Trading day and Abigail Doolittle has a sideways day. Abigail not a lot happening. We have the dow and s p 500 day sickly flat. Biotech shares are weighing us down. This puts the dow on pace for yet another record close. Interesting here is that we did have a nice rally in asia and europe to some degree. Ahead of the ecb decision tomorrow with the hope that the ecb will extend the bond buying program. That rally is not extending here at this time. Another reason for Global Investors to be optimistic. Will be going to the bloomberg, this is a chart of analysts bringing up their profit forecasts. We can see all the way to the side that analysts are bringing up the profit forecast on the goals basis to a level not seen since 2011. This is very positive and stocks at the end of the day trade on profit outlook so perhaps this that investorsse arent sharing . When we take a look at the euro ahead of the ecb meeting, it might not support the idea that the ecb and ecb president will expend the buying program. We see the euro trading higher. If investors that it was going to be extended, typically that would weigh on the currency. But it is worth noting that the euro is down after the u. S. Election by about 5 . And finally, a quick look at health care stocks, trading lower. This is after donald trump said that he is planning on bringing drug prices lower. That is not good for the distributors and shares are trading lower. Stocks are rising here. Not so much there. Three days of gains. The banks are the thirdbest performer. Followed by basic resources. To theire risen highest level since january, taking their rebound since july of a fiveyear low to 45 percent. Take a listen to this. The stoxx 600 is breaking out of the bearish channel and it is crossing above a key technical resistance level, representing a 50 reach race meant of the fx drop from december 2015 to february 2000 16. Lets get to the banks. This is driving banks up today. Credit suisse up by 6 . Earlier rising by as much as 8. 7 . Lower profit targets into units. Of a 1 another cut billion and costs. Forced to adjust his turnaround plan. The second time they have had to readjust the plan to organize the company. Thatis interesting is before today, the stock lost 41 since he was first announcing his reorganization plan last october. Investors are questioning his ambitious profit goals. Shares are rallying today up i65 5 . This is the big decline are on the stoxx 600. Shares are down as much as 12. 5 . Shares down 13 now. Rejecting a belgian competitor. This is the final takeover offer and says that regulatory triggered by the deal would hamper operations and hurt employees. Raising the offer last week to 5. 75 euros a share. That was proposed earlier in november. It also made good on its shares to shareholders. European outgrow the in the three years through 2018. It does reflect better Economic Performance and a steady drop in unemployment and high property prices. The spanish gauge, fallen by 13 since the start of two thousand 15 versus an 8 gain for the dax. Julie . Onie now, lets check in the first word. In indonesia, an earthquake has killed almost 100 people and has destroyed dozens of buildings. Hundreds of people have been injured. The earthquake was magnitude 6. 5. It struck on the coast. In 2004, more than 100,000 people died after an earthquake triggered a devastating sue not me. A plane belonging to Pakistans National carrier crash takeoff. Crasheds say the plane in a village near the town of about 45 miles northwest from the capital. There were no immediate details. Renewing the fight against trump travel to fayetteville for the second stop on his thank you tour. He said the impact of his presidency will be felt globally. A we are representative to large extent of what is happening in the world. The world is looking up to us but they havent been looking up to us much and they will begin looking up again. We will be good to the world, not just good from the country. Also also repealed he revealed his pick for secretary of defense. And donald trump is time magazines person of the year. If they gave the title to the person who has the greatest influence for better or worse. In an interview, he said being named a person of the year is a great honor. Global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. Julie once again, at t and time warner executives are talking about their merger. Will cuband mark q answer questions before the subcommittee. We are now getting the opening statements. And we will continue to bring you updates on this statement. Lets get back to the markets. Global stocks rise on the hopes as investors prepare for the ecb. Uncertainty does linger before concludes tomorrow. Jpmorgan, 1. 7 trillion. David lebovitz, thank you for coming in. Ofre is the assumed stimulus the Incoming Trump administration. Do you buy the thesis that the seeets say we are going to an uptick in inflation as a result of all of this . Will see anatural we dramatic uptick but it will go up as we move into 2017. Fundamentally, what we know about policies on the table is that donald trump wants to inject more demand into an economy that is running out of supply. The way that manifests itself is higher inflation so we do expect that along with more stable Commodity Prices to push Inflation Higher into the next year. Julie the debate and the discussion has been, will that be further stimulus for growth . Or will it provide a cap to growth . Exactly. Our view is that a little bit more inflation wouldnt be the worst thing in the world. We have spent eight years trying to figure out how to get inflation to accelerate amid the opes of fiscal stimulus, it seems to be a step in that direction. At the end of the day, inflation is fundamentally too much money chasing too few goods. Wage growth would hurt corporate profits. We could take that in line with rising Commodity Prices and more fiscal spending by the government, and we could see inflation pickup to a point where it is detrimental but we