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tv   Bloomberg Markets Americas  Bloomberg  January 27, 2017 1:00pm-3:31pm EST

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the prime minister is expected to pitch a free trade deal as the u.s. president puts together his vision for a more assertive bilateral approach to trading relationships. we will be going to that news conference live, but before we go to that, let's check in with kevin cirilli, guy johnson, standing by at the white house. here in the studio is michael mckee. guy johnson, let me start with you. theresa may cannot get into any weeds on the trade deals, nor would she want to this first meeting, but she is actually not allowed until article 50 is triggered. -- guy: theoretically, yes, the u.k. should not be negotiating any kind of a trade deal. in practice, you can have lots of conversations, there are back channels and theresa may has certainly arrived with some kind
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of an idea of a formulaic idea on what a trade you may look like, but it is early stages. theoretically, she cannot negotiate. in practice, she will push the rules as hard and she can. david: we are waiting for the joint news conference with the prime minister and president. mentionedhael mckee that wilbur ross has not been confirmed. the trade representative has also not been confirmed. donald trump yesterday saying that he would be proud to do the negotiations himself and may have to, with the u.k. and mexico. is a comment like that reflective of the situation, that they have not been confirmed, or can we read more into it, that he will be taking more of a leadership role? when you look at the series of tweets on u.s. businesses and the economy, you are seeing that president trump
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is doing what he said he would do on the campaign trail in regards to taking direct action on issues that have his ear. the on this press conference, there is a lot happening behind the scenes, in terms of negotiations with bilateral trade agreements. last night, officials meeting at the u.k. embassy with prime minister theresa may, again, having that one-on-one face time to open a door to a political discourse. there are differences between the prime minister and president trump, and there were differences that she again alluded to yesterday in her speech at the republican retreat in philadelphia. however, she took a tone that the administration feels is much more receptive, if you will, and not as dismissive as others have been, including notably the mexican president. vonnie: who has the most to gain here, guy? a lot totries have
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gain with straight, but does britain have more to gain? is in atainly, it weaker position, is a smaller economy, and is about to be exposed to global free trade. it has significantly more to lose. the results, significantly also more to gain. you can find it on your bloomberg in some of the functions. the u.k. does not run a particularly big trade surplus or deficit with the united states. it is reasonably well-balanced. the two economies are in a fairly good place. but there are massive differences in terms of the ability to deal with issues like agriculture. the u.k. has a problem with a number of ways that finances are regulated over here, so many differences, difficulties in try to get a trade field done. starting point is fairly straightforward, we are
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reasonably in balance. then you get into the complicated stuff. they will not be dealing with how you manage gm in this meeting, nowhere close to that. at the meeting last night, not yet confirmed, but the fact that he was there indicates that they are talking at a more elevated level that you may have first assumed. and maybe the french would have hoped for. david: we are getting a read from the british embassy about what happened earlier today. also saying the prime minister will be meeting president trump for substantive discussions in the oval office, will have the opportunity to see the churchill bust in place in the oval office, a symbol of strength. the prime minister will also give the president a handful of presents. what is funny about this, she is giving him a scottish cup of friendship, and we know that the scottish may
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not want to stick around. fold in what is happening in washington with the gdp data we got today. let's talk about the role of trade in the u.s., how that factors into the numbers, as we look at what may happen with mexico. part trade is not a huge of the economy. maybe tall percent. it does represent a significant swing factor month to month and quarter to quarter. we saw a big rise in exports in the third quarter because there was a one-off purchase of thousands of tons of soybeans. that corrected this past month, was taken out of the data, so there was a big decline. that was what really push down the gdp figures today. if you take the trade component inventories out, which can often be a legacy of trade, you end up with a relatively
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strong performance, which is where we have been for the last five or six years. meeting nexted week. what will they talk about this time, do they know more than last time? we don't know what will be affecting the economy, donald trump has not laid out his legislative agenda. they will take a wait and see attitude. couldta we have gotten support a rate increase, but why do it if you don't have to, if you are not sure what will happen? of busy days for the president. he is scheduled to go to the pentagon later today for the ceremonial swearing-in of james mattis. the secretary of defense has authorized a review of the f-35 program. , reviewing that program and the air force one program. this is something that donald trump talked about in the transition.
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what could this review look like, what is the status of that renegotiation? this is about wasteful spending and also a competition between two u.s. companies battling each other for defense contracts, boeing and lockheed martin. when you take a step back and look at the pressure that this white house has put on boeing with regards to renegotiating the air force one deal, and boeing officials responding, quite candidly, being receptive to this incoming administration, saying they will work with the white house to lower the cost of air force one. that is a signal that they potentially view perhaps an opening in getting more defense contracts, because they lost several years ago on the fighter jet program that lockheed martin won. as a result, is now being accused of perhaps dragging its feet. this review, i think, is
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indicative that president trump will be directly involved in the negotiations with top u.s. companies, all over the world. lockheed martin shares are reversing a little bit now, not as low as they had been. we are getting more detail about that conversation between the mexican president pena nieto and president trump. it happened by telephone today. we know the foreign relations minister was in washington on thursday meeting with trump administration officials and told reporters that discussions would continue. it is still possible the two sides could reach a good agreement. michael, could this all blow away quickly? we know how the president can sometimes be in terms of emotions. mike: we have seen him be pena nieto's friend during the
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campaign, and now not getting along. it will be harder for pena nieto because the politics of it. by thebeen dissed president of the united states, his approval ratings are already low. he has to stand up for mexican dignity and honor in all of this, so he cannot be seen as caving into the u.s. president. it has made the negotiations, how they get to them, more difficult. , as leaders of the countries, you can say they will put it behind them, but on a political basis, pena nieto has to make sure that he get some kind of concession, something that he can show as a win, in order to have the political support to make done what needs to happen. david: reporters taking their seats ahead of his news conference between donald trump and theresa may. guy johnson, what happens next?
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theresa may is supposed to meet with the turkish president. what do these trips tell us about her overall foreign-policy objectives? trip to turkey will be interesting given what has been happening in the country, the powers has been centered on mr. erdogan. you have to remember as well, this is the southern flank of nato. the people are becoming extremely nervous about this. it comes back to the current security architecture that exists. the big bases down there, the use of airspace is extremely important for nato. ultimately, this will be a conversation about syria as well. then we come to the conversation that the president will have with vladimir putin. hegemonicabout the spheres of influence we have talked about over many generations, how the russians think about this. in many ways, the west has been sidelined in the conversation,
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and this could be an attempt to reengage the west, u.k., european powers, american authority into the conversation. it is interesting the way the whole conversation tomorrow will pivot back toward that. a refocusing. the nature of all of this is really incredible, talking about what is happening with mexico, brexit, and on the southern flank of nato, syria. david: thank you so much. areld trump and theresa may now taking their podiums in the east room of the white house. i am honored to have prime minister theresa may here for our first official visit from a foreign leader. this is our first visit. so, great honor.
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the special relationship between our two countries has been one of the great forces in history for justice and for peace, and by the way, my mother was born in scotland. today, the united states revenues the deep bond with , military, financial, cultural, and political. we have one of the great bonds. we pledge our lasting support to this most special relationship. together, america and the united kingdom, are a beacon for .rosperity and the rule of law that is why the united states respects the sovereignty of the british people and their right of self-determination. a free and independent britain is a blessing to the world, and our relationship has never been stronger.
