aftermath, gridlock or compromise? will the democratic house work with trump, or does the mueller investigation get in the way? markets look for clues on the end of the hiking cycle after the bond and dollar selloff. italy and brussels, the eu throws cold water on italy's growth projections and says the deficit is close to the eu 3% limit. david: welcome to "bloomberg daybreak." on a serious in story out of thousand oaks, california. , 13 have, a shooting died, including the shooter and a sheriff's deputy, the first respond to the scene. afteri feel like week week we get more of these stories and it becomes difficult to know where to take them. david: the mass shootings, you

can't get over how many there are. they don't go away. they get worse. alix: we will keep you updated on headlines from that. in the markets, a risk-on tone. s&p futures off 10 points. higher.y, a gap any riskn about will rally be sustained? euro-down, a mixed dollars story , trying to find its footing. any risk rally bethe 10 year yield is doe basis point. terrible thirty-year auction yesterday despite a bowl flatten er.-- bull flatten part of that is the opec story. david: we will get weekly jobless claims today. 2:00, the fed rate decision. the interest is the balance sheet on that one. after the bell, earnings from

disney and activision. first word news. good morning. emma: in southern california, a gunman burst into a bar last night, throwing smoke grenades and opening fire. , including apeople sheriff's deputy responding to the attack. 10 others were wounded. the gunman was found dead inside. authorities have not identified him yet. >> we have no idea if there is a terrorism link to this event or not. investigationsng and that information will come out as soon as we determine who the suspect was and what motive he might have had with this horrific event. the shooting took place in thousand oaks, california. we will keep you updated throughout the morning.

president trump would consider raising tax rates to pay for a for the middle class. the president indicated that could include an increase in corporate taxes. the taxs criticized bill for not doing enough to help middle income americans. a critic of the russian investigation is supervising it. president trump named matt attorneyto be acting general and put him in charge of robert mueller's probe. replace jeff sessions, who resigned at the president's request. president trump criticize sessions for recusing himself from the russian investigation. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. david: thank you so much. first take.mberg our reporters.y

i want to start with the aftermath. what comes after the midterms? we heard at length from president trump yesterday. he spoke about the possibility of working with the democrats. >> hopefully we can all work together to continue delivering for the american people, including economic growth come infrastructure, trade, lowering the costs of prescription drugs, some of the things that democrats do want to work on. david: do we have any reason to believe that will happen in washington? >> i think we do. i think you will come from the democrat side and from nancy pelosi. she has expressed an interest to be the speaker of the house again. this is her opportunity, her legacy. she can go out as the tip o'neill-type speaker, or she can go out as the speaker who tries wrongdoing on the

president and turn the economy into a recession. i think she will choose the former. alix: yesterday, you had a dollar selloff and yields moving lower because we will not have that fiscal stimulus. >> we had the sense that gridlock was going to be a positive for the stock market. we saw that in some of the areas president trump noted. the biotech etf saw the most inflows into weeks on the likelihood we will not see reform on drug prices. we saw the financial etf having a good day on the expectations that maxine waters want be able to wind back regulation given that the president has his people in place of the key regulators. we will see whether nancy pelosi comes through and works with the president to get these things, but we have the and packs of the

trade war that could be looming over it. reflectedee that inflows if that comes back into the news. ,avid: right now, tom barrett the founder of colony capital. we will get his take. alix: another top story is the federal reserve. one area is fed treasury holdings. the conversation is do we need to do so now because of a funding squeeze. what do you think? >> difficult question. the fed is taking an approach as if they see a crisis looming. the fed has two ways to lower rates, they let the economy dictate or they dictate. the fed dictates when there is trouble in the market. in normal times the market dictates. now the fed is dictating. i question that. the only reason i see why is they sensed something looming,

maybe over session, that they would need to lower rates quickly in the future, and the only way is to get it to a higher level to give them latitude to do that. reducing they would be the balance sheet and letting the market dictate where rates go. david: is that what you are seeing? alix: you see leaning towards the ultrashort end. 6 billion to 8 billion and inflows into short-term etf's last month. we saw outflows of 4 billion. people are positioning for higher rates in the near term. they are looking at that balance sheet. a great story today that explains what is going on with regards to the upperthey are loe sheet. band, the feds effective rate and where we should be looking. alix: you have got to love that. special alongd

with expert analysis from our guests. for our third story, we turn to italy and its budget. it is in the news again's morning. hard look and said no way, no how. they were supposed to get it to 2%. it came in at 2.4%. the eu said it's going to be 2.9% to 3.1%. >> their growth projections are very ambitious. we know that will not happen. the italians are in a similar situation. through what it means for the dollar. yesterday the conversation was the dollar has found its peak and we will see a bear market in the dollar.

how do you factor it? >> i don't think dollar has seen its peak at all. is it going to be trade? yes. compromise? we will see. the dollar will be the place to hide for asset and haven flows, and treasuries as well. david: people running away from italy right now? >> a lot of people are sitting on the sidelines. were not seeing outflows, but not inflows either. u.s. hasst one in the not seen inflows since early last month. that tells me people don't want to go in because they don't see going,n of where this is but they are not ready to pull their money out. unless you are a unicredit shareholder and you are rethinking things. thanks very much. you can find all the charts on gtv on your terminal and

browse those features and savior charts. save your charts. gtv . capital ceo,colony chairman, and founder coming up. this is bloomberg. ♪

>> this is "bloomberg daybreak." there is a new chairman at tesla. it has made one of its directors a replacement for elon musk after he had to give up the position after a run-in with secured he regulators. job cuts on the way at the marty

eight -- workforce. 9% of its boostis stocks have a after the ouster of jeff sessions. etf's jump to new highs on the news, rising as much as 9%. that is your bloomberg business flash. the biggest question after the midterm elections is how the newly divided congress will work with itself and the administration. --welcome now tom barrett tom barrick. yesterday fair amount about we want to work together. time, the president said if you start investigating me come all bets are off. >> if they start investigating you, that you can play that game

and investigate them. can you compartmentalize that and still continue to work with them for the benefit of the rest of the country or are all caps off? that, all it is is a warlike posture. david: that is not as encouraging some of the things the president said. which is it going to be? >> of course they will go through investigations. house oversight will get busy on that. that is something we should expect. that is the normal constitutional check of congress. the democrats will try to find areas where they can work with them, prescription drug pricing as well as infrastructure. infrastructure always comes up. i am not confident they can get a deal done. david: what about infrastructure?

perhaps it matters the most to our audience. what are the odds? >> tax cuts 2.0 is off the table. i think you could probably get a small deal done, maybe $100 billion to $200 billion in federal spending, similar to the build america bonds program in 2009. i don't see a new $1 trillion spending project. that seems too high. to be totally clear, i put the chance as pretty low, 10% to 20%. alix: you talked to the president on election night. how serious is he about reaching out to democrats? >> i think he is serious. this president is practical and dealmaker and he puts aside the traditional republican philosophy for the sake of practicality.

