>> the european open. where we have your first trade of the day. it will be a busy session. just as busy i suspect. caroline hyde is over in london. what are we watching? the trump jump, share gain on spending pledges. how do investors position themselves as questions of policy still remain. , rip dodd-frank. what will the new residency mean

for the financial sector. and the great again website threatens to dismantle wall street reform. hillary clinton weaves the popular vote and protesters take to the street. how will the big cities of america may just make their voices heard over the next four years. you are looking at live pictures from l.a.. let's talk about the markets. what a 48 hours it has been, incredible moves across the world. let's take a look at what is happening in terms of the picture. that is the s&p. it bounces yesterday, now index fading. that is what we're seeing on the u.s. 10 year, down around 2%. where watching -- what we are watching on copper is epic. >> the risk appetite is out there. this spending pattern, $500 billion that is being have to angled by donald trump seems to be building up, that pushes --

the pushes higher. we saw their slits have a look at where your pull open. 130 billion euros in terms of markets. u.s. stocks will search. and the ftse 100 is clearly going to be the winner. it looks as -- to watch out for the miners. get more. let's get more. >> thousands of demonstrators have taken to the streets to protest the election of donald trump as president. demonstrations and vigils have taken place in major urban areas including new york, chicago, washington, and was. you're seeing the pictures of los angeles. also protests in smaller cities. this came despite hillary clinton and president obama urging their backers to accept

trump and support his transition into power. the white house has not ruled out issuing apart into particularly clinton from prosecution by the incoming administration. over her use of a private e-mail server. during his campaign down trump threatened to assign a special prosecutor to investigate the former secretary of state. the president-elect will meet with barack obama at the white house later today. the yuan has the to a six-year low on concern about china's trade relationship with a more protectionist u.s. china arump is called grandmaster at currency manipulation and has threatened tariffs of up to 45% on the countries imports. commonwealth bank of the story has estimated such a move would cut china's shipments by 25% in the first year. new zealand central bank said it has only done enough to return inflation to target after cutting interest rates to a fresh record low. the reduce the official cash

rate by a quarter to one point 75%. inflation has languished between 3%. despite some of the strongest growth in the developed world. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 100 -- 120 countries. high: and the hours of -- after marketas been elected, players have been awaiting clarity on the president-elect plans while others have been getting in there and putting money to work. >> i tried to put a lot more to work but i could not put more than about a billion dollars to work. and then the market got away. i am so happy about it. is not much to be had

in terms of growth area i would still stick to the 1% to 2% growth rate that the imf and others are suggesting for the u.s. i do not think a trump victory will really do much there in terms of the policies that he is now advocating. >> imagine after slapping tariffs on mexico and china. he needs to refrain from doing that. i could do nothing his policies will prove to be unpredictable and all. we have seen the manifestoes he laid out, god knows he has seen hundreds of editorials i have written. those are his policies, he is going to stick to those policies and the donald trump you saw in his acceptance speech is the donald trump i came to support. guy: we saw some of the big

players around the world getting involved in the market. why were the getting involved, because the swings were massive. when it became clear that donald trump was going to win, the market on the futures nosedived but then it turned around. the get the turnaround, look at the scale. you can see at the right hand of your screen, the three big spikes next to the one we saw was brexit. and then the previous one was in august of the previous year. just to give you a sense of the scale, that tells you the story. you can see that kind of swings we normally get in the market yesterday, just topping the charts in terms of the intraday moves that we saw. let's bring in jim mclaughlin who is a man who oversees $386.7 billion is the ceo of principal global investors. good morning to you. is it as simple as going long stocks, short bonds right now? yes: good morning. not really. what happened yesterday when you call it the trump jump is not

really based on fundamentals. the has been a habit and it has been generally very successful to buy on dips in the u.s. market. tot is almost habitual investors, there is a lot of that going on and essentially, that is how i would interpret carl icahn's comment. i would not say it is necessarily a very fundamental move. buying bid dips, added to that, there was unwinding of lots of previous hedging trades. a lot of investors have done hedging trades and that was one of the reasons why you had seen quite a week market in august and september and october. the market had been quite weak as the hedging trades were put in place. you saw the other side of that yesterday. i would argue it -- it was a very technical market and i do not think we are seeing the fundamentals of the infrastructure spend or anything else. through just yet. >> there are a cash balances out there.

