364. i have to say, we were much lower than this. risk assets are showing some resilience. you expect a weaker peso and that is what you have got. dollar-yen, treasuries, yields, higher. bid.ront and it is a curve steepen her. and that is the theme in the equity market and bond market. alix: here is what you need to know. donald trump eat hillary clinton in a stunning upset of political establishment. republicans delivering another blow to democrats by keeping control of the senate. setting the stage for a broad conservative agenda. and the big question is, how will it impact the fed rate hike? that is what you need to know.

to the markets, quite a night. aggressive repricing at one point after a softer tone from donald trump. julie: just to get a better picture of what you are talking about, here are the futures in the overnight session. the s&p futures. at one point we saw them falling as much as 107 points. that for the lows of the session that happened around midnight. there was still a decline of 2.1% at the moment. well off the lows. another thing to look at is the distribution. this is hrh which looks at the historical returns. we were looking at a very rare event. as measured by a bar that would have been to the left. this zone.in

so it is uncommon if we see a drop in the futures of this magnitude. similar.utures look we don't always look at the dow futures but it is another way to measure what we are talking about and it is more heavily traded in the overnight session. we did see these futures plummeting steeply. points, dropping by 2%, but not as much as earlier. ato, let's take a look reactions to the most recent elections. the day after election day. we have seen big moves. 2012 after obama was elected for his second term, we saw the s&p 500 fall. a bigger drop after his election in 2008. the next contest is that it was not a predictor of the next 12 months of performance. in which we have seen stocks soar.

sawwise, bush in 2004, we an uptick. a 1.5% pullback quickly. whatuickly, to illustrate alix steel was talking about, futures and what they are pricing in, we are looking at a 51% chance of an increase. the number was 78% yesterday. so the odds of an increase go down with the fed victory. david: one thing that may have brought equity markets back was a speech that trump gave at 2:30 in the morning, new york time. he set an inclusive tone domestically and internationally. >> i want to tell the world community that while we will always put america's interests first, we will deal fairly with everyone. everyone. all people and all other nations. common ground and not hostility. partnership, not conflict.

-- we for more, we during are joined by megan murphy and mike mckee. we have watching you all night long, well done, you made it through. how did this happen? megan: i will give you the defining statistic. of this is chunk white voters between 45-64. 63% for donald trump last night. talk a lot about education. donald trump one college-educated whites. among whites with no college degree, 67% of that vote. and the stunning processd on an third of latino men voted for donald trump last night. the african-american vote didn't come out in the way that hillary clinton needed in battleground states. but his strategy was the white photo base.

those voters came out for him last night, particularly in michigan. wisconsin. pennsylvania, a state that republicans have never been able to close the deal, it is stunning. david: those are stunning numbers and the reason they are standing is because we had so many polls that set the reverse. we had a bloomberg piece on college educated voters that set the reverse. how did the pundits get it so wrong? looking over the trajectory, we didn't factor in so many of the things that led him to the primary win. 16 otherainst welldates and did very with college-educated voters through the primary season. but the assumption was only look around virginia and philadelphia, that she would do

more strongly than she did. the early sign of the evening for me was virginia. as had been polling as many eight points up and it was expected to be an easy win. winning but it was razor thin margins. mikmckee, i want to bring you in here. presidentjust the elected. it was the senate and the house. mike: it looks like what happened is that donald trump rock people along on his coattails. .ou saw that in missouri it looks like kelly ayotte is going to survive. and that is by narrow margins. if hillaryhave lost clinton had performed better in those states. so that means maybe he has leverage on capitol hill with some of these senators. the real question is, what can he get done now that he has a republican house and senate? it may not be as united as people

think, particularly on the house side because what trump is talking about doing is an infrastructure program which you mentioned earlier, $500 billion plus a big tax cut that people say will leave the deficit way down. maybe even as low as barack obama in 2009. half the members of the house were elected on a tea party platform of don't spend more money. cut the deficit. cut spending. so he'll will he be able to get something through? taxes, wecifically on have paul ryan, the speaker on the house. largely adopted his plan. so aren't they agreed on that? doesn't it make it likely there will be real tax action? it makes it more likely that we will see some kind of repatriation deal. and some kind of corporate tax reform.

out therty affiliation window. you are talking about lobbyists 's for every special interest in washington gathering. whenber when donald -- ronald reagan did it, it took a combined effort on the ways and means committee to even push that through. so that will be harder than it looks. david: thank you to megan murphy and mike mckee. both of them have been up all night and are doing a terrific job. jonathan: another person up all night is tom barrick. advisor to donald trump. let's talk about what is on the table. what can he get done? the epicenter of his acceptance speech was for structure. there is a series of number one contenders. healing the wounds of the other side.

wet you saw last night, what have talked about before, the real donald trump. the sympathetic and charismatic and kind and considerate donald trump. for the worlding is, is this man reliable, was brexit election in the u.s., is it real or a joke? and at every step he will prioritize by saying, i need to reach across. acceptancepartisan of what i'm doing. even though i have both pieces of congress, the house and the senate. and i think he will take foreign policy, domestic policy, which needs fiscal stimulus. the market will react to consistency. to get growth, monetary policy and productivity, it is waning. so fiscal stimulus as

infrastructure relates to a piece of it makes sense. everywhere in the world has the partnerships except for us. and we have a structure policy which is 30 five years old. i think you will see the world new formats of transactions to take place and he will do it in a more elegant way than the candidate donald trump appeared to be. by the way, he was right. the victory was his. everyone said to be more practical and presidential and softer and he found a seizure in america that was remarkable. and it was his strategy. how does he create the sense of consistency over the next days? how much of it is his appointments? tom: the great news is he has

mike pence. .e has a real advantage he has a vice president to can actually do something for him. you has relationships, power and ability to move legislation along. ,nd just like president reagan he was an actor who was to forced had no foreign-policy experience and what did he do? he went out and surrounded himself with george scholz, cap weinberger, richard allen. he took the best of the best and had them help him with the first 100 day plan. alix: who is the best of the best? business leaders? what do you think kay's best of the best looks like? is tohe first reach people who know the system. who can use the system but are not part of the system. right? part, was a serious

referendum on the status quo. so i think you will find now -- the transition team has them working on this for months. the candidates available to him are not the candidates that are available to him today. because people who wanted to be considered were not really taking it seriously in the moment. and i can tell you in the last 12 hours, just on my phone, the -- i've always been there and i couldn't tell you because of my wife, husband -- jonathan: i think that is what the polls had a problem with as well. so they were part of a kitchen cabinet that ronald reagan had when he was a governor in california. is there a kitchen cabinet that we can look at now to say those are the people that he will rely upon? tom: yes. much smaller. and ave had carl icahn

series of business people who have always been close. close.associate who are thehe political side and military side, he has a new band of relationships. but what he is kept option analogy. the frustrating thing for the say,t -- it makes sense to you have a relationship with another major supervisor power that has been contentious. why does it need to be contentious? every place we have left, putin has filled. so to send a message in saying hey, i'm not interested in having that relationship and i don't care what the bureaucrats say -- i will send a new kind of diplomat to have a new kind of deal and we will see if it works. i am drawing work,

hard lines. so when i draw a line and say that if these boundaries are invaded, there will be a consequence, i mean it. and i think you will see in the next 90 days, a transition team come up with a slate and venue of unbelievable people with deep experience who are just not part of this establishment system. again chip away slowly and move it just a matter of degrees. that's all it takes. nothing sudden, bold or shocking. from the whitear house that obama has invited trump to meet him at the white house on november 10 to update him on transition planning. we did hear that obama would be speaking to the white house that today. so that is already happening. you become the president you assume a set of responsibilities. and you assume the capabilities to move markets.

there were a series of faux the campaign that you can get away with on the campaign trail. once you become president-elect and you say the kind of things he said previously, it is going to move markets in a significant way. do we have a shift in approach in terms of fundamental policy? or is he still going after the fed chair? totally. i think what you saw is candidate trump. in a ufc octagon saying everything goes and he is reaching and groping with analogies and illusions in which he has the liberty to do that. i think what you will see now is a serious and thoughtful man who is saying, you know, i will leave a legacy of showing the world that an independent person coming from modest means with no political background can be the best president the united states

has ever seen. and i think that is his goal. cadence andon and advisors around him on all the things that have to do with the markets we live in every day, he will be thoughtful, deliberate and soft. tom barrick is staying with us. we can't let you go. coming up, which sectors seemed to gain or lose the most? plus, a election reaction from the all-star lineup of guests. this is bloomberg. ♪

jonathan: this is "bloomberg daybreak." let's get a check on the markets.

we had a political surprise. futures down. -41 on the s&p 500. -5% earlier.w as we have erased some of the market tension. the board quickly. bonds, treasuries, yields up by six basis points. alix: digging deeper, take a look at the bloomberg. a big down move as the status shocks. it's still with us is tom barrick. supporter of donald trump. when you take a look at the chair -- when you take a look at do you interpret market reaction and trump?

