the publisher, editors, and reporters of the new york times, mr. trump again, i am looking at it very closely. trump the campaign, mr. threatened to pull out of the agreement. president obama has granted clemency to 79 more inmates today. he has reduced sentences for the hundred 61 inmates since october and granted more the 1000 overall. that is more than the last 11 u.s. presidents combined. house republican leaders are urging the president not to take before heonal actions leaves office that would strengthen the iran nuclear deal. the request by house speaker paul ryan and his colleagues were made in a letter that said they expect his soon passed letter -- signing the bill should be the president passes only step. is rejecting condemnation by the united nations of its human rights

record. it says the united states is the worst abuser of human rights and european countries are committing crimes against humanity. yang has been particularly concerned with the possibility that new england sanctions would ,arget workers overseas affecting their ability to send much-needed funds back home. in turkey, the nationalist opposition party is preparing to endorse a different more power. signaling it is close to an agreement with the ruling party on a new constitution. they want to formally change from a ceremonial presidency to an executive one. president obama is rewarding the medal of freedom, the nation's highest civilian award, 221 people. you are looking at this ceremony live from the white house. tom hanks, robert de niro, and robert redford. stars, bill and

melinda gates, diana ross. the national interests of the united states, to culture or other significant endeavors. global news 24 hours a day powered by 120 600 journalists and analysts in more than 120 countries. this is bloomberg. ♪ worlde from bloomberg's headquarters in new york, i am scarlet fu. joe: i am joe weisenthal. 30 minutes from the close of trading in the u.s. scarlet: above 19,000 for the first time while opec deferred talks. joe: the question is, what did you miss? >> faltering or losing a bit of steam today.

perhaps thethat games had gone too far, too quickly. president-elect donald trump weight -- lays out his first 100 days but absent from the list is some of his most controversial plans like building a wall and obamacare. the current prime minister should gain power even if a referendum is rejected. more highlights from our conversation later. let's first get you started and check out where the indexes stand. abigail doolittle is standing by. we have stocks in the u.s. finishing on a strong note. the dow s&p 500 and asked at all trading in the green. abovee the s&p 500 back that psychologically importantly 200 level. all three of the major averages to close at all-time

record highs. less than 30 minutes will determine that. strength extends right through to small-cap. we take a look at btv 3302. this is a one-year chart of the major averages. plus the russell 2000 which closed a record high. this is the first time we had all four of these averages closed at all-time highs since 1999. we are looking at some strength here. the fact that these averages are , he toldt record highs in an email that he considers it to be bullish and a likely signals that more strength is ahead. as for the s&p 500 and what is ahead, katie stockton, the chief of technical strategy, was kind enough to share her thoughts yesterday. looking at 5091, this they chart we just took a look at an hour or so.

a very nice uptrend. then we see volatility between 2014 and 2016. we have new record highs. despite the fact that the uptrend is broken, we have new at bti g,hs and over katie is saying if the s&p 500 can in fact close above the august highs, 20 194 yesterday and today, we know yesterday happened and today, it puts her eye on a target that she set back in july of 2400. enough strategists out on the street bullish thinking the strength will continue. what could be a wrinkle, one last chart, this is 2005, in white, the s&p 500. in blue, we have the s&p 500 earnings stream. have the s&p 500 climbed to all-time highs, we have earnings in a recession. unless earnings can turn around,

it may suggest it could be troubled hyper stocks or perhaps strength in the s&p 500 is suggesting there will be a bit of a turn for the earnings for s&p 500. quite something's got to give their. thank you. joe: u.s. stocks reach new heights and a manager's warning investors to take stock of potential risks in store. here is what was said earlier today on bloomberg. growth to pick up and therefore continue to rally. if and when legislation comes in and they are not at the level we would like them to be, rates are 50 basis points higher, there is the chance for a day of reckoning on that front. >> for more on the dangers that lurk ahead, we are joined by troy, senior portfolio manager of sky bridge. for joining us here

the rally postelection has caught a lot of people by surprise. even people who thought maybe trump would be good for the markets in the medium-term, surprised by the speed of the doubt that we have seen. why do you think that is an do you think it is possible investors are overlooking some aspects of trump's that forms that are less obviously business. >> it would take several days for markets to digest the fact that more growth is good. there was so much angst will to with that potential outcome. if you compare it brexit, there are negative and medium-term consequences and it took the markets days to get past that. other than trade, it is hard to see what the negative consequences are. a deep everyone took breath and cash levels were very high and jack to two sectors

