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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Day bake At podcast, available every morning on Apple, Spotify

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Speaker 1: or wherever you listen. It's Thursday, the seventh of November

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Speaker 1: here in London. I'm Caroline Hepkit.

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Speaker 2: And I'm Stephen Carroll. Coming up today, Kamala Harris concedes

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Speaker 2: defeat as the Republicans edged closer to winning the House.

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Speaker 2: On top of the Senate and the presidency.

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Speaker 1: Traders pile into US stocks as Wall Street bets on

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Speaker 1: a pro growth agenda from the Trump administration.

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Speaker 2: Plus rate risks return as the Federal Reserve and Bank

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Speaker 2: of England gets set to cut bets on further easing

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Speaker 2: take a hit with proposed trade tariffs, and focus.

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Speaker 3: Let's start with a roundup of our top stories.

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Speaker 2: Donald Trump is on his way back to the White

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Speaker 2: House after a stunning political comeback. With the completion of

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Speaker 2: Trump's victory across Swing State's vice president, Kamala Harris has

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Speaker 2: conceded defeat. She addressed her supporters at Howard University in Washington, DC.

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Speaker 3: Today.

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Speaker 4: I spoke with President elect Trump and congratulated him on

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Speaker 4: his victory. I also told him that we will help

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Speaker 4: him and his team with their transition and that we

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Speaker 4: will engage in a peaceful transfer of power.

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Speaker 2: The defeat for Harris caps a world win campaign for

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Speaker 2: the country's first female vice president, who sought to make

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Speaker 2: history by becoming the first female president. Her one hundred

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Speaker 2: and seven day pitch to voters came after Biden's decision

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Speaker 2: to drop out of the race and endorse her. However,

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Speaker 2: the Democratic nominee was unable to escape the headwinds from

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Speaker 2: the electorate's frustration with the administration over decades high inflation

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Speaker 2: and a migrant surge across the US Mexico border.

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Speaker 1: In less than eleven weeks, President elect Trump will once

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Speaker 1: again take the oath of office on the same capital

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Speaker 1: steps where a mob of supporters battled police in a

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Speaker 1: failed attempt to override his twenty twenty election. The Republican

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Speaker 1: has set his sights on tax cuts and deregulation, whilst

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Speaker 1: promising sharp tariff increases and the mass deportation of illegal migrants.

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Speaker 1: Here's the former RNC chair and former Trump White House

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Speaker 1: Chief of Staff Ryan's prebus on Trump's victory.

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Speaker 5: He created a diverse blue collar coalition in this country

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Speaker 5: made up of Hispanic voters, Black voters, Asian voters. It

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Speaker 5: was across the board, and it wasn't just a ground

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Speaker 5: game thingment. I mean, he came reasonably close in New Jersey,

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Speaker 5: in Minnesota, in New Mexico. There was no ground game there.

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Speaker 5: People heard what Donald Trump was preaching, and people in

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Speaker 5: this country liked it.

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Speaker 1: Right's prebuses comments come as national exit polls show Trump

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Speaker 1: expanded his margin among men from twenty twenty, whils Kamala

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Speaker 1: has did not do any better than Biden among women.

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Speaker 1: Trump also gained ground compared to twenty twenty with black

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Speaker 1: voters of both genders and with Latino men.

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Speaker 2: Democrats choices chances of taking control of the US House

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Speaker 2: of Representatives are dwindling, with Republicans gaining confidence and retaining control.

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Speaker 2: All four hundred and thirty five House seats were up

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Speaker 2: for reelection. Republicans have won two hundred and five so

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Speaker 2: far and Democrats one hundred and ninety. Republican gains and

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Speaker 2: races in Pennsylvania, Michigan, and North Carolina have offset losses

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Speaker 2: in New York. Democrats hopes for a check on Donald

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Speaker 2: Trump's power by controlling the House or fading, but the

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Speaker 2: battle of the House could ultimately come down to five

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Speaker 2: hard fought races in California, where absentee ballots can be

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Speaker 2: counted for up to a week after the election provided

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Speaker 2: their postmarked by election day.

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Speaker 1: In the markets, the S and P five hundred, NAZAC,

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Speaker 1: and Dow all rose to record highs on the election news.

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Speaker 1: Trade is piled into US assets, predicting the president elect

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Speaker 1: will favor tax cuts and protectionist policies. Queen's College came

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Speaker 1: Bridge president and Bloomberg opinion columnist Mohammad al Arian says,

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Speaker 1: the market moves make sense.