i think it is an interesting time. the country is in dissension, in debate, and that is not a good thing in one sense them up but participation has never been higher, so voter participation has never been higher come the election of women and minorities has never been better, and thanks to you and all the news agencies, the dialogue has never been higher. the democrats are smart. taking on this president, and for sure that will be an investigation and rhetoric, but he is pretty good at that game. if they play that game going into 2020 and things stall out come it is not good for them. david: there is no question he is a dealmaker. he is also a fighter. he enjoys the fight, it appears. can he do both at the same time, fighting it. fighting and reaching over to

nancy pelosi. >> absolutely. of won't see this long tail him saying i will fight. he will get things done. even the mueller investigation. there is nobody better than bob mueller. if you were to pick a person to do a job, he didn't invent the job, he is just doing the job. all this rhetoric about the justice department and the mueller investigation, it would be foolish for him to do that. he let's the rhetoric rise so we all participate in the dialogue, then he would do what is practical. david: bob mueller has a new boss this morning, and acting attorney general on the record saying he disapproves of the investigation. if he does not fire him, he will cut the budget. do you think the president will let him do that if that is his direction? >> my personal view is no. it was rhetoric when he was

chief of staff. that is different than being attorney general. i think it would be foolish. the president knows robert mueller is doing his job, a professional group, a professional staff, but it finish and be done with it. alix: in history, there have been investigations, but still bipartisan ability to get things done. what would be different about this scenario? has gotten so heated between the democrats and the president, the prospect of a 2020 election on the horizon. do the democrats want to give this president a win before the 2020 election? you also have to deal with the republican senate. you have to get a lot of parties together to get a deal on prescription drug pricing or any measures they are talking about. david: give us a sense of the priorities. let's say we move past the fighting. infrastructure, drug prices, the

wall. give us a sense of what the president thinks is most important to get done. >> i think he looks at it all. infrastructure is difficult, right? it is not just federal. the real problem are the states. when you look at private pay and how it works through the system of the states, it is quite complicated. you have the secretary doing a great job in looking at federal transportation, but the states going to a canadian private pay system is complicated. were talking before we came on, this economy has a tail. what stimulates it is the question. he understands that. and flow. will ebb

infrastructure will come into focus. david: that is the question for many people in the financial community. we got a big stimulus out of the tax cuts. what comes next? we saw the gdp growth go up. from the president's point of view, what is the second arrow in the quiver?> it and you at all of need it now. too,think trade u.s.-china, the new nafta deal, as well as u.s.-europe, those are areas that could boost the economy. imagine if we got a massive bilateral deal with china. that opens up markets in china. trumpyesterday, president also talked about china. here is what he had to say. >> on the other hand, some decided to stay away.

they did very poorly. i'm not sure. we will try to make a deal with china because i want to have great relationships with president xi and also with china. alix: walk me through then how this plays out. >> right. there are a lot of issues at play. a lot of clients have been asking about the prospects of a deal at the g-20. ip theft, force technology transfer, floating wto rules, those are a lot to solve in one month. i think this is one step along many steps to get there. >> robert lighthizer is amazing. ,hen you think about nafta canada, mexico, he is a warrior. resident -- president trump and president xi have a wonderful

relationship. that kind of bonding the between two powerful people, we are playing. is a fundamental difference. no matter what you thought about nafta, nobody with saying canada or mexico change the way they are doing business. the president is saying here is the fundamentally way you are changing business to china. is that doable? >> absolutely. president xi is president for life. for him to bend to this president, if he wants to rotate after that, rotate. i think the chinese are practical and you will get a deal done. alix: we heard yesterday from hank paulson in singapore that there was an economic iron curtain coming up between the u.s. and china and they would be fighting for different things.

he painted a pretty grim picture. what part of that would be your base case for us to get there? see 20%ink you will tariffs on all chinese imports coming in. it will trim u.s. growth, but not derail the u.s. economy. this idea of an iron curtain or new cold war is brewing. for the chinese side, if they are thinking about 2049 and this dream plan to be the global haveonic power, they will to get gdp per capita in line with korea and taiwan. alix: what will be a win? no more tariffs and we will talk? is that considered a win for trump? is it reducing the deficit with china, caving on intellectual property? timee trade deficit at a where they are the largest buyer of our debt is a difficult

discussion, which you want. is a consensus between these two powerful presidents that shows some meeting of the minds in the middle. , theseld is saying, wow powers could be at odds with each other. sides, on both intellectual property will not happen overnight. that is a cultural issue. it will take a decade. them and gave them our software and licensing. expensively and we buy our own, so i don't know whose fault it is. i think you will see both of them say we need to fix this. they both have great warriors. robert lighthizer is terrific. i think you will get on trade tariffs taking the heat out of the system. talk about the amazing relationship between

and presidenti trump. president is not accommodating with his language, but he can be accommodating in deal making. president xi is the reverse. he talks nice, but does not do much. >> president xi does a lot. one belt, one road. that will go through new york city soon. president trump basically has north america now. the trade in mexico and canada every day, we don't need anybody else. we are energy independent. i think president trump is holding a lot of cards in the near term. alix: for a win on november 20, it will help the markets feel better about trade, is it hiding of rhetoric. >> it will be a joint statement with a whole rhetoric, rollback tariffs come and find how they

will work together. deal, if we can get a similar process on u.s.-china and that would be a huge win. alix: thank you so much. more with tom. we will talk about the difficulty of the asset management business. this is bloomberg. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions.

to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. alix: "bloomberg daybreak: americas." this is "bloomberg daybreak: americas." i'm alix steel. a little bit of softening in the risk tone. dow jones futures off by 67 points. european stocks dishing out a

gain as well as european banks, despite unicredit getting slammed, having to take a right at on turkish assets. ino-dollar and the 10-year italy having dynamic forces playing. you have the european commission saying we see your budget deficit next year close to 3%, and that could break the rules. italy coming back saying, but you looked at a partial, not a careful analysis of the budget draft plan. that rhetoric continuing in italy. here in the u.s., it is still a flatter curve. 26 basis points is how we print into that fed meeting later today. well bid throughout the day. crude is flat on the day. update from get the what is happening outside the business world. emma: in southern california, a

gunman broke into a country bar last night opening fire and throwing smug grenades. he killed 11 people including a-shares deputy responding to the attack. deadunman was found inside. the shooting took place in thousand oaks, california, about 40 miles from downtown los angeles. a longtime critic of the russian investigation now has the power to fire robert mueller. president trump has named matt whitaker to be the acting attorney general. jeff sessions resigned at the president's request. the president frequently criticized sessions for recusing himself from the investigations. hedge funds suffered their worst monthly loss in more than seven years. more thane fund fell 3% in october because of a decline in global stock markets. the largest decline was in equity strategies. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700

journalists and analysts in over 120 countries. i'm emma chandra. this is bloomberg. inid: tom barrack found colony capital in 1990 with of get from robert bass capital, and since has grown into a $20 billion company, making investments around the world. ceo of colonyw capital now to talk with us about his redirection of the company, tom barrack himself. welcome back. you never quite left. take over asust ceo again, but you are redirecting the company. tell us where you are going. >> the same way the market is going. hedge funds not performing well, especially this month. they are not performing because the market is so efficient. if you look at the top five stocks and invest, you see what happens without a 2/20 structure.

