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tv   Whatd You Miss  Bloomberg  November 9, 2016 3:30pm-5:01pm EST

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president trying to put a positive spin on tuesday night's results p or obama: regardless whether your candidate won or lost, the sun will come up in the morning. -- bit ofe big prognosticating that actually came true. invitede president has mr. trump to the white house tomorrow. hillary clinton has excepted the results. she gave a concession speech today in new york city. theclinton: this is not outcome we wanted or that we worked so hard for. and i'm sorry that we did not win this election for the values we share and the vision we hold for our country. secretary clinton also -- tomerican democracy heal a divided nation. history trump is about one week away from -- to narrow down.
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kellyanne conway says vice president-elect mike pence, new jersey governor chris christie, and alabama senator jeff will be the most closely involved in the process. the philippine president , the number will be mocked and will exclude assaults and they will also go ahead with a 2014 defense agreement that permits u.s. forces to be stationed temporarily at five designated philippine camps. daytrader accused of helping cause the 2010 flash crash is set to plead guilty in federal court in chicago according to his lawyer. a year-long battle to avoid extradition from the u.k. he is accused of making $40 million for spoofing the stock
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futures market over five years, including may 6 of 2010. almost $1ped out trillion from the value of american and peace. news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries that i am mark crumpton. this is bloomberg. ♪ scarlet: we are 30 minutes from the close of trading in the u.s. live, i am scarlet fu. >> u.s. stocks top 2%. the presidential election sent global markets into a tailspin overnight. joe: the question is what did you miss? matt: donald trump, the
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businessman and now president-elect, yearning for change, overcoming a very troubled campaign. canceled aer trump white house, when democrat hillary clinton and president barack obama called on the country to be open to the new leader and work with him as the nation begins a new political era. is it time to put your money to work, or should you watch and wait? how heahn weighs in on celebrated the surprise election outcome. let's take a look at where everything is trading. we go to the nasdaq. abigail has more. massive rally a major averages all three trading higher. nasdaq trading close to the all-time record highs. probably a surprising outcome.
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even more surprising perhaps was the selloff in bonds. this was represented by the massive spike higher. we have the 10 year yield back above 2%. this reflects the trump victory treating uncertainty for trump's leadership, basically saying that rates could rise. that could clearly be good for financials. not surprisingly with financial theing sharply higher, financials better etf's of over 4%, the best day in a 25 years. leading the charge is a company that has an education loan portfolio. higher education will be good for that revenue. big banks, goldman sachs and jpmorgan and morgan stanley trading higher. a massive breakout to the upside.
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look at btv 4872, provided to us by our friend, chief technical officer over at m cam partners. on whether or not the breakout we see all the way to the side of the chart, whether or not it is legitimate, he believes it is legitimate and he believes it is likely they will take out the 2015 highs. on the bottom of the chart, this a the s&p 500, right through three-year trend line, suggesting we could see continued strength not just -- but for the s&p overall. bullish stuff. a nice chart. thanks so much. joe: hillary clinton ended her historical presidential campaign after yesterday. on supporters to put the divisiveness of the campaign behind them. clinton: donald trump is going to be our president. we'll him an open mind and a chance to lead.
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democracy andonal the peaceful transfer of power. we do not just respect that. we cherish it. joe: how will president-elect to policy?p turn kevin, let's start with you. you are on the trail with trump the whole time. does he go next? what are the first priorities and what to me know about how he wants to staff out his administration? >> a senior trump advisor told me later today, they will have a first transition meeting. theently at trump tower, communications director for the republican party as well as reince priebus, are there. other top surrogates are expected to trickle in today. trump will head
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to washington, d.c. will meet with president obama in what i am sure will be a very interesting meeting to say the least. headi am hearing he will to capitol hill to meet with republicans in congress who again start to put together an agenda. donald trump in the last couple of weeks focused so much on trying to become president and less so on the policy agenda. scarlet: what to know about whether his agenda matches up paul ryan's agenda? on many things, they do not agree. cut ryan is looking to government spending. not 100% sure that paul ryan will be the speaker of the house yet. paul ryan may have to pay a political price for not wholeheartedly endorsing trump during the election. it sounded to me like a guy who wanted to hang onto his job.