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Speaker 6: This is the emergence of a new power structure in

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Speaker 6: the United States, and I think the markets are reacting

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Speaker 6: in an incredibly rational fashion. In fact, if you look

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Speaker 6: at how the markets have treated the last few months,

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Speaker 6: they've done much better than the political scientists in terms

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Speaker 6: of predicting what could happen and then in reacting to

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Speaker 6: what has happened.

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Speaker 1: Muhammed el Arian there on what was the best day

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Speaker 1: after a US election for the S and P five

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Speaker 1: hundred in history. The euro meanwhile saw its worst job

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Speaker 1: in four years, with some traders predicting that it might

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Speaker 1: reach parity with the US dollar. Skeptics are concerned about

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Speaker 1: the threat of a potential trade war with the US

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Speaker 1: and its diverging interest rate path.

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Speaker 2: Jerome Poweller is widely expected to announce a quarter point

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Speaker 2: cut on interest rates later today, but what the Federal

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Speaker 2: Reserve does after that is much less certain. The election

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Speaker 2: result has upended expectations around inflation, bond yields, and growth.

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Speaker 2: Bloomberg's International Economics and Policy correspondent Michael McKee explains.

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Speaker 7: Next year path is going to be interesting to see

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Speaker 7: how they handle it, which we won't find out really

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Speaker 7: until December. But because there's no way to put any

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Speaker 7: kind of model on what the economy is going to

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Speaker 7: do under a Trump plan, because Trump doesn't have a plan,

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Speaker 7: He just has some talking points. The Fed is going

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Speaker 7: to have to wait, and so we'll hear a lot

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Speaker 7: of jpal saying we don't know.

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Speaker 2: Michael McKay adds that yields on long dated treasuries are

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Speaker 2: already up twenty basis points as Wall Street positions for

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Speaker 2: fewer coming cuts. While the Fed's rate path is in

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Speaker 2: doubt and tariffs are looming, central banks all around the

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Speaker 2: world are signaling a willingness to protect their currencies well.

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Speaker 1: Policymakers at the Bank of England will decide whether to

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Speaker 1: lower borrowing costs for the second time this year today,

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Speaker 1: but their choice may also be overshadowed by both the

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Speaker 1: government's recent budget and Donald Trump's selection victory. Blomberg's UK

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Speaker 1: correspondent Lizzie Burden has more.

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Speaker 8: Economists expect the Bank of England to cut interest rates

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Speaker 8: again today, but the path ahead is less certain. Events

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Speaker 8: at home and overseas have thrown the road ahead into doubt,

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Speaker 8: causing Betts to fluctuate on financial markets. Just last week,

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Speaker 8: Chancellor Rachel Reeves announced one of the biggest fiscal lootenings

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Speaker 8: in decade. That borrowing splurge is likely to force the

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Speaker 8: Monetary Policy Committee to expect higher inflation in the years

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Speaker 8: to come. UK policy makers will also determine the first

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Speaker 8: major central bank reaction to Donald Trump's victory, in which

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Speaker 8: threatens to send shockwaves across the global economy in London,

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Speaker 8: Lizzie Burden Bloomberg Radio.

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Speaker 2: Germany's chancellor has called for a snap election after his

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Speaker 2: three way coalition collapsed over economic revival plans. Things came

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Speaker 2: to a head after Olaf Schultz dismissed his finance minister,

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Speaker 2: Christian Lindner, over his refusal of a proposal to suspend

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Speaker 2: borrowing rules to plug a budget shortfall. Schultz told reporters

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Speaker 2: he plans to table no confidence vote on January fifteenth.

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Speaker 2: If as government losers, the country will face a snap

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Speaker 2: election in March. The move comes amid economic stagnation, rising

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Speaker 2: geopolitical tensions, and a potential trade war with the United States.

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Speaker 1: And those are your top stories now on the markets

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Speaker 1: a day to really reflect upon. Yesterday, the S and

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Speaker 1: P five hundred, nasdak daw all hit all time highs.

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Speaker 1: Big tech in the form of the mag seven also

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Speaker 1: hit all time highs, the S and P five hundred

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Speaker 1: having its best post election date in history, so despite

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Speaker 1: some of the preparation of investors, it was not really

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Speaker 1: priced in.

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Speaker 3: It turns out the Trump win.

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Speaker 1: Trading volumes also sowed post election sixty three percent above average.