those cash balances get put to work? seet: i think that he will attempts to see more certainty. our cash balances are not much higher than normal. we get very strong inflows so plenty to come -- becoming available. i would not say we sitting on an awful lot of cash at the moment because we have taken a fairly positive view of the u.s. economy in particular. that -- i continued to take that view. it felt that in spite of washington and in spite of washington does not really change, the real strength of the u.s. is an extremely strong private sector, lots of innovation, great productivity. so long as washington does not get in the way, the private sector in the u.s. will continue to produce the goods so do not underestimate american business. the: should we be thinking

moves over, we have seen copper, aluminum shoot up. rio tinto -- up to a record at the moment. $500 billion that seems to be putting to work. this that make these moves fundamentally driven? guest: no. i do not see that really happening. we had a very similar attempt to spend a lot of money on infrastructure at the getting of president obama's first administration. the catch was -- catchphrase was shovel ready products. it takes too long. infrastructure has public inquiries and planning consent attached to it. i go through laguardia airport pretty frequently. what itforetaste of would be like if they rebuild it. nine a -- it is a eight or billion dollar and her structure that takes long time to get started and to make a dent in 500 billion you would have to

have a few of those across america. if we get that infrastructure spend it will take years. i think the move in metals have been overdone if people think it is based on infrastructure. there is an argument for metals on the defense side. president trump has said -- president-elect trump has had some quite belligerent rhetoric which could mean higher defense spending and the agreement is very monday intensive. -- commodity intensive. cracked when he to talk about what is happening in the financial sector as well. is dodd-frank dead? do not take a hike. happy forelect is janet yellen to stay in the current role she has been occupying. will she get react, that is the big question. we will take a look at the functions and come back to the conversation surrounding dodd-frank.

to untiedges restraints on u.s. banks that were put in place after the global financial crisis in 2008. are we heading back to some sort of glass-steagall? trump butratulates are they headed for a collision? all that still to come. this is bloomberg. ♪

guy: welcome back. you are watching the european open. we have 16 minutes to the market open. futures are positive pointing to a positive start in london trade. let's get caught up. te: siemens has predicted higher than estimated profit. revenue advanced most of it in the industrial business units. the announced plans to spin off its health care division. zurich insurance groups third-quarter profit has more than quadrupled, net income was $112 billion. a decline in major test of his help to reverse a loss in its general insurance unit.

there's a telecom has reported an increase in third-quarter innings. a rose to five and a half that matched and estimates. offset slower growth and its german market. that is your bloomberg business flash. guy: markets have been considering the monetary policy impact of a trump park -- presidency. blackrock said the market turmoil resulting will cause the federal reserve to hold off on a hike next month. san francisco fed president john williams said existing rates are policy will be a gradual process . it takes a few years. currentlyon has been low. inflation today measured the way that we look at it is running about 1.7% over last year. bewanted to be -- want it to 2%. what is happening with the strong economy, i am expecting

inflation will move back to that 2% in the next year or two. we are very close to achieving our goal. guy: yesterday we saw wild swings in interest-rate probabilities surrounding what the fed will do next. you can see that clearly on your work function. go to the swap contract and you will see this bouncing around. theumped initially on prospects of what the trump when will mean. we came back up again. we are back where we started. we are even a little bit higher. you can see this on the right-hand of my screen. we really bounce back. go to your work function and look at the last way for hours. the stock market is not immune to what we signed terms of volatility. the fed has got so many things to think about right now, but we learned is economic data does not change very much or very quickly at all. we still have a time of uncertainty.

how will janet yellen reviewing those two factors? effect may of the come through a bit quicker than in the brexit case. and brexit none of the rules have changed and it is not very clear how the trade rules will change whereas in the u.s. it is clear that confidence among minority consumers will be a lot less than it was. the demonstrations in the coastal cities will disturb consumers. many is apprehension among people that they will lose their health coverage if the affordable care all -- care act is repealed. there is lots of reasons why many consumers will be feeling very uncertain and i think that is what the fed will be looking at to see whatever they can determine about it in the run-up to december. i do think there is a chance indications,umer it will not be much data but it will be sufficiently negative to

persuade the fed to take a pass again at the december meeting. --h a clinton victory i'm with a trump victory i think it is a 50-50. you could see continued steepening of the yield curve. >> how long do we see a gathering pace in rate hikes, how long will the debt to consumer spending be? we just heard from fed president williams talking about he wants it back at 2%. we have seen 10 year break even up,the inflation rate is there are big spikes that the fundamentals could work against what you say. >> that is a longer running issue. as policy becomes clearer, hopefully, in the first quarter of next year, it is quite possible that when mr. trump's president, policy will be dominated by lower taxes, by plans for more government spending. that would be a classic

