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tv   Bloomberg Markets Americas  Bloomberg  February 6, 2017 12:00pm-3:31pm EST

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david: in new york we are taking over more in the boston and then san francisco in the next hour. here other top stories we are following. the s&p 500 trading for the first time in four days, the dow is little changed. assetshas rise for haven the treasury rising along with gold. brand trump's immigration -- been likely to reach the supreme court eventually. they may decide as early as today whether the ban can be reinstated, weighing in on the authority of the executive branch. he may have signed an executive order to scale back dodd-frank, but officials fear what may be a long and complicated process. we will explain. julie hyman is standing by. bit of a decline, but it's small as we see this lack
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of egg movement in the s&p 500 and the other major averages, for that matter. what downside there is today has a lot to do with oil prices. look at crude oil today. we saw it take a more betweenant leg lower, 10 and 1030. it looks like the move was coincident with the highs of the day in the u.s. dollar, which this oiluncing back drop us translating into a decline for energy stocks and if people look at the map on the bloomberg, they can see that pretty clearly. energy earlier in the session in the middle of the pack. down 8/10 of 1% now, the biggest drag on the major averages. even though the overall drop is only 2/10 of 1%, you can see most of the groups are trading lower. in terms of individual stocks that we are taking a look at
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today, there is news pushing various stocks around. report --y reuters reported that they were in talks to acquire ppd for $8 million, saying that they are not very happy about that potential deal. meantime they have found company sales disappointing and have said that they will not be continuing to invest in mergers and acquisitions, though they had been on something of a spree in that department. there are a lot of questions being raised about whether could afford to take the company. it is a significantly smaller company in terms of market cap and sales. today macy's falling back, with hudson bay in canadian trading up about 5.5%. thank you -- vonnie: thank you vonnie.,
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taylor? taylor: the trump administration will try again to get its controversial immigration dan restarted. the justice department will hear a final argument over the weekend. judges declined to immediately reinstate the restrictions. angela merkel says that she will be seeking common ground were ever possible with the trump administration. she told reporters in munich today that despite their differences over the travel ban, she will be looking at each issue separately to see if there are places where the countries can cooperate. the french presidential candidate francois fillon saying that he has nothing to hide, that he and his -- he had his wife working as a parliamentary assistant for 15 years, that the practice is legal but he acknowledgment is no longer seen as acceptable and he apologized
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to voters. a french newspaper acknowledged great amountpaid a of money over 15 years. tom brady did lose something at the super bowl. after their stunning win over the falcons, somebody apparently made off with his jersey from the locker room. he told reporters that it would be on ebay at some point. global news 24 hours for day, powered by 2600 journalists and analysts in 120 countries. this is bloomberg. david? with us now is our white house correspondent. speed on what transpired over the weekend and what the next steps for the white house are. the justice department is not yet held by jeff sessions. we saw ahe weekend flurry of legal activity in the courts with the white house.
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the opponents battling back and forth over this immigration band at the president put in place just over a week ago. a sickly the ban was struck down and the white house tried to get that temporary restraining order lifted. they have about until 3 p.m. to file their latest claim in this ongoing legal battle, but it doesn't look like this is something that is resolved quickly. it could take weeks or several months before we have a final resolution to this. vonnie: greg, if this goes to the supreme court, it would depend very much on whether we have eight or nine justices when it does. greg: there are two things we want to keep separate. first there is what we were talking about this weekend, a temporary block of this policy. that is going to come up to the supreme court in a matter of
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days and it will be an eight-member supreme court. losing at the appeals court level, it will need five votes there. of powerer question under federal statutes, that may take longer and we may well have nine members by that time. to understand the history and notoriety of the ninth circuit. known for being more liberal than others? questions get reversed by the court over the years a disproportionate number of times in part because it is a huge circuit. in addition to california it has washington state, which is where the order from the federal judge came on friday. and a panel that is considering over thee that arose weekend, with two democratic appointees, one republican appointee. we don't want to assume that that is how they will come out, but it does suggest some leanings. once again we have a
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tweet from donald trump, saying that this opinion is ridiculous and will be overturned. i mean, there is no precedent for a president attacking the judiciary like this, is there? seene: we have definitely president trump take an unconventional approach to the presidency, specifically regarding his twitter account. he has seen some backlash from some of his republican supporters, saying that this is may be crossing the line by attacking a member of the independent judiciary. but he was supported by his vice president who on the sunday shows said the president was frustrated and communicating in the way that he normally does with his supporters who appreciate his plainspoken approach. he is obviously not happy with what this judge did and believes it will eventually be overturned.
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has this supreme court judge nomination fallen to the weight -- wayside? what is the white house going to do to make sure that that is still front and center? without that justice, they realize that it will be harder for them and this is a rallying cry for them to try to oppose neil gorsuch. this to sortg abaddon down the hatches and get ready for what looks like is going to be a pretty big and major fight in congress and the senate over whether or not neil gorsuch is can -- confirmed. supreme court, what is the deal with trump and his tweets there? are they causing anger? quite i wouldn't cause -- i would expect the justices to respond, but i wouldn't be surprised if it bothered john
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roberts, fierce defender of the judiciary. he recognizes that the president is entitled to criticize rulings, but when you start talking about questioning the legitimacy of a judge, that is where you are going to get some pushback from the justices on the supreme court. vonnie: and it's not just the supreme court justices and the people who go to work there every day as well. absolutely. let me ask you about the degree to which this case is growing. we have seen states attorneys general join on as well. any indication that it will continue to grow in size? >> i think that advocates opposing -- opposing the president on the issue of prepared to turn wherever they need to if they lose this particular battle. it's also just remarkable how quickly, briefly mentioning high-tech companies, you rarely see a big amicus friend of the court brief like this at this
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temporary restraining order stage. tremendous organization on that side. this will be a high pick, high-powered battle on that side. no matter what. the president is due to speak at 1:15. we have received an intelligence briefing from the commander and troops there. will he stick to just talking about america's role? will it be a bit of a morel speech? or will they talk about these issues here? that the president described the order as a national security initiative. that the: remember president described the order is a national security initiative. he is likely to focus on that issue and highlight the fact that he wants to keep america safe, as he said, and he will likely make a reference to the idea that he wants to make sure that he keeps a radical
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terrorists outside the country and make sure that we are in the best fighting force to make sure that if we do have to take on terrorism, we are prepared for that. vonnie: we will of course be bringing you all of that live. greg is there live in washington, d.c. outside the supreme court and we will do -- we will be bringing you the president comments, live, so stay tuned. rolling back dodd-frank, not as simple as it sounds. we will talk about the latest hurdles to dismantling this regulation. this is bloomberg. ♪
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♪ vonnie: this is "bloomberg time now forid: the bloomberg business flash. j.p. morgan chase has been picked to place credit suisse at the world banking group. the payment processing committee may make an announcement on the decision as early as this week. they currently have a market value of $7 billion. bill gross's investors must embrace what he calls the financial methadone of quantitative easing. saying that if the european bank and bank of japan pull support, things would sink. tyson foods says that they are under investigation for its chicken pricing. they are cooperating. tyson and its largest competitors have been named as defendants in a series of lawsuits claiming that the chicken industry colluded in
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2008 to drive prices higher. they have denied the allegations. that is your business -- update. tonie: it has taken years replace the regulatory structures on wall street. they won't be removed fast or easily. head of our financial regulations team in washington, d.c. dodd-frank, jesse. talking about the pageantry around this executive order and the idea that it is all theater, that very little will be rolled back, but they didn't sound so convincing. jesse: the order itself is not a major step. you didn't need to sign in order to get the treasury department to take a look at dodd-frank and how it's working seven years later. the hard part would be bringing about change.
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congress is getting more divided every day. things like the trump immigration order, it affects the prospect of reaching compromise on dodd-frank. as a regulatory agency it took years, as you pointed out, to bring it about, and it's going to take a long time to get rid of it because the same bureaucratic process has to be gone through to remove a rule. david: how big of a liability is this goldman sachs alum for the white house and republican members of congress as they push for changes? jesse: it's an interesting strategy to have a former number rip wallldman sachs street rules. you would think that people would be alienated by the message of he's the one channeling it. on the flip side, maybe he has the best perspective to know how the rules impact of the financial industry. but in terms of regular voters,
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you know, goldman, we all remember the vampire squid label . it's an interesting choice the trump has a guy from that firm putting out his announcement about how they are going to attack dodd-frank. well, they're in power now, so i guess that he can put what he wants out there. the consumer protection financial bureau, is it easy for that to go away? absolutely not. it's legislated into the law. one of the things that the trump people is arguing is that it's unconstitutional. you did have a court ruled that it's structure was unconstitutional last fall. but that doesn't mean the agency is unconstitutional. the way to make it go away, legislatively, we talked about the fact the you need 60 votes in the senate. i don't know about messaging, but saying that a consumer agency should exist, what's the message that trump puts around
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that to get people in middle america to support that? not so easy. what sense do you have about which institution is driving reforms? the white house put a stamp of approval on fundamentally changing the law. isn't the congress owing to be doing the nitty-gritty here? that's possible. there are a lot of republicans in congress that would like to do away with it or at a minimum change it significantly. the easiest way to go after byzantine is at the regulatory agencies, like the federal reserve, securities and exchange commission, so on and so forth who introduced these rules. you can get those agencies to rewrite the rules with congress doing nothing. the problem is that it took many years for those same agencies to implement the rules.
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repealing them, that's not even the right word, but rewriting them, watering them down, making them less strict on wall street, that's an extremely time-consuming process as well. you talked about the messaging and i wonder if there isn't a perfect opportunity here to blame interest rate increases on the federal reserve. anything else they could say is easing conditions for people banks,mebuyers, smaller small and medium sized enterprises. messaging. is the trump said it repeatedly. that banks are hoarding capital and they can't release the capital to make loans and make the economy grow, to put people to work. mortgages, small business loans, etc.. the data is mixed. a lot of the reason that that stuff bottomed out is because we were in a severe recession that
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it took us a long time to climb out of. that loanome evidence growth is not fantastic, but companies and businesses are getting loans. to say that that is all the fault of dodd-frank, that's a tough message to back up. jesse, joining us from washington, d.c. hasn'thead, this story been seen in almost two decades. details, coming up.
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vonnie: this is bloomberg markets," i'm vonnie quinn. david: time to zero in on the m&a business come inside analysis from the biggest players behind the deals. here with us is the bloomberg
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executive editor of those deals, jeff mccracken. the word of the day has been uncertainty. why, given what's going on? jeff: i said we should prepare a story saying that january was disappointing and we are off to a slow start because of the uncertainty and risk around donald trump. we crunched the numbers and i was completely wrong. turns out that this is the best january since january of 2000. i hope you put it -- vonnie: i hope the -- that you put a bet on the super bowl. [laughter] jeff: this is partially because deals takes a long to come to fruition. the biggest deal of the year, so far, was j and j. we initially broke the news on that one on thanksgiving. they have been talking for weeks even before that. these deals take 2, 3, 4 months to get rolling.