reits, almost 50 billion in assets, is supposed to be the passive recipient of income streams. no value added, operating entities have to be someplace else, a patient interactional growth of income. the problem is in most asset classes in real estate there is the devil named capex. are growing a hotel or health care or industrial segment, or office building segment, for instance, new york evaporates free cash flow. mature balance sheet assets, the yield on that sometimes is deceptive. sometimes it looks like it is return on capital but is return of capital so you have to go to a more actively managed for hat

-- format. for us that is asset light. the advantage of having the balance sheet is you can take positions in value-added product overreate a magic elixir creating that, creating better value, and sell those pieces of two third-party investors, institutions who do not want to engage in that process. us about what happened, going backwards before forward. you did the north star deal. i'm sure the company has not done as you would have liked it to be. was that acquisition in more trouble than you thought? forget the market move on you and it went in a ticket that different direction? >> both. we missed it. he built a great platform, for what the market was at its time. that merger was much more complicated than we thought, bringing two cultures together.

the retail market data, health care got in trouble, and we missed it. are, a greatwe , a seventy for me dollar stock is different from a $14 stock, but the growth is in the asset management, investment portion of the business where we are using the balance sheet. we will have $2 billion of liquidity. leveraging that for third-party capital, and fees, is exponentially better. 20% returns are better than 4%. alix: no asset managers have been creamed, it's been a terrible year. is it a buyers market, sellers market, how do you grow it? did you pick up companies that would fail anyways? how do you compete in an industry that is seeing outflows anywhere you look? >> there is a flood of

liquidity. the markets are efficient. when you are buying a company 11 times, leveraging it seven times , you will dividend back your equity quickly. it is a leverage play. what we are doing is something different. the reason asset managers are behind it all of it is because there is no value in the public markets for kerry. we all used to live on promote. the business was not an asset management business, it was a total return business. you buy an acid over a three-year period, you put management in, recycle the assets, and you sell them in your five or six, and the promotional interest of that was the main consideration of that management group. we wanthe market says long-term contractual fees and we will give you a 15 times multiple on those fees. institutions are becoming better, fees are coming down, they like: investment.

you have smarter groups of people in sovereign wealth funds, public and corporate pension funds, and they want to make investment directly with somebody like us. capitalput 20% of our with you but in a less intensive business. it is hard to re-create a blackstone, carlisle, apollo. those entities that started in 1990 were really in search of themselves. now they have grown up into the lighter day investors and everyone will morph into something else. kkr uses a balance sheet, uses it intelligently. you have a tpg that doesn't have a balance sheet, they are very intelligent. race of what is the next type of asset manager. the market mistakes, continual contractual fees, i would focus more on promote. as you went through that

litany, there is a lot of competition in this area, lots of people trying to do this. what is your competitive advantage? >> our company is a balance sheet. can onlyd in funds acquire assets within these co-mingled entities. breadth of how quickly they move is less. the other thing is it is a long line relationship business. when you are relied on third-party investors and shareholders, you gain reputational capital and inches over decades, and you can lose it in an afternoon. this, it's aike time to monetize, keep the dividend strong, move to liquidity. there will be fishers that break in the market. windows break, you take advantage of them in that marketplace without overpaying in an environment that it is so inefficient it is priced to perfection. that is what is going on in this real estate market.

everyone saying we are late in the cycle. ffo, only eat core cash flow. how do you generate cash flow? those will be the winners. alix: the industry you are describing would lend itself to an activist investor. anyone colony interested in? >> these are difficult because assets go down every afternoon. if you look at blackstone, for instance, the gold standard. steve schwarzman, john, tony have done a fantastic job. without them at the helm to blend into another entity or consolidate, merge with another private equity firm, doesn't make much sense. the assets are not on the balance sheet. are on the christmas tree, the ornaments on the balance sheet. modeled think anyone is concerned about activism. there will be consolidation.

investor distribution in this liquidity market, when you see what happens to private equity, these institutions have to do that to match their actuarial returns. there is no way in a continuing market they will meet their actuarial returns. david: where will funds come from, co-investors, what parts of the world, and where will you be looking to invest assets into? >> public pension funds in the u.s. have to continue to invest in alternative assets. that is a long process for them to decide where and how, they are consolidating managers. sovereign wealth funds have become unbelievably sophisticated. qatar, the one in saudi arabia we have heard about, the northern european countries, the canadians are so good and smart. liquidity is epic.

david: you have done a fair mother worked in qatar. given the relationship between qatar and saudi arabia, can you do this is on both sides of that boycott? -- nothave to choose just you, but in general -- to choose to be with the qataris or the saudi's? >> the middle east is a rubik's cube. all of these young countries have brilliant, young leaders who are trying to find their way in their own style. done an amazing job since 1997, the leadership has been incredible. there is bright, young, western educated. he has an incredible team. the same in abu dhabi, second generation of leadership. we brought them out of the desert from trading into this

unbelievably, incredibly well cycle. this tribal rivalry they have is really regional. it is between them. my view of this is let them figure it out, keep the u.s. out of this mess. there is no good answer. i think what you will see happen in the middle east is, if we allow them to resolve those issues themselves -- they know power in the gulf is in alignment amongst them. shia split. sunni, president obama had this philosophy that iran was closer to the solution and president has moved away and says that the sunnis are the answer. withs are now along israel, along with jared kushner, trying to get peace. you will see these young leaders and eventually a line and say we need a golf presence, and that

is the only answer to stop iran from doing something drastic. alix: i'm glad you brought up saudi arabia, letting them figure it out, staying here, it is hard to do that now with the jamal khashoggi affair. we saw a lot of business leaders not participate in their economic forum but they want to be invested. does that change the way you want to be operating? >> it is very delicate. saudi arabia is operating within a regime of their own legal system. the regimes there based on a toarchy, based on suggestion sons of one mother, and the country which has 27 million people, 60% of which are below the age of 20, has to change its tribal cadence. it has been a rock, rugged --

not corrupted by their standards, but somewhat by our standards. it is just the method by which it works. it takes bold, brutal action. andhe way, the boldness brutality is not something that is new for america. starting with saddam hussein and the shaw of iran, gaddafi, regimes that benefited us. this resource curse, this oil and gas that america had incentive the west to make sure there was in balance in the region. it was our hope, not their fault. the reaction to this will take time in understanding. as the demands from the west become more dominant -- because we no longer need the oil. 10 million barrels of oil out of saudi arabia is significant. salman, whatever trouble he is in, for this unbelievably heinous act,

