off. blaring music as they rallied around a giant tree decorated with christmas lights. ongoing merkel has summoned top security officials to discuss the government passes response to an attack in berlin. on the groundses for the christmas market of 12 million killed and 50 people injured. the islamic state claimed responsibility for the bombing. a pentagon panel outlining donald trump's defense priorities is not included russia according to it. which obtained a copy of the memo. primary concerns listed included islamic state, cyber strategy, improving efficiencies. the number of inmates put to thingdue in part to the

into single-digit for the first time in years. georgia accounted for nearly half of executions nationwide care texas executed seven inmates, the fewest in that state had put to death since 1996. global news powered by my 2600 journalists and analysts in more than 2600 countries. this is bloomberg. scarlet: -- julie: i am julie hyman. scarlet: i am scarlet fu. u.s. stocks are climbing as investors via financials, extend group gains since the presidential election. julie: the question is what did you miss? [laughter]

lookt how translation hachangethe outlook fokeep our amended. hik. terest-rate what is really worryi bonds is politics. chuck -- top trump trades as 2017 care it the trump rally could go on for a while. if that willmore continue driving stocks to record highs. scarlet: let's give you a look as we head toward the close. abigail doolittle is standing by. >> we have major averages trading higher. the down the nasdaq are on pace for record closing highs while all the major averages have managed to put in intraday record highs, all-time highs. of course, you know the big story.

dow didn't come within 12.5 points of hitting the milestone. many are calling it an important psychological mark but not a predictive indicator. it could happen what was in the next few days, you could be the fastest 1000 point gain. this shows 1000 point increment gains. them to climb to 11,000. it took more than two years. if this should come, it would be quickly within the last 92,000. look to the bloomberg and at btv 5092, this is going back to 1999. we see when it happened in the past, it happened in clusters. 19,000 in.

the question is whether or not we put it in an additional circle in the days ahead. percentage pharmacist ahead of an earnings report. bullish comments while higher on a date for positive and capital. the firm is positive on caterpillars, emerging market, and goldman sachs trading at levels last seen in 2007. the bank of japan raised its assessment of the country's's economy since the first time of last year while making no change to monetary policy. they forecast a monetary death modest recovery thanks to resilience and private -- three increases next year. now that central banks have spoken, how does that set us up 2017? cio of cumberland

advisors, david, a q4 see -- good to see you. >> it is cold up here. it is to apologize. we look at it warmer for you. 2016, the scene was all about monetary divergence. >> we have europe in negative rates and it stay that way for a while. that is latest. if you look at bank of japan that we were just talking about for a second, they have really managed policy well. never took the deep dive to negative rates, which hurts financial institutions. back now easing his way out of it. think you have to give the bank of japan heart -- high marks. it is working slowly, after 20

years but it is working. scarlet: hasn't he been given a gift versus the u.s. dollar? perhaps luck in play as well. >> there is an old japanese expression about looking a gift horse in the mouth. of course. the stronger dollar helps. change.the postelection we have a move between the yen and the dollar. so he has got a gift and he takes advantage of it. i like that story. i think we will see more out of the market. scarlet: it goes toward 100 or 130. i want to shift gears and ask you about the u.s. because donald trump will have a major impact their use day he could name up to five governors. >> you know he can fill those.

.ook at janet yellen it is speculation but probably unlikely that she stays. be 75.scher will rouleau has in the regulator and elsepublicly have someone probably trump will name most of the new set or maybe all of the depending on a couple of the others. >> if you say the model was academics, people who thought published textbooks and monetary policy taught it. ,ou move to businessmen

financial people, bankers, a minority, you change the outlook and composition of policy. the answer is probably yes. unfolding in real time and it will be a lot of fun to watch. scarlet: he accused the fed of keeping interest rates too low for too long. as a real estate guy, he benefited from low interest rates. >> i do not know what he will do. we will probably learn through a tweet. monetary a way to run policy. expanding deficit, more precious on the interest rates and the federal budget, and possibly zero come of a strong dollar, which will start to translate

into business worldwide. another missing piece is the repatriation issue. deployed? what happens with the cash flow? how much will coalesce into monetary policy? there are so many moving parts. it will keep journalists busy. scarlet: you have to navigate all this with your invest in its decision. you look at all moving parts, how -- when you go into next year, what is your highest commission? >> mid caps have been on a tear in that is likely to continue the dollar get stronger. you know there is a bias in favor of the energy sector in the group. financials.n

interest-rate have an upward path. enter sensitives like utilities have a headwind. you can get themes today. another month or two or three before we can get details around that. scarlet: we have a continuation, lower tax rates, but large caps pharmacy favorite, is this obamacare being repealed? >> there is a piece of that. if you take the 35% corporate and you lower its 1% and make it a permanent shift, you add a dollar permanently to the s&p 500 earnings. 20 orse rates go down 25%, you have added continuing earnings to companies. how do you price the market if you just added $15 year after

year to the earnings and the s&p 500 #you can turn around and say the market is overvalued on to the cost of it but tomorrow it might he cheap. it is a tug-of-war here on which way to go. scarlet: so you are talking about the cash coming back into u.s. through potentially these tax cuts. companies spend money on? >> it depends on the rules. there are no parameters. they would say listen, take a fourth of it and spend it on infrastructure and buy bonds to pay for the treasure. then we have got a free-for-all. we're free to do what we want.