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if this uncertainty is having an issue and causing ceos and boards to be concerned, like they don't know if the tax policy will look like on forward , who are the regulators that will have to judge their deals? if that actually becomes an issue, which is what i thought was going on, we will probably see that more in march, april, or may. bonnie: there might be a rush to get those deals underway? but probably not. the real issue is tax policy. you would assume that donald trump, given what he said, that they would get a tax plan through, but you haven't seen anything yet as of three weeks or so about what the tax policy would look like, whether there would be repatriation. that's a huge issue. companies are sitting on hundreds of billions of dollars offshore that they would love to repatriate and bring back. that would influence them. they might quit doing so many deals overseas.
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and do more in the united states. about the regulatory space? any better sense of what that will look like? jeff: that it will be easier for deals to get through. easier than under obama or even george w. bush. we might be looking back to the reagan era, when it felt like there was very little scrutiny. i mean, that's what they are hoping. vonnie: jeff, i mean, to a certain extent, with very little earnings growth in very little overall macro growth, companies doing deals without demand returns? they have to engineer earnings. exactly. interest rates are still low. we are still in this situation where investors will see a company do it deal and be supportive of it. that someone might break
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someone is buying something and the shares go up. 10 years ago anyone who was going to spend that money, their shares would get pummeled and they would drop on the day of the announcement, but we don't see that much anymore. vonnie: what about lbo activity? jeff: this is going to stay slow. vonnie: all right, jeff mccracken. coming up, president trump, advising global populism on the markets. we will have a device from the head of global asset allocation, next. this is bloomberg. ♪
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♪ live from bloomberg headquarters i am david gura. going with's get
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headlines from bloomberg first word news. taylor week -- taylor riggs has more from the newsroom. >> officials have entered the legal battle over president trump's immigration order. that the-- arguing travel ban undermines national security and will endanger u.s. troops in the field. among those signing it, former secretary of state john kerry and former cia director leon panetta. on capitol hill the debate resumes today for trumps that for president trump's contra shall choice to be education secretary. a fun of on betsy devos is likely tomorrow. vice president mike pence may have to vote to break the tie. british prime minister theresa may is meeting with benjamin netanyahu. he asked to support new sentence on iran, saying iran wants to destroy israel. may says u.k. is committed to a
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two state solution for israel and palestinians. russia has rejected president trump's assertion that iran is the number one terrorist nation. russia's foreign minister says iran should be part of a proposed coalition to fight the islamic state a kremlin spokesman says russia values its from a relation with iran. 24 hours per day powered by 2600 journalists in 120 countries. this is bloomberg. vonnie: we are going to have a quick look at some data now. we had quite a calm day. we are just in the red down a 10th of a percent. s&p 500 down 2/10 of a percent and the nasdaq is down 2/10 of 1%. looking at the dollar index. in general it is weaker. today the beneficiaries are the euro and the yen. on ruble is strengthening
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comments over the weekend. also the 10 year yield we are seeing a buying into treasuries. markets are open with 6.80. let's go to abigail doolittle now. abigail: stocks are near all-time highs. all at or near all-time highs. multi-yearcreating lows, speaking of tremendous complacency on the part of investors. this is the basis for one of the top stories on the bloomberg, five charts that's just the all is not well. take a look at one of those
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charts. it is the global economic policy a measure ofndex, certain headlines that suggests there is fear out there in the real world versus the vix. we see with economics -- economic uncertainty trading at record lows, this is elevated. this is with stocks trading at all-time highs. it may suggest there is a bit of a day versions. financial market uncertainty is perhaps less high and the financial market will have some pull back. this may be my favorite. we have the price paid for the s&p 500,rsus basically pointing to risk or shock. in blue we have the vix trading at multi-year lows. this is a pretty big divergence.
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this divergence doesn't happen all that much. it does suggest investors are paying up for the possibility of a shock event ahead. partners on friday told us he thinks this could happen in march. finally some movers on the year, some of the big growth high beta names are the biggest boosts to the s&p 500, including apple facebook and am jim. they tend to be a bit more volatile than the overall markets. investors are willing to take on more risk. >> thank you very much. that market check. the global macro outlook is out. domestic agendas and a shift in where many investors may see the most volatility. on daybreak america erik schatzker sat down with kkr's head of asset allocation, and he
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described the current paradigm shift. guest: i think this is the first time in 15 or 20 years we have an inflection point and what we are trying to highlight is a couple of things. see a major shift from monetary to fiscal. you're going to have government spending driving incremental growth. it's a big deal, as well as rates and volatility. i travel all the time. me we areike to moving from global agendas to domestic. that has implications for trade in other parts of the world. are movinghing is we back from regulation to deregulation. thinkial services and i health care will be in the mix at some point as well. and then i think you are moving toward the world where a lot of volatility has been in the
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currency markets going on in the equity markets. on a sustained basis most of the volatility has been in the currency markets as people wrestle with qe and evaluations of currencies. shifting more into the interest rate market this year and probably overtime into equities. >> people may look at those four forces that you believe is going to govern the macro environment and say, that sounds about right for the united states, maybe it sounds right for the u.k., where some forces are already playing out with brexit. what about the rest of the world? >> i think this may be missed by many investors. a lot of talk about brexit, about president trump. china's deficit is closer to 10 to 11%, not the 3% reported. if you take the first quarter
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last year alone, they put $1 trillion of stimulus into the economy. that is about half of their gdp. there is a lot going on behind the scenes were government is using this goal to get some reflation. we have been in a period where .e -- where we had slow growth structurally we think rates have bottomed. in aink we are reflationary environment where governments are driving the outcomes. that is going to create more volatility over time. think people can understand that jargon more than potentially what is being said by president trump right now area you look around the world politically, we got a lot of strongmen. we haven't seen this for quite some time. these people have very strong
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agendas where you are creating some nationalist fervor, and that is even before i get to the continent and europe. >> what about cycles? we were many years into the business cycle, many years into the credit cycle, don't those cyclical forces still persist? >> i think they do. it's hard to hurt yourself falling out of a basement window. we haven't had much of a recovery. i do think you will get more growth. we are 90 months into an economic expansion. 2018 was going to be the end. i think what is most important for investors is our job, we are not a macro shop. we invest in credits. we are trying to take the macro out. we are going to put all her
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money to work at once, we are not going to do anything. right now there are certain sectors of the economy. generally i don't think it will be the u.s. consumer that pushes us into a recession. look for excessive credit growth and a lot of that has been asia and china in particular. translate intot a different asset allocation? -- i'll are things we give you the view from kkr. in private equity we are quite active in japan right now. see the d conglomerate's asian, a lot of these multinationals, we are as active as anybody there. even if it doesn't lead to great gdp growth, there is certainly
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corporate reform going on. not a bad hedge, owning yen-based assets. >> what about emerging market versus developed market? view would be after 74 months they are bottoming. >> even in a strong dollar environment. happening isat is but rates are much higher deficits are stronger. into economies that are domestically focused. potentially india where you have a larger consumer economy. active in performing private credit. that's a nice return. generally on the liquid side we
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would see high-yield in our mind looks the most expensive. dataf you believe the coming out of europe right now, tos look expensive relative growth, particularly relative to inflation right now. vonnie: it was kkr head of global asset alec. asset allocations. we will examine why, this is bloomberg. ♪
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♪ vonnie: you are watching bloomberg, i am vonnie quinn. parton --i am mark mark barton. she is open the forces that led donald trump to victory will do the same for her. >> a management shakeup. out after disappointing holiday sales. >> and in today's quick pick, should colleges with multibillion-dollar endowments he doing more to help middle-class families pay for school? france, a far right leader has kicked off her presidential campaign. she to clear the same nationalist forces that led donald trump to victory in the united states will do the same for her in france and she promised a referendum.
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find satisfaction in a system that has us in chains fiasco is ruined us because of the mouth unction. elected, i will renounce the organization of a referendum within the first six months of my mandate and whether to stay or leave the eu. are seeing their profits squeeze because of the pound. that is according to the british chamber of commerce. there has been a shakeup in shift -- shakeup in tiffany. after disappointing financial results. former chief executive michael: how ski will replace on an interim basis.
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u.s. dollar.rong raising the forecast for the fiscal year. selling more lexus models. trade tensions with president trump could have an impact. the president has criticized plans to build a factory in mexico. take.e for our quick a not so old joke says harvard has paid off with a hedge fund with the university attached. billion, made largely of donations and retaining earnings. critics are asking if they are doing enough at a time of soaring. president trump wants to make sure colleges getting tax breaks -- congressman tom brady wants
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legislation forcing universities with endowments over $1 billion to spend more on middle income. donations of $100 million or more have come in a flurry in recent years, with one dozen received by universities. endowments have also grown by aggressive investment technique. that is down to 4%. -- here's an argument. it would have produced $16 billion in fiscal year 2014. amounting to about $6 billion. around the same time, about 30
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of the nation's richest schools was in financial aid packages. you can read more about college endowments and quick takes. head to for more stories. ♪
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♪ vonnie: let's get a check on markets. the gmm function on your bloomberg, we see some market movers. some of the biggest ones were in europe today. european markets close but the doubt is down 1.2%.
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some weaker data out of europe and a lot of uncertainty as well over the weekend. the dollar index is a little bit stronger today. you are seeing some the beneficiaries of the currencies -- the currencies that didn't benefit from that, i should say. the most volatile currency last year closed behind -- you had the ruble. let's look at the french 30 year yield, up nine basis points nearly and the german yield, which is the two-year yield. we see the direction they are going in. president trump says the replacement for the affordable care act could take until next year. it was a lot longer than he previously indicated. , those comments in an interview with bill o'reilly during the super bowl pregame show.
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in --r putting it president trump: we are putting it in very soon. we should have something within the year and the following year. vonnie: i'm joined by bloomberg health care reporter zach tracer. could you say he is keeping a promise? guest: trump comes in, said top priority, i want to get rid of this obamacare ring, now we are saying maybe this year, maybe next year. he talked to republican lawmakers frustrated by the fact that the white house is talking about their plan to fix the a for double clear at -- a formal care act. who is leading the charge? we want our said
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hhs pick, our health secretary to leave -- to lead the charge. he might get confirm this week. that's pushing this time i back further and further. >> with actual coverage, are some of the insurance companies changing the way that they are working on this? >> i can't imagine what folks are thinking right now. plansgn a period for 2017 just as people will theoretically be setting up for 2018 plans. insurance companies are wondered what this is going to look like. >> what do republicans want that to connote? >> i think they are starting to just rip thisan't
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out and reset the health care system, they are starting to think 2018 we are probably going to have the affordable care act, so how can we make some changes or bring inn price more options for people in the affordable care act? >> who is the leading voice on this? >> we have seen lamar alexander, susan collins, a number of republican senators who want to -- they are looking at their constituents and they don't want to take health care away from 20 million people. right now they realize the reality of the situation. vonnie: are the gop going to be depending on senators that were elected in blue states? for obama tot went a certain extent?
