With the smallcap stocks. Joe em stocks up over 1 . Not a dramatic outperformance but they have been over performing for quite a while. Scarlet lets dive deeper into the action with our market reporters. Abigail, what are you watching . Abigail not participating in the risk on rally and record highs, bitcoin. 15 day chart, down 14 out of the last 15 days. However, today it appears as though bitcoin is maybe trying to stage a rally. Below 7000 as the technical side suggested for quite some time. Trying to hang on by a thread. This is a multiweek decline. In the context of a weekly chart. Over the past few years, a beautiful uptrend for the most part. ,here is the bitcoin bubble 20,000, then going below about 4000. Right now, hitting down over the past couple of years, right around 6400. If these levels can hold, maybe we see a brief bounce back higher. These levels suggest maybe we go down to that average below 5000. The longterm message is bullish for bitcoin. Nearterm chop. Taylor i wanted to look at the health of the consumer as we headed to that black friday event. I wanted to look at a 12 month moving average of consumer Conference Consumer Confidence and the Consumer Discretionary index. On the 12 month average comedy Consumer Confidence index average, the Consumer Confidence index peaked in september and december. This year, it hit a low in september and we have not recovered from those lows. The Consumer Discretionary index has fallen from a record its set on july 15. It is off almost 5 from the highs this summer. Consumer sentiment perhaps starting to weigh a little bit on the discretionary index, which would be a shift from where we were a year ago. In smalls huge rally caps. The biggest 2 , gain in six weeks since the indexs 13 month high. That is significant. Today, it has finally broken out of this trading range it has been stuck in since the end of february. That perennial question, of what is leading this valley this rally, for small caps, it is all about the smallcap growth and smallcap value stocks, both outperformance the index. That is among the best performing big etfs today of assets more than 5 billion. This could be investors catching up with small caps. Russell 2000 only up about 20 this year compared to about 25 for the s p 500 and 30 for the nasdaq. Romaine, it has been a long time since these russell 2000 index set a record. You have to go all the way back to august of 2018. We have a bit more to go before we are celebrating a record in the russell 2000. Us is crossll with asset reporter Sarah Ponczek and Wealth Advisor jason katz. Jason, this rally we are seeing in the russell 2000, is it sustainable or just thanks to a couple m a deals . Jason i find it heartening because for the past few years, there have been people clambering over u. S. Largecap growth and people who properly diversified were not rewarded. In emerging markets, the value trade. Is it sustainable . It is all predicated on whether these pmis indicate a bottoming, whether the shrinkage 12h debt down to about trillion is indicative of a Global Economy that has found its footing. If it has come a growth next years would be mid single growth next it has, year would be mid single digits. Joe on a daily today, basically everything is up. Reporteading a goldman this morning, hedge funds are still overweight. The big tech names, microsoft. Like facebook and amazon. To value in tech or is there life coming back into these growth names . Today, it looks like the rotation is intact. Over the past two weeks, we have seen a rotation faltering bid. Like out over the past two weeks or so, the likes of utilities, real estate, Consumer Staples performing well once again. I took a look at the high data etf to use kind of essay proxy. Bank of america said you would see this trade. For mutual funds lagging benchmarks, they need to be invested in high beta names that have High Sensitivity to the market. However, last week, we did see these high beta etfs falter for the first week in five. There is a slowdown but we have to take into account the switch we have seen was very, very swift. Romaine this has been a pretty big switch. I want to bring in the yield a little bit. Where we had today these records, we did see a buying and treasuries. Onehere we are right now, 1718 on the 10 year, is that supportive for this rally . It makes these levels, stocks considerably more compelling. If we continue to see the yield curve steepen, if europe finds its footing, germany does, and rates go higher, then stocks will have some competition. You may see a rotation out of bonds into equities. Steepens,d curve then stocks are all of a sudden the game in town. Scarlet how does the conversation change among your clients about fears of recession whether in the u. S. Or globally . Survey investors and 70 view geopolitics is what really drives markets, not necessarily fundamentals. It is our view that we are going to postpone this recession at least a year if not two years because our base case is a trade deal, if a phase i comes to fruition, a phase ii may not happen until an election. Scarlet we have some breaking news. Hp enterprises reporting results. It is down in after hours trading after thirdquarter revenue missed estimates. Billion dollars. Analysts were looking for 7. 