Position as we head until then until the end of the year. Correlations breaking down as we continue to see the Broader Market gain. The dow and s p, because they closed at records yesterday, gaining again. That means they are records once again in todays session. Lets take a look at the various components of the s p 500 to get a better picture of what is going on. We have Information Technology here it down, free from the bottom. That is one of the reasons the nasdaq is lacking. Telecom, financials, real estate are gaining. It isnot as clear not as though cyclical are lacking and defensives are gaining or vice a versa. It seems as though it is sector and stocks. Utilities are up, declining the most in the s p 500. You will get into that later in our sector spider report to one group we are seeing clear movement is within the mall owners. Moll real state investor trust. That is because we have a deal announced. European mall company has struck a deal to buy westfield, based in australia but has a lot of malls in the united states. The 2. 8 billion dollars is the price. 15. 8 billion is the price. In particular, westfield is an a mall owner. It is a higher and mop. Some of the others that own malls are also seeing gains. Many of them are seeing activist interest in them. Centers, l. A. Management has a stake in that company. There is some m a talk or pressure being brought on many of these other companies. We will take a look at how mall owners have done this year versus real estate stocks. Not great. Here is the real estate component of the s p 500. Retail real estate has really a perfect underperformed. Done better. Have broadly, Retail Real Estate has not been where it is at this year. Julia we will be looking at the details of that deal later on. Lets get a check of the bloomberg first word news with mark crumpton. Mark thank you. Voting is underway in alabama in that special Senate Election to fill the seat left vacant i Jeff Sessions. Republican roy moore faces Democrat Doug Jones who cast his ballot in a birmingham suburb earlier today. This is an important time in alabamas history. We feel confident of where we are and how this is going to turn out. Feel so good about what we , anddone and what we said the people of the united states. Is backede moore who by President Trump is accused of Sexual Misconduct with teenagers when he was in his 30s. He is also opposed by a number of republicans, including alabamians senior richard shelby. Some estimates have a voter turnout at about 25 . The french president Emmanuel Macron is hosting 164 World Leaders and Business Leaders as well as prominent figures who were involved in fighting global warming. Major focus for the gathering is to help find financing for poor countries and industries to reduce their Greenhouse Gas emissions. President macron said fulfilling commitments to the climate agreement was the only way to win the battle against global warming. He also noted the very bad news of President Trumps decision to reject the climate accord. Californias governor is urging President Trump to fighting Climate Change or to get out of the way and let the rest of the world work on reducing emissions and investing in clean energy. Aking at a Global Climate he said the rest of the world is very serious about Climate Change. Violent wildfires in california as an example of extreme weather worsened by human made Climate Change. San francisco board of supervisors president has become the citys acting maitre following the death of mayor ed lee. The San Francisco native also became the citys first africanamerican female mayor. She has been considered likely to run for mayor after the last term expired in 2019. She could remain a mayor until june of 2018. Minnesotas governor is expected to announce a replacement for Al Frankens Senate seat at 11 00 tomorrow morning local time from the state capitol. Frank and resigned last week in the wake of Sexual Misconduct allegations. He did not give a final date on when he will step down. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Thanks so much, mark. As mark mentioned, lets get back to the alabama showdown. Roy moore arrived on horseback to cast his ballot in the heated race. You would never see that in the u. K. Doug jones made a more conventional election to the polls. Jones is seeking to become the first democratic senator from alabama and more than 20 years. Bloombergs chief washington correspondent joins us from montgomery, alabama. Great to have you with us. The polls say this is nice edge, but you dont really get a sense until you have been on the ground. What do you sense from talking to people . Kevin they are undecided. Have spokens, i with several republicans in particular about how they are feeling. They have a lot of messages. There are some who do not believe the accusations against judge roy moore. There are others who feel President Trump endorsement of roy moore have provided them political cover. They feel it is a vote for President Trumps agenda rather than roy moore himself. There are others who feel they will vote for moore with the hope the senate expels them and they get another republican in there. It is a very complex, local issue. Which here in montgomery is a bellwether of sorts, a in alabama. F county i can tell you that democrats are fired up. I spoke with an administrative official where attorney general Jeff Sessions went to school and went on to become student body president. He said turnout is up. In terms of other special elections have been in the past. It is shy of the president ial level. Democrats are trying to rally the africanamerican community. A deeply conservative state that has not elected a democrat for governor or senator in more than 20 years. Scarlet i love the local color. Speaking of local issues, it feels like Sexual Harassment and allegations have taken center stage when we look at the two candidates. Policies have nothing to do with that. Education, health care, infrastructure, seems to have been swept under the rug. To what extent are these being raised locally . How concerned are the voters on the ground when they are going to the polls . Kevin such an interesting question. Last night, i was with roy Moores Campaign in the final campaign rally. More bannon speaking for than 30 minutes. He didnt really mention local issues. He just talked about President Trumps agenda. He barely mentioned roy moore. On the foot side, i would flip side, i would note within the last hour, the states attorney secretary of state said that they would send over the official documentation for when the winner of the special election will be seated. That is going to take place between december 27 and january 3. Sometime just after the Christmas Holiday and the new year. Lets note, if a democrat wins the state, that could have implications on the timetable for tax reform as we all know. Scarlet certainly huge implications are Kevin Cirilli reporting from montgomery, alabama, live on the ground. Thank you. We want to continue this conversation with megan murphy, editor of Bloomberg Businessweek. This is really a tossup. It is. It is hard to see what is going to happen. Senate , democratic senator, he would be the first in over 20 years. He needs to get turn up a monk amongst black voters who may flip over, given the accusations we have surrounding