that were under the boot of .egulation those two sectors have been beaten down strongly. joe: you say other than trade. it is interesting one of the first definite things trump says he will do is withdraw from the ttp. even on finance, the republican platform as we were talking about earlier, it talks about the reinstatement of glass-steagall. why do you think these aspects that most people would say are probably negative for stocks or finance or whatever, are not the considered? >> i'm trying to expand what happened -- >> i know. why do you think people are dismissing this? >> i think most would argue trade policies would take a while. it just means we potentially will have a little more growth and trade. away from that if you look at the benefits from infrastructure stimulus, inother

the short-term, the market is weighing them higher. i think the glass-steagall comments you made is interesting. he talks a lot about how and othertax cuts stimulus measures will be good for banks and yield curves. the trump administration is concerned about the working-class in the middle-class and small business. it is not the old-school republican playbook of what -- let's do everything good for corporate america and hope it trickles down. you think about regulatory regulatory's look at relief. it will be less about getting profits back for banks, which is and moreearnings, about expanding small business lending, and really cutting corporate taxes for small business, more impactful for corporate america. the fixed tax rate for corporate america is 24%.

220, it is not that big of a deal. huge deal going from the highest marginal personal tax rate to a 15 or 20% tax rate. >> he would not know that the trump administration's per hosel's will benefit the rest of america as opposed to wall street. having said that, everyone got the election wrong and brexit wrong. a couple of big events are coming up in europe. the italian referendum, and elections next year. how do recent events influence how people influence of cells -- position themselves. positioningve been themselves for them and liquidating europe. pre-banks -- brexit, before travis post trump. liquidation continues and markets are voting in saying the populist movement long-term will lead to much stability so we aren't taking the money and running.

markets have been an agreement pulls that the outcome would be negative. no outcome.be markets are expecting no, pulls would be saying no. be thatot destabilizing. either way, i take the question back to the risk and reward. while we agree with those in europe who say there is finally liquidation, in the shorter term, we are more than happy to own assets that maybe have less upside but certainly far less downside if things take a doctrine in europe. joe: another thing that arguably works against the case in the postelection scenario, a significant backup in yields. the housing market, probably will fall off a cliff undisputedly. do you see any risk from that? quoted,inly, what you

one of the biggest reasons is despite elevated multiples, how low long day today interest rates have been. how many people talk about dividend yields being higher than treasury. that is interesting, you look at all ofdata, let's assume the progrowth policies are worth 70 times earnings. here is now at 2.35, maybe trading higher at 1.5. how do those things interplay with one another? 50 times earnings, unabashedly bullish. well, youf things go can be less enthusiastic about long equities. we have very little equity exposure. this yield her -- yield curve

move is awesome. a long time. >> taco little bit about credit. and they be cheap for a long time? >> yes. the thing about cash flow generated assets is they can stay cheap forever. when they stay cheap, that means you have less downside to the eventual recession, back a while here, and more upside if people show up and buy it. the residential housing market has in appreciating it too fast they level. a good thingare because they take up some excesses there perhaps. seven the cheapest stuff of all, commercial real estate is a complex asset classes.

a lot of issues are on risk retention. yields,er very good cash flows are much better than high-yield. later, you will get a meaningful pickup in price. >> we will hold you over after the commercial break and talk about home purchases at a nine-year high and we will see if they have a further hurdle to jump if games were to continue. we will talk that it next. his bloomberg. -- this is bloomberg. ♪

joe: we are back with joy. senior portfolio manager. one market that got hammered is emerging markets, a combination , higherrns about trade rates in the u.s., what is your view on that? a lot of people are betting on emerging markets. firstt went from worst to and now back to worst. it reminds people of how tricky it is to navigate the first and now back to worst. emerging landscape. you think about the election outcome, immediately stronger dollars. a lot of funding issues, emerging markets. the lied hillary has increased a little bit more. think about the risks from china. from china come it will be very problematic. if china decides to stop fighting currency depreciation and letting it go, that will

have a very negative impact in the short-term. the dollar is not strengthening for as long as it did in 14 and 15, 11 exacerbation of all of the funding. >> you bring up a lot of good points. we have seen india and indonesia and malaysia intervene. at anotheroking financial crisis? >> you compare it to back then, offshore liabilities are lower as a percentage of gdp. they have more reserves particularly with china. but the debt levels are higher. so you have a push and a pole. still coming off in the side that there will be a meaningful downside. our point is relative to other