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an olive extending branch, it would not surprise me if donald trump takes it. we should not assume it is a certainty. reallyonald trump is not a republican in any way. not a fiscal conservative, right? will he be able to pass things with this congress? >> a lot of that might get reversed now. donald trump will get stuff done. of his immigration policies, i think will get done. >> we look for the transpacific partnership in the lame-duck to be a crucial policy issue. you have got to remember that paul ryan worked with president obama on a bipartisan agreement and there were a handful of modern republicans who worked with democrats on that. sanders,ump, bernie
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making a populist pitch on both sides of the aisle, posing the trade deal, uncertain about whether or not tdp will get that. joe: basically all the pundits got it wrong. a shockme after election, you read stories in the days and weeks ahead, you are like, there were signs all along that worried them. ande were all these clues people reconstruct the narrative as if it were totally obvious. what are those signs that everyone missed along the way that clearly they should have seen coming that would have helped them predict the outcome? >> she added stops in her schedule like michigan that were not on there before. they were obviously seeing something in internal polling they were not sharing with the rest of the world. hindsight, hillary clinton was just the wrong candidate for the election. the mood foras in change and democrats literally put up the most insider
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candidate they could affect. >> i will just say that eight years ago, in the aftermath of the iraq war, in the aftermath of the economic collapse, barack obama winning, with democratic control, and now eight years later, you had the opposite. all of us are outside of cities about the pace of economic recovery. that i think is what propelled donald trump to become the presidential elect. matt: i think there is a possibility a lot of men said they would vote for hillary a lot ofhen really, white people were there and they said yes, i will vote for hillary clinton. and they did not.
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it is interesting the polling was so far off. the polls i read suggested it did not go down that way. i would not overlook the role racism played. it was not determined tiff, and he did not secure trump a win, but there is some of that going on in the election. for comingu both with us. >> hopefully, you guys get a little bit of sleep. >> i have got red bull. what will thep, trade policies look like under a trump presidency? we will ask the former secretary of commerce for the united states of america. this is bloomberg. ♪
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matt: donald trump has called for dramatic changes in the u.s. trade policy. what is the reality of u.s. trade deals once he is in the oval office? carlos on president george w. bush, we are joined from washington, d.c. thank you for coming on the closer -- on the program. for trade and he is against nafta and the ttp. does that ring true to you? not. does i cannot connect those dots. strategically nafta is so integrated and we have created you cannot just unwind
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that. beeny chains have integrated and there are manufacturing systems that have been integrated. you cannot just say to throw it out. the whole area creates a tremendous amount of uncertainty. projects are being held up around the world. at the end of the day, trade deals have been good for our country. there may be communities that have suffered because of it. we need to take care of those communities. trade has been a great thing for the country at large. we hope the administration reconsiders. joe: when people think of trade, they e-gov a very simplistic framework where there is an air-conditioning company for mexico.
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products and designs, tell us more about the complexity of the international trade and why these agreements are so crucial of the operation companies we interact with all the time. companies getes, materials from different countries. a lot of the assemblies have hee in mexico, people think make 100% of a car. the value is created primarily in the u.s. the assemblies done in new mexico. that enables a u.s. consumer to less, whichfor $300 means they have $300 more to spend. we have manufacturing facilities in new mexico that can make custom cars in two days. there are things like that that have been created over 25 years.
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computer systems that are totally integrated. sales done in the u.s., that drives materials and purchasing and sales forecasting. you just cannot take that apart. aboutis a superficiality the way we think about trade that is all wrong and could be devastating. to give you an idea, our agreements are about 10% of the world's gdp outside of the u.s. with 40% of our exports those countries representing 10% of gdp. that just shows how much benefit we get. exports are not what creates jobs -- not what -- not cutting off imports. scarlet: i was reading something written in the in -- in the new yorker postelection. he says so many americans
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struggling with money picked trump. it must mean capitalism could use further adjustment. is a possibility our leaders promised to much, that we expect that more is possible that it really is. of are at the intersection politics and commerce. are our leaders and -- promising to much and not focusing enough on doing good? >> that is a great question. about what donald trump promised, that he will build a wall immediately. that will not be easy. tot he will bring jobs back the u.s. it is almost unfair a promise. how do you do that? bring back textile jobs sent to vietnam? will we bring backups of a product by we are not competitive anymore. we need to think about creating new jobs. how do we get investors to come
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in instead of scaring them away? new businesses and new innovations. as opposedhnologies to thinking about the past. there is too much about going back. willjust delaying trade put us at a terrible disadvantage. joe: trump's success does suggest that obviously, at least in part that the trade method for some voters, is there anything we can do for the distributional effects of trade? what more can we do to help compensate the people we have lost out in these agreements? that is a good question. there is a program which essentially is designed to help
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communities that have been impacted by trade. it is a program that can be expanded. it is a program the administration took -- should look at. the problem is throwing the baby out with the bathwater. that is the part that is concerning. a lot of the talk was directed at china. and how china is ripping us off, and how china, we should not have a trade deal with china. the reality is we do not. should. perhaps we because the ground rules would be a lot clearer. there is a lot of misinformation. job's's point, there was a lot of anger in the election that really drove it. this was a rebellion against the system. your former boss, george bush and hillary clinton, secretary
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clinton, two huge parts of the system. is there anyway to quell that anger and heal america without completely shaking of the establishment? throwingt completely the economy into a nosedive. war, if wete a trade put a hold on immigration, those two things freight there will be devastating for the economy. hallowed two-week row grow? donald trump promised 3.5% growth. you will not do that by slapping tariffs on imports. how do we do it without following a status quo prescription? thing he talked about is lowering taxes. have the highest
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corporate tax rate in the world. if you combine lower tax rate would lower exports, you have one problem. and -- atplan that the end of the day, leads to something that we have a lot of disconnected pieces that do not lead to an overall plan. scarlet: i want to get your final thoughts on immigration. aspect do you think establishment republicans and donald trump can see i to i on? >> the key with immigration is the following here in the matter what we do and how high the lawless, and how big and beautiful it is, the only way we is byix the problem making our legal system work and by not forcing our employers in the private sector to have to go to the black market for labor.