roy moore. I went to get back to the question about policy and issues. One of the things that has flown out of this election is alabama is a fascinating state. It faces so many entrenched obstacles as well as spots of hope. It still has the highest poverty rate in the nation. Its Health Care System is very embattled, constantly in this rural divide. Infrastructure, a huge problem. Those issues have been discuss this election. That is not actually that unusual given what we have seen this siren with some whistle politics that has dominated the american electoral generals. Scarlet it feels like this race has been hijacked it by outsiders. Steve bannon dimension local issues but talked about the president s agenda. Talk there is a lot of that steve bannon was a key maker and backing roy moore over the president s original favorite. Lets be clear about roy moore as a candidate. This is someone who has been known for extreme views for the entirety of his career. Even prior to the scandal surrounding alleged Sexual Misconduct. This is someone who was kicked off the bench for refusing to abide by a constitutional ruling. For someones stance on transgender issues is what most republicans believe. What this election will be today is dont listen to so many of the pundits, what it will be about is how still entrenched is in parts of the country, how much people still feel you need to burn down the establishment and almost any form. The trump stuff, mashed up politics, or whether or not this will be like what we saw in virginia where people have switched their allegiances. Scarlet we have some breaking news. We want to go over to washington where Senate Majority leader Mitch Mcconnell is speaking. Lets listen in. All still in an discussion with our colleagues on the house side. I dont have any news to make on that front now. We hope to wrap it up pretty soon. We are winding down on 2017 and i am hopeful by the end of the year we will be able to say we did three major things. One is we have confirmed a Supreme Court justice in a historic number of federal court nominees. We have reformed the nations tax code to make it simpler, more progrowth, and giving all americans a tax cut. And we have rolled back the Regulatory Overreach of the Previous Administration that was like a wet blanket on our economy. Confidencen consumer having technical difficulties. We will return back to washington when we get a chance. Im easily, no new movement on the tax reform plan. Julia perhaps getting an announcement megan heres the thing that is interesting. We should not forget how many eggs they have in the basket. Can talk about other legislative accomplishments. But to they have put their eggs, and those eggs looks like they are beginning to mulder and iraq. And rot. When you go down to washington, you hear republicans get a little nervous that what they thought would be seen as a tax cut for all and a way to boost the american middle class is being seen as what it is. Which is a massive transfer of welfare. Of wealth. Wasa the cbs news poll illuminating. 22 of americans find taxes will be lower. 41 saying that taxes will be going up. The numbers for democrats in high tax states like new york and new jersey. We keep saying, analysts keep saying this is critical, getting something done is critical for the midterms next year. Yet, when you look at those numbers, if that is the perception surrounding this success to the gop, megan there is a great model here. It is known as the Affordable Care act. When obama does that regardless of your views on the Affordable Care act now, that became a political albatross. Not only was a constant rallying point for republicans in the midterms in 2010 where they turned out in huge numbers, it became a real legislative albatross for president obama for several years. There are people who are speculating. On the flipside, it is central to the party. Tax cuts will benefit the middle class p the numbers are not there yet. You are entirely right. The risk is just as equal to the game. Talk about royo moore. Circle back to where we started. The point you made about the enduring limitations of democratic the Democratic Party in the south, if indeed roy moore wins, despite the north, south, the world rural divide, republican rule, and the fact that the democrats capitalize on that at this stage. For thee is set Republican Party heading into the midterms if roy moore does indeed win this senate seat . Fore could become locations them afterwards, as a result of him being there. Megan there is a lot of talk that this will become something that really rallies democrats across the nation appear people say, the democrats are in a winwin position. If they win and get doug jones in the senate, that benefits their numbers. If roy moore wins, they say the perceived wisdom is it will hurt Republican Party the Republican Party. There is a person that misconduct with teenagers in the senate. I dont think that is actually true. We live in a new cycle that is so incredibly rapid. It is not clear whether or not republicans, democrats, will forge roy moore out of the senate if he is elected. Frankly, it is not clear this type of conduct has longevity in the cycle we have seen when we see constant traction to have a lasting power and negative impact. Instead of President Donald Trump talking about the election, he is tweeting about another senator to a classic bait and switch, on a day when everyone is focused on alabama. Julia glad you mentioned it. Scarlet megan murphy, thank you so much. A wellrounded conversation on all things washington. It is time for the Bloomberg Business flash. Julia a look at the business stories. They are looking for a buyer for their stories in spain and portugal. An company is offering agreement for 472 million. Which allows the buyer to vacate the property after five years. Officials say the move is partly to strategize, but did not confirm the price. Beenal executives have suspended on allegations of Sexual Harassment from former stylists, the nfl network has suspended hall of fame running back marshall faulk. Former nfl Network Executive producer, Eric Weinberger has also been suspended from his role at the media company. Donovan suspended mcnabb and eric davie from appearing on its network during investigation. The investigations include groping, sexually explicit comments, and nude photos. It was filed in a los angeles superior court. Your business flash update. It is neverending. Scarlet for more on that exclusive reporting, diversity reporter Jordyn Holman joins us with more. This is a commendation of a lot of accusations in the past. That were made before. Can you tell us about the backstory . This lawsuit against the nfl network was filed in october. It was one day after the harvey the newn story broke in york times. When i was speaking with the lawyers, they said there was not a greater understanding for Sexual Harassment or how invasive it might be in workplaces. Yesterday, they filed an amendment naming names. That has really brought howeness to how present pervasive they allege this Sexual Harassment was at the nfl. Scarlet jamie cantor, the person making these accusations, she raised concerns about working at the nfl network before, complained to her superiors and nothing was done. Jordyn yes. She was a wardrobe stylist at the nfl network for 