data, then paying the hackers to delete it and keep it quiet. janet yellen has a message for jay powell, warning against rising rates to quickly. chancellor hammond looks to lay out a popular view for brexit. for our audience worldwide, this is bloomberg daybreak. i am jonathan ferro with alix steel. david westin did the smart thing and joined the thanksgiving journey a day early. will be working tomorrow. let's get you up to speed on the action this wednesday. very much the mission of getting to the close for everyone in the united states as they are celebrating a shorter trading week for the side of the atlantic. just short of 2600 on the s&p 500. in the fx market, positive 1/10

of 1%. the treasury curve off the back commentsllen steepening just a little bit. alix: a little bit of a risk on feel except in portions of the currency market. the yen gets a good bid. , stephan'sshocker just a touch over 60 basis points. south of south of 58, 57, a lot of people denying what the yield curve could mean. my question is at what point did the yield curve become real for the deniers? the: is it the number or speed? crude prices are more expensive now than in two months. an interesting phenomenon. time for your morning brief.

the u.k. delivering its autumn budget. the data dump, jobless claims, durable goods, and it 2:00 releasing the minutes from the last monetary policy meeting. breaking headlines for you, rockwell automation rejecting the unsolicited proposal trump emerson. rockwell rejecting the emerson.ed bid from we heard potentially we would hear a bit come in as emerson tries to change its business. cavalli put success of the deal says a than 20% as he different structure. it looks like rockwell is saying no thanks. we will see if there is a revised bid coming in. jonathan: should we get to the news everyone has been talking about? a massive data breach at uber. the company paid the hackers to keep it under wraps. hackers stole data of more than including people, names, emails, and phone

numbers. the bloomberg tech reporter. what a story. when did this happen, and can they guarantee the data has been deleted? december of 2016, but they are just chosen to tell everyone about it, even though they had illegal obligation to tell regulators at the time and in some states an obligation to tell customers their data had been stolen. they didn't do that. in terms of if that has been assures us it has been, but we have no way of independently verifying that. he has said this should not have happened. he has apologized. one of many apologies he has had to make since taking over at uber. apologized to customers and regulators and saying he is trying to change the culture at the company. jonathan: we caught up with the

strategic cyber ventures ceo. believesonally don't they lived up to the credit card cybersecurity standards that would recommend more proactive measures being taken across their supply chain to include their developer community as a whole. at thecked underinvestment or lack of attention being paid to cyber security in general. illustrated by the fact the cso was a lawyer. jonathan: we knew he had an important, difficult job at uber, but the kinds of things mr. kellermann laid out, the guy the head of cybersecurity was a lawyer? the amount of money they have to spend on cybersecurity now? when is the company going to go public? could that be pushed back more? jeremy: right now you have softbank in negotiations with uber about taking a large percentage in the company.

this will give softbank some leverage to use on the valuation, the terms of the deal. $1.2 billion, can they push that down and what that means for uber? jeremy: it could push the evaluation down. there were talking about around the $50 billion mark. already a decent hit from what 18e claimed uber was worth months ago, near $70 billion. it could fall further below the 50 billion mark. alix: travis kalanick is still on the board. does he keep that seat for long? anythinge has not said so far. travis is still on the board. he controls 2 other board seats as well. i don't think he is going anywhere. i think he is holding on to his board position. whether he will be forced to make a statement about the hack, i'm not sure.

it is possible he will make some kind of statement in the coming days. jonathan: i want to bring in steve wood. where would it be trading in after hours? i assume it would be down 20% or 30%. knee-jerk reaction was it is a good job they aren't public. do they need to get public? the discipline of the market might be a good thing for this company. steve: it could be. the market is very disciplining. this is part of what we will see as they struggle through a lot of internal issues and how they will price this. i would agree that this is going to give more leverage to external offers then internal players right now. alix: what is this doing for the private versus public market valuation. what does that say to you? steve: they will be sharpening pencils on blank pieces of paper to find out what will be done.

in cyberspace, it will be critical. when i look at uber and i cannot the stockn specifically, the phenomenon, going to be uberization we can buy today given the effect is much higher. the valuations we will see in the space will spread across the market. jonathan: it seems when we talk about uber airbnb and tech unicorns conceptually, a lot of them still lose money. we have no idea what is going on behind the scenes. it seems like he comes from a public company into a private one and find issue, after issue, after issue. how widespread could this be? steve: you look at it from our perspective, security selection is important, but also asset allocation and strategic discipline will be important. that is why we are multi-asset

and global. you don't want one asset to drive that much of your portfolio return. the specific name, what does this mean? the flattening of the yield curve, looking at inflationary, this is a key component of those dynamics as well. we can't look at it just in the context of the company. alix: is this an uber issue or a broader right cheering issue? i think this is probably an uber issue. this company has had a slew of problems that have not hit other ridesharing companies or companies that are private tech companies. i think uber had a particular culture that was throughout the rules if necessary. now we come up with all of these instances in which the rules were broken and they tried to sweep things under the carpet. i think it is an uber-specific issue. and: lawsuits

investigations trickling out in new york and the u.k.? the new york attorney general saying he will investigate this. you had uber immediately hit with lawsuits trying to get certified as class-action suits by customers. in the u.k. you had the information commissioner, chief data regulator, say they are concerned about the breach and will launch an investigation. i think you could see uber hit with substantial fines. in the u.s. it is a criminal matter. in europe regulators have the levy to substantial fines against uber. jonathan: moving towards banning uber. their i assume would not help their case? jeremy: it is definitely not going to help their case. it will be another thing that will make those people on the transport for london taxi licensing board think maybe we were right to yank the license.

this is not an issue of data security that they were looking at, but this route help them. alix: thank you so much. steve wood stays with us. we talked about the regulatory oversight in europe and how they are coming after tech companies, this is another facet that will grow. jonathan: consumer protection. this company paid hackers to delete the data to protect themselves, not employees and customers. that is a strong message to send. alix: it sounds like a tv show. who does that? jonathan: a bit of a soap opera. who would play travis kalanick? you work on that. alix: is the fed concerned about the flattening yield curve, and luz, british prime minister theresa may just spoke at parliament ahead of the release of the u.k.'s autumn budget. this is bloomberg. ♪

it is dangerous is because of expectations are down. i don't some evidence think it will be down very much, but there are some suggestions that after many years it will slow inflation and even drifting down. that would be very -- a very undesirable state of affairs. jonathan: janet yellen speaking in new york. joining us in new york, the head of u.s. rates strategy. steve russell is still with us -- steve wood is still with us.

does he take over? ambitions will be very interesting. i presume they would have different styles in the way that they communicate. what stood out in her speech yesterday was the fact that she was not sure inflation was transitory. she seems to be thoroughly back her thoughts on inflation which are aligned with our view. that inflation could go up in the first half of this year, next year. over time we might end up where we are right now. jonathan: what stands out for me led by janet yellen worried about inflation would do nothing. this fed seem story about inflation, then hike, hike again, then hike again. i am concerned these are signs we are about to see inflation drift. i'm worried about an extra session and we need some space. subadra: absolutely.

by the time and extra session comes and you don't have the ability to cut rates. what you need to to provide more accommodation. i think central bankers world over are concerned about, you are moving accommodation, yes, but having room in case of a slowdown in the future. jonathan: the flatter yield curve makes whole percents. the market has the same concerns come along and coming down. they are saying they will carry on rate and rates and the front end should come up. the flattening, with that argument in mind, makes sense. steve: the chair of the fed, paul, coming in, they are weighing two different priorities. it is not the mandate of growth and inflation, it is where they inieve there is a softness the inflationary data. the institutional requirements saying they will have a high enough rates or when the recession hits there something to lower. there is a dual mandate, but it

is an institutional requirement to raise while the getting's good. the economic data is less compelling. europe will be a very good counterbalance because the data is less clear. the european central bank split the hair down the middle. they cut their policy but extended the time. they guided both ways. there will be a global softness in the inflation data and probably a lower for longer. it will go up, but lower for longer is the general statement. how flat can the curve get? subadra: what is troubling to me is how fast the curve has flattened. a couple of weeks ago, the market was flattening in december. a be one or two hikes for next year. now we are fully pricing in march and the pricing for another rate hike by the end of next year. i would say their pre-pricing has been quite dramatic.

also, you have important technicals on the backend end of the curve. a lot of demand from pension accounts. the stripping activity in the long end, where you take a bond and strip the coupons and the principles, that activity has picked up a lot in october, mostly driven by demand from tension and pension-type accounts. you're seeing the dynamic where there is technical in place with most apply coming in on the front end, then technical on the back and with demand coming from asset liability managers at a trying tothe fed is raise rates. there is a signal that you should be taking from the flatness of the curve. last when i asked the couple of days, credit risks or duration risks, they are saying duration risks. is that a hedge? it is a hedge not a risk? subadra: i completely agree. that is the way i look at it. the treasury market is becoming a place for hedgers because it

is a safe haven asset. if you aren't equity holder you probably want to have some treasuries in your portfolio. if you are a credit or high-yield holder you probably one treasuries in your portfolio as a hedge case of a downturn. jonathan: you mentioned the pace of the flattening. it doesn't indicate the crowded trade spirit usually they get sticky in that direction. how crowded is this? subadra: it is a consensual trade. the flat makes sense when the fed hikes rates. whenever offense too much the market will be concerned. steve: i don't think it is too crowded right now. it is something that will be more crowded into 2018. we were always at a toss of a coin in december, now we think it is a 2/3 probability. we are always at 3 rate hikes in 2018. jonathan: when does a get real