keynesian stimulus, fiscal stimulus. if that happens, then you're going to see that buildup of inflation because remember, it is a keynesian stimulus when the u.s. economy is almost running at full capacity. it will be largely inflation, a bit of growth. unemployment is 4.9%. it could down to three or three and a half but it is hard to see it structurally, it's lower. there is a little bit of spare capacity in the u.s. economy which is by creating jobs it will be quite hard, it will be hard to find the people to do those jobs which would tend to be inflationary. what happens whether or not you get a rate rise and december, i more the -- he looks likely to see more rate rises next you. i would not be surprised to see at least three next year. you could see a third funds rate up towar2% within a very short time, within a couple of years,

they would be the inflationary side of it. worried if market be it is yellen or someone else? the new administration is not to go "janet yellen anywhere anytime soon." heading up who is the fed make a big difference for the market at this point? >> depends on who it is, guy. janet yellen has a lot of confidence from the market, she was not only a continuity candidate after chairman bernanke e, but she was also a very steady care of hands on some very important decisions. i think she got criticized for being slow to raise rates but that is more of a pace issue than a policy issue. i do think that if janet yellen stays, that will help market confidence. if she goes, who knows because that depends on who comes in instead. that is pretty unpredictable with an administration led by a new president who has a reputation for being a little

capricious and for doing unexpected things. digging into all the ramifications of the electoral victory for donald trump. we're match of the european open. next we take a look at a move in intraday trading. we break down the numbers. that is next area -- next. this is bloomberg. ♪

the fact that they had a higher than expected profit for much of the market fourth-quarter, revenue and venting on most of its industrial business units and that was the plan to spin off its health care division. focusing on the engineering company but what about the health care unit and what about another health care coming in to keep an eye on this morning. look at faster zach and the u.k., second-largest drugmaker, earnings rose.

how much is that fundamentally driving the business? it rose in terms of profitability but we know both the sectors need to be born into consideration when it comes to the president-elect, what is he going to do about infrastructure , what does that mean for health care as well. guy: that is the one of the questions the market is trying to grapple with. you can see that the stock is -- has dipped relative to expectation. it has come down quite a bit. are wequick question, going to simply price out the posedhat hillary clinton to the pharmaceuticals sector because there is so much structural stuff. the problem that the u.s. has had is that drug prices are way higher than there are in the rest of the world and that has been tolerated because of the pharmaceutical lobbying. to clinton side was going

bring that down. there is no sign the new president will. >> the market open is next. we are expecting a positive start. "trending business guy: good morning.

you are watching bloomberg markets. i am guy johnson. caroline has your morning brief. caroline: guy, it is the trump jump. how do investors position themselves with questions on policy still remaining? plus, what will the new presidency mean for the financial sector? and hillary clinton leads the popular vote and protesters take to the street. how will be big cities in america make their voices heard

over the next four years? guy: we are moments away from the start of european trading and we are expecting another positive start for european equities. we sell quite the turnaround yesterday. nter-day jump was something to watch. i positive story is expected. let's turn to the bloomberg. the whtite line is the london market and we are expecting that to pop higher. we are expecting the other other markets, confident to follow suit. it might take a few moments for germany to begin trading. the cac rises up by 0.5% this morning. pharmaceuticals and mining stocks make of a good portion of the london market. the london market is up .7%. germany, as ever, a little slow

to open, but we will see how the market settles that one out. siemens, one of the big trades. nejra: i am starting on the sector rotation and what is happening on the imap. it is interesting because in asia, we saw the material stocks leading the gains with higher commodity prices, most likely spurred on speculation that trump's plan to spend on infrastructure would boost demand. financials are leading the gain on the stoxx 600. it is those materials then, second in line, up .8%. financials are moving higher on those inflationary expectations, pushing bond yields higher. the 10 year guilt yield, we are up about three basis points. it is moving in the same direction as other bond yields

in europe. 1.29% on that 10 year yield. i have the 10 year bund yields moving higher, as well as the rest of europe. the 10 year yield on the treasury is actually coming down slightly. yesterday we saw that really, a startling turnaround when we saw the 10 year yield surge mtghehe most since 2011. coming off a bit here today on the 10 year yield. perhaps, some investors see some opportunity with the 10 year yield moving above 2%. the bloomberg dollar index is tracking that 10 year yield as well. i am starting with pastor astrazeneca. it is off by a little bit today.

