. >> and capex in the first half of the year and buybacks are down so that's important to be 2018, down relative to 2016. you want to see a reacceleration of capex in 2018 and you need that certainty now, mario is talking about the need for fiscal policy you have the hand-off or the belief that the hand-off was going to occur from monetary to fiscal policy. it is concerning when you hear, to pete's point, 2019. can we even get to 2019 without them losing the house? that's the problem so now you're questioning, well, maybe that fiscal policy isn't going to be there when the monetary makes the hand-off. >> wasn't the centerpiece, steve, of this whole thing corporate taxes? that's going to spur earnings, maybe eight to ten bucks there was a note yesterday from jpmorgan, an incredibly bullish note on what tax reform could mean for earnings and what the stock market could do as a result of that if you start having to peel some of these expectations away, what impact is it going to have on the market >> well, my own view is that you had to be delusional to believe that it was going to happen.

immediate expensing of capex reduces the cost of business. so you can't look at one provision in isolation, you really ought to look at that as an overall package. >> host: you refer to the politics of the timetable of nafta and you have the mexican election that's coming up, obviously, that will affect their willingness and their ability to compromise. if you can't work something out by march, is the president prepared to unilaterally withdraw from nafta? >> well, i think the president has spoken for himself on innumbererable occasions. his general point of view is that no deal is better than a terrible deal. he'll exactly evaluate whatever we come up with. because it won't be that nothing lands on his desk. something will land on his desk in all like hooked. >> host: -- likelihood. >> host: you mean some kind of a draft? >> some kind of a draft will land on his desk. it will be a binary decision in that sense. >> host: what do you think the impact would be of unilateral withdrawal of america from nafta? >> i think it would be several differ

there was also a lag between profits and capex.rofit growth rebound and become supportive of more investment spending. this is a down the road story. when better to start than now? coming back to the fundamental drivers of the u.s. economy, it is growth in your labor force and growth in productivity. there is a direct relationship between investment spending and productivity growth. jonathan: i've got a suggestion for us all. i've got the greatest invite ever and i think you've got it too. vodka infused turkey. and the kicker. this is the best invite of ever had. a free taxi ride home included. david w.: i wonder why you need that. jonathan: why didn't you get an invite? alix: there is literally nothing worse i can think about. [laughter] jonathan: senators with me. david w.: this is not going to increase productivity. [laughter] jonathan: michael, think you very much. david lebovitz is sticking with us. coming up, the yield curve near its flattest level in a decade. it could zero out next year. from new york city, counting us down

and capex.- there willrf: be some investments. the question is magnitude. of the story we hear is that lower tax rates encourage investment, and that means more capital stock of higher wages. willlogic, most economists accept. the question is the magnitudes, and the evidence suggests to the reading of most economists that the magnitude of the extra investment and the effect on wages will ultimately be quite small. julie: i want to ask you about the issue of dynamic scoring here, to show the deficit impact of all of this. difficult to do dynamic scoring, at this point, because it's not the final version. but inasmuch as these numbers have been out there, what can we tell from them? mr. elmendorf: i think dynamic scoring of important pieces of legislation is very worthwhile. and that just means that you know that in the estimates of the effects on revenues and on the distribution cost of his best concert once as of the legislation, that we would incorporate the macroeconomic feedbacks. the effect on work and saving and investment and lost on gdp and wages and

alix: some questions on the capex. investing will do better than those buying dividends? >> you have to be careful, because what has been happening, this is where i am different from some, i think we will see the pick up in bond yields, you will see rotation away from growth and value. value is more cyclical and the growth guys have a lot of excess cash to buy back the stocks. are they as attractive when you can get growth the summer else, economic growth somewhere else, at cheaper prices, which is what value provides? the point luke made about the pricing model structures based on the discount rate you are using for the present value calculation starts to benefit the value as well away from growth, and it does limit how much the market goes up because you get rotation as opposed to just directionally higher and higher. jonathan: the equity market making new record highs, the equity market marches on and the bond market, we cannot stop looking at a going lower. 2'se a 57 handle now on versus 10's what are people -- 10'