10 years. She had raised this complaint that the players, the former players were texting her nude photos and groping her in the mornings. She said instead of good morning, they would grope her in the breast, the but, so her supervisors said that as part of the job. She is alleging she did not even have a support system while she reported it. Julia have we had any feedback . Have we contacted the accused individuals to get feedback on the latest or deep dive into these allegations . We definitely reached out to the people named in the suit. To be clear, the only people being sued is the nfl network and one of her supervisors. We have reached out, they have been suspended. We have not heard any statements further than that. Scarlet developing story here. Thank you so much for that exclusive reporting. A quick programming note as we had to break, tune into our fed special tomorrow at 2 00 p. M. Eastern. We will give you the latest analysis and reaction to the fed decision from former get fed governor, and much more as we look ahead to Janet Yellens final News Conference as fed chair. This is bloomberg. Scarlet mrs. This is bloomberg markets. Julia john burbank has shed his flagship hedge fund, calling the last two years unacceptable. This begs the question is it time for a new strategy . With aels that fell hedge fund, the industry is fading fast. Just check out this chart. The yellow bars are Equity Hedge Fund assets. 60 000, they accounted for, of all hedge fund assets. Today, it is less than 30 . Joining us with the latest, Peggy Collins who leads the u. S. Investing team for bloomberg. These guys put the hedge in hedge fund. Peggy exactly right. Julia that chart is illuminating, even with the discussions we continue to have about the struggles these guys are facing. Peggy thats right. They basically came up with a model of, i am going to look for stocks to go along on, thinking they will go up. Then try to find us stocks that i am going to short and sell because they think they will go down. That is the part that has become harder for hedge funds to excel. Scarlet there is not a lot going down. If you look at the markets, it has been pretty a steady climb past new records and old records. If you look at that, is it cyclical or structural . Are people saying, once we get volatility coming back, the luxury hedge fund will make his comeback . Dutch will make a comeback . If the market does go down, will they actually be able to deliver on protecting the investors . And will they then see investors head back to them . The other one is actually structural. We have seen a lot of passive investors, behemoths like black guard, they are attracting the most money because the market is going up and they are lowcost. Up, it iss are going harder to find stocks you might want to short because they are following the whole benchmark up for a long period of time. Julia returns have been poor. They are starting to raise funds, too. The influence are going in one direction. It is not going to the active guys. Peggy one of the other interesting things my colleague found out that she wrote this story is another thing weighing on the long short strategy is we have seen a decline in the number of companies go public. The number of publicly traded companies is striking. It is about half the amount it was in 1996. That is a whole other thing weighing on the industry. Scarlet there are more index as then are actual Companies Listed in the u. S. Is anotherh eyeopening statistic when you look at trying to invest in this environment. Where is the money going . It is not just about this active versus passive switch. In this article, you picked out fascinating areas like Litigation Finance funds and quite specific areas that investors are looking at. Peggy we are seeing Hedge Fund Managers trying to adopt. One of the areas is Litigation Finance, that is seeing more activity. Real estate. A huge area is really around private equity and private debt. I have talked to people who say we are having more trouble making money in the lit market, making meaning the Public Market. We are turning our team toward the Public Market or private debt. Julia alternative assets. Scarlet that is a new future for these hedge funds. Thank you so much. Peggy collins, head of our investing team at bloomberg. Still ahead, why some educators say the republican tax plan could make a College Education much more expensive. We will be speaking with martha pollack, president of Cornell University. This is bloomberg. From bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. Im julie chatterley. Commodity markets are closing in new york. Lets begin with Oil Trading Lower today after climbing more than 2 in trading yesterday. Fear subsiding that the hairline crack in one of the worlds most Important Oil pipelines would choke supplies. Lets take a look at the performance. Of 1 lower. 2 10 moving to gold which is also in the red as the dollar gains, investors are heading the fed will raise rates tomorrow amid improving Economic Data and some signs of rising inflation. Lets and on a bullish note from bullish from goldman sachs. Predicting 10 higher. Setting strong Global Demand across raw materials. Scarlet lets get a check of the headlines. With mark crumpton. Authorities in new york announced federal charges against 27yearold akayed ullah , an immigrant from bangladesh who said set off a pipe bomb on monday. Federal Officials Say he became radicalized through the internet about three years ago. The search yesterday of his apartment in brooklyn and heights, pieces of wires, and metal screws consistent with the bomb materials recovered at the scene. A passportso found there in his name. With handwriting that included one particularly chilling note. America, die in your rage. Mark Authorities Say he admitted he had been inspired by an Islamic State to carry out to the attempted attack. President trump is reiterating his call to overhaul the nations immigration system in the aftermath of that attack in new york city. Authorities say the suspect in the blast arrived in the u. S. Through a Family Connection to an american citizen. The president says Congress Must get involved immediately. Theria has approved resumption of gas flows to italy where the nations industry minister had to clear declare a state of emergency due to a lack of gas supplies. Energy markets have been rattled for a second day in a row after an explosion at a natural threatens supplies pier 1 person is missing and presumed dead. It happened at a key distribution and reception hub for gas exports and imports. Including from russia, europes biggest gas suppliers. The u. S. And Winter Olympics host south korea may try to reduce tensions with north korea during the be warys games. Person familiar with the matter, they made a lay the annual spring military drills until after the olympics are over. Announces the wargames as a prelude to an invasion. The first playing carrie and russian soldiers from syria it landed in dagestan is morning. Vladimir putin declared victory in syria on monday during a surprise a visit to the Russian Military base. Putin announced a partial pullout of russian soldiers. The troops were welcomed by relatives and local military commanders. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Scarlet thank you so much. Higher education could be a potential loser from the republican tax plan with the house and senate bills including a tax on endowments and graduate students stipends. Youre with us to consider the state of higher ed in the trump area is martha pollack. She is president of Cornell University and, cornell received a 100 million gift from bloomberg philanthropies in the city. Thanks so much for joining us. Martha thank you. Scarlet we talk about this tax on nonprofit schools, appearing in the house and senate bills. Do you think congress and the white house are unfairly targeting Higher Education . Martha i do. Im concerned about this bill. This is not a bill that will increase access for students or drive down costs. It is not a bill that will help us hold it down. It is the opposite. See this with moodys having downgraded the outlook for education from stable to negative. Because of these impacts. It is a bill that will hurt higher ed and without clear policy purpose. Julia there are a number of angles whether we can look at tax treatments of student loans, the tax on endowments. Lets start with that specifically. If we do see a change to the taxation on endowments, what impact is that going to have . Take it from a Financial Aid perspective. What proportion of that money is used directly for Financial Aid . Martha that is a great question. At cornell, we spend a 75 million a year of endowment distribution toward a total Financial Aid bill of 240 million. It is quite significant. Is that the tax were to impact cornell, it would cost us about 10. 5 million a year which is to 300re between 200 student a packages student aid packages. Packages. Aid you are opening the floodgates to taxing something that helps make college more affordable. Isia to be specific, this not targeting the top 1 . This is targeting those who financially probably would not be able to afford college and you will be able to provide less support for those kind of graduate students. Martha thats right. Our endowment pays for a number of different things. Primarily, it pays for Financial Aid. R faculty. It would weaken our academic standing. Scarlet it would affect operations at the school. What about taxing the provisions to graduate students who have to pay taxes on their stipends and their tuition waivers . Is that fair . Martha i think it is incredibly harmful for this nation. A lot of the advances in this nation come from students who have received advanced education in the sciences, business, and in law. These students are receiving a areion waiver, they fulltime students. They do not have the money to pay on this tuition waiver. We are simply saying to them, you are a good student, you can come to school for free. Where they are supposed to get this money i dont know. It is going to seriously graduateinterest in education. That was one of the factors that moody cited and thered downgrade. Scarlet i was looking for defense. According to the American Enterprise institute, very few Americans Care as much about graduate students because so many of those graduate students come from abroad. These are not americans. It is not plain play to main street. Why it is while it is true there are a lot of international students, there are a lot of domestic students. Secondly, it is the case that many of these international students, particularly in the science and engineering, stay in this country and contributed to this country through the development of new technologies, innovations. All kinds of innovations. We are going to penalize and make it much harder for those students to come and do this. I think it is going to hurt the economy. Julia that brings me to the question, what is the policy that is trying to be achieved . What do you think the government is actually trying to achieve in, as you agreed, targeting Higher Education . After wish i had an an answer. There have been proposal for bills where we might have disagreed with the mechanism. We all agreed on the policy. The policy was more access and more affordability. This seems like a mechanism for trying to scrape up more money to provide a phil in four places in which taxes are being reduced. I dont see clear policy. Julia unilateral damage and away. Martha that is what it seems like. Scarlet there could be an argument that this could be backlash of years of rising astion costs, as well scrutiny over cultural issues on campuses like free speech and other issues that have raised concerns. It might even look like a culture war on the Higher Education system. Martha you may be right. It is hard for me to get into the minds of the people who are putting this through. We have talked about this before. Most universities have worked very hard to drive down costs. Becornell, it cost less to the student than it was 20 years ago if you have Financial Aid. Were trying to be more affordable. I also think the cultural war issue is an important one. I think many of us recognize we need to have a greater diversity of voices on campus. I dont think it is quite the story you would hear from the press. We frequently have republicans and conservatives coming to campus is do we need more . Yes. Have a question from a viewer. I want to bring it to you. How do you suggest to lower the cost of College Without simply shifting the cost to someone else . How open are you to lowering professors compensation in order to make education more affordable . Martha the thing about higher iscation in any market is it a very competitive. We are looking to have a very best of faculty we can. These are very highly paid, welleducated people. They command a good salary. If you want to have the best faculty, you have to pay what the market there is. Julia how do you fight against the perceptive that it is a latest that you are out of touch . The look at support among Republican Party that this deception that you were pushing liberal agenda scarlet ivory tower. Julia how do you fight back . Martha i think you fight that into being wasted the first is recognizing the continuing value of an education at the top at a toprated university. When a student graduates from college, they get more than the return on investment. The return on investment is enormous. A College Graduate makes about 1 million more over his or her lifetime appeared to a student who did not go to college. Julia do you think this policy will exasperate the policy wars and the divide that you are stretching restricting money to those who cannot afford education versus those who can . Martha i dont know. It is a good question. We will continue at cornell to do everything we can to ensure diversity among our students. We work hard at that. As you take away more and more money from universities, you make it harder for them. It is a great insight. Scarlet when we have to wrap everything up, along with the travel ban which targets a number of countries and now the possibility of taxes on endowments and graduate students, what kind of effect with this have . Do you worry this will have on recruitment and enrollment . When i say recruitment, i mean professors as well. Martha i think it will have a negative effect. The effects will differ from school to school. The more you are resource constrained, the worst this will be. Over time, we havent luckily seen a huge hit at cornell yet, but over time that is going to impact our desirability. It will