you have to understand, he played a very important role in this campaign and that should be respected. mark: kushner reportedly has had a major role on trump's transition team, leading a purge of allies of new jersey governor chris christie. congressman tim ryan will challenge nancy pelosi for the house leadership position. pelosi says she has the backing of two thirds of the caucus. leadership elections are november 30. hours a day34 powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: we are 30 minutes from the close of trading in the u.s. live from bloomberg world headquarters in new york, i am scarlet fu. joe: i am joe weisenthal t. janett: ponce sliding on yellen's comments -- bonds sliding on janet yellen's comments. joe: for the question is, what you miss? -- what'd you miss? scarlet: janet yellen has signaled her intention to remain at the helm want -- until her term ends in january 2018. contenders for donald trump's candidate comes amid reports of infighting and disorganization. after the close today, tesla and soliciting will meet at the altar -- soliciting will meet at the altar with shareholders deciding whether to approve elon musk's plan. let's start off with a check on where the major indexes stand as he had to the close. -- as we head to the close. abigail doolittle is standing by. abigail: dow, s&p, mastec into the close -- the s&p 500 is close to a record high. dow had been negative earlier, wait on by walmart, but helping-- weighed on by walmart, but helping three nexis, shares of microsoft it on paper, it's best day since the beginning of november. buy by goldman sachs. the cloud business is quite strong, the second-best in the market, and with 100% growth year-over-year for second quarters, one analyst thinks the franchise and really grow. -- could really grow. i stayed for microsoft, helping to explain some of the strength -- nice day for microsoft, helping to explain some of the strength in indexes. advanced micro devices, shares a 10% gain, best day to day since july 25. our team spoke to an analyst today and he said he believes what is behind the strength is the announcement by google on tuesday that google is going to include amd on its cloud platform, and he says he does not think it will add too much to the numbers in the near term but it as legitimacy to the stock that he is starting to warm up to. we took a look at a chart on amd . the stock is doing something very unusual. up in a huge is way, now up more than 160% on the year. we see this beautiful uptrend. what we were talking about yesterday were mixed technical signals. it has started to reverse below the uptrend, signified by that yellow line. on today's strength, the stock has retaken the uptrend. you do not see that very often. it will be interesting to see whether advanced micro devices can continue that sort of momentum instantly climb higher. -- and simply climb higher. scarlet: thank you so much, abigail doolittle. joe: neel kashkari addressing banks that are too big to fail. earlier today, he explained his stance. neel: first of all, this is a nonpartisan issue. there are people on both sides of the eye we think we need to address too big to fail. our analysis says there is still a 67% chance of another crisis in the next century, a lot of risk. i think with the new administration and congress there was a chance to take a fresh look. if you look at what chairman hensarling has put out, is also calling for higher capital requirements. we need to go further. >> is part of the deal, from the banks' one of you, let's tone back on the behavioral regulation in terms of more onerous capital requirements? chairman greenspan was on our program last week and he made a similar proposal. neel: i think that is correct. so that they are truly safe, not at risk of failure, don't need to turn to the taxpayers, we can rely on more micromanagement of what they are experiencing today. >> wells fargo is big, jpmorgan is big. what is big for you and what needs to be addressed? neel: our plan applies to bank's $250 billion and above. all the capital requirements would go up to 22.5%, real equity. the federal reserve calculates debt in that level. eyesight firsthand in 2008. the notion that you will -- eyesight firsthand in 2008. the notion that you will bail in his creditors, it sounds great but it is a farce, never happens in real life. common equity really absorbs losses. in the biggest institutions, the treasury secretary has to super five they are no longer -- has to certify they are no longer to be to feel. banksed the offset for and the offset for growth. that will hurt growth. one of the big things this country did was hoping you led, the recapitalization of the banks, the bailout of the banks. this is late stage stuff. do you think the offset could be quite damaging? neel: here's the thing -- we have seen that financial crises ise so devastating, d estimated it is 158% of gdp. to the u.s. hit economy by the financial crisis. if we avoid one of those, our plan will have paid for itself many times, or we could take another approach -- that's ok, we will have a financial crisis every 50, every 80 years, just get on with it. i for one don't accept that. we could do a lot better. >> have you had any reaction from the big banks to the proposal? and the related question -- internationally, different schemes for regulating, this is a different approach to what these banks would be subject to in europe. doesn't that pose difficulties for them riding the horse in two different directions? neel: the banks hate it. they want to the kennedy too big to fit -- they want to pretend the two big to fail -- too big to fail problem doesn't exist. we can't follow the rest of the world to follow our regulations could we have to do what is right for our economy, and if we can show the world that you have an economy that is a vibrant, you don't have giant too big to fail banks, other countries will need to follow. we can't wait for europe to catch up. >> one of the consequences of the