college and bellwether. i have spoken with supporters of doug jones and roy moore. they are aware of the meaning that this race has taken on. we should note that charles barkley, the nba legend has campaigned with doug jones last night trying to bolster african-american turnout for democrats in a state that has not elected a democrat governor nor senator in decades. steve bannon, the presidents's chief strategist campaigning with roy moore. he spoke for 30 minutes of the final campaign rally. he hardly mentioned roy moore. he noted a vote was needed for roy moore to help president aump, in order to accomplish just late of goals. within the last hour, headlines crossing the bloomberg terminal about senator rand paul who is on the fence about the president's texture from legislative agenda. tot poses significant risk the president trying to get down tax reform if people like senator rand paul as well as soon it -- senator susan collins. so much being decided in the special election. shery: senator rand paul seems to be referring to the budget measure. as you said, this could have big implications for the final tax bill given the senate passed its bill with a razor thin margin. kevin: yes. it will be interesting to see. i have spoken with several voters who tell me they would be interested to see if they were to vote for roy moore whether or not republicans would ultimately vote to expel him from the senate. this is far from over. between and forth senator kiersten jell-o brand as well as president trump playing out on twitter. this comes one week after put ator al all -- after senat franken had resigned. a lot of people are undecided. republicans have not devoted traditionally for a democrat ever. i was speaking with an official who told me turnout is the graphic and we up from previous elections. still quite shy of the presidential levels. david: that is kevin cirilli reporting from alabama. shery: for more on the election, we are joined by the man with a crystal ball. director of the center for politics. he is with us from charlottesville. ago, after theth sexual misconduct allegations against judge more surface, you told us alabama was leaning democratic. is that still the case? larry: no. we have moved it back to tossup. impossibleme almost to determine who is actually going to show up on december 12, which is today, in a special election in alabama. two weeks in front of christmas. this is really difficult to determine. if you noticed in the polls, the polls are wildly gyrating from survey to survey with more up -- 10, jones up by by 10. --ot of people have decided three different predictions depending on who shows up. we are going to have to see who is coming out to the polls and in what numbers. david: what is likely to determine the question? what is going to get people out? we have heard about urban rural distinctions. basically, alabama as we know is a heavily republican state. when donald trump can carry a state by 28 points, you know it republican. roy moore has to fritter away those 28 points. it is difficult to do. here is how he could do it. here is how jones could win. big turnout in black belt the african-american vote being high, moderate republicans in suburbs, particularly women having being turned off from roy moore because of the allegations, and republicans either staying at home because they don't like either alternative, or doing what republican senior senator dick schaap be so just they do, write in another republican which is subtracted from moore strategy. shery: democratic party figures --e president obama, joint joe biden, how wise is getting him there when he is also trying to be a republican moderate? larry: ideally, you do that quietly. i have been surprised at how many times i have seen obama and biden and other democrats pop up on the screen. not because they are personally campaigning in alabama, but because the news media is reporting on their robo calls or whatever else they are doing to help doug jones. that is not something you want to advertise if you are a democratic candidate in alabama. massivest alabama by landslides both times. support in that order to motivate that one big piece of his base he notes he -- he knows he will get 90% after african-americans. david: i want to talk to about tax reform. we had a chance to talk to governor jerry brown earlier today. about the ramifications for state and local taxes. four states like california or new york. listen to what he had to say. it is meant to punish california for voting for hillary clinton. it is meant to punish new york. it is meant to punish illinois. another states that have taken the effort to raise their state income tax. what is that for? goes to education, health care, goes to public disease.o combating this is a terrible war on california and new york. remember, these states that have an income tax are the engine, not the entire engine, but very critical parts of america's prosperity. david: those states he mentioned are unlikely to go republican. what about the congressional districts? shift in the to a house because there are representatives from those states that are republicans now? larry: that is a good point. that is why almost all the republicans from california, new york, and other blue states that are being hurt by this change in state and local taxation, they have come out strongly against this tax plan. they are making the same arguments jerry brown is. guess is the voters are going to take it out on somebody, and probably they will take it out on the remaining