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.

vote is scheduled on brexit. that is what you need to know. david: number one story is the election. where one day away, the consensus of national polls continues to show hillary clinton in the lead. with a new bloomberg politics poll out this morning showing clinton leading donald trump by three points. joining us now is marty schencker, senior executive editor of "international governments and economics." we see the leads, and they are only 2, 3, or four points. and thenrespected organizations show a larger percent of her winning. "the new york times" says 84%. the -- pillar on clinton is clearly in the lead. when you look at north carolina, she is in the lead. when you look at florida, it is hampshire, it new is difficult to see a path for

donald trump. even if he were to take all the states that mitt romney took. david: we talk about this blue wall. take us into that. what would donald trump have to do to get over that wall? marty: he would have to take a state that many people think he is not capable of taking. michigan, wisconsin. he would need almost a perfect string of key states for him to get to 270. all the stars would have to align for him. that is a very difficult thing to do. and raise the question of how reliable are these polls. is there a possibility that people may be for donald trump and not admitting it? marty: there is this theory of a strong supporting wave for trump that will swing some of those key states. the polls have been wrong. there's also a question of whether those people actually

tell pollsters that they will vote for trump, so there may be a hidden search for him. that -- there may be a hidden search for him. david: that is what they're counting on. david:we have some sound from the weekend -- david: we have some sound from the weekend, a different tone. let's watch that. right now she is being protected by a rigged system. 650,000 emailsew in eight days. you cannot do it, folks. hillary clint is guilty. she knows it, the fbi knows it. the people know it. and now it is up to the american people to deliver justice as the ballot. david: this is donald trump complaining about the fbi investigation's reversal here. it seems in the final days hillary clinton has gone positive and donald trump has gone negative.

marty: it is interesting. democratic strategists thought donald trump sounded like a , a dark, gloomy place where this country is. and hillary clinton has tried to take a more up eat approach as or pull them -- a more upbeat approach. scare isthe comey away, she has been able to take a more positive tone. david: what is the one state we are looking at? marty: to me, new hampshire. that is marty schencker, the senior executive editor of "international government and economics." tune in tomorrow with a bloomberg election special with david gura and washington bureau chief megan murphy. chart?eel, you have the alix: volatility across all aspects -- across all asset

classes. with one difference month, realizing volatility for the s&p index -- look how much it overshot. it is higher than it was at brexit, during the u.n. devaluation of august of 2015. we have those nine down days for the s&p for the first time since 1980. you had the relief rally today, bob volatility -- but volatility is still elevated. dollar-peso,ne is one-week volatility. the blue line is euro-dollar volatility. euro-dollar volatility has fallen. take a look at the dollar-peso volatility. it is still extraordinarily elevated. this gap up is where we heard donald trump is gaining in the polls. the idea is, yes, they are coming down. volatility is significantly higher. you want to take a look at where volatility is.

in the treasury market, where yields will go short, medium, long-term is very positive when it comes to a trump victory. you can see here the big spike higher. we are nowhere near where we were back in june, brexit of 2016. nowhere near where we were at the end of 2017. nonetheless, another big leg higher. jon? steve, i am told it is pretty simple. you will get fiscal spending from both of these candidates. whoever wins, inflation is around the corner. is that right? him like tots life will see a -- you discounted into the market place. i believe fiscal policy will fail and the afterthought will be three to six months down the

pipeline that the backup and interest rates was totally unnecessary. you might have the federal reserve not only moving rates once in december, but the fear is that they will move one more time. jon: will it failed because it ultimately will not work? steve: it will not work and we are not sure if it will get done. there is a prospect out there that this is a coup by moment -- ya momentkum ba that takes place. i do not think there will be any real improvement. i do nothing there will be any improvement in the politics in washington after this is over. they both poisoned the well so badly. david: that is the politics, but what about the fundamentals? is the money there to invest? you have a chart that indicates the ratio of u.s. debt to gdp --

it is pretty alarming. steve: you can get one or two orders of growth out of this. the question is if it is sustainable. the rising real yield that we will see on the backdrop of this and the rise in the currency will choke off anything more than one or two quarters of benefit from fiscal stimulus. you might wind up with a structural deficit instead of $600 billion of $900 billion. then it makes things even more difficult going forward. alix: what happens to the private sector? the debt could go $5.3 trillion. what does the private sector do on the back of something like that? steve: the private sector is not investing. real yields in the private sector are pretty high. adopting not to invest a plan -- they admit they are buying back their shares. the automobile industry is stretched beyond the limits of what it can run at.

there is no cyclical bounce to come on the back of -- what will happen in the next 24 to 48 hours? steve: the markets will selloff, unless you get a trump victory. if hillary wins, there will be a slow bleed up in yields, slow decline in the equity market. if donald trump wins, volatility goes up dramatically. we probably see a rally to the 10-year note. ricchiuto, you make it sound so simple. outside the world of business -- here is taylor riggs. internet operators must cooperate with investigations involving crime and national security, and there will be mandatory testing and certification of computer equipment.

earthquake has struck in oklahoma not far from the largest oil storage site in the u.s. it was close to the cushing tank farm. damaged, butre not some buildings in cushing were. woman to serve as attorney general, janet reno, has died. she was strongly precise for her on then with the raid branch davidian compound in texas. she was 78. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am taylor riggs. this is bloomberg. we do have a global equity

rally underway. it is risk-on. hsbc helping the european shares, lifting banks higher, on pace for the best day in seven months. revenue is rising faster than costs did for the first time in more than a year. also in the upside, ryanair. this time they plan to buy back as much as 50 -- 550 billion euros of stock. the stock getting immersed burst as well. berkshire hathaway reported after the bell on friday. here's what we know. operating earnings came up a 6.6% in the third quarter. net income fell by 24%. the good stuff was the utility unit for berkshire hathaway energy. the downside is guy: and bnsf -- is geico and bnsf. david: coming up up, what would

a donald trump president mean for the fed and for interest rates? and setting up for the u.s. election. this is bloomberg. ♪

jon: from new york city, this is "bloomberg daybreak." an fbi boost for clinton may be a squeeze in these markets. thou futures up by almost 200 points on the session so far. switch up the board quickly. over the last week, it has been the haven bid. that is not the story. 1.04.-yen at a weaker japanese yen.

treasuries fell off along the curve as well. 10-year, 1.81. that did notng freak out last week was a fed expectation for a hike in december. this chart, the real clear politics 2016 poll average for trump, that is the blue line coming in around 45%. the white line is the chance of the fed height of about 25 basis points in december. you can see, irrespective of trump gaining in the polls, the market is set to -- as the markets are freaking out last week, how do you explain that the markets are so confident about a hike? >> donald trump has been vocal in terms of his cision and his thoughts on the fed. so a trump victory would not necessarily be seen as politically impinging on what they are going to do. number two, the data itself has given them the opportunity, and the markets have given them the opportunity.

so the probability of them going in december have been high. come inside the bloomberg and you can see the difference here. the bloomberg -- the blue line is the move by december of 2017, and the green line is the trump polling average. it did wind up rolling over a little bit. what is the correlation for next year? the fedhe problem for is going to be more the language that they use and how they set expectations and right now the markets have a belief that we will get one or two more next year. bewe only get one, it will one in 2016 -- one in 2015. they will set the tone of the more aggressive. jon: how are they going to be aggressive when gdp is doing this, consumption looking softer? how does the fed get aggressive? steve: i do not think they will

accomplish what they say they are going to accomplish and what they say versus what they do. in 2016 they were planning four rate hikes, getting quickly out to the 3% handle on the fed funds rate. we have gotten one rate hike, maybe. i am anticipating they will two or three in the next year. i am betting they will not get any. alix: any? jobs are petering out, meaning we are almost at full employment. why no? steve: i think the interpretation of the labor market is all wrong. i think what you're seeing is the fact that people are reading into the unemployment rate that we are reaching natural limit. i believe the underlying potential is stronger than economists anticipate. , there ise net result

a lot more slack labor market and currently anticipated. a lot of this is a function of the fact that capital spending and autos -- david: you are saying the donald trump has a point. when he reacts to jobs, he says they are not all that great because of labor participation. it is pretty weak. what does that say for a hillary clinton presidency if she is elected? steve: even beyond that, if you look at some of the emails that came out of the dnc, they interpreted it the same way , other than what they are laying out in terms of the public media. one is part of the we have view privately and one for publicly. the view you have to get at in this process is that the interpretation of the labor market that the fed is looking at is a rosy picture of the reality we are facing. on is1.i want to hone in the average hourly earnings. they are actually rising -- one

point that i want to hone in on is the average hourly earnings. they are actually rising, close to full employment in that area. how do you explain that? steve: the overall rise in hourly earnings is not that strong. it is not strong enough to get you anything more than the growth rates we have been having, especially when you have the real yield environment that we have because of our deficits that are outstanding and because of what the currencies are doing. interest rates are going to rise and the currency is going to move up there that will choke off any long-term potential. i do not think this concept that we have the labor market near, anywhere near the stresses we had -- there are a lot of people who can still come back into the labor force who we are not hiring. a lot of people are getting less hours as we pay them more. thank you so much, steven

ricchiuto. coming up, the timetable from brexit. the u.k. prime minister says britain's exit from the e.u. will not be obstructed by judges or lawmakers. we will show you the next step in triggering article 50. ♪

jon: from new york city, this is "bloomberg daybreak i'm jonathan ferro. with us now, more from london, is the bloomberg news economics editor. a lot of people are getting crazy about the idea that they could not get an appointment. how well is it going?