i am also focusing on rio tinto, because we saw that and hbhp rie 2.7%.st since 2009, up siemens, reporting than higher-than-expected profit for the quarter. they have a plan to spin off of the health care division. guy: interesting that the financials are on the move. it is quite an interesting morning. the financials are on the move as well. what does a trump presidency mean for the financial sector? i urge you to take a look at the president elect's website. you can stick around to watch various videos, but i would ask you to look at what it means in terms of the financial sector. the financial services policy

implementation team will be working to dismantle the dodd-frank act and replace it with new policies to encourage economic growth and job creation. hm. so, what exactly are we going to be replacing this with? that is one of the big questions. there is the website. go and dig around.t around.d dig let's go back to our global principle investors. , what would be the implications of the removal of dodd-frank? it depends what replaces it. there has been some talk about moving from dodd-frank to something that looks much more like separation of custom is

with investment banking and consumer banking. if that happens, the banking sector would not like it much more than it likes dodd-frank. in fact, it might like it less. i think it depends what comes after. pure deregulation back to a pre-2008 position does not look very likely and that is what the banks would prefer. i don't think there is any likelihood of european rules getting listened anytime soon. global banks, that means it could be a difficult situation. guy: let me read something else from the website. the proponents of dodd-frank promised it would lift our economy, but now the american people remain stuck in the most tepid recovery since the great depression. is there a point there that financial regulation has limited the ability of the financial sector to deliver growth for the economy? that feels more true for europe than it does for the united states?

>> i think that is right, guy. i think it is a much more european phenomenon. if you look at the period of dodd-frank him unemployment has gone from 10% to under 5%. that is not a bad record. it has been slow compared to previous recoveries, but it has lasted a long time. the strength of the u.s. private sector has created those new jobs, created the growth. and you know, you could argue whether that is in spite of dodd-frank or not. i suspect it is to some extent. but i do not think there is a magic bullet here for financial reforms that will lead to much more rapid economic growth. there has to be a more complex array of policy changes if you are going to convince that greater growth will accelerate. caroline: on my screen, we are looking at every single bank in europe, trading higher today.. credit suisse and barclays

are leading the charge. is this on bits of higher rates? what is driving these banks across the atlantic higher? >> higher rates and lower regulation. my comment after dodd-frank came , this9 to 2010 was could turn banks into low return facilities. 10 years ago, banks that they could make an 18% return on equity's. are getting around 8% or 9%. i am frankly skeptical, though, because i think the replacement for dodd-frank will not be just doing what they want. guy: careful what you wish for. i think some of the european banking ceo's my have to just compute at the moment. jim mccaughan will stay with us. what else have we got coming up?

trading with trump. we will talk emerging markets and look at the economies that stand to lose the most under president trump. then, chemical reaction. a record $193 billion of deals has been announced in the chemical sector this year. we will speak about mma. and markets are having some difficulty figuring out what president trump means. global leaders are not having an easier time. will consider foreign policy in the trump white house. all about, coming up. this is bloomberg. ♪

guy: the european markets have been open for over 11 minutes. let's check out what is happening. it is green across the screen. the trump jump continues. we all think financials are really delivering. caroline: they certainly are. we are digging into the stoxx 600 mrr. you will see a number of the leaders of the pack. credit suisse is up there, almost 6%. that is on the back of less regulation, as jim mccaughan was just telling us.

amidst all this up evil and thise, up -- amidst all thevil and change, company is up eightt percentage points. the french conglomerate has earnings beating consensus. there is a strong execution on costs. goldhe downside, ran is losing today. meanwhile, you have to be keeping a close eye on the individual views coming up. be u.s. this could protectionism. now, let's get a check in on the

bloomberg first word. reporter: let's start in the u.s., where protesters took to the streets overnight to protest donald trump being elected president. this took place in new york, chicago, washington, and los angeles. this comes in spite hillary clinton and president obama urging their backers to support trump's victory. the one person who is not protesting the victory is the billionaire. he left the victory party and took a $1 billion in u.s. shares. >> i tried to put a lot more to work, but i could not put more than about $1 billion to work, and that the market got away. i'm still happy about it. and the white house has not ruled out issuing a pardon to protect hillary clinton from prosecution over her use of the private

e-mail several. during his campaign donald trump said he would persecute hillary clinton. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. this is bloomberg. caroline: now, emerging markets. stocks are trading higher today after falling the most in five months. investors try to position for a trump presidency. jim mccaughan is in dubai. talk us through the storm, and maybe the calm, slightly. where does the money move to? >> the money is moving into stocks, into risk at the moment. slump the trump yesterday, followed quickly by in the art,mp which has kicked into the asian markets this morning.