think that is late 2017, early 2018 story. When Interest Rates are low and rising, the correlation with equities is positive. Exactly. So next year we may see low inflation scares with the yearoveryear comparisons on Energy Prices become more normal but it is suggested that the multiple ofontain a 18 times earnings as long as inflation is between 0 4 . If Interest Rates are a forward itk of where it may be, could be changes in rates. Mark so inflation needs to remain in check. Equity market should be able to generate made to singledigit returns . Is that right . Exactly. Im not betting on the market multiple going that much higher. I think if sentiment stays where it is and it can be supported by a little bit more wage growth next year, as well as lower incomes, that im not betting on the multiple. Im betting on the Earnings Growth. And reese on the First Quarter of positive Earnings Growth over that first year. That needs to continue rising and i dont think investors are willing to pay much more than they are today. Which means that fundamentals will be the primary driver, Going Forward. Are talking primarily about u. S. Stocks. And we talk a lot about what happens in europe, as well. Given where the two regions are in their respective cycle, do you see the value in europe, as well . Or do you think the u. S. Is a better bet right now . Think there is value outside of the u. S. But for us, it is longerterm. Even our expectations around the dollar, for a u. S. Based investor, it will be tough to generate a return outside the u. S. Here, you could get the currency translation effect at the end of the day. Your point, emerging markets are still the engine of growth for the global economy. So we dont think that it should be dismissed. But we think they may need to be a bit more patient in waiting for them to come up and generate their returns. Mark this goes in line with what you were saying just there. Essentially, im showing off her. This is the stoxx 600 and what it is doing is breaking out of the bearish trend and channel, which did start about three months ago, crossing the key achnical resistance level of 50 retracement. It is a bit of a mouthful but as we know, european stocks have been very much unloved for the last 3031 weeks with just one 30 weeksnflow versus of outflow. When you we see more of a convergence between u. S. Stocks and u. S. Stock performance . David i think you are talking about the aggregate stock but what you need is present patient from the financials. Of theore than 20 financial indices. So if they are under pressure, it will be tough for the aggregate market to rally. But what i would say is that europe emerging markets, there are great places for active management. There are a lot of companies that are doing really interesting and good things. And so we think a more nimble approach makes more sense because again, you will not get the aggregate to rally unless financials are participating so cautiously optimistic is what i would say. Julie one more question. I have my own chart here on the bloomberg, which looks at the s p and poses of them have been higher. And this white line in particular has really outperformed since the election. Justified . K that is will we see more outperformance going into 2017 . Feeling is that it has to do with a stronger dollar and growth in the u. S. You naturally would want to focus on companies that are domestic and inward looking. And those are the small caps. So i think the run could continue. I do think we are due for a pause. In quite a move, and it has been quite a move since the election. So i wouldnt dismiss small caps but i would temper return expectations Going Forward. Julie david leibovitz, thank you for coming in. Mark coming up, u. S. Lawmakers get to weigh in on the proposed 85. 4 billion takeover of time warner. Says the deal may need more analysis. Adding that at t and time warner could favor its own products. London and new york, i am mark barton. Julie this is bloomberg markets. Talking about Randall Stephenson and jeff puke is testifying before lawmakers about the proposed takeover of time warner. Stephenson says that together, they will disrupt the entrenched model. Giving consumers more options and accelerating the employment and deployment of 5g broadband. You just saw a senator on that committee speaking. For more at what is at stake, lets bring in paul sweeney. What is your view here . Is this deal good or bad for competition . What does this really mean . Think most feel that this will get approved. It looks a lot like the one with universal in which a distributor geta content owner together, different than comcast buster posey acquisition of Time Warner Cable which got blocked because it was more of a horizontal deal. The expectation is that the deal will be approved and it is just another step in what we are seeing in the convergence of media, telecommunications, technology. And we are seeing a big wave as we have seen over the last few years of it getting even bigger as the whole communication sector continues to consolidate. To think the view is that it will get approved, ultimately, who decides in these types of situations . Paul the department of justice. I dont think the fcc will have much of a role here. Ofy take action in terms this. Much like what they did before, this will ensure that it is eager and more vertically integrated. It will still be a platform where other content players can get carriers. They want to make sure that whether it is Internet Access or cable access, in whatever platform that may develop, that everybody will have a chance to play on the bigger at t network. Much like they did with comcast. Deal so the version of the might be straightforward but what kind of concessions might have to be made . The concept of open access. I think what regulators want to make sure is that if new content comes along, a new mobile lap or website or source of content comes into the marketplace, netflix we have seen that will that new source of