tv Bloomberg Markets Americas Bloomberg January 25, 2017 12:00pm-3:31pm EST
david: from bloomberg world headquarters in new york, we will take you from mexico city to washington and london in the next hour. here are top stories we're following this afternoon. the dow jones industrial average climbed past 20,000 for the first time. stocks around the world extend the rally. interview with the cio that will center on global market risks under the new administration. in politics, president donald trump plans to act on two of the most fundamental and controversial elements of his presence will campaign, building a wall on the border with mexico and tightening immigration policy. us now doolittle joins with a look at the markets post doubw 20,000. abigail: the dow is above 20,000 mt of record highs in the s&p
500 and the nasdaq as well. an extension of the rally that we saw yesterday plus the global rally. and shifting mood up head of technical analysis at interestingly though, the head of technical analysis at oppenheimer sees it as a momentum of the past. #btv 5310.ook at g doubt 20,000 is the second 1000 point gain. it is the second longest doubling for the dow in history, back here between 625 and 1250. it has taken about 18 years since alton thousand since dow 10,000. as for the s&p 500, it's not all about the dow. what the s&p 500 has done relative to the last 10 presidents over the first 100 days has mainly been pretty bullish.
seven out of the last 10 times, the first 100 days for new president in office, it has resulted in games. perhaps this bodes well for president trump and we will see an extension of the trump trade. we do have earning winners like boeing. all these companies beat estimates. upgraded shares of seagate well there are multiple levers to pull going forward. rockwell automation beat by 21%. they also raised the midpoint earnings above the consistenc cs estimate. boeing beat earnings by 4.6%. he was a little bit worried about guidance, but with the stock up, it seems investors are looking past that. confirming all the strength and the risk on activity we are seeing from the financial markets, we do have precious metals trading lower. gold, silver, and palladium lower. palladium is on its worst day
for august -- since august 2014. it is coming on bloomberg dollar index weakness. typically will help commodities trade higher, but it is a signal that is a risk on day for the financial markets. vonnie: thank you for that update from our markets wall. we will speak exclusively with kyle bass. that is next, but first, a check on other news making headlines. but go to taylor riggs. lor we will hear more about president trump's plans for a border wall today. he will visit the department of security where he will plan on revealing plans for building the wall. he has repeatedly said he will make the mexican government pay for it but may tap for existing funds at dhs to get the process started. president donald trump says he will order an investigation into voter fraud. trump won the electoral college
but lost the popular vote by almost 3 million votes. he has repeatedly made the claim of the 2016 election was tainted by massive voter fraud. in a tweet this morning, the president said, "i will be asking for a major investigation into voter fraud, including those registered to vote in two states, those who are legal, and those registered to vote who are dead." rebel gunmenmist from somalia fought their way into a hotel after a suicide car bomb exploded at the gate. dozens of people, including lawmakers, were thought to have been safe at the time of the morning attack. at least eight people were killed. n bolt has been stripped of one of his nine olympic gold medals in a doping case involving his teammate. the ioc says carter tested positive for a banned stimulant and a testing of samples from the 2008 beijing games. the committee says the jamaican
team is disqualified and all metals have been withdrawn. 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. david: doubt 20,000. we're here in part because donald trump the administration may be more business friendly, but there are fears about protectionism rhetoric. erik schatzker joins us now with kyle bass. .rik: great to see you let's begin with this. what is new is news. how does trump change your view of the world -- broad strokes? kyle: trump will change from both economic policy and foreign policy that it will take broad, big steps in the world. we think about it from an economic centric perspective as well. theike to read all
geopolitics, but from an economic perspective, his plans to lower the corporate tax rate from 35% to 20% or even as low and bring entering with it accelerated depreciation as well as a honeymoon but a specific time where you can bring back the offshore capital. all those things are going to be extremely stimulative. it will start favoring labor over capital, which we have been favoring capital for the last decade or so. if you get accelerated depreciation, you will see real capital investment. if you see real capital investment, may be the productivity numbers that have done nothing but go down in the united states because the capital being used has been engaging and share buybacks and dividends, which have zero productivity associated with them. we're going to see real capital investment. we are going to see trade competitiveness from our corporations.
we are going to eliminate off shoring and europe stealing our tech space. we are going to get fair shakes and better deals with our trading partners. all those things are going to happen at basically full employment. we are going to see a very stimulative environment as trump is successful in his endeavors. it's want to be very positive for the united states and slightly negative for the rest of the world, but it's not like a globalist nightmare in my opinion as they are trying to make it. we have talked off-line. athink the u.s. has been which give her enterprise take her for the last decade or so. wage takeo be a which tak her. r. erik: potentially inflationary for the u.s. economy. better for the u.s. at the expense of the rest of the world. is as simple as short rates and dollar strong? kyle: if you need to boil it
down to a soundbite, i would say yes. their idiosyncrasies in every trade relationship. the question is how do we pay for it? had we pay for cutting the corporate tax rate? it is my view and argue at the firm that the border text adjustability is the only way to pay for it. is basically taxing the trade deficit. it is broadening the base and forcing your trade partners to pay for the cut in tax. it's actually very elegant. in 1990, feldstein and paul krugman actually agreed on something. on the-authored a paper positive attributes of border tax adjustability. i think one could make it a bipartisan success as long as the special interest groups in the u.s., i.e. the retail federation, walmart, nike, the people that have supply chains offshore lobbying like hell against it.
if trump runs into enough resistance on border tax adjustability, he will use his authority at the commerce department to enforced tariffs. erik: how did you play the election? playing thee not election going into the election, but what was interesting was, as many people know now, when you saw trump holding the lead in florida and solidify his lead in the upper mississippi river area, the markets made it very irrational moves, especially global chr currencies. it went into a risk off and dollar weakening scenario when if you studied the various participants, they were all going to be progress. -- pro growth. trump was going to be the most pro growth of them all. we took a large position in
global currencies that night. erik: like carl icahn, you are investing. kyle: in huge amounts because we thought the world was misinterpreting the win. fortunately enough, you get something every now and then right. that one seemed to be a little easier. erik: was that equity trade? kyle: it was all currencies. currencies and rates. erik: are there any natural trump trade right now? because some of the stuff has played out. kyle: says who? erik: to a degree. given what i think just went through with you, real rates in germany are at the lowest level ever right now. inflation in germany is spiking. it's not even moving in a linear fashion. you have even seen members of the ecb and the bundesbank speak today about the fact that i think we are going to see
inflation running much hotter than any of the central banks thought it would. therefore i think the move in bonds is just beginning. ,rik: if what you say plays out the natural course of action would be for the ecb to raise interest rates. kyle: yes, it would be a combination of tapering. he is going to have to taper some more and possibly raise rates. erik: how soon? kyle: i don't want to speculate there. what trump is going to do is speed everything up. erik: you have been out with a bearish view on the chinese banking system. a lot of people say you are bearish on china, but it's errors on the banking system for about a year now. what if anything about your thesis changes with trump? kyle: you have to study the background of everyone advising trump on china.
whether it is wilbur ross or navarro, read the books and blogs. erik: maybe a little bit of rex tillerson, too. kyle: what they are all doing is saying that china has got the better of us in maybe the last 8-10 years. i tend to agree. what is important about that is developing the lens that the white house is going to be looking at china through is really important as an investor. my view is that somewhere between free trade and 45% tariffs is where we are going to end up. profound comes consequences. some of those are economic and some of those are geopolitical. hek: it is important whether -- trump and his administration choose to take on china
through established channels or choose to impose a tariff like 45% or something less. what is most likely and is that part of your thesis now? i've never met trump himself, but i don't know what is most likely. what i know is what i just said. somewhere in that continuum is where we are going to end up. the only way to pay for corporate tax reform and its sense iss fullest through border tax adjustments. erik: let's say for arguments sake the united states imposes some kind of a tariff on chinese imports. this might be important to your thesis. how does xi respond? kyle: they have a plan for response. the first plan for response is economic. the question is does all this economic wrangling really start a fire that ends up moving into a kinetic response in the south
china sea? it is something we hope does not happen. the big question is where is this all going as far as trade? armed look back at conflicts, i think they are all rooted in some sort of economic -- whether it's a grab or malaise. what we are headed towards is some sort of -- here's the issue. china's banking system has been recklessly built. this idea that china is an emerging economic power and is now the driving economic power in the world, i think, is illusory or somewhat of a fallacy. they built their credit system in 10 years while they have only grown gdp 500%. they recklessly built a system that's going to need to restructure. that just so happens to be metastasizing right when trump becomes elected. the world is a multi variable a question. what is happening to china will happen on its own on top of the
fact that trump is going to get a better deal for the united states. those things are going to cause profound change at a time when xi is consolidating his power and entering the 19 party congress this november. this is all happening kind of as a confluence of events that were completely unplanned, but they happen at the same time. erik: sounds to me like you have more conviction. kyle: this is a fire that has been smoldering. erik: trump is an exce accelerant. kyle: trump is gasoline. erik: what about the counter arguments you have heard over and over again? things appear to be improving a little bit for the banking system. deflation is less of a threat and corporate profits are improving in china and deposits keep growing. they have a different funding base than other countries, largely domestically deposit funded. basic thesis there is
that we all believe in the omnipotence of the chinese party.st they can throw any lever they need to throw because they are internally funded and none of these problems will happen, i.e. economic gravity will never take over. in the last 18 months, credit in china has grown 6.5 trillion. let's use dollars so it's easy to discuss. it has grown $6.5 trillion. deposits are growing $3 trillion. credit is growing exponentially, so they are having to fund enormous moves in credit growth what we call running at standstill. that is where the banking system is today. think about the emergency injections they have had in the last two weeks. they have clamped down on capital outflows dramatically. china wants to be a global reserve currency. there are many people that already counted as one. how many global reserve currency's had to raise overnight rates to 120%
annualized to stop outflows? i don't know. there's a dissonance in everyone's belief that china is the power that they say they are. erik: let's talk about how you are exposing your view. people believe and think that you are short the chinese yuan. is that the case? kyle: i'm not going to talk about specific positioning, but i will answer your question in another way. the ultimate arbiter of my argument versus anyone else's currency.s the if i'm right about the baking system, they will have to recap the banking system. if they have to recap the banking system, the currency will be worth a lot less. erik: the reason i ask about the you want is not just understand how you express the view but also to understand whether there are collateral traits to be made. like the hong kong dollar pegged to the u.s. dollar. do you express your view that way as well? kyle: i don't know how many by thees are recognized
u.n. today. i think it's 190 some odd countries. let's say it's 200 countries in the world. 's top trading partner is china. when you look at relationship with china, whether they are pegged elation ships or managed relationships with their currencies, those three constituencies are worth investigating. when you look at who china's is trading partners are and what desk effects will be naturally imposed on their trading partners, then you high-grade those. the answer is yes. there's primary damages. their secondary and tertiary. those are something that we has spent many years thinking about. the asia-pacific region clearly is going to have maybe a proverbial race to the bottom because it's the only way it can happen. that has profound implications for equity markets. erik: is it safe to say that you are short those currencies? kyle: it is safe to say that the
asian theater is where we haven't focused for three years. and we have done a lot of analysis on who we think it is going to be impacted the most. erik: the conventional wisdom is that trump is that for china. trump is bad for mexico. trump might be good for populism and europe might be good for russia. what is your view on russia? kyle: let's talk about economically first. russia have the ruble trading around 30 to the dollar. russia's economy is primarily driven by crude. let's say when crude prices fell from 100 to 27 and are now back to 50, russia decided to take the adjustment all in one year all in their currency. the currency went from 30 to 80 rubles to the dollar. it is right i around 59
rubles to the dollar. russia understands the world as well as any finance ministry in the world. there some of the most towns economic thinkers in my view. when you think about the way they took that adjustment, they still maintained the current account surplus. growth,eady backed 2.5% albeit lower growth and they want. they took that adjustment through the currency. china is between a rock and a hard place. china is between a rock and a hard place. what happens to an economy when interest rates start moving up globally? erik: so just to put a finishing touch to it, short china come along russia -- short china, long russia? kyle: that's a good place to start. erik: he is kyle bass. vonnie and david, back to you. vonnie: thank you for bringing us a completely fascinating interview. let's take a look at where stocks are. the dow crossed the 20,000 mark.