if we change the tax code, what about interest as a deductible item? all of these issues in the restructure of the corporate tax code, then you have got to big whirlpool spinning here. scarlet: thank you so much. >> stay safe. >> you too. and coming up, she's global advisor mohamed el-erian on what can sustain the so-called trump rally for u.s. markets. this is bloomberg. ♪

scarlet: the u.s. dollar is the

strongest as has been since 2002. will we see more growth tied to monetary policy? onef global advisor was daybreak america today and was asked when monetary policy becomes self-limiting and produces the opposite of desired growth. >> it goes too far when it does two things. when it fuels protectionist rhetoric in the united states. the is why in order for trump rally to be sustained, it is not just about fomenting policy at home. germany, and china. >> this was an inflationary move rather than true growth. if there is really inflation without underlying growth, that will hurt the dollar.

>> absolutely. if we get protectionist tendencies, that is even worse. it is an open issue right now. the market has priced three distinct issuances. one is high inflation as you mentioned. two is hired growth. -- higher growth. that is why you're getting the textbook reaction on the equity and bond market and fx segment. >> i want to explore the two channels you have identified financial conditions and the protectionist rhetoric that could come out. for trump to do what he would like to do, the stronger dollar is not part of the story. who steps in? it is not the fed as a moment. desirable is that

governments in germany, japan, china step in with two things. structural reforms and more fiscal stimulus. that is desirable. you get a rebalancing, you can maintain the equity rally, and you could do not get too much pressure from the segment. succeed, it iso not just that he has a clear path to mystically because the governments control both houses of congress, but he will need to convince the allies and china to move on their rebalancing. book, thee in your only game in time, advising mr. trump as he takes off, one of structural reforms, let's start specifically with the tax code and particularly corporate taxation. if you are advising mr. miniature right now, what would you tell him? .> one is simplify it

remove a lot of the entegris distortions. we have not had a fundamental tax reform since the mid-80's. we have had a lot of tweaks that resulted in a system that is less coherence and certainly not progrowth. the first thing is to simplify it. second, the minute you do that, you lower your rates and third, you can move on deregulation infrastructure spending. it is relatively low hanging fruit. president obama proposed some of this but cannot get any cooperation from congress. question is yesterday, we're talking about a spread and diversions where the united states continue to deregulate: ashley go the other way in europe. we call this a race to the bottom, will this be the beginning of that again? issue is dispersion. we get it in economic performance and we also get

dispersion and many elements of policies. much youa limit to how get including on deregulation. , thees back to the issue u.s. can do a bit on its own but in order to sustain all of this, it needs other countries to rebalance. >> to what extent will the united states reflection way that change? basedl be a conversation on regulation. the capital will flow toward markets that will be regulated. >> correct. that speaks to either the u.s. pulls up everybody else over because others don't and the currency gets too strong here in the u.s., the u.s. gets pulled down by everybody else. that is a tug-of-war that will pay out in 2017. the markets are betting on pulling everyone else up right now. therek from pimco said,

are two sides to the risk and one has to be careful not to over emphasize one side. >> i have been told there is no today risk here help me out. here is my dashboard. treasury pushing 315. the definition 27 -- 20,000 points at the moment. what matters more to main street, the mortgage rate at the end of the month and where the 30 year trade is at the moment and what that will mean, or seeing now 20 k splash across the front page in newspapers? i think 20 k will have an influence to we are getting higher rates for the right reasons. the right reasons are people are pricing in higher nominal gdp. 20 k will be the signal of higher nominal gdp entire mortgages, well yes, that is not great but it is coming because we will get more income, more

jobs, and more growth. that is narrative that will play out for a while. at the end of january, people will they, are the measures following? we have got to evaluate all of this. got to go to a detailed design which is not easy. >> let's go to the short end of the curve. auto loans. the short end, the fed is not really raising the rates here. at what point does it affect sectors like the automobile industry? is a race between the cost of borrowing, affordability, and income. we are not yet at tip-in points in terms of the funding cost. we are starting from artificially low levels. you may get a reverse reaction, which is, people accelerate the

purchases upfront. you may get a reverse reaction initially and you have to pay back later on. >> up next, we will look at the past 60 years of index. this is bloomberg. ♪

scarlet: italy wang an increase for wait to banks. you're looking at a snapshot of

the italian government current debt repayments several. the bluest portion of the bar is the principle of that and the ellis is interest. it goes down back again as you head out. potentially rescuing banks -- yesterday, asking permission for parliament to increase the public debt by as much as 20 billion euros. will fail inably his efforts to raise funds here it is not getting the anchor investment it is looking more. not committed just yet. not command for it seemingly. our hopes.sing we have not quite gotten there. waste by historical standards.

