Carlds on whether announces his claims to independence. Back down to avoid confrontation. He says he can guarantee a fair and credible election. Ahead of the Election Commission says corruption will taint the process. In august, the Supreme Court nullified the election in which the incumbent president was declared the winner. The top electoral official can you cannotid meet the global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Basic expectations of a credible election. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Julia live, im julia chatterley. Live, im julia chatterley. Scarlet i am scarlet fu. Joe i am Joe Weisenthal. Were watching the dow on session highs. Joe the question is, what did you miss . Watching the dow. Are coming for wall street jobs. You want to hear our next guest on how it is time to rethink jobs with algorithms. Join us founder, will in the next hour to talk about open ai and investing in Artificial Intelligence. Impact,l look for any those results coming up. Julia wall street is entering a new area. Im industry and giving away to algorithms and soon, Artificial Intelligence. Andnology in different ways using algorithms. Trade across portfolios. Analysts, social media, even data satellite initiatives and listings. Ed forecast and valuations to make investments faster than ever before. A task that would normally take any bank or months to dig through. The start of develops machine to identifyorithms potential m a targets primarily in the tech world. The ceo joins to identify potential m a targets primarily in the tech world. The ceo joins us now. Great to have you on the show. It was a pretty long introduction but we wanted to set the scene. A good question. I think the word automation covers a lot of nuanced thinking about how people do their jobs. There are some aspects of the repetitive and others that have a high level of skills. We talk about using aim is Machine Learning and we are looking at the ground work aspect. To doing muchf. Ore high order thinking understanding relationships better. Behind red sheets and powerpoint presentations. Joe when your software is making recommendations of potential matches between companies, is looking back at the history of deals and m a to find things that map against deals deals that were . Is that the idea . Quick fist. What do companies do today and what are the gaps relative to competitors and where theyre headed. Looking forward to find those matches. The company has entered into a new space and competing with a new set of layers, it identifies other companies that should be more competitive. Joe you hear technology and a lot of sound good on paper. Thing it is another thing to change workflows here what experience do use the on that hundred terms of getting people how they work. Done ishing we have keep the associate in the middle of the process. One thing to recognize as no one will accept black box answers. The machine told me this. Say the reason they will believe the analyst is the narrative. The narrative, control the narrative. Answer questions that would have taken several weeks to get to her they control the narrative. A huge timesaving benefit. Well cut jobs though. Analysts, out of a job, surely. It is possible and likely. What we have found in our experience is there is less of a substitution and more of an augmentation. It is empowering the analyst to do more. One thing we find is most analysts will tell us they never have time to do a good job because theyre running up against a deadline. It allows them to do a much better jobone thing we find is t. Nalysts will tell the augmentation part is what we need to emphasize terms of making analyst better. The augmentation part is what we need to emphasize terms of making analyst better. Scarlet doing all of that prepares them. What will dealmaking look like if the introductory bankers no longer have the job and everyone who is left our people high up the food chain . The way we imagine this is a difficult situation, because there are time constraints, we barely able to have enough time for one. What happens is it allows us to multiple hypotheses at the same time. A learningwe right now find th, very basic tasks. The network graduates, spending relationship and can create better structures for those deals. Element element it is not about spending time on that sheets. It is about understanding things better. I think that would make them a better then today. For to copy it confidentiality reasons, i cannot disclose but we have duty banks working with us. Thank you for joining us. Thank you. Up, lettingng into its stores, figuring it has more to gain than fighting it. Ceopeak to an incoming about the arrangement. This is bloomberg. About the arrangement. This scarlet the Department Store chain will sell amazon products and returns in select stores. The chief merchandising officer and incoming ceo began why asking what by asking why coal is working with amazon rather than competing against it . We all have to think differently. If we think about complementary strengths, what kohls has is an incredible thriving physical footprint. What amazon brings is the tremendous reach and the amazing brand. It is an unbelievable opportunity. That is an opportunity for you. Amazon as returning the item. Item. We think it is a great opportunity and a touch point with the customer to deep in relationships with new and existing customers. Tell me how this works in terms of cost. Who is paying for