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what we have done by having insufficient laws is we have created a black market for labor. we spent all of our time talking about the 11 million undocumented in the wall, but we do not spend any time talking about what is the newest immigration system to serve our economy. we are solving matt: the wrong problem. matt: thank you so much for your time and we appreciate it. secretary of commerce. thank you. scarlet: mexican president and rico speaking. these are his comments on the presidential election since we have learned their results. he is speaking in spanish. we will bring you the headlines there as he goes into comments. live from mexico city, the president of mexico. ♪
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scarlet: mexico's richest dropped $5.9 million -- bloomberg billionaires data. if you were that -- where to look on the bloomberg, you will see that mexico's 10 richest people lost a combined $5.9 billion on wednesday. this is because the mexico peso devalued and dropped as much as 12% following the announcement that donald trump has secured a victory as president of the united states. , new mesko's richest person, let the law -- losses. he is the fifth richest in the world by the way. joe: it is remarkable that the world's richest billionaires made on of money earlier -- a ton of money earlier and most did find today on the opposite result with the risk -- the exception of mexican billionaires. quite badly today.
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>> still doing ok. so what about $65 billion. the market closes next your take a look at the major averages. minutes tohan four go to the close. gains better than 1% for the dow, the s&p, and nasdaq. this is bloomberg. ♪ . .
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scarlett: where moments away from the closing bell. -- we are moments away from the closing bell. i'm scarlet fu. joe: i'm joe weisenthal. matt: and i'm matt miller. we want to welcome our viewers to tune in live on twitter. every weekdayus from 4:00 to 5:00 p.m. unless something special happens over the weekend. : the dow at one point flirted with a record high, briefly it's -- briefly eclipsing its all-time high but did not get there. joe: stunning reversal from what we saw last night in the immediate wake of the result. at one point today, dow futures were 6.5% higher than they were last night at midnight. we will talk more about these huge swings, historically wide
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days we have not seen in a long time. incredible day for the market reversing what we saw yesterday. matt: trying to remember first, what was the day james comey -- scarlet: october 28. matt: october 28. i have a chart i pulled up. way, smith & wesson is going to change its name to american outdoors company. there are reasons for it, but really? everybody knows they can keep buying guns. there is no rush to covello -- to cabela's. you can look at the s&p in granular ways. see construction and materials, construction and engineering, metals and mining. a lot of bets on infrastructure
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spending, investment. that is really a big game for today. sbs,i wanted to look at which is a great way to look at average volume. the blue line is what we actually need. the green line here is the average. can see that you are trading about double the amount of projected to close over 4 billion shares today, and we are looking at an average of just about 2 billion. joe: the day. also amazing day in the world of government bonds. last night, it was close to the 1.71%. one of the biggest moves ever. treasuries as they got really nervous, then as it eased of it, people sold treasuries. we had the general market left, and then people remembered that fiscal trump will be the
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stimulus president, lots of spending, lots of debt, and then 10-year yield i want to look at a one-year version of this same chart. yields have been rising for a really surging. i want to look at the one-year chart. we are seeing steepening. long-term,ion in the maybe a fed a little less inclined to raise rates aggressively now. short-term rates not moving nearly as much. that is a really violent steepening at the end of the chart. also want to look at the international ramifications of this victory. we saw yields higher in most emerging markets. 10-year yields much higher in mexico, higher in south africa. we did see this come back in the
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u.s., but it did not really translate so much overseas. interestingly, brazil ultimately did and lower. before we wrap up on government bonds, i want to go to the bloomberg and look at the becausees whipsawing this is a chart of the intraday move of 10-year treasury yields. this was the biggest intraday swing from the initial dive in yields to the surge. we had a similar move in brexit, but this was even bigger. just an extraordinary day. we will be talking about it later on the show. unbelievable action. matt: related to that, i just want to take a look at what the markets think a trump presidency means. look at the u.s. break evens, look at the 10-year and look at a graph of how they have traded. pretty incredible. nasa needing to me that investors think donald trump is
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going to come along and deliver what janet yellen and ben bernanke and mario draghi just cannot do, and that is inflation. scarlet: and overnight, right? he got the yield curve to steepen. let's move on to commodities. they have surged overnight, basically ending flat on the day. crude oil ending higher. you have to wonder how long that we have a much more pro-drilling administration and we have now and soft commodities, a bit of a breather. i do not know what the connection is between corn and trump. scarlet: and currencies, the u.s. dollar surging the most since the day after the brexit vote. it was volatile during the vote count, but you can see them as a quick snap back on the heels of
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the reversal in treasuries. no turnaround, though, for the mexican peso. 12% beforemuch as paring some of its losses. we know the nation's top economic officials held a seven-minute joint news conference. they said the country's finances are solid, trading has been orderly. they did not take any steps to support the currency. the central bank will be meeting next week as planned, so we will look to that for more headlines, and a final check on the offshore chinese e&p. donald trump as candidate has promised to declare china a currency manipulator. this is the offshore trade. keeping the yuan artificially week in order to boost exports. joe: people are going to want to keep an eye on that in the coming days. scarlet: and that would be at the expense of u.s. jobs. for anyone who wants to spice up their currency trade, here is an atypical -- actually, let me pull this up. hold on.
