Comments raises questions on whether Prime Minister may can get enough backing of her vision of brexit. She says she can still get the bill on the withdrawal from the eu through parliament. John cornyn says arizona senator john mccain should be available on the senate floor for crucial votes to overhaul the u. S. Tax system. Mccain is receiving treatment at Walter Reed Medical Center for side effects of his ongoing cancer therapy. Cornyn says the timing of the taxable is still unclear, as discussions continue on a range of topics including the Child Tax Credit. The Texas Republicans also said he has confidence in robert mueller. The Northeastern Region are underwater. Thousands of residents have fled for their lives following extensive flooding. Authorities say it was caused when two rivers overran earth and dikes. Firefighters are using helicopters to conduct rescue operations. Global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Julia live from bloombergs World Headquarters in new york, im julie chatterley. Scarlet im scarlet fu. Joe on joe weisenthal. Julia stocks nearing session lows as marquette small caps leading the losses. Joe the question is, whatd you miss . Scarlet Internet Service providers one todays tugofwar. Delivering a blow to content providers. Michael beckerman, ceo of an Industry Group that represents netflix, google, and amazon joins us in the next hour. Another shakeup in the media world coming from disneys allocation of 21st century foxss. They gained the movie studio and a remarkable stake in sky. Wo senators threaten to throw the gop tax overhaul into the lurch. Susan collins and marco rubio worried it could break an agreement between republicans. Julia whatd you miss . In. Retail sales rose more november, and the previous month was revised higher. Thats according to figures received released today. Boston playing of consumer demand as broad strengthening of consumer shopping. Neil, great us is to have you with us. Things are good. Joe thank you for coming. [applause] from new york, this is bloomberg. Julia would you like to say some things or talk about productivity . The consumer took the rubber band off of the casserole last month the cash role last month. With interesting is they are spending, accelerating in areas sensitive to the housing market. Particularly things like furniture, and Building Material stores. At this point, it is getting hard to argue that this is a rebound from hurricane damage. I believe there is something more fundamental to it. Our support in stronger Consumer Spending, you can argue the growth is overstated relative to income. At the end of the day, the labor markets are healthy, that will support Consumer Spending. At the same time, if you look at the inflation data, apparel prices plunged in the last month. Despite that, these retail sales number are reported in nominal terms, they reported growth of 0. 7 month over month. That means the volume of clothing retailers was quite strong. I think the consumer is healthy, this has been a year where we have seen broader growth, business investing has been quite strong. There is still room for inventories to accumulate. I think the economy is heading into the year with a strong economy. Scarlet with her janet yellen and the fed raising their forecast for 2018 gdp to 2. 5 , saying that economy will get a shortterm boost. Nothing that will last beyond that. What does that mean for retail sales . How much more heat could we get in retail sales . More reasonable Consumer Spending estimates for the next year is probably around 2. 53 percent. Say nominal income growth, wages are growing about 3 , for around 2 and then you have inflation, 2. 5 to 3 is reasonable. Joe one of the most consensus ideas going into 2018, if i had to summarize, things are good but watch out for inflation. Could we see some upside on inflation that people are not anticipating . I am not an inflation nest inflationist, i think we will do stronger with growth. The notion that inflation will take off, it doesnt take off. Expectations are anchored. Process,lation is a especially outside of commodities. If you look at Service Sector inflation, it is moving slowly. I think you can see a couple of quarters were core inflation is surprising on the upside, but its nothing to wring your hands over. I think we have a firming of inflation, but i dont think it will get out of control. Scarlet any upturn we get will be well telegraphed, something we will know ahead of time as it moves higher . Inflation is a process. To me, where is it going to come from . Expectations are anchored, wages are moving up slowly. At the same time, productivity is picking up. Productivity rising is at the margin, thats good for real growth. Its disinflationary. Julia we are seeing a number of economists reiterate that concern about the lack of productivity growth. You are saying theres some optimism,easons for one is the rotation into Productive Industries like manufacturing, in particular. I think productivity pessimists are fighting the last war. Productivity has been very weak, thats no guarantee for future results. That doesnt mean anything about what will happen forward. There are a number of reasons to be optimistic. When you mentioned about manufacturing is another example. You have had a rotation of workers into the manufacturing and goods producing industry. They tend to be more capital intensive and more productive. We saw pmi reporting very strong employment growth. Look at the data. October,es fell in despite the surge in manufacturing output. That tells you that we are not building inventories enough. Joe to clarify this long productivity slowdown, its a composition story. Have seenhe growth we in the economy is in sectors where you dont tend to see if much productivity gains because their services can be replaced. Thats part of it. If you think about it in a more fundamental basis, it comes down to capital deepening. Thats a huge driver for productivity growth. Investment relative to hours worked. We had a strong jobs recovery, not a strong investment recovery. That is changing because we are at full employment. Look at what the atlanta fed is setting for growth, 50 . Thats after a quarter in q3. , thate strong momentums should boost the capitals stock and imply capital deepening, which means stronger productivity. Julia at one point can Companies Start raging raising wages as opposed to having prices to combat that . They can raise prices without having to raise inflation, they are offsetting they are getting upset from the bottom line. Julia 2018 . Joe i think its happening. The rebound story is no longer a forecast. Its happening now. 1. 