from bloomberg's world headquarters in new york we are covering star -- covering stories this hour. howell president trump change monetary policy at the reserve? tops another record. this despite a slowdown in the economy. we will hear from alibaba's president. and major art sale, which hopes to make $200 million. artessionist and modern joins us. abigail is here to tell us where it stands. nasdaq: we have the moving slightly into the green right now. recording, a new

closing high and s&p 500 are on pace for the best weekly performances since 2011. relative the -- relative to the s&p 500, wheat -- we took a look .t the a lot to kohl's this is a year today chart of the s&p 500. on monday we suggested there could be a balance ahead. on monday we had seen the s&p 500 around the bottom blue line, suggesting we could see a move up toward the top. is will we see the s&p 500 through the next week? something that may support that is the broken year to date up the yellow line. telling us the sellers are waiting to pound. as for what is weighing today,

we are looking at oil and some of the day -- some of the majors. one reason could be iran said they could report record output since the international sanctions were lifted akin january. we have another pocket of weakness within retail. down.ey is to be up 1%, 2%. investors were a bit disappointed. declining and alibaba is the final single's -- from $14.3 billion, but the stock may be down.

seeing some weakness in the metal complex. this includes gold, silver, and platinum. work --down 6% for its first first -- for its first weekly performance. david bank that update on the markets. let's check in with the bloomberg first word news. mark crumpton has more. trump -- he is in a trump tower meeting with senior staff men to -- staff members. he will soon be making some important decisions on the people running our government. in portland oregon a demonstration against president elect try turns violent

overnight. it was the second night of anti-trump demonstrations across the country. a train derailment in southern minnesota has prompted an evacuation. the steal county sheriff's office says the evacuations were about 80 miles south of the twin cities. derailed car is carrying liquid petroleum gas, which is flammable. six candidates are bidding to succeed jacob tuma as the leader of the african national congress next year. the new leader will have to lower back millions of support powered by more than 2600

journalists and analysts in over 120 countries. this is bloomberg. >> the mexican peso plunged and mexican equities have also fallen. he is the deputy governor of the bank of -- of the bank of mexico. time tove to take some see how things will involve the largest economy in the world. >> was there any sort of systemic problem he had to deal with? >> markets are absolving immediately.

that is the process of new information. on being -- we have to take some time in order to see how this administration will put up a new package of policies. >> when you look at what happened to the peso, are the moves to sharp and to set an? was a the mexican peso matter of volatility. the uncertainty will evaporate or diminish.

the volatility would be reduced. >> how is liquidity in your markets? are well.kets the prices are fed with sufficient liquidity. talk -- any of that being considered now? the approach mexican -- a sound had taken economic policy in a framework that includes monetary policy, fiscal policy, and structural reforms.

we will continue to face uncertain environments continuing to implement these responsibilities. >> when you meet on thursday of is yourk, what assessment going to be of the economic impact? can you make one at this point? guest: on this new information will be examined and i cannot willnt on what eventually be the decision at the central bank.

information. >> can you make an assessment of what this may mean for the eight mexican economy? >> i think it is too early to make an assessment. we need to know all these of whatt businesses would eventually be the economic program of the new administration. thatall the uncertainty any forecaster could make. the best way to face this

uncertainty is to continue strengthening the macroeconomic of mexico. >> the fundamentals have been weak lately with energy prices down. would you feel that the mexican economy is at risk now of may be no growth or contraction if the economic policy, if the worst policy of the new administration comes true? guest: all they talk about is to have this sound economic and -- economic policy and structural reforms that have been implemented in the country in the last few years. of otherind

isironment, certainly it very important they would continue to grow. it is an important engine for the mexican economy. relationship.g integration in between the united states. we would continue to experience some positive growth in the following years. >> inflation has been picking up. with the peso falling as much as a lot, are you importing more inflation and the economy >> the bank ofr?

, oneo has been mentioned of the reasons is -- rate -- so far prices have been relatively mild. well anchored on target. risk thatthat is at we may have. so far it has been well contained. >> coming up, stocks join commodities and selloff in the market the bins. this is bloomberg.

-- david: technology shares were -- the sector's growth prospects are vulnerable to policy changes. joining us with morris stephen rees, head of u.s. equity strategies and j.p. morgan chase, where he oversees $1 trillion. julie hyman also joining us. policy, we have pronouncements. we can predict what he will do when he is in the oval office. do you invest on that? not trying to

articulate what the policies are going to be. i think the market has gotten increasingly comfortable that moves the policies that trump has talked about, pro-business and pro-market. we went out with a pretty bullish u.s. equity. we are going to focus on the fundamentals. the have more paths to better earnings growth. thinking there will be big infrastructure packages that you are getting behind? guest: infrastructure has been a big part of both campaigns. fromnk you will hear more president trump in the coming weeks for months. we have seen a big rise in industrials and specific infrastructure names. wait a longg to term policies with the short-term opportunities.

julie: what i found more shocking was the market reaction. why did they get the markets wrong? saying, we knew trump's plans before. >> we don't typically see that feature pullback. it is sort of a range bound environment. we weren't surprised to see the market reaction. the equities haven't really gone anywhere since the summer. the earnings had consistently come in better than expected. like it or not we have visibility on the election and

people that have been on the sidelines are coming back. it might be very good for a profit. there is a significant upside. >> a lot of the food makers, basic goods makers. >> going on their? >> i think the bigger issue is it has been a bonded proxy yield trade all year. we are the consumer staple selloff. that is the bigger driver this week. most of the stables tend to be multinational.