>> it is not going particularly well. certainly this is exactly the sort of meeting, the sort of trip that needs to go very well. well, a keyvery part of the narrative is that while these negotiations with e.u. are going on, british ministers around the world are getting ready to -- for when britain leaves the european union. there are a number of unintended issues, a clash with prime minister modi about the number of indian students enrolling in british universities. so far things are not going fantastic for theresa may. just a one trick, or is it indicative of the other trip coming on the back of this? kind of ironic that they want to control immigration and blew trade elsewhere, but then immigration has become a core theme of boosting trade elsewhere.

theresa may will find out as she goes around the world that trade negotiations are not a one-way street. cannot justit camp expect people to come rushing to the negotiating table and not demand things in return. education is very interesting. a lot of countries around the world will want a return on their investment in education. other countries will be demanding or the next 2, 3, 5 for thehat it will take -- for britain to negotiation david: of trade deals. -- to negotiation of trade deals. there will be robust

arguments as regards the legal surroundings, the triggering of article 50. this is not yet a done deal. the supreme court, the appeal goes to the supreme court next , so certainly the government is showing no signs of retreating. theresa may was very adamant with reporters, saying that they have gotten the right arguments, confident that she will end up winning. in the supreme court. but currently the government is in a tricky position here, and they will have to buy the scenes start thinking about how invective they will play this. leader ofly -- the the opposition party has been in a tricky spot for a wild. how did they react all of this over the weekend. >> it was a bit of a mess. initially, jeremy corbyn came

out and said that the labour part will block the triggering of article 50 unless theresa may guarantees access to the single market. comesng access to brexit as a surprise to many labor voters who voted for this. jon: great to have you with us. over the weekend, mr. corbyn was asked about the prospects of the election and he addressed those questions. we are counting down to the presidential election. ♪

this is bloomberg daybreak, he was what you need to know at this hour. the fbi director says hillary

clinton's handling of e-mails s not a crime. stocks around the world rallied records isican peso best day and a month. hillary clinton leads donald trump by three points among likely voters in the final bloomberg poll. theresa may is on the way to india where she clashed with leaders over immigration and failed to arrange a meeting with executives. this as the house of commons for their first debate on brexit. jon: let's deal the markets are captioning -- capturing no stories. quickly, heh out was the other asset classes. treasuries rallying to the whole of last week. yields up about three basis points. the yen weaker, back to a 1.04. as well.ting a lift the other proxy for this election has been the mexican

peso, seeing its biggest again in the month -- in a month after hillary clinton is cleared. joining us now, credit suisse global head, good to have you on the program. let's start with the peso. is that a short or conviction? very liquid at the moment. but it's been liquid for a long time. the closer you get to the election the more that is going to matter. the gap will be bigger. the other direction, will it go up very quickly. broadly speaking, anything that suggests that clinton will win this good news for the peso, and the direction makes sense. alix: take a look at the bloomberg, i have charted what happened in sterling in the month of june. the white line on this chart, overlaid with that is the blue line -- that is the dollar/peso just through october.

you can to the gap that we did see. whate uide for the peso, kind of gap can me expect if we see a trump victory? >> what we don't know yet is how the mexican authorities would react. in the u.k. there is not much of a chance of intervention. there is a good case for the central bank to intervene. the question becomes whether they wait and see before they take action or try to preempt a large move. the options market suggests you can get a large move by 5% or so almost immediately. the bank would try to do something about this, i think. jon: talk about liquid currency pairs, that is the big difference between the brexit debate in this one. given the time this could come out, what are the concerns around all of that? how does the mexican authorities set themselves up for that? shahab: i think what they will

be thinking about is the trade-off between spending money picture therey to is not much for the market. or, waiting to see how far the currency falls first. but the market exhaust itself before then coming in -- let the market exhaust itself before coming in. are arguing that sending money now is drops of water in the ocean, not much use in this environment. that is really the trade-off for them both a personally, i would go to with the second option and wait to see how the market reacts first. try to calm things down later, rather than try to preempt them. david: what about their ability to intervene, sooner or later? have they lined up lines of credit with the imf? mexico does already have

large foreign exchange reserves that is helpful. there are, as you mentioned lines of credit with the imf as well. the global community will be quite happy to help mexico in the situation as well. i think other financially officials will be receptive to helping mexico on that front. we believe mexico does have the resources to calm the market down after the initial shock we might see on a trump the truth is the med -- trump victory. medium term, the isn't enough in the bag in terms of reserves. if mexico could have a structural growth shock, with the differentiate between what they do on day one for intervention and what they might do over the course of a year where the might be happy to let the peso fall. jon: let's talk about the dollar

specifically. event,ly, and a risk-off the dollar is strong. what i am hearing from people like yourself is not -- that is not what is going to happen this time on the back of a president trump, let's say. in the coming months, let's say you get the fiscal deficit spending and the rate hikes because they have to contain inflation come doesn't scream stronger dollar for you anyway? shahab: that is true. but the market doesn't know is will trump suddenly come out one day and disagree with the idea of a strong dollar policy? u.s. hasomething the been doing for 20 years or so now as a concept. suddenlyes out and goes against that idea, that changes the market's perception of the dollar. other issues to consider as well, how will foreign central banks react to a more uncertain policy environment in the u.s.?

will they still see the dollar as a safe haven? will they need to look elsewhere and diversify more than they have? these are issues that a big inuctural change could see terms of how central banks deal with the dollar. that could overwhelm the issues you just mentioned. alix: those questioned her probably not be mentioned in the next 24 hours. now, to your morning must listen. the u.s.nding ahead of election. the industry is waiting for more clarity over opec's production quota. the secretary-general told bloomberg it stands by the deal it struck in september. >> we as opec remain committed to the ideas that we painstakingly put together in algiers. itswe remain committed to

implementation. alix: we also heard from big oil, at the exhibition convention today. bloomberg spoke to a ceo on just how important an opec deal is to them. >> it is quite important for our financial investors that would like to be -they would like to know that it is taken care of. that there ishink a strategic role here that can be given assurance that we are doing -- alix: bloomberg also asked the bob dudley who the most important player would be in a deal. bob: it certainly isn't the ioc. i think it is the gulf states, and russia and iran. those are the ones that need to

reach some agreement. i've no special inside information on where they are going. alix: for more, bloomberg join is going ony, what on the ground? could we see a deal in the next few weeks? tracy: this is the biggest convention that abu dhabi sees every year. it is usually about oil and gas. technical companies coming to show off their latest wares. this particular year turned into meeting. a mini opec the entire conversation is focused on opec at the moment. there was a lot of enthusiasm. the thing that strikes me as people seem to think that opec is doing the right thing by propping up the market at this stage in the game. we had an amusing soundbite from the energy minister today where he said that opec had come to its senses.

that got a big laugh in the room. but, people take that seriously. alix: do you get a sense that big oil is waiting to prop up prices? or have it done enough on the cost-cutting side to stay stable around $55 a barrel? people are still waiting for the deal. the level of conversation you see in places like this illustrates how important it is to the market. i just now on promises. they need something else. they need at a minimum some sort of new quotas to be published when it comes to november 30, whether or not opec members actually agree to those quotas and followthrough as a whole other question. but certainly, the markets are expecting something. ground among oil industry professionals you can see that expectation manifest itself in the amount of conversation that is revolving around opec at this moment in time. alix: the story in the market is

and saudi arabia could cut that would be the bulk of it and the willingness of them to give up market share to prop up prices. can you talk about that dynamic of prices versus market share on the ground? tracy: that is the really tough question. we saw when the market first started thinking about this opec thereent, there was hope would be sharing not just among members but also potentially involving some non-opec members. that looks like a pipe dream at this point in time. it seems like the bulk of the cut will fall on saudi arabia. that brings up some very tough choices for saudi arabia, which is always been viewed as a leader within the opec cartel. it is now facing its own problems in terms of its economy and its government. that are big big issues saudi arabia will have to deal with. it is not entirely clear what -- that saudi

arabia will take that medicine. potentially, at the expense of it on market share because a rebound in oil prices could lead to a rebounding u.s. shale. alix: excellent point, with the market share battle just continue later down the road? tracy, that's for joining us. oil trading right now around $46 a barrel. coming up, how will the future u.s. president handle the populist movement gaining traction in europe? a harvard professor joins us next to see what the next american president must look to europe for. ♪

daybreaks is bloomberg i'm here at the hewlett-packard

enterprise room. coming up the next hour bank of america's global head of market research joins us following the u.s. -- to discuss the u.s. election. ♪ amid: this is bloomberg, i david westin. after tomorrow, should know who the u.s. president would be. whether that is will start their transition right away. it is time to start thinking about what will be high on their agenda. a former undersecretary of state and political affairs and former ambassador to nato and greece joins us now from providence, rhode island. good to have you. explain what we should be so americans, about europe. why is that in our national interest? is a leading investor into our economy and a leading allied that we have. 27 members of the nato alliance are european countries. what happened in europe really happened -- matters to us strategically.

