tv Bloomberg Markets Americas Bloomberg March 9, 2017 12:00pm-1:01pm EST
vonnie: from bloomberg world headquarters in new york, we will take you to washington, d.c., san francisco and paris. your other top stories around the world we are following. oil is fighting below $50 a barrel of the first time this year. wit down for the -- wti down for the fourth day. jamie dimon says president trump's agenda is reawakened animal spirits in the u.s. he expects at least some of the administration's proposals to be enacted. more from bloomberg's exclusive interview with the ceo. i will be speaking to columbus circle investors and what he is doing with his health care focus as discussion over the affordable care act replacement continues.
we are halfway into the trading day this thursday. jamie joins us now. a lot going on. julie: it looks like investors are waiting for tomorrow's job report as yet another confirmation that the fed can go ahead and raise rates on march 15, which is already largely priced into the market. expectations higher after the adp report yesterday. a little bit of an upward bias today but not that much movement. if you look at individual winners, there are significant gains. we have signet rising after the company said it will close some of its mall locations and refocus its efforts away from malls. earnings per shares also beat estimates. marathon oil doing asset sales and benefiting from that. it will be buying permian basin properties. hertz global holdings, according to morgan stanley, may need radical options including potentially a sale.
maybe it would be attractive to other companies. we have been watching the bond market. there is not necessarily a huge move today. not just in response to what's going on in the u.s. but to mario draghi's bringing up inflation at vacations. we have seen a pretty monster move over the past couple of weeks. it is now the night straight session we are seeing -- ninth straight session with an increase in yield. 21 basis points over the past couple of weeks. even as we have seen those yields climb, value stocks have not gone along with them. we will see a breakdown of this relationship. this is a rate ratio versus the world's growth index. in this particular case we are seeing going into this year the value underperforming growth. typically value benefits when we see yields go higher. in fact some analysts are saying strategists are saying the value rally has gone too far. bernstein and deutsche bank have
downgraded value shares to neutral. vonnie: thank you for that rundown. dimonorgan chase's jamie says -- as part of an inclusive interview with bloomberg's francine lacqua at the jpmorgan 2017 global markets conference in paris. francine asked jamie for the president trouble get regulations right. >> i hear people say we had a crisis. no one is asking for that. we want to be a reason voice to look at those things inside not just dodd-frank but regulations that need to be recalibrated, coordinated. there are two main people involved in mortgages. it is hurting lower paid, first time buyers, small business owners. we need to do it for the sake of all people. no one could rationally say it was some of proper fair, coordinating consistency.
have an intelligent conversation about what is working, but the side effects is, on intended consequences. if you don't have a healthy financial system, it will not have a healthy economy. just keep that in mind. it is good for the citizens of the country, not the financial players. they are damaging the financial system is a bad idea if you want jobs and growth. dialogue you feel this with the administration is healthy and constructive. he is consulting a lot of ceos. directly third gerry connolly and steve mnuchin -- gary cohn and steve mnuchin. i believe collaboration will win. finger-pointing won't. there are solutions to problems. what do you want the outcome to be and how do we get there? i think we will have a civic society collaborating together. i think some of these business
are the finest institutions on the planet. we take care of people in clients. before the crisis that we were trying to help people. we want toake sure do a job helping to grow and helping the economy to get better. francine: a lot of banking ceos are terrified that if donald trump deregulated wall street too much you're not on a level playing field anymore. think it's a good thing. there has been criticism and some are legitimate. at the end of the day when steve mnuchin, they will where things that make sense for everybody. we want a level playing field. american banks of far more capital. i was the european banks to thrive. if the european banks don't thrive, europe will not thrive. to me the regulators should really look at those things to help european banks compete and thrive to grow their economies.
much more important in europe and the united states because they fan it -- finance 70% of the economy here. francine: what are the chances of the u.s. ignoring the rest of the regulations in the world? are you certain they will reach agreement? jamie: the u.s. made it harder. i hope they release some of that so it started closer to bosil and bosil takes a deep breath. in the next round it is probably best probably calibrated for enhanced growth. they should be looking at both, not just one. not more or less, smarter. if you look at the united states, we have half $1 trillion more, proper legal safe harbors, things like that. people have been very reluctant. a lot of banks ran out of mortgages. the federal reserve said small theness formation is lower,
first time with a net negative recovery. net is negative for the first time personally due to credit. a lot of banks got out a small business and always unintended consequences of regulations. what are the unintended ones? it's hard to hold certain small business, certain real estate loans. because of that banks are pulling back to manage their risks. dimon in an isuzu interview from paris. up three quarters of 1% right now. we will talk to bill gross of janus capital. janet yellen is walking a tightrope basic record debt levels. mark crumpton has more from our newsroom. mark: the trump administration is asking 68 nations fighting islamic states to meet it washington this month. according to administration
officials, the goal is to plan their next move as the militant group loses ground in iraq and syria. the summit will be led by u.s. secretary of state rex tillerson. wikileaks founder julian assigned said his group will work with technology companies to help defend them against the cia's hacking tools. in an online press conference today, he ate knowledge companies that asked for more details about the cia's cyber espionage toolkit whose existence he purportedly revealed in a massively published tuesday. from some these calls of the manufacturers, we have decided to work with them to give them some exclusive access to the additional technical details we have so fixes can be developed and pushed out so people can be secure. mark: so far the cia has declined to comment directly on the authenticity of the leak.