republican representatives. at least in districts that are not so overwhelmingly republican that it becomes impossible to dislodge them. there are a lot of seats that could be lost the republicans because of what is in the tax bill. same time, the tax bill right now is pretty unpopular. when you are making your projections for the midterm elections next year, will the republicans have enough time to sell the bill and will this actually help or hurt them? larry: the republicans are going to have to undertake a massive pr campaign in competitive districts and states to sell what they have done in the tax bill, if they can sell it. let's remember, the democrats will be doing the same thing, opposed to the bill. they start out with essentially two americans opposed to the bill for every one that favors it. there is a significant advantage there for democrats. i would say the republicans have their work cut out for them in the bill. provisions andof therefore their donors. they will get the money they need to run, but will they be able to get the votes they need to get reelected? questiondoes raise the of motivation. this is not a groundswell from the populists saying if us tax cuts. what is in it for the republicans? is this a matter of theology? larry: first of all, there is no magicon that this is the elixir for republicans. they automatically believe in tax cuts. list of them are not particular about which tax cuts. there is something else there. they have not succeeded at any big thing other than getting the neil gorsuch on the supreme court in this first year of the trump administration. they feel obligated to pass something big and this is what it turns out to be. big donorsned, their have been very blunt and telling them over the past month or so, you either pass tax reform that forike, or don't call us money in your reelection campaign next year. they got the message. shery: always great to talk to you. thank you so much, larry sabato at the university of virginia from charlottesville. david: let's get a check on where markets stand her julie hyman is here with the latest. a bit of a mixed picture. the nasdaq has been the weakest of the three major averages. it keeps bouncing between gains and losses even as the s&p and nasdaq trade at record highs. we still see some investors watching what is going on in washington. not just the outcome of the tax bill, if and when it gets passed. but also any kind of spending plan. we continue to monitor that. we're taking a look at the bloomberg, we will stay here and look at the bloomberg and see the big gains we have seen. this shows the s&p 500's gains. up over the passover years. on the bottom, volatility over the past month. it is an indication of correlation. as stocks continue to go higher, realized volatility has gone lower. which would imply theoretically that this would be a good environment for folks who are stock pickers. that -- we will see if that ends up being the case. speaking of stockpicking, it looks like people are not picking energy shares. we have oil prices selling off after rising for several days. brent crude hit its highest going back more than 18 months. about two years earlier today. now pulling back as we have that hairline crack in the pipeline in the north seas. it will take a couple weeks to prepare. it looks like traders are not as concerned about that. some of the u.s. shale operators are seeing declines in today's session. david: thanks so much. shery: coming up, the latest round of nafta talks are underway. we will talk with congressman about whatan higgins should be prioritized in the renegotiations. this is bloomberg. ♪ ♪ shery: this is "bloomberg markets." i'm shery ahn. david: it is time for first word news with mark crumpton. mark: president trump is reiterating his calls to overhaul the nation's immigration system in the aftermath of monday's pipe bomb explosion in a new york city subway passageway. the president's comments came a day after authorities said the suspect in that blast arrived in the u.s. through a family connection to an american citizen. >> there have been two terrorist attacks in u.s. -- in new york city. here on green cards. first attacker came through the visa lottery, and the second through chain migration. we will and both of them. chainttery system and migration appeared we are going to end them. that the president added congress "must get involved immediately." cast ansions said he absentee ballot in alabama. he declined to specify who he voted for. sessions, who vacated the seat to become a attorney general, said he "valued the sanctity of the ballot." sessions spoke at a news conference that focused on a gang violence and immigration. european union council president donald twos warned it will be in his words, a curious race against time for the eu and britain to finish brexit talks by next fall. the eu leaders will be asked in a summit starting thursday to endorse proposals to move onto the second phase of negotiations and include future trade relations. even if they do, he warned most of the work is ahead if britain is to make an orderly departure of 2019.you in march -- from the eu in march of 2018. that is after russian president vladimir putin it gave his backing last week. under international olympic committee sanctions announced last week in response to russian doping at the 2014 games, russians will compete under the olympic flag as "olympic athletes from russia." global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. shery: thank you. largely overshadowed by tax