i interpret it as the magical three words -- by the dip? i think you're going to see the marketplace level out with every iteration that comes out of this president-elect. and the flow of that will be more consistent and more thoughtful. andill start calming fears jitters of the erratic markets. david: so you are not only a trump supporter that also a shrewd investor. so how do you invest your money, now that we know it is president-elect trump? by the dip. equities. if you look at exit, the opportunity this morning for me is equities. with the opportunity is tomorrow maybe something else but today, i think equities are the place to be.

david: any particular sectors? if you're going back to a globalization base with a more secular focus, i think the rdustrial base -- you know, tractor has been beat up for so many years and people are overlooking it. saying you don't have emerging markets action and what will happen. but i wouldn't be surprised if those industries get an uplift that is unexpected. buying the s&p 500 is different than buying treasuries. yields are higher and curves or sticker. i wonder whether it is pricing in something else, the risk premium associated with treasuries that wasn't there before today. message toe the foreign holders of treasuries when on the campaign trail, it

was confusing when he started talking about america's debt load and how it could somehow be reorganized. what is the communication around that, now? the debtou look at load and all the statistics, regardless of wheree are with our debt. we are better off than any country. so what i say to foreign investors is simple. you have few alternatives. the u.s. is your best alternative. an increase in debt with corresponding growth in every sector is a good thing and not a bad thing and that we have a gdp coverage correspondingly to cover that. you have repatriation of capital and you associate that with a tax plan that they are with a reduction in overall tax rates but an increase in revenue, the coverage on the debt is better than it is today. so the risk premium is just

volatility. volatility and demand. that will i think diminish. and the u.s. treasury is the best postage stamp of value and security in the world. and what option is there? jonathan: tom barrack is joining us. joining us and now is david bloom. good to see you. how does the fed not hike interest rates in december given that data is unlikely to deteriorate and the market reaction may not be that severe? david: of course they will raise rates at the moment. donald trump one and we weren't expecting that but what we were expecting is for the dollar to rally against emerging markets. and the mexican peso would be worse off. and that happened. equities ago lower? it happened. equities would selloff against major currencies and that has

happened. volatility would pick up? that happened. off the brexit, we want -- we were prepared. how does this evolve from here? wespoke after brexit and talked about the structural story. has this become a political currency for the time being? david: you hit the nail on the head. is now political currency. we have the eu referendum in italy coming up in december. brazil,alk about politics, turkey, politics. where is it that you talk about economics? the u.s. is absolutely no exception to that. jonathan: so i wonder. the fed is set to hike in december. if it is not about rates or the economy, how do you trade the

policies of the u.s. and the dollar and how volatile is global fx becoming? david: that is exactly the point. offave treasuries selling because people think there is the possibility of a big fiscal boost is there. traditionally, if you get a fiscal boost, monetary policy will be pricier than expected. oh, the economy is better but actually, the fed could be a more aggressive. so actually, on the fiscal side, it could turn into a dollar positive world. let's find out and see who the man is. we've heard a lot. he said everything he needed to say to get elected. what is real and what's not real? that is what we are to figure out. jonathan: the peso trade with easy to make going forward. what is the move now? think the dollar-yen. i would normally say the euro. but we have an election coming

up with another referendum in italy. has gone one way in the u.k. and another way in the united states and people are really nervous about italy and the government and that's put the yen in a space. thank you, david bloom. david: best of luck to everyone. dead wrong on brexit and the presidential election. david: a brave new world. ross coming up, wilbur will be joining us. along with tom barrack. this is bloomberg. ♪

alix: you are looking at a live picture of the white house where donald trump will be moving in. he will be the 45th president of

the united states. barack obama will be making a statement on the election later on in the day. this is "bloomberg daybreak." it is 12: 30 p.m. in london. here is what you need to know. donald trump beat hillary clinton in a stunning upset of the political establishment. he will become the 45th president of the united states. and his speech last night he struck a more inclusive tone and the one we have seen. >> it is now time for america to bind to the wounds of division. we have to get together. to all republicans and democrats and independents across the nation, i say it is time for us to come together as one united people. alix: obama has invited him to meet at the white house tomorrow. obama will speak about the election later today.

and republicans delivered another blow to democrats by keeping control of the senate setting the stage for trump to enact a broad conservative agenda. question is, how will it impact the fed rate hike chance. the chance of december has now fallen to a 51%. jonathan: capturing that story in the markets, we look like this. it was way down but knowing your that now. futures -- negative almost 300 points. market in europe, health stocks outperform on this result. switch up the board. the epicenter of the acceptance speech by donald trump was fiscal spending. infrastructure spending. capturing that story in the bond market. 10 year treasuries up seven basis points from 192. and a bit of risk aversion with a stronger japanese yen and a substantially weaker mexican peso. next, our morning must

listen which can really only be one thing. trump celebrating his victory at 2:30 in the morning in new york. partially calming markets by taking an inclusive tone. now, it is time for america to bind the wounds of division. we have to get together. republicans and democrats and independents across this nation. i say, it is time for us to come united people. as i have said from the beginning. ours was not a campaign. but rather, an incredible and great movement. made up of millions of hard-working men and women who love their country and you want a better, brighter future for themselves and their family. while the campaign is over, our work on this movement is now

beginning. it is my honor. it was an amazing evening and it has been an amazing two years. and i love this country. david: that was donald trump speaking five hours ago and that is a different donald trump than anyone we have seen. alix: measured, calm, inclusive. very different than what we have heard. and elected trump trump, are they different people? to unified comments helped calm some losses. joining us more for market reaction is wilbur ross. a senior adviser to the donald trump campaign as well, tom barrack. earlier, the symbol was by the dip. by the dip in equities. what would be your call?

wilbur: for sure. i think it is ridiculous that there is a selloff. but the republicans having control of the senate and the house. his tax program should sail right through the house. because it is very similar to the house program. thinkingd of people there is more uncertainty, there is less uncertainty. there is very good certainty. been there would have uncertainty was if hillary clinton got elected. can you imagine if she became president and you had a republican house and senate? that would have been a reason for the market to sell off because it would have been a real mess. this is going to be far, far better by any comparison. do you appreciate that some of the market selloff is related to the unpredictability and not necessarily about the policies? wilbur: i don't think his policies will prove to be unpredictable at all. you have seen the manifestoes he

laid out. you have seen the hundreds of editorials i've written. those are his policies. and he will stick to the policies. and the donald trump you saw in his acceptance speech is the one that i came to support. tom wasat is what saying earlier in the program. if we take a look at the bloomberg, the steepening of the yield curve. you can see the big jump there. and the question now becomes, is the world of low yields over? are we in a new era? tom: i don't see a. -- i don't see it. to be honest. to go to residual and not current yields, because there is no productivity or growth anywhere in the world. see the monetary policy stalling where it is. i see fiscal policy adding to that. but i don't see any rational

reason why, in the near term, it should change. david: respond to the question about uncertainty in the government. i understand that we now know we will have republicans around the government. in general, when the government can't do anything where you are, when they start to get active, you are not sure what will happen. football, when you throw a football, three things will happen and to our bad. bad.d two are it was the average american saying that i'm not comfortable with the policies of the past. not that hillary is collapsed. not that obama didn't do a good job. we just haven't had a lineman. now we have alignment and we have the opportunity to recruit the best and brightest people in ross,sphere, like wilbur

to accompany this president and side-by-side with vice president ce crafty legislation on all sides. and foreignade, tax policy practices which suddenly moves the needle and sends a different message. i don't think you will see anything gigantic. no matter what you say and do, you can only influence the aircraft carrier two degrees. think the prudence and cadence and quality of the man you saw last night, which is why wilbur and i are both here, will in theeflecting itself seamless necklace of the senate, congress, judiciary and the other side of the aisle. said this to you before. you are better expressing his views then the man himself. on the campaign trail he said

the first thing that he would do with favor china with a currency manipulator. is he going to do that now? does he go into the white house and call china a currency manipulator? i think it is too early to micromanage what he will do first. i don't think that is the key issue. i think the important issue is that this will be an active program but not one like we have had before of overregulation. not all legislation is bad. and i think we will prove that as time goes forward. jonathan: but clearly at the center of this, it is a broader issue. a manipulator is a broader issue for the economy. 10 years ago, maybe but right now, not at all. this is hand in glove. tpp habeen a gigantic topic

and there are a lot of reasons why it should continue and why it shouldn't. however, the real issue is china. tpp is a defensive move to try to occupy that arena. , as it expands, doesn't have access to that market. so why four around with the rest of south east asia when you are not addressing a direct relationship with the real issue -- china. you has good relationships with donald trump. lots of thoughts on his policies. over ross, what will your relationship be in january? wilbur: i will continue to do what i can to help him. alix: will you move to washington? know you have to ask but nobody can answer. guys the idea is, are you the people who will be at his side? wilbur: i think we are the kind of people. david: a different question.

