tv Bloomberg Markets Americas Bloomberg January 24, 2017 12:00pm-3:31pm EST
from bloomberg world headquarters in new york, we're going to take you from washington, to london and beijing. here are the top stories we're following. president donald trump signs two more executive orders meant to move along the approval process of both the keystone and dakota access pipeline. we will get a live report from washington. in global politics, the uk's highest court ruled theresa may must get parliamentary approval before she can open divorce talks with the european union. johnson & johnson posts fourth-quarter earnings that beat estimates, helped by its growing pharmaceutical division. abigail doolittle joins us with a look at the market. abigail: we're looking at modest gains for the major averages -- the dow, s&p, and nasdaq all opened essentially flat, little changed. now stocks are being pushed to the upside. leading the charge today are the dow transports, up more than 1%.
that is a reversal of the dow transports falling about 1% yesterday. overall, not a lot of movement up or down. this is exemplified well in a one-month chart of the s&p 500. the s&p 500 is up less than 2/10 of 1% over the last month or so. investors are uncertain about macro factors, including what the republican administration will mean for the corporate outlook republican --trump administration will mean for the corporate outlook. one stock that is doing well -- car stocks, the automobiles -- ford, chrysler, gm all trading nicely higher after the ceos of these companies did meet with president trump at the white house early this morning with president trump saying he believes the environmental regulations are "out of control ." he plans to remove obstacles. we reached out to intelligence analyst kevin heiman who said the staff makes sense given
president trump also wants to build in america -- he has to remove obstacles to make that the feasible, possible. we are certainly looking at a nice rally here, especially for fiat chrysler. as for the trump train itself, we happen to the bloomberg. there has been some talk about whether it is reversing. this chart suggest that relative to stocks, it really is not. since the election finances are still doing the best. when we see the biggest changes for the utilities in orange, initially down 6%. now down about 1%. that, as the 10-year yield has moved down, pulled back a little bit after the big move up in the fourth quarter. looking at the bloomberg dollar index -- more uncertainty here p we see a lot of volatility. the bloomberg dollar index is not just down today, basically flat, but on the year, it is down nearly 2%, on pace for its worst start to a year since 2009.
the bloomberg dollar index is reflected some of the uncertainty around the macro issues, david, that investors are feeling out there. david: thanks so much, abigail doolittle, with the market update. signed executive orders on the keystone and dakota access pipeline. let's bring in luke, who covers the white house for us here at bloomberg news. what happens next? there is the symbolic flare of signing these in the oval office. what happens next? president trump called himself a great negotiator. this is the opening bid in his negotiations can he will be talking to the canada prime minister in a few days and i know the keystone xl pipeline will behind on his agenda when he has the meeting. also, the dakota answers pipeline is another one where he will be meeting and talking with business leaders behind the deal, trying to make sure those pipelines are going to create jobs, and if they are going to move forward, that they continue
to follow the regulations that president trump agrees with. so, we are expected to see more negotiations from the president and future announcements on both the pipelines in the days to come. david: the executive orders do not -- vonnie: the executive orders do not give transcanada and energy partners to plug in, start drilling again or start building pipelines, right? there is a lot more to be done. toluse: there is the only a lot more that is to be done, but president trump wants to send a signal he is happy to reduce regulations, reverse some of the obama administration's policies when it comes to pipelines, and unlock the energy underground in the united states. kit is the beginning of a long negotiating process, but he wanted to send the symbolic signal he is signing an executive order that could get these projects moving once again. david: this is another busy day for the president -- he began by meeting with executives from major auto companies. he tweeted "i want new plans to
be built here for cars sold here ."riod -- sold here what did he have to say after the meeting? toluse: more of what he talked about in the tweet -- you want them to create jobs in the nine states, and he will try to reduce the regulatory burden on them. executive's came out and said the meeting was productive, and they look for to working more with the trump administration. they are happy he withdrew from the tpp yesterday, and they are looking forward to working with the trump administration on things like regulation, reducing taxes, to make sure copies continue to create jobs here in the u.s.. vonnie: we heard a little bit from the ceo afford and gm, but did not hear much from sergio marchionne. do we know if they are of one mind about this?
toluse: well, that remains to be seen. at this point, it seems like there is much to be determined about how these various groups are going to move forward in their interactions with the trump administration. obviously, trump has ruffled feathers by attacking some of these companies for the place to create jobs in other countries, and sending out tweets that call them out, saying they would pay big order tax. obviously, none of these copies are in favor of a large border tax for products shipped overseas. they are trying to figure out what is the best way to deal with the trump administration, but so far it looks like they are looking for a conciliatory note in trying to praise the administration for its action so far. david: speaking of a conciliatory approach, yesterday president trump met with house speaker paul ryan. they had dinner at the warehouse. tonight, he is scheduled to meet with mitch mcconnell. the can you tell us about religion be has with both of those month? toluse: you can tell the
president -- relationship he has with both of those men? toluse: you can tell the president is trying to have a strong relationship with the leaders. speaker ryan has extended an invitation for the president to come deliver a joint address in front of congress next month. it will be important for president trump to have a close relationship with congress as he is trying to push for this bold and ambitious agenda. he is trying to show them that the ropes here in washington -- show them the trappings of the white house, bring them into the oval office, and we will see how things go. the highly, one of anticipated nomination is will come, as he said he will announce the supreme court nominee, and has been speculation in the press about who that might be, but trump saying he will pick a truly great supreme court justice. what are you hearing on the hill and around the white house on who that might be?
toluse: right now the top administration is keeping those names close to the vest, and trump a's are saying it is a decision that will be made specifically by the president, so i am not sure even his closest aides know who the person is going to be. number, earlier this year, or leicester during the campaign, president trump, while i canada, put out a list of 20 different candidates he would choose from -- still a candidate, put out a list of 20 different candidates he would choose from, and they were praised by conservatives that were concerned he might not pick a conservative supreme court justice. the best way to get an idea of where president trump may select his next justice will be to look at that long list. we are hearing that has been whittled down to a handful and in the next week we will find out who president trump has chosen. david: quickly, what we know about the opposition democrats might take? there was talk about democrats filibustering this, trying to
delay that nominee getting a seat on the supreme court. what is the latest? toluse: for this nominee to be confirmed in the senate, president trump will need 60 votes. obvious to, democrats can block the nominee, and their leader, chuck schumer said unless president trump chooses a consensus nominee, someone who is more of a moderate, they will hold the seat open. this could be a big fight in the first 100 days of president trump's administration. david: thank you very much. vonnie: now let's check in on the bloomberg first word news this afternoon. taylor riggs has more. taylor: senate committees have approved three more cabinet ininees including ben carson housing and urban development, elaine chao in transportation, and wilbur ross at commerce. now the full senate will vote whether to confirm them. president taylor:'s insists his -- president trump's at -- says
his administration is bringing jobs back big league. pres. trump: we have a big push with auto plants. you are not being singled out, mary, i promise. we have a lot of plans with a lot of different items built in the united states. it is happening, and it is happening big league. he said there will be a short process to get environmental comments. he said the regulatory climate is out of control. a defeat for theresa may during the supreme court -- judges ruled the government cannot formally begin the brexit process without a vote by parliament, likely to delay may's timetable. a majority supported the remain campaign. legislatures could slow down any bill by attaching amendments. israel says it has approved 2500 west bank settlement homes.
the defense and esther says the majority of housing units will be built in settlement blocs. those areas are where most settlers live and where israel wants to keep under control under any future peace deal with the palestinians. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. vonnie. vonnie: thank you. politics,in global u.k. prime minister theresa may faces a new set of hurdles after today's court ruling. we bring you the latest details. this is bloomberg. ♪
were talking about the supreme court pick down out of is expected to announce next week -- a statement just out, saying the president has invited chuck schumer, the chairman, and mitch mcconnell to the white house this afternoon to meet with him regarding the supreme court vacancy as part of ongoing consultations with member of the senate. mitch mcconnell saying i appreciate the president soliciting our advice. mitch mcconnell going with his counterpart, chuck schumer, and the senior ranking member of the judiciary committee to the white house. vonnie: earlier he said he will announce the nomination next week. we will have to wait until next week to figure out who that is. it's up in court has been operating with just eight justices since last year, since the passing of justice antonin scalia, and we know from abc news and other outlets that the favorite is the 49 euros on the 10th circuit of appeals in
-- i will getice some details on the justice. such is his name, and we know he is the favorite, but those things can change. there is conversation happening this afternoon. the uk's highest court ruled by mr. theresa may may need ruled that prime minister theresa may may need permission for brexit. is this the end of the court process now, simon, or what is next? then: it is the end of session. there are cases that will look into whether britain can revoke article 50 later, or whether britain voted to leave the european economic area -- my new shade areas -- my new shed areas that could be written large.
it is now up to parliament to try and get that done. theresa may saying today that march 31 remains the deadline and it continues to trigger the brexit by then, even with the need for parliamentary approval. david: help us understand the import of it going back to the speech she delivered last tuesday, saying she intended to seek the counsel of parliament in the speech. what has changed here and there is -- as a result of this court decision? simon: she spoke about seat -- speaking to the parliament at a later date and she said parliament will vote on the brexit deal, but in reality that would not stop brexit. parliament votes for the deal, or it doesn't. more importantly, it is whether she triggers article 50. that is not the only doubt, really, after the hearing. parliamentarians saying they will back triggering article 50.
they do not want to oppose the will of the people. she is going to try to rush bill thatsmaller gives her the right to invoke article 50. critics will try to add amendments to that in the hope they can either soften her approach, or force her back to talk to them as he goes down this two-year process of removing the u.k. from the eu. vonnie: now, part of the decision was that it does not need to happen in the assemblies , and then in northern ireland, scotland, and wales -- what happens now, do we see more referendums in those countries? simon: that was one bit of comfort for the prime minister today. thathe supreme court said the semi-autonomous government
elsewhere, had they been handed power, they would be in trouble. scotland voted against brexit. you could see a real push to block it. so, they are already talking about a second referendum on whether scotland remains part of great britain and breaks with the u.k.. so, it is a test for later on. for today, theresa may will not face a scottish nadal. veto. tell -- david: there were interviews with our editor -- what is still unknown about theresa may's plan for brexit? simon: an awful lot. we are only at the start. what is mainly unknown is how europe will respond. europe is staying very conservative in its common, speaking about how they will not discuss the deal until the formal notice is served, saying
theresa may cannot cherry pick. it left doubts in what she seeks does not answer what the 27 european countries will seek. whether they will punish britain -- they do not want to many contestants. it will enhance the europeans to drive this forward. vonnie: what is jeremy corbyn doing right now -- is he preparing any kind of response to this in any practical way, or has he just rolled over? simon: i do not think you can ever say the leader of the butsition has rolled over, he has been criticized for not necessarily leading the opposition in the way past oppositions have been led, and he came out today say while they will not block breaks it or the trigger of -- brexit, or the trigger of it, they will try to amend it.
