We start in the United States, with a Democrat Doug Jones this week delivered a stunning upset by beating republican roy moore in alabama. That since the Republican Senate majority to just one. Kevin cirilli joint to myself as the results came in. We are hearing he will come out and address his supporters any moment now. But the republican majority in the senate is razor thin, down to one vote, the number of votes republican can lose. There are host of issues, that is the only vote they can lose. With tax reform coming, this is the bottom line. Doug jones will likely take office sometime the week after christmas and before january 3. Tomorrow, President Trump is going to meet with a Bipartisan Group of lawmakers from the house and the senate on the Conference Committee to finalize the details of the tax reform package. If republicans want to get this done by the end of the year, they have to do it before doug jones gets up to washington, d. C. Because of that razor thin majority now is down to one vote. Republicans arent unified on that reform plan by any means. Senators like Susan Collins have concerns about it, but this puts a lot of pressure on them to get this done before the jones takes office. Yousef kevin give us a sense of , how this effects the power dynamic between the administration and players in the senate in the republican party. It is a razor thin majority but a majority nonetheless. Might this still fire up some other conversation basically the beginning of a domino effect that could actually swing the outcome of the tax vote . Kevin we are hearing from Top Democrats are ready, including tom perez, who has praised doug jones for his victory. It is the first time in more than a generation that a democrat has won a senate seat. In addition to that, i would youre the tension absolutely right, there is tension between the Senate Majority leader Mitch Mcconnell and steve bannon, the former chief strategist, it is palpable to say the least. Steve bannon was the architect behind roy moores campaign. It is a stunning defeat in a deeply, deeply conservative state. It is a stunning defeat in a that President Trump carried against Hillary Clinton easily, by double digits easily. So this is a really significant , blow to steve bannon and his political coalition. Think a lot of republicans are going to be scratching their heads, trying to regroup tonight as they head into the 2018 midterms. Democrats are celebrating tonight to say the least. Yousef staying with the United States, and as expected, the Federal Reserve raised rates this week. The fomc also upped its forecast for Economic Growth but stuck with its projection for three hikes in the coming year. In her last post policy decision news conference, chair janet yellen says they expect the labor market to remain strong with sustained job creation, ample opportunities for workers, and rising wages. They obviously are still playing to the room. It misses a lot of the demographics, of those influences on markets. One thing i think about is if you look across to japan, they got record, record lows in unemployment, and they still cant see growth picking up. They have the worst issues with demographics. This is a phenomenon of technology in demographics around the world today, and we still are globalized. Wages are going to go up, and they can move to other countries around the world. That is going to keep inflation still relatively steady. This year, obviously we have , some influence coming through from the oil price, the appreciation coming through. They will peter out once we get to the back half of 2018. So once again, particularly if you look across to europe you , could see lower inflation rates again, rethinking the whole process. Let me jump in here and talk about the weakness we are seeing in the dollar. Some investors are struggling to get their head around it, given they had an projected increase in growth from 2. 1 to 2. 5 . We put this up on a chart to get the additional perspective. The dollar disconnect, the greenback lagging, even as people are pricing in the rate hike. You also have the oneyear forward. This is for additional context. Is this dollar rout going to continue with a rate hike course that is pretty much said going for, and a possible tax cut being built into that equation as well . Well, the u. S. Dollar has been on the weaker side, but this is the range we have been in since 2015. So we are right at the bottom of , it. The sense is that the market is still quite short, dollar is still quite bearish. Tax cuts didnt overdeliver. What i would suggest is that its probably going to be quite bullish coming through once we get the realization of the tax cut, and once we get into the First Quarter and Start Talking about tax hikes again. The rest of the world isnt catching up at the moment, so that carry you are looking at has a huge influence on where the dollar plays out. The only downside at the moment is people will stop thinking about that fiscal deficit again. Its really starting to build up, will it be taxed mutual . Will it be tax neutral . That has been one of the key things as a key deficit, why the dollar has been weak for so many years. Are we going to get back into that trend again . So, understanding, is this going to be fiscal neutral or not is going to be key to the longerterm perspective. Yousef how confident are you that the inflation figures are going to pick up into 2018 . Because so far it has not really , come as expected. I think this is around commodity prices. This is more of a headline number and not necessarily the core. We dont have enough evidence now that we are