Transcripts For BLOOMBERG Bloomberg Surveillance 20161109

Trump as i have said from the beginning, ours was not a campaign, but rather an incredible and great movement. Made up of millions of hardworking men and women who love their country, and want a better, Brighter Future for themselves and for their family. Francine trump said Hillary Clinton called him early this morning to concede and congratulate him on his win. The republican victory has roiled the global markets. I came in about eight hours ago and it was definitely a surprise when we first started having the count in. Since, markets ever coop raided a little bit. I wonder whether it is because we do not have a full policy. I wonder whether donald trump tried in his triumph speech to reconciliation United States. This is the msci world index. Volatility still spiking up. To watch. The sectors we have been talking about pharmaceuticals. Watch out for the european banks. Again, this is the one we have been watching over the last couple of weeks. It is clear that health care, because Hillary Clinton was talking so much about being able to put a curve on a lot of the pharma stocks they are gaining 2. 4 . The stocks to watch that is what we are watching. Stay with us for the full coverage. We are live at trump headquarters in new york city. We also have great guests to whatssed to discuss this momentous news means for your markets. In new york, Robert Shapiro, professor of Political Science at Columbia University. Marty shanker, bloombergs Senior Executive editor for economics, and the fixed income head of research at hsbc. Marty, what a night. What exactly happened . Marty the night is not over for me. About 24 hours. It was an incredible night. We always had that brexit bug in the back of our minds, and it actually happens tonight here in the United States. It was a little more slowmoving them brexit was. Moment. S not that ahha but it soon became apparent that this was a different election than a lot of people thought it would be. Francine the parallels to brexit are very true. This feels so much bigger. This could really shape the world economies, Foreign Policy. This could be an earthquake. Marty it is an earthquake. It is not could be. For those of us who have covered politics for a long time and government, donald trump is the nost u. S. President who has government experience whatsoever. He has never served in office. He is a businessman. And he will approach the presidency as a businessman. We have never seen anything like it before. Francine you understand the nuances of politics like no one else that we have here in the newsroom. When i look at the markets, they were freaked out at the start, and now they are kind of finding a floor. Is there something in his acceptance speech or his trial speech that calm the markets, or is it because they want to know more about his policies . Marty i do think his acceptance speech was a Pivotal Moment for him. That acceptance speech does set the tone for at least the next 100 days, and the fact that he praised Hillary Clinton for her Public Service he was not strident. He was president ial. I think it was very calming to the markets, and i think the investors are just going to take a wait and see attitude to see who he puts in his cabinet, how he does his transition. And they are just going to wait and see. Francine he really wants at least in his speech, he tried to tell the nation that they need to come together. Will he succeed . If hillaryink clinton had one, she would have done the same thing. It is all in the execution. Words are great, but he does not only have to come to grips with the people in Hillary Clintons camp. He has to come to grips with his own party. Paul ryan, speaker of the house his agenda does not mesh with his. Together. To come there is an extreme right wing of the Republican Party who will not be happy with a lot of spending proposals that donald trump has made. They will have to all come together to see if they can get something done. Francine can we with certainty say the policies in this election was not about the economy . The person he puts in place as foreign secretary is almost as important, if not more important, then treasury secretary. Marty the secretary of state in the u. S. Is an important position to implement the policies that donald trump has so famously talked about. The fact that he alone can defeat isis. The secretary of state is going to have to implement those policies, and his selection of those people will say a lot about how far to the right he is going to go, or how far to the center he is going to go. And frankly, i think he has to go closer to the center if you wants to govern. Francine if you look at the markets, there has been a little bit of movement in google. The foreign policies one is how he deals with russia, and how he deals with china. What do we know . Marty we know for certain we are not sure for certain. He claims he is no friend of Vladimir Putin, but it would be nice to get along with the russians. From their standpoint, they may of to just test the level that kind of cooperation. I thinkhat reuters reported that putin congratulated him already. It will beo me, interesting to see which foreign country donald trump chooses to visit first. Will it be the u. K. . Will it be russia . Will it be israel . Francine on twitter, i think it was Marine Le Pen her hopes on the state of wrench politics and european politics in general. I do not know how much donald trump knows about Marine Le Pen. I think that was grandstanding. She congratulated him before he actually went over the 270 electoral votes. But that is ok. But his Foreign Policy is going to be critical, and his pick of treasury secretary will also be critical. Francine marty, thank you for all of your insight. What a shanker heads are Global Coverage for economics and government. Lets get to cap headquarters, where Kevin Cirilli has spent the last 15 hours. President trump spoke to his supporters in the last hour. The moment i guess was jubilant. Was it incredulous . Kevin what is interesting is i have been covering donald trump since the beginning, and always the throwaway line of his speeches is that he wants to unify the party. Not just the party, the country. You have this bombastic rhetoric, but what was interesting and notable about tonight the entire tone of the speech was one of a call for unity. It was an increasingly divided country, not just the Republican Party, but the entire country. What is interesting is that we all looked at the markets and the Market Reaction to this stunning political upset with donald trump becoming president. But the market actually uptick during his speech, not only a thing because of his tone, that also and this is important because of the familiar cast of political characters with whom he was joined on stage, people like rnc chairman Reince Priebus and new jersey governor chris christie, who will be heading his Transition Team, and senator jeff sessions, one of the first senators to endorse his candidacy. Donald trump taking the president elect roll with a republican majority in both the house and the senate. Kevin, what did we learn about policy . We are getting breaking news out of the terminal. , the president of the european parliament, is extending his invite for donald trump to visit the e. U. For a summit. But what can you tell me about what we have learned about Donald Trumps aspirations for infrastructure spending, to step up spending and reflect this economy . This economy . Been one of the core messages of his campaign, which was drowned out by immigration and negotiating trade deals, and the temporary muslim ban. It was this notion that he is a republican who wants to increase spending on infrastructure. That has bipartisan support. He is a builder. Over the last couple of weeks, he has attempted to close his argument at many of the rallies by saying he wants to rebuild america with infrastructure spending. That, of course, i think is also going to be perhaps one of the biggest bipartisan policy areas where he can reach across the aisle. Francine thank you so much. Kevin cirilli at trump headquarters in new york city. At hsbc. In london is stephen, i want to get your calls on treasuries. You had some stunning calls. Overall, why do you think the market seems so much more calm than three hours ago . I guess that was the kneejerk reaction, francine, which sold the big risk off trade. You saw what happened to s p futures. The treasury plummeted. The 10 year treasury was down 1. 71. It is now back to where it started, or in fact closed yesterday. I think people are being a bit more considered than they were over brexit, for example. There are similarities, but there are key differences here. There is so much that we really do not know. , as theaiting to hear previous guest was mentioning it is very key what policy advisers trump has. Thrown into the mix is the fact that nobody really knows what kind of fiscal policy there will be, rates at the next fed meeting, and trade. There is so much to think about. So actually having 10 year treasuries unchanged on 24 hours is probably about right. The more considered views will focus on steepening of curves. And that is because you combine the idea that rates are not going up any time soon with the idea that there will be an attempt towards some kind of fiscal loosening. I say attempt to cause any radical plan has to go through congress, and there you have got mr. Ryan, for example. It is not obvious to me there will be a massive fiscal change immediately. Francine we have talked about the composition of the house. We will get back to steven shortly. We want to find out more about trumpump defeat defeating clinton in a stunning upset that roiled the markets. You can follow all the Election Results on your bloomberg terminal at tlivego. State with surveillance for special coverage, including the safety trade. How should investors react to another major shock . We get the views of our expert panel. Less, we talked Global Politics with american investor to germany john emerson. The 45th president of the United States mean for the worlds most important central bank . We talk trump and the fed. Is bloombergs surveillance, looking at capitol hill in washington, d. C. What a night. Markets a little bit less anxious than they were when we started having news of the surprise victory for donald trump. I think the world overall is trying to get to grips with donald trump in charge of the worlds biggest economy. This is treasuries. You see the fiveyear 1. 29. I want to show you why, if we can take my bloomberg chart. This is the yield differential between 30 year and five year treasuries. Earlier this night, 10 years fell to 1. 71 percent, but have erased their yield to being unchanged. Lets get to our expert panel. Robert schapiro is professor at Columbia University. Bloombergs Marty Shanker. And joining us from london, hsbcs steven major. Onven, you are the expert treasuries. You had the bold call. Is it change anything on when the fed hikes rates . Steven well, yes. ,f, before this election result the probability of a fed hike was 80 90 , it is now 50 and may be lower. In fact, the uncertainty regarding trade and fiscal ,olicy and a lower stock market we can emerging markets all of that would add up to say no change at the meeting next month. And i think the path of rates was already very flat and shallow, so it is very unlikely that much will happen in terms of the fed. And in fact, i think that yields will probably be lower later this year than they are now. At the curve is definitely entering a steepening phase. Steven, intephen, front of me, in the space of eight hours, it went from 84 probability of a hike in december 251. 