Of bonds versus stocks. We know that as stocks has been rallying, so have bonds. That is interesting because because the correlation between them has been declining over time. The correlation is at the lowest going back a year. But and actually might still be attractive to be buying stocks over bonds. If you look at the chart here inside the terminal, when looking at the dividend yields about the 10 year yield, dividend yield is still offering more return than the 10 year treasury yield. So even though bonds and stocks are high, actually still might make sense to buy dividends over treasury yields. Lets bring volatility and the vix into the equation. What we are looking at is the vix curve. Up, it is this melt at super low levels. The lowest levels we have seen in about a year. Beneath the surface we are seeing the curve steepen. The steepest in three years. Basically what this tells us is even though volatility is low right now, the implied volatility going out further is steepening the most in three years, especially towards that march quadruple month where there is lots of liquidity and volume for big Asset Managers. It suggests we have big Asset Managers putting hedges against volatility, or perhaps making an outright short bet. Areer way, it appears some preparing are looking for big volatility for stocks perhaps in 2020. Michael here is something we can all be thankful for going into the holiday, and that is the atlanta feds gdp now estimate of Gross Domestic Product growth in the Fourth Quarter. It really perked up this week after the durable goods ordered data and the trade deficit data. In fact, this model of growth in the Fourth Quarter was its lowest, about 0. 3 just two weeks ago. As you can see in the chart. It is really perked up since then after these latest data points. Now pointing at a growth a little less than 1. 7 for the Fourth Quarter. Still not strong, but a lot better than what it was looking a couple weeks ago. The fed is basically saying domestic investment is less of a drag on gdp after this data. And exports went from being a drag on gdp to a contributor to growth in this quarter based on these latest figures. Scarlet i will pick it up from here. Thank you so much. Still with us is edward campbell, managing director at q a, as well as Bloomberg News cross asset reporter sarah ponczek. I want to pick up where taylor left off, where she talked about the dividend yields being above the 10 year yields and perhaps that being a signal equities can rally further. Do you agree with that signal, and does that mean we are going to see bond yields continue to support equities . Edward i do think that is the case. If you look at the absolute valuation of stocks, we are about a 17. 5 forward. On absolute basics stocks are expensive. Certainly above average. I would not call them grossly overvalued. But you really have to look at stocks relative to the computing assets like bonds. If you look at stocks at a 17. 5 pe, they were at 18. 5 pe in january 2008. So while they are high, they are lower. Meanwhile we have seen bond yields come down significantly this year. Certainly on a yearoveryear basis they are down significantly. When you look at things like the earnings yield relative to the bond yield and dividend yield relative to bond yield, stocks are still attractive relative to fixed income. We may see rights move upward from here. We are certainly expecting little Economic Growth to pick up in 2020. But we do think rates are likely to be contained, and that was still favor equities in terms of relative valuation. It is odd that we have seen this melt up and stocks over the last several weeks and yet people are buying treasuries. Rates are lower since the beginning of the month. And the dollar on a real winning streak, neither of which totally fits with the story of this euphoric reflationary move you might get. Sarah it does not. You would think people flocking to the dollar. Same thing, buying of treasuries lately. But still with stocks it is pretty unbelievable move that we are seeing at yearend. There was a piece out today on the bloomberg, and i heard a couple investors bringing it up, the idea that we have 25 gains in the s p 500 this year, as we saw last year we are likely not going to see that pressure from tax loss harvesting. So the idea is we might continue to see this melt up through the end of the year. That could be one factor. Not the complete factor, but many people tend to believe the path of reason of least resistance is higher. So sure, you could sell if you got in at the beginning of the year locked in a 25 gain. But a lot of people did not get in right at the beginning as stocks are falling in the Fourth Quarter and maybe want to hold on to make up some ground, especially through the end of the year. Romaine a lot of folks are going to say into this market no matter what. Trade sort oflue materialize but that was accompanied by steepening in the yield curve. That steepening seems flat on that curve and it gets even flatter, does that blow up the whole value trade . Edward it would certainly be a headwind. One of the things we value trade has going for is is an extremely interactive attractive compared to growth stocks. When you have such a relative value advantage and a potential catalyst, and i think we are going to have that catalyst in 2020 with improved growth both on Economic Growth in terms of Global Growth and Earnings Growth and higher rates, i think that should be the catalyst that could drive a phase of value outperformance. Scarlet if you want value you may as well look abroad because the u. S. Has outperformed every other market, or certainly International Markets over the last 12 years. A narrative that has picked up steam the last few weeks is International Outside the u. S. , e. M. Will outperform the u. S. In 2020. How much conviction is behind that call . Sarah this almost seems to be turning into a consensus trade and it goes back to reversion. We have seen such utter underperformance so long international, whether that is developed international, emerging markets. But you are going to have to eventually see some sort of trade. Even when it comes to outlook. 