financial crisis is the version of escaping -- erosion of risk-taking capital. necessarily --'t safer banks don't necessarily import supermarkets. do you look at that kind of situation with the erosion of risk-taking capital and the potential for markets to get a whole lot messier? neel: i don't find those arguments persuasive at all. the idea that wall street dealers will be stepping in to make markets when there are big price moves and somehow they will change the settling of the price, i don't buy that at all. look at where the s&p is now. stocks are high. it is not as though there is a lack of appetite for risk taking, it is not as though there is capital to go into equity markets because banks are regulated. >> to be fair, we are talking about monetary policy and you guys had a $4.5 billion balance sheet put there for the market. once you pull that away, don't you need those guys to come back to june the job they used to do -- to do the job they used to do? neel: if you are blackrock or fidelity, you are making decisions for your clients' business capital for the long-term. the idea that they need goldman or morgan stanley -- if blackrock and another wants to trade with each other -- this deal providing great service to make markets work, and absent that the whole capitalist system will break down? i don't find that. you are telling me that you need multi-chile dollar institutions for blackrock to find somebody at vanguard to trade with? i don't buy that at all. >> the timing of this plan is striking. you said in february you were going to do it but it comes right at this transition and it matches up with some things we have heard from president-elect trump. for example, backing off on smaller banks. have you and your colleagues have discussions -- had discussions with the transition team or people close to donald trump? neel: we have not. no contact with any of the campaign for the transition team. we have heard from members of congress on both sides the aisle who said they want to address the two big -- too big to fail issue. i'm optimistic. i think there's a possibility that could be a compromise that everybody could get behind. joe: that was minneapolis fed president neel kashkari. scarlet: coming up, we will speak with congresswoman maxine waters, and in light of president-elect trump's stance on regulation, we will get her thoughts on financial stability and consumer protection. this is bloomberg. ♪ scarlet: what'd you miss? walmart is the biggest drag on the dow industrials today. it had its worst one-they slide since october of last year. let's show you why in today's "numbers don't lie." the onejust shy of point 3% analysts predicted and it marks a slowdown from the preceding quarter. total revenue missed estimates because of the strong dollar. beyond the brick-and-mortar presence, walmart posted again in online sales last quarter. retail has been pouring money into the website to meet its goal for growing online sales at a rate of 20-30% this year. was archase of jet.com big help in the effort. that website has 200 million unique visitors. the online strategies highlighted by his recent move to double stakes in jd.com. you might be suffice that it is the biggest u.s. grocer, and that category makes a 56% of its revenue. grocery prices around the country have been dropping. on a year-over-year basis they dropped with a street not seen since 1960. it is good news for consumers but it has brought headaches to walmart. the company is now pulling back on new openings. instead, it is spending more to spruce up existing stores. store cap growth is slowing but the real deceleration doesn't take place until fiscal 2018 or you see a plateau that where you see a plateau. ceo -- where you see a plateau. the ceo doug miller says he is not satisfied and it needs to change to reach long-term goals and investors agree. joe: time for the biggest business stories in the news right now. maersk and u.s. private equity firm eig are potential bidders for the dawn oil and gas unit. that is a going to people familiar with the matter. ng energy has invited potential bidders to submit initial offers before the business end of the year. mexico awarded a group led by morgan stanley infrastructure fund contract to build a new wireless network at this after a competing bid was discarded. the project will entail $750 million of initial investment and is expected to provide mobile broadband access to 92% of the population and is scheduled to go into operation in 2018. verizon's aol is coming about 500 jobs, 8% of its workforce. ceo tim armstrong told employees that the committee added 1500 employees over the past year and it needs to consolidate to improve operations. outtrong says aol will edge the areas that is driving growth. $4.4on bought aol for billion last year. scarlet: coming up on "what'd you miss?," congresswoman maxine waters will be joining us from washington. she is the ranking democrat on the house financial services committee. we will get her take on the all caps agenda and fannie and freddie. donald trump's agenda and fannie and freddie. -- scarlet: bank stocks continue to rally as investors bet that a donald trump presidency will sideline some of the industry's sharpest critics. earlier today, janet yellen warned lawmakers that any changes to bank supervision need to ensure we don't repeat the financial crisis. i certainly would not want to see all the improvements we have put in not want to see the clock turned back on those because i do think they are important in diminishing the odds of another financial crisis . scarlet: joining us from washington is representative maxine waters from california. congresswoman thanks so much for joining us today. i want to start with a letter that you sent to financial services trade groups regarding the appointment of steve bannon as president-elect donald trump's strategic advisor. you mentioned that as leaders in the business community, these leaders should have more obligation to speak out against his appointment