aboutis a lot to be said trump presidency trades. we have a much more pro-growth view. so we are sticking with that. when are you going to see the effect of the new administration and those? a highhink there is probability something is passed in 2017. maybe not the 15% corporate tax rate. maybe not a full repatriation. at some point we will see something. corporate taxes move from 35% to 20%. if we see a repatriation act similar to what we saw on 2004, that could be another 20 basis

points returning to growth. we had already been very confident in 6% to 7% earnings growth. >> one of the groups that in theory -- it seems like there are two things going on. what will the relationship like withina will be the trump administration? >> i think there are a lot of jitters out there in terms of what trump will do. technology is the most international sectors. it is an easy sector to say i will sell it and we will worry about it later once we get clarity.

to some extent it is a bigger issue for the sector. working for policy and moving into laggards year to date. there is a lot clear benefit from what trump is going to do. we have really focused in on secular growth companies. companies that don't manufacture a broad but offer services or what not. are services that won't be impacted by visa restriction or potential trade restrictions. borrowing costs go up, but what does that mean? is going to be harder to hit those records going forward? part of the reason why we are so excited about a repatriation, we have cash sitting overseas.

higher rates accompanied with pro-growth companies, we are not at a level yet where we are most concerned about companies willing to borrow or what they are going to pay. i think it does have major implications for yield stocks. i think they continue to be a funding source. >> as president-elect donald trump readies himself to drain the swamp, a look at his transition strategy. this is bloomberg.

it is time now for the bloomberg business flash, some of the biggest stories in the news right now. the frontrunner to acquire bank of america has mbm may credit business. loaned advanced customers 8.5 ilion dollars at the end of 2015 according to the annual report. several parties are in talks about being taken private. the provider of identity theft protection services are due this month. they could value life look at $2 billion. elliott management unveiled a mistake. chipotle mexican grill says its entry into burgers is going

well. new offshoot restaurant opened in lancaster ohio in october. seeing strong sales. it could be a bright spot for a company still reeling from the food safety crisis. third-quarter same-store sales plunged 29.1%. that is your business flash update. vocal criticwas a of the federal reserve when he was running for president. we will ask one of his elect -- one of his advisers next. this is bloomberg. ♪

david: from bloomberg world headquarters, i'm david gura. this is "bloomberg markets." let's get a look at the first word news with mark crumpton. mark: harry reid donald trump's

election "embolden the forces of hate and bigotry." in a statement he said white nationalists, vladimir putin, and islamic state extremist are celebrating trump's victory while innocent law-abiding americans are wracked with fear. he added, that does not feel like america. german chancellor angela merkel has called donald trump to congratulate him. she says she spoke with him late thursday night. she stressed the common values shared by germany and the united states. the british government has .utlined the case on brexit according to the ministry, three judges were wrong to rule the government was to get parliamentary approval before starting the process of leaving the eu. the ruling is due in the new year. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries.

i'm mark crumpton. this is bloomberg. david: after a long campaign, president-elect donald trump is not faced with the task of turning campaign promises into policies as he prepares to occupy the oval office. one of his biggest challenges is uniting citizens as protests break out across the country. alex wayne joins us now from washington, d.c. let's start with a meeting yesterday between president president electronic, paul ryan, and mitch mcconnell. to the extent they talked about an agenda, apparently it centered around immigration, health care, and the economy. mr. trump said they would create big-league jobs. he met with paul ryan and the senate majority leader mitch mcconnell. we heard a lot about the

strained relationship between the president-elect and the speaker of the house. what is that relationship like between the senate leader? >> i don't think his relationship is super with either one of them. campaigning, he never appeared in public with either leaders in congress. when paul ryan came out wednesday morning and gave a very complementary and supportive news conference on donald trump's behalf, that probably helped him a long way to securing his job in the next congress. david: david: our colleague was here yesterday as we watched donald trump and barack obama in office. something he said was pay attention to the faces of the advisors around them. as you watch the meeting yesterday, what did you see, what stood out to you? the body language of the two principles was telling us something, i think.

donald trump looked a little awkward, nervous. barack obama looked more relaxed. i think the nrc of taking on this job is starting to settle in on donald trump and they are scrambling a bit on his team to figure out how exactly you take the reins of government and run the country. david: after hillary clinton , protests broke out in new york, other cities around the country. donald trump awaited on twitter responding to those, changed his attitude toward those protests in a series of tweets. how big of a deal is this movement, what are they trying to get here? people are trying to express some frustration and rage about the outcome of the election. one thing donald trump needs to learn, i think, is that one of

his greatest powers is the power of the bully pulpit. he could come out right now and address the country on both of these protests and these episodes of the racism we have seen around the country in the wake of his election. i think that may go a long ways toward doing what he says he wants to do, which is unify the nation. david: there was another tweet this morning where he said, busy day, soon making very important decisions on the people running the government! what do we know about the status of his transition, whom he has hired, running things, and when could we hear names for cabinet appointments? >> transition planning by twitter, i guess. cabinet appointments we have heard, possibly rudy giuliani as attorney general, jeff sessions, who was one of donald trump's earliest supporters, has been given his choice of

appointments. i have heard him mention as defense secretary or attorney general. newt gingrich may have a role in this administration as a prominent supporter. one thing that is clear, donald trump will reward loyalty. if you came onto his campaign early, you will get a high profile job in his administration. david: what are president-elect donald trump's economic policies going to look like? someone me is the codirector counseling donald trump. if you have a role in the transition team, we saw the reports that david malpass was heading up the economic side of transition. can you confirm anything? >> i really do not want to comment on the transition. as an economist, i could not be more optimistic or feel more

positive about the economic growth program that our new president-elect has in store for us. he is putting together an excellent team but i cannot be commenting further on specifics. david: let's talk about donald trump's sense of how the current fed janet yellen has done in her job. she is in that job until 2018. what does he think of the job she has done? >> he has been very open about that. he understands how monetary policy and interest rates affect the economy. saidthe beginning, he has that while he appreciates very much as a developer and the builder, having access to very low cost money and think that is a great advantage if you are already wealthy, he has also shown great empathy for people who, as he tells it, have always done the right thing in life, they put away savings, they have