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matt: while you're doing that, when you said peso, i polled up gmm to see the severity of the move. if you look at my bloomberg, you can see a slider at the top of the screen that allows you to differentiate the moves by severity. i'm moving it all the way over to things that moved three standard deviations away -- joe: that is a pretty incredible chart. matt: wow, just some big moves in the markets. scarlet: for those of you who want to play along, and atypical currency pair, a russian ruble versus the mexican peso, so anyone who bets on the ruble gaining versus the peso is reaping the rewards, as you can see by this big move up in the ruble. more than any other emerging market currency pair. not a typical currency pair, but why not, right? those are today's market minutes. joe: for more on today's action, we're joined by the senior
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currency strategist at rbc. thank you very much. extraordinary 12 or 24 hours in the currency markets. huge gains for the dollar. it which weit-like saw the pound weakened considerably. what is the outlook for the dollar going forward? >> i'm actually very positive on the dollar, but not so much on fiscal stimulus. it's for the potential for tax reform. i think one of the big news of the night was the fact that republicans not only kept the house as they were widely expected to, but they kept the senate as well. we have a referral president. for the first time, taxes on is really on the agenda. matt: what kind of tax reform? lower corporate taxes? an allowance? almost an amnesty of sorts? is that the kind of thing that is on the table? >> we have heard a lot from speaker ryan about the potential for overseas tax reform, and
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that could have potentially huge implications for the u.s. dollar. trump himself has talked about a doomed repatriation tax. last time something like this was done, it led to huge inflows in the u.s. dollar in a real turnaround in the dollar cost fortunes. scarlet: i was showing earlier the chinese yuan. we know donald trump has been very vocal on china being a currency manipulator. does that happen? if it does, how does that trickle-down? >> the reality is china is a currency manipulator, just not in the way that some might think. china is not really allowing its currency to freely float. it is intervening to prevent it from weakening even further, so i think policymakers have to be careful what they wish for. if china were to step that, you could actually see it a lot stronger rather than weaker. when it comes to currencies, we tend to see less manipulation in
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the g 10 space. japanese authorities overnight but weite concerned, have seen quite a bit turnaround in dollar-yen, so i think they will feel comfortable there is not anything they need to do. if you look at the turnaround we have seen in markets, the biggest reaction has been a switch from what we saw last night too much more dollar strength and more risk on today. as we look forward, we really think about the medium term impact of tax reform. potential tax hike. all of those things will come together. joe: there is a global story about political chaos or surprises or whatever. started with brexit. u.s. obviously nothing is really settled in the eurozone. where are the safe haven currencies, the safe haven places to park your money where one can feel confident there is not political of people in the offing, or is it just the yen
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and swiss franc as always? >> bn in the swiss franc are classics. when the u.s. did introduce the hia act back in 2005, the swiss franc was one of the biggest losers. act,omeland investment 2000 five. that is the potential for quite a lot of strengthening in dollar-swiss. yen is still the safe haven if you look at the whole world. joe: what about australia and new zealand? i'm always curious when i read those articles of people going to the end of the world to buy their real estate way out there. could we see more flows? more stable countries, very asid rule of law, not really geopolitically in the center of anything -- could we see more flows into those currencies? >> the underlying assets do tend
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to act as forms of safe haven. the currencies themselves do not trade anything like safe havens. very small, liquid, difficult to trade. i think you should be looking for more strength in the australian dollar in the new otherd dollar for reasons. matt: we have a situation here where monetary policy is going to be tightening, and it looks like there will be fiscal loosening. does that typically have an effect on the dollar like the one we are seeing today? >> absolutely. capital flows are more meaningful. that is what you have to be focused on the most in coming months as we begin to see what form the cabinet will take, what policies trump will introduce. that is what you should focus on to get the sense of the dollar. joe: thank you very much. scarlet: we have breaking news from mylan, the generic drug
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maker, reporting earnings weaker than what analysts had been looking for. a miss on the bottom line, but the company reaffirmed its full-year forecast in its 2018 and expression estimates. again, the revenue number and eps number for the third quarter missing, but mylan reaffirming its full-year forecast. matt: coming up, the republican party takes stock following donald trump's surprise victory. we will speak with new jersey's governor, christine todd whitman, a republican who voted for hillary clinton. this is bloomberg. ♪
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" arlet: "what'd you miss? the future of the republican party, one of the central questions looming over the
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election. we saw a number of lifelong republicans throw their support behind hillary clinton and you can count our next guest among them. christine todd whitman joins us from scottsdale, arizona. i want to get your reaction to the election, first as a woman, second as a republican. ms. whitman: first of all, i was disappointed. was he was not my candidate. i was surprised by the magnitude of the suite. hispassion was behind voters. there's a whole host of angry, frustrated scared people out there for whom government has not been working. the fact that he was able to win was not a total surprise. it was the magnitude of that win that was surprising. see a woman as president at some point in time because i believe we do bring a different way of problem solving and prioritizing, but i did not vote for hillary clinton because she was a woman.