this . We do not share financials between the two companies. See whatcited to unfolds as we entered is these great experiences today. Are you concerned about amazon cannibalizing kohls, that you invited them into the store and they will take customers away . Our starting point on this is the ambition to be a leading omnichannel retailer. It is the marriage of our strength and physical footprint and of course digital presence. Working with amazon, we think it is a tremendous opportunity. Market and plenty of room. It is growing. That bringingcern in another ecommerce retailer, that may continue the growth or prison prevented from continuing in the same way . Believe there is plenty. We do what we do really well. They will then get really used to having i dont think so. No pure no. We are excited about the relationship. We will learn a lot more. U. S. Retailers not releasing order to stay abroad geographically. Said you were reducing the number of your stores. Does that help the store strategy . I think it is a great example of using the space differently. Number of yourenge stores. Ourselves to think differently. The customers are evolving in the industry is evolving. 200, taking a chunk, reducing inventory in those stores paid you get a space for those experiences. The National Retail federation printing a 4 in sales. Is that something expected as well, around that number . I will not comment on sales. I will tell you i was feel that holiday is black friday, the holiday campaign. It is a tremendously dynamic time in retail and i am sure your that from others. It raises the bar for us, which some say is daunting. I find it exciting and it forces think differently and outside of the box. 2018, you are ceo elect. 2018, you are ceo elect. What are your plans for calls. What are your plans for calls as you take on here . Do you have specific things you achieve . I am honored and excited about the responsibility that will take place come next may. Kevin and i will be partnering for years. My big focus is delivering a holiday. In may, the chiefs merchandising officer and incoming ceo speaking with them a contra. Now i look at some of the biggest business stories in the news right now. Giantzil, the ecommerce into their biggest economy. Shares rebounded today hours after amazon opened its brazil marketplace for electronics with no Free Shipping details were deliveries. Or deliveries. Amazon invests heavily in logistics, which they call unlikely in the shortterm. Ting map with apple to make managing machinery, and power plants. To ramp up sales and software services. Were looking at shares of snap falling. Julie hyman is here with the details. Usually, a pretty outspoken analyst. Pretty colorful in his notes. Literally, his note says it about his neutral rating on it. Usually, a ofack april 4 2017. There are not that many to play the migration of individual consumers to mobile. You see the stock is not performing well. Growth has slowed down. Not making money off of these folks. I remember when i went public. Im not a millennial and never used it. A low of just over 11 back in late july. It is now close to 16. Some people think there is some life there. He still has the rating and is not alone in being not correct. You have got the largest chunk of analysts on the stock. There are 10 eyes here. He is not optimistic when it comes to revenue. He is less optimistic. Worstcase scenario, seven dollars. If you look at earnings estimates, there are losses as far as the eye can see. One thing pointed out in particular, the average revenue per user. This is a quarter growth for north american average revenue per user. In the second quarter. His forecast when he initiated, 28 . It is a big dropoff. Thank you. Volatility hit a record low. This is bloomberg. Scarlet john cody reigns in you is equities and europe as well despite headwinds in weight places like spain and italy and elections next year. Everyone is focused on growth, the best seen in over a decade. If you look at it, it is doing the best level since the first half of toy 15. The bottom half shows volatility or in this case, lack thereof. It fell to an alltime low today. Year, it is down 40 . Of volatility for stoxx 50 is actually rising which suit just investors are paying to hedge against turbulence in the market. Central bank policy errors seen risk. Biggest tell the ecb next week. What about policies for Something Like government around the world . Creating some excitement this low tax rate low tax rate rati. About what we can see in terms of the high tax rate outperforming the low tax rate. As you see coming over the righthand side, even in october, we have seen the optimism voice on september fading away. It is the High International sales company, and those inflows over there, fueling optimism there. Get tax reform, companies can be happy Global Growth is good. We talk about mobile growth, one of the themes of the year. This is what it looks like. Earoveryear export theyre all going straight up. Shipping and things like that, up 35 all going in the right direction. Science for the economy. Scarlet komen Dow Jones Industrial average well industrial average well above 23,000. That is a sizable move. This is bloomberg. Earnings for all markets, the s p climbing for another record high, the dow closing above 23,000 for the first time ever. Im julia chatterley. Scarlet i am scarlet fu. Oe i am Joe Weisenthal welcome to our closing bell coverage every weekday. Record highs as we begin with the market minutes. Record highs for the dow and the s p. For the dow it is a fairly big move, up to 0. 