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>> you will need 60 votes, there are not 60 republicans in the senate. so far they have said we are not going to get involved with repealing obamacare. why are we going to help you? we may seext year the position shift on that quite a bit. antalking about having orderly transition, what does that mean, what does that look like? >> it is going to be tough, the big problem is a piece of that is going to begin to insurance companies. here's some extra money to help you deal with the sick folks you are ensuring. it's good to be tough for them to figure out how to do that. >> what is the status of tom price's plan? >> there is a sense the tom price plan may become the backbone of a replacement plan.
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it is clearly not going to be what gets rolled out in full. partially because it is quite harsh in a way. we have seen decreasing appetite for any plan that would do that. >> our bloomberg news health care reporter. president trump is expected to make a mark in the air force space in tampa florida. this is bloomberg. ♪
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♪ ♪ vonnie: this is bloomberg markets.
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from bloomberg world headquarters, we are going to take you from washington dc to san francisco and washington state in the next hour. here's what we are watching around the world. lower than midday training. surging through a november high and 10 year yield pushing a two week low. in politics president donald trump's immigration dan -- immigration ban -- a court may decide as early as today whether the ban can be reinstated. likely totion is weigh in on the authority of the executive branch. we will bring you fat as it happens.
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in company news the wall street journal is reporting disney ceo bob iger may extend his term again past june of 2018. we examine the issue ahead of its earnings out tomorrow. we are halfway into the trading day here in the u.s. and julie hyman is here with the year -- with the latest. seen a bit of a downward by but now seeing a bit of a bigger fall, particularly for the s&p 500. we have the of course been watching the volatility and trading range. a a year and now it has widened out a little bit as we see the s&p fall further. . range of only 5.8 points a could be the tide is trading range we have seen thus far in 2017. today, wef what is up
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have big cap test. facebook is up. also catching bid at 2%. this is the technology hardware index. it is also doing well. we have been watching the banks in the wake of that decision on friday. as we have been reporting today, it will take quite a while to online -- to unwind some of those restrictions. we see a strong and to the year. s&p bank atf, the here are the weekly in and
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outflows. we see more inflows than outflows. they have been substantial here. initially there was a lot of about relaxing regulation. >> let's check in with bloomberg first word news. >> house of commons speaker announces he intends to block the president from announcing -- it is customary for visiting president to address -- however as speaker, per cow has the authority to block figures from doing this. ecb president mario draghi says the move to cut the monthly pay asset purchases reflect better outlook for the euro area economy. european lawmakers are told
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falling prices are no longer a major problem. the acute deflation risk has disappeared. inflation is set to pick up over the coming years. is largelys view driven by energy. reason to discuss tightening monetary policy just yet. they will lead the country out of the euro if elected president. chiefs according to economic advisor. le pen has declared the same nationalist forces that led donald trump to victory and will do the same for her. and francois fillon says he has and the salary was perfectly justified. his wifenference said worked as parliamentary assistance. longerowledges it is no seen as acceptable. reportednewspaper
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penelope fillon was paid $500,000 over 15 years. 24 hours per day powered by 2600 journalists and analysts in 120 countries. this is bloomberg. vonnie: president donald trump expected to speak at the air force base. we will bring you remarks as we get to his report area to we go back to trump's immigration order. white house correspondent joins us now. where do we stand legally on this? >> right now as of this very moment the immigration ban has been temporarily restricted. is nulltime being it and void until this legal battle is allowed to play out.
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case -- its case for lifting on the immigration ban. we are likely to see this battle play out from the east side of this debate from several weeks ahead. the could end up before supreme court, where there is a vacancy. appointed by republicans. to changetrump wants the balance by having his first supreme court justice confirmed. there is going to be a debate and eight right about that in the senate where they are vowing to block that nomination. have any sense what the battle plan is? what is the and ministration arguing? guest: administration is saying the constitution and the laws give the president a very wide latitude to say who can come in to the country legally.
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they are sing some of these constitutional arguments that opponents are making to not apply to people who are not hit -- not citizens. they are sing the president has wide latitude. they are targeting specific countries where there have been known problems with terrorism. fighting back against the argument saying there are several countries, the majority of countries that have not linked up with this band -- with this ban. we will see how long that gets in court. >> there is the other issue. whether the president is double executive powers. it doesn't help when he tweets out things like this. here's one he sent out. it's very difficult for judges
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not to see the commentary about those tweets. they don't evaluate cases based on things like this, it can't help can it? >> we have seen republicans and democrats come out and speak actively against the president taking a direct and strongly worded side. out a judge, saint specifically he is a so-called judge, this has rallied democrats and republicans in opposition. judges wanted to express themselves as a co-equal branch of government and allow theident trump to know that judiciary does often get in the way of the executive branch and does rule in ways the executive branch doesn't like and that is the hallmark of our democracy. that is something we will see play out in the court system.
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the president's learning there's a limit to those powers, even if he signs executive orders. there are court systems and another branch of government that could stop him. david: thank you so much, joining us from outside the white house. staying on president trump's immigration order, nearly 100 tech companies filed a legal brief, condemning the travel ban, the brief emphasizes the importance of immigrants in the economy and society. cory johnson joins us from san francisco. let's start with how this group came about. who brought them all together to file this? cory: a lot of companies have business to do with the government, have business where they want regulations to be operate infree to certain places and felt they really need to come together.
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the commentary of the judge in washington state was focused on theomic issues, focused on cost to the businesses as well. business leaders saying this will be a cost to our business, our business depends on immigrants, i think a strongly supports the argument that judges making and they are trying to tailor the message to help the court reach that decision. how does that then translate across the country when you have other people making the case that we don't hear about -- we don't care about your bottom line we care about national security." importantink it is that it is in the ninth circuit here in san francisco. the notion of these companies and the wealth they have created, companies led by immigrants or the children of immigrants, the notion that we wouldn't have an iphone if it wasn't for a syrian immigrant, steve jobs, we wouldn't have
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companies like ebay or a french immigrant. intel is an example. a lot of modern companies. immigrant from the soviet union and came here on political refuge, political simon -- political asylum. are distantt they from us is not true. people are very well aware that so many people who fled their native come tree -- native country came here. and so may people who worked for those people. it is very much seen as a business issue, not just a human rights issue. are there any surprises in terms of companies that have not signed on to this brief? theret is interesting is
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are not more modern companies. alexander graham bell, another immigrant who created a reasonable size. and companies that are so important to the world but not this is the way it starts. someone looks bad by not being on that list. i wouldn't be surprise if we see more and more company's coming out once they see the coast is clear. see if they have any sway in the court. he will be joined by carol massar for bloomberg markets on bloomberg radio. and cory is hosting bloomberg technology at 5 p.m. eastern, 3 p.m. pacific. --h steve mnuchin still on still unconfirmed, we're looking
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at who is filling in the role. this is bloomberg.
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♪ david: this is bloomberg markets. time for our latest bloomberg business flash, a look at the stories in the news right now. a traditional game is paying off. the most in 16 years. that is along with the first christmas season. helping the company top analyst estimates. jetblue has cut back expansion to gain mores year
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control over pricing. at a range increase of 5.52 7.5%. the quarter remains unchanged. and there has been a shakeup at tiffany's. officere replaced chief -- after disappointing financial results. chairman and former ceo will replace him on an interim basis. a slump in tourism and stronger u.s. dollar. bloomberg business flash. >> president trump's economic policies have a new face, if belongs to a wall street bank. her -- left wall street for the white house. another goldman alum, steven mnuchin, is picked as secretary -- as treasury secretary.
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what role is gary cohn playing >> he is national economic director for trump at the white house. need senate confirmation so he can start as soon as the trump administration begins. he is pretty much the face of economic policies going forward from the trump administration on friday when trump unveiled his dodd-frank executive order. we heard from gary cohn about the details. vonnie: how much does he agree ,ith the likes of steve mnuchin but maybe the treasury sounds like from his testimony there may be some agreement there. likes to characterize himself as a regional banker. anytime anyone refers to messick goldman sachs partner, he says i'm a reasonable banker.
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from that perspective when it comes to dodd-frank and a lot of the community banks wanting a savior out there, he may be the right person. it remains to be seen how well they can work together. cohn, who comes from a markets background. thinkingoming from his experience. people pulling in different directions and you wonder what it is like when they are all in a room. >> the history of the director national economic council -- when you look at people who held that in the past, these are people who have very large public roles. cohn hopeshat gary to make after mnuchin is confirmed? >> it sounds like it is going to be a strong role.
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he was a pretty strong director. now we have rubin, who maybe wasn't quite as strong, but was known her coordinating across many agencies. then he ended up at treasury. depends on whether there is a lot of people pulling rank, people who are closer to president trump and who has the better idea and who is able to come together as a team. >> i suppose it will he up to cohn to take care of regulation. tomay be up to mnuchin divide up the priorities. >> i don't think they will divide them up. when you hear about the few times he has been out in the public and talking, he seems very interested in tax policy. aboutaks carefully dodd-frank and wanting to look deeper into the issues.
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he knows what it is like to be a regional banker contending with all the regulations that are out there. >> to we have any sense who might be in the running of the council of economic advisers? >> i don't know anything about that. we were going to be naming someone, maybe news and rumors, i don't think they are taking it very seriously. >> that is bloomer treasury department reporter. moments ago president trump had at the air force base in tampa, florida. he will be making live remarks in a moment. there you see the air force base in tampa florida. expected to begin shortly before 1:30 p.m. ♪
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we are looking at the air force base in tampa florida. donald trump, president of the united states, addresses seniors at the air force. we will bring that to you in just a few minutes time. i'm david gura. time ceo may extend a and in june 2018 the company is still lacking a successor and the annual shareholder meeting is just one month away. we sort of felt like this is happening. eicher is extraordinarily involved. left or walked away,
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it is clear he has his own thoughts. >> there is a real chance bob iger is going to be in the existing 10 year. for most investors that is fine with them. i think most investors will like to see an extent. there is no high profile internal candidate or candidates available. that is a longer-term issue for the company that the board needs to manage. company talk about the being under the leadership of bob iger. this is walt disney shares versus the smp. what has he done well? how has he been able to manage so well? >> most important for shareholders they have allocated capital. he has made big acquisitions, mostly on the entertainment side by buying pixar and studios.