but the immediate expensing of cap capex will be implemented january 1, 2018. it's not good.s not the worth thing in the world and i have a feeling it's not going to hold. capex is good, that's pro growth however, delaying the decline from 35 to 20, you know, it will take out some growth it raises doubts, which is what art is suggesting. it also will continue the avoidance and the sheltering i mean, look, a lot of these big corporations are offshore for a reason we know that and have talked a lot about that but in terms of repatriation, if they're staring at a 35% tax rate, that's a whole different ball game. that's much higher than they expected, they will keep offshore if they can foreign firms that might want to come here because we have such a favorable tax climate, they're going to hold off for another year and see if it actually happens. but the tax avoidance issue is an issue back in the envelope, it could cost them $200 billion that's the weird ironic thing about that and in washington, they don't know how to model tax avoidance and tax sheltering, they just don't. th

i think the best place to play is oil services, these guys it actually starting to see some capex. >>nd some support from thear anco ipo >> that's the ramp, that's the tailwind but these are huge levels in wti and in brent that we haven't seen in quite some time. so we have to get over those on a technical basis. but i do think it's too attempting for opec to cheat, brent at 60, forget aboutit, ussr supply comes on >> you look at valero, a ten-year high or something in valero the last time we traded this was '06 or so. these levels, very important we hold these levels in vlo we have been consistent in exxonmobil since august. karen and i were talking about this last night. $76 held, bounce, bounce, bounce here we are at 84. exxon is at a significant down trend. we've said there's a good chance it remains in that down trend. that's where i think that's going. >>> ahead, facebook and tesla, facebook giving all after hours gains while tesla flirts with bear market territory. the conference calls are under way. we'll hear from mark zuckerberg and elon musk in a few minutes much mor"ft moy

mike: i am not saying repatriation alone will drive capex.ven 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 rya

something shareholders want to hear in terms of the bonds they have do, and this is not even talking capex it is contribute 20 billion tars to the softbank vision fund, but the question is over land be and how important control over sprint are his plans for vision fund and his visions for the internet of things future will be clear on monday in tokyo. rishaad: great stuff. coming up, china's official reading was lower, but how will the private caixin show those numbers? those numbers coming out in minutes. this is bloomberg. ♪ ♪ haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. rishaad: i am rishaad salamat in hong kong. the latest business flash headlines. best buy has stopped iphone sales up to complaints about the $100 premium it charges. best buy is one of apple's key retailers. website shows the price at $1249 the company said the premium was intentional because offering different options for iphones "has a cost." haltednetflix has production of the final season of house and cards in light of the allegations of sexual harassment against kevin spacey. they are now dec

>> a bicycle ride is one dollar, capex is low. 14 people writing a day is quite a bit of cash flow and , you pay foronths your bike and you are cash flow positive and off to the races come in i think it is very exciting. we are not just talking about big cities. there are 300 cities with more in thele or united states. it is easier to launch a service like this in secondary and tertiary markets. emily: thank you so much for joining us. bob o'donnell, you are sticking with me. up, a wake-up call as the doj starts cracking down on megamergers. what this could mean for other media deals on the table, next. this is bloomberg. ♪ ♪ media executives and dreaming of megamergers got a wake-up call. was once presidency seen as ushering in a new era of consolidation because republican administrators are thought to be more business friendly. now washington is no longer considered a sure thing. department has pushed back against at&t's takeover of time warner. with me to discuss what other deals may be impacted is bob o'donnell. what do you make of this and what it means for consolidation in genera

ir capex at the moment.tors have yet to be convinced with your story. ,our stock down 11.4 this year underperforming the main market. the road ahead, i look at what is happening ahead, the construction and amount of supply coming on. are you concerned or interests that that is going to pressure the market more? last time we spoke you said it has bottomed out. tracy: good question. >> we still believe it is bottom down. we are not worried about supply in office and schools. very few supply in new offices. it is mostly supply in residential markets. we are quite optimistic about the future. tracy: the structure has tended to come under pressure when we see interest rates rise. we are in a tightening cycle in the u.s. now. that comes through here in the region there were two of the dollar peg. how much is that pressure feeding into your business and what we are seeing in terms of share price? >> they share price is more due to the foreign investors. lately, you can see that on the chart. that is something to re

