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tv   Bloomberg Markets Americas  Bloomberg  January 9, 2017 12:00pm-3:31pm EST

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♪ from the bloomberg european headquarters in london, we are watching stories out of detroit, washington, and beijing. and the dealsek report we will speak to the goldman sachs cohead of m&a who outlined the deals landscape for 2017 and how the trump tax plan could affect the market. plus, live from the north american international auto show in detroit right now. we will speak to mark fields. the donald trump cabinet gets grilled by the senate this week. all of his picks are expected to be confirmed starting on tuesday , starting with jeff sessions. halfway into the trading day. abigail doolittle joins us with a look at the markets. forail: not a lot happening the u.s. stocks.
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largelye major averages unchanged in trading in a mixed fashion. the dow, the s&p 500, down slightly, being dragged by the energy sector. the nasdaq slipping between small gains and losses come up most of the time. off by 3/10 of 1%. the nasdaq is being helped by and buy some m&a winners. first up, surgical care trading nicely higher, best day ever on the news that united health is purchasing the company, putting the largest insurer in the u.s. into the outpatient surgery market, basically diversifying their business. we have a pet hospital chain trading higher for the first time since 2001 on the news that mars is buying the company for 7.7 billion dollars. interesting mix there. finally we have area pharmaceuticals up a whopping 73% having its best day since
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2000. basically in 17 years on the are purchasing the company for $4.6 billion. small-cap biotech, now made cap. 2016 is off to a strong m&a start. i should say 2017 is off to a strong m&a start. as for 2016, it was a good year. deals were done for $4.32 trillion in deal activity. these were the top advisers on top. deals foring 309 roughly $876 billion. morgan stanley, 294 855 billion. it would appear that the deals for morgan stanley may have been bigger but goldman sachs is clearly the king of m&a in 2016, something we probably hope happen again in 2017. to do a quick asset class check, this is more of a risk off picture, trading higher up 1%,
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the 10 year yield down five basis points, telling us that bonds are rallying and the pound versus the dollar trading lower after theresa may's comments suggested that there could be a clean break from the eu and the pound is suffering to some degree this morning. vonnie: vonnie: -- vonnie: abigail doolittle, thank you. segue into our first guest, but first the bloomberg newsroom. >> president obama is expecting confidence in the future of the keen energy industry -- green urging thestry and trump administration to reconsider its views on climate change. seatsay they will lose the at the table if they pull out of the omission agreement. they are predicting a dreary prospect here for president-elect trump. the next five years will test american resilience, china and russia will try to counter u.s. influence. parliament is debating whether to hand president heard one
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greater powers. the amendment could give his presidency sweeping executive powers and the possibility of two more five-year terms, giving the president too much power they fear will turn turkey into a dictatorship. a war veteran accused of killing five people in a fort lauderdale airport is making his first court appearance today. he could face the death penalty if convicted. authorities say that it is too early to tell if the shooting was an act of terrorism. glue bond -- global news, powered by 2600 journalists and analysts in 120 countries. mrs. bloomberg. vonnie? that.: thanks for time for the deals report. every monday week take a look at the m&a business insight and analysis from the biggest players behind the deals. today we are analyzing the big deals in the day ahead.
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here with me is the executive editor for global deals, jeffrey , as well as the global thousandsa working on of transactions in his career, including at&t and directv. yahoo!,media, verizon, and the sales to salesforce. that's some list. take it away. greg: thank you. jeff: 2016 was a good year, but we had good deals. what do you look at in 2017? what does your crystal ball say? the outlook is strong. a lot of the factors that drove activity continued to persist. low interest rate, abundant available capital. and you have positive equity markets. that is still in place.
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more importantly some of the headwinds that we saw are starting to subside and specifically that's the regulatory environment. the expectation is that we will have something easy with regulatory. vonnie: sorry, gents. president-elect is speaking at trump tower. >> i have spoken to him about the support of small businesses, trading and passport business. [indiscernible] has the concerns, the solutions, he wants to discuss them with china, how it can be better. i advised and suggested we could go to the business community to understand the situation better right away. thank you. >> we are specifically talking support for one
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million small businesses, especially in the midwest of america. small business platforms. selling products. agricultural products, american services sold to china and asia. a lot of the midwest, the agriculture products, also some products like garments, in front of the line and the fruits. we had a very nice discussion. thank you so much. andie: that was the founder chairman of alibaba, jack ma. he said he had a very nice meeting and he mentioned that they talked about doing deals and trump earlier said that he was a high-quality man and that jack and i are going to do great
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things together. time to go back to our global deals segment. today our guest is greg lem cow --gregg lemkau. jeff: sorry about that. wanted to give jack the opportunity. as you were saying, you expect an easier regulatory environment? quite i think that the expectation will be a looser environment. i think the expectation will be a looser environment. there will be a general sense a lot to him is him in the business community that drives a desire to be much more proactive. jeff: how does repatriation -- how do you think that will impact m&a? so many deals right now, a lot of these companies have offshore aspects in europe. what happens if they bring that back to the united states? gregg: there's $1.2 trillion in
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cash-strapped offshore. a lot of a deployed in the terms of capital expenditures and the flow of m&a. a lot of companies have done acquisitions outside with that but the companies with the ability to deploy the capital in the u.s., whether it is $1 trillion or $2 trillion, you will see it pick up domestic activity. which: -- jeff: industries? tech? google, apple, microsoft, pfizer, j and j, you have seen them access that offshore. they have used it, they have deployed it, and they can do it much more you -- much more easily. use for m&a is the anticipation, if you will. gregg: yes. the big pharma companies, looking to growth, it's a real
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fuel for the top line. are there certain trends that emerge in a certain year? --6, the europe x, or 2009 the year of x. what do you think will be 17? -- 2017? gregg: significant convergence happening in the telecom and electronics sector. big transactions with comcast, abc, and the big distribution companies looking to purchase content and the desire for these big media and big technology companies to get access and close to consumers is critical. last night at the golden globes had 17 nominations for shows or movies produced by netflix or amazon. imagine other in that sentence five years ago. they all desire content and the
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ability to get close to the consumer. what's interesting is that amazon, google, apple, they have lots of cash. but they haven't done a lot of big deals. do you expect that to change at some point? acquiring rivals? >> the five biggest market cap companies in the world are these big tech companies. they all have to have big cash balances offshore that were underpenetrated. as the topline growth starts to slow, it's a natural time to do it. is this question regulatory peace. will they allow them to do that? not from a trust standpoint willy, but the doj or ftc, they allow these big companies to get bigger? it your expectation that the trump administration will be more like the bush administration when it comes to
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antitrust? gregg: i think it will be. the hope is that it will be a bit looser. the obama administration in the past year. more stringent around m&a. there were $500 billion in transactions last year that fell away because of antitrust. a lot of big deals fell away and the obama administration heading into its last year got more aggressive. i think that it eases up to a degree and whether it is under the bush administration, it has yet to be seen. jeff: do you see situations where companies did not do a deal because they thought it would be blocked and waited a year? gregg: you saw some of those deals fall away in 2016. the last thing aboard wants is to announce a big strategic transaction a gets held up for long time and ultimately not happen. it paralyzes the company, it's not good for the board or the buyer. people really backed away from the table.
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i think we will see a looser regulatory environment. so, trump has that situation where he will have the house in the senate in his party, if you will. odds are that we will see big tex moves, not just on repatriation. how do you think that impacts m&a overall? i would say that corporate tax cuts should also be a fuel to m&a. it will be easier to sell if there is a reduced tax rate. you will see more to investors than spinoffs with people trying to get a tax-free spinoff recently. copy is that you may see a bit of a pause for a while .ntil it becomes clear if you are selling an asset and you don't know if it is going to earn after taxes, you will probably want to wait and see what the impact will be, valuing accretion around the power of what you are selling.