in europe, german chancellor angela merkel was among the eu leaders gathered for a summit. they are redoubling support for free trade and the meeting in brussels. it's a show of opposition to the trump administration's protectionist stance. doctors in japan same a 185 cases of thyroid cancer that in children who live in the 2011 nuclear disaster cannot be linked to radiation. a team of doctors said today they cases were found due to blanket screenings and not the radiation that leak from the plant. they also said evacuees stress and changing lifestyles have prompted obesity and diabetes, decreasing -- increasing the risk of strokes and heart problems. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i mark crumpton, this is bloomberg. vonnie: thank you. paul ryan is holding a
conference right now. he says we must replace obamacare before it gets worse. and mandates are paternalistic. some of the headlines you can watch on tv . columbus, we hear from circle investors, managing money in his fund focused on health care stocks. we will look at how is allocating for potential change to obamacare. this is bloomberg. ♪
staples will close about 70 stores in north america this year. they are trying to overhaul operations what a deal with declining sales. they connect with customers online. brands are considering options for auto centers units. sears plans to activate managers real estate portfolio to a much value. exxon mobil is fitting $2.8 billion to buy 25% stake in a project in mozambique. i thought has been expanding and gas production. the sale still needs to be approved by mozambique. that is your latest business update. president trump of this morning with the ceo of community banks. let's get it washington correspondent kevin cirilli at the white house with robert nichols, ceo of the american bankers association. kevin: how was the meeting?
the purpose of this meeting was really to talk about the regulatory burden on community banks and some of the things they could be done to remove some of the impediments to make it easier, more effective and more efficient for community banks all across united asus are the customers and clients and communities. we just had a great hour with the president. one of the things we are hearing on capitol hill is the threshold about what actually qualifies for there to be a community bank in terms of regulatory relief offramp. it threshold come up? robert: we talked about a whole host of issues. when you are a bank and you jump over one of those thresholds, all of a sudden fewer subject more regulatory -- first of all in a utopia we get rid of thresholds altogether and look at the underlying risk of a bank. in the absence of said utopia, raising them makes a heck of a lot of sense.
kevin: which range? robert: living them as high as we can. there are rules. dodd-frank's trickle-down impact of the small community banks while across the united states. some of the ways they are being examed would be the way they exam a larger institution. we did talk about some of the ngings that needed changi through legislation and having the regulatory officials at these entities. kevin: federal reserve vice chair supervision. we still have a name. a lot of moving parts. a representative was mentioned, other folks dropping out. where does that stand in terms of the timeline when we are going to get these appointees? . investors need to know this robert: there are several coming up. same with the fdic. at least three governors of the federal reserve, one of which will be involved in supervising
and regulating all banks. another will be a community banker. there is lots of really important positions in addition to the ultimate cfpv director. kevin: where does he stand on the consumer financial protection bureau? robert: this president definitely understands the need to have people with real world common sense experience at these regulatory entities. we did not talk names of we talk about the need to have people who understand -- kevin: does he want to keep it or get rid of it? robert: i will let him answer that question. we talked about how the regulatory rules set forth. this was about community banks today and how they can be improved so we can get rid of some of the trickle-down, how they can be tailored better so some of these impediments that make it hard for community banks to serve local clients and customers can be streamlined, improved to kick of lending. one of the themes was these community bank are doing ok, but they could be doing much better.