2 . I am surprised it is not at 20 . Steven it might fall further, but there is so much unknown here. It is too early, francine, to say. What i would say, if pushed, there will be no change. It is funny how in the space of the last few weeks, people have been flipflopping from one side to the other. Those who thought there would be no change have changed their mind already. It is quite confusing. My view is quite consistent. The fed cannot hike by much at all anyway, and this uncertainty pushes out the path of rate hikes. Francine professor schapiro, with the fomc, looking at other coverage, be confused at what the next path should be . Robert i think so. Donald trump has been has created a high level of uncertainty with regard to what he would do, certainly, on the interNational Front, certainly with regard to broad Economic Policy and to a lot of specifics. He likes to be unpredictable is not something that inspires confidence in the markets. Francine i imagine it is too early to talk about this, but he has sent in the past janet yellen needs to be replaced. Her term comes to an end in 2018. He has been critical, saying the fed has artificially kept rates low in order to affect the election. And now that he has won that election, it would be odd to see them back off from a rate increase which everyone thought was in the offing for political reasons. If the market stabilized between now and decision day, you might see janet yellen stick to her knitting and actually raise rates. In aine steven comedies market stabilizing . They have in the last three hours. It happens in the next month and a half, especially with currency . Steven in the next month or so, you have also got the events in europe to focus on. Aboutith brexit, it is lightning has struck twice for the populist agenda. It is the u. S. And u. K. It could be that italy and france are the focus in the future. And i think that the currency markets could be all over the place in the next few weeks and months. As for the stock markets, if they are weaker at the time the fed meets again, then they will not hike. I think it is very important to understand that in the feds reaction function, there is a piece for the emerging markets and also the stock market. If you look back through the last year or so, the reasons for the fed not hiking have been international. It is the read across from this event today to other markets that really matter. Francine professor, when doing no know about Donald Trumps policies . He wants to spend. Does that mean inflation goes up almost automatically . How does he fund it . We understood a little bit more of what clintons thinking was when it came to infrastructure spending. Bert clinton claims to want to shore up entitlements and increase spending on infrastructure. He wants to claim that he was to pay for it by going the economy. He is very vague about it. Francine who does not want to grow the economy . Robert that is right. It is just a question of how you get there. As our guest mentioned, we have to go through congress to get it done, and congress is deeply divided within itself, within the gop, even though it is a Republican Congress. They are going to have difficulty reaching at consensus on how to do that without increasing spending, which seems to be an impossible task. Francine i want to go to markets in a second, but how much damage can a President Donald Trump inflict on this economy . Cany well, i mean, he implement catastrophic damage of his policies are reckless, that i do not think he is going to do that, because he has a number of people within and around him who are going to impose some discipline. He showed discipline tonight, and i think he really does want to seem president ial, and will probably have the advice of some very senior people who will keep him in tow. Francine thank you so much. Lets cross to mark barton for your asset check. Markets not as ugly as they were two hours ago. Mark that sums it up. Turbulence in Financial Markets has carved in recent hours. There is no better function than our gmm function, global macro movement. This is the equity column, the nikkei down by 5. 3 , down as much as 6. 2 at one stage. It ended, as you can see, the most since june 24, the day after brexit. Those on the markets in asia. The big currency that has been affected is the peso. 8 lower today. Massive fall, leading other emerging market currencies lower. It has fallen as much as 11. 8 , the most since 1994. We have seen for sovereign yields falling across the world. Those are your commodities. Gold is up by 1. 9 . Gold earlier did rise much much more than that. We are very much off the extreme levels we saw overnight, before trump was confirmed president elect. This is the western european portion of gmm. You can see equities in europe are lower, but not as low as postbrexit, to put it in perspective. The stoxx 600 is roughly 1 lower. After brexit, it fell by 2. 3 percent, and then fell as much as 7 . We are nowhere near those levels. Those are the currencies rising against the dollar, money moving into the euro, the swiss franc, and the pound today. For sovereign yields are falling. We have seen the likes of spain, italian yields, greek yields rising. Those are your commodities. Wonderful w crs function haveights the movement we seen to slight equality in the currency markets today. This is the yen against every single major currency today, the dollar falling as much as 320 against the yen, the most since againstas much as 3. 8 the yen, the most since 1998. These commodities are trading lower against the yen, the haven currency of choice. Coming back to what is happening in europe, this is the stoxx 600. These are the industry groups. Health care, drugmakers like no one notice, they are rallying disk,akers like novonor glaxosmithkline same pressure on drugs prices in the u. S. Would continue regardless of the outcome, but health care has been hit hard ahead of the election on concern clinton would win last friday. The healthcare index fell to a twoyear low after falling to 17 . Turbulence in Financial Markets have calmed. Francine i wonder whether the markets are seeing the spending extravaganza. Donald trump will be the next president of the United States. Here is what he had to say as he celebrated his victory. Mr. Trump now it is time for america to bind the wounds of division. We have to get together. To all republicans and democrats and independents across this usion, i say it is time for as one uniteder people. As i have said from the beginning, ours was not a campaign, but rather an incredible and great movement, made up of millions of hardworking men and women who love their country and want a better, Brighter Future for themselves and for their family. While the campaign is over, our work on this movement is now really just beginning. It is my honor it was an amazing evening. It has been an amazing twoyear period. And i love this country. Ourcine still with us, panel. Robert schapiro of Columbia University and Marty Shanker from bloomberg, who overheads our economic and government coverage. , steven major. Can he really unite and get the disaffected americans back to work and bring the economy into a spending extravaganza . There is getting americans together emotionally first, where he has his work cut out for him. On the economic front, any efforts he makes to stimulate the economy and create jobs will be all for the good. We would see that well received by democrats and republicans. Francine this is about disaffected people all around the world. Marty the last four president s also they need to unite america, and none of them were able to do it. We are more divided than we have ever been. It will be really a challenge. Francine markets are on the move a little bit less than they were an hour ago. We will get back to steven major with his bold treasury call. The treasury yield curve at a sixmonth high. Robert shapiro from Columbia University stays with us. So does Marty Shanker, Bloomberg Global and government team. Has been. Ht it up next, germanys defense minister says she would ask trump about his stance on nato. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Francine this is bloomberg surveillance. We have a result, donald trump is the president elect. Lets talk that an Foreign Policy. Robert shapiro from columbia and marty schenker. Stephen major joining us from london. The u. S. Ambassador to determine he served ony, it the senior staff between 1993 and 1997. He joins us from berlin. How much pressure how much pressure is there on Angela Merkel . On welcoming donald trump or ising to make ties and she the almost de facto leader of the free world . There is no pressure, she plays for the longterm and certainly is not going to be thrown off by one day or one week. Clearly, there is going to be some time for her to build a relationship with the president elect. Presumably after he assumes office. Mind is no question in my that the germanamerican relationship will remain an indispensable relationship. The question is more about what are the kinds of issues that we work on together. I think that there is no question that donald trump reflects a more isolationist approach to american foreignpolicy, a more inward looking approach. He ran a campaign where he repeatedly talked about the need for our friends and allies to play a bigger role or carry more weight. I forget what phrases he used. That will clearly be a subject for discussion and will have implications on her role in germany and in europe. Francine what does this mean for European Security and what do we know this means for nato . Donald trump has said he will not contribute as much or maybe not at all, do we believe him . Are always treading on dangerous waters if you do not believe somebody. Particularly something they said repeatedly. I will say that often people say things in campaigns and when they are confronted with the awesome responsibility of governance and have facts before the that perhaps they did not during the campaign, they sometime change their views and opinions. It is inconceivable to me that the United States of america would take a position of anything other than absolute strong support for and commitment to nato. Some nuances in and around that but it would be hard for me to see the relationship the most successful alliance probably is certainly of the 20th century and the 21st century would be put in jeopardy. Francine Angela Merkel will make a statement a little over two hours from now, we will watch that closely. It mean that countries like germany come under pressure to raise their defense spending . John germany is already committed along with all the nato partners to over number of years to get to the 2 of gdp level that all the nato partners agree to in wales two years ago and reaffirmed in warsaw earlier this summer. That is already a progress and the chancellor recently reaffirmed germanys commitment to that and the ministry of defense came out with a white paper, the first one in 10 years , looking at their defense policy and structure. The white paper reconfirmed that commitment. That will not be new. Francine we want to look at the map to see what happened. The perl else between brexit are striking in certain cases. Turningmean there is no back from brexit, it is not a mistake, cut from the same cloth. I do think that there has been a permanent realignment of political interest in the United States. There is a large number of people who feel disenfranchised from the government. That is supposed to serve them. This is a permanent state of affairs in the United States. It has been replicated around the world, not just in the philippines and elsewhere. Francine what do you think s firstt drop trump foreign trip will be . Not know, the optics of going to rush it would be odd. So i do not think it will be there. He had scheduled a trip to israel and canceled it. You may see that be his first foray, a safe political place to go and he has expressed great support for israel. Francine what about china . Economice of his advisers who