for theck to the 1950's dow, it shows every time it has doubled. it happened quickly in the 1980's and the 1990's in the latest dubbing has gone longer. we are within about 50 points of the 20,000 level. we have been going in starts here. the shortest time, as abigail was telling us earlier, it was 35 calendar days. we will see if we get there if we set a new record. >> it is very cool. i love this. you have a lot more banks fueling the latest leg up since the election. debate about whether 20,000 is important at all. whether it means anything at all or if it is a nice round number we cannot get enough of.

the market closes next. take a look at the interest rates trading as we head toward the close. not quite. but we are higher by 80 points and it is good for a record close once we get there. this is bloomberg. ♪

scarlet: we are moments away from the closing bell.

"what'd you miss?" average make another record but only flirts with getting close to the mark, the milestone yet to be reached. i am scarlet fu. anchor: i'm julie hyman. scarlet: you can watch our closing bell coverage of every weekday from 4:00 to 5:00 p.m. eastern. we begin with our market minutes. a record close here for the dow jones industrial average and the nasdaq comp is it. 11 major groups in the s&p 500 rising. in terms of economic data, no scheduled events. there was no specific catalyst for us to continue this rally. julie: volume is down. people are wafer the holidays -- are away for the holidays already. it is on relatively low volume. scarlet: if you look up the

sector breakdown, this is grouped ranked returns. no clear divide between cyclicals or defensive, certainly among the winners. telecoms, which is typically a defensive set are also gaining ground here. also gaining ground here. your consumer staples and health care, but is health care really a defensive these days? julie: there is not a lot of rhyme or reason. scarlet: what we do see thematically is the continued drag lower in the vix. it is holding below 12 at the moment. 11.54. historical averages almost 20. look atf you take a fixed income on the day, we have got treasuries seeing a bit of divergence in the curve.

the two-year yield falling by a is point. the selloff resuming their. what is -- resuming there. we talked a lot all about correspondence and -- trend, butt a interesting correlation between oil prices in the 10 year yield. oil price and the 10 year yield in white and we have seen more correlation as we look at the set of rising commodities in the inflation outlook. that is something to watch perhaps going into next year also. scarlet: of course in currencies, the boj had its meeting overnight and made no change. governor kuroda said the current dollar yen rate reflects a stronger dollar rather than a weaker yen. the next move according to

analysts -- that wouldweakens, add to the argument for rating the 10 year yield target to keep the young from falling too much. euro,k check of the deepening its losses. last year it broke through the lows of last december. it is now trading at its weakest level since january of 2003. everyone is on parity watch. julie: julie european vacation watch. we looked at oil versus the 10 year but gold is worth mentioning. there is the year-to-date chart. its lowest. we have seen not a breaking of that trend downward since we have seen since the election. copper worth mentioning even though on the day we did not see that much of a percentage change, you see a push and pull between the effects of the stronger dollar on the one hand and a drop in inventory on the london metal exchange on the other, so that push and pull

equally not a lot of movement on the day there. pretty flat. those are today's market minutes. let us talk about today's stock records. so, mark, welcome. -- market, welcome. rc, welcome. this momentum have seen, when you have this kind of momentum, is it hard to slow it down? do you need a catalyst to do so? marc: that is a good question. there has been a sea change of hope. when you look at the fundamentals, the valuations, there is a lot of hope baked into policy next year. that could cut both ways, but if you look at the economic indicators, the index on bloomberg, you have seen there is a good positive tailwind where economic surprise indexes of really sword.