most every stock market in asia is up at the moment. that is beginning to filter through to europe as it opens as well. interestingly though, the currencies in asia have not been in that kind of mood. most of the currencies are a little bit weaker today, maybe because of a reassessment as to how quickly the fed will raise interest rates, which is a dollar positive thing. guy: very quickly on the currency story. why did you lay out some of the details? is there a commodity factor in there as well? our commodity economy going to do well on the back of this? >> that seems to be the way the market is seeing it. create is going to positiv create positive stimulus in the u.s., and we see an uptick in demand, that will

help commodity exporting countries. asia is a question mark. that currency is a little bit weaker today as people try to factor in the uncertainty that vie theings visa agreements with asia. caroline: justin, thank you very much, lies in dubai. jim mccaughan, still with us. we see, perhaps, a little bit of reprieve for the peso. we had the dollar yesterday, versus the euro. which emerging markets are you most concerned about? >> i'm quite concerned, depending on how the policymaking by the new administration flows. there are many things to choose from. possibility that they

go very seriously early on the rriffses for ta for imports from ask in china, and the possibility of tearing up trade agreements, if you couple that up with moves towards nasty deportations of perceived illegal immigrants, then you could end up with a nasty recession that could hit the trade with emerging markets. the cut in china are in the crosshairs of resident trump.esident elect i am not saying this, since the early be the new administration, but if it is, it will prove to have been too early to buy the dip on emerging markets. guy: what are the concerns over the last few ymonths? we have looked at south africa and our political concerns there as well. we have looked at turkey and there are political concerns

there, too. does that still applied, given the conversation we had about the fed, and what the fed will do next? the fed might have to hike harder, and that could be negative for these countries. >> it could be negative, but if the fed has to hike harder, that could mean commodities are running well, which could be a positive for south africa and for the south american countries. so, it depends how it flows. policy will make a difference and it is very hard to tell at this point which policies will get executed. the demand forthink infrastructure will be as strong in the near term as is expected. but i do think south africa can get a short-term reprieve. guy: jim, you mentioned china earlier in the conversation. we will talk about that any

moment because that is one of the big relationships, and certainly one donald trump spoke about. let's talk about what we will focus on next. up next, trade and china, the big concern. china watches, worried about the relationship between these two largest economies under a trump presidency. that is the conversation we are having next. this is bloomberg. ♪

>> we are confident in the u.s.

so far, this year trade between the countries have grown. pacifict was the asian ceo of the world's biggest shipping line maersk talking about what is happening with the trade between china and the united states. not everybody is quite so optimistic about donald trump presidential victory. and what is concerning china watchers as well, the threat of a trade war between the world's two largest economies. president elect said on the campaign trail that china was stealing american job and threatened tariffs up to 45% on the country's imports. jim, are we heading for a trade war between china and the united states? >> watch clearly what the new

administration says. it is not clear they will go beyond rhetoric in the new term. the commentator from maersk will be right if they do not actually do tariffs. if the u.s. were to impose tariffs on china, that would reduce world trade very rapidly. and i do think that would be something that would be very negative for the economy. there is a fair chance it will just be rhetoric and persuasion, but i think it is very dangerous to rely on politicians not implementing their promises. i do think elsewhere though, on trade there could be some positives. i will give you an example. theresa may is finding it difficult to get willing partners for trade agreements for a post brexit u.k. i suspect a trump administration might be willing to make that an early success and you could see some attempt at a trade agreement between the u.k. and the u.s. much more

likely under trump than it was before. caroline: give us a sense of china and the yuan. the yuan is near six year lows at the moment. even if we are not completely convinced that the rhetoric will be followed with policy, how do you trade this? how do you manage to put your portfolio in alignment, that you will not be having our shares ripped off? >> that is a very tough one. as you said, the yuan is a mu lti-year low, but they had a lot of inflation until a year or two ago. china has not got a massively undervalued currency anymore. that is actually one of the odd commentaries on one of the trade rhetoric. maybe it was true 10 to 20 years ago that china had a drastically undervalued currency, but that is not true anymore. so, tariffs would be maybe a