reform, another one of president priorities is being negotiated. nafta talks continue in levelgton without cabinet officials for the second time. congressman brian higgins, a democrat from new york represents a district that borders canada and joins us from capitol hill. great to have you with us. publicly opposed nafta. you have had discussions with prime minister trudeau. i've you discussed backup plans if nafta fails? first ofan higgins: all, after 25 years, nafta needs to be improved and updated. a lot have -- has changed. i think the united states and canada are uniquely positioned to develop a bilateral strategy toward the goal of bringing mexico to our labor, environmental, and human rights standards. i think that is a reasonable expectation. as a representative of your constituents in upstate new york, what is the number one thing you would like to change in nafta to make their lives better? congressman higgins: there are three words -- a three word phrase in the original plan in 1984. trade, adjustment, assistance. workers -- that means he will not have a job. when you look at the united states, the strongest economy in the history of the world, or an economy that is 70% consumption, of course everyone wants to trade with us. 80% of the exports out of mexico come to the united states. gives us tremendous leverage. i think the united states and canada are more closely aligned ,hen it comes to labor environmental, and human rights standards. i think using that leverage is wise for both the united states and canada as it relates to a north american free trade agreement with the united states, canada, and mexico. shery: when you talked about a new bilateral strategy, where you talking about the old u.s.-canada trade deal being re-implemented? canada's chief negotiator mention that last week. congressman higgins: no, i think it is about strategy. one that takes into account the facts on the ground as they exist today. things have changed profoundly. i think the united states and unique leverage in negotiating a new north american free trade agreement. generally,agreements including nafta, are very convoluted, very nebulous. i think this new trade agreement has to be explicit. i think it also has to be enforceable. the enforcing mechanisms are not strong enough. when you are doing trade with other countries, you half to look at your -- you have to look at your strength as leverage for the three countries involved. but also for the united states, a country with a population of 326 million people, the strongest economy in the history of the world, 70% consumption. that means the things we used to make and sell to the rest of the world, they now make and sell to us. that is the unfortunate aspect of it. fortunately, it gives us leverage in a new trade negotiation in the context of nafta. take youryou constituents in upstate new york, is -- their jobs, their well-being, is it more affected by relations with mexico or canada? which are you more integrated with as a practical matter? congressman higgins: i think integrated more with canada. i think it is a positive relationship. there are net benefits to both countries. less so with mexico. for example, the windshield wiper blade was founded in buffalo, new york. for an entire century, windshield wiper wades were made in buffalo, providing good manufacturing jobs. in 2002, that stopped being the case. wiperst of the windshield blades are made in mexico. why? labor standards, lower environmental standards. we can't compete. i am simply saying -- staying -- saying the united states and canada should use the leverage we have to ring everyone to the same level as it relates to environments, human rights, and labor standards. we can compete effectively with anybody on a level playing field, so long as that playing field is level. much forank you so your time. brian higgins, democrat of new york. plenty more coming up. this is bloomberg. ♪ ♪ david: president trumpps decision to recognize jerusalem continues to reverberate around the world with demonstrations in the region and some world leaders criticizing the decision. we caught up with bob gates in dubai. he gave us his thoughts on the decision. >> it seems to me counterproductive to the administration's own objectives on two counts. first, they have devoted a lot of attention to see if there is a way to bring progress in the israeli-palestinian peace process. multiple previous presidents have tried this and failed. there was a sense this administration really thought it had a shot at making some real progress. true, itere at all seems to me, this announcement, especially since nothing practical will be done for several years, apparently in terms of moving the embassy, that it makes it much tougher to try and get any kind of thosecal progress between two. even if you totally discount the possibility of progress in the israeli-palestinian process, one of the things that president trump has achieved is significant improvement in our relationships with the arab states and particularly the gulf states. makess announcement, it that more difficult for them because they may not feel strongly about it. many of their people do. it seems to me that when we have the progress in improving state of our relationships with the arab world after the obama administration, it seems to me that this certainly does not contribute and may be a setback. >> it may be a setback. if i look at the european u.s. recognition of jerusalem is a very dangerous development. in terms of escalation, you have worked on -- under bush, obama, you have seen escalation. how do you see this playing out? how could this escalate? the real danger is in the street react very strongly and there is violence that comes out of protest. -- protests. the governments will probably accommodate themselves to it, especially since we have said we are actually not going to do anything. to thes a certain truth reality. every time i would go to israel and visit with the prime minister, i would go to jerusalem. that is where a lot of the government ministries are. i don't see how it fits into any forward thinking strategy. david: that was bob gates. coming up, talking with jerry brown about climate change, wildfires devastating his state. live from new york, this is bloomberg. ♪ >> this is bloomberg markets. >> let's get to the headlines with mark crumpton. mark: francois hollande is the latest -- latest to weigh in on -- decision to make decision jerusalem the capital of israel. he spoke in dubai. been brutalion has and harmful. it was unilateral. making this decision without consulting the u.s. congress, without consulting the palestinians. it will not lead to any negotiations. also commented on brexit saying it is unrealistic for the u.k. to expect to keep this same deal as other countries in the single market. thinks the says he resolution of differences between the house and senate tax bills could come today. ping-pongmakers have offers back-and-forth with the house and are making progress. the house ways and means chairman overseeing the house-senate conference committee says the panel could have a written agreement by friday. house and senate republicans have been working all week on a topromise tax overhaul bill send to president trump as early as next week. donald trump, jr. will return to capitol hill to talk to the senate intelligence committee as part of its probe into russian interference in the 2016 election. that meeting will come a week after trump junior spoke to lawmakers on the house intelligence committee. it is his third interview as part of the investigations after he spoke to the senate judiciary committee in september. a would-be suicide bomber now facing federal charges, charged with providing material support to terrorists and using weapons of mass distraction. account on his facebook trump, you failed to protect your nation. he is still in the hospital with burns. the mayor of san francisco died overnight. edmund lee was 65 years old. lee was san francisco's first asian-american mayor, in office almost seven years. global news 24 hours a day powered by more than 27 journalists and analysts in 120 countries. this is bloomberg. the french president inron is hosting a summit paris where business leaders come together to review agreements. among the dignitaries, governor jerry brown. we talked with him about how far we have left to go, what can be accomplished, and the level of commitment those at the commitment have shown. >> i have never heard such clarity of commitment as i am at this conference. none too soon. the world came together in paris. it is now not doing what it needs to. the climate is still deteriorating. greenhouse gases are increasing. we are not taking steps needed to avoid catastrophic climate change. there are many nations represented here, island nations that will disappear in the next 40-60 years. this is a crime. it is a crime against humanity. therefore we must prevent it. california, next september we will continue the convocation of particularly subnational jurisdictions, states and provinces, and others from civil society to galvanize, mobilize our commitment against this existential threat that donald denies, that majority of your publican party denies, and many in the business community also denied. we have to wake people up, change direction. if we can't do it from the white house, we will do it from california and new york. everywhere we can go to make this transition to a low carbon and noncarbon world. if we don't, millions of people will be at risk rather soon. hundreds will be at risk in not too many years and decades to come. two summits move the ball forward at all in persuading people like president trump and others? or is this more people getting together who already believe that and reinforcing one another? >> we are not going to be converting donald trump. we are not going to convert mitch mcconnell or the koch brothers, or mr. ryan. .hey are in a cabal of denial they are pulling back on research, they are trying to prevent california and other on as that want to go renewable pathway. they want to resurrect coal, which is dying. says chas this, it does mobilize commitment that doesn't exist before they come here. there are real financial statements that are going to be reflective of real commitments in dollars. i heard this morning from west africa, for indonesia, for other these are real things. we are doing stuff and we are converting people. we've got to do it one nation at a time. yes, this is not perfect. there are people here talking and what have you but the world is going in the wrong direction. we've got to wake people up. just because the complacency of the powerful obscures the truth people such asy the secretary-general of the u.n., the president of france and many others, from so many countries, there are a lot of people and more all the time. more than there was two years ago. it is a battle. it is not clear we're going to win, but i'm going to do everything i can to move the world toward a future that is sustainable and will not be a destructive