been anticipating retirement, and they have found themselves getting next to nothing returns on their accounts. he does nothing that is right. he wants the economy to work for everyone. so i think where he has been very powerful, and i give him a lot of credit, he has a knowledge that there are political implications to monetary policy decisions. he has said that when the time , and every president is permitted to appoint a chairman, that he may want to have someone more in line with his thinking in that regards. he hasn contribution is brought attention to the fact that monetary policy has not been working the same for everyone. he has also said that these low rates have set us up for a false economy. i think that's been an important message and a rather

sophisticated one. david: he cannot force her to resign. do you expect she will stick around for the duration of the term? >> i cannot imagine why she would not. it is her auction, the fed is independent and will remain independent. i would not want to speculate on her feelings. he has said before long ago that she is very confident and it's just a matter of having the prerogative when her term is up of retaining her or choosing a successor. you telling your advisee, in terms of personnel, replacing janet yellen, filling these vacant seats on the board of governors, what type of individuals are you recommending he looks at? >> those are not discussions .hat i would want to broadcast the president-elect will make those decisions. david: not even from an academic, ideological premise where the people would be coming

from? >> the overall theme one might take, if you look at what president-elect trump has said, not only about the importance of having a solid footing versus a false economy based on distorted price signals, which can be the result of monetary policy, especially this elongation zero interest rate approach we have had for eight years. he has also commented on currency manipulation with our foreign trade partners. while he believes in free trade, finds it to be unfair if countries deliberately debase their currencies. there is intellectual consistency there. he is talking about monetary integrity. that carries over to his broader view that many to put america on a solid footing. we need to make it real. we need to appreciate people who are in manufacturing and who

create things. we need to pay attention to small business. the entrepreneurs need access to financing. growth is really the increasing financial is asian of the economy, rather than the real growth that wages raises -- raises wages. david: is he prepared to declare china as a current to manipulator? that is something that he said on the campaign trail. >> i think he will carry through on what he has said. he has always been very straightforward and honest. i expect him to be consistent. it is not just the currency manipulation, although i totally agree with him. if a country can debase its currency and change the price relationship relative to its competitors, then that is not free trade. people who are too quick to say there areectionist --

a lot of american workers, especially in the auto manufacturing states who have long said we are perfectly open to the idea of competing, and we compete very well and we deliver good products, but it is just by changing the exchange rate you suddenly are priced out of the market relative to your because currency depreciation. that is not really competitive, that is cheating. i think president-elect trump wants to put an end to that, once to put an end to intellectual property theft, other barriers that make it unfair trading, that do not correspond to a level playing field. that is where you will see his emphasis. david: thank you for your time, judy. still ahead, we hear from alibaba president mike evans

about their record-breaking sales. date sales -- day this is bloomberg. ♪

vonnie: this is "bloomberg markets." i'm david gura. barely moving, up just three points. .he s&p 500, down let's go to abigail doolittle with more. >> we had some analyst action. archer daniels midland, shares of the agricultural company are lower, on pace for their worst day since february on a

downgrade over jpmorgan. the analyst may the bearish move following management meetings. she sees the downside risk to u.s. agricultural. she sees more than 10% downside for the shares of archer daniels midland. are shares of tiffany, up 1% on an upgrade at cowen to over perform. the analyst says luxury is coming back. he sees about 10% upside for the shares of tiffany, which are up on the year, but interesting is a divergence between tiffany and diamonds. over the last five years -- three years, shares of tiffany and in orange trading lower. a recent divergence.

it will be interesting to see how this plays out over the long-term. annualalibaba held its singles' day shop upon, a 24-hour spending blitz. it dwarfs black friday and cyber monday in the u.s. emily chang spoke with the alibaba copresident mike evans earlier today. day is the biggest shopping day of the year in china. we kicked it off last night in china with the announcement that david hill, who organized super bowl's, has done the oscars, will be organizing for us. katy perry will be our global ambassador. we have thousands of merchants, entertainment. it will be a wonderful event that all of china and many different parts of the world are participating. last year,s there you processed $14 billion worth of merchandise in a single day. what kind of numbers are you expecting this year? 14.3 billion dollars,

actually, but it's not about the numbers. what really makes singles' day a success for us is on the receipt a large amount of power that changes hands between merchants and consumers, but it is the social experience. it's a great event for all the people that participate. we have not really achieve what we want. our e-commerce platform is a social platform. it brings people together in a their livesy live right now, online, chat rooms, all sorts of experiences that they have not had historically. singles' day and the global shopping festival is all about the total experience, not the amount made on the day. emily: jack ma sent a letter to shareholders a couple of weeks ago, rattling investors, talking about how alibaba needs to transform. it's not enough to be an e-commerce company. what does that mean for your job? >> we have to think about the

way retail will change in the future. i think people may have misconstrued his letter. the retailhange of model in the future he is referring to. emily: we have tw investors on the stage yesterday who said china is in above all, there is a massive collapse ahead of us. the banks have four times as -- assets ascents the u.s. did before the financial crisis, there are billions of square footage of real estate not being used. is china in a bubble, can the economy continue at the pace it is? a bubble.s not in the economy is slowing but not slow. the combination or the components of the economy are changing rapidly from investment in old industrial, manufacturing , to services and consumption. there are too many points that were raised yesterday when i was not here to discuss them and in isolation, but

what i would love to do is get both the gym and kyle to come to our campus and sit down, and we can help them understand some of the things they don't understand about china. david: that was emily chang talking to mike evans, taped a few weeks ago. we will bring you the interview from him today in a few minutes time. of $14icted sales billion. alibaba saying it was $17.8 billion. coming up, christie's auction houses superb for a major sale next week looking to rake in an estimated $2 million -- $200 million. this is bloomberg. ♪

auctions kickoff in

new york next week. christie's hope to bring in an estimated $200 million. the head of modern art at christie's is with us now. thank you for being here. what are you most looking forward to, what are the biggest pieces that will bring the most attention? >> the most exciting impressionist work on the market this week is that these from work in a culminating series of canvas is that he did around 1891. this is the first time that he devoted himself to one subject over the course, in this case, one seasons, to see how subject can be influenced by atmosphere and light and really use that as an abstract canvas to investigate landscape. that would be the germ of what would become ultimately the waterlily series that was so famous. this is a pivotal moment in