curvee rea yield flattening deniers? or people come on board and say this mean something? subadra: the curve could remain flat for a while as long as condition jermaine accommodative. if equities are doing well, credit spreads are doing well, if the economy in the u.s. and globally are doing well, i think there will be some willingness to look past the flatness of the curve. over time this will feed through to the broader economy. that is what i think everyone will be paying attention to. jonathan: do we see zero before 100 basis points? to zero than 100. i will be a good economist. on one hand closer to zero. will stick with us. thank you very much for joining us. coming up on friday, catch bloomberg real yield, 30 minutes

dedicated to fixed income. 5:30 in london. oil, the big story in the commodity markets, as it always is for alix steel. traders are expecting opec will not disappoint. market impact if opec does not deliver. this is bloomberg. ♪

taylor: this is bloomberg daybreak. i am taylor riggs with your bloomberg business flash. rockwell has rejected the unsolicited takeover offer from emerson. the $29 billion bid is not in the company's best interest. no response from emerson. in saudi arabia a wealthy suspect detained in a probe has

started to make payments for their freedom. some businessmen and officials are starting agreements to transfer a portion of their assets to avoid trial. the saudi government is not commenting. jp morgan ceo jamie dimon called the coin a fraud and the buyer stupid. the bank is considering whether to help customers that on the price of the cryptocurrency. according to a person with knowledge of the situation jp morgan is gauging client demand and potential risk. that is your bloomberg business flash. alix? about bitcoinalk and jamie dimon? i hate bitcoin, but we will help you trade on futures. listen to what we do and not what we say at the end of the day. jonathan: does he think it may futures are a little bit more legit even though the underlying thing is maybe not for him? alix: it is a great story that we will follow through the next

couple of hours. oil heading to a two-year high before opec meets in vienna. javier blas joins us from london. the news was they are inviting 20 more non-opec countries to the meeting. what is the story? javier: the policy of restraining supply that they have implemented for the last year. how seriously will they take the new countries? i do not think they will add a lot. maye two or three of them join the deal. i don't see any of them making a production cut. we could see production decline in those countries because the fuel is getting more mature and production is falling in any case. brazil,the countries, norway, are saying they will not participate in the meeting.

tightthe market will be is getting a hotel room in vienna next week. they youm so bummed get to go and i don't. wti, oil prices hit a two-year high. first month and second month contracts, it is an backwardation so we are tighter in the present month than in the future. is that sustainable? javier: the main reason for that is where suffering in u.s. as the keystone pipeline is shut down. it links the production areas from canada to oklahoma for u.s. crude. it was shut down on november 16. there was a leak. we're losing 1600 barrels a day. there is pressure to draw inventory from every refinery that was sourcing crude oil from the refinery.

wti slipping into backwardation for the first time since december 2014 and the price has gone to a two-year high. i think that is related to keystone. great to see you. javier bloss. as. coming up, the u.k. item budget will be out. we will bring you the latest. markets, two hours away from the opening bell. story as follows. equities a little bit more positive. dow futures up. s&p 500 futures up three points. ♪

jonathan: two hours away from the opening bell. a shorter trading week with enthusiasm for record high continues. just short of 2600 on futures. positive by .1%, dow futures up

.2%. a bond curve slightly steeper after yesterday's flattening throughout most of the session. the yield to basis points higher. the fx market cable going into the budget in the u.k. dead flat. 13 1.3 239. we will bring you the highlights of bill a payment's speech as we get them. here is anna edwards. we await chancellor hammond's to start talking about what is in the box. what are you expecting? anna: thanks. onare expecting him to talk tax and spending plans. we expect the office of budget responsibility will downgrade the potential for the u.k. economy.

they have been overoptimistic around expectations for productivity. that could tie the hands of the chancellor. he is expected to be more of the talking about the potential for the u.k. in post-brexit -- a post-brexit environment. constrained, a constrained chancellor. the cabinet constrained because they lost members over recent weeks. they will be trying to avoid any scandals, u-turns, or backtracking. in one sense there are many big and bold, on the other hand they are constrained and will be mindful not to do anything that further puts in jeopardy the precarious position the government is in with brexit hanging over them. jonathan: continuing the prime minister's questions at the moment. we're waiting for the markets. it doesn't seem to be an fx story at this point, but it could be a guilt story.

the management office in the u.k. what they might need to borrow. anna: indeed. there has been expectation that perhaps they are going to say the gtmo does it need to borrow as much as they thought. we did a survey at bloomberg of those in the market who suggested they lower the amount of issuance by 720 million pounds. there is the potential that the economy had performed up to this point that it than anticipated. that is a possibility. there could be a lower than that issuance that could drive up demand for gilt. bill longer-term story is different -- but the longer-term story is different depending on brexit and the like. long-term markets, analysts suggested depending on the brexit outcome and trade negotiations we could end up between 120 and 140 on cable. it depends on a host of unknowns at the moment around brexit. jonathan: the situation from the outside looking in, single issue

politics is all about brexit. what we learned from the election is it is more than one issue. it is not just about brexit, and i'm talking about the left, the far left, real socialism, getting a firmer footing. is he conjures he will do something? will the labour party move the chancellor to the left somewhat? just out of an election where many people have drawn the conclusion that perhaps austerity fatigue was one reason we saw many that may have boded conservative moving further left. the s&p on the labour party have been calling for the chancellor to step away from austerity commitments he made in the past. i spoke to the former chancellor in the u.k. and he said we are just out of an election with parliaments. it is not the time politically

to give away large amounts of money to the electorate. that is what you are doing closer to an election cycle. a live issue. we will see an attempt to .ddress some of that in the housing sector, there are calls for more spending on housing. we might get headlines around the housing market as we wait for chancellor hammond to deliver his speech. well if this is not received, what are the implications for the political landscape in the u.k. and how that eats through for brexit conversations? anna: this is a cabinet that has lost 2 ministers in the last month because of a combination of factors: sexual harassment scandals, freelance foreign policy work by another foreign cabinet minister. theresa may doesn't want to lose

anymore. she has a government that is fragile because she relies on a deal with the party in northern ireland to get her big policy issues initiatives through parliament. it is a precarious position. analysts pointed out her weaknesses her strength. is seen as someone that can be pushed and pulled by many conservative party meaning no one will want to take over the reins of the party. just after the election the former chancellor referred to her as a dead woman walking, suggesting she had little time left as prime minister. on.has hung that was june. there has been conversation whether anyone else in the conservative party wants to step then. that means we can see a conservative party. that is the assumption, that they's case week -- the base ca

se we carry on in this party. to analysts and investors preparing portfolios for the outside chance that we go to another early election for some reason. perhaps a vote of no confidence at some point. base case. the jonathan: if her weakness is her strength, things must be really bad for that to be her strength right now. angela merkel struggling to put together a coalition in germany. is there anyone that can give her air cover as she tries to negotiate with the eu 27? anna: what is happening in germany is making headlines in the u.k. in germanyvid davis recently talking to a business audience trying to convince the business audience to put their pockets ahead of policy they

might have in mind. suggesting they need to be pragmatic and do a deal over brexit. they're mindful of doing deals with the germans, but the german political establishment is in flux. when we saw the prime minister talking about russia and russian interference in western politics, some suggested this is an appeal to eastern european side trying to get them on . the u.k. government is attempting efforts to do deals. the message comes from brussels time and time again you cannot divide us. you have to do a deal with the eu 27 as a whole. jonathan: the chancellor will be speaking in a moment. can you tell us the special us?rage you will bring in the united states we will continue our programming then you.over to philip hammond

-- hand over to you. philip hammond delivering the budget. >> continuing to confound those that continue to seek to talk it down. path to a set on a new relationship with our european neighbors and a new future outside the european union. ofuture that will be full change, new challenges, and above all, new opportunities. in this budget we express our resolve to look forward, not backwards. to embrace that change and meet those challenges head on and to seize those opportunities for britain. those negotiations on our future are innship with the eu the critical phase. the prime minister has been clear we seek a special free andip taste on frictionless trading of goods and close partnership, strong

mutual respect and friendship. as chancellor i'm clear that one biggest proves we can provide to businesses and families to protect jobs and prosperity as we build that new future is to make early progress in delivering visions. thatplementation agreement allows businesses to plan and invest with confidence. this government will make the pursuit of that progress a top priority in the weeks ahead. we workty speaker, as to achieve this partnership we ensure theined to country is prepared for every outcome. we have invested 700 million preparation.xit today i'm setting aside over the next two-years 3 billion pounds and stand ready to allocate

further funds if and when needed . no one should doubt our resolve. for this budget is about much more than brexit. the world is on the brink of a technological revolution. one that will change the way we work and live, transform our living standards for generations to come. choice.a either we embrace the future, seize the opportunities within our grasp and build on britain's great global success story, or as the party opposite advocates, reject change and turn inwards to the failed movement of the past. mr. deputy speaker, we have no doubt we choose the future. -- we choose to run

towards change, not away from it. to prepare our people to meet challenges ahead, not hide from them. the prize will be enormous. for the first time in decades genuinely at the forefront of this technological revolution. not just in our research institutes, but in the commercial development labs of our companies and business parks across this land. we must invest to secure that bright future for britain. this budget, that is what we choose to do. mr. deputy speaker, we are listening and we understand the frustration of families where are underes pressure. we choose a balanced approach. maintaining fiscal responsibility as we seek debt

keeping. continuing to invest in the skills and infrastructure that will support the jobs of the future. building homes that will make good on our promise to the next generation. crucially helping families cope with the cost of living. as we invest in our country's future, i have a clear vision of what that global britain looks like. a prosperous and inclusive economy. everyone has the opportunity to shine, wherever on this island they live and whatever their background. where talents and hard work are rewarded, where the dream of homeownership is a reality for b ofgenerations, the hu enterprise and innovation, a beacon of creativity, a civilized and tolerant place that cares for the venerable and theturers