decade or two late, if you like, in terms of the currency manipulation argument. so, i'm not particularly positive about china's competitiveness. that willat actually fix the issue, tariffs or no t ariffs. i think there is a lot of debt there. they will not be a banking crisis in the next year or two. there will be one eventually in china, but it could be 10 or so years out, because there is so much debt s.y: jim, the u.k economy is a very closed economy, but it is not completely close. this highlights the deficit big year's we can talk about in terms of the relationship -- this highlights the deficits we can talk about in terms of the

relationship between china and the u.s. if we were to see that trade going way and that deficit having to be changed and these parts having to be altered th fairly quickly, what would be the impact of that? is it possible, and what would be the impact in terms of inflation and everything else? >> i am not sure i would say the u.s. is a closed economy. i would probably stress the the positive and say it is a consumer economy. so, what that means is, anything negative for trade is a minor negative for the united states economy and a massive negative for china, which remains very much more dependent on global trade relatively. although for the last five years they have been trying to expand the domestic consumer economy. so, if you see the anti-trade rhetoric escalating, and if you see it turning into policy

changes, that would be really negative for china and other emerging markets. guy: jim, thank you for spending so much of your time with us today. up next, a we will be talking we will be talking chemicals and m&a. ♪

guy: 3:30 a.m. in new york city. inh more civilized 8:30 over london. caroline hyde, what are these markets looking like? caroline: crazy hours for us, guy johnson. 30 minutes into the trading day and we are higher. the stoxx 600 is higher. the miners on the metals surge. food and beverage in the red at the moment, but the dax is up 1.25%. nejra: one of the things that really caught my eye on the

bloomberg is morning from bloomberg intelligence is that we have reached the loads for bond yields and for commodities. that is providing a little bit of a backdrop to the stock claim focusing on right now. i am starting with aegon and credit suisse. twos and insurers, fo thof the best performers. if we look at aegon, it did return to a profit in the third quarter, helped by investment gains. the dutch, is te owner of transamerica. credit suisse got quite a lot of exposure to the americas. it did recover and it is gaining right now. i am wondering how much of these gains have to do with specific stock stories, and how much have to do with the overall momentum. looking at antofagasta, a lot of

this has to do with the momentum we see with miners today, because we have seen metals hit one year highs today. vivendi, we wanted to highlight this as well with better-than-expected third-quarter profits. the strength of its music business onset continued pressure. ourline: let's which attention to another business today. we have seen record m&a in the industrial sector, amounting to $193 billion worth of chemical deals alone. one company that survived is the german chemical producer. they reported third-quarter earnings today. we are joined by the chief executive. thank yoou for joining us. you have increasing 2016 17% of your well, revenue comes from north america.

give us your take on the election victory of donald trump and what it means for your business, for your sector? >> eventually, we see that the north american economies are a very strong economy, same as in europe. the growth has been modest, as we have seen over the last two years. but we do believe in the north american markets and we do believe in the continued strong relationships between the two strongest regions in the world and therefore, our focus is on generating the value that exists in both regions. we are positive on the future. caroline: what about your ongoing joint venture that you have with saudi ramco. what do you have to say about what you have heard from donald trump about relationships with the middle east? how much could that dent that particular business? >> let's face it. saudi ramco is the biggest oila n and gas company in the

world. without their contribution to the world wide oil and gas supply, we would have an issue internationally. for that reason, i with think we are well advised to continue the collaboration and to maximize the value for people around the globe. morning. just to return to what is happening stateside. do you expect there will be regulatory changes that could affect your business. back to the m&a story. do you think the trump president could change the regulatory framework in which you operate? >> politicians have to do the best for their countries and citizens. it has been proven over the last several decades the international trades benefit all people. if we can do something that improves the economic growth for both regions, we would have a win win situation for the

citizens of both regions. caroline: you keep talking about both regions. obviously, the united states. but what about latin america? it is the most exposed to the negative trade ramifications of donald trump, which have been theorized at least. latin america makes up 30% of your revenue base. is this area an issue for you? >> as a matter of fact, the big concern, or the big benefit that the globe should focus on is the north american regions and economies. after making up the significant amount of global gdp, china takes a big share as well. if you look to the latin american region, brazil has suffered. the domestic market has started to improve. it seems like this is having stabilized and now it is on the way up. so, the domestic market will