said that countries who have a surplus are cheating america. A tricky and difficult relationship between the u. S. Under donald trump and china. Hethe one positive things says is that he wants to make a better deal. The question is, on what issues will he try to make a better deal, trade, related to kersey, he has not specified. Francine do you worry, ambassador, about the rest of europe turning more populist . John it is already beginning to happen in many parts of europe. If you look of the rise of populist movement in poland and , and inand austria germany. And in france and the brexit vote. It is also important to understand that we have dissatisfaction coming from the left. If you look at spain and jeremy preaches witht he labor in the u. K. There is dissatisfaction from politicalof the spectrum and mainstream politician, this is a lesson, a brexit and this election, ignore those concerns at their parol. Do you get called back . John first of all, i represent the United States of america, i was appointed by president obama and fully intend to serve through the remainder of his term. Of theforget that 70 ambassadors are Career Foreign Service folks, only 30 of us are noncareer ambassadors. When a new administration comes in, there are a lot of models how you view with it, sometimes an administration will look of his situation and ask for someone to stay longer and other times they will flat out asked for a particularly for the noncareer ambassadors, a resignation effective january 20. In terms of what happens to the , weent set of ambassadors will have to wait until an indication is made as to who the Foreign Policy team will be, who the secretary of state designate is. I am confident that during transition there will be a policy we will abide by because we serve at the pleasure of the president. Francine how much do we know about this Transition Team and how quickly can we expect to know who is in charge . Marty they will have to do that quickly. ,here were reports last week some news reports of possible cabinet appointments and it came out later that donald trump had never talked to any of these candidates. He will take his cabinet approach i think to how he ran his campaign. It will run up through him. He will be personally comfortable with everyone in his cabinet and he says he wants the best people, it will be interesting to see if he reaches outside the gop to more technocratic people who get things done which he says thats what he wants to do. Francine is that what the markets are waiting for, who he surrounds himself with and what kind of experience they have . Absolutely, no expectations he will be a handson leader and micromanage anything, he will be delegating and the evil to the delegate is crucial. He has been take on it. Big on it you are in germany, ambassador, what is the question you are expecting to get the most today and through the week . Interviewsenor of my changed during the evening and the question i get more than anything is what does this mean for the germanamerican relationship, the transatlantic relationship, and i get a host of questions about what the agenda, particularly from an International Affairs to foreign of a Trump Presidency would be. There is a lot of question and concern in a sense that because we have a president elect who has never served in Public Office before, and who does not have a background in policy or a series of statements that have been developed over time, it is really a big unknown. It is fair to say there is a little bit of unease and a little bit of nervousness on this side of the atlantic about that fact. Francine thank you so much, john emerson, the u. S. Ambassador to germany. And Robert Shapiro. Stephen major, researcher at hsbc will be to you shortly and look at the market moves. This is a picture overall. Ago, they were a lot more nervous than now, look at the mexican peso, we saw wild gyrations, taking it back a little bit. Is an anxious world when you speak to politicians and heads of state, confronting the reality that donald trump has become u. S. President. Up, with us, plenty coming not only talking about the markets, we will discuss what u. S. Foreignpolicy could look like under the commanderinchief. Donald trumpis challenges abroad and at home and we will talk atut the vicechairman Kissinger Associates and as the republicans maintain control of the senate, we will discuss what that means for the future of congress. All that and plenty more to come. Withlegory to working resident electro and welcoming them to brussels and to meet him soon to discuss the way forward and how we can strengthen the transatlantic bond in challenging times with a more challenging security environment. Francine that was the nato secretary general a reaction to a donald trump victory. I want to go back to stephen. Your on treasuries initial reaction, we had brutal moves when it comes to currencies pairs, a lot contained a lot of excitement three hours ago. The initialainly reaction in terms of direction is pretty much what the markets had expected but it is the extent of the move is far more modest. Two things. The acceptance speech where there was no mention of the , that hasolicies reassured the markets and secondly and probably more importantly is the expectation that perhaps the Republican Congress will act as a controlling force. It is an contract incorrect to say this is a clean sweep because is he a truly republican questionable and i think the interaction between the white house and Congress Going forward will be crucial in determining the sentiment in the markets. Francine look at the mexican peso. It has been the most volatile currency as expected after this donald trump win. The mexican peso, u. S. Dollar, what does mexico do from now on on what happens to the currency pair . Was no mention of mexico or the other must wal infamous wall in the acceptance speech and if he follows through on the rhetoric he used while campaigning you could envisage mexico going further than where it is now and it is down to determining how much of what he mentioned in campaigning he tries to pursue and follow through on their followthrough on. I think that the risks are that at some stage, the panic will set in again. From an emf fax perspective we could see some dollar moved to the upside. Francine what are you waiting for in terms of policy to understand whether donald trump will follow through what he the rhetoric he has been laying out so far . There is a long list of economic policies on the agenda and if half of these are followed through with we are in for some sharp. Bond markets are about waiting a more considered response against the kneejerk reaction we have had to it centers on three things, trade, fiscal policy, and then race. Another words the fed. The market is behaving at the moment and the one data point i would give you is the 30 year treasury. The way the market is behaving is building in risk premiums, its uncertainty at it says to me that the market is pricing the fed is staying on hold for a while. The risk that donald trump talks about loose fiscal policy while having a negative start on trade. That is how the market seems to be reacting but bond markets are more about looking through noise. Francine where do you see the 30 year and the tenure 12 months from now 10 year 12 months from now . Trade is a negative factor on Economic Growth, it will outweigh the stimulation it will outweigh the stimulation from the fiscal side because i believe that congress will constrain a Trump Presidency. If you have a more negative impact through growth from the trade angle, the stimulative piece from the fiscal side, bit bond yields will be lower in one year. Francine we started the show by sobering view the time 30 year the dollar is retreating at the moment, where does it finish the year . Is it significantly lower and that must boost u. S. Is it significantly lower, i do not think so. Mentiong important to is that there is a global phenomenon and we have had Political Risk premium here in the u k, initially at the start of the year, then postbrexit, the Political Risk premium moved to the United States. We have had to shock results in terms of what the markets , nowted in the aftermath the Political Risk premium will shifts to europe. Higher in euro, although reversing now could be very shortlived. We have key events in italy and the netherlands, france, germany, and the populism evident in the votes in the u k and u. S. The markets will start pricing in the risks of that repeating itself in europe and that could spell bad news for eurodollar. Francine thank you very much been thank you very much. Thank you all. What will a Trump Administration look like, we discussed that with Robert Shapiro from columbia and look at the electoral map and figure out what happened over the last 24 hours. That is we are discussing next. This is bloomberg. Francine this is a lecture 2016. Election 2016. Donald trump finishing with 290. We will get to the markets in a second that we are with professor shapiro. We met state we had no idea it would go republican. Robert book your letter, florida, and ohio, surprisingly went republican, cyclic michigan, pennsylvania, wisconsin were off the table with regards to republicans winning those. That was a huge surprise because of the enormous base of white voters that he was able to mobilize. Francine lets go to mark barton for the market check. Mark well off the lows of the day, the heightened concerns overnight have dissipated. In decay is the highlight asia, down my 5 , the biggest exit since the exit. These are your sovereign bond yields, core yields are falling although the long end of the u. S. Curve is rising which is highlighted on concerns we will have more fiscal policy which will boost the long end of the curve. Gold off its highs of the day. Earlier it was up 4. 8 , the most since 2009. We are well off the lows of the day. On the day of brexit, we saw as much as 7 . Nowhere near those declines. These currencies are rising against the dollar, moving into the swiss franc and pound, the euro as well. We are seeing core Government Bond yields all in peru friel yields rise. To highlight the flight to holiday, wc rs is the function, all these currencies are falling against the japanese yen. The japanese yen is the haven of choice which was expected. U. S. Futures, this highlight, these three figures, s p futures down by 1. 