programming get access to the distribution on the at t network . That is absolutely what regulators around the world are pushing for and are trying to put in place provisions to ensure that it occurs. Mark donald trump during the Campaign Said that he would block this deal if he became president and he will be president. What are we going to learn about the president elect intentions towards this deal and m a in general . Would block the deal and said he didnt like the deal but i think what will happen is that he will come back ad look at it with dispassionate view. So the expectation is that the department of justice, under the Trump Administration, will generally be deregulatory as most administrations tend to be, but this deal will get a fair look on the merit of the deal. And given again that it is more of a vertical integration, most investors think this deal will be approved under the Trump Administration. Julie paul sweeney, thank you for your perspective on this. Lets listen in to the hearing. Chuck grassley from iowa is speaking. Chuck grassley affordable prices make for a happy consumer. At t and time warner say this vertical merger will, in their words, benefit consumers. Now, critics of the merger say that this deal will have an impact on innovations. There is a worry that it will block better access to time warner content. There is concern that a combined company will give preferable zeroel placement and rating pricing to time warner, time warners premium entertainment programming, then to the disadvantage of other content producers, and particularly, small, independent producers. There is also concern with the ability over negotiating a better Licensing Agreement or raising the price of this to the detriment of other distributors. There is concern about the merged companys ability to avoid tactics which would dictate rates and terms to other networks. There is concern that this acquisition will concentrate too conglomerateto one , resulting in higher prices and fewer options for the consumer. And there is also concern about the mergers implication for a free and diverse media. This is something that i because onperienced the farm, i watch channel printer 49 on directv. I found out it wasnt there anymore and i asked why and i found out what was going on is an on fair contract negotiation. Seriouse are all concerns which should be scrutinized carefully by antitrust regulators tasked with reviewing this transaction. Some warn we should be careful about how the at t and time warner deal should be examined because of the dynamic nature of the industry and complexity of fastpacedlace and innovation and consumer wants and demands. They question whether the metrics are suited to tackle this transaction and urge caution on determining the competitive effects of mergers between different complex platforms. Secondly, they said just that they may need to redefine market power and reassess how to analyze this in a fast shifting industry with multisited platforms. With tech giants like google, facebook, amazon and others changing the way consumers access content, it is legitimate , as one scholar recently said, which look straightforwardly anticompetitive in the Old Industrial merger models may not be so simple in the merger of modern media platforms. The deal warrants close scrutiny because it raises all of these complexes and concerns. We want to be sure that the proposed merger doesnt allow an unfair advantage over competitors or facilitate anticompetitive practices with anticompetitive effects. Yet, we also need to be thoughtful, forwardlooking towards a market that takes into account the complexities of modern, interconnected media content and Telecom Platforms and relationships. Julie we were listening to the hearing before the judiciary subcommittee on the at ttime billioneal, the 85 dollar deal. That was senator chuck grassley. Are raisingrs questions about competition in the industry in the wake of the deal. You can continue to watch this on live go and we will bring you headlines that come out. Mark still ahead, thomas ack joins us with Donald Trumps latest cabinet picks. This is bloomberg. Mark i am mark barton along with julie hyman. We are watching oil today trading at 51 a barrel. The speculation of production boost from shale Production Output will counter the first cut from opec. We are just about to get ustry data from the u. S. What are we expecting . Julie expecting a drawdown and that is what is happening. A drop of 2. 4 Million Barrels in the weekly inventory barrel. Is nearly double. Gasoline inventories climbing 3. 4 Million Barrels. Desolate inventory barrels climbing. So that could potentially counterbalance some of the effects of that drop that we are seeing overall in inventories. We will keep watching the price of oil but at the moment, we are seeing this close to the low of the session. Oil prices are down for the second straight day. I dont know if we have a look at what oil is doing in the wake of this. 50. 36. Or so. N the barrel so we are watching that closely. So in terms of other breaking news that we are getting, cbs reporting that donald trump has the third general selected by donald trump for a highlevel post. In the meanwhile, he may be softening the stance on china. As evidenced as his pick of Terry Branstad, picked to ambassador of china. Joining us now with more is david westin. David more important, we are joined by thomas barrack. Hisreal claim to frame, friendship with donald trump. Lets start with the china question and Terry Branstad. What should we weave into the ambassador to beijing . Thomas you read into it as a considered and thoughtful and calculated choice. Longest branstad is the standing governor in u. S. History, i think, almost a 30 year relationship with china. To the key with china is curate politics and business in , coltssubtle, longterm really sensitive way. So i think the signal of taking somebody who already understands the hardships, who has a reputational capital with in a settin