talented. a free trading nation for goods in the world. wantis the britain that i to leave to my children, mr. deputy speaker. a britain we can be proud of, a country fit for the future. we won't build it overnight, but in this budget we will lay the foundation. speaker, i am being tempted with something more exotic, but i will stick with plain water. i did take the precaution -- i did take the precaution of asking my honorable friend to bring a packet just in case. [applause] [laughter]

mr. deputy speaker, mr. deputy speaker -- >> order, order. order. we might need a hearing aid if this continues. i shouldputy speaker first report to the house on the economic forecast of the obr.pendent will b with long economicy words in it. [laughter] robert andi chose his team for their hard work over the last few weeks. i believe the best way to improve the lives of people over the country is to help them get into work. mr. deputy speaker, i am aware

that one point 4 million people out of work is 1.4 million too many. i welcome the obr forecast that there will be work.r 600,000 people in government's this record in creating over 3 million new jobs since 2010. a far cry from the 1.2 million predicted hireling 10 in 2011. let no one be in any doubt this government continues its focus on getting more people into work, giving them security and peace of mind of a regular wage. i also want work to be of good paid, andell regrettably our productivity performance continues to

disappoint. each of the last 16 fiscal events has assumed that productivity growth would return to its precrisis trend of 2% a year, but it has remained flat. today the revised down the outlook for productivity growth. investment and gdp growth across the forecast. obr expects 1.5% in 2018, 1 .3% in 2019 and 2020, before picking back up to 1.5%, and 1.6% in 2022. 3% in thiseeking at quarter before falling back to target over the next year. i reaffirm the independent monetary policy and its 2% target.

mr. deputy speaker we took over an economy with the highest deficit in our history. then, thanks to the hard work of the british people, that deficit has been shrinking. next year it will be below 2%. it is too high and we need to get it down. not for some ideological reason, but because excessive debt undermines our security leaving us venerable to shock, because it passes the burden unfairly to the next generation. it simply cannot be right to spend more on our debt interest then police and armed forces combined. i'm pleased to tell the house debt tor expects that t peak, then gradually fall, a turning point in our recovery.

speaker, apparently, not everyone shares -- jonathan: philip hammond delivering the autumn budget in the nine's kingdom. united kingdom cutting the 2018 economic growth forecast 1.4% from 1.6%. this year forecasting cuts your more regrettably philip hammond maintaining the inflation target of 2% cpi for the bank of england. that might change the gauge of inflation. on brexit, more money being put aside for preparations on brexit. extra 3 billion pounds. philip hammond setting aside an extra 3 billion pounds pre-brexit preparations over the next two-years. the office of budget responsibility cutting the growth forecast to 1.4% from 1.6%.

joining us from westminster is the former director of the confederation of british industry. it is a story that will continue over the next hour. we will get details of what chancellor hammond brings forward. brexitonstrained by politics and a weaker u.k. economy. what would you like to see to help british businesses? foremost is the forecast. debt now, but three years out, what you didn't say is he said would come back into levels of more than today. inflation will turn back down to 2%. ly, 600,000 more jobs will be created in the next two years. in america and europe

listening to this thinking is britain a place to invest? if you are looking at that and the two-year profile, it is doing ok. from a macro point of view i like what i just heard. secondly, you referred to the political constraint. you refer to it as brexit and you are right. the other political thing he has to do, more than anything else with a minority government in a fragile political environment, is not screw up. sure there areng no elephant traps he falls into. he is not forced into backtracking next week because of political debate, and is now promising something today someone says can't happen. to show that against that backdrop of macroeconomic short-term diminution and long-term improvement, came is not politically in any way give hostage to any fortune to his

own side or any other. what he is faced to on the other side of the house is not a conventional thing we have seen left and, center center right debate. this is well-regulated democratic capitalism against marxism. the labour party being taken over by marxists. would you have got is he has got to show they could never deliver in a global, competitive environment with the people of britain need. he needs to look competent, strong, and above all else, no mistakes. jonathan: lord digby jones, businesses will never like socialism. that socialist message is resonating with the u.k. public. you said the macro environment was favorable at the moment.

i think a lot of people would push back. the opr has cut productivity well.sts as there is a real risk we have a global synchronized recovery and the uk's left behind. the forecast for europe and the united states are being revised higher, not lower. if businesses are watching this program now, they might ask how is this an attractive destination to invest in with so much uncertainty around rex it and when forecast are being cut, not upgraded? >> if you think uncertainty for brexit, try germany. such a big exporter of cars into the united kingdom. try france where we are the second biggest home for agricultural exports after their own domestic market. try italy, half a billion dollars worth of luxury goods every year into the british market.

if you think instability, think mainland europe just the same. it is wishful thinking unless they deliver the trade deal that will help europe and britain. that would implicate the jittery markets in my country of which you rightly speak. when you said that english public like a socialist message, i would point out 700,000 people had actually voted the other way were voted at all you would have a conservative majority. jonathan: no one would argue with the numbers. we can look at the numbers and the swing. the fact of the matter is it issue electione for the conservative party, and they failed to make it about a single issue because the far left made it about much more. the single issue for prime minister may was brexit politics. >> i don't agree with that. jonathan: tell me why.

is i don't think she went with a single issue. that was the problem. what she said is all i'm a strong, stable prime minister and these people who are not rely on me. it was about personality politics and she failed. on the other side, you have an incredibly far left alternative appealing to a group of people who never participated in the democratic exercise before, the young, on tuition fees. if you vote for me i will save you tuition fees. what changed the dynamic was you had a group of people brought into the exercise that never participated before. it is like on your side of the atlantic were there was a group of people in american politics to whom president trump -- candidate trump appealed who has never participated before.

you have the route to the exercise changing away from conventional electioneering into social media. there is good parallels between donald trump and jeremy corbyn. that might be an inconvenient truth. i don't believe when people voted on brexit -- jonathan: i want to get to a final question. the british public, there are areas that have closed the gap with the conservative party. the margin was wider and closed when we got towards election time. to make sure socialist politics doesn't become mainstream politics in the u.k., from the perspective of u.k. business who overwhelm only -- overwhelmingly would not want that, but for the sake of british business, what is your insistence to the chancellor? he is running out of time. >> you are absolutely right. thank you for raising that. the most important thing is it .hould not be party politics

the chancellor in that building, he has to stimulate small businesses. you invest in your people. you get more out of the work you pay. that means training, more businesses to train more than they do, and the physical infrastructure. ports,railways, and investment in broadband. that is a government responsibility. so we can get our goods to market and our people to work. jonathan: we will leave it there. lord digby jones of westminster. ♪

♪ jonathan: another setback for uber, the company concealed hacker data from sticky 7

million people. -- 57 million people. janet yellen has a message for pau. the ceo might have said it is a they may be offering cme bitcoin features to clients. really? apparently. good morning, this is "bloomberg daybreak." i am alongside alix steel. we closedupside -- yesterday at an all-time high, just short of 2600. euro-dollar going absolutely nowhere, and the treasury market, flattening has been the theme of the yield curve over the last couple of months, more dramatically over the last couple of weeks, but a little bit of steepening. alix: take a look at the reaction in u.k. markets, the pound is dropping to lows of the

session. you have a little bit of buying coming into the gilt market as the budget deficit will be ,educed in terms of forecast meaning potentially less into it -- issuance in the gilt market. yields moving down by about two basis point. we do have a risk on field but dollar-yen down by 4/10 of 1%. someone was talking about that spread, the 2-10, rising 59 basis points. a little bit steeper after that slide yesterday. the crude market, the last ticker we are seeing is the first month versus the second month in terms of oil prices. the current month is pricier than the second month, an indicator of a tight oil market. will that continue as oil prices hit a two-year high? jonathan: you know how much that resonates me that you are really

looking at the oil market. alix: not surprising, right? jonathan: i am not shocked at all. alix: there could be a reversal in the opec meeting next week and a shakeup in the market. jonathan: is vienna and opec done? alix: no. jonathan: what is on the line? alix: if they will announce an extension this month or wait until march. i think there could be a lot of disappointment if something is not living up to market expectations. time now for the morning brief, does not have to do with the oil. jonathan: you will come up with something. u.s. jobless claims and durable goods coming in about a half hours time. the fomc will release the minutes from the last monetary policy meeting. oil, not helping policy expectations. there you go. jonathan: let's get you up to speed with taylor riggs. taylor: eight people have been

rescued from the crash of a u.s. navy plane and the pacific a lotion, carrying 11 passengers and crew, all the way to the uss ronald reagan operating in the philippines see. the navy and japanese forces are looking for the other three people. in saudi arabia, wealthy suspects detained in the corruption probe have started to make payments for freedom. according to people familiar with the matter, some businessmen and officials are signing agreements to transfer a portion of their assets so they can avoid trial. the saudi government is not commenting. the kremlin is stepping up a push to resolve the civil war in syria. after meeting with syria's president shar all assad on monday, russia's president is meeting with the leaders of turkey and iran today. s forces have upheld the upper hand in the fighting ever

since russia intervened in 2015. it is the first full day in 37 years zimbabwe is not being led i robert gabi. -- robert mugabe. there were celebrations overnight as he resigned under presser. -- pressure. the vice president will become interim president and will be the ruling party's candidate in next year's election. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. riggs.ylor this is bloomberg. .onathan: great work, thank you the chancellor of the exchequer philip hammond continues to deliver the u.k. budget. you can follow this at live go on the bloomberg terminal, that is the chancellor. some of the headlines we have gotten so far, philip hammond setting aside another 3 billion pounds for brexit preparations over the next two years.