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that was not my central issue. it was because i was more concerned about him and his ability to bring the government together, but i have to take him at his word in his acceptance speech last night and i hope proceed.he way we scarlet: absolutely. you are the face of moderate republicanism. what do you think it looks like today and what might it look like in four years? ms. whitman: that is a very good question. it will depend how donald trump approaches the congress and those senators and congress people who did not run with him, who ran against him but whose votes he will need to enact some of the things he wants to do. if he reaches out and tries to heal the wounds and steals a more moderate course in the sense of driving for the change the electorate demands but doing it in a way that does not alienate people and demonize groups that might oppose him, then i think we are in a good place, but if you have groups like the freedom caucus who will insist on trying to extract the
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pound of flesh from those republicans who were not "republican enough," then i think we are in a bad place of having to do a hard reboot. joe: do you think it is possible there is no future at all in the republican party for your sort of moderate rant of conservatism, and relatedly, are there evil of your ideological bent who are still republicans out of inertia but do not really have a place or reason to stick with the party? ms. whitman: there are, and a number of people have said they are out of it after these results just because they are so concerned about the rhetoric we heard during this campaign, as i am concerned about it and was concerned about it. that will be a key for me. about an election cycle or cycle and a half behind us. if you look at the pressure hillary clinton was under from elizabeth warren and bernie sanders and bill de blasio, they are moving to the left, so a host of democrats will be left in the center saying, "i'm not
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comfortable here," and that may be nucleus of a new movement. it is not just a right-wing anger and populism. spain has put in most -- spain has podemos. is it just a time now where a lot of radical proposals go through? do you think donald trump is given more room to move some radical legislation? ms. whitman: it does give him room, but because he cannot do it just on the back of the more extreme elements, he has to bring in moderates, so he has to have some balance. it will be interesting to see how he handles it. he has never had to do that thing -- that kind of thing before and he will find a very quickly that he cannot fire congress. he will have members of his own party, and of not talking about those who did not support him, but those who would be his natural supporters that have their own agenda.
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they may want to push him further than he wants to go, and that will be an interesting struggle to watch and see how that plays out. : as matt said, this is not just a right-wing phenomenon. across the u.s. and europe, both left-wing and right-wing movements are gathering strength. is there a prescription for establishment politicians, ideologies to gain currency in a way thatle would not just be pandering towards them or ultimately damaging? ms. whitman: first of all, they have to get the message. if they have not gotten the message with these first kid of elections, and you look at the spring french elections, i do not know that angela merkel will ,urvive elections in germany all around the world, you have the populism movement, and it should tell the establishments in all those countries that people want to see the government work for them. they want to feel that their future can be better than their past, then what previous
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generations saw. in this country, congress has a terrible rating as far as the public is concerned because they spent their entire time -- they got to comfortable, and they are in an echo chamber, and they spent their entire time fighting politically and not negotiating we need a issues dressed, and that should form a onh for them to go forward what it will take to address those issues in a meaningful way. matt: we saw stocks overnight tank -- or futures and then recover this morning. it seems the market got more optimistic. do you have any room for optimism for this candidate for whom you did not vote? is it possible you think this works out well for the u.s. economy? ms. whitman: i certainly hope so. he is going to be my president now, and there's a lot that for the be done
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american people in general. he will not be able to do all he said he was going to do because it will not be within his control and you cannot stop progress, which has made us more inicient with fewer people manufacturing, for instance, but he can make a real difference, and i'm very hopeful. scarlet: christine todd whitman, former governor of new jersey, joining us around arizona. thank you. joe: coming up, we will look at one place where investors in the wake of last night's big surprise. stay tuned. this is bloomberg. ♪
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joe: "what'd you miss?" moves in interest rates, that's on the fed, bets on inflation. pretty extraordinary day in the
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fixed income rates world. what happened? where do we stand? what are the expectations of investors? >> the interesting trend we have been seeing, really since the september fomc meeting, is a componente breakeven of treasury yields. interest rates have been going up because the inflation factor priced into those yields has been going up. we have also seen stocks going sideways or down, which is not something you usually see. usually when breakeven inflation goes up, stocks go up as well, so that was odd, but in the last , not only are breakeven inflation rates continuing to go up, but stocks are going up as well. joe: earlier in the show, matt joked that overnight, trump has accomplished what mario draghi and janet yellen have not been able to accomplish in years, which is to get investors to think inflation is coming.