up 7/10 of a percent. it just keeps going. bowling up 4.5% and caterpillar up one point 75% -- 1.75%. united technologies is lower. youtry market movers and can see all the major indices in the u.s. are in the green, led by the dow and s&p 500. we have the bloomberg dollar index down a quarter for percent. the canadian dollar also benefiting there. inventory figures really affecting. u.s. treasury yields selling just below that 2.25% mark. this is bloomberg. ♪
vonnie: this is "bloomberg markets." i am vonnie quinn. and david gura. we expect to hear from president trump where he will reportedly unveil specific plans to unveil a southern wall on the border. there are two things in the works with one plant to build a wall on the southern barter and immigration. what do you expect to hear from the president? kevin: i think we will hear broad terms on how he will and not his immigration policy. earlier today vice president mike pence was seen with nikki haley as well as senator marco rubio, to individuals who played a role in the republican immigration debate. this is fulfilling a campaign promise that president trump you spouse multiple times on the campaign trail. several folks on the campaign trail wondered whether or not he was speaking and sarcastic tones
or whether or not he would actually implement his plan. clearly when he is speaking later this afternoon and just about an hour, i wouldn't his pit lots of people are going to be paying attention to whether or not he will specifically do what he said on the campaign trail. vonnie: kevin, is there any possibility he might try to undo some of what a lot of people said was some damage when he spoke in front of cia personnel a few days ago? kevin: i think that you will see a different tone in terms of his rhetoric with intelligence officials. i can tell you that i speak with capitol hill aides. they were somewhat concerned to say the least about that tone. they are also going to be seeing just specifically how republicans in congress will be able to work with president trump to enact these immigration policies. again, the reality of governing is something that president trump and his staff are now
having to face, particularly on the building of a wall or increasing border security along the u.s. and mexico border. that is going to require government funds coming from the budget committee. those funds and those allocations, that is a process in congress that quite frankly perhaps they are not going to be as ato move as fast timetable as president trump would like. vonnie: thank you, kevin. david: we will be checking with him later this afternoon. president trump is announcing his plans in about an hour. we will get an insight from republican michael mccaul. that is coming up next. bloomberg.ebir ♪
open and still above, 20000 and 55 points up above. .7%. nasdaq up .6% and the just barely beating the dow. let's head to abigail doolittle for an idea of what is pushing this dow jones industrial average as high as it is. abigail: one stock is definitely helping, boeing shares are up. one of the top performers on the year and one of the top dow performers since down 19,000 back on november 22. shares are trading higher after boeing beat earnings estimates. dreamliner washe behind the strength. george ferguson said overall this is a very strong, solid quarter. one thing that stood out to him was the fact that guidance was
light and he was disappointed by the 9% margin for the commercial segment, but the military segment had an 11% margin which he said was really quite solid. you would think the military margin could help the defense contractors, but we look at lockheed martin and general dynamics and looking at a lot of weakness here. this is probably more of a reflection that lockheed martin offered a 2017 earnings below estimates. this is one of the best sectors since the election. #btb 5702look at g since the election. in orange we have raytheon. they are all trading higher. we see that general dynamics is outperforming in a big way, up about 14% since the election and douglas says this have to do with the company's exposure to
the shipbuilding activities, something that has been supported by trump, while lockheed martin is weighed on by that view and fears along -- around cost-cutting. vonnie: thank you for that from our market wall. let's get to the headlines on first word news. taylor riggs is in the newsroom. hotel: president trump's management is planning to triple the number of hotels in the u.s. and will open the first of the properties this year. that is according to the trump hotel ceo. the hotel business consists of branding and management projects. they manage eight namesake hotels in the u.s. president trump is getting closer to naming the nominee for the supreme court. the president will announce his pick february 22.
-- february 2. three were nominated to their current posts by current president george w. bush -- former president george w. bush. -- after lawmakers demanded greater scrutiny in parliament. separateis the question of publishing the plan i have sent out, a bold vision for britain for the future. i will do that in the white knowsand the gentleman one of our objectives is the best possible free-trade arrangement with the european union and that is what we will be negotiating for. was speaking to lawmakers in the house of commons. rescue crews have recovered more bodies in the room -- in the rubble of a hotel the stride by an avalanche. rescue workers continue to search for victims. 6 people are still unaccounted for. global news 24 hours a day, powered by more 2600 journalists
and analysts in more 120 countries. i am taylor riggs. this is bloomberg. david: thank you. big daynt trump tweeted " planned on national security. among many other things we will build the wall!" he is expected to make an announcement in less than an hour. early i spoke with michael mccaul who chairs the house homeland security committee and asked if he shares trump's enthusiasm for building a wall on the southern border. >> we have been trying to get this border secure for the 12 years i have been in congress and i think we finally have the political will to do this. i think the question is what is the wall going to look like aunt how is it going to be paid for -- going to look like and how is it going to be paid for? it calls upon congress to authorize and fund the implementation of the wall. i have had discussions with the
current secretary of homeland security, general kelly and i think it will involve many things in addition to a brick-and-mortar wall, it would include fencing and i think it will have the technology, be able tosets and achieve visibility from the sky to see what is happening on the ground. the term wall is a bit symbolic, but it does stand for securing and gaining operation control of the border, which is a big campaign product -- promise and pledged the president made and i actually advised him on it and agree with him. vonnie: all along --david: all along the campaign, the candidate was saying mexico would pay for this. what has changed and how do you convince taxpayers this will be more than just a very expensive symbol on the southern border? rep. mccaul: that is a great question, i think what will
happen is we will have an emergency supplemental bill that we call to congress that will have emergency funding to pay for the beginning security measure and then i think you will be looking at how is that going to be paid for down the road and i think there are some creative ideas i have been coming up with and others in the congress where the taxpayer makes the initial down payment, but then eventually the security measure is paid for by things securitying a border fee on visa applications from mexico and central american countries that are the biggest offenders of illegal immigration . things like a border security fee crossing the border and looking at remittance going from the united states into these countries, a border security fee attached to that. innie: i want to get --david:
want to get a sense from you the quality of the discussions between the congress and the new samiti and the white house. it seems you have been coming up with a plan and there will be this announcement at the department of homeland security. are both sides talking about it? is there congruity between the white house and congress? rep. mccaul: that is a good question. i think this president is a ceo and wants to move at lightning speed and be very decisive. he is going to have to work with congress whether he likes it or not and the fact is he is moving rather quickly. we are getting a lot of this information in real time. i am in a more unique position, having been an advisor to the campaign on the national security team, this is nothing new to me. a lot of these ideas -- and he will be rolling out ideas on the vetting process with visa security on thursday. i have been in a fortunate
position to be more on the inside of the trump team to advise him on these issues. a lot of what i have been advising and talking to him about i am now seeing playing out in executive orders. david: i was looking at the census bureau website and the demographics of your district in texas, more than a third of the --ulation in austin or latino. what does that tell you -- what are they telling you about the rhetoric of building a wall? rep. mccaul: because texas is a border state, they want to the security pie -- security peace done. they also recognize the partnership as a trading partner and other ways that mexico is really a neighbor to the south and not an enemy to the south. texans not looking
as -- at mexico as the neighbor -- enemy, but a partner, this is andeep out illegal cartel drug traffickers and also terrorists. i think there is a consensus that needs to be done. david: after allegations emerged that russia was involved in the presidential election you called for congressional investigations and you were alone in doing that. headway made any getting other colleagues to join you and do you think you will see any congressional investigation on the house side? rep. mccaul: i think there has been headway in terms of the senate intelligence committee now has chairman burr and mark warner the ranking member announced they will be officially investigating this as well.ossiers regardless of political party,
when you have a foreign adversary like russia tampering with our elections and democracy a more, that warrants thorough investigation. i know the intelligence community and the fbi are further investigating the lengths that took place and the influence mr. putin may have had. it is very dangerous to look at. , nowe past, through spies they use the power of cyber confusedly to influence and it is a whole new dimension we need to take a look at. i think my committee with oversight over cyber security will certainly be looking at this issue. david: that was a portion of my interview with texas republican representative michael mccaul. you can see the rest at tv go. we will try to answer one of the oldest questions in the food industry, who has better restaurants? london or new york? this is bloomberg. ♪ ♪
taking steps to avoid bankruptcy as it works on the biggest safety recall in automotive history. mark: the challenges facing brazil's new president as he tries to revive the country from the worst recession in history. propellingartis is -- proposing buying back $5 billion in stock. we spoke earlier with the ceo joseph gimenez. >> the announcement of the share back -- share buyback reinforces the company's confidence in the growth trajectory. we will continue to do m&a in the $2 million-$5 million range. we decided now is the time to leverage up and return some cash to the shareholders. making --o is
acquiring app dynamics. they snapped it up before it planned to go public this week. takata is taking steps to avoid bankruptcy. they say they want to avoid a .engthy court process takata's faulty products are linked to at least 17 deaths worldwide and the subject of recalls that may exceed 100 million units. vonnie: time now for our bloomberg take where we provide context and background on issues of interest. brazil's battered economy is taking another hit. the imf cutting the outlook by -- by more than have to just .2%. it highlights the challenges by the new president as he tries to revise latin america's largest economy in the worst recession on record.