do you think you will know the next treasury secretary, will it be someone you know? you won't be surprised? wilbur: i hope not. [laughter] many thanks to wilbur ross and tom barrack. coming up, tim pawlenty. someone who knows something about running for president himself. he will be here to tell us what he thinks banking regulation will look like. this is bloomberg. ♪

emma: this is "bloomberg daybreak." gephardt. richard

♪ david: this is bloomberg. after 500 days, the election is over. donald trump is the president elect. now the country turns to what comes next. one of the places where change may be most stark is ranks. pawlenty, now is tim the former governor of minnesota and he ran for president himself. welcome to the program. bringing up my ill-fated presidential campaign is a sore spot. david: a noble effort, that is what we remember. let's talk about the financial services regulation under trump. what does it look like? he has saidbecause

various things, and it isn't clear what his priorities would be. is unclear what would be in what priority of order. but here are some things he said. he will carry interest -- something that should be reduced. the republican convention and a platform there was a call to reinstalled glass-steagall. and he said that dodd-frank is killing lending but he didn't build up details but was definitely critical in a general way in who spoke about the need for midsized bank relief. so those are a few examples. we just spoke with alan greenspan. -- listenns out that to what he had to say. greenspan: i would like to go to square one.

repeal dodd-frank. and the equity to acid ratios for all intermediaries -- and i suspect that there is very little else you need to do in the regulatory system that wouldn't be solved with that simple regulation. david: so alan greenspan wants to go back to square one. is that realistic in this congress? be with many republicans. one thing you would look at that is a cousin of what he described is the so-called choice act. -- passed through his committee and said it would be on his marker. i know he and donald trump had discussed that. -- capital requirements for certain types of banks. alix: you brought up glass-steagall.

what is confusing is that he wants to bring it back which sounds like a elizabeth warren. and you wouldn't think they would agree on much. but also, he says he doesn't want regulations. do you think it is in the cards? tim: it is unclear whether he will embrace that or not. it was brought up at the 11th hour and put into the platform. donald trump campaign manager reaffirmed that it was something that donald trump supported. i don't know that he personally eference -- the -- regards trump. when you look at the financial service priorities, trying to make progress on the debt and deficit, that is

something you want to take seriously. dolooks like he wants to that but it is unclear what he wants to make that look like. does have some other things that would be more concerning. for example, trade is important to member companies. it is a mixed bag in general but generally it is positive. alix: he did vilify big banks. is goldmanto mind sachs, saying that these are the guys who still your money. how does he repair that relationship, assuming there was damage done during the campaign? tim: a lot of things were set on both sides regarding ranking regulations which will now have to get to the serious stage to get converted into policy and

that will be the challenge for him. that afteroverstate the policies. withu look at the policies tax reduction or reform, reforming or reproving dodd-frank and replacing it with something else, the idea of fiscal discipline, there is a lot to be positive about. governor tim pawlenty, thank you for joining us. check on what sectors are moving after the trump upset. julie: everything is not read. as though you might glean that futures. a decline of 2%. stocksseeing drug higher. and that is interesting because both the candidates on the campaign trail had rhetoric

against hyde truck prices. seeing a bounce and there is also the prospect of possibility that there will be repeal. the affordable care act will -- it is unclear what will be but we are seeing a bounce in drug makers. we also see an advance in shares of minors. gold prices are bouncing. people are buying gold. it is not good news for renewable energy companies. and anything having to do with energy. solar, going lower as well on the idea or possibility that president trump will not be as supportive of the renewable energy industry. some of the groups we are watching this morning.

those are some of the things we been touching as more and folds. coming up, more election reaction from the all-star lineup of guests. this is bloomberg. ♪

david: this is bloomberg. reduction -- reaction around the world from donald trump winning the election came quickly last night. would like to congratulate donald trump on his victory in the election. russia is ready and wants to restore full-fledged relations with the united states. >> the u.s. election opens a time of uncertainty. are theed states primary partner for france.

what's at stake is peace, the fight against terrorism, the situation in the middle east, the economic situation and climate change. >> the japan-u.s. alliance is on unwavering. i hope to strengthen the bond of the alliance and communicate strongly with president-elect trump to address the challenges the world confronts. i look forward to working together with him. >> with no other country outside of the european union does germany have a deeper with then the united states of america. democracy, freedom, respect for the law and dignity of human life regardless of background, skin color, gender, sexual orientation or political attitude. on the basis of these values, i offer the future president of the united states of america, donald trump, a close cooperation. david: joining us now is mike mckee.

i must say, looking here at the european exchanges, the equities are off although not dramatically so? mike: it is early to know what the markets will do with donald trump. but you are hearing the leaders say what you would expect them to say but there is an edge to some of their comments. let's start close to home. he will change or withdraw from nafta. you saw what happened with the peso. there is also a talk with canada with lumber. you go to europe and you heard angela merkel -- the idea of the various values that we share. those are not values that donald trump shares. so we will see. we have elections coming up in germany next year. italy next month and a referendum in france. east at to the middle the one country that is happy about this is israel. he did not get along with barack obama. but trump has demonstrated he

doesn't know a lot about the middle east. saudi arabia is concerned. vladimir putin is a winner in this. and south korea is very concerned about whether north korea will test the relationship. the counselor on foreign relations say this is the big foreign-policy issue anyone has ever faced. any gauge mike: of that from the leaders themselves? met with almost none of them. he did meet with vladimir putin and the president of mexico but beyond that, he doesn't have much foreign-policy experience and we don't have any evidence that there is a different donald trump from the one that we have seen. isn't there the option already that in europe it would have a broader coalition? maybe they could get closer together because they need to fill the void? they both have to muster

political elections next year so they will do what is best for themselves. alix: mike mckee, thank you very much. rhetoric overe the last hour has truly been the person who campaigned is different than the person who has been elected. and i'm interested to follow that conversation. jonathan: according to trump supporters so maybe we should bit.ion that a little coming up next is libby cantrill. we're counting you down to the market open in new york with futures lower but not as aggressively low as they were earlier today. this is bloomberg. ♪

jonathan: good morning and

welcome to bloomberg daybreak. the tone of the markets expecting the status quo and in getting president-elect donald trump. 224, s&p 500own futures right off the lows, now down 25 point. here is the situation and the other asset classes. 10 year treasury yields up nine basis points and it is risk of with the yen substantially stronger. alix: donald trump beat hillary clinton and a stunning upset of the political establishment. he will become the 45th president of the united states. he struck a much more inclusive tone than the one we have seen. >> now it is time for america to bind the wounds of division. we have to get together. to all republicans and democrats

and independents across this nation, i say it is time for us to come together as one united people. alix: president obama has invited donald trump to meet with him at the white house and mr. obama will speak about the election later on, today. atretary clinton will speak 9:30 a.m. according to her campaign. republicans delivering another blow by keeping control of the senate, setting the stage for president-elect trump tonight a broad conservative agenda. the market imply chance of it -- december rate hike is now a 76%. that is what you need to know. for more on equities as we look 2:00 back clawba from those losses we saw overnight, julie hyman is digging deeper. julie: we have seen a bounce back from the lows, overnight when the s&p teachers fell as much as 107 points, now coming

back and only down about 21 points. we also watched gold closely because money has been coming out of stocks and some of it has been going into gold. , but it seen a bounce has moderated, just as the loss in stocks have. the movement we are seeing in gold is a look at the standard deviation from the normal move. all the way out here, we have today's move in gold. that is how unusual it is, but when we have a u.k. vote to exit the eu, we were looking at more like three standard deviations. i have also been watching currencies and the japanese yen. here is yesterday's move in the yen. we saw it gaining against a --

losing against a broad basket of currencies, including the mexican peso. here is today's move and all of these currencies losing against the yen. this is another manifestation of that gold trade we just looked at. investors are looking for what they perceive to be a safer area in what is looking like uncertain times. the mexican peso is down the most against the yen, about a 9% loss. david: president-elect trump made his victory speech at 2:30 a.m. eastern time in new york. it may have something to do with that bouncing back in equity markets. he struck a conciliatory tone with domestic people and internationally. >> i want to tell the world community that while we will always put america's interests first, we will deal fairly with everyone.

all people and all other nations. we will seek common ground, not hostility, partnership not conflict. david: we are joined by the senior white house correspondent who has been following the and the whitegn house to correspondent. this is a standing victory -- stunning victory. why are we so stunned? when you look at right track, wrong track numbers, it indicated that able wanted a change. historically, it is difficult for democrats to become a third term. there are a couple of reasons why and one is that donald trump made so many divisive statements that there was a collective wisdom that he could not possibly alienate women and immigrants and mexican-americans and muslim americans and the college-educated sensibility and

be able to pull together enough coalition to win. 2012 was supposed to be mitt romney's proof that you need a wider coalition besides white men. the other part of it was just pulling. -- polling. this: the indications at point are that he did not alienate enough to drive people not to vote for him. you had a third of hispanic males voting for him, college-educated white people voting for him. where did we go so wrong? lothis will be examined a and it has been, but there are a couple of things to watch for. one is clinton's inability to hit her target on that obama coalition from 2008 and 2012. is a transition that has started as president obama gives his remarks, tomorrow. the president-elect will visit with him. what does that transition look

like and i understand president obama will start an international trip, next week. what will he be doing differently, introducing donald trump to world leaders? >> he wanted to make this the final trip of his presidency with hillary clinton, his former secretary of state. be a veryg to different trip and he will have to reassure world leaders that u.s. foreign-policy will continue without any major changes as donald trump has proposed, and he will have to reassure a lot of our allies across the world that things will be ok. he will try to strike a conciliatory tone and tried to bring the nation together after a very shocking victory by donald trump. david: we are all line. the hillary clinton and the loss she suffered, but this was also a loss for this white house, particularly president obama. what does this do to his legacy

