Soldiers burned to death, the first such footage of turkish citizens in an Islamic State propaganda video officials wouldnt comment turkey blocked twitter, facebook, and youtube access. Turkey is at war with militants on several fronts, fighting kurdish groups and Islamic State in syria. And president obama is planning a farewell address next month in chicago. That is according to a report in to people with knowledge of the event. The remarks are slated to take place on january 10 and will thankyou toe a chicago and the state of illinois for launching his political career. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am Courtney Collins. This is bloomberg. Scarlet live from bloombergs World Headquarters in york, im julie hyman. Scarlet and i am scarlet fu. 30 minutes from the close of trading in the u. S. julie u. S. Stocks little changed today. Scarlet the question is, what you miss . Books on aing the major dispute, Deutsche Bank and Credit Suisse and announcing settlements with u. S. Regulators. And defense stocks are trailing after president elect Donald Trumps tweets yesterday. Martin shkreli unleashes on the drug pricing debate. How does he think president elect trump will take on the issue . That is ahead. Lets look at where the major averages stand as we head towards the close. We have little change here. Volume is down as well. Abigail doolittle is standing by. Abigail you are right about all of that, julie. Not a lot of action for u. S. Stocks. We look at the three major averages dow, s p 500, nasdaq. Each is basically unchanged. They had been flipping between very small gains and losses. On the week, it is worth noting they are up. Seven the time in a row for the longest weekly winning streak since december 2014. Strength for the dow. As for 2 stocks in the news, boeing and Lockheed Martin, after president elect donald trump tweeted yesterday that he ks boeing should it caused going to pop higher and Lockheed Martin to drop. Boeing has been trading in mixed fashion today. As analysts weighed in, including one military analyst, he says it is bizarre and late to the game and irrelevant. It is interesting to see how this shakes out. Interesting about these stocks out of the election we look 1318. Btv Lockheed Martin in blue, boeing in white, since the election. People thought Donald Trumps defense spending would be great. Boeing, steady climb higher. Now we are seeing a reversal. Curious to see whether or not that reverses in the year ahead. Some are thinking that the trump trade could reverse. Right now we have boeing up more than 10 since the election. Lockheed martin still up about 4 . As for defense spending, this is another great chart in the bloomberg. Btv 1034. Since obama has taken office, 200e seeing a bit of a dip, billion lower than the high. This may suggest that it could come down. Perhaps we have seen so many reversals of expectations around president elect trump and what he could be for stocks and the markets and this could be just will notrea that become investors play out. Scarlet another unpredictable consequence of the election. Donaldeard from abigail, trump it appears to be pitting 2 defense committees against each other. He took to twitter and said that because of the cost overruns of the Lockheed Martin f35, iff boeing i have asked boeing for a comparable super hornet. The shares have been moving in Different Directions since the election. Joining us is George Ferguson, Senior Defense analyst for Bloomberg Intelligence, and in washington, the white house editor for bloomberg news. George, as the defense expert, looking at how donald trump has positioned himself here, it is a little bit unexpected, given that people thought defense spending would increase, and yet here he is hitting companies against one another. What is the strategy here . George i dont think it is necessarily the case that defense spending will increase during donald trump presidency. What we have seen, the surprises that he is pushing defense. Ompanies to provide more value i think he realizes theres a lot you wants to get done over his presidency, a fair amount of spending, stimulus package, tax cuts. On top of that, he wants to grow defense spending but is looking for more bang for his buck. These companies it is great to get them to compete against each other and deliver product at a lower cost. Drive, that is his real to get as much as he can for the dollars he is spending. Alex, when you look at the past administrations and their positions on defense spending, defense spending, have we seen this kind of scrutiny . Is it seen in washington as needing attention and cutting . Aex i dont think there is member of congress who has his job after promising to increase defense spending. It is an easy position to take in washington, unfortunately. And to sell them to politicians here too seldom do politicians consider whether defense spending needs to go up and whether we need all of these new advanced weapons, fighter. Ets, ships, nukes, bombers donald trump is well in the vein of his predecessors here in washington. Julie and indeed, on the topic of Nuclear Weapons, trump has tweeted about that in recent days. These are also weapons that these 2 companies we are talking about are poised to submit bids on. Talk to me a little bit about how this may be brakes with what we have seen on recent policy. Usually thewell, United States makes its Nuclear Weapons policy in fairly dense documents issued by the pentagon. Here we have the president elect appearing to restate u. S. Nuclear posture on twitter. It is, i think, reasonably alarming some of our allies and adversaries and proponents of denuclearization. Of, for sure, and likely disturbing to some people. Scarlet george from you mentioned that the president elect wants to get more bang for his spark and that is his motivation for pitting these companies against one another. Nuclear