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then there is a significant pickup inactive it he. fantastic, we will return in just a second. coming up, we will be speaking with the ceo at the north american annual auto show in detroit. and how could president donald trump reshape will return in the car industry? this is bloomberg. ♪
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♪ this is "bloomberg markets." vonnie: we are back with our deals report, where we take a look at the insight and analysis from the biggest players behind the deals. the goldman cohead of m&a go
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just joins us with our executive editor for global deals. they are talking about oil and gas and why 2017 could be a busy year. could be verygas busy this year. pretty slow in 2015, 2016. maybe because a barrel went to as lowest $25 per barrel down from $100. what is your view on what it will do? big oilu look at the and gas energy companies that spent their time and focus over the last few years on fixing their cost structures for something dramatically reduced, they have figured out how to survive. lots of that is behind them. there's a general sense of optimism. there will be a meaningful pickup inactivity relative to what we saw in 2015 and 2016. jeff: what kind of impact does it have for a company when the core commodity is dropping so dramatically? d trump has obviously been
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fixated on jobs and maybe that starts to play into m&a this year? gregg: i think that's right. but i think a lot of it will be wait and see. you have a sense of how they will be pro-business, but not anything specific. consolidating transactions over the past year or two have been focused on cost, jobs, that's the going to be a sound bite or a narrative particularly appealing to the administration. the company going to focus on doing big m&a transactions and creating a winner in the u.s. of a global industry, going back to doing m&a transactions, focusing on growth but not cost-cutting. there particular industries were jobs are more likely to be part of the equation? gregg: the big consolidating transactions that have largely work, industrial and consumer, the ability of these companies to come together and take up costs. whether it is jobs, salespeople,
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r&d, the bottom line, not necessarily feeding into the sentiment of where the country is going right now. they will be positioning themselves to accelerate a top line. jeff: thanks, greg, good to have you. vonnie: that was jeff mccracken with gregg lemkau. team,ahead, trump's and facing tough stuff this week. the former exxon made -- exxon mobil ceo is one of the star traction's. we will speak about all of that, next. this is bloomberg. ♪
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♪ is "bloomberg markets." i'm vonnie quinn. david: and i'm david gura. senate commission will be holding cabinet nominee
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commission meetings with chuck schumer being handed a list and mitch mcconnell has what his party requires from the most words,some, his nominees. kevin, how much discord is there right now between republicans and democrats? democrats were making a lot of hay over the fact that none of these nominees had been sufficiently vetted. >> it sort of business as usual with democrats versus republicans on this, but the bottom line is that if democrats want to stop any of those appointees, they face a tough battle. just because the numbers simply aren't adding up for them. that being said, there is an advantage to try to frame the debate, if you will, to in terms of characterizing these picks, particularly folks like jeff sessions, rex tillerson for the department of state, steven mnuchin for treasury, they will try to portray these picks as out of touch, but democratic
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strategists as well as republicans of speaking with as early as today are telling me that they don't anticipate the democrats to be able to have the numbers to block any of these picks. david: so many confirmations happening this week. i wonder how much appetite there is for that happening. these are all obviously being very closely watched. many of these nominees have not been in office before. >> transition sources noted that they have 87 meetings on capitol hill and in the senate. they have practiced with more than 2600 questions for these picks. they are taking it quite seriously in terms of trying to navigate this, but you are right, they are receiving criticism from democrats who are arguing that this is perhaps going too fast. but again, it's just under two weeks until inauguration day. trump has consistently said that he wants to hit the ground running, if you will, so to speak, within hours of getting
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inaugurated -- confirmed. whether it is on corporate tax reform, dodd-frank repeal, or even repealing and replacing the affordable care act. a lot is happening behind the scenes here in washington. vonnie: the other thing that we learned today is that bob dole of all people was appointed to the transition team. the vice chair of the transition interesting thing is that he is a lobbyist for the taiwanese government and was the person behind the call to taiwan that wanted china to say -- don't do this. why with the trump administration do that? , in trump world, loyalty is currency. bob dole was one of the top republicans who is able to get behind the candidacy at a time when many in the party were not. also remember bob dole, a sending that could mention in cleveland this past summer. the second point i would raise on the issue of taiwan is that you are starting to notice more
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outreach from the trump political orbit to taiwan. just over the weekend ted cruz, once arrival to donald trump, actually met with the president of taiwan when she was in texas before going down to south america. this, of course, coming on the heels of last month trump speaking on the phone with the president of taiwan, obviously that raised some criticisms, but clearly some signals from this incoming administration that there is going to be a new foreign policy with regards to how trump handles taiwan. vonnie: all right, thank you to bloomberg's kevin cirilli there on capitol hill. investigatoret talking about apple and other deals under the microscope. this is bloomberg. ♪
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♪ >> live from the york. >> this is a bloomberg markets.
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british chancellor is hoping the third -- he is meeting with european counterparts. he says it is a gradual exit. a u.s. defense official says he fired three 20 shots. the incident took place sunday after the islamic resolution ignored multiple orange. from a 50 were fired caliber machine gun. the u.s. supreme court won't using ahere and appear --el similar to movers uber's.
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final testimony is expected as prosecutors wrap up arguments that delivers should be sentenced to death for the south dilemma shooting. jury is likely to deliberate tomorrow. global news, 24 hours a day powered by more than 200 analysts and journalists. this is bloomberg. vonnie: we're going to go to come tower in new york city where donald trump has been speaking, talking about how he is already started the process of handling interests. let's listen in. republicans about there is no replacement. >> not even a little bit.
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we're going to talk about it monday. >> is there a plan now or a plan on wednesday? [indiscernible] executivesting with today. mitch mcconnell met earlier today. they talk about replacing the affordable care act and confident they would get the nominees and place this week. wholso heard from jack ma says they had a good chat. let's check with the stock. the s&p 500 down. , 5539.
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dow jones 19,918. action, amix trading top sector and the horse sex or -- sector -- last friday continuing its strength. atare of course looking apple up. . to super cycle around the iphone eight among other reasons. we also have nvidia trading higher. texas instruments are benefiting.
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the idea there is going to be continue outpouring for the chips in 2017. some nice technology. as for the worst sector, that is energy down. we have oil down nearly 3%. one reason could be increased suggestingtivity there could be an output supply coming out of the u.s. in the wake of the opec. transocean is also lower and downgraded tank of amerco merrill lynch to underperform. analysts see a 15% downside. there -- there could be overall downside.
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this is oil up 25% having its best year since 2009. the striped shows the relative strength index. it is often considered to be a sell signal. interesting to see if we see some sort of continued vonnie: for her 2017. thank you for that. representatives -- she is the european union's competition commissioner. apple lasty targeted year in facebook last month. earlier today come i spoke with
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her and asked her about the dupont merger. 0 it's a very -- >> it's a very concentrated sector already. choice of seeds, products that can help them fight worms or fungus or whatever it might be so these other things we're looking at. we had the hearing just today. you have been looking into that. what have you uncovered the last couple of months? these -- these companies are in similar or overlapping markets, the mergers are very different in their
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nature when it comes to what markets they address and the emerging companies. china is very much focused on the chinese market, wants to improve the product in the market. that maybe the one thing that they have come -- and common where innovation is a very important thing as all. forming is in all that they need innovation as well and some of these products. that is something we would discuss with the companies looking forward. mark: bloomberg has reported on chinese interests outside of china. chinese companies getting into the european market? depends on the company. we do a case-by-case basis.
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if we see there is an issue that would damage the european union and markets that we will raise concerns. to some grid the -- some debris that may happen, to some degree it may not. it all depends. mark: last month, you address this book with whatsapp. fine --ested they be fined. -- i consider this a very important issue. the concern we have is that facebook didn't give us the right information during the merger procedures. that is a huge problem if that is to be true. if we are not told the full
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story then we would not be able write the same conditions. that we willnt police are procedures to make --e we get the right otherwise we cannot do our job. we try to do that as best as possible. mark: you've been looking at google as well. how satisfied are you with what the company had to say question we just got the last part of the android answer, so we are in the process of analyzing it. therefore, it is too early to say what will be our final decision, but we are in the process of going through. earlyt respect, it is too
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and now we have the answer from google on the case in question. seen the rise of populism. what does it mean for you and your office looking at competition in general? >> i think it is important that people see we do our best to do the job ahead of us to make sure -- the businesses do not agree with prices in the back office or competition in the market but they actually do compete with products, prices, services they can offer customers because i think for every citizen it is important to do theirauthorities job to service citizens.
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in that respect, i think it is important will we do. mark: we have seen the photographs of jack lew. by all accounts, it seems like you had a good relationship. have you met with members of the incoming administration? >> no. i haven't met with anyone from the incoming administration. to -- wrong to say -- it is wrong to say we don't have a working relationship. when we have the necessary waivers from businesses to be allowed to work together that we can share analysis, talk over the phone in order to get there analysis right.
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bestnk that is one of the tokens of the appreciation of how the corporation can be. myk: that is part of exclusive interview with the brexit commissioner.
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♪ vonnie: you're watching bloomberg. david: this is your global business report. fiat chrysler plans to invest $1 billion to make more cars in the u.s.. vonnie: mars is making more
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acquisitions but it has nothing to do with candy. david: bitcoin is saying a revival with a different purpose from which it was created. forld trump has tough talk automakers who moved jobs to mexico. a lot of opportunity. we have more in common with the wesident-elect that -- then have at odds. we are looking to strengthen the country and the business performance. we provide over 100,000 really good paying jobs and looking for some reform. some streamlining. he has already made statements about the tax codes. it will improve our business and allow us to reinvest. chrysler heading off
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.riticism expandingr mars is into the pet care business. mars already has a division focusing on animal health care. mcdonald's has agreed to sell control of it china business. values mcdonald's at more than $2 billion. asia revamping its operations. vonnie: time now for background on issues of interest. was used to for drug deals to cupcakes for it, there is a new wave of excitement that may be less sexy, but has the potential to reshape the global financial system. more than 50 banks have joined
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consortium to track money transfers and other transactions. australian stock exchange is it is also being tested by retailers for ensuring food safety. the creators of the coin solve a key problem. the pace of creation is limited. 20 million bitcoins will be mine.
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interpreters say focusing on the price is missing the point. even bitcoin itself could be left behind. some of the currency's biggest boosters say there is no guarantee to break into the mainstream. that is your global business report. head to for more stories. david: donald is keeping up the pressure on the auto industry to build more cars in the u.s. earlier, he tweeted that it is finally happening. fiat chrysler is adding 2000 jobs. ford says it will expand in michigan instead of mexico. reaction from the
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north american auto show in detroit. thanks for joining us. before we get to that stuff come up let's talk about the f-150. the best selling vehicle in the united states for 30 years running. we are introducing a new powertrain, more smarter and capable than it has ever been. been >> long since you redid it from the ground up. >>we did that less than three years ago and from our standpoint we have been a leader in the marketplace and have to challenge ourselves as a leader to say what do we do next? technology.e this is a tool for our customers and we want to give them the best they have.