and you addressed this letter to the american bankers association, national association of federal credit unions, a long list of recipients. what has been the response? rep. waters: we have not gotten a response yet. it is early. we just sent it out, i think about 24, maybe 48 hours ago. but yes, we did send the letter out because we think everyone has a responsibility to deal with this issue of inclusiveness. we are very much afraid of what we see happening with this possible new administration, with donald trump, and some of the people that he is appointing, like bannon. we want to make sure that the industry, many of whom have been working very hard to create diversity, we don't want to see that stopped. we don't want to see a slowdown. we want people to join in with supporting the idea that we should have opportunities for all of the people in our society who are capable, who are competent, who want to work. and we are asking them to join with us in sending this message. thelet: before we knew of election outcome, i wonder if you had any inkling of people's thoughts on the campaign and how the president-elect was running his campaign. any discussion on that level? rep. waters: we have had a lot of discussion from all quarters about the campaign and about the way that the candidates were conducting themselves. fact, donaldf trump sent a shockwave through many communities in the way that he talked, in the way that he called names, in the way that he insulted folks. i and many others had never seen anything like this before from a presidential candidate. and yes, there has been a lot of discussion about that, and of course, since he is now the president-elect, we are wondering if this is going to continue. if this new president will be the same person that he was during the campaign, using the same kind of language, mocking and mimicking the disabled, talking badly about women, calling people names such as he and hehillary crooked called some of the other candidates, even republican ones, liars, many names. and so, yes, there has been a lot of conversation about this campaign, about both candidates, but particularly about donald trump. a-- the move to stop band bannon, keep him out of the white house, -- with this letter have you been able to generate interest with groups you have talked to around this particular goal? rep. waters: we have not gotten responses back in yet. there is a lot of interest from the telephone calls we are getting from various individuals and groups. in los angeles, we had over 8000 people a few nights ago. andly talked about bannon the fact that the president should not have included him in his administration. and now that he has, he should get rid of him, he should reverse himself. is going to be a conversation that will go on for a while until we drive him out. there is, i believe, a real commitment by many individuals and organizations to influence donald trump and have him reverse himself on this decision. i'm looking forward to getting the responses from the business community, from all of those organizations and businesses that i've contacted. i don't have it yet but i would be happy to share it as soon as we get coming in. joe: i want to ask bigger picture about strategy. when barack obama came into the white house, republicans decided early on that the best strategy was complete opposition to him. there was very little moment of bipartisanship or anything like that. what do you think is the best strategy from democrats, in the minority in congress? do you think it makes sense for democrats to find opportunities to work together with trump or would it be better to completely reject him and show he is unacceptable? rep. waters: you are absolutely correct about what happened when president obama was elected and how they strategized to stop him and block him from being able to accomplish anything. i believe that we don't know who donald trump is. man, whoknow this changes his opinion from day to day, who indicates that he is example, support social security and medicare, not going to cut it, and the next thing we see is him talking about modernizing, modernization of medicare, which basically means privatizing cuts and other kinds of things. we don't know who we are dealing with it at this point, what i'm saying is we have a theonsibility to educate public about what he is saying, the contradictions, what he is doing, all the public policy associated with that. i am not urging people to go to work with somebody we don't know when understand -- know and understand. scarlet: congresswoman waters, one final question. the dodd-frank law has 21 pages, a lot of it is unworkable compding to limenters and critics. is there anything to be improved upon? rep. waters: dodd-frank is the law of the land and we have a responsibility to implement it. i've worked with the other side of the aisle on a few changes and modifications in dodd-frank. but the basic law is what trump wants to get rid of. he wants to kill it. i'm not for that. i believe we are going to continue our struggle to make sure we implement a good law that will take care of our consumers, that will reign in wall street, and not allow the kinds of abuses that have been done in the past to continue. joe: thank you very much for joining us. rep. waters: you're welcome, thank you. scarlet: take a look at the major indexes. s&p near a record high. this is bloomberg. ♪ >> we're moments away from the closing bell. energy shares leading u.s. higher. as oil prices rise. comments fromand comments fed chair janet yellen. scarlet fu. >> i want to welcome all of a our viewers tuning in live on twitter. unwatch close -- you can watch closing bell coverage on twitter every weekday. >> we have some breaking news here. reporting that mitt romney the former presidential nominee is under k as secretary of state. romney and trump will be meeting on sad. that doesn't go towards any the secretary of state nomination. they will be meeting. that meeting will take place on beurday, not sunday