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Speaker 1: As for the European reaction, the euro had its worst

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Speaker 1: day in four years. Bitcoin hit a record high after

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Speaker 1: the election, and then just looking at the inflationary impact

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Speaker 1: of the possibility of that from Trump's policies, US thirty

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Speaker 1: year YEARLDS jumped the most since March twenty twenty ten.

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Speaker 1: Year yields now stand at full forty two and those

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Speaker 1: long yields at four point six percent in the US

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Speaker 1: this morning, you do have gains in Asia, in China

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Speaker 1: across the MSCI Asia Pacific Index. Stock futures also are

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Speaker 1: heading a right now, both for Europe and for the US.

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Speaker 3: Are those are the markets?

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Speaker 2: In a moment, we'll discuss what's next after Donald Trump's

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Speaker 2: victory in the presidential election in the US yesterday, Plus

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Speaker 2: we'll look ahead to more on those central bank decisions

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Speaker 2: today from the fair of the Bank of England. But first,

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Speaker 2: it wasn't just Donald Trump who was a big winner yesterday.

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Speaker 2: There was also someone called Freddie nine nine nine. And

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Speaker 2: if you're not sure who are who he is, we

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Speaker 2: aren't either, but we can tell you he's a French

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Speaker 2: national with extensive experience in financial services, and that he's

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Speaker 2: expected to make a profit of around forty eight million

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Speaker 2: dollars on bets that he made around the US forty.

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Speaker 3: Eight million dollars. It's quite some swoop.

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Speaker 1: Of course, this whole issue with polymarket sort of popped

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Speaker 1: up because of these outsized bets around Trump.

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Speaker 3: Just in the run up to the election.

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Speaker 1: The issue is that you can't be a US citizen

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Speaker 1: apparently to use this website. So that's why we know

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Speaker 1: that he's French, and that's the only thing that has

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Speaker 1: been revealed.

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Speaker 2: So yeah, indeed, but based on the trading patterns running

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Speaker 2: up to the election, we've worked out that his bets

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Speaker 2: aren't Trump winning the election couldn't at them that massive

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Speaker 2: forty eight million dollars as well. Interesting move because it's

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Speaker 2: one of the things that we've been tracking running up

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Speaker 2: to selection as to how to track sentiment ahead of

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Speaker 2: the voting day of course, but it looks like a

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Speaker 2: big payday for that particular user of the polymarket trading platform.

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Speaker 1: Now, trump populism is back and the world is adjusting,

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Speaker 1: while Democrats' hopes of having a check on Republican power

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Speaker 1: by holding onto the House are fading. Joining us now

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Speaker 1: to discuss is been Aberg's senior editor, Bill Ferries Bill,

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Speaker 1: good morning Trump from its tax cuts, tariffs and mass deportations.

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Speaker 1: If Republicans win the House as well, how much of

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Speaker 1: his agenda will be adopted by the US. What does

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Speaker 1: it mean for America and the world?

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Speaker 8: Right?

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Speaker 9: Well, I think you're going to see pieces of that

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Speaker 9: agenda all implemented, perhaps quite early in his Donald Trump's

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Speaker 9: second term in the White House. Some of that does

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Speaker 9: depend on how these final races wrap up in the

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Speaker 9: House of Representatives. California, as I think you guys mentioned

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Speaker 9: at the top, is going to be very close in

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Speaker 9: some of these districts, and there are still ballots on

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Speaker 9: their way in the mail to officials, So you have

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Speaker 9: until a week from election day, so until Tuesday for

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Speaker 9: those ballots to arrive if they were postmarked before election day,

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Speaker 9: So those races may not be called for till next week.

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Speaker 9: But yeah, I think first of all, tax cuts, Donald

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Speaker 9: Trump's twenty seventeen tax cut legislation is set to expire

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Speaker 9: in twenty twenty five. I think that's going to be

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Speaker 9: a priority for the administration, regardless of whether they have

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Speaker 9: the House, to try to get those extended through the

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Speaker 9: end of his term. At least, tariffs. I don't think

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Speaker 9: we're going to see the big wall of tariffs come

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Speaker 9: down on day one, but I think you could see

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Speaker 9: some at least symbolic tariffs coming up very early, things

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Speaker 9: like Chinese EV's batteries, things that are already have difficult

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Speaker 9: to get in the United States, particularly the evs. He

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Speaker 9: could easily increase the tariffs on those and then start

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Speaker 9: using the threat of tariffs as a negotiation tactic against

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Speaker 9: other countries, and then deportations. I think a lot of

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Speaker 9: his advisors have said they want their focus to be

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Speaker 9: initially on getting migrants who are in the country illegally

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Speaker 9: and have criminal records deported first. That's something that used

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Speaker 9: to have bipartisan support. Barack Obama's administration did a lot

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Speaker 9: of that as well. I think that you'll see increased

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Speaker 9: resources going to immigration officials to step up some deportations

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Speaker 9: very quickly in a new Trump term.