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investment weour will be introducing the next three years a hybrid f-150. you can actually use it as a mobile generator. >> you announce 13 vehicles. that is a pretty ambitious plan. what kind of growth are you anticipating. in our view, the costs of ownership is going to converge over time between a gasoline powered engine and electric vehicle. on the electric vehicle side it will be better technology, bigger scale so it bring costs down andy internal combustion
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will get more sensitive because the cost of fuel and regulations. >> how important is the government in that? heard rumors of a new administration coming in and there may be changes. one has to think about the possibility of a different approach to alternative fuel? plan onhat effect your electric vehicles? >> the issues is the infrastructure. we think long-term this is the right play. we want to make sure that working with the government that the legislation for fuel economy doesn't get ahead of its self. consumers pay a price and we want to make sure it is done in
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the right time. list?t is on your wish what can we talk about when it comes to the midterm review? what are you hoping for? >> we agree to the fuel for 2025. you look at the assumptions on the cost of fuel tech dodgy, and adopting customers and adopting jobs. we are really disappointed the epa short-circuited that review and they just mandated it. we are looking for in the new administration to talking about this and a new time for a midterm review. so again, we can give customers the best fuel economy but the best way.
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-- when we look at a policy standpoint we are proactively talking about with the transition team. would like to see is free and trade agreements. we want to see regulatory policies that are more reflective of market reality and we want to see corporate tax reform. we have the highest corporate tax reform and we think that would be good for the economy. where do you see unfairness right now? you see it in our relations under nafta? do you see it with china? at nafta, itook has improved competitiveness across the country and the supply chains are deeply
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integrated between canada, mexico and the u.s. that integration supports a lot of american jobs. or ourhink about this trade agreements with china come out the most important thing is to look at the facts. look at the facts and understand what it means for each country's economy and make sure it is fair. i think we are looking forward to those kinds of conversations. david: board has been in mexico many years -- ford has been in mexico many years -- >> 90 years. employeesout 8800 down there. we have 10 times that here in the united states, over 80,000 employees. if you look at ourselves, 80% are made from vehicles made in the united states. we are the largest manufacturer of automobiles in the u.s.
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less than 13% of our sales here come from mexico. i don't see changing too much. at the same time, it comes down to things we look at and factors of making investments. some of those our trade agreements, tax policies. david: so could effect future plans? >> it could. it depends on how those policies are implemented. build, but also at the same time be very strong in our home market. david: thanks so much. that is mark fields, president and ceo of ford motor. we talk with him again in a few minutes. vonnie: nbc reporting that kushner --p's jared donald trump's son-in-law jared
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advisorwill be a senior . now it is confirmed he is senior advisor to the president. this after a weekend story he family firmo quit a ceo according to his lawyer. detroit.e ahead from coming up at 130 -- 1:30, we will talk with call gomes -- call gomes -- the s&p 500 is down. the mastec continues to break records. this is bloomberg. continues to break records. this is bloomberg.
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david: good afternoon. vonnie: welcome to bloomberg markets.
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♪ from bloomberg headquarters in new york, we are covering stories. bremmer joins us to discuss hacking of the u.s. election. economists criticize the federal reserve for trying to do too much. examine and nissan ceo joins us. abigail is here with the latest moves. abigail: after the possibility
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of doubt and 20,000, that did not happen. action.mixed trading the nasdaq is carving up a new so interesting picture here on monday. of shade. risk that bonds are rallying and this may be in line with a recent trend. charts a very interesting and the yellow bars represent weekly returns. see the week starting off in a decline. july since since
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brexit. trends are of interesting to keep an eye on. activity, first up, care up.uitable -- space wee biotech have. pharmaceuticals up 73%. the small-cap biotech company -- we have two other oncology companies trading higher. vonnie: thanks for the update.
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thatlicans are morning trump could face risk with members of the party. senator graham says he and john mccain will push for sanctions against russia for hacking. later today, democrats will theuss investigating in 2016 election. we will talk about mexico and a few moments. tell us about the outcome here with russia. do relations change immediately after january 20? >> i think they do. i think trump has made clear that at every possible moment that he wants to work with putin . he has done so despite the fact that there is fairly strong opposition not only from
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president obama, but also within the own party and congress. it is easy for him to put points on the board with mr. putin. this is by far the biggest syrianaire of obama under and ukraine and response to the hacks of the election so trump could easily say we want to work together. assad is not going anywhere. he isestion is how far going to go and what kind of reaction he gets from that and how sustainable the relationship will be. vonnie: what possible good could come from this in a real sense? beene sanctions haven't effective. russia is not leaving ukraine. the europeans are taking it on the chain. they are losing out economically. the united states would make
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them happier. in syria isthe war a must over. negotiations are taking place without the americans. it has been the syrian government, russia, iran, and turkey. and putinagine trump working together dealing with terrorism. that is probably the best possible scenario. the question is is it going to last a long time? as we know, russians do not want a strong america. you have seen photo after photo of john kerry trying to hash out a deal with syria. >> reqs tillerson -- rex
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tillerson knows trump personally more than any american. he has been doing the largest deals in russia and doing them with putin directly. there's no question if he had been secretary of state under obama, he would have brought a set that obamal does not have. of what trump's intentions already are. he does not like multilateralist . trump likes the idea of a strawman. tillerson is very capable. clearly he will get there congress. if trump is dead set on building a relationship with russia irrespective on what the
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intelligence organization has said russia has done, he will facilitate that. david: we got this report from the intelligence community about the russian hacking. we spoke to james after being an advisor to trump. what does it look like under donald trump? >> is a very least we understand the cia is a professional organization, but they also worked for the president so they give him what he wants. i think that will change the nature of the intelligence coordination process.
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they didn't need a big job. -- he clearly felt uncomfortable with the way trump was delegitimizing the agency. you deal with a publicly and you america tobility of project power. thatnk it is clear americans without a shadow of a reason to a strong believe the russians were hacking the dnc and others. it does not mean the election was one because of trump. there's no way to prove that. there's lot of other things you can blame hillary clinton non-.
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the point that trump is unwilling to accept publicly the russians are behind the hacks has though reince priebus said trump gets it, implies there is something else going on. it is not clear to me that we know exactly what is going on. the face value of information we have would not quite get trump as far towards. as he has.ds putin -- of theo's president-elect changed? the mexicans unnerved.
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i think the mexican president and his new foreign minister that the top road it to get something done between on the rightafta footing. worsthas said it is the one the united states has done. i think the mexican government will work hard to get this fixed early. vonnie: thanks to ian bremmer, founder of eurasia group. a $4.6 billion deal by
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the end of february. the announcement came at the start of the jpmorgan health care conference. we go now to the st. francis hotel. >> thank you. ray to see you. -- great to see you. everybody understands why area had is attractive. a first-class rmb apartment. why did to canada need to buy it -- to cater -- are focusing our investment on these areas.
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it is a great place for us. >> what other companies or treatments did you consider as an alternative? that is really our criteria. >> walk me through the math that it took to get to $24 per share on a stock that was trading at $13. byproductk at product and say how promising this product is. this is a lung cancer drug. we can -- believe it can be the best in class. that is how the math works.
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if you believe that this product -- if you believe that this product has potential than that is how it works. >> why do believe it has potential? data look at the clinical nd we feel that isn't best in ?lass we don't think that is a possible scenario based on what we are seeing. look at the data. -- ould be the best [indiscernible] >> what is your strategy for
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monetizing this medicine? it is commercialized. we want to continue to invest in clinical development and making benefitis available and >>. this is a leukemia drug? >> yes. >> is there room to raise the price? on makingfocusing sure access is provided to patients. price morecrease than low single digits.
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>> are you already anticipating that in order to help that you will have to raise the price? >> no. we don't anticipate have. ak s it ta -- >> it is not new to us. >> what about the drug for lung cancer? what is that going to be priced at? ?> do you have an idea >> no. it will be a global launch. we have not made a decision yet. >> you're hoping to get a decision by april 29? >> how long before comes on the
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market? >> as quickly as possible. us, it is to do a global launch. >> is area had the big deal your investors have been waiting or hoping for or is there more? months, we did18 -- barry at is more visible because it is bigger. collaborationsal are really what is guiding our principle. >> whether the hunger is there are not, do you have the capacity to do another deal of this size? >> we have financial ability.
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>> apart from the cancer drugs, what else are you hungry for? for --re looking >> is there anything valuable you would like to buy? >> no comment. >> why not? have you looked at what they have to offer? as we established is clearly doing something right.
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they developed to precision medicines. what else to the half cooking that looks promising? >> they have interesting platforms. >> have you keep the r&d? engine running >> we have a great advantage here. global oncology business and research and technology's next-door so collaboration will be easy. >> thank you for spending time
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here on bloomberg television. done a big deal but he has the appetite for lots of interesting things to come in 2017. we return to him throughout the hour. this is bloomberg.
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this is bloomberg markets. gm's chevrolet volt was named north american car of the year. earlier today, david west talked ongeneral motors chairman
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what it means to the company. >> we are very excited. it won north american car of the year. i cannot be more proud of the team. this is not an electric vehicle. it happens to be a great car that happens to be electric vehicle. 238team was able to do miles. they did it in a shorter time frame. it is a great car. >> it is on sale now. >> absolutely. you can buy these now. >> is there any track record on how it is selling? >> it is really early. there's a lot of interest in the vehicle. this is just the start of the platform we are going to use to go to much more different vehicles. this is the jumping point. version fromr new your crossover with chevy. important. become
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what you think about it -- scv has become important. what do you think about it? >> suv really allows you to adapt to your lifestyle. i think -- it is people saying i want a car that fits my lifestyle. once someone drives an suv, really do they go to a car or sedan. we are really focusing on that trend. we have several suvs to rollout this year. excited. be more >> so you are responding to consumer demand.