path that the synnex and those who don't understand climate science are stupidly moving the world toward. we are making progress. is it enough? no. but we are taking steps. next september we will have a similar conference in san francisco and we will keep doing this as long as we can and eventually we are going to win. the people on the side of truth and the science as we understand it. david: can you win without the president? can it be enough to sustain? with the secretary-general of the u.n., with a lot of private industry? is that enough? >> no. i don't think in the long run we can make this work without the president. trump is not going to be the president forever. this is much bigger than the current political noise and activity, even the hot news of the day. this is a long-term atmospheric change that will effect all living beings. there is nothing other than nuclear war or nuclear incident that is more serious than the climate challenge. the fact that washington under trump and the new epa and the attorney general, and the vice president, they are in a whole of denial. the rest of the world is coming around. america, three states and corporate leadership, through the media, we are holding the line and advancing while we're waiting for a new president and a new congress to wake up and do what is right instead of the dark pathway they are pursuing. david: that was my interview with jerry brown. shery: coming up next, the eu parliament throwing concern that trust issues could undermine brexit negotiations. we will tell you where both sides stand before talks resume tomorrow. this is bloomberg. ♪ david: this is bloomberg markets. shery: the european parliament accused the u.k. minister in charge of brexit of undermining the brexit negotiations saying the deal struck by the prime minister last week was not legally binding. another member of the government said in an interview that what i want to see is a full and comprehensive agreement on trade is close to what we have today as possible. to help sort this out, covering the british government for bloomberg, it is not just in the u.k. we are seeing this rhetoric. uap and parliament is having strong words against the u.k.. >> that is true. this is a political row. there is a row going on about whether brexit should be happening, what the nature of it is. they arehe problem is playing to two different audiences. it is trying to conduct a negotiation in brussels. the messages we are good partners, you can trust us, and it is trying to keep its own members of parliament on board in london. they want to hear something different. what david davis did, having finally got this agreement, to move to the next phase of talks, there was some disquiet among conservative mps as to what exactly had been agreed. he helpfully went on television isn't a legally binding agreement. this is a starting point. what happened is people in europe can speak english. they can see these things thanks to the internet. they say you just -- we just had a big battle nailing down the language and now you are saying you are flexible. there is a diplomatic problem here. davis has had to row all the way back and say it is not legally binding but i consider myself bound by it. -- theyou give a sense parliamentarian who is responsible for brexit said after the the unacceptable remarks it is time the u.k. government restores trust which sounds like things are not going well. does the european parliament have a lot to do with this anyway? >> they do have something to do with it. there are 27 other countries involved in this. he is grandstanding. we have got to be clear. both sides are doing politics. people makingee public statements because they play well with their domestic audience. there is a bit of that going on. the most important counterparties in this of the european commission. harlem and does get to sign off on the deal. a lot of this is what we would call a storm in a teacup. it is not that important so long as you can keep the overall deal moving. theou want to look or signs government isn't always handling fact thatbly well the the brexit secretaries having to go on twitter to explain he didn't mean what he said on bbc, that is a sign you could look for. >> politics in the u.k. heating up. threats from tory lawmakers that they will vote against aspects of this brexit bill. will we see that? that is what we are trying to work out at the moment. this bill is making its way there he slowly through parliament. the government has scheduled all of the difficult votes for the committee stage. we are now in the final three days of that. today, tomorrow, next wednesday. tomorrow there is another area about what sort of vote members of parliament get. at the moment the government is saying it won't back down but the language leaves the possibility open. we want to talk and hear what they say. i think maybe they still think they can win enough people back. the leader of the rebels, who used to be in attorney general, what the government has offered is not enough. select at the moment it looks like they will. >> a crucial week. >> they are all crucial weeks. now it is time for our stock of the hour. we will take a look at boeing. another all-time high. what is going on here? >> certainly very bullish action . on pace for its best day ever helping to explain that all-time high. they didn't raise dividends by 20%. they're are going to replace the existing buybacks. very interesting. we just had a headline cross. we can see shares are up sharply. then we have this