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they have allocated a lot of -- hel and investors recognized really early if you invest in big brands, overtime disney can monetize him. >> what if they don't come up with a succession plan, just like a general succession, investors were punishing more. to see bob iger is relatively young at 65. certainly in great shape and engaging in the company. company did a very good job. setting up a succession plan with a identify two very strong candidates.
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it did not work at for whatever reason and not clear to shareholders. they are setting up a cymer type of situation where they can identify an internal candidate or look external. >> the super bowl had 113 million viewers. cross-platform. the air force base in tampa florida, we are awaiting a margin -- we will bring that to you live here on bloomberg television. ♪ . .
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david: a live shot of macdill air force base in tampa, florida. the president of the united states scheduled to speak in just a few minutes. we will bring that to you live
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tampa-a-lago, he went to and had a briefing from central command and special operations earlier today. at lunch with enlisted personnel. we are waiting for the president to speak, delivering remarks to senior u.s. commanders at macdill air force base. taylor riggs has more from the newsroom. taylor: president donald trump must not be allowed to address the u.k. parliament, that is this be grown the house of commons said today. >> before the imposition of the n, i would myself have been strongly opposed to an address by president trump in westminster. after the imposition of the migrant ban by president trump, i'm even more strongly opposed. taylor: prime minister theresa may invited trump to visit the u.k.
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it's customary for visiting presidents to address the lords, however, sb here, he has the authority to block visiting figures from doing that. ander secretary of state ecstasy officials have enter the legal battle over president former cia -- officials have entered the legal battle over president trump's immigration ban. signing, former secretary of state john kerry and former cia director leon panetta. on capitol hill, the debate resumes today over president trump's controversial choice to be education secretary. thomas --vote on the betsy devos is tomorrow. vice president pence may have to vote to break a tie. last night the super bowl featured the greatest comeback in history, but the tv ratings have fallen short of calling -- according to preliminary data.
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almost 49% of all households were tuned into the game, that was less than the ratings for the last two super bowl. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm taylor riggs, this is bloomberg. vonnie: taylor, thank you. harvard university's joseph niles is one of the most influential scholars on american foreign-policy. he joined tom keene and francine lacqua on "surveillance." the three top -- the three talked trump. will he have influence, or is president trump a one-off? >> one of the big questions, is he going to tear up 70 years of building a system that we have seen since 1945? or is he going to wind up reinforcing it? at this stage, this is an open question. too soon to tell.
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tom: tell me within the classic textbook where the judicial branch fits in? is it an independence of an american judicial branch? >> there is. it's one of the reasons that some people who are alarmist and trump is like mussolini. my answer to that is not at all. united states is not like italy in 1922. we have separation of powers and a strong independent judicial branch, and we just saw it this past weekend, the past week with the executive order. the united states has the benefit of long tradition of strong institutions. , speak tossor nye bloomberg's global audience as they would to america in turmoil. is it another part of our history, or should there be real concern about the stability of america as the dominant
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institution? >> i still think the united states is a pretty robust society with strong institutions. think back to the 1960's, when you had rioting in the streets, a set of assassinations, deep bitterness over both civil rights and the vietnam war. we are not in that kind of situation today. we are in better shape, despite our differences. francine: how much will donald trump actually test these institutions? he talked about checks and balances, how far with the -- will he try to go in challenging them? he were toif challenge the institutions in a serious way, as opposed to with tweets, which is what we have seen where he tweeted against the judge that came down on a decision against him. if he were to do something more
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serious than that, i think there would be resistance, not just in the congress, but also in the rest of the judiciary. and in civil society. indeed make he can life difficult for judges, but i don't think he in a position to corrupt or undermine the independence of the judiciary. wereine: a lot of people surprised with the rhetoric coming from president trump since his inauguration. do you believe what you see is what you get? he so far has just held very close to what he said in the campaign. he is talking about a wall, he said he would ban immigration. can we take a campaign and say that is going to be his verse 100 days in power? -- first 100 days in power? >> president donald trump has tried to demonstrate to his followers, his base supporters,
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that he is doing what he said. that explains the executive orders, some of which were hasty and poorly thought through. as in the immigration order. and a lot of others, which are primarily symbolic. in the sense that we don't know how they are going to work out. but he has wanted to use executive orders and tweak -- tweets to show his bc is carrying out what he said. that is important to him, because he was elected by minority. he has to energize that minority. rather than moving to the center , as let's say george w. bush did after a close election in has really tries base, or tried to do that. david: that was joseph nye, professor at harvard university great how donald trumps policies have an effect in canada.
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shot of mcdill air force base -- a live shot of macdill air force base, donald trump will be speaking to senior coalition officers. that's before he went back to washington, d.c. vonnie: a quick data check it, a little sense -- a little strength for the bloomberg dollar index of .25%. the euro is lower today and the yen as well. the ruble's struggle -- is stronger. 5826, the strongest -- 58.86, the strongest we've seen in a while. ,he u.s. 10 year yield is 2.42% the whole curve, the five year yield is down about five basis
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points, and the tenure is down four basis points. 0%,you want offshore, 620 6.0%, and gold futures is well benefiting from all of this turmoil and rhetoric. up -- off the highs of the day. the german two-year yield is -77 basis points. there's no wonder there's a big difference between the german and the french yield. french yields are going ever higher, the germans ever lower. this is some of the country market movers in the united states. lower is what we are seeing, but not by a huge amount. the s&p 500 down by about a third of a percent. some of the oil companies are lower. and you see the yen stronger about .7%.
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this is bloomberg. ♪
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david: we continue to wait for the president of the united states. donald trump is scheduled to speak at mcgill air force base in canada, florida. we will carry his remarks, he is having lunch with enlisted personnel. general joe dunford is there as well. vonnie: there was a briefing as well. david: earlier in the day. vonnie: let's head over to julie hyman for her chart of the day. julie: i'm looking at the super bowl indicator today. not necessarily one of your fundamental market indicators, but a fun one to talk about. whatever you think about the outcome of the game last night,
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i know there are a lot of opinions. there is a historical indicator in terms of the market. the original afl team like the patriots wins the game, the markets saw that your. -- markets fall that your. wins, the markets rise. we look at the patriots history in particular. it's been on the super bowl a record nine times, the most of any team. the yellow bars is what it has the super bowl indicator has been correct. and 1997, the patriots lost in the markets went up. in 2002, the patriots won, and a market went down. the indicator to not hold true -- did not hold true in 2012. it doesn't give much solace to those who are not happy about
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the patriots win last night. that's what the super bowl indicator states. we will see that holds true for this year. among all of the tea leaves folks are reading, this may not be the most reports. david: -- the most important. david: julie hyman, and time to the business flash. , theuts are on the way overall number of top executives produce -- reduced by more than half. it reflects the striking size. the bank is 70% owned by the dutch government following a night out. china's first homemade passenger jet will make its first flight. the 919 was originally due to fly two years ago, but it's been plagued by manufacturing problems. the chinese plane is designed to compete with the 737 and the airbus. scotland,bank of
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according to people familiar with the matter of underscore the difference in performance between two of the uk's bailed out banks. lloyd's is now paying dividends after returns profitability is and rbs may stay mired in government ownership for at least five more years. that is your business flash update. vonnie: nations around the world are watching every move made by the donald trump administration, and that's especially true for canada. eigererg markets kamala joins us now. be in theappears to middle -- >> there are plenty of positive science on the canadian economic outcome right now. last year got off to a bit of a rocky start, but things picked up in the second half of the year, that is reflected in data we are looking at with respect to employment as well as exports. there is quite a bit of hesitation including from the
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bank of canada. centralthe time when bankers speak, we are parsing every word. but the governor is making our jobs a bit easier lately, he was in edmonton at the country's oil patch last week. talking about how uncertainty really has motivated him and his colleagues to step to the sidelines until more information comes out and more specific about trump policies come out. quo's basically the status in the meantime. we are seeing divergence between canada's central banks and the federal reserve while canada sits tight. you about me ask fiscal policy and publications because of crafting fiscal policy. we are expecting a budget in the next few weeks. is this making a difficult? -- that difficult? lily: there's been speculation that canada would be releasing its february -- in several
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budget in february. there's the possibility that officials will wait weeks or months beyond that. right now, the elephant in the room is a potential renegotiation of nafta, which was certainly have an impact on the canadian outlook. that is something officials are keeping in mind. all of this really puts pressure on the finance minister under justin trudeau. he is very likely going to have to build risk cushions into his budget projections. the could mean a larger deficit projection going forward. that is certainly not something the administration here wants. ultimately, it might just mean a delay in when the budget is released. there is a precedent for that. pricesrs ago, when oil officials came to grips with what that would mean for the economy. it has happened before. vonnie: viewers can see this in the bloomberg terminal chartwell 65, the canada jobs engine revving up.
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-- chart 1265, the canada jobs engine revving up. the massive increase in jobs in canada, is pretty stunning. what are things that are concerning and what is the current consensus of a renegotiation of nafta? lily: a little bit of whiplash on that front. specter of the renegotiation was first raised, a lot of concern here. some of that concern was allayed when we heard from blackstone ceo steve schwarzman, the head of trump's council of economic advisers. he was in calgary telling officials the administration has what he calls an unusually high view of canada. concerns are mounting as more and more analysts here start to crunch the numbers. we have a report out recently from the national bank financial, based in montréal. tax onoked at one of 10%
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goods crossing the u.s. canada border would do, and they are expecting a 9% hit to the value of canada's imports. it's only expected to be higher in canada retaliates. david: you mentioned the governor of the bank of canada. afraid we have to go. thank you for joining us from toronto. it's go live with the president of united states is about to speak. president trump: thank you, everybody. thank you very much. [applause] donald trump: thank you. a lot of spirit. great spirit for this country. thank you all. have tremendous spirit, i want to thank you. we had a wonderful election, didn't we? [applause] trump: i saw those
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numbers, and you like me and i like you. that's the way it works. i'm honored to be here today among so many of our really and truly great heroes. i want to begin by thanking general hotel and general thomas for their distinguished leadership and service on behalf of our country. there he come a very outstanding people. thank generalto dunford, the chairman of the joint chiefs of staff. that's big stuff when you have the chairman. stand up for a second. [applause] trump: also, commander vogel and everyone serving at macdill air force base. quite a place. we are to be loading it up with beautiful new planes and beautiful new equipment. you have been lacking a little equipment, we are going to load it up.