the u.k. cutting 2018 economic growth forecast to 1.4% versus 1.6%. a more dramatic cut to growth for 2017, given where we are already at as we approached year end. the fx market, just a little bit of softness. bordered this already, maybe the most interesting thing is that the chancellor -- alix: i looked it up on google. jonathan: he can have a hard drink. the last person to do it was kevin clark, former chancellor in the 19 90's. hammond joked about reaching with a test for a drink. -- for a drink. alix: just him? jonathan: i think it is just the chancellor who deserves to drink. i think we all deserve one. alix: i found your question earlier to be interesting, why

would you invest in the u.k. if you are a business? why wouldn't you go to germany? jonathan: it is going to come down to price, and for price, it will come down to sterling and you have got to ask yourself, is that adjusted enough lower? doesn't it capture the political risk and investment risk, given the massive current account deficit? i do not know what the answer is just yet. bankstake the wall street . for goldman sachs, jpmorgan, they would love the status quo. they do not know whether it will exist in two years, so what do you do? do you wait and do nothing? or du gradually get to the point where you say, enough is enough, i have no idea what this will look like. on the balance of risks i am going to make an investment and move. alix: what is the advantage of being a first mover? jonathan: it is not about being

the first mover because they are all going to the same place. they are all going to scatter. some will go to frankfurt, dublin, paris. sterling at 1.3226. u.s. stocks resumed their rally, reaching fresh record highs. -- 2600 for the first time at the start of the intraday. investors are expressing some concern. the market could be facing tough times ahead. >> i am less concerned that you keep chasing and chasing. some of our metrics are suggesting a little more caution . you cannot make the argument that does argument that valuation is cheap, so earnings have to come through and come through big. jonathan: joining us now is mike ryan. is it all about earnings and earnings coming in big? mike: i think it is.

for markets to rerate higher we would take a lot of good news out of the earning side, and we might not get that. you still have some geopolitical hotspots, so i think what will be required for equities to go higher is earnings. coming off yet another quarter of growth not as good as the last two, but the earnings in 2018 is pretty strong. we are looking for earnings up about 8% next year if we get no tax reform. if we get tax reform, we could see earnings as high as double digits. are you that bullish? mike: i think a lot of things would have to go right to get to 3300. we are a little more cautious and we think there is further upside. we think you can get high single-digit gains in u.s. equities next year. if we are underestimating earnings growth has perhaps the

benefits for tax reform are more than $10 a share, there is upside. i am not dismissive of the .arket's process to the upside we walked into a lot of , policynty in 2017 uncertainty, political uncertainty, but the markets marched. alix: buybacks were strong but we are getting word they will roll back a little bit. does that remove a some -- financial support to the market question mark mike: it is healthy if countries that companies are looking to invest in business. to the extent that tax reform does past and we get an ability the deceiver repatriated earnings, that will be did -- we get to see repatriated earnings, that will be divided in several ways. jonathan: do you want it to go into? x? cape businessterms of

investment spending, it has been historically low. jonathan: the money is already available to the companies. they tapped the debt market, so they have a decision to make and they have chosen not to increase capex and have chosen to have capital distribution back -- what is it make a difference? mike: i am not saying repatriation alone will drive capex. it is driven by better visibility in terms of the macro outlook, and we are getting a better growth outlook. growth estimates are rising across the board. secondly, i think the regulatory environment is much more favorable for businesses. if you have a more accommodative rate-- environment from a standpoint, you are more confident the investments will pay off down the road. perhaps some regulatory relief, i think those of you the two catalysts. alix: where does that leave you

in the value versus growth debate? mike: we still believe value is a better position. this point in the cycle tends to favor value, and value has significantly underperformed over the coast -- course of this year. growth underperformed by about 1700 basis points, so we think it is not only attractive well-developed -- relative to valuation, but is positioned well. alix: that growth like the dollar -- for a lower dollar? mike: we are not looking for a significantly lower dollar but more dollars stability. jonathan: mike ryan, you will stick with us. more bad news for the world's biggest ridesharing committee -- company. what it means for the over database -- uber. alix: map go, this is your traffic update on the bloomberg. you can see how hard it is to get out of brooklyn and into new york, which is what i care about

as we had to massachusetts. those bridges do not look good. do not take the williamsburg. jonathan: people do not care about shopping, they just want to get out of the city and it was already gridlocked yesterday. things giving traffic in focus. mission -- get to the close on wednesday. that is what it feels like on wall street. more all-time highs and futures further, dow futures up about two. this is bloomberg. ♪

♪ alix: a big setback for uber, a big scoop for bloomberg, the company reporting hackers stole

57 million customers' data. the ceo -- help me. jonathan: i think. alix: definitely not how i would say it. he told bloomberg that none of this should have happened, and he would not make excuses for it , but the company is changing the way they do business. joining us is jeremy con. how do they change the way they do business when traffic -- travis kalanick is still on the board? jeremy: the ceo has sworn he is going to do it. he has got a hard road ahead of him. alix: have we heard anything yet from the board or travis kalanick? jeremy: no, we have not, and a lot of people are waiting for him to make some kind of statement. he may make one in the next day or two, but the board has been pretty quiet and we do not know

what they knew. when they knew it is a big question. uber said the chief security officer who they asked to resign did not inform their chief legal officer about this breach, so it is not clear the board knew there was this breach and they made a payoff. jonathan: the chief security officer has only just announced it after they have disclosed it, not after they found out about it? jeremy: that is right here at a asked him to resign because of this disclosure about having to sweep -- having slept this all under the rug and not told the regulators. -- sweat this all under the -- jonathan: why is the chief executive officer a lawyer and not a specialist? it raises questions about how widespread the in -- oversight is in uber? what are you being asked? jeremy: there is a lot of

questions, less so about the fact that the chief security officer was a summer dish former -- former federal prosecutor. he should have known the obligation to disclose the breach and you would think he was on that but he was not. it is more about the culture at uber where they played fast and loose with rules all over the place, and this is another example of where they were maybe not on the ball in terms of cybersecurity, and once they had a breach they ignored the rules and did not disclose. a common -- say, becoming the risk of an enron. how does this wind up playing out in terms of their expansion plans and regulatory oversight? jeremy: i think they are going to plow ahead. you have softbank in negotiations to take a large stake in uber.

this revelation is going to give softbank some leverage on valuation for that stake. it looks like the have a lot of cash, they are going to keep pushing forward with their growth. i think there is a question about are some of these past wrongs going to catch up with them, will they get hit with massive fines and lawsuits in the u.s. from some of these legal breaches? alix: great stuff, jeremy kahn of bloomberg. i would say yes, we will have some lawsuits. jonathan: maybe. i will predict the likelihood that we will get the ipo anytime soon is going to drift. alix: 2020? jonathan: i feel like it is drifting away. alix: janet yellen is worried about inflation drifting lower, but is the fed concerned about the flattening yield curve? this is bloomberg. ♪

♪ >> one reason it is dangerous is because inflation expectations are likely to also drift down, and indeed there is some evidence, i do not really think they have drifted down very much , but there is some suggestion that after many years now of low inflation, they may be drifting down. that would be a very undesirable state of affairs. jonathan: that was outgoing fed chair janet yellen speaking in new york last night, ahead of the release of the fomc minutes later this afternoon. if she was not the outgoing fed chair and she had another term, what with the price action be like after those comments? mike: i think there would be a little uncertainty about policy direction. we have been discounting that the fed has been charting a course for a december rate hike

and two more in 2018. you might say what exactly are we pricing in, in terms of inflation and what does how can we temper the fed's hand? we see inflation really miss the mark and in the absence of that, i think they moved in december. jonathan: what underlies the change? it used to be, i am waiting for the whites of the eyes of inflation before i move, and now it is the other way around and the bias is to hike. what is fueling that? mike: you think about this, we still have a policy put in place during a period economic and financial crisis, and those conditions are no longer appropriate in terms of where we are in terms of recovery and stability. what we are seeing is not a tightening, but a normalization. when we are tightening, you look for the whites of the eyes of

inflation. when you normalize, the past of least resistance is to go to normalization unless something changes that dynamic. alix: how do you invest when you have a yield curve 2-10 at 60 basis points? mike: historically it has been in the 70 basis point range. alix: like yesterday when he oft from 61 -- in a period minutes. mike: there was a damping down of inflation expectations and i would not be overly concerned about investing if we have a positively sloping yield curve has part of this is still technically driven. the fed has a lot of long-term debt and there is a lot of demand for u.s. based paper goes we are ironically that high-yielding currency. as long as others keep monetary policy accommodative, the u.s. will be a draw for capital. jonathan: say you do not believe

in the fundamental argument, is the market pricing in a recession if we go dead flat, ofer real-world consequences the 2-10 spread that gets incredibly narrow. mike: economic consequences for the cost of borrowing, it restrains the cost of borrowing for long-term debt which could encourage further debt taking, which is not unhealthy for the economy. the biggest impact will probably beyond financial services firms to have a yield curve arbitrage. the less we see the yield curving, the more we see arbitrage. alix: you think value, you buy financials. how do you buy financials at 60 basis points? believe the fed continues to raise rates and that is more positive dynamic for earnings. alix: how? the more they raise, the flatter it gets. mike: their interest margins are

not made at the 2-10 spread. as long as we have a positive spread and short rates are rising they can still make money. the other issue, i will go back to the issue about regulation. tax reform in regulation have huge benefits for financial services communities, and we have seen an impetus toward relaxing and easing some of the conditions put into place. also, if there is a tax reform if we get it. alix: what would you be scared of? mike: lots of things. i am most worried about what you were talking about before with uber, the cyber incursions happening more frequently and in ways that often go undetected. they can often go undisclosed. jonathan: which are you worried about the most? wall street seems to be really on top of their spending, a lot of money to protect against it. our other sectors looking vulnerable? mike: electric utility grid can

is there it is about safety, security, quality of life, and maintaining stability if you ever had a complete blackout in parts of the country, that would be concerning. i am less concerned about the financial services industry because there has been such an emphasis on protecting the integrity of data and client information, so i'm less concerned about the financial services area. jonathan: coming up on friday, bloomberg "real yield," we will be on top of the bond market at 12:30 new york, 5:30 london. philip hammond delivering the budget of parliament -- to parliament. sterling a little drop as the headlines drop. ♪