he will also require to come back and report to parliament on multiple occasions in the future. they want more control here. parliament wants more control over the process. vonnie: thank you so much for that. simon kennedy, he is our brexit editor in london. david: breaking is about toyota -- motor company will invest $6 million and at 400 jobs at an assembly plant in indiana, part of a component part of a $10 billion spending plan they announced early in the month that over the next five years will expand and modernize u.s. factories. responseeing seen as a from reddit we have heard from the new president. toyota announcing it will invest $6 million at a factory in indiana. a new rough reality for roughnecks as robots take over -- how automation is changing the face of labor in the oil industry. this is bloomberg. ♪
bloombergis is markets. i am vonnie quinn. david: i am david gura. robots are taking over oil rigs -- it is reducing the need for human workers. here to talk about this phenomenon and the outlook is david with the, who covers it for us. using a great -- a great piece using the words roughnecks and roustabout. you cannot go wrong. what are humans -- what are robots doing that humans used to do? : there is something called the iron roughneck, and automated, big, giant red machine that grabs these
sections of pipes that go down mileshe oil well, underground, and connects them altogether. in the past, this was one of the iconic images we used to see a big, burly men connecting pipes altogether -- it was muddy, dirty, dangerous. you have this machine now that can connect hundreds of sections of pipe and put it down in a tedious, automated process. that is one prime example. you will see that rolled out on more rigs to save time, manpower, but the thought is it could go much further than that. if we can do that kind of thing, can we take an engineer that is sitting at his desk, designed the well, and that basically push a button and send instruction to the rig? you will have guys overseeing the operation from a far. you would mainly have a robot doing most of the drilling work. vonnie: so, these iron roughnecks, as they are being called, how much does one cost, and what kind of man our
productivity do you get out of one? the man our productivity -- the rough equivalent on an offshore rig is your gone from three guys to two guys for that process. you have saved about one-third of your manpower. they are a little bit less expensive for the land rigs, which are cheaper operations. that one-time amount, and you say about one-third of your manpower, and more important me they brag about the safety aspect of it, but you are also getting a guy off the rig floor. david g.: the last question here -- about timing, this comes as we are having a national conversation about bringing jobs back to the u.s., finding more jobs come especially in manufacturing -- the president applying a scrutiny to that happening here. give us a sense of why this is happening now, what it means now to have this conversation is part of the national rescission about jobs and energy? is a fascinating
time to have this talk, especially with the new administration, but part of it was worn out of necessity. the oil field was high in cost. when you had $100 oil, you were not watching your cost as much. one analyst said it was a bloated headcount. now they have had a chance during low oil prices to reassess headcounts and say what is the right amount we should have, and they have any chance to put more automation into the process. it is also a scary time for oil companies to be talking about automation and talking about keeping headcount down because it is -- you do not want to thee too much of an ire by trump administration. david g.: we have to leave it there. david wethe thanks so much. this is bloomberg. ♪
the dow's seen some gains right now. the s&p 500 is up. almostdaq is also up by 0.45%. we have some losers on the dow and right now. -- onn the downside right the downside right now. verizon is down. they missed earnings estimates, and they also missed driver edition numbers which was disappointing to investors. it was the core wireless network that -- businesses that were behind this week. it could involve some of the company takeovers that are likely to happen. that includes yahoo! which is likely to take place during the second quarter of this year rather than the first quarter. trading down, and at&t is trading down in the philly -- sympathy.
has an and johnson forecast that is disappointing investors. on thee blaming the miss forecast on the stronger dollar. eighingat is really w on the pharmaceutical business. ago, one analyst told our team that he thinks this weakness overall probably has more to do with profit-taking than this quarterly disappointment. some of it could have to do with uncertainty around donald trump. bloomberg,at the this is a longer-term chart of the xlt or health care etf. first of all, we see this beautiful uptrend. it was very befriended by obamacare. obamacare was very from the to the big pharmaceutical companies. range ofwe see this
uncertainty with investors not knowing what is next. this bottom of the range indicates that some bearish forces are in play. we will see how this plays out. president trump recently saying that he thinks the big from cynical companies are getting away with "murder relative to pricing." and that some kind of bidding process needs to come into play to make prices more fair. vonnie: abigail, thank you for that. time for our first word news. expect the address to a joint session of congressman month. the invitation came from house speaker paul ryan. inviting --ng: i am speaker ryan: i am inviting president trump to speak with the joint houses of congress. this would give him a chance to hear from us about our agenda.
taylor: new coming presidents are traditionally invited to speak before congress. fbi director james comey will keep his job according to the new york times. it said that comey told top agents around the country that donald trump backed him to stay on. during the campaign, donald trump harshly criticized the fbi about criminalg charges on hillary clinton for her use of a private n.l. server. -- email server. the choice for secretary of state will make his first trip to the office since his nomination. the senate foreign relations committee has approved his nomination. the full senate may approve him as early as today. the oscar nominations are out. it is a record for "la la land." the film is leading with 14 nominations. the film has spurred nods for best picture, best actor, and best actress. global news 24 hours a day, powered by 2600 journalists and
analysts in more than 120 countries. i am taylor riggs. this is bloomberg. twist and turns for johnson and johnson take over saga. it puts the health care industry and focus. let's take a look at that 's numbers doday not lie. the stock is seeing its worst days since october. according to the company, is being driven by a strong dollar. johnson & johnson is said to have tentatively agreed on a price to acquire the swiss biotech company. it would allow johnson and johnson to use its cash pile, an estimated $14 billion in cash flow. pharmaceuticals are key for johnson and johnson, as it represents 45% of its sales in
the third quarter. momentum is slowly building for growth in the company's consumer devices unit. they are also adding one company to their consumer drug business. competition for a similar by of it. testers will need to pay more attention to resident trump -- investors will need to pay more attention to president trump as he is in the white house. last month, he promised to drive down the price of medicines. johnson & johnson had ceos that met this week with president trump. vonnie: earlier today, johnson & johnson ceo spoke with david westin about financial relief. that have very high growth accelerated over the prior year in total shareholder return of
2016 was in excess of 16%. we are pleased with our results. as we look at the fourth quarter and our outlook for 2017, it is very clear to us that not all of the analysts who follow us had updated their models for recent currency interest. we have done so. we are right in line. i think this is just a factor of analysts not yet updating for current currency movements. that is the difference between our and their expectations. week market currencies account for the difference. >> that is right. we attributed solely to currency. david: explain to me how you did so well on the earnings per share. that cost savings? -- is that cost savings? how are you doing that? >> we have a very good cost control. we estimated we have -- we would have over 600 basis points for
movement in 2016. we actually delivered at the age of 50 point asus improvement. that was very good across the enterprise. it will do very well moving into 2017. david: where does that put your profit margin for the year? at 26%overall income is for the year. david: they are showing growth --limited >> as you know, the pharmaceutical was launched by pfizer in november. it is early, and so far we have not seen much impact. we intend to defend our intellectual property. more importantly, we believe that we have very strong products. , strong,y good
underlying business. we are looking at the impact over the year. we estimated what it would be in our guidance. it is fully taken into consideration in the guidance we provided this morning. david: these are the drugs that are coming online that you would develop might -- that you expect .ight develop with remicade strategically, if a deal goes or word, would fit into that category? >> we will not comment to much on any particular transaction. strategically, we always look at growth enabled by strategic acquisitions in addition to organic growth. we are in exclusive discussions right now. whether or not it will result in any transaction, we will continue to look for ways to improve our growth with strategic acquisitions that create shareholder value. david: your boss met with president trump at the white
house. did he give you any sense of what was talked about? >> he did it. he said it was very productive and he said it was a discussion about trade, tax, economic stimulus, and job creation in the u.s.. all very important topics, and we are very excited and pleased to be working with the administration to advance all policies in that regard. some policiesre that might not be as attractive to you. if there is less coverage under a revised obamacare, would that affect johnson and johnson? what about also some block negotiations to keep prices down? >> the overall health care act in 2010 increased access for some americans. we did not see much impact in our overall business. any reduction in the coverage would not have any particular significant impact on our business. we advocate for expansion on access to health care for all americans.
with respect to drug pricing, health care cost is a concern. 12% oricing represents 40% of overall health care costs. we are very responsible -- 12% or 14% of overall health care costs. we are very responsible in the pricing of our health care goods. we want to make sure we keep it all in perspective. johnson &at was johnson's cfo earlier with david westin. david: with more on johnson & johnson's earnings as well as will be can expect in the future, here is jerod. is there more at play here than what was said? remicade andtion some declining numbers there. he did say several times that it is the currency strength of the dollar. in talking with the company, maybe about four analysts were the only ones they said had
predicted this guidance with them. so, maybe to them it was just about the currency and that is it. on the call today, none of the analysts i heard disagree with that. vonnie: what about margins? what is the room for them to squeeze margins? down, ande is coming they are looking at a way to offset that with some other possibilities. aey have i/o similar which is remicade whicho affects their guidance and play with that. david: there is a sense of how this affects their deal? >> they had been in discussions for a number of weeks now.
they eventually stopped, and then they resumed. they eventually stopped, and then they resumed. it is not entirely common, but it is not rare. the last we have heard was that they had agreed on a price, and they were trying to figure out an evaluation of an r&d unit only instead of maybe the whole company as an acquisition. that is kind of ongoing. they did not specifically address it today. will they search for more deals? they said they are not against doing that. the ceo did say on a call that the bigger deals -- they tend to stay away from those him up because they are more challenging for them. vonnie: the automakers and their ceos, whether they are bowing to donald trump or not, something is happening. could the same thing happen in pharmaceuticals? >> as donald trump alleged, they do have very strong lobbying power.