armament may be an issue he will be grappling it. Give a sense as you rejected the Defense Budgets will likely grow where the spending project the Defense Budgets will likely grow where the spending will go to. George there is a number of areas that have been underinvested in the last decade. We just came out of wars in iraq and afghanistan spent money on the army and marine corps and the land forces. A lot of the products we built, Navy Air Force products, take a longer time to bring to the force and have not been reviewed in some time. Renewed in some time the ohio class submarines, made by general dynamics. The current Ballistic Missile submarines we used our 30plus years old and need to be rejuvenated. Some of the delivery mechanisms, both conventional and nuclear armed, our bombers. A lot of the bombers in the fleet are approaching 50 years old, more than the b52s made in vietnam and post vietnam. I think the Trump Administration will look to rejuvenate that. It started under barack obama, as we awarded new bomber contracts. A lot of platforms like that need to be rejuvenated. Force, Navy Platforms need to be rejuvenated. George, the type of weaponry you are talking about is more traditional as you say, it needs to be rejuvenated. Conflictthe u. S. The u. S. Is facing now are different from traditional conflict. Are the companies you cover in those warfare areas where we could potentially see spending benefit as well . George when you say newer areas, you mean . Julie i mean talking about scarlet technology, even. Intelligence,ogy, not traditional wars where the armies are clashing on various fronts. Interesting thing about this is all the copies we cover boeing, lockheed, raytheon they are on the technology and of the businesses and work on the intel side of the businesses. Remember, you get a lot more employment on the bigger programs. That is one of the other things we need to remember. I think donald trump wants to look strong on defense to would like an employment driver. Those would do a lot for his presidency. He is going to like some of the big programs, rejuvenate them, and they employ a lot of people. Unfortunately, you dont spend a lot of money on the other stuff like intel programs and drones and stuff like that. They are not bigticket items. And if you remember if he is leader,esque type of reagan built these big platforms but never engaged the enemy with those platforms. You have the Employment Benefit and you are not necessarily looking to engage. Scarlet to followup on what george was saying, donald trump wants to look strong on defense. We talked about the bigger and more elaborate defense weapons systems. All of that. But in terms of personnel, are we looking at a larger navy, larger army, more people in the marine corps . Alex george makes a good point that a lot of the bigticket weapons are sons and ships and planes are old subs and ships and planes are all good there is no country on earth that can challenge the u. S. In conventional or nuclear warfare. Where we have problems is what julie was talking about, asymmetric warfare, guerrilla war, russia sending little green men into neighboring countries who dont wear uniforms with insignia and all of a sudden crimea is taken over by russia, just overnight, practically. These are the places we are lagging behind and i dont see investments trump is calling for that would solve the problem. Scarlet George Ferguson of the intelligence and alex wayne, white house editor for bloomberg news. Thank you so much, gentlemen. Julie coming up, Martin Shkreli speaks out on the drug pricing debate, saying that despite the backlash he would do it again. This is bloomberg. Julie whatd you miss . Martin shkreli gained notoriety for buying an obscure drug and raising the price 56 times and then refused to answer questions before congress and tweeted that lawmakers were in the cells. David shkreli joined westin and Jonathan Ferro this morning and talked about how the conjurer still price hikes played a role in the president ial election. Caught inen you are the perfect storm of political season it is easy to become a target for unwarranted aggression. If you look back, one of the things i noticed is that president obama and his and administration said actually nothing about drug prices through the entire peirod, and i asked one of the people in his cap, why is he and joe biden staying silent . He said very curtly, they are not running. It is a populist issue and blown out of proportion. Seeings of regret, not that as acutely would have been a minor regret, but because the price increase has stuck, that is the main mission, to raise the price and have it generate increased revenue. That has happened. David apart from the politics, and perhaps in business you can never be entirely apart, as you learn, but did it benefit the investors in your company, the way you handle this . Would you have made more money for investors if you are not raised at this fast and in this public . In that sense it was difficult to do anything in terms of the investors from the cash flow perspective. It makes no difference. You are better off raising it faster. From the perspective of things like multiples and exit opportunities and brand names, there is a damage done. Again, i think it was someone unexpected when i raised the price of a drug 20 fold and there were not any stories. Jonathan how do you pitch what seems to be an ideological pursuit, poster boy of capitalism, versus running a company and going to d. C. , where you have to negotiate and dance around to have a Successful Company . Can you do both . Martin it is hard, isnt it . In your prior segment you were talking about his criminal charges against banks. We have been in administration that is very thuggish and bullyish when it comes to companies. They look at them as targets to shake down, in essence, and actually enforcing justice is not