to continued. yoo so far just so many different names. threat seem like there's at all other than lots of people being talked about. we begin meantime, with our market minute. u.s. stocks closing higher. was within spitting distance of a record high. it closed at its best level since september 6th. movers,ook at the discretionary was best performer. through se -- the nasdaq outperforming. today.ly not the case >> you know what, i have to correct myself. consumer discretionary lost the to financial. you look at the sector break down. it was pretty mixed day. the positive number for the s&p 500. you do have five industry groups including real estate investment trust and energy. the bond proxy. for the small cap benchmark. rally.y all these small domestically asrated companies are seen beneficiaries of more protectionist u.s. among individual names, cisco forecast a drop in sales. that stock down about 5%. retails in the spotlight here. winners and losers. best buy profit beat analyst estimate. it did move higher by 14%. wal-mart and staples reporting sales missedst mate. >> let's take a look at the government bond market. right there around 8:30, you can see the spike. got some solid data on initial jobless claim. also housing strong. the u.s.ence that economy is doing solidly. let's take a look at the 10 year chart. jumping up around 830 and the day.f we're talking about the bond proxy selling off. too.onds are selling off higher yield. >> jobless claims too. >> jobless claims and housing starts solve. >> let's move on here to currency. if you look at the dollar yen, month climbing to five high. the prime minster japan meets donald trump at 5:00 eastern time in new york. remember, president-elect has accused japan of currency manipulation. saying that japan should pay for its own security. firmer afterso janet yellen indicated a rate hike could come soon. when you look at the pound, it was better than expected. that boosted the currency and it more evidence that the u.k. economy is holding up better vote.the brexit mexican peso, the central bank raised interest rate. the peso weakened. hike after the election of donald trump. inflation right now is not an mexico. the peso from the chart has been declining not just today but over the long term. that's boosted the value -- there. risk of inflation >> finally quick run through the commodities. we'vee most active day seen. gold.elling in crude back down below $45 a barrel. coper has done very well before giving up some 1.1%. not a huge day. >> those are today's market minutes. u.s.nt to move to inflation. there was that cpr report. the fed twoailing percent goal. for more than four years. spendingrastructure pledges are fueling expectation of a pic up. result could be significant for inflation depending on which type of president trump we get. martin explain is hagerty. martin, certainly seem like counting on one kind of president trump to emerge. >> so far. two extremes that could happen. you have the campaign rhetoric towards antiimmigration, trade wars. speech thatptance has been seen to be positive towards creating an atmosphere conducive to real economic growth. contrast to what we've seen for the past. coupled with the infrastructure mentioned.you >> this call, people have been call for big infrastructure time morea long physical spending. some people say, would it made a sense several years ago when we had much higher wagesoyment as we see rising rapidly 3.9% year over year. much slack. what's the fed response if we get a big fiscal boost at a time close to full employment. >> you raise a good point. is 4.9%.loyment rate this morningn 2.1%. we're still waiting for pce higher.n to move there a risk. engaging, potentially , engage in a battle of fiscal policy and a healthy inflation backdrop. we're not still pricing a innificant overshoot inflation market. we look at various one year forward rate. pricing in cpi inflation, nextclose to 1.75% for the three or four years. it's still below two percent. get that metric north of 2.5, which is equivalent of a rate of inflation about 2.12, that then probably creates shift in the fed's reaction. right now they are committed to stand back and janet yellen indicated she would like to run economy hot. policymakers have been campaigning for a while that fighting that battle on their own. some fiscal help would be greatly appreciated. >> obviously not all fiscal same.ng is the you could have extremely wait for fiscal spending. you can have a thousand bridges to nowhere. you can have a productive sort modern infrastructure around energy. we really don't know details yet. how important will those details be when they emerge and being able to make some of these calls they will do to the economy and inflation going forward? 100%.hink you're multiplier of which projects we question.the big if they are focused towards high multiplier opportunities, the is real. that does translate into prospects for higher real good. >> martin hagerty. >> tesla shareholders approving the merger by 85%. the meeting is taking place now. votes were already in. it was pretty clear how quickly the vote took. the meeting, you can check it out on live go. shareholder meeting take place. tesla notres off by 2%. solar city bouncing around a little bit. obviously he's not a fan of elon musk, tesla he was saying that shareholders ought to have their examined. >> he said that. headsd to have their inspected if they vote for this. but 85% of the shares voted in favor of it >> there's elon musk, live on stage now at the tesla meeting.er's elon musk take the stage here. pushing for this merger. lot of people say this is a case fund choreng able to each other. >> there was a lot of skepticisms in the early weeks. other thing, elon musk is a fantastic story teller, capital raiser. not surprising that the people visiona who believed his and story are enchained to go along with his vision of entities. >> tesla motor shares down 1% in after hours trading. this is bloomberg. >> time now for first word