you are coming off the -- have really soared. we are looking at 2% for the year. global growth, you have brazil coming out of recession, so you have a positive backdrop to growth as well. up the i pulled bloomberg economic surprise index, so if you comment by the bloomberg here, you can look at a six-month snapshot. there is the move higher, data surpassing economist expectations. the five-year, we are not back to the levels we had seen necessarily back in march, 2012, but we are past the point of september 2014. julie: that is not even accounting for all of this suppose it stimulus that is -- supposed stimulus coming up the pipe. how you factor that into your analysis when it is still unknown? marc: we are trading at 17 times

s&p for the year. that is cycle highs. there is a lot of that. we are looking at 129 for eps of next year. you could add $10 for stimulus corporate tax, etc.. on a run rate basis, you are looking at five dollars because you would have the drag from interest going forward. you have baked in a lot of that and you're looking for policy to deliver, but you have seen a significant shift already in sentiment, coming from a very low base, but investors have been extremely cautious on the markets. you see sentiment move forward. you have seen the flows into equities out of bonds, probably the biggest shift in about two years. you have still seen over the last decade, probably $1.5 trillion in bonds and nothing in equities. there could be a sizable shift of flows back into equities if we continue to deliver here in hopes of a recovery into next year. scarlet: the reflation trade is

not yet over. julie mentioned catalyst, verbal intervention, job owning, from donald trump, from the republicans, that you say could drive big market swings. is there a relevant historical precedent for this? marc: we'll see, right? the truth is, there is this seachange in terms of sentiment. that is the thing to watch. we look at the southside indicators for what wall street is expecting -- scarlet: i think we have a chart of that. marc: that is a noticeable jump, on a low basis. you know, that is one thing i would be tracking to see how sentiment is shifting on wall street. we have also seen from an active we have seen to month ago, they were sitting globally on 5.8% of cash on the sidelines. that has dropped a full percentage point of late. this is our southside indicator.

it has jumped up significantly but as far away from euphoria. euphoria is this missing ingredient that comes towards the late ages of a bull market, typically the last year of a bull market. you can see a 20% move to the upside. this sentiment coming off these very low levels is all something that could potentially push this market significantly higher. julie: while he might not have euphoria, we seem to have sort of consensus, if you will, growing consensus. there seems to be this optimism on the one hand. there seems to be consensus when it comes to industry. sectors to buy, sectors to avoid in the s&p 500. stay away from defensive, stay away from interest rates, go cyclical, financials, etc.. how'd you go up when everyone is going in the same direction? marc: we are really hanging our hats on policy delivering. if we see policy missteps, we see some protectionist measures

come through, etc., and you get a stagflation environment, our bear is 1600. we are overweight health care, for yields based on the we prefer telecoms, and from a cyclical exposure, we prefer consumer. scarlet: it is not clear whether that has been priced in. it is one of the region's share prices continue rallying. jolt to that one time the bottom line. at what point does that get priced in? details need to be revealed, but at what point do investors think this will be the big game changer? marc: that is a good point actually. what is interesting is fiscal stimulus appears to be much more priced and then tax beneficiaries, so we looks at companiesnge of those that benefit from fiscal stimulus and you have seen it

virtually double versus those that don't benefit. those that have significantly higher corporate tax rates that could benefit from or protects is coming back, they have not seen those type of re-rating, so there is much more opportunity on the corporate tax side than the potential fiscal side. julie: we talk about all of these unknowns with policy for next year, and one of the things that dropped me is you said the most contrary and theme is ian theme -- contrar is long-term. is that what you have got to fall back to in this environment? marc: the truth is we have kind of all forgotten what we're playing for. the truth is, valuation explains 20 to 90% of returns. if you pick investment of the right price and stick with it, over time, it will benefit you and the problem is, because we have got more and more focus on immediate results, that for

those of us that can plow through and hold onto those investments over time, come out above. scarlet: we started with dell getting close to 20,000. this make sense to you that the dow is a star performer? gett justified that the dow to 20000 and outperform everyone else? marc: it is another measure of sentiment and if we breach that threshold, it is another thing to get people talking about equities and it you are still sitting in cash, you are missing out. equities continue to move forward. in terms of the russell small aps, their beneficiaries of cat. 3 form in the u.s. because of naturally, what they are associated with. those are continuing to look at is going and get people off the sidelines in terms of participating in this rally. scarlet: thanks for coming in, marked. -- marc.

hedge funds betting on macroeconomic trends. one of the worst performing strategies in 2016. our next guest believes he can turn it around, peter tchir joins us next. this is bloomberg. ♪

scarlet: "what'd you miss?" as he moved towards 2017, the industry has gotten an unexpected pick me up. the market rally from donald

trump's white house win. the time ever could ignite, spirit that attract productive capital. if this administration can spark a virtuous cycle in which people can make money, the move out of cash could be huge. joining us now, peter tchir. peter, you have declared 2017 to be the year of the active manager. state your case. peter: there is a few things going on. it has been -- scarlet: i have to interrupt you. nike reported results. we have nike's second quarter earnings per share, $.60, better than the company anticipated. revenue of $8.2 billion better than what analysts have been looking for. growth margins, 44.2%, pretty much in line with what analysts were looking for and inventory increasing 9%. nike has not had a great 2016. it is one of the laggards in the