7 , triple digit point move. Joe this is a big move. Inrlet and the housing came better than expected. Nevertheless, stocks continue to melt up, and as julie mentioned, it is given by earnings. A big component of the industrial average, rising 9 . Best day since 2009. That is following revenue and profit that beat analyst estimates. Revenue growth for the coming quarter as well is one reason thatnvestors helped drive stock higher. After five years of declining sales, ibm will show investors it can grow again. Afterompany is up 2. 5 selling the pharmacy management unit. It was accused of overcharging billions of dollars. Ea is down 2. 5 . Theiraid they will close visceral videogame unit and release a star wars title that has been projected to add to the revenue line. A lot of health care companies, Community Health systems, a lot of back and forth. Stock is down 7 after soaring 11 the previous two days. Before that had fallen 9 as investors try to find out the latest on health care. We dont have any clarity on whether the president supports the Lamar Alexanderpatty murray bill. What changes, he says. Joe looking at the bond market, rates higher in the u. S. Twoyear yield picking up, perhaps some of it on growing expectations the next fed chair will not be janet yellen, will be someone more hawkish. 10 year yield up to 2. 34 . We closed out at 2. 27 last time, so it has been up every day this week. Mexican 10year yield coming down. Remember yesterday we saw the peso rally, thanks to the news that nafta talks are not going great, but at least they are still continuing. So there is still biting longterm mexican bonds. Julia gold is climbing for a Third Straight day. The euro is also stronger. When we got to the ecb president , he will get insights with the qe tape reprint with tapering plant is doing. Is doing. Dollaryen is stronger. We are arguing, watching for the election this weekend. Shinzo abe is expected to win. Then we quickly move on to the dollar you saw that strength yesterday that we will continue to see negotiations even if they are tense. Costingurrency analysts casting their year and the peso forecasts. 18. 7 mexican peso is for the dollar. That was one week ago. A quick look at commodities. Oil gaining but still in the same range, hardly moving, under 52 in west texas. Gold slipping a little bit, under 1300, a fitting move with a higher rates. A little bit of a monetary tightening. Copper, which we have been talking about, performing very strongly, just giving a little bit back at the end of the day, less than 1 . Those are the market minutes. 2. 0 is theump trade goldilocks rally that has risky assets steaming ahead but the promise of tax reform could be too much. Steve mnuchin vowed that if congress cannot pass the longawaited legislation, it will not be pretty for investors. There is no question in my mind that we can get it done. Be securedinvestors as mnuchin is signaling . We are joined by ed keon. Thank you for joining us. So Steven Mnuchin has reasons for political reasons, trying to Push Congress along, but is there a kernel of truth . Ed i think there is some reason to believe the markets are counting on progrowth policies. We are, but i would not expect. O see a tremendous fallback if you set 5 or 10 , but the market could do that for any reason at any time. We have had an incredible run. There may be a kernel or truth of truth. Scarlet is it too aggressive for fiscal policy . Ed there is a balance. If we are at full employment, especially with education, you throw a fiscal stimulus on top of that, and they did infrastructure, the chances are you start to get genuine overheating. We have not seen this in a long time, we forgot what it looks like. But the Federal Reserve will react to it. We will get overheating in the economy. Julia is that what makes you describe yourself as a nervous bowl . Bull . Ed we are well above historical averages. That is true of every asset class in the world. In the better values, and at this point it is not so much the values and the price of in one but the forces direction or another. In the case of stocks, you have Earnings Growth multiplied by expansion and things we talk about every day that are in place. For now the better place to put your money. Do . But what do you seems like there are a lot of investors that change the situation because there is no other game in town, and to be fully invested to buy every dip, but they also look at the charts, whether it is buffetts metrics or other things that say everything is expensive. Is there any place out there that looks compelling . Ed from evaluation point, no. Valuation point of view, no. You need to look at growth prospects, and that is in global stocks, maybe a chill spill outside of the United States rather than inside. Scarlet when was the last time you felt like a nervous bull . What is this reminiscent of . Ed probably back to the 1990s, really, 1999 or so. I had a similar feeling. This was one of those things where there are some folks that turn conservative in 1996, and it was years before we actually cycle back in the stock market. It is not necessarily a good timing tool, saying what is the expected return. It is lower. I think we have a way to go as long as we are getting good growth and in every recession there is no policy mistake. We have a bird further bit further to go. Julia