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>you make a lot of money off of suvs and trucks. >> we make sure we have the right products that are warranting the investment in the capital. that is something we are very disciplined over the last three years to make sure when we make an investment it generates the right return. >> historically, one of the things has been fuel economy and trying to make sure you balance it. is that still the case? house at evolving? >> the fuel standards have changed a bit. otherwise, it will cost the customer from a bottom line perspective. othere really improved
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vehicles as well. >> so there may not be much of a differential between suvs and regular cars? >> absolutely. we continue to perfect technologies to make sure we have the most fuel-efficient fleet. >> you mentioned the midterm reviews. what you expect from that? are you expecting some relief in that area? >> i think we're making sure we have less ability. they put theasons midterm review and is because technology and markets would involve. we are looking for flexibility. that is mary bars seating -- speaking. trumps federal reserve take a hawkish turn?
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down that next. plus, we go back to the north aerican auto show with interview of nissan chairman. this is bloomberg. ♪
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david: from european headquarters in london, i'm david gura. vonnie: i'm vonnie quinn.
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this is "bloomberg markets." is facingndustry challenges and opportunities this here. from a to self-governing vehicles to pressure from the incoming trump administration potentially. let's get more from the international auto show in detroit where david westin is standing by with another guest. theaildavid: we are here with chair of the song, carlos ghosn. let's start with your latest car, the rogue sport. >> the road is the most sold car in the u.s. for nissan. crossover categories are growing in the market. the rogue sport is the entry-level for the rogue, primarily for the younger people. it complements a strong offer we already have on the market. it has been the crossover which has grown the most in 2016.
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we are adding to create more momentum around the product. david: are we doing away with cars altogether and we have just suvs and trucks? carsis year, 60% of the are trucks and suvs in the u.s., 40% cars. this is the maximum we have seen historically. it may continue, as long as there is appetite for trucks and suvs. david: another big development has been autonomous driving. you have been fairly outspoken where that is. seem to have some skepticism about how far and as we will go. >> we think it will come in steps. there is acars means driver in the car and they decide if they want to drive or not. this is coming soon, and it will come in waves. highways first, cities after. then you have the driverless car, which may take more time, because it requires more
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when itn, particularly come to cyber security and other things. moderate andmore we made a distinction between autonomous car and driverless car. david: you have been pushing on electric vehicles, you have the leaf. where do you see the future of electric vehicles? particularly in a trump administration, if they back off of alternative fuels, does this change that? >> the progress can slow down, but it will not change the trend of the industry. we are facing emission problems all over the planet. we are facing it in china, europe, japan, u.s., everywhere. we need zero emission technology everywhere to overcome these challenges. electric cars are here to stay. david: we have a new administration coming in. if you talk to mr. trump today
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and you say these are the regulatory changes that you would like to see for the auto industry, what would they be? beingrything which is done in collaboration with the industry is much easier. no matter what the administration wants, the industry can do a lot of things, as long as it is a collaborative effort, as long as we have some visibility of what will happen. we can do a lot of things. the only thing that we do not like is being caught by surprise all of a sudden. david: there have been some tweets coming out of the president-elect and some of your compatriots are waking up to see some of these. you have 25% of your production in mexico. do you have a bowl ability there? we adopted the strategy along time ago to localize production as much as we can. controlker can really the exchange rate. the dollar goes up, the peso goes down, the yen goes down,
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the euro goes up. we decided to localize production as much as possible a long time ago. if your revenue is in dollars, your cost should be in dollars. we are following this strategy. in a certain way, what is being asked by the administration, building and selling cars in the u.s., we are fine with it. david: carlos ghosn, thank you for being here. westin,thank you, david at the international auto show in detroit. and janet yellen's term ends january 2018, and already we are hearing about with the central bank may look at then. replacements with pursue tighter policy. mike mckee joins us now for more. these three have been saying tighter monitor the lessee for a long time.
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maybe by the time they become fed chair, if any of them does, they will not be saying that anymore. mike: because we will already be there. they are arguing what should have been done before. if you look at the taylor rule, named after john taylor, he puts the rate of just over 2%. right now, they are at 66 basis points. the argument is they are a little bit behind the curve, which is the language that taylor used at the conference. glenn hubbard suggesting the same thing, saying the fed had overstated shelf life. kevin war, the most critical, saying the fed had been on a ride the wind short-termism policy, trying to get unemployment lower while forgetting about inflation. all of these people concerned about where we are going with inflation. get two to's say we
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three interest-rate increases this year, that is what we are looking for right now. if that happens and one of those three takes over, what do they do to rectify what they think is wrong? mike: that is the issue. none have put a precise number on where they think the interest rate should be right now. the calculation donald trump would make in replacing janet yellen, if that is what he decides to do, he wants to get the economy growing faster, but the fence job is to lean against that. if the economy starts to grow faster, they will raise interest rates. if that happens before his replacement of janet yellen, may be the calculation changes, he want somebody more dovish. it is hard to know. david: you mentioned john taylor's rule, there is a rule on capitol hill right now going to a systems based approach. did any of them they were a rules-based approach to policy? mike: kevin warsh and john
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taylor do. the problem is what rule and how do you apply it? , you have tole have a lot of different regulations, including what you think the neutral rate is right target, fed's inflation and but the output gap is. those are all bearing numbers, so it's hard to say how a rule would work. warsh is also calling for some other reforms, as trump has, and he is a multimillionaire, which trump likes. take any ofgoing to the three and say maybe they are a favorite for replacing yellen, maybe he would be the guy to keep an eye on. david: eric rosengren spoke today, the president of the boston fed. what did he have to say about infrastructure spending? mike: dennis lockhart had the same message. the median forecast for three
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increases is about right. we are at full employment, may go a little below it. inflation will pick up but not so fast that you have to overreact. we don'them cautioned, know what the fiscal policies are going to be from donald trump so we cannot put them into our models. we don't know if we will have to raise rates more quickly as the year goes on. vonnie: any reason to believe that anyone appointed by donald trump would change the mandate? has suggested reform to the federal reserve act, as have many republicans in congress. president obama was always the check against that. if trump would allow something like that to go forward, once you open up the federal reserve act, where does it stop? ,ou could have all changes made you could've somebody wanted to do the rules-based monetary formula. also suggestions that said bank resident be confirmed by the senate. they cannot even confirm governors to the federal reserve. imagine presidents.
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they could change the rules as set forth in dodd-frank about what powers the fed has to work on the economy. vonnie: something tells me we will be speaking to you a lot in the next 24 months. thank you, michael mckee. david: coming up, the head of mercedes dieter zetsche on the new e class coupe. and president-elect donald trump's focus on auto manufacturing. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm vonnie quinn. david: i'm david gura. let's go back to capitol hill.
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standing byi is with rand paul of kentucky who has had a few ideas on how to replace the affordable care act. to ask you, senator paul, what do think president-elect trump should do with the timing of repealing obamacare? >> i think we should vote on replacement the same day we vote on repeal. i discussed with him the other night, he is in agreement, we should vote on replacement at the same time. replacement does not need to be too complicated but should ensure more people at a lesser cost. obamacare kind of failed us because the prices went up and we did not necessarily ensure more people, and many of the insurance companies were going bankrupt. >> a lot of republicans within your own party are saying perhaps they would have to delay the implementation of an alternative. why is that lyrically bad and why is that also policy bad? >> obamacare is failing, one. north carolina blue cross lost
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400 million dollars last year in the individual market because of the rules. if you get rid of the individual mandate, it will get worse quicker. the model we have under obamacare is not working. you should have replacement day one because we have to replace something really bad with something that allows the marketplace to work. our replacement bill i think we'll get to the heart of it. we will legalize inexpensive insurance, help people save for that insurance, and we will help people in the individual market band together to be part of an association so they can get cheaper rates. >> there are popular parts of the affordable care millennials staying on their parents health care plan until 26, to name a few. you mentioned it is largely unpopular. is there any part of obamacare that you think should remain intact in the trump administration? of obamacare was to ensure more people, and we should keep the goal. most of the practicalities of what was in the building not work. they started out with some suppositions that are contrary
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to each other. one, that you can wait to buy your insurance until you are sick. that does not work as an insurance model. >> if you do repeal this, you look at the polls, a huge can agency of republicans think this is unpopular. heading into a midterm cycle, a lot of democrats are organizing, saying it would be a way to campaign. what do you say to republicans who say this would hurt chances in 2018? >> that is why you have to immediately replace it with inexpensive insurance, help people save, help individuals band together so they can get a cheaper price. >> one more question. earlier, last week, you reintroduced legislation to audit the federal reserve. did you talk with president-elect trump about that, and do you anticipate he will ask federal reserve chairwoman janet yellen to step down? >> donald trump on the campaign trail said that he was for auditing the fed.
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we did not talk about it, but it is very popular and bipartisan. , every republican and some democrats voted for it. it is about transparency, knowing what your government is doing. congress gave some power to the federal reserve but they did not give away everything. we should be overseeing what they do. it's a real problem at the main people up your arguing against oversight of the fed is the fed themselves. >> do you think he will keep yellen? >> i don't know, but auditing the fed is a good idea. >> thank you. back to you. david: a conversation about monetary and health care policy. rand paul, the junior senator from kentucky. vonnie: let's go to abigail doolittle who has some charts. the 10-year anniversary of the introduction of the iphone.