5 , thats not what we saw in the 90s. Its certainly double the rate we saw in the last five years. I think productivity is picking up, that means recovery has more room to run them people appreciate. Scarlet productivity gearing up and getting in their. Thank you so much. Coming up, trips in the final sprint trip in the final sprint. The republicans that could derail the president s tax plan for christmas. Rubio and collins. This is bloomberg. Scarlet whatd you miss . A possible rent in the republican tax plan. Marco rubio he is a no vote on the bill as written unless the Child Tax Credit is raised. He complained gop leaders found the money to lower the rate, but cant find more to help parents raise their children. President trump was not so convinced. He has been a great guy, supportive, senator rubio will be there. We are doing very well on the tax front. We have tremendous support. Scarlet here with the latest developments is sahil kapur on capitol hill. Marco rubio could be the spoiler. We thought everyone was keeping their eye on Susan Collins, but he is taking his heels and. He is certainly emerging as a lastminute obstacle to pass this bill days before the senate and house hope to get a final conference report wrap up. He has spent weeks, probably months insisting on a larger Child Tax Credit. 2000 bute amount of to what he told me, was he wants the refundable portion of the Child Tax Credit to rise from the 1100. He didnt specify an amount, but he is going to vote against this bill unless that happens. I spoke to senator hatch, he was unclear as to whether those demands can be met. Senator rubio looking at the potential novo. We have senator corker no vote. Nothing has changed for senator corker. He says those will be difficult to overcome, but he will look at the final bill before making his thoughts known. Republicans cannot lose any more members if they vote no. Scarlet is there anyone else senator rubio may be speaking on behalf of . He is working with senator mike lee of you talk to expand the Child Tax Credit. They have worked together on this. I contacted senator lees office, he is not making the same threat as rubio. What his office told me is that he is undecided and is working to make the Child Tax Credit more generous. Apart from him keep your eyes on senator collins, she is also undecided. She has made a number of demands related and unrelated to taxes that may or may not be met. Joe as soon as this headline crossed that rubio is threatening to vote no, you can rolling,ybodys eyes saying no he will get rolled in the end. Is that too cynical . Is that groupthink conventional wisdom is dangerous and lazy here . You are correct that is, the general consensus that he will come around in the end. And wont ultimately play spoiler. Knowing that, i asked him specifically isnt it going to be a tough position for you if you are the deciding vote . His response not tough at all, all. He is clearly willing to die on this hill. As you mentioned President Trump doesnt buy it, how it shakes out in the end i dont know. He is taking digging his heels more than anybody would expect. Julia not credible when he voted last time with the same complaints. What about Susan Collins . On made her yes contingent further stabilization measures, particular for obamacare, given the individual mandate reveal. Where does she stand . Will she be another one to vote for promises that she doesnt follow through . She is in the difficult position of casting a vote before she will probably know whether congress will adopt those Health Care Stabilization bills she has demanded. That will be a difficult decision for her. I dont think it will be clear whether the house is going to pass the bill by the time the tax bill comes around next monday or tuesday. Apart from that, she has asked for other things, some of which have been met, including lowerin the income thresholdg for expensed eduction. She has also objected to rate cuts for people making 1 million and above. 36 it goes down to 37 . Who knows, that may be an issue for her. Joe julia noted he voted for the original version that hadnt expanded the tax credit. Was it the fact that they bumped up the corporate rate to 21 and brought in the tax break for millionaires that emboldened rubio to feel like he can ask for more . Thats exactly right. The the priorities and changes to the bill that upset him. He said Republican Leaders managed to find more money to lower the top rates for the highest earners. But couldnt find more money to help parents raising children. That seems to be the crux of his problem. He voted for the initial bill, he has not in the past been a republican senator who has killed major pieces of legislation, as some others have been. Thats why i think there has been so much skepticism. Scarlet he can usually be counted on. Sahil kapur joining us from capitol hill. Lets go to stock of the hour. Retailers are trading lower, stock of the hour is an exception. A diamond in the rough. Tiffanys is at its highest level in three years. Julie hyman has more. Joe