dow jones industrial average for the year. earnings also out. i will take a moment to look at these numbers. it looks like the earnings are missing estimates. i am seeing different numbers so i want to kind of table it and see which ones are exactly the best to look at. it looks like revenue is missing estimates by a pretty wide margin this is correct. second-quarter revenue, $6.74 billion versus $14.9 billion. but i'm suspecting that might not be entirely correct. fedex sees its fiscal 2017 earnings per share of $10.95 to $11.45. by that measure at least, it is unclear at the revenue miss is and the company is cutting its forecast for 2017. scarlet: if you look at fedex

shares, trading is down by 2.8% now. nike getting better than 4% in after-hours trading after its revenue and profit beat. i guess you fedex, it is comparing like with like and we are not sure which items to back out. julie: it does look like a clear-cut to the forecast for 2017, so we will bring you an update on that little bit as we get more perspective on the numbers. scarlet: in the meantime, peter, i'm so sorry to interrupt you. peter: i think managers have to perform this year. i think the pressure has really built. the ability to be a closet indexer or hedge fund and keep a u.n. is clearly not working. aum is clearly not working. he get paid to be aggressive. been central bank,

central bank, central bank, so clearly we have the central banks, but all of a sudden, you have trump, the mid-election noise, brexit, italy, so i think he will have a very difficult world to navigate, which will be a time that hedge funds can perform very well, active management. i think this is the year, active can do very well. it may stem some of the outflows finding their way to passive. scarlet: hasn't this year made customers more aware, more particular, more demanding, perhaps, of their money managers, whether it be hedge fund managers or anything across the spectrum? thiswe continue to see winnowing out of people not delivering that performance? peter: for a wild, people were able to not see this performance and keep assets under management. it has taken a year, two years for this to sink in.

to outperform. people are happy to pay for performance, but not under performance. with that mentality coming in this year, i'm expecting the active managers to be more aggressive, to trade around. the other thing that is nice is the fixed income area. there is growing liquidity i believe in the corporate bond market that is going to let hedge fund managers across all asset classes be more active. traded around, look for those opportunities, look for when things are overdone versus underdone. what is the political scene mike? -- scene like? passive does very well. passive i think is very good at taking what has gone on and protecting it. when those productions change, he gets really awful. one of the best examples is the huge inflows into these lowball funds and that turned into an epic disaster once the outflows of that post there was no natural buyer. these funds were very good at

looking at retrospective. i'm betting that this is the year for the active manager. that havehe smart etf exploded, you are saying they are based on themes for the secular stagnation. avila -- stagnation period. peter: will they miss the reflation trade? time when active managers who are aggressive can look and be ahead of the curve. investors on the active site will have to maybe miss a bit of the upside, ms. a bit of the -- of the downside. if you panicked, you were out. if you bought anything that they, that drive your whole quarters return. that is the environment we are in right now. there's going to be volatility spreading across asset classes. volatility ands this opportunity and it is going to come down to being set the right. we talk about wanting to be a stock pickers market, i think this will be that year. scarlet: we are going to talk to

you a little bit more over the break about where to go. i want to reiterate these fedex numbers. revenuea corrupt number. revenue for fedex in the second quarter, fiscal second-quarter, matching estimates. $14.9 billion, and once again, adjusted earnings per share cutting its forecast for fiscal 2017. julie: the shares are down, but wanted to clarify on that revenue number. scarlet: quick recap of nike results as well. earnings per share in the second quarter beating analyst estimates. revenue topping the consensus as well. gross margin do contract from a year ago to 44.2%. nike citing higher average selling prices, offset by higher products cost. there is some inflation there and unfavorable changes in ethics rates, a stronger dollar. we have much more coming up in what you missed with peter tchir. we will talk about the top trump

trades of 2017. from new york, this is bloomberg. ♪

scarlet: breaking earnings news. the company is reaffirming its forecast for adjusted earnings per share for the full year of $11.85 to $12.45. the company spent or to improve its growing ground shipping unit and that offset to some extent the growth in online shopping, which has been a huge engine of growth for companies like fedex. julie: that is ups as well. let us get back to peter tchir. he is still here. let us talk about what those active managers or any manager

should be doing with their money in 2017. top trump trades, perhaps. domestic energy is one of your big fix. you are looking at -- big picks. you are looking at that versus financials. peter: there is a lot of room for energy to continue to improve. policy got it from a perspective, a lot of energy backers in the republican party should help energy. there is a lot of defense backers and anything that really makes energy independence more probable will also get the support and to be honest, barack obama specifically really blocked a lot of proposals in the energy space. a lot of the infrastructure in ands going to be around, supportive of energy. energyg that really help mover on the country should be good so i look at the mlb space and that seems undervalued to me and i look at the financials.