things, you have more risk and may be less now than pre-election. joe: it sounds like there is a fair amount of headwinds that -- potentially for the u.s., even , ah growth aspects of this slowdown globally is not ideal all things being equal. doinglical growth is better p maybe a little worse. bounced back. joe: another aspect, home purchases hit a nine-year high. this is obviously before rates trumped up. u.s. economythe this year, a reason they like the growth story is housing had not kicked in foley, we had a long way to go until precrisis levels. rates start to kickt to the kneecaps out of the housing market, that theoretically takes away one of the ball arguments. thing's for sure.

higher mortgage rates mean activity. affordability had been very close to all-time highs. not as those as 12 or 11 went home prices were lower. still, fairly inexpensive and two 2004 before the bubble. the bottom line is you will have marginally less growth than you would have with lower mortgage rates. you do get better growth and you get more exhilaration and crisiswhich is at post levels, that goes a long way. the key indicators for affordability are wages, influenced by wage gains, mortgage rates, credit availability, and prices. wages picking up, prices may be picking up at a less health the, less egregious and less steep bubble. higher rates are negative.

still supportive all in all. or will have ae president whose specialty is real estate, might we expect him to come up with policies that are more beneficial to that industry? >> that is a great question. all of theugh rhetoric and there is probably a central message. what is best for the working and middle-class, not what is best for the 1% that made a lot of money already, and could potentially make more. go back to the basics. better growth, more inflation is good for real estate. housing has in the ultimate .nflation hedge people forgot about that in 2010, 2011. going forward, if you own

commercial real estate and the debt backed by commercial real estate and assets, you have got to feel better with inflation picking up. financial assets, stocks are better than bonds. it is not like it is all that rosie. joe: all right, troy, we appreciate it. >> the markets close less than 10 minutes away. their 39 points above 19,000 for the first time ever. we look at the record levels for u.s. equities next. this is birth. -- this bloomberg. ♪

scarlet: the nasdaq s&p 500 and the dow all ready to close at record highs simultaneously. how often does that actually happened? our producer doug into the numbers and this is what he

found. it happen a couple of times, at least this current cycle. each bar highlight on a quarterly basis. we did that so you can go back to the early 1970 six. you can see there is a long time from 2000 until 2015 when it did not happen. it happened a bunch of times in the mid to late 1990 passes in the early 1990's. droughtsee there was a in the 1970's. not kind as you mentioned it all the way over to the left-hand side of the screen, you can see where the s&p 500 did not all make highs. >> another record, but the simultaneous synchronize ties are not that common throughout history. >> absolutely. enjoy it while it lasts if you are able on equities.

joe: the euro everyone is wondering if it will go to parry against the u.s. dollar. you can see this is a five-year chart. out with a note saying it is now or never that the euro is that it has frequently been at. it has frequently been there was a lot of reason to think maybe this is the time when they go to parity. the u.s. growth story, all the political stuff we were talking about in the last segment. france.d huge convergence. huge yield gap between the u.s. and germany, so keep an eye on this. aligning for parity to happen. scarlet: time for joe to go to europe. the market close is next.

less than four minutes to go before the close. record highs all around except for the dow, the s&p and the nasdaq. we are not talking massive games -- massive gains, but yet another record high. this is bloomberg. ♪

scarlet: we are moments away

from the closing bell. another day, another record high for u.s. talk. -- u.s. stocks. the nasdaq at an all-time best and don't forget the russell 2000, a new high as well. i'm scarlet fu. want to welcome all of our viewers who are tuning in live on twitter. you can watch our closing bell coverage on twitter every week day from 4:00 until 5:00 p.m. eastern time. scarlet: we begin with our market minute. a record high for a second straight day for all four indexes. yet when you look at how trading volume fared, it dropped certainly from the 20 day average. the dow looking at a 14% rock, the s&p 500 off by about 9%. -- the dow looking at a 14% drop. most of the sectors of

today, health care and energy are the two in the red. i don't know what that means necessarily. consumer discretionary, real estate doing well as well. a closerlet's take look at health care. there were some noticeable laggards here. care shares are the big drag if there were any on the s&p 500. medtronic said second-quarter sales missed analyst estimates and it cut it for your forecast. looking at the telecom companies, there is some cheer about the prospect of net neutrality going away. theoppenheimer analyst said trump administration will likely craft -- it will be good news for internet service providers. joe: let's look at government

bonds starting with the u.s.. action once again, except that two-year yield is sensitive to rate hike expectations and continues to creep higher, at one point hitting the highest level since spring 2010. tomorrow will have further insight on how it might progress. i want to look at german yields because this is the exact opposite story. there arelds -- negative yields in the world, not all rates are going up. this is a one-year chart of german two-year yield, sharply lower. higher rates in europe anytime soon, so a real divergence from the u.s. story. scarlet: especially as the ecb gets ready for its meeting and people are looking for an extension of qe. the u.s. dollar erasing early losses.