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both america and britain understand that governments must be responsive to every day governmentsle, that must represent their own citizens. madam prime minister, we look forward to working closely with you as we strengthen our mutual ties in commerce, business, and foreign affairs. great days lie ahead for our two peoples and our two countries. on behalf of our nation, i think as for joining us here today a really great honor. thank you very much. prime minister may: thank you, mr. president. and i start by saying i am so pleased that i have been able to be here today, thank you for inviting me so soon after your inauguration. tom delighted to be able congratulate you on what was a stunning election victory. as you say, the invitation is an
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indication of the strength and importance of the special relationship that exists between our two countries, a relationship based on the bonds of history, family, kinship, and common interest. in a further sign of the importance of that relationship, i have today been able to convey her majesty the queen's hope that president trump and first lady would pay a state visit to the u.k. waiter this year. delighted that he has accepted the invitation. today, we are discussing a number of topics and there is much on which we agree. the president mention foreign policy, discussing how we can work even more closely together in order to take on and defeat daesh and the ideology of islamist extremism. our two nations are already leading efforts to face up to this challenge and we are making progress with daesh losing territory and fighters but we need to redouble our efforts. today we are discussing how we can do this by deepening intelligence and security
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cooperation and critically by stepping up our efforts to counter daesh in cyberspace. we know we will not eradicate this threat until we defeat the ideology that lies behind it. our talks will continue later, i'm sure we will discuss other topics, syria and russia. on defense and security cooperation, we are united in our recognition of nato as the bulwark of our collective defense. today, we reaffirmed our unshakable commitment to this alliance. mr. president, you confirmed you are 100% behind nato. we are also discussing the importance of nato continuing to ensure it is as equipped to fight terrorism and cyber warfare as it is to fight more conventional forms of war. i have agreed to continue my efforts to encourage my fellow european leaders to deliver on their commitments to spend 2% of their gdp on defense, so that the burden is more fairly shared. it is only by investing properly in our defense we can ensure we are properly equipped to face
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our shared challenges together. finally, the president and i have mentioned teacher economic corporation and trade. trade between our two countries is already worth over 150 billion pounds a year. the u.s. is the single biggest source of investment into the u.k. together we have around $1 trillion invested in each other's economy. the u.s.-u.k. defense relationship is the broadest, deepest, and most advanced of any two countries sharing military hardware and expertise. the president and i are ambitious to build on this growionship and order to our respective economies, provide the high skilled, high paying jobs of the future to working people. we are discussing how we can establish trade negotiation agreements, take forward immediate high-level talks, lay the groundwork for u.s.-u.k. trade agreements, and identify the practical steps we can take now to enable companies in both countries to trade and do
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business with one another more easily. i'm convinced a trade deal between the u.s. and u.k. is in the national interest of both countries and will cement the crucial relationship that exists between us, particularly as the u.k. leaves the european union and reaches out to the world. today's talks were significant for president trump and i to build our relationship. i look forward to continuing to work with you as we deliver on the promises of freedom and prosperity for all the people of our respective countries. thank you. president trump: very nicely stated. steve holland. you are going to be speaking tomorrow with the russian president. what message would you left to convey to him, how close are you to lifting some of the sanctions imposed on pressure over its ukraine incursion, what would you expect in return? prime minister may, do you foresee any changes in british attitudes toward sanctions on russia? i hear a callp:
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was set up. we will see what happens. as far as the sanctions, early to be talking about that. we look to have a great relationship with all countries, ideally, that will not necessarily happen, unfortunately, probably will not happen with most countries. if we can have, as we do with prime minister may, and the relationship we have all developed, even the short relationship that we have just developed just by being with , we haver, have lunch really had some very interesting talks, very productive talks. if we can have a great relationship with russia, with china, with all countries, i am all for that. that would be a tremendous asset. no guarantees. but if we can, that would be a positive, not a negative. ok? prime minister may: as far as the u.k. is concerned on sanctions with russia in relation to their activities in the ukraine, we have been very clear, we want to see the minsk
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agreement fully implemented. we believe the sanctions should continue until we see that minsk agreement fully implemented. we have been continuing to argue that inside the european union. laura. you, prime minister. you have talked about where you agree, but you have also said that you would be frank gore you disagreed with the president. can you tell us, where in our talks did you disagree, and do you think the president listened to what you have to say? -- president we will see what she says. mr. president, you have said before that torture works, you have praised russia. you say you want to ban some muslims coming to america. you have suggested there should be punishments for abortion. britain,people in those sound like alarming beliefs. what do you say to our viewers at home who are worried about some of your views, worried
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about you becoming the leader of the free world? president trump: this was your choice of a question? >> [laughter] president trump: there goes that relationship. on the issuer may: that you raise with me, laura, can you confirm -- i have been listening to the president and the president has been listening to me. that is the point of having a conversation and dialogue. we have been discussing a number of topics, will carry on after this meeting, meeting a number of other topics. there will be time to we disagree. the point of the special relationship is that we are able to have an open and frank discussion. so that we are able to make that clear when it happens. but i am clear also that there are many issues on which the united kingdom and the united dates stand alongside one another, many issues on which we agree. i think, as i said yesterday in my speech, we are at a moment now when we can build an even
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stronger special relationship which will be in interest not just of the u.k. and the united states, but in the interest of the wider world as well. president trump: we have a great general who has just been ,ppointed secretary of defense general james mattis. that hetated publicly does not necessarily believe in torture or waterboarding, however you want to define it, enhanced interrogation, i guess, would be words that a lot of people would like to use. i don't necessarily agree, but i would tell you, he will override, because i'm giving him that power. he is an expert, highly respected. he is the general's general. got through the senate quickly on the witch in this country is not easy, i will tell you. so i will rely on him. i happen to feel it does work.
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i have been open about that for a long time. but i am going with our leaders. , with oring to win without, but i do disagree. andar as, again, putin russia, i do not say good, bad, or indifferent. i don't know the gentleman. i hope we have a fantastic relationship. that is possible. it is also possible we will not. we will see what happens. i will be representing the american people very strongly, very forcefully. if we have a great relationship with russia and other countries, and if we go after isis together , which has to be stopped, it is an evil that has to be stopped, i will consider that a good thing, not a bad thing. how the relationship works out, i will not be able to tell you that later. where iad many times thought i would be getting along with people and i don't like them at all. i have had some where i did not
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think i was going to have much of a relationship, and it turned out to be a great relationship. so, teresa, we never know about those things, do we? iwill tell you one thing, will represent the american people very strongly. thank you. fox?bout john roberts, mr. president, thank you so much. madam prime minister, it's my understanding, mr. prime minister, that you had a phone call this morning with enrique pena nieto this morning. can we get an update on where the relationship is? what do you say to your critics who say that you have already soured a relationship with a very important u.s. ally? madam prime minister, if a mysql ask you, are you concerned about the state of relations between united date and mexico? president trump: i think the promised her, first of all, has other things that she is worried about than mexico and the u.s.'
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relationship. i will say that we had a good call. i have been very strong on mexico, i love the mexican work with the mexican people all the time. great relationships. as you know, with the united states, mexico has out negotiated us, beat us to a pulp through our past leaders, they have made us look foolish. we have a trade deficit of $60 billion with mexico. on top of that, the border is soft and weak, drugs are pouring in. i am not going to let that happen. general kelly will do a fantastic job at homeland security, as you know. we swore him in yesterday. we have a really good relationship, the president and ip. we had a talk that loss in about one hour this morning. a are going to be working on fair relationship and a new relationship.
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but the united states cannot continue to lose vast amount of business, vast amounts of companies, and millions and millions of people losing their jobs. that will not happen with me. we are no longer going to be the country that does not know what it is doing. and so we are going to renegotiate our trade deals and we are going to renegotiate other aspects of our relationship with mexico. in the and, i think it will be good for both countries, but it was a very friendly call. i think you will hear that from the president. i think you will hear that from the people of mexico that really represent him and represent him very well. i look forward to, over the coming months, we will be negotiating. we will see what happens. i am representing the people of the united states. i am going to represent them as somebody should represent them, not how they have been represented in the past, where
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we lose every single country. president trump: as the president himself has said prime minister may: -- as the president has said, the religion between the u.s. and mexico is a matter for the u.s. and mexico. i wonder if you could help us with the brexit trade deal. stand by us would with nato, but how can the british prime minister believe you? you have been known in the past to change her position on things. people are fascinated to know how you will get along with each other here you are so different. the hard-working daughter of a vicar, the brash tv extrovert. have you found anything in common personal yet? president trump: actually, i'm not as brash as you think. and i can tell you, i think we will get along well. it is interesting because i'm a people person. i think you are as well, teresa. i can often tell how i will get
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along with someone very early. i think we will have a fantastic relationship. and i don't change my position very much. myyour back and look, position on trade has been solid for many years, since i was a very young person talking about how we were getting ripped off by the rest of the world. i never knew i would be in his position where we could do something about it. talking to your folks about brexit. brexit was an example of what was to come. i happen to be in scotland at turnberry, cutting a ribbon, when brexit happened, and we had a vast amount of press there. this was the day before, you probably remember. i said brexit is going to happen. i was scored in a press for making a prediction. i was scorned. i said i believe it will happen. he will want to know who is coming into their country and they want to control their own trade and various other things.