news. obama and angel merkel held their final news conference. discussed wide range issues. >> i reiterated our hope that negotiations are in the united kingdom's exit will be conducted in a smooth and transparent fashion. preserve as closely as possible. economic and political security relationships between the u.k. and eu. also filled the president-elect donald trump to stand up russian president putin when moscow's behavior deferuates. trump met with haley. she's on the short list for secretary of state. formerped up with secretary of state henry kissinger. incoming president discusses china, russia, iran and the european union. house financial services says he discussed financial reforms with mr. trump during his meeting. his name has been considered for treasury secretary. syrian activist ands are cue workers say air strikes pounded aleppo.ld eastern killing more than 20 people and hitting a water pumping station. third day of renewed air campaign on the besiege territory. military said air strikes killed at least 30 members of an al qaeda linked group. the long running drought in much the northeastern portion of the united states is expected to continue through winter. the drought is the worse in more than a decade. it's been devastating to farmers in wateresulted restrictions. drought also is expected to southeast,much the southwest and parts of the california. a day.news 4 24 hours crumpton. s there bloomberg. >> thank you, we have breaking news. reporting that 3rd quarter sale and profit fouranalyst estimate and year revenue topping consensus. peraises four year earnings share estimate. we're looking at sales force 6%.es up third quarter billing up 19%. analyst looking for a gain of 14.7%. >> very nice. shareholder have proofed -- approved by overwhelming margin. musk proposed merger between tesla and solar city. 85% of the vote went towards .pproving the merger shareholders should have their head examined if they approved it. listen toey didn't him. you can see there, solar city up a little bit. >> stay with us. box.n hagerty of black martin for being patient. >> martin, let's ignore trump a second if we can manage to do that. just take about current inflation. got cpi rating today. here's a chart that i tracked that has a bunch of different ways you can slice and dice comingon, cpi, ex-energy down still over 3%. line is, you can tell a story where inflation is building. stories writs not going anywhere. assayed -- aside, rising?eel like it's cpi will probably stay in the 2.1 to 2.3 range in the next few months. probably heading 2.5 near end of 2017. we think it's stable. areas where at the inflation is coming from, it's services. charge soave led the far which is tied into the capacity. comest unemployment rate down, services and inflation will continue to be the main driver. the drag from commodities and goods, which is strength.dollar thee seen depreciation in dollar post election. the dollarn appreciate in the dollar. delayed byto be three to six months. >> services led inflation, is that good inflation as opposed to commodity price driven inflation. >> of inflation in a developed ofld comprises a majority the inflation industries. it tends to be a very low component. it's moving in a relatively healthy direction. down, thereak it contribution from shelter is high. does crimpo up, that disposable income. is she wanter that leads probably won't give them much comfort in being relatively policyive in removing accommodation. >> we'll be speaking to neil richardson. i want to get your take on my chart here. this shows u.s. budget deficit gdp.percentage of increasese that during recession. in the latest cycle, the deficit blew up because of the obama stimulus. but then it peaked. began shrinking. increases this year it's begun widening just again. we no that the president-elect massive fiscal stimulus. deficits could get bigger. budget deficits inflationary? >> depends what we do with the deficit. joe mentioned where targets are potentially delivered towards. are in high multiplier , towards growth and inflation is positive. not employed in the faction -- point we got this morning which i have here. housing start hitting their level since the crisis. theyentioned sheller and measure it's not -- there are different ways to measure it. underhoused because we discipline so much. we have this sort of millennial moreraphic who need houses. isn't this just going to be on inflation regardless of the fed? >> with increase in supply of shelter. >> in other words, do you think still have a tight housing market that will continue to put housingressure on the component of inflation sort of regardless of what the fed does to the economy? think that the run rate that is running at is unsustainable. going to plateau. the rationale,f cpi maintaining. if we look at the house price depreciation, there is still some upward pressure that's probably going to be felt in the next six months. but the pace which we've been end.ng at is coming to an >> martin hagerty. thank you so much. you.ank >> coming up, s&p 500 home nearly 3%ndex rose today best day since august. we dig into the housing data gains.ove these this is bloomberg. >> "what'd you miss?," u.s. new home construction jumped to a october. high in residential start served more than 25% the fastest rate since 2007. joining us now from washington nela richardson. extraordinary jump today. it sustainable? can we continue to see further gains? will see further gains. it won't be at the same pace. 25% from last month. that's a big surge and big jump. will see gains in housing starts. we'll see gains to the single not justde and multifamily. needed.amily what is i think it's incredible news this month. >> to what stint does recent mortgage rates, which follow ten year yield higher, derail this housing recovery that we have? >> rates have really done something dramatic in the last two weeks. they've gone up 40 base sis fix is shy ofar 4%. which is where it was last year. concern.ot for the folks buying new