a lot of details from donald trump so it is hard to analyze. bipartisan or ofpolitical -- probably 2% gdp deficit that comes out of that. on the clinton side we have a package of spending increases and tax increases at the same time. it should be good for growth.

we have to see what happens in congress. francine: do you automatically stocks go down wednesday morning if trump wins? jonathan: to the point about the composition of congress, the market would not be happy if you had an all democratic sweep. we don't like gridlock but at the end of the day, i think wall street does not want to see a more left leaning all out agenda in washington. and would like the senate president to go democratic and the house to stay republican. off thisi make money market? and theook at the dow range we have been in through the election -- i am having trouble with my thing this morning, he there we go. we have a range.

in this conversation we make the assumption that the election is the driver for the the market isut telling you they're happier to see a clinton win. odds went up after the james comey memo. so you get a tiny relief rally. but past that, the economy is growing modestly. but we are seeing this. earnings are tepid. and i think that will be the story over the next couple of days. companies are returning a huge amount of cash back to shareholders. dividends and buy back. investors are looking at that compared to dividends and bonds. and equity investors are really uncomfortable with the divergence between an

uncomfortably tepid economy and stock multiples which keep rising higher. earlier: tom scolded me for wanting to talk policy in this election but the markets do seem to underestimate -- the new president will have a huge amount of foreign policy. it will be interesting to see what the first major policy is. supreme court or him for structure spending and the composition of congress is critical. and i think once the election is over, people will start focusing on what is going to be accomplished. and all these things happening overseas that people stopped paying attention to. hong kong and turkey -- they will become clearer and in focus and will have an impact on equities and bonds. had this made. it is a basket of stocks.

i want to bring this up for you. what surprised me is that if you look at haven's, it has moved off the back of this latest poll. how do you position yourself ahead of tomorrow? i'm not sure that i would be positioning my portfolio specifically around this. i think the most important thing is what you talked about. what kind of stimulus we might get. long-term spending projects, the problem with those is that they don't hit the economy quickly and they don't matter as much. on the other hand, if we see something that is meant to juice the economy over the near-term then you get a bigger hit two interest rates and the banks. one thing that would hit the economy in the case of a is no lag.y

the import and export -- we would import more. we still have 50 days between election day and inauguration day. but if we did go to a trump presidency, you would have to start thinking about that. tom: one last question. over the weekend, what are the republicans doing? what is romney doing? what is their plan after wednesday? their plan is, if it is a hillary clinton victory, is to reconstitute themselves. shows thatis morning republicans say if trump or to lose, they would recommend that the republican party reinvent themselves, be more inclusive and moderate their rhetoric and basically -- tom: does the new republican party happen at the state level? to seeink what you have

is just how the down ballot candidates do in the wake of a trump defeat. there are indications that they will do better than many people forecast. , thankrty schenker you so much. later this morning, alan greenspan. this is bloomberg. ♪

francine: global stocks. a beautiful picture of new york.

circulationing on that hillary clinton will win the election. smp futures gaining 1.4%. look at that. a gorgeous city. tom: it has been a beautiful fall. a warm fall. you wonder where we are heading. the marathon was yesterday. francine: let's get to the bloomberg business flash. taylor: hsbc reported third-quarter earnings that beat estimates. their profit was up 7%. the ceo has been cutting costs and bolstering the capital cushion. he also has been trying to redeploy more assets into asia but it has been complicated by the slowing economy in china. more problems for volkswagen. hassupervisory chairman been added to a german investigation of the emissions scandal. it relates to his time as the chief financial officer.

meanwhile, they may face more trouble here in the u.s.. american testers have found technology to treat in audi cars. that is your bloomberg business flash. debt to: let's discuss gdp under different administrations. terminal, this is what it looks like. we brought it back to 1966. anything in lieu is democratic president. we are back with carl weinberg and we are also back with jonathan golub. carl, when you look at the chart, and this is something i hear over and over again is that even if donald trump wins, there will be checks and balances. and it will be easy as it goes but i disagree. foreign policy won't be the same. investment will be the same.