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2007, steve jobs introduced the iphone. apple istoday, going to reinvent the phone." ,he proof is with the putting and in this case, it is the revenue. if you look at the bloomberg, we have a great chart. these are the revenues for apple over the last 10 years. purple is overall revenue. -- excuse me, aqua is overall revenue, purple is revenue for the iphone. last year, more than 50%. the iphone has been a huge success for apple. but it has not been without storms. in 2012, 2013,t,
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the stock took a dip. this was around disappointment of the iphone 5, margin issues, but the 5s turned out to be a good upgrade cycle. the stock was able to rise out of that. 2016, was a little bit difficult around revenue around the iphone 6s. now we are hearing good reports around the 7. there is every reason, based on technicals, to believe apple could trade higher from here. facts on the fun iphone itself. more than one billion units sold. last year, more than $140 million in revenue. in perspective, that is more than the arkansas gdp. up in ais also just huge way. vonnie: thank you.
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it is time for the bloomberg business flash. main hedge fund strategy stayed on track in 2016, according to a monthly client update. blackrock quants used computer models to sort through data and identify patterns. president-elect donald trump and alibaba chairman jack ma spoke to reporters today after a great meeting at trump tower. createscussed plans to one million jobs in the u.s. over the next five years. ma says the focus is on agriculture products for the small business community, particularly in the midwest. the meeting comes as tensions chinese andween the the incoming trump
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administration. uniqlo reported a drop in sales this past year. his net worth currently stands at $17.7 billion. that is the latest business flash update. david: up next, the offshore yuan volatility continues. we will look at the future of u.s.-china relations in an inclusive interview with the president of the asian infrastructure investment bank. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." i'm david gura. vonnie: i'm vonnie quinn. the president of the asian infrastructure investment bank is optimistic about relationships with the u.s.. he says the bank is planning to ramp up its lending projects this year. >> we approved a lending program of nine projects worth $1.73 billion. the 25% of the lending program are freestanding projects prepared by our own professionals, 75% are the cofinancing programs with the for 2017, we can definitely do more than in 2016,
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because we have more people, we have collected more projects to consider. the pipeline is getting bigger. in 2017, my priority is not just to deliver a program of 2 billion, 2.5 billion. what is most important is to have a better balance across the countries, regions, and sectors. >> moving to the u.s., do you expect the election of donald trump to see washington reconsidering its position regarding the aiib, and crucially, does the door still remain open to the u.s. joining, should they choose to? >> the door will remain open. occasions, on many regarding the membership of the united states, we can work very well together. for instance, we engage american
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financial institutions. we engage business companies. we encourage them to participate in international competitive when we finance infrastructure projects in our member countries. as you know, we have american nationals working in this institution. >> you must have been encouraged by some of the sounds from his advisers regarding your bank. encouraged byuch the very positive comments on aiib. i heard this expressed by very senior officials in the u.s. government. comments byt the whocrats and republicans served in various senior positions in government. >> do you think a consensus is forming in washington now that
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it was a mistake to ignore, at least turn a skeptical eye to the aiib at first? >> i do not regarded as a mistake. a mistake is something that you did and cannot take back. we have 30 countries waiting to join. they did not become members for various reasons. you cannot tell me that they made a mistake, i don't think so. should we bened about a potential china-u.s. trade war, what steps would you expect beijing to take should trump go ahead with some of the things that he has suggested on the campaign trail? national, it's very important for the chinese and the u.s. to work together. >> how concerned are you about that? >> by nature, i am an optimist. since china ever opened its doors in 1980, i was
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involved in the bilateral dialogue between the u.s. and china. i am the witness to the huge tounts of benefit accruing china, the united states, and other countries, when china and the united states works together. vonnie: that was the asian infrastructure investment bank president speaking with bloomberg. david: coming up, we are going back to the north american auto show in detroit for an interview with ian robertson of bmw. this is bloomberg. ♪
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>> it is to a hawk in new york, 11 it a clock in san francisco, and 1:00 in london. welcome to "bloomberg markets."
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we are live in bloomberg world headquarters in new york. we are covering stories attitude short, tampa, and munich. u.s. stocks drifting lower today as the dow six further away from 20,000. ,erspective from david hunt which manages more than $1 trillion in assets. a busy day for president-elect trump. he will name his son-in-law as a senior advisor. meanwhile, he had been meeting with mitch mcconnell and business titans such as jack ma of alibaba. bmw says it remains committed to its plans to mexico despite trump's tax threat. we will hear from bmw's ian robertson from their tax strategy once trump takes office. in two hoursclose
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time. abigail doolittle is here with the latest, including the nasdaq at a new high. isto your point, the dow moving away from 20,000 after all of that excitement of the important psychological milestone being reached. today, the dow is down slightly. carving out new highs on the day, helped by tech. dragging on both the dow and s&p 500 is the energy sector. right here explains why it oil is down sharply, 3%, on pace for its worst day since december 14. natural gas is also down. one thought as to why oil is down is u.s. and activity has accelerated after the opec cuts suggesting that may weigh on the price of oil. if you look at the bloomberg, this activity has shown very
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well, this is the baker hughes rig count. before the crash there was a nice acceleration before the crash, but right here we have a big recovery. lots of drills coming back on. this could be weighing on the price of oil. this is not entirely a surprise. we will be keeping an i on how this weighs on oil. as for the natural gas stocks, we are seeing lots of red. corprces southwestern, eqt . all lower. it is kind of interesting. here in new york it is freezing, so that's not the reason today, but overall we are looking at a warmer forecast. scarlet: thank you. let's get to first word news. taylor riggs has more in the newsroom. withr: mitch mcconnell met
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donald trump today at trump tower a day before the senate begins confirmation hearings on cabinet picks. >> the president-elect and i had a good meeting about the senate agenda which includes confirming the capital appointments, getting further down the road toward repealing and replacing obamacare. we talked about the senate agenda and how we are ready to get going once he gets down there. are takingocrats issue with the hearing schedules quick pace because the ethics office says it has been received financial disclosure reports for some nominees. more on this later in the hour. the kremlin is echoing mr. trump russia ofsm accusing meddling in the presidential election, calling it a witch hunt. the report from u.s. intelligence agencies alleges resident vladimir putin ordered a hidden campaign to influence voters in favor of trump over hillary clinton.
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a spokesperson says the accusation has no substance. the british chancellor of the exchequer philip hammond says proceedings may not be completed until january 20. he says the parties will have to discuss with the interim period should look like between britain leaving the eu and delivering long-term arrangements, if we cannot get them in place by april 2019. he says the first objective is to get everything completed by that date. pakistan's military says it successfully testfired a summary and launched cruise missile for the first time. pakistan says the missile, which can fly low enough to avoid radar, was fired from the indian ocean. pakistan became a nuclear power in 1998, developing the capability to match neighboring india. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg. thank
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car dealers are gathering in detroit to shop the newest models at the north american international auto show. david westin is there where he is joined by bmw board member ian robertson. david: thank you. dr. ian robertson, thank you for being with us. let's start with one of your big announcements, the new five series. tell us about the car and why it's important to bmw. >> for many, the five series is the core of the brand. last generation, we did 2.3 million of these around the world. we have been a segment leader in virtually every country with this car. it is very important to us. the new car breaks a lot of new ground, 100 kilos lighter, it is the business athlete. it is the car that is more connected than any other. it has the latest semiautonomous driving capability, and at the
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same time, and builds on all of that excitement that you would expect from a five series. david: it is a little bit u.s.,g a trend, in the there is a movement toward suvs and trucks. how does that work for bmw? >> it is fair to say we invented the sports activity segment with 1999. in last year, we did about 30% of our overall business with suvs, but that is a big lineup of vehicles from the x1 through to the x6. x7 is in the pipeline on the other side of the show. we are seeing the trend, we are seeing and move probably toward a 50/50 ballots. the rest of the 50% is made up of sedans.
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sedans are a big part of our business. is a: to be clear, the x2 crossover suv. >> slightly higher seating position, great-looking design, exotic colors. one of our american dealers was saying this morning, this will be the young person's car here in the u.s. david: another big story here is electrical vehicles. over here we have some of the bmw electrical vehicles. you have the i8, i3. what is the future of electric vehicles from your view? still a smallt is portion, but from a standing , threeith the i3 and i8 years ago, we went over 100,000 sales. the momentum is building. out this yearll hoping to do 100,000.
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clearly in a company producing and selling 2.5 million, this is obviously still a small percentage. the car behind us is a five series plug-in hybrid. kilometers,ge of 50 miles per gallon in the mid-60's. it has a co2 footprint of around 44 grams. it will meet the threshold of most of the tax incentives around the world, and in many markets, it will be a big seller. david: we also have news being made in new york by donald trump as he prepares to take over the presidency. as you look forward to a trump administration, what opportunities are you looking forward to in terms of regulations that may benefit you? >> the signs for the economy are good. the u.s. is our second largest market in the world, the home of our largest planet in the world in spartanburg. about $10orting
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billion worth of product from the united states to other markets in the world. i think our commitment is there. we are also investing a billion dollars to bring the x7 online. this is a very important market. standards are always interesting. we are into a phase now where autonomous and driving is going to come. we have put a partnership ye,ether with intel, mobile e two of the biggest computing and willn systems, and what we see in the next years and months is standards of autonomous driving. it would be much more difficult it countries and may be individual areas, cities said this is what we want. this is the next big thing in the automotive world. let's get some clear standards in place. david: another thing right now is where cars are being made. you have a substantial facility in spartanburg. at the same time, you have a lot of investment in mexico. are you adjusting your balance
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between mexico and the u.s. in response to the trumpet administration? strategic plan in mexico, like we have new plants coming online in other parts of the world in recent years. we continue to expand and invest in our u.s. plans as well. the plan in mexico will come on stream in 2019. we only broke earth last year. ultimately those cars are produced and sold, we will decide in the next couple of years. we bring the, three series in from various plants all over the world, sold across the world. we produce global cars. a three series in the u.s. is the same as in europe, japan, so on and so forth. that is something which is flexible. we make the three series in various countries, we have a flexible response. we can make a hand, left hand, different primitives of the ame platform.