europe is in crisis right now because it is at low growth or no growth across much of the continent. there is a rise of populist parties to the taken over poland and hungary. elected ineatening france, germany, and the netherlands coming up. and of course, there is putin, who divided europe 25 years after the cold war ended. the multiplicity of crises, this is the most important, tenant to the added state -- continental to the united states. david: also, brexit challenging the existence of the european union. united states president point of view, what can they do to affect of those european issues? that we are aink global country. our next president has got to pay attention to all parts of the world. the issuer we can be most active is helping to contain vladimir putin. following the annexation of crimea in the division of

ukraine and his earlier invasion of georgia in 2008, putin is trying to we divide the european continent to the south and west of the russian federation. nato is going to be moving under u.s. leadership, battalions of troops into estonia, and our three baltic allies and poland. firming up that position and rebuilding u.s. military capacity in europe, i hope that would happen under a new president. that is the best way to contain putin and give the european some stability so they can deal with these other problems that are on their own solution -- that need their own solutions. david: the same in ukraine and georgia, we have something of an interregnum here. there will be a transition. how dangerous is that potentially? vladimir putin teams to be an opportunist when it comes to osthings. he will move in when the season opportunity. how concerned should we be about the next 90 days? who should be

concerned that he will try to test us during this transition. one issue is financial sanctions, the energy and financial sector sanctions have been put on russia by the european union. they have to be extended by a consensus vote, meaning every country is to vote for it. that happened in mid-december. president obama will push hard for the europeans to continue putinnctions because slippedet the condition the sanctions. hillary clinton will also continue that. it is donald trump, i think all bets are off giving his unorthodox and i think very weak and dangerous views about russia. david: you declared yourself on the hillary clinton versus donald trump issue. how do european leaders view this? we can say with some degree of certainty that vladimir putin and the russian

government relied donald trump to be elected. they perceive you will basically withdraw american forces from europe. trump has been denigrating nato, you make it weaker and won't be the strong leader that the europeans are accustomed to. the russians -- and every other year -- every other european country want a hillary clinton presidency. elite are sophisticated enough to understand how the notices can be effective in that region. for most west europeans in east europeans trump is a real danger to them. david: moving off of that, let's talk about brexit. president obama famously said england would be at the end of the line of the queue. to the next president make it a priority to help the u.k. out of this jam? nicholas: i think we should try to help as much as we can.

this will be u.k. matter because the courts ruled the last week as you know that theresa may will have to go through the british parliament to receive authorization to negotiate a brexit under article 50 of the eu constitution. be on, britain remains the closest ally in terms of our military relationships. we should reaffirm that. i hope when britain does leave if they do in 2019 -- that is the projected date, that the united states with thick and not free trade agreement with the united kingdom. we have a special relationship, it is the second largest economy in the european union. it is the strongest military. we want to reinforce that time. i thick america can be a good friend in that respect. .avid: thank you so much now it is time for other stories making headlines at this hour. here's taylor riggs with your bloomberg business flash. taylor: nissan's quarterly profits fell. the stronger yen is hurting

overseas earnings. plus, nissan increased incentives in an attempt to boost sales in the u.s.. hsbc reported third-quarter earnings that beat estimates. been cutting costs and bolstering the capital cushion. he is also trying to redeploy more asset into asia, that is been complicated by the slowing economy in china. disney's hot ticket at the box office has resume. itsook an $85 million in debut in the u.s. and canada. the newest movie stars benedict cumberbatch. disney is only the second studio ticket in $6 billion in sales in one year. that is the bloomberg business flash. alix: thank you so much, taylor. coming up, it is the u.s. election guide to the market. arel show you how investors positioning themselves in front of that decision day. this is bloomberg. ♪

this is bloomberg daybreak, 24 hour's go until election day. here is how we are positioned in the next critical day. taking a look at the s&p into election a historically and where we are right now. the blue line here is average of election days. you basically into election days this white bar here you are relatively flat. you might usually see a decline. after the election you see a rally by as much as 5%. take a look at what is happening this year is the orange line. where well below the average heading into the election. p?e recent that 5% po or are we really pricing in the risk? you can see a done virgins -- see a divergence when it

comes to how much risk is in. about 15cal average of or 16 come a more volatility is expected. how much more? this white line here is the s&p in the orange line is the fix index -- vix index. more volatility going through the vix, you can see that rather than the s&p. the vix is searching over 20. the s&p volatility is quite low. that is much more than it was pre-brexit. where did all the money go? it is definitely not going into u.s. equities. those have been hit pretty hard so far this year. you are seeing somebody come into is it -- you are seeing it go into mutual funds. that is reversing a few weeks of

s out of mutual funds. nonetheless, definitely not in u.s. equities. david: thank you, now it is time for bloomberg trends. here is a look at the top story terminal users are reading. you can find these for yourself. my top pick is with the world fixated on u.s. election, anyone of the stories would've been prominent in our program but for the u.s. election. they have a new finance chief in china. who support independence in hong kong can't run for office anymore. and they also said if you are coming in here's good have access to the codes. -- we can have access to the codes. jon: you expect them to be building if they were doing the currency manipulation. they are trying to support their currency. he would, who says

call them a manipulator straight off the bat. david: and he would impose substantial tariffs for that because what he claims is currency manipulation. alix: also look into what happens to the s&p? about whatry talking happens after an election. an average 1.5% today after a vote, 12 months later it doesn't really matter. it is never any bearing on where we will be in the next 12 months. you can see those bluelines versus the orange where we were the day after a vote. coming up on daybreak, former fed chair alan greenspan joined us to talk about the u.s. election from new york. ♪

♪ david: good morning and welcome

to bloomberg daybreak. reaction pretty clear, we are squeezed across the board in europe and it is due to the united states risk. david: i think it is safe to say. -- here iss results what else you need to know, fbi director federal comey said that the new e-mails to not possess any crime. that is sent the mexican peso up ford's biggest day in months. hillary clinton leads donald trump by three points among likely voters in the latest -- the last of bloomberg poll. also theresa may went to india where she clash with leaders and trade deals.ablish david: back to the u.s. election. lls, hillaryt poo clinton maintaining a moderately

over donald trump of stop secretary clinton with a three-point lead over donald trump nationally. a reporter foris bloomberg politics. difference yount have organizations like 538 and upshot saying it is overwhelmingly likely that hillary clinton will win. how do you square those things? >> both can be true. these are national polls and our election is not a national election post-up it is a state-by-state electoral college process. it can be very true that these all arein -- these within the margin of error. even in the state she needs to win but because of the way that the electoral map is set up, her path is so much easier than donald trump. the you divide up on democratic state and republican states that we know go to either side, there relatively even about 191-196.

stagewhen you take on the where clinton has a lead of five point or more and give those to -- michigan, wisconsin, pennsylvania, virginia -- she something close to that. all she has to do is one more state, north carolina, florida, that would be it. trump's path is a much more difficult. he needs six or seven states just to get close to that. david: the candidates are taking quite a bit of different tactics. we have some sound of the two candidates over the weekend to show what they're saying. she is being protected by a rigged system. e-mailst review 650,000 in eight days. hillary clinton: i want us to have an ongoing discussion on how we will all contribute to making our country all it should be. 'sreally believe that america

best years are still ahead of us. president obama: those values we taught our children, we cannot have a president who every day seems to violate those basic values. my opponent has a very dark and divisive view. donald trump: it is up to the american people to deliver justice at the ballot. a sense there that while hillary clinton and president obama want to try to get a high road and push off on donald trump saying he is the petty one, how are the voters reacting? >> that is right. shows a tightoll race. overwhelmingly what this tells us is that no matter what happens tomorrow night, the state of this country and the american electorate will be divisive, totally divided. that whoever wins, if

it is not their candidate, there will not give them a chance. they will keep fighting for whatever their position is. we get this sense throughout the whole thing that people expect from both candidates scandal ridden administrations and no copper mice. david: what about -- no compromise. david: what about the fbi? point, what we're seeing is that the fbi is getting attacked by both sides. i think we will see that continue for a long time. they will both blame them for .nserting themselves into this we never saw a ton of movement for this. we will see. david: we will see tomorrow, actually. in tomorrow, tuesday, for our special election coverage starting at 5:00 p.m. eastern time with a two hour with all due and john heilemann. then, our bloomberg election

special the david gura and megan murphy. doing theirkets are best to anticipate the results tomorrow. there is analysts are predicting what a clinton or trump's victory will mean for the s&p 500. the banks think a truck victory could lead to selloffs. calling potentially 13% drop then. joining us from chicago now, research founder and president here in the city was mike mckee, bloomberg economic and editor. about theseing eerily similar situations of the brexit vote. a freeze in the markets, going the one way with reports. why won't this be a june 23? real feeling in the markets and elsewhere that brexit is the template.