improve and i think we will all benefit from this direction. guy: i am curious to know about what you think about the automotive sectora at the moment. be it china or europe or the united states. if trade barriers rise, how will be automated sector respond and what will it mean for you? >> at the end of the day, you have to be present in all respective regions. the beauty of lanxess is we do not only have a production base in europe, but we have a regional production base in asia and north america. for the intendant acquisition, which we announced a just recently, we will strengthen our north american footprint and morefore, be far diversified than in the past. it should give us a good

platform for making great things happen in the future. zachert, matthias thank you for your time. investors are having a difficult time figure you donald trump. imagine how world leaders are feeling. we look at the idea of trump's foreign policy. this is bloomberg. ♪

caroline: welcome back. we are higher on the stoxx 600. let's get you up to speed. iemens has reported higher-than-expected profits. at the same time, europe's largest engineering company announced plans to spin off the health care division. the ceo says siemens can help donald trump with plans to invest in infrastructure. >> there is a big opportunity here when the government and the president want to rebuild the infrastructure, make sure that it add money to your automation and simulation. i would know someone who can help him. reporter: the prophet has more than quadrupled. the net income was more than $900 billion. as the general

laoss. rose to $5.5 billion as files sales plunged. customer gains helped offset german home markets. that is your bloomberg business flash. caroline: world leaders are not having an easy time figuring out donald trump's presidency. his candidacy was marked by strong isolationist rhetoric. leaders from across the globe gave varied degrees of congratulations. >> i would like to congratulate donald trump with his victory in the election. we heard his electoral slogans when he was a candidate and he spoke about resuming and restoring relations with

russia and the u.s. >> this country with its military potential, it's cultural influence carries a responsibility that can be felt all over the world. >> i hope to further strengthen the bond of the japan-u.s. alliance. i hope to cooperate closely with president elect trump to address the various challenges the world confronts and i look forward to working together with him. >> in the name of italy, i congratulate the president of the united states of america and wish him a good job. the country and myself are convinced that the italian and american french it will be strong and solid. >> i congratulate donald trump on being elected as the next president. britain and the united states are and will remain strong and close partners on trade, security, and offense. positions trump's have to be confronted with the values we share with united states. caroline: i imagine the french

president has a lot to think about. there are those in france though, whose praise wa s unrestrained. >> the election of donald trump is good news for friends. it is a refusal of the ttip trade agreement. it will pacify international relationships, including with russia and disengage with wars that are responsible for big waves of migrants will stop thests. these promises, if they are cap, will mean big things for friends. you philip, good to see again. what does this mean for the likes of marine le pen? what does trump mean for the political movements? >> he has essentially broken the model that opens up the idea that it is possible to elect a candidate that threatened all the conventions of any nation. it has actually given permission to voters to move and it has

incentivized them. i think it is perfectly possible that elders in the netherlands could emerge and the election to come as the leader. i think it makes the victory of le pen in france much more likely. he has essentially normalized the extremes. those extremes can now govern. caroline: indeed, we heard not just from angela merkel, but schuable. he has put an op-ed into the most widely read newspaper in germany, saying that populism is not only a problem in america, but look elsewhere in the west. it is a political debate that is in an alarming state. he says this cannot be fixed overnight. in the fight to show that globalization can help the many, not just the few. >> no, in the short term.

globalization works incredibly well for the developing world, but has essentially frozen incomes for the working-class and increasingly the middle class in the developed world. i cannot see any policies coming about that can reverse that. but i can see policies emerging that will attempt to do that, but will cause great damage. if we thnink about donald trump spoke about 45% tariffs on chinese imports and 35% tariffs on imports. he almost has unilateral authority to do this. s willk the populist attempt to do something, but i do not think it will work. and that pushes us into potentially even more extremism. caroline: let's take up on the point. we saw a big protests overnight in the big metro areas in the u.s. it seems very reminiscent of the

brexit vote. how does the metro area citizen respond to the next four years? how does the london citizen respond to what brexit ultimately will mean? give us the response from those groups. >> well, the trouble is, the world has been run in the west for a very small, liberal elite that has done astonishment well in places like london, new york, and washington. it has essentially left everybody else behind. what they have done is laughed at, they have insulted, they have ridiculed working-class people. they had created a sense that there are no shared values between the educated and the uneducated, between the upper class, and the middle class and lower class. in america, between white and black. there is no longer a common value set people can draw on. what we have allowed to create