corruption in the oil branch has ensnared members of business and the political elite. the previous president was removed from office after being impeached by -- four bypassing congress. initially business and consumer confidence rose, but it has taken another downturn. brazil has been prone to these cycles. about half of exports are world products, so prosperity is tied to commodity markets. on paper it looks like a powerhouse. it is -- it's wealth distribution amongst -- remains the most unequal and falling commodity prices sent the economy sputtering. onworking to put brazil back solid footing by limiting expenses, restoring the social security system, and introduce a new business friendly environment.
the new president is a seasoned politician with experience striking deals and he has good relations with legislatures. there is growing opposition within his own coalition to austerity measures. ofcandal -- a system corruption. you can read more about brazil and all of our quick takes on the bloomberg. head to bloomberg.com for more stories. ♪ ♪
pursuits, london versus new york, which city comes out ahead in the major trends we see in 2017? joining us is food critic richard vines. you both set out answering this recently. i will start with you, who won? >> of course i will say new york goodwon, but london gave a fight. richard came up with fantastic trends and some great people to combat us, but i think new york city is the winner. david: she is messing with you, what was your argument for london? richard: i think the issue is we love each other's cities. i am sorry to say, kate, you got it wrong. it was great when you came over and i cannot wait to get back to new york, but there are very exciting trends in london. we are going for inexpensive
dining and we also have a lot of women opening restaurants and it is a remarkable change in london restaurants. david: let's talk about that. you say there are a lot of female chefs, what are your favorites? richard: the main one is a woman called claire smith and she runs gordon ramsay's restaurant. thanpeaks more quietly gordon, but she is a talent. you also have sophie, a french woman who owns three michelin stars. she is openly -- opening this month. another tv chef is coming in and a mexican chef from exeter city. david: i remember talking with wolfgang puck and he said there is a rite of passage to opening a restaurant in new york and it took him a long time to do that.
ise: new york city definitely the battleground. there is a lot of scrutiny here, but people and restaurant tours -- restauranteurs have started to make the roads here. on here.so much going to get back to richard on that, i would say we have our own and we are also doing craft casual really well. epic 11 of madison park is about to open and i called made nights which will change the game. david: what is prompting the growth of fast casual here in new york? kate: it is basically because everyone has it all and people are addicted to comfort food. food that is
fantastically made, but almost all of it will be under $15. david: let me ask you about the type of food you can get in london. while i was there i had some local english food, but i sampled peruvian food as well. how much is that growing in the last decade or so? richard: it has grown very quickly. london has always been the first, but we are adding cuisine. mexican food is one of the big new things in london, which was an area that we were so far behind new york. we have peruvian food as well. my favorite food in london is indian. david: i had some great venison while i was there as well. the meals.you about if i were going to go out for a special meal and sellout -- show out a lot of pounds, what would you recommend? richard: i would recommend the fat duck. i managed to secure a table and
i was excited until i saw the prices. the basic menu for lunch is 265 pounds. and by the time you had wine it is up to $1500 for lunch. david: how about in new york question mark it is easy to spend money here. kate: we can actually go more expensive than that. za is the most expensive restaurant in the country, $595 and that does not include the drink. david: there was a peter elliott piece talking about how there was growth and restaurants outside of london and new york. is there awareness in new york and london about that? these are very expensive cities to live in and operate in, do they recognize they are losing ground in perhaps innovation? kate: absolutely, like when the thehits 20,000 -- even
cooks are looking for other cities to go to. they are going to other cities like philadelphia were outside of chicago. it is a big trend. david: do you see restaurants close because they cannot stay open in london? richard: they are opening at record late -- record rates and oddly enough they are not closing. lots of chefs are opening in east london, which is traditionally a poorer part of the city. david: great to speak with you and happy birthday in advance. a good debate. for more, check out pursuits, your destination for the finer things in life. a look at how the markets have been faring today. the big headline was the dow crossing 20000 and staying there. we are at 20,061, 148 points led by bowing up almost 5% after the
-- saying the green liner was now profitable. tech stocks are doing well today. let's move on to other securities. the dollar index starting at the $100 level, well below the low -- just a basis point away from 2.52 and the german 10-year yield rising substantially as well, selling off germany today, europe buys more bonds and you can see a strengthening chinese offshore as well. yuan this is bloomberg. ♪ ♪
vonnie: from bloomberg what headquarters in new york we are taking you from san francisco to bloomberg world headquarters in new york, we are taking you from san francisco to mexico city. president trump is getting ready to act on the two most controversial elements of his campaign, building a wall along the mexican border and limiting refugee inflows to the u.s. 20,000 for the first time in history as earnings fuel a global rally. ceo's moveman sachs -- we are halfway into the trading day in the u.s. and we know one thing about the trading day and abigail doolittle will tell us more. abigail: the big story is dow 20,000. we have been waiting 64 days
since down 19,000 and it happened today. we have's -- have nice strength for the s&p 500 and the nasdaq. bestow is on pace for the two-day rally since december 8. the head of technical analysis at oppenheimer told our team he does not see 20 -- doubt 20,000 as an indication of future price. he does say this rally shows we are likely to see a -- of the upturn. 3 -- ke a look at g # btv 2 the buyers are in control to an extent that we could see a pullback. this has happened over the last 20 years and it tended to move down after that. rally, but a nice
what it would not be surprising to see a holdback in the future. turning to stocks doing well, building material stocks. the expectation that president trump is expected to sign a directive to start building a wall between mexico and the u.s. abc said construction will start in months. we have a big rally for building materials companies, especially see next -- cemex, the second-largest cement company in the world, ironically based in mexico. lots of other strength for building material customers and the mexican peso not so much. it has been a proxy for trump policy and attitude and positioning since he announced candidacy down more than 60% over that time period. on more than 10% on the news about the wall. mark of templeton said he believes the mexican peso is very undervalued.
20% below parity and he thinks it will outperform other emerging market currencies and believes even if export activity out of mexico drops, it will not weigh on the mexican economy and it's the mexican peso -- and the mexican peso is a very undervalued currency. david: thank you. we will talk more about u.s.-mexico relations. taylor riggs has more from our newsroom. taylor: task a washington to help ensure separation between the white house and the family business. according to a person familiar with the matter, bobby burchfield will become the chief compliance counsel. a draft executive order shows president donald trump asking for a review of america's message for interrogating terror suspects and whether the u.s. should open cia run prisons
outside the united states. in the lumia -- 11 -- police in somalia -- 11 people killed by freedom fighters. the four attackers were also killed and survivors described chaotic scenes. the obama administration in its last days of power sent $221 million to palestinians. the move came with the objections of congressional republicans and is being reviewed by the state department to make sure it follows policies of the trump administration. the obama white house had for some time been preparing to release the money for humanitarian aid in the west bank and gaza. global news --global news 24 hours a day, powered by more 2600 journalists and analysts in more than 120 countries.
i am taylor riggs. this is bloomberg. trump isesident donald expected to unveil plans for a wall on the u.s.-mexico border when he visits the department of homeland security in his first interview as president. the outcome spoke to david near -- david muir. wesident trump: as soon as can possibly do it. probably within months. david: kevin was standing by at the white house and eric martin is in mexico city. the president talking about the timing for this. what sense do we have our hope to get about timing from the ?resident this afternoon after he writes a tweet like this, how much does he flesh it out in a speech afterward? kevin: the sources i am speaking with tell me the work is already underway with how president trump will work with congress to
implement the building and construction of this wall. what you will see later this afternoon is trump urging congress to begin to take immediate action to fulfill one of his most promised campaign iterations along the u.s.-mexico border. reaction has been swift and fast from political opponents, including democrats who are looking to target key republican lawmakers who are up in swing districts in 2018. doing so would go against one of the bedrock of american principles in welcoming immigrants to the united states. vonnie: eric martin in mexico city, it must be a relief to relievedayers will be at a later date and for the people of mexico because at the moment they are not paying for a question mark -- for it? eric: this announcement is met with outrage.
there are lots of calls from former mexican officials from previous administrations, former foreign minister saying that the president -- the mexican president should immediately to the u.s.rip planned for next tuesday, saying this is an outrage when trumps -- win talks are beginning for the trump administration to make this kind of announcement. it is aextent i think relief for mexico to see they will not be immediately playing -- paying for the wall. there is some concern over nafta renegotiation. there are many ways america could eventually have mexico try to reimburse the cost of the wall. pay forot having mexico it as donald trump said over and over and over again, it was
something the president was asked about in the interview. ultimately, it: will come out of what is happening with mexico. we will start negotiations relatively soon and we will be, in a form, reimbursed by mexico. m: so they will pay us back? president trump: absolutely. david: talk about the politics here. with my conversation with -- in my conversation with representative mackall, it sounds like he and others are learning the plan as it goes. kevin: as is the media. that video is showing that republicans on capitol hill and their respective staff are having a difficult time following these specific policy issues of how exactly president trump will get mexican leadership to repay the u.s. government and taxpayers. the trump political folks argue
that they have always consistently said that taxpayers would initially for the bill, but perhaps they would look for leverage in a variety of financial areas in order to put pressure on the mexican government. the area we hear most notably about, of course, is remittances of immigration remittances funds being allowed to travel back from the u.s. to mexico through immigrants. clearly trump is keeping his card very close to his vest. a lot of the attention on the key campaign promisee that promises that he is fulfilling this week. vonnie: the fact, kevin, we are getting breaking news from the white house press conference being given by sean spicer. there he is speaking and from the headlines they have had a
productive conversation with congressional leaders. a -- will will sign build "large, physical barrier on the south border." anothering one way or mexico will pay for the barrier and on another topic spicer saying the u.s. will create more the tension space at the southern border and saying that there will be also an executive declaration on immigration inside the u.s. one way or another mexico will pay for the barrier and there will be an executive declaration on that and also on immigration today. let me ask you about the quality of the relationship between the mexican government and the trump administration. then candidate donald trump took city. to mexico is there a dialogue between these two sides?