42 billion. First quarter adjusted eps outlook. It gave you range in the midpoint beats the average analyst estimates. On that front, betterthanexpected. On the top line, disappointment, and you see that reflected in the stock price. And wes basically over have a couple of Companies Reporting here and there. Now we focus on the retail picture and what happens over the next couple of weeks as we head toward the holidays. How closely will people be watching the retail numbers, the anecdotes . The big question is always is the health of the u. S. Consumer. Investors dolly, want to look at the anecdotes. Investors do certainly look at that, not just for amazon as a company, but for how is the actual consumer of the regular retailer going out and spending money over the holidays. You want to make sure any anecdotes about policy about positivity are feeding through to spending patterns. Investors will be keep an eye on , especially when the growth picture, there is optimism out there. The curve flattening for a ninth straight day, that is the longest streak since 2015. I would not be surprised if we are in positive territory but we start to your people talk about the yield curve again. Joe the election, is that a big thing on peoples minds in terms of positioning, or is it too uncertain . He mentioned president warren earlier, right . Jason i hope that was a freudian slip. [laughter] that was not a freudian slip. [laughter] jason it is certainly dominating conversations that we had. Express your views politically when you get to the voting booth, hold off before pulling the trigger with respect to a trade. The collective wisdom of the market up to this point is that a farleft candidate is unlikely and if that were to come to collective wisdom is that that would be a kneejerk reaction to the downside. Whether it is health care, the anticipation that a moderate wins, buying financials now that a fear of regulation will be off our back, it is too premature. Scarlet we still have 11 long months to go. Thank you so much, jason katz with ubs and Bloomberg Cross affect reporter Sarah Ponczek. Whatd you miss . Is next when we will be talking about todays merger mania. This is bloomberg. Romaine live from bloombergs World Headquarters in new york. Scarlet i am scarlet fu in for caroline hyde. Joe i am joe weisenthal. Andine the dow, s p, nasdaq all closing and record territories. Joe the question is, Bloomberg Technology the question is, whatd you miss . What drove dig in to the rally. A fresh batch of major mergers hitting wall street. We dig into the m a ahead. Change in tides in hong kong. A Record Number of voters turned out to rally behind the prodemocracy party, winning 80 of the almost 450 seats up for grabs. Joe lets get more on hong kong. Joining us, bloombergs shery then west from washington. Just break down how significant and how unexpected the results of this weeks election were when the prodemocracy party seemed to win a landslide. Given the unrest continuing to grow Company Expectations that we could see something similar, that the prodemocracy camp could come up with good numbers but no one imagined a landslide victory. We are talking about the prodemocracy camp getting 80 5 of the 400 seats up for grabs. 85 of the 400 seats up for grabs. This is telling you how the probation camp did the which won about 13 of seats. The key here was voter turnout. About double the people who voted in 2018 voted this time around. 2. 94 Million People casting ballots. The government coming out, chief executive carrie lam saying they will respect the results of this election. Scarlet ok, so they will not dispute any of it. What does this mean in terms of hong kongs relationship of china . We are talking about the council, it is not as if they are determining bigger issues like policy. Ben these people are basically determining local services for their constituents. They dont have any say on the five demands we are seeing from protesters when it comes to the resignation of carrie lam, selfdetermination. This is kind of seen as a referendum on those five demands. The public has clearly given support or at least has kind of voted noconfidence in carrie lam. What comes next is this political negotiation period, does the Hong Kong Government acknowledge this and try to course correct or come as we have seen the past months, do they go along as usual and we fall back into the pattern of escalating violence . Even though these are lowlevel seats, this is essentially a referendum. If there is not sort of a change in tone to her new protesters and their demands, is it possible we could slip back into violence or something worse than we have seen already . The i think that is kind of skeptical