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low and behold, the following day, it happened. he often went good for me when i made the statement because, as you know, everybody thought it was not going to happen. i think brexit will be a wonderful thing for your country. when it irons out, you will have your own identity. you are going to have the people that you want in your country, and you will be able to make free-trade deals without having somebody watching you what you're doing. i had a very bad experience, i had something when i was in my other world, i have something in another country, and getting the approvals from europe was very tough, getting the approvals from the country was fast, easy, and efficient. getting the approvals from the group, i call them the consortium, was very tough. but i thought brexit, i think it will go down that it will end up being a fantastic thing for the united kingdom.
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in the end, it will be a tremendous asset, not a tremendous liability, ok? prime minister may: just on the question you asked me, tom, as the president has said, i think we have already struck up a good relationship. but you asked what we had in common. if you look at the approach that we are taking, one of the things we have in common is that we want to put the interests of ordinary working people write up their center stage. those people who are working all the hours, doing their best for their families, and sometimes they just feel the odds are stacked against them. it is that interest in ensuring that what we do, the economies in our governments are actually working for ordinary working people, work for everyone in our countries, i think we both share that. president trump: thank you very much, everybody. vonnie: you have been watching
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the news conference between the u.k. prime minister theresa may and donald trump, u.s. president , the first foreign leader to visit the white house since donald trump took the office of the presidency. they began by saying their relationship has never been stronger. there is going to be a state visit to the u.k. later this year by the there is lots to chew overcome including some foreign-policy statements by theresa may and the idea that donald trump is 100% behind nato. the two talked about sanctions. more news on mexico. let's bring in our cheap washington correspondent, kevin cirilli and bloomberg's guy johnson. also joining us, michael mckee. let's get some reaction from you, guy johnson. what you make of the comments from theresa may and donald trump?
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may was doing what we expected her to do, reinforcing what she came her to do. to create some personal chemistry. we will dissect that one over the next few hours. i suspect she came here also to talk about trade. what you did focus on was the international security story. the president was backing nato. that is a big win for theresa may. david: let me ask you about the conference itself. you and i have watched a ton of these. the statements at the beginning were much shorter than in the past. to getve a working lunch to. this ended 10 minutes earlier than was scheduled. this was a less combative president trump. , stylisticumorous tone instead of the combative. this was president trump acting
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presidential. that will be a takeaway in terms of style points. more broadly speaking on policy, about nato, president trump saying he had a friendly conversation with mexico's president and we also heard him discuss trade. brexitd him talk about much on the parallel between his own personal presidential rise to that which is happening in the united kingdom. publicly, this was a win for the white house. prime minister theresa may. vonnie: maybe it is a function of the president having just taken up this role and theresa may being in her role for a substantial time longer.
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it seemed like president trump was holding his cards closer to his chest. on things like russia and , theresa maynato was laying out her positions and she said donald trump is 100% behind nato. hindshe was 100% be the sanctions. mike: the president has nobody working for him. his cabinet officials other than the national security trio have not been confirmed. has stepped in a lot over the last week with his tweets and comments in various interviews. bewas appearing to presidential and trying to contain his answers. on russia, he's under a lot of pressure from members of the senate. ohio alsob portman of put out a statement saying the senate should take action on the sanctions. they seem to be trying to box them in.
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mexican president put out a statement saying the two of them in their phone call had agreed not to discuss the wall in public. maybe it ishe case, a breakthrough and maybe what we are looking at is an effort by donald trump to change perceptions. to keep himself from getting into deeper trouble. saying theesa may relationship between united states and mexico is up to the united states. yesterday, the u.k. prime minister to talk about nato and the imf and the world bank and the u.n. and the need for reform there. is she the one pushing harder toward the continued strength of multilateral institutions? guy: she probably is. that is what the british prime minister has come here to do.
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to persuade the president to start engaging with the institutions. they represent much of the financial and security architecture that exists at the moment. she wants them to engage with them positively. she had some success. she did copy up it desk caveat saying europe needs to step up. she was trying to make the point that maybe europe needs to take a stronger stance when it comes to defense spending. vonnie: let me ask you for your reaction to the questioning. it was very interesting how the british reporters were speaking to their prime ministers versus how u.s. reporters are speaking to the current president. did you feel there was a difference in tone? kevin: i think there was a difference in tone.
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president trump looked to americansconcerns of -- we are in a divisive political environment, but also worldwide, there are many observers around the world who have concerns about the u.s. election and its results. in terms of projecting how president trump will engage with global leaders come i thought it was interesting and quite back how helay responded to questions about russia were particularly his relationship with latimer about russia, -- particularly his relationship with vladimir putin. he said it was too early to begin discussing walking back ,ny sanctions against russia despite some in the u.s. business community who are
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bullish that that will begin to occur. he has hit the pause button on talks that could have gotten away from him in this new cycle. david: the prime minister is much more emphatic. she says we believe sanctions and should continue. set the table for us. this phone call tomorrow with latimer prudent. -- latimer prudent -- vladimir putin. mike: a similar situation to what theresa may and the president were doing today, establishing some sort of relationship. he wastrump has said very close to vladimir putin and he has also said i've never met him. we don't know the exact truth. they have to have some sort of relationship. to startbe bad form talking about sanctions immediately. if they can begin laying out
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some of the issues between them and promising to work on them, that would be a good start. the other interesting thing that came up today was donald trump saying general mattis -- secretary mattis will be the decider on torture. that was a walk backup donald trump's previous behavior. he said i will stay out of it and let the military decide w. vonnie: he has said that in interviews this week. guy johnson, theresa may bringing up the trade agreements she wants to see happen between the u.s. and the u.k. ,uture economic cooperation stressing there is a trillion dollars worth of investment between both countries.
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guy: we were talking about this before the press conference started. the relationship is symbiotic and well-balanced. u.k. money flows the other way as well. that is a very good starting point. you wanted to talk about trade, she did not want to knee-deep into it -- while she wanted to talk about trade. it is far too early to get into the nitty-gritty. vonnie: our thanks to guy johnson and kevin cirilli. michael mckee in studio will be sticking around all day. david: fond traders got there first pay bump since 2012. we will discuss bankers' bonus bumps, next. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." david: a good time to be a rates trader on wall street, boosting the 2016 bonus pool by 20%. bank of america traders got increases of 10%. lydia beyoud. >> it is all connected to what's happening in trading. fixed income trading is great, doing wonderful. their revenues are rising, especially with u.s. banks seeing a better rate than
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european banks. we did talk about looking at the numbers at the end of the year, fixed income trading, revit is 20% for bank of america -- 20% for jpmorgan and 10% for bank of america. vonnie: are traders at jpmorgan better? >> who knows why one gets better revenues than the others. are a market leader and they have been expanding their market share. it is now 70% or 18% of the market. -- 70% or 18% of the market. -- 17% or 18% of the market. they have gotten out of certain products, they don't offer everything anymore. they have an advantage there.
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the market trading goes up and down all over the place. the market taking a lot of risk. will interest rates go up by one or two? you have to build positions thinking of those moods and maybe you build the run position, you don't make good money. you build the right position, you make good money. david: you mentioned european banks. a different conversation in europe at this point when you talk about competition generally. some of the banks are seeing declining revenues -- decliningesk in revenues in trading.
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the trading revenue gets smaller, so the bonuses get smaller. u.s. banks have done all that, they've gotten rid of several hundred thousand people since the crisis. they have slowed that down and have stabilized especially the bigger ones. europe is still doing that. the bonuses go along with that. vonnie: with all the transparency there is now in rates and markets, does this go away? >> oh, no. room, so muchmore going on. world trade is going to change. is the fed going to keep raising rates? all the unknowns help trading and despite the transparency and volatility. let's get a check on the
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markets now with everything that's happening today, here's julie hyman. of the press wake conference we just heard from donald trump andreessen may, still not seeing much change in stocks. -- donald trump and theresa may. for the an upward buy nasdaq. i want to check on the british pound. still seeing a decline, close to .5%. a bit of volatility but holding relatively steady after that conference. other things affecting specific stocks or currencies. lockheed martin is one of the stocks we are watching. after weleg lower heard that the new defense secretary will indeed be examining the f-35 program to see if there's a way to bring costs down. this falls in line with the rhetoric of president trump before he took office. there was a bit of a reaction.
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we continue to watch the mexican peso as we learned that president trump and the president of mexico had an hour-long phone call. we see the dollar continues to weaken versus the mexican peso. the peso up 1.5% versus the u.s. dollar. we continue to watch the various companies that have exposure in mexico. kansas city southern gets half of its revenues from that country. whirlpool has significant manufacturing operations there, as does general motors. they talked about bringing some operations back to the united states. and constellation brands, the modelo. corona and talks about the wall, talks about potential import tariffs, these are the potential companies that could be affected by that.