eric: absolutely and this is a step by the mexican government sending the foreign minister to washington in president trump's first week. going the mexican president to washington is an effort to try to establish that dialogue early in the administration. analysts and economists say what is hurting mexico the worst is the uncertainty about what is going to happen with nafta and the rules of the game that have been in place for more than 20 years. this is something that the mexican government is very anxious to get in front of. we have seen a strong push and planning to be talking with president trump from day one. theoke yesterday with foreign minister who president trump has previously praised as a wonderful man and someone with whom the u.s. can make wonderful deals and the foreign minister said yesterday that the u.s. can build the wall on its side of
the border and as a sovereign nation, mexico accepts that they can take steps for defensive border, but he was adamant that mexico will never pay in any form for the construction of the wall. vonnie: who is going to design this executive action once it gets fleshed out? we will be -- be getting the signing of something today, that will just be a few pages. -- what will congressional republicans say? kevin: i think you can first and foremost look to senator jeff sessions who has joined the trump administration cabinet. this was one of the most ultra conservative members of congress who was a staunch advocate for more stringent border policies between the u.s. and mexico as well as for implementing more
conservative immigration policies. his former chief adviser, stephen miller, also joined to the trump administration as a chief policy advisor to president trump. he is also someone who has taken the issue in terms of crafting that specific policy. i would also say that eric's point about how this is juxtaposed and going to be work in cohesion with nafta agreements as well as trade agreements is a very smart point and another part of the leverage that the trump administration as well as their allies in congress view for perhaps getting mexico to pay in some capacity for the creation of the wall or what will be just bolstering border control is through that leverage and those trade agreements are a big part of the leverage the trump administration is eyeing in terms of placing pressure along the mexican allies. the last point i would make is
that both of these leaders, the president of mexico and the president of the united states are facing intense pressure within their own base to get a deal on the issue. david: thanks to you both. that is kevin's a really -- kevin cirilli and eric martin. vonnie: the move by president trump to washington -- this is bloomberg. ♪ ♪
gary cohn has just had a major payday. on cohn pay package is anders mcmillan. it sounds like a nice payday to us, but there is no saying that if he hadn't hung around a little longer at goldman sachs it wouldn't be longer when he did leave. >> exactly. this is not necessarily new money, these are awards that were outstanding that he was likely to earn if he stayed on and he is getting it up front instead. david: break it down, what are the component parts of this unprecedented -- did we see something similar back in 2006? anders: it is certainly not unprecedented. as an executive going into the administration you cannot hold these securities.
there was about the vicinity of $60 million or $70 million of restricted shares that he had earned, but they had not yet invested or they infested, -- invested, but there were selling restrictions. 240 $3 million is a massive amount of money but how long had he been at goldman sachs? david: 26 years? vonnie: is that a lot of money for 20 years at goldman sachs? we are talking about a very elite slice of life and he had been there for 20 years. i almost might've guessed more. anders: if you compare with hank paulson, it is not as much. $485on had a stake worth million in 2006.
not necessarily that level. david: there were incentives that he could have cashed out earlier than he did. there is a federal government requirement that you have to do this. why did he hold on? anders: a lot of figures do not necessarily want to sell all equity holdings and they cannot the best right away because -- the best right away because -- rightannot really divest away. this is a once-in-a-lifetime opportunity for a guy of this stature to divest right away. vonnie: donald trump has said he will not take a salary and we do not know about gary cohn. do we know how much he would learn -- earn in public service? anders: somewhere around 100 $70,000. not necessarily close to the 20 million in 2016. my guess is he will be just fine. david: i want to ask about the
timing of this and the value of goldman shares. is there a tax value to doing this? anders: he can apply for a certificate of the vestige or -- certificate of divestiture. david: anders millon joining us here in new york. appie: cisco snapped up dynamics just before it went public. this is bloomberg. ♪ ♪
dynamics for $3.7 billion. they scooped up the company before it plans to go public. cory johnson joins us from san francisco with more. what has maybe been among the first one or two ipo's of the year. would it have made more money going public? because we know don't know what would've happened to the ipo. there were a lot of dynamics that suggested the ipo would be hot. it is an attractive sector right now in the software service around the study of apps and this more forward thinking way of computing. when cisco realized it would get away from them, they realized it was a match for their existing business and much more of the future of what cisco might be. david: the future of what cisco might be.
play that out for us. what do analysts see in the future? cory: if you look at all the big hardware vendors, ibm, cisco --ackard, and cisco is really the only one that has shown growth over the the few years, much to annoyance of other companies. they have done so by strong in places -- through the sales of software and security. and a focus on what customers need. they look at cap dynamic -- appdynamic and they saw a company growing very fast. you have something like amazon web services, google cloud, and others that -- businesses are oveributing their apps such a wide variety of networks that finding out how the apps are working is really finding
out how customers are using your product and cisco recognized this would be an important part of networking going forward. vonnie: you have sound from the cisco ceo i believe. let's check what he said earlier today. >> there are a few things we looked at that are important to understand. first, they are absolutely the best company in this space. secondly, they are growing twice as fast as the nearest competitor. third, they are growing faster than any publicly traded software company today. david: growing faster than any publicly traded software company today. that may be what was instore for the ipo. imagine that product with the cisco salesforce and you can see how they might get more value out of the business right away. >> very quickly, qualcomm reporting that they are squarely in apple's crosshairs.
cory: apple and south korea's crosshairs. these antitrust concerns are important. qualcomm has beaten these charges every single time, but you can expect investors are going to have a lot of questions on the conference call when earnings are set after the close today. vonnie: cory johnson therefrom -- there from san francisco. you can hear more from cory johnson on the half hour when he is joined by "bloomberg markets" on bloomberg radio. vonnie: president trump --david: president trump will take action on two of his campaign promises. we will have reaction from the president.
donald trump's hotel management company is playing to triple the number of hotels across the u.s. and will open the first of its new lower-priced branded properties this year. that is according to the trump hotel ceo. the hotel business consists meme of branding and management contracts. the company manages eight hotels in the u.s., some of which are owned by the trump family. president trump is getting closer to naming his nominee for the supreme court. the president says he will announce his pick february 2 -- three federal appeals court judges are said to be the front runners to replace the seat held by the late antonin scalia. all three were nominated to the current post by former president george w. bush. ae italy premier has knowledge delays and malfunctioning in the response to the avalanche that very day mountain hotel. he says it is wrong to try to find scapegoats now.
24 people died and five remain missing and are presumed dead. the judge overseeing the upcoming state trial of church shooter dylan ruth is getting a look at court seal records looking at his mental competency. a u.s. district judge has ordered transcripts from his hearings as well as medical and psychological records to be sent to the south carolina state judge assigned to the case. sentenced to death rather this month for the june murders of nine people at a church in charleston. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. thanks so much. we are getting images of donald trump at the department of homeland security where he is .nveiling steps sean spicer, the white house press secretary is addressing his plans to build a wall on the u.s. but go border. -- mexico border.
you can follow that on the bloomberg. he says border security plans are not a one step solution. congress must act on some parts of donald trump's border security plans. he defend the idea of some enhanced betting from some immigrants. that is from sean spicer. if you want to watch that in its entirety, you can watch that on the bloomberg. vonnie: for more, let's bring in kevin cirilli, who is at the white house. we also have our government reporter in mexico city. kevin, we are getting some highlights here, but what we are really a waiting is the next hour where the president will actually speak and possibly sign something. kevin: this is really just repackaged campaign rhetoric, at least from the early statements we are seeing from the white house press secretary sean spicer, as well as from the earlier reports about what
actually president trump will do with his executive order. he is saying he will build a wall and bolster the border security between the u.s. and mexico border. increaseing he will the prisons along the southern border, which again, in arizona in particular, has been a heavy concern for law enforcement officials. he is saying he will somehow get mexican officials to pay for the wall. what he is not saying is how he will do it. i will be honest, there are a lot of capitol hill aides within the republican party who are carefully monitoring as we speak , these comments, and when they are gathering is that they will be the ones to decide the specifics, specifically amongst the budget committees in the house and senate, where they will have to allocate the funds, and as a result, deal with the politics of having to fulfill president trump's promises. vonnie: let's go down to our
mexico city bureau. david: as you are listening from the president, what are you hearing? what is the country listening for, what is mexico listening for in the remark that donald trump is making? >> first of all, for mexico and mexicans here, the fact that trump has been talking about going forward on the wall, today, specifically, is the latest affront for mexicans. it happens to be the same day the foreign minister of mexico is in washington right now and talking to negotiators about u.s.-mexico relations. , peoplet of columnists that is justo, really bad timing for these two things to be happening at once. vonnie: the mexican stock exchanges down a quarter percent
. year to date, it is up about 5%. on a currency adjusted basis, 2.25%. the mexican peso has weakened substantially. let's bring in our international correspondent michael mckee about what the mexican central bank will do. is impossible to know what the impact will be. they could raise interest rate to attract capital back in. that that hurts the economy going forward. this is a high-stakes gamble -- situation or the mexicans. they don't know what donald trump will do. there are indications that donald trump does not necessarily know what he will do once the negotiations start. the mexicans are talking tough because they want to come into the negotiations as tough as possible, but as they raise the chances that it could damage the economy, that will spook the markets. a lot happening in
washington john kelly sworn in as the homeland secretary. sean spicer wrapping up his briefing in washington. let me ask you about the other component of these immigration announcements. that is curtailing immigration from some countries, more stringent vetting on some of them. how different could that be from what is in place right now? there isht now, extreme vetting for a lot of the refugees, particularly from syria. there is a very detailed process for vetting where they come from, who they are, what they believe, that goes through the fbi, immigration and .aturalization a lot of different people look at this. it takes two to three years to come here. are of the people we talking about from syria are women and young children. 60% are children coming to this country. it is not like they are just
letting in anybody, and it is not 100,000 people, as trump claimed on the campaign trail. they let in 10,000 in 2016. the reports are that he will cut that back. it is not clear what he wants to do that is not being done now. back to mexico city, we are hearing more and more people are trying to cross over into the u.s. now before anything actually takes effect. is that being reported in mexico? nacha: there are some sources who talk about a rush to get ahead of the curve before there is a wall or much stricter policy. that is being reported here. cirilli, what else are we anticipating from the president? the markets are getting a little itchy hearing details about other things like tax and regulation reform.