♪ jonathan: the opening bell just over an hour away in new york city. all-time highs to the close yesterday, we could add to that. futures up 1/10 on the s&p 500, two on the dow.

the bond market looks a little something like this, yields higher by a basis point, dramatic flattening over the last few sessions. a little bit of steepening, we are up by about one basis point on the u.s. 10 year. euro-dollar, 1.1747, just a little bit firmer. the data in the united states, jobless claims dropped to 239 as they always seem to do. they grind lower from a revised higher level of 252. pretty much in line with estimates of 240. durable goods orders, a little bit of softness, -1.2%. the estimate, 0.3%, so some weakness. you back out transportation and it comes in a little bit weaker at 0.4%. capital goods, the headline number at -0.95, the estimate

0.5. we were looking for 0.3. alix: the u.s. business equipment orders fell in october, the first time in four months. capital goods shipments looked towards steady investment growth, but it was really the business equipment orders, and what does that say about the capex story? is just -- is this just and of your commentary? jonathan: let's bring in mike ryan. said itthink what alix is something we have been concerned about, the more anticipation of pending tax reform the more potential to hold back spending until you know what you will be able to leverage in terms of tax arbitrage. that is not necessarily putting a freeze on capex spending. alix: do you wind up getting a faster pickup?

there is a concern if you are able to deduct your expenses that in five years you will deduct a lot and buy stuff you do not need. mike: i am not sure they will not buy things they do not need. if they are planning investment spending, they could push forward because there is incentive, a tax incentive, so that could certainly spur a boost in capital spending. jonathan: coming to the u.k. where there are serious worries about business spending and cutness -- philip hammond the country's 2018 growth forecast to 1.4% to 1.6%. he also said brexit implementation is a priority. setting aside over the next two years another 3 billion pounds, and i stand ready to allocate further funds if and when needed. no one should doubt our resolve. jonathan: mike ryan, the story

in the u.k. at the moment is a difficult one. i go back to a tweet hamed el-erian put out on a visit to the u.k. -- it is becoming a single issue country, it is brexit, and the rest of the world is moving on and leaving it behind. is that what you see? mike: we do. we are still negotiating the terms of divorce. there are some folks who think brexit will work out fine and it may well, but i have rarely seen two year divorces that worked out amicably so i think there is probably more volatility. we are positioned in terms of our globe are all -- global --weighting -- jonathan: let's look at the forecast of productivity, chopped again. business investment is not likely to cook up -- pick up. mind, what will happen with productivity growth

and how long-lasting could this be? let's say you get the ideal deal with the european union but have done this for a couple years. could we have long-lasting consequences? mike: you could have structural impact from decisions being made around an exit of brexit. businesses will make decisions based on what they see as the long-term business prospects and not a short-term issue related to brexit. if brexit will fundamentally audit the ability to alter the ability to do business, it could have long-term consequences. we do not even know what the terms will be like. able on the are u.k., what you will say is the global growth synchronized recovery we keep talking about will outweigh any kind of issues with brexit and sterling. why is that not true? mike: i would say the synchronized expansion is certainly helping most or all economies.

what you see is to the extent the u.k. is a little less integrated with europe, and perhaps trading more around domestic issues rather than global issues, perhaps it has less of a positive impact. they strengthened and expanded their trade ties outside the region. one of the things the bulls on u.k. are counting on is weaker sterling and that makes u.k. companies more competitive and gives them an earnings boost. jonathan: is 1.30 the price or does it need to be lower? we need to have significant adjustment on the currency to account for a massive current account deficit, and if you look at the forecast post-brexit, it was somewhere down there 1.10. does 1.30 do it? mike: probably not. i am not a u.k.-based economist in my expert on that is probably as much as yours in farsi. throwing shade. we also thought it would help exports and it did not.

we did not see the boost we thought we would see. is that mean the boe needs to provide more of a floor? mike: it certainly could get ugly. trade takes a while to turn. trade is sort of like an aircraft carrier, you do not have the immediate impulse because you have weaker currency . if you are going to have a better trade, better terms of trade than you make sure you have to have quick clarity in terms of engaging your trading partners. part of the issue is not just what is happening with regard to the eurozone. there is concern about global trade of all as how the terms are trading -- changing. jonathan: how much time do you spend talking about politics, and how useful is that? ultimately in the market, it is not meant much. mike: from our perspective, we think the fundamentals always matter more. we think politics matters now more than in the past because the outcome depends on the

policies and the will of political leaders. when you steer current this into a really bright light for a long time and turn away, you cannot see anything. i think there is a steering into light for way too long. endthan: let's call it year and we look into 2018. into 2017, everyone was staring into politics and making calls on the market, and some of those were really bad. one of the consensus calls was to go short em on the back of policy in the united states, turned out to be a terrible call. do you see anything similar happening, focusing too much on the politics and shaping consensus positions that will not work out the same way they did not this year? mike: there is one concern we could see the midterm elections in the u.s. could lead to an anti-trump backlash that

jeopardizes the republican majority. there are those who say if that is the case, the pro-business agenda stalls and could undermine growth and earnings. we think it is premature to start calling midterm elections. there is some concern about this fed transition. it is not just about the fact we are seeing janet yellen step down. the composition of the fomc, the board of governors, the chair and vice chair, and rotation of regional vice president's, we have the potential to see nine fresh faces. that is the biggest leadership transition in the fed since the 1930's. jonathan: mike ryan, sticking with us. alix: coming up, philip verleger on his call on saudi arabia and how he sees it on the war for market share. if you are headed out for thanksgiving like my husband, leave early. this is live traffic updates all throughout the tri-state area.

i have been corrected that this is the 59th street bridge so from queens to new york stinks. this is your travel in the new york area. if you are in philadelphia, it also kind of hurts. that is what you are looking at there. i do not want to be stuck in that for four hours. this is bloomberg. ♪

♪ alix: this is bloomberg daybreak, i am taylor riggs -- taylor: this is bloomberg daybreak, i am taylor riggs. this is bloomberg. ♪ now tear bloomberg business flash. rockwell automation has rejected

that unsolicited takeover offer from emerson. the $25's board says billion bid is not in their best interest. no response from emerson. for the first time in four years, annual sales growth for the world's largest maker of farm machinery, they also expect bigger than expected earnings. farmers are replacing tractors and other machines despite depressed races. airbus wants to develop the equivalent of self driving cars. that would allow a single pilot to drive a commercial jetliner. that is your bloomberg business flash. alix: oil soaring toward a two-year high, one week before opec members meet in vienna. opec is expected to extend output cuts. ,oining us is philip verleger always a pleasure to see you.

you have deep insight into the drama involving opec. if you were advising them today, what would you say? philip: what i would be telling them is first, the center of the world oil market has moved to houston. second, that they need to keep the prices probably below $60 a barrel based on the most recent says $65 a barrel leads to a very substantial increased in production for the u.s. by 2021 or 2022. and that they are going to face this problem continually. ,o rolling the agreement over which looks like it is in the cards now, at least at this time next year, is probably ok. they might actually want to increase production and let

prices go down a little bit to slow the advance of non-opec production. alix: that has been your out of consensus call, that they should go back to that. and just pump and go for market share, that is the way to go, lower the back end of the curve to prevent hedging. tell me how that makes sense and how they would roll that out without causing a complete crash in the oil price. philip: they cannot. i have heard people say, you need to lower the back end of the curve, but the back -- fax of the matter -- fact is the matter -- the ford part of the curve is basically tied to how many people are buying versus how many people are selling, and the buyers out there tend to be the swap dealers and others who are at the same time writing for thes, shorting speculators, buying at the front end.

the idea that you can raise cash price and lower the back end is a fairytale. it is just not going to work. if they tightened prices more, what will happen -- or they tightened supply and the cash price goes up, the back end will go up, more oil will be hedge, and they will accelerate the data which they are swamped by more fractured oil. oil prices in the u.s., if you look at the first month contract versus the second month contract, we are in a second -- a degradation. is that sustainable if we do not see an opec extension of the cuts? do we see a turnaround and wash out in the market? philip: i am having a problem right now looking at the wti curve at all -- the wti cushing cushing is ause financial market and oil is bottled up in cushing. the real market is now in houston.

there is a huge open interest in houston and about 300,000 to 400,000 barrels a day. that is where the market is. that market last night and today is very backward dated. cushing is full of oil because it cannot get out. the cushing market has tightened today because of the problem on the keystone pipeline, a transitory problem. when he gets fixed and starts flowing again we will see more contango in cushing. there is now a futures market and i trade acme future market that is basis cushing. that has got open interest of about 200,000 contracts, so we have to teach everybody in this market that the market is not cushing really telling us about the physical situation. the market that tells us about the physical situation is houston. that is reasonably tight. alix: two round this out and

take a broader perspective, we have had a lot of drama coming out of saudi arabia, whether it is norway cutting their oil and gas investments. we also wind up having the arrests in saudi and are potentially seeing more ring fencing when it comes to money. what is the back room conversation with this as a backdrop? philip: i think the first thing, person that we all to be looking at is the foreign minister. he is a very skilled, very adept person. he has been leading this effort on lebanon, and i think that what they are looking for is a way of accumulating $800 billion, maybe $1 trillion from saudis invested overseas, ring is back home. when that money is there, then they will be able to stop working with russia on oil

production. they are fighting russia, they are fighting them in syria and lebanon and iran, and working with the israelis according to bloomberg. now what i think they want to do is essentially get enough cash back home, and then go back to the strategy of bringing prices down to slow the development of the u.s., and essentially weakened the oil markets for two to three years to push venezuela out and others out. andy hall has a wonderful line talking about the twilight of oil which we are moving into, and they will profit from the twilight of oil right the cigarette companies are being able to profit from the twilight of cigarette. alix: good stuff. i love reading your stuff, philip verleger, president of pk for liquor. with us, mike ryan still at the table. do you like energy? philip: i do. notwithstanding those comments