a number of studies and market analyses suggest that capex has been curtailed in this space because asou had in a previous segment, the sword of damocles of rate regulation was swinging over isp's, so title two was created for the ma bell monopoly. the fcc with this bottleneck all of a sudden for innovation and experimentation in the marketplace. keep in mind, by the way, that over 90% of consumers have a choice of 4 mobile broadband providers. speeds are much faster than dsl or cable modem speeds were, and they will be 100 times faster after we wirelessly connect with 5g the internet of things, so it's going to be a wonderful time. emily: how do we hold isp's accountable when this is mostly honor-system-based? mr. mcdowell: there are many laws in effect here. what prevented them prior to 2015 from behaving in an anti-competitive way that harms consumers? the section five federal trade commission act, the clayton act, but also economic incentives. you have a competitive marketplace for broadband, and it is primarily mobile broadband. we see cord cutting and cord shaving. you have marke

gabe: a bicycle ride is one dollar, but the capex is low. four people day,ng a day -- riding a and we have seen up to 14 people per day, that is quite a bit of cash flow and operating income. after a few months, you pay for your bike and you are cash flow positive and off to the races come in i think it is very exciting. we are not just talking about big cities. there are 300 cities with 100,000 people or more in the united states. it is easier to launch a service like this in secondary and tertiary markets. emily: we will be watching. thank you so much for joining us. bob o'donnell, you are sticking with me. ok, coming up, a wake-up call as the doj starts cracking down on megamergers. what this could mean for other major media deals on the table, next. this is bloomberg. ♪ emily: media executives dreaming of megamergers got a serious wake-up call this week. the trump presidency was once seen as ushering in a new era of consolidation because republican administrators are thought to be more business friendly. now washington is no longer consi

it earlier was easing some of the morning drop on the back of third quarter capex numbers as well as building approvals coming in slightly better than forecast. overall, the chinese pmi boost is lifting the aussie dollar, but not helping sydney stocks, which are losing about .6 percent. technically the on-base metals in shanghai, they are looking mixed. copper continues its downturn, losing .6% in shanghai. going back to what's going on with the currency space, you have the korean won easing. still on the downturn, losing .4%. following the be ok's first rate bok's first rate hike. we are seeing korean bond yields lose ground. the 10 year yield falling by one basis point as traders are looking for clues about when the next rate hike could be and whether or not this decision was unanimous. the big picture has been this drop in tech stocks overnight. catching ong that in asia amid concerns that the tax reforms could hurt the bottom lines of text players in the united states. take a look at what is going on bid,the tech heavy taiex losing one point 6% so far this morning. we are seeing

globe has been strong, it hasn't been the driver consumer spending has been a driver and a pick up in capexexpect continued strength in the global economy look for it near 6%, 5 1/2 to 6% global growth and nominal gdp. it will move from the 2.2% pace perhaps higher this is something that pimco will hash out in its quarterly meeting. it looks like there's a chance it could pick up for you one last point, consumer spending is strong >> we have to leave it there anyoveuc mh. >> thank you >> "squawk box" coming up next no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. running a small business is demanding. and that's why small business owners need more. like internet that's up to the challenge. the gig-speed network from comcast business gives you more. with speeds up to 20 times faster than the average. that means powering more devices, more video conferencing, and more downloads in

. $10 billion is enough to cover capex, to cover the dividend.y strong quarter for the big five companies. they were able to generate enough cash to lead. now with oil, it could look very well for big oil. ♪ ♪ >> have a look at where we are here in the equity markets. it shows you the monthly performance of asian equities for the last 30 years. astounding, isn't it? the top row that you see right there, not a single red month, if you will. that is the first time on record this deep into a calendar year that we have not been humbled by a marked decline in equities. 2017 has been weirdly fun for global investors. >> there are about 30,000 functions on the bloomberg and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites. here is another function you might find useful, quic. that will take you to our quick takes, where you can get fast insight into timely topics. here is a quick take from this week. >> it used to be when a colleague emailed you to say they are working from home, you may not ha