however it transpired, has to be fixed. but it is a sovereign country. to say we will throw the country of the ax of a group of people is not feasible for u.s. foreign-policy. much: you have done so business over there, let's come back to colony capital. to what extent is the future success in colony capital as you are directing it, dependent upon mohammad bin salman, dealing with the sovereign wealth fund over there? is that an important part of your future strategy? the macro economic environment is an important part of all our strategy. 357on't rely on -- we have investors in private funds, and they ebb and flow on what they need and want. but the region is unbelievably important. my hope is, out of this redefined relationship, what are the requirements we expect from saudi arabia, how do we blend

saudi arabia and qatar, -- it is an opportunity. and an problem opportunity. for us, the flow of oil and gas from that region, the buildup of sovereign wealth funds -- they don't have an actuarial hurdle like a calpers or new york common, who says i have to hit a 6% return. the diversification of their acid-base is much more expansive. being smart, staying out of the political rhetoric, understanding the patience of that system in the middle east -- they always talk about the , never mind, maybe tomorrow. i think that is the attitude that investors like us need to retain. david: tom barrick will be staying with us. it is time for some of the top business stories we are watching this morning. emma chandra has bloomberg

business flash. emma: qualcomm is feeling the legal fallout from its dispute with apple. they came out with a weak sales forecast for the current quarter. apple decided earlier not to use their chips in the latest iphone . the two companies are in a battle over licensing. the turnaround at commerzbank is being slow down by costs and competition. they blamed falling revenue from competition and low interest rates. meanwhile, they are spending on marketing to acquire new customers. tesla has picked an independent director to replace elon musk as chairman. she will leave her position as cfo at the australian telecom telstra. that is your bloomberg business flash. thanks for much. tom barrick still with us. what do you think? >> i don't think. tesla, can i say

governance issues? like you know what it is to have a leader that tweets a lot. >> he is a genius, so with genius you go to pre-flop. i have a tesla, the best engineered car i have driven, but the market catches up quickly. the governance of an occupant are like elon musk who is thinking 30 years ahead is different from the governance of a slow-moving train. alix: so be private here that is what i don't get. wall street beat, three things that wall street is covering. unicredit rights of turkey. the company takes a $972 million charge but the ceo says they are ready to double down on turkey's economy. his and hers at goldman. named 69 new partners including a husband and wife. and a look at the ranking of business schools in the u.s.

joining us now is jason kelly, our hea u.s. bureau chie. joining us now is jason turkey, the gift that keeps on giving. we knew it had some problems but this is a billion dollars. >> more trouble out of turkey and for european banks. one of the things, as you pan out a little bit here, you see that this is a story, a turkey specific story for unicredit. this is not the only problem they are having, and they are having the exact same problem that a lot of their peers are having which is revenue is not growing, trying to figure out asset management. i wonder, if i can pose this to tom, you have had experience by distress in europe. our banks a distressed play in europe right now? tom: great question and answer is yes.

problem is the regulatory and legal systems. the benefit of america is it is understandable, you have a legal system that works, and quite honestly, in europe, it doesn't. side,ou look at the asset in europe, there is no resolution mechanism. if you have bad assets, what do you do? this is why you have not seen a quick pace of that happening. basis, absolutely. alix: so yes and no. goldman partners. we reported that we would not see the kind of partnerships that goldman that we were used to but there was a husband and wife promoted. i didn't know that was allowed. we don't have it totally confirmed yet, but we are pretty sure this is the first time this has happened, which is a pretty safe bet, because we know that it has not really become easy to become a woman partner at goldman historically. to be fair, a higher percentage

of women named to this class. david solomon -- i turn to tom again -- really putting his mark on this bank quickly, smaller part her class, more focused, steel, onlyfor alix one commodity guy. alix: only one commodity trader to the 2018 class. tom: david is an amazing human being, so smart. if you look at this transition of where he is going with john againstn, never bet david solomon. he really is making a lot of changes. the partnership is so legendary at goldman. look at a lot, but you other big senior moves, and he is making them very quickly.

alix: not like he has a list or anything. david: make story for a lot of people in the business world, new ranking from bloomberg businessweek about the top business schools in the country. if it were law schools, i would be paying more attention. a lot of people pay attention to this. i have had a chance to dig into this over the last couple of days. 30 years in, they redid the entire methodology here. one of our top editors was essentially given a blank sheet how do wend said actually think about business education? we all know this. it is an investment, ultimately. you don't go to business school -- sort of want to find myself, figure out what i want to be. there is an opportunity cost and there is an actual cost. it is not a cheap degree.

they look to compensation, learning, networking, and importantly, after partnership. number one, stanford. by a lot. david: harvard was not even number two. jason: wharton, university of pennsylvania, and in writing out the top were m.i.t. and boone school. alix: what were the worst? jason: let's show them now. san diego state, denver, oregon. there was a lot of movement, and i incurred people to go online and poke around a little bit. you went to law school. a lot of business. can you tell the difference according to where they went to business school, as to how they do? tom: no. [laughter] david: that was not a plant.

tom: stanford is first class, but there is a winner even on a muddy track. you pick the horse, not the track. all of these schools are terrific. at the end of the day, those arrows in the quiver are sometimes limiting. george, thee withterrific most brilliant students from stamford dropout in year two. they do something else. the opportunity cost to talk about our huge, but i think it's all about the athlete. these top 10 schools, including my alma mater, usc, which skyrocketed in the last two years, is doing better as they moved to an entrepreneurial set. it used to be that you went to

work for procter & gamble and then goldman sachs. now what do they do? tom: and that is why networking is a key element of this. jason: you are paying for the opportunity to essentially hobnob with successful people. one of the levels they went down on this which was fascinating, you can network, but do you get a job from that? i don't know about getting a job, but i know that jamie dimon went to harvard business school with stephen that is nowns nbc, coincidence. they have known each other through their careers. everybody.om knows didn't talk about where michigan ended up on this list. not pretty. top 20, there you go. note, as a programming will be doing our show from stanford tomorrow, so a lot more to come on those rankings.

david: tom barrett, jason kelly, thank you for being here. you can tune into jason on bloomberg radio daily from 2:00 until 5:00 in the evening eastern time. tomorrow, he will be broadcasting live from stanford, the number one business school on the new rankings. alix: did you go to business school? i did not. denise chisholm will be joining us, along with mark cabana, head of u.s. rates strategy of merrill lynch. the rate waiting for decision, tune in starting at 1:00 today. this is bloomberg. ♪ mberg. ♪

show me movies a grinch would love. [ bark ] nu uh, i'm picking the movie tonight. [ whimpers ] be sad, i enjoy it. show me grinchy movies. oh, goody. [ whimpers ] mmm, fine! show me movies max would like.