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you are going to get a lot of equipment. believe me. [applause] thankent trump: let me all of the coalition partners and the representatives assembled here today. youery proudly stand with and we will be fighting for your security, they are fighting for our security and freedom. but we recognize our great governor and very good friend of mine, somebody who endorsed me, that makes him a better friend of mine. they don't endorse, believe me, if you were ever in this position, it's never quite the same. but it neverto, means the same. but this man is a great governor and has done a fantastic job, rick scott, governor, stand up please. [applause] president trump: thank you, rick. finally, on behalf of the entire nation, let me express our gratitude to all members, and i mean all members of our military
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serving in the united states central command, and the united states special operations command. we salute the army, marine corps, navy, air force, and coast guard, along with our civilian defense personnel who are so important to the success of what we are doing. let me also recognize the military families and spouses who bravely shoulder the burdens of war. i want every military family in this country to know that our administration is at your service. we stand with you 100%. we will protect those who protect us, and we will never, ever let you down. as your president, i have no higher duty than to protect the american people. the highest duty we have. i said at the other night. great, great supreme court nominee. you all saw that.
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i said to myself perhaps the only thing more important to me, definitely, is the defense of our nation. so supreme court is important, but we have to defend our nation. and we will do that, believe me. [applause] president trump: we will do that. and each and every one of you is central to that mission. haveen and women serving forgot their hearts and souls to this country. we really experienced things that very few people get to experience. you should your lawn -- you shed your blood across the continents and oceans, you engage the enemy on distant battlefields, toiled in the burning heat and bitter cold and sacrificed everything so that we can remain safe and strong and free. howard administration will always honor our sacred bond to
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those who serve, and we will never, ever forget you, believe me. we will never, ever forget you. ensure that the men and women of our military have the tools, equipments, resources, training, and supplies you need to get the job done. you've seen me say we been depleted. point almost as low as world war i. that's a long time ago. that's a long time ago. it's not going to happen anymore, folks. it's not going to happen anymore. not with me. we will ensure no taxpayer dollars are wasted. i have already saved more than $700 million when i got involved in the negotiation on the f-35. you know about that. i want to thank lockheed martin and i want to thank billing and i want to thank all of the companies that have really opened up and when i say ", rick
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scott understands this very well. "their prices. because that's what they did. we've got that program, is going to be back in really great shape from being really very troubled. and we are going to be taking care of our great veterans. we will make a historic financial investment in the armed forces of the united states, and show the entire world that america stands with those who stand in defense of freedom. we have your back every hour, every day. now and always. it also means getting our allies to pay their fair share. us, been a very unfair to we strongly support nato. we only ask that all of the nato members make their full length robert financial contributions to the nato alliance, which many of them have not been doing.
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many of them have not been even close. and they have to do that. central command and central operations command are the very center of our fight against radical islamic terrorism. aw of yournds in couragee. those that are standing have bravely fought in the middle east and bravely battled a vicious enemy that has no respect for human life. we express our gratitude to everyone serving overseas, including all of our military personnel in afghanistan. m dispatched its warriors to the most during missions in defense of the united states of america. against stands a chance our special forces.
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not even a chance. they don't have a chance. and as we were going to keep it. and you are going to be better off because you will have the finest equipment known to man. you're going to be better off. the proof that our nation has been blessed by god, look no further than the men and women of the united states military. they are the greatest fighters in the greatest force of justice on the face of the earth. and that the world has ever known. the challenges facing our nation, nevertheless, are very large. very, very large. we are up against an enemy that celebrates death and totally worships distraction. you've seen that. isis is on a campaign of genocide, many atrocities across the world. radical islamic terrorists are
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determined to strike our , asland as they did on 9/11 they did from boston to orlando to san bernardino. and all across europe, we've seen what happened in paris and nice. all over europe, it's happening. it's going to a point where it's not even being reported. and many cases, the very dishonest press doesn't want to report it. they have their reasons, and you understand that. so today, we deliver a message in one very unified voice to these forces of death and destruction, america and its allies will defeat you. we will defeat them. we will defeat radical islamic terrorism, and we will not allow it to take root in our country. we are not going to allow it.
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you've been seeing what's been going on over the last few days. thated strong programs so people that love us and want to love our country and will end up letting our country are allowed in. not people that want to destroy us and destroy our country. [applause] president trump: thank you. freedom, security, and justice will prevail. in his first state of the union message, president george washington wrote that to be prepared for war is one of the most effectual means of preserving peace. later, as thers general was also speaking about ronald reagan, he said that
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wisdom comes in three very, very strong words. peace through strength. i've said it many times during the campaign, speaking in front of tens of thousands of people at one sitting, and i'd always mention america first. probably never heard, make america great again. [applause] president trump: and peace through strength. the men and women of the united states military provide the strength to bring peace to our troubled, troubled times. we stand behind you, we support your mission. we love our country. we are loyal to our people. we respect our flag. we celebrate our traditions. we honor our heroes. you are heroes. and we are prepared to fight,
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and we pray for peace. you, god bless you, and god bless america. thank you very much. scarlet: that was president trump speaking and macdill air force base. what to get you a recap of the headlines and overview of what else the president discussed in his comments. we are reporting from the white house, the president spoke late because he was scheduled to begin speaking at 1:00 p.m. set the scene for us. who was the main audience? you touched on a number of different areas. lexi walker to voices support for armed services and various service his members fighting on a number of different fronts. theanted to speak to american people, and those who are his opponents, who have spoken out against immigration ban. he said the united states needs strong programs to decide who
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can come into the country and who needs to be kept out. he wanted to allow the other people to know that the reason he put in place this immigration ban was because he wanted to protect the national security of the united states. this was part of that message, is an ongoing fight. and of course, he wants to win the battle over public opinion, saying the reason he put in this immigration ban is because he wants to protect united states. >> he continues to find that legal battle as it builds. is that this rooftop point we can continue to expect to hear from him and his and administration? at the end of the day, this is about security of the united states and protection? >> definitely. theou look at the tweets president put out over the weekend, he took a very direct out -- at the judge who put out this restraining order, saying this judge is going to be responsible for whatever bad things happen.
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bad people are going to come into the country. he painted a picture of a very dark and dangerous country, where different people are trying to come into the country. he is acting to try and stop it with his immigration ban on seven muslim majority countries. that is an argument we are expecting to hear from them going forward, that he is protecting the united states and he is going to do what he can, even though the courts as he says, are standing in his way. scarlet: what do you say about nato? while he did say he supported nato, he had some conditions. >> that the other argument. this was a statement that was not only for the american people and the people of the audience, but to the world and our allies in nato. it does not believe in countries are all paying their fair share. he says the united states is being taken advantage of, and while he did say he believes
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strongly in nato, he wants a lot ,f those countries to pay more to pay what they believe their fair share should be. he agreed that he will be going to a meeting of the nato members later this year. that's an argument that we expected him to take directly to them, that a lot of these countries aren't meeting that 2% threshold that is part of the nato charter, he's going to tell them the need to pay up. oliver: i thought that was interesting, that 2% gdp contribution is one point he has been specific about. part, defense spending there was one second where he told the audience that he was going to bring in the best equipment, the best military technology. he also talked about how he wants to cut costs for what he sees as being overly expensive programs. how does he marry the two? gracie says is a deal maker that cannot only increase the effectiveness of the military by
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getting them better equipment, he said the military has been depleted. obviously, that is a big budget item, defense spending takes of a huge amount of our u.s. budget. he says the way he is going to do that is in part by negotiating with some of these defense contracting companies like boeing and lockheed. he pointed to the f-35 contract, the largest contract with the military, and he says he has worked to negotiate the price is down. -- the prices down. he is going to be working to try to negotiate with these companies that have large u.s. contracts and telling them the need to bring their prices down. he try to have both sides of the coin saying he is going to increase the effectiveness of the military and get them better equipment, will also bring down the prices of the war agreement they use. -- equipment they use. scarlet: let's look at what happens next for the president immigration ban. where are we in a timeline for
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the ninth circuit court of san francisco to deal with the appeal made by the justice department? >> the ongoing battle has a number of different deadlines. a three 5 p.m. deadline for the justice department to make its latest filing, where they can make their argument that this is constitutional. right now, the immigration ban has been put on hold by a judge in washington. it looks like this is headed towards the supreme court, there have been conflicting rulings by different judges in different jurisdictions. it does go to the supreme court, we can see this play out over a number of weeks or months, potentially, with the ultimate decision to be made about whether or not the president has the authority to ban whole countries of people, and whether or not this is a violation of the establishment clause in the constitution. that is an argument will likely to see play out going forward. wewill continue --oliver: will continue to follow that. thank you.
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u.s. markets close in two hours. a check on where stocks are trading with julie hyman. julie: u.s. stocks or near the lows of the day. all three major averages are lower. even though the s&p 500 is down that much, it is a pretty broad-based drop when you look at all the groups in the s&p that are seeing declines. as we are seeing selling in u.s. stocks, we have been seeing some buying of so-called haven assets. gold is trading in a two-month high today. we have been watching gold prices go up. an interesting piece out from dave wilson, with bloomberg news. he drew on a note from the chief investment strategist at bank of america merrill lynch who basically says that gold is the tell for volatility. if you have rising gold prices and higher bond yields, that can foreshadow stock market slumps. interest in perspective as we see gold rise by 1%. and bond yields are not exactly
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cooperating with that scenario. yields,eeing a drop in the lowest of the session down six basis points at 2.41% today. that is helping put pressure on groups like financials. we also saw a earnings and earnings related news to contend with, tyson food came out with record earnings, but the company said the securities exchange commission is investigating price-fixing allegations in the chicken industry, and said -- sent the company a subpoena. sysco matching estimates. its acquisition of a company from bain capital will modestly heard earnings per share in the third quarter. earnings-per-share in the third quarter. also moving down, crude oil prices. we dig more in that in the commodity close about 30 minutes. chesapeake and transocean are taking a hit. this is the biggest declining
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group within the s&p 500 today. scarlet: we look into little later on when commodity markets close at 2:30 p.m. let's check on bloomberg first word news. emma chandra has more. emma: angela merkel says she will seek common ground with donald trump's administration. despite the differences over the travel ban, she will look at each issue separately to see if there are places where the two countries can cooperate. french presidential candidate francois fillon says he has nothing to hide, and that his wife's salary was perfectly justified. at a news conference in paris today, he said his wife worked at his parliamentary assistant for 15 years. the practice is legal, but he ballasted is no longer seen as acceptable, and he apologized to voters. $900,000 over 15 years. cornerback patriots
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tom brady did lose something at the super bowl -- his jersey. after the game, he reportedly could not find his number 12 in the locker room. says since brady is the most popular and collectible player, bidding would start at $300,000 and could reach half $1 million. 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. scarlet: thank you. coming up, we hear from henry .cvey at kkr he tells us what sectors he believes be most impacted by moves to cut regulations. from new york, this is bloomberg. ♪
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scarlet: this is "bloomberg markets," i'm scarlet fu. oliver: i'm oliver renick. kkr's 2017 global macro outlook is out, and it revolves around four main themes. on bloomberg daybreak: americas, erik schatzker sat down with the head of global macro asset allocation described the current paradigm shift. >> this is the first time in 15 or 20 years where we have an inflection point, and what we are to highlight is a couple of things. major shift for monetary to physical, which i think is a big deal. we have had all the central
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banks running the show, and now you have government spending driving incremental growth. it's a big deal with applications for growth as well as rate and volatility. the second thing i would say is we are moving globally. i travel all the time, and the authorities we are speaking with feel like we are moving from global agendas to domestic. that hasn't location for trade other parts of the world. the third thing was we are moving back towards deregulation , and particularly energy and financial services and i think health care will be in the next at some point as well. -- in the mix and someone as well. you are moving towards a world where a lot of volatility has been currency markets but not an equity markets. equity market volatility has been high, but i'm a sustained basis, most of the volatility has been in the currency markets andeople wrestle with qe dealing with the currency. to thethis shifting industry market and over time into equities.