you are on weight bonds, overweight equity, but prefer to sell a regular to basis. Regulative basis. Break it down for us. Ed lets say the biggest portfolio i run have a 70 equity allocation, 50 u. S. , 30 bond. 22 for1 u. S. , international stocks, and 3 underweight on the blind side where we have additional mandates of real estate. We are equally there. Equal weight there. Course,the bond side of one of the big debates going into this year was, are we about to see that bond bear market people have been predicting for decades, that never seems to materialize . We get it here and there, then people are disappointed. What will it take to change a longterm trajectory no door inflation, like the labor market will get some tracks. But it is interesting because to some degree we are discounting some of the data because of the natural disasters. There may be things happening underneath the surface where we say the data cannot be trusted. At the same time you have good growth around the world, low levels of unemployment, it is possible we might see it is a surprise pickup in inflation over the next year. Julia thank you for joining us, from q,. Qma. Estimates, 150g versus 148. The number i am paying attention to is the fullyear outlook. Is 5. 90, so that is something higher than what analysts had been looking for because actually on the 586. End because it is so that might be at least not as high as some had expected, but the stock is up 2. 1 . Ette joe adobe stocks are still shoring soaring. Eps 5. 50 coming ahead of estimates by . 30, and 2018 eps view beating estimates. That is very good. This is bloomberg. Mark it is time for a check to first word news. British Prime Minister theresa may said one thing is certain during a brexit talk, that the in. Will leave the e. U. March 2019. She told parliament the government is ready for either outcome. I can confirm what we are doing is working for the best deal. But it would be irresponsible of government not to prepare all possible scenarios. That is what we are doing. K the u. K. In the e. U. And of the au are divided on how much the u. K. Should pay to leave. Is u. K. European Union Unveiling new measures against lone wolf attacks that comes after a number of killings and extremist in cities by extremist. The cr to protect major sporting events and concerts. President trump and the record puerto rico governor will meet at the white house to discuss the recovery and rebuilding effort on the island after it was ravaged by back to. The governor has been supportive of President Trump while the mayor of san juan has been outspoken in her criticism. Much of the island remains without electricity several weeks after hurricane maria. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. The debate over Artificial Intelligence. Couldnt do more harm than good in the long run . Could it do more harm than good . Bloomberg technologys reporter is there with a special guest. Reporter i am sitting with sam altman, the president of y combinator. He is the founder of a penny i. He has made dramatic comments about ai saying it could be the next world war cause. Is that future ominous . I think there will be good and bad. We have to work hard to minimize the bad. I think this is a technology that can sort of eliminate most human suffering, make life better. I am excited about it. Reporter so the mission is to have safe, general Artificial Intelligence. What does that mean, and how do you make sure the benefits are eva lee distributed evenly distributed . Samuel we will fight that as we find that out as we go. It is very hard to solve. We have got to figure out how to build a capability. We have had good results this year, and make sure that it is longterm good for humans. Reporter how does the Company Research get balance and not get into the right wrong hands . Samuel as we get closer to building true ai, we will have to rethink what we share in what we dont share. One of the things we believe is part of the way you make this be good for everything is you make sure things are shared widely and have tools for the entire community, develop technology operatives and share those. We are continually willing to rethink how we do things. One of my favorite copies hobbies is to read about big projects of the past, and one thing that surprises me is how much of the change the planet as you go. To tilt this and have a go as well as possible for humanity. Build this and have it go as well its possible for humanity. Reporter artificial hasnt really come up. Is that concerning to you . Does that put it behind other countries . Jeff yeah, i dont think our government is taking this seriously enough. World leader in ai should be a national priority. Part of the reason why it is hard is because it is easy to talk about globalization as the problem for outsourcing and this and that. You can easily understand blaming immigrants. Globalization is one sector, but there is automation. That will change the world. To know what to do about that. Reporter and china has done that, made Artificial Intelligence a national priority. They set goals to be the leader in a number of years. You think that would put america behind other countries . Samuel why i care about trying to build on the political influence is to wake our government how important this is rather than have china ahead of us. Reporter before the election you published a post saying that presidencyrumps could lead to a number of things. Now we are almost