Next Years National elections. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. On mark crumpton. Im mark crumpton. This is bloomberg. Julia live from bloomberg would headquarters in new york, im julia chesley. Scarlet im scarlet fu. Joe im joe weisenthal. Julia the little stocks are here. Investors poised and ready ahead of the big news. Joe the question is, whatd you miss . Scarlet President Trump says he is very, very close to naming a new fed chair. What each candidate brings to the table. A critical week for catalonia. Separatists talk about mobilizing a human shield to block efforts to as a control of the breakaway region. Venezuela might be meeting the end of the credit road. The country faces two huge payments in coming days. Julia whatd you miss . In japan, shinzo abes governing coalition has held onto the two thirds majority in yesterdays election. That was a gamble for abe who decided to capitalize on how he has been handling the north korean situation. Stephen engle has more. Japanese stocks again for a 15th consecutive session. Shinzo utleys Ruling Coalition won a majority in snap lower house elections here in japan. Now that the Political Uncertainty has been removed, we can move onto the agenda that mr. Abe has put forward for perhaps the next fouryear term. The agenda includes more abenomics, the cocktail of fiscal spending and more monetary easing as well as fiscal stimulus, spending on social issues such as health care and daycare for the young. Abe says he wants to govern in his next term with more humility but also wants to tackle a raising of the consumption tax in 2019, which here, as unpopular well as reviving the pacifist constitution in light of the growing threat from north korea. Stephen engle, bloomberg news, tokyo. Julia now for more on what his victory means, lets bring in scott. Great to have you on with us. Clearly this is a divisive, decisive victory here for Prime Minister abe. Just tell us what you think his Top Priorities are now domestically but also internationally. Scott so he definitely wants to use the victory to kind of put additional momentum behind his effort to revise the constitution, although that is still a very controversial policy item, something he has close to his heart but that remains quite unpopular, so we will see him accelerate the progress they are making in kind of putting the plants together for that, but he will have to take a soft approach. On the economy, more abenomics. More monetary easing, more fiscal spending. The Structural Reforms are probably going to be relatively slow as they have been for the past few years. , hehe International Front has President Trump coming in at the beginning of november, and that is going to be a very big summit for him. Joe on the abenomics, obviously the package of monetary easing, easing structural reform, various aspects have been in place now for a number of years. Is there anything going to change, or is it more of a continuation of the status quo . That will beories accelerated or anything different to watch for in the new term . Scott so on the labor reform they have been kind of dragging their feet on that for a number of years. It is an issue that always has strong voices on either side of it, but he has talked about wanting to now move forward and try to loosen up the labor markets, make it a little easier for people to move from job to job and introduce some needed flexibility in what has been normally a pretty rigid workforce. Honestly, i think that most people see this election as just a confirmation that we are going to see a lot more of what we have seen over the past four years. Scarlet does that mean we are going to see another delay of this consumption tax hike . That was one of his key campaign pledges, which i do not quite understand because it does not mesh well with abenomics, this idea of easy spending and fiscal Monetary Policy. I im alike to be able would love to be put to look into the crystal ball and see if he follows through on that pledge. We have seen two times in the past for he has decided to postpone it, arguing the economy is not Strong Enough to withstand that kind of shock. It is slightly unusual because he has been talking about fiscal spending and the tax revenue normally for a consumption tax has been planned to go into paying off the debt, but he has talked more recently about siphoning off some of that money and putting it in other places, boosting childcare and welfare programs. That is probably the way he is going to get a little more Popular Support behind the idea. Scarlet on the other side of abenomics his easy Monetary Policy. What is the likelihood abe will on asr the person to stay the bank of japan as opposed to asking for someone new . Scott i think certainly mr. Corona has the inside track. His second term to have if he wants it. I think the one wildcard is really nobody knows if he wants to continue or do Something Else. He is 73, maybe 74. Even if he wants to spend another five years fighting with deflation at the bank, maybe other people around him, his family, maybe they have a different view, but at the end of the day, even if it is not him, it is someone who will have similar views on Monetary Policy. Julia about as far as the International Profile . You see the u. S. And President Trump stepping back from the asian region. Japan clearly wants to be a great counterbalance to china in the region. How does that filter into their right to have a military and the tensions that would create within the coalition itself . Scott abe has long thought that then the Political Risks, geoPolitical Risks in the region, whether it is north korea or the rise of china, it is really incumbent on him and japan to ensure that they have an independent capability to defend themselves. We are always going to be part of a very Strong Alliance with u. S. , and we have seen them cooperate