the reality is, even with --dropping, some of dodd frank will change. the yield curve steepen the bit. again, that is going to take a while. that rate is overdone. i don't like the big financials right now. i think that traded overdone and things like mlb is our underdone. that is where performance is going to be given. mlps are going to be helped. not enough is person. scarlet: the time patient is to slam on to the emerging markets because the stronger dollar hurts them. alreadyhat trade has played out. we saw a lot of inflows into that. we taste the asset values -- d the asset values. the dollar seems to have plateaued. maybe it is already overdone, suggest stable dollar helps on the inside.

energy is fine. the u.s. is maybe going to touch towards 3% gdp growth. emerging markets could benefit. i'm looking at emerging-market debt first. equities are any way to play this. julie: oil prices are trumpndent of u.s. administration policy, so how optimistic are you opec was the to the cuts and the stars are going to align and oil will continue to move higher? ater: i am a little bits and call. so long as the saudi's have not done the aramco ipo, they have every incentive to keep oil above 40 or something like that. the saudi's are the ones leading the statements in terms of the cut back on their selling. saudi arabia has a huge incentive. i think there is support. anchor: peter, think you so much. coming up next, we will be speaking with on 10 as the company boost its -- to john

chen. this is bloomberg. ♪

>> i'm courtly collins. -- courtney collins. a bomb went off in western aleppo where dozens of people were gathered for a christmas tree lighting event. no injuries reported and celebrations resumed a few minutes after the device went off. dozens of syrians waving flags as they rallied around a giant tree decorated with christmas lights. claimingtate is responsibility for the berlin attack according to the groups news agency. has summoned her top security officials to discuss the government's response to the deadly attack in berlin. the site earlier

today, laying white roses for the 12 people killed and 50 people injured. fbi agents were convinced that s laptopweiner' contained classified information. that is according to an fbi search warrant application unveiled today. courtney: he was being investigated in an unrelated matter. news about the investigation was revealed in the final days of the presidential election. more charges have been filed by michigan's attorney general l in theead-tainted water crisis in flint. lead-tainted the water crisis in flint. nine others have been charged in the probe. news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. scarlet: let us get a recap of

today's market action. day two of the final trading week of 2016. the s&p 500 adding a third of 1%, eight of the 11 major groups in that index did move higher, led by the financials. closinglso, earnings in trading. fedex reported numbers and the company's profit fell short of estimates by $.11 a share. 280, the company spending more on its growing ground shipping operation that is offsetting to some extent the jump in holiday online shopping that is bringing so many boxes to all of our doors. scarlet: speaking of boxes, some of those might be shoeboxes. nike reporting results. it isasing concerns that losing ground to under armour or adidas. period.ith $.50 in the one thing we did not get any details on was worldwide futures

orders and this according to the company will be referenced on the earnings conference call as deemed appropriate. not sure why that would be the case that it would not be deemed appropriate in the news release, but in any case, for now up by 1.3%. julie: another company reporting earnings today. blackberry posted a profit margin of nearly 70%. bloombergs caroline hyde caught theith john chen from company's headquarters in ontario and asked him whether these margins are sustainable. john: the market is growing. we committed that we will be moving faster than the market about have come to -- that. caroline: angela merkel uses blackberry. are you seeing a pickup in demand at the moment?

actually, in a certain way, that answer is yes. the answer has to be yes. , see a lot of discussion people try to get their arms around, especially can't enterprises, tries to get their arms around security and cyber security. mobility is one of the biggest component ability points, so this is where we excel. we are the number one player in where mobile meets security. a lot of conversation, we feel very comfortable where we are and where we hit with the customers. caroline: it is interesting, you were announcing just yesterday, a new research center in canada to focus on automation, driverless vehicles. this is a really crowded space. you are up against phone makers, the software makers, apple and the tech giants, not to mention the automakers as well. how do you fight within this competitive space? john: i do not fight with them

at all. first of all, about a month ago, we announced a transaction or agreement with ford motor company. we are providing software to help them build the next generation car. i will let them tell you what the next generation car is, but we are helping them to do that and we have engineering people helping them, using our software. this is just an example of what the autonomous driving innovation centers will focus on. all the automakers will be our customers, our partners. all of the tier 1's like panasonic and harmon will be our partners. they have already been our partner and we are very proud of our relationship with them. we are not setting up to compete with the automakers. we are not setting up to compete with tier 1.

we are pretty embracing, pretty open standard. we want to build the foundation where cars can safely be put together and put on the road. chen withat was john caroline hyde. onrlet: we are going to stay the mobile industry. we are looking at telecoms with bloomberg intelligence. we are going to take a look at what you cannot miss in different sectors or 2017. julie: joining us now, john butler. we all know the troubles they have had with handsets. now one focusing software. one of the things you are focusing on is apple and what it is doing in china. apple seems to be losing momentum in the country. john: apple has a lot of problems right now, and it really begins with china. i'm not sure it ends there, but it begins there. when you look back at a couple of years, i mean china was 25% of iphone sales. it is now down to about 18%.