construction, that means they right now.a great their timetable is little. they do this in terms of when completed.s where we're seeing a little panic for those people who can't even 4% rate. they have to wait three, five, months. there's uncertainty about the rates going forward. addition to money giving more expensive, the core components of building a home getting more expensive as wages go up, there's already been talk of construction worker for a while. looking at the wages growth tracker, 3.9% year over year. tightness in the labor market is real. problem this if up and we can't get enough construction workers? supplyremaining problems and new construction side. it's lot and labor. part. the lending credit is available. labor shortages is strong. many construction workers left during the bust. they haven't returned. really thing that could derail the recovery is immigration plan. that 2 kales foreign -- curtails coming to thes u.s. one in four construction worker an immigrant. we have to look at the policy tom stimulus plans immigration plan to growth to see how they affect the housing economy. stay about theto stimulus plan, if there's a big becomeructure boom, that a source of competition for that same labor. does. you can imagine that there could be a shift in construction from theprivate sector to government sector. necessaryeally infrastructure. we have competing claims on construction talent. is not enough to go around. a -- what happens to inventory when mortgage rates creep higher? >> it's really demand when it comes to mortgage rates. we've seen that's how they are translated. it creeps into supply to the wants toeller who trade up won't trade up for fear higher rate. they won't buy because the rate is higher. they may not like their house their mortgage. if they're locked at the low not for 30 years, they may put that starter home back on the market. we've seen price depreciation, moreulk has been affordable. those are the homes we need to get back on the market. sellersrease that keeps locked in a mortgage -- thef you come inside bloomberg, we have housing starts that came out this morning. this shows new home building. suspect that a nine year high in october. according to bloomberg intelligence economics, the housing sector has not contributed to gdp in the meaningful way this year. be doing more. do you agree with that assessment? some softness in the middle of the year. that's true. i think the housing has come a long way. it has -- we've seen some increase in the new construction as we've been talking about. the question is, is it going fast enough. too recovery has been far slow. it's one of the key measures that the fed is looking at in housing sector. it's too slow for anyone who is the sector. >> thank you so much for coming out. >> take a look before we go to break, we'll give you a recap .ere of the market s&p 500 within a spitting distance of record high. this is bloomberg. ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. we're opening more xfinity stores closer to you. visit us today and learn how to get the most out of all your services, like xfinity x1. we'll put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. there's more in store than you imagine. visit an xfinity store today and see for yourself. xfinity, the future of awesome. news.e now for first michael flynn is the leading er to be president-elect donald trump national security adviser. that's according to two people familiar with the matter. a refired army lieutenant general who was a advisor to the trump campaign. tim kaine will seek reelection in 2018 and is ruling out a presidential bid in 2020. the vice presidential nominee said his decision is final. the 58-year-old said he wants to chamber for upper as long as he's healthy ant voters of virginia and his wife him. japanese prime minster today becomes the first global leader sincet with donald trump he was elected president. he was stopping off in new york way to peru. he'll try to work hand in hand with him. wants to keep trump from pursuing the trade and security on.cies he campaigned iran being warned to adhere to afteristoric nuclear deal it has been found in violation for a second time. nations u.s. and united agency that regulated the deal iran about breaching the stockpile allowed in the agreement. global news 24 hours a day, powered by more than 2600 journalist and analyst in 120 countries. this is bloomberg. >> thank you so much. motors and solarcity approved electric car makers shares. on the elonning off musk to run two companies. deal is valid about $2 billion. here's elon musk moments ago. >> i like to thank all the employees shareholders that were of the transaction. think your fate will be rewarded. it's going to be amazing stuff that comes out. david more bloomberg joins us from detroit. there any doubt that this would not go through >> initially there was. the dayes went down 10% announced.e lot of the share hollywood who -- shareholders didn't like the deal. if you believe the theory that tesla cash and ability to raise money will bail out solarcity aey're in for a dime for dollar. help.areholders needed it. bought in and voted for kind of as the summer wore on, it looked like the shareholder moving in the direction. clip we just played, elon musk said your faith will be rewarded. essentially still the story with tesla faith in elon and his vision? >> it is. that's why you see some large who own large stakes. into elon musk's genius. you got this total green one that stuff.r all they're buying into his ability to deliver on those products and brand name. the tesla brand name which elon part of. was a huge i think that's absolutely what into.e buying >> of course, this is something jim noted frequent critic of elon musk. let's take a listen. >> i think the combination is absurd. i said that. i don't know if i can sugarcoat more. the shareholders of tesla have have their heads examined. >> we talked about how this merger makes it easier for cash.ity to raise there's some cost