a year into it, where do you stand . Know, i am certainly happy so far with the robustness of the system and how little has changed, but it has been at the margins on things like immigration, renovation. The u. S. Has the lead in the entire world when it comes to innovation and creating technology. Away from us, we will regret it very quickly. It will be hard to get back. Watching sort of this antiscience, antitechnology thrust from the administration is disappointing. We arer right now facing, the Largest Tech Companies are facing scrutiny, we are not preventing russian interference on their platforms. What type of responsibility do you think Companies Like facebook, google, twitter, what do they need to own up to preventing manipulation on their platforms . Samuel this is a place were we need industry and government to work well together. We are not as good at that as we used to be. There are clintons between freedom of expression tensions between freedom of expression and others. This is what the rules are going to be in this is how we are going to apply it. I still believe our government is supposed to help set those rules. I want to see that happen. I think we need these platforms which are usually powerful and only going to get more powerful to really work with our government and say, here is what we are going to do. Then we will apply this to everybody. Reporter do you think they need to be more highly regulated . Samuel they could be regulated, i dont know if highly. This is ok. Technology changes the world, then regulation has to catchup. Now we need it to catch up. Reporter thank you, sam altman, president of y combinator. Julia thank you. We have some breaking news. Scarlet a change at the top for American Express. The ceo and chairman is retiring. He is 66 years old. He has been in that position for 16. 5 years. He is making way for the vice chairman who will take on the chairman and ceo role. So he will be the ceo of American Express, replacing kenneth, who will be retiring. This is effective february 1, 2018 or the stock is down 0. 7 . Also results with the fullyear outlook. Julia lets look at ebay, continuing operations. , 2. 41 billion. It is a beat. The problem is the outlook. Fourthquarter adjusted eps continuing operations, 57 to 59 was the estimate. Analysts wereat expecting. The stock is off 4 . This is bloomberg. Scarlet mixed messages from washington, only a day after senators Lamar Alexander and patty murray presented a bipartisan healthcare fix. Now you have paul ryan and President Trump coming out against the plan today. Nine months in with the president , obamacare is the law of the land. We are joined by the chief content officer. Joe President Trump came out against this, but is he against the fix . Some of theagainst things, but he has made it clear on certain occasions he wants to see some sort of bipartisan deal get done that prevents people from feeling pain. I dont know if that is possible. His views seem to change every time he talks about it. Julia can we get something passed, because we had the executive order that counts on insurers with a moment of hope. Now people are signing up for these things. Whether they can reach a bipartisan deal is unknown because there are various constituencies even in the Democratic Party about what should be in this bill. The democratic governor states are actually going to court to get the federal judge to declare the suspension of payments illegal. It will wind up that the courts decide this rather than congress. Who is the president addressing when he says he supports the senators efforts . Is it his base . Marty i think it is more an emotional reaction on his part. He would like he loved it when they reached out to the democrats and prevented a fiscal crisis. He would like to see them get a bipartisan deal, but only on his terms. Scarlet has he identified his terms . Marty no. He will know it when he sees it, and use getting various advice from different factions in the white house. Julia sounds like tax reform. We can talk about that, but i the otherlk about issue that is brewing in washington, and those are comments over the fallen soldier. And a florida congresswoman overheard. What is going on . Marty this is the combative nature of this president. This is something easily anyone could take care of. If he even said those words to her, he did not say they were taken out of context, but if they were, i apologize. An everurned it into growing controversy about how he handled it. Joe part of a broader thing, trumps role as the figurehead has always been an awkward fit for him. He does not fit the model of behavior of previous president s, and this is a situation where he should be solemn and sincere, and he is struggling. Marty he is not. I made the comment, has anyone not noticed this is a nonconventional president . At hisinue to be shocked behavior. I guess that is going to continue, but he will not take the conventional approach. Julia he is easy to take out of context. Marty schenker, the chief content officer. Next, the record highs for the s p, dow, and nasdaq. Abigail doolittle will talk with justin for to break it down. This is bloomberg. Mark i am mark crumpton, tied for first word news. Jeff sessions is defending the trump administrations travel in as a important tool fighting terrorism. He talked before the Senate Judiciary committee. The executive order is an important step to ensuring that we know who is coming into our country. It