Continued u. S. Cooperation, head of president elect trumps inauguration. He says the eu would be naive to rely on others as global risk threatens stability. Global news powered by more than 2400 journalists and analysts. This is bloomberg. Scarlet live, i am scarlet fu. Joe we are 30 minutes from the close of trading in the u. S. We are seeing declines, the dow industrial falling. Joe the question is what did you miss . Scarlet we will dig into day past the session with the equity strategist of bank of America Merrill lynch. Investors gear up for Bank Earnings which kickoff tomorrow. Expected to post the biggest fourthquarter trading since the financial crisis. Plus, inside the Federal Reserves head and more the struggleeveal at the start of the debt ceiling crisis. Joe lets look at where the major averages stand as we head toward the close. Abigail doolittle is standing by. Our guilt modest declines for averages heading into the close. All down about one quarter of 1 or more. This does not tell the complete story. We saw decent volatility with the lows, the dow s p 500 down 1 pair the nasdaq was down more than 1 . This is exemplified by the smallcap index, still down more than 1 near its lows, down about 2 . Some more saying this could be the unwind of the big rally out of the election. This chart suggests it is a little too early and yet too late to say this. 5556. In white, we see a nice rally out of the election. The blue, it tells us that bonds soul off and an orange, we have gold, which was selling off, all holding those basic directions. We see a little shift but that is not around the trunk yesterday. Yield is down for its fourth week in a row and we see the dow is starting to lose a little steam while we see a big rally there in gold. The gold rally may look the biggest but probably most significant is the 10 year yield. We look at the 10 year chart of the 10 year yield and we see a massive move higher, 84 basis points. Bonds were selling off. This was a little congestion suggesting perhaps it is reversing. The big move up has caused a few bond movers to say we may be looking at the end of the bond bull market. In the next hour, we will have scott of kuvin of guggenheim coming out to discuss this. We look at the 10 year yield we have with that before, this is the tv 5215. The chart suggests right now, the bull market and bonds remain intact. In the 10 downtrend year yield as bonds rally. Bonds,recent selloff in back in november, the top of the channel was touched perfectly and the channel has been reliable. It is also supported by the relative strength index. It is a quantitative analysis theantitative analyst said last four times since 1981 rsi reached a level that suggested a big reversal. Few weeks ora months, it may well stay intact. Scarlet Senate Confirmation hearings for the u. S. Commerce secretary have been put on hold. We can tell you ross is finally a strong ally in the u. S. Deal industry. The president of the united steelworkers is with us from pittsburgh to talk about what is driving his support. Thank you for joining us. Following the announcement that mr. Ross would be the nominee for the commerce secretary, you have put out a statement saying the industry is smaller but more efficient than ever. The mostmembers are productive workforce on the planet p are your union negotiated a contract with the International Steel group. Tell us about your experience. Turnofthecentury, 2001, 2002, 2 thousand three, the domestic Steel Industry was in complete crisis because of the flood of imports from china, brazil, and russia. We had 40 bankruptcies. Major Steel Industries and we were not having a good time finding someone to help us save those companies. Interested. Help us and him acquire those countries. Us anded closely with said to directors, you do how to make steel. Tell me how to get the play started again. They had planned to close the steel mills in cleveland, which would have really destroyed the mills. We put the mills back in place we almost 15 years later, still have people working in those steel mills particularly in those places. Thousands of people are working and wilbur was one of those people who helped pull that off. I respect him a lot and during the time, he often articulated his strong concern to maintain Strong Manufacturing in america and new that manufacturing was the key to families supporting jobs. Joe i want to get your perspective on the administration as a whole, after the deal to save some jobs, donald from fired off a tweet blessing the president of united steelworkers 1999. Is the relationship overall between your union and this administration . Do you see it as hostile . I dont. Medicaid, voting rights, probably not on the name page. Nafta,ng and replacing with china, having a strong and longterm infrastructure bill, those things we were fighting for for the last 35 years. If that is what president elect trump plus his agenda is, we will help with that agenda. Help him accomplish it. Of overtures kinds has anyone from the Administration Made you and your union . Have had some discussions with wilbur obviously. We know peter very well. Someone who io be have a tremendous amount of respect for. Peter navarro has done a movie and a book called death by china. Those are people we know that share our desire to have Strong Manufacturing industrial base. I get tired and annoyed when people call this the belt. You will find an operator and a four orll has three or five or six years of training. Them towork with maintain and grow them. Vision, what would be the key differences between what we would have now and what the ideal replacement would look like . You some give statistics. Nafta, wepassage of have accumulated the trade deficit with nafta. We have accumulated a trade deficit of almost 1 trillion. With the trade deal with south korea, again in a short time, a trade deficit of 162 billion dollars. Why does no other nation want one if it is so good for the economy . Not against trade. We