tiny leg down here on the headline the canadian government is going to use the fighter jets, abandoning the plan to buy boeing jets. , not is a small leg lower a huge amount lower but worth mentioning for this stock that has been doing so well. shery: the announcement was already priced in? >> this is an ongoing development to some degree between boeing and the u.s. and canada. boeing has launched a chance over commercial planes. president trump has rejected justin trudeau's call to intervene. perhaps this is a small form of retaliation. it could also come down to the economics of the. the big point in the future, candidate did just launch a jetsam to buy 88 fighter as a long-term replacement. they will award a contract in 2022. that is something boeing is going to want to be a part of. they have to heal this. david: good to have you here. shery: has trump cut more regulation that any president in history? we will explore the data. this is bloomberg. ♪ shery: this is bloomberg markets. president trump is killing regulations with a caveat. many are already dead. government records and in some cases the agencies carrying out trump policies tell a different story. here with more details, from washington, alan, what have you found? >> as you said, the trump administration has made bold claims about cutting regulations. we decided to take a close look at that. it turns out the administration has cut a couple dozen existing regulations. they have said they have cut almost a thousand. what that is is pending regulations. interestingly when you look 860ely at that list, it is regulations. what you find is hundreds of then really don't add up to a cut. hade were almost 200 that actually been killed or were enacted during the obama administration. there are others that appeared to be paperwork glitches. in some cases the agencies developing these said even though they were reclassified, they are continuing to work on them and plan to issue them shortly. david: have they slowed them down? >> there is no doubt that the trump administration is attacking new regulations with a fervor we have never seen. first nine or 10 months of the obama administration they took a close look at 200 regulations. is lessber under trump than a quarter. only 52 or so. they are definitely slowing down. they been able to do more? isthe regulatory world verily carefully did -- carefully regulated. sometimesp to a year, three or four to get a regulation in place. that is designed so the government moves slowly and carefully. what that means is the trump administration has a laundry list of things they would like to get done but they cannot do immediately. david: we are putting a chart up to illustrate this. they have to go through a review before they go in effect. they are down quite a bit. some would say maybe they haven't been able to get rid of a lot but there aren't as many new ones being proposed. all ofecessarily stop them but it will take a year or two or three. is that plausible? these actionsree are coming down the pike. the administration has been successful in other short-term measures. they stopped enforcing certain rules even though they are on the books. we see fines going down for certain financial regulation agencies, for the environmental protection agency. there are things they can do. areas, where they can do something, where is the administration having the most profound impact? >> it is difficult to quantify. but i would say if you point to things like climate change. some of the financial regulations, the consumer fraud protection issues that trump has taken on, i would say those were the areas where they are having the biggest effect. and energy changes. what extent would there be a deep regulatory effect and just not filling jobs? some of these agencies have a lot of openings in the administration isn't in a hurry. does that slow down the regulatory apparatus? >> it works both ways. if you don't have your people in place you can't put your policies in place. particularly those that are the most controversial. but if you -- but if it takes a while to fill up those jobs, government effectively slows down as well. it is a double-edged sword. david: thank you very much. thank you for joining us. shery: breaking news out of italy. italy says austria has approved the reduction of gas flows. we did have a deadly blast at the australian -- austrian pipeline. they have approved the resumption of gas flows. >> coming up, republican lawmakers racing to get a tax bill on president trump desk before the end of the year. we will speak to steve scalise later today. this is bloomberg. ♪ scarlet: it is 11:00 a.m. in san francisco. i'm scarlet fu. julia: i'm julia chatterley. welcome to "bloomberg markets." ♪ scarlet: we are live and bloomberg world headquarters in new york over the next hour. here are the stories we are covering. day in alabama as republican roy moore and democrat doug jones make their closing arguments to cotton states voters about who should fill a crucial senate seat. we are live with the latest. we look at why the traditional long short equity hedge fund is falling out of fashion. higher education in the trump era. we discuss the impact of the tax legislation with cornell university president mark --martha pollack. julie, we know the dow, s&p closed at record highs. they continued to build. julie: the nasdaq is diverging. we had a reversal of the divergence. the divergence is happening hadn because the nasdaq been rebounding it back to a leadership position over the last several sessions.