is necessary that we are proud to depend. Defend. Mark he said the Justice Department will prevail in their efforts to enforce the ban. Pakistans military has new fencing and guard posts to prevent militant attacks on both sides of the border. These have angled kabul. Angered kabul. League isal football not changing its policy to require players to stand during the playing of the national anthem. Roger goodell and others said today the leagues athletes taking changing should stand to must stand was not discussed. We have about six or seven players that are involved with this protest at this point. And this is something that what we try to do is deal with the underlying issue and understand what it is they are protesting and address that matter. Mark when it was reminded President Trump tweeted about the demonstrations during the anthem, commissioner goodell said nothing there is nothing unpatriotic about his leg. League. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton, this is bloomberg. Scarlet lets get a recap of the market action, the dow above 23,000, up zero point 7 . It was the outlier, and that is a result of thirdquarter earnings. American express reported results and the boosted outlook for the year. Is the news for amex chairman is retiring effective february. He is stepping down and making way for the current vice chairman who will take over on february 1. United takeover of continental, but we will go to ebay first. Julia you can come back to that. We have got disappointment in the markets, ebay is now down. Revenues actually were a bit better than analysts were expecting. The problem is the forecast below for the fourth quarter, eps at . 57 to . 59. The consensus was towards . 59 and . 60. That is accounting for disappointment in the markets. Scarlet lets look at united continental. A little changed after hours trading. Beating analyst estimates by three cents, revenue in line with what analysts had been looking for. Down 3 innue it is the third quarter. For the fourth percent they see passenger revenue for december down versus the year ago while october, november roughly unchanged. Joe and a correction on what i said about adobe earlier. These are numbers it is reaffirming. They see fullyear adjusted eps fullyear revenue 8. 7 billion versus 8. 6 billion. That explains why this is surging after hours. Julia the major averages has closed at record highs while making fresh alltime highs during the session. Our next guest looks at this asset close approach. Here is abigail doolittle. Abigail joining me for this weeks charting system is jeff degraaf of Renaissance Macro research. Great to have you here. I love the fact that your work is across asset class. We talk about record highs for stocks, but not so much time talking about the credit markets. What is it on the Credit Conditions, and how do you tie that into the stock market . Jeff Credit Conditions are fantastic, and that is good until it is not. If we look at Credit Conditions, one of the things we will use is the spreads of triple b versus double b. I gives us some indication how aggressive the fed is, whether they are subsidizing the short curve the or not the or not. It is not bearish. His bearish above the twoyear yield, but until that it is good news. You can see on the chart we are still above 40 basis points from the fed fund. We have been above this are the better part of the financial insis, how it was inverted 2006. That [please stand by] that the markets are starting to struggle with the weight of policy, it is not happening yet. Abigail that is interesting, because i see that in 2006, so the market was putting in alltime highs. Are there any tells here, spreads about being supertight that would be in single that would inverse . Not really. The different spreads versus triple b versus double be, they are at threeyear lows. It is a Good Environment from a credit perspective. That smooths a lot of things. It gives you volatility,. Aluation that can be extended the credit does an awful lot of things. It becomes mysterious. When the mystery goes away, it is not. Abigail we remember that. So what about the economy . We could be having the most in the mix recovery out of the anemic recovery, but you are thinking some areas are super hot. We have a chart that shows pmi. 60. 8 if you look at that, is the highest level since 2004. It is one of the highest reading, in the tents decile ecile. Decile tenth d usually when they are robust, it is negative for the s p, the reason being the fed is behind the curve in becoming more aggressive, taking away policy, in very inverting the curve. The fed has not caught up yet. We think this has the ability to extend itself to put more distance in some of these assets in terms of higher valuations, higher returns. It is late innings. It is more dangerous, but those can give you a lot of juice. We think there is higher ability that can happen. Abigail so that were dangerous, i keep hearing that since 1987, 1937, and now we are in a year ending in seven, not good for fourth quarters since 1897. That you have a great chart that suggests this is nothing like the past. Jeff this is not even a melt up in our view. , and isalk about linear sort of a straight line. The white line is where we have been the last year or so. Compare that to the yellow line, which is basically the two years prior to the crash of 1929. Compare it to the blue or teal line, the crash of 1987. Note when you got into the phase where