-- he has great insight into the energy market -- i still think the energy gap is closing and that is important for energy prices. notmoved, oil stocks did and they now trade at a 40 year low. we see that gap continue to unwind as production comes down, and there will be a point that north american production comes on line a big way. what we have seen as the capital spending has been very slow. you just do not immediately turned it on, so i think there is a window for energy stocks to outperform. alix: mike ryan of ubs, good but traveling. jamie dimon called bitcoin a fraud but now the bank he runs is looking into getting into bit -- bitcoin futures. look at ouryou can charts and graphics and indirect with us directly. this is bloomberg. ♪

♪ jpmorgan ceo jamie

dimon has strong feelings about bitcoin and said it is a fraud and called it buyers "stupid." >> it will blow up, science has kicked them out. he will lose money somewhere else. .o not ask me to short it it could be 20,000 before this happens, but it will eventually blow up. it is a fraud. jonathan: the bank may be rethinking its stance on bitcoin , considering offering bitcoin futures to its clients. joining us around the table is camilla russo and mike mcglone. camilla, let's begin with you. his comments, how close are we to jpmorgan offering this to clients directly around cme futures? camilla: it is hard to know how far along they are in the conversation, but it is clear that big wall street is taking a look at this. even if the piece of those banks

are little skeptic, there is just so much demand for interest for their clients that they at least have to consider it. jonathan: seemingly they are considering it that i would ask the following question -- will this happen on a cme? and how difficult are they finding it? mike: it is probably a done deal . it is probably this cme that is the bigger one, even though the cboe announced first, but that is kind of an odd way to put it because jpmorgan is one of the largest emission merchants in the world, and this these are available liquid, they are just going mainstream and to the futures. alix: it is not like we are trading in oil contract, so how liquid can these be? mike: that is where the cme sometimes has the advantage, creating liquidity and getting

people to trade. that will be the first thing people look for. jonathan: how difficult will it be to clear some of these contracts? mike: they will be cash settled, it is not an issue of clearing, and it will be about margin. if there is risk in will be a high-margin cost. jonathan: this is something you pushed forward. jamie dimon has come forward strongly about this. isn't this a little bit of a conflict? the ceo is saying it is fraud and the buyers are stupid and yet they are looking to get exposure to it and they have to facilitate that exposure. end,a: i think in the jamie dimon is entitled to his own opinion and that is what he expressed on bitcoin. jpmorgan will have the obligation to trade the contracts that are out there. how can they deny this to their clients? were reports earlier this year on goldman sachs considering setting up a trading

desk around cryptocurrency. big banks are looking at this. alix: do you feel like traders and the infrastructure is behind on bitcoin? yes, is far as behind, think your institutional traders are but once it goes to futures it will catch up. it has to go to unique exchange to catch up. it is not regulated by most compliance departments but once against you futures, it is mainstream. alix: what we see new money coming into the cme or a rotation out of other asset classes into bitcoin? mike: i think we are seeing some of that already and if it keeps high, sell higher tracks wealth. when volatility picks up in bitcoin, it does not just go one way. alix: when can we say it is mainstream? camila: i think once derivatives

, that will open the floodgates. after that we can probably see etf's being approved. the sec says they are not being a derivatives market was one of the main thing stopping them from approving them, so once etf's are approved and we have derivatives, i think it is safe to say we will bring it into the mainstream. jonathan: camilla russo and mike mcglone, thank you. jamie dimon will speak at the economic club of chicago this afternoon. june into bloomberg for the complete coverage of his remarks, 1:00 p.m. new york. didn't he vow never to talk about it again? alix: like five minutes later. jonathan: this is bloomberg. ♪

♪ jonathan: bulls on parade.

an all-time high ahead of the release of the federal reserve mins later today. the company concealed a heck of data from 57 million people then pay the hackers to keep it quiet . fraud, butd it is a offering bitcoin futures to clients. for our audience worldwide, this is bloomberg daybreak. --m jonathan jonathan ferro along with alix steel. matching the longest winning streak in almost two decades. futures are firmer and stocks set a record as we come into wednesday. of .1%. the euro slightly firmer, no big change in the g10. in the bond market a little bit of curve steepening coming through in the treasury market. yield on the u.s. 10 year. still dominating

some of the movers in premarket. fourth-quarter sales were up 23% year on year, topping estimates. they expect equipment sales to rise 38% in the first quarter. yearshad a bad couple of but has been a monster performer, 54% over 12 months. is stepping down february 1. the ceo is going to be the first engineer to run the company in 20 years. is the company cut its first quarter outlook by $.20. the first half of the little rough. the m&a that will not happen. rockwell for the third time rejecting emerson electric's bid. the last was $225 a share. trade to thatnot

level. that tells you something about the market stock. how many times can rockwell say no to emerson? is a deal the market never thought would happen anyway. for the broader market after two weeks u.s. stocks reach fresh record highs. tops 2600 for the first time ever appeared wall street bulls got more bullish. >> 2018, what we are expecting is 6% to 7% growth or returns. what we are seeing and what we are looking at, everything is expensive. 2.3, 2.4.r at tacking on and healthy -- tacking on a healthy 3% risk room you get healthy returns. you can get it 2018 solid growth at age percent, valuations are cheaper than you think where we see higher rates

priced in meeting higher growth expectations not price 10. the upside case hinging on a corporate tax cut, which we still see as likely. in tact.ll market what we are looking for playing out in spades. very stimulative financial conditions. those are conditions for a bull market. that is what we are having right now. jonathan: joining us is the allianzo manager for global. burns: we don't see a recession on the horizon. i would argue that stocks look slightly expensive across every metric. even if we see a pullback, and we probably are overdue, you typically see a 5% pull a couple of times a year. noto 10% retrenchment accompanied by a recession could bounce back quickly. in the case with that does is

what we have been telling clients is to keep a wish list, names on the back burner you might get into. jonathan: a wish list that may never come around. investors are becoming conditioned not to wait for the five or 10, but a 100 drop or 150% drop on the doubt and fill the gap. burns: we're not saying keep your powder dry, but don't try to time the market. everything i said about stocks looking slightly expensive i would have said three years ago and you would have left a lot of money on the table. yesterday was an interesting day. looking at the thanksgiving week, for whatever week -- for whatever reason it is a bullish week historically. gain.usually 0.7% 0.8% i can't really figure it out other than low volume.

yesterday the volume wasn't that low. is a bullisht week. looking up to the industry groups, it is very much the same groups that have led all of. tech, health care, energy, telecom. it is the time of year where i'm not sure anyone wants to write letter to the investors say we sold out of bank stocks. it is too early for windowdressing, but it looked like it yesterday. the more conservative side, 26 point 75 at hand of next year. his name call is a lot of the investment in stocks has been pulled forward. you won't get the boost that you expect. it is frontloaded. is that true? those i would argue estimates are conservative. you do see earnings growth has been what has driven this market over the last couple of years. you are looking at another 10% next year. with tax reform, it doesn't seem

to be priced in. probably your downside risk is a little lower than your upside risk if you look at the betting markets. if that is the case, notwithstanding everything else proposed, if you get a corporate tax cut of 35% down to 20%, that could attack on an additional 8% or so to s&p earnings for next year. that is not priced in. you get a call option on that. jonathan: it was like it is going to happen. they are edging towards it. it is a matter of when. you say it is not priced in. other people say it is. why is there such a big debate on that? at if it isan look the betting market. a lot of investors are looking at baskets of companies. companies that have not fully reflected the upside is one place to look at it. quite honestly, we live in a world in which all it takes is for the president to tweet himself in the foot in the next

thing you know those likelihoods go back down again. alix: then they go right back up 20 minutes later. burns: sure thing. we probably have a shorter and shorter memory and the stock market. alix: you mentioned it is too early for window dressings, but there will be rhetoric around the end of the corner, particularly the uncertainty around tax reform. hedge fund turning defensive on tech. what do you make of that? michael: the latest goldman , very important positions, are bullish on tax, 27% weighting. that is way above the s&p waiting for tech. mainoncentration is in the names. facebook, amazon, microsoft, stilla, google, it is very high. 60 8% in the top holdings concentration. it is an interesting dichotomy between hedge funds and mutual

funds. mutual funds are more bullish on financials. hedge funds, it is almost like a growth versus value trade mutual funds to hedge funds. trade.s of a crowded we have been saying, how long have we been saying that? you can say crowded for a long time. newman mentioned we haven't seen a market wide selloff. we do -- you mentioned we haven't seen a market wide selloff. they are susceptible to that news, any whiff of bad news you will get about of selling. none of it seems to last. we get recoveries with every one of them. who knows how long that will last. jonathan: someone messaged me and said what happened to being fearful when others are greedy? burns: there's a lot of talk about what the tax stocks have done, but the birth of the market is fairly solid. the tech sector is not as richly valued as it was during the dot calm bubble.