if you look at the bloomberg , still holding around 11 month highs. is priced into once it happens you could see more expectations of further tightening which could further support the dollar before eventually giving up some of those gains. the best-performing currency is the rant. that the cost of the program would be too much of a strain to the economy and to the government budget. this comes as rating companies are descending on's south africa to review that country's credit rating this week. joe: a quick look at commodities . look at iron ore, a massive surge, of nearly 9%. ,opper continuing to dowell

all these industrial metals doing well. rubber having searched yesterday , down nearly 2%. tomorrow we get minutes from the november fed meeting and their likely to confirm that officials were closer to the first rate increase in a year before the election. the committee that -- next meets on december 13 and 14 with another read on inflation before the decision. is the economy prepared for another rate hike? joining us is a cheap international economist at deutsche bank. the market thinks it is an absolute lock -- chief international economist. makes sense. even before the election, the economic data was getting better . look at the gdp numbers.

it does make sense, we're seeing signs of wage and placement -- wage inflation. scarlet: yet when you look at the inflation data, and these are different measurements. there are a couple that are inching down a little bit. >> that's true. the white line is the most important. reading is 1.7. you could say 1.7 is not quite2. the uptrend is modified more recently but nevertheless the

trend is worrying when you think about the fact that we're seeing a lot of wage pressure, including construction. we've had a takeoff and wages for the last year or soon and that suggest that it's time for the fed to move. joe: you've been pointing out that inflation measures of real inflation have been trending up for a while. it feels like something has snapped postelection where now bunch of people are believing the data. has anything changed for you in terms of your thinking of the rater-term outlook for the pass, that it will be steeper than previously thought? the market has certainly priced the curve upward. you see that it's been basically coming down. it's been coming on for a very long period. that chart is overall suggesting that the market is moving up.

what has been unique about the last several years is its constantly been a dovish hike. joe: the green line here is the fed line. the red line is where the market was as of the last meeting. what we see that's what we see with that blue line is that the market is moving closer to the fed. >> that's why the december meeting is so important. we've been used to be dovish comments from the fed but if we do have an upside surprise, maybe we can get a hawkish hike in december, and that would be the first time they come out and say where a little bit behind. the latest beach saying we can have hikes next year in the market. scarlet: i find that interesting, a hawkish hike,

what does that mean in terms of the outlook? >> that basically means that at the moment they are arguing there will be to hikes next year -- two hikes next year. making signals that more rate hikes would be needed next your, that will be the first some actually say we need more rate hikes, not less. joe: as an economist and fed watcher, how do you think about the risk of a politicization of the fed? suddenly it would appear that there is a clash, this incoming president doesn't seem like the type to keep his views help close to the vest. do you worry about something where you have the white house saying this is bad? >> i get a lot of client questions about what about the , that certainly

opens up a number questions that we have not been asking for quite some time. so indeed, there's a lot of uncertainty on the political front and this could potentially have some indications. joe: you will be staying with us and we will talk more about potential donald trump policies and the ripple effects of the oncoming administration. scarlet: hewlett-packard ,nterprise and hp incorporated let's start with hp enterprise, the faster growing enterprise part of the business. fourth-quarter adjusted earnings per share of $.61, beating estimates by a penny. the stock down marginally right now. as for the legacy printer and pc business, revenue coming in ander than anticipated

adjusted earnings per share in line with what analysts were looking for. that is down by 1%. we will keep an i on these. this is bloomberg. ♪

trumpsident-elect donald said he had no intention to investigate or prosecute hillary clinton for her use of a private email server or her family's foundation. the president-elect said, i don't want to hurt the clintons. i really don't. she went through a lot and suffered greatly in many ways. according to tweets from the papers journalist, he added, i think it would be very, very

divisive for the country. a new poll says most americans, 50 3%, say donald trump ultimately will do a very good or fairly good job as president. 66% say mr. trump will bring change to the country, but only 43% say it will be for the better. tennessee, aa, school bus driver has been arrested and charged with be he can homicide in the deaths of five children. authorities say monday's wreck happened because the driver was speeding. the bus flipped onto its side and hit a tree. 35 students from kindergarten through fifth grade were aboard. more than 20 were taken to a hospital. authorities say 12 remain hospitalized. a new report concludes that since 2014, islamic state has used chemical weapons in iraq ,nd syria at least 52 times targeted 19 times.