their goal. Their goal is to make a name for themselves and extract these billiondollar settlements. One has to tread very carefully. That is why some of the greatest been quite. Ple have david people feel strongly about their prescription drugs and that means politicians and government get involved. Did you put turing to some extent at risk of government coming in . They will come down on you hard. Martin absolutely, and learning at a young age that government in many ways is an apparatus of vengeance is, to be a little cynical about it, is frustrating. At the same time, nobody talks about the drug on the shelf at bristolmyers squibb, just hit the primary point, trial i planned with nyu nobody talks about that. Nobody talks about what i put into the clinic. We talk about one insignificant drug. Jonathan lets talk about something a lot of people are talking about, a trump presidency. You brought up the issue of populism. Do you think donald trump makes it a populist issue . Martin i think the media made it a populist issue. If you look at california, they ran an ad with my face on it during the world series. My family was shocked to see. The proposition failed. This is one of the most progressive states in the country. The proposition failed. Jonathan you say the media made it an issue and i love when people come on the show and say that. Hillary clinton was running martin she is an apparatus of the media. Jonathan using the media to get the message across martin it is no secret that the media favored jonathan i would not go that far. Martin ok, whatever. David not to the people who needed to take it terribly important. If you have people who dont have a lot of money and they need to take this drug, there is going to be consequences. Martin there isnt consequences. They have insurance. I dont know if you are familiar with health care insurance. Americans have it, the president forced us to get it. I paid a fine for not having health care insurance. David your insurance is really great. A lot of Peoples Insurance does not cover 100 of the cost. Martin as far as i know it is covered by every major insurer. I ultimately think trump is going to be a fantastic president. He will bring more competition for drug prices and solve it in a capitalist way. Getting a generic approved takes five years. Jonathan the ultimate problem is for the Healthcare Industry come almost monopolistic because it is so hard to get drugs through the fda. Martin drugs are a small jonathan beyond that, the pricing issue, it will be harder if they would dress that. Martin drug pricing is a small part of health care expenditures. Physicians prices are rising faster as our hospitals. The drugs of the best costeffective solution for health care. They are algorithmic, remodular. Whereas surgery, much harder to control. David there is no question that the price of drugs is going up faster than the cost of living, and as a percentage of gdp in this country, healthcare costs are 18 or Something Like that. Martin absolutely. David much higher than any developed country. When you have the Health Insurers pay high prices from that gets expressed through premiums sooner or later. Martin and so the question is, grow, and weps are at the top of that act, we learn as a society that what we prize in life is our health and we will spend more and more on our health than ever before and that is a good thing. It is the mark of a civilized country. David so you would do it again . Martin of course. Shareholders you have seen castigated for their increases. They raised prices after the senate committee. I look at bloomberg for inflation and i dont see they need to give up 13 inflation. Surprisingike im that i would do it again. Everybody is doing a good and capitalism you charge the highest price you can for the profit. Scarlet i am scarlet fu. Whatd you miss . A Mortgage Rates spike. Home loans are getting more expensive and the 30year x Rate Mortgage has gone up 75 basis points to the last time we saw a move like that that steep in that amount of time was june 2013. Back then we saw home buyers jump in and push home sales up by about 19 . What happened afterwards . You saw a big dive. Home sales plunged afterwards. If you look at what happened today, we got new home sales they jumped 5. 2 . This is perhaps the peak before the decline. It is something we will be watching for in the coming months. Julie people act quicker than they might have. Today we got the mexican trade balance numbers and mexico reported an unexpected surplus, trade surplus of 200. 4 million. That is the white line, pretty close to the top. Going about that shows surplus. 900 million deficit was the forecast from economists. None of them predicted a surplus. A change . What changed . The pace. Pesos the u. S. Dollar versus the u. S. Dollar could that caused an export gain. Even as we see the rhetoric about tariffs, potentially talk about trade wars with various companies, the drop in the peso has created at least one benefit for mexico thus far. Helped, of is course comply oil prices stabilizing. The market close is next. Take a look at the major indexes with less than four minutes to go before the close. Little change here, slightly to the upside. Dow up by almost 12 points. From new york, this is bloomberg. Scarlet we are moments away from the closing bell. Stocks with narrow trading ranges, falling out ahead of the holidays. Scarlet on scarlet fu. Julie and im julie hyman. Scarlet welcome to viewers who are on twitter. You can watch closing bell covered every weekday. We begin with the market minute, sleepy in terms of equities and how they are performing today. We wanted to a couple of sectors that i will begin with european banks. They are in the news, one making headlines. They are paying a combined 12. 5 billion to uncle sam. And we see italian banks gaining after the Italian Government agreed to put 20