you can't tell me that such different presidents will have the same impact. carl: i agree. we will have a different profile. there will be a higher gdp to debt ratio. what it all depends on congress because -- well, congress has been disciplined in recent years. they could maybe recapture some money abroadn tax and bring it back into the revenues to finance expansion. that is how we could get a more inflationary policy. francine: i also made another chart and this surprised me. again, 1975. the percentage of the people under the poverty rate. different administrations back to 1975. how do you explain to me the popularity of donald trump given that actually the poverty rate has gone down? carl: you are giving me a big job to explain the popularity of donald trump. but a lot of people feel like

the economic system hasn't reached them. whatever prosperity we have had in reducing the unemployment rate down to 4.9%, it hasn't gotten to them. and that is driving people. there is a lot of dissatisfaction. it is more about the rejection but it is what it is. are is the question we deciding right now. are those the most important things? i think we have to be careful looking at republican or democratic administrations and say they are responsible for the economy. if you look at what the economy looks like when obama came into office, anyone would have seen some of these negative statistics like offer d, come down because the economy has been healing. not because of obama, that simply because we are leaving a financial crisis and getting to something better. the clintonng with

presidency where we had fantastic economic prosperity. so i think that those things perhaps occupation the underlying -- that under true every democratic president, the debt to gdp ratio has gone up. since eisenhower. maybe it is a coincidence? thesean: if you look at charts, if you put them in a procession line, you get a better read. i'm not defending it. carl: a different story. not saying that one president or another would have a very different set of economic policies. we agree on the issue of deficit or deflation, versus the other. days, it islast 90 like mary poppins when the weather vane shifts. the weather vane has shifted on our fiscal deficit.

just in the last 90 days. carl: people are now coming to understand a little bit more about what economics are all about. 90 days, if you ask me what the program was, it you wouldn't have a clue because it hadn't been articulated. and now, there is something that a lot of people want to embrace so it does shifted on how wall street professionals view the economy. thank you so much to jonathan golub and carl weinberg. .e will be back stay with bloomberg for the latest on the u.s. election. we will bring you special election coverage through the night tomorrow. that starts at 7:00 p.m. in new york. this is bloomberg. ♪

is about.is what it the white house, the washington monument in the distance. we go to election day tomorrow. let me go to -- i brought a good morning must read. a fabulous book, "the great inflation and its aftermath." -- what we need, it was obvious even before mr. clinton, is a new social contract between generations. one that acknowledges longer

life expectancy and greater wealth among millions of older americans. the inattention of campaign two to these fateful issues is the real national embarrassment. carl weinberg, this goes to fixing our medical system. really, it didn't come up. carl: there you go again, talking about issues. i think what we are done with this campaign, we will get a chance to talk about all the things we didn't talk about that we should have talked about. social security, medicare, entitlements, the looming u.s. fiscal deficit. i will call this the francine chart, by the way. and these are the crucial issues of our time. not whether we cut taxes or raise taxes in the short-term, but how do we pay for the things we have promised. and it is a tough one. there is no easy political solution.

no one can make someone vote for them by talking about this but this is what we do have to talk to in the next administration. tom: carl weinberg is with us this morning. and i can't say enough about the view of the much higher inflation in the 1960's. tomorrow is election day. he has followed it from his new hampshire. notes.nt good morning we get an update on election day. everything is about turnout in the early election ballots we have seen. this is bloomberg. ♪

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private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. tom: politics, politics, politics. a clinton surge, at least within the markets.