to frame that, you're looking at essentially an increase of combined operating expenses and capex ofoughly $18 billion. that's versus an increase of 8 billion expected for 2017 and of course 6 billion for 2016. so, it's a significant jump in expenses for 2018. we were not expecting that you're looking at a significant contraction in only rating margins over the coming year but with that said, you are looking at incremental revenues of 13 billion to $14 billion of revenues coming on to the platform next year they continue to take significant share of advertising dollars. that's moving in the right direction. incremental revenues will come from messenger, possibly from whatsapp towards the back half of '18 the fundamentals of the business are still solid and strong so we still like the stock here we do acknowledge that there will be operating margin pressures because of this. one more point, every single year over the past three, four years, facebook has guided for a significant investment year and they have always come in below the costs. i expect the same to happen again for 2018 >>

specifically the way it account force some capex currently the way it's accounted for, it's not consideredn expense, but if the changes come through it may be able to lower overall profit numbers, and therefore how much tax it pays so, big changes ahead. if you consider how stocks have performed lately, some of it has been down to earnings. there's been a pop on the back of earnings season some numbers baked into the stock, would have to argue might be down to potential around tax reform intel stock took off on suggestions that reform is coming i asked about whether he thought there was a correlation two the comments yesterday about the stock market records and confidence in trump's administration or whether it was something else driving the changes. >> i'm not an economist, so i'm not sure i'm the right person to ask. i'm a technologist i don't believe, especially when you look at technology stocks, that people look at government or politics as, you know, how they value us. they really look at the amount of innovation, the products, the growth if you look at it, most of the tech industry,

it's an enduring feature of every business expansion that c capex cycles kick in we're seeing that in.s. and we're starting to get the better productivity numbers on the back end of it that is a keenum. >> great stuff lovely to see you. >>> were a pointing to a slightly lower open on wall street this morning. that's it for "worldwide exchange." "squawk box" when we come back >>> good morning under pressure this morning. futures pointing to a lower opening on wall street we will get you set up for the shortened trading week ahead developing story, talks to former coalition government in germany breaking down putting angela merkel's future in question where is our friend today? plus, let's make a deal. marvell technology reportedly ready to announce a $6 billion acquisition today. the chip market is hot, isn't it it's monday, november 20th, 2017, and "squawk box" begins right now. ♪ ♪ >>> live from new york where business never sleeps, this is "squawk box. >>> good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq markets set in times square. i'm becky

areas, emerging market consumers, emerging market small caps, companies who will spend money on m&a, capexd then in europe, domestic european plays. we just take profits in germany and switch money into france >> michael thank you very much for that michael o'sullivan >>> now, in other company news, this was a shocker, i warned you, centrica reaffirmed its 2017 guidance despite losing 823,000 accounts between july and october. the co of the uk utility company warned the energy supply business had a disappointing second half warning that trading conditions were highly competitive. share prices were off 15.5% over the past three months, the stock falling 3 %. >>> remy is backing its full-year guidance after a sharp rise in operating profits. results were boosted by strong demand in china and the u.s. the distiller said it is focused on higher-end liquor which offset higher marketing spend. >>> and thyssenkrupp has come out with better than expected profits and strong orders. it swung to a loss charging sailing of european operations cnbc spoke with the ceo about his strategy for tackling ove

we have seen a decent capex cycle with improvements over where we were a year ago when energy priceswth or significantly higher growth in the united states. we are probably not heading there now that we are nine years into the cycle. tom: that is an important point as we get to 2018 analysis, the eng istion and lin length is-- important. to equatefect day yourself. bloomberg daybreak, captives in your car at the george washington bridge wanted to go west in new york, that ain't happening. bloomberg daybreak, coast-to-coast, this is bloomberg. ♪ francine: this is "bloomberg surveillance." .t is a busy week it is thanks getting any. all this week there was one thing on your mind. tom: there is always one thing on my mind. turkey, turkey, turkey. thanksgiving plans, let's eat out. ene, are youke listening? thanksgiving plans, let's eat out. francine: i'll get to the bottom of it and bring you the latest on that. you are not cooking, you don't cook, you want to eat lasagna. tom: smoked turkey is what we are doing this year. i am actually really looking forward to it. a little shopping as