are for a balanced trade. We used carrier as an example, the only reason it wanted to move from indiana to mexico is they could pay workers a total of six dollars per hour. I think the president elect has the right idea. If you will manufacture furnaces in indiana, move it to mexico. Mexicans do not need furnaces, then sell those in america. You should pay a heavy tax for leaving and trying to cut back. Im glad you bring up the trade deficit. I wonder how confident you are in Infrastructure Spending wreckage will be passed here especially as Mitch Mcconnell has warned against a debt that would come through such a plan. Some point, Mitch Mcconnell and paul ryan have to come to their senses. They need to get out of their acrossand travel america. We lose more energy on the grid than we can imagine. Dozens of bridges that are impossible with transport trucks. Ryan annoyed that paul oppose the domestic content provision because he had small manufacturing in congressional district. It is important we stand to fight and helped the president elect to get a strong infrastructure bill, that we find a way to fund it and establish an ember Structure Bank very much like in europe where the bank is continuing to invest in european infrastructure and modernizing it. Am prepared for that debate they need to get out of their bubble. Joe thanks so much, the International President of united steelworkers. Scarlet financials still leading the decline. We will see dan, of bank of America Merrill lynch. This is bloomberg. Scarlet despite the day decline, if u. S. Policymakers can deliver on the 2017 promises, joining us now is an, equity strategist form bank of America Merrill lynch. Talking fiscal policy makers or Monetary Policy makers . The ship has sailed. That is the point, that the ship has sailed. The central bank has been replaced by a more powerful thing on the market. It is the only thing that matters in the next six months or so. Joe since the election, the present only seems to be interested in tech and companies that manufacture overseas or other things related to drug prices. He does not seem to be talking much about the infrastructure stuff. How confident are you that you . Ave some idea at some point, it does not matter. I think it will come with more negative than people think. Itll probably be more water down than people think but that does not matter. Want to start worrying when those things get locked down. That will not be in the next six months. I want to go back to the idea of the central bank. What would trigger a donald bernanke wef are about to go into earning season. We get any signs of slowness or slowdowns in the Economic Data, anytime anybody will worry about that, who will short the market when you think stimulus is down the line . Those expectations will still be there. Joe i know we are not supposed talk about the fed. The fed is yesterdays story. You mentioned strong data continues to be, another price of the initial claims number, almost no signs of weakness anywhere in the data coming out. Does the risk of a faster than expected series of rate hikes threaten the rally at all . What if the fed actually make for 2017 or four as things pick up . For the time being, yellen has demonstrated she is very conservative and will not do anything to disrupt growth. Line, we get to next year and maybe a faster fed hike , as we get the policies that may become more water down, there will be a lot more of those negatives. Next sixen now and the months, there is strong support for this. Joe you mentioned you think the ultimate bill might be worse thinking, people are what could be specifically worse . To get stuff done, you have to make car compromises. You look at the s p, if you just thathe lower tax rate, could add 10 or 11 for the s p. The borderce one of adjustments, if you keep adding on these, it is not that they could of a positive for the market. That is the balance. Thingsf you want to do on a budget neutral basis, maybe you have to do something more like 22 , and as you start making these shifts, it becomes less and less positive. Scarlet one thing we were talking about is the incredible indexes. If you invest in this post trump world, look at the companies in which he is praised, versus the companies he disparages through , whichand other comments he calls a swamp index, and that is the blue lined. It is up 16 including financials. The drugmakers he highlighted and called out. Of do you get a lot questions about tailoring Investment Strategy based on his tweets and other things like that trying to figure out which companies are in and out . Id do not get much in terms of tailoring investors to tweets. You have got to differentiate what the market is expecting and pricing in terms of real beneficiaries. Multiples, those stocks have more than double the expansion whereas tax beneficiaries, probably the more likely beneficiary, they have not actually seen much expansion. There is a lot of nuance. Joe equity strategist for bank of America Merrill lynch research, you will stay with us and next, we will take a look at volatility and currencies. Scarlet president obama introducing the Vice President , a tribute to the bidens and the first lady. If you wanted to catch the entirety of the tribute, you can catch it out on the bloomberg. President obama there has not been a single moment since that time since i have doubted the wisdom of that decision. Choicethe best possible not just for me, but for the american people. Scarlet lets take a deep dive into the bloomberg. Charts at theur bottom of the screen. Colleague. M your in yellow. El the vents holding the 2. 