234.utures up afterer dollar, even oil a number of difficulties. texas intermediate, and the mexican peso stronger. a lower statistic, yields of a nice 4 basis points. francine: i picked up on the mexican peso as well. and gold is down. 1.4%. overall gaming 1.3%, but we saw a bit of a rally in european banks. that is because of the possible clinton win. regulation has a huge impact when you have u.s. banks with european banks. tom: i agree that hsbc is the outlier and did quite well. right now as an outlier, let's get to an wonderful "first word news." taylor: the final bloomberg

politics poll before the election is out, and it shows hillary clinton with a narrow lead. 1%. in a -- 44%-4 fbi director james comey told congress the agency is sticking by its finding that hillary clinton did not commit a crime in her handling of emails as secretary of state. in july, he said the fbi would not recommend charges, even though clinton and her aides had been each family careless. that is on october 28. theold lawmakers that fbi was examining new a miss possibly links to the investigation. that news gave donald trump's struggling campaign a boost. he now says that she is being protected by a rigged system. the fighting is rating on -- is raging on in mosul.

because so many civilians are staying in their homes, the iraqis cannot rely on airstrike from the u.s.-led coalition. islamic state has held mosul for more than disco years. theresa may says -- for more than two years. government will get on with the decision of the british people. global news 24 hours a day, powered by more than 2600 journalists and analysts in more i'm tayloruntries, riggs. this is bloomberg. francine? tom? tom: thanks so much. it is about our financial future. carl weinberg is with us on financial economics. bring up the chart right now. go to cash in early. go to cash often. how many excuses have there

been, back to 1928, to go to cash? you have a depression over there. the red arrow. ub, there is always a reason to get out and why do a stay in stocks wednesday morning? isn: first of all, the vix high, around 19 and change it once we get through this, assuming something crazy does not happen around the election, you will see volatility drop in the market. that is going to mean the market is going to rise higher. we saw that today with the odds of a clinton win going up. beyond that, this is really about the fact that stocks are returning a boatload of capital, and that while everybody says they are cheap historically compared to fixed income alternatives, money has to go into stocks to push them higher. that is the story. tom: the distinction in the languages the word "blind." compare owning equities in a

blind market. john: if you look at corporate profits, where looking at something like a 5% number. when you take out the corporate buybacks, the corporate profits are only growing about 3%, 3.5%. as a trend, it grows at 8%. this is a weaker economy, corporate profits are weaker, and profits are getting those numbers. goinghe critical question forward is can they manage on the income statement to keep that 3% level or even to do better in earnings? is there wiggle room, room to cut expenses, or is it just the m&a process? jon: the big issue investors will grapple with is that wage inflation is going up, and companies do not seem to have a ton of pricing power. we are getting a ton of withions right now

friday's report, 2.8% wage inflation. we will look over the next six months at a wage inflation over 3%. that is a magic number. can they manage margins in that environment? francine: it seems critical how feels, how they spend their cash. if we have a donald trump presidency, will we see that drying up? carl: everyone has a different view, but the word "understand" is important. as soon as people understand what the policies of the next president will be, whether trump or clinton, they will be able to act. would not be surprised to see a delaying of projects and still -- it is acts until big issue on both sides of the aisle. francine: i have a fiscal spending election chart. not to expend the trump case percent, but when he spoke

with the economic club of new york, i was with a table of senior investors, and it was clear what his plan was. 's basically pulled jack kemp plan off and dusted it off. lower corporate tax rates, lower individual tax rates, rolling back regulations. get finance projects, and you are correct on that, and protectionism, which is odd with a free market view. i do think there is a plan, and i think the investment community will embrace it more than we think it will. francine: let's look at fiscal spending. there has been a clear economist thinking. donald trump may not be that bad. but how does he fund the fiscal spending? essentially he is cutting down taxes. jon: what donald trump will say is that if he is able to get the economy fast enough, it becomes self funding. it is the argument that was

debated 30 years ago, which was if you can get the economy fast enough, can you cut taxes and have them pay for themselves? i am not defending one side or the other, but that was the argument. carl: but what will congress give him? congress has been disciplined about linking revenues to new expenditures. will congress give him the tax cuts unless he comes up with alternative financing? will there be compensating factors? same thing about hillary -- but the question is, what is the offset going to be? the quid pro quo, if congress does what they have been doing, which is keeping a lid on the deficit. jon: some people look at how much debt they have, and others look at the cost to financing the debt. with interest rates even creeping up a little bit, but so low -- the one thing we have not problem financing the

deficit that we have. at some point in time, this is an issue. but i would bet that if people can get fiscal spending, the argument that it is free to finance is one that people in congress will grab on whether they should or shouldn't. carl: here is where that goes wrong. today there is an into the intestinal -- there is an infinitesimal rate of interest. the question of running up debt on any level is a question in and of itself. i would say congress right now has a bias against increasing debt. jon: there is a difference between policy -- whether it is good or bad policy, the question is what will they be able to do, and will the candidate finance this at cheap -- tom: i want to go back to jon's enthusiasm for equities. the animal spirit and the makeup of that -- let's go to the chart.

