David einhorn says it is putting inadequate and dangerous products on the road. Betty not one to mince words, David Einhorn. May be it is frustrating him overall because it is an example of the stocks that had been lifting the market that he has not been a part of because he is a value investor. I wanted to show a chart for our which showsbtv 440, you how much value stocks have lagged behind. More than half, in terms of growth over the last year, behind the growth stocks, the. N. G. s, the tech stocks. Buy into stocks like amazon and tesla not the boring old value stocks. Yvonne he is not the only Hedge Fund Manager that has been lamenting this. Is he waving the white flag too soon, given the rotation we saw . We did see more buying into the value stocks like the financials, theyre are up 15 in september alone. Going the other way. Perhaps he is speaking too soon breaking outelds to 2. 4 percent. Could be adding fuel to the fire in this bank rally. Betty i would be curious to hear what the godfather of investing has to say about this, warren buffett. Meantime we have blowout earnings reports from major u. S. Industrials. Rallyeld the wall street along this tuesday. Ramy inocencio at the wall with the latest on the markets. This is where we stood at the close for today. The big thing to remember is, the dow rose 168 points, up 0. 7 . This is a new record. The s p and nasdaq closed up 0. 2 . Not records, but continuing to climb we have seen this year. Lets take a look inside the bloomberg terminal at the mmr function, the memberranked return functions for the s p 500 over the course of the last trading day. Look at the green, the bestperforming stocks. 3mst had to do with earnings, and caterpillar up 5 . For example, they got a big boost over the Third Quarter from the falling dollar. We know it is higher over the past three or four months. During the Third Quarter it had fallen as much as 4 . When they repatriated earnings, they got a bump. Caterpillar getting a bump in terms of revenue from overseas. A lot of it comes from emerging markets. General motors getting a big bump because of better sales for its suvs. Lets go to one more bloomberg terminal chart, g btv 394. Look at the tandem moves from caterpillar. Caterpillar is in white and the msci emerging market index is in blue. They have been moving together. This is almost parabolic over the past year or so. In large part, because of what is happening in em. From overseas. Es a large part, from china. Yvonne could be a good indication for some japanese construction stocks, as well. Lets take a look at how markets in asia are faring so far. Not seeing the exact type of optimism in new zealand so far, flat on the nzx 50. The kiwi could be sliding further after reaching technical levels,. 5906. We did see a choppy day for them dollar. Dollar. The fed thanks john taylor can make a good fed chair. At the sydney open, stocks up 0. 25 . Expecting price gains to climb back to 2 . 16th straight day on this winning streak, a recordbreaking one we saw yesterday. Looks like we can be continuing highrally on this abe after the landslide victory for the Prime Minister, 113. 94 for the dollaryen, just kissing 114. Kissing met gop senators to push ahead with tax cut plans. Republicans have complained to the president is not clear about what he wants in it. The spat widened between the president and senator bob corker. Trump called the senator incompetent, while the senators said the president was debasing the united states. The social graph this just as group come out the end aa cp the naacp, said they have seen disturbing incidents from africanamericans. They are alerting travelers, especially africanamericans, to be careful. Airlines couldan subject them to unsafe, discriminatory conditions. Spanish Prime Minister mariano crisis ining the catalonia. The socialist back tim come up there trying to crush the separatist movement. Party leadership is worried the crisis may escalate out of arerol if the catalans backed into a quarter, with no options besides secession. Inject more than 30 billion into statecontrolled lenders over the next two years, 10 times its previous pledge, as it seeks to spur growth. That includes spending more than 100 billion on road infrastructure. Indias economy is growing at the slowest paced in three years pace in three years. Reports from japan suggest shipment of the iphone x will be 20 Million Units, about half the number analysts have forecasted for 2017. The report says they are struggling to deal with technical issues. They have opened talks with other suppliers to make the problematic components. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers, this is bloomberg. Twice in a decade top leadership reshuffle will be complete today and may shed light on xi jinpings Succession Plans. It fell as the communist partys decision to elevate the president ial power, not seen in generations. Tom mackenzie is in beijing with more. We want to know, who were the most likely contenders . Betty tom tom it is still difficult to say, about 204 people on that list. Normally, 25 members one we are focusing on has been dealing with the trade relationship between washington and beijing. He may be elevated to the standing committee. Province. Rom a and another, an ally to theident xi and led up propaganda arm when president xi ran that province. Trustthe economic brain is staying on in the central committee, some say or suggest the economic reform plan will continue in line with what we have seen the last five years. We also saw a stepping down of a man who led this aggressive, Anticorruption Campaign by president xi. How much of an influence is xi likely to have, Going Forward . Growth at all costs, has that shifted after this meeting . Tom his influence is expected to last for decades. He has been elevated to this level, along with mao zedong. According to the Economic Framework he laid out, youre right to point to the shift. It has been described by some as a