it was a different situation there. for one thing, you had a binary vote -- a yes or no. here, not only do you have the presidential race and the senate race you have millions of different kinds of referendums on the ballot. their reasons for people to turn out in ways that may influence the way that they vote. the biggest thing is, the polls in brexit weren't wrong. they were within the margin of error. within two percentage points either way. what happened was the bookies got it wrong. a lot of money came in the remain side. but there were more people actually betting on leave. mediaot obscured and the picked up the big bookies a story. people picked up on the idea that remained was going to win handily. when you look at the polls, it was always going to be close. jon: ultimately, you said the senate might be the reason to

go. what would be the reason for that? >> that might be part of the rally today. if you look at 538, nate willr's website, 51, 49 it stay republican post a look at real clear politics average the can be a pick up of two democratic states them to 49. the book is traded at 50 that it would say republican the highest since february. the story going into this is that the republicans might hold onto the senate. that is epic gridlock. that is what the markets like. we have a wins and republican senate they will be no compromise and no issues. markets like that. they like the little done. it is the senate that could be emerging in the final to date as the big story. alix: if we do get gridlock again, what is the upside for the s&p and what is the asymmetric risk if trump wins? >> if we get the senate on

gridlock, i think the s&p would probably rally. it is oversold right now it will be up today. if trump wins, it will be a clean sweep across the board. i would assume that the republicans would also hold the senate under that scenario. that is a wildcard. if you look at the betting market and overlay it with the stock market there is no correlation. the markets have no idea what to make of trump. it doesn't mean they sell off for rally. i think they have to wait until the day after to see what trump says if he wins. now, the most likely scenario is a republican senate and a republican house and a democrat president. for the markets that might be the best scenario. david: maybe we can want the same, but more the same for me in markets means low returns. next 24-48 hours you get a squeeze and that is positive for risk assets. beyond that, do we just remain in this low return world? >> i think so. what is the backdrop here?

so-so ongrowth and earnings. earnings will be a positive 2.5% growth. for the first time in six quarters we don't have negative earnings growth. it is only 2.5%, barely above the inflation rate. we have fully evaluated markets at 18 or 19. with low interest rates, there is really no room. is there a scenario with gridlock i describe it gets us to 3% growth? very fewee it, and other people see it. there's really no reason to see these markets really leap forward from here. if we throw in the idea of inflation or something else that gets interest which to go higher, that could wind up being a bigger negative as well. david: how much differences and make who the president is? what options will they really have in a low growth world? fundamentals really restraining growth. how much leeway will the new president have? >> we always get presidents too much credit and too much blame for the economy.

if hillary clinton comes and she will propose some additional stimulus spending on the fiscal side. if that goes through, it would help those. will it go through? a lot that depends what happens in the senate. it is possible she could cut some deals if paul ryan stays as speaker and he wants to be seen as accomplishing something. there is a real unknown and it may come down to what happens in the senate. it will be within one vote or so. to figure it who is in control. jon: thank you very much, stay with us. go to europe for some headlines outside the world of business. dealt a blow to supporters of independent in hong kong. it effectively prove that two pro-independence activists elected to hong kong's legislature can't hold office. thousands of demonstrators gathered outside the city's highest court to protest. they warn that it could hurt

international confident in hong kong. a seven-day transit strike is coming to an end in philadelphia. the union representing 4700 workers has tentatively agreed on a new contract. this led to gridlock during morning and evening rush hours. bus, rail, and trolley service will be restored with full service expected by tomorrow. the first women to serve as u.s. attorney general has died. reno served under president clinton. she was sharply criticized for ordering the deadly raid on the compound in texas. involved in some of the administration to other controversies including whitewater and monica lewinsky. janet reno was 78. global news 24 hours a day powered by more than 2600 journalists in more than 20 -- 1200 countries. david: thank you very much, the s&p could report earnings growth for the first time in seven quarters. find out why jim bianco isn't so

impressed. electionill the u.s. affect interest rate and the fed? ethan harris gives his outlook. ♪

jon: from new york, this is bloomberg, let's get you up to speed on the market action. a squeeze across assets right now. futures up to 35. in europe, all 19 groups of a stoxx 600 in positive territory. quickly, look at the peso, it is a stronger peso story. it is a stronger dollar story right now and a weaker yen. up by one point -- one full

percentage point. at $44.53 and one full percentage point. alix: uncertainty around the election also has the earnings season 421 s&p companies have now reported. this is how they stack up, the top panel is the average sales coming in at just 1/10 of 1%. the bottoms the average earnings feet. president isch still with us. the market did not reward those stocks as much as you would of thought. what happened? is prettyngs beat standard. in the last several years the post crisis. 70% of companies usually beat. that is largely what we have seen. the bigger picture, the growth filmis around 2.5% of the

expected on 0% growth rate for the fourth quarter. there really isn't anything to get excited about with earnings. if you couple that with the market evaluation for that the market is pretty fully valued right now. maybe it is overvalued but nobody thinks it is cheap. in order to get the stock market to move higher you need a earnings growth or lower interest rates. the all-out talking about the fed raising rates. they're all these headwinds going forward. earnings are not going to become a tailwind like getting a six, 7% growth anytime soon. , maybeis projecting that out until 2018. alix: the other part of earnings had to deal with the guidance. not many companies actually issued guidance. did ithat did so, mildly. how different was the rhetoric out of companies? jim: the biggest word we saw out of guidance was the election. everybody seems to be talking about the election. thes the new blame it on weather thing. you are right, there has been an

unusually low level of guidance this go around. even now you put that out with the positive it is not enough to really suggest that the situation is looking brighter. a 2% or 3% a more growth. a 1% real growth and that is just not going to do it with pes at 18. david: we tend to focus on earnings per share. what about the quality of the earnings? what is happening with the margins? jim: margins have been coming down over the last couple of quarters. around 2012ry fat four 2013 post-up some of them close to bury records. they are still historically high on the margins but are -- they're trend is lower. it is getting a little bit harder for these companies to move. that might be consistent with what we see in the economic data with productivity. productivity numbers are down if not negative right now. i might be showing up in an earning squeeze. jon: have you asked many people

when the stock market was down they would say that it is the presidential election and the uncertainty. when you really overlook the last week it is them what is happened in the crude market. what is happening with that market and what it means going forward from here? oil was crushed last week down almost 10% just in a five days last week. it is down 70% from the high set to .5 weeks ago. crude oil means one or two think it is viewed as a global demand indicator and while it is getting crushed you could blame the lack of an opec deal on that. demand and will growth is not as robust as we thought. furthermore, if crude oil continues to go lower $3 trillion of energy companies worldwide. back in february we were worried about massive defaults all along the line in the energy sector because of low crude oil. $44 is not going to give us

massive defaults but if he continues to shrink it will start to worry about the credit worthiness of the energy sector which is about 20% of the entire high-yield market. it matters a lot. all things being equal, i would think last would be story would have been the annihilation of crude oil and it would've been taken very badly by the stock market. to some extent that was overlooked because we were so focused on the election. alix: i don't know what is going on. co joining us now post-up coming up, dollar judgment day. clearing hillary clinton by the fbi but that a trump surprised lead to some panic selling? this is bloomberg. ♪

jon: from new york comments is

bloomberg daybreak. concerns over the dollar with the u.s. election. the fbi clearing hillary clinton sparked the current's biggest rally in about four weeks. earlier, guy johnson and i spoke with the head of currency strategy on how the economy would fare in a trump victory. more guessing them of. we basically use the pattern we have seen so far all the time of the risk is actually rising for donald trump to become president. we have seen this pattern that the dollar is weakening. or us, this is not in line with fundamentals. because, try means higher growth rate probably because of higher inflation which means it would be more action from the fed. johnson, me now is guy it is a fascinating dynamic in the fx market because typically we have a conversation about risk events and you see the dollar bit. that is not what happened. we got the short term trading

soria versus the more longer-term. what do you make of it? likeclearly, people don't uncertainty. you don't know what donald trump would do for the economy. moret could actually be beneficial for the dollar if he got in because you it's a big fiscal expansion and i could drive the story. basically, what it is saying is short-term short long-term long. another interesting thing is that he would be more likely to propose some sort of tax amnesty or tax holiday akin to the homeland investment act. that could drive a buyback program as well. you could potentially see that having an effect into the equity market as well. it is a real conviction trade with him. the longer-term fiscal expansion would be positive for the dollar. jon: for me personally, what he looks to achieving what -- if he achieves it is different. until we get a president trump and talked about deficit

spending and the repatriation of all that money. ok, the fx market would adjust to the perception but the reality of it happening could be a different question. can become a dummy up to think about what else is happening with the political spectrum. where with the senate and house be? within the willing to pursue that? take a step back, we've been talking about the need, central banks are saying this, fiscal policy story needs to pick up. in some ways, you do pushing on an open door. as you say, probably he would be able to get everything done that he wants to do. it is them to be a backing at the moment that fiscal expansion needs to be part of the conversation. jon: let's talk a fiscal spending more globally. my issue is all of this is that we are already getting massive deficit spending. that already is pushing on it anyway. why is it going to change anything if they push more? keynesiant into the

politics, you just need to get the economy moving again. drive higher would growth and that would ultimately feedback in. that is the hope. a world will you be in below growth carries on at this kind of level four a long time? i think this vote and brexit and what is happening in france and elsewhere around the world is basically signaling that there are large part of the general population that had enough. we need to think politically but how we get out of that story. jon: let's talk politically over the last few months you and i had a similar conversation on june 22. you had a squeeze in the market in the polls saying things were tight with the bookie saying it wasn't that tight at all. there's this feel eerily similar to june 20? does, but every conversation i've had to don't worry about it, it is fine. everybody seems remarkably relaxed about it. that is the common factor to me. the public may be his new york

or london seems to be signaling that everything will go back to the status quo. pavlovian is conditioning, i'm hearing the bellringing and enough feeling quite nervous. it is making me feel nervous. we are calling this the cable way. your differently getting the better of that. jon: i am, i'm picking up the tab at the public, apparently. on tv and tv with guy on bloomberg as well in european hours coming up. james comey's decision to a curriculum clinton, will it be too little too late? has the damage already been done? ♪