see the grinch in theaters by saying... "get grinch tickets" into your xfinity x1 voice remote. [ laughing ] uh oh. something in my throat.

alix: midterm aftermath, gridlock or compromise. will a democratic house work with president trump the mueller investigation get in the way? markets look for clues after bonds and dollar selloff. elon musk loses his chairman seat after 14 years to insider rob and then hold. is it enough to rein in the ceo? david: welcome to "bloomberg daybreak: americas." i'm david westin. overnight, of course, there was a tragic shooting in thousand oaks, california. 13 people are dead as of this hour including the shooter and a sheriff's deputy. it was in a crowded country-western bar when somebody went in, through some smoke bombs, and started shooting. we don't know the cause but it is another mass shooting in the u.s. alix: president trump tweeting he has been fully briefed about reiterating that

the shooter is dead, 13 people reported dead. he is being updated. this is now over 300 mass shootings this year. david: this year? alix: depending on how you calculated, now over 300. david: if you track it over time, it is getting worse, not better. whatever the problem is we are not addressing it. 100% right. let's take a look at where we are in the markets. we had that risk on rally. question is how long that sustained itself. s&p -- s&p futures down 5.3%. euro-dollar pretty much flat, you had a good spanish bond auction, mixed german trade data and all of the italy trade drama between ec and italy, what the trade deficit means. here is a u.s. you want to buy the long end. a terrible 30 yada yada auction, but now you have about two basis

points. crude flat despite the fact that some are convinced commodities will rally. david: in the meantime, what happens to u.s. treasury's? time for the morning brief. 8:30. we will begin getting weekly jobless claims. 2:00 this afternoon, the federal reserve rate decision. and then today we got earnings from walt disney and activision. right now let's get an update on what's happening outside the business world. emma chandra has first word news. emma: in southern california, a gunman broke into a country and western bar last night bronx moat grenades and opening fire. he killed 12 people including a-shares deputy. 10 others were wounded. the gunman was found dead

inside. authorities have not identified him yet. we have no idea there was a terrorism link to this or not. these are ongoing investigations and that investigation will come out as soon as we are able to determine exactly who the suspect was and what motive he might have had for this horrific event. the shooting took place in thousand oaks, california, 40 miles from downtown los angeles. the president has tweeted he has been briefed on the incident. a critic of the russian investigation is now supervising it. president trump named matt whitaker to be acting attorney general. whitaker is a temporary replacement for jeff sessions, who resigned at the president's request. president trump quickly criticized sessions for recusing himself from the russia investigation. opec is considering get another u-turn. the cartel says they will return

to cutting output next year. producers boosted production over the summer after political pressure from president trump, but a surge in shale oil output says -- has made opec said that they will be considering. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm emma chandra. this is bloomberg. is suddenlyone asking in washington, why can't we all get along? >> hopefully we can work together to continue delivering for the american people including on economic growth, infrastructure, trade, lori the cost of prescription drugs. these are some of the things that the democrats want to work on. >> one thing we have learned about this president is he is practical and he is a dealmaker nontraditionalde republican philosophy for the

sake of prodigality. >> last night i had the conversation with president trump about how we could work together. one of the issues that came up was part of our for the people agenda, building infrastructure for america. >> we will certainly try to help the president achieved what he would like to do with regard to the wall, border security, and that will have to be done on some kind of a bipartisan discussion. >> there needs to be majority and simple majority in the house for any kind of legislation that the administration wants. i would think right now that nancy pelosi and her incoming leadership team, assuming she is speaker, will not be so quick to go along with whatever the trump white house wants without getting something in return. david: taking us through all of that noise, we welcome from boston denise chisholm, fidelity head of sector strategy. headw york, mark cabana,

of u.s. rates strategy at merrill lynch. denny's, that was pretty hopeful, but at the end, eric cantor said they would want something in return. what hopes to you have? >> i don't have any specific hopes on what they can and cannot do. what my process is like is studying historical probabilities and letting that in for my investment views. let me give you some statistics. that investor has heard 100% of the time 12 months after a midterm election stocks are up. there is some bias to that if you lookeaning at it versus baseline alts, 70% of the time stocks go up. if you pick your starting point in october, you pick up 15 percentage points of seasonality, so it is not different. of all the data i scrubbed, there is something interesting about midterm elections. the market has a strong tendency, 70% of the time, multiples contract going into midterm elections. 85% of the time expand coming out.

investors need to be aware that the market is a very effective discounting mechanism, and interestingly enough, if things you are concerned about are in earnings deceleration, the year where we may see a multiple tailwind over the next 12 months, which could be a pretty significant offset. alix: really interesting. we saw that in october as well. have seen ishat we usually ends up rallying into the end of the year. the funding squeeze. that story sideline yesterday with the selloff. where do you stand at bank of america? >> we see downside risks from here. we think written log washington will persist, skeptical that anything will get done between the republicans and democrats in the near term. with that backdrop, we think you'll see a slight deceleration in growth next year, closer to trend by the end of next year, and that will not bode well for the dollar or rates.

david: no more tailwind from tax cuts essentially. what if trade got resolved? would work in the opposite direction, that would be a big surprise, the market would sense point a bit of relief from that kind of development. probably, that would allow for rates to selloff a little bit, risk to be bid, dollars to strengthen a bit. that is a clear risk, but based upon what we know as far as political outcomes are concerned, we think it will be gridlock for the next few years. alix: that means a weaker dollar, also a boon for stocks. when you scrub the data, i wonder if it was a sector specific story. the performers after president from was elected, consumer discretionary's, financials, technology, when you look at the pattern, what do you see on a sector basis? >> echoing those thoughts on the dollar, i will say 90% of the time after we see a move of this

magnitude -- because it's been last nine10% over the months, you see deceleration in the dollar. from a historical risk reward perspective, that is on point. from a sector perspective come in terms of midterm multiple appreciation, there has not been a consistent pattern within individual sectors but you see one of the benefits of looking at sectors. you can divide them into what i classes,all asset defensive sectors, consumer staples come utility, health care, telecom, and the rest of the sectors that are economically sensitive like energy, industrials, materials, financials, real estate. that cyclical sector, as a class, benefits from the tillman when you see from multiple appreciation but it has not been a consistent signal in terms of this sector working more often than not. david: put that analysis of

cyclicality together with global growth. where are we? that could cut the other way. >> with the u.s. slowing over the course of next year as the benefits of fiscal stimulus feed, that will be a challenge for the global growth cycle. europeans are in a challenging place, we are not seeing concrete growth out of japan. it has really been the u.s. leading the charge. if the u.s. begins to slow, that does not go well for the rest of the world. alix: denise come you talk about the cyclicality. a weaker dollar is good for tech, mobile slowdown. hammered, hedge fund specialties got hammered in october. where do we go from here? reward a risk perspective, i think it is favorable for technology. as much as it has gotten hammered, on a relative basis, we are dead in the middle in terms of a one or two month basis. we have not seen any

significantly on the performance. drivers of marginal acceleration still look positive within internet and even excluding internet that is now moving to the communication services sector. what i will say is valuation without internet services has dropped to the bottom quartile of its historical average on a relative basis. that in and of itself, regardless of fundamentals, has offered you about six to 5% on historically. so the risk reward from a valuation perspective still it's beneficial. that said, the market got very narrow from a sector perspective. only three sectors are performing in the past 12 months. that only happens 5% of the time. what you usually see is a broadening back out quickly to six sectors. tech might be challenged in terms of its dominance of outperformance, but the risk reward there is still positive. denise chisholm, mark cabana, thank you.