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Speaker 2: Meanwhile, China's price and teaching ping has congratulated Donald Trump

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Speaker 2: and are healthy and sustainable US China ties. What is

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Speaker 2: the thinking on the possibility for a trade war.

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Speaker 9: Well, those tariffs would certainly spark one, and there's been

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Speaker 9: some analyzes, including one by Bank Mcquarie Bank today saying

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Speaker 9: that if the US put in all of the tariffs

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Speaker 9: that Trump has proposed during his campaign, that that could

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Speaker 9: cut two points of growth off Chinese GDP, and China

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Speaker 9: would certainly respond. They're certainly in a better place to

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Speaker 9: respond they have particularly rare earth metals and other critical

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Speaker 9: minerals that they could halt exports of to the United States.

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Speaker 9: So you very quickly could turn into having a trade war,

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Speaker 9: disrupting supply chains and the global economy. But Donald Trump's

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Speaker 9: a guy who's always liked to make a deal, and

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Speaker 9: he feels like he has good personal relationships with people

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Speaker 9: like Shi Jinping. I would expect them to be well,

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Speaker 9: we think they have already spoken, but I would expect

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Speaker 9: them to be talking very early after he takes office,

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Speaker 9: and with President She trying to talk Donald Trump down

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Speaker 9: from some of those air promises he made in the campaign.

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Speaker 1: Meanwhile, Kamala Harris made a brief concession speech last night,

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Speaker 1: referencing the importance of upholding the US Constitution. Democrats now

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Speaker 1: face an existential crisis, don't they. I mean, perhaps even

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Speaker 1: more bitter than usual.

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Speaker 9: Yeah, when you look at how Kamala Harris underperformed, even

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Speaker 9: in states that she won, and even among demographic groups

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Speaker 9: that she won, it's a pretty stunning rebuke across the country.

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Speaker 9: I mean, by and large, Republicans made gains just about everywhere,

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Speaker 9: even a state like New York that Joe Biden won

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Speaker 9: with sixty five percent of the vote. Vote four years

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Speaker 9: ago Kamala Harris got sixty percent, so five percent gain

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Speaker 9: in New York. Harris still wins, but Trump showed that

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Speaker 9: he has a broader base of support than I think

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Speaker 9: many people would have guessed on six months ago. So

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Speaker 9: Democrats have to do a lot of autopsies on what

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Speaker 9: went wrong and how they get themselves back in the game.

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Speaker 9: Midterm elections just two years away, less than two years

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Speaker 9: away at this point, and that's the next focus for Dems.

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Speaker 2: Okay, bith Faries, I've seen your editor, Thank you very

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Speaker 2: much for joining us.

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Speaker 1: Meanwhile, market's had a frantic day of repricing around the

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Speaker 1: world after Trump's victory, with stocks hitting record highs and

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Speaker 1: a selloff in bonds given the possibility of more inflation.

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Speaker 1: This as we look ahead to the rate decisions from

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Speaker 1: the Federal Reserve and the Bank of England later today.

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Speaker 1: Joining us now to discuss our markets whupport a valuie

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Speaker 1: titel just put into context how big the moves were.

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Speaker 10: Yes what a risk on rally we saw across markets yesterday,

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Speaker 10: not only the SMP reaching new all time highs, but

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Speaker 10: the Dow, the NANSDAC MAG seven all closed a record

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Speaker 10: highs last night and they're extending in the Asia session today,

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Speaker 10: with SMP futures up another two tenths of one percent. Also,

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Speaker 10: if you look under the hood, you can see more

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Speaker 10: stocks on the rise that are I guess, leverage to

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Speaker 10: domestic growth. We had regional bank stocks rallying, big investment

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Speaker 10: banks and small regional banks rallying. We also saw small

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Speaker 10: caps Russell two thousand index rallying nearly six percent into

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Speaker 10: the close, and the volumes behind this were very strong,

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Speaker 10: Caroline sixty eight percent of sixty eight percent above average

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Speaker 10: volumes we saw on this equity move yesterday, so it

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Speaker 10: had a lot of momentum behind it.