impact our desirability to attract international felt guilty. We want the smartest, brightest faculty making contributions. Julia very interesting. Scarlet president of Cornell Universitys staying with us. We will discuss getting more women into stem careers. This is bloomberg. Scarlet im scarlet fu. In todays walk the talk, bloombergs ongoing conversation about diversity in the workforce, we take on gender imbalance in stem jobs. Women held 47 of all u. S. Jobs in 2015. Only a quarter of jobs in science, technology, engineering and math. With us now is martha pollack, president of Cornell University. She has expertise in artificial intelligence. I too have you back on with us. Cornell opened its brandnew applied campus in new york city in conjunction with israels university. This is cornell tech. How does the u. S. Maintain its edge while making the stem disciplines more inclusive to women and people of color . This is an ongoing struggle. Even as we form our resources into the discipline, we have to make it more accessible to everyone. Martha we do. I dont think the question is how do we maintain our edge. I think we the question is how do we maintain our edge of we dont do that . There is demand for talent in these fields. These fields. Were leaving behind half the population if we dont include women or diversity. Julia where do you scarlet brady c adaptability with instruction to these disciplines to students . A greatthat is question. I have to be a little selfserving. Cornell tech is a remarkably innovative institution. It was set up specifically to train students for the digital economy. It brings in students on lets them work closely with entrepreneurs within the industry, teaching them how to go out and do startups. I think well have an impact on the city of new york as well as Higher Education. It is intentional in trying to adjust address these issues. Not only at the masters and phd level, but even reaching out into the city schools. Scarlet you start at the bottom and create that pipeline. Martha you do. Scarlet and build from there. Martha we are working with k12 students schools to introduce students with computing with a minorities. Ls and were working with colleges and a program called whitney, women in technology. Women who are in college and give them scholarships so they can see the beauty on the Computer Sciences. The beauty in these technical fields. Scarlet how long does it take to see the change . When you look at the tech industry, it is a very white and asian male dominated. How long does it take for that pipeline to kick in . Martha in ithaca at our ithaca campus, the incoming class in the Engineering College is 51 female. This is something our current the had made a priority seven or eight years ago and had been building up to. We are now seeing a class of potentially 5050. We are take a decade, now going to graduate this whole group of women out in the Engineering College who will go out into the world and hopefully further keep the trend going. Scarlet lets talk about you. As a trained computer scientist, how did the new cornell tech campus and program influence your decision to move here from the university of michigan . Martha it was a huge factor. It was really important to meet not only because of what it does in and of itself. Train students for the digital economy. But also because it shows the universities can be innovative. We are breaking down silos to we have Computer Science students and engineering students all working sidebyside. We are also breaking down silos between industry and academia. We have a newly named biddy in itng which has housed both our master students working on their projects, and industry. They are working together in ways that one would not have thought possible. I love that spirit. Scarlet it is that interaction that will create more change. You graduated from dartmouth with a self designed ager in linguistics. You turn that into Computer Science. How did that shift happen . Martha i ended up doing natural language processing. Teaching computers how to speak whatever language you like. That was the connection. Throughout my career, you ask how long it takes, i have been a minority. To tell people that when i got to the university of michigan, there were more faculty members named i gore igor then women. In part, that comes from a trend in technology where we are beginning to really interlink the sciences and engineering with a social science we are realizing process are not just technical. They are also sociotechnical. Scarlet i know youre busy so you will not be able to teach up a school. For those who are female professors, a lot is asked of them. They need to be mentors, advancing their of fields, making a name for themselves. How do they do that without necessarily extra Institutional Support . Martha that is a great question. One of the things i have always tried to do in my career as an administrator is make sure when we evaluate people, for raises, for promotion, for tenure, that we take into account the mentorship they have done. The work they have done to increase diversity and they work they have done the work they have done. That has to be a factor in how you reward people. Scarlet there is more of an onus on women because there martha are not very much. When i was a professor, i remember mentoring and advising women whose areas were very far from my own. I was the only woman in the department. I was happy to do it. I also appreciated it when it was taken into account in my assessment. Scarlet martha pollack thank you so much. Julia great interview. It is time for our sector spider report. Julie is looking at utilities which are underperforming today. Talk us through it. Julie we talked about this. This is the worst performing group today in spider etf terms. It is the xl you. That is the name of the etu it is falling today. It looks like it is potentially linked to an interest rate. When we tend to see treasury yields go higher, that is one of the things that can put pressure on the utilities. Be one of theo things and play today. If you take a look come at the utilities trading lower along with the examples of those that are trading lower. I think we have a look at the 10 year over the past several sessions. As yield getting as high 2. 