energies. thisegically, why does deal make sense? >> that's a lot of people have with.ulty if you're tesla and you want to businessolar panel integrated, you don't to buy solarcity. you can cut a marketing deal solarcity or get panels from another solar producer rather than take on the cash needs of sor solarcity. are all of his companies. people are buying into what he do. >> elon musk obviously teller.us story incredible vision for the stop shop world of green energy. what's the next thing on the investors are going to be expecting to see in terms of executing on this vision? >> what elon really needs to do model threethe sedan out. that's the affordable tesla that exposed to sell in the of $30,000 or less. thisf people worried about deal. that is the next big piece. a lot going to generate more cash for this company for elon to fund his vision. past model three, he's talked about pick-up trucks and suv. has this big vision of fleet of electric vehicles under the tesla names charged by that that powered roofs to get done. the model 3 will be the first piece of it after that, probably truck and you see him try to get into the delivery business. >> model 3 is essential if he wants it to make a mainstream vehicle. thank you so much. up next, we'll speak with peter tchir. higher yields does seem over done. this is bloomberg. >> after trump surprise win investors have been piling in to riskier assets. much further can the run go. tchir.bring in peter extraordinary market reaction. everyone betting on higher rate.ion, higher can this go on? >> i think maybe it can. right now we need to pause a and see -- he's got to start delivering. there's been a big benefit of doubt. builds.ws and there's a strong premise to believe that he will be successful. now we have he has to prove himself. >> we're making a lot of assumptions that not only everything he's campaigned on, he can deliver on. in all show results reasonable amount of time. infrastructure projects take a long time. this,hink when i look at we repatriation is the first that will get done. it will bring money back here. that's actually supportive for the bond market. be things like infrastructure that take time. it's republicans straight through. i think there's going to be a lot of infighting over gets to spend what money in their district. not bet on that happening quickly. >> going back to that it happened before in 2004. >> no, it wasn't as broad based this one could be. this one is going to be more base. i think this is -- i don't understand when i look at it, i don't think companies need the to hire on shore. i think the whole premise that shore willollars on jobs. all these very fundable. i think ability to hire wherever want sunday -- doesn't change. the bond market rally in those names. i think there will be some restrictions. lessons fromhe big this week? obviously, the outcome of the surprise to most people. askn't think anyone -- 100% them would not have guessed we'll be at all time high in equity market. >> we had a big sell the rumor, news.e >> this intense of rally within up 8% on dow futures from net low. >> from my trading perspective, we wouldn't have this intensive rally if we didn't have a big .ell off brought if a lot of weeks short. the treasurynds on market. now at 2.3%, everyone hates the ten year treasury. weak ofthis consolidation. we'll see a by the of a rail -- rally.a i think all the stories that are now making bubbling the way to surface, lot of them have played out. >> that was the positioning when everyone was surprised by the victory. what the positioning now going forward as we wait for some kind details? >> people become more under wait. people are nervous that he is and maybe it'sr excited they will deliver. you see the treasury break even gone up. inflation.n of there's almost hope. betterot forget, for the part of the last three to four years, everyone hated treasury. but down.nothing i think people are bit too quick on this bandwagon. we've got the christmas holidays. if activities slows down, yields pick up. money you earn is important. people will chase it. >> speaking of changing trade, things that we talk -- one of thing we talked about, how love that low volatility trade. huge flows in the beginning of the year. splrv, daily flows into had somee lately we've pretty big out flows. that trade really gotten unpopular. >> that was one of my things. was a very weekend. everybody would like it. thinking.ul there was a double whammy, as coming in, it made it, this is a great strategy. started,the flows have it's problematic. why would you want to own from perspective, these kind of stocks.xy it's good that it's getting shaking out. sets up for a proper rally. people can digest trump and have people, you'll invest for the right reasons and instead rates or low. assuming trump stabilizes and does things that hope he would do, take the pragmatic approach, we can hit all time highs on the stock. there is a lot of money. getting rid of the fed only buying stocks is positive. >> we need to look at december. yellen was on capitol hill today. she indicated that interest ines are set to rise december. what from that december mighting might surprise investors that cause volatility to move? rates.l get a rise in the surprise can be that bonds.y helps the because everyone is worried about inflation. starts dampening the inflation, that will stabilize the long end of the curve. be good.ld >> talk about rallying for the right reasons. maybe the fight tightened a little bit. becomes notrket just a game. far and getoes too ?eal clashes what would that do to the market and market psychology? off.l bets are we go through the election night lows. people, recommending to you've had volatility come down. something tos watch for. other thing to watch for is the has to do something about the ten year treasury. higher. rates are going mortgage rates crested a lie. i would not be surprised if she something to address the long end. >> some fat tails with possibility. peter tchir, managing director