he has suggested that going after drug prices -- that the government should be negotiating for better drug prices was a surprise for a lot of people. not necessarily a number one issue on the republican side from president trump. however, he is a populist president, so there are a lot of issues at play with that. david: there was the meeting yesterday between the ceo and the president. he said the meeting was productive. how will johnson & johnson navigate the repeal or rewriting of the affordable care act considering the changes that could come into play from washington regarding trade and taxes? >> they said they are optimistic about tax reform. .hey have a lot of cash like a lot of these companies, to have it overseas. there's speculation it could be used for m&a.
that theresa may must receive parliament permission before triggering the countdown to live the eu. they are asking banks to pick themselves in a advisory role. mark: in today's quick take, measuring china's economy. ♪ vonnie: british prime minister three's and they now has a series of roadblocks before she can get the brexit started. just to give best receive parliament permission before she can trigger the two-year countdown to live -- leave the european union. fromen the u.k. withdraws these agreements, certain rights enjoyed by u.k. citizens will be changed. therefore, the government cannot
trigger article 50 without parliament authorizing that course. vonnie: the decision threatens the prime minister's deadline for starting the process. members of the conservative party worry she could hurt the economy by jeopardizing trade and limiting immigration. mark: thanks for being urged to pitch for an advisory role on the world's largest share. saudi arabia plans to sell 5% of the energy company. among being -- among banks being asked are some of the ipo's expected in the third or fourth quarter next year. james hogan will step down as group ceo as the abu dhabi-based company announces with losses in investments. the us trillion will leave in the second half as the company
refuses -- reviews its own operations. a new look for a global ceo and cfo is now underway. performance, the have been losing market share. competitors have been offering lower prices in exchange mutual funds. back in october, they and as they were merging with the london-based henderson group. vonnie: time now for our bloomberg quick take or we provide background and context on issues of interest. --s week, officials in china it is another example of how tricky it is to get a handle on the world's second-largest economy. china is huge and changing fast. transparency first is not exactly the national motto.
one leader said he does not like to rely on u.s. economic data. another leader -- here is the situation. china's national bureau of statistics kabul's together data from a variety of sources. of bureau reports that tdp 10.4 trillion u.s. dollars. however, they say in some chinese provinces it was estimated at six 4% more than that. toy are urging residents register as unemployed. they are ignoring twitter 70 migrant workers. here is the background. look at china's statistics. focusing on centralized industries such as steel or automobiles. jenna has not been able to keep up with the data requirements of a modern, consumer driven economy. are not ase, they
much looking at data like restaurants and karaoke bars. bank of america uses an index that looks for contradictions in data. the industrial output coincides with weak electricity use. informalmist has an process indicator. he indicated that a slowdown in software sales during the lunar new year festival may indicate that china's economic downturn is worse than it looks. you can read more about china and our quick takes on the bloomberg. for continued business reports had to bloomberg.com for more stories.
many in the scuba diving toustry are looking forward taking a trip to cuba. we took a look at some of the country's pristine diving sites. >> for americans, getting to cuba is easier than ever. some island destinations remain elusive. one such place is something of an open secret in the diving immunity. welcome. "gardens of the queen." one of the most largest protected environments. the archipelago is larger than the size of the florida keys. divers the year are allowed to visit. lucky divers can witness a healthy ecosystem, a rare find among the oceans strained ecosystems. with the flourishing of the
aquatic life, there is one feature that can make things uneasy. caribbean sharks can grow up to 10 feet long, but they do not usually consider divers edible. shark sightings are rare in the caribbean. here, sharks are everywhere. thes a clear indicator of ecosystem and the healthy food change. that is no accident. cuba's government has incremented aggressive protection measures to keep the area clean. i offer some of the most incredible and untouched dive sites in the world. if cuba is going to preserve them for generations to come, the government will have to continue to balance commerce and ecology. -- it means that the dive site will remain an exclusive location for some of the most luckiest divers in the world. david: check out "pursuits."
your destination for some of the finer things in travel. you can check that out on the bloomberg. vonnie: coming up, president trump's executive actions on the access pipeline. the, we will speak with australian treasurer about the australian bush after donald trump's executive order on ttp. this is bloomberg. ♪
vonnie: from bloomberg world headquarters in new york, we take you from toronto to washington, d.c. and london. here are the top stories around the world. president donald trump take steps to advance construction of the keystone xl and dakota access pipelines. we get a live report from toronto. global news as president trump withdraws the u.s. from the transpacific partnership. austria is leading a push to trade -- to salvage a trade deal. we speak with us trillion treasurer scott morrison. ,e hear from maxine waters citing blowing dust willingness to work with donald trump on infrastructure and spending. we are halfway into the trading day in the u.s. and abigail doolittle is here with the .atest action
abigail: the dow is less than 100 points from 20,000. on today's stealth rally with the dow up more than half a percent, we are back on doubt 20,000 watch, some nice gains after a basically unchanged open as the buyers are really pushing the major averages, higher on the day. a piece of this could be earning season. 56 59, this chart tells us that investors are very optimistic about the earnings season and that the expectations for estimates are quite high. the white line is the bloomberg estimates for earnings, the s&p 500. in blue, we have the trailing 12 months earnings of the s&p 500, so a nice slope higher in expectations and on is the difference between the two. high,ations are pretty
for the u.s. corporate profit outlook to improve nicely in the first quarter. that could be helping to explain why stocks are trading higher. we do have resmed trading higher, on pace for its best since 2012. the stock was upgraded to an overweight, citing strong growth. they really think there could be strong double-digit growth for resmed. we also have generally collect they alsoy-clark, beat and they expect to see higher growth for the second half of this year. investors are looking forward to that. alibaba up more than 2% on a nice beat and raise quarter. they did raise the outlook, so investors clearly look -- clearly like all of this. looking at the vix 10 year, old and yen -- gold and the end.
-- and yen. we have the 10 year yield trading higher, represented in red and tells us that haven bonds are trading off as investors go toward the growth. gold trading lower, and we also withthe yen trading lower the dollar gaining against the yen. thank you, very much. let's check in with taylor riggs for the " bloomberg "first word news." taylor: that'll trump had a breakfast with ceos and top executives of the big three automakers and promised to make the u.s. more business friendly cutting regulations. >> we will make the process much more simple for the auto companies and everybody else that wants to do business in the
united states. you will find us very hospitable. taylor: the meeting presented a key opportunity for a kid -- for automakers to weigh in on it are issues you administration plans to tackle, including trade, regulations and tax reform. the congressional budget office is projecting that battle trump is inheriting a stable economy and e-government on track to run a budget -- deficit. new estimate from the nonpartisan group also say the economy holding steady. the data comes as the gop moves to repeal the health care law, boost the pentagon budget and reform the tax code. the senate foreign relations committee has voted to approve south carolina governor nikki haley as u.s. ambassador to the united nations. the panel recommended president donald trump selection ofhaley. -- of haley.
hamas rulers are warning the u.s. not to move its embassy in israel to jerusalem. the islamic group said such a step could unleash new violence. the palestinian authority has also urged president donald trump not the follow-through on his campaign promise to move the embassy from tel aviv. the palestinian city of east jerusalem is there hope for a capital.- is their global news, 24 hours a day. this is bloomberg. david: as president trump withdraws the world's economy from the transpacific partnership, australia is leading a push to salvage that trade deal. australian leaders are also opening talks with the u.k. ahead of britain's withdrawal from the eu. joining us from london is scott chiefon, australia's
treasurer. a lot of work has been put in by australia and the other parties to this arrangement. the decision by the president was not unexpected, but that does not mean you simply walk away from these people. there is still a lot that week -- that can be gained and we where to pursue that there is opportunity and potential for other partners to stay -- step into this. we embrace trade and foreign investment, and so our economic interests are aligned with that approach. we have a excellent arrangements with china and south korea and japan, and the tpp was an important part of this, and while we respect the decision made by the president, we just get on with it. david: i know that during the course of the u.s. trade
representative pitching this to the people, he mentioned china quite a bit and said there was a national security reason for doing this, saying that china could fill that void. does this make the trade agreement that china has been pushing more attractive to you? scott: we already have a free-trade agreement with china and the other nations i just mentioned. interests and our the united states will define their own. i will leave it to them to make their judgments on their issues. our agenda is one that we will continue to pursue with enthusiasm and optimism. that is how we have always seen these. services exports, where australia has seen strong growth , and largely, into asia, which is our big market. david: no doubt you have heard
from our president about the prospect of a trade war between the u.s. and china. china obviously the u.s.'s biggest trading partner. what would that mean for you at that came to pass? scott: nobody wins from that. cooler heads to prevail on the sorts of things and that ultimately, people will take a pragmatic approach, whether it is to that issue or the issues we are seeing, in the u.k. and with brexit. that was a decision made by the british people and now there are practical issues to be addressed and we are proponents of strategic -- strategic patience while these arrangements get finalized. they are detailed and complex and issues around transition and settlements in the euro and
passporting for the financial institutions in the u k, it is in everybody's interest that all of these things get sorted out in a pragmatic and patient way. whether it is that for cooler heads prevailing when it comes to the u.s. and china, everybody will win from that sort of approach. david: theresa may's vision appears to be some kind of constellation of bilateral deals. what is australia pushing for, in a trade deal with the u.k.? what might the timeline for that happening be? these things cannot formally commence until the issues with the eu have reached their trigger point. a clear we have made intention to the u.k. of our willingness to engage in a free-trade agreement with them in many respects, it would mirror what has already been in place as a starting point with what we have been seeking to do
with the european union. inalready have strong ties the services and other areas, but we will look to build on that. particular, the u.k. will be moving forward with a housing statement in the very near future. there are good operators and service providers in australia who can feed into that, particularly in the area of -- and things of that nature. we are up for it all. david: in the last quarter, the australian quarter short -- byterday in -- shrank national and scott: the data coming up for industries we have seen in the december quarter, so far, would indicate that there is not a lot of concern in that front and there was not, at the time and the surprise result came out in the order.
when you look at our forecasts, over the short to medium term, we expect to see our growth performance pick up where it left off. we cannot be complacent and obviously there are issues around trade and foreign investment. these things remain critical to our future growth, not -- but australia is in our 26 year of consecutive annual economic growth. a whole generation of australians have grown up without ever having known a intenton, and it is our -- our intention to make sure that a new generation will not, either. david: there have been reports that he might be considering a government-backed on the vehicle -- bond the a cold. the a call -- vehicle.