today it is on national security, it seems. national security and immigration. when you take the broader step back and look at how president trump and this administration has look to utilize its first full week in office, when you are seeing is an administration trying to project that will fulfill its campaign promises. however, also trying to skirt some specifics. on monday, withdrawn from the transpacific partnership. sources i talked with telling me that they have not begun early negotiations to draft their own trade agreement efforts. on tuesday, of course, we heard that a more economic plans were going to be in the works, including a meeting with automakers. hearing we are midweek, that next week we will have a supreme court pick. also, that we will be talking about immigration. all of these points, taken
together, are the campaign issues that trump was speaking about. senior administration officials are arguing that this is them in their first week trying to signal to their support that they are looking to fulfill those promises. however, the real work will be how the republican-controlled congress is able to supplement the executive orders that the president is making. break: kevin, i want to now because we have news, the president has signed his first directive today on public safety. a second directive signed at the homeland security department. we are waiting on details about these directives. two so far. thepresident visits department of homeland security. we know earlier he had said that john kelly was recommended without hesitation. trump said that kelly would be
very special. guests.u to our mike, we are waiting for those directives, but he is taking a tour of the department as well. we will get details in a moment. public safety and homeland security obviously the concerns. mike: sean spicer said he would be signing to directives, want to start construction on the wall using the 2006 authorization to build a 700-mile fence which has since been completed. he did not say how they would pay for it. he says they will have to negotiate with congress to get the money. obviously, there will be lawsuits. thing we can say, construction will start in a few months. the other thing is public safety. they are doing a lot of things that are already done, it is trump getting in front of things that are already happening and claiming credit.
the obama administration already ramped up the deportation of criminals, more than anyone ever before, and trump is now saying that we will deport criminals. something like 90% of those deported in the last year that the category that trump is talking about. he is also talking about cutting off funding to sanctuary cities. there are about 400. localities. there is no precise definition of what that means. basically, it means law enforcement officials, don't go out of their way to stop people and make them prove their nationality. like we areooks going to have more prison near the border, or at least more space. mike: he says they will provide more prison space. an open question as to how many more people they can catch. he would have to add more border patrol officers, and in what do you do when you put them there? do you send them back immediately, do you need more space? one of the things he announced is that they would open up -- reopen the secure communities executivehich was an
order started under the bush administration that the obama administration discontinued. databases so that arrests at the local and state level would be provided to federal officials who could then identify people as illegal immigrants. there was a lot of backlash about it, felt it was not particularly well put together, was being misused. so the obama administration ended it. it back.bringing we will see what kind of reception they get at the state and city level. vonnie: donald trump visiting the homeland security, taking a tour of the agency. that, hefore doing signed a directive on border security and one on sanctuary cities. i want to thank all of our guests here they will stick with us as the news continues to develop. theresa may gets ready to meet president trump at the white house. that takes place on friday. we get insight from robert kaplan and where the two may agree and emerge -- diverge.
david: this is "bloomberg markets." i'm david gura. vonnie: i'm vonnie quinn. president donald trump siding directives on border security and sanctuary cities at the department of homeland security in the last little while, moving closer to fulfill promises he made during the campaign. how will this and other actions like the decision to pull out of the tpp impact latin america and those countries relationships with the united states? joining us now is the head of research and strategy at bank trust.
safe to say that it will impact mexico the most, at least what we have seen so far in terms of nafta, all we have not gone anything official. you said it well, so far, the impact has been mostly on mexico, and i believe mexico has taken most of the heat already. i would expect from now on to see positive surprises from mexico. anxiety and the uncertainty that the incoming president generated in mexico because of declarations of building the wall, renegotiating nafta, etc., has been mostly priced in in the mexican peso. david: let me ask you about the role china plays in the region. with the u.s. stepping out of the tpp, the chinese have an opportunity to take a more prominent age. investments in
bolivia and infrastructure. how much has that increased? china taking over the u.s. in this case, pulling out of the tpp, is not clear to me. china wants to export. , potential partner of the tpp with the u.s., we are hoping to get into the u.s. market. i do not think it is a perfect substitute. china plays a significant role and will take advantage of this pulling out, but not in the form of taking the place of the u.s. vonnie: you mentioned everything is priced into the pay so. we have a graphic of today's move. a little bit stronger but above .32 at the moment.
that is a long way from where we were. hernan: that is an interesting point. a weaker peso will actually help mexico renegotiate, in a way, with the u.s. let's not forget, for president trump, a good partner is a partner that is doing well. if there are issues on immigration, issues with renegotiating nafta, it is always better to have a healthy mexican economy. that will take away a lot of immigrants in the u.s. with the mexican peso being cheaper, referring to your point , i don't think we are seeing an the trunkon come to candidacy. it is functional to the mexican economy and i think it will lead to a better renegotiation with the u.s. seed: where do you
opportunity in latin america, in the sovereign space, corporate space? we have an election coming up in a court or. we also saw, in advance of the big move by, a argentina and other governments to issue bonds ahead of that. where are the opportunities? hernan: for investors with a strong stomach, i see opportunities in venezuela and ecuador. venezuela will be able to serve its debt on the sovereign. the election in ecuador is a positive event for sovereign bonds. ea'ser way, if corr candidate wins, it would be more to the center, which is good news. david: it is close. hernan: yes. what gets venezuela back to be a workable country? hernan: i'm not sure that that
is the key question for investors. i agree, it may not come back to a normal country in the sense that we may refer, but it is still attractive to investors. as i said, those that can holler right high volatility. vonnie: vonnie: head of research and strategy at bank trust, thank you. david: dow 20,000 is just a number, right? we will look at the markets of session with round numbers. if we look at history, rallies can erode just as quickly. this is bloomberg. ♪
first a comment on dow 20,000, a significant milestone? >> no question about it. if you look at the last couple of months, people have been expecting this. i think there is a side of believe that we made it through the number. we called it over the last month, the fear of the round number. we have gotten through that, but the question is where we go now. david: i'm going to pull up a chart. the dow breaking 20,000, going back to the 1950's, we see how much the dow has doubled. where do we go from here? we hit this round number, what does that tell you about what is around the corner? term, overthe long the balance of the year, we think both earnings and the economy are on track to essentially keep the bull market going.
the near-term is a little bit less certain. but we have really done is we almost destroyed the small of part, that the seven and a half years at the bull market has climbed. whether you think about it in terms of the low level of short interest out there in the market , the very high confidence levels on the part of both consumers and optimism in small business, both of which those numbers are extremely spiky. when we have seen those numbers dipped in the past, it's been difficult for stocks to sustain the kind of momentum we have seen the last couple of months. trading below 11 is definitely a sign of complacency. was thistime the vix letter was back in august of 2015, shortly before you had
market discomfort over china's surprise the valley when its currency. when you have this kind of confidence and complacency setting in, you are vulnerable for near-term negative surprises , which we think is something we need to be mindful of. vonnie: we know the 10-year yield crossed that threshold of at 100.6.dollar index how more -- how much more do we have before complacency becomes obvious, if there is complacency? is, you getquestion to a price in the yield that causes prices in stocks to pause. we think that is likely closer to 3%. we don't necessarily think you will get there. one thing we would note, part of the rally over the last couple of months, this trump rally, if you will, was driven simultaneously by a bidding up
of financials, cyclical issues, but also a rally in the dollar. the rally in the dollar has visibly paused over the last couple of weeks. that is something that we think will continue, because a lot has been built in, in terms of where the economy can go. we are just not sure that the expectations, certainly in the near-term, can live up --that the reality can match these expectations. david: thanks for joining us, julian. vonnie: coming up, david neuhauser joins us. this is bloomberg. ♪
underarkets close in just two hours. we hit dow 20,000 at the open. let's check in on where stocks are trading that with abigail doolittle. the dow, s&p 500, and nasdaq are higher. dow 20,000 happened at the opening, it has managed to hold onto those gains. with this, we are looking at a new set of record highs for the three major averages. lots of strength for u.s. stocks. funny is the fact that we still don't have a 1% move for the major averages. ,hen we look at the bloomberg this is the dow. the topline is the 1% move up, the bottom line is the 1% move down. we still do not have a 1% up in the last month. last time it happened was december. the last time we had a 1% move down was in december. the dow on pace for its best
today rally since the beginning of december but we still don't have that 1% move. what we have is a doubling of the dow. this is another great chart in the bloomberg. these are the markers of when the dow doubled. it took 24 years to double from 625 to 1250. this is the second longest doubling. it may also be worth noting, the last four out of five time that this happened, there was a brief pullback, so we may be looking at something along those lines in the future. finally, the sectors doing the best today, we are looking at a real mixed picture between construction, banks, and computer hardware. we have the construction index up nicely, up 2.7%. the president is expected to sign a directive ordering to build a wall between mexico and the u.s. up ase the banking index
it yields are higher, the 10-year up about six basis points. then we have the computer hardware sector up nicely, apple gaining ahead of its report tomorrow. seagate put up a nice quarter also, helping to boost their numbers. oliver: let's get a check on the first word news. emma chandra has more from the first word news room. emma: we are ridding remarks from the department of homeland security as john kelly is set to be sworn in. we will bring you more as we find out. president trump, who believes he did not win the popular vote last november because of voter fraud, says he is asking for a major investigation and may strengthen voting procedures. he has repeatedly made disputable claims of a rigged voter system and has continued to raise concerns over fraud. the u.k. prime minister is battling a rebellion from her own lawmakers with threats to
complicated her times over leaving the european union. the supreme court decision yesterday to hand parliament more power over the brexit process. six conservative legislators are uniting with the main opposition labor party to demand she publicist an official government document detailing her negotiation goals. usain bolt has been stripped with one of -- of one of his nine gold medals in a doping case involving one of his teammates. in a statement today, the committee said the jamaican team is disqualified, and all metals have been withdrawn. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. thank you. president trump is moving quickly to fulfill key promises he made during the election campaign. moments ago, he signed
directives on border security and century city's. before taking action, he spoke about his plans with abc news. >> ultimately, it will come out of what is happening with mexico. we will start those negotiations relatively soon. we will be, in a form, reimbursed by mexico. >> so they will pay us back. >> 100%. scarlet: kevin cirilli is at the white house. we also have a guest from mexico city. toterms of the action here, be clear, this was an executive order and not a presidential memorandum. yesterday's action regarding the keystone pipeline was a memorandum. kevin: absolutely, and that is the fine print did this is a repackaging of campaign rhetoric but it does little to provide details into how exactly he will implement his proposals. he will be relying on congress in order to do that.