6 and earlier they were down as much as 5 , the maximum loss permitted before trading curbs are triggered. We are well off the lows of the day after a more conciliatory acceptance speech from the president elect, donald trump. What a night and wanted day we will have been what a night and what a day we will have. Francine the turbulent markets we saw over two hours, a kneejerk reaction and now the recouping a little bit. There is still a little bit of a rally in haven assets but people thinking about, what the policy means with donald trump president. Bloomberg surveillance continues, tom keene joins me in the next hour. Francine ruhle. Donald trump is the next president of the United States. I want to tell the World Community that while we will always put americas interests first, we will deal fairly with everyone. With everyone. All people and all other nations. We will seek Common Ground, not hostility. Partnership, not conflict. Francine he captured a number of the belgrade states, including florida, ohio, and pennsylvania. Clinton conceded but she did not speak. I am friends want lucky Francine Lacqua in new york with tom keene. The kneejerk reaction, they are tempering with european stocks gaining. Tom there is so much history and so many different ways we can go. To figure outeed whether the donald trump, what he promise for america. Does it mean a reflationary economy . Is all original coverage and we have great voices within sight and conversation through ,he morning, our data check hysteria about 10 00 p. M. When North Carolina went down, someone disagreed, we recover, futures 38, the dow futures 301. Much, much worse. The 10 year yield 11 basis points higher, that is not a typo. Oil not a part of the discussion. Next, please. Pretty must longterm average, a lack of the syria, a serious adjustment. That is where the dow was a bit ago. Francine we need to look at currencies, looking at the end, gold looking at yen, gold. We have a peso chart coming up. We saw a little bit of a rally in haven assets and i think after the donald trump acceptance or triumph speech, investors are trying to reassess the effects of Donald Trumps surprise victory in the president ial election. Lets get more with megan murphy who has been up about 49 hours for three months straight. In terms of the people that came out to vote, why so many donald Trump Supporters . He did well with white men and white women. He turned out the vote, much better in some of the suburban counties. More affluent voters, he ran the table up and did better than expected among College Educated and with his core group which was those with no college degrees, he won an astounding percentage. Voting, a lot of talk about a latino surge, nevada, florida, the turnout was very similar to 2012, that did not seem to be a moving indicator. One of the stunning statistics, donald trump took a third of latino men according to exit polls. She did not put together the coalition she needed. Francine does that say there are more disaffected americans than we thought and is he the president that may make these disaffected americans come together . Megan a lot similar to brexit in terms of the tone. Disenfranchised, people who feel disconnected from the American Dream and from Barack Obamas america. We should be clear in saying there will be a lot of autopsy of Hillary Clinton, the campaign she ran, she did not consistently have the cohesive narrative and message that is why you should vote for Hillary Clintons america as opposed to donald trump. Tom a couple moments last night, i was thunderstruck by the results from bucks county, pennsylvania. They find to our global audience , the importance of a wealthy philadelphia suburb in this stunning result. Thele talk but they went in booth and did something different. Megan pennsylvania for me was a thunderclap, we saw her winning by 5 to 6 . We saw that in virginia which is closer than expected, the countys you talked about, he carried some of those counties in the suburbs of philadelphia and in virginia he did much better. Booth, and ioting go back to the old days where your father would hold you with the toggle switch. Megan my confession like convection confession. Tom somebody goes into the booth and vote for trump, did they not both for clinton and did they choose not to vote for mr. Johnson . Megan everyone saw no evidence of the silent donald trump voter, the secret army and guess what you saw last night, exactly the silent trump. A lot of people who said that would happen and it is what we saw in brexit as well. They had a perfect antiestablishment candidate on the ballot. People were looking for change and she is not her like abilities and favorability is are just so low as she could not deliver. When i think about covering the campaign for the past 18 months, when i think about president barack obama over the last month and what he did in a personal way he made this, we are reminding people that democracy is not about i am on the valley and even then not being able to turn the tide in urban areas and get the turnout they needed, it is a stunning and a wakeup moment who thought we would never see this in america. Thejust this is not death of the Republican Party, a rebirth. Francine megan murphy, our Washington Bureau chief, thank you. Of u. S. Ing in the head economics of Renaissance Macro research in london macro research. Let me come to you first. , we sawf thinking donald trump that was more president ial than he has been in recent months. That he will spend part on infrastructure hard on infrastructure, inflation will go up and the country will be better off. That is one theory, probably the right place now, i think donald trump is promising to run a larger budget deficit. I did not hear talk about trade. Yesterday. Ory speech nothing on trade, all about infrastructure, so much infrastructure would make Larry Summers blush. I think the bigger question for economyat with the u. S. Converted to full employment and the fed reaching inflation goals come is this a wise they could do . In the u. S. , the Construction Industry, jobs are going begging. Job openings are surging, an open question is whether we want to spend a lot on infrastructure which would potentially take resources away from the Residential Housing industries in the u. S. And whether that is a wise thing to do. I do not think this is a doomsday scenario for the economy that the markets initially francine they are recuperating a lot. You are one of the best thinkers we have in terms of policy and disaffected people and regulation, what have you learned in the last 48 hours . The preoccupation here has been the news that prince harrys new american girlfriend which seems like a very clever toe by the royal family retain the special relationship with the u. S. At a difficult moment. The markets do not know how to digest this. Argumenta respectable for saying that the trump recipe of increased spending by the government and perhaps compensated by slightly tighter Monetary Policy would not necessarily be a bad economic prescription for the u. S. I accept what he says about the Construction Industry but think there is a great need in america to renew its infrastructure, a wall probably is not the top priority but other things you need to be rebuilt. In some ways, you may say that Overall Economic direction would not be too bad. They worry is whether it is accompanied by a protectionist false impulse which causes nervousness and a slowdown in world trade which would negate all the benefits of a looser fiscal policy. Tom false sir howard, good. Think trump populism is an export item of the United States of america to do you think we will see what we witnessed in the last 24 hours, will we see it across to italy, france, and other nations . Howard i think the attire and referendum is extremely complicated the italian referendum is extreme the complicated and i do not think populism will play. The country that will be anxious is france because up to now everybody in france has said, just as all kinds of informed opinions, america set trump cannot win, Marine Le Pen cannot win, there will be a lot of people asking themselves is that quite so certain. The french will be very nervous and the germans less of it and the germans less so. By donaldthis victory trump amend the hsbc outlier call for lower rates and lower rates for longer . Steven i will not change my mind on one thing. Show, onbeing on the the brexit result, i stressed the importance of a considered opinion because if you heard had followed through with the morning price action after brexit you would have been the wrong way around. I see the brexit playbook being played out in front of me this morning. Almost as if we had a few weeks of price action in a few hours. Treasuries rallied and now they have sold off. The markets are still trying to figure this one out. My best guess as it stands is that rates stay low and while i respect the idea that fiscal loosened, it has to be very targeted because there are countries like germany and canada that can and could loosen fiscal policy but have not. Ism not certain the u. S. Currently able to loosen that much and even if donald trump wants to, will congress allow it . In a year, yields will be lower in the u. S. Tom how will Global Finance adapt and adjust to what we have witnessed . You are planning for next year and we know the challenges of the royal bank of scotland and you have a lot of company in Global Finance, will this election change that timeline of Strategic Planning that all of finance is dealing with . Howard i am not sure it will. Areink a lot of banks giving with the fact that the previous precrisis notion we had the globalization of finance could only go in one direction. That has now been seriously questioned. We see a lot of banks retreating to their core markets. And cutting back on overseas exposure. Will not mind me saying theyre cutting back in a number of countries. The notion that that being a global opera chris beck for all people everywhere is one that no longer is quite exciting the markets. , howeverresidency seriously he goes in ittionism, he clearly is what were globalization appears to have gone too far for the American People who cannot catch up. With the globalization of finance, it is likely to continue. Continue here in new york. It is an extraordinary moment for the nation, we will drive forward the conversation as we have done since early this morning. In the next hour, we will bring you the former ambassador to northern ireland. Hormats on the trumpet victory. This is bloomberg. Tom it is extraordinary, that is not rooting for the new york rangers of ice hockey legend, that is for the United States of america, the Empire State Building in new york. Donald trump living just north of here on fifth avenue. Changed fifth avenue for donald trump and the secret service, new levels of security across from his trump tower. We continue our coverage which we have done from last night and moved directly through to asia and a stunned europe. Eil, and sir Howard Davies with us in london and stephen major steven major of hsbc. A quote from the telegraph, i like the publications, and eclectic set. Mr. Stanley of the telegraph, like Donald Trumps degree could the u. S. , good for this is brexit with bells on, even if he as is that as his critics say, he will be one of the most checked and balanced president in u. S. History, the media will have a constant shruti, the military would probably refuse to a bay illegal orders ok illegal orders. Promise from a has enjoyed much the same scenario in help us with your view of the checks and balances in the United States and what it means for mr. Trumps first 100 days . He has signaled in his acceptance speech that he will try to be more conciliatory than some people have feared so he recognizes that he will need to build some bridges initially with the Republican Leadership in congress. Because they are not well aligned with this policy prescription. He will have to do that. If a president has a clear mandate and a fouryear term, people start to adjust their. It will be possible with a congress that both houses for him to do some things he wants to do. The question i think is which of the various policy promises he has made in corporation tax, income tax on high earners, infrastructure, which of these will he choose to prioritize . That is what we will watch most carefully over the next few weeks. Francine first of all, donald Hillary Clinton, a stunning upset to the establishment, when you look at his policies and lets assume and i am not sure lets assume what you said that this is a more inclusive president , here at the acceptance speech with the triumph speech, where does this leave us in terms of infrastructure and spending, how will he fund it . Howard i suspect there will not be that much, probably some highprofile projects which he will be able to create but whether it will be massive in terms of a meaningful percentage of gdp, i would doubt because i think that would be the thing that would be most difficult to get largescale republican support for in congress. There is typically always a kneejerk republican support for cutting taxes and they will probably find it easier to get a majority for that he will form largescale effort structure spending and that tends to have a slower impact because finding shall already projects Shovel Ready