free websites like capex, the college board, fast web or scholarships.com let you fill out a profile to identify what is unique about you and match you with potential scholarships. >> national scholarships offer more money but you might be better off focusing on a local scholarship. it will be easier to snag one of those because you'll have less competition. >> and of course, it pays to start early. >> i started in eighth grade. most people don't start in eighth grade. >> eighth grade, that's early. keep in mind the application deadline and keep a list of each scholarship, its requirements and its due date. a missed deadline is definitely a missed opportunity, wendy. >> thanks, susan. >>> a special honor to a man in our area who has given a lot of money to preserving some of our country's most treasured landmarks and pieces of our past. last night the lbj foundation ard wad david rubenstein, the liberty and justice for award. former presidents made a video thanking rubenstein for his help in preserving iconic landmarks such as the washington and lincoln memorials, as well as the decl

what do they need to do to incentivize you not to do the share buybacks, but investing capex, which improves productivity? bob: i don't know if bloomberg reported is, but steve mnuchin recently asked the question, to what extent, if you repatriate money, will you reinvest it in real assets, such as factories? apparently, very few people put their hands up. they would do exactly what you just said. and uh, the way around that is you have the differential tax. the detail is quite difficult, but you say the repatriate tax, if you invest it in real taxes, then the investment rate is lower than if you pay it out in dividends. you have to have a conversation about what you would do with the money it have a tax of vantage to invest in real stuff. -- have a tax advantage to invest in real stuff. anna: what interpretation do you take from the flatness of the yield curve at the moment, bob? some people say this is suggesting another recession and some say it is a function of divergent monetary policy. we have accommodative monetary policy still in japan with that ford money going back into 10 years in

company's access to cheap money which has afforded them to do buybacks and not spend the money on capex is the ubs chart. it has not happened, even though they've been given corporate bond buying. heaven for bid corporate have not utilized money wisely and their buying back their own stock at increased dividend. who would have thought that that could happen? the context of the debate about the u.s. and reduction of corporate tax rates and the hope that will bring to the u.s., you will find that if corporate stone have good an obvious avenues for increased will channel those funds back into dividends and stock buybacks. if there is evidence in the eurozone that it is not meeting its demand then the debate will increase as to whether the process should continue. as we know, we are seeing that bond buying come gradually to conclusion over the course of the next few months. the ecb will look at how they parcel out that strategy of buying over the course of that time. manus: we have a little more to get through with jeremy stretch. the european investment bank vice president joins the bloomb

that money for, where it is approach it to buy back shares -- i think they will use that money for capex will not leave that massive amount of cash on their books with that. when of the things we looked at in the corporate market is that been rising to leverage has been sneaking higher in corporate america. has reflectedally some deterioration in credit quality. having the money overseas and having to use debt to finance what that money could have done has deteriorated balance sheets. jonathon: here is a difficult question. do you get a sense that credit is more or less vulnerable on the back of this tax plan? bob: i think it is less vulnerable. jonathon: because of these policies. why? the cash back from overseas will decrease the amount of corporate issuance. leverage will go down in the corporate sector. when we were talking about some of the changes to housing taxation, the first thing that popped into my mind is that it will decrease the leverage in the housing market. consumers are not going to be incentive to read -- i ncented to reach for the larger home thinking about the tax be

i'm there, the ability to expense all of your capex on that in the first five years, if that mine made since 15 years ago, it makes more sense today than it did 15 years ago. the economics to do that to make that investment today when you're looking at after tax returns, or or whatever you want to look at after the ability expense up front. and the ability to look at that with a lower task rate. even when you pay your employees more money. which you're going to in a tight labor market. will make more sense. which will drive economic growth. >> let take a poll question. which we have here. you know the drill. open up your app and here we are. the question is will congress pass a major tax reform by the end of 2017. we're seven weeks away. yes, no, depends on what happens in alabama. so far. there we go. that's -- little bit of pessimism in the room. surprises me a bit. you're very confident. we were talking about this backstage. again, there's a lot to be worked out. house bill and senate bill. amendments to both. reconciliation and conference. you're confident this is going to get done

capex, factory automation, robotics, iot.put, they have to redouble efforts in boosting productivity. are seeingre we growth, but maybe not in the overall macro context. >> thank you so much. the vice chair and chief japan equity strategist for goldman sachs. much more ahead. one feature on the bloomberg we would like to bring to your attention is our interactive tv function at the tv . but seewatch us live, previous interviews, dive into securities or functions we talk part, and you can become of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ >> the latest business flash headlines. softbank boosting its stake in sprint after a collapse of merger talks with t-mobile. agreeltimately failed to how to share control of the combined operation. investors have welcome the prospect of the merger to cut costs and challenge at&t. logitech expects growth in china. we will see the mainland become the biggest market in 5-10 years.