the report says chlorine and mustard agents are the most likely chemicals to be used against civilians or military forces in mosul. i'm mark crumpton. this is bloomberg. scarlet: president-elect donald trump bows to start u.s. withdrawal from the transpacific partnership prove it in a youtube announcement, he detailed the executive actions he could take on day one. >> am going to issue a notification of intent to withdraw from the transpacific partnership, a potential disaster for our country. absent from the list were some of his most controversial plans such as building wall and repealing obama care. the big question is, which policies are we going to get? the one for he's a big spender and boost the economy, or something that's more republican

la paul ryan? economists have not really adjusted their thoughts. >> we just don't know, from a market perspective it's all about economic policies and what they are going to look like, how big or small will they be? there's a whole range of other policies that could be even more important. the market conversation is all about that we think a lot is coming. we have not seen a dramatic upgrader the forecast so there is some discrepancy in some markets getting ahead of themselves. but it's for declare that changes in the air. joe: you heard on the clip he was talking about his priority

on day one is to withdraw from the tpp. a stance that is less hospitable toward trade. what are the economic ramifications? >> it depends on the magnitude and how important it is from a macro perspective. it's still very early and it remains to be seen how significant it will be. there's just still so many things that could be positive. there are a few things where you could be slightly worried, but overall, we just believe it looks like some bigger changes are coming. scarlet: whatever comes, everyone is pricing in a higher dollar and that's wreaking havoc on commercial markets. everyone sees it as positive right now that we will get a boost in government spending. but down the road is it going to be a problem eventually? we will have to deal witheveryoe right is

sooner or later and it will be a drag on growth. >> is quite fascinating. joe: we have a good chart of the treasury move index that demonstrates that. >> we've seen a very significant increase in volatility in rates and fixed income. we've seen a dramatic sense of uncertainty around where inflation and where will the fed be. to pointies continue to very limited impact on equity markets overall. the yellow line shows you volatility in fixed income and that has remained elevated since the election. here's a question i have and i've asked a bunch of people and i've never run -- really gotten a good answer. you talked to a lot of clients.

ay is it that generally from growth perspective, people have really changed their view from prior to the election? jump from the good to the bad. >> there are two reasons why. the first reason is that if you have more deregulation, you make the economy more competitive, and all countries you will see a higher potential growth rate. the chances are that we will see slightly higher gdp growth. on the structural level we will see some improvements on how the economy functions and make it more dynamic. it if we dol level, get a big fiscal expansion, it's quite ironic. for many years we've been talking about expectation. now fiscal policy comes along and we could potentially get quite a big boost, and now we say it's too much and could create inflation.

it's a chance of getting a live to the potential gdp growth rate and at the same time getting away from stagnation, that seems quite positive. scarlet: it provides a boost to asset prices, but the regulations were put in place to price fixing. >> you have to put up the pros and cons and are we putting too much weight on one than the other? it's either too much regulation or too little regulation. with that being said, everything he said during the campaigning, low corporate taxes, infrastructure spending, of course there's a big discussion of how it will be financed. a chart ofe have

corporate tax rates. this is probably the official corporate tax rate and some people say the effective tax rate is lower. but how big of a bomb could we get theoretically by lowering or reforming corporate taxes? the orange is the headline rate in the blue is indirect taxes corporate paid. were going from the top to the bottom. if you do that, you should see some significant improvement on the corporate side. the big question remains, how will this be financed? will it be financed by spending cuts? that's where the discussion between the white house and congress will tell where the outcome will be. do we expect to see the next bar start to come down? can tax cuts pay for

themselves? most studies will show you that in most cases they don't pay for themselves but in certain circumstances they can pay for themselves. you are going to stick with us. we will focus next on europe. shares of urban outfitters are falling in late trailing -- late trading. they missed on same-store sales. this is bloomberg. ♪

joe: there is a beautiful new york city sunset which we only ever get to see on this video camera because we are always inside. it is beautiful, but cold. we're back with the chief international economist at deutsche bank. i want to talk about europe now. this chart tells the whole story, the gap between u.s. 10 year yields, german 10 year yields, at the highest level since 1989. an extraordinary level of divergence being reflected. tell us what you see here. >> i see a significant decoupling of the u.s. business cycle. u.s. is getting away from lower growth. the prospects are that we will see the fed hike because they think the economy is strong enough. this is pretty much distorted by the ecb's buying of bonds.