way to look at it. I think we are seeing a honeymoon period right now. Protesters showed a great deal of unity over the weekend. We saw virtually no protest. I think that was out of respect for the democratic process. We should not interpret that as any kind of end to protests. Now, watching for carrie lams moves. What is she going to do, what is our government going to do . That could come in the form of provocative moves like an 2017 where they disqualified some of the representatives, it could come in the form of talks. The government said they would consider talking with protesters and maybe getting some negotiations. There are a lot of ways this could go right now. This is really kind of a breaking point. Scarlet a fairly peaceful vote led to the hang seng index rising, getting close to that 2700 level. Joe sherry, what is the result out of china . Shery chinas foreign minister saying the results dont change the facts that hong kong remains part of the mainland. Werent expecting much, but the fact remains that the tone is the same. Fallsng kong issue also into chinau. S. Relations. The holland the human rights and democracy act being passed in Congress Almost unanimously. The Chinese Foreign minister summoning the u. S. Ambassador strongranstad to express opposition to interference in matters. The question, what will President Trump do . Bill . E sign that that question to band. Will President Trump signed that the land what are the that bill and what are the repercussions if he does . If hee does, it does veto, it will go back to congress. You could see an override. If it does pass, china has made it clear that they view that as meddling in internal affairs. So watching for some reciprocation that could affect u. S. Businesses in the region. Scarlet maybe the temperature goes up a bit in the u. S. China trade war as well. For more on these stories, domestic daybreak australia and romaine merger monday. We saw some big deals become official. Lvmh finalized its acquisition of tiffanys and Charles Schwab announced a takeover of td ameritrade. We want to welcome in liana baker. This was a day, i think this was probably the biggest day of the year we have had at least in terms of announcements and total value. Is this just sort of end of the season, and of the year type of flurry, or is there more we can read in . Liana that is a great point, it being the end of the year. If they would not have announced them now, it would probably have never been announced. All of this work going into megamergers for months, now is time for the announcement. Td ameritrade. I think we expected thursday and friday, it obviously slipped over the weekend. Are they going to be regulatory issues with this in terms of how they define the market . Liana the executive today on the call say they expect the deal to be approved within six to eight months. It is a very fragmented market. There are many ways to trade stocks. Schwab has a lot of business. Could we expect divestitures . That is possible. Scarlet that is the 26 billion he missed deal. The secondbiggest deal is behemoth tdeal deal. The second biggest deal is tiffany buying lvmh. Liana i think that was a matter of getting the value that investors were comfortable with. Romaine lets take a look at novartis. This is a deal that, when people saw the price tag, i think eyeballs pop out. A lot of people think this is still a good deal for novartis. Liana it is almost a 10 billion deal, but they have a game plan. They believe in this cholesterol drug that i cant pronounce. It is not on the market yet but they are expecting fda approval. Joe you mentioned obviously that there may be some advisors trying to get this done before thanksgiving. What do we still have our eye on things that could still come to fruition . Liana one deal that we have been following in the printer space, xerox and hp. It seems to be turning a little bit uglier. It looks like it is turning to a proxy fight or tender offer. Other deals, the nutrition flavoring space, dupont and kerry group, another european buyer. Kerry is doing Due Diligence on dupont. Selling also ebay stubhub today. Scarlet thank you so much. 77 billion of deals, 164 different transactions announced today either being pending, completed, or closed today. Speaking of lvmh, staffers of that french luxury brand they have to shift Holiday Shopping plans because the luxury giant will no longer allow staff discounts of up to 90 of unsold products. This is after a French Tax Authority saying that bargain prices should be considered a taxable benefit. You imagine if you took a job with the express benefit of buying stuff with the discount and you cant do that anymore . Joe like the snacks in the pantry, if i had to pay taxes on those. Joe a lot of benefits are like de facto tax workaround. Romaine can we give our bloomberg terminals as our gifts this year . They are still getting 75 . From 90 to 75 . Joe i think they should be taxed on that. Scarlet if you are a Louis Vuitton staffer