4 . If you take a look at the bloomberg, you can see the inverse relationship between the tubing. This is taking a look at the utilities which is here in white. Yields are in blue. It is not a perfect relationship that you tend to see it directionally. That is one of the things that is at play. Julia another factor that it could be some infiltration from one stock in particular. Talking about edison international. This is a californiabased utility. It has been a tough time to be a California Power company. The law in california says if some part of your equipment in some way is linked to the fires, the wildfires that have been happening, even if you are not negligent, even if there is not something necessarily wrong with the equipment or negligence on the part of the power provider, you can still be held liable and have to pay damages. This is something that hit pg e with regards to the Northern California wildfires and now that is affecting edison. Edison confirmed cal fire, the regulator who investigates these into, may be looking edisons equipment with regard to the latest fires in southern california. It could potentially be eventually lead to damages that the company has to pay. Julia eventually is a great word. Any sense of how long this will take . Take a longcan time. There is that overhang of interesting note out of citigroup, he says that california utilities are on investable because of this this. Stable because of the company last year, its revenue was nearly 12 billion. Relatively a big chunk here potentially. Questioni thought your was interesting because pg e got caught up in the Northern California fires. We dont have clarity on that situation. Julie exactly use at 8 billion from pg e wiped away. It is 4 billion for edison. There is not really any resolution that is necessarily insight. Much in the hot seat. Just by reference of the law here. By virtue of operating in california. Julia thanks very much to julie hyman. More to come, the alabama speak with we republican strategist michael field. From new york, this is bloomberg. Scarlet this is bloomberg markets. Julia im julie chatterley. It is time for the Bloomberg Business flash. Investing, comparison to the gold markets for some. In a bloomberg tv interview, tyler winkle vos shared his views. Like think that bitcoin is gold 2. 0. What other whatever the reasons for investing gold, whether it is scarce, durability, portability, we think that the bitcoin matches or beats gold across the board in all of those categories. Klevoss and his brother started their Exchange Gemini in 2015. Gemini is the only exchange of a world license to buy bitcoin and ether. That is your business flash update. Coming up, House Majority whip Steve Scalise. When he thinks will make it into the final tax bill. Is it going to be 20 or 22 for the Corporate Tax rate . We julia we shall see. Scarlet from new york, this is bloomberg. Julia it is 12 00 p. M. In San Francisco. 8 00 p. M. In london. Im julie chatterley. Scarlet im scarlet fu. Welcome to bloomberg markets. Julia we are live and bloomberg World Headquarters in new york over the next hour. Here on a top stories we are covering on the bloomberg and around the world. Crunch time for republicans as lawmakers race to meet the deadline on the tax bill. We speak with Steve Scalise in just a few moments time. Billionaires. More of our interview with cameron and tyler winkle vos as the crypto currency faces a wild ride in trading. Californias governor talks tough on the climate. You will hear from jerry brown as he deals with the worst wildfire season in his state on record. We are one hour from the close of trading. Lets get a check on markets with the julie hyman. Julie we continue to see this ed picture with tech lyle lagging. The s p 500 also trades at a record. You do see some of the large cap tech firms that are waning today. That is putting pressure on the nasdaq. At the component, the sectors within the s p 500. We have utilities as we were discussing that are the worstperforming group. Energy and tech reasonably week. A lot of strength as well. Financial strong. Real estate and health care are also gaining. I want to focus on the weakness and energy for a moment. It has been a wild ride over the past week or so for energy prices. Crude oil is lower and took a sharp leg lower today. We have seen a lift in oil prices. That is because of a hairline fracture in a north sea oil pipeline that is the key one for delivering oil in europe. The entity that operates it said it would take a couple weeks to repair. Initially that was seen as negative. And it was seen as not that long and supply is ok. That sent the price is lower. Here are some of the other oil stocks falling the most in the s p 500. Our markets blog made an interesting observation. I have to say, i ripped off their chart because i liked it. This takes a look at the evaluations of the S P Energy Index versus the s p 500. This is a ratio you see in the white lines as oil prices have climbed. Trades which typically at a premium to the s p 500, spread has shrunk. Should not say it is a ratio, it is a spread of the two groups. The S P Energy Index and the s p 500. Has recovered, we are not necessarily seeing these stocks trade at a premium valuation as i do typically. Something to continue to watch. Outside of oil, lets take a look at the banks. I mention the financials is one of the bestperforming groups. Goldman sachs is leading them. Wells fargo, regent financial and Morgan Stanley are gaining. Saidn a note earlier today the tax overhaul is not fully priced in, particularly for financials. That focuses on the original financials here in you are seeing a lift overall for the group. As we mentioned earlier, this higher rates which have been rising over the past several days, has been bad for groups like utility but potentially better for groups like the financials. So much. Think you lets get your check of bloombergs first word news with our mark crumpton. Mark thank you. As done in past elections, roy moore wrote rode his horse to the polls to cast his ballot in todays special election in alabama. He was accompanied by his wife who was also on horseback. The former alabama judges campaign has been dodged by allegations of Sexual Misconduct with teenagers while more moore was in his 30s. He faces doug jones. He is best known for prosecuting to Ku Klux Klans men who were you killed two girls in a church bombing. Todays winner will take the seat previously held by Jeff Sessions who became u. S. Attorney general. President trump said the u. S. Has won the fight against Islamic State harris in syria and iraq and is pursuing the extremists as they spread elsewhere. The president made his comment at the white house during a ceremony to sign defense policy legislation. It authorizes funding for our continued campaign to obliterate isis, as you know. In syria,n the we have won in iraq. But they spread to other areas. And we are getting them as fast as they spread. A daythe president spoke after the arrest of a bangladeshi immigrant after a bombing at a new york city subway station. Police said the explosion was a botched suicide mission. The first plane carrying russian soldiers from syria landed in the republic of dagestan this morning. Vladimir putin declared victory in syria on monday during a surprise visit to the Russian Military base. President putin announced a pullout of russian soldiers. Friendsfrench president while alana says it is unrealistic for the u. K. To expect the same deal on trade as a union nations. He spoke exclusively to bloomberg at the ire of the form in dubai. A trade agreement is always possible betting needs to be clear that it cant happen at any cost. There have been discussions held over the past few years and they have continued. There are points to europe that resolute, forly example, agriculture and what one would call coal troll exception. These are important issues. I think Donald Trumps condition on trade agreement is not encouraging. Mark the former french president called President Trumps decision to recognize jerusalem as the capital of israel brutal and corrosive. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Scarlet thank you so much. Time to talk tax reform. The clock is ticking on capitol hill as a house and Senate Republicans work to get a tax bill on the president s desk. Earlier today, we heard from senator Mitch Mcconnell who said intense discussions are taking place and they will wrap this up pretty soon. We are joined by House Majority whip representative Steve Scalise is a week of louisiana. Thank you for joining us. Rep. Scalise good to be with you. Scarlet john cornyn, the senator said the tax bill could come as soon as tuesday. Kevin brady, the congressman who is the house and ways chairman said the risk written legislation could come as early as friday. Right now, what is the biggest Sticking Point as you resolve the differences between the house and Senate Versions . Rep. Scalise both the house and senate have tremendous tax cuts for middleclass families to get the economy moving. Right now, the biggest Sticking Points are how low can we bring the top rate down so every rate comes down . Also you have to look at a few other issues like the Corporate Tax rate. We would like to see a Corporate Tax rate well below the world average wages the world average, which is 23 . We will get well below that. When it will be implemented is being negotiated. Differences, tax there is a number of final things that are being worked out. , we willig issues are have middleclass tax relief, every income tax level will come down, we are going to have true Economic Growth because all those jobs that have left america because we had the highest corporate trade in the industrialized world, that will change with this bill. We will not only be average, we will be better than the rest of the world. We will be able to bring those jobs back. On thel see these bill this bill on the president s desk by christmas. Julia you have been coded that the individual mandate repeal is likely to make it to the ultimate tax legislation. Can we say a 20 Corporate Tax rate is also very likely to be included . Know the ratei will be below the world average of 23 . At the conferees work out the final details on what that number will be. Working hard to bring all rates down, including the top rate. This actually go in get finalized and get it passed by the house and senate early next deskand on the president s before christmas. President trump wants his belt. He wants to sign this bill because it will be a win for hardworking families. And want to see our country competitive again. Scarlet you have made the case that this will make america more competitive and bring Companies Back to the united states. There is a perception problem. According to a recent poll, 41 of americans believe their taxes will go up. Bill. E of this tax because of this tax legislation. Many americans dont think that tax cuts will benefit them. How do you combat that . How do you fight against bad, especially when the negotiations are taking place in secret . Rep. Scalise the numbers he talked about, we had a polling you talked about, we had polling that i asked that question in 1986 where 41 of americans thought taxes would go up. That was about three weeks before the 1986 tax reform act. It is interesting to show that even back in 1986 when Ronald Reagan was historically cutting taxes, the American People right before the vote thought their taxes would go up. What they saw just like they will see in this bill, their taxes will go down. The economy will take off. Just like a 1986, there was misinformation out there. When the proof is in the pudding, when people see they are getting more money in their pockets and they are seeing the economy grow, seeing people get off of welfare, but is what will be the determining factor in whether this is a win. It will be a win for the american workers. Julia so you are not worried about low Public Perception as far as this is concerned . You are saying wait for the result and things will be fine . Rep. Scalise what we are focused on is getting the policy right and making sure we can touch cut taxes for everyone. And see middleclass growth. We have lost the middle class because we have the highs Corporate Tax rates are we are doing something about it. We are making our country competitive so we can rebuild the middle class. We are going to be judged on the result of whether or not this bill is a win for families or not. It will be a big win. We are doubling the standard did action, increasing the child tax credit. But as families want. We have heard from singles single moms who want relief. This bill gives them that relief. Scarlet i want to turn to the special election in alabama. As a republican, would you welcome roy moore if he is elected senator . That islise obviously, something the senate might have to deal with, depending on how the selection goes. I know people in alabama who have said, you cant turn on the tv in the last couple weeks because both sides, the ads have been so violently negative. It is unfortunate. Ultimately, the people of alabama have to make that decision. The senate will have to deal with the results one way or the other. The house, we are focused on getting our work done. Getting a bill to the president s desk that cuts taxes so we can get our economy moving. We need to get the job done and get it done by christmas so we can see the economy take off early next year. Julia what did you mean by deal with . Do you agree to that the gop, aether the house or senate, perception problem with having roy moore involved in the democrats keep hitting you with this problem . They are facing their forcing their own people and keep putting the focus back on roy moore and the president himself. Isnt this a problem for the gop Going Forward head of the midterms . Hasnt been he elected first of all. The people of alabama will have to deal with that. They have a choice to make. Even if they might not be happy with either candidate, ultimately they will make that selection this evening. In the house, we have been dealing with this. You have seen a number of resignations. We have a zero tolerance policy for Sexual Harassment. Julia it is great to chat with you. I want to wrap up by asking how you are doing and how your health is . It is great to see you back in action. Rep. Scalise thanks. Doing really well. I appreciate everyone who has said prayers. They are working. I have a lot of his goal therapy and rehabilitation to go. I have a great support network. I am back at the job i love and working for the people of southeast louisiana. About to deliver something historic for the country. Could be a better time to be back. Scarlet thank you so much. Steve scalise of louisiana. Areng up, are investors investors ready to work with bitcoin . Boss and Cameron Winkle winklevoss join us to talk about that. This is bloomberg. Is bloomberg markets. Scarlet im scarlet fu. We are two days into futures trading for bitcoin. The debate continues over what role he cryptocurrency should play. Cameron and tyler winklevoss, cofounder of the gemini exchange, joined bloomberg. It they talked about what they see it as the value behind bitcoin. Is like golditcoin 2. 