2020 outlooks from goldman sachs, barclays, all talking about potential strength in europe. There is a lotke of force behind this idea right now that we could see International Stock markets really take off. Joe are we going to need to see some sort of turn in the dollar for that to happen . We were just talking about this weird situation. Risk on, but with very impressive dollar strength. That makes it hard to see outperformance. Edward so many of these trays are related. The u. S. Outperformance relative dollar,national, strong growth overvalued, large or small cap. Decadeslong trades where the u. S. Has posted Something Like 13 returns over while emerging, markets 3. 7 . That has built up some really heavy valuation discrepancies. If we do get a world year where nonus growth is rebounding and u. S. Growth is slowing, which i think is likely to be the case, then you could see the dollar weaken from here. Missed ite completely but apparently santa claus ran the closing bell. I think they should have had a turkey. What about bread and butter . One ofseriousness, in our market reporters earlier was talking about the vix and how low it is. It is almost nonexistent at this point. Is it still relative as a factor in the way that traders are positioning themselves . Or is there some other volatility risk metric that people sarah i would see the vix is absolutely still relevant. People raise the question is if there is a different or better way to measure volatility. But if you look at daily swings, volatility would still be very, very low right now because we have not seen Much Movement either way. Joe i guess romaine i guess my question is, is the vix a signal that investors are not worried . Sarah they may not be the same signal it used to be. But you look at the vix, it is at the lowest level in about a year. Of course people are going to start to think about the word complacency. Are investors not worrying about the risks . Are people too complacent and will they be taken by surprise . Because many times when you see a large spike in the vix, accommodated by the other volatility metrics as we saw in february prior, they typically come off of a pretty low base. Very complacent volatility really drives up and all of a sudden something comes out. Scarlet so are we too complacent . Joe i think it does signal edward i think it does signal some level of complacency. But never short i dont market. If you look at the a dull market. Lower volatility tends to coincide with better equity market return than higher volatility. So i would not get out just yet. Scarlet what is the single biggest risk that could disrupt everything in 2020 . I feel like i set myself up with that question with the election coming up, but is that a question you get a lot . Edward yeah. So, if you had asked someone a few years ago when the next recession would be, most people were focus on 2020 in terms of the timing. The probability of that happening is going lower and lower and that is one of the things that is fueling a rally here. I would say the election is a risk. The main risk from the election is if you do get a clean sweep and you do get a reversal of the Corporate Tax cuts. Scarlet by the democrats . Edward by the democrats. There are a fair amount of the candidates on the democratic side who said they would repeal the Corporate Tax cuts. The same way that turbocharged Earnings Growth last year, it would weigh on it in a major way next year. Sorry, the year after, because it would take some time to legislate. But the market would see it before hand. Edward campbell and sarah ponczek, thanks. That does it for the closing bell. But what did you miss is next where we will take a look at the outlook for the Retail Sector with nate checketts. That is next. This is bloomberg. This is bloomberg. Scarlet live from bloombergs World Headquarters in new york. Heres a snapshot of how u. S. Stocks closed today. Another day, another record high. The mood continues unabated. The dollar strengthened and treasury yields increased. Romaine same story, different day. U. S. Stocks climbed into another record as a risk on move shows few signs of abating. And the impeachment saga continues. President trump denies directing you Rudy Giuliani to ukraine to dig up there on his political rivals. And bursting the black friday bubble. Is the hype overinflated . We will look at why some say retailers should treat the Holiday Season like a marathon and not a sprint. All that and more, coming up. Slew of u. S. Economic data it was released today showing that consumers are restraining their spending before the make or break Holiday Season. And an unexpected uptick in Business Investment may be what keeps the expansion chugging along. Lets bring in the alanna to help us break down the data. There was so much data today and yesterday that it is kind of hard to pin the rally we saw on any one piece of data. But if you have to look at everything across the board was the most impressive piece of Economic Data . I would highlight two things from the cornucopia of data we received this morning. First of all gdp growth was revised higher. But that is not a positive sign. Because the revision came from inventory which was driven by anxiety stockpiling. Another point would like to make is corporate profits slowed down. That growth is very important for future Economic Growth. And we saw a significant slowdown in that sector. That is something to highlight from the gdp report. As you mentioned, personal