who works somewhere else, you benefit potentially. Joe sounds like tax evasion to me. Can thep, candy fed fed fight inequality . We will discuss this with a veteran economists, next. This is bloomberg. I mark House Intelligence Committee chairman adam schiff says his panel will issue a report on the impeachment of donald trump to the Judiciary Committee soon after the thanks giving recess. Continueshift will with investigative work and is leaving open the possibility of additional hearings for closeddoor depositions. He says the committee will recommend an article of impeachment related to obstruction because the administration told certain witnesses not to testify. Of priests found guilty day guilty today of sexually abusing children in argentina and sentenced to 40 years in prison. After those verdicts were announced, relatives of the victims erupted in cheers outside the courtroom. The defendants, who pleaded innocent, declined to make statements. The cofounder of the Online Research database told the Associated Press that the horror is twofold, the torture of the children and the churchs failure to prevent it. Urged Polytechnic University authorities to do something to resolve a more than weeklong crisis after they met two protesters inside the campus today. The Legislative Council told reporters that the University Authorities are planning to enter the facility tomorrow. They added, we believe the best to solve the problem takeam hoping they would over the management and they i hope the university would reevaluate. Mark police had stormed the campus overnight. They made dozens of arrests before retreating. Thousands protesting before parliament in the country of georgia. The latest in a series of to pass after a failure a reform measure from the party. It would have changed elections so that all seats would be allocated according to the proportions of votes received by a party. Local news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Inequality is increasingly a problem on some u. S. Policymakers minds. Neel kashkari from the u. S. Fed thinks that Monetary Policy can help. It can keep Interest Rates lower for longer. Here with more is matt bosler from Bloomberg News and also with this is a professor from the university of oregon, author of fed watch and contributor to bloomberg opinion. Neel kashkari is kind of leading on this but we have heard jay thell make references to idea that keeping the economy growing faster will keep americans from all different economic backgrounds. What specifically convinced Neel Kashkari that fighting inequality is something the fed can and should do . Matt this is a conversation that has really been bubbling up on the fed beat a lot this year. 2017 is when he started looking into stuff at the minneapolis fed. The thing that really changed his mind was just what has been happening in the labor market in the u. S. If you go back to about 2015 or hours Labor Force Participation had stayed the flat. They thought, that is all what they can squeeze out in terms of job gains. It kind of started to change some things on that question. Seenwe have obviously economists, policymakers at the fed be very surprised by how much the on employment rate can drop without sparking inflation. I am curious, is this a matter of the models from is calibrated or the models that show a relationship or just not particularly useful in the first place . I think they were miscalculated in the first place. How far we can push the Interest Rate lower. I think the other issue, most of overweighted the risk of inflation and probably under weighted the cost of significantly higher unemployment. I think it is a combination of those things that were really driving us toward outcomes that were a little bit too biased against unemployment. Essentially low unemployment. Joe romaine when you have a sense of rising tides lift all boats, when you move to something that focuses more on distribution and the outcomes of does that fit within the current fed mandate . End up with a situation where you tribute income to a wider range of the population. Beeninly groups that have traditionally disadvantaged, they find themselves lack of a job is the ultimate inequality. , moreargaining power income return to labor. I do think that having low unemployment, persistently low unemployment, avoiding a recession, will help. Inequality or achieving less inequality. That is what jay powell has been saying that his news conferences. The first time around, that the overriding goal of expansion. As much as he has brought this to the forefront, i think that janet was even further ahead because she started to talk about this in her tenure. Matt this has been playing out over the past several years. This kind of goes back to the 2015 timeframe or so. Jay powell came in in 2018. There is some continuity. This kind of went back that question that jay powell had to field where she started talking about the ability of Monetary Policy to affect longrun labor market outcomes. Chris