Projects is not so easy in the shortterm. , to so much to talk about pick up the debris of last night and to move forward as a nation. Interesting congress we will see on the path to a january inauguration. From new york, after this history of last night, this is bloomberg. Francine with strong support from white workingclass voters got the electoral votes needed to become president on january 20. He will preside over a government he has called corrupt and unworthy of trash. In london, sir Howard Davies. We want to talk about treasuries but first, does the regulation from donald trump the regulation from donald trump put european banks in a much worse off place . Howard it depends on what he means by that. What worries european banks is the progress of for. I would like to know what he thinks about basil for. The agreement is supposed to be reached by the end of the year and i doubt if the new Trump Administration can influence that. I would be surprised if it amounted to a large reduction in the amount of capital that u. S. Banks have to hold. I think he would find that very difficult to push through and that would be the thing to create an uneven playing field. Full conformity dollar dynamics, hsbc has a stunning call on sterling to a 110 level end of next year. How do you adapt to u. S. Dollar and mr. Trump . Steven i know from the brexit experience that the kneejerk reaction was wrong. It seems to me that people are trying to secondguess that right now. I suspect that a more considered view will see a lower yield next year. As for the dollar, it depends on trade. It is too early to call that. Tom much more to talk about. Thank you for beginning our 5 00 a. M. Coverage in new york. In the next hour, ambassador haas with us. Robert hormats, formally from goldman sachs, serving secretary of state clinton and president obama. On a most changed america. For those waking up, it is stunning and that is a stunned capital. Mr. Trump, our 45th president. From new york, this is bloomberg. It is a stunned europe and that more stunned america over the election of our 45th president. I am tom keene and we welcome all of you. Smart conversation through the morning and perspective on what happened last night, particularly this idea of moving forward to the first 100 days of a Trump Presidency. Francine the markets had a violent kneejerk reaction. They are recouping a little bit of that reaction, i wonder if they want to know more about the policy. Tom i want to know who will feel the warm bodies needed in an administration. We will get to that. To bring you uptodate on 2 00 p. M. And 3 00 p. M. , here is taylor riggs. He broke the rules and beat the odds and donald trump has been elected president of the United States. The republican billionaire brought one of the most bitter campaigns request by shocking Hillary Clinton. White workingclass voters embraces populist message and the result has rocked Financial Markets around the world. He won the battleground states including florida, ohio, North Carolina, winning wisconsin put him over the top early this morning east coast time. He sounded conciliatory. Mr. Trump now it is time for america to bind the wounds of division, we have to get together. To all republicans and democrats and independents across this usion, i say it is time for to come together as one united people. Clinton called him to concede, donald trump said he thanked her for her long history of phone service. Her Campaign Says she will speak to supporters later today. The next president will have a Republicancontrolled Congress to consider his agenda and his nomination to the supreme court. Republicans held onto the senate and will have at least 51 seats, races in New Hampshire and louisiana have not been decided. Only handful of races in the house and still have a substantial advantage. A question whether hardline conservatives will try to depose of paul ryan. The head of nato has congratulated the president elect. I am looking forward to working with president elect trump. I look forward to welcoming into brussels in our next summit next year. And to meet him soon to discuss the way forward. And how we can strengthen the transatlantic bond in challenging times with a new and more challenging security environment. During the campaign, he reveled the military alliance by suggesting that america will look at whether nato members have a there sure before deciding whether to come to news 24fense global hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Francine we are hearing from Vladimir Putin, congratulating donald trump on his victory. Looking at live pictures from moscow. I believe that is the interior of the kremlin, he says russia has been following closely this campaign and at times it felt Vladimir Putin was in the campaign, brexit was the warmup , World Leaders are looking with the election of donald trump as a populist with type sweeping throughout developed economies, it seems like a new world order. Tom any four of its did a comedy piece any horovitz had a joke about mr. Putin campaigning for donald trump in the battleground states. Greg has given us perspective. Let me go to you, michael. The republicans have won the senate or is it still in the air . Senate, ite won the looks like kelly ayotte may hang on in New Hampshire which gets 52 seats and we have conservatives running in louisiana and the Runoff Election is december 10. 53 seats. Tom an amazing outcome. Congratulations on becoming the first expert i ever saw say do not underestimate mr. Trump. You nailed this, i said it yesterday, you nailed it like nobody, when did you know leslie, was a North Carolina . Thank you for the compliment but i still got it wrong. I thought he would lose, i thought he was a much stronger candidate than a lot of people anticipated. I would like to try to make limited out of lemons and i think the narrative, the markets might be able to live look is a progrowth economic agenda. Gdp,nk he can do stuff for maybe not good for the bond market but that is the one limited you can get out of these lemons. We let me talk about what talked about over the weekend, the latino vote and such, help of whatyour analysis secretary clinton did not accomplish, was it the africanamerican vote, women, where is the new wants nuance . The ground game got overhyped and she was the ultimate establishment candidate in an election where the establishment and globalization are really unpopular. Francine you were on yesterday and the thing that struck me the most you told us was that you believe donald trump seemed president ial in the last month, what did he seem like in his triumph speech . He must have been on a different wavelength from the bus to work three weeks, he was substantive, not doing the tweaking, he did not insult people, he stuck to that last night. So maybe we are seeing a new donald trump. Francine when you look at the markets, they were freaked out and they are recouping a little bit of loss, was it because of the speech where they see a new president that has been so divisive, that maybe wants to work with unity . Marketsnot think the will all of a sudden change their minds after one speech. We have not seen the u. S. Markets open so we do not know what will happen over the longer term. Can he move is to a more rational persona and maintain that . Then, what does that mean on capitol hill can he get along with enough people to get things passed . It does not matter what questions you ask this morning, i do not know to any of those and the markets will have to say, i do not know to any of those. Tom a quote from the mr. Drop will embarkeech, we National Growth and rental and i will harness the greater talents of our people and we will call upon the best and brightest to leverage their tremendous talent for the benefit of all your it will happen, thank you very much. Thank you to mike pence. What an outsider going into washington. How does he fill the slots that every administration the, i deny get it i do not get it . He needs to send flowers and candy to paul ryan and janet len, they need to put him teens to put that in his cap and he has insulted them and he has to get people confirmed by the senate and i do not see a lineup of february unless i missed some. A lot of these nominations will be controversial. Sendu say he has to flowers and candy to paul ryan and janet yellen, is donald trump would not do that, will he . , heret comes to spending is the interesting question, he wants this Infrastructure Project that half of the republicans on capitol hill were elected to specifically fight against additional spending. How does he get that through, even the Republican House . Francine this goes back to whether we will see a reflection of the u. S. Economy and that changes against the fed. We already have that, he is inheriting a economy hitting its stride, average Hourly Earnings are up 3 so far this year. Market, itd the bond was short before he won an it would short after he held one. The budget deficit in the widened next year. Maybe it will widen more. One of the interesting things i took away was that there was no mention of trade whatsoever in his speech. One of the other things to keep in mind, trade elasticity globally has been falling. It is not the big driver of growth that it has been made out to be. It is important. Parallelsthere are with brexit but because this is the biggest economy of the world, this could be an earthquake and less donald trump keeps it together like he has in the last three weeks. Let me comment on Interest Rates, i have been talking to investors who do not like Hillary Clinton and do not like low Interest Rates. There are so many investors who say they are sick of low rates so if they creep up, i agree and a lot of people will not mind. March . Happens in donald trump wants to spend more money and we run up against the debt ceiling and all of the republicans ready to crucify themselves to prevent that from rising, at that point, s p, moodys comes in and the Credit Rating of the United States, this could be a real battle royal. And paul ryan will have to go to nancy pelosi for votes to pass the debt ceiling. Francine we will be back in the next hour. These are your markets. Turbulence in the Financial Markets comes you saw a kneejerk reaction three hours ago, we saw a huge selloff in stocks and the rally in the haven assets which has been tempered. Reassessing with the effects of this donald trump victory. Tom we welcome all of you worldwide and across the nation. A stunned america over these Election Results. Donald trump is the 45th president of the United States. There have been quite moments in the last 24 hours and one of them was an immigrant from oils who put out from wales who put out a tweet. He was a professor at Dartmouth College who said i was an immigrant who voted for secretary clinton. Within the dartmouth bubble, tell me about a changed america. It is forever changed, isnt it . I think it is. It says things about the forecast. People keep comparing it to brexit. I think you could go a step before that which is the election in the u. K. Was for best forecast wrongly. Forecastingg about and peoples reaction to a huge recession and the fact that they are still hurting. He said so many times about where the u. S. Is in terms of full employment. If we were at full employment, people would be feeling it, they are not happy and do not feel good come austerity, we are not at full employment and all bets are off with uncertainty in the air and the speech he made was important. Ball p be a wrecking trump be a wrecking ball or will he do things and that is the changed world . It is aelieve republican president and the Republican Senate and a Republican House, you have been the greatest voice on a lack of austerity and get fiscal spending going. As you that within a United Government or is gridlock better for david blanchflowers physical needs . I would argue