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david: julie hyman with that market update. conference, to questions from reporters at from -- to questions from reporters from the u.s. and to questions from reporters from the u.k. joining us now is bloomberg tv canada anchor -- react to what we've seen over the last 24 hours. as donald trump left philadelphia yesterday. what has the reaction been in canada to all that news? >> initially, is canada next? as we got our bearings, there seems to be signs that canada is not in the cross hairs here. canada has a trade deficit with the united states while mexico
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has a surplus. canada has a pretty similar economy to the united states in a lot of ways. with high labor costs. that means canada is not really in the cross hairs here. mexico seems to be the target. that is the idea that we've been given from the trump administration, from the trump team over the last couple of days. vonnie: prime minister trudeau has been quiet this week. even on the pipelines that should in theory help canada. it happens at the eyes of the u.s. president turned to canada? -- what happens if the eyes of the u.s. president turn to canada? y: well trudeau has remained
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relatively silent on this issue, we did hear from the canadian ambassador to the united states on sunday which now seems like eons ago. he was in calgary where government officials were meeting to limit the losses from a potential renegotiation of nafta. that would essentially leave mexico out to fend for itself. vonnie: thank you. ceos: coming up, why aren't concerned with the increasing unpredictably of donald trump. this is bloomberg. ♪
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david: business leaders are
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usually concerned about uncertainty. that doesn't seem to be the case with donald trump in the white house. peter writes about this in the businessweek."rg we've seen the parades of executives coming through the white house over the last week. you start the piece by noting there was this clearing call throughout the above and ministry's income executives -- the obama administration come hate uncertainty.cutives >> he doesn't have a set of rules that companies can follow, which is what republican ceos were asking for. give us a level playing field and we will take it from there. talking toike individual ceos, calling them into the white house and dealing with them by phone, tweeting out at them. there's an incredible amount of uncertainty out there. david: you call him mr.
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unpredictable. in writing the piece, it was hard to get executives to say anything negative about the president. peter: there are two reasons why that might be. they are just afraid of getting on the wrong side. there are abelieve lot of ceos who hope he will be better for them than the democratic president who preceded him. been abillionaire, he's business person all his life, he likes low taxes and low regulation. they're willing to forget a lot if they get those things. david: you had an interview with larry summers. he expressed some displeasure with the way the president has been dealing with business. said a loty summers of the ceos who are now praising
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meetingscoming to his smiling saying comforting things are the same ones who were just months ago like, quite critical. even back then come i wouldn't say there was a groundswell. now, they are even more cautious. says we arecantor witnessing a tectonic shift in washington. what does that shift look like? peter: when he said it, he met in a positive way for trump. this is the republican agenda. truly a not conventional republican. if he were, he would be a small government kind of guy. i don't see trump as a small government kind of guy. i see him as a big government
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kind of guy who wants to put his personal imprint on the way america operates. david: peter coy, thank you very much. i know you are looking at the mexican peso. ,onnie: it is picking up steam one with 6% stronger now in today's session -- 1.6% stronger now in today's session. comment that they will not talk about the wall in public and that there was an hour-long conversation between the president and mexico's president earlier. continue to watch "bloomberg markets." kevin: ♪
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scarlet: it is 2:00 p.m. in new york and 7:00 p.m. in london. oliver: welcome to "bloomberg markets."
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scarlet: we are covering stories out of mexico city, london and washington. president trump and british prime minister theresa may wrapped up their news conference talking trade, brexit, nato and more. the president talked to mexico's president by phone with contentious issues like the border wall and trade hanging in the air. the peso extending its gains against the dollar. we will dive into tech earnings next week come including apple, amazon and facebook. u.s. markets close in two hours. let's check in on where stocks are trading now with julie hyman. a record-breaking week for the dow. julie: we have a trip for the major averages. drift for the major
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averages. front, gdp last quarter growing by a smaller amount than had been estimated. on the other side, we have consumer sentiment which is indeed pretty healthy. we will see the consumer sentiment is measured by the university michigan at eight 13 month high. -- the university of michigan at a 13 month high. we have heard from some of the big tech firms in the plus column. 's move related to the cloud. kla-tencor also benefiting from all of this as its shares are up 4%. dragging in terms of earnings
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today, starbucks shares are lower by 4%. this as the company said its same-store sales in the u.s. grew by 3%. overall same-store sales growth has been tricking here. ironically, it is as more and more people are paying with their mobile phones. we have a chart of the percentage of sales that come from digital sources. now coming from this method, which seems like a good thing. except for the fact that these people put their order in online were on their phone and walked up to the counter and there is this bottleneck there. the company has to work on these issues. let's check on the first word news this afternoon. : president trump and
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british prime minister theresa in have kicked off a new era u.s. u.k. relations. they stressed the importance of the special relationship between the two countries. theresa may is the first foreign leader to officially meet with trump since the inauguration. she confirmed mr. trump has accepted an invitation from the queen. president trump spoke for an hour on the phone today with mexican president peña nieto. the two men were supposed to meet in washington next week but the mexican president canceled the visit after mr. trump moved forward to begin construction of the wall. russia says the next round of syrian peace talks will be postponed until late february. england continued clashes --ween rival factions and
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rebels fighting to remove ass declined an invitation to meetad -- to remove assad declined an invitation to meet in moscow. officials in southwest or just say a 77-year-old woman has died from injuries she suffered when a tree fell on her home last weekend. georgia.est 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. trump beganident his first full week in office meeting with corporate executives. today, he is wrapping up the week with his first meeting with the foreign lead a foreign lead.
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may addressed the nato alliance. today, wester may: have reaffirmed our unshakable commitment to this alliance. the president confirmed he is 100% behind nato. we are also discussing the importance of nato continuing to ensure it is as equipped to fight terrorism and cyber warfare as it is to fight more conventional forms of war. oliver: let's go to guy johnson who is here at the white house. let's start off with a comment on nato. we have a great story this weekend about the same topic a lot ofthe idea that countries have not been could you beating their fair share of towardsf gdp protection, towards the military. what do they want to get done with nato? guy: they want to get a number of things done. to ensure the white
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house engages with the current western security architecture, that it sticks with nato. the president had been disparaging of the alliance and the fact that theresa may was able to come here and persuade the president that he should announce he is 100 sent this 100% behind the alliance is a significant win. thats keen to point out europe needs to do more. the u.k. is one of a handful of nations within europe that contributes more than the 2%. that is a finger pointed firmly at germany which does not. it will be interesting how the conversation will go with the germans tomorrow on that note. scarlet: one thing they did agree on was to disagree on a number of issues come including russia. theresa may did not say that in some new words, did she?
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u.k.'s hawkish compared to the line we've had coming out of the trumpet ministration. that's trump administration. the russians need to stick with it will bed -- interesting to see how that one feeds through. president points out he doesn't know how that relationship is going to go. we've been hearing this from inside congress as well. the idea that the americans should be watering down the current sanctions. that includes the british at this stage. there are a lot of core principles behind brexit and the rise of trump that would lead us to believe that theresa may and the u.k. in the west should have a lot of overlap. i want to get the english perspective. they areeem like
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warming to trump quicker than other countries? what do people make of this across the pond? it seems like they are getting along pretty well. a certain amount of nervousness in the k about how quickly theresa may has developed this relationship. we still don't know the core principles. about how quickly theresa may has developed this relationship. it was interesting to hear the president talking about his predictive powers on this subject. see america as a pragmatic new start in terms of a trading relationship that has its genesis in brexit and the election, but they hope it will go further than that.