20th-century art history. it is incredibly radical, but it is also sumptuous and gorgeous. it is in amazing condition, d, which ise important to connoisseur collectors. that is a really exciting piece to be offering. the appetite from collectors right now, what has changed? >> the quality of works we have been able to offer is always the leading guide of what will happen each season. that is why i mentioned the monet first. people always asking about the state of the impressionist market. i think this will be an interesting bellwether for impressionism specifically. there are not great impressionist pictures left in private hands. this is one of them. david: we have seen and an erosion in the guarantee that houses are giving. are you seeing any changes? supply is certainly impacted

by liquidity in the market always. you will see some guarantees the season for high-quality works, one of them is the kandinsky you mentioned, which is a fantastic example of his geometric abstraction from 1935. this is also remarkable because nothing of this quality remains in private hands. all of this kind of work are in museums. this was acquired directly from the artist a year after it was painted. it's only been in two collections and its lifetime. when something like this comes to the market, it's incredibly rare, and that is what motivates the markets. david: difficult to generalize, but who is your customer these days, where is he or she coming from? >> incredibly diverse, and geographically diverse. we have bidders coming in from all over the world. european and american bidders are a staple of the impressionist and modern sector.

but we see new asian bidders coming into the market all the time every season, as well as latin american and middle eastern. david: when prices consolidate, i imagine it is an opportunity for some. are there certain artists that need to be discovered, have the potential to be real premiums for buyers? >> i see a real premium in the market today for the banner names from any movement, so whether you are looking at impression is him, and there is a huge thing and being paid for monet but not necessarily for pizarro or cesanne. you can see that in many movements across art in the 20th-century. david: thanks for coming in today. pursuits.check out still ahead, the alibaba singles' day sales brings in

over $15 billion. we hear from the president mike evans. this is bloomberg. ♪

david: it is 1:00 in new york, 6:00 in hong kong, and 2:00 in london. i'm david gura. this is "bloomberg markets."

from bloomberg world headquarters in new york, we are covering stories from san francisco to washington and seoul. stocks, commodities, bond investors wonder about the uncertainties of a donald trump presidency. it has been three days since america elected donald trump its next president. we hear from noted academic neil ferguson. let's take a look at where things stand right now with the julie hyman. julie: things are looking a bit more mixed today in the wake of the really. this week we have seen this interesting dichotomy where the dow has been out for arming and the nasdaq has been lagging, but the nasdaq is coming back today, so a bit of a bounce for technology shares.

the s&p has been down thing around throughout the day. it has come back from the lows of the session. there has been a little bit of repositioning over the course of the week, and now on his last day of the week, people are taking another look at the moves we have seen, seeing if they were overdone. we are also watching gold. it has had a wild ride this week, trading lower once again by 2%. it had been rising in the days inding up to the election spite of selling in the wake of the results. mining and berrick being hit. we have been watching oil prices. iran and iraq said they raise production last month. saudi arabia pond near record amounts of oil. that raises the west is about an opec cut agreement. crude oil cutting out back by 3% today. murphy oil, pioneer, some of the

big declines associated with that. for the week, we have had some big winners. financials, up almost 11% this week as we have seen a widening of the yield curve and potentially an increase in net interest margins at the banks as well as the idea that an incoming trumpet administration will try to throw out dodd-frank, so fewer regulations. industrials have been out performers, the thinking that there will be new infrastructure spending. and health index, as investors talk about the prospects of not having more regulations of drug prices and the ripple effects of a possible repeal of the aca. david: thank you. let's check in on first word news with mark crumpton. mark: paul ryan and senate majority leader mitch mcconnell are reportedly both urging

president-elect donald trump to appoint republican national committee rights previous as white house chief of staff. according to cnn, both say preibes is the best person for the job. steve is also said to be in the running. president obama patron be to the nation's veterans in a ceremony at arlington national cemetery. the president laid a wreath at the tomb of the unknown and down his head inside attribute before a bugler played "taps." you who once more the uniform of our army, navy, air force, , we owe or coast guard you our thanks. we owe you our respect. and we owe you our freedom. earlier in the day, the

president held a breakfast reception with veterans and their families in the state dining room. arson is being investigated as the possible cause of more than 20 wildfires in a national forest in north carolina. a division of the poor service says the fires have been burning on more than 27 square miles in a national forest in the western part of the state. brazilian president michelle temper the administration says there were no irregularities in the financing of his 2014 vice presidential campaign. the spokesperson is denying a report suggesting the president may have received an illegal campaign donation from a leading construction program. reports investigating alleged a linearity is in the financing of the 2014 campaign of former president dilma rousseff and mr. temer. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. we mentioned earlier,

alibaba held its annual single'' day shop on. emily chang spoke with copresident mike evidence -- evans to talk about how it's become a barometer of chinese consumer sentiment. here is a portion of that interview. >> the absolute dollar value of what we're selling on the pop on today is not the most important thing. are we're really focused on the thousands, hundreds of thousands of brands selling products on the platform and the experience they are having in connecting directly to consumers and we are also very focused on consumers where we are experimenting with new ways to interact with brands, through ar, all streaming, sorts of different ways that we have not tried in the past. this has been fun for consumers, in gauging, tremendously educational for brands. we are realizing, having the opportunity to see the strength and resilience of our platform,

whether in payments or logistics , where we have to deliver 600 million packages, processing orders at 170,000 per second, processing payments at 170,000 per second. this is a great test of the resiliency. in my responsibility for building alibaba globally, we are going to need a platform capable of making this happen. emily: one of the goals this year was not just to attract international brands but to attract consumers from outside of china. how much did they make up sales this year? >> this year for the first time we are making a big push outside of china to markets like taiwan and hong kong but also into southeast asia where we have a platform. that is going well. we have our ali express business that continues to sell products from chinese small businesses to more than 200 countries globally. that is also going well.