it is fed day, markets looking for clues on what to expect in 2019 and with a terminal balance sheet will be and what kind of dollar funding squeeze we will see in the short-term. this is bloomberg. ♪ bloomberg. ♪

emma: mrs. bloomberg daybreak. there is a new chairman at tesla. the carmaker has named on of its directors, robyn denholm, to replace elon musk. muska to give him the position after a run in with securities regulators. her jobwill be leaving as cfo at telstra. job cuts on the way to playmaker but barnier. they posted quarterly estimates that missed estimates.

the company will also sell its turboprop unit. cannabis stocks got a boost with the ouster of attorney general jeff sessions. exchange traded funds tracking marijuana jump to new highs on the news, rising as much as 9%. sessions was a major opponent of marijuana legalization. tox: the fed is expected maintain its status quo and some fixed income traders believe the fed make a policy mistake. .hey are concerned wall street also sees a risk of reserves on scarce if the fed allows its balance shoe to run off. still with us are denise chisholm and mark cabana. this is the conversation now, if you have the basic balance sheet of the fed, you think it is terminal. if you go too far, you'll her liquidity. walk us through this conversation. >> there is more concerned that the fed will arrive at scarcity faster than they anticipate,

which means the fed will have to stop the balance sheet unwind earlier than expected. what the fed is looking at where the fed funds effective is trading in relation to their target range. the use the interest rate on excess reserves to drive that within the target range. there's a possibility that it fed funds effective keeps moving up, it will exceed the top end of what the fed is targeting, and i will mean they are losing control of monetary policy. so what they are likely to do is within their ioer technical range and make these adjustments. in layman terms, it means the fed will raise rates in 20 basis points in december as opposed to their typical 25. alix: is that what we will blame libor for example? is that what we target at? >> libor is certainly driven by rates,ther money market but i think that is largely a funding type

phenomenon. less necessarily to do with the fed balance sheet but funding te phenomenon. part of the story. liquidity getting type. david: we talk about the fed balance sheet. give us a sense of where it is now compared to where we started out before quantitative easing. although they have come down some, they have not that much. if they had to stop, we would have more in the balance sheet today than 2007. part of the story. liquidity getting type. clearly, although interestingly enough, lower as a percentage of gdp when compared to other nations, which is interesting. the problem with the balance benchmarked not relative to anything. could predict what the balance sheet would do, or if you insert money supply as a proxy, could predict what the balance sheet would yoe highest on's and average of

equity relative performance. you see the same thing with interest rates over time. most investors don't know that if you are an equity market investor, rooting for stocks to go up, you would rather the fed hike rates, rather than lower than. the reason for that is really important. when we talk about balance sheets, money supply come interest rates. , risingen than not rates are a reflection of growth rather than a deterrent to it. that is important to understand. when we look at what the fed means to the market long-term. david: there is a third function of interest rates, and that is being able to react in case of a downturn, having some aviation to fire. how important is it to get those rates as far off as they can without hurting the economy? they are not sure that they will

be as free next time to use their balance sheet. great question. great question. we are debating for really the first time in our history the level. the way i think about it from a historical perspective is a real interest rates. that has been the clear determinate. we debate nominal interest rates all the time we are from a historical perspective, we like them as equity market investors to be going up. real interest rates are the clear signal that we either want to sell or buy historically. what is interesting is we have obviously gone from april 2 of negative real rates to now the way i think about it from a historical perspective is a real interest rates. neutral. we are still will the levels historically, which is around 3, 4, where you see equity market contraction with high probability on's. alix: where do you see the curve going? you sure in your 10-year. >> we have been holding at 3.25

until the end of the year but on downside risk based gridlock and alaska additional fiscal tailwinds. in terms of the curve, we think the outcome of the election, reduced operability for support means a generally flat or curved on the view that the fed will probably keep raising rates in the face of strong economic data and we think the market will have to mark down a little bit their expectations for future growth, given we will be decelerating closer to trend by the end of next year. david: mark cabana, thank you for being with us. denise chisholm will be staying with us. join us today at 2:00 this afternoon in new york for our fed a special with tom keene and scarlet fu along with expert julie coronado, jonathan.piro, and coming up, a new era at tesla. robyn denholm obese succeeding

elon musk as the chair. this is bloomberg. ♪

david: it is time for the bottom line, where relook look at three companies worth watching today. i will talk about 21st century fox. they came up with her earnings yesterday, something of a beat. the story is really they are selling most of the company to bob iger's disney. by next year this will be done, so we will not have much to all be because it will up to bob. speaking of, i will interview him today after the bill because they are coming up with earnings. again, that will be largely about what comes next. car,ave now caught the what are you going to do with it? i'm looking at she near energy, one of the companies that can export lng in the u.s. solid earnings.

commissioning corpus christi as the first strains. two terminals. the more trains you have, the more export capacity you have. they also reached a deal with poland. forr today, tune in bloomberg commodities edge. i'll be breaking down everything election as well as what happened to crude or this week. david: the third company we are watching is tesla. they appointed robyn denholm to succeed elon musk as chair. someone whoow is has a neutral rating on tesla. tell us about what you know about robyn denholm. she had a position at telstra industrial you for a short time. >> she has a strong tech background, strong silicon valley background. i think most importantly the up

ointment accomplishes the governance issues they want to address. the whole point of the changes that elon cannot be chairman for three years. this has come about because of governance issues. you want to have a person who now is in a more objective role to oversee governance, and i never really thought they would appoint somebody who could overshadow elon. that would not be good, he is still the face and the focus of the company, and a real driver of the company. i think it's a good move. david: it accomplishes what the sec said they had to do. i know that she was on the board when all of those things that happened that got mr. musk in trouble to begin with. where was she then, why will she do a better job supervising now? >> i don't believe she was at fault. elon is hard to control the matter who is on the board.

situatione whole about the tweet about the takeover has now caused this change, so the board has probably spoken with elon to say we need to be much more tighter in our governance. i still say he was very lucky in the outcome. i think this doesn't congress what they want to do. overall, control for elon is still there. there to say, thank you. coming up, financial industry in the face of a democratic-controlled house. ken bentsen joins us. this is bloomberg. ♪

alix: and this is "bloomberg daybreak: americas." i'm alix steel. not a lot of movement in the market. yesterday was a risk on rally after the midterms but now you are pretty much coasting. no real movement behind that.