>> that is true, that plays an important role. it has been improving generally over the last several years. we're not seeing inflation going up to the target. that makes it somewhat worrying what the outlook is for european rates versus u.s. rates. u.s., with the election of donald trump, that was seen as sort of a populist result, but the result of that economically, the markets are pricing in the government balance sheet will finally be used to spur growth. could we ever get that in europe where we actually see a physical jolt the way people are pricing it in here? >> a physical jolt is not just spending more money. it spending more money in a very calibrated way. to increase

productivity of the economy, you have to invest in something that creates productivity. whether you give money to -- it's or you start the designer fiscal policy that is most important for the long-term results. it's not about spending more money are giving tax cuts. are they going to increase the productive capacity of the economy or not? scarlet: when you look at the monetary divergence, you can really see it in one way, which is through the labor market. this is a chart you provided here. to u.s. jobless rate is back 2005 levels. you can argue that were at full employment even if the fed doesn't say that explicitly. europe is not there yet.

imply that were going to get there in another year, given what the ecb is doing now? >> remember the fed has a dual mandate of full employment and inflation. box and the out the fed is looking at the white line saying it's time to move. the orange line is telling us we still have some way to move before the ecb can support employment. we're not quite there which is why were not going to see the upward pressure before we get to that full employment point. joe: so great to have you on the show for an extended time. great discussion, we appreciate it. scarlet: coming soon, the world's biggest real estate binge. this is bloomberg. ♪

mark: time for first world -- first word news. donald trump held another round of high profile interviews today. rudy giuliani was among those who met with trump. he's being considered for director national intelligence. mr. trump said he's considering dr. ben carson to head the department of housing and urban development, but dr. carson said he had no interest in serving in mr. trump's cabinet. poll says 59% think mr. trump should close his personal twitter account.

he used twitter extensively during the campaign. he has 15.7 million followers. china is calling on the u.s. president-elect to improve relations between the two countries. the communist party's newspaper says u.s. china relationship is too big to fail and said donald trump shares an obligation to make sure that ties between the two improve and never worsen. authorities say firefighters are making progress against those while iris raging across the southeastern u.s., but several new blazes continue to creep into new areas and more fires have been started by suspected arsonists, at least 44 uncontained fires are ongoing in the south, covering more than 120,000 acres. arson investigators are -- investigations are underway in four states. a day,news 24 hours powered by more than 2600 journalists and analysts in over 120 countries. let's get a recap of

today's market action. record highs with the dow, the s&p, the nasdaq and the russell 2000. building on those gains from yesterday, oil little changed. the laggards were health care thatse of concern perhaps medical device makers would have a tougher go going forward. joe: you see green across the board. scarlet: urban outfitters declining in late trading by more than 8%, missing on earnings and sales and same-store sales. the stock is up by better than 70% so far this year so perhaps giving back some of its gains. joe: the world's largest cross-border residential property boom. the surgeon domestic housing costs have chinese citizens purchasing homes at a rapid pace.

joining us now is a professor of real estate and finance at the wharton school of business. susan formerly worked as assistant secretary for policy research at the u.s. department of housing and urban development. susan, thank you very much for joining us. there have been stories for quite a long time about chinese money buying real estate all over the world. vancouver, australia, new zealand, you name it. is this showing any signs of slowing down? susan: no signs of slowing down at this point. is here for the long run, i think. the long run being were going to see this kind of growth and demand for years. of course are in downturns in the u.s. market, but this is a long run search. moneyt: big scene chinese

flow to places like sydney, london, vancouver and hong kong. what's different now? toan: this is going second-tier cities, not just the major cities. ,t still san francisco washington, dc, new york, but it is increasingly seattle in houston and dallas in the second-tier markets across the u.s., they are seeing a ton of money coming in for residential real estate. particularly college towns like boston. what is the appeal, why is going into the second-tier cities, is it the view that we want to have assets in markets that respect property rights, and a home in houston is just a safer that as a home in san francisco? susan: absolutely. toronto, is already