the is from michael darda other day. this is nominal gdp, and it is a pretty simple chart with a trend of deflationary/inflationary trend. a goodf you presume america after the election, is the expansion in real gdp here, or is it a higher inflation? gdp: i think we have real growth right now, it is just not as fast as where you see. it is very close to our potential rate, which means overall the economy is doing what it is supposed to be doing, which is putting people to work. the uptick we are seeing in out, it ison pointed the first sign of a higher wage growth. that a real growth or is that a money illusion that we will get from wages? i would suggest it is real growth. carl: i would agree with you.

this is a catch-up time for income. which is a real wages rise -- we should see real wages rise. tom: i can be assured that whoever wins, francine, they will be out on the green grass of the white house on telling us it is real. -- of the white house lawn telling us it is real. this is wonderful, carl weinberg golub.n n we have all this early voting no. it has certainly changed the dialogue. tomorrow on the program, 8:00 a.m. on bloomberg radio, james me, on radioexcuse today. worldwide, this is bloomberg. and that is the white house. ♪

francine: london, the cheese grater. i miss it. what a surprise -- this is where it is happening. the high court decision on thursday, a rippling effect. let's get to corporate stories with the "bloomberg business flash." nissan's quarterly profit fell 16%. the stronger yen is hurting overseas earnings at the japanese automaker. company softcom businesshe domestic performed well again, and sprint showed improvement. softbank owns 84% of sprint. francine: theresa may is in india today meeting with mr.

lodi -- with prime minister lodi. the house commons will hold its first full-scale debate on brexit. we are still with carl weinberg, high frequency economics, and jonathan golub. it is a divided u.k. we saw that after the high court thursday. the weekend was pretty ugly. quite a lot of vitriol from the newspapers on friday and then we can talk shows or nigel farage -- on the weekend talk shows. -- a slow brexit, a voice of calm over the weekend. we had a reemergence of the

split that we saw. francine: what did we learn from the prime minister of india? i guess theresa may was hoping to sign an agreement or some kind of trade deal. she was rebuffed not only by the but others who would not meet with her. -- yes, a a bit of a bit of a cold welcome for her. that britain should be open, that they should be trade in the future. -- is a 50% decline in signing up for students, the visa system here. ok in wales is foggy. not able to meet with theresa may, which seems to be a bit of a snub.

difficultyn of post-brexit because the britons will need trade relations with india. but at the same time, they are cracking down on immigration -- that is hard to achieve. francine: we covered the high court decision last thursday, and since then it has been ugly for the tabloid press, that went pretty aggressively, even "the daily mail": theresa may public enemy number one. has there been a backlash? simon: newspapers over the weekend talked about more calm. theresa may talked about an independent judiciary but also a free press. not necessarily clamping down on british media. it has been a reflection of the debate going on for several months now. just a sign of the tensions that theresa may would help to soothe in the coming months.