that gridlock is better because you do not do anything bad. Called austerity a huge visitation of evil on people, a huge macro error and in some sense if we will see a loosening of the fiscal purse, that is one thing. The question is, he may want to loosen the purse, will you get the votes in the congress to do so . I suspect you will but your question at the beginning was right, everything changed last night, a precursor in the brexit vote and before that the vote in the u. K. And we will probably see these similar things in france, germany, and elsewhere. Francine this was not an election on the u. S. Economy, that was my understanding so the biggest earthquake as far as we see could come from foreign presidency, a trump Foreign Policy, defense and accommodate oh, not the economy nato, not the economy. It is about americas place in the world, people have not felt good come in some sense like they were apologizing to the world and this huge Political Uncertainty will be important to the markets. What happens and how this plays out will be important. We will talk about this for a long time but i think it was a micro and macro unhappiness and we will see if donald trump can transform things. The question is whether the rhetoric comes into reality . If it does not, what will those people who have high hopes yesterday, how will they feel if trump can deliver that cannot deliver . Will rhetoric meet reality and if it does not, then what . Tom thank you so much. The New Hampshire senate race still up for grabs. Lets look at a deeper market, that would be Foreign Exchange. Looking with the bloomberg terminal on the phone. , in theat dollarpeso london, here is the 10 year yield now. Looking for a lower yield. Morning, tellod me about your estimate of what the dollar will do, will receive brutal moves after this brutal election . I think for sure we will have a volatile foreignexchange over the weeks and months ahead. In the last few hours, the dollar pushed down quite considerably across the board overnight but it has recovered some of its standing. As we move ahead and get towards january and the inauguration we will see further Downside Potential for the dollar but some currencies are even more vulnerable, the mexican peso and also canada, the Canadian Dollar will be concerned about trade relationships, protectionist policies in the u. S. If you look at currency such as new zealand, they are vulnerable, the expectation that the Central Banks could be cutting Interest Rates has risen on the back of the u. S. Election results. Francine we want to show you the volatility on mexican peso. If you are mexico at a lot of emerging markets that you trade with in the u. S. , how do you react today and what is your favorite pairing, a mexican peso versus the dollar or the euro mexico or do you go to swiss euroyen . We have seen the peso under pressure, that has been the standingr of the trump at these holes for some time. We see a different pattern evolving over an emerging market in europe with the ruble and the hungrypoland. The east currencies are more aligned to europe than the u. S. , perhaps that i tell you in referendum italian referendum which could be the next market could have more of a sway over how investors look at these emerging markets but for now i think we can safely say that the yen will be given the global uncertainty we have. Tom ian bremmer will join us later this morning looking at international relations. G0 me ask you is this a world as we wake up to a Trump Presidency . I think what we have seen is a lot of nastiness tendencies and i think people are looking more inwardly and there has been a black mark against the name of globalization and people in the u. S. And in europe have a rebellion against the effects they see have come from globalization. Francine thank you jane foley. Coming up on television and radio, we speak to Mohamed Elerian at 9 30 a. M. And 2 30 p. M. In london. I markets calmer than they were but the unimaginable has happened for many americans. This is bloomberg. Francine americans have voted in this is what they voted for. To regressshocking but keep in control of the stage for president elect donald trump do it and acted broad conservative agenda, possibly injuring a Republican Supreme Court for a generation. Election night amounted to a complete disaster for Senate Democrats in a year when the map where the favor them, 10 of 11 battlegrounds were on republican turf but this is how the house shakes up. Tom interesting to see the reaction from mr. Prudent, chancellor merkel will speak. Francine in five minutes. Tom we welcome you worldwide and across america. Us, has been patient with he is not a home. Tell me about the dots, donald trump, chair yellen, and where will be off the december meeting . Even this historic moment can amend that policy . Neil the markets are doing what you expect, you had uncertainty and the fed job is to lead against uncertainty uncertainty. Tom professor fisher and dr. Yellen will change their plans because of a Trump Presidency . Neil i am not there yet, too early. On top of that, there is a lot of speculation about Janet Yellens future. Anyone has known her, she is not a quitter and she will not leave. Francine what do we know about Donald Trumps thoughts on these low rates come he said they are too low. Has said he is a low Interest Rate person and she is a low Interest Rate person, he likes low Interest Rate for his building projects at high Interest Rate for savers. What pointn is at does this look more like a typical Republican Administration and if that is the case, if he is getting fed resumes, i think people should look at someone like kevin worth or john taylor, the kind of names that would come across his desk to fill some of the vacancies on the fed board. Tom thank you for being with us. Dutta on the american experience. In the next hour, we will review the shock. Of what everyone witnessed last night. Policy and Form International relations, joining us here is Richard Haass and ambassador hormats will join us with Kissinger Associates. This will be most interesting. It is a stunned america and a stunned new york city. Mr. Trump is president elect. Good morning. Tom it is an election that will 1800, 1916, and 1960. Donald trump will be the 46th president of these United States. A stunned nation looks forward to the next four years. Era,ca must envision a new an original president. Mr. Trump i want to tell the World Community that while we will always put americas and just first, we will deal fairly put americas interest first, we will deal fairly with everyone. We will see, ground, not hostility. Partnership, not conflict. Clinton losttary North Carolina, markets crash worldwide. And relativet stability. Toward a new american exceptionalism in this hour, Richard Haass and Robert Hormats. This is bloomberg surveillance , live from our World Headquarters in new york. I am tom keene. With me, Francine Lacqua. Francine the market turmoil has eased a lot. This is because investors i believe are trying to accept policies for donald trump. We underestimated, maybe as the media, with the polls, how angry the u. S. Electorate really was. Tom absolutely. Lets go to chancellor merkel, speaking in germany right now. Speaking in german, adapting and adjusting to the trump victory. With us this hour, lets do a data check. As we come out of chancellor merkel, i want to get to one data board. Futures off the bloomberg are a negative. My eyes are failing me right now. Negative 3. 24 on the dow futures with some dollar weakness. I want to get to our guests this morning. There is the close yesterday on the dow. And again, yen strength. Francine . Francine after initially sliding the maximum allowed, futures on the s p 500 are now paring some of the losses. European equities are also pairing some of the losses. 19. 96. E vix tom i mentioned in the elections. Woodrow wilson and of course jfk , nixon in 1960. With Richard Haass and Robert Hormats with us, it is important to full together the perspective of last evening. No one does that better than megan murphy. James reston, november of 1960 lets bring up the quote from a stunned nation in 1960, in the election of the first catholic president this is not new, is it, megan . Megan it is not. I want to be clear on how last night played out. The dow futures as 800 down on my board last night. You mentioned North Carolina, pennsylvania. Florida was looking very bad for her and very tight early on. When i look at the maps this morning, there are very few people, maybe even not one, who had the map filled in with read the way it was last night. When we saw was him jerking out white, workingclass america in a pretty historic way. Hillary underperformed among some demographics. Surge not see the latino we have been talking about. His strategy worked. To there are so many ways go. Let me jump forward four years. Do we go to a threeparty system . Is that something you would perceive . Megan i talked a lot about america trending toward a fourparty system, a centerright, centerleft. But america is not tending that way. The prognosticating before the donald trump would be the death of the Republican Party. You know what he was last night . A reviver of the Republican Party. This the death of u. S. Democracy, as some people fear . There were republicans blaming donald trump. Megan when you have no sort of voting regularity, this is democracy, actually how it works. It is the fault of perhaps the establishment and the media that did not see some of these swings coming in states like michigan, pennsylvania, wisconsin, the surge of people who feel dislocated. You can analyze this in any way. You can say this is the end of the old demographics, the last have had inmap we the last four decades, perhaps a lasting phenomenon of this anger. Tom not only that, but our collective memories. It is amazing how things have shifted. Megan murphy, thank you for this thisus morning. Richard haass and Robert Hormats what are you ambassador to, economic progress . Robert economic progress, right. Go on for hours this morning. Ambassador haass, let me go to you on how your council on Foreign Relations what would you perceive would be his foreignpolicy . To focus elastically does not make you antiisolationist. You have to have a domestic foundation, and part of mr. Trumps philosophy is to repair the foundations of the American Economy. The real question is, to what extent is the limit of the american involvement in the world . I know what he said during the campaign. I do not know how he will go. Talked abouthas nato. Will he pullout . Richard i do not see anybody pulled out of nato. It is dangerous to make productions. I do see an attempt to recalibrate the american relationship. Sharing, so burden that is an issue. You have two big challenges. One is domestically. You saw a little bit of it last night. He has got to do some repair work. This country is seriously divided. Internationally, you have a world that is incredibly unnerved. He has to reassure that they can stick some security on the United States. Francine the domestic challenges one of the biggest domestic challenges is china. We need to know what donald trump wants to do with china. One of the advisors came on this program five days ago and said anyone with a surplus means they are cheating america. What does that mean for Foreign Policy . Robert if you take that attitude, it is terrible for Foreign Policy. The basic goal is to a dress domestic economic is to address domestic economic problems. Have a greater role in prosperity in this country, and a lot of disenfranchised people feeling more and franchised by the Economic Policy. The second is to deal with other countries in a constructive way. If you want to achieve domestic prosperity, you cannot do it in the middle of a trade war with one of our biggest trading partners. The most rapidly growing