very much there. nowspread to the u.s. and to the second-tier, you can get a lot more real estate than you can in china in major cities. it's a way for them to put their money in assay currently like the dollar. do we have any data on what percentage of these purchases are actually occupied or being rented out or being used productively? or are they just sitting there him to? susan -- sitting there empty? andn: there are some, manhattan is exemplary of trophy places that are empty and maybe once or twice a year being used, but generally, no. they are temporarily perhaps

investment properties with the thought down the line that they will be condos that will be used for children going to college, or we hear stories about people who are not married who are buying real estate in college towns with the expectation that when they have children they will be heading out there. there's a great story about the southern tip of malaysia across from singapore. the theme of the story was that the scale of development in this one area is absolutely extraordinary, so much that people don't really know if it will be economical, if the prices go down. how much of these cities competing against each other and how much does it depress prices in other cities? is a supply response. a lot of money is going for development.

seen supply catch up to demand in cities like new york and san francisco were heading down slightly. so there is always that possibility. there are 2.5 billion people coming to cities over the next decade so we need to develop a city of a million people a week. there is a need for financing for that an investment for that. china money is deciding where those cities are going to be. mega-region that is being developed as we speak. joe: one thing we've seen is city start to push back. we don't get that much value from selling this real estate to chinese buyers. , did theens after that cities really lose their appeal once attacks on the buyers is levied, or does the money keep flowing in?

flowinghe money keeps in. there are always ways around. chanat: and prices inside -- china, you don't get a whole lot for your $1 million. you can get a lot more in orlando or houston or vancouver. should we present that everything is paid out in cash, or is there a thriving market for foreign currency mortgages? susan: it is cash. there is some mortgage but it's a lot cash. therefore interest rates go up and we've seen incredible movement in interest rates over the last few weeks. that's not going to stop it. and china tier cities collapse, thent we will see a decline in money coming out of china.

it would be a big hit to wealth in china but as long as the it'sh in china builds, moving diversity into safety. in terms of a combination of safety and human capital, is a winning combination, having access for your children to a long-term safety play and education play. joe: fascinating stuff. susan, thank you very much for coming on. up, the coming president-elect is signaling an end to any further hillary clinton investigations. which of his campaign promises may or may not be binding? this is bloomberg. ♪

scarlet: president-elect donald continued his hectic schedule of meetings today. there were revelations about everything from hillary clinton to climate change continued hisc schedule of and new details about potential cabinet picks. alex, a headline that caught our attention is that president-elect donald trump is leaning toward mitt romney as secretary of state. there was a long list of names associated with secretary of state, including rudy giuliani. why would mitt romney agree to be secretary of state after their contentious relationship during the campaign? >> when the president calls and ask you to serve your country, you agree. it's kind of a job offer you cannot refuse. it's a very prestigious role. it's one of the highest ranking

cabinet positions. secretary of state is pretty in case something were to happen to the top of the government. scarlet: and this is according to the wall street journal and the new york times. another big thing that happened today was that donald trump, after some back-and-forth this morning, went to the new and some of the headlines that came out of that, he said he was kind of open to the idea that humans contributed to climate change. i think he once called it a hoax perpetrated by china. at the end, what he usually calls the failing new york times he said is one of america's jewels. a cynic might say that donald trump has the inclination to flatter whichever audience he has at any given moment.

might say that. a cynic might also suspect that donald trump's position might change depending on the last person he spoke to. made really astounding statements at this new york times interview. for a paper that he seems to did make a lote of news with their private journalists. one of the more amazing things i -- he'she said was that under a lot of scrutiny right now about what is going to do with his business when he enters office. nothinger appears to be . he's just going to let his kids run it and there will be an arms length relationship, he will still be elbow deep in the operations. he seems to think that is not a problem. scarlet: and there is no law in the land that prevents that from

happening? alex: not really. there's a constitutional clause if he gets any sort of payment from foreign officials. if foreign officials stay at his whats, he could file late they call the emoluments clause of the constitution. something i haven't paid much attention to until a couple of days ago. other than that there is no conflict of interest law regarding the president. let's say he does offer mitt romney the secretary of state position and he accepts. what does that tell us about the foreign policy of this administration? alex: romney will have to execute donald trump's foreign-policy. i don't think romney will be any kind of a freelancer at the state department. hillary clinton certainly was not under barack obama, even though they were campaign rivals at one time.