that would be a big challenge. the we talked about conservatives earlier. tell me about the labour party. i believe in the house it is 231 members out of 650. how does labor respond over the next 6, 8, and 10 weeks? simon: labor has a bit of a challenge. jeremy corbyn has not necessarily covered himself in glory during the referendum campaign. being over the weekend, he was talking about brexit bottom line's for him, access to the market, the continuation of the workers rights legislation that you you grants us. he was holding out the idea -- that the e.u. grants us. out the idea that you need assurances on those issues. coming out and saying that the labour party is not going to block brexit. looking toople are him as a brexit spokesman, who

has covered himself in glory. to thepolitics, new house of commons, only elected last year. he has emerged as someone to watch in setting the labour party tone. tom: simon, thank you so much. markets on the move. this off the fbi announcement, all clear for secretary clinton. i think i can say that. futures up on a nine. yields higher, dollars stronger. even oil makes a move for a bit. francine lacqua and tom keene. this is bloomberg. ♪

tom: peso, peso, peso. maybe it is a matter for florida or a newly interesting michigan. peso, --- a stronger , a stronger peso. by mr. may makes an historic visit to india. francine: coming up shortly, it is "bloomberg daybreak: americas.

what are we watching echo david: welcome to new york. good to have you here? we have two former senior government officials joining us, alan greenspan, the former chair of the federal reserve ordered. we will talk with him about what he has seen in these transitions, whether the markets are prepared for volatility, or what the agenda of the new .resident can be and then ambassador nicholas burns, the seniormost diplomat in the state department. he was the ambassador of nato and of greece. about what the issues are and as a practical matter, what the u.s. president can do to help with europe. tom: david westin, thank you so much. how about a single best chart? this may be my chart of the year. this is a really emotional chart of the nation's economic growth. this is a four-year presidential

moving average. carl weinberg, mourning in america is on the left, eight on the right. 4 handle onfrom a gdp growth down to a borderline 2.1%. why did this happen? carl: we are still trying to figure that out. the stagnation crowd has one view of it. others say it is a short-term blip and a longer-term trend. explanation is demographic, and it makes it harder to grow faster. whyre still guessing as to it is, but the reality is that the potential rate of growth has gone down. even with that potential rate of growth, we have managed to achieve full employment. what is the economic system supposed to do? is it supposed to put everybody to work, or make the economy grow faster? tom: you have been brilliant on the terminal value of the united

kingdom's economy. is the kind of sustainable growth newly acceptable? carl: we will know on tuesday if the people who are dissatisfied -- or are the people satisfied with where we are going in order to keep the same tools? that is a question for the american people. we will know more on wednesday morning, we hope. francine: does dollar strength in. gdp growth? strengthens,ollar money flows into the u.s. economy. the real benefit is that mega-cap stocks and stocks in general 10 to move higher. i wanted to comment on this 2.1% . i entirely agree with carl that , we have to grow, all you have gotten is a

collapse in the money and it does not do anything. the question tom is asking is, is that acceptable to the political class? the answer is absolutely not. which means you are going to get some sort of fiscal stimulus, and you have seen it in japan, and china, in canada. tom: it is an overshoot. jon: you are attempting to move something that is not movable, and therefore it ends up being bad policy. to carl's point, we have to get comfortable with it. francine: the problem with fiscal spending -- this takes five or 10 years. if it would have been that easy, they would have done it five years ago. at first we said if we printed enough money we can get the economy going, and we have no general inflation or growth. you will get the same thing with fiscal spending. carl: but europe's problems are different than in the united states. have thed for them to

tools that they have to fix their banks. slow growth is a solvable problem. francine: the u.k. has more similarities than central europe. carl: the u.k. also had a broken banking system, and that was the -- that was at the root of the crash in 1988 and 1989. tom: carl weinberg, thank you so much. jonathan golub as well. both gentlemen will continue with us on "bloomberg surveillance" on radio. don't forget mark halperin and john heilemann tonight. with this perspective on tomorrow's historic day for america. this is bloomberg. ♪

jon: good morning and welcome to

"bloomberg daybreak." i am jonathan ferro with david westin and alix steel. futures are up 6.33 on the dow, up 28 points on the s&p 500. look at treasuries. yields higher. the fx market, a weaker yen, the dollar-yen up 1.2%. mey's clarence -- the fbi director says hillary clinton's handling of email was not a crime. stocks around the world rally. the mexican peso reports its best day in a month. just one day to go before the u.s. election, hillary clinton leads donald trump by three points among likely voters. theresa may is on a three-day visit to india, where she clashed with leaders over immigration and failed to arrange a media eting. no