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it will be interesting to see how it develops. how they can reinforce each other still remains an open question. there was some suggestion before this meeting that maybe the president would talk about trying to assist theresa may in making sure the triggering of article 50 would happen by the end of march. a lot of people wondering how that will happen. scarlet: did theresa may come into this meeting from a position of weakness or disadvantage since she asked for this early meeting? some people saying she's a junior partner in this relationship. guy: of course she is the junior partner in this relationship. the u.k. is a much smaller economy. it is not a superpower in the way the united states is g. they want it to be perceived as a relationship of equals. reagan and thatcher -- the
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president talked about something similar to that. it will be interesting to see where the leadership comes from. u.k. has a certain number of cards to play as well. ,he fact that today went well it was short and presidential come is something the white house would have appreciated from this first meeting with a born leader. -- with a foreign leader. the chemistry was good, they both feet off each other and that will be taken positively. -- feed off each other. scarlet: trump's meeting with he has aay comes as dispute with another leader, president mike:. that's president -- president
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peña nieto. carlos slim saying he is pleased mexico has united. you can watch the full news conference on the bloomberg at live . ♪
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scarlet: this is "bloomberg markets." peso is gaining following news that president trump and president enrique peña nieto spoke by phone today amid rising tensions. trump addressed the phone call earlier in a joint news conference with british prime minister theresa may. president trump: we will renegotiate our trade deals and renegotiate other aspects of our
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relationship with mexico. in the end, it will be good for both countries. it was a very friendly call. you will hear that from the president and from the people of mexico. oliver: mexican billionaire sang in a news conference -- mexican slimonaire harles carlos speaking at a news conference. we talked to you about the cancellation of the meeting between peña nieto and trump. today, trump reaches out via phone call. what is the vibe there? >> what we've been hearing is that president peña nieto and the trump team were always going to continue working. the mexican foreign minister said as much last night in washington before departing
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for mexico city. the damage done yesterday was a step backward in this relationship and the cancellation of the president's trip to washington next week is a setback for the process. it will be interesting to see how this unfolds over the next days and weeks in terms of damage control and trying to repair the relationship. it depends on the back channeling that will take place in the weeks and months to come. theld trump likes to cite -- $60s with mexico billion trade deficit the u.s. has with mexico. mike: who told him what a trade deficit is? we are using our purchasing power to buy things we want from mexico. we get things we want and we pay a lower cost for it. that is in general a good thing with the u.s. moved tostries have
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mexico where labor costs are lower. the people left behind need some sort of help. that is what most economists say you should focus on rather than the absolute level of the trade deficit. it doesn't necessarily mean a bad thing. it is all in context. we want to buy things that mexico is selling. we are taking our earnings and getting what we want and we are getting it at a lower cost. the general welfare of the unite states is improved by this. -- united states is improved by this. we aren't having our lunch eaten like the president said today. scarlet: carlos slim holding his news conference right now to discuss the wall. .vailable at live
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give us some context here around carlos slim. does he support donald trump or does he oppose donald trump? he's made comments that would it open to interpretation. >> we've seen both sides of the coin from carlos slim. nobody speaks for mexican business like one of the richest men in the world. we did see carlos slim criticizing donald trump during the campaign, talking about the mistakes in his rhetoric and his ways of viewing mexico. we saw in december that mr. slim had the dinner with mr. trump and called it a great meeting. everyone is looking to see from the business sector in mexico what the response is going to be to trump's latest statements about the wall and his reiteration of that point. also looking for mexican allies in the u.s. to be lobbying the trump administration, making the
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case for why nafta and why a good relationship with mexico is important to american consumers. anybody looking at what's happened in the last 24 hours, peña nieto canceling the meeting based on trump's tweet, he is playing a bit of hardball. is the mexican economy in a situation where they can afford to play hardball with trump or will he eventually get his way? eric: not that is still in place until something else comes along to change it. -- nafta is still in place. mexico continues to export to the u.s. tiescan pursue stronger bilaterally with the tpp partners. this kind of rhetoric from mexico's president plays very well at home. and analyst said donald trump
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has succeeded in doing what mexican politicians for generations have failed to do, uniting all mexicans in a common cause. scarlet: we will continue this conversation. we have much more coverage because carlos slim is still talking right now. ahead, what would a potential border text mean for u.s. energy companies? --t the cohead of america's this is bloomberg. ♪
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scarlet: this is >>. -- this is "bloomberg markets." mexican billionaire carlos slim still speaking mexico city, talking about donald trump, saying he's a great negotiator. mike mckee is with us. some breaking news. jamie dimon was seen entering
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the white house. he's chairman of the business roundtable. perhaps he is going there in that capacity. we will keep you posted on any headlines that emerge from that meeting. when we talk about what's going on with mexico and the u.s. and the phone call between the two presidents, one thing i noticed is the mexican peso is strengthening. the mexican peso has gained 3.1% so far this week. this is as these headlines rollout about these conversations between the two presidents. mike: the peso took a big dive when donald trump was elected.
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it has moved around within a band and it is still over 22 the dollar at the moment. put a .93 right now. 20.93 right now. to thetill over 20 dollar at the moment. you had the tweet storm and the andt and the cancellation today, they are making nice on the phone call. nobody is taking an extreme position anymore because they are not sure where this is going. you are not getting anything out of it by jumping in and jumping out. i want to talk about the comment we were just talking about during the break. bill gross and trade volatility -- it is hard to figure out what
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exactly that means. wereave these certain days you get a tweet and your company goes down in the mexican peso goes down -- mike: it's been unusual given the news headlines. markets seem to believe the of what donaldst trump has promised, more spending, more federal spending and fewer regulations for business will lead to higher profits. discounting the idea that we will make more money in the stock prices can go up. they are looking beyond these headlines. that is why many people look to the markets rather than to the newspapers. trump and peña nieto saying they will not talk publicly about the wall. that is important.
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to what extent are they going to talk publicly about every step of negotiations? pieces?e leak bits and are there details left and right? mike: yes, there are a lot of leaks. mostly, you are negotiating. you don't get a lot of here is what we decided as the negotiations go along. trade negotiations can take a very long time. , it willeopen nafta take a long time to work through all the details because it can get very complicated. his donald trump want to be disciplined enough not to talk about it and the wall? he's made the point to his supporters, he wants to build the wall. the more he talks about it, the harder it is for peña nieto to make any kind of concession.
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theret: perhaps a victory for mexico. you can continue to watch the carlos slim news conference, he is speaking in mexico city on the wall and u.s. and mexico trade relations. oliver: still ahead, the commodities close. how a proposed order tax would impact the number of food products for mexico. -- from mexico. this is bloomberg. ♪
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>> this is "bloomberg markets." scarlet fu. >> i'm oliver renick. here's julie hyman. >> i went to get breaking news
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it has nothing to do with commodities, and that has to do with rite aid. shares taking a leg of before being halted for volatility ater new york post reported possible white night if the merger of laundry and write a -- currently there is an interest in acquiring the 865 shares that agreed to divest. the post is citing sources familiar with the matter here. if this deal was able to go through, that would explain the uptake we are seeing in the shares. walgreens also taking a leg up on this. turnaround, left out in the cold potentially on this, might be fred, which had agreed to buy some of these stores. that move had not been enough to satisfy regulators.
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i havehares going down about 3%. continue to monitor the situation and see we can get confirmation of it. getting to commodities, i want to check out what's going on with oil at the moment. we are seeing it down by more than 1% today in part after a strong week and lingering questions about opec members, whether they will be continuing to cut, and also not supply in u.s.. it being a friday, we got the weekly rig count. since this bottom, it has seen a pretty steady increase for 30 of the past 35 weeks. there's been an increase in this rig count. that implies more supply coming in the united states putting pressure on those oil prices. checking on gold and silver, the chinese lunar new year holiday has begun, and there are some reports that means chinese are
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no longer buying. gold little changed. having a good day. in contrast, it is up by 1.7%. oliver: thanks so much. staying with commodities, the limes,f your tomatoes, and avocados could be headed higher. donald trump set to impose a li, and avocados could be headed 20% tax on mexican imports to pay for the southern border wall. our bloomberg news commodity reporter is here. say it ain't so. a 20% tax ons mexican imports, this could be disruptive for everything from wine and beer. mexico the biggest seller of wine and beer, from fresh fruit and vegetables, including avocados, which is the staple of all the guacamole at all the super bowl parties. scarlet: it's not just mexico.