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trump istation is spending, fiscal stimulus. >> that is something that fed officials have been talking about for a long time this year. "we need more help. we cannot do this all on our own. it is time for structural fiscal policies to take the baton and ift the outlook." it's fascinating because that is what we are seeing in markets today after the election result. if you look at the curve and pinpoint exactly what is going on, it looks like the probability of hitting in laois and above 1% or maybe above 2% has been going up, but the has not beenf 3% going up as much. markets are really seeing this sort of development that apparently is going to allow the fed to hit its inflation target but not necessarily cause runaway inflation.
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joe: so what are the expectations with regard to tightening? in the immediate aftermath of the vote last night, we saw markets collapse and they have basically recovered completely. afternoon,te this the odds of a december rate hikes are up from where they were yesterday. not only that, but over the next year, which includes december but all of 2017 as well, the outlook or tightening has been marked up as well, and even going beyond that, further outcome of the outlook for tightening. really, at every stage of the game, we are seeing investors think the fed has a better chance of getting interest rates higher now. joe: absolutely extraordinary developments. it will be really interesting to allows the fed to get off to zero and continue a more normal rate cycle. thank you very much. coming up, financial markets' reaction to donald trump's surprise victory in the u.s. has so far proved less extreme than the brexit vote in june.
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we will show you some side-by-side comparisons. this is bloomberg. ♪
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mark: time now for first word news. donald trump is said to be about a week away from narrowing down the first members of his administration according to three aides. his first transition meeting was today. his campaign manager says vice president-elect mike pence, new jersey governor chris christie, and alabama senator jeff sessions will be the most closely involved in the process. the impending presidency of helpingrump is already his books sell. his breakthrough best seller from the 1980's "the art of the deal" and his campaign work "great again" made's movers and shakers today, a list
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featuring books that made the biggest jumps on the bestseller list. with six broadcast networks, comcast nbc was tops with an average of 12 million viewers in primetime according audience numbers released by univision. walt disney's abc was second with nine point 7 million. five more indian diplomats have returned to their country in an ongoing diplomatic dispute with pakistan. both countries expelled an embassy staffer on allegations of spying. global news 24 hours a day powered by more than 2600 in oversts and analysts 120 countries. scarlet: thank you. we have breaking news -- a lexicon pharmaceuticals suspended from trading right now as the company says it is
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investigating its sales practices, and it filed to delay its 10-q. it says its audit and finance committees are working to complete the investigation. it has retained outside counsel as well to assist in the investigation. as a result, it is unable to file its 10-q in this trading period. day for equities, especially when you consider futures had been plunging yesterday -- joe: it is a mind blowing day given how far down we were last night. i and in disbelief at the speed of this recovery, even having seen how fast we recovered after brexit. scarlet: at one point, it was trading at its record high. matt: what i did was i went into the bloomberg and looked at the reaction to risk assets at noon in london on the day after brexit and at noon here the day
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after the election. you can see it is a very different reaction. s&p futures were down after brexit. upiously, the s&p cash trade after the trump election. the emerging markets index, the commodities index, treasuries -- everything is going in different directions with the exception of gold or the dollar, and even that is a pretty market difference. everything is like is compressed this time around. matt: for more, i want to bring plus global equities strategist and asked just why the market is reacting so optimistically. before this, every pundit said clinton would win and also said that trump would be disastrous or the economy. so many guests came on the be aam saying they would recession, and yet, people are buying stocks and getting out of safe haven assets.
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why? >> markets are clearly hoping we have a more benign president then we did candidates, that we have a progrowth agenda. we have some sector relief today. i can try and rationalize it. scarlet: does it mean because the republicans captured the presidency, the senate, and the house that whatever uncertainty there was regarding donald trump 's policy proposals, at least now you know what those policy proposals are and the likelihood of them getting past is that much higher? >> i think that is a bit of it. the market is clearly betting on growth coming through. i think that is far too early. at call is we are looking extended heightened economic uncertainty on the day you have this big move in economic markets, the economic uncertainty index -- joe: what is that based on the? >> it is based on news.