challenges when it comes to housing affordability, it is the old market principle. demand ands to meet in australia, while we have had strong growth and house prices in sydney and melbourne, that has been driven by classic economic fundamentals, not as a result of speculative bubbles or financing issues. while that may have had some impact at the margin, the fundamental is about supply. it is about how you can increase land releases and planning and systems and approvals and getting construction happening across the board, whether it is greenfield sites. infrastructure, connecting to suburbs and where the jobs are. only the issue you mentioned, the house and -- housing bond aggregator for affordable housing is what has been
recommended through a process we have been working on with a similar model that has been successful in the united kingdom. whether it is affordable housing, meeting the needs of the private rental market, the private purchase market, at the end of the day, it is how you can build more houses, to make -- meet the rising demand of a growing economy. david: thank you, for your time, scott morrison, the australian treasurer. vonnie: coming up, president donald trump has signed an executive order to advance construction of the keystone xl pipeline and the dakota access pipeline. does the decision marks the start of an era with zero constraints on the oil industry? this is bloomberg. ♪
david: this is bloomberg markets. vonnie: president donald trump signed orders to advance construction of the keystone xl and dakota access pipelines. former president barack obama had rejected them or stalled them. withy transfer partners canada is part of the project. a pipeline in dakota was protested by native american groups. for more, we bring in bloomberg markets canada anchor -- in toronto. how are investors reading the news, so far -- greeting the news, so far? shares of seen transcanada which is behind the keystone xl pipeline approaching new heights. same thing with energy transfer
partners, which co-owns the dakota access pipeline. obama had halted work on both of those projects, based on environmental concerns. this new posturing from trump has been received very well my investors in those companies as well as other companies that have a stake in canada's oil patch. you can take a look at suncor shares trading higher. haveian energy companies been ramping up in anticipation of an oil recovery. the issue for quite a while had been how to transport it. if you look at the bloomberg western canada crew differential, this chart shows the price of heavy crude coming from western canada had been trading at a discount compared with other oil. that is because of that lack of access. that is changing, now and you can see it is narrowing as the access issue gets addressed. the symbolism of this, him signing the executive orders and in the face of environmental who --
environmentalists who thought this, doggedly. what happens next? >> we have not heard comment from transcanada, but the company has been public in a very recent -- in the recent past about their commitment to sticking with this project, even after president obama had nixed it. the day after the election, the company was looking for ways to convince the incoming trump administration that it had benefits for both sides. the company may need to submit another application to build this pipeline, but those plans have been thoroughly vetted at this point. sioux: the standing rock tribe has come out with a tweet, we are not opposed to energy independence. we are opposed to reckless and politically motivated pl.lopment projects like da
there is opposition to this. what does the president say to this in the exhibit of orders that in the executive orders? david: the tribe had initially said -- >> the tribe had initially said they would not -- it sound like they reversed themselves, their. as for what president trump said as he signed of these orders, late this morning, he said he plans to renegotiate the terms of the two projects, specifically a quote, we will build our own pipeline and build our own pipes. continuing to push that populist message we heard from him so often, with a real emphasis on american jobs. this is an issue he campaigned on, but he is drawing criticism and not just from environmentalists in the tribes
-- and the tribes, but also from political types to point out that he had owned stock of energy transfer partners during the election and that he also took a pretty sizable campaign contribution from its ceo. vonnie: thank you. still ahead, alibaba is raising its full-year sales forecast after they beat estimates. this is bloomberg. ♪
is being led higher by the bank index of 1.7%. the transportation and next makes up 1.3%. reporting better than quarter -- but of an expected quarterly results listing it yearly sales forecast, and joining us now with more -- writes about asia technology for bloomberg. where is this revenue growth, coming from? there is not much growth in user numbers, anymore. in, the users are spending more. 30% growth in the average revenue, so that is really big so in people are pulling out their phones and purchasing, 50% more, than a year ago and that is really important because china is so large, and they are hitting almost peak usage, they
will not be able to get that much more out of it, so the need to get more, per person. vonnie: is it all in china? tim: the company is 95% china. they are looking overseas. the ceo came overseas and talk to president, then president-elect trump. successou write about in the non-commerce businesses. what are they, and what growth do we see? tim: there is more than e-commerce. they do have a cloud area they are going big into. david: like amazon. tim: there was a lot in the alibaba playbook that looks like amazon -- there is a lot in the alibaba playbook that looks like amazon. that,e looking to push they want to get people onto the alibaba platform and keep them there. they are spending a lot of money on content. it is growing as a top line, and
they are getting growth. are one company that has all users domestically in china, but a lot of the manufacturers import and export. i'm wondering what this whole movement towards protectionism and the lack of trade deals from the u.s. means for alibaba. tim: that is what they are concerned about. jack came to the u.s. and met with donald trump and his reason for coming was too kind of hold off on protectionism, advise him not to go down that path because he sees it could be bad for him and his company and that the global commerce. he is a free-trade kind of guy. if we start going down this path of putting of trade barriers, it will be bad for everyone. david: you mentioned its competitors. how was the competition shaping out? -- how is the competition shaping up? the three between a really
competing. not just commerce itself, but getting people onto the platform and staying with them. you keep them on your apps, you can get the commerce going. david: nice to see you, tim timen with bloomberg -- culpan. next, goldmanup sachs on oil and the u.s. economic outlook for 2017. insights from the head of global commodities and chief economist. this is bloomberg. ♪
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taylor: president trump signed executive orders that advanced it is -- advanced the construction of the pipeline. it has been stalled since september. president trump has invited senate leaders to the white house today to talk about the opening on the supreme court. that is according to senate majority leader mitch mcconnell. according to abc's jonathan karl, 10th circuit -- the 10th circuit court of appeals judge is the leading candidate. the announcement could be made early next week. the president's pick for budget director said there needs to be -- quick action on the national debt. the congress month from south carolina says the nearly $20 isllion in the national debt equivalent to the average american family owing nearly a
quarter million dollars on the credit card. alks are focused on cease-fire in place since september 30 and are to be followed by more negotiations next month. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am taylor riggs. this is bloomberg. of opec seems to be complying with its production cut deal. head of commodity research jeff currie says there is reduced price volatility thanks to a reduced compliance rate. he was asked about oil prices and his outlook on them. >> when we look at compliance and our expectation going into the production cut, we see significant compliance out of the gulf states. oman, qatar.uwait, the regions such as libya, iraq -- we expected to see supply increases, and we are seeing that.
and 85%n target for compliance, which was our expectation going into this. how does the u.s. respond? last friday we saw an increase in oil rig counts at 29. one of the largest we have seen in the most recent period. this will likely lead to more supply in the second half of 2017. we look to the upside price risk and we have price target on wti of 57.50. further out we see prices moderating to 55. too far aboveget $60 because of the potential for the supply response becoming significant, creating further downside risk. >> six months is enough to get the supply balance? jeff: that really is the key issue. you listen to what opec's rhetoric has been, it is not about price trading ranges but
about normal evasion of inventory. there are reasons why they want normalized inventory. above 4.es sit why is this important? going into the production cuts announcement, we had four. spot prices were at above 44. back end was at 55. if opec can get that done to the lowerby low world -- by normalized inventory, it reinforces their market share strategy. the other reason, lower volatility in oil prices. they are issuing $70 billion of debt this year and the potential for an ipo at ramco, lower volatility of earnings lead to higher financial assets. >> how do you see the shale rebound in the united states continuing the supply uptick? jeff: our base case is that the quarter over quarter increase this year is likely to be 500,000 barrels per day.
there is room for that because a stronger demand growth and higher -- you get numbers higher , then it starts to become a problem. $55 to there is in the $60, the supply rate can be accommodated. kong, janso from hong hatzius said expect higher trade values. stephen engle asked about the ramifications of president trump with the trans-pacific partnership trade deal. jan: it is certainly widely expected. it does underscore that we can trade, u.s.us on manufacturing, u.s. competitiveness, and we do think trade variance will go up. we do not expect the numbers across the board basis that
trump was using during the china, 35% on% on mexico, we do think that this will be a major focus. what we have seen so far confirms that. stephen: is there an alternative that can take its place? trump seems to be backing away from it. opens moretainly room for other countries to take the lead on global trade. in terms of alternatives, there is also the question of what the u.s. might do on a more systematic basis to try to help u.s. manufacturing and exports. as you know, there are a number of tax proposals on the table. the border-adjusted tax, different versions of that. there has been a lot of debate about that. all of these things i think are
going to be on the table, and we will learn a lot more about what the preferred will be over the next couple of months. stephen: if we look at the economics of it, how does this affect your outlook for 2017, for the u.s. and the global economy? jan: i think the economy generally is in pretty decent shape. in the u.s., we think basically we are at full employment. the early part of last year was on that side. the labor market stalled for a wild. since the middle of the year, we have seen renewed acceleration. we think that will yield benefits in 2017. now, the main change in our outlook is that we are not building in -- we are now building in a easier fiscal policy, which should have an
effect heading into 2018. that will prolong this period of growth through 2018. so we will go beyond full employment. we also have more hikes in the balance rate than what is priced in the market. vonnie: that was jan hatzius from goldman sachs, speaking with stephen engle in hong kong. david: coming up, congresswoman maxine water on president trump and infrastructure spending. this is bloomberg. ♪
im david gura. vonnie: i am vonnie quinn. abigail has the chart of the day. abigail: something interesting is happening with the dollar. we have the bloomberg dollar index down about 1.8% on the year, on pace for its worst year since 2009. some of the weakness could be consolidation of last quarter's big move up. it gained a huge move for a currency last year, its biggest since 2008. but it also may reflect uncertainty around the trump administration. -- 56.81.lso reflect in white, we have the 10-year yield. in blue, we have the bloomberg dollar index. they are closely correlated. we see the currency in question here. after the election of president trump, the correlation tightens up even more, until just
recently. the bloomberg dollar index is ticking down as rates stay in that consolidation of range. it is interesting to see that consolidation. we showed a chart that shows the 10-year yield, suggesting both may come down, consolidate, and reduce -- and reverse. there is another interesting chart that may suggest we are going to see moves down for both rates and the bloomberg dollar index. personal- we have the consumption expenditure. this is the fed's preferred look at inflation. for most of the last year it was ticking up, until the end of last year when it started ticking down. above it, the bloomberg dollar index in the 10-year yield, in that area of congestion -- if the pce continues to trend down, the fed may be on hold. it could suggest we could see more consolidation in weakness for the 10-year yield and the
bloomberg dollar index. that would tell us if there would be a valley in safe haven bonds. vonnie: abigail, thank you. david: time for the "bloomberg business flash." fund for acus hedge 20% increase last year, doubling the rise in the u.s. stock market. it is the fourth year in a row of double-digit gains for the renaissance institutional equities fund. renaissance is regarded as the most successful hedge fund of all time. to --l advisors is close the new york-based bond market rolled out the latest version of its title initiative this month. person -- that is according to a person with knowledge of the matter. creating index of mortgages securities third media outlets struggling to make money are
scaling back on facebook's instant articles program, which allows stories to load faster on smartphones. that is according to a report over increasing concerns dominating the news landscape. beis tougher for them to selling ads on their websites. that is your business flash update. dodd-frank -- the republican plan to replace it is the financial choice act. earlierrilli spoke today with maxine waters on her plans to rock some of the republicans' efforts to do away with dodd-frank. >> it is going to be very difficult. we hope to keep appealing to some of the republicans hope that we can get 1, 2, 3, or four
on a particular piece of legislation. kevin: who are some of the republicans you hope to flip? >> i don't know. i have friends on the other side. lucas is a friend. we talk, but for the most part they vote lockstep with the republican agenda. of the things that democrats in your own caucus have signaled that they perhaps would be open to is having a board of arbitration, getting rid of the director. i put that question to elizabeth warren, and she is opposed to that. are you open to having a board of directors leading as opposed to just one person? waters: i am with elizabeth warren on that. the we constructed this in dodd-frank reform, we knew that there would be a lot of opposition from wall street.