stocks leaking at a gain of .7% despite italian banks getting slammed, in particular, unicredit taking a write-down. euro-dollar now flat. 10 year yield in italy up by five basis points. anythinging but hardly when you compare it to the headlines we are getting from the european commission. italy saying that you only did a partial analysis of our growth plan. david: you have a move in the market things to the jobless claims. 1000 high revised last month. 214000 last month, but they have revise it up to 215000. job market,ng probably something that we will hear in the fed statement today. david: the big question is how the newly divided congress will

work especially with financial regulation. maxine waters of california is set to leave the financial services committee and outline her agenda yesterday in which includes addressing concerns about deutsche bank and wells fargo. concerns about deutsche bank, money-laundering, that is simply one piece of the business we have to do. you know that we have requested information from the treasury about everything from sanctions to deutsche bank, and we know that deutsche bank is identified as one of the biggest money-laundering banks in the world perhaps. wereare the only ones who amenable to providing loans to this president. now we are finding their other fraudulent activities. we are going to talk about that, we are going to understand what is going on. i have told the ceo that i would be happy to meet with him. we are going to correct those things in the system to the best of our ability that is causing

harm to our consumers. bentsen, welcome ken resident and ceo of sifma. your views about what you think happens under this congress when it comes to financials. >> any time you have split control between the house and senate and administration, first of all, not much legislation happens. that is not necessarily a bad thing. when they do happen, they tend to be bipartisan. with your interview ranking member waters, who is likely to be the chairman of the financial services committee. every congress that comes in as investigative hearings, congress always exercises its oversight responsibility. but you want to look at what policy will get done. we have to look at what congressman waters has worked on over the years, things like banking, affordable homeownership. to me, that looks at things like

housing finance reform, something the treasury would like to do, the chairman of the senate banking committee wants to do. i think you'll see things like that. things in the retirement space, where there is a bipartisan movement toward multi-employment retirement plans. wells fargo, deutsche bank, that investigation will be isolated? >> i cannot comment on any individual firm but there have been hearings on issues like that, there will be hearings in the future. the question is does that lead to any policy issues or not? know.'t to drive policy through legislation you need bipartisan consensus in the house and senate. the other thing we have to look at is what does the new house look like. we know what the aggregate numbers are but we have to see where these new members are coming from, a lot of new suburban democrats coming from districts.red

what type of district are they? david: and a lot of first-time legislators who may have different views about things. >> lots of veterans, small business owners. david: specifically with financial deregulation, anything that may have bipartisan support? we don't know how infrastructure will get done. can you say there is one there that i think maybe democrats and republicans could come together on? >> i talked about housing finance, looking at maybe the gse's. david: that has been spoken about four how long? >> something could be done, but you are right. something that you could see moving to consensus on. i talked about multiemployer retirement plans. there has been some growing bipartisan support for that. maybe a spell over year when you have a new chair of the ways and means committee. we wantr big issue that

to watch closely is in the macro space. other speakers have talked about this. the school policy. do we have a status quo fiscal policy going forward? we want to avoid things like shutdowns, we have a debt limit, getting to that on march 1, we have to be careful with that as well. for: if you wanted to press more deregulation's, leverage ratios for big banks, who do now solicit, the sec, fed? congress may not be as receptive anymore. >> most of that is being done by regulators. i don't see that changing much. i think they are taking a methodical approach to looking at the rules being put in, looking at dodd-frank, seeing what is working and not working. they put in some pretty sober proposals. officials are in place, in set.

so i think we will see regulatory activity at the pace it is now. david: officials is it possiblet will be more protective? as i recall, a lot of the criticism of the independence of the fed came from house republicans. now with democrats in the majority, will that rhetoric died down? first of all, an independent fed is terribly important. not every other country has had that, some only recently. the fed is always under criticism. when i was on the house banking services committee, they took shots from both sides. spirit withinong the fed to protect their independence and i expect to see that going forward. 2016 election, deregulation for banks, everything is great, we have now exhausted that scenario. what are the biggest catalysts in 2019 that your members see? >> i think it goes more to the broader macro issues, government shutdowns, issues around the

debt limit extension, not addressing that. those are the things we have to be concerned about where we have disruption, normal functioning of government. rememberhat we have to will want these folks to get something done, put points on the board, because they will be up before the voters two years from now. there will be a lot of political fights, there always are, but at the end of the day, people will say what can we do to say that we have accomplished something? alix: ken bentsen, thank you. still with us is denise chisholm. we were talking about the leadership in the market, still value in tech but the leadership has changed. can financials take the leadership from tech? >> i think there is good potential for that. there will be a lot of political fights, there always what i try to look at is what is discounted in the market. financials have a unique situation. with the underperformance we

have seen, multiples have contracted relative to history. that is where you get those good odds on a go forward basis. regardless of election outcomes, potential for fiscal policy, sometimes given these valuation levels, you just climb that wall of worry regardless of fundamentals. in addition to that relative valuation levels, what you're seeing is something pretty unique. relative earnings have lacked quite a bit, although nominal has been fine. the reason for that is it has not kept up with the market. the critical driver for that earnings growth in 2019 is loan growth. predictindicators do oddspretty good historically that that will continue to accelerate. if that is the case, the deceleration in market growth

may empower financials to join into that leadership. the risk rewards are positive on a go forward basis. alix: part of that scenario be the value versus growth trade-off. selloff, wee get a get into the conversation but it never sticks. what do you need to see to make that risk reward make sense? >> people clumped together value and growth. i look more idiosyncratic with insect yours. value is really brought in terms of what it includes. not just financials, as much as i want to talk about them. it is consumer staples, industrial, health care, energy. there is a big value blend where we could talk about financials versus technology and think that is value or growth, but we may not see that play out in the indices. when i look historically, financials and technology have been positively correlated when interest rates are going up, meaning they are historically progrowth sectors. in the short term we have seen a

negative correlation which is that valley growth dynamic. when you study history, what you can pull back, important for investors to understand, although short-term correlations are there, history suggest they may not be persistent. it wouldn't surprise me from a historical perspective if we see consternation between technology and financials on a short-term basis. but on a long-term perspective, they are both positive. alix: wrapping it up, this takes into account the idiosyncratic factors you talked about, the volatility we have seen. had been highy over the overall index volatility. using that is what we will continue to see going forward if we get that bump up in the equity markets? >> from a volatility perspective, it is interesting. from an odds perspective, levels canthese vix

be very difficult to do. the shorter you extend your time horizon the more varied it is. 0.e outcomes are very 50/5 as soon as you you log in that years, 1, 2, 3 volatility at the levels is a positive thing. to are more likely to want buy it then sell it at these levels from a stock perspective. it always depends on your time horizon. what we have seen in the equity markets is something pretty unique. when i talked about those asset classes earlier, separating into defense and offense, we have seen a sharp defensive rotation that has not been confirmed by credit spreads. that is very rare. on a go forward basis, it matters a lot to the quality of the rally we see and the cyclicality. meaning the lack of confirmation in credit is usually a positive thing for cyclicals.