alix: the cash levels are really low. in general, the cache level keeps going down which is a report of a more greed mentality. look: balance sheets still pretty good. we like to focus on dividend paying stocks. the tech sector has gone in the oft decade, hang 5% or 6% dividends to 16%, you have good payout ratios and good dividend growth to hang your hat on. sir.han: thank you, more bad news for the world's largest ridesharing company. cooper's data breach and what it means for the company's turnaround efforts. tuesday,d high on coming into wednesday with futures of a little firmer. around .1% on the dow. this is bloomberg. ♪

taylor: another setback for uber . hackers stole data from 57 million customers and drivers, a breach of company hid for more than a year and paid out. , you are a guy. you probably wouldn't be in uber stock even if it was publicly traded. if you wear, what would you do on a day like today? burns: it comes down to the fact that the cover-up is worse than the crime. this is what we tell our children. the specifics of uber, one of the things you have to factor in his the corporate governance side. we feel you can look a ceo in

the eyes, see into their souls, and trust them, but you do have a concrete example of a company forced to their employees coming up to think it would be the same way to shareholders. jonathan: you have to think if founders are ever the right leaders. you remember mark zuckerberg. in that case, they were dead wrong. he is a fantastic leader and the founder of the company. is that a single issue thing? when you create something so privative, do you need to hand over the reins to someone else? burns: whether it is the case ath facebook, once upon time the question with apple, i don't think it is a must be. the most important job a ceo has is capital allocation.

what you do with cash coming in the door? it is a unique skill set. just because you are a great leader of people doesn't mean you have that ability. as a result it is almost 2 different continuums. some could be, some could it be. bloomberg.com if you are cash allocator and everyone is throwing money at you, regardless if they love the concept, which happened with uber, mistakes are made. it is important to discuss, is the allocation in the market around concepts like airbnb and uber the discipline in the public market. it isn't their private. -- there private. does accountability exist in public markets? fact that it does find itself to be more prominent in the private market is why the public equity investor, we like to hang our hat on companies that are substantial dividend payers.

it enforces discipline on management that might not be there otherwise carry for dividend investors it is a key reason, notwithstanding the corporate governance challenge you are currently seeing from uber, it would not be the first thing on our buy list. alix: u.k. regulators are interested in what happened with uber. new york also looking into that. getting hit with potential regulatory issues in europe. how do you view that dynamic playing out? burns: one of the most important things we have to know is what we don't know. what is your unique skill set? being able to navigate a rocky regulatory environment as an investor is something we will say, that is probably not the first thing we are experts in. alix: if there is a company coming to you with regulatory risk you want to avoid? burns: we are willing to step in on headline risk. if you're going to do that you have to make sure these

companies have a rocksolid balance sheet to allow them to weather the storm until the cycle turns in their favor. focus -- do not necessarily by a company because it has great management. eventually it will have poor management here you need a rocksolid balance sheet to help them get through because you will see times like this. jonathan: how much time do you look at talent? in this sense the chief financial officer at uber was a lawyer with no experience, historically, with cybersecurity. this guy was a lawyer. do you look at those situations and say this doesn't add up? burns: it is a factor we found time and time again. but numbers don't. you need to make sure they have solid cash flows, a solid balance sheet, not

overleveraged. because it is so hard to avoid, you have to make sure you have cash to stand on. that is the best foundation we can have to protect ourselves. alix: one company that will be looking at this is softbank. 1.2 billion dollars is what they're thinking of putting into uber. does that change based on the news? joins using partner for the vc perspective. if your softbank, what are you thinking? >> but they have been thinking is we have a number of investments globally. there are markets and heavy competition. let's consolidate. i think softbank's interest in uber is an important market in southeast asia. softbank owns one of the largest ridesharing companies in the region. they mightg in both

consolidate here to might see what happened in china with uber and didi. to dothat has nothing with the hack. if they were looking at the price and the conversation was will there be sellers in the markets are they can buy the secondary shares, does that conversation change? vinnie: it does get crazy overpriced. i do believe there will be. such a fundamentally important part of the global economy. people are using not only for ridesharing but uber is going into of their services like food delivery. there is opportunity for them to monetize and become a central app on people's phones. jonathan: thank you very much from golden gate ventures. coming up, janet yellen is dippingabout inflation

lower, but is the fed concerned about the flattening yield curve? 11 minutes from the opening bell with futures firmer. this is bloomberg. ♪

>> one reason it is dangerous is because inflation expectations wn. likely to also drift do there is some evidence, i do not think they have gifted do -- much, but there is some suggestion after low inflation you need a drifting down. that would be an undesirable state of affairs. jonathan: janet yellen speaking in new york last night. joining us is bloomberg intelligence chief interest rate strategist, burns mckinney.

what did you make of the comments in the last 24 hours? >> i think she still holds weight and will for the next few meetings. i think she was very measured in saying if the fed hikes too much we will get a slow down. too little and inflation might leak up. actdescribed a balancing the fed is in of not hiking too fast to destroy the economy, but at the same time worried about low unemployment and the potential for lo -- where did this bias to hike come from? >> twofold. everyone says look at tha phillips curve. in conventional economic parlance they need to hike to get in front of any concern

about inflation. on the other side they want a few more bullets in their gun for the eventual slowdown in the economy they will have to respond to. they don't want the first action to have to be quantitative easing. flatter yield curve. i would say from the amount of conversations around this table the consensus view is this latter yield curve is not what it was 10 years ago, 20 years ago. i wonder when the fed gets concerned and when they pause for significant thought. is it 40 basis points, 30, 20? ira: on the two-year curve versus the 10 year curve, there levelimportant technical at 57 basis points. below that you could see a further acceleration in the flattening. i think the federal reserve is worried about it, but this is normal. it is not unusual.

alan greenspan called it a conundrum, but when the fed hikes overnight interest rates two-year interest rates and short-term interest rates rise. the market says that means three years, four years, five years from now the economy will slow and inflation won't be a problem. the 10 year doesn't have to move at all because it is priced for a slightly slower economy. this is a normal event. does the fed say we are only going to hike once next year? doing something like that would be a curve steepener. a flatteningg while the fed was on hold. burns: we have a contrarian take on this. despite the fact that chairperson yellen did say she thinks inflation will be tamped down. busy a greater risk of higher inflation then is being priced into the markets. you have unemployment at the

lowest it has been in many years. a lot of the inflation that up has beento kick kept down by geopolitical factors, demographics, price discovery for things like ridesharing and airbnb. we don't believe the phillips curve is dead. a lot of the indicators are the most important to look at and are showing signs of pick up. bakedg higher wages are in. the average hourly earnings are below what worries the fed, but the trend line is positive. we see deflationary at present, but an inflationary future. alix: are we seeing the curve aattening because it is hedge, or is it really a risk? flattening is technical. just because you have the

federal reserve to hike interest rates because the market is pricing in for higher short-term interest rates a year and half from now. the inflation next year might be higher than some people expect. lower volatility sectors and higher volatility sectors in terms of price. lower volatility sectors are seeing an increase in price. they tend to be very wage-driven. jonathan: great to catch up with you. a special thanks to burns mckenney. coming up next, a record high closing yesterday just short of 2600. that is next. this is bloomberg. ♪ is this a phone?

or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. jonathan: on course for the longest winning streak in the s&p 500 for two decades. another record high close yesterday. can we finish north of 2600? we closed just short of it

yesterday. dow future up 40. s&p up 1/10 of 1%. i think that is father christmas. father christmas, macy's ringing the bell to can we get back to the markets? bond markets, databases to 35. the dollar is weak or down .3%. -- weaker, down .3%. , 57.75. alix: dow jones flat on the day. s&p up by barely one point. right around the record close ramy yesterday. nasdaq up .1%. the nasdaq, a record shocker. you have to assume the volume will be light into the shortened holiday week. retailers dominate the theme of

the day. gamestop up 7%. a sales pledge from nintendo switch systems. hardware sales rose 8%. retailers, a lot of younger generation retailers, doing well in the earnings season. guess is not one of them. sales in america down 13%. square is up 2%. we don't have a lot of news. we know semtech spending rose $8.2 billion, 23%, year on year. we are seeing payments and bitcoin that is providing help. interesting making its way through the market. go by caution, then go home and drink some wine. a percentage of equity flow for some of the big retailers, dillards is the white line, jc blue,the

restoration hardware is the purple. they have all been following a little, but sitting around 50%. 50% is the short interest for jcpenney. intot of pessimism baked some of the names despite luxury, discounters, and young-focused retailers have done well. none of these stores are on my black friday shopping list. jonathan: what is on your shopping list? alix: a coat. booties --black we are joined from jcpenney. what have they got? jcpenneys is getting ready for tomorrow. they will open at 2:00 p.m. on thanksgiving into black friday.

they have been promoting online. that is a theme of the season for traditional retailers. trying to get promotions out early, making sure customers know about them and that they can get them in-store and online. this jcpenney will try to get people through the doors tomorrow. they have coupons and things that will be available to get customers extra discounts. this is one of the highest volume stores in the company. last year they had 5000 people outside and they are expecting a similar number tomorrow. one of the things people are watching is whether more people come in store or if they shop online. jonathan: are people going to go shopping in stores or all online? steve: i think they will go shopping. we feel good about the retail season because the stock market 16%, good for wealth

creation and the top 20% of the population. thisollar is 7% weaker year, which appeals to the international shopper. we think the christmas season could be plus 2% or 3%. in terms of the malls, we think they could have sales between 2% to 3% for the fourth quarter, which includes christmas. an improvement over the last four to five quarters. alix: not all retail is bad. jcpenney might not have anyone in their store as we saw, but has the market priced in that not everything -- jonathan: i love the fact that the store was empty. alix: maybe a worker in the back. jonathan: no shopping today? alix: no way. jcpenney has low prices anyway

why would you go in unless they are giving tv's away for free? some retailers have done well, is that reflected? thes: the retailer --steve: retailer index bottomed in august. the store numbers, people thought margins were improving in many retailers, nordstrom, gap, urban outfitters, the e-commerce platforms are doing better. good for retailers because they have embraced e-commerce and started to put up that her number since august. .he apparel index is up they are recruiting more the e-commerce-type retailers to their properties. they are still impacted by what is going on in terms of the shakeout at department stores. nordstrom's had earnings of week or two ago. that is a department store in the a-wall.