they do not want oversight. they do not want anybody getting in their way of the progress they have been making historically by the oversights that we would be doing. so we had to make sure that number one, they could not lock him by going through the committee and they could not tie him up with a commission. seemingly --ats you are against the tpp are you happy that president trump withdrew from tpp? we do not know what the republicans are going to do. they are the ones who wanted it. very badly. so it is going to be interesting to see how trump is going to deal with his own party on that issue and whether or not they are going to resist him. but we like the fact that he removed us from tpp. infrastructure is another area where democrats could
seemingly work with the white house on an economic stimulus plan that many in the tea party would oppose. waters: this is a big issue with democrats and with obama to do infrastructure repair, to create jobs, deal with our roads, bridges, and sewer systems. but again, trump is saying that he is for it. but then the republicans are saying they do not want to spend that kind of money. so let's see. hasn: how influential senator warren been in rallying democrats and keeping them together, especially even in the house? waters: i think that when she speaks, people listen. i worked very closely with her because she is on banking and i am the representative on financial services. i think people listen. we need to make sure that we -- vonnie: that was congresswoman
maxine waters with kevin cirilli per he joins us now from capitol hill. kevin, thank you for that. let's move to something that donald trump, the president, i announced this morning, that he would be talking about his supreme court pick next week. we are going to know who it is next week. kevin: yes, and of course he is going to have to pick several names. he put out during the campaign trail a list of conservative picks that he could potentially pick. obviously a lot of conservatives are going to be watching to see whether or not he sticks with that list of some of the picks on the supreme court. it again, fulfilling a campaign promise that he espoused during the campaign season. wonder the degree to which this is going to be collaborative. the senate majority leader earlier today saying that he has been asked to come to the white
house, that the chair of the senate judiciary committee will be meeting with the president as well. to the democrats hold out optimism? kevin: they are not. i believe the democrats will do everything they can to block the --inee, whoever the predator -- whoever the picks. i can tell you here on capitol hill, all attention is still very much from the democrats' point of view watching over these appointee picks. nick mulvaney faced tough questions about how he will leave the office of the budget. he faced one question from rising democratic senate star kamala harris from california, who pressed him on whether or not he would give emergency relief funds in following a natural disaster, raising the issue of his opposition to hurricane sandy disaster relief
fund versus his support for disaster relief funds in south carolina. while democrats will not be able to block a supreme court nominee or even president trump's appointee picks, they are very much working to define and characterize those picks. actionsmore executive taken in the first day or two at the oval office. kevin: absolutely. earlier today we saw executive orders coming from the white house regarding a bevy of energy and pipeline executive orders. on what thedesigned white house is pushing to spur economic growth. it comes following executive orders with trump announcing that the u.s. has withdrawn from the trans-pacific partnership, and it also comes following another day of meetings with ceo's. earlier today, he met with automakers, and yesterday he met with his manufacturing counsel.
clearly, in the first two days of hisfirst is this week first full week in office, he spoke on the economy. vonnie: kevin cirilli, thank you. the white house correspondent from capitol hill. david: press secretary sean spicer, talking to reporters. he just confirmed that we will get a supreme court nominee next week, also saying that the trump administration has asked the securities and exchange commission to look at regulations hurting companies. the commerceo to department, asking them to report on manufacturing. he said that the -- he said that donald trump aims to rebuild infrastructure with american goods. he is giving his second press briefing in the white house. you can watch the rest of it on the bloomberg at live go. coming up, corey lewandowski. this is bloomberg. ♪
david: this is bloomberg markets. corey lewandowski, the former trump campaign manager, has rebranded himself as a way into the trump white house. matt phillips was asked why corey lewandowski does not think he is part of the swap that -- the swamp that donald trump promised to drain. the outsiders, doing away with the establishment. corey lewandowski, who is trump's campaign manager in the first half of the campaign, there were internally were some dustups with reporters. he left the campaign to be a cnn contributor. critics said that he was basically a trump surrogate on the air. he has since started his own
lobbying shop. it is literally two blocks away from the white house, sitting in his corner office. he can point out the window and say there is the president's bedroom. that proximity suggests not only literally the physical access but he purports to have, actually his ideological proximity to the man. his fealty is 100% to donald j. trump the man. any otherarily to trappings of washington. >> so that is his value, that he presents to potential clients, that he knows trump personally. basically going people that can further the ideological principles that donald trump has campaigned on. >> they are very direct in what they have described they will be
doing. their loyalty will not necessarily be to clients. their loyalty will be to the trump agenda. and if you are not on board with what trump is trying to do, then they do not want you. they do not want to spend weeks looking for a maybe. if you are not into this, we are not looking at you. that is the way lobbying has asked that is a backwards way from with a way lobbying has worked. a lot of the lobby shops are bipartisan. you usually have a republican and a democrat as your principles, and it is usually a one-stop shop. no matter what kind of company you are, you can find somebody who can give you entree into capitol hill. no matter who was in power. fealty is to donald trump and to his agenda. if you are not on board with that, they do not want you as a child. -- as a client. david: hear more from magazine
reporters on saturday and sunday on bloomberg television. vonnie: coming up on "bloomberg markets," jimmy dillon on big bank m&a in 2017. that is next. let's look at the majors as we head to the break now. the nasdaq earlier hit a record, up 0.8%. at 55.98. -- at 5598. u.s.,-year yield in the including oil futures, up+++
scarlet: we are live at bloomberg world headquarters in new york. we are covering stories of calvary, washington and hong kong. stocks holding near the session highs with homebuilders among today's big winners. the dow within striking distance of the 20,000 mark yet again. a gauge of the dollar falling for a fourth straight day. in a major departure from the obama administration, president donald trump has taken steps to advance the keystone and dakota access pipelines. implicationsat the for the north american oil industry. in a few minutes, we will hear from long time dealmaker jimmy dunn. his outlook for the financial under donald trump and the regulation. u.s. markets close in two hours. let's look at where stocks are trading. we are getting close to that
20,000 level. >> we are looking at records. we do have the nasdaq and s&p 500 on pace for record closing highs. this niceking at rally and a nice turn of events. look at the dow transports up more than 1.5%. a bit of a reversal and pullback yesterday and we see a wider trading range for the s&p 500. andop into the bloomberg look at the daily trading ranges. in yellow, we are looking at the full integrated trading range. something we have been talking about is the intraday volatility but the closes have been nine. right now, we are two hours away from the close but we are relatively close to the full intraday range. it's interesting to see that
relatively soon we could break 31 days without a 1% move higher. today, onebig story of the big stories, president trump taking steps to advance construction of the keystone pipeline and dakota access pipeline, helping some of the natural gas related companies. energy transfer equity owns a stake in the partnership company, so a lot of green here, expected to give this sector and these companies a bit more freedom and leeway going forward. many details are yet to come but the early take is positive. we have some green relative to earnings winners with dow higher, beating earnings estimates by 22%. there ceo is giving investors confidence the merger is likely to go forward, so dupont is up
as well. oliver: let's check on the bloomberg first word news with, chandra in the newsroom. ,: the trump administration has instituted a media blackout for the environmental protection agency. they are banning press releases or posts to the agencies social media accounts. the trump administration has ordered a temporary suspension business activities at the department. the senate foreign relations committee has voted overwhelmingly to approve south carolina governor nikki haley as ambassador to the united nations. by voice vote, the panel recommended her to the full senate and is expected to be confirmed easily. michigan environmental officials say flint's water system no longer has led exceeding the limit. that is good news for a city whose 100,000 residents have grappled with a man-made water
crisis. the lead levels are now comparable to other u.s. cities. the minnesota governor says he has been diagnosed with prostate cancer but will finish the final two years of his term. one daythe announcement after collapsing while delivering his state of the state address. he does not believe the incidents are linked. he says he will travel to the mayo clinic to discuss his treatment options. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. oliver: thank you. now for a special conversation on dealmaking in the donald trump era. schatzker is standing by with a chief who just advised on the biggest merger so far this year. dunn, that would be jimmy the cofounder of sandler o'neill and partners.