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scarlet: you could make the argument for brexit, but we have not seen that just yet. the data is indicating the economy is holding better than many people have feared. what if that is the case with the united states as well? concern is we have had this steepening of yield curves, this backup of breakeven inflation. how does the fed respond? the growth attached to that is a year out. joe: we talked about the fact that expectations for fed rate -- in your model, how does that feed into equities? >> we work concerned about equities coming into this. we are still concerned about equities today. these expectations, very high. i would argue a lot of this
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growth is sort of baked into the numbers. you're sitting at close to all-time high profit margins. i think the backdrop was already pretty vulnerable. matt: so it is a good day to go short stocks. >> i just think it is far too early, and i would certainly be interesting the things that were done poorly, the steepening of the yield curve, and i would be looking at some of these defensive sectors. matt: does it not tempt you, though, when you think about 's constant talk about infrastructure investment and big, big stimulus? we're not talking hillary clinton $200 billion. $1 trillion, giving that money to caterpillar, to joy global, two people who are going to build this stuff -- scarlet: not to mention rewriting obamacare as well. if we're looking at a re-inflationary environment, i
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would be looking at materials, energy, maybe even real estate. ,e like those sectors anyway either because they are defensive or because we are quite bullish on emerging markets. joe: we did see today a big rally in copper, iron ore, and aluminum. was a gap today in performance between domestic equities and international ones. emerging markets still had a pretty bad day, clearly underperformed. would you expect that gap to close, despite perhaps even thep's antagonism toward global trade that the international markets could outperform u.s. ones? >> funnily enough, i think the rest of the world has a problem here and the u.s. equities are a relative safe haven. i think he europe is the big loser here. you have the most globalized corporate's, some of the least flexibility in europe, very low growth. rates are extraordinarily low.
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i think trade is a much bigger issue for japan that it is in china or, dare i say, mexico. big trade partner, but rates are very low. scarlet: the u.s. looks better than europe, then japan, but overall, valuations are pretty rich and you want to stick with the defenses? >> for now, yes. in a day where everything has performed the opposite of how you would have expected to, emerging markets has gone as badly as you would have expected it to. i think there is an opportunity. market? mexico emerging >> e.m. is a big place, so probably avoid mexico, brazil, south africa. matt: thanks so much for joining us. appreciate it. trump's surprise victory shocks markets and the nation. we will dig into how he paved
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his way to the white house next. this is bloomberg. ♪
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matt: time for the bloomberg , a look at some of the biggest business stories in the news right now. the british day trader accused of causing the 2010 flash crash is set to plead guilty in chicago according to his lawyer. he lost a year-long battle to avoid extradition from the u.k. he's accused of making $40 million on spoofing cme group's stock markets futures including on may 6, 20 10, when a trader frenzy briefly wiped out almost $1 trillion of value from american equities. mexico's wealthiest person lost
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$5.1 billion after donald trump's stunning upset to hillary clinton. he shed more than 9% of his after the peso dove as much as 12%. the 10 mexican billionaires on the index dropped a combined $6.5 billion in early trading. finally, jack rivkin, ceo of money manager al tager's, has died after a battle with cancer. by almostn remembered 50 years of investment experience. he was previously a chief investment officer at altegris, but he held a number of other roles including research at smith barney and lehman brothers and newberger berman where he was chief investment officer.
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he was 76 years old. that is the bloomberg business flash. joe: "what'd you miss?" in the hours after donald trump's election as u.s. president, pundits and markets were surprised, so how did everyone get it wrong and what can markets expect in the months ahead? our next guest recently wrote about how trumps populist uprising brought him to the white house. perhaps the most surprising aspect of the map was how well he did in the upper midwestern states. michigan, wisconsin, pennsylvania -- i don't know if that is considered midwestern, typehese sort of rust belt of states. there were hints of that, that he might do well late in the campaign because we saw all these campaign stops from clinton and obama. that cannot have been how they wanted to allocate their last weekend. what happened in those states?
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>> this election last night eatery desk easily the most staggering political upset in recent history, and you pointed out the story -- the rust belt states, great lakes states, and the upper midwest. trump won michigan, a state obama won by 10 points in 2012, wisconsin, which obama won by seven points, and wisconsin, a state republicans have been trying to win and have failed to. these states were turned the blue wall, that republicans were not able to win since the 1980's. trump not only put cracks in that wall but absolutely shattered it. the biggest thing polls missed was trump's strength among particularly non-college-educated white .oters in those states among non-college-educated white men, it was 72%, absolutely decimating democrats. scarlet: that is pretty incredible. which other groups did he make inroads into that we did not
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expect? i read somewhere latino men, educated white women -- matt: how does he win florida? scarlet: a lot more flocked to trump then we would have thought. >> trump surprisingly outperformed mitt romney by a couple of points among hispanic voters and african-american voters. i don't think anyone saw that coming, but the big story is these voters stayed home. the types of voters democrats rely on, and hillary clinton needed them in huge margins to come out. they did in 2012 and in 2008 or obama. they did not show up yesterday and that was the reason she lost. as for the polls from the other states, they were not too far off. trump won a number of tossup swing states which were critical .o his past -- his path
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it really hit a nerve, and a think everybody estimated the extent to which that would power his showing in those states. of theo is the leader democratic party today? >> your guess is as good as mine. democrats had a huge, huge moment of reckoning right now. and people in the political media class have been preoccupied talking about the republicans' problems with minority vote is when we forgot about the democratic party's problems with the one group that reliably votes in elections, and that is white voters. i do not know how they will come out of it or learn from it, but the path they are on right now is unsustainable. they thought this coalition of minorities, millennials, and unmarried women that howard obama twice would be sustainable and regularly turn out in presidential elections, and it turns out that group is not reliable to turn out unless president obama's name is on the
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ballot, and that is a huge problem for the party. scarlet: i keep reading about the white working class, especially white non-college-educated men, voting will be lessd that powerfully voting bloc next time around. democrats, by virtue of the fact they represent minorities and liberal college-educated women will be in a better position. is that not the case? >> that is certainly true, but they have to turn out to vote. the hispanic vote grew or the hispanic share of the population grew by several percentage points, but they only grew by one point in terms of their far belowte, which is their overall growth rate, and white voters are turning out at a pretty high rate, already much higher than hispanics and hire this election for donald trump. that is what they are contending with. democrats certainly have potential if these groups of
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voters continue to support them, but again, it comes down to turnout. it is the biggest cliche in politics, but that is what happened yesterday. matt: it was interesting to hear hillary clinton's speech today. i thought very gracious, and president obama talking in a way that aims to bring the country back together, to heal us after election.ive a lot of people on twitter talking about the possibility of a pardon for hillary clinton by barack obama at the end of his term. a lot of people do not know you do not have to be charged with anything -- of course, she has not been. she is not under indictment. do you expect that to happen? a kind of gerald ford/richard nixon kind of pardon? >> the white house did not give an answer, but josh earnest did express how the next president will look forward, not look backward, and not seek political revenge, that sort of thing.