trading partner, china. If you have the attitude you are going to bludgeon china into doing what we want economically and from a trade point of view, then you have a destabilizing trade war and it will not just be with china. It will be with other countries. That will feedback negatively. You cannot do it at the expense Economic Policy. You have to do it in conjunction with it. Tom you have lived this. I perceive checks and balances with the legislature, with the military. Are there checks and balances within our Foreign Policy, or can you literally run a Foreign Policy out of the white house . Ambassador haass . Richard far fewer checks and balances on foreignpolicy. Theres greater latitude under the constitution. No one can force the president to use or not use force. On the other hand, trade is Something Congress is something is something that congress is heavily involved in. All things being equal, no matter who was elected, the president has tremendously, considerably more latitude on what he does in the world or chooses not to do in the world than he does domestically. Francine what does he do domestically . We have heard but there is no concrete policy on how to Fund Infrastructure spending. Richard infrastructure is one of the few areas that the two candidates agreed, at least in principle. The devil is going to be in the details. It is a question of funding and what you spend on. A lot of these things are going to be in the agenda. One thing that was counted on besides the surprise as to who is the next president is the fact that you have republicans who basically ran the table. They not only kept the majority in the house, they kept their position in the senate. Tom you are in the timeout chair after this election last night. Im going to ask you if you are called upon, will you serve in this administration . Richard if the president elect of either party calls you, you pick up the phone. Are fortunate enough to have served multiple president s of both parties. There you have the conversation as to whether you think this is sufficient alignment. Where you think you can serve and represent the United States. Tom this is important. What is rob portman do what does rob portman do . What does the senator do with a new republican super majority that you just mentioned . Anhard rob portman is important voice for internationalism. He was the u. S. Trade rep. Tom and all of you can find Common Ground . Tpp matters more strategically, the transpacific partnership, then it does economically. Isone of the questions there any way through renegotiation are some understanding between congress and the white house you can resurrect this agreement, which is on lifesupport . Tom i have to go to you on this. Joseph nye, his book america in the 21st century, it changed last night. Robert it is yet to be seen. America now, because of domestic problems, there is a lot of pressure to pull back from our global role because people want to focus on the domestic economy. The problem is that people have in their minds a sort of zerosum approach to this. You have to take an international view. It is all backwards in the area of you off,ve to cut ambassador, and i am so sorry for that. On thisoing to return historic morning. Later in the 10 00 hour, William Gross of Janus Capital will no doubt way in, with a bond volatility. Stay with us. Worldwide, this is bloomberg. Tom a surveillance fiction. The curtains will be changed. A shocked white house this morning as president obama waits for a forever changed america. This is bloomberg surveillance. We are going to speak so much about the Nation National relations, with Richard Haass and Robert Hormats. Ambassador hormats, Richard Haass, we were talking about trade and the idea of the almost unilateral power of a president on trade. Let me start first with Richard Haass. Tpp i believe it is dead. Is that right . Richard it is on lifesupport. No matter who won this election, there was not a consensus within, much less between, the parties to move ahead. Do you let it sit there . If so, for how long . Do you try to renegotiate it to address the perceived flaws . Can you imagine a deal, a site deal between this president and this congress that would address everything from work to retraining, currency manipulation issues, to other perceived flaws . That is an open question. Am you wrote a decade ago beautiful ending chapter to my book, expect the unexpected. The unexpected happened last night. Unexpectede with the of how you piece together a distinct department if you are such an outsider as mr. Trump. Robert people will be looking quickly at who he meets with right away. He knows how to present things to the world. He is good at that. He has been very effective. Who are his first meetings with . Are they with responsible people who have a depth of understanding about foreignpolicy . That will be very important to reassure our friends and allies. What does he say . The things he says in the next few days will set the trend for the way the world looks at him. Let me get back to Richard Haass point on to richards put on trade. Madison put in checks and balances on the system. The president can, for a variety of reasons, impose new trade barriers, higher tariffs, impose trade penalties. There is the International Economic Emergency Powers act. Is aine but there Republican Party that will not let him do whatever he wants, right . Congress has already given him authority over the years, starting in the 1970s, to do a variety of things, impose barriers on a lot of actsries if he violates considers that they are doing acts against the United States. Richard there is no consensus on trade. The era of the Republican Party that is profree trade is gone. The Democratic Party, with Hillary Clinton losing, the Democratic Party is most likely to move significantly to the left. That is where the center of gravity will be. That is also not a profree trade constituency. So you have to say the dynamics trade, if that free it is not dead, is on life support. Robert and the moderates sort of support the open trading system. If you take progressives in the Democratic Party and very conservative nationalistic people in the Republican Party, they converge around taking a much more xena phobic much xenophobic approach. It will be externally hard to negotiate a deal country by country. Tom ambassador haass, i know you have to run on two other obligations. What is the number one thing you need to do, from your experts this morning . Richard the world is what it is. You need to think about who is going to staff the new administration, how you reassure the world, which feels vulnerable to what happens here. You do not want everyone reconsidering their security portfolios. You face an enormous inbox. North koreas. Adres ands, the middle east, this is the most enormous inbox that any president has faced in this generation. Tom we will continue with ambassador hormats. Coming up later, with perspective and expertise on our game theory, Mohamed Elerian will join us on the new game theory for america. Stay with us. Bloomberg surveillance. Good morning. Francine donald trump, the next president of the United States. Trump was pushed over the 270 Electoral College votes needed by wisconsin, with strong report which strong support from white workingclass voters. Lets pivot as we look at his policies come january 21. Vladimir putin congratulated the u. S. President elect. We are back with Robert Hormats. When we listen to Vladimir Putin, he has graduated donald trump but is also hopeful for better ties. What kind of tie can we expect from donald trump to Vladimir Putin . Robert i think donald trump have to do a lot of homework about vladimir before he starts talking to him. He has to really understand that Vladimir Putin is not a person who operates on a basis of friendships or what he thinks about trump as an individual. They can be great at ease they can be great buddies, but vladimir operates from a position of russias best interests. As fragmenting parties like the National Front in france. Francine can they come together in the middle east . Let them you donald trump a telegram i did not even know they existed but a telegram saying that he hopes to find an Effective Response to challenges of global security. Is that how you deal with i. S. . Robert it is a noble thought, but the russians will be pushing and testing trump from day one. John kerry has tried, obama has out a deal inwork syria. The russians have demonstrated an unwillingness to it here to the deals that have been reached. Trump will have to do a lot of homework to figure out what kind of a deal can be worked out, if any. Tom that sounds like an hour conversation. To try. It is important just do not have your hopes too high. The russians have interests that are very different from ours. Francine this is bloomberg. Francine election 2016 is a stunning upset for the establishment. Donald trump was elected 46th president of the United States. Picturesooking at live from d. C. Of the white house and capitol hill. The president elect and Hillary Clinton are here in new york. For an election update, lets get to taylor riggs. Taylor it is a giant rejection of the political status quo, and the impact is being felt all around the world. Republican billionaire donald trump will be the 45th president of the u. S. , scoring a stunning upset victory over democrat Hillary Clinton. It is a result that is likely to affect americas priorities at home and abroad. Musthave statesnch o like North Carolina and florida. Trump as i said from the beginning, ours was not a campaign, but rather an incredible and great movement, made up of millions of hardworking men and women who love their country and want a better, Brighter Future for themselves and for the family. Clinton called trump to concede to speak publicly today. Vladimir putin sent a telegram to the president elect congratulating him. The head of nato has congratulated the president elect here. I am looking forward to work and president elect tromp, i look forward to welcoming him to brussels with , and intelect trump look forward to welcoming him to brussels. In challenging times with a new and more challenging security. And the new president will have a Republicancontrolled Congress to work with. Republicans held on to the senate. They will have at least 51 seats in New Hampshire and louisiana still undecided. Question is the future of House Speaker paul ryan. He was criticized for his armslength support of trump. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more i am taylorntries, riggs. This is bloomberg. Thatit is a headline defines america, just out across the associated press. The president called mr. Trump early today to congratulate him. It is suggested that mr. Trump may meet with mr. Obama later this week. Right now we meet with Robert Hormats of Kissinger Associates. Greg joins us. From purdueofessor university and author as well, clearly in support of secretary clinton. The audacity of hopelessness. To that, you wonder if you will see a democrat in our lifetime. How do women and how does the Democratic Party regroup . The democrats will have a rough election in 2018, losing more seats in the house and the senate. I am not sure this was all about her gender. One, people said they did not trust her. How do you get elected at two to one . One more point, she did not have a progrowth agenda. Whether it was taxes and regulation, she did not talk enough about growth. Francine was this a win for donald trump, or was this a Hillary Clinton loss . This is crucial with what we see with voters. Latter. Think it was the i think she would have lost by more if the ticket had been kasich or rubio. Does this say about how donald trump shapes domestic policy . To behe needs conciliatory, sending flowers to paul ryan today. A taxgoing to write reform bill, and i think he needs to take anything that paul ryan gives him. Tom the president elect talked about a movement. Is he a politician . Greg first and foremost, he is the greatest marketer in our lifetime. No one markets like this guy. He pushes the right buttons. Tom Robert Hormats, your expertise on fiscal policy, your wonderful book a number of years ago on the need for fiscal policy. That witht th President Trump and a house full of republicans . Robert that is a big question. If you look at his proposals, they will increase the deficit. Period, by about 5 trillion, down from an earlier estimate of 10 billion of 10 trillion. He has spending increases, including on infrastructure, which i support. This is going to be a problem. There will be a lot of republicans who do not want to increase the budget deficit. Trumps programs will. He has to work with kevin brady, who is the chairman of the ways and means committee. He has to work with the speaker republicans already have a blueprint. He will have to work with them and move weekly because the continuing resolution comes up december 9. They have to find some understanding even before that, even though he will not be president. I do not mean to be inflammatory, but what do we understand about his policies at the moment . We have a broad brush, very little detail on infrastructure funding. Those he has to work out details. The House Republicans already have a blueprint. He has to get together with a group of people very quickly to develop some sense of what the legislature will look like. He has broad concepts. How you translate those tom mr. Trump, if you are watching this morning, i know you live on fifth avenue. Can you fix 58th street . It is all about you, isnt it . [laughter] wrap this up with the vision and the moment that we have seen for the last year and a half. It is original politics. Frame it back not to Woodrow Wilson in 1916, but to the total cacophony of 1912 when everyone on the planet hated teddy roosevelt. Greg the antipathy toward washington is extraordinary. Trump really tapped into that brilliantly. People wanted to give the middle finger to washington, and they did. Robert and also to elites, to what they consider the privileged few who run the country, who run the financial system. America is not just divided today, america is fractured. Our society is fractured. There are groups of people who resent the establishment, think they are not being listened to, and many of them are not. So you have to find a way of listening to what they say and figure out a way of adjusting to reach the broader range of people. Brexite this feels like , like brexit times 10. But does it mean that a Marine Le Pen presidency in france is a possibility . Robert Marine Le Pen being one, and there are numerous other parties in holland, finland, italy. There are a whole range of these groups in europe who will say if the americans can do it and elect a populist from outside the normal system, so can we. Greg and the dark side of the story that will not go away is immigration. Tom now we have time to do immigration. Greg there is a path to citizenship. It will die in the house. The house will not touch that. Tom are you going to move to canada . Greg switzerland, maybe. ,om very good, Greg Valliere thank you so much. An exceptional day into the week as well. Later this morning, picking up the debris of the bond market investment. William gross of Janus Capital. Look for that in the 10 00 hour. From new york, thrilled you are with us. Bloomberg surveillance. Francine bloomberg surveillance, looking at election 2016. Rates rise following donald trump has victory. They are now at 51 if you look at the w. A. Rirp function on the bloomberg terminal. Still with us in new york, bob hormats. Eric, always a great pleasure to hear your thoughts. Before we get on to the fed, a broader question what does the donald Trump Presidency mean for the global growth, and the next six months . It is tough to say. The market has reacted less severely than i thought it would. People are nervous about what is going to happen. Longerterm, anything you heard is not good news because it is antitrade. Francine how do you explain the fact that the market tour model the market turmoil has now softened . Is it because they are looking at donald trump, which sounded more inclusive in his speech, or are they awaiting details of his policies . Number one, they are saying he was more inclusive. That it was a more friendly tone, giving you a feeling that this was a game played, that it was a big debate and the competition and i won, and now lets get together and do something good for everybody. People kind of like that side of it. So that is an important part. The other side is that it looks like the senators are in the republican the like the senate it looks like the senate is in republican hands. Going to say it is going to be good for the American Economy shortterm. Been an optimist. Does that change now with the populism in america . I believe we have a few other elections in europe moving forward. Does that change your optimism on the european political experiment . Erik i am getting more nervous, to be honest with you. I am not sure i share bobs conclusion that this will stimulate the nationalists in europe. I think it is more likely that you will see a stronger move by germany and france to do things together. It could be security internal and external. But certainly when there are dangers around europe, you have always seen germany and france get together and drive the european agenda. Conclude anything nationalistic for europe on the back of this one. Americas. Eak of two aheaddwards may be well of it. Are there two europes . Erik i think that is a fair point. Is toou saw in america some extent a reflection of the brexit vote and what you see particularly in france, the support for Marine Le Pen. Extent, mucho some less so in the eastern states. Globalizationof and i. T. , technology digitization, which has left a number of people unhappy. It is easy to blame others on it , trading partners particularly, trading partners particularly, immigrants and so on. It has been much harder to detect for the common man in terms of lower prices and better products than it is to identify people who lost her job and have up who lost their jobs. Francine were role can or should Angela Merkel play . I have heard a couple of emerges saying she can as the real leader of the free world. What kind of sense of cooperation are you expecting from Angela Merkel and donald trump . Erik it is going to be friendly and constructive. Sent was already a letter from tusk to invite him to europe and talk about the continued great relationship. I suspect trump would rather meet with merkel, and rightly so. This is democracy. We have to get on with it. In my opinion, it is unpleasant for modern growth, but we have to get on. She is not going to do any grandstanding here. She will go on with it and get the best out of it. Tom erik nielsen, thank you so much. We continue with ambassador hormats in new york. What a book world order was. Henry kissinger, writing a controversial book, chapter by chapter. Two chapters on america were the most foreign chapters within world order. Help me with the new globalization and the new america after what we saw last night. What is americas new order and our place in the world . Robert we do not know. Trumps notion of policy, or the emphasis of policy, is largely domestic. To the extent that he has talked International Policy in general security, political, economic it tends to be very xenopho bic. Xat is the point, other takeobic parties will heart from this. Secretary clinton redefined Economic Growth within our Foreign Policy. I believe we are going back to mercantilism. What is the zero sum of a donald Trump Presidency . Robert he has got to understand one thing, and i think his advisers will tell them this may soundlist policy good on the political stump when you are campaigning to be with economiccies xenophobia against trade agreements. A lot of countries are in negotiating agreements at all times. The asians are negotiating as we speak. We have to have some proactive policies. Even if we do not have tpp, we should be negotiating with. Ietnam we can be tough negotiators, but we have to understand there are markets out there and American Companies need more access to them. We need rules. Here, but theo go rules are within the uncertainty of what we observed last night. Robert if we are not on the playing field, others are going to write the rules, not us. Tom the data very quickly francine, help me with this. The issue here is chaos at 10 00 p. M. Last night. A substantial amount went to the market. Francine lacqua and tom keene. Stay with us. This is bloomberg. Tom good morning. Seismic shifts in Foreign Exchange as the balance of the white house last night down below mexico, 19. 86. Record mexican peso weakness, as a wall between the nations proxy, does better this morning. 19. 86, a far better state than we were with the loss of North Carolina, clinton to trump, last night. Francine coming up shortly is. Loomberg daybreak americas you are focused on trump plus victory, but there are about 25 angles on the election. All, will letf tom barrett with us, a close advisor of donald trump. And what comes next yak what is next for donald trump . What does it mean for investors . Radio with others as well as on television. And Mohamed Elerian also has a piece out already in the financial times, that this is a n copper to do to break out of a stagnating pattern. And Richard Gephardt will be here to talk about what will happen in congress. How can the democrats work with president elect trump . And what does this mean for paul ryan, and what does a unified government mean for policy . David westin. Coming up in five minutes from now. Bob hormats, when you look at the policy changes, the challenges for donald trump and america going forward, talk to me about the supreme court. Can he ensure and will he ensure that there will be a Republican Supreme Court for at least a generation . There will probably be three opportunities for him to name justices to the court. One seat is already vacant, so there are eight sitting justices. 80, soustices are over he will probably have to make two picks, or perhaps three. That will influence the court for decades to come. That will be very important. The question is, will the democrats try to block those republicans have tried to block the obama picks . Francine what does he do with janet yellen . Robert her term ends in february of 2018, so he will have a chance to pick another substitute for yellen, but also there are two or three other members of the board who will be coming up during his tenure. He will have a chance to reship the court and reshape the fed to reshape the court and reshape the fed. Tom it will be interesting to see whether the brother and of the supreme court, the cabinet, the administration, ambassadors fascinating to see. There are questions of who he meets with right away and who he starts aimed to his cabinet. Tom bob hormats, thank you so much. We will continue this on bloomberg radio. Absolutely extraordinary. Stay with bloomberg through this day. Jonathan good morning and welcome to bloomberg daybreak. Futures down by 364. I have to say, we were much lower than this. Risk assets are showing some resilience. You expect a weaker peso and that is what you have got. Dollaryen, treasuries, yields, higher. Bid. Ront and it is a curve steepen her. And that is the theme in the equity market and bond market. Alix here is what you need to know. Donald trump eat Hillary Clinton in a stunning upset of political establishment. Republicans delivering another blow to democrats by keeping control of the senate. Setting the stage for a broad conservative agenda. And the big question is, how will it impact the fed rate hike . That is what you need to know. Jonathan