like for example, the supreme court? >> there are so many parts of his legacy and agenda that have been repudiated by donald trump. he said on day one he will try to revoke all of those. the president named two supreme court justices and has a third nominated but the senate has block the nomination and now the donald trump has one bank the presidency, there is basically zero chance that merrick garland will go through. the president's legacy is likely to take a setback because of donald trump's victory. mention thatnt to hillary clinton will speak today at 9:30 eastern. i want to thank our chief white house correspondents. jonathan: joining us now,

pimm:'s head of public policy -- pimmco's head of public policy. i want to ask a question, the market trades on hard data, gdp, payroll, what often misses is the electorate. there seems to be a big disconnect in june with the brexit vote and overnight here as well. what do you guys do to try to understand the market more? >> political events have been part of our secular thesis that we have been more cautious about, just the global economic outlook has of these vague political points, brexit, the u.s. elections and elections in europe. pollsters got this wrong, prognosticators got this wrong and the markets got this wrong. they were pricing in a status

quo outcome. i think what markets want right now is the donald trump that we saw last night. they want this more sober, more rational, more disciplined president and not necessarily the candidate that we have seen over the last 18 months. if we get back, the market would look through some of what we have seen to some of his more policies. jonathan: the bond market is capturing the story. you guys had a position. deficit?pect this >> that is a critical point because on government spending, on tax reform, you need congressional approval. there are things that the white house can do without approval, but on those policies, you need approval. the fact that republicans kept the house, they kept their majorities, they also kept the senate which was key.

is nots that this necessarily going to happen, but it is certainly more likely than if we had a divided congress. alix: moving inflation expectations is a different thing. this is five-year and they also popped and this is more the market inflation expectation, mired lower as well as household expectations. what is the follow through this kind of chart for the market? >> that will remain to be seen, but there are certainly a lot of things about trust policy agenda that would be inflationary, so his stance towards deregulation, his stance toward more fiscal stimulus in terms of government spending, tax reform, all of those things could actually pushed up inflation and maybe get the inflation that the fed has been looking for over the last year or so? -- david: will it be pro

growth? question and it will depend on what type of fiscal package we get. atyou just see tax reform the very top levels, maybe not, but if you see big government spending bills with infrastructure, then you could see that being more translating growth.t of the gdp and bullets olivia: and the rise, multiples contract, earnings will disappoint and -- that is sort of the other side of the progrowth reflation trade. ,ne of the chances we see that what would have to happen for that scenario to play out? >> these are all possibilities and i think this is why the market has repriced the way it has because the market does not like it's and there is a lot of uncertainty around beltran's agenda -- around donald trump's

agenda. we don't understand what his economic agenda is going to be, so in the days and weeks ahead, the market is going to be looking to donald trump to fill out some of the details of his economic policy agenda and also look at who he surrounds himself with. who will you float for treasury secretary, for other economic positions, because that will make a big difference the markets? the markets just don't like governments that can do things, they like gridlock, billick the certainty of a government that cannot do something, so from an outsider looking in, a few were told that the republicans would have congress and the president, you think they could do whatever they want, but i wonder whether he can work with a lot of people within the republican party. will we see those groups come together? >> conventional wisdom is that divided governments are better

for the markets but the stock market has done better under government party control as opposed to almost any other scenario. but is a bit of a contrast you are right that there are a lot of differences between the kind of paul ryan republicans and the kind of donald trump republicans. tax plan looks very similar to paul ryan sacked and, so i think that donald trump is going to find some areas of commonality and try to push through those because no incoming president wants to see this ask it -- risk assets selling off before their inauguration. it is not an ideal situation. david: a lot of people think donald trump copied paul ryan's tax plan. pimmco's very much, head of public policy. talk aboutwith us to what happens in congress, next. this is bloomberg.

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jonathan: this is bloomberg daybreak. with the eyes of global financial markets on washington, d.c., and the occupier of the white house. next up, president-elect donald trump. market pricing for a status quo and that is not what it got. equities, futures down across the board. -27 points on the s&p 500. a resilient session for risk assets over in europe. the ftse treading water and the dax only down by 6/10 of 1%.

this is the situation. a marginally stronger japanese yen. dollar-yen up by one full percentage point. david: the election, donald trump won the presidency and will inherit a pop -- republican congress of both houses. he blurred party lines in his rise to become president. joining us is a former presidential candidate and former house majority leader. thank you for being here. i want to start with you being an expert into matters of congress and how congress works. we have a republican house and senate. how much aligned will they be with president-elect trump? >> it gives him a good start, but the first job of any president is to work with the congress. i always tell people congress is

hard to work with becn au ie end, it is a substitute for violence. congress, ang committee of 535 people, to mediate big conflicts between the american people on a variety of issues. is toesident's first job leave that congress and that means that he or she has to spend inordinate time talking to people, listening to people on a day by day basis to try to find those magic compromises that really get things done. that is going to be his greatest challenge, going forward. david: as president-elect trump goes forward, how much capital does he have because of this rather stunning victory? the people have spoken and they said who they want, and congress cannot go against him to quickly -- too quickly.

>> they can't, but sometimes presidents overestimate the mandate they have gotten on the american people. the american people want action, they have many disagreements over what that action should be, and the tough job of a president and the congress is to figure compromises that can bring enough people together around a solution on a particular topic that you can get the votes for. the only thing that counts in congress is votes, and so you have to really work, day by day, meeting after meeting, and i cannot stress enough how many meetings presidents have to have with members of congress to try to find those compromises. the mandate is there. at the end of the day, this will take a lot of rolling up sleeves and hard work. person that has to be

working pretty hard is the speaker of the house, paul ryan. he is very involved in tax reform, something he wants. how much leeway does mr. ryan have with his own caucus to make real progress in tax reform? >> i lived through tax reform the last time we really did it in 1988, so i know how prickly and difficult that subject is. everybody wants it, but everybody has a different idea of how to do it, and people feel strongly about their ideas. he is going to have his work cut out for him, as will the president and all the other people in congress to figure a path through it were they can get the votes they need to do it. it is one of the toughest subjects to deal with, because everybody wants their thing in the code or their thing not taken out of the code.

ryan a tough job, and paul has thought a lot about it. he was the head of the ways and means committee, so he has a lot of thought and has done a lot of work, but it will take a huge amount of work to get that issue done. david: as president-elect trump goes forward, can he ignore the democrats? does he need to pay attention when the majority has both houses? >> he has to pay attention to everybody. it is a mistake when a president thinks i have a majority in both houses, i just need to deal with my people. two rules you have to remember, congress can only do one big hard saying at a time. when it is doing a big hard reform, it tax really is important to do it on a bipartisan basis so that after

you get the compromise done, if you can, then the people of the country will subscribe to complying with that law or change that you are making. withresident has to deal the republicans, obviously, but he has to deal with the democrats as well, and it means he is going to be sitting in hundreds of meeting day in and day out to find those compromises. david: thank you so much. inathan: we want to bring fema's global president and founder. great to have you on the program. on the campaign trail, very critical of fed chair janet yellen. does that become an issue? >> i think the issue right now is the vision of where growth is going to come from. there was lots going on on the campaign trail.

this was a complicated election, so i think that we already talking about how do you get to astor growth? the big emphasis last night, and i think it was a great acceptance speech, was to talk about the growth rate doubling, and talk about the inner cities, and that does not involve the personnel decisions at the fed. jonathan: talking about the growth rate is a wonderful conversation. i want to talk more about detail beside the investigations. market participants want to understand what kind of relationship -- what the u.s. relationship is going to look like. explanation good that the u.s. wants foreign countries to know that we are going to find a way to work fairly with everyone and he said that straight out, with everyone. that is good for americans. it is america first because we will find ways to make the u.s. grow and it has not been working well.

look at the low growth rate we have been suffering for years. alix: if you take a look, we do see higher import taxes for goods. you also see illegal immigrants deported. that winds up hurting gdp. if you combine those, you could see a recession in a year or two. 2017 is a long time from now, so the emphasis right now is the surprise to the public of president-elect trump winning and being president, and then finding that path to growth, and we know clearly what it means, a lot more small business investment, and that means hiring young workers, minority workers, there is a way to make the country go faster and better, and i think that is where all the emphasis is. jonathan: on friday, you talked weak a week jobs report --

jobs report. i want you just draw a distinction between what the market will trade on, which is hard data and what the electorate is currently trading on, not just the u.s. but in the u and across the eurozone. that phenomenon, the markets's inability to price political risk, how will that evolve from here? >> two things have been going on. real median income has been falling. it means the average for americans have not been good times and it is the artificiality of the environment. low business investment, small businesses are not creating jobs the way they normally do, so those have to change, and that is the way i would explain it. when you think about what donald trump reached out to, it was average americans, and they voted pretty loudly, last night, so we have to go with that and find ways to make a better

environment for average people will stop alix: growth is better, inflation picks up, does the fed have to hike faster? >> we should not think of the fed as the independent actor, they have said clearly there depended on data, and of growth is exhilarating, and there will be opportunities for hikes, but that is not -- they are not controlling the economy, and that is not what would be to join the economy. the market has been fixated on this for too long, and it should be thinking about how do you get tax cuts through, will there be a repatriation of capital? jonathan: next up, hillary clinton supporter. this is bloomberg. ♪