0. Whatever the reasons for investing in gold, whether it is scarce, durability, portability, we think bitcoin matches or beats gold across the board and all of those categories. It is actually not scarce. It is fixed. You can send it around like you send any mail. It is harder to do that with bars of gold. The market cap of the coin is 300 billion. The market cap of gold is 6 trillion. Bitcoin at coin we have been saying this since it was 1 billion and bitcoin. We are 300 times more today. We think there is a chance we will be 20 times more correct from here on out. If there is any reason to think people are selling gold and not bitcoin . But as possible. I think anybody who likes the characteristics of gold in their portfolio definitely will be attracted to gold. Two bitcoin, excuse me. Jeff. Had a note talking about that. From his research on the flipside, he has not seen that yet because etf is not seen outflows of gold. They look a different kinds of supply and demand dynamics. You said you could be 20 times more correct than you are now. In other words, we could see another 20 or 30 fold coming you guys were quoted as saying, increase in the price of bitcoin. How do you get there . Were positive on bitcoin, many of them say we could see a sharp correct and correction. It could be a rocky road to get there. That is creating access to it. We build gemini. Com which is a licensed exchange canadian consortium. We are unsure ahead courting in new york. It makes it easier for hedge funds to get involved. We have some of the worlds most sophisticated people in gemini. Phase two of that is creating a futures contract. A bitcoinave done, futures contract which allows institutions that are trading in chicago exchanges to get exposure to bitcoin with cash and that should settle out and cash. They dont have to touch or a field bitcoin, and they get the exposure to it. I think the next phase for that would be Something Like an et pf product. Guys hadyou introduced, you had a filing, the sec pushed it back with all of the etf filings. Are you planning to refile . What is the next step . We are in process. We dont have to read a we are on appeal. Because we are on appeal. We are waiting to be heard by the commissioners. What is the next step . See me is right around the corner. Price from gemini which is what you cofounded, but actually from a combination of different exchanges. Thats right. Our contract settles for the gemini auction. We really love our product because we think it is simple and easy to understand. The product, we certainly welcomed them to the party. They settled on an index. It is a different flavor. We welcome more products and more price discovery in this market. Scarlet that was cameron and tyler winklevoss, cofounders of the gemini. Julia it is time for the Bloomberg Business flash. Hedge fund pinion Asset Management is returning all client money, according to an investor letters and by bloomberg. The event driven equity firm said the pfaff past three years have not been favorable. With 100 million, Capital Management had a seed investor. Different did not return calls for comment. Tesla is getting its known truck from pepsico. The preorder is 100 is on is worth an estimated 2 million. Placeo joins walmart who all orders earlier this year. Production is scheduled to start in 2019. Kellogg is building outofthebox. Isew cereal cafe in new york banking on millennials to break year sales slump. The cafe will have a full cereal bar, as station to heat up pop tarts, and in instagram station with props and professional lightings. Doors open thursday. That is your business flash update. It is a skilled to read and keep looking down at the pictures. I want to look at the trucks cannot i want to look at the trucks and the serial story. Scarlet be sure to tune in tomorrow for our fed a special at 2 00 p. M. Eastern. You can join us for the analysis and reaction to the fed decision from former get fed governor, and much more. This is bloomberg. Julia this is bloomberg markets. Im julie chatterley. Scarlet its time for option insights with julie hyman. Julie thank you so much. Joining free joining me today is kevin kelly. , i shouldcreated firm say. Kevin, we should take a look back at this year. As you titled in your note to me, volatility year in review, except it should be titled lack of volatility, year in review. What stands out to you . Eye of thes in the beholder. Last year in december of 2016, we saw we had the low of six for the entire year. It was 11. 27. If we compare that to this year, we have averaged underneath that. Going into the end of last year, we sought skews spike up. That is the tail Risk Insurance part of the options market. People were hedging themselves. They were hoping, it was portfolio insurance. We saw in january of this year, it was pretty high. It was in the 140 level. We have averaged 134. We are back to that level. Anwe look back, we have elevated skew or you would not have volatility in the marketplace if everyone is starting to hedge. If you have skewed high, they have already hedged their portfolio. They dont have reason to sell. This bodes well going into next year. Its a similar playbook because of vix is a 30 day indicator. What the vix market and skew market is telling you is that it will be much of the same over the next month or so. We could see a rising, slow trade up. That plays into the whole seasonality of fact. Julie one of the other things we have been talking about is correlations going down. And that giving more opportunity for single stock trades are you have one for us today on alibaba. What do you think next year holds for alibaba . Alibaba is not a technology play. We have seen chinese technologies selloff harder than u. S. Technologies. It is a financial firm. They have one of the biggest money market funds in the world. There is an entertainment company. Alibaba is a playoff the rise of the chinese in a class. We know all the u. S. Companies have tried to go over that. Tim cook said in 2020, there should be more chinese citizens in the middle class than we have of population in the u. S. You want to collect that premium here you will get about 3. 65. It is a 2 yield. You will be owning alibaba if it goes down to the 170 level. This is a weighted position because it has been over 100 this year. This is a great way to wait it out and play into january. This is before their announcement in january. Julie we will be watching it. Kevin kelly. Julia back to you. Julia you look to know what goes on during these segments. We were practicing scarlet that is the oldfashioned one. What is it now . Julia kate william wave. Scarlet monarchy. This is a need to know basis. Californias governor talks on climate. Youll hear from jerry brown as he battles the worst wildfires in his state on record. That is to come. This is bloomberg. Democrats are rallying behind new york senator Kirsten Gillibrand who was singled out by President Trump today after she demanded he step down over allegations of Sexual Misconduct. In a tweet, the president slammed her, that she would come sa is his office said you cannot silence me or the millions of women who have spoken out. Democrats accuse the president of making crude insinuations with massachusetts senator Elizabeth Warren tweeting, are you trying to bully and intimidate senator gillibrand . Good luck with that. Federal charges were announced against the 27yearold immigrant from bangladesh to set off a pipe bomb in a new york city subway some monday. He became radicalized through the internet about three years ago. A search yesterday of his apartment in brooklyn revealed pipes, pieces of wires, and metal screws consistent with the bomb material we covered at the scene. Officers also
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