of course, the capitol hill aides i speak with tell me the budget fight, particularly for the funding of how he will be able to bolster security along the u.s. and mexico border, remains to be seen. in fact, it may take longer than perhaps trump would like to see. either way, clearly trump is ending a message today by saying that this is going to be one of his priorities for the new congress, urging them to get to work fast. however, the republicans i speak with in congress tell me, in terms of actual legislation to the executive actions, that could take several months, maybe not even getting started until february. oliver: taking a step forward on a campaign promise that was a core part of both his own rhetoric and those against him, mexico city.e in as we get closer to this wall
getting underway, what is the reaction as this thing could move closer to reality? nacha: i think there are a lot of mexicans, government officials who are upset about the wall, especially since right now the foreign minister is in the united states trying to the goshen with the u.s., and at the same time, trump is signing off on a wall. within the government, there is a priority. number one priority is nafta. important tomore the government in mexico, and to ,he economy, and to the peso then the questions of immigration. this is where the government is keeping their eye trained on negotiations and on what will happen to nafta, what kind of tariff increases, if any, will come out of this. oliver: when you look at what mexico can bring to the table --
trump has been pretty vociferous about the fact that they will pay for it. mexican government say, let's meet you halfway, let's think about it paying it this way -- what will they be campaigning for? nacha: there is a sense among experts that mexico's could save space and mexico could get what it wants, if there was some kind of incremental increase in tariffs, and that can go to pay for the wall, according to trump. he could take it back to his constituents and say that this tariff increase could raise money for the wall, where is mexico can come back to its people and say, a 3% or 10% tariff will not be that significant because the peso has depreciated. that would counteract any problem there. oliver: do we have any sense in
terms of timeline how quickly things can get started on construction of the wall? we just got news that president trump told abc that the construction will begin within months. again, the specifics for the funding allocations go come from congress. celeb point, the leverage that president trump and the administration sees with regard to how they will be able to negotiate with mexico is really through trade policy. it is no coincidence that trade policy on monday coming from the white house saying that they will withdraw from the transpacific partnership, as well as look at nafta. that is now considered that two days later they are talking about immigration. a lot going on, a lot of moving parts. sources on capitol hill are carefully watching. marco rubio, one of the most
moderate republicans on this issue, was meeting with mike pence earlier today. those conversations all continue as we speak. looking at are live shot of the department of homeland security. president trump expected to deliver remarks shortly and swear in a new homeland security secretary john kelly. final question, kevin. are there any points on which the u.s. and mexico see eye to eye and are not adversarial? kevin: there is an interest in growing both the mexican economy as a mechanism of fueling u.s. economic growth. one of the key points that senior administration officials have made to me is that the u.s. does provide a lot of economic relief for mexico, especially when you talk about things like remittances, and to some extent, a lesser extent, trade agreements. as, of course, factories, jobs, manufacturing jobs become a more
prominent part of this administration's economic agenda , i think you will see collaboration. all eyes will be on the leaders of the two countries when they meet face to face next week. oliver: kevin cirilli in d.c., nacha cattan, thank you both so much. up, davidoming neuhauser will deliver his firm's winning bets on entertainment and energy. when he is going long on, what he is shorting. it ended 2016 with an 85% gain. his best year on record. this is bloomberg. ♪
we are keeping our eyes on the department of homeland security. president trump is set to deliver remarks. he will be squaring in his secretary of the homeland security john kelly. meantime, 20 16 was largely a year of gloom and doom for the hedge fund industry. buck the trend, livermore partners. at ended the year with 85% because of bets on entertainment and energy names. the stock has been on the rise since livermore called for changes in january of last year. david neuhauser, founder and managing partner, is here with us. you are an event-driven hedge fund. looking at energy, industrials, and financials. what are the events that you see taking front and center this year? yes, rising interest rates, the infrastructure spend, but specific events?
david: that the minute is playing well for us this year. the past few years it's been tough in financials, energy, industrials. the new administration, the new focus, you are starting to see those animal spirits grow, you are seeing people refocus their efforts on energy, financials. we were really bearish financials for a long time and not really invested. today we are certain to see signs where activist investing is being moved to more proactive , would definitely start to come to the surface, things we can invest in. scarlet: you are looking at community banks in particular, those that are mismanaged, in m&a mode. i know that you will not disclose actual names, but can you talk about the criteria you are using to determine which one look appealing? i have been doing this a long time. on the activist side, even though livermore has been around a few years, back in a day, i work for a hedge fund in chicago and we did that. banks,eted community
push for a change or sale of these banks. maybe 10 or 12 of those banks. it has not been the focus lately for livermore, so i want to make it more of a focus. the criteria is, in the past, in the late 1990's, we were investing in banks, they were trading at half book value. they were really cheap at the time and there were not many banks available. now we have gone from saturation, and then 2008 hit. today we are starting to see banks more capitalized, stronger, but some of these smaller banks don't have the access to capital and the cost of capital is higher. a merger, seeing where a slightly larger bank could gain a footprint, i see that path definitely in front of us today. we are having some dialogue with some banks, building some positions. therehe next few years, will be a good opportunity to see some of the consolidation. talk about theu
enthusiasm in markets, opportunity for activist investors, at some point, enthusiasm can work against you. when you look at rallies that have rallied so strongly, people focus in on a few isolated sectors. how do you determine the like scarletanies, is talking about, but also where the investor enthusiasm has been, has not been overdone? you look at some of these big banks, jp morgan, goldman sachs, they have been on a tear after the election. we would consider those attractive. i am looking at those things under the radar, problems, sec investigations and the like, and all of a sudden, the equity valuation is hammered. first, they take a lot of work. you often build a position and talk to the bank. and then things rise dramatically. that is a fallacy.
these things take time. you need to be involved operationally. at livermore, i have a strong team of guys who are chairman on the boards of larger banks, private equity firms. network, getting their view on things, weekend look at it. we definitely bring a more off personal -- operational approach to things. i am not shy about being aggressive when i think the management team is not listening. those are some of the situations that i think we can get involved on the banking side. things thatng for are really left four dead, so to speak, and then we can get involved and see the equity, of them over time. scarlet: how are those management discussions going? if rates are going up and things are not improving for financials, are they saying, we think we can stick it out, we think we can get through this? david: that is one thing that is bad for an event-driven investor, activist investor.
when the markets are doing well, equity values are up and then nobody cares. everything is fine. so we find less opportunities to invest in during those days, but there will always be situations in which you can really -- the rising tide is lifting all boats. when things start to normalize a bit, that is when you see the real issues at play. i kind of look at that as a short-term phenomenon, not longer term. we are trying to build companies that will have sustainable growth. think about the financial regulation, everything that trump and the people he surrounds himself with, talking about deregulating, that seems to have fanned the flames for investors to get behind those financial companies. as an investor, when you look at those companies left four dead, what are the financial regulations that right now are an albatross on them that could be lifted? david: a couple different
things. one is how much capital they need to hold. in the past, the idea was when you wanted to own a bank stop, i want to own a bank stock because they're cast of capital is lower than the money they are making of their spreads and loans. values going up as well as a number of loan activity in the global economy. therefore, they can return capital back to shareholders. in this hedge fund, we were buying these stocks because these banks were trading a nice dividend yield. they were trading at a discount to their book value. weay, the idea would be if see the relation take effect, banks potentially splitting up some of the divisions that are poorly run, versus the one that are more like cash cows, and the economy takes hold. you will see sustainable equity value in those banks. i see a path to that. i definitely think there is some, again, where we can help extract that.
that is sort of our mantra when it comes to the financials. neuhauser,vid founder and managing partner of livermore partners. oliver: much more ahead on "bloomberg markets." the major averages which have been on a tear this morning. dow jones up about 80 basis point right now. obviously, well over that 20,000 hurdle. the s&p and nasdaq leading the way. the nasdaq doing well. a nice departure because the dow has slowed down relative to the s&p this year. we will continue to watch that. and guess what is leading it? banks. this is bloomberg. ♪
to make some remarks at the department of homeland security. you can see the audience waiting for his arrival. earlier, we saw the swearing in of his homeland security secretary john kelly. we will continue to keep our eyes open for when mr. trump arrives. are hereantime, we with david neuhauser, founder and managing director for livermore partners. an 85% gain in 2016. you also picked up some new positions. one then you are targeting is burberry. this is a stock you like, even though retail on the whole has been disliked by so many investors, because of the changing environment. is true, and we have had some targeted short positions in retail. as a whole, retail is always a tough environment. burr very is a little different, more of an iconic brand. they have had some issues with some of their cost structures in the past couple years, some management shifts. in the past year they have made some good changes.
very fashion forward company. i think it is a well-run, iconic brand. i think for the cost-cutting initiatives, it will definitely help for their profitability. scarlet: are they a profit for m&a? david: yes. they are definitely one of those brands that still remains that has great attraction. m&a would be a potential for the company, if the company cannot further decrease their cost and start to show some sustainable growth to their brand and image. i would guess they would have some pressure from shareholders, like myself, to focus on extracting further shareholder value through m&a. oliver: what kind of companies would be a potential for that, other luxury recognizable names, retailers, somebody that could wrap them up into a larger product? david: i think it would be a
-- i will not mention names there. but one that has the scale to take on a transaction like that. they have been rumored with other companies. i'm not a big fan of that. the valuation that should be had should be had by someone who sees the value, the potential, wants that brand as part of their company for many years to come, for the image and profitability potential. there is definitely synergies therefore these larger companies. i think if management can get it right, they can stay public a lot longer and grow the value. if they cannot, that is the next step. diplet: i know buy the worked well for you in 2016. is that the playbook in 2017? david: no. you have to be very specific in nature. the market has run pretty dramatically here.