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donald trump beat hillary clinton and a stunning upset of the political establishment to become the 45th president. in his speech, he struck a very inclusive town. -- inclusive tone. time for america to find the wounds of division. to all republicans and democrats and independents across this nation, i say it is time for us to come together as one united people. president obama has invited president-elect trump to meet him at the white house. mr. obama will speak about the election and secretary clinton is expected to speak in just under an hour. republicans delivering another blow to democrats by keeping control of the senate, setting the stage for president-elect from to enact a broad conservative agenda. a big question is how this will impact the fed rate hike path? chance for a fed

hike in december is now 76%. jonathan: breaking news, the mexican peso is not quite at a session high, but it is weaker against the dollar. by 9.85%.o, up the mexican central bank holding a news conference earlier, refraining from enacting measures to enforce the peso. the central bank will take decisions and the board feels are needed. after the aggressive mood in the -- move in the fx market, still a significantly weaker currency. the mexican central bank refraining from announcing measures for now. , s&p futuresown down -34, it was much worse than that. we have eased some of the pain of the last couple of hours.

the tone of that acceptance speech really helped the market along. switching up the board, here is the state of affairs. a stronger japanese yen. what does mark gallegly think? the also specializes in distressed debt and is a member of president obama's economic recovery in his report and is here with erik schatzker. eric: we have made multiple references to how financial markets are responding to donald trump's victory, the republicans holding onto both chambers in congress. from an investor's point of view, is it possible to price this in, even what we do and don't know? markets don't lie, so everyone is making a decision, right now. it is clear that overall for a

time, and id of invest for a longer time, but for me, one of the core things is what is the likelihood that you will have some stability in the world and if you are on the side of the aisle that says volatility is going to increase, it is harder to price it in. for: this position is good both of your businesses, good for distressed debt investing and private equity. will we see dislocation? to hand it to donald trump. he has run the table. that is a major event for someone who has so little support from traditional republicans. you have to look at what he is going to be doing. his first couple of comments were somewhat more reassuring than the campaign he ran.

we will see what he decides to do over the next number of weeks. if you look at the core things he has talked about, what he believes about trade and foreign powers and foreign affairs, what he thinks about immigration, these are all pretty radical things. even in the u.s. economy, a complete transformation over what has happened over the last eight years adds to uncertainty and volatility. unless he moderates some of the things he has been saying, it is a difficult market for that stability. do you expect a growing economy? mark: i expect a growing economy. the u.s. economy does not move based on any one event in the short-term. the economy grows a couple of points each year and it looks like that will continue. eric: if you have a surprise like this, it can often be followed by another surprise. if you look at other elections

taking place, and a continuation of what i would characterize as real surprise moments, then i think the cumulative power of that could be quite -- i would say that it is hard not to call it that. eric: you made reference to europe. do you think that what started with brexit would continue last evident inill be france and germany? mark: is not my core confidence. line, could you see this in the french election and the italian number -- election and what is going on in germany, absolutely. there is a sense that if you are perceived to be on the elite side of things, then you can be pushed over the ledge.

a distressed debt investor, the firm trades in public securities. the center bridge go into this election with a trump hedge? mark: we are in the private equity business with a hedge fund. the hedge fund business is focused on special situations, distressed credit. i don't want to talk about our positioning, but i will say that if the market is trying to assess probability weighting of what is going to be the outcome, it is hard to say i was not surprised by this. eric: i know you are reluctant, but did the positioning of the firm reflect that, the same expectation that this is not the result? you mentioned that donald trump has made a lot of promises. there is immigration, trade

policies, specifically on the economy and finance. what do you think he will do? mark: this has been an election driven by personality and by a few big themes. very little on specifics of his policy. what he is going to do will reveal itself over the next couple of months. it is not totally apparent. was asked how disruptive he will be or his policies, on the very optimistic side, i heard david say he believes growth will be unleashed in 4% per year. i don't see that. i don't see the underlying demand requirement necessary for the kind of capital investment he is talking about in the private sector. if you want to have that kind of investment, you increase certainty, not volatility.

think you, your firm, your investors would do any worse under a trump presidency than you were to have -- then you would have under a lenten presidency -- then you you would -- than have under a clinton presidency. that questionsked eight years ago, what with the average investor have said -- headset? they would say we would do a hell of a lot worse under an obama presidency, but the markets soared, and that is the reality. under a trump residency, it is too early to tell. hillary clinton's the even the near term, the likelihood that you knew who would be around her , that you understood her ability to think about our relationship to the rest of the world, that was a high

certainty, so the markets reaction in the last couple of days tell you that the market is nervous. eric: i'm certain you hoped we would be here talking about who might be treasury secretary and who could get past elizabeth warren and into government. there are not that many people with deep financial and economic experience in the truck tent -- in the trump tent. who would you like to see occupying those roles? we can choose among the obvious known names. mark: at all think any investors would look at their own backgrounds and say that they have deep public policy experience, and that does that mean they cannot play the role, but it does say that around all

caps campaign, there is not a lot of people who are well-known for their policy chops. eric: that sounds like a lot of uncertainty. ofk: you will see a lot republicans who previously were at best quiet and it worse negative on trump come out and want to be part of his organization and his administration. have anhappens, he may opportunity to choose some really first rate people. eric: business did not come out swinging for trump. who would business like to see? mark: i don't have any names for you, because i think there are so few people who have been around him. i don't know if you mention stephen, but he has obviously been a key person for donald trump.

eric: do you feel differently about the results of this election and the prospects for the future? equityn the private business, i try to focus on the micro of the company we are investing in. what is its competitive position, what is its strategy, and how does a management team that into all of those things? what changes can we make to improve the business? as a citizen, i think more broadly about what is the united world. position in the on the first, i can handle that, i can handle the micro. on the second, it is to be determined. donald trump is a wildcard.

on his specific policies, he is a wildcard and we will see how it plays out. eric: how would you describe your movement, this morning? libby: mark: i'm -- mark: i'm fired. eric: thank you for joining us. jonathan: i want to draw your attention to a move in the market. the dollar index now flat on the day. many investment committees have gotten roundtables and wargames and not many of them came up with the idea of a president-elect trump and a dollar index that would be unchanged. the neat that is a much stronger yen and a weaker dollar on that currency pair. quite remarkable. alix: no one would have said that, 24 hours ago. if you still say somewhat of a flight to safety with the yen, what does the doj do -- the boj do?

it is an enormous hike. jonathan: the boj and the ministry of finance in japan are said to have gotten together, today. i sit here thinking how do they not hike in december. billy thing that has changed is a political unknown comes into the mix. they should be hiking. alix: jp morgan saying just that. we will be hearing from many individual speakers later on in the day. president obama will speak later today at the white house, plus the leader of the house, paul ryan will speak at 11:15 eastern and it just about 45 minutes, hillary clinton will be speaking as well. -- much rhetoric coming out of congress as well as the white house. jonathan: coming up, we now know the next u.s. president, but who

will be the future treasury secretary? this is bloomberg. ♪

emma: this is bloomberg daybreak. coming up, bloomberg view columnist and chief economic advisor joins us. david: this is bloomberg. donald trump won the battle for the white house and will inherit a public and congress. he said some pretty aggressive

goals on trade in jobs and growing the economy. the question is know what he needs to do to achieve those goals and who will help to get that job done. we are joined by don merrin, chairman and founder of program.e to the you spent a lot of time on wall street and a fair amount of time in washington. address that question. if you are advising donald trump, how does he begin to address the goals he set for himself? >> the first thing he has to do is calm the nation down. you have to see him as a statesman. the second thing he has to do is take the key issues for him and address them. the wall, infrastructure, the traditional conservative ideas of abortion and gun control, but people want to understand where he stands on those in this new

way as president-elect. he then has to think about both the issues and how we can go about accomplishing them. that is the key element. he is not from washington and that is why he was hired. none of this is going to be done without congress. the first step is to get someone that can work with the congress but is not of the congress. david: mike pence will be his vice president. he has been in congress. what sort of team people does he need around him to handle that congressional part of it? can he needs people that get along with congress on a bipartisan basis. he needs the democrats to get anything accomplished. he needs a couple of people who are genuinely knowledgeable about both sides of the issues. let's say you start with infrastructure, talking about $500 billion in infrastructure. that would be a fabulous program

because it would be highly visible with jobs everywhere. on the other hand, it is a way to have a porkbarrel. we could easily start that way and get mired down in congress. you need a very good person to work their way through that. -- we you spent time on just had a discussion about inside washington versus outside. from your experience, this he needs someone with real washington experience, or could he take someone off of wall street and put them in as secretary of treasury? we are not insular, but we are insulated and that is the first thing to think about. you need someone that can have a broader point of view and has credibility in that way, so i don't think it has to be someone in washington, it has to be someone who respects the process?