i wanted to begin by talking about the mood on wall street. i just came back from the world economic forum and talked to a lot of bankers, all of whom you know. i was surprised by what i heard. instead of using my words, i'm going to use larry summers' words. he wrote i'm disturbed by the spectacle of financiers who three months ago or telling anyone who would listen that they would never do business with the trump company rushing to praise the new at ministration. there is certainly some truth to that. the bankers i talked to seemed to call it over eager to highlight the good and down play the bad. what do you think explains all of this sunny optimism? peoplei think underestimated how bad the last eight years have been. night was anion
unbelievable thing to see. i forget has unearthed a lot of optimism and more of an attitude of can do. i don't agree with a lot of things larry summers says but i agree with the idea that optimism is a great stimulant for the economy. he says guest: confidence is chief for stimulus. and i think you have some of that and i think the appointments have been very positive. i am optimistic. we're going to give him a chance at a lot of the people he's put in place are fantastic. rexuld not have picked tillerson and i think he's a fantastic choice. i would not have picked him and i would not have had the nerve to put him up and he's been confirmed. i think a number of these choices are very good. into if we drill deeper what underlies the optimism, is it about regulation, tax reform or something else? financials,nk with
you have rates, regulation and return. member what it was, but it was a very good article. i think regulation has just gone so far. my view is a did a lousy job in 2006 and 2007. we were way overleveraged and nobody did anything about it. now you give those people the power to call a foot foul and put you out of business for a year. it'sroblem with that is not going to happen overnight. there's this belief that it's going to change but it's not. this is deep and cultural and we have moved away from common sense regulation, at least on financials and that is going to take a long time. i think you will see three rate hikes next year and in a year or so, a new fed chairman and i think that could be positive. erik: what about the unpredictable he factor? the president and his former
life, before he became the president, proved himself to be an unbelievable care -- and unpredictable character. we've learned a few things about the way he is going to conduct himself. guest: he is in critical. would becomeved he president. i was shocked and i watched the whole thing and he has been unpredictable but that's part of his charm. i wish like everyone else that he would not get on twitter every time somebody says something offensive, he feels the need to respond, but on the other side, some of it i kind of like. i think we've gone too far the other way. if everyone had a safe room to go to -- there are elections and are going to be consequences. if it didn'tif everyone go youru are an american, act like an american. erik: let's talk about your
business. you advise companies and financial services, brokerage firms, asset managers. if you look at your client base, can you see how the trump administration or the era is going to be good for those companies? what i can see is from election night until now. were up,ion is stocks the bank stop -- bank stocks and financials in general. what did you see as a result? we had 22 eckley deals at the end of the year. that is very telling. people are raising capital. i think the possibility of tax reform is the one thing that has to happen. there's also a risk here. we have a president who is willing to take risks. i am concerned about that to
some degree but we have paul ryan, who understands how to do things, we've got congress, we've got the house, there's an enormous pressure on all of them now to perform because if we don't get it done now, you won't get tax form. the minimum to see rates doubled in tax reform -- basically the only way to get out of our issues is to grow the economy. erik: what about the risk that he turns on finance? he passed up few opportunities to bash wall street. guest: i don't care if he bashes wall street. i don't care if he doesn't. what i am concerned about is if he's good for the american economy, that will be good for wall street. if he has a weak spot for wall street. we do care about is something for the economy and as
the economy is better, if the attitude is better in the effort is better, there will be plenty of business to do. he does not need to be pro-wall street, just worry about the things -- he should be worried about what he is worried about. odd: do you think it is that he has his choices favored something about the experience and maybe something else that people get at goldman sachs? think goldmann to sachs is a pretty good firm. i think they have been good for a long time. i've worked with them and i've worked against them and i know them and i've got nothing but admiration for what they do. factr two, i think the he's got people who have done very well in our system and our patriotic and want to give back and are not looking to make money but they have a boatload of money on their way down i
think is a refreshing change. i don't care if they from -- if they are from goldman sachs, i don't care where they are from. we know something about those people because they are in the process of or have already met the disclosure requirements, but what about the president himself who has not shown as his tax returns? iest: this is the problem -- don't support everything he is about or how he does it or what he does. i support the president of the united states. i would have supported the president if it was hillary clinton. the tax thing i don't get. it is disappointing he hasn't done it. he's not very charitable. everybody in new york does that, which unless he does it anonymously, i bet he's got some kind of reverse real estate deal where they paid him money. i don't care. his net worth is probably not what the world says and he's
insecure about that end i hope he doesn't use the office to inflate that while he is there because he has an opportunity to do great things. your firm advised on a $2 billion deal yesterday. as young as it is, where is it going and financial services this year? onst: last year, we advise 44 deals for about $15 billion, which is representative of a really good year. currency because of the trumpet election and three typeshere are of companies -- you are a seller, a buyer or you are not sure. there are very few real buyers. that is the one thing people don't really understand. there are people who are in the middle and i think you can see
that affect at secondary and tertiary institutions. i don't think the big guys will be in for a while because i don't think the regulatory position is going to be resolved for some time. erik: is there somebody in the market is going to roll up a bunch of banks? guest: you have a lot of great companies. we represented the bank of north i hadna in this deal and very little to do with it. my partner was the one who did it and i think they were so smart in the fact that they took the company which is a well-run company and you have the bank leaving tennessee going to north carolina. there's another company that can build dramatically during this time. banks used to sell it to times book or greater and used plus.de or generate 15%
are we going to get back there? things -- before the crisis, everyone would talk about you got three and a quarter or book, but did you sell the stock? for the most part, you can make a lot of money buying bank around book and selling them about 2.5 times. that has been a rule that has worked well for a long time. as far as the return, we require a third more capital. 15% return on equity is going to be difficult. you are going to look at between eight and 12 and that would be an excellent return. we areas book value, threatening to an half or three times. this deal got almost three times book for the company. they are fully valued. if we do something with the tax code, they are undervalued and that's the important thing. erik: the glory days may not be back that i can see you are
looking forward and hoping for the best. -- seniorng partner managing principal at sandra o'neill. oliver: still ahead, shares of verizon fall in the company's efforts to remake itself and off to a rocky start. we will have more on verizon's challenges of next. scarlet: and the daily news conference held by the white house press sector, sean spicer. he's commenting on a keystone and the coda pipelines, saying trump plans to ensure they benefit the u.s. taxpayer. you can follow along on bloomberg live go. ♪
verizon. shares are down about .7% after latestpany reported its results, showing become but he continues to face a slowdown in its core wireless business. let's talk about the quarter. i know earnings may not be as important with the yahoo! deal, but the core is disappointing in terms of it shows one of its core business is not doing so great. it is a tough moment for verizon. the stock is probably at a two-year low and the movement downward today has been pretty bad. i think what investors are surprised by is how difficult it was in the fourth quarter to keep their business. verizon has been known as the best network among all the carriers and didn't have to work too hard in terms of price cuts, but they did and it hurt their profits which came as a shock to
a few investors today. a noticeable decline in revenues across the board, not just in terms of how much they have had to spend to keep customers but less revenue across the board. to what should that be a treated? a lot of competition out there -- sprint has revived a little bit. hearve stolen the can you me now pitch man and a lot of people are looking at sprint does not and t-mobile is taking almost twice as many customers as verizon in the market. : what is it they are giving their customers that verizon is not? guest: the perception is it's not about quality so much anymore because they are all getting closer to having a decent connection and data rates. it's all about price and the giveaways -- t-mobile is known for letting people stream their videos for free. that is something sprint will probably get more into. verizon is still kind of the old
looks particularly tough in the contrast to his largest rival, at&t, which it is trying to buy or is trying to buy time warner and become a media powerhouse. carol: go 90 has not been a blockbuster for verizon, or at least not going as well as they had hoped for. if they follow through with yahoo!, does it start to come together in a better way? guest: they don't make any apologies for how slowly go 90 is coming along. they know it is going to be a long road. it's getting mostly teens, so most of us don't see it or have even heard of it. they feel like it is their core path. answerearly not the big they would get if they did a big megamerger. carol: if they don't follow through with yahoo!, they said
now it's not a first-quarter thing and hopefully it is a second quarter kind of thing, verizon is still looking through trying to figure out if they are going to go through with it. do they need yahoo!? guest: they need them desperately. usershey see is a billion that they can sell ads to. the hack has not helped that scenario much. the delay, it is trying people's patience, obviously, including investors. go 90 has not been a block esther success. as you look around the industry, you see google coming into tv with more content and you see cable wanting to get into wireless. verizon looking like it needs a stronger strategy. cory: on one hand, there could be a big acquisition looming out there, but are we looking to
short-term? they say we are going to have content when 5g happens. 5g is three, 4, 5 years away? maybe it's too short to look at the ultimate content pay off? guest: verizon would be the first to point to 5g as an opportunity, but it could be four or five years out. you have a changing dynamic in washington that might allow bigger deals, so some of verizon's competitors are taking advantage of that. they seem to have time to write to make a deal. verizon looks a little under strategized for its future. carol: you don't sound very up need. our telecom reporter at bloomberg news joining us. thank you.
scarlet: carol massar and carry carol massar and cory johnson. you can catch them on the bloomberg. oliver: time now for the bloomberg business flash. currency trading fell across major global centers, including london, new york and tokyo. daily trading for spots and swaps and options fell in october, down 2% from april. trading in north america fell 1.3% to $880 billion. cisco is promoting its new digital whiteboard as the answer to the failure of most videoconferencing hardware. the flat panel display with touchscreen and camera was unveiled today. cisco says it illuminates the need for multiple pieces of a quitman and would retail for about $5,000. it was created by their
collaboration unit accounted for 9% of their $12.4 billion revenue in its most recent quarter. pushing forramco its world's largest share of sales, saudi arabia plans to energy company, raising as much as $100 billion. among the banks being asked for proposals, goldman sachs and hsbc. that is your bloomberg business flash update. still ahead, the commodities close and the vti climbing on signs of opec compliance with promised production cuts. ♪
to join the rally in industrial metals. goldman sachs says it expects chinese them with to support the demand for commodities. gold futures retreating from a two-month high a stronger yield weaken demand for the precious metal. crudeok at oil -- the bti rising for a fourth straight day as iraq says it is close to implementing its share of how must reduction cuts. above $50 a barrel since opec and other producers agreed to output cuts. and staying on this cuts, one analyst from goldman sachs says countries participating in the deal is close to 85%. at compliancek and our expectation going into this production cut, you see significant compliance out of the gulf states like saudi a -- like saudi. we are seeing 100% compliance.
iraq, weike libya and expected to see supply increases . if you put together, we are on target for 85% compliance. ofthe big question in terms prices is how does the u.s. respond? we saw an increase in oil rig counts of 29, 1 of the largest we have seen in the most recent time and it's likely to lead to more supply in the second half of 2016. when you look at the upside price risk, we have a target of 5750. that's when we expect inventories to decline. cannot get prices too far above 60 because of the potential for a supply response first become significant. our base case is 55 in the second half of this year and 55 in 2018.
i think the key issue is you listen to what opec's rhetoric has been. it's not about price trading ranges but normalization of inventory. there are several reasons they want normalized inventory. for andces sit above why is this important? going in to the production cut announcement, we had the opposite. the backend is used for risk capital, so if opec can get that done to the curve, they benefit tremendously and it reinforces their market share strategy. oil prices,lity and they are issuing $70 billion of debt and the potential for an ipo, lower volatility leads to higher valuation. shale do you see rebounding in the united states?