these two men will have to seriously bury the hatchet if this actually goes through. only really lead the never trunk movement in the campaign, he said things like the election of donald trump would mean trickle-down racism in america. so there are rivers of bad blood between these guys. i'm still astounded this is a possibility. joe: definitely they will have to find some way to walk back that. thank you very much for joining us. scarlet: time for the bloomberg business flash. hewlett-packard enterprise offering a disappointing forecast for its first quarter profit. the reason, slumping demand for servers and storage. ceo meg whitman is stripping away underperforming businesses as she tries to make the company more flexible.

at&t's online version of directv is launching next week. directv has more than 100 live channels delivered over the internet for $35 a month. will collectds ceo a golden parachute worth at least $24 million when he steps down on december 31. it includes a consulting deal that will yell tim a minimum of $5,800 an hour. -- will yield him a minimum of $5,800 an hour. and that is the bloomberg business flash. $1500 an hour, can you imagine? joe: something for all you fine lovers out there. we will show you the index that tracks wine. this is bloomberg. ♪

scarlet: there is actually a chart that tracks fine wine on the internet. if it closes the final two months in positive territory, it will be the first year to show consistent upward movement for a year. james miles joins us now from london. joe: my first question is, how does the -- how is the index constructed? way it works?sic

>> we base it around the top winds in the market, based around high critic scores. and then we wait it by both productions and scarcity to give it a kind of market cap weighting if you like. the idea is the index reflects what is trading on our trading platform. joe: what tends to drive the price of wine as an investment? what sort of macro trend, is it about growth, about the need to find scarce assets at a time like when nice -- like how people buy gold? past, unsurprisingly, we found a quite close andelation between wine

forbes, the value of assets among the richest people. we found a quite close correlation with industrial production in emerging markets. that would make sense because in the last 10 years, hong kong and china have been a big consumer of fine wines. those are the key issues. the alternative, it's not terribly correlated with most mainstream assets. in the past we've also found it tends to do pretty well when stocks and bonds are doing quite so well. scarlet: what about the dollar? the dollar rally in the wake of the u.s. election. there is a concern here for those in the emerging markets, especially companies that have taken a lot of u.s. dollars in debt. do you see a correlation with currency bloopers? -- currency movers?

>> currency movements have been a big factor in the rally we've seen in fine wine prices in the last 12 months. clearly the impact of brexit seems -- we've seen sterling weaken against the dollar and against the euro. the u.k. has been a huge beneficiary of that. fore seen a lot of demand mainstream markets like the united states, for example. sales to the united states have more than doubled in the last 12 months. consumer isthe u.s. cashing in on the weakness of sterling. joe: you mentioned the impact of emerging markets. you can see it under late's with

the recent peaks of 2007 and 2011 with the msci. how big is a market? is wine trading on a platform for speculative reasons? >> our customers really account for the vast majority of fine wine trading. they turn over about 2 billion pounds a year. , it's small markets clearly, but it is still a material amount. for a variety of -- of historic reasons, the u.k. accounts for about a third of that trade. europe is also clearly a big player, with the u.s. and asia being big consumers. joe: one phenomenon in the world economy is incredibly low

interest rates or even negative rates in some situations. does the global interest rate situation affect whether people want to park their money in an asset that they have to pay to hold on to? >> that's a very good question. certainly, it influenced the desire for the top château, for example, to sell their wines at low prices. view, i'making the probably better off holding on to my stock for a longer time than they have done traditionally, because i'm going to make more money out of the out of the cache i'm going to earn a sale of that wine. so that has been an interesting impact of low interest rates. helps, there's no

doubt about that. scarlet: thank you so much for staying up late and speaking with us. joe: coming up, what you need to know to gear up for tomorrow's trading day. this is bloomberg. ♪

scarlet: another day, another record high for u.s. stocks. all closing at all-time highs. outlook,of tomorrow's the u.k. chancellor of the exchequer, philip hammond, will make a statement to parliament at 7:30 a.m. eastern time. joe: i will be looking at fed minutes from the monetary policy meeting in november at 2:00 p.m. eastern. this, farmn't miss

profits have been declining.

>> with all due respect to donald trump who keeps trying to get ben carson to join the administration, have you considered accepted to request mark carson has interesting theories about the pyramids and storing grain. donald trump upheld his date with a very old gray lady. on-againgain,