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dr. ian robinson, thank you for being here. scarlet: thank you very much, david westin, with ian robertson from detroit. coming up, $22 billion worth of deals announced today. which industries will see the most consolidation? the goldman sachs cohead of m&a gives us his perspective. this is bloomberg. ♪
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scarlet: this is "bloomberg markets." i'm scarlet fu. it is time for the bloomberg business flash.
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executive of heritage pharmaceuticals pleaded guilty today to price-fixing charges. the former ceo jeffrey glaeser and his plea in philadelphia. he is scheduled to be sentenced april 10. dow chemical and dupont face an open outcome from a european union antitrust review of their merger. the companies met today with regulators to defend the proposed 760 billion dollar deal. regulators are worried it would hurt a petition in the agrochemical industry. that is your business flash update. in the m&a world, 2016 could be called the year of withdrawals. well over half $1 trillion of were withdrawn.
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jeffrey mccracken sat down with gregg lemkae from goldman sachs asking about what trends to expect in 2017. wave in 2017 fueled by the cash repatriation is transactions across media and telecom peewee have seen a convergence happen. comcast bought nbc. time warner and at&t coming together. the big distillation companies looking to buy content. the desire for these big media companies and big technology companies to get access to content and get closer to the consumer is critical. lastat the golden globes night, 17 nominations for shows or movies produced by net eggs or amazon. are all desiring content, getting closer to the consumer. what is interesting, amazon, google, apple have lots of cash.
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they have not done a lot of big deals. do you expect that changes, that they acquire their rivals, entertainment companies? >> that is the great question. the five biggest market cap companies are all these tech companies. they have big cash balances offshore. they have been underpenetrated in m&a. the question is when will they pursue that. as their top line growth starts to flow, it's a natural time to do that. the real question really pens down to the regulatory piece. will the regulators allow them to do that? whether it is the fcc or the ec, or doj, will they allow these company to get bigger? >> is it your expectation that administration will be more like the bush administration when it comes to antitrust? >> a lot remains to be seen. i would say the obama administration come in the past
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year in particular, got a lot more stringent in m&a. there were $5 trillion in m&a laster that fell away. if you look at pfizer and allergan, staples, office depot, a lot of big deals fell away. the obama administration got a lot more aggressive. the view is that eases up to a degree. whether it reverts to what we had in the bush administration, that is yet to be seen. you looked at companies and thought, that will be blocked, let's revisit this in a year? >> i think you saw some of these deals fall away and you saw people get anxious. the last thing you want is a board to announce a transaction and then have it held up by regulators and then not happened. it is not great for the board or the target or the buyer. as these transactions were getting stuck, people backed away from the table. if they see a loser regulatory environment, they are likely to get back to the table. >> trump will have the house and
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the senate. the door that we will see big tex moves, and a big tax cut that may impact corporate. how will that impact m&a, what does that do to a company looking to sell? >> corporate tax cuts should also be a fuel to m&a. you will see more divestitures than spinoffs. people have been try to do things with tax spinoffs recently. the one caveat is you may see a pause for a while until it becomes clear what the tax rate will be. if you don't know what it will earn after taxes, you probably want to wait to see what the new tax law will be, because there is meaningful value around the earnings power of what you are selling. you could see a lag until there is clarity around the tax reform, and then a pickup in activity. scarlet: that was gregg lemkae speaking with jeff mccracken.
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next, we go to capitol hill for the latest on donald trump, as he names his son-in-law jared kushner as an advisor. and we get the latest on his infrastructure plans and we speak with david hunt. this is bloomberg. ♪
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scarlet: this is "bloomberg markets." i'm scarlet fu. donald trump is two weeks away from his inauguration and we have learned the president-elect will name his son-in-law jared kushner as an advisor. he says he is planning to divest his holdings would create a conflict of interest. for more on his preparations for taking office, we join kevin cirilli on capitol hill. not a huge surprise jared kushner will be advising his father-in-law on a more formal basis. tell us more about his holdings that could be problematic. >> jared kushner is a real
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estate titan in his own right, and of course, has been a close advisor of president-elect trump even on the campaign trail. what you are looking at right now is just over a day before trump will address the nation at a press conference on wednesday, where he will specifically discuss the separation between trump organization as well as the trump administration, this is going to raise new questions. the bottom line is this. jared kushner is someone who trump trusts, someone who has proven to be loyal, and he is also someone who has really proven to have an ability to connect the more tea party conservative far right wing of the republican party, bridging the gap to the more moderate wing. all of that leads to say, this soon-to-be 36-year-old policy person is going to have a big role to play in shaping the republican party for years to
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come. scarlet: we know donald trump trusts russian or, his son-in-law. on what policies will he be advising on, what areas does he have expertise in? >> technology and infrastructure. if you talk to any of the trump aids, former campaign staffers, they all point to jared kushner as someone who was able to raise that social media presence for donald trump. they credit that to him, as being one of the driving forces the hind understanding the new social media landscape. the second is infrastructure. this is a guy who is in real estate. folksou talk to like steve bannon, others on capitol hill, who are looking at having a trump stimulus plan, jerod kushner is in all of the rooms of these meetings. he was with elon musk last week talking about economic policy. he is someone who has been in the room, he will continue to be in the room.
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the question is whether or not that raises conflict of interest , and whether or not the incoming administration can put that behind them. the first test will be on wednesday when trump has his press conference. scarlet: kevin, can you tell us what kind of role ivanka trump, of course, his daughter, mary to kushner, will be playing? might we expect any formal announcement on that front? >> what is interesting about ibaka, unlike don junior, eric, not bemp boys, she will having as much of a role in the organization as a result of her husband elevating his status within the senior advisor role. they have looked for property here in washington, d.c. they will be moving to washington, d.c. i would anticipate she has a pretty front and center role in terms of the optics of the white house.
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this is a family, mind you, that has grown up in the public eye, and is used to that sort of stature. of course, with the white house comes a whole new type of celebrity, if you want to call it that. they are now global figures. as of january 20, they are america's first family. scarlet: we also learn boris johnson, the former u.k. foreign secretary, former mayor of london, is now in capitol hill. before he was in washington, he was in new york city and met with trump advisors. you, i wasll speaking with a senior aide on capitol hill, a republican advisor today, who told me that boris johnson met with speaker paul ryan as well as house majority leader kevin mccarthy. according to my sources, johnson did more asking of the question then talking. they did talk a lot about brexit, the similarities between andp's election and brexit,
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also the key differences. if you look at the stock market, the u.s. responded much differently to trump's election and has been responding differently than what we saw to the brexit vote. ,ome differences but clearly the incoming administration, as well as republicans on capitol hill, looking to have a strong andtionship with the u.k. with our trusted ally across the pond. scarlet: kevin cirilli, thank you. donald trump says he also looks forward to meeting theresa may in washington in the spring. still ahead, the commodities close. a look at oil prices down 3.4%. that is dragging energy shares lower as well. coming up, david hunt. this is bloomberg. ♪
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>> from bloomberg world headquarters in midtown
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manhattan, i am scarlet fu. markets are closing in new york. abigail: a lot of action for the market. the lco global commodities, we see all of the action. redenergy, we see a lot of metals. pretty mixed, overall, the bloomberg commodity indexes down 1%. more of a drag as opposed to a boost from various commodities. winners, wef the look at gold. hitting levels last seen six weeks ago. the red we saw, oil is down sharply at session lows, down about percent right now after the count did show it rose for the 10th week in a row, all of us happening around the opec supply cut, suggesting
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production is rising. that dynamic certainly weighing in the price of oil and oil is weighing in on some companies including exxon, chevron, transocean trading lower. analysts seized more than 15% downside. there is reason to think other energy names may have downside ahead. this is btv 5291. we have the s&p 500 energy index care last year, it was the best sector. up 24%, it's best year is 2007 is will rose in 2016. its best year since 2009. that has left the energy sector in overbought decisions.