spending of the trajectory of growth in the spending sector is slowing and that doesnt bode well for Economic Growth into the next year. Joe so bottom line, it does not sound that good. If people were looking for green shoots the way you describe it, it is not obvious. Weak one wayll be or another. The question is if it will be a critical slowdown such as some tracking estimates, such as atlanta fed and new york fed, or it will be a slowdown, but Something Like slightly below potential. We are in the camp that expects slightly below potential. Romaine what about the consumer side . We got some data that shows personal spending. It was not quite what the market was looking for, but it was not awful either. Yelena it was not off, but if you look into the details of inflation, Consumer Spending, it was zero. So it was flat in the month. And if we continue to see such growth, or the absence of growth, we will see a significant slowdown in the quarter as a whole. Scarlet i want to bring up jobless claims. Joe always loves watching this. He calls it his Desert Island indicator. If he only had one economic indicator, he would want this one. Joe is a very interesting guy. It seemed to bottom out and turn, it up. It appeared. What does this mean in terms of how we think about expectations for the jobs report next week . Yelena and what is better even, the Unemployment Rate also ticked down, touching the alltime low. So i think we should expect a positive report. Obviously it will be overstated by gm workers coming back, but we expect another decline in the unpleasant rate. Joe at some point, though, does this have to give . You cannot have multiple sectors of the economy slowing, as you describe it, and the labor market remain as robust as it is. Because firing and all that stuff. At some point you have to expect one of the two to converge. Yelena absolutely. This is a huge risk for future outlook. I do not expect further slowing on the investment side. It is already pretty weak. But slowing in Consumer Spending is quite likely, and that is a major risk for economic outlook, as you mentioned. Scarlet yelena, thank you so much. Joe coming up, President Trump and lawmakers no break from impeachment. House democrats inviting the president to testify. We will get the latest from washington, next. This is bloomberg. S bloomberg. Joe when lawmakers return from thanksgiving, the house will move into the next phase of the impeachment inquiry against President Trump. Jerry nadler sandy Judiciary Committee will hold its first public hearings next week. For more lets bring in bloomberg congressional reporter billy house from capitol hill with the latest. Thank you for mark thank you for joining us. Oflain to us the timing these hearings, and will adam schiff be finished by the time adler begins . Billy adam schiff, the chairman of the intelligence committee, says he will have a report to either members of the house, including the Judiciary Committee, when they come back tuesday. Wednesday is the first scheduled to Judiciary Committee impeachment hearing where they will call four experts on constitutional law in impeachment to testify. It is assumed would not certain the Judiciary Committee will have that report, the investigative report from shift and his from adam schiff and his committee by then. Romaine one thing that is interesting about this particular stage in the impeachment process is this is where they would draw up formal articles of impeachment but this would also be the first chance where President Trump and his legal team would have a chance to sort of defend themselves i guess in front of the committee. Is that right . Billy that is absolutely correct. But as of today the white house was not saying whether they were going to participate in what they call a sham process. Bille past, in 1998, clintons lawyers did participate in those hearings. And there were four that time. We dont know how many hearings they are going to be. Right now we just have the one on wednesday on the record. We will see how that plays out. Scarlet at what point with the president and his legal team need to respond to whether they will show up at the hearing . Presumably if they dont ever respond, the hearing will go on as scheduled. Billy the hearing will go on. They have been given until 6 00 p. M. Sunday to respond. Whether that is set in stone or whether they can respond by monday morning, who knows. But right now the letter that jerry nadler has sent to the white house gives them until 6 00 sunday to say are you going to show up, are your lawyers going to show up, are you going to ask for witnesses, are you going to crossexamine our witnesses . Joe plausibly, what is the soonest we could see the full house vote on whether to impeach the president and send it to the senate for a trial . Billy democrats are a selfimposed sprint to get this done by christmas. That is what they are shooting for. If, like with the clinton impeachment process, they have three or four hearings, they could conceivably have a vote on the house floor by christmas. Andher that holds true whether the clinton team decides to put up a fight or a defense, and that could extend it, or whether other witnesses come forward that have not so far, like john bolton or others, it could extend their timetable. Scarlet that is less than one month from now. Billy house, appreciate it. Lets switch from politics to business news. Business flash headlines here for you starting with shares of deere, they finished down on the day. Construction equipment maker delivered a more cautious outlook than expected. They could fall as much as 10 in fiscal 2020. Deutsche bank selling another chunk of unwanted assets to goldman sachs. Bloomberg has learned the latest of 51 billion tied to emergingmarket debt. They are previously housed in the win