capital. >> coming up from south carolina to ther nikki haley japan prime minster. see a live shot of fifth avenue. trump tower. for the japanese prime minster to walk through any minute. meeting donaldbe trump at 5:00 p.m. eastern time. this is bloomberg. >> the dollar is rising against the yen before japan's prime abe meetsinzo president-elect donald trump at trump tower. the closed door meet willing from now. moments kellying to trump aid anne conway. of visitor.ong list let's go to bloomberg bloomberg washington.n there have been all of these fascinating stories about the between trump and foreign leaders. malcolm the prime minster of australia got trump's cell phone number from greg norman. minster teresae may she should let him know when york.uld visit new what do we know about these conversations he's had with leaders? >> there's a story that some foreign leaders have been dialing trump tower asking for donald trump's office. entertaining stuff. shinzo it will be his first meeting. he'll get an earful about china and the transpacific partnership. abe went through difficult negotiations with president tpp.k obama over he can't be too happy to see it scrapped. remarking that shinzo abe and donald trump have a lot more in common than you might realize. of both of their positions. >> i wonder about that. , abe when he came into power, sort of a make japan again theme rebuild inflation, some of the economic themes. possible they could see eye-to-eye on their views of the world? doubt it. i think good deal separation guys still.e two point.lid has sought to revitalize the japanese military, which has caused some concern among his neighbors. trump is certainly looking to do the same thing here. >> of course, trump wants japan to pay for more of its national security as well. speaking of security and international relations, what is the latest on potential state nomination? one day it's rudy guiliani and another day it's john bolton. yesterday it was nikki haley we've got mitt romney as a possibility. >> that's the best one to me. guy who saidthe that trump would bring trickle down racism, trickle down misogyny might be his secretary of state. i think this is donald trump the media.h these throwing names out there and laughing. i will pay each you a dollar. mitt romney is secretary of state. >> that would be my next question. if donald trump's administration outis people leaking different names to keep reports off. that we such disarray were getting reports? disarrayk the reports are probably a little bit exaggerated. we're only about a week and a half into this. do a lot of preparation before they won because they didn't expect to win. we still got 60 days before he's inaugurated. i do think some of this is gamesmanship by the trump people. they're enjoying watching the name game play out in washington. also, credibly, he is seeking in thefrom people republican mainstream. good sign i think that he's bringing in a guy like mitt most vocalwas his opponent in the republican party. an oliveffering branch. ofthere's serious question potential employees within the trump white house. mitt romney hammered him. trickle down racism. if you're mitt romney and you have the opportunity to shape shape its house and policy and you're looking at if it's between you, if you're offered, and someone mitt romney would regard less stable and responsibility, do republicans responsibilitya to help shape the administration for the expert? is an argument that when the president calls you and ask you to serve your country, do it. regardless who the president is. we're all americans and patriots. yes, i think if trump actually be secretaryney to of state, mitt romney because he's a patriot and american, it.ably will do >> alex, one final question. paul ryan confirmed speaker of the house. there too challenge his leadership role. side, nancyrat pelosi's position might be under threat now from tim ryan of ohio. there?the update >> i think interesting things the democratic side. that party is really caught in a battle between its old guard and the young blood who are todering how are we going challenge this president. are rewe'll in best position to do it when we putting people and chuck pelosi schumer back in power. ohio, represents the kind of people who voted against 2016.ats in i'll be surprised if he manages to knock off pelosi. -- ist it's healthy for think it's healthy for the party. >> alex wayne white house editor news.oomberg thank you very much. a charto take a look at that i've been looking at and it wilson.m dave it compares the nasdaq buy back here.up in the wall versus the general market. there's been a big surge the buybackor stocks. the bet here is that this is had would happen if you this big tax repatriation. about with peter tchir. cash forree up more stock buybacks and sell all of that have money locked overseas. toll have more dry powder to buy back shares. >> that's kind of what happened last time around. a tax repatriation, amnesty in 2004. you had a lot of money come back prop up the share price. but not so much put putt back the the company for economy. >> good for capital, less good for necessarily everyone else. coming up, what you need to know to gear up for tomorrow's day.ng this is bloomberg. >> let's take you to live pictures from trump tower in midtown manhattan. shinzo abe will show up any minute to meet with donald trump. -- it should be interesting. >> do not miss this. coming up tonight, chinese property prices. >> and i will be looking at speeches from james bullard. fornd, indicators due out october tomorrow. thank you for watching. >> have a great evening. this is bloomberg. ♪ ♪ >> trump tower offering no new announcements today, but there was one whopper of a headline. mitt romney will meet with president-elect donald trump this weekend about secretary of state. donald trump says he is serious. what do we make of all of this? >> donald trump is watching the coverage of the transition.

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