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canada the next biggest importer. when you're talking about renegotiating nafta overall, the number of vegetables and fruits are affected gets even larger, and the dollar amounts get particularly striking as well. oliver: the u.s. bought $70 billion of agricultural goods from mexico, and usually there is a trade surplus between the u.s. and mexico and agriculture. they and canada and china are by far the three biggest trading partners pick with the exception of canada where relations seem to be strong, mexico and china are big-time in donald trump's line of fire and they happen to agriculture, two incredibly important markets. scarlet: we are monitoring this news conference being hosted by carlos slim, the mexican billionaire. he's discussing donald trump ago incredibly important markets. scarlet: we are and the construction or plant planned construction of the wall. oliver: as of now it is not anything set, it is what trump
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has threatened, at least for the moment. andaw that pena nieto trump, phone call, they say they will talk some more. if this is something that doesn't happen -- we could be in the clear. until then, let's talk about it or it -- it. beer you can replace trade i don't know about avocado. chemical is interesting of a question, if you have a more protectionist regime up anyway, any renegotiated nafta, there is a greater chance of protectionism in the end. you have a fascinating situation where perhaps avocado for mexico become more expensive. that makes california avocados more competitive. where does the labor come from? that comes into immigration policy and now we have something , we start looking at the second-order effect of where these things go. becomes a fascinating question of economics that affects people directly other dinner tables. scarlet: we talked about how donald trump likes to cite the
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$60 billion trade deficit the u.s. has with mexico. it varies, doesn't it? >> in terms of agriculture as a sector -- lester the u.s. had a trade deficit with mexico but that was the first one since 1995. good for been very u.s. agricultural export trade mexico is the biggest buyer of corn and soybean meal and other commodities. it's a very positive bilateral relationship for the united states, fruits and vegetables a big source from mexico. they have a better climate for it and they grow it very inexpensively. agriculture is an area where trade with mexico is seen as a win-win for both parties. about manufacturing and other parts of u.s.-mexico relations, as it is in so many other areas, agriculture becomes an afterthought. it's one of the most important sectors in these i lateral relationships. bilateral relationships.
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scarlet: let's check in on headlines on bloomberg first word news at this hour. ateral relationships. emma: president trump and british prime minister theresa may have kicked off a new era in u.s.-u.k. relations. the two world leaders have a joint conference at the white house today where they stressed the importance of the special relationship between the two countries. pres. trump: america and britain understand that governments must be responsive to every day , that governments: president tp must represent their own citizens. inister, we look forward to working closely with you as we strengthen our mutual ties in commerce, business, and foreign affairs. emma: theresa may is the first foreign leader to meet with trump since the inauguration. she confirmed trumpinister, we k forward to working closely with
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accepted an invitation from the queen's state visit. chavez expected to make good on another cap pledge. the white house said he accepten invitation from the queen's state visit. chavez expected to make good on another cap pledge. the white house said he will sign an executive slowing the flow accepted an invitation from the queen's state visit. chavez expected to make good on another cap pledge. the white house said he will sign an executive slowing the flow of refugees into the u.s.. president trump and mexican president in riga -- enrique peña nieto had an hour-long conversation today and that tensions after the border wall. afterwards peña nieto called the conversation constructive. could berorists planning to undermine elections in france and germany, that warning from the european union. pen isionalist la running to become french president, and angela merkel fighting off anti-establishment versus as she seeks reestablishment in germany. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
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i'm emma chandra. this is bloomberg. scarlet? scarlet: coming up, what is the relationship between president trump and elon musk, and is musk to thank for the rising shares? billionaire carlos slim holding a news conference right now in mexico city. he is speaking on president trump and the construction of the wall. watch it on the bloomberg at live go. ♪
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scarlet: this is "bloomberg markets." i'm scarlet fu. oliver: i'm oliver renick. dramatic movement on individual stocks. the rest of the market has been pretty quiet. that includes tesla, which rallied since the u.s. election
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although all trump ramps of his up his threat on import taxes. corey? cory: so much news in technology this week. some stocks being affected, some not. i've got to start with a great story this week about ibm, the company alex used to cover. ibm came out with a press release during the president-elect's transition period, $1 billion in spending on job training, america's going to hire tons of people, right? oliver: 25,000 jobs they are touting. cory: as they lay people off. oliver: multiple rounds of layoffs, potentially thousands of people. of shows that a lot
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of this is all for appearances, political theater. the actual job numbers are so clear. cory: the company has 19 quarters in a row of declining revenue. the company's falling in terms of revenues, profits, head count. they are focusing on basically all of the cloudy stuff, but the older things they are selling, that revenue is falling faster than the new stuff can make up for. over the ginni rometty past five years talking about, we are remixing all these people, moving these people around. this story is a story we have seen before for them, they promise to hire people in the midwest and then they fired people. --y: it's the way ibm says >> exactly. and the timing is interesting with trump now being the big job promoter. cory: follow what they do, not what they say. to that cloud notion of proof
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being in the pudding, i was alphabet google's results, of all the companies that reported yesterday. forget the quarter and the analysts, you see a company -- fourth-quarter revenue growth three digits two years ago. they showed a lot of growth. that was the theme in many of the earnings this week with a and theth in cloud, promise of a lot of profit coming through. cloud computing server, server storage industry also saw that, and microsoft's earnings and intel to some extent with all these companies buying servers. cloud, it's interesting. more clarity from a lot of these companies. >> with all they group it in other. it's going to be all these things delivered as a service.
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office 365, microsoft azure and microsoft seem to be doing well. you're the company talking about margin improvement. that seems to be the theme with a lot of the tech companies. they spent so much over the last few years trying to ramp up on having data center capacity, selling things like intel does play into data centers. now it seems like some of that is shaking out and we are seeing the fruits of those labors. cory: elon musk shows up at the tech summit where 20-something people gathered in a room with the president for a short period of time. the stock with no other changes in the business, missing their fourth quarter and year-long goal for shipping cars. stock as we mentioned is rallying quite a bit as part of this trump rally. changes in the business itself but changes in the political environment. elon is very quickly develop this relationship rate it doesn't hurt to have his relationship with pter thiel --
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peter thiel. cory: when they bought elon's company, elon briefly ran paypal. >> invested in spacex, invested in tesla. thiel and musk go a long way back. thiel, trump's right-hand man. there's the perception of this connection between trump and musk that could benefit tesla, but also the fact that elon -- they make the cars here. they don't import like many other automakers. >> morgan stanley analyst adam jones came out inside, trump is not part of the investment pieces here. we are looking at the model three, which is in production right now. looking at the integration from the solar city. we are looking at this made in thing, doesn't fundamentally
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change the business itself. cory: i don't know if we expect clean energy subsidies to come out of trump. thing, doesn't fundamentally change the business itself. because subsidies go away, this is very expensive. you are our ipo reporter now, you have the easiest job in the world right now. this year we expected a lot of deals. big deal this week sort of snatched away from public markets. >> $3.7 billion stable price for dynamics, supposed to be the biggest tech ipo of the year. days, no no cup technology or communication companies on the road right now, to basically mid-february. we have all of this talk about, is this going to be a visitor year for ipo's. we have all of this need for exits and need to have a better
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exit environment from silicon valley and the investors here, and we haven't really seen it yet. obviously snapchat is a big companylooming. we still hear that as soon as march. --terms of the little ones image to go public as soon as the first quarter as well. there aren't a lot of names out there. i will say,ources, the fact that it was bought for $3.7 billion, when the market value was looking closer to $1.7 billion, that premium is a good thing for companies considering going. it could potentially help with valuation. cory: that was a fantastically growing company. positive andh flow profitable. >> investors are excited. cory: thank you very much. back to oliver renick. oliver: thank you so much. ceo will be discussing the
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company's latest earning results on today's episode of "bloomberg technology." catch that conversation at five point 15 p.m. eastern time. scarlet: ontario medicinal retirement has agreed to back catch that conversation at five point 15 p.m. eastern time. the acquisition of allied world assurance. the investment will give ontario municipal a 21% stake in allied world. the company in talks with several additional third parties to come on board. infrastructure partners is a new york-based firm with the biggest ownership stake in london's gatwick airport, raised $15.8 billion. encouraged by president trump to invest $1 trillion on american highways and bridges. fund is almost double its previous pull in 2012.