i have watched too many businessmen go down to washington and think they can do andjob by ordering people doing memos, but it does not more likeway, it is making sausages were the end product is great, but you hate to see the process. you need to pick one or two crucial items that most reflect what you promised your base and go after those. we had a former majority leader of the house on the program and he said that congress can only really handle one big thing per year. what is the one big thing you would recommend donald trump take on? >> he has a couple to choose from. one is taxes. for the most part, taxes are easy to do on repatriation and corporate. the second thing he has to deal with his immigration.

i would say the biggest thing to do a summit in that creates jobs and is visible that creates jobs and is visible, and that is why interest -- and that is infrastructure. put a new program that is visible on every street corner in america, weekly, which is what you can do. david: a beginning to an agenda, that is pretty great. peopleit would calm down, showing the real dollar trump as someone who is thinking about the people. david: thank you so much for being here, chairman and founder of lightyear capital. alix: coming up, hillary clinton expected to speak 30 minutes from now, plus more on our all-star guests reacting to the donald trump victory. s&p futures up by third -- off by 32 points. ♪

jonathan: from new york city, this is bloomberg. the tone of the markets nowhere near as bad as it was a few hours ago. futures were down 5% at one point and are now down just 1.4%. dollar index is now unchanged on of day and the only price the d10 the dollar is substantially weaker is against the japanese yen. year, higher on the 10 aggressively so by nine basis points. let's get across to julie hyman. julie: steelmakers, a lot of rhetoric about trade and also about tariffs that other countries put on u.s. steel with donald trump having said on the campaign trail that he would

respond with the u.s.'s own tariffs. , newport and other natural resources are soaring in early trading. we are watching health care closely, will there be an affordable care act repealed? will there be changes to it? that looks like it is what markets are pricing in. biotech stocks are rising. a lot of rhetoric by hillary clinton and by trump about drug pricing. it is unclear whether there will be some kind of movement on that front. we are seeing biotech companies higher. smaller sectors, private prisons. the -- federal government recently said it was going to toe you are contracts private prisons and we saw stocks drop sharply. now they are coming up. corrections corporation of america and geo group are both trading sharply higher. definitely something to watch.

coming up in the next hour of bloomberg daybreak, a bloomberg view columnist. looking forward to that conversation. really interesting moves in the bond markets. we wonder if that continues from here and whether the idea that we get this deficit spending becomes reality, somehow. david: we will assume that is what is going on. then you get bigger inflation, what does this do for the bed, too many questions and not enough answers. jonathan: a lot to discuss as we count you down to the cash open. ♪

nathan: good morning.

welcome to bloomberg daybreak. i'm jonathan ferro alongside david westin and alix steel. a political surprise ripping through the markets. dow futures down. s&p futures erasing so much of the losses we saw. switch up the board. yields up nine basis points. the dollar actually very stable. on the dollar-yen cross you see a big move. alix: here's what you need to know at this hour. donald trump beat hillary clinton in a stunning upset of the political establishment. he will become the 45th president of the united states. morning hech this struck a much more inclusive term than what we have seen through the campaign. >> now it's time for america to bind the wounds of division.

we have to get together. all republicans and democrats and independents across this nation, i say it's time for us to come together as one united people. alix: president obama has invited trump to meet with him at the white house. secretary clinton will be speaking at the new yorker hotel at 9:30 in new york. republicans kept control of the senate setting the stage for president trump to enact a broad conservative agenda. how will it affect the fed's rate hike? the chance is now 77%. yesterday it was 51%. julie: i wanted to look at futures. because of the big curve we saw in those futures overnight.

we seldom fall to the lows of them falln -- we saw to the lows of the session. now down 26 for u.s. futures. we are watching treasuries very carefully. there's not only thing calculation of people trying to handicap what the fed is doing in december. there is also what donald trump will do in terms of fiscal stimulus. will there be new spending programs? will there be tax cuts? we are seeing a bump up in yields. quite an extraordinary one. we are also seeing a widening of the yield curve. you see this dramatic move.

this reflects on the one hand those decreased expectations that there will be a rate increase to some extent in december. the spending plans and tax cuts being reflected in trade on the 30 year. this morning. not as much as it was at the highs of the session. up by 2%. also an inflation hedge. thed: for more on historical election last night we bring in michael mckee, bloombergs economics and politics editor. connect them. we had a stunning turnaround. how are the markets reacting? >> the markets are reacting as you would expect. they are down because there's a

lot of uncertainty. nobody knows what's going to happen. we don't have any experience connecting the dots between what donald trump says and what he might do because he says all of these off-the-wall things. how do you price that? we are seeing them try to figure out where the bottom is and where they should go. largelydip, that's foreigners who don't get u.s. politics knee-jerk trading. david: we saw something similar with the dollar. it feels a little like brexit. >> the trade is much the same. where we have gone with the british since the brexit vote is we have seen equity markets stabilize the we are not seeing real stability. when the pound went down it did

not really come back up again. we will have to wait and see when they start building uncertainty premiums into the dollar where it goes. is it going to be more about anti-immigration anti-trade or more about stimulus? deciding what priorities the trump campaign has little hints at where the market is going to go. if we get this amount of stimulus on the fiscal side but we lose this amount from trade where did we end up? that's the kind of ms people will be trying to do over the coming months. .avid: there is a third way that is tax. tax reform is coming through. how would markets react to that? both sides of the isle have been calling for tax reform for a long time. are going sure they to get the comprehensive tax

reform people are looking for. it was forr how hard ronald reagan to get that through. if they are able to lower corporate taxes and bring some money back that is an offset to the money that donald trump wants to spend on stimulus. that may reassure the bond market a little bit. alix: thank you, michael mckee. hillary clinton has now moved her speech to 10:30 a.m. eastern time at the new yorker hotel. our next guest says the republican's sweep will result in a more expansive economy. joining us is portfolio manager at janus capital investment. what's behind it? >> the initial thing is the gop is very pro-business. have a strong impetus for tax reform, lower marginal taxestes, lower corporate

and some repatriation agenda that brings money back into the u.s.. you will also have increased focus on spending. that has been enunciated by both hillary clinton and donald trump. you are likely to see trump advocate for that and a gop congress push for that. alix: you have anti-immigration policies. hsbc says we could actually see a recession over the next one to two years. why is that not the story today? it's's a fair question and a risk. i think it's overplayed. the regression from trade is going to be difficult to do. part of the issue is donald trump really doesn't have a mandate. the gop does. if you look at elections around the country into vegetable -- individual gop members of all pulled better than

donald trump did in their areas. they are not going to be called into a donald trump anti-trade rhetoric. there going to do things that are more mainstream gop thinking. a lot of that is pro-free trade. all right and is a big advocate for free trade and he is still speaker of the house. donald will make deals to get things done. the easy wins are increased government spending and cut taxes. i want to talk about the markets. did you imagine that the dollar index would be unchanged right now and that futures ahead of the open 22 minutes away would only be down one percentage point? what do you make of the resiliency of risk assets? give you a little

nuance. i actually did. i would have immediately thought you had a risk off trade because of a volatility of a donald trump presidency. we don't know what he's going to do. if you were to have a republican sweep you would have a very progrowth agenda going forward for business and that was going to create a massive buying opportunity. you would see the s&p run. you would see the dollar strengthened because of the growth relative to other markets around the world. you would see rates rise because of the positive expansion of all of these maneuvers. once the initial risk off shock adjustment faded you actually set yourself up for an even better growth profile than that election. david: what about deficit? how can this be done without borrowing a lot of money?

when bill clinton came in one of the first things they did was persuade the bond markets they were going to be responsible. like bill clinton said those bond markets are extraordinarily constraining and important. one of the risks longer-term is what this does to deficits. we will see whether or not the gop takes advantage. first is simplifying tax repatriation so you can bring money back on shore. the second one is with respect to the affordable care act. do they reform the affordable care act or do they kill it entirely? either of those things would bring a lot of money back because it's a highly deficit expansive policy. we will see how the government deals with that. it is worth reading comforted by the fact that the traditional gop is very conscious of deficit spending and probably not a big fan of that.