their real problem is they are up against these local competitors that are doing extremely well. they are coming out with great devices at lower price points and these are companies like tivo. -- vivo. they are hometown favorites in china and apple is having a hard time competing there. anchor: there is a new administration coming in. what does that mean for the telecom industry? there has been talked about, could we see net neutrality thrown out, other changes made to the fcc? what are you predicting? john: i think it will be a great year coming up for telecom in that regard because they have been under so much pressure from the regulators. you know, that neutrality is the big one where, really, what they are after there is as they move into new services like video services, they want to offer what is called a zero rated service, meaning you can consume

video free of charge during those periods. at&t launched directv now. under current fcc rules, they cannot really do that. what they want to do and hope to do under the republicans is move beyond those regulations and have the freedom to offer and not have that subscribers saddled with what would be very high data rates to consume video. speaking of that convergence between data and video, you have at&t and time warner looking to get married. john: it is an interesting deal. whetherleaving aside donald trump's were to support that or push back against it, are we going to see more industry consolidation and telecom? seeingeah, you are tremendous convergence between cable operators, which are going to get into wireless and 2017, through a wholesale agreement with verizon.

if you are seeing at&t now moving into cable tv operator turf with directv. they are the largest paid tv provider in the u.s.. most people don't realize that, but through the directv acquisition, they are the largest. we are seeing that convergence. that really is in many ways, it is a distribution place. it is horizontal integration. they are moving vertically and buying into contact, which i think is a great move for the carriers. 2.hink that is their act at&t is making a stronger move than verizon. anchor: is in there sort of only so many choices though when it comes to these kind of deals and what we can potentially see? ofn: there is still a couple properties out there. i mean, there is family owned, viacom, and cbs. cbs has been in the press reportedly in play. we'll see.

again, i think the pressure is to integrate and overcome some of those hurdles. i'm sure viacom and cbs are feeling pressure as well. what is happened -- has happened is linear tv is under pressure as everyone including me begin to consume a lot of media on tablets and smartphones, they are moving over the top and looking to the internet. scarlet: everybody is waiting to download and view their tv shows on their 4g lte streaming. [laughter] scarlet: 5g is now on the horizon for 2017, isn't it? john: it has been much-hyped ove by the way. scarlet: it is always hyped. lightning fast. lightningeally is fast, but the standards have to be set, and that is probably going to happen around 2020. what you see in telecom is a lot of people begin to build prestandard equipment for the

carriers to go out and feel, try on some of the carriers. amazon will get aggressive enough to come out with what are called prestandards commercial services. they will go out and offer a higher-speed service with this sort of proprietary 5g equipment , which will have frankly, much higher speed than 4g and get, a flavor for how to drive that network, and really manage it, and then swap out for standard based equipment down the road. i think we have an interesting 2017 coming up. scarlet: we look forward to it and breaking it down with you. john butler, senior telecoms analyst at bloomberg intelligence. eyeing anald trump is former bush official for trade representative. we will have the latest. this is bloomberg. ♪

scarlet: "what'd you miss?" president elect donald trump is considering a former official in the small business administration for u.s. trade representative. she became the highest ranking latina in the company part history. here is what this could mean for trade under trump. margaret, what do we know about her and her background and also sort of how her views on trade online with president-elect trump'as? as yout: her biography said is this combination not only of experience in the bush

administration, but at ups, at that level as the highest latina with an emphasis on operations in latin america. that could become really important. idea that some of the decisions over trade would be largely subsumed by commerce no, they're not looking at collapsing into comics, but wilbur ross will have a strong will to play. and this ise sense, something every administration goes into. what is the wall, who can handle trade? trade will be so important. some,working to do bringing together of latino voters, latino business people, into the trump administration is really important and she may serve that function. there: the cynics out

will wonder if this is a political move, his appointing a female latina. what are her credentials? our u.s. trade representative kirk locally focused on the private sector? margaret: ustr really comes from a range. it depends on who the president's. we saw in president obama's case, before going to ustr, playing this role. , it certainly helps, particularly in president-elect trump's case, to have someone with that private sector background, keeping not only with the tasks of ustr, but the ways you approach the entire cabinet selection process, but you tr is very heavily staffed is a veryhas -- ustr heavily staffed group. it has an ambassador level posting. it really depends on what president-elect trump wants to do, but with this position and

on trade, but i think the symbolism cannot be overlooked. it is not as a she does not have skills and qualifications, but to say that symbolism, if in fact that is the direction in which he goes, is very important. anchor: in terms of the cabinet positions now yet to fill, we have some headlines today that there are some folks who met with president elect trump in florida as possible contenders to had the veterans affairs department, including the head of the cleveland clinic. what do we know in terms of the progress on that and the other post? that is right. there are only a couple of cabinet and high-level positions like that left to fill. what you see with the v.a. is quite interesting. you mentioned the head of the cleveland clinic. what is interesting about mr. four is he was under consideration by president obama to leave the v.a.. that is important and a vietnam veteran as well.