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rik: people may look at those four forces or themes that you believe are going to govern the neck environment and say that sounds about right for the united states. maybe it sounds right for the u.k. where some of the same forces are already playing out with brexit at a little bit of reflation. what about the rest of the world? mr. mcvey: this is missed by many investors. there's been a lot of talk about brexit and a lot of talk about resident trump -- president trump. we think china's deficit is closer to 10% or 11%, not a 3% that's reported. it's a huge difference. if you take the first quarter in last year alone, they put $1 trillion stimulus into the economy. that's about half their gdp. there's a lot going on behind the scenes where governments are trying to use fiscal to really get i would say some reflation. we have been enough time we had
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slow growth and monetary policy, disinflation. that ended right after brexit. structurally, we think rates have bottomed. we are in a more reflationary environment where governments are driving the outcomes. that creates were volatility over time. we may not all be economists, but people can understand fed jargon more than they can potentially what is being said out of president trump right now or xi jinping. if you look around the world, politically, we have a lot of strongmen. we haven't seen this in quite some time. , xi jinping, trump, everyone -- they are creating nationalist fervor, that's even before i get to what's going on in europe. mcvey, that was henry jake you are head of global macro and asset allocation. scarlet: we hear from the cofounder of well front.
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this is bloomberg. ♪
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scarlet: global advisors are gaining traction with investors, these are firms that use computers for a fraction of price charged by traditional brokers. carol massar discussing this right now. carol: scarlet, thank you. we are listening to bloomberg radio, and you have a special guest in the san francisco studio. , an: the ceo of wealthfront interesting developments in the last week, where you have a pretty significant new products to your business. introduced what we think is a revolutionary new approach to financial planning. if you can say revolutionary and financial planning. cory: it's certainly that. you see this across the world of
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investing, the concern about what robo advisors mean. you guys are with a new level of vice you haven't had before. -- advice you haven't had before. >> we're trying to deliver everything you could traditionally get from a private wealth manager to the masses. that is one of the things that differentiates us the most. we're trying to serve people who are under 40 years old and canada for the minoans associated with traditional advisors. work -- can'till afford the minimums associated with traditional advisors. how many of the folks investing with you are under 30 years old? and that's what you are targeting them to make the audience bigger? >> we like to say under 40 years old, but i think 90% of our clients are under 50 years old. we are really trying to focus on the people who have not traditionally have access to
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outstanding investment management and financial planning. competitorsf your take a very different approach. there are two groups -- robo advisors that provide human advice of some sort or a level where you can ashley talk to a person on the phone or sit down with someone. -- actually talked to a person or sit down with someone. but there are robo advisors. why have you chosen to go against the notion of an actual human financial planner? >> our target audience doesn't want to talk to someone. our clients say we pay you not to talk to us. this is a generational change your. we are serving a generation that grew up digitally native, that prefers everything to be done through their phone. we try to deliver solutions that don't require anyone to talk to you. do need to talk to someone with amazon or airbnb?
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do need to talk to someone with uber? no. but for some reason we think you need to talk to someone in the financial services space. carol: some investment advisers say this is a great thing, you are taking the emotion that comes out of advising or investing, because people are just going straight to the platform and making decisions. at the same time, what stopgaps do you have for someone who might get nervous about their portfolio when in does start to play a factor -- emotion does start to play a factor? says therecord review difference between what you do and the traditional industry does is the traditional industry tries to sell your products that perhaps are not the best things for you. they talk you want to the ledge, therefore they need to talk you off the ledge when things go poorly. our clients believe in passive investing at index investing. since we didn't talk them on to the ledge, we don't have to talk
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them off of the ledge. you don't see the kind of withdrawals in down markets from our service that you do from a traditional advisor. it seems there's a perception that because your investors might skew younger, their accounts are really small. but some of the numbers i've seen you put up in the past suggest you have a lot of big accounts and air not just a few people. >> the largest unaffiliated account is i think over $16 million, but that is really not the target. we are trying to find someone who has between $100,000 and $1 million. cory: how many people are in that bucket? >> we have over 100,000 clients. i haven't tracked the number we have. cory: was the a u.n.? >> $5 million. it's the fastest growing investment management term of all time. carol: how competitive is a
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getting? -- is it getting? the top four players have assets over 80%. two of them more than doubling what they hauled in according to our data. how competitive is it to get out those investment dollars? >> for what we do, we find it to be less competitive. one of our competitors, who was traditionally only software just announced they were going to advisors. we think they are serving an older clientele. we are trying to serve people who are 40 years old and under. largest generation in our country's history, and collectively, they have seven children -- $7 trillion in investable assets. we are seeing less and less competition for them as we build more and more products that are specific to them. schwab,rol mentioned
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but there are others out there. for them to have a robo advisor business keeps the assets under management in the same place, but it becomes a much worse business for them. if you work in a business like that, they have a higher fee. you are making more fees in your left pocket, you don't want to move the money to your right pocket, even if you're clients are clamoring for a robo advisor. million under0 management, but only $1 million came from new clients. it's not a very good experience for young people, who are the people who most want a software-based solution. inhave a number of people our client service group who used to work for schwab, and they talk about how that was a big narrative inside the company, that they are obsoleteing themselves. of absolution,on there is speculation that these
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companies might get taken over. do you see that as an eventual end for your business? >> before i got into this -- scarlet: i was cory johnson and carol massar. cashmore from them on theer: time now for bloomberg business flash, the biggest business stories in the news right now. propose import tax by the trump administration will deliver the sharpest blow to jaguar land favoring makers like forward -- ford. jaguar land rover would need to raise prices. ford with significant domestic manufacturing would need $282, followed by general motors with a height of about $1000. tyson foods says it is under investigation for its chicken pricing. the arkansas-based company says
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it is cooperating with the probe. tyson and his largest competitors have been named a series of lawsuits that claimed the chicken industry colluded since 2008 to drive prices higher. the companies deny the allegation. j.p. morgan chase has been picked to replace credit suisse for corporate brokerage world group. we have u.k.'s 100 biggest companies. the payment processing, he may make an announcement on the decision as early as this week. they currently have a market value of $7 billion. that is your bloomberg business flash update. we will be taking a look at the commodities close, looking at oil. that is up next. this is bloomberg. ♪
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from bloomberg world headquarters in manhattan, this is "bloomberg markets." i am scarlet fu. julie hyman is at the markets desk.
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julie: gold prices are up 1% today. there at the highest in two months. as investors are looking for stability or safety, as we got some commentary out of marine le pen, the french presidential candidate, who is saying that france should leave the eurozone or eu. you look at gold and how it has done since the election, we have it coming back from its losses. at one point, it was down as much as 11.5%. prices, we have been watching them, as well. we have seen declines. it looks like that is the biggest effect. we of course continue to see more supply, online even as opec is constraining supply.
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in the u.s., folks are pumping. i wanted to look at the five-year chart to give some perspective. the number of rigs in the u.s. for oil and gas, since we've seen the bottom last may, we've seen an increase of 325 rigs. that's about an 85% increase. however, there's a lot of room for it to go higher. one of the items of uncertainty surrounding the trump administration is how favorable some of their policies might be to the oil and gas industry and how much of a comeback we could see an oil and gas rigs. we have been watching oil volatility. we spend a lot of time talking about stock volatility. oil volatility is also quite low. that is the white line. fromains that we have seen the opec agreement have been relatively sustained, and the
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drop in volatility has been relatively sustained. oliver: let's stay with oil. more, bloomberg intelligence commodities strategist mike mcglone. we got a prediction of volatility. the oil vix is pretty low. what are these things that are going to change? mike: oil volatility will go down as prices go up because the daily moves are about the same in terms of dollar amount, but that's a lower percent. let's say oil was five dollars. 100, it's five bing percent -- 5%. that is one thing that is changing. seemed to be a bottom for a while. scarlet: oliver mentored a vitol. why does their opinion matter?
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mike: it's a key energy company. my focus is what they said. by volatility come it makes sense. the range they put in makes a lot of sense. the range around $60 a barrel -- in 2015 when the market was collapsing, it was stuck there between may and june. that is a key level. we all know if prices go up. supply comes on. on the bottom, $52 may be a little high. i look around $46. that is where things bottomed before and after the election and after july and august. oliver: in their assessment, they say they are going to see bouncing between $52 and $62 a barrel for brent. they attribute it more to trump, saying donald is going to keep the market bouncing back and forth. i thought we had opec. i thought we had groped -- global demand fueling these supply. is it about keystone?
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what is exactly the trump influence? mike: everything i see from the trump administration should be somewhat negative for prices because of more supply. drill at will. it's more of a focus on wti u.s. it's really not a positive factor. the major issue has been opec. opec has cut supply, but what has that done? there are all of these signs to create more supply. within the markets, open interest in manage positions have reached record levels per the pendulum may have swung too far compared to a year ago. scarlet: do you think that people are -- it seems people are surprised with how compliant opec and non-opec members have been in those production cuts. do you think it is justified? mike: yes, we have seen that
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before. what i like to do is to try not to find out these unknowns. try to focus more on the knowns. what has happened before based es?market analyst be carefulosed to about being long, exactly the upset of last year. oliver: let's jump in. walk us through this. on the bottom panel, we are looking at that positioning, which is the yellow line, total opec interest just looking at wti, and the blue line shows you the net position, which is very long. it's taken off quite a bit. is this a concerning chart? 9 mike: i mike: look at that as very concerning. i would say, be careful. that is mad and should money -- managed money. ago,r look at the yea
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when the consensus is this bullish at the upper end of the range, you are probably supposed to be more careful. oliver: and bullish isn't backed up by that open interest? mike: open interest will drive the market, but the key thing is liquidation. of every day that goes by, crude oil becomes less expensive to produce. that is one negative thing for crude, although technology is working against it. scarlet: commodity strategist mike mcglone, thank you so much. let's get you a check on the headlines. emma chandra has more. emma: president trump was admitted still air force base in tampa, florida when he got a briefing from military commanders at u.s. central command. trump said he plans on making a big investment in the military and our veterans. >> we will make an historic financial investment in the
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armed forces of the united and show the entire world that america stands with those who stand in defense of freedom. emma: the president also said he will "load up mcdill air force base with beautiful new planes and a lot of new equipment." in the u.k. k, house common speaker john barco announced he intends to block donald trump from addressing parliament when he visits the u.k. this year. it is customary for visiting presidents to address mps in westminster hall. however, the speaker has the ability to block visiting figures from doing this. rejected president trump's assertion that iran is the world's number one terrorist nation. a kremlin spokesman said russia values its friendly relations with iran. british prime minister theresa may met with israel's prime minister benjamin netanyahu.