>> this is bloomberg daybreak. it is a: 30 a.m. on wall street, 1:30 p.m. in london. comey's clearance of hillary

clinton's e-mails. one day to go before the u.s. election. hillary clinton leads by three points among likely voters. british prime minister theresa may on a three-day visit to india clashed with leaders over immigration. this is the house of commons held its first debate on brexit. no vote is scheduled. >> in the markets, it is a nine day losing streak. that is where the drama stops. the reality is it is a 3% correction. dow, up 29 one the s&p 500. dollar-yen, 1.04. aeasuries are on offer with

full four basis points. even crude finds a bit. david: we are now just a day from that election and most cold show hillary clinton holding a slim lead. that bounced around in the wake of fbi director james comey's announcement. --st he was going to listen look into some e-mails and they found nothing was there. joining me now for more is eli lake, he has reported's extensively. i know you have written about this. is this a sideshow? >> i think it is a sideshow because it is not something that is a very rare crime, if it is a crime at all, in washington. classified information is mishandled all the time. serious issue we have learned in the project -- in the process of leaks is the

investigation into the clinton foundation and the status of that is unknown. it is rare to learn about ongoing fbi investigations, particularly the week before election. that is a concern there elements of the fbi are in a kind of insurrection but at the same time, if you combine the fact that the fbi has been interesting this -- interested in this which is now known because of the hacking of john podesta and other prominent democrats, there is certainly a lot of smoke. david: it is rare when the fbi director writes a letter to congress to give them an update. are those linked? there are some reports that there were some fbi agents very unhappy with the way the foundation investigation was going. >> i think that partisans believe they are linked because the argument you will hear from people in the national review is

that the private e-mail server was a way to shield the influence peddling that is part of the clinton foundation scheme. that has not yet been proven. it is something that should be investigated in a nonpartisan way. i think there was a sense from clinton's opponents that the e-mail thing was like getting al capone on tax evasion. but in my view i think that it is just way too much -- it is such a double standard. the fbi is investigating hillary clinton for the handling of classified information and lots of people know about this because of the leaks to the press. david: last question. what was james comey thinking? we know he is a professional, very able man with a lot of integrity and yet he inserted himself into this election in a very bizarre way.

>> the roots of this go back to janet reno -- i'm sorry, when i saying? it was loretta lynch who met on the tarmac with bill clinton. they say the attorney general was not in a position to make a fair judgment on the e-mail situation so it was left to james comey. i think he tried to split the baby. he did not think there was enough for any prosecutor to reasonably go ahead with the prosecution, particularly the person of the center of this being the nominee of the democratic party so it would take a lot to overturn the will of the democratic party's voters. on the other hand, his bureau is charged with protecting classified information. problem withge talking to the fbi with that in particular, using private e-mails is a pretty commonplace thing for senior executives in the government. athink he was trying to send

message to please both republicans and democrats and ended up in this mess. david: that is eli lake, bloomberg news columnist. alix: with the election just a day away, investors placing their bets on who they think is going to win. various analysts predicting what a victory could mean for the market. an increase in the 10 year yield but if clinton wins, you will see a drop in yields if trump wins. economics says there could also be a third the 2000which is scenario where we don't know who is going to win and is a contested election. what do you think about that scenario? >> i think that is bright. andou have a hung election, there is really not much certain about who the winner is, it would be a risk off trade in the capital markets. the marketsady seen

extremely sensitive to this election and the tendency has highwhen the markets see a probability of an uncertain outcome based selloffs and that will be what will happen on a hung election. alix: what about longer-term? the market think anything about a potential clinton stimulus or trump stimulus? >> it is uncertain because we have to see how washington functions after the election. our assumption is that if there is a clinton win in a continued republican house which seems ,ike the most likely scenario you probably get a small stimulus. you get some ability for paul ryan and hillary clinton to work together and get some kind of agreement around international tax reform and infrastructure spending. in that kind of status quo environments, treasury yields should be inching up over time

as the u.s. economy looks better and we get the fiscal stimulus and so on. trump scenario it becomes more uncertain because we have to decide which donald trump we get? deregulation, tax cuts, infrastructure spending donald trump or the big on immigration, and titrate donald trump. those have opposite impacts on the markets. the second scenario is the risk economyk -- weak scenario. the first is a higher bond yields scenario so individual analysts have to decide which trump we get. jon: how limited is the upside for high-yield. i was told again and again that this has nothing to do with the domestic economy and everything to do with what was happening in global economies. so why, when yields rise, is it

about the u.s. domestic economy? >> i think a lot of what is happening in the bond market over the last several months as opposed to just the last couple weeks has been about global markets. it has been about the fact that we have both been in the ecb and the doj, seemingly moving interest rates steadily into negative territory. that creates downward pressure. then we have a backing off of those policies and a sense that the doj were in maintenance mode, maintaining the current policy but would not go further. that is the main reason i think that initially as u.s. yields go up, going forward, the u.s. election can drive yields but you are going to have that limiting influence of the global markets that prevent a big selloff in the bond market. those buyers step in overseas. alix: what would the election mean for the fed?

a fed hike in december is the white line versus the polling average for atmp which is the blue line 40.8%. when markets freaked out last hike the odds of a rate didn't really move, they just kept going up. how do you explain that? >> i think investors are beginning to accept that the fed really does want to hike in december and it is going to take a fairly big shock between now and me december for them to change their minds so in the context of all the focus on the election, you quietly have the fed singling -- signaling that it is likely. so really the call around the december meeting is simple. either we get something really negative on the markets and then the fed doesn't go or things are relatively calm in which case it is likely the fed hikes.

in the backup of all this is a fed that is moving towards december. david: james carville once said that when you die you want to come back as the bond market because it is so powerful. that was when he advised president bill clinton. if you were advising the new president, whether it is donald trump or hillary clinton, how would you advise them? they have to make sure the cost of borrowing stays low. >> i think that is the key to the bond market in the next five years or so. it is not that the u.s. dramatically reduces budget deficit but more steady senses of the market. it is a steady hand and they can trust the integrity of the u.s. treasury market. there is no big policy that they should be doing. continue tojust have the sensible policy. don't have massive budget stimulus.

frankly, one of the things that sure that is to make the fed continues to have independence as a central bank. that would be good for confidence in the bond market as well. alix: ethan, thank you very much, is in harris, bank of america global head of economics. coming up, investing in health care. the candidates impact on pharma stocks. that is next. this is bloomberg. ♪

>> this is bloomberg daybreak. coming up, former fed chairman alan greenspan joins us for

impact on the markets and the fed. jon: from new york, this is bloomberg daybreak. get a check of the markets. did hillary clinton just get an fbi boost? the market up to 57 on the dow. we are 45 minutes away. counting down, a big rally in europe with 19 industry groups in positive territory on the stoxx 600. it is like last week upside down. today, yields of four basis points. on the u.s. treasury, dollar-yen at 1.38 weaker with a stronger dollar store. david: 45 minutes away from the open, also 24 hours away from an election tomorrow.

answers toe getting important questions like, who will be the next president and what sort of congress he or she will deal with? none is is focused on the results as the health care industry. my two of securities has look back through history to look at what has hurt or helped most. welcome to the program. >> take us through what your analysis shows. what sort of government would most -- would most be beneficial to health care stocks. >> my colleagues and i got together to take a look at this twice, first in january and most recently public at last night -- publishing it last night. what we have seen in the last 12 election cycles is that when you have gridlock, no matter how that gridlock is construed, no matter which variation you have, a democrat in the white house or the senate, so long as you don't have complete control of

washington by one party it is good for health care. either way it could be rather extreme. david: it appears that risk is getting smaller and smaller. break it down within health care because not all is created the same. there are different sectors. >> we break it down into providers, payers, on the one hand, the part -- the pharmaceutical companies that include specialty brand names, big pharma as well as biotech, and then others that are either supportive of one or the other. david: let's take those one at a time. pharmaceuticals. let's take a hillary clinton presidency with a divided congress. she will be trying to do something. >> our view is the first thing you need to do is see what is on her 100 day of -- 100 day agenda

when she is elected because when she set about drug prices, she meant it and congress took her up on that. it is funny when these issues become pocketbook items, how they become bipartisan. we would anticipate that with a democratic senate and a hillary clinton white house, there would be a continuing pressure on the pharmaceutical prices. not that anything could be done legislatively but the president controls the administrative branch and i would anticipate that we would see continued pressure from the doj and the oig on the investigated and regulatory front. high drug prices could be something that cut across the aisle. something,t that be even in a gridlocked congress that might get through? >> absolutely. we see that is one of the most important risks to the sector. it is fairly obvious but

importantly, we could get relief a budget, come spring, process that nothing more would be done then hearings. we could see the market becoming immune to those pressures. david: what about obama care? there is a lot of talk about fixing or repealing. what is the likelihood something might get done? >> so long as, from our perspective, the gop controlled the house, repealing obamacare is going to be proposed that it is not going to pass so long as you have a democrat somewhere in the other two venues. revealing would be dangerous for the providers. on the one hand the hospital gave up $155 million in cuts to get reforms but on the other hand what they got was a significant medicaid expansion and some help in paying for uncompensated care and relief in

insurers as last resort from the hospital level from the exchanges. even though they have not worked out successfully for many, they have been incrementally positive for the sector. if you repealed obamacare and replaced it but let the custom say, that would be the worst. david: how does your calculation change is donald trump is president with a republican house and at least a close senate. >> it makes it much more dangerous for those stocks and we would anticipate the level of uncertainty would be extreme and the stocks would rewrite negatively again because they discounted that in the last 10 days. even so it is financially difficult. there is a trillion dollars in savings that came along and it would somehow have to be replaced. david: that's right. thanks so much for being here.