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the divide over pay british airways and its cabin crew has intensified. two back-to-back three day walk outside being planned for next month. the heathrow-based flight attendants say to test will run from february 5 to 7 and from february 9 to 11. talks fell apart in december and that has spurred 2 strikes this month already. and that is your business flash update. oliver: coming up in markets, more on the peso. the currency of the week, surging against the dollar as presidents trump and peña nieto hold a quote, constructive talk on the border wall. holding newss talks in mexico city where he is discussing president trump. check it out live on bloomberg at live go. this is bloomberg. ♪ he's discussing president trump,
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calling him a great negotiator. he's also addressed the construction or plant construction of the wall. we will continue to monitor the headlines that come out of the news conference. of course you can watch it live as well. it's in spanish, so you will need to know how to speak spanish, or at least understand it. it is on life go on the bloomberg. erik schatzker,, and he's been listening in on the conference call and has highlights for us. erik: yes, he is praising donald trump is a great negotiator, but this is not a press conference meant to celebrate the trump presidency by any stretch of the imagination. i was in mexico at the beginning of december interviewing carlos slim and much of what he is saying today remains the same. at the time he thought the trump
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presidency could be great for mexico. if donald trump was successful in generating 4% gdp growth or greater, successful in creating 25 million jobs, that by definition had to be great for mexico because america would need mexico. there aren't enough people here without jobs to fill those 25 million positions donald trump has talked about. carlos slim says the same thing. he still believes if trump is going to be successful, the partnership that mexico has had with the united states will have to continue. he says, however, the much of what he's heard over the past several days is concerning. he says it would be a mistake for trump to try to return america to some idealized version of 20th-century industrial glory. if america were to impose some kind of a tariff or border adjustability tax, the cost of the tax would be borne by
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americans, not by mexicans. if anything, the united states should be focusing on the things that make it great now, things of strategic and technological importance, not going back to making the things that say america made in the 1950's, some concept of ge. and electric ranges. closing the economy can only be bad. slim is implicitly criticizing the things that he has heard come out of the trump administration in recent days, saying that the things that bring america and mexico together should be preserved, but this is going to be a very difficult negotiation and if anything, it should be a wake-up call to mexico. it should be something that drives mexico to recognize that it can't continue to rely on the
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things it has counted on since nafta went into effect in 1994. mexican industry should invest in itself, and do thingsnafta we shorten travel times in mexico city, invest in infrastructure, so mexico becomes a more viable competitor. scarlet: paradigm shift. erik: yes. oliver: this is a rare occurrence where slim says, i want to have a press conference, or what sort of made him do this now? do they talk about the wall, the tariffs? erik: sure. it's the fact that peña nieto are supposed to meet. who knows whether it was a mutual cancellation as the white house was telling us or it was unilateral. peña nieto himself pulled out. the wordisis, is slim used to describe it.
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he once mexicans whom he praises for coming together to wake up and realize that this poses a threat, and that somehow the situation is going to change. andco just can't sit back take it. the commonat's been theme, this is uniting mexicans and the country overall. erik schatzker will be monitoring that live news conference. catch that carlos slim news conference in spanish on bloomberg at life go. go.ive ♪
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oliver: i'm oliver renick. i'm scarlet fu. welcome to "bloomberg markets." ♪
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oliver: we are live from bloomberg world headquarters in new york for the next hour. we will be covering stories out of chicago, washington, and london. politics, british prime minister theresa may and president donald trump held a joint news brexit,ce discussing foreign relations, and the special relationship between the u.s. and united kingdom. the president says brexit will be a good thing for the u.k. u.s. stocks threatening to close out the record-breaking week. energy and real brexit, estate g the hardest successors, with dow still above 20k. which sectors are primed for further gain? why he's avoiding consumer staples and revving up utility stocks. one hour away from the close of trading. what's going on, julie? julie: you were looking at the
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bullish bright side with the dow maintaining above 20,000. really it's just a drift, 20,000 drift we are seeing for the major averages. in the case of the s&p, post record drift. andpulls back about 3 1/2 the nasdaq little changed. if you look at the range of motion within the s&p 500 on the day, it's a small one. here you see that we have the daily range for the s&p 500 going back to the election, it slowed down considerably today. a range of 7 points in the s&p 500 and we are still on the streak of days without seeing a 1% move up or down in the s&p 500. that has been going on for quite some time here. this is not terribly unusual for earning season, that we see sort of these individual stocks pushing and pulling the indices in directions that equals not a lot of movement overall. today in a similar. the toothpaste maker, among makers of other consumer
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products, that company coming out with a forecast for earnings below estimates. starbucks, same-store sales coming in disappointingly as the company is a victim of the success of its mobile payment is seeinge company more congestion in its stores. microsoft shares rising, beating estimates. the company in terms of its earnings on more cloud spending by customers, and intel also benefiting from that trend, its earnings also beating estimates and shares of 1.5%. we have been following this developing story, "the new york post" reporting that service capital have potentially stepped in as a white knight to buy stores from walgreens -- rite aid stores from walgreens. telling the post-it had not conquered -- contacted the ftc. stores from walgreens --right eight and walh moving higher on the news. fred's, which offered to buy some of the right eight stores to get the deal done, trading lower -- rite aid stores to get
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the deal done, trading lower. we've heard all this rhetoric back-and-forth between president trump and president enrique peña nieto of mexico. forave had a big up week the mexican peso, up 3.2%. the dollar has fallen 3.2%. he looks set to be the best weekly performance since last february here, as there is perhaps optimism on the part of traders that this is a negotiation, and it's not clear what the outcome might be, despite the headlines and rhetoric. have breaking news regarding anthony scaramouche he and the sale of his investment firm, sky bridge, just days --he struck a multimillion dollar deal to sell to a little-known company. bloomberg has been reporting on this and we bring in for more details.
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the story just crossed on the bloomberg. tell us what we found out. as he was scaramucci getting ready to go to the white house to be a top adviser to donald trump, he also arranged to sell his company, sky bridge capital, which is a well-known fund to fund manager. there's hna, a chinese conglomerate, and in this other company called ron transatlantic which very few people have ever really heard of before. this,: when you look at and from a reporting standpoint, what is curious to you is doesn't look like a vanilla sale, or is there something that stands out? >> kickoff the attention of a lot of analysts we talk to because the price seemed higher than what we typically see for a funds to funds transaction. the other thing is that this company, ron transatlantic, is kind of a mystery. ci told us today that
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he doesn't know who the investors are behind ron. scarlet: he sold it to a company where he doesn't know the investors? >> that's what he told us today. ron previously owned a stake in his company and that stake was owned by a man from venezuela. was -- had close contacts with the government of hugo chavez. oliver: this is just to clarify, something he wanted to do to free himself up to be a part of the administration. >> that's right. he was at the same time kind of working out what role he would have in the trump administration and also selling his company which he founded in 2005, to free himself up and not have these conflicts of interest. scarlet: how did he meet up with these buyers if he doesn't know who they are? >> he knows the guy who kind of runs ron, who is a man who was born in new york but grew up in venezuela. he says he's known him for 20 years.
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ron was a long-term investor in sky bridge but the economic ownership of that stake, up until recently, was this gentleman. oliver: when you go about buying his structure of his fund -- it's basically fund to fund how. do they go about trying to figure out that type of company? >> when you talk to analysts or investment bankers who buy and sell these companies, you try to compare it to something like normalize, or net operating income. mucciose metrics, scara told us the number he thinks is accurate is 7.2 times that earnings number. and, the analysts we talked to say the number is more like 3 to 5. it is important to point out says this is a unique asset, it has a distribution channel that no other fund to fund has. it deserves a higher valuation than a typical transaction. scarlet: transaction value 7.2
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times normalized. what were we saying was average? >> other analysts said when you see fund to fund's hands, it's usually in the range of 3 to 5. oliver: that value add, what exactly does that mean? is it about the actual funds? business, inique the sense that sky bridge has 41,000 -- not quick mom-and-pop investors, but scaramucci says d ennis, the intern -- he can make those investments into top hedge funds that you otherwise have to millionmillion or $10 to qualify. it is this access to thousands of investors. oliver: put some together, gets into the amount you can then enter a hedge fund and put that in and brings those returns
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back. >> that's the argument for why this should command a premium price compared to a fund to fund. scarlet: sacarmucci -- scaramucci scores millions. president donald trump addressing a wide range of issues during his joint press conference with the british prime minister theresa may, including his phone call today with mexico's president. pres. trump: we have a very good relationship, the president and i, and we had talked that lasted for about this morning -- an hour this morning. and we are going to be working on a fair relationship and a new relationship. president trump also saying that in the past, mexico has beat the u.s. to a pulp when it comes to trade. joining us is our chief washington correspondent. give us the latest on the tensions with mexico over the proposed wall. mexico and the u.s. have talked
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about it, and in some ways agreed that they won't be discussing it in public. >> mexican president peña nieto saying in a statement at the same time as a press conference earlier this morning with u.k. prime minister theresa may, that there had been an agreement not to discuss the wall publicly. we haven't heard from the white house regarding whether or not president trump agreed with that. clearly at the press conference president trump saying there was a quote, unquote, friendly, hour-long conversation with peña nieto today regarding the cancellation of that meeting. that was the political hiccup that overshadowed perhaps much of president trump's appearance yesterday in philadelphia at the republican treat. that theys telling me are still confident that he will be able to work with mexican leaders in the u.s.-mexico border control, but already democrats pouncing on this,
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criticizing president trump, saying that this was a mess up on the world stage. scarlet: we are also monitoring headlines coming out of carlos slim's news conference taking place in mexico city. he is speaking in spanish. he is talking about donald trump and how mexico and the u.s. can better improve their relations. oliver: catch it on live go. let's look at the politics not only addressing mexico, but the scene in general. i want to get your take on today's press conference. it was silent on twitter. trump took an approach, conveyed a win with president teresa may. ashink scarlet put it framing a supplicant. what did you make of that, kevin? >> after yesterdays new cycle, president trump looking to project that he would be able to
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again meet with global leaders on a world stage. he was speaking today not only to his allies in congress and america, but on the world stage. we saw him take a much different less combative, more measured tone. less combative, more measured tone. and on the issue of russia, there was some question about just whether or not this administration is getting ready to feedback russia sanctions, to walk back with the previous administration has done. he put the cabal wash on that. he said it was too early to begin talking about that. another issue with general mattis, who will be sworn in later this afternoon, with mr. trump attending. he said he would defer to oferal mattis on the issue torture. again, he has faced criticism for his own rhetoric on torture, but saying that he would listen to general mattis on torture, who has said he does not support it.