they are talking about 4 billion in capex they punched into the french business in the last couple ofears. will they get a significant return on that that certainly has been a question there are a lot of people going to be fired and it is something that mr. drahi says he can fix again i noted they changed management there as well atus, i think we have that also, take a look. remember cable has gotten hurt here, started with comcast in the preannouncement a couple of months ago remember and then it wasn't followed up by charter at least in commentary but then its quarter was not good altice's quarter was not that bad buti finished nonetheless. >> that's what i talk about with gloom. the thing i was most worried about was the balance sheet. here you have the balance sheet being taken care of and the stock gets hammered anyway >> it's getting hammered because of the same concerns that have hurt comcast and charter, namely cord cutting and broadband inability to change price and more competition than originally thought. >> the letter m. >> the letter m. >> millennials. >> yes. >> the scou

almost 30% for some of these companies that might put through wage increases and also spend more on capexmething policymakers should be doing to force wages to go up and forcing stronger inflation? >> he s. way for thes one government to tie in the corporate tax cut, but politically it will be difficult. this move by the government to raise the consumption tax, but lower corporate tax, i think that would be very difficult for the government to make the voter swallow. throw up ant to quick chart. we keep going around in circles when it comes to inflation. this is chart 9616. it is a problem japan has been struggling with severely to run made the least headway, but you could argue it's coming off the toughest situation when it comes to the decades of deflation, but globally we are seeing this seeinghere we are not stayin inflation. is it a structural issue that tells the story when it comes to the japanese economy which has seen seven straight quarters of growth? , so japan did suffered two decades of desolation. chinese look bobby lea now, but in the 1980's in japan, it was super bubbly. t

i would expect to see, in the real world, especially with full expensing of most capex under these newmpact. nejra: i am just wondering, the tax plan as they stand, do they just end up adding to the deficit without having any meaningful impact on long-term trend growth? >> they would not necessarily just add to the deficit, even a few do not add to long-term growth because in the short term , they will give us cyclical lift. we expect real gdp growth to go up to 2.7% next year. i do not see how these tax changes will have a material impact on the growth of potential output. ofm not a great fan enthusiastic scoring, there will be some impact on the level of path of potential output. it will be a significant increase in the federal deficit and the federal debt to gdp ratio as a result of these plans. tom: let's continue the discussion with willem buiter at citigroup. on bloomberg radio, a congressman from ohio, talking about tax reform in the 8:00 hour. worldwide from london and new york, this is bloomberg. ♪ ♪ taylor: let's get to the bloomberg business flash. bitcoin with a record high

begun to fight yet >> and once they know where we stand on interest deductibility, where we stand on capex, where we stand, frankly, on the territorial system that may be implemented, but is going to have differences in terms of how it treats different industries for example, pharmaceuticals versus industry companies. and that is a real possibility i'm telling you, based on at least the conversations i've had, the fighting has only just begun. and so there are -- >> carpenters? >> i'm saying that, you know, u.s.-multinationals, it's not apparently just we're going to a territorial system, there are different ways to treat different businesses there's going to be a lot of lobbying within that >> but you do believe something small will get done? are you with me on that? >> the people i speak to come back to the idea that eventually this effort will fail and we'll end up with a tax cut and some sort of repatriation >> they've been saying the same thing since the spring >> that's right. i'm completely onboard with what you're saying. >> and there is a great deal of optimism, i think, in the re