this is not about brands from all over the world selling just to china. it's also about chinese companies selling their products to consumers all over the world. emily: last time we spoke, you told me the chinese economy is slowing but not slow. how does alibaba to you to buck the trend of a slowing chinese economy? singles' day last year transactions grew by 60%. can you keep that up? weit's highly unlikely that will continue to grow by 60% each year because the absolute numbers are becoming so large that that would be very difficult to do. but as you can see, we are at least 30%-plus higher than last year and it looks like me will a $17 somewhere between billion and $18 billion total gnb. that is against a 9% depreciation in the renminbis. be more like 33 or 34% from the renminbis 10 point. but the real opportunity is we are only today penetrating about

10% of the china retail market off-line -- online. there is huge potential growth in that china market together with everything we are planning to do as part of a globalization initiative. we see substantial opportunities for growth in the future. emily: bloomberg reported that trumps trade policies may pose the biggest threat to alibaba of all the chinese tech giants. how would alibaba respond to potential trade tariffs, sanctions, even an extreme case, a trade war? >> the way we are currently set up, we don't actually sell that many products into the u.s. if you want to know who the number one beneficiary is of our global shopping festival this year, the u.s. has the largest number of brands selling products to the chinese consumer and to other consumers around the world. number one, ahead of all other countries. it's hard for me to imagine a

reason why we would not want that to continue. it is great for brands, great for retailers like macy's, costco. it is fantastic for job creation, wealth creation, all of the things that trump and many presidents are focused on. david: that was emily chang with mike evans. stocks are still on track to impress a weekly gains, but in emerging markets a lot today is bringing down postelection exuberance. john kerry is a portfolio manager at pioneer investment. good to have you with us. let's start with the lively last few days, as you put it in your note. how have you been navigating what we have been seeing? it has been a market that has had the rug pulled out from underneath it. investors are scrambling, trying to figure out what are the new possibilities and of abilities. the results of the election were not anticipated.

people are working very hard to figure out what may happen. it is early days. keep in mind, the new administration has not even taken office yet, let alone past any new laws or changed any regulations. thatof the directions people are anticipating, of course, were suggested during the campaign. people are concerned about changes in trade policy, possibly friction with some of our trading partners as a result. thehe other hand, some of possibly more stimulative fiscal spending proposals could be very helpful to companies. so there has been a shift back toward some of the cyclical, traditional u.s.-focused types of companies, a little bit of wariness toward the big, international companies, particularly in technology, that might encounter problems should we have some disputes with our trading partners. david: how much uncertainty is

there right now, how hard is it to build and investing thesis based on what donald trump said on the trail, waiting to see what policies will be? >> i would think about making some changes as the directions become clearer. i would say diversified. -- diversify. one of the focuses of investors is coming back to the u.s., but that could be risky if the policy do not produce the rapid growth that people are looking for. so you may want to keep some international exposure as well. i would be careful about jumping to conclusions. i would be careful about rearranging everything right away. i would be especially cautious about trusting the opinions of experts as to what will happen, given how poorly the pundits did with respect to forecasting the election. david: let's talk about health care in specific.

in the last few weeks, a lot of enthusiasm by market participants about the health care sector. now it seems there's an open question of what happens to the affordable care act, what that would mean for hospitals in particular, what it means now that donald trump will be president when it comes to drug prices and pharmaceutical companies. what are you seeing in health care right now? >> and exceedingly complex situation. i would be especially cautious about jumping to conclusions about who might be beneficiaries , who might, on the other hand, suffer from changes in the affordable care act. i would be very cautious about moving too quickly there. i would stay diversified and remain cautious. listened to what donald trump has said and maybe you can build a thesis on certain sequiturs -- sectors here in the u.s. how worried are you about what he said about trade, and what if the u.s. becomes more inward looking? >> mr. trump is a businessman.

he believes in commerce. i believe we will have continued good trade relations with most of the countries around the world. it may be that some countries that could be perceived to have taken advantage of looser trade restrictions could see some alteration in their relations with us on a trade level. i am hopeful. i think we need to give mr. trump a chance. if he is optimistic and forward-looking, which is the better side of his personality, and inspires people to work irder and look to the future, think we could have some pretty good economic times ahead. david: what do you see as the role of the federal reserve going forward? it seemed like a rate hike was all but assured a few days ago. case, doesll the this complicate things enough that maybe you will see them waiting longer? >> i think the fed will remain

on track and consider quite seriously raising rates. third-quarter earnings came in better than people expected, indicating that may be the second half of this year is going to be stronger. almost every year it seems people are looking ahead to the second half for recovery and better earnings. perhaps this year it is really coming true. up, aseconomy does hold it appears to be, i would think the federal reserve may act and raise rates. david: it seems like an open question, how fast inflation will rise under a donald trump residency. what effect would that have on the equity space, corporate profits in particular? >> you would need to be careful about stocks that are supported by yield. on the other hand, those more income-generative stocks, if they have potential to raise dividends over time, could

continue providing good returns. i would be careful about anything that might be --sidered a bond steps to substitute, careful of any stock without any growth potential in that kind of environment. david: thanks for talking to us, john. coming up, some top names in the tech sector have slid since donald trump's election. why some are worried about trump's tech policies. this is bloomberg. ♪

david: this is "bloomberg markets." i'm david gura.