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[inaudible] this is a great opportunity for me to ask a question that i wanted to ask. i thought it was interesting because we saw a rare moment of deference for trump where he said, you know how i feel. i'm going to head it off to my advisors. do we expect to see more of that? >> i think we will expect to see more of that. said mr. spicer has trump does not one people in his cabinet who are always going to agree with him. but when you look at the differences of policy division within his own cabinet, particularly on financial economics issue, when you have no mold any leading the budget department, someone who is much more in line with the party versus folks like gary cohn and steven mnuchin, this is conservative still, albeit
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diverse economic policy prescription that they are proposing. clearly, i think president trump projecting for the world stage because not only was this a divisive political election cycle, there of course our folks around the world who are concerned about what they saw and heard during the last election cycle. they so much great billionaire carlos slim still holding a news conference in mexico city, where he is speaking about president trump. slim says trump is not the terminator, he's the negotiator. watch it on the bloomberg at live go. ♪
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scarlet: in markets, the u.s. dollar showing strength. on bloomberg surveillance today, adam parker discussed how the dollar correlates with investor appetite to own international stocks. >> our house call for several years has been to prefer u.s. equities over every other region i just like a change my mind on u.s. equities in the last couple months and got a little bit more ballast or cautious as the market has gone up, we've also raised our views of non-us areas. we are preferring japan first. i think the currency will help and the earnings expectations look more achievable there. garner.jonathan in europe, after the huge outperformance by the u.s. last year, the currency probably helps, and expectations.
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we have japan and morgan stanley, the u.s. and europe tight second. -- tied second. >> it's adam parker math. underpinnings to it, and the big search there, 2014 and 2015, up we go. bob sitting in his chair yesterday, with adam 4-5 likelihood of a strong dollar. does that permeate the morgan stanley blief? -- belief? >> it is one of the major factors. the way i think about it is how it impacts corporate earnings. the dollar euro is more important for s&p earnings. you if we get below parity, probably have to look at lowering your s&p numbers. every 10% the dollar strengthens, about 6% out of your s&p earnings. you've got to be careful that we don't get a huge strengthening move in how you think about your earnings.
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i would avoid consumer staples. i have a lot of non-us exposure chemicals, machinery that have foreign currency exposure. we like overweight utilities, underweight staples. they are both rate sensitive for sure but utilities are way cheaper and don't have currency exposure the way staples do. if you want to have some rate neutrality in your portfolio, you will be cautious of staples and overweight utilities. >> how cheap with the euro have to go to get u.s. investors over not being concerned about european politics? how big a factor is that? >> institutional investors are not that worried about european politics. you plotted on your computer, from cyprus to greece to spain, portugal -- everyone of those things, and the yeardaddy of all last
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ended up being a buying opportunity. your average u.s. equity trader thinks, what can go wrong in a dutch or french or italian election? i think it's the other side of the coin, people are a bit complacent because they have been conditioned that none of these events really damage the trajectory of s&p earnings. if that risk reward turns negative particularly on a dollar euro move -- that would be may be a potential downside from here. i don't think sentiments really that negative about europe. scarlet: that was adam parker speaking on bloomberg surveillance. oliver: still ahead, today's option inside. coming up next week. again, we are following remarks from carlos slim. speaking in mexico city about trump, and about trade. the most recent one, he says trump again, we are following remarks from carlos slim.
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speaking in is in the terminat's a negotiator. -- isn't the terminator, he's the negotiator. scarlet: slim says he would support withdrawing from nafta if it is in the mexican interest. this still taking place in mexico city. we will bring you the headlines. ♪
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oliver: this is "bloomberg markets." i'm oliver renick. scarlet: of scarlet fu. time for options insights with julie hyman. julie: joining me is the cboeing partner from the out in chicago. . what is going on today? we have a super tight range on the s&p 500, vix continuing to fall. where is everybody? >> it is shocking what vix has done to a lot of people. we worth -- we were within 2/100 the 10 year low in
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fixed today. we might be seeing some inklings of volatility increasing. the vvix, the vix of vix, tends to lead vix a little bit. it's actually up. there is demand for this option today. it sounds really quiet behind me, but there is decent volume, trading electronically, open outcry today in the vix contract. maybe an inkling of some action next week going on, here in vix. scarlet: -- julie: is not unusual that you see volatility for individual stocks higher than for the market overall. are there macro catalysts you are looking for coming up, that might cause that uptick you are talking about? >> next week we've got the fed, we have non-farms.
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this trade deal with mexico, this trait discussion -- right now it's kind of a nonstory that is a story. if that does turn into something, that could be a problem. the real risk is in bonds straight if we see a problem in european bonds, european banks, or a strong structural selloff -- see movements around individual stocks. you are looking at a company that is reporting next week, coach. a cannot out with a positive forecast in december. -- they came out with a positive forecast in december. the stock has not been doing well over the past six months. >> i always talk to my wife, lauren, who runs a fashion blog and i asked her about coach. she said, i don't really like the brand. i just got a pair of sandals for next summer. when my wife likes a brand and is spending money, that stock is generally on the way up. she's kind of my litmus test.
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i look at this as one that could make a move higher towards $40. if not that earnings, maybe the next one. i like taking kind of a longer-term trade. volatility not particularly high. i like buying a longer dated call spreadvolatility not partiy high. to move towards 40, which was a tie back in december. julie: you are looking at buying the may 36 call, looking further out, and selling the may 41 call, right? >> yes. i want to pay a buck and a half for the may call spread. payout is about 2-1. if the stock goes to 40, i will turn $1.50 into four dollars. that is easily attainable and risk reward, this is a nice trade. scarlet: got in a plug for our website too. he will be popular at home this weekend. back to you. scarlet: we are monitoring these
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live shots of president trump being greeted by the defense secretary general james mattis. this is at the pentagon. there will be a ceremonial swearing-in of the defense secretary. with him is vice president vice prints -- vice -- mike pence. ♪
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>> let's get to the news this afternoon. prum and british prime minister have kicked off a new era in u.s.-u.k. relations. the two world leaders held a joint press conference at the white house today where they talked about the effect brexit would have on the united
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kingdom. president trump: i think it will be a fantastic thing for the united kingdom. i think in the end it will be a tremendous asset, not a tremendous liability. >> theresa miaa is the first foreign leader to meet -- may is the first foreign leader to meet officially with trump since the election. scientists say a border wall would be bad for the planet. engineers at n.y.u. and university college-london say concrete is a potent source of greenhouse gases and the wall will need a lot of it. more than double the amount in the hoover dam. another scientist says a thousand-mile wall would release as much as carbon dioxide into the atmosphere, more than the annual emissionses from every home in pittsburgh combined. prum is scheduled to make his -- president trump is scheduled to make his first visit to the pentagon as commander in chief later this afternoon. "the new york times" is reporting trump will ask for a plan within a month to more aggressively strike islamic state. and there's going to be tighter security on some european


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