the other gentleman, with whom president-elect trump is meeting and is under consideration now for this job, one of the newer names to be added to this is -- a man who is ceo of a multibillion-dollar health care company that does health care for a military -- for the military and veterans. with a lot of symbolic appeal as well as real-world experience. but others are already in the mix. this looks like a list of maybe perhaps four or so to lead the v.a. and in the coming days, we hear about agriculture, council of economic advisers, od anni, and senior staff in the white house. anchor: we look forward to hearing more about some of these cabinet positions. coming up next, our walk the talk, where we look at the

united nations. where the international organizations trying to elevate the role of women by making history, herstory. ♪

scarlet: it is time now for "walk the talk," where we look at pressures for social change and it is out facing our ability to-- outpacing our ability adapt. for greatern representation in the united nations while highlighting how they shaped global culture and politics. she is columbia's ambassador to the u.n. how herby asking her job helped to propel her story

forward. ,> our next secretary-general and now using that momentum. using that momentum, we need more women in leadership in the organization to represent, you know, that 50-50 idea of men and women shaping the world. scarlet: this idea came because your effort to get a female secretary-general did not go as planned. talk about what you learned when you went to the archives and put together this exhibit, because it was striking, some of the themes that came out. inia: we kind of found out the basement of the u.n., the archive, very important moments for the organization, the shaping of the world, led by women. francisco, 1945, the war ended, 160 delegates, and suddenly, four women appeared. they told them, you go to type.

no, i am a delegate, some said. a delegate woman? it was a big surprise. they shaped the preamble with men and women equal in this organization. so we found, in different moments in time, how women shape the different moments and the different pillars of security, peace and security, of development and of course, of human rights. it is quite interesting. scarlet: women played a critical role. the new secretary-general, antonio gutierrez, was just sworn in. tell us about his commitment to advancing the no parity. maria: he has had important moments over 20 years of his political career. prime the 10 years as minister of portugal. he had real parity. it also when he was in

charge for 10 years of refugees. you know, so he has the humanity, he has the head, and the heart. has only 22 of the leadership positions. still very far away from parity. ambassadors were only 37 out of 193. so still, we need to work, and he has to commit. scarlet: do you worry the engagement and willingness to advance gender parity takes a backseat when you look at the geopolitical tensions brewing? we can refer to the us as a russian ambassador to turkey or the seizure of a u.s. drone by china in international waters, or even donald trump's rhetoric. maria: i hope not. the world,bly around the geopolitics are not helping very much, but we have one of the most important leaders of that geopolitical direction,

which is angela merkel. she is a woman, she is running for president. we have to make an effort. and i think women will have to continue to play that role of leadership if we are there. the results could be better. i'm sure the results could be better. scarlet: sponsorship is a big part of this. as a representative from columbia, you worked with others on this exhibition. that kind of surprised me as women in the gulf states don't appear to have as many rights as men do. is there a misconception about women's rights in the gulf states? too, how surprised me encouraging they were, and how they immediately reacted to my proposal, not only of acceptance, but also of participating in the group. we will submit a paper on what

to do in the first days and the middle and long term. you will be surprised of the list of countries ready to do something, to engage with sort of leadership positions, and from there onwards, you know, which would make this world better. scarlet: and we have news on twitter. yet another executive departure. this time at a messenger tweeting that after five years, "i have decided to leave twitter and take time off. grateful to jack for the opportunity and to my team for --" this is bloomberg. ♪

scarlet: "what'd you miss?" nike shares rising. julie: fedex shares are falling after that companies earnings missed estimates. scarlet: that is it for "what'd you miss?" thanks for watching.

courtney: you are watching bloomberg technology. that's start with a check of your bloomberg first word news. the islamic state claim responsible -- responsibility for the attack on a german business -- holiday market.

says it is extending economic sanctions on russia to include eight more entities and seven individuals linked to the annexation of crimea. the move keeps pressure on russia by raising the cost of the occupation of the ukraine print -- peninsula. primary concerns are islamic state, a cyber security, and including inefficiencies. russia has been identified as a district to the united states. fbi agents were convinced former congressman anthony weiner's laptop contained classified --ormation connecting connected to the investigation of hillary clinton's in males.