condon asked about that and she said, no, just to clarify, i was just suggesting that this was a theoretical possibility. I think you are starting to see, as the evidence accumulates, more and more belief that this could be the case. In your view, for all of this talk, how deeply entrenched still at major Central Banks and the fed is this idea still that even though there is a dual mandate, that fighting inflation is the first among equals. Are you optimistic that the kind . F work being done no, and the conflict at the first sort of glance, what we are talking about here is we have overestimated the risk of inflation. A goalt we are pursuing of sustainably lower unemployment. The other issue is that you are trying to avoid a recession. On the others of this, you are trying to not tie in policy so much on the front and that you tip the economy over to a recession and start to lose the benefits of unemployment. I do not think it is down compatible it is incompatible at all. It is how sensitive you think inflation is. The low unemployment rates and the worries that you have about how high inflation will get. Romaine great to have you here in person, tim dewey from oregon, and bloombergs matt bosler. Coming up, adam schiff says he is not waiting on the white house. Democrats are pushing forward with impeachment despite the legal battles that have kept the biggest it from testifying. The latest, next. This is bloomberg. Time for a look at what stories are trending. Aboutal users reading softbank which lodged a tender office tender offer for shares of the we company. It was five Business Days after an accelerated 1. 5 billion equity adjustment equity injection. According to people familiar with the offer, it expires on april 1. Bloomberg. Com has a story on the downside of diversity. An analysis of years of market returns finds that when they avoided female directors, they when they appointed female directors, they experienced stock decline. Academics have found mixed results as to whether any direct link between diversity and Company Performance actually exists. Tictoc on twitter has reported that u. S. Scientists are reporting pet dogs. The study will collect records, dna samples, gut microbes, and information on food and walks. Dogs will also test a pill that could slow the aging process. It could shed light on Human Longevity and answer the question of who really is a good boy. All of these under terminal, bloomberg. Com, and at tictoc on twitter. He ist adam schiff says not waiting for the white house. The chairman explaining his next steps in a letter to his colleagues in the house. The committee will begin preparing its report. Schiff left open the possibility of new hearings. We want to bring in bloomberg congressional reporter billy house. When i hear the possibility of additional hearings, i wonder if that includes former National Security advisor john bolton or former white House Counsel don mcgann . Any word on whether they will testify or be forced to testify . Happenthing that could today is a u. S. District judge in d. C. Is set to rule on former don mcgahn, the chief of staff of the white house, would have to testify. That would not be binding but it andd give the john boltons opening to do so despite white house opposition. The reportce we get from the Intelligence Committee sent to the Judiciary Committee and we have these public hearings and what we assume will be the formal articles of impeachment, what other committees involved in the house right now are still investigating and still plan to investigate things surrounding this administration . You are right. There are five or six committees still looking into such things as hush money payments, emoluments violations. What we are told is they will be able to weigh in with Jerrold Nadler on possibly adding articles related to those issues. Be the Judiciary Committee that would put together the final slate of articles to take to the house floor. Joe i am curious about the pure politics. I know republicans have been citing some poland showing that support for impeaching or impeaching and removing the president has gone down. Democrats, are they so eager by and large to move forward with this even if there is no prospect of movable and the senate, that this is a smart move for them for the longterm to keep pursuing this . Billy more than by and large. They want to do it and do it now. Todays letter from adam schiff saying that a report will be done when they get back from thanks giving break. It does stick to a timeline for action on the house floor by christmas. It would from there that we would go to the said to the senate for what is tantamount to a trial. Joe thank you for the report. Bloombergs billy house reporting from washington. For more on impeachment, lets hereby one of the democratic hopefuls. We are joined by marianne williamson. Lets start with, we were just having this conversation about impeachment. In your view, is the president s impeachment warranted, or do you