. -- capex. it can create a scenario where growth with high low inflation.capital and productivity grows, you can get into a healthy growth scenario. theme i wasg was liquidity. francine: and it is slow. mr. thiam: and communication around it is very good. asset valuations are as high as they are and it is important to take the investor by the hand and not surprise him or her. so far, the central banks have done a really good job with that. we think that emerging markets will be ok. and emerging markets, we think they will be ok. in the background, you have industry. the lack of the ability of credit put a damper on growth since the financial crisis and that is starting to shift. we can support our currency in their m&a ambitions. francine: are you not worried about china? governor will have a lot to deal with and a huge debt. chinaiam: you can look at in a number of ways. what we elect to look at is the gdp and capital. it is about where the u.s. was in 1950. 25 years ago, it was where the u.s. was in 1825. that is a piece of a transformation that we are wi

market spiked up when reagan was elected and then what happened was because everything was delayed, all capexnd all of that spending got pushed out a couple years. we went through real stagnant growth for a couple years there. we're talking about gdp suffering, talking about earnings suffering all of that has not been factored into this market, so if, indeed, we are going to see dysfunction with this fax reform, look for this market getting worried and more than likely pulling back a little. >> before we go, jonathan, i mean, how much -- i know you're inclined for masrket to go higher. >> we came back from the 250-point decline on the dow, do you take that as comforting development or more concerned we had the selloff today? >> i'm not concerned with the selloff. this is natural, right i would like to see the market consolidate at these levels we're at here. we went from 2,550 to 2,995 in the s&p real quick needs to come back and settle in for a little bit of time we're getting closer and closer toward the end of the year, we got thanksgiving coming up so less trading might be occurring in th

the deadline you see seems to be constructive on the investment picture and capex with the corporateax cut. that could be some of the things you can see buying more time in the cycle in giving more room to grow in the u.s. and i could be very constructive. it would be more of a sugar high tech story. that is the big question we will be grappling with. francine: you have fomc members coming down. bill dudley from the fed saying -- announcing his resignation on monday. are you worried there is no communication you go is that the biggest risk? --indication? is that the biggest risk? jean: we have a history. in the first phase of this news fed -- new fed administration, there's a story that is there. we have to plan around the balance sheet that has been laid out. the big primers are in place. at the end of the day, the fed matters but they kind of gradual normalization story is largely not even up to the fed to decide. that picture i will think is likely to change. francine: jim, do you worry about monetary policy overall? jim: i think the fed is fine. monetary policy is ok and it is go

as it is picking up around the world as a function of capex that could be very powerful story for industrialser it's in japan, europe or the u.s. as well. alix: still ahead, attorney general jeff sessions is back on capitol hill. he will be facing the house judiciary committee over russia's involvement in the u.s. elections. we will tell you what to watch out for. you can tune into my colleague tom keene over on radio. tune in to him and when you get somewhere turn on the tv and watch us. this is bloomberg. ♪ >> this is bloomberg dave reichert i'm emma chandra in the hewlett-packard enterprise greenroom. coming up in the next hour, the tellurian ceo. this is bloomberg. david: jeff sessions is back in the news today when he appears before the house judiciary committee to answer questions once again about what he knew between contracts -- about contacts between the russians and the campaign. or hadve never met with any conversation with any russians or any foreign officials concerning any type of interference with any campaigns for election in the night dates -- united states. george papadopoul

. -- shape thepe the capex for the general election? francesco: yes.ivenow the responsibilities of congress and when the banking system goes in such difficulty as the tiny one, it is to vote not to say that someone is responsible. i don't think that should be the main animal. francine: thank you so much for joining us. he is senior fellow at google. make sure to keep it right here on "bloomberg surveillance." we will be speaking to jean-claude trichet a -- jean-claude trichet. teresa gives ready to tell a business leaders to be more optimistic about brexit. this is bloomberg. ♪ francine: you are watching "bloomberg surveillance." let's check in on your markets. nejra cehic is following all the action. nejra: we are seeing european stocks trading sideways. you got miners heading for 2013 high. the stoxx 600 flat after its seventh weekly gain. that is a big of context -- a bit of context it also focusing on dollar yen. we saw dolly and hit a seven-month high. after comments from hirohito kuroda showing the real commitment and priority of hitting that 2%