other storiesur making headlines. here is taylor riggs with your business flash. >> two things past. chase and deutsche bank turned down the opportunity able tothey were not provide financial details. that is according to people with knowledge of the matter. bank of america and morgan stanley did sell to their private wealth division. its profit raised target. third-quarter estimates beat estimates. it is trying to boost profits by whitening -- widening its appeal with models with smaller engines. mgm resorts posted third-quarter results that beat estimates. they rebounded where casinos have been in a slump for two years. there was continued strength in las vegas.

mgm is the largest owner of hotels on the las vegas strip. this is bloomberg. alix:alix: coming up, donald trump's impact on janet yellen's plan for interest rates. victory putrprised it on hold? this is bloomberg. ♪

david: this is bloomberg. time for battle of the charts. matt boesler goes up against alix steel. >> going back to friday's jobs report we have the headlines. the white line was the highest, ine growth, since the crisis october. the blue line takes out the leisure and hospitality sectors so we are talking about restaurants and hotels here.

so you can see that the rest of the labor market wages are not really growing that fast. purple lineat this it shows you the year-over-year change in employment for that leisure and hospitality sector and it has been be celebrating quite a bit -- decelerating quite a bit. we might be close to full employment, so what does that mean? we are seeing light -- rising with labor costs and the rest of the economy has not caught up but this is definitely the place to watch. david: is this basically adam smith? maybe the more you employ them less? alix: i wanted to make some charts just like that but it shows when the tightness really is. thank you michael for helping me .ake this chart this blue line is the fed hiking cycle for 2017. a few basis point increase by

the end of december. the green line is the trump pulling. polling. -- if you didn't see the expectations for hikes in december roll over just attached at the same time where trump was gaining in the polls. it is not supertight of a correlation. it could have had to do with the jobs number or the fed meeting, but i want to look at this correlation. if we ignore a trump victory, we have to look at it for longer-term growth in 2017. david: if there was a firm correlation would you be worried about the independence of the fed? alix: or the idea that if we do see a big stimulus from trump, does the fed have to hike faster because there is so much money in the system and more inflation? they are not really independent at all.

dad: even if he wants it he can get it. i'm going to vote with matt, sorry alex. i hadn't focused actually on the travel and leisure part of the jobs industry so that is terrific. jonathan? jon: our on-air marriage is in a bit of trouble. coming up in the next hour of daybreak, former and fed chairman alan greenspan will join us to talk about the election and what it means for the economy and the markets. and a solid s&p 500 performance on the ftse and the tax. this is bloomberg. ♪

jon: good morning and a warm welcome to bloomberg daybreak on this monday, november 7. i am jonathan ferro. 30 minutes away from the cash open. we are 24 hours away from a presidential election. the market is about to get snapped in a big way. board, besth of the if you switch up the board, yields up for basis points on the 10 year from 182 and the dollar-yen reclaims. alix: at this hour, comey's clearance cost effect on the market. peso has its best day in more than a month. hillary clinton leading donald trump by three points in the likely voters in the final bloomberg politics national poll. our big guess this hour, alan greenspan. he will give us his take on what should be on the economic agenda

of the next administration. polls tome of the last come out before the u.s. election tomorrow shows hillary clinton maintaining a moderately over donald trump. that bloomberg politics poll is out this morning and shows clinton with a three point lead over trump nationally. joining us now is such a eisenberg. -- sasha eisenberg. how does it play out in the elect oral college? hillary clinton has this lead of three points for a while now and it shows that even in this comey news, it hasn't drawn from closer. we are back where we have always been. she has a structural advantage in the battleground states that forces donald trump to have an inrwhelming suite -- sweep states where he has never had a

solid lead. bothis what makes campaigns seeing her in the drivers seat. jon: take us through the staples in this sense. if you are advising donald trump where what is a scenario you think he might actually have a chance of carrying it? >> florida is essential for any map. they are fairly confident about ohio. the early vote numbers out of nevada, where two weeks ago the campaign was very optimistic, show an electorate that is heavy voters andtime latinos and i think there is reason for them to be very pessimistic about nevada and colorado based on the early mail ballots. that is one of the changes. there is less reliance on public polling or private polling and far more in some of these states

where 70% of people are going to have voted for -- before tomorrow. that is one reason we see donald trump going to minnesota yesterday where he had never campaigned before because he is desperate to pull something else that the states he had identified as battlegrounds now simply drifting away. david: you refer to the fbi investigation that was ended by director comey. it is interesting how the campaigns reacted. appearinginton was with lebron james in cleveland and never mentioned it but donald trump put it front and center. >> she is being protected by a rigged system. you can't review 650,000 e-mails in eight days. >> i want us to have an ongoing discussion about how we are all going to contribute to making our country all it should be. i really believe that america's best years are still ahead of

us. haveose values that we taught our children, that you are teaching your children and grandchildren, we cannot have a president who, every day, seems to violate those basic values. >> my opponent has a very dark and divisive view. >> now it is up to the american people to deliver justice at the ballots. david: what is that sort of exchange telling us about what these campaigns are thinking about what they need to do? >> hillary clinton has wanted to end on a positive note for a wild now and in large part because she wants to be able to tell a story that seems to give her some sort of mandate, legislative lead, and not have the story if she wins the that she ran against a historically weak candidate and one by default. she spent a lot of time going

after trump because they felt vulnerable. i think this gives an opportunity to spend the last 40 hours on a positive message and have her victory represents something forward leaning and not just a contract -- contrast against her opponent. for a tune in tomorrow special election coverage starting at 5:00 p.m. eastern with a two-hour addition of all do respect. jon: that is the political backdrop. the market fallout is futures higher and equities rallying. in the 22 u.s. elections going all the way back to 1928 the s&p 500 has fallen 15 times the day after polls closed. however, showing no indication of longer-term trends. here with us now are oliver renick and joe weisenthal. what does history tell us? >> no matter what happens, keep

a cool head. if the market pops because of a clinton victory with a lot of people expect, don't get too excited because there are still a lot of things to parse out. wins, flip side, if trump the common assessment is that the market is going to fall. how much? anywhere from 5% to 15%. don't sellline is everything because either way, history has shown it is a coin flip in terms of what the market does the next 12 months. jon: you came around this table and the first thing alex asked you is are you staying up? you said of course. but markets stay up as well. market participants have to stay up to provide some liquidity. has been eroded by a ton of regulation? you just wonder where the liquidity is going to come from if you are going to headline? there is some tail risk.

>> absolutely. remember when the brakes and results started coming in and the first hint that the u.k. was , someto vote to leave extraordinary moves in the pound and in japan and in the s&p futures. if any headlines come in that are a deviation from what the markets expect, particularly if they start to show trump leading, i think the performance of the markets today suggest strongly that the markets right now are wanting to see clinton win, who knows? 1:00 in the morning, there could be extraordinary action. alix: take a look at this. it shows the volatility within u.s. stocks other than the difference between one month implied volatility and realized volatility. this is, i think, my favorite chart of the week. this is a you and evaluation back in august and we have now

moved past that level. that brings into question the gap we could see in the next 48 hours. >> that is the expectation that there is going to be some kind of big move. joe and john's point is that when you have a morning like today where there is this news about comey saying there is nothing new here in the latest bech of e-mails, it might battalion stocks up to 2%. you've got everything around the world buying equities and because of this news, it does raise some questions in terms of whether or not you have a market where you are so focused in on one event, how reliable are these big moves? that speaks to the historical point of it as well because we are so keyed into this. no matter what happens on wednesday, certainly the point we made about gaining the markets if clinton wins, there

are still a lot of things that need to be worked out sector wise. david: that is a really important point. part of the structural issues, the nature of this race is that it is hard to know when either candidate -- what either candidate is going to do when it comes to the economy because they have spent so much time on fbi investigations and old tapes with lewd comments. >> if you listen to these political pundits making their forecasts, the theme is that clinton is probably going to win but we are not totally sure. that is what i see in that chart. clinton is probably going to win that we want to provide some down hide -- downside protection. i think another layer of the uncertainty is the particular lack of clarity about what economic policy would look like, particularly under a trump residency.