we continue to get more information on who will comprise donald trump's transition team. it, andiel has joined then begs the question what kind of role will he have? cory johnson is in los angeles. peter thiel, a real outsider backing donald trump during the campaign. as you see this playing out, what it -- could he be charged with doing here? will have apes he voice for policies that will take silicon -- help silicon valley businesses. he knows a lot about that from a venture standpoint but also from what it takes to get businesses up and running and what silicon valley needs. frankly, a lot of the issues espoused by donald trump, such as the anti-immigrant stance, is not one that silicon valley embraces. silicon valley is a business community often built with immigrants, certainly employing immigrants, needing that talent. furthermore, peter thiel is a gay man. the role of gay people in

america going forward in his administration is one that a lot of lgbt people feel threatened by. to have someone so prominent in a transition might suggest an openness that the campaign did not suggest it i do not want to overstate that because we don't you how that plays out, but can only see the notion that things could be more inclusive with a candidate, president-elect who did not espouse inclusiveness in his campaign. david: the current administration has tried to make overtures to silicon valley, to make the divide between the east and the west coast as great as it has been. it has had some success there. good peter thiel help to bridge that divide, or because of the fact that he was an outsider, his endorsement of trump led to real discord in silicon valley, and limit what he can do? thiel is very plugged into silicon valley, he has a lot of money behind startups. facebook has had some

significant impacts on the world. he really is plugged in and somebody that people listen to, even when he has crazy ideas, as jeff bezos, of all people, pointed out. i think he has the kind of connections -- he knows the issues silicon valley is facing. he has a unique take on all of those, but he is certainly aware of those issues. certainly one would hope that he can bring those issues to bear. donald trump will not be inviting jeff bezos out. david: i remember the speech he the rnc int cleveland. he is known as, not in favor of big government, government in itself, so how much enthusiasm will he bring to this job, to staff government, given the background? david: it is a very -- cory: it you very meta question when

have people who believe people in washington cannot get anything done, going to washington to get things done. how you govern what you don't believe in government is a bigger question that goes far beyond peter thiel. when it comes to business, the focus of our network, certainly of peter thiel, there are particular needs that businesses have, particular influences that government can have, whether ,egulating or deregulating certain tax policies and beyond, and he will be able to give voice to that. david: let me ask you about market reactions. stocks, at the fangs tech stocks that have been slumping since trump was elected. why is that the case? is this something that will stick around for a while as we await new policy plans? cory: let's pick one stock, amazon. the notion that donald

trump will create some kind of new tax policy to punish amazon or go after jeff bezos to get even for the washington post reporting -- i don't know what that theory is, but investors selling amazon stock for that reason are insane. it is ludicrous to sell amazon for that reason. they will not be able to go back and find new taxes to apply to , a company that things more about taxes and profits than anyone out there. the selloff in the stocks are largely responsible -- if you look at the returns of the s&p -- thereompare them to is amazon selling off while the s&p is rising. amazon is an important piece, but if you take out the fangs stocks, you find that about one from lasthe move week would have been greater if not for the selloff in those fangs stocks.

if you look at the return over the last year, if you take out those fangs stocks, you have 1.9% of the gain just those three stocks -- not netflix. to say, 25% of the returns in the s&p were just those three stocks. they are very expensive stocks by any sort of pe metric, but that will really hurt the overall returns. david: thank you, cory johnson. this is bloomberg. ♪

david: this is "bloomberg markets." i'm david gura. it is time now for the bloomberg business flash, some of the biggest stories in the news right now. .

is pushing back against the idea that fake news stories impacted the election. some say facebook a lot false information to run rampant on algorithmsnd its provided the voices that people wanted to hear, instead of the actual news of what was going on. moran buffett added $5 billion to his fortune after the election, jumping to number two on the bloomberg billionaires index. he has a stake in wells fargo which rose 13% this week. bill gates is the world's richest perch in with $87 billion. that was your bloomberg business flash. this is bloomberg. ♪ wow, x1 has netflix?

hey, drop a beat. ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how about bojack, luke cage ♪ oh, dj tanner maybe show me lilyhammer ♪ ♪ stranger things, marseille, the fall ♪ ♪ in the same place as my basketball? ♪ ♪ narcos, fearless, cooked ♪ the crown, marco polo, lost and found ♪ ♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1.

live from bloomberg world headquarters in manhattan, i'm david gura. this is "bloomberg markets." . it is time now for the bloomberg business flash, some of the biggest stories in the news right now. familiar with the matter say that the team plans to roll back the most disliked provisions of dodd-frank but the nonbanks are systemically important and should subject into more regulation. another record-breaking single'' day for alibaba. reached 17.7 billion dollars cut easily beating last year's record total singles' day is the biggest online shopping day in china. couldan jack ma says they host a singles' day in the u.s., eu, and japan in the future.

to amer confidence rose five-month high in november. if the m climbed from 87.2 to 91.6. it also showed year ahead inflation expectations rose the most since early 2015. and that is the bloomberg business flash. a move from passive to active funds have increased since 2009 with etf unseeing an increase in funds. our next guest co-authored a recently released report suggesting the secular migration toward passive strategies is a once in a duration shift. our guest.now is before we get into these in specific, what is the catalyst, what has brought about this change? >> i think it's the confluence of different factors. it is the innovation in financial markets, the advance of the new vehicles, such as etf's, packaging off of private

market solutions, new vehicles, making them available to different investors. it is the technology that you see across sectors. it is the incorporation of data analysts. obviously, we have seen other parts of financial services globally, it is the impact of regulation on different parts of the market. it is the perfect storm with all of those things coming together. david: you look at the last three decades, the exceptional returns, and i wonder what it needs for investors, folks planning for retirement. this is a real seachange. >> if you look at the structural trends -- i'm not an economist by training -- but if i look at our economic think tank, they highlight the fact that some of the structural drivers of economic growth globally in the last 30 years will not hold true in the next few decades.