think this is a smart policy going into 2020 . Theanne i certainly think impeachment inquiry is warranted and it will go where it goes. I think it is important to remember that america has a lot of problems that were here before the president got here. We have to be able to walk and chew gum at the same time, look at much bigger issues than any president. Injustice in our economy, millions of traumatized children, the fact that our National Security agenda is more about preparing for war than peace. That wery important to keep our eyes on the ball. Romaine a lot of the divisiveness in this country, politically speaking, it seems to be rooted in the idea of economic inequalities. There are obviously different approaches by democrats and republicans. How specifically are you going to address that . On your platform, you called basically our Economic System sociopathic. Remember, we did not have a wealth inequality problem in the 1970s. This started in the 1980s. Aam for capitalism with conscience. Viruy real and strain a lent strain of capitalism has hijacked our economy, a system that is untethered from workers, the community, and environment. Milton friedman, who was the main articulate her of trickledown economics said there had to be a universal basic income to make all of this safer people. What we have led to is the idea that shortterm profits for stockholders takes precedent. , unjust. Oral look what it has done. It has created a massive transfer of wealth into the hands of the 1 of americans. This is unsustainable. That 2017 tax cut where 2 trillion went to the richest, . 87 of every dollar of those 2 trillion went to the very richest. I would put back the middle class tax cut which i believe belonged there. I would stop these corporate subsidies. You tell me why we paid 26 million to oil and gas alone last year. Militaryay to the u. S. , every dollar they need, they get, but those hundreds of billions of dollars above what they say they need where defense contractors just want to increase their bottom line, that needs to go away. These are policies to tax policy prescriptions that resonate among these are policy prescriptions that resonate among democrats. Numbers,ok your pull your support is in the low single digits. What is your path to the nomination . Marianne i am having a conversation with people that i believe is more about root causes been about symptoms. I am not just talking about how to pay for health care, i am also talking about how to create health. I am talking about things that are inconvenient for the political establishment such as the fact that we have millions of traumatized children, 13 100,000hungry children, homeless children. Im talking about the fact that our military is created more on war, because that is where the profits are, rather than creating peace. What i am on the ground in iowa, new hampshire, and south carolina, this is where people hear me. When you talk about the poll , when you look at the debates and you look how, to be honest, how unfairly the whole thing works, that it is actually the clubto make sure is perpetuated. Those debates are a reality tv show. It is undemocratic to me. The people who should be narrowing the field of the voters. That is what primaries are for. I am out there and i am having conversations with voters and that is where i believe the practice of democracy lives and where it should live. It is democracy, candidates, and voters. So you are saying that you want to wait for the voters to weigh in. Marianne sometimes everywhere i people say, we need you in the conversation. But you cant be in the conversation if you are not in the campaign. It is when you are actually in the running that you get to have these very important conversations with the voters that otherwise you cant have if you are not actually running. Scarlet thank you to democratic president ial candidate marianne williamson. We want to make a clear disclosure. Michael bloomberg is the owner and founder of bloomberg lp, the owner of Bloomberg News, and he is among the candidates. This is bloomberg. Scarlet quick check of the business flash headlines. Drugmakers have talked about resolving a u. S. Pricefixing investigation. Bloomberg has learned that one of the possibilities explored deferred is a they would pay fines and cooperate with the investigation. Now, dont miss this. Earnings season is still in swing. We are at the tail end. Thirdquarter numbers reported before the bell. Joe alibaba is making its trading debut in the hong kong exchange. Romaine new u. S. Home sale numbers for october are coming out at 10 00 a. M. Eastern time. Bloomberg technology is next in the u. S. Joe have a great evening. This is bloomberg. Taylor i am taylor riggs in San Francisco invert emily chang and in for emily chang and this is Bloomberg Technology. London Transit Authority refuses to renew ubers operating license over concerns about passenger safety. The Company Valves an appeal. Ebay is selling stubhub to european rival via gogo