assuming clinton wins and we still have a republican congress, we could have more of the same gridlock style, but under a situation in which you could have a real sort of policy regime change, fiscal policy is not just countercyclical. rethinking trade, perhaps different monetary policy if trump is not a fan of yellen. all kinds of interesting unknowable's. many thanks to our bloomberg team. for an update on news outside of this world we go to taylor riggs with bloomberg first word news. is takinghi unprecedented steps to ease bad air quality. protesters demonstrated the local government shutdown of schools for three days and put a five day ban on construction and demolition. there is concern that india's

sectors could be at risk if the government clean up the air. a seven-day transit strike is coming to an end in philadelphia. an agency in the union has tentatively agreed on a new project -- new contract. servicel, and travel a will be restored with full-service by tomorrow. the first woman to serve as u.s. attorney general has died. janet reno served under president bill clinton. she was criticized for ordering the deadly raid on the branch davidian compound in texas. she got involved in some of the administration's other controversies including whitewater and the monica lewinsky scandal. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. alix: it is risk on a across-the-board. look at where futures are, up

over one and a half percent. at the session high, futures were down 250 points. a monster rally after all these down days. trying to break its nine-day losing streak, helping on some and, will be earnings. they are continuing to trickle out. we are looking at the end of the longest earnings recession. that stock up almost 6%. cognizant technologies is basically an i.t. service colony -- service company but it did top it's your revenue view. , it was really because bank of canada is investing. they have a $1.3 billion agreement to buy some loans when they try to rehabilitate that image. david: coming up, commodities.

gold falling the most after the said the handling of hillary clinton's e-mails was not a crime. how commodities move after the election. we discussed that next. this is bloomberg.

alix: the risk on rallies pervades this commodity market. look at nickel. up 4%. crude oil continuing to climb higher over 1%. gold getting hammered. what is the trade over the next 48 hours? joining us now is oliver sloot of i i trader. a lot of our clients have

been asking us the same question and it is a great one. a lot of volatility in the markets across the different sectors. crude oil, gold, etc.. silver, which ultimately like these metals are longer-term basis. if hillary wins, we could be back. if trump comes out with a victory, we could see gold go back to those july highs of 13.77. we like the trail longer-term basis regardless of who wins because we may be gone with whoever becomes president. the uncertainty is still going to linger. a lot of people are suggesting that we could see rates rise ultimately. we are looking at global rates remain low and that is going to support gold. alix: in terms of the risk on rally, we were seeing that in copper and nickel and oil. what is the best way to play

risk on rally? >> there is definitely a lot of ways to play it. buying protection is what we call it. -- a lotvising clients of our clients like the longer-term prospects of gold, they are protecting their downside exposure with long options. that is the best way to play it throughout this week. it invites more volatility in the market in the last two weeks and we will continue to see that play out through the rest of this week as they find out who the next president will be. alix: thank you very much. moving ahead more to the oil have the riskou on rally today but this chart is going to rush oil over the next three weeks. this is the maximum and minimum output opec needs to cut into that november 30 meeting. based on the september output they only need to cut 1.3

million barrels a day that now based on the return of oil, that looks to be about 1.8 billion barrels -- 1.8 million barrels a day. onlysaudi arabia be the country willing to step in and cut that extra production? or will they fight for market share and take a step back? that uncertainty can cap any kind of upside. ahead, it will be the first change in the administration since the financial crisis. alan greenspan will weigh in on what challenges are ahead for the next u.s. president. this is bloomberg. ♪

alix: last week we had a taste of what come -- what a trump presidency would look like for the markets. this was a huge withdrawal as investors look for safety.

we are talking a billion dollars in a few days. sawinvestment-grade markets $1.23 billion. billion, the director of high-yield investment grade credit, was the fundamental reaction to a potential victory or just a technical glitch? >> somehow high-yield always seems to be the punching bag. it was during the temper tantrum when oil was going down and brexit. the real comparison is towards equities. high-yield is going to be up-to-date. equities areecause rallying and high-yield go down, it is the same thing again and again. >> the spreads might have tightened then? >> we will see what happens in the election. a trump victory is going to spook markets. rates probably rally.

the question is what happens after that? heard you earlier talking about how you're not sure what these policies are going to be. slow growth actually tends to be the best for credit markets in general. when you go very fast, companies take their shareholders are not creditors. >> you have got positions in the mexican peso as well. time for the brave to start taking speculative positions at this point? >> things like the peso are certainly undervalued. even a small probability of trump winning is enough to make that meeting divided by 10 or 15%. we think there will be a rally on a clinton victory. people with money on the sidelines are terrified of a trump victory. >> two week before the brexit vote, someone had so much conviction they were going to stay in.

just keep selling them. you'll make a ton. how brave you think people will be if there is a peso upside? >> i think it is on the time horizon. if you wake up wednesday morning and it is in dispute, you could see the mexican peso and other currencies down 10 or 15%. you had athe chart before, it depends on the horizon. alix: your company, what do you do? do you bring issues forward in the third quarter? >> most companies that have had to issue have done it. so even if markets are week for the next six or 12 months you are not going to see massive holes because of that. 2-4use bonds are usually years before maturity, companies have a window to refinance. alix: does that make the chance for owning high-yield to get a

little tight? > i think it is well-positioned in that risk spectrum right now where if markets are good you might do better with equities. way,f we go the her there is a lot of other stuff coming up. david: not all high-yield is created equal. the stalk about energy which has been up and down. we have seen it go down significantly last week and we have seen very different policies from these candidates on energy. >> in the energy space, when oil was at 30, it was clear that most of it, it was going to end up defaulting. if we are kind of in that in between range. the price of oil will have an impact on the energy part of the market. what is a good sign is that unlike what we saw in 2014, we are not seeing that. oil prices being lower are

actually good for the high-yield markets. for input costs and transportation costs, lower energy tends to be good. alix: what is the best and cheapest way to hedge the next 48 hours? you have a lot of conviction when it comes to after the election but short-term, what is it? >> because of the impact it for ahave on markets trump victory, even if it was a 10 or 15% chance of a trump victory, that is enough to make it expensive to hedge. the best hedge to me is to sit and do nothing. look what happened with brexit. we talked about how no one thought it was going to happen. but if someone told you it was going to happen you would have sold everything it may be that look smart for a day but it was the wrong decision. jon: let's pretend you are all in cash. day after, status quo, where

would you put it? >> high yields. alix: would you wait a little longer? >> always hard to say. this could have more or less impact than brexit. at the end of the day, the u.k. economy is only 2% of the global gdp. the u.s. is a little different. great to have you with us on the program. we are four minutes away from the cash open and the opening bell. looks like this as far as features are concerned. traveling north on the dow. a rally in store set to break a nine day losing streak. this is bloomberg. ♪ wow, x1 has netflix?

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♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. we're opening more xfinity stores closer to you. visit us today and learn how to get the most out of all your services, like xfinity x1. we'll put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. there's more in store than you imagine. visit an xfinity store today and see for yourself. xfinity, the future of awesome. ♪ jonathan: this is bloomberg daybreak. where moments away from opening in new york city. up 30 points on the s&p 500.

futures, 15 seconds away from the cash of it for equity. switch up the board. the action in the other asset classes is like this. money out of the hate is that means a week or yen. treasury is off for basis points. crude is getting squeezed as well. on longest losing streak this equity market since 1980. here is alix steel. in, yes,of 15 seconds s&p is up 20 points. the dow is also up. the nasdaq gaining 1.5%. treading over its moving day average. a big throw away from that area. earnings, we're almost done with earnings season. s&pofit gain of 2.5% for

members for the third quarter. that would mark the end of the earnings recession, which was the longest since the financial crisis. on the downside today is gold. all .5% as safety trade comes out of one target. is leveragedminer on this gold price. the biggest in the world is off by 4%. it is precious, it is down today. david: ok. whichever way it goes tomorrow, the united states will have a new president in january. that means change. something markets typically do not like. former chairman of the federal reserve is alan greenspan, and he has a share of change throughout his tenure in washington. good to have you here. greenspan: thank you. i'm glad to be here. david: in the past markets have been resilient in response to

changes of administration. this is the first time we've had a changing administration since 2008. do you think there is a risk that some of that regulation may make it difficult for markets to respond to this change? i don't think markets understand exactly what type of future there is out there. that is causing a considerable amount of uncertainty with either possible nominee. a i don't think this is usual, strictly analytical roach . -- approach. there is not any. this is ground not covered previously. we will have to work our way along. david: it is ground we have not covered rigorously because we have a lot of behavioral regulations as opposed to reserve requirements. will this be the first test of whether that behavior approach is effective? dr. greenspan: no. i think right now we know that

it has not been working. it has not been working since square one. if you're going back to dodd-frank for example, there is only one thing that is working one thing that is wise to do. a significant increase in capital requirements for the banks. nothing else has done anything other than -- as far as i can see, other than slow down the liquidity, reduce the liquidity in the financial system. jonathan: there is an argument that risk-taking capital has been eroded off the back of regulation. our markets able to effectively price risk? if not, what needs to be changed? dr. greenspan: to the extent a numberre withdrawing of the highly technical issues that exist in the system, we have removed a lot of them. as a consequence, there is less .bility to respond

unfortunately, that is the politics of this. i do not know exactly how it is going to come out, but i would very much like to go back to square one. repeal dodd-frank. a very large increase in equity ratios for all financial intermediaries. i suspect with very little else there is unique to do in the regulatory system -- you need to do in the regulatory system with that simple regulation. i'm thinking in terms of 20% or 30% capital required. everyone tells me that will cause the banks to go into serious trouble. history tells us know. the rate of return is competitive with all other aspects of the economy. we have data going all the way back to 1869, which confirms this. is the sooner we