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matt: what if the next president talked about seeking political revenge in every one of the debates? scarlet: or more importantly, the rest of his party? >> let's just say, if it is on their mind, they are not talking about it publicly. mentioned democrats now face this reckoning. hillary clinton won the popular vote last night. i also remember people saying democrats' social liberalism had no currency in middle america and i remember them saying the republican party faced a huge reckoning after 2012 and the party had no currency outside of white americans, which did not seem to matter this election. thewe to quick to declare death and permanent wilderness of these parties? >> we should not be writing any party a permanent obituary and suggesting any of them will go the way of the whigs.
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parties did, the adapt in these moments. i think after the 2004 election, the democrats did adapt by appealing to this new section of the electorate, which apparently came with its own downsides. republicans in the obama years obstruction and used it to mobilize their own base and that's why they won big in 2010 and 2015. i think the parties are resilient in a two-party system to adapt, but the process of getting there is painful. it's not clear what things will look like when they come out the other end and that is a process to regret are about to look at now. scarlet: up next, billionaire investor carl icahn reveals he left a trump victory party last night to get $1 billion on stocks. that's coming up.
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♪ scarlet: carl icahn says the republican nominee has victory last night is a step in the right direction but do not expect changes overnight. carl icahn: i'm not telling you that overnight this market is just going to run away only upside. i still think that -- there was no question, you know, just wipe out the problems the cousin donald is coming in in january. there's still in number of problems in our economy, and i think the zero rate interest rates are a problem. i'm not telling you overnight this is a complete change, but i think it is a major step in the right direction. you saw last night -- i think it is an amazing story, by the way, and so perfect for carl icahn.
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you are waiting to celebrate the trump victory with the donald and his family and all his other backers like yourself, and you cannot resist the opportunity to trade when you see the s&p 500 futures tanking. i make it acahn: point, meaning i thought it was absurd that the market -- the s&p was a down 100 points on trump getting elected, when i think by lunch, there might be some problems with him getting elected, but it certainly to me is positive. how positive? am i telling you next week it's going up? no. i'm not going to say that. we are not out of the woods of this economy yet. i think there are some overriding problems, but i think what you have to do is change perception, and if you do, i think we've got great opportunity in this country. it's a great country. we have a great country.
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we had a very willing workforce, and we have great ability to manufacture, and yet, we just sit back and do not do anything and build regulation on regulation on regulation. and then wonder what is wrong. one of the major problems that economists who know more then me about this thing will tell you productivity is not growing. when productivity is not growing, you cannot compete. why is it not growing? because businesses are scared to spend money. i know this. i own them. joe: your portfolio is measured in the billions. when you talk about the trade you describe last night, how much money are you putting to work? icahn: i try to put money to
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work, but i could not put more than about $1 billion to work. the s&p was so liquid. it was unbelievably liquid. the world was going nuts. it's amazing. the world was going into a panic for no reason. that is my point. i think donald cumming and is a good thing for the economy, not a bad thing. ♪
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joe: don't miss this -- president-elect donald trump meeting with barack obama at the white house tomorrow. should be fascinating. matt: disney earnings out after the bell. scarlet: our very own matt miller heads to berlin.
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you.e going to miss matt: i am going to miss you as well, but i will continue to watch "what'd you miss?" every day
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mark: i'm mark halperin. john: and i'm john heilemann, and with all due respect to those who think this can be reversed, maybe, but only in postproduction. man, stuff has happened here in america. well, about last night, after more than a year of brain-twisting, reality-based in, you cannot make it up plot twists, the 2016 presidential race ended with one final, tectonic plate shifting 9.5 on the richter scale


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