these are simple facts such as demographics. we will not have as much growth from the younger population and retirement plans need to be funded. so it as a result, unless technology changes the picture with big productivity gains, we believe there is going to be pressure on the returns across asset classes. i think that is basically the structural challenge that will impact returns. david: one of these factors is what you call a digital revolution. explain what you mean by that and what difference it could make. manygital it impacts different ways. it starts with the interaction between the individuals and financial advisors, the role of the advisor has been an example of that. it has been using much more in the sales process between the asset managers and want managers.

and using digital digitization in the middle and back office processes, new technology such as block chain, can impact that as well. what's your advice to navigate all of this, if this is a brave new world, what are your tips to navigate it? analyzing what is cyclical versus structural and not losing sight of some of these structural shifts long-term. it is hard to predict the short-term but it's easier to be short-term about the structural. making few decisive choices in terms of strategic and operational topics along digital analytics, investments, products. i look at the media space in particular, the consolidation we have seen in this sector. could we be looking at that in the asset management sector, will we need fewer bigger participants? >> definitely the concentration

of assets has gone up. the top 20 global asset managers gaining share over the last 18 years. definitely there are more benefits to scale these days. that would predict more consolidation. definitely within the cards. we have seen a couple of recent transactions that would validate that. that said, i don't expect many megadeals. it has been an active m&a market but probably some of it will be smaller scale. from passives move to active, i was talking to jack bogle about a week ago, and i wonder, when you look at the history of this transition, how much responsibility does vanguard have? commentnot want to about specific companies, but when you think about innovation, etf's, definitely they play an important role in a portfolio,

whether it is a retail portfolio or institutional portfolio. there'snk about it, been a lot of innovation in financial services that have helped investors achieve better outcomes. passive and etf has been an important part of that. managersve seen active and alternative managers getting a lot of value out of their portfolios as well. portfolio. toid: betty liu was talking larry gemelli yesterday. let me play a little bit of what he had to say. it was cmp, ins 2008, it was something else. this time it is etf. i don't think it's any harder. david: making the case that there is an argument to be made about the resurgence of active investment.

mother always be a place for it, will it start to diminish? >> there will always be a place. going back to structural and cyclical factors that benefit certain styles of investing, low interest rates, central bank policies, had contributed to the rise of passive, which may slow down a bit depending on the macro environment. in my opinion, structural reasons provide strong demand for passive as well. typically means advisors will look for lower cost of ownership and passive etf's tend to be at lower price points. david: we are surveying the landscape, wondering what will change under this new president. it was not many weeks ago that the department of labor's fiduciary stated -- made a rule. do you expect that will stick around in a new term, how much uncertainty is there are other regulatory structure we have now? all of us are digesting the

implications of the regulatory landscape. i don't think we have a great line of sight. reasonable to expect some change and regulatory trajectory but hard to predict at what scale and pace. my own production is typically regulation takes time to evolve. some of these changes may take a little longer than just months. david: thank you. from mckinsey and company. still ahead, as the world come to terms with a trump residency, neil ferguson have the american voters came to choose the president-elect. this is bloomberg. ♪

david: this is "bloomberg markets." i'm david gura. let's get a check on the first word news. least four candidates may be seeking to leave the democratic national committee. ray buckley is considering a run for the top job. former vermont governor howard dean says he wants his old job back. dean was dnc chairman from 2005 until 2009. minnesota congressman keith ellison is inspected to make an announcement on monday. former maryland governor martin o'malley says he is taking a hard look at the job. the white house says president obama is prepared to spend his final major foreign trip talking about president-elect donald trump you next week, the president will make stops in greece, germany, and peru. the trip was imagined as a goodbye tour and a chance to increase support for u.s. agreements on iran's nuclear program, trade, and climate

change, but advisors now say the president expect to face questions about how a trump could impact those deals. six west point cadets are facing drug-related charges. the u.s. military academy says charges were initiated under military law against five seniors and one member of the class of 2016. the charges are conspiracy discharged beat strolled -- distribute controlled substances, and distribution of controlled substances. charges are the first up in the court-martial process. in south korea, authorities are urging protesters to show restraint tomorrow at a demonstration against president hye. south korea's government says it is concerned the protests may turn violent and illegal. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton.

this is bloomberg. let's go to julie hyman who has her chart of the day. when 32% growth is not enough. that is what we are talking about today. alibaba, singles' day is wrapping up in china. that is the big holiday that alibaba has essentially created in order to spur spending. about $17.8 billion is the most recent tally we have for this year's singles' day tally. 2014 22015 was 16%, so there is some disappointment among investors today that there has been a slow down in the pace of growth. that disappointment is reflected in alibaba shares, falling about 3.5% over the past couple of sessions. alibaba done with tech stocks yesterday, falling today on that

degree of disappointment. also questions about the sustainability of future growth. that have to do with the rate of income growth in china. this is an interesting chart. alibaba has created a price index of 100,000 items it sells on its website. that price index has been going higher. on the flipside, a measure of disposable income in china has been going down. so some economists have been questioning the ability of the chinese consumer to hold up, given these kinds of numbers. if prices are going up and income is going down. this is definitely something to watch in the coming quarters and on next year's singles' day. david: thank you, julie. the transition is underway to a new president. as we look ahead to new

appointments and policy proposals, we are also taking stock at how one of the biggest political upsets in modern history happened. niall ferguson weighed in on "surveillance" earlier today. >> things had gone to such a point that there were enough voters to gamble on trump because of their dissatisfaction with the current policy, not just of the last eight years, but of the last 16 years. this was a repudiation as much of the bush era as the obama ear. >> with your study of regime changes in civilizations, what is the immediate disappointment for the new regime? there is a honeymoon, there will be the inauguration. when does the first disappointment set in for a republican president, republican senate, and republican house? >> i am trying to work it out. divided government is no more. the republicans control the