seeing the wages building up at this point. , it has bottomed out, but we are not seeing a dramatic lift across the board. We are really focused on the headline numbers. This is more around the commodity prices. Then obviously, we know the moment and is it going to be there going forward, so you are going to start seeing headline numbers tapering back down to Core Measures again. The fed is not that particularly worried about inflation or they would be will behind the curve right now. Yousef and lets talk about this from a market perspective. We obviously touched on the it dollar. Is interesting that yellen, herself, talked about the flattening of the yield curve. Her doubt that it will be flatter than in normal times. But it is not going to indicate any kind of recession. Trump is talking about the verge of an economic miracle, and a look at what janet yellen says, she doesnt see a gigantic rise in the economy. Are we just talking about tax way too much in terms of its propensity on the consumer side . On the retail and consumer side . Well the way i think about , this is if i think back to when they flooded the market with money previously, the one thing they didnt think about was that the velocity would collapse, and the money didnt get into the real economy, and that is the asset price appreciation. So you can think about the tax cuts exactly the same way. If it is going into the corporate will it get into the , real economy or will it stay in Financial Markets . Ceosight, we saw some saying they are going to do some stock buyback some a which is good for the economy. From our perspective that is not getting into the real economy. We will see how would get spent. Obviously, there will be some benefits, but there are some offsetting factors around state taxes as well when you may not get as big of a deduction. We need the finer details, and the government giving us a boost. Yousef coming up next, abu dhabi gets its biggest ipo in a decade with a listing of fuel distribution unit. We hear from the deputy ceo next. This is bloomberg. Yousef welcome back to the best of Bloomberg Markets middle east. Shares of the fuel retailing unit jumped wednesday morning. The ipo was the first listing in the city for more than six years, and was also the biggest in a decade. Bloombergs Tracy Alloway spoke to the deputy ceo. We have been extremely pleased. We are bringing in International Investors to abu dhabi. It has been a huge achievement for us and has been significant. The first time in 10 years, the biggest ipo in 10 years, and we are really happy. Tracy so give us some color on the investors you have attracted. What percentage are international . Does. With 30 of the investors are international. When we went over we spent a lot of time in new york. The ea yout shown in around investment has been in the uae run investment has been hugely [indiscernible] it allows us to accelerate our business plan, that level of International Investment will also [inaudible] its a great sign for abu dhabi. It shows a lot of confidence in abu dhabis market and economy. The overconsumption of additional distribution was a strong signal. A lot of investors were for multiple institutions. We noticed that much of it comes from foreign money showed a lot of interest. Are there more listings to come and how many do you expect over 2018 . Indeed. I would assume many are coming. Gas of them within oil and and some from other sectors. Coming into three another ipo. Ofshows there is a lot interest in the market. Usthe ipo itself helps accelerated live our initiative forward. Ensures confidence in our business and to get to a level of transparency internationally as well, which allows us to build our plans against international benchmarks, and really become a worldclass business. I think that is the important part. Tracy right. You are talking about driving the business forward. Can you give us an investment figure for your expansion . Do you have a certain amount earmarked for that . We have declared that we will invest [inaudible] we are looking at expansion in saudi and we have a business that has good Growth Opportunity inside and outside the region. [inaudible] in abu dhabi, i think we are [indiscernible] saudi arabias modernization drive got another push this week when the government announced it will allow commercial cinema back into the country for the first time in more than 35 years. Meanwhile, a source told bloomberg that the kingdom is planning to raise the most a cash planning to raise domestic gasoline engine fuel prices in gradually raising gasoline engine fuel prices in january, part of a program to gradually eliminate energy subsidies, and balance the budget. I spoke to the head of equities for rasmus investment bank. This comes as part of the reform programs, listing subsidies, improving the usage of government resources, improving the liquidity of the government. And this was, lets say, coming sooner or later, whether it is utilities, fuel, among other subsidies. So, it is not that it was something that started, and then they just forgot about it, or it is complete. It is a Multiyear Program you will see bits and pieces of every little while, and that is how it should be staged. If you bring all these reforms at once, you could put the economy in a shock, and that is what the imf and the experts pointed out, the easing of the implementation of these programs. So, this is coming. We have seen that happen in other parts of the gcc. It happened in the uae. It has its discomfort at the beginning. In terms of the market we put up a fabulous function, the market relative undulation. This