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Speaker 2: If we look ahead to the next big market event.

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Speaker 2: Of course, we have the Federal Reserve. Later on today,

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Speaker 2: we're going to be hearing from Jerome Powell. He's going

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Speaker 2: to be facing a lot of tough questions about how

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Speaker 2: Donald Trump's policies might impact the Federal Reserve. Is he

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Speaker 2: actually like to address any of them.

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Speaker 10: He's unlikely too, but he's going to face a route

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Speaker 10: of tough questions. His response is more likely to be

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Speaker 10: framed on I'm not going to speculate on policy. The

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Speaker 10: Fed is not going to react. We actually see legislation

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Speaker 10: on paper being passed. But he is going to be

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Speaker 10: asked questions on tariffs. Does he think they're inflationary or

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Speaker 10: is he more worried about the downside hits to growth?

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Speaker 10: And then when it comes to tax cuts, is he

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Speaker 10: more worried about that boo boosting the fiscal deficit or

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Speaker 10: is he more worried about the boost to growth? And

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Speaker 10: then you know, we have the question over deportation of migrants.

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Speaker 10: Is he worried that that's going to tighten the labor market?

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Speaker 10: And lastly, his energy policy, drill, baby drill, as he

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Speaker 10: said he wants to get oiled down to forty dollars

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Speaker 10: a barrel. Is that going to boost growth or is

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Speaker 10: it going to be a deflationary impulse. He's going to

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Speaker 10: get asked all these questions. He's probably going to push

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Speaker 10: back on giving any concrete answer, but of course the

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Speaker 10: market is going to be very attuned to every single

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Speaker 10: word he says when he does answer these questions for

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Speaker 10: any hints on any upcoming policy changes.

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Speaker 1: And yeah, there will also be underlying issues and surely

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Speaker 1: some questions about the independence of the Federal Reserve itself

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Speaker 1: and the pressure of the power will face I mean,

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Speaker 1: Bom Bigstel Mickelthwaite when he had that May just sit

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Speaker 1: down with Trump and that long interview in the run

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Speaker 1: up to the election, asked about this, temp was quite

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Speaker 1: equivocal on this point.

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Speaker 10: Yeah, he did slightly hint that he wanted to be

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Speaker 10: more involved in Federal Reserve rate decisions. But Caroline, you

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Speaker 10: have to, I guess acknowledge that the Federal Reserve is

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Speaker 10: easing at the moment, and normally politicians want a dubvish

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Speaker 10: central bank when they're in power. It helps them boost

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Speaker 10: boost growth, et cetera. So we probably I just don't

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Speaker 10: I don't see him pushing too much back on Powell

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Speaker 10: in terms of the path ahead, because we have priced

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Speaker 10: in so many more cuts and the Fed has told

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Speaker 10: us that they plan on easing, but we don't know.

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Speaker 10: That's a big question mark. And also Powell's term is

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Speaker 10: up May twenty twenty six, so we're going to have

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Speaker 10: a lot of discussion next year on the possible successor

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Speaker 10: to Powell, and perhaps that could be a more political

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Speaker 10: name that goes in to run the Federal Reserve. And

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Speaker 10: his influence would be on that Federal Reserve chair pick.

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Speaker 2: So that's an an interesting issue to keep an eye

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Speaker 2: on as we look down the line value. Just a

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Speaker 2: word too on the other central bank decision that we're

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Speaker 2: watching closely today. Among the several that are happening, I

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Speaker 2: should point out the Bank of England. We saw the

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Speaker 2: pound slump, guilty 's jumped yesterday. What should we be

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Speaker 2: thinking about in terms of the Bank of England.

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Speaker 10: This is another central bank dealing with the reaction to

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Speaker 10: the change of government. We heard from the Office for

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Speaker 10: Budget Responsibility. Their response to the budget is that it

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Speaker 10: is going to boost inflation and hence going to boost

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Speaker 10: the federal the bank rate of the Bank of England.

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Speaker 10: We get their forecasts from the Bank of England today,

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Speaker 10: so it'll be interesting to see how they have interpreted

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Speaker 10: the budget and how that compares to the obr's forecast.

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Speaker 10: Those forecasts drop at the same time of their rate decision.

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Speaker 10: I expect most of the market reaction to be on

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Speaker 10: those forecasts.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 2: stories making news from London to Wall Streets and beyond.

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