entirety of the key institutions of the federal government, and yhey also have extraordinaril strength. what is not to like from the republican vantage point? the issue is whether donald agenda can be aligned with the agenda for his own party, since he himself has been -- he has been a protectionist, wants to restrict immigration, somewhat: nativism. he is planning a keynesian fiscal policy. this is all pretty strong meat for the republican traditionalists. that may be the disappointment as they come to terms with how much of that they can actually swallow. >> use a divided government no more. the republicans were there to keep a check on donald trump, not that they are the same page all of a sudden. >> this is but will be

interesting to watch. there has been so much surprise at trump's victory, nearly everyone underestimated this. people are now enthralled to the victor. trump has, i think, played is very deftly, the humility of his handled hisway he meeting with president obama yesterday. all of this is carefully calibrated, i think, to reassure people he is not a crazy man. i think we're already seeing a peculiar kind of pet it. -- pivot. from popular campaign rhetoric to state like rhetoric. people expect of him to do this much earlier. i thought that he should do it in the debates before the election, but when you think about it, the day to do the pivot is the day after you have won. >> it is everyone's understanding that president obama had also asked the senate and house to pass on fiscal

spending because he wanted to build more for folks on infrastructure. they said no. will they say yes to donald trump? >> it is highly likely because he is in a much stronger position, as we mentioned before , he has the senate, the house. but above all, he has the initiative. i am slightly more bullish term,e, to use tom's regime change is here. regime change applies to a major change in policy that resets expectations of market participants. we saw such a regime change at the end of the 1970's and early 1980's that launched a period of falling inflation and falling rates. i think the trump regime change will be in the opposite direction and we already see it. we will see upward shift in inflation expectations and in nominal rates. i think this is risky from a fiscal point of view if the

deficit explodes, which it probably will. then we could see a worrying increase in borrowing costs for the federal government. david: that was niall ferguson, senior fellow at the hoover institute. will talk kbw ceo about president-elect trump's attempt to rip up financial rules. and what role is therefore political insiders inside of donald trump's washington? this is bloomberg. ♪

david: this is "bloomberg markets." i'm david gura. in washington, it used to be good to be an insider, no longer in the error of donald trump. peter coy writes about the pace

of the american elite in the latest edition of business week. the consummate washington insider. who are these guys? >> these are people from government, of course, nongovernmental organizations, national resources defense council, all the way to the national rifle association, the news media, not to be forgotten, all the people who move into government and out of it again. republicans find their places outside of government during a democratic administration and vice versa. there is kind of a permanent establishment not just in washington but bicoastal. other members of establishment in the new york area, wall street, banks are important part of the establishment. california has its representative establishment, too, the entertainment industry, large corporations.

donald trump has campaigned against all of these people. so now they are ducking their heads thinking, how do i stay out of trouble in the new washington? david: i imagine a lot of them all hole up in the think tanks as this is going on. you look at his transition website and there is a call to fill 4000 positions in government. there will be a bit of tension between the rhetoric that he used on the campaign trail about these guys and the fact that he needs people to work in his administration, he needs people who knows how to get things done. true.y in my article, i spoke to the former michigan governor who is the president of the business roundtable, which is so much a part of the washington establishment, represents ceos of that largest companies. they invited the heads of the transition team for clinton and trunk to speak, and so for republicans it was chris christie. when he spoke to the assembled 85 ceos, he said, some of you

may be getting a phone call, assuming trump won, which he did, and i hope he will answer that call, because we need your service for the country. they are thinking, not so bad. is the kind of relationship we want to have with a trump administration. i believe there is a big part of the establishment that got that way because it is nimble, it knows how to ride the wave and find a place in whatever administration takes office. david: donald trump says he intends to drain the swamp. d.c., of course built on top of a swap a long time ago. we just learned trent lott, former congressman, now big-time lobbyist in d.c., will help, i suppose with that. what does this say about the genuineness of the rhetoric? >> i think he meant it when he said it but he is running into the hard realities of how you run a government when your team , asists of your children

handful of friends who themselves are not part of the establishment, who don't have their hands on the levers of power. that is why i think maybe it will not be quite the transmogrification as people were expecting. let me ask you about how these two parties are taking stock of what's happening here. based on polling, a lot of people thought there would be a big moment of crisis for the republican party. we could see a deeper fracture, a split. now there are those who think the republican party is fine, perhaps involved some, compared to the democratic party. what is the democratic party thinking in the way that the election turned out, its composition, and where it's headed? >> washington understands power and winning. hillary clinton just had an historic loss, and election in a democrats hands.

her star has fallen, so has that of her husband. that centrist wing of the democratic party is the one with the problem. ironically, it is the bernie sanders and elizabeth warren wing of the party that has been strengthened. grew on that anti-establishment energy that donald trump grew on, and because they are going to stand up against trump. piece,it is a great peter coy. you can get the latest copy on newsstands today and online. you can hear from more of the magazine's reporters and editors every saturday. coming up, why the trump era will be great for the democratic party. this is bloomberg. ♪

carol: it is 2:00 p.m. in nork, 11 arc m. in san francisco and 7:00 p.n. in london. i'm scarlett, welcome to bloomberg markets. [captioning made possible by bloomberg television] [captioning performed by the national captioning institute,

which is responsible for its caption content and accuracy. sit ncicap.org] scarlett: we're live in nork over the next hour. plus covering stories in san francisco, next mexico, and the white house. jcpenney posted a third quarter sales shortfall. we'll discuss what the results signal for the holiday season ahead. the movement on the mexican peso was the trade to watch as the presidential election unfolded this week. returning once again to the peso as this wild week winds down and focus on other moves following the election. ultimate fighting championship makes its madison square garden debut saturday night. we'll speak to u.f.c.'s c.o.o. about the sport's historic debut at the world's most famous arena. markets close in just under two hours. julie hyman has been checking the movements in equities after a four-day rally. we seem to be taking a breather. jewel: sort of. it's at least slowed -- julie: sort of. it's at