watershed moment where he has elevated the need to tackle inequality on the same level as the need to generate economic growth. The priority has been growth at all costs. Now, he has squarely put the focus on tackling inequality. In that sense, it is a shift. Inequality and pollution issues. We are that impact the state sectors and corporate said sector. We have heard from jack ma and the company wanda, they will build Business Strategies in line with this focus. That will likely impact potential property taxes. You may see levees in terms of environment and pollution aspects. Potential,ll concrete scenarios that may come about as a result of this. We also have a new focus during the speech and in the Party Opening up the market the foreign investments. Some have said, expected moves on that front in them the months after the Party Congress. Yvonne a big day in china, with that reveal in a couple hours. President xis speech, live here on bloomberg expected around 11 45 a. M. In hong kong. Lets bring in mark chilton, senior policy advisor and former head of u. S. Commodity futures trading commission. Studio. D us in our we talked about the narrative change, expecting economic reforms. But this is more about revitalization of national interest. How do you think is xi jinping forward with consolidated power will balance stability versus financial reform in china . Not with l. A. Piper anymore, but that is a good thing. Because i am unshackled from conflict. They say, do not talk about this or that. I am free to speak as i want. The president has a new lease on mice. On life. Not that he was not already powerful, exalted in china and around the world he is filling an important vacuum filled by President Trump in the u. S. , who seems to take a more isolationist approach and does not want to be involved in too many things. Although he is making his foray into asia, starting next week or it seems to me that president xi is doing so many good things to address inequality, and particularly this belt and road initiative. It is so exciting. Betty compared to the u. S. Yvonne compared to the u. S. And we have not heard much about infrastructure. Bart i was talking about highspeed rail in the u. S. , said you have to go to an Amusement Park and ride the screaming demon or something. Betty good to see you over there in asia. With the president about to arrive in asia and particularly in china, i am curious. We have seen so much in the last 12 months about trade tensions with our asian counterparts in particular in china. What do think President Trump needs to deliver . What do they need to get out of their relationship when he makes his trip over there . Bart hi, betty. I think not stepping in it would be a good thing. Not talking about destroying any countries and not making crazy demands. Help usy, will you here, but we will mess you up on trade. Some sort of levelheadedness would be a good thing. I speak with a lot of folks, not just in the states but here. I gave a speech yesterday. Even republicans, President Trumps party, are fairly embarrassed of some of the things going on in some of the dialogue. I am just hopeful he can represent the country in a dignified fashion. If he can get something, particularly with north korea, that has to be above Even Economic issues related to trade he has to focus on. Thene to bring you back to chinese markets, we have not recovered from what we saw in 2015, the botched reform. There is boom and bust in the stock market. You mentioned than that china blew it when it came to regulation. How do you see things now . What is the right prescription when it comes to china and how it could open its markets . Bart it is a great question. By and large, chinese regulators have been good. They blew it a couple years ago when they tried to put Circuit Breakers on, a command and control balance china has to deal with. How much do they regulate the stock market . What is the right thing . They placed the Circuit Breakers that really messed up markets. Yvonne are they still gun shy when it comes to implementing more reforms . Bart they are. A great example is what they did a few weeks ago with stopping the trading of Digital Currencies. And a few weeks before that, disallowing initial going offerings, the icos. What china is doing what is hong kong, promoted here in hong kong, is be riskaverse. They have the belt and road and all these things in their economy Going Forward, everything looking great, 6. 8, 6. 9 gdp, better than they predicted earlier in the year. To me, they do not want to risk it with having Digital Currencies go south on them. The Reputational Risk for china is more important now than ever. Betty we are going to talk more with you in a moment, not just about china, but a specialty of yours, regulation and tax reform in the u. S. Withll talk all of that bart chilton. In the meantime, donald trump asking republican senators for a show of hands on the next fed chair. More on his secret straw poll, later in the hour. Yvonne that was unusual. Businessut teslas model, what David Einhorn had to say about elon musks leadership. This is bloomberg. Betty this is daybreak asia, i am betty liu in new york. Yvonne i am yvonne man in hong kong. And bob corker have intensified their feud, this time, over taxes. After calling the president to stay out of the tax reform effort. Donald trump said bob corker cannot get elected dog catcher in his home state of tennessee. And bob corker said it was an untruth from an untruthful president. The twitter feud really became the headline here today during this lunch with gop senators. It was a very interesting day on capitol hill. I would say it is unusual, but this is the new normal. Trump were feuding, with interviews in the press and on twitter. Hill,came to capitol corker was in the room, and it did not come up at all. Perhaps both were restrained on their part. Moments after the lunch ended, senator flake, from arizona, said he was stepping down in 2019, was not