clearly the rhetoric president trump has said will be expensive for deficits and that's a worry. much.an: thank you very let's continue the conversation on the market. reactions to trumps victory. we bring in bloomberg view columnist. great to have you on the program. there are two stories for me. what's happening with treasuries. a steeper yield curve. is that a regime shift or just the knee-jerk reaction to a political surprise? it's a reaction to the possibility of two things. fiscal stimulus and protectionism. both are inflationary and on the growth side one upset the other. all of this together calls for higher yields and a steeper curve. you can say the low

yielding world is over or we will get foreigners coming in and buying any kind of selloff because we have better yield. a lot will depend on what president-elect trump does next. if we get the trump we saw at 2:30 this morning which is a ,ery gracious, unifying trump yields will go higher. but the equity market will remain relatively calm. if we hear the anti-trade rhetoric in particular we are likely to see the equity market go lower and the treasury market will be torn between two different things. the flight to quality versus the heart of fiscal spending. a lot will depend on what happens in the next few days and what mr. trump signals. alix: over the next few months

we have seen the 10 year term premium start to read rate higher. trump climbing higher as gained in the polls. here we are grinding ever higher. how high do you think this can go? two. can go to the big question is what does the fed do. the markets are right in repricing expectations of a fed hike in december. that's absolutely right because it's not clear how long this market turmoil will persist. if the market turmoil does not persist in the fed will be tempted to hike and market expectations will go up again. ,ou would get the policy impact fiscal impact and trade impact. a lot will depend on what is said. thisbroadly i can't stress enough, yet another improbable

that has become reality. that speaks to something much bigger that is happening on both sides of the atlantic which are fundamental change in the way politics is conducted and therefore how the economy finance and institutions will respond. in the follow-up to the situation you just post, a question on markets inability capacity to price risk around significant risk events. what have we learned so far th year that we can apply to the political risk events we have on the horizon in the next 12 months? we have learned that we live in a world where the improbable can become reality very quickly. what we haven't learned is how to price that in. we have a very interesting contrast between what the system is telling us and the signals drawn have been consistent. brexit. mr. trump winning. we are seeing one improbable

after the other materialize and yet markets still believe somehow that central banks are going to be able to maintain order through this. be the main to question at the macro level. how long can these contradictions persist. i wonder if one of the big shifts we are watching is president-elect trump taking controls on the economy back away from the central bank. we have been depending on what the fed is doing and what the doing. are we seeing a shift back to the administration playing a very substantial role? >> potentially yes. what we are seeing around the is dissatisfaction at a policy stance that over relies on central banks. it delivers growth that is too low and it delivers noninclusive growth. when that happens the politics of anger dominate. you get an anti-establishment getting greater

traction. people lose trust in expert opinion and you end up with these results. have athese improbable's common exclamation which is you cannot run sophisticated market systems at low gross that is noninclusive and not get breakage economically financially institutionally and politically. that is what we are seeing on both sides of the atlantic. jonathan: let's tie this together with the federal reserve story. at the end of the year we will get another summary of economic projections. you have always talked about the ultimate destination and the journey the federal reserve is going to be on. the idea this is going to be the loosest tightening in history. things will go shallower and shallower. at what point of a president trump four-year term do you start thinking that actually maybe it won't be the loosest in

history? maybe things will be a lot steeper? >> trade policy is going to be key. if we get the combination of fiscal expansion which i think we will get and protectionism which i'm not quite sure about, if we get both the fed is going to be dealing with significantly high inflationary pressures and is going to be put in a really tough situation. keep an eye on the trade site. that's going to be a very important factor going forward. david: i want to take us back to some of your writings. you wrote in the financial times this morning connecting what's happened with donald trump with your writings there. it says an unusually unsettled and divided america euros for a clear vision of where the economy is going and one that

supplements the usual economic indicators with a feel for what lies ahead with wage growth health services and education for their kids. what is your view of what president donald trump could do with this opportunity? >> first move quickly with congress on policies where there is broad agreement. corporate tax reform. deregulation. the interest rate. infrastructure. he can move on a set of policies that he has spoken about in his campaign that will promote growth and a sense that there is forward movement in the economy. him is to harder for refrain from implementing other promises. dismantling nafta. slapping tariffs on mexico and china. he needs to refrain from doing that. needs to be able to communicate in a way that unifies the country.

fromse the other message last night is that the u.s. is deeply divided. to govern be able well during this administration who going to have to have some unifying team. there is a possible path in terms of what he does and how he communicates it. he's going to have to move quickly before all these other tensions and contradiction of the new normal having lasted for so long before those elements start to get into the driver seat. david: thank you for being with us today. he is also the author of the only game in town. coming up, he was a major force in the u.s. senate for two decades and he prided himself on being able to work with republicans and democrats alike. trump heame to donald backed an ad involving a mushroom cloud. we will talk about last night's

results next and more on the surprising market reaction to the election with jeffrey's chief market strategist. this is bloomberg. ♪

putd: as a result is packed out an ad that included a mushroom cloud because he was worried about the dangers of nuclear war. senator bradley joins us now. thank you for being with us. >> good to be with us -- you and your new life. david: we all have a new life this morning with president-elect donald trump. you have prided yourself on

being bipartisan and working across the aisle. look forward with this really contentious election we have just put behind us how do we put this country back together again? trump beganonald last night by saying we should come together. that's positive. we have to do that heal the wounds that are out there. to have tos going reach deep into himself and his own soul and find a way to express some regret for some of the language that he used during the campaign. that open the wounds for a lot of people in america. he can do that that will be a major step forward. i also think his cabinet will be absolutely critical. to have a cabinet that reflects the country meaning is he going to have a cabinet that can govern for all of us? will he have steady hands?

will he have people of great reputation? i think we have to see what he does. there is onethat number that's very clear on economic policy. 4.9% unemployment. that will be interesting to see how he gets that lower. there is a chance to reach across the aisle and we will see what happens. david: does he need to have a democrat or two in the canada -- cabinet? >> that's possible. i think that would help. i think that it's more personal. hes got to demonstrate that recognizes what the country needs and he's able to reach an himself and give us something that is different. politicalre in a campaign that's much different than when you are governing. when you are governing your

governing for everybody. he's got to be able to convey that to the public at large. does it mean it's important how many women, black people, hispanics in the cabinet? there have been so many divisions throughout the campaign. >> that would be one thing you would look at. the major thing you would look at is the quality of the people. are they people we are going to trust our life with? competencee some that would be able to give him advice and will he take that advice? >that's really the question. over the next couple weeks we will get a good picture of what a trump administration might be. david: you are a lifelong spiritt and you know the of democrats and how they are coming out of this election. if mr. trump can make a gesture are the democrats -- could they

take the hand that is offered them? >> i think it's going to take a little while. i think there's got to be a real effort to rate shout -- reach .ut sincere effort. that means personal contact. getting to know people and convincing them that you really care about them as well as the people that elected you. i think change is an important thing. i look at donald trump and i think his major constituency were people who were voting for change in washington. many of them voted for obama. clearlyo something very . if you want real change in washington you reduce the role of money in politics. public financing of congressional campaigns and supreme court justices who would reverse citizens united and

return the power to our people and not to special interests. that's one thing he could do. that's what a lot of people voted for him to do. all of those people that are heard by technology and globalization, that was a vast part of his constituency. the 4.9% unemployment is one of the key things. another aspect is what are we going to do on immigration. had amber i once conversation with the founder of singapore. he said the 21st century will be determined by talent and the chinese have a talent pool of 1.3 billion people. but the united states has a talent pool of 7 billion people. as long as it stays open. that's the real question. a lot of walls up those people are going to go

elsewhere. that doesn't mean massive immigration. what's our face to the world? david: he ran on a platform that was not particularly recep to immigration. can he make that pivot without losing his support? >> i don't know. i think that's very difficult. i think the constituency that he had had very clear ideas about what he was going to do on trade, immigration. the real question is will he followed through on those things? will he follow through on tariffs against the chinese or defaulting on debt? i don't know. maybe that was just campaign rhetoric. that's why only time will tell. only time will tell if he's able to reach out to people and what is his agenda. he ran on big themes. taxes, trade, immigration. to me and those are unknowns at this point.

david: thank you, bill bradley. thanks for being here. andthan: we are one minute 10 seconds away from the opening bell in new york city. the story in europe looks like this. down 2% and more at one point in today's session. then we erased all of the losses in the day. the stoxx 600 pretty much unchanged. a remarkable turnaround for european equities and futures as well. u.s. futures limit down. aggressive repricing now down just .8%. alix: it's like investors learned from brexit. very strong. some analysts saying you could still see more short-term downsides. jonathan: what strikes me is the

idea that a couple of seconds before the cash open in new york the dollar would be unchanged, different than many people anticipated. a much more resilient risk asset at the moment. we are lower but not as aggressively. -16 points on the s&p 500. expected,big move as a substantially weaker mexican peso. 10 full percentage points. crude unchanged. the unexpected. 25 seconds into the session. let's get you up to speed. julie: stocks are down. a far cry from the depths of the lows of the overnight session in futures. we've got out of the gate the dow down six points.

we are seeing a little bit of a delay in some stocks. now the dow is slipping higher. we are seeing opening volatility out of the gate. down.sdaq we have been hearing from a lot of strategists this morning. chief u.s. equity strategist at goldman sachs is keeping his projection for the end of the year. the equity market response to the election result will be limited. tom lee is cutting his year-end forecast by 100 points but he is still looking for a 7% rally. he says popular presidents do not equate to bad economic and stock market outcomes. interesting that in the short term we might see some selling. right now we are seeing some flipping around. through the end of the year we

won't necessarily have negative reactions here. let's look at some of the movers we are watching this morning. we are seeing a rally in many of the bank stocks. the widening of the yield curve here. bank of america is just one example. we are seeing again in gold prices. we've got amazon.com. a lot of the tech shares are trading lower this morning. amazon is among the tech shares that are weaker. big drop in hospital stocks this morning on the implications of a trump presidency for the aca. details in just a few moments. sectors within the s&p are doing well. industrials, financials and health care. .ulie: steelmakers there was a lot of rhetoric on the campaign trail about trade and terrorist.