we are most dangerous, these are all indexed, you were 50 higher for the dow back in 1987 in just a twoyear timeframe. We were higher in 1929. Now we are 27 higher. That is nothing to sneeze at, but it does not have the parabolic melt up cents to it. Sense to it. Then inflation is low, focus is on inflation. Of those dollars going to assets first then we feel in the other policies from a daily basis. Abigail i hope they dont affect starbucks coffee. Drink that pretty frequently. All of this is pretty bullish. How do we break this down to individual stocks . Jeff it is supportive. There are stocks that are extended. Most of the Software Names are extended. They should benefit with the melt up. We look for names that are in big bases that are emerging from the trading ranges, the people that have forgotten about them. Intel, this is a long turn up the geoeye 1983, but you could looking back from 1983, but you could be saying the last crisis from 2003, we really have been in this range ever since. You have given up almost a decade of no returns other than what you received from the dividend out of intel, and is just starting to break out. Those are the charts we look for. Cisco is doing the same thing. You could make the case for the financials look the same way. If you are uncomfortable getting google and thank, they are fang, they are extended. But if you look at longterm, these are the charts you can look for. Abigail good stuff in terms of catchup potential and based on Credit Conditions of the economy , and what we are seeing from the stock market drift of that it does provide more room to go. Great stuff. Thank you. Jeff degraaf of renaissance medical research garden. Scarlet thank you so much, abigail. May be taking a turn to the environment. Transforming his speech. This is bloomberg. Nothing radical in terms of chinas Economic Forecast from president xi jinpings address at the communist party congress. But the priorities will be shifting to the environment. He mentioned that word 89 times, up from 74 in his predecessors speech in 2012, or his previous speech. The economy got 70 mentions down from 104. What does this mean for investors . Lets bring in the senior asset manager from eb, known as alliancebernstein. Does that mean . He is focused on the quality of growth more. The emphasis on the environment the first stateowned or efforts. What we are seeing on the ground is a consolidated control by large stateowned exercises enterprises. Private companies, particularly in the old economy are changing. What isu change the connection between improving the domestic environmental conditions and the cityowned enterprises . The state owned enterprises . Morgan when you think about polluting, what the government has been doing for a year now is effectively shutting down disproportionately plants that are privately owned, consolidating control by the state owned companies which gives them more pricing power, and allows them to make environmental improvements and reduce pollution. Julia does that also help with the centralization of control and deleveraging, with Financial Sector liberalization we have been looking at and tailed off as we got to this congress . Someone listed the inversion in the yield curve, this hope of deleveraging going forward. How is that for the yield curve . Morgan i think it is too iftain too soon to tell we are heading for meaningful deleveraging. The Central Working Group that creates actual policies will meet in december behind closed doors, and then it is when we will learn specific policies the government will undertake in the coming years including potential deleveraging in the Financial Sector. This focusis there on china . Morgan we have seen tremendous growth in earnings, 34 across industrial companies. They continue to trade at a discount to the broad market in some uses cases. Joe you said we will still learn more about specific policies. Nonetheless, people notice he did not say much about major state enterprises or Financial Market liberalization, if there were changes on the currency. You surprised from the economic agenda that it seemed modest . Morgan this was a political meeting, consolidating political control and naming the next standing committee. It will be in a couple months we hear about specific policies. Scarlet i want to go back to the inverted yield curve. This highlights the spread between the five and 10 year for china. That is the white line. It is inverted the second time this year. Usually we can attention to these because it is a reliably indicator. That is not what we are saying . Morgan they economy is growing at 6. 5 . If it slows down, it is 6 , so i dont think the yield curve is telling us about the economic direction. Chinas equity markets are large, but there is a lot of official influence in pricing. The prices do not really reflect Market Forces like other we cannot such that infer as much as that for the economy or stock market as we might for the United States. Julia there has been a lot of excitement about emerging markets, but a third of the gains in equities are as a result from the big tex stocks. Tech stocks. Etfe else do you like morgan . Morgan in the last month, five stocks in the emerging markets account for half of market return. They are the bank stocks of emerging markets, companies focused on ecommerce and mobile. You have alibaba, baidu, tencent, samsung, companies and ecommerce gaining business or gaming businesses. They have shown strong