in the west is essentially different believf sets and we cannot reconcile them. this is when power ends. this is when the world changes. caroline: is that the case? guy: i have read a couple of ep-eds that say this is th throw of the dice of the baby boomer generation. if you take a look at the demographics, there is some support for that argument. >> i think this is liberal utopianism. globalization has been bad for the working-class, arguably fatal, automation will be worse for the middle classes. and automation, which will take out whole sways of middle-class jobs, and dramatically increase economic insecurity, so that 2/3 of western populations might start to feel economically insecure, that could increase

the potential base support. if you look at donald trump, his racism was actually stupid. you know, he could have easily also appealed to black working-class and minority voters. actually, he polled more minority workerst than mitt romney. if you look at the long-term trends. caroline: i am depressed. you say that what actually, donald trump, if he brought in more extreme policies, like that trade and taxes, it would foster more extremism. give us policy that would help show potentially, that all people can rise when globalization happens. what do governments in the west, whether it be italy, the netherlands, the u.s., what do they need to do? >> me give you three ideas. we have to give economic

security to everybody. we have to open up assets that have been captured by those at the very top to everybody. in places like britain, that means mass house ownership, particularly for the young, who are 20 years behind. two, create lifelong training opportunities, so we do not just educate people when they are 18, and then they have skills, but they literally can train in every decade of their working lives. and three, create a common value set, a new patriotism that actually creates, breaks down these different value perspectives. that is the real, deep long-term trend. we have got to do things like in britain, the bbc, which is unjustly vilified by many on the right, it is a huge agent for national consciousness.

we have to create new national narratives that triumph over the fragmentation. and countries do not survive this fragmentation. we are literally living in a turning point of the west. and if we are not equal to it, we are going to be fragmented, in war, and we will not survive as a coherent value block. guy: i think people are still recovering at the bbc. philip blond, thank you very much indeed. up next, is dodd-frank dead? donald trump vows to dismantle post crisis wall street. 3:50 a.m. in new york city. 8:50 in london. ♪

>> it is a mistake. it has done a good job of de-risking the system, it is not perfect. but it has improved the system enormously. i can say for the first time in my wall street career i am not worried about the u.s. financial system. i was worried about it for my entire life. people who advocate going back on dodd-frank, i don't know what they are talking about. guy: that was my conversation with steve eisman, of course, made famous by the film "the big short."

we were talking about this before the election. there is one person that does advocate rolling back dodd-frank and he was just elected, folks. we quote from his transition website, greatagain.gov, the financial services policy implementation team will be working to dismantle the dodd frank act and replace it with new policies to encourage economic growth and job creation. for more on what that means, we are joined by bloomberg intelligence analyst jonathan tyce. what would be the implications of rolling back dodd-frank? >> i don't thk anything is talking abt managing to repeal this act. since 2010, the republicans have put more than 60 attempts to amend and within 10 attempts to repeal. i think the focus needs to be on title two and title vii. and the derivatives.

one thing is clear. it will be a moratorium on any further regulation. we already see in europe they backtracking of further regulatory requirements. they will be an easing. if you look yesterday at the asset managers, if you looked at wells fargo, some of this stuff is not implemented. i think the argument is, these banks are far more capitalized than they were. mean that we will see a relaxation and question marks, i think absolutely. this is not a new debate, and i do not think we will see a wholesale, let's throw the baby out with the bottle. caroline: every bank is rising on the stoxx 600. they help regulation will come down. who are the big winners?

and who are the big losers, potentially? >> the big winners have to be the banks we were concerned about. it is credit suisse, deutsche bank, the wholesale banks. and the banks where we were not clear on what the trajectory was. making america great again, we are in the middle of brexit. suddenly e ark is putting its hand up a bit more aggressively. -- suddenly new york is putting its hand up a bit more aggressively. will they get more stringent, the rules? there is an element of protectionism as well. it is positive across the board because it is hard to see regulation getting any tougher. but that said, there are pockets of question marks in the u.s. managers are certainly beneficiaries. caroline: we want to know what the doj is thinking right now.

jonathan tyce, joining us from bloomberg intelligence. stay with us. i am going to join jonathan ferro on bloomberg radio. up next, it is "surveillance," and as you can see, it is a great lineup. this is bloomberg. ♪

francine: welcome to the white house. after a surprise win, trump begins his transition with a visit of president obama. the republican party claims a mandate to rewrite financial rules and overturn obamacare. democrat leaders urge unity. global equities rally amid optimism that trump's plan will boost the global economy. this is bloomberg "surveillance ." i'm francine lacqua in new york.