u.s. steelhing the sector should stand out as a unique beneficiary of a trump presidency in part because of infrastructure spending. big increases this morning. we talked about prisons earlier. some private prisons companies are trading higher. there was a ruling a few months ago that the federal government would be contracting less prison business. gunmakers are actually lower. this is a bit of a surprise this morning with a republican winning the presidency. you won't necessarily see that surge among gun buyers on concerns that some of their second amended protections are going away. you don't have that urgency on the part of gun buyers it doesn't necessarily mean a list for gun sales. jonathan: let's get some

reaction from jeffries chief market strategist joining us on the phone. thattold you yesterday donald trump was going to win and the s&p 500 was going to open unchanged how surprised would you be? >> i would be pretty surprised. the price action has been nothing short of surprising. no question about that. jonathan: do you expect the asset classes to carry on being this resilient? to our clientse that the risks of a donald trump winward mispriced in the market place and we recommended lightning everything up earlier this week. it was a very messy overnight session. it felt like kind of a good idea. you take some comfort in particular from donald trump's acceptance speech. if the first thing he said was you're going to build walls and lock her up you would have had a

very different market reaction. market is very much in a positive state of mind based on that speech you saw. during that speech futures moved quite substantially. going to be some return back to the more controversial parts of his campaign? is he going to bring back some of the more controversial things that would give the market more pause? it would be hard to know because he pivots very quickly. there is more volatility to come. i think it is still a dicey situation. alix: emerging markets still getting hit. lower bytocks open 2.5%. you are interested in emerging

markets. how do you adjust that position? recommended pulling out of brazil and argentina and colombia positions that we had been pushing post-brexit. i didn't see the risk reward in the election because we had a hillary clinton election fully priced. it has not really move these currencies very much. even in the equities. i'm pretty impressed with how risk assets have held up. i think we watch and see. tells me there is still volatility to come with this and we have to assess what this all populism trade we have been rattling on about really means for returns on capital and ultimately the dollar.

we are watching things like breakeven inflation, real yields, and the dollar closely for signs that if that's not going to be the same as brexit than the waters may be a little safer. i think we are in a little bit ala land after the surprising speech from donald trump. it has a lot of people feeling much better. on the one hand, the markets have been pretty choppy going into the election. they may be choppy coming out as well. let's get really cautious. on the other hand this might be pretty good for risk assets and we don't want to lose out on the opportunity.

which makes the most sense this morning? your history of how you came into this thing. if your boss called you up and said s&p is down a hundred points and i need you to hedge, you are in a bad position right now. people who were prudent cut some risk are probably going to have some time to look at it and think about it. i don't think it's going to run away from you. wrong but impletely don't see it. i think there's going to be a reassessment of real returns to with wallsa world going up and borders and lack of mobility in that capital that may have been there before. pointed out before there is fiscal stimulus in the pipeline. there is a storyline that looks pretty interesting from a stimulus standpoint. the question is if you go down that fiscal path what do you see for the fed in december?

are talking something very different from what we have had is the fed now going to feel able to raise those interest rates they have been pushing back on because of all of these headwinds? if we get really strong here i have to think the fed is going to start banging the table a little bit. i not super excited about the trade for jumping into risk. i like the idea of getting back into currency trades. i think there is still a storyline which is kind of a weaker dollar that develops out of this much like the weaker sterling story that developed out of the exit. -- brexit. i think that's the story. alix: if we get the fed story play out eventually the fed will

have to re-rate their hiking hire. faster in a shorter amount of time. how with the market deal with the? -- that? market absorb it because it would be coming from a growth in deflationary standpoint? >> people are going to have to assess whether there is a handoff from monetary to fiscal. that's kind of what the market was hoping for with either candidate winning the election. obviously the fiscal side of what donald trump has been proposing is much bigger. his attacks on the fed left people with nervousness about that policy would really look like. honesty you just have to play this as a more volatile handoff then maybe otherwise would have been under clinton. i don't know how to exactly handicap not but i don't think the markets are priced for an enormous amount of volatility.

i think we had barely one rate hike priced in for next year. if there really is going to be a fiscal stimulus story that develops i think it is an interesting and messy trade that makes its way through the bond market. that is where you are seeing more of the mess today than anything else. futures were up over two points when stocks were down a lot. it has been quite a turnaround in the bond market. i think breathtaking is what i read in some strategist notes. thank you for being here. coming up, few people know donald trump better than billionaire tom derek. why president trump will be different than candidate trump. this is bloomberg. ♪

emma: this is bloomberg daybreak. coming up election result reaction from chairman and ceo of continental resources. jonathan: from new york city this is bloomberg daybreak. we are about 15 minutes into the open. people came on this program and said there would be carnage. stocks would fall several percentage points. the s&p 500 is down by .4%. the dow off by .1%.

i want to get to abigail doolittle. abigail: we have wild swings within sectors. within health care we have one sector that is really losing and one that is winning. these are the hospitals. we are looking at hca holdings community health. basically what's happening according to cheryl skolnik, the triple play is a worst-case scenario for health care. she believes this could mean that affordable care could be repealed. clear. she's looking for more clarification from the trumped administration. -- trump administration. some real weakness there. we are looking at the big pharma stocks. these chairs are nicely higher including pfizer. and eli lilly. around the drug pricing debate led by hillary clinton is really easing. we have bmo saying they expect more m&a in the space.

michael douglas is expecting a relief rally in the big pharma shares. david: earlier today we spoke with tom barrack. he is a staunch trump supporter, advisor and friend. we asked him what he thinks trump can get done. last night which is what we have talked about before is the real donald trump. the sympathetic, the charismatic. the kind and considerate donald trump. the main thing for the world is is this man reliable? is he trustworthy? is this a fluke? is that a joke or is it real? at every step he's going to prioritize by saying i need to reach across. acceptancepartisan

of what i'm doing even though i have both pieces of congress. i think he will take foreign policy, domestic policy which needs fiscal stimulus. the market will react to consistency. consistency is in order to get growth, monetary policy and productivity is waning. stimulus as infrastructure relates to a piece of it. everywhere in the world has private public partnerships in infrastructure except us. i think you will see that. i think you will see foreign policy. you will see the world waiting for new formats of transactions to take place and he will do it in a much more elegant way than the candidate donald trump appeared to be. he was right. the victory was his. everybody said event, be more practical, be more presidential. he found this fisher in america

that was quite remarkable. it was his strategy. >> how does he create that sense of consistency and steadfastness over the next 90 days? hew much of it is who appoints and which priorities he puts forth? >> the great news is heas mike pence. there's no better congressional liaison in the world than mike pence. real advantage and he's got a vice president who can actually do something for him. that has relationships, has the power to move that legislation along. president reagan was an actor. he was divorced. he had no foreign-policy experience whatsoever. in the first 100 days he surrounded himself with george schultz, richard allen. he took the best of the best which you will see

president-elect trump do. and had them help him with the first 100 day plan. jonathan: when you become the president you assume a set of responsibilities and you also assume the capability to move markets. there was a series of faux pas in the campaign. an outright attack on the fed chair that you can kind of get away with on the campaign trail. once you become president-elect and you say the kind of things he said previously, that's going to move markets in a significant way. do we have a shift in approach? or is he still going to be going after the fed chair? >> i think what you saw is candidate trump. trump in a ufc octagon saying everything goes and he's reaching and groping in ons in whichd allusi she has the liberty to do that. what you see now is a very

serious thoughtful man who is saying, i'm going to leave a legacy of showing the world that an independent person coming from modest means with no political background can be the best president of the united states has ever seen. i think that is his goal. cadence, thehis advisors around him. all of these things that have to do with the markets i think is going to be thoughtful, delivered and soft. jonathan: that was tom barrack. hour, top of the next bloomberg markets with mark barton and vonnie quinn. what's coming up? mark: we are dissecting every aspect of the trump surprise. kicking off with bill gross, followed up with eric cantor. we will round it out with the american action forum president

losses that it was posting last

night. probably the central bank is going to wait another week when they're supposed to be for a potential rate hike. alix: it was worse early in that the day. a 200 basis point hike would be needed to offset the decline in the peso. by 20didn't increase five basis points. at least this morning. it extended losses but just by .2%. to wrap up the international reaction to a , some of theprise bias. you don't see that from the statements from leaders in europe. bythey're going to start off doing their best to have a relationship.

there are comments from the leaders. they said they are ready to work with president-elect trump. jonathan: bloomberg's mexico bureau chief carlos manuel rodriguez. that wraps up the market action. that wraps up this program as well. thank you very much. may be justeaction as surprising as the election result itself or not. up four points in the s&p 500. we are up 12 basis points on the air. this is bloomberg.

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vonnie quinn. welcome to "bloomberg markets." global reaction to donald trump's victory in the presidential race. first, let's talk to julie hyman about all of the gyrations and markets. averages are now higher. this is not an outcome that would have been easy to predict at midnight. we sought futures at the lowest in the session. s&p futures down as much as 107 points at the low and now s&p 500 index cash open four points. andave seen traders investors take a step back and figure out what a trump presidency means for the economy and markets. we had to couple started just coming out today and keeping the target for the end of the year. over at goldman sachs, keeping at 2100 target which is below where it is now for the year-end s&p 500. keeping his target by 100 points and saying