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when it hit the seven day level, that is considered to be an overbought level. continued will see weakness ahead for the energy sector off today's weakness. scarlet: good stuff. after closing at record highs, we have seen consolidation track the biggest companies. the dow moving either way. the s&p 500 lower while the nasdaq is extending gains to make another all-time high. david is joining us, the .hairman and ceo company oversees $1.3 trillion in assets. it is quite a bit of money. trying to consider whether this is a head fake or something more justified, you are looking at many things. corporate growth and corporate investment. we have seen companies borrow a lot of money to fund buybacks and dividend growth. is that a good sign, is this
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something we will continue to see? is an important time for all of us who are long-term investors to risk that on whether we have a short-term bond or whether or not fundamentally we will see productivity growth and therefore real growth in the economy? there are three as we look at. the first is business investment. while many people will go through earnings which are starting to come out this week and subsequent quarterly earnings, for us what is important is whether we the a rebound in his this invest. in almost a decade, we have seen the consumer come back but we have not seen confidence in business spending. that is where it will be interesting. i picked up a sense of optimism around business executives and we do a lot of lending into the middle market. thatk up for them a sense
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yes, they are looking at new plans and new equipment and more fundamental investment which should drive productivity to it we will look at that closely than whether we will look at earnings go up. markets going down low that if it is driven by investment. to be theapex has right place because donald trump will not hesitate to call you out if you are spending millions a billions of dollars making factory across the border. do we presume we get water years in executive branch micromanaging? >> one thing we have learned in the early days here, and maybe this brings up the engineer in me, the noise to signal administer dacian debt ratio is fundamentally higher with the ministration than in the past. we are taking a stance of looking at what they do rather what they sayuch or what tweets come out. fundamentally, if you look at
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the backgrounds of the people in the cabinets, they understand what drives business fundamentals. >> fair enough. infrastructure of course is right for discussion. it is so appealing or attractive for a policy maker say we will invest in infrastructure. but it is difficult to get right . why? >> we have seen this movie before in this country and other countries. most notably in japan, we have beautiful bridges two small islands, roads to nowhere. is not the kind of spending with you to see in this country. we will focus on whether or not infrastructures ending is the kind that tries relativity. we need to see more investment in the fundamentals of energy that the electrical grid power, pipelines, airports, and the that isng about it is mostly controlled by states and
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municipalities, and that the federal government. states are in a crunch themselves. we will need public-private partnerships to make this work so long-term investment -- investors like us can put the money to work in the products we need. >> we had president obama infrastructure projects that failed to materialize quickly. most of the products take years to start and longer to complete. should we expect a similar timeline? >> i hope we have a longer timeframe. it is like renovating a house. you can put a new roof on quickly. if you want to put on an entirely new electric system and plumbing, it will take you a lot longer and the same thing will happen here. so i hope we have a thoughtful long-term strategy about how to rebuild airports and revitalize subways in the major cities.
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that will require different structures than what we have in place today. scarlet: how do you get investors comfortable? getting better and learning from other countries. if you look at the u.k. and they have a more robust set of approaches to how structures where long-term investors, can invest alongside the government in driving new airports for example. a good example of that, which, as you know, with on the mentally oversubscribed. it is not a problem of money or whether we have the right structure. plenty of money wants that long to ration to know into infrastructure. it is the execution. scarlet: let's talk about something we have talked about in the past are different pension funds and the assumed rate of returns. the annual rate of return was cut to 7.5% for the next three
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years. didn't go far enough? >> you have been kind and patient to listen to us most 24 months on this topic. we continue to believe many institutional investors have too high expectations. if you look across the industry, 2016 was good news. many as two shows lowered their expected rate of return. the -- there are risks of doing that but the risk of not is far greater. level ofbring down the return, you do not have to reach for yield or risk or use leverage in the same way. we would rather have a lower expected rate of turn and a lower risk in a lot of the pension funds we advise. scarlet: what kind of ripple effect to you think we will see, whether it is defined contribution plans or pension plans? this has ane
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important role to play in all of that, and people will reassess both the return, to continue to bring those down, and therefore the risk here we hope to go down.will begin to we hope he structures will begin to come down and we will come back to probably a lower risk portfolio approach. >> thank you for your time. we appreciate it. oversees about $1.3 trillion in assets. we have breaking news. blackstone is in two by $5 , $5 billion ofgy energy transfer access said to have trended here this is according to people familiar with the matter. the wall street journal reported last month that shares of energy partners jumped as much as 5% on that initially and that hurt the economics of the deal. the representative of blackstone
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declined to comment at our request for comment was not returned. you can see energy shares took a big leg lower currently on his headlines last on an energy transfers discussions have collapsed. let's get you to bloomberg's first word news with taylor riggs in the newsroom. alibaba defender met a trump tower and discussed how alibaba is -- is focused on creating a million u.s. jobs over five years. >> we will discuss american small business, selling things to china and asia. we mainly talk about small and wes, young people, think the china u.s. relationship should be strength to be more -- more friendly. >> he says the focus for now is agricultural products --
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progress particularly in the u.s.. a senior visor to the president according to a person familiar with the matter. the attorney says he is working on a plan to step down as ceo of to meet estate company u.s. ethics standards. turkey's parliament is debating president hand the greater power. the amendment would give his presidency sweeping executive powers and the possibility of serving two more five-year terms. fear giving the president too much power would turn turkey into a dictatorship. the war veteran used of killing five people in the florida airport made his first court against today. he could face the death penalty if convicted. he has spoken to investigators but authorities say it is too early to tell if the shooting was an act of terrorism. global news toy four hours a day
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powered by more than twice its hundred journalists and analysts than one 120 countries. this is bloomberg. scarlet: thank you. coming up, bill says he speaks with president obama regularly hear what exactly do they discuss? we will hear from him next. this is bloomberg. ♪
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scarlet: the president-elect's building pressure to build cars at home. adding 2000 jobs -- this after ford said last week it would expand to michigan in the u.s. and that of a billion-dollar plant in new mexico. david westin spoke with the
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cochairman earlier today and asked him to school -- describe the developments he has seen in detroit through his career. >> several cycles of boom and bust. than themore difficult 2008 and 2009 timeframe. if you came to this show during that time, it was gloomy. what a difference a year and makes. detroit itself was all coming back. it is great to see. >> we should turn to the new administration. the auto industry has been in the news. of people think part of the problem is trade, that a lot of jobs are going overseas. what is your view about the trump administration as they formulate trade? >> i have a great relationship with him i talked to him from time to time, like last week when we announced here in michigan. he is interested in the things
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we are interested in. all things that affect american operations. i am encouraged about what i see about his policies. >> if you would write the ticket right now for an atmosphere that would be helpful to the auto industry, what would you right now? >> elaine chao, i have known her all at labor and then transportation. she knows the industry. her industry is changing so much with autonomous driving at all the technology going in. we will need a partner in government to help make it all happen. i'm pleased she is the choice. >> to you agree with what you coming out of the transition team? you could have negatives as well as positive square -- positives. >> we have built vehicles well over 100 years around the world.
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that is something i think it is important for any administration to understand. >> as you look at it. are thesetent decisions not to go forward with a new plant in mexico, is it a is this decision and to what extent is it reactive? it has to be business. my family is a big shareholder. we have to do it for the shareholders. we did not need the capacity, he and we arell thrilled to do it here in michigan. going fall in, these discussions are what we will be having. >> you are known to be concerned about the environment at beginning four. are you concerned in my cough
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some of the encouragement? >> i do not think so at all. developing about technology, it has to be cleaner and we are developing products around the world. the world eating up, even in major cities. sometimes the air, you literally cannot breathe it. a lot of it is power plant. clean up the plants, hourly host, -- >> the development we has the -- we have seen is moving away from cars to a truck and tv show, no ink percent. >> many suv's used to be station wagons. suv's herebuying they are capable and you go off road with them.
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the suv's wildly popular not just here in the u.s. but around the world. >> will we enter a world with no cars and all suv's? >> we will see. . think the point is choice the smallest vehicle to the biggest pickup truck you could imagine. it will choose what is right with them. >> that was bill speaking with bloomberg weston -- david westin. college football, starting to break down. this is bloomberg. ♪
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scarlet: alabama will take on clemson in the college championship. favorite to win for a second straight year and they already
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beat them in the legacy game. the program brings in $97 billion a year, more than twice what they do. bloomberg's reporter took a look at business of college sports. the alabama football team is bringing a lot of money and others are taking a lot of debt because of the attempt. how much money are we talking about here? you build beautiful facilities and multibillion-dollar practice facilities and good players to come, and you challenge them a field. we look at what their debt service looks like. anything from low range to the 200 millions. >> uc berkeley, pretty much off the charts at this point. i see georgia tech -- georgia tech in the middle there.
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how does it work? is scaredn everyone to take on debt is revenue streams are in question. a way to do it helpfully is take as a way of guaranteeing you will have a way to take it back. georgia tech goes to donors that have given a lot of time and they say, if you're willing to give me a million dollars a year for 20 years, you essentially mary that to the debt. at least you are not settled with debt you cannot pay off. there are three main ways for schools to make money. fox willney espn and pay, and those are the three pillars. there is a fourth pillar, essentially support for the
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school itself. student fees or taxpayer money, etc.. >> there is a lot of anger among smaller campuses. >> we're getting there. professors catch on they have no money for research but students are kicking in an extra eight nine dollars for the football to travel around the country, they get upset by that. we're entering a time where they are a little more aware to go to the athletic side and there is more pressure on the athletic administrators to bounce a budget. scarlet: given the controversy and the debate over whether players should be paid, why are so many schools paying -- is there pay a new level. they have essentially doubled in the past 12 years which
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coincided with the national championship run. a schoolnt to beat that is a little bigger, you invest in the football team. you want to be in the take 12 conference if your houston. if you are calc, you want to beat alabama. you take on a half a billion-dollar's of debt to reach the level. everyone's chasing the next level of debt and money. it sometimes works and more often it does not. scarlet: schools are trying to move up to the next higher profile division. university of idaho is the first school in modern history to drop down a division in college football. they essentially gave up and decided they didn't want to give us much and they will make less money, but their president who i talked to a couple of months ago feels this gives him a better chance of creating equilibrium that is helpful for the
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community. the question is whether we will see other schools following that trail brazing and i am not sure we will. a lot of schools are seriously can drink taking the step and maybe they should but at least for now, we do not see it as a trendsetter. all right. you can catch his entire series on coming up, the world passes bigger make it just biggest maker of cancer drugs to cut costs in europe and the united states. we will discuss it all with him. from new york, this is bloomberg. ♪
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scarlet: it is 3:00 p.m. in new york. i am scarlet fu.