puts it all into perspective in terms of dividend yield, and then it gives it a valuation score. If we go over, it is. 51, which means it is relative to its peers and is actually expensive. How more specifically in terms of sectors would you invest in the kingdom . I would agree and disagree at the same time. We look at saudi is a longerterm story, extremely attractive. In the sense, the reforms that the government has embarked on our interesting and are valuecreated, generating a lot of his miss for the private sector and will have a trickledown effect. That is something we have also seen in other parts of the gcc. The difference in saudi arabia which i think needs to be quantified better is the social reform as well that comes on top of the economic reform. So, whether it is the cinema that you mentioned earlier, the housing program. The housing programs but not only just create demand on Building Materials in new houses, but also you think you need to stop all those new fridges that will be installed in these houses. So the social reform is just another layer, and increases the attractiveness on the opportunities in saudi arabia. Yousef across the board in the uae, we have the budget announcement, quite expansionary compared to the year before. This arguably could make quite a few companies a lot more attractive to investors on the basis of locking in new project right . , exactly. There are multiple things within the uae that are going in the right direction, and have been going in that direction for some time. We continue to track them and like them. The expansionary budget, i comes as noeded, big surprise. The magnitude is definitely something that has surprised some market participants, but as dubai gears itself to host for 2020, the Infrastructure Spending and all that expansion need to happen in time for that to take place. Countless cranes around this building, and the property story has been a softer story. Downside pressure, you are concerned as well about it. Just give us a finger on the pulse, if you will, on the health of this particular sector, and if there is a turnaround coming anytime soon. Yes, the real estate sector, like any other sector, is governed by supply and demand. But there is a change we are seeing in the dubai market, which is the more relaxed payment plans. As you know, any project has really three sources of financing, which is customer , and equitye banks of the developer. So, by delaying customer payment, it means that the banks will have to lend more, and i think there is a limit on how much they can lend. The other part means the developer has to shut out more equity. And that puts a pressure on their profitability. That is not my bigger concern. My bigger concern is their ability to actually bridge that gap. Yousef if i could make one trait in the middle east right now as we go into 2018, what would you be telling clients . I would be telling clients to concentrate on health care and education, which is about 30 of our portfolio today. There is a Good Opportunity with saudi banks and over capitalized lends its waych to dividend hike and returning that over capitalization. Yousef up next, pricey picture. Abu dhabi defends the 450 million it paid for the da vinci painting. We hear from the chair of the culture and Tourism Department, next. This is bloomberg. Yousef welcome back to the best of Bloomberg Markets middle east. Abu dhabi has confirmed it was the mystery buyer of the da vinci masterpiece last month. There had been reports salvador mundi has been bought by the crown prince of saudi arabia, but the Tourism Department says it has picked up the payment, and is defending its 450 million price tag. Its chairman spoke to Tracy Alloway. We have been eyeing this piece for quite some time. It was important for us to showcase the da vinci especially , after that loan from our french partners. We have seen firsthand what da vinci means for any museum. It is astonishing to see and to know that 19 da vincis in europe. One in the u. S. And now, there will be one in the arab world. It is not just anyone. It is a very important portrait, that will broadcast our essence of acceptance. It is going to be sitting side by side with some of the greatest artists and painters from all over the world. We tend to forget that over the last 10 years, we have continued to collect some fantastic art, and we are not the type that goes out and broadcasts what we bought, whether it is monet or gogaz. We do it quietly have a and we do it for a reason. And the reason we do it for is that we can showcase this fantastic piece of art to the world. They are not bought to be put in a house or home or to be hidden. It is done to showcase the beauty of the world. Tracy so you bought it , directly, with a specific strategy in mind . Yes. We had a strategy in mind, and we worked very closely with the broker on this piece, we bid on it, and it was acquired for the price we thought was right. Tracy right. It is an exceptional piece. Astonishing doesnt happen every day. You know, you see people fly as close as possible to the sun to get a glimpse of the sun. We see people wear glasses to get a close view of the eclipse. We felt in our lifetime likely we felt in our lifetime, most likely we would never see , another da vinci come to market. As far as we were concerned, it was important for us to have a hand on this. Yousef up next, as middle east anger grows over trumps jerusalem to schism, Vladimir Putin tries to capitalize. Find out how exactly, next. This is bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Yousef welcome back to best of Bloomberg Markets midd