disruption there is continue newity gives court america confidence going forward, continue to to expand capexbelief a much more business friendly environment. maria: you want cuts permanent. >> on business side they are. >> yesterday really the market rally you could see argue because of powell's testimony more than anything. >> yes. >> optimism about tax? >> i think so but i think the market is a little more hesitant because they saw that it went through a budget committee before on health care, i think they always get nervous when you only have one or two votes to work with, i think yesterday was a little more of the idea of powell having a really good testimony on the hill. dagen: banks surged on that news we saw it. maria: comment on rates. >> yes. maria: we will keep following this a lot of stories to discuss right now, the breaking news of the morning, of course, nbc fired matt lauer. the network terminated "the today show" host this morning over allegations inappropriate workplace behavior his co-host savannah guthrie reacting to the news on the at a show this morning. >> we are heartb

you can't find labor, you're going to have to do it as a corporate more capex productivity.s anything were you right now? is there anything that gives you a little bit of pause? >> in terms of priorities there's plenty of things that worry me. top of the list is the same thing it has been for the last three years which is the central banks are two dovish. the longer you continue to be dovish the longer you extend you take it then off at exactly the wrong time when the economy is actually picking up. jonathan: i am worried about dovish central banks. i have never -- lisa: nuclear war. in 2014.appened you are advising donald trump today, he wants 3% growth. what do you want the interest rate to be to get there? if you want to get to 3% gdp growth what with the interest rate be? >> one of the interests for my optimism is there are all of these completely public secrets. number one is u.s. gdp growth has been 2.1 percent. statistics that we all know. take out the government. private sector gdp growth already 3%. jonathan: thank you very much for joining us around the table. if y

you could argue that based on research it's not just the short-term impact, but you're also creating capex. think about the works progress administration in the 1930s. we built an awful lot, including laguardia airport, the high school my mom taught in were built by the wpa, it was not just putting people to work and stimulating the economy for the short-term, these were infrastructure elements used for decades since. that's something that has not been talked about, but critical. >> i do think it's bipartisan, both sides would say you need more infrastructure spending president trump said that himself. >> i will have to just beg to differ on this part. why are we so concerned about roads when there are so many other things in the economy that matter investments in commuters, investment in new technology -- >> that's been included in infrastructure spending. >> i'm talking about private investment rather than having that money go through this big public works sector. it's just a different approach i say put that money into the private sector, give it back to the consumer give it back to the

their capex up 7 % >> did you not say -- they asked you what's pressuring the markets lately the firsthing you said was uncertainty about tax cuts did you say that >> that's a one-day thing. >> a one-day thing >> so manufacturing, 30-year high >> right >> fundamentals drive markets. despite the worse impact of politicians and irrational thinking >> if it becomes clear this is a no go, you think it's a one-day thing? >> no, because the fundamental back drop of the my is so strong -- >> so you think if tax reform doesn't get done, that's a one-day phenomenon and the mar ketd kee market keeps going higher? >> i do. >> i would take the other side of that. you can look at what forward earnings estimates are, they're incorporating -- >> forward >> forward >> okay. >> forward earning estimates are incorporating some form of tax reform i think that doesn't come through, that gets backed out of the market >> okay. so that's one thing to watch yesterday bullard said don't raise. you think they're still raising, don't you? >> yes in december, i think we get another rate increase. the real questio

see what randall stephenson also said yesterday he said at&t would invest $1 billion in additional capexose corporate rates go lower next year. that would free up their money >> i travel -- i'm outside of washington way more than inside of washington, we hear that every day. american countmpanies are not as competitive as they can be one thing that favor the well connected and powerful, we're urging them to do that as part of getting the rates down. >>> when we return, three big topics dominating the business world. retail earnings on the docket. president trump in asia, we will bring you his comments on north korea and the u.s. trade deficit with china, and a potential roadblock in the pporosed merger with at&t and time warner. you're watching "squawk box" on cnbc november is epilepsy awareness month. i am the proud father of a very strong little girl named adelaide who was diagnosed with infantile spasms an incurable and debilitating form of epilepsy. it's been a devastating journey that has robbed my baby girl of normal development. that's why i have launched the my shot at epilepsy c