more even with south korea, which is a positive development, but he really feels like at the end of the day, if something happens, japan needs to be able to stand as much on its own as possible. Scarlet i want to go back to something we talked about earlier, which is abes intent to revise the constitution. Do vote is prioritized japans ability to form a military as much as shinzo abe does . Scott no. That have generally shown over time, people have become more comfortable with the general idea of revising the constitution. It has not had anything changed it since it was first put together after the war. It does need some updates, according to a lot of people. But they just do not see it as something that needs to be highprofile items. Certainly not something that abe should be spending a lot of his capital and Political Energy on. Joe all the rhetoric surrounding north korea between has thed kim jongun, head impact or play into japanese politics . Scott certainly. I think there is a lot more concern about north korea. As you know, north korea has been shooting missiles over japan. They are doing drills, which are making a lot of the population quite nervous. That has actually boosted abes status. E does well on the world stage he projects himself as a very strong leader on security and defense issues. Ismany ways, kim jongun partially responsible for the victory yesterday. Scarlet interesting take. C. , thank you for joining us. How will the ecb decision affect china, and are they possible to survive a possible recession . From new york, this is bloomberg. Scarlet whatd you miss . The European Central bank holds a policy meeting on thursday when it is expected to announce a stimulus plan for 2018 or what it does for stimulus at least. The senior economist discussed his protections for ecb policy with our mark barton. The miscommunication has been remarkably clear and consistent for this future extension. Does not mean there will not be any surprise, by the way. There could be some Technical Details that can be unveiled in december in terms of the modalities of the qe composition or Investment Policies that could all help to surprise the market, but the bulk of the decision we expect this week should indeed be consistent with the longer qe extension. Even the books at the ecb seem to agree on that kind of extension, whether it is 25, 30 billion, even slightly more, 35. That can make a slight difference. Mark do they give an end date . How important is stipulating an end date . The survey suggests it comes to an end in september. If necessary, they can extend it further, but is it wise giving an end date . I think it is way too risky, to be honest. It is not in mr. Draghis the innate to take such risk at this particular juncture. Inflation, lets repeat that very clearly, inflation is the measure the ecb is looking at more closely and just about 1 . It is too far away from the 2 target. Dateu indeed call an end and commit to an end of the program now with the euro where it is, the euro is exactly at the level the ecb staff were expecting in september, but any further appreciation would put inflation outlook at risk. I think it is a mistake and a mistake the ecb will not make. Mark does the ecb have enough tools in its arsenal to fight the next recession . I am not suggesting that is going to happen anytime soon, but just looking ahead, does it happen of tools . Is it a wellequipped enough to fight the next recession . You are asking all the right questions, and this one is the most difficult one. It is maybe too early to say, but i think the past position for the ecb is to use the same tools at as before tool as before. For guidance on the reinvestment to keep the Balance Sheet at a constant sighs like the fed has been doing in previous years and guidance in terms of policy rate. That is the First Response will be likely the tool the ecb will focus on to keep rates low. They cannot address the negative rates. But the main rate, which is currently at 0 , will likely remain low until well into 2019. Believe, will be the first answer to potentially a recession. Scarlet that was fredrik, senior economist, speaking with our mark barton earlier today on bloomberg markets. Julia time for the Bloomberg Business flash, a look at the biggest business stories in the news right now. A big transaction in the Insurance Industry today. Thanrice a little less 1. 5 billion. Dding to earnings next year the shares fell by more than a year earlier today. Allocatens over how to the revenue on wednesday. Manchester united, arsenal, and chelsea own a large share of the 1. 3 billion a year the league gets for overseas media rights. They want a structure that awards the First Place Team twice as much money as a clip that finishes last club that finishes last. Maybe the grinch that stole christma. It is leading to late nights for workers of fans rushing for the biggest realtor a change in a decade. The head of currency trading says it can ruin some peoples christmas. That is your Bloomberg Business flash. Scarlet it is time now to return to our stock of the hour, and we are focused on hasbro, the worst performer in the s p 500. Shares falling sharply today, off by mor. Abigail doolittle has been checking out the damage. A lot of pain here. Abigail yes, there is. The shares have fallen off a cliff. The team is good at managing expectations. It is the outlook for the Fourth Quarter. A growth of 4. 