5 year lows. The bottom panel is a spread between the two. It is the widest in 15 years. We have seen wild swings, relentless pressure, unexpected moves in the offshore yen, equities is yawn. Why so much complacency . You do not have to worry about any of the fundamentals. Everything has risen in the u. S. If you look at what has happened, a lot of fun volatility is going on. Have worries next year about half oftion in france the emerging markets are still coming out of the recession. A lot of volatility. Trump takes care of u. S. Equities but nothing else falls under that umbrella. Everything else is a world of chaos. To some extent, i think that is definitely true. The correlation between treasuries and financials and right after the election, we saw financial stocks shoot up because of course, when rates go up, the banks are expected to make more money. There is the expectation banks will do well under trump, but as you can see, and that does not show up for a well, you can see they have diverse lately. Interest rates have pulled it back to levels we have not since his november. Financials have held up. Is there more room for financials to run or is this trade going to sputter spin around as long as rates are languishing . Two things going on. It is not just the financial story, it is the right story. Support factors financials get to doing to outperform and that is why you see it outperform today. In addition to that, there is further upside for rates. You will see rates go higher and that will help catalyze that performance. It is not just a rates story. In addition, you have got deregulation and all of the other positives financials have. Joe dan, senior equity strategist for bank of America Merrill lynch. Thank you very much. News from jiming comey, who says he is grateful to the expect her general for opening the investigation into whether the agency followed appropriate procedures when he investigated Hillary Clintons use of private female. Remember the timing of the became a huge point of contention during the campaign overall. Would cooperate fully with the doj review. The Inspector General for this review according to a Statement Released by the head of the fbi. The market close is next. Take a look at the major indexes. Scarlet motorway from the closing bell. What you missed, u. S. Dollar and slumping the day after trump phil to provide details in his speech. Failed to provide details in his speech. Joe if you are tuning in life on twitter, we want to welcome you. Closing bell coverage every weekday from 4 00 to 5 00. Scarlet we begin with our market minutes. I feel like it does not tell the whole story because the indexes took a dive. P. M. , theynd 12 00 have been on a Straight Path higher. It has been a pretty remarkable pairing of those gains. Joe this is pretty minor losses in the perspective of the day. Scarlet exactly. One sector i want to highlight is the bio techs. Plungecouped yesterdays due to the crackdown by trump. They made a big comeback, but over the past two days, they are down 2. 5 . Also under pressure today at least is chipmakers. You can see the Philadelphia Semiconductor index. I highlight apple because it is one of the big ones on the Dow Jones Industrial average. Lawsuit against apple can move forward. Control over the app store violates u. S. Antitrust laws so we will be keeping ion that. Joe lets get a look at Government Bond markets around the world. Yields lower across the board. Modestly lower in the u. S. The 10 year yield have been significantly lowe 2. 3. R to i want to spotlight the turkish 10 year yield because we talked about it yesterday. Today was a bit of a comeback for the turkish lira and so forth. Nice decline on that front. Scarlet we have been giving a close eye on the turkish lira here. Things have changed again. The found initially lost value on the announcement that Prime Minister theresa may will layout her brexit vision in a speech on tuesday. If you look at a chart of the one make volatility on the british pound, it shows it has been moving higher because may has signaled she will likely seek out the hard brexit. Joe chino represents pound risk. Now represents pound risk. Scarlet that is a good point. Edging closer to the 2 target could mean an end is insight for the stimulus program. A surge in the currency could be problematic because it would lower inflation. That would get in way of the bank. Joe kind of like the u. S. Anyway. Lets look at commodities starting with oil and gold. Not much going on in either market. Oil rising back above 53 a barrel. That is west texas intermediate. The real action today was in the grains market. Wheat, soybeans, and rice all green on news from the usda about lowerthanexpected farm planting. You see a bullish day in the grain market. There you go. Scarlet those are todays market minutes. What did you miss . Trump yesterday gave investors little reason to their bets that would improve the dollar. The nasdaq biotech index plunged. Even though it made a recovery, still down. The bottom line is trump moved markets. Joining us now is scott. He manages 250 billion in assets. How do you position yourself or do you bother positioning yourself around trumps various announcements . That is pretty hard, right . We need to take a longer view with the trump policies, which are given the likelihood that we are going to get further deregulation or a slowdown in increased regulation and then ill tell about the possibility of a tax cut and fiscal stimulus, this is a pretty potent mix for the economy. That should translate into higher equity prices. I would expect to see the s p 2500, but in the near term we have come a long way pretty fast, and i dont think any investor be surprised to see the market take a pause, correct, and try to establish a base to move higher. Joe what about the fact that trump lashes out anytime someone says something that is politically unpopular . Yesterday, he took a shot at the drug companies, pharma. Does not like the prices they charge. The attacked aerospace committees because he thinks they are expensive. The investment plans a Car Companies are now under the light. Who knows where he will go next . How do you way that risk . Scott the key to the success of the trump program, economic plan will be not to get bogged down in minutia. Scarlet it seems like he is. Scott that is the