>> the quarter over quarter increases likely to be 500,000 barrels a day. there is room for that due to stronger demand growth in supply the client and a higher-priced production around the world. if you get numbers too much higher than that, then it certainly come a problem. but the key is in the 55 to 60, the system can't accommodate the type of supply we see in the u.s. scarlet: we may see an even bigger increase since president donald trump assigned to memoranda advancing construction of the keystone xl and could access pipelines. joining is on the latest for what this could mean is our bloomberg news managing editor for energy and commodities in the americas. quantify for us what happened because the president signed memoranda that would advance
construction but did not green light construction. guest: as most things in the trumpet ministration, it's difficult initially to see what is going on. we have not seen these memoranda , but what we have heard from sean spicer this afternoon is that these are going to start negotiations with these companies and one of the things the president himself highlighted was he wants to see an exchange for moving these products forward, the use of u.s. steel in the pipes being late. scarlet: we were just forwarded the text of the memoranda and it willpresident donald trump help fulfill the campaign promise of initiating the process for approving the keystone xl pipeline. is this symbolic? yes.: and i think what is interesting is how far he's willing to go. bring inis this would
some of the tribes in opposition to the dakota access and ameliorate some of their concerns. it seems like he's going to ask for quite a lot in exchange for initiating the process to start approval. the keystone pipeline feels like it has been started and stopped and renegotiated. is this a chance to get something meaningful done coveys going to be an power for presumably the next four years? guest: it remains to be seen what the details of this approval would entail. if you are transcanada, you have ifbe think -- be thinking i'm using u.s. steel, how was i going to change the dynamics and economics? we've seen a huge decline in prices since the project was proposed. we have seen shares of trans canada, lifting energy stocks as well.
what does this do for the canadian oilsands industry? another way tos bring their oil into market. is theng we have seen difference in oil prices because all of that project -- -- all of that is stranded in canada and you have to move it by rail which is expensive and timely. ship ite proposed to potentially to asia and keystone xl is another way to move all of that out of the region. oliver: it seems right now most countries in the gulf region's are going along with the opec production cuts. if something like the keystone pipeline comes along and starts pumping oil and that moves prices down further, how does that change the dynamic of what's happening now in order to keep does prices higher? another source of supply
is not necessarily needed right now. you don't see a huge uptick as you are trying to curtail your own production to level eyes what has been oversupplied market. keystone xl, assuming it goes forward, assuming it reaches all the terms the president is asking for would still take two years to come online. so it is not an immediate fix. assuming the president green lights the construction of these and moves beyond advancing the construction, what's the next step he would take to fulfill his campaign promise of removing the regulation and letting the fossil fuel industry meet its potential? guest: i think you should look to see what federal land and offshore areas would be open to drilling. this would be one of the prime targets for the industry. getting the permitting process to drill on lands as short as possible. they have complained it has gone from six months to three years to get these permits through.
does this change the outlook for oil prices? guest: not in the near term. at any kind of movement requires a long lead time, so it could move prices going a couple of years out. let's get you a check on the headlines on bloomberg first word news from the newsroom. --emma: resident trump has invited republican lawmakers over to talk about the supreme court. the president announced he would make his announcement next week. senate committees have approved three more of president trump us cabinet nominees including ben carson at housing and urban development, elaine chao, and wilbur ross at commerce. the full senate will vote whether to confirm them.
rish prime minister theresa may has a new set of roadblocks before she can get the brexit process started. court in u.k. has ruled they must get the permission of parliament before triggering the countdown. the ruling came at the supreme court. u.k. withdraws from the eu treaties, a source of eu law will be cut off. by u.k.rights enjoyed citizens will be changed. therefore, the government cannot trigger article 50 without parliament authorizing that course. ma: that threatens the 31st of march deadline for starting it. some are concerned it could hurt the economy by jeopardizing trade to win control of immigration. approvedys it has been 25 west bank settlement homes. the majority will be built in settlement blocs, the areas where most settlers live and where israel wants to keep under
discoveries of pesticides. investors boosting confidence that the deal will close in june. regulators worry that the merger could hurt innovation and crop protection. fairfax financial is close to announcing a deal that would contributed to ling -- a billion dollars in financing according to people's earlier the matter. would go into the retirement system as early as this week. at $4.8 is valued billion. 43% of charter financial analysts can it's past the first of all of a three-part exam the cfa institute. almost 60,000 financial professionals that for the exam, a 14% increase from the previous year. hoursates spend 300
repairing and takes four years to complete all three tests. they can smooth the path to better jobs and higher salaries. that is your business flash update. oliver: let's head over to abigail doolittle for today's sector report. abigail: today, we are looking at the home building etf. we see a beautiful pop higher. a combination of data and earnings. existing home sales for the month of december did come in, and interestingly they fell. simply -- there are simply not enough homes for sale in the u.s. and that should keep prices rising. a future look suggest bullish activity ahead for existing home sales. 2016 was the best year in a decade, so some strength relative to the data. d.r. horton stock is up to
exploit 5%, on pace for its best day in more than year after they beat earnings and sales earnings to make $2.9 billion and adjusted earnings, very encouraging is the fact that orders for new homes rose by 15% , so another tell on the idea of future activity for the housing sector could be quite strong. paul d homes and lead are trading higher. as for the tight inventory, we we havereat chart -- the following inventory in white and in white and yellow, existing home sales. we see after the great recession and homes crash in the last decade, they nice tick higher with 2016 the best year over this entire time, being helped by inventories dropping to a 10 year low.
inces could tick higher 2016. scarlet: thank you so much. series,'s walk the talk we focus on social changes that have outpaced corporations ability to adapt. we spoke to the author of the " and she"own it explains why women have gone backwards when it comes to equality in the workforce. >> diversity has stalled. gender progress, we've see it in politics, but in business, for all the discussion and debate about the power of diversity, it has stalled and on wall street, it has gone backwards. prescriptionyour to get away from the happy talk of the recent decade? guest: four ceos, just do it. the impact of not doing it has been theoretical. you won't get the higher return on equities and the greater innovation but at some point, is going to become actual because number one reason lineal women
leave their job is tim make more money. -- he'sng back to 1999 made a success of himself and he says if you live this day today, it is not that hard. what is holding up the rest of corporate america? guest: it's because they do think it is that hard. it's so much easier to bring in diverse individuals and treat them like middle-aged white guys. your case,t, make ray sure hand for the p&l responsibility as opposed to pulling out of everybody do different things they bring to work to drive the power of responsibility. >> do we just need more diversity in the workforce? through transparency, we can fight for diversity. it's difficult to see where i should be fighting. guest: i think that is a great
onnt and, on today's show -- today's trajectory, we are a hundred years or 180 years away from pay parity. longer if you are a woman of color. that there are resources like that areraised comparably higher where we can see about how much we should be paying. back in my day, couple of years ago, when i would go for a raise, it was please give me a raise. today, it's this is how much i should be making and i can see it, so i would like that raise. the power is shifting. francine: what is the common misconception on how to treat diversity and how to be more inclusive? guest: i think the boards have not taken the bull by the horns. everyone says this is important to do but when your ceo shows up and says i know and i would love to put susie in that role, but jim gosch, he reminds me so much
of me, the board finds it difficult to reach into the company and question those individual decisions despite what the research indicates. tom: we have a research project here -- bring up the video of this weekend. this is extraordinary. got 4 million women marching. i get it. it's a huge deal, but how many of those women took trigonometry? you go right to it in your book and you say this canard that women can't do math is baloney and what people don't know is this was invented with your work with sanford bernstein. are you seeing more women say screw the stereotype, i'm doing trig? inventi did not trigonometry, though i do appreciate -- i do appreciate the koppelman. but there are several gender money gaps we have that cost us
millions over the course of our lives. will you -- women can go to their website and we put together a whole guide book. on is theam focused gender investing gap which costs women hundreds of thousands or millions and we still by the aussie and harriet mass is for guys and guys are better investors and women. neither of those things are true. tom: i try to think of the percentage of our audience who know who ozzie and harriet is. it's way back. gilligan's island, the partridge family. need to actively move away, here is is the place -- one that drives me nuts -- women needs more financial education to invest. and we are like you are right. i need more financial education, except guys need more also. final point.
oliver: this is bloomberg markets. i'm oliver renick. scarlet: and i'm scarlet fu. president donald trump says he will announce his pick for the supreme court next week. joining us now with the latest is our bloomberg supreme court reporter. what have we turned -- what have we learned in terms of the likely nominee? guest: a couple of names have moved to the forefront. there is a judge on the 10th
circuit in denver who has been on the court for about 10 years, he was on donald trump's list of about 21 people. he's one of the front runners and could well get the nomination next week. this isobviously, potentially something the senate will push back on if it takes someone who is not mainstream. i don't think it's the most republican area in the u.s. tell us about this guy's background. guest: in some ways, it's like the other supreme court justices. he went to harvard law school. he does provide some geographic diversity. this is a court that is heavily east coast oriented. he has a solid conservative track record. has been a big proponent of religious liberty. he is not someone who has made really flamboyant statements.
he's not as potentially controversial as some of the other people who have been on donald trump's list. he is someone that would make conservatives happy to have on the court. one person to watch is a man named tom hardiman, a judge based in pittsburgh on the third circuit. he has a little bit of a different background. he is of a who drove a taxi to get himself through college. he's quite conservative. ruling that folks on the republican side are going to love involving gun rights, saying new jersey was going to far restricting the ability of people to carry guns in public. he presents a little bit of a different image very conservative and would be a solid vote for that side of the court.