the sales trend has been plus 9%. the e-commerce strength of nordstrom is stronger than a brick and mortar which was 1.9 percent in the third quarter -- -1.9%. -walls up 2.5%. jonathan: a handful of companies that succeed, and how are they getting on right now? alls aswe define a-m $6,000 per square foot of sales typically anchored by nordstrom or a macy and whatever the hot restoration hardware is in the mall, the restaurant concept. they are bringing more restaurant concepts and non-apparel concepts because that is where the demand is.

apple stores, samsung stores, warby parker, they're going to class a malls. it will be a process because weakerve to week out retailers that have been losing to e-commerce. alix: private equity into the mall space as well. what you think about that from an investor standpoint? steve: good for us because stocks go up. brookfield properties bid $23 a share for gdp, up 15% where the few weekse trading a ago. it will lead to price discovery in class a malls because the 6%, malls areup down 10%. the typical mall a couple of weeks ago was selling at a 30% discount. the question is, who was right? bid for general growth

properties, $23 a share, implies a 6% cap rate. below many people's estimates of what a malls traded at. estimate was $28 a share. this came in at $23. we will see what happens in the bidding process. brookfield is associated with brookfield asset management, a sophisticated ire of assets. they understand mall fundamentals because they own 35% of gdp before they make the bid. the chairman is the chief executive officer of brookfield management. alix: interesting. on a big reality investment guy and asked him where the value was. here's what he had to say. rates.three different one is multi family. parks, andle home one is office. mostffice is the one

threatening. that is the one we have converted to almost cash. the multi-family one is well-positioned, but definitely affected by supply and demand. home/rv one has the best performing rates based on there is no new supply. alix: what do you think? steve: i agree with the general commentary. he didn't address retail -- alix: he didn't want to own any of it. steve: the manufactured housing business is interesting because for're not building plots manufactured homes. he didn't comment on retail or retail rates, but he hasn't owned much of that in the last five to 10 years. alix: the point is there isn't the value you would like to see, it is too risky.some investors from private equity say they don't want to touch it because there is too much risk. is a weeding out

process and bricks and mortar retail. it is painful. malls have been crushed in terms of value. we tracked that through, foreclosures in the market. there has been a pick up on that. three herthat stay $25 per square foot in slaes or .ess exist in the marketplace when they going to the father becomes a market transaction. we see the value of obstruction. that is where the declines in occupancy and rent is most dramatic. most bricks and mortar retailers want to zero in on the most productive location. in new york the short hills mall which is nearby does about $1300 $1400 per square foot in sales. retailers want to be there.

the tertiary malls 10 miles to 50 miles west of there, sales drop off to 450 dollars per square foot in sales. those landlords are under rent and occupancy rusher. .lix: we appreciate you are you shopping box on friday? steve: no. all the time. [laughter] alix: and emma chandra is stock in a jcpenney in queens. look at maps go, it will tell you the traffic pattern in the tri-state area. new york traffic picking up in and out of brooklyn and jersey. i feel like i am a traffic/weatherpersons. jonathan: that is where you're going to be in 20 minutes. trying to get across the bridge. bumper-to-bumper. i am going to take a nap. my husband is driving. jonathan: counting you down to the close on wednesday.

everyone wants to get away for thanksgiving. futures are going nowhere ahead of the cash open. stocks are flatly open. s&p 500 futures were flat. he opened flat, 11 minutes-12 minutes in. from new york, this is bloomberg. ♪

taylor: this is bloomberg daybreak. on bloomberg markets, jamie dimon, jpmorgan chairman and ceo speaking at the economic club of chicago at 1:00 p.m. in new york.

bitcoin, you hate it or love it. starting a 500 million dollar fund to invest in cryptocurrencies. he told us why he thinks skeptics are wrong. >> you might notice all of those guys are over 60, and i am not. there is some truth to that. it is very difficult for someone who did not grow up in a digital world to start understanding how we can be moving into a digital world. it coin you can look at as digital gold. gold is a precious metal. it could have been copper or lots of things on the periodic table, but way back people chose gold. it has value because people say it has value. bitcoin is based on amazing technology, there is a limited supply of it. came oute revolution

of a breakdown in trust. out of the 2008 financial crisis. people said we don't trust financial institutions and governments. in venezuela, it is hard to bank, or central zimbabwe. the centralized revolution, which bitcoin is the poster child of, is a response to the breakdown of trust. or trade?nvestment overnight there was a cryptocurrency i had never heard of called tether. down was bitcoin going 5.5%. there seems to be a lot of volatility in cryptocurrencies. the second or third ending of this revolution. experiments.ng each of these are individual ecosystems with their own use case. bitcoin, the largest, is a decentralized system to store

wealth. there are a thousand other coins decent market cap coins with their own system. because prices have moved so far people are nervous. he made a lot of money, there is news, you want to book your profits and get out. ofx: people lost millions dollars they aren't going to get back. how does that not put the model into question questio? >> $30 million was stolen. that gets people nervous. we spend a lot of time thinking about security of our coins and how to keep them safe. 2 years ago when i had a smaller amount invested, i spent less time. david: this is market share of cryptocurrencies with the white bitcoin being at the top. that is market share. it looks like a theory and has taken some. ethereum had an

amazing run. to $400 here$1 up did coin stayed on the sidelines during that move. then bitcoin had a big move. i think right now, for first-timers entering this market, bitcoin is the name they have heard of. that is what is driving that move. in the last few days, ethereum started to move. i think it will hit a new high said. there are positive things happening in the ethereum ecosystem. alix: what is the call for 2018? end at 10,000 in bitcoin. the end of the year close to 500. forthan: reports on bitcoin bloomberg. it is great to have the around the table. he is enthusiastic about bitcoin. i wonder why. it is something that we were

popping around the other day, it seems like this is where the excitement is. he seems generally excited talking about it. is that what is in it for them? every day well bitcoin is up 700% this year. --had three sons of 25% three slumps of 25%, now it is back up. it is exciting to watch and trade. when you see that chart, it is like this is where we can actually make money. alix: not if you are tether. i thought his answer to my question was interesting. people have lost millions of dollars. his answer was it doesn't matter because it is a big market. a few million dollars isn't a big deal. what kind of mentality is that? and the smaller cryptocurrencies, you have to be aware of the huge risks.

bitcoin itself, which is like the gold in cryptocurrency, is still risky. you have to be prepared for that kind of loss. alix: how many other tether-things are there? camila: hundreds. around 10 big cryptocurrencies of several million dollars of market cap, then hundreds of really tiny ones. i think if you're just starting to get into this, you'll get into something like bitcoin or ether. maybe put a little bit of money into the smaller ones because they are super risky. alix: thank you for joining us. jonathan: cryptocurrency portfolio management, allocate a little bit to the risky ones. is that what it has become? alix: isn't that what it is going to wind up being? jonathan: ok. alix: check out tv , and

interact with us directly. go to tv on your terminal. markets 21 minutes into the session a record high in the close yesterday. 2600 on the s&p today. this is bloomberg. ♪

outthan: before you head for thanksgiving stay tuned for the fed minutes, which will be released at 2:00 p.m. eastern time. alix: i have plans to make a velvetayered tiered red cake. i have to get that going. jonathan: maybe you can do that on your phone. inflation is starting to drift. someone has to watch it as it comes out of d.c. from washington. we feel for you that you have to be one who waits behind looking for the fed minutes. >> we are looking for anything about 2018.

markets are pricing in december ratings at this point. whatever they say about next month will be fairly inconsequential, but any hint about the rate path going forward and how they are looking at inflation going forward will be important. how will we think about that given some of those people won't be there? >> we will have new fed leadership and 4 open spots on the board. it will be a transitional period for the fed. we know the new fed chair is taking over from his position as the governor is probably thinking similarly to how they are currently thinking when it comes to inflation. any conversations around inflation and the minutes is probably a valid read going into his fed chairmanship. alix: any idea how we will get the fed is viewing financial instability? the conversation has turned to

the flattening yield curve. what might we glean from that? talkten there will be about financial development and how financial instability concerns are shaping up. you will see the discussion from the federal market committee. people will be in tuned with the federal market committee has to say about that. i think the flattening of the yield curve will be one of the big trends to watch. fromhan: the comments chair yellen, did you take that as a message for chair powell, or was she saying the obvious? >> it was a swan song speech for her because it is the first major speech she has given since we have known she won't be the chair of the fed next year. it was a repetition of what she also isore, but previewing issues that chair powell will have to deal with. 2-cited risks.

they have to worry about hiking too fast or too slow. she really reiterated that. 40 secondse have left. you can go. alix: thanks. thethan: 26 minutes into session to wrap things up here. the rush for thanksgiving. the trading will continue. we are closed tomorrow in the united states. coverage will continue on bloomberg tv on global markets. the s&p 500 has unchanged. elsewhere, bond market yields were higher on treasury. now lower. from new york, this is bloomberg daybreak. ♪ is this a phone?

or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. ♪ mark: from -- vonnie: from new york, i'm vonnie quinn. london, i'm mark barton. welcome to bloomberg markets. ♪

vonnie: a lot to get to in the next couple of hours. u.s. stocks are mixed, and breaking economic news with the u.s.. >> final read on consumer confidence for november. coming in at 98 point 5%. that is higher than the 97.8% for the prior month and higher than analysts had been estimating. we have been seeing consistently high ratings from the university of michigan and other outlets as well that measure this. the index does mean higher than expectations, so something to keep an eye on as that trend does continue. this coming on the heels of other economic data this morning haveshows that u.s. -- declined by more than five weeks