7 . Analysts had been looking for 11 . Anything below that equates to the miss so this could be a reset. They manage lots of the could be setting the bar low. Toys r us in bankruptcy. This is really pretty interesting because toys r us is a big customer for them. Here is hasbro. These are the suppliers on this site. Walmart of top. 18 , walmart really taking over the world along with amazon. Target, 9 equaling toys r us at 9 . There is amazon relatively small at 3 . For the rest being in bankruptcy hasbro is delaying shipment. Toys r us being in bankruptcy, hasbro wants to make sure they get paid. Joe even though toys r us is nothing like his former self and bankruptcy and all that, it is a huge part of the toy industry ecosystem in a way that the other Companies Like walmart and target just are not. It is interesting about toys was because it is not they what is ahead. They are saying this will impact the Fourth Quarter results, but it could lead into 2018. Toys r us has a huge real estate footprint. What if they cut stores, reduce the size of the stores . It is not entirely clear how that will impact, but the potential for lower customers can certainly affect the shares. A longterm chart may suggest there can be hiccups again even on the company is we setting the bar here. This is 1039 in the bloomberg, a longer term chart. We have a nice uptrend here. Buyers are in control. Back in 2011, when the u. S. Debt rating was cut and there were ripples, it has not consolidated to the longterm uptrend in a while. Right here, this pockettells us investors got very excited. The fact that it is starting to reverse those as investors are reconsidering that initial position if the entire area reverses back down. It happens to me the uptrend, suggesting there could be declines ahead for the shares. Julia what are they doing to try to mitigate that, diversify . Abigail that is a great question. We had a picture of my little pony there. So cute. Wars, theyony, star are really going to their online and entertainment brands and trying to build this out. The interesting thing about that highermargin,s amazon, walmart, target, they are other big companies, big customers. They know they are getting hit to some degree by toys r us. That an impact margins. Lots of moving pieces here. Nobody really knows the changing landscape of retail in the toy space. Julia toys r us is still operating. Scarlet it is going to be operating over the Holiday Season because that is where they will try to make their money back. Thank you so much. Coming up, the sign of your real estate slump in china. Why the trend could be welcome news for president shes ping. From new york, this is bloomberg. Scarlet whatd you miss . Seems like Everyone Wants to be in emerging markets these days. We got this global synchronous narrative. R t that is a bunch of etfs track the emerging markets. This one, however, this is the ishares core. Iemg is the youngest and the favorite as well because since it began trading five years ago, it has not seen a single day of net outflows. All inflows. Go to 2017 and take a look at what has been happening of late. 15 billion. Year, which is the vwo, largest emerging market etf issued by vanguard. As for the differences between these different etfs, ietm, more than 2600 large and mid count names. This gives you a broader exposure. Brawl in the etf wars. They are all cannibalizing each other. Scarlet different when you look under the hood. Joe good point on that and remarkable surges lately. Lets talk about china because they came out with their latest data on how many cities are seeing real estate prices gain and lost. The fewest number of cities are seeing real estate, price increases just over 40. That is the lowest since january 2016. If we go back to really of this year come over 60 major cities were seeing price increases. This is important contacts. There have been efforts throughout the year and in recent years trying to tap down as speculation in real estate. We also heard during the recent part in congress the mantra or idea that real estate is for ,iving in, not for speculation so it is a theme they keep trying to hammer, and you get these periods were real estate takes off and they try to tamp it down and it takes off again. Speculation seems to have cooled a little bit. Julia the question is, does the pollution have anything to do with what you are moving if you are living in china . Have you heard of the caqi, the china air quality index . It is not talk related by the chinese. It is calculated by the u. S. The epa. What it does is it caught deletes the five major air pollutants regulated by the clean air act. Ozone, particle pollution, carbo carbon dioxide. On the righthand side, you can see the ratings. 50 is good. 51 to 100 is moderate. Unhealthy above 100, which is here. The top line is 200 and we had when you are at 300. You can see where china is on a daily basis here. Look at the december readings. They spike. The highest level on their index is 300. If you look at these ones, this is around 600 or approaching 600. Level, double beyond the where the pollution levels in china are deemed unhealthy. Joe go to instagram and look at beijing photos. You will see how much smog there is. Scarlet the little masks people where will not do anything. Julia no. You cannot see 10 feet ahead of you. Incredible. Scarlet take a look at the major indexes. This is bloomberg. Julia whatd you miss . Racingstart of the week to record highs. Im scarlet fu. Joe im joe weisenthal. If you are tuning in live on twitter, we want to welcome you to our closing bell coverage every weekday from 4 00 to 5 00 p. M. Eastern. Scarlet lets begin with our market minute. So much for record highs at least for the start of this week kumal which will be critical when it comes to earnings. Lots of companies reporting, including quartet of big names on thursday. The dow closing down. Points, andng up 10 the nasdaq losing two thirds of 1 . Joe you know, not a huge selloff, but my recent standards, still pretty shocking to see these kinds of numbers. Scarlet the dow gave up earlier gains as well. Lets get you to some of the bigger names that are putting a drag on the index. General electric all i 6. 3 . The Earnings Report came out friday and was disappointing as a big miss in every way possible. Yet, the company recovered off