i understand the euphoria. i do impress it, to some degree, if things are truly shifting, gdp growth and the u.s. economy could really take center stage. said, you have to focus on fundamentals, focus on valuation, look beneath the surface for things that are really unique and still hold value on those dips. scarlet: david neuhauser, thanks for joining us. we are awaiting president trump to arrive on stage at the department of homeland security. he is prepared to deliver remarks following the swearing in of the new homeland secretary john kelly. this is bloomberg. ♪
president trump is scheduled to come out and deliver remarks shortly. we are waiting for his remarks and will bring them to you live when he begins. this is bloomberg markets, i am scarlet fu. oliver: commodity markets will close in new york. >> we have the global commodity function. this is a great way to get a quick snapchat -- snapshot. with therecious metals agricultural commodity but mainly are down. then index is down about half of a percent. metals, gold and silver all down 1%. down sharply, 7%. assets are selling off and hire. bid
metal,kness and typically a weak dollar will help the metals trade higher. we have corn trading higher as export demand increases. we have lead and soybeans trading lower. it is interesting to do no china is an and -- a big importer. will be interesting to see how the policy toward trade effects farmers. this is 5708, and it shows us farming income now dropping for the fourth year in a row. for farmers in fact vote president trump but it will be interesting to see whether his policies around trade may hurt
the farmers. it is something to keep an eye on. >> that is something we do not pay enough attention to. pro-businesss of a trump -- erik schatzker sat down with and if -- for an exclusive interview . how trump changes his view of the world. >> trump will change from economic and foreign policy will take broad big steps in the world. we think about it from an economic perspective. economic perspective, 35 to 20, even as low as 15.
bringing with it and accelerated appreciation. all those things is extremely stimulative. if you see real capital impressed -- investment, productivity numbers will go down in the united states. engaging in share buybacks and dividends, which have zero productivity. we will see trade competitiveness with corporations and the tax rate. we will eliminate off shoring and we will start getting fair shakes for better deals with our trading partners.
so we will see a stimulative environment as trump is successful in his endeavors, for thell be positive united states did it is not the globalist nightmare. we mentioned off-line, i think has been a wage giver and a price taker for the last decade or so and we will just be a wage taker in the next four years. >> stimulative in the u.s. economy, essentially inflationary, better for the u.s. with -- at the expense of the world. ratesas simple as short dollar strong? make it aneed to sound bite, i would say yes. the question is, how do we pay for cutting the corporate tax rate from 35 to 15?
is our view at the firm that board tax adjustability is the only way to pay for. broadening the pace -- it is elegant. paul krugman actually agreed on something with marty and they wrote a paper on the positive attributes of border adjustability. could make a bipartisan success of long as special interest groups in the u.s., the retail federation, walmart, nike, the people that have supply chains offshore, might be against it. if trump runs into an us resistance on border tax, he will use his authority in the commerce apart -- department to oppose tariffs. >> how did you play the
election? >> we were not playing the election going into the election, but what was interesting was, you saw trump was holding the lead in florida and he kind of solidified his river area ander other areas around there, the markets made very irrational moves. especially currencies went to a risk off dollar weakening scenario. if you understood them, they were going to be progrowth and trump was the most progrowth of them all. took -- that night. >> you are investing in huge amounts. now andnately, every
then, you get something right. you do not get it right all the time and i don't. but that seems easier. currencies and rates. >> are there any natural trump trade's right now? because some of this stuff has played out to a degree. think given what i went through, real race in germany are at their lowest level right now. is spiking. germany ecbhave seen members of the speak today about the fact that i think inflation will run much hotter than any central-bank thought. i think the move in bonds is just beginning.
>> the natural course of action would be the ecb to raise interest rates. >> he will have to taper some more and possibly raise rates. >> how soon? not want to speculate there. he will speed everything up. >> that was founder and ceo -- king exclusively with >> organization officials, a washington attorney and president donald trump's is mrs. to ensure saturation in the white house and family businesses. compliances's chief counsel and george will become the chief compliance officer. theresa may is promised -- promising to put the u.k. first
in trade talks with president donald trump. echoed trump's america first comments. she would be the first foreign leader to meet with president trump -- saying she needs to fix -- there have been 42 killings, and if they do not reduce homicide figures, he will send in the feds. violent islamic extremist -- putting the way in the hotel, as -- a suicide car bomb exploded. at least 11 people were killed. global news 24 hours a day this is bloomberg.
towards management and layoff half of the staff. other layoffsys coming by the end of 2017. across voices six major metropolitan areas in the u.s.. -- and that is according to the trump hotels ceo. managementd some of which are owned by the trump family. groups of the trading with a key the cell role of boosting back participation in the economy people familiar with the matter. one of the country's biggest ever. art of the sick owned by
pension fund manager, shareholdings could be listed as restricted to black investors. that is your bloomberg business flash update. >> we so -- focus on social .hanges the coo of facebook was at the world economic forum. how men need to join the fight. quite a few have to give women a safe space to raise these issues. , i'm not saying it always gets reported because it does not but there are systems put in place to deal with that. it is usually an -- important and we need to do better.
your boss is probably a perfectly great guy who thinks he is fabulous on women, that is what is happening, these paper cuts. creating the problem. you cannot go file and hr complaint, i got interrupted. happened, things that we launched lean in three years ago. it gives you a safe place to anonymously give the feedback. rather than your perfectly nice is giving told he them credit, we provide training. circle -- circle leaders can meet with the head of hr and say it is happening and then he can
training.s it is huge to knowledge we have the problem. u.n. women have led here, we have to give men a reason to participate. what isit goes back to good for them. we have known it is the right thing to do and it has not happened. why do laundry? if you are a man. i tell men all of the world you will have more sex if you have -- if you do laundry. why do it? because you have a happier marriage. why do health care? will do betterds at school, and will be and happier and better adjusted. good reason.y
if you can use the full talent of the population rather than half, you will outperform your peers. you are just better to work with . or you are the chief marketing officer, the ceo. you will do better. if we can convince companies to market to women against stereotypes of women because they can sell products. they will be happier and more successful in both fronts. the good news is the data is on our side. sandberg, coo.l >> coming up, the dow to have a 20,000 for the first time in history. it is the bond market indeed the end of the bull market there? .3% -- threeout
scarlet: this is bloomberg markets. dow hitting the 20,000 mark today, right next for u.s. stocks, chief equity strategist, key lot for the equity market and he explained why. earlier today in hong kong. gwen slaughter the new trump administration policies going to an issuehere is related to tax reform that is the underlying aspect of where the companies will be benefit or hurt. it is too early to say. the point of maximum optimism will take place in march. the reason it becomes a critical
issue is all of the tax deduction and enthusiasm up cap --about potentially positive that we will have to address in record time with congress, more inclined toward a revenue neutral tax reform. that is a key part of identify winners and losers in the market. >> do we power pastel 20,000 in the near term and taper off? for the s&porecast 500 at 2200. my forecast would be around 2200 for the s&p 500. in march, that is when you have maximum optimism in terms of potential earnings, it upside to corporate earnings is the key driver. we are in a more fundamentally driven market now. in the last three years, there has been no earnings growth.
flat earnings. all of the discussions are coming from a low-interest rate market. valuations are very high. the direction of the market will be at the function of earnings, positive and negative. the positives will come from lower corporate tax rates. various proposals about removing the deductibility of interest ultimately thes core of discussions. >> trump until march and then more benefit. >> a very modest return, that is the trajectory of growth you have seen her at 5% return this year including dividends. >> that was the chief equity strategist at goldman sachs speaking.
>> depends on whether you think that inflation will last. dream -- joining me to discuss, maybe it is 2% with the -- at which the bond market has the him but we will stick with someone who believes that is not the case at all. oliver: the question we have to ask now is ok, we could have a cyclical upswing in growth. pickupd see inflation thanks to tightening markets and higher commodity prices, but the early 80'ssince the have gone away. >> looking at president trump walking out, he is due to speak soon. in of thee swearing
homeland security secretary. getting ready to make his remarks at the homeland security in washington after he took executive action on the wall with mexico. let's listen in. president trump: first i want to congratulate secretary john kelly and his wife, kathleen. john brings the skills, the leadership, the background, the definitely the determination you have to have, to get the job done and get it done correctly. little to deliver for no --d for the country, and the american people.
we also just finish the briefing . struck the southeastern united states. thoughts andnds prayers to everyone impact by this incredible tragedy. can to help those suffering and affected. we have approved mississippi and others who are on their way. fema has done an incredible job of speed. the mandate will guide our actions. the department of homeland security has many different
missions. one of the most important is its law enforcement mission. this is a law enforcement agency. [applause] president trump: but for too in alloweds have not to properly do their jobs. you know that, right? you know that. absolutely. change. is all about to i am very happy about it and you are very happy about it. asking all of you to enforce the laws of the united states of america. they will be enforced.
because people are surprised to hear we do not need new laws. we will work within the existing framework. we will install the rule of law in the united states. before we go any further, i want to recognize the border patrol officers in this room today and honor their service and not just because they unanimously endorsed me for president. that is not the only reason. acknowledge two are -- two individuals. i like to recognize brandon judd and chris, two friends of mine
president of national's counsel. guys are about to be very busy doing your job. where are those guys? thank you, fellas. crisisin the middle of a on the southern border. of unprecedented surge illegal americans is harming mexico and the united states and starting right now, the steps we will take will improve safety in both of our countries. nation without borders is not a nation. beginning today, the united states of america gets back control of its borders, gets back its borders. [applause] -- presidentk
trump: i just signed orders that would save thousands of lives, millions of jobs, and billions and billions of dollars. these two orders are part of an we outlinedreform during the campaign. i want to emphasize you will be working in partnership with our friends in mexico to improve safety and economic opportunity on both sides of the border. i have deep admiration for the people of mexico and greatly look forward to meeting again with the president of mexico. discuss" nation on many important issues between our countries. this coordination includes the andantling of cartels keeping illegal weapons and cash from flowing out of america the
tenant to mexico, out of our country and it goes right into mexico. they have to stop it. we have to stop it. they will save lives on both sides of the border. we also understand a strong and healthy economy in mexico is very good for the united states. very, very good. we wanted to happen. by working together, i truly believe we can enhance the relations in our nation's not seen before in a long time. i think our relationship in mexico will get better. here is a brief summary of what actions are contained in my second orders. the secretary of homeland myselfy, working with
and my staff will begin immediate construction of a border wall. so badly needed. how -- know how badly needed it is. this will also help mexico by deterring illegal immigration by central america and by disrupting violent cartel. repeatedly, we are going to get the bad ones out, the criminals and the drug dealers and the gangs and the gang members and the cartel leaders. the day is over when they can stay in the country and wreak havoc. we are going to get them out and get them out fast and john kelly is going to lead that way. [applause]
president trump: our order also does the following, and the policy of catch and release of the border. to take other countries back their criminals. crackdown on sanctuary cities. target andficers to remove those who pose a threat to public safety. calls for the hiring of another 5000 order patrol officers. tripling, the number of officers. [applause] trump: you will do an incredible job but you need help. you need more.