financials, technology, industrials, consumer discretionary. pleasure to have you, thank you. denise chisholm. an update onget what is making headlines outside of the business world. in southern california, a hooded gunmen burst into a crowded country and western bar last night, throwing smoke grades and opening fire. police say he killed 12 people including a-shares deputy responding to the attack. police say the gunman was found dead inside. they tell the associated press 40was a 29-year-old used a nine caliber pistol. the shooting took place in thousand oaks, california, 40 miles from downtown los angeles. a longtime critic of the russia investigation now has the power to fire robert mueller. president trump has named matt whitaker to be acting attorney general. he will supervise the probe. jeff sessions resides --

resigned at the president's request. house democrats will use the new majority to seek deals with president trump on infrastructure spending and prescription drug spending. still, party leader nancy pelosi says there will be no backing down to the white house. democrats will have to come up with policy goals that liberal and moderate members can support. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm emma chandra. this is bloomberg. david: ford implies scooter startup. marcy klevorn, the executive vice president and president of mobility. this is bloomberg. ♪

emma: mrs. bloomberg daybreak. coming up later on bloomberg markets, and inclusive interview with bruce richards. this is bloomberg. david: ford is a vision of the future is in scooters, at least partly. the company announced it has acquired scooter sharing company spin. klevorn is the ford executive vice president and president of mobility. welcome. good to have you with us. tell us about his new investment you are making in spin. >> great to be here, thank you for having me. we are very excited about this investment. thoughtlessyear old

scooter company in 13 cities around the u.s., cities and campuses. we are so excited about it. we believe the customer has spoken. the data shows that as well. scooter rides000 daily, and that generates about a million dollars of revenue daily. we are excited to be a part of it. the first and the last mile problem is real in urban settings and campuses, and we think hooters address that problem. the battery electric these addresses pollution. the fact that the scooters are doubtless addresses parking and congestion as well. david: give us a sense of what saturation is. 13 cities, 240,000 rise. what is the size of the market as you can tell? >> millions and millions arrives. scooters in general have even in a shorter time surpassed the ride-hailing market in a short amount of time. if you compare the growth to the

yfts, scooters have taken that market by storm. we are continuing to plan to grow. over 18 months, we plan to go to over 100 cities. david: what are the regulatory issues? i assume you need approval from the very cities that you go. some have resisted it. >> that is a great question. it is one of the things that we uniquely liked about spin. unique permits in cities. one of the things spin has done to differentiate itself is to work closely in partnership with cities, stone to make sure they have permission before setting up, that creates a win-win with the city. my mobility team has a city solutions group. there issuch a nice between how spin approaches the city and relationship we have established. we know that working together we can help them in a way that works with the city, and also

putting customers first. it is one of the reasons we selected spin to be a part of the ford family. closely mirror ours, trust, integrity, creating these win-win solutions for the cities. david: this is part of what you see for the future but certainly not all. talk about how this micro mobility fits into the larger package, things like autonomous vehicles. how does that fit into the larger strategy you are pursuing? >> when we talk about our strategy overall, i can pivot to the av piece of it, which is a continuation of the same strategy. we believe in the power of choice for our customers. when you think about what we have in our portfolio today, you can lease our great vehicles, commercial vehicles, performance vehicles as well. and through our campus product, you can also have access to a vehicle without having ownership. v's, ournto av's, e

ridesharing project. scooters help us round that out. we also have an emergency medical transport project. this provides a suite of solutions that gives customers a choice. maybe they need something very affordable, which this product provides. it is about one dollar a ride, $.15 a mile. very affordable. very affordable. it also provides choice. my husband is an f-150 raptor customer. but when we visit our son in the city, the scooter may be the perfect solution. we believe this provides affordability options but also choice depending on the situation. david: let me ask the question that is on a lot of people's minds with ford and autonomous vehicles generally. it is thought that you are behind general motors.

your ceo says that you are number two. how do you catch up and be number one? >> great question. i don't think that being number one or two in this point in time dictates "who wins." we think there will probably be two or three winners that emerge from the race going on right now. we are approaching it differently. how we are approaching it differently is this. number one, we are working on how we form businesses to create revenue opportunities from av's, along with developing the self driving system. why that is important is this. the two will inform each other. -- we create businesses just announced we are going to washington, d.c. come apart in with businesses to learn about how we can treat revenue from these autonomous vehicles. as you do that, you can inform the technology and get your

driving system fine-tuned, and vice versa. additionally, we are taking a human centered approach. in partnership with dominoes, for example, we learned a lot about how people approach and autonomous vehicle, what you need outside so people can interact with it. david: can you do it on your own, do need volkswagen? volkswagen will do some investing with you, the way gm got honda? >> we don't really comment on speculation but what i will tell you is this. we know we are very differentiated by creating businesses. these cases will be commoditized over time. how we are focused on the high-value pieces will ensure that ford is one of the few left standing at the end of this race. we are super confident about that. our work with spin helps us work with cities to do better getting permits, working with them. when you get into the world of autonomy, that is so important. david: appreciate you being

here, marcy. good luck with spin. i will have to try one. marcy klevorn, president of mobility. alix: i will one video of that. pot stocks higher after attorney general jeff sessions steps down. more on what i'm watching after this. this is bloomberg. ♪

alix: what i'm watching is pot stocks, heading higher after sessions stepped down as attorney general. to boost these guys. we also had some ballot voting on the midterms at her positive for pot stocks as well. this brings us back to flint, michigan. recreational the use of marijuana. sales could be as much as $275 million in annual sales once dispensaries are open. also another positive. david: most of it in ann arbor. i'm sure a fair amount already. alix: probably.

it is not just michigan. north dakota defeated that ballot, missouri approved medical marijuana, utah looks like it has passed a medical sense. so you have elections and sessions, and that is helping. david: you can go ahead and prosecute people. alix: if that rolls off. there you go. that wraps it up for "bloomberg daybreak: americas." up, the capital management founder and ceo. this is bloomberg. ♪

jonathan: i'm jonathan ferro. from new york city, the countdown to the open starts right now. jonathan: coming up, decision

day for the federal reserve. investors looking to close. it and the president making it clear to the democrats -- work with me or against me, not both. the markets of 30 minutes away from the opening bell, the stage is set as follows. we are down by a third of 1%. muted price action and fx, with the euro-dollar going nowhere, and a bid back into treasuries. moving by two basis points. 3.22 is your yield on the u.s. 10 year. and is it time for the fed to take a pause? >> not only are we hiking, we are reducing the balance sheet by $50 billion a month. >> you are starting to see problems in the front end. >> lowest unemployment rate since the 1960's. >> financial