are they getting into Crypto Mining . Are the for sure was they were doing a the currency. Julie tiffany, joe thinks you should get into crypto cryptocurrency benefit. It may be an acquisition. Fundamentally he likes, where the company is going at this point. We could see an increasing tailwind from currency. We could also see earnings for sure lift with tax reform. He is talking about tiffany maybe an attractive acquisition target. City analysts are talking about strength in some of the european luxury and jewelry companies, and they may be considering acquisitions. Companies like lvmh, swatch, if you connect the dots, you can see perhaps there is some speculation that tiffany could be attractive. You can see what these companies have done today, their currencies have gotten richer. Julia julie hyman, speaking there. Up next, policymakers are doing the utmost for Rate Decision, but do they have to be . We have the charts you cant miss. From new york, this is bloomberg. Its time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Tom and this is said to be planning to step down when his term ends in 2019. Earlier, there were reports that the chief officer could step down as soon as february. In october, they warned employees that serious consequences from a probe on corruption. Downal reef is stepping from the supervisory board. The company has been rocked. An accounting scandal that they are plunging. A raise more than 11 billion amid values. Earnings for this and last year would have to be respaces. Facebook plans on testing six second as starting next year. According to the wall street journal, which will have people briefed on the strategy. It will appear before videos begin playing. Facebook is also learning how to pay publishers to insert it midway through a video. Thats your Bloomberg Business flash. Scarlet that would be annoying. Whatd you miss . Central banks and their meetings this week. What was a common thing . It was cautious optimism. Whether it was janet yellen, mario draghi, or more holly mark carney. Were looking at the citigroup economics of price index. It is higher. This line doesnt indicate growth, the its the extent to which data is coming in better than expectations. We are at above 56 well above, the average of the last nine years. This index is a high list highest since 2010. Plenty of worries about it. Mark carney said worries Economic Growth has been softer than expected. The gdp forecast was rate, but not inflation. Mario draghi says europes economy is not Strong Enough to take it off of qe. Yellen says considerable time addressing the flat yield curve and talking about what an inverted curve might mean. Joe its such a beautiful chart. All the talk about why dont people care about a little reds and white markets never selloff . But look how good things are. The fastest rate in years. The simple answers, isnt it . Lets talk about stocks and whether they are in a bubble. Everyone can find their data points, you can find and say its a bubble, find another and say its normal. Heres one for the normal argument. The pe onio of russell 1000 Growth Companies versus the spread to russell 1000 value companies. You can see during the true bubble, 1999 the premium people, were paying for growth which is absolutely extraordinary. 50. E then, the spread under you can see thats exactly where we are right now. You could make the argument that people are not paying out the nose or anything. You can also make the argument that people are paying for everything, which is why these this difference isnt that big. In this measure, it looks nothing like 2000. Julia qe little boats, its all relative in this case. What about europe banks . Scarlet mentioned some of the headlines we got from mario draghi think growth estimates increasing. Inflation is still a worry. We have those 2020 forecasts, still nowhere near target. Look at this. We have seen an improvement in jobs being added in europe. I am looking at whats going on as far as youth unemployment is concerned. For most. Year area companies, its incredibly high. You have the European Union average which is the yellow line, over 18. 5 . Look at the purple line, italy, over 34. 5 youth unemployment. Greece, 40 . 6. 6 . Y, you get a sense of the greater levels of satisfaction in germany. Imagine if we could get these guys back to work and what that would mean for growth, and the suppressant that we see as far as wages are concerned. Scarlet this is a great snapshot of the two speed europe. Julia all the enthusiasm about europe, theres still a long way to go. Scarlet we have read on the screen for the major indexes. The dow off by 50 points, the s p 500 losing nine points. Coming up records of the doubt. The nasdaq also moving up. This is bloomberg. [applause] julia whatd you miss . Stocks are in the red. The nasdaq turning low, after the Net Neutrality rule. Im julie chatterley. Scarlet im scarlet fu. Joe im joe weisenthal. We want to welcome you to the closing coverage every weekday from 4 005 00 p. M. Eastern. Scarlet we begin with our market minute. A lot to go around for the three major indexes. The rollbackack of the Net Neutrality by the fcc as the reason why the nasdaq finished lower. The s p 500 lost ground after marco rubios spokesperson said he will vote know if he doesnt get what he wants when it comes to the larger Child Tax Credit. Joe not huge, this text debate is getting interesting. Scarlet is certainly is this text debate is getting interesting. Scarlet it certainly is. Were seeing highs for the s p and dow. Small caps leading the way, but lets lead with big names. Disney and 21st century fox were the highlight because disney agreed to a 52 billion deal to buy some of the assets, including a movie production house, and a lot of paytv channels that include fx and national geographic. Is about 29. 54 a share. , pharmaceutical