vet theseen they guys, what are they going to ask? guest: they both have extensive track records of rulings and there will be documents that will be produced and they will be digging into the background of their speeches. anything they have said or done will be fair game. you can imagine it will be a divisive supreme court fight. we look forward to that and more drama. thank you so much. path tocoming up, the higher rates will be marked by significant volatility. we will talk to a portfolio manager about what he sees next year. ♪
oliver: we're live from bloomberg world headquarters in new york for the next hour your plus, covering stories in washington, dallas, and chicago. here is what we are following on the bloomberg and around the world. the s&p 500, the nasdaq on pace for a record close. homebuilders giving a boost to the s&p 500 after a strong quarter. in energy, president trump has taken steps to advance the controversial dakota pipeline, a major departure from the obama administration, likely to revive a bigger -- bitter fight with environmental activists. as the this six-week low treasury secretary nominee steven mnuchin echo the president saying an exclusive -- a strong dollar could be bad for the u.s. economy.
there one hour away from close of trading. abigail: we are in rally mode, look at nice gains for the dow .&p 500 and nasdaq the s&p 500 and the nasdaq have put in all times record highs today and on pace for a new record closing high today. the dow is less than 70 points away from the all-important down 20,000. look at to thousand, up more than one point 5%. the small-cap growth index the way.ading a lot of strength for u.s. stocks. we do not have 1% move for the s&p 500. we take a look at btv 5611. the daily ranges for the s&p 500. the top movies 1% higher. it has been 31 day since we have had 1% higher. lower, the last time that happened was back in 2006.
we see the last round of relatively complete training within this range, then produced some volatility. after that in august, we saw a bit of a sellout in august. here, we had the big election rally. dell -- as for the dow 20,000, there is one technician who had said on bloomberg tv, they came within a point of down 20,000. that will not happen. this is btv 2026, it does not reflect conn's work. near term, wehe are looking at the reversing uptrend on this complacency. willhart suggests this dissolve to the downside. thisquickly, supporting risk on day, we have it trading lower, the 10 year yield higher.
thedollar is rally against yen as a currency trades down. scarlet and oliver. oliver: interesting. sometimes, a lot, he was right on down 20 k. thank you. scarlet: let's get a check on the headline this afternoon. president trump says his administration is bringing manufacturing back to the u.s. the president met with ceo's is a general motors, ford. we have many other plants. you are not being singled out. -- a lot of plans for a lot of different items. bigley.ppening saidesident said -- trump
the writing tory climate is now out of control. willirector james comey keep his job and said president trump has asked him to stay on and he agreed. during the campaign, mr. trump harshly criticized the fbi for not bringing criminal charges against hillary clinton for her use of a personal email server. trump said he has not make -- made up his mind about whether he will ask james comey to resign. president trump inherited a stable economy and contract for a billion dollar budget deficit for an ongoing budget year. economy is holding relatively steady. gop led a move to appeal to the health-care law and reform the tax code. oscar nominations are out and it has been a record day for la la land. 14 nominations matching it with titanic for the most ever.
best picture and best actress for ryan gosling and emma stone. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. president trump taking steps to advance the koch marshall keystone" a pipeline. energy transfer partners higher on the news. joining us from the white house is margaret. here is bloomberg's economic and policy -- this was taken to a presidential distinct from executive order. tell us the difference. >> that is right. trans canada and the others on the to code a pipeline and the third is on the deal of everything has got to be done with the u.s. made products and workers. an difference between
executive order and a presidential memoranda, in an executive order, it happened. a direction to agencies and outside groups, and expression to congress, it may loosen up the doors and get things moving but there is a lot of devil in the details. is an encouragement, and direction to agencies to look at things quickly and nowhere president trump is coming from. negotiations, as was put today in the briefing, has not yet begun. oliver: devil is in the details. what you find? any devil or anything at all? >> one of them has something interesting in it, the call for looking at regulations that impede american manufacturing, construction of new plants. asking for a collection of comments on that that would help
them guide regulatory process going forward. you can say he did something. in the others, he is saying i like pipelines. if you want to reapply, i am in favor. the -- within these, the army corps of engineers, the regulatory bodies involved in the pipelines, are directed to follow law in determining whether these pipelines go forward. neither determined either project should go forward. back on president obama canceled keystone, did not take a position. recently, the dakota pipeline was postponed. >> it seems like the pipeline conversation went from politically charged, environmentally focused conversation to whether or not it benefits the u.s. in the most optimal way. is that a fair assessment? >> you are right on the money. partyncides with which
the president belong to. when president obama was in office, it was not the most burning issue for him. in the beginning, you could not understand why this was the issue a lot of environmental's wanted to go on the mount on. there were huge political implications perceived in terms of democratic party fund-raising and the primary election site heading up to 2016. part of the reason president obama has faced so much pressure had to do with democratic politics. thatdent trump signaling he is sensitive to various concerns around the pipeline politically, and i have been saying for the last couple of -- the jobe is message, some of these groups, steelworkers and other union members who may traditionally have voted democratic or for whom these are important
buzzwords, that is what we are seeing now. honest: i like a margaret in on the political messaging and the environmental side of it. on the impact of the pipelines, have there been studies that showed they would benefit the u.s. economy? >> only a little bit, which is why it was more theater for president obama and president trump as well. pipeline is part of a pipeline that was already built. it would generate 4000 construction jobs over two years. for af those seasonal couple of months and another 40,000 jobs or so. for two years. permanent jobs for the keystone pipeline, 35. for the access pipeline, permanent jobs, 40. long-term, there is not a huge economic and if it. i checked with those at bloomberg intelligence. basically we are taking oil and
moving it out of the way as not adding to the amount of oil we will have. no real impact. we are moving things around. no real impact on oil prices. >> despite the fact that this will move around -- move along, you're also avoiding the potential of verse impact of the production. in the end, what does it accomplish. worried about keystone. canada, more environmentally destructive, that was the big issue for democrats and environmentalists in the beginning. >> thank you so much. oliver: coming up, the path to higher rates can be marked by significant volatility according to our next guest. we will speak to joe about the rate hike and the implications
markets. oliver: let's get back to the markets as the fed prepares to hold its first meeting of 2016. is the managing director who has about $880 billion under management. he manages the bond fund. let's jump in. a conversation is emerging about the end of the bond bull market. it shifted from whether or not it's the end to what level it is officially the end. where do you stand? >> it is a term. rates will likely rise. the u.s. economy is doing well and with the administration, we have a significant amount of stimulus coming on. how much occurs and in what form has yet he determined. it is not necessarily likely in our view that rates will skyrocket and rates will have runaway inflation. we have growth around the world. a lot of slack in the u.s.
latest illustration of where members projected to be, -- e looking at >> chair yellen wants to sustain growth. not going to be shy getting started with one rate. >> i want to talk about expectations and whether or not they have come too far. i want to dive into the terminal. investor sentiment. when they get sure, it tends to
, we have seen it happen twice this year. the most any year, as you can see here now. i say, these repeat themselves and we have a long way to come down in yields. >> we still do not know exactly what it will look like. we do not know what consumer spending will show us. sentiment is still mixed among different groups. we do not know how many workers who have been out of the labor market will get back into the labor market. a lot of unknowns. a think there will be moderate amount of equity. a diverse portfolio with enough instruments that can do well in
a rising rate environment. also, the risk of a recession has pushed it out. >> it is interesting. .ou have been buying bonds emerged,latility that will that be going to the wayside? >> in our view, that depends on how fast rates rise and whether or not we see rates grow to an unsustainable level. if rates move slowly, there is no reason the bond market and the credit spread -- if rates move quickly, all bets are off. scarlet: right now, rates are stuck in this range. 2.956%, it has just kind of been meandering and holding right now.
the relationship between the 10 year yield and the dollar. which one is driving which? driving0 year yield is -- the dollar in fact is driving the 10 year. administration wants to create u.s. jobs and stimulus. that will drive the economy and eventually, cause rates to move higher. we have foreign players wondering now to what extent it is sustainable. it makes the administration's job tougher to get done. there is an iterative function. market,about the bond lookingestors overseas at their own sovereign bonds yielding negative or close to
saying let's get movement in terms of the price appreciation, if now those start to weaken and get yields, does that hold it out from u.s. bonds? >> it would, but we are not there yet either. , probably more important than the comment in the next two months, it continues to be over here coming out with their tolerance for growth. scarlet: that is more of a move for the euro and how it is if the dollar and how it plays out for treasury. it. about what is moving up, a lot of these measures are sort of already getting to the point, i guess the jobs get better, people get paid more. >> correct. people retire later.
we've traded sideways. the volume has been about three quarters of normal. volatility seeing relax. you see prices move higher. there is still a lot of angst and uncertainty. i have to ask you, will we see dow 20,000 or not? about 70 points away from that. yes or no? >> i don't think so today. i was looking forward to this happening this week. the chinese lunar new year marketsg, typically the make a move and you see a big push. ofdo you think the range complacency we have been stuck in, is there a reason to think this could really bring to the downside? and i have been
optimistic and mallet be negative in the vix. the victim and in the channel for most of the last year. bolo 12, target 10, i have talked about getting below a couple digit level. >> impossible to predict the trigger for pullback especially after the big rally. if you took a stab at it, what are the guys and gals talking about? learned isg i have to not focus on politics as much. focus on price action. anything and everything can impact the markets. i view that as more of a positive when it could have been maintained its stability. prepareds have to be to control risk. >> so valeant, you have a bit of a bearish trade.
>> actually, it is alleged to neutral. the stock has gotten completely beaten up. into a stock i want at a lower level, or get paid not to. you're taking advantage of probability. this is a way to get into a stock at a level not seen since 2008. optimism andr thank you for your time, as always. scarlet: thank you, abigail doolittle. two thirds of 1%. points shy of the dow 20,000. >> it has fallen short of the s&p a little bit. the dow is pretty much flat and only it is -- 80 basis points on
conference on the 28th. this will be an opportunity for the people and representatives to hear directly from our new president about his this -- vision of our new shares agenda. income -- incoming presidents are invited typically to speak. canada and mexico in 30 days to discuss his plan to renegotiate the north american trade agreement to protect training. canadian officials seem more concerned about avoiding unintentional damage about the economy and has not been given details but he claimed it for the loss of u.s. who called it in u.s.t trade deal history. the president half pick for budget director the -- says -- testified