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♪ we are alive from bloomberg world headquarters in new york for the next hour. we're covering stories -- stocks around the decline in oil prices hitting shares of energy companies hard. until it is say telecom going lower. we will speak with ceo daniel o'dea. how will the company deal with potential backlash. goings atomings and trump tower today. senator mitch mcconnell among those meeting with the president elect. mr. trump is reportedly having his son-in-law for senior adviser.
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no real trend except the nasdaq continues to make a new high. collect overall, we are not seeing the major averages change all that much. largely unchanged and mixed. the indexes are being tracked down while the nasdaq carving new record highs. we take a look at the year to upe chart, the nasdaq is nearly 3%. on technology strength especially last week, we are see on pace to close another record high. earlier today carving on another all-time high. we are once again looking at last, of four out of the
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five days. morgan stanley highlighted them in. pick, a 20% upside for shares of appeared we have pharmasset is trading higher, $4.66 billion. way.tock is up in a huge trading higher on the news -- buying a pet hospital company for $7.7 billion, having its 2001.ay the green on the nasdaq is the 10 year yield, down year to date . it's fourth weekly decline in a row, longest streak since july after the brexit.
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what makes this standout again is we have stocks that all-time highs, especially the nasdaq. we have bonds rallying. this is an interesting chart. bond index.lobal in november, we had a huge diversions. we see bonds are starting to rally again heard something will have to give. we keep a close eye on it. scarlet: thank you. taylor is in the newsroom with the headlines. >> met with president-elect donald trump today at trump tower. the senate begins confirmation hearings on a cabinet. >> the president-elect and i had a good meeting the senate agenda , we are getting further down the road toward repealing and
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replacing obamacare. we talked about the senate and how we are ready to get going once we get down there. >> the ethics office says it has financialed disclosure reports for some nominees. we will have more on this later. the kremlin is echoing -- accusing russia of tampering with the presidential election, which they're calling a witchhunt. orderedt vladimir putin -- a putin spokesman says the accusations have no substance. officials have cleared scott pruitt as the nominee for the epa to receive through the confirmation process. he disclosed his investment portfolio valued to $1 million,
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held primarily in mutual funds, bonds, and retirement plans. no dates have yet been set for the confirmation hearing. appointed diplomats as his country would negotiate with trump. thatnding to criticism texaco has been to tepid. trump is proposing to test companies that make u.s. go through mexico and negotiate the trade agreement. news 24 hours a day or more than twice is hundred journalists and analysts and more than 120 countries. this is bloomberg. scarlet: thank you. rising pressure on drug prices. donald trump set to take his seat in the white house. many companies trying to get ahead of the criticism on pricing.
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morgan at the j.p. health conference with more, eric? .: i am here with the ceo. you can see everybody wants to see daniel. the inauguration is two fridays away. how do you expect the world to the affected by policy changes and health and medical care under the trump administration? >> our mission stays the same. our goal and objective is to discover and develop and get the patient's medicine. we are the number one company in cancer medicines. showing an extension in lung cancer and bladder cancer that we have not seen before. is our mission and objective regardless of the administration. what we can control is making
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sure our medicines are really differentiated from what is out there today. iser things we can control making sure we are smart about are weisions we make pursue a personalized health care approach where we are very ,ocused on working diagnostics only those patients that need our medicine to benefit from our medicine. toare exploring a chance look and value-based reimbursement for our medicine, in the best interests of patients. do you kinds of changes think we might see in 2017? >> we will see a continued pressure on drug prices like in the past. we will see how it comes with the administration. the answer to whatever changes we do not know will come will be having truly differentiated
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where we are focused on is cancer care and new medicine for patients with multiple sclerosis. it is a big patient care need. we will work with all stakeholders but our job is to come up with these transformational medicines. >> is there any alternative for drug companies like yours to raise prices to make up for what you did lose? >> there are a lot of players in the system and we took a look at a holistic approach. any time we look at pricing medicine, we take into account the value it adds to patients. less than 10% of health-care costs are spent on medicine today.
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right, we are job part of the solution for the other 90%. so regardless of the other health players, which we're all connected and working with, i believe we will be an answer to a lot in the health care system. yours payes like could the system, could a structure for the system that would clarify this stuff? >> we're all for transparency and we have been clear in terms of how we price the medicine and the value it will bring. even after the stores are launched, we develop those further.
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we are focused at looking at the in beingof the benefit transparent about what benefit we bring to the patients and transparent about how we price medicine and what we do. we spent more than 9 billion u.s. dollars, more than any health care company, back into research and development. >> the environment here is different than the environment in europe. do you have a hope we will begin to see indication based pricing in companies like germany and france -- in countries like germany and france? >> we have imitated -- indication based pricing today in italy. >> i am thinking of elsewhere. germany or france? thee do some work now at
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in combination based pricing where we look for those patients who need more than one of our medicines for the treatment. we look at pricing those ready to aaa -- instigate these systems, i think -- it isxt five years, happening today. i think evolutionary wise it will happen in the next five years, more and more companies will adopt it. global leader in cancer, you are making huge progress with multiple sclerosis , and doing some things to extend your leadership in cancer. pressure to do a major deal? >> more than 25% of the downpour
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today are in areas of infectious disease, immunology. significant diversification today and with the new medicine you mentioned with multiple sclerosis, and he'll -- imo. that will become even more. i think you will see more of what you have seen in the past. we have a robust internal pipeline. we will compromise -- comment that with medium-sized acquisitions. some innovative partnerships we with data and information processes. >> i'm wondering if you think about where you want the company to be in five years, can you get there on your own with the
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partnerships you have already struck, or you -- do you need to do something different? >> i think we can get there on our own. we're getting ready to launch two more medicines this year. we have a robust internal pipeline. we will always look externally to be able to compliment that ensure us up. you have to. we're always on the hunt for information. we fund valuations to still be challenging in many cases. we will continue to look for strategic acquisitions that support our core business. the internal pipeline is hitting on all cylinders right now. >> thank you so very much. scarlet, from san francisco, back to new york city. scarlet: thank you.
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coming up, we will hear from chris, the ceo investing millions to remake his home city . from new york, this is bloomberg. ♪
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scarlet: we had now to the auto show. outside the auto history, the owner of little caesars, detroit tigers, and other businesses in the city. here's what he had to say about his commitment to investing in detroit. story, throughe
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the industrial revolution, ran into several decades of difficult times. we felt the obligation to do everything we could to bring the city back. >> as we talk nationally about private public partnerships, what could we learn? what we you tell us worked well and what should we avoid? >> what we're doing in detroit, our organization, is a great example is the power of great public private partnerships. our city was going through and the governor had the vision to enter into the private partnership. our obligation was to spend $450 million in private funds. is the 450 has now grown and this has accelerated
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and we catalyzed an additional 900 million. the state came in thinking it would spend 252 450, about $2 billion has been spent on private funds. has been incredible. >> you would be the first to say you are not there yet. continue the, supply of jobs. during a phenomenal job of that. the young people want to be here. the employers are starting to identify, employees who want to be in detroit. evolution innued the city, which is getting better.
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>> there has been a participation. they have been a big part of it. you look at the mobility innovations in the region and in the state. our universities are paramount. >> really with the auto industry going back to the turn of the last century, a criticism of , was it was too dependent in the auto industry. is this the automobile industry driving this? to what extent has michigan the on the auto industry? >> a great question. when folks say you are too reliant on the auto industry, i say any community in america would want this in any country in the world would want the
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industry. what we have here. to have it.nate it is a powerhouse and it is what moves our economy at the end of the day. there are a number of entrepreneurial firms and individuals like ourselves, dan, tom, folks who are moving forward and investing into time our feeling is there is a long way to go. we are on the right trajectory now. scarlet: still ahead, we are taking a look at retail companies ahead of the conference in orlando. we are watching traits of lululemon as well as retailers
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-- this is bloomberg. ♪
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scarlet: it is time ever options insight. abigail: thanks. me is jim and thank you for taking the time. we were talking before the segment, where did that come from? >> a little bit of a surprise. 185 components of the s&p 500 index just by the end of january. time to wake up and get in the back of the game led by financials.
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>> sang session at least in terms of happening. now, earnings expected 3.8%. real optimism going forward. the next three quarters are double-digit gains. a lot of optimism cooked in. the vix all show folks even in the run-up since the presidential run-up have been adding some protection. across the products. everyone has enjoyed the run-up. it looks like protection his -- has been layered on. abigail: very interesting.
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trying to retail, one thing we -- been talked about, macy's,ls last week, november, december, stocks got slaughtered. it is about taking the raiders here. she likes all price retailers specifically. there are a few winners we do like. >> could you take us through your trade on lululemon? >> sure. stock traded lower, it is flat on the day. momentum continues.
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there could be near-term catalysts out to march. he paid about $2.50. which can potentially make $10 and leverage play on continued momentum to the upside. >> back to you. scarlet: thanks so much. still ahead, we will stick -- speak to calmly. we will discuss why he is more cautious on 2017. this is bloomberg. ♪
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>> live from bloomberg's world headquarters in new york. >> we're 30 minutes from the close of trading in the u.s.. >> investors sold following last year's advance. >> the question is, "would you miss"? >> the biggest bear, tom leads thoughts on his faith. plus, will it take a hackett turn? at a trump fed with vincent reinhart. and ceos are gathering in detroit for the esteemed north american international auto show. , asaught up with mary barra well as other executives from audi and mercedes. let's get u


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