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netanyahu asked may to support new sanctions on iran. may said the u.k. is committed to a two state solution for israel and the palestinians. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. scarlet: coming up, treasuries and gold are rising. global stocks are selling off. is this a sign that the trump rally is coming to an end? from new york, this is bloomberg. ♪
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this is "bloomberg
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markets." i'm scarlet fu. oliver: i'm oliver renick. harvard university professor joined tom keenan and francine lacqua on "bloomberg surveillance." >> bush 41 was, i think, a period when we had a strong foreign policy and a very civil discourse, and i think that technology has hurt this somewhat in the sense of that at 140 characters, people can be quite rude, and the rhetoric of the 2016 campaign was pretty rough. the question is whether politicians will find it in their advantage to keep it that
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way or people will say, we will like to hear a little bit more listening, a little bit more politeness. it's possible that the pendulum will swing back. on the other hand, technology is not in our favor. >> what is your prescription for the newly minted of secretary of state mr. tillerson? how should he act given the executiveness of the white house in his first two weeks? >> as i said on your program a i think thes ago, tillerson appointment is a good one. he knows what he's doing. he knows the world. with going to have to deal a white house which likes to act quickly sometimes without carefully worked out consultations. there is a long tradition of some tension between the state department and white house.
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i remember ronald reagan ran through six nsc advisors. i expect we will see a bit of friction. the key for tillerson is to keep the study course on his own. >> what about the friction within the gop echo will be party stay around and actually make sure donald trump is in check, or will they rally behind him no matter what happens? >> i think in the short run, facing reelections in 2018, a lot of the people who were critical of donald trump in 2016 are reluctant to abandon him. hand, if part of what donald trump and steve bannon are doing is to try to byanize a new populist party appealing to the tea party republicans and the so-called
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reagan democrats, then a lot of middle-of-the-road republicans or moderate conservative republicans are going to feel that pressure. >> what are the chances of a trade war between the u.s. and china this year? >> well i hope that calm voices .ill prevail a trade war would be expensive for china, but it would be expensive for the united states, as well. our exports also provide jobs. i think it's a bad idea, but if if asked me to place a bet there will be some, i would expect there will be some. oliver: that was joseph nye on "bloomberg surveillance." scarlet: it is time for bloomberg business flash.
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uber has hired a nasa veteran. he will work on a flying car initiative. uber isn't constructing a flying car yet but will work to solve problems like noise pollution and the fledgling industry. hasbro's decision to stick with monopoly and traditional games is paying off. increased sales by 11% to more than $518 million last quarter. that along with its christmas helped hasbro top analysts estimates for profits and sales. british companies are seeing their profits squeezed because of a drop in the pound. that is according to the british chamber of commerce. according to the group, sterling's decline since brexit is having a negative decline on
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sales. as for exports, that is mixed. investors must embrace what he calls the financial methadone of quantitative easing. the investor says that if the european central bank and bank of japan pull their support, markets will sink. grow says the central banks are keeping interest rates artificially low. is your business flash update. let's get you a check of how markets are trading with abigail doolittle. abigail: we are looking at a bit of a risk off tone for the financial markets. we take a look at a multi-asset class board. is trading the s&p down about 3/10 of 1%. we see haven assets are trading higher, confirming the selloff we are seeing in the growth year risk on stocks. on the year, the yen is sharply higher, on pace for its best
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year since 2011. a bit of an under the radar screen there. course, the 10-year yield is down six basis points, telling us that haven bonds are rallying. as for what is dragging the stocks today, the worst sector is energy. we have oil trading lower by 1.4%. not surprisingly, some of the big e&p names are among the on the s&p. what stands out is the fact that energy was the best sector last year. this year, we are seeing a bit of a reversal. we have seen some weakness and energy today. amid this risk off tone, we have strategists calling for a bit of a pullback. bloomberg,to the 5815. this is a one-year chart of the
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s&p 500. they had a technical analysis over at oppenheimer. re: walt has been bullish for quite some time, but he says he thinks we are due for a likely pullback. he's basing this on the fact that the relative strength index, and momentum indicator, is starting to show bearish highs. gone, and momentumwe see that s -- lots of voices out there talking about this near-term pullback. oliver: all right, abigail, i like it. always a fan of the rsi. scarlet: i was going to say, how many technical indicators do you like? oliver: one.
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scarlet: in brazil, advertisers are focusing more on the beer and less on the babes and bikinis.we will tell you how the third largest beer market is trying to whet the appetite of women. this is bloomberg. ♪
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oliver: this is "bloomberg markets." i am oliver renick with scarlet fu. scarlet: while budweiser super bowl ads took on a political tone, beer companies in brazil are privi -- pivoting to reflect cultural taste. brazil's top for beer producers are toning down their ads and hoping to tap into a gender-friendly wave. i sat down with fabiola mora in today's walk the talk to explain
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why this is significant. >> in brazil, we are known for having a sexist culture. , in au to have an idea poll last september, more than 40% of men said they think women somehow contribute to when they are raped, which is very basic. the fact that at least beer producers are getting more conscious about objectifying women does seem to be a positive sign in a culture that is still tainted by that much she's no. -- machismo. is the beer industry behind the curve in the way businesses in brazil approach women? >> actually, the multinationals are leading the way, and as part of that, in dave is a leader -- leader in that they
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are not only more gender friendly but the first one to sponsor the lgbt parade here in brazil. they really have an active policy of supporting minorities and diversity. the same is true of other brands of beers, and i would say it was noticeable, this change in the beer markets, although there are other areas like cosmetics and other sectors that embraced more gender friendly marketing. scarlet: what prompted this change? did it happen suddenly like a flip of the switch, or was it something evolving in this direction. >> it was a very gradual change, and it is still happening. less of theoticing sexist advertising, but there are still holdouts in general.
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you still see women wearing swimsuits on the beach in situations that are not they byily similar to day situations in brazil. for the last 10 years, slowly, advertisements have become less sexist. scarlet: what does it say about the female buying power in brazil? >> women are making more money. that's for sure. i think it's not only in brazil. it's all over the world. getting morere represented in society. it's not just having more jobs. it's having more influential jobs on higher levels.
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there is still a long way to go. the marketing notices changes before other areas. that's the public they are trying to reach. is a course for beer sommoliers, and women are taking it. that was my interview with your mora a bloomberg news. oliver: interest in the french election as it's coming into focus. we will explain why there is so much attention on the race and what it means for the global markets. let's take a quick look to see what is happening. we saw stocks kind of vacillating close to unchanged, but now down about 10 basis
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points. a little bit more weakness in the s&p 500. we are seeing some weakness in the trades that brought the markets to a positive weekly gain on friday. on friday.down financial companies had the best gain since the election, and we are seeing some softness today. let's check out the dollar, a little bit of strength in the dollar, down lower from its highs higher the past six months. some weakness in the bond market, as well. this is bloomberg. ♪
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scarlet: this is "bloomberg
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markets." we are live from bloomberg world headquarters in new york for the next hour. we will be covering stories in los angeles, london, and washington. here are the top stories we are following from around the world. u.s. stocks take a cautious tone as we near the closing bell, moving lower on this monday. investors are making a bid for safeties with treasuries, and gold is on the rise. we will take a deeper look at financials as president trump looks to roll back at dodd-frank. could we see more upside for shareholders? in the sea suite, head of disney's earnings, we will discuss whether ceo bob iger could run the show longer than expected at disney. one hour away from that closing of trade. julie?going on, julie:julie: all three majors trading lower here after drifting sideways through much of the day. we've taken a leg lower the last few hours. it's a pretty broad-based the klein.
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if you take a look at the bloomberg, you've got almost all the groups within the s&p 500 that are lower. ech is the one exception. it has touched its highest since 2000. otherwise, it's a little bit without rhyme or reason, at least if you look at the interest rate-sensitive stocks. we've got bond years lower and real estate and telecom not benefiting. doing the less. financials are getting hit. there's not a lot of logic to those moves. i want to take a look at what is going on with energy. and white. partially as 1.4%, we see the gain in the u.s. dollar. the dollar index, hitting its highs, just after 10:00 a.m., at the same time we saw oil taking its lows.
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we haven't seen as much of a tick for ticket move after that. the exception within the energy complex and within energy stocks to that downdraft is oil and gas, which is up almost 11%. this is after williams companies one u.s. approval to build it's s gas extension here in the northeast. in moreually a rise than williams in this particular case. other movers we are watching on the top and the bottom of the s&p 500. barbie sales, not doing well. girl division, doing very well, gain. more than a 50% we've got lab corp. of the americas, and that's after a
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report from reuters that the company could spend more than $8 million to acquire competitor ppd. analysts don't think that would be a positive deal for lab corp. oliver: thank you so much. scarlet: let's get you a check on the headlines. emma chandra has more. emma: president trump was at mcdill air force base in tampa, florida where he got a briefing from commanders at u.s. central command. president trump said he supports the nato but wants allies to pay their fair share. we strongly support nato. we only ask that all of the nato members make their full and proper financial contributions to the nato alliance, which many of them have not been doing. emma: the president warned that is linux eight is on a campaign of genocide and america will terrorists.
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former secretaries of state and asked cia officials have entered a legal battle over president trump's immigration order. they sent a statement to the appeals court hearing the case arguing that the travel ban undermines national security and will endanger u.s. troops in the field. among those signing it, former secretary of state john kerry and former cia director leon panetta. in france, far right leader marine le pen will take control of the central bank and lead the country out of the euro if she's elected president. that is according to her chief economic advisor. she is declared that the same nationalist forces that led donald trump to victory in the u.s. will lead her to victory in france. last night super bowl featured the greatest comeback in the game's history, but tv ratings appear to have fallen short. that is according to preliminary data from fox, which broadcast new england's epic victory over atlanta.