do something, the better. alix: i want to turn back to the markets. last time you were with us, you said that the bull market in treasuries was unsustainable. this has continued to be the theme, especially with yields so loved in europe and germany and japan. think this can go on? what will burst it? dr. greenspan: it may be the fact that we are moving into the brewery early stages -- very early stages of inflation acceleration. that could be the trigger. it has always been a very unusual bond market. we have not seen anything else like this at these low rates for a protracted period. we have never seen them period. result is we have no way of

getting a historical handle on how to handle this except to say that there is only one long-term direction and long-term interest rates, and that is up. david: i want to turn back to the presidential election. there will be a new president in january. what are the options open to that president in dealing with the economy? beside what they should do, what can they do? dr. greenspan: first off they have to identify what are the problems associated with the economy at this stage. if you listened to the debates in the primaries and post primary, nobody is addressing the fundamental issues that need to be addressed. as i said before on this program many times, that is entitlements are rising and choking off domestic savings and investment. it is a major cause of the reason why output per hour,

productivity is so flat. not only in the united states, but throughout the developed world. david: thus far we have gone through this by borrowing more and more, when does that end? what will keep us from continuing on that path? greenspan: it can go on remarkably long until those for lending the money revolt. i see no sign of that yet. if the early stages of inflation hold,o develop and take you could get a fairly major shift away from these extraordinarily low yields on 10 year notes. i think we are in the area of 3% or 5% eventually. that is what it has been historically, not only 100

years, but for thousands of years. ne -- an expert in mary peri -- this is an extraordinary period. circumstances forces that. this cannot go on indefinitely. jonathan: higher rates, higher inflation, they cannot carry on --rowing, and wellpoint th at what point does it become a problem? this time around 5%, is that a problem? greenspan: it is a problem if you go from where we are now so 4% or 5%. if we could wave a wand and reproduce 4% and what about the history of the last five to 10 years, we would be fine.

there is a structure of adjustments that have taken 2008, especially since which has to be unwound. that will not be done without a problem. alix: thank you very much. more coming up with alan greenspan, former federal reserve chairman. we will talk more about u.s. growth. the globalging as risk on rally continues in the u.s. this is bloomberg. ♪

♪ is "bloomberg daybreak: americas." make sure to catch our special election night coverage tomorrow at 7:00 p.m. eastern on

bloomberg television. >> back with us is alan greenspan joining us from washington. dr. greenspan, 24 hours to go until the u.s. election, let me paint a picture for you. the fed theyead of don't like you, they want you to leave. how do you function with that kind of rhetoric? dr. greenspan: i think you have to disregard that because i statute and buy history -- by history, they federal reserve is independent. wells functioned fairly through a number of similar circumstances to today. i think the board of governor and what the chairperson does at this particular stage as they haven't all historically relevant times is disregard

that. when i was chairman, i received of requests to lower interest rates. not a single one to raise them. , if you takely with the politics are telling to runat is not the way the financial system. i think you have to just disregard this stuff. alix: what is so interesting about where we are in the global populist movement is that central bank conversations are not unique to the u.s., we are seeing it in the u.k. and europe. is the surprising to you? dr. greenspan: i think it is fascinating and somewhat troubling that the whole doerest of the central banks

and what the economy is going to do has so fundamentally changed that it is very hard to forecast what is going to happen. i do know what the fed has to do. that is nothing. david: is there a danger in that? there seems to be a growing chasm between the elites of the economic and business world on one hand and the people who feel disenfranchised. this is not just the united states, but europe as well. at some point the fed needs political point -- support at some point. otherwise you'll have factors that will profoundly affect the economy that the fed is trying to larger. dr. greenspan: it is not the fence job to put -- the fed's job to put the position where we wanted to be.

that is up to the political leaders of the country. if theret criticize -- is a concern, it is not the job of the federal reserve to change it. it is the job of the senior political figures, from the president on down, to act accordingly. 18 and a half years at the bed, that is what the issue is about. i think it worked well. alix: if a current sitting fed serve, ifot asked to donald trump is present, and if he does not ask yellen to serve, do you think she should stick out the point you're making? dr. greenspan: i think it is up to the individual. tost of all, i don't like

discuss hypothetical issues when we will know what the facts are very shortly. all i can tell you is that the principles on which i think we are to govern, and those clearly, unambiguously for an independent central bank which disregards the type of letters i used to get. in other words, if you took a vote of the populace as to how the central bank should function, everyone would be in favor of printing more money. road,w the end of the that is disaster. david: another important principle has been the benefits for everyone from globalization from free trade. where has the failure been in communicating those benefits to the people at the bottom of the food chain? dr. greenspan: that is basically our political system.

it is not the job of the federal reserve to enunciate economic principles. it is the job of the president, those who areall specifically oriented towards finance to do it. that is not the job of the federal reserve. it is the job of the federal reserve to explain how markets work, to explain why free trade is a value, but it does not lobby for those particular things, and should not. alix: thank you for joining us today. dr. alan greenspan, former federal reserve chairman. jonathan: at the top of the next hour is bloomberg markets. there is a strong correlation, not in markets, but between manchester united and the energy levels of mark barton. what do you have? mark: i am through the roof.

it is a rare manchester united win. he is cautious long-term. he says there is not enough growth. then we will talk the fx or mutations after tomorrow. what happens if donald trump wins, what happens if hillary clinton wins. how does the market react? we will go through those permutations. then we will go to brexit, a statement to fellow mps at 10:30 your time. that is in response to last week's high court ruling. the opposition labor party gives their view. then there is a 19 minute debate. we will jump in and out of that. i am bouncing. 3-1. everybody is on form today. jonathan: mark is doing well today. markets, the biggest

problem for the s&p 500 since june 29. it is up 1.5%. a nine-game losing streak, the longest since 1980, it looks like we're breaking that today. from new york city with the world and attention on d.c., this is bloomberg. ♪

alix: we are at the tail end of earning seasons. you have priceline, news corporation, and see entertainment all reporting earnings after the bell today. in terms of earnings, about 5.5%. jonathan: markets doing their best to anticipate the result of the u.s. election tomorrow. some key states like florida have already seen more of half of their voters casting ballots.

michael mckee is with us. the brexit parallel is good for a conversation at the bar, but he speak to posters, they say an event like this is far more predictable. >> that was a one-off referendum. a binary question. in this case we have voting history in each of the states, many races driving people to the polls. it is a lot easier to go back in history and try to figure out what is going to happen because you have that, whereas in the united kingdom, you did not. jonathan: how much does early voting help? >> it is hard to tell. the states are making it easier to early vote. it is a little bit like the growth of the internet. every year more and more people do it. we have seen significant turnout in early voting. florida, explain one million people early voting.

in 2012, a total of 12 million people voted. we have well over 50% already voting. the same in north carolina. david: in florida, the percentage of hispanics early voting is much higher than last time. >> in pretty much all of the states surveyed. that has been hard to work with because historically hispanics have fewer landmines, they don't like talking to people because they could be from the ins. and almost all the polls are conducted in the was -- english. there was some news over the weekend that arizona had some issues with early voting. >> a number of states have had issues. one of the biggest problems was in north carolina where it s very easy for republicans to get people off of the voting rolls.

they sent you a notice, and if you did not respond, you were kicked off. a lot of people may have not gotten those. a judge ordered those people look back on the rolls. -- put back on the rolls. thirdsda, they had two of their total turnout already. people who watch nevada closely say that it is an almost insurmountable lead for hillary clinton so far. jonathan: we spoke about this problem this morning. you have the people who say they don't know on the phone, but then you cannot fall them into the booth to watch have a vote, and they are the ones who swung it on brexit. how do you capture those people? >> there was concern about people scared to say they were

voting for donald trump. we have not seen that in the early voting. there is an interesting aspect in some states like new hampshire. after the first james comey letter, more people said they might not vote for hillary clinton because of that. is thatlsters find people who are not happy with their candidate tend to not answer the phone when that happens. that distorts the reports. tapethe donald trump bus came out, a lot of reporters -- voters were not answering the phone. alix: interesting. david: as we look forward to tomorrow, what is the scope of efforts going from both campaigns to monitor the polls? >> this is a normal factor. you have somebody from each party and each campaign at every poll monitoring them.

you have groups of people monitoring polls from both parties. there is a strong effort from both sides. jonathan: the parallels and not so much parallels between brexit and the election. we are .6 minutes into the session. that wraps things up for "bloomberg daybreak: americas." it was a nine day losing streak, the longest since 1980. it might just end today. the s&p 500 over 1.5% up. it is early days. there is some conviction. bonds on offer. the dollar well bid. from new york, this is bloomberg. ♪

>> from new york, i am vonnie quinn. mark: live from london, i am mark barton. welcome to "bloomberg markets."

♪ vonnie: we're going to take you from new york to london to washington and abu dhabi in the next hour. here is what we're watching. it is the final day before the u.s. funds for their next president. hillary clinton leads donald trump by three points nationally according to the bloomberg politics poll. mark: the election is driving the market move today. the dollar is higher against all major currencies. ae mexican peso viewed as proxy for a donald win. gold is falling back. vonnie: oil falling back. qe market waits for