Earnings Growth like in the United States by a large. There is another set of 830 companies in emerging markets which in many cases are also delivering stronger growth and have not seen multiple data this month. A lot of things on the stock exchange, they have good experience. They will look for the next thing. The next leg up in emerging markets is waterbased. Broader based. Julia thank you so much, morgan harting. Now American Express showing thirdquarter earnings and a leadership change after 16 years. The ceo is stepping down. More on that next. This is bloomberg. Julia it is time for the business flash, looking at the biggest stories in the news right now. A shakeup at the border. Ceo of the French National food giant, effective december 1. He takes over after the other man becomes honorary chairman and will be the Strategic Committee of the board. Signing up for milton new tracking service, writing on demand Services Like netflix. Agents, producers, and have aided in negotiating with dreaming companies which will take in eight alien dollars on content billion dollars on content. It will support international viewers. Kannel xpress ceo tennis channel is stepping down chenault is stepping down. He will be succeeded by the company vicechairman. That is the business flash update. For more on the breaking news, American Express, we are joined by the u. S. Finance team leader. So he presided over a 90 rise in stocks since he took over, but that has trailed from yesterday. For years this was a strong performance. The last few years it has been tougher. We have had a lot of competition whether it is established firms like j. P. Morgan have gotten into prime card space, or ups darts upstarts like paypal. They have had some challenges trying to deal with that. Joe i looking at the chart of the stock, so in early 2016, people were trying to panic about them. They were losing deals with people. The stock is now close to the alltime highs again. Is there a sense they are back on the right track after highprofile lookups . Hookups . Hael certainly they have they release earnings today, boosted their for your guidance for that. They are in our fouryear guidance for that. I think he did not want to leave in the middle of turmoil. He spoke to that in the press release about the handoff, saying they feel it there on firm ground to do this. They will do it in february. Julia the right time. Michael it does feel stable. Joe is there anything specific they did what they cited as how they got to this point of what was panic for investors in terms of course correcting . Michael with the appointment of the Vice President , he ran the Corporate Card business, still there largest business. You see them lean on that lately. So i think the fact they are picking an insider who has been there 30 years does Say Something about the point they are at and how they feel about the stability. You have warren buffett, one of their biggest shareholders, he seems to be on board with the appointment given with quotes. Julia there were questions being asked about what would happen with the leadership change, who would step into this position. We had executives leave. We had questions being asked. Does anything changes materially . He has been in the office for quite a long time already. Does it change the direction of the company as a result of the change . Michael i think there will be some continuity given the time he has been there. He will take on these challenges and the business is changing very rapidly. Rewards are becoming a bigger piece, becoming more expensive for these companies. You have upstarts like syntax firms, so there is a lot to navigate. They are picking someone who has been there for a while. Joe the u. S. Finance team leader, thank you. Coming up, what you need to know for tomorrows trading day. This is bloomberg. Julia u. S. Stocks trading once again at record highs, the dow staying firmly above 23,000 at the close. Dont miss this, the pboc governor speaking at 9 00 tonight eastern. Joe and i will be paying attention tomorrow to President Trump interviewing janet yellen. What kind of news comes out. Julia and verizon, blackstone, and dish all reporting earnings in session tomorrow. Joe and the founder of anger minutes of and home depot joins us tomorrow at 10 30 a. M. Eastern. Julia Bloomberg Technology is next. Joe have a great evening. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. I am alisa parenti, you are watching Bloomberg Technology. Lets start with a look at the first word news. White house says President Trump and puerto rico governor ricardo will meet at the white house tomorrow to discuss the recovery and rebuy rebuilding effort. Much of the island remains without electricity several weeks after maria struck. Jeff sessions says he will not be revealing confidential conversations he had with. Resident trump testifying before the Senate Judiciary committee, sessions said the president is entitled to have private conversations with cabinet secretaries. The committee will press him on those conversations, particularly about the firing of james comey. A manhunt is underway for a gunman who opened fire at a Maryland Office park, killing three coworkers and wounding two others. He is identified as a 37yearold. There is not a motive to the shooting. Roger goodell believes all for theshould not stand national anthem. He said he did not commit to making it a rule
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