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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. scarlet: let's return to the markets. we are seeing caution abound. u.s. stocks, drifting lower. one catalyst for this risk off sensibility, concern about france and the growing prospect of marine le pen advancing to the final runoff in that country's presidential election. .oining us is michael regan also with us is lisa abramowicz, host of "bloomberg markets" on bloomberg radio at 10:00 a.m. it feels there is a lot of thanks to over this french direction. -- election. donald trump did make a speech earlier, but it's been quiet on that front. let's stress about what's going on in europe. michael: wait and see is the zeitgeist of the markets at the moment. on friday, we had a jobs report
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that was sort of a goldilocks as far as equities goes. strong growth in the headline number added. average hourly earnings weren't so hot that we had to start worrying about corporate margins and more aggressive interest rates. trump, gary cohn talked about dodd-frank on friday. that helped banks on friday, still not enough to get them to break out of the range. his the reflation trade on or not? wait and see is still the mantra. oliver: that seems to be manifesting itself in the bond market. .e had the big jump what is going on with bonds? lisa: we've got to competing
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factors. you've got the idea that growth is starting to accelerate. inflation is starting to pick up. we are not accelerating beyond the low yields for longer kind of idea. we are seeing some hope there will be fiscal stimulus, something that will push us out of this range. those hopes are put a little bit more on ice when goldman sachs came out and said, we're not sure how much you can get done given the chaos we are seeing in some corners of washington. let's take a step back. let's see what we are dealing with. scarlet: things may take a long time to happen, whether it is financial deregulation, tax reform, infrastructure spending. oliver: that was kind of the point of bill gross's letter. he said, get ready -- we might keep getting qe, but it might be methadone instead of heroin. [laughter] lisa: my colleagues at liz mccormick and scott mcauley put out a great story talking about when the fed or if the fed will start to taper its reinvestment
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of mortgage backed securities. it holds almost $2 trillion of mortgage-backed securities on its books. the fear is, if they start unwind this portfolio, mortgage rates could spike upward. now they are at 4%. that would dramatically affect the situation for homeowners and housing values. people have time to worry about this stuff. scarlet: the thing that lisa was just talking about applies to europe. the data has been getting better for the most part. michael: we had a post from cameron christ saying, look, in his opinion, the french election is more noise the actual concern. he doesn't think marine le pen -- the polls are still pretty wide against her. scarlet: it's not like she is within spitting distance. lisa: didn't we hear this in the u.s.? isn't this like deja vu?
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michael: i think the metaphor he used was, trump and brexit had to climb a hill, but marine le pen would need to climb mount everest to get a victory. obviously, clearly the market is not going to take to aggressive of a chance against that, and you will definitely see caution in the europe and u.s. markets until that. scarlet: to come inside the bloomberg, this is eu go. marine le pen in blue at 30%. it's still early days. lisa: i would say there's enough caution from people's recent memory. skepticism that you could see bond traders starting to price in more political risk in french bonds. you can see the spread over german bonds has reached the highest since 2013. it might, be mount everest but people are pricing it more, -- it might be mount everest, but people are pricing it in more.
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oliver: in terms of buying, there has been of a bit of a drawdown in terms of how bullish investors are getting. i want to show a few things. first come it's the fun flow into the etf. outflows, the most since the week after the election, which was a reversal from that inflow we saw in the green. we've got an interesting chart here, mike. looking at gold, what does gold tell us in? michael: this was interesting. this was coming from a michael hartnett bank of america report saying, gold could possibly be the tell for a little bit of volatility ahead. if you look at the simultaneous rise in gold and interest rates and how a similar thing happen before some volatile stretches in the markets in 1997, the mid .0's there are a couple data points.
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who knows how much to take away from it? there is a general sense of anxiety that the market may be a little too quiet. at some point, this faith in the reflation trade could get unwound pretty quickly you people are position pretty heavily in value stocks. -- pretty quickly. people are positioned pretty heavily and value stocks. i think there is a general sense of concern that one big disappointment out of washington, and we could see some volatility. oliver: markets seem coiled up. scarlet: i'm glad you brought up that goldman sachs note whether they -- where they question this reflation trade. lisa: we saw the same thing with ray dalio. after therst emerged election, the founder bridgwater, he said, this is going to be great for economic growth, game changer, and last week, he comes out and says, not sure. maybe not. oliver: maybe they are taking a
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while to reverse because so many were so wrong after the election. scarlet: there is that conviction. mike regan and lisa abramowicz, thank you so much. oliver: coming up, disney's succession headache. we will discuss why bob iger may extend his contract again, and happening now in the capital of romania bucharest, protesters are gathered outside government offices for the seventh consecutive evening. they are demanding the government resign after some tried to soften ethics laws. protesters are in victory square . this is bloomberg. ♪
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oliver: this is "bloomberg markets." i am oliver renick.
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scarlet: i'm scarlet fu. disney is reporting earnings tomorrow, but there is drama. ceo bob iger may extend his tenure for a third time. his contract ends in june of 2018, that the company is lacking a clear-cut succession -- successor. joining us is paul sweeney a bloomberg intelligence. he covers media. it's not the first time tiger would delay his entire met.does bob iger want to retire or stay on? paul: i don't think he wants to leave. job. inguably the best corporate america his tenure has been extraordinarily successful, no blemishes on his resume. is, theyhe issue certainly did plan for a succession plan for or five years ago. it looked like it was proceeding smoothly, and at the last minute, tom staggs was deemed not to be worthy by the board and ceo, so they weren't able to keep that succession plan. the board has been looking.
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it's been a big issue. to the extent they can't find anybody internal or external to me that timeframe, i think most investors would be happy to have .ob iger stay on oliver: is it normal to have that kind of setup where every year they revisit, am i going to stay on? why is it that unique sort of structure? paul: for disney, in my opinion, they were kind of the case study for how to run a planning operation. they kind of set up a good race between the two. everybody can get a performance. they based time staggs, very .ell run again, it was deemed he would
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not be the future. that threw all of their succession plans out the window. is there anybody internal leeco, it's not clear. they had two successors in the running. there wasn't really a third string. the question became, would it be someone extra no? scarlet: disney is very much a sum of its parts, and many different parts are contributing to its firepower. is the lack of a clear-cut successor distracting the company? everyone is focused on, who's going to be the next bob iger? paul: the good news is bob iger is very much engaged and never really pulled back. the management, the board has and supportespect of bob iger. they would be happy for bob iger to stay as long as he would like. company hast, this
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to put in place a succession isn, and the question is, there anybody internal they can elevate to that kind of level, whether it is a coo spot or raise some of the division heads to raise their profile and build their credibility to be a ceo? we haven't seen that. oliver: i look at the stockholders function on the bloomberg, and it looks like a lot of vanguard indexes. are they going to be pushing them to come up with an answer? paul: there hasn't been a big activist push in this company at all, primarily because the stock has done so well. the company has executed on the majority of its business plans, anduding shanghai disney the movie acquisitions that have been so successful. there is a good team at the operational level. there doesn't seem to be any pressure yet, but it's time for the company to think about articulating a more defined a
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succession plan and/or announce that they are interested in looking be on the company. scarlet: espn was once a crown jewel, but subscribers have not been coming in the way they were. there are calls for the company to divest its espn holding. do you think that will happen? paul: it's possible. espn, as you mentioned, continues to be the biggest profit generator for the company, but it'd hasn't been -- it hasn't been driving at the same growth rates it was. i don't think the company is there yet at all. i don't think they are close to it. i think the real bear case for the cable television business has been disproved over the last four or five quarters. the pace of decline of the paid tv universe is probably a little
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bit slower than some people had thought, so perhaps there's more room for espn before they make any big decision. scarlet: paul sweeney a bloomberg intelligence, there's a lot of waiting to make big decisions at disney. oliver: still ahead, today's options insight trade. we are looking at kellogg's ahead of corporate earnings. the cereal giant, struggling to rebound after hitting an all-time high in july. way down from those highs, nearly $87. this is bloomberg. ♪
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scarlet: we have some breaking news. holding, the insurer that ip owed in december, is considering whether to make a bid for fidelity and guarantee life. is according to our reporting. we cited familiar people with the matter. athene can't begin discussions about a possible matter because there is a deal that prohibits negotiations with third parties after wednesday.that
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is a deal we will be looking to as we develop this story. in the meantime, it is time for options inside with julie hyman. julie: thanks, scarlet. joining me today is jim strober of an km holdings. if you been watching my holdings, you know volatility has been low, but one of the things we have been looking at on the bloomberg is the cboe skew index. we have been comparing on the chart of the vix, which is low, .ersus the skew index how expensive is protection for out of the money events? maybe not black swans but bigger market moves. when you look at a chart like this, what does it tell you? jim: it tells me the same thing, but you can see over its history there have been plenty of times the index has lifted, and realized volatility has not followed suit. what i would do behind looking
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at that graph is digging into some of the names, and there the relevant data is 70% of the components of the s&p 500 have three months 90 to 10 skews. that is historically flat. yes, people might be putting on some tail exposure, some hedges, that if you drill down to the single names, there's not a whole lot of risk in these volatility surfaces. julie: at a time when you are seeing correlation very low within the stocks on the s&p 500 -- i want to move on to your trade of the day. it's on catalog, which is set to report earnings. you are looking at the company because there is some deal talk. jim: we run a weekly screen looking across volatility surfaces and options training to try to isolate distortions. it can come from a significant
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move in total open interest, put call ratios, skew term schedules, etc. kellogg pops up on our list, as well as smucker. clearly, there's been a lot of activity in the space. last week, there was a bid for me johnson. mills, allgeneral mentioned in this realm. kellogg's reports earnings later this week. some of the distortion could be related to that, but it opens up a larger discussion. how do you do better then just a long stock and do it in expensive leeco for this one julie:, how do you do it? julie:jim: you go out to july. $67.50, $60 put
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spread. you come to march, and you buy at $77.50. that the stockew moves higher before that expiration, and you are funding it with the sale, that put spread out in july. late february, we would look to roll that forward. julie: we will see if there's another event of that materializes. scarlet? , we speak tong up bill lee, citigroup's head of north american economics. when will the dollar rebound, and what would a border tax with mexico mean? this is bloomberg. ♪
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♪ >> let's get to first word news. president donald trump must not be allowed to address the u.k. parliament during his visit to britain according to the speaker of the house of commons. imposition of the
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migrant ban, i would myself have been strongly opposed to an address by president trump in westminster hall. after the imposition of the ban by president trump i am even more strongly opposed. prime minister theresa may invited trump to visit the u.k. later this year. it is customary for visiting presidents to address mps and lords in westminster hall when making visits. however as speaker, he has the authority to block visiting figures from doing this. french presidential candidate says he has nothing to hide and his wife's salary was perfectly justified. worked as anife assistant for 15 years. the practice is legal but he acknowledged it is no longer seen as acceptable and he apologized to voters. a french newspaper


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