create an office of homeland security dedicated to supporting the victims of illegal immigrant crime. for years, the media has ignored the stories of lawful americans victimized. all of those hurting out there, these words.ou we hear you, we see you, and you will never ever be ignored again. [applause] president trump: as i traveled the country, i had a chance to get to know mothers who had lost their children to violence at the border. i want to thank the project, such incredible people,
forgiving the families a voice. they are called angel mom's for a good reason. because they are a voice to protect all of america's children. their children have not died in vain, believe me. [applause] president trump: london's talk about how enforcing immigration laws can separate illegal immigrant families. but the families they do not are the families of americans, forever separated from the people they love. they are -- they do not talk about that. as your president, i have no higher duty than to protect the lives of the american people. [applause]
president trump: first the families lost their loved ones, then endured a system that ignored them while at the same time cost of a who broke the law. for these families, it has been one injustice after another. that all turns around beginning today. we are joined here this afternoon by parents whose children were harlow -- hardly killed by individuals living here illegally. i will now read the parents names and ask them to stand. minehave become friends of and have supported me so dearly, and i appreciate it. son,nne mendoza lost her
police sergeant rented mendoza. fred and his son james who lost really feel it just. and james'sed's son brother. billy's wife was also killed by an illegal immigrant, somebody who never ever should have been here. laura lost her 17-year-old son, beautiful. josh is special. where is laura? thank you, laura. louise who lost their
young daughter, felicia. thank you. beautiful. thank you very much. thank you. stephen, who lost his 21-year-old son grant. thank you, stephen. others with us from these groups and they are incredible people who have endured so much. i want to thank everyone for being here. very very special people. nothing can ever make their pain go away, but i want you to know you are -- your children will not have lost their lives for no reason. set this incredible goal for so many.
these were great young people and they will always be remembered. we will never forget them. to the parents and loved once who kept alive with your activism, keep it going. save thousandsll of lives. when it comes to public safety, there is no place for politics. no republicans and no democrats. just citizens. good citizens. communities. we demand safe communities for everyone. respect. we want great schools. equality forty and
everyone. be a president, i promise you, for everyone. we will bridge our divisions, heal our wounds, and unify the country. that, we -- if we work together, there is nothing that we cannot achieve as america -- as americans. is limitless. good luck to our new and brilliant leader, general john kelly. and godu, god bless you bless america. congratulations to john. [applause] the presidentwas just began the department of homeland security. he spoke on the new homeland
security john kelly, saying he wishes him good luck. do the job quickly of getting bad people out of the u.s. quickly. he also listed names of people who had relatives or who were killed by illegal immigrants. >> i thought that was interesting. a visceral way to get the point across. it is typical with what trump likes to do, point out specific instances and draw upon larger points of that. let's bring in kevin at the white house and michael mckee, here in new york. point, i thought it was interesting. i know it was bringing out the parents whose children lost their lives, it is striking and visceral. i feel like politicians often bring up people who will be
directly affected by the policy, whether it is health care, etc.. >> it is something we saw repeatedly on the campaign trail, the presidential campaign in houston and up to new withhire, he would meet the family and he said we are directly impacted by drug cartels from the u.s. order. stark contrast to the today, opting-- for a month -- a much more compassionate -- the bottom line is we still have yet to see specifics on how exactly he would implement policy prescriptions. heavily he would rely
on congress with enacting several the principles. did not hear the word wall mentioned in his inauguration address. said --ming from senior senior staffers, again hitting many of the key constituencies who fueled his right -- rise to the white house, law enforcement officials to moms who would been impacted again by drug addiction, so clearly making an emotional appeal for laying the groundwork that a lot of forecast to be done utilizing resources in congress. while president trump was speaking, we have been keeping a close eye on the mexican peso. youave inverted it so when look at the line go up, it indicates the peso is strengthening. we saw a huge leg up relative to what we have seen earlier in the day. when you look at the mexican
peso, it has been held hostage to whatever the president says. abouthas been a barometer what trump might do with mexico. the things you look at here, whether or not it may be overdone, the other is donald trump said he would build a wall but he will have u.s. congress pay for it for the time being. at some point, mesko will pay for it, he does not have a plan to do that. waye does not seem to be a to force mexico into it. we do not even know if he can -- if the u.s. congress will fund the actual cost. was not able to say that at the briefing today, spicer. . looking at this and saying it may not be the danger it is. donald trump said some nice things about the mexican president coming to town. a lot of people do not want him to come now after the announcement of the wall.
but he is coming. that will relieve investors sentiment as well. >> saying mesko will pay to the wall to the they will reimburse us. scarlet: it is not clear how that will be done. he also said he has ordered the immediate construction of the wall. what gets to congress? has there been any action on the front? >> this is a debate the republican congress has had before the latest presidential increasest how it border security or whether that includes drones or a fence and all of the nuance, michael mckee's point, it is truly going to be interesting to watch.
with the republican base, the type of rhetoric is popular. many moderates in 2018 are going run with or away from the president's immigration policy. >> remember the wall, it would not cost $12 billion. or more, that did not include maintenance. increasent to government spending. sean spicer asked about how sean spicer scarlet: -- mckee,nks to michael economics policy correspondent. and of course kevin joining us from the white house. , ating to a different story the white house, trump told the chief that pollution regulations are out of control and outlined
incentives to create more jobs at home. is this the right time for a big expansion? joining us now is our detroit bureau chief. auto sales have not been doing well. they have plateaued lately in the past year. why might this piece -- something they are reluctant to do at the moment? .> it is a tough time to expand no one expects auto sales to grow here in 17.5 million units roughly maybe a little less next year. very healthy but not the time you want to add more capacity. already plenty of factories out there to supply the market. you start seeing big rebates and deals to keep moving at rates the industry has enjoyed in the past couple of years. long-term, you do not want to be
saddled with a plan you spend a billion dollars a year out of the next decade taking down car sales. scarlet: here is a reason why they might be reluctant to increase jobs. totale a line that tracks automatic payrolls and we shaded it with red and blue to indicate republican versus democratic administrations. when obama took office after the bankruptcy is of yemen crisis -- chrysler, president trump is pushing these to add jobs and he is up against tough comparisons. >> absolutely. you can see as far as wages go, it seems like there are two elements to it. the idea of whether or not they will be able to bring up sales, about ridesharing that is interesting, why people buy cars, i am wondering, david, no one really expected the
, gdp growth to almost double. is there a certain recalibration once we see economic numbers trickle and what we're doing overall? yet. one is doing that but your point is a good one. if the economy has a second thereing of steam here, is plenty of production -- capacity out there. ine than 19 million vehicles the region now. you report about 5 million, a lot of them coming from asia. were to add plants in the u.s. as the president wants, he will have to close it somewhere else. billions of dollars in investments from international automakers, they have a chance to get a return on that.
producing vehicles that make suvs, if you turn it down because there is a big terrace, that is a tough is this decision for a company to make. terrace, can you remove production to asia? parts to those mexican plants, those are in the u.s., the jobs go away because they would get the parts and information. there is a workable game trump would have to play if he were to try to cut off mexico. scarlet: right. extent any what carmakers in the u.s. had increase jobs here. it appeared at trump tile before the inauguration talking about creating u.s. jobs. toyota, audi,s of honda, been called in by president trump?
>> they certainly have been pressured. the problem they have is this tends to be a smaller voice. if you are somebody like volkswagen and audi, you do not have as big a voice here. have much to bargain with in order to keep trade ocean -- open and keep production in mexico. scarlet: our thanks to david. still ahead, options insight, we are trading microsoft. closing at a record. ♪
abigail: joining me is dan. he joins me from the cboe and chicago. happy doubt 20,000 to you. thanks as always for joining us. what do you make of them 20,000? higher before a pullback? psychologically, you can pooh-pooh it all you want. waiting to write this story for quite a couple of weeks here. ischologically, it significant. fors psychologically german the most part. i think it is a positive. you are seeing strength across the board. the nasdaq, the s&p support.
you are seeing the broader market supporting this move. again, it is a combination of both. they are not willing to step up to pay for options until they see real-life volatility. we are on pace. we are looking at the closing wall. we see a couple handful of times , but we could see a little put in that goes back pre-2008. andet price movement players are not willing to pay up here given the market are not willing to sustain these levels. they are not seeing a sustained down movement in quite some time. abigail: the trump trade remains in effect, one of the top sectors out of the election.
if there were a reversal and weakness in the financials and materials, with that potentially be a signal of weakness ahead? >> leadership continues to drive and the broadening of the rally across the tech sector as well. even emerging-market. at fact of the matter is these very low levels, any shift in sentiment will be pronounced in the vix. it will be a low-level as we see an elongated type of selloff. we are going to see a shift dramatically given the expectation side to it we will see the market move lower. >> your trade with microsoft very quickly. dan: march 65 calendar spread, i upside, over bound
the next couple of months, that will benefit the beneficial trade. abigail: thank you for joining us. scarlet: thank you. still ahead, the president will join us with the dow crossing the 20,000 mark. got above it.ally let's check in to wear that standard we got the dow, little bit from the earlier highs, still just about 20 k but a little bit off the highs. nasdaq doing really well. this is bloomberg. ♪
beginning starting the wall -- speaking to abc news in his first interview since the inauguration, mr. trump says he expects a full reimbursement from mexico. >> ultimately it will come out of what is happening with mexico. we are to start those negotiations soon. we will be reimbursed by mexico. 100%. -- r. trump white house chief strategist steve bannon was registered to vote in both new york and florida for several months. he registered to vote in new york on october 14, 2016 and cast tenacity ballot there but he was also registered in sarasota, florida. will voter his registration comes as president trump calls for