going to run again. He gave a very impassioned speech on the floor, saying he was disappointed with president ial leadership. It was not a day for gop unity. Does this help tax reform . We will see. It may not heard it, but i do not think it will help it at all, because now you have two senators not big fans of the president , who are totally untethered and do not have to respond to an election in coming years and be more principled ut one what they want about what they want to see. If these guys do their own thing, you have a lot of other players, and this whole thing could fall apart. Republicans are banking that this is what they can get done this year. There is a sense that health care sales, they were not able to get big, legislative accomplishments done. But if they get Health Reform it could be a nice christmas present. They are going to unveil the bill on the house next week. Through six or seven steps before he gets to the senate. Betty politics. Once you stop running, then the truth comes out. Our discussion with bart chilton, the former head of u. S. Commodity futures trading commission, also senior l in theto tom dashel senate. You have seen all the wrangling, i know you are a veteran in washington. Do you think tax reform is nearly dead . Bart 0 chance it is getting done this year. I do not know what they are smoking 0 , cannot see it. Maybe a month ago i could have gamed it out. If i were smoking something. But i do not see it. Betty why . Bart a couple reasons. There are all these controversial issues, pesky policy stuff like 401ks, and what are the levels . The numbers are really tough. The president and republicans are trying to do what they did with health care that did not work out so well because they tried to do it on a partyline basis. As was just reported, the republicans only had a two seat majority. But if they did with the president talked about earlier on, trying to meet on the middle in the middle, democrats want tax reform. They could get 65 or 70 out of 100 votes, instead of trying to get 50 or 52. You know people in the last 20 minutes, four or five senators that will probably vote against it. I do not see it happening. Betty you do not see it happening, but the president , a lot of political will on his part to get it done. Steve mnuchin continues to say we will get it done by the end of the year. Why do not believe them . Bart they are pollyannaish. I hope they are wrong, i want tax reform. They wanted to do repeal and replace obamacare on day one, a 1 trillion infrastructure bill. They are wrong. Odds, i just do not see it. If i worked up there for 12 years i worked up there for 12 years. Going onl you what is there, what you reported about the bickering and High School Bullying backandforth and the speech by senator flake, that is a big beetle. It is one thing, that tipped at being in the chamber and senate and saying those things about how the president is not truthful and hurting our democracy by a member of his own party, that is really serious and significant. Yvonne corker flight, are they just the minority . Or is this the sense the gop is self sabotaging . People listening to those two . Bart i do not know if they are the majority, but there is an undercurrent, a silent majority of senators who feel the same way. But what are they going to do . This is their leader. A lot of them are up for reelection, despite the president acts like this, he carries a lot of weight. A lot of these senators, 10 of them, are up for reelection. They may be faced with primary challenges of they are not towing the line behind the president. Former advisor steve bannon has been urging. Run against these guys that they do not step in lockstep with the president. It is a dicey circumstance. Yvonne he wants to bring in challengers to the incumbents, of course. When it comes to what the gop can do, everyone is circling april 1 as next years deadline for tax reform. What can they do from now until then to change the course of it . And taxrid of state reduction does not enough to pay for it at all. They do nott have the actual proposal, it looks like about 6 trillion and they are only budgeting 1. 6 trillion. People should be wary when they hear dynamic scoring. When someone says dynamic scoring, watch out for your wallet. That means what we do will be so gangbusters great, it is going to add revenues to the federal coffers and we will not need to worry about the deficit. We have about 820 trillion debt 20 trillion a debt right now. Republicans ask like act like they will be fiscally conservative, but are now saying, we will use this dynamic scoring. I wrote a book about scam artists and when they talk dynamic scoring, watch the heck out. Betty a red flag to you, bart. I am curious, being you are a long time veteran in washington, what do you make of the speaking out that we have really never seen or rarely have seen . Bob corker and now jeff flake. What do you make of them is speaking out of turn to their own party and criticizing the president so harshly . I think it is the degradation of the american democracy. We will kick back, we are resilient. I have worked on capitol hill for so long, i am probably part of the problem. This is a time when people like neil andmeal tip o Ronald Reagan could work together, after 6 00 they could hot a hot Party Together toddy together. Those it can work across the aisle, there are a few of them left, but they are a minority now. I worked for Senate Majority leader tom daschle at the time. You try to get a yes with the votes and work across the aisle. Yvonne you say they dont look at deregulation, that is actually happening, and israel. How much are we seeing their . Bart you are seeing a little deregulation. I had a lot to do with writing frank. F god frank dodd is u. S. Financial sector stronger than any other sector around regulations, it actually helps confidence and markets. ,vonne thank you, bart chilton former commissioner and washington veteran. This is bloombe