that is something this president is interested in. kevin: when i talked to my sources, when i talk to the chairman jeff banister link of that committee, they still feel like they might be able to get financial the regulatory policy passed within this first year. is that still a commitment from president trump from treasury second mnuchin? -- treasury secretary mnuchin? robert: we did discuss that today, they need to push legislation in a timely manner. there is definitely a push on this part of the white house the that. i know with many members of that committee. they know we support the legislative process moving forward. we are interested in working in a bipartisan, commonsense way to get this done but definitely we did talk about the need to do this sooner versus later in the meeting with the president. kevin: humidity bank regulatory relief coming this year? robert: we hope so and will push rigorously to make it happen. kevin: we appreciate your time
♪ this is bloomberg markets. aca versus ahca. the market continuing today with committee hearings. house ways and means committee met this morning to approve its portion of the overhaul. speaker writing given a presentation as part of his news conference in the last few minutes. president trump just tweeting out. despite what you hear the press health care is coming along great. talking to many groups and it will end in a beautiful picture." liver, the total number
of gdp spent on health care? iver: in the near term you will see the status quo. the idea here is that for the next three years we will probably see very limited change. importantly, the elements included also include a stability fund that's the help is a currently have the affordable care act insurance to maintain that insurance. toaddition we are likely see the repeal of individual interpleader mandates, removal of the fee charged to industry in order to pay for obamacare, and finally you are likely to see an expansion and medicaid to the states that did not expand. talk about the individual sectors within health care. you had been bullish for hospitals. does that change now it looks
like, maybe not the medicare portion, but willing ensure it might drop in numbers? think expectations are there is more disruption out there in that many will lose insurance. the fact of the matter is it likely will not happen. first of all, obamacare brought roughly 30 million people into the insurance market through 50 million in medicaid and 50 million or less their exchanges on and off exchanges. having a phasing period of three years, having a stability fund we ultimately see a more stable environment with less disruption than i think the environment of current investors -- vonnie: how would a hospital do with people coming into every two weeks for the emergency room because people other health care elapse? oliver: most of the aroma has already occurred. roughly 10 million people into the exchanges for 2017.
we will not see much disruption there. 2018-2019, it will undergo some changes. they are looking to have a stability fund of roughly 50 billion per year in order to help make sure they are paying for insurance for those in rolled in obamacare. we think of the next couple of years you will see more stability than people think. we are selective in the hospital group. vonnie: what does that mean? oliver: we are not making a group: hospitals. investments we think our particular for those companies for the fundamental they are undergoing. but the uncertainty related to obamacare in the disruption is likely -- vonnie: who will be the winners? oliver: you have to look at who is the losers. the losers with a managed-care companies. they went into this business of seeing expansion an opportunity
to generate profits. as you have seen over the last year and a half, many managed-care companies are exited obamacare. feweresult you have insurance companies in the market and you have seen premiums rise substantially. as companies that have not done well exited the business because i'm profitability, there is now the potential there tax credits s forhe selection of ahsa' them to turn their business to a profitable opportunity. vonnie: are you less sure now the word then? oliver: it will always depend on the company. we are fundamental-based. in terms of our analysis, we take a thematic approach. last year health care was the worst performing group, down about 3%. biotechnology down about 20%. significant uncertainty related health care driven by the election and a lot of the political rhetoric around drug pricing.
wewe have gone past that have gotten to the election of president trump and more portly a sweep of the republicans, we see two things happening. one, a market friendly environment where republicans tend to look for solutions to the complexities and efficiencies and health care through market-based solutions. you will find winners and losers. the second is you have a tax plan that can very much benefit a lot of the health care companies, not just from lowering the tax rate which would favor companies like managed care in hospitals that tend to have 35%-40% tax rates, but a situation where we anticipate a significant acceleration in m&a driven by the repatriation of funds, two, the interest of that ability that should accelerate companies' decisions to acquire before you potentially lose the opportunity. hadie: obviously we've
stalled m&a in the laststalled , and m&a shot down when it comes to that you would dissipate any other direction or any kind of m&a if it will be repatriating funds? oliver: you are correct. 2016 sawa big year, significant slowdown which is not e -- unexpected. i absolutely see an acceleration and m&a, napoli for the company's we are talking to the for the fact that tax rate reduction, interest rate deductibility will lead companies. this is bloomberg. ♪
republicans are a step closer to getting rid of former president obama's health care overhaul. earlier today a house committee approved a measure that would repeal tax penalties for people who don't purchase insurance. the legislation would also replace income-based subsidies with tax credits that are largely based on age. a number of conservative republicans are opposed to the bill, and hospitals and doctors groups have also come out against it. senate majority leader mitch mcconnell says today there is no evidence that president obama wiretapped trump tower in new york city. he made a comments that it political event in washington. president trump tweeted last week and that former president obama had cap'tis phones at trump tower during the election. mr. trump offered no evidence to back up the accusations. through a spokesperson, mr. obama said neither he nor any white house official had ever ordered surveillance on any u.s. citizen.
there has been a shakeup in vladimir putin's administration. he fired 10 senior law enforcement officers. no reason was given for the dismissals, but speaking at the interior ministry today, president putin pointed to a series of arrests of senior officials last year. in recent months he also has reached -- free shuttle provincial governments, the action widely seen as part of preparations for a march 2018 presidential election. the internal revenue service says its efforts at fighting identity theft are paying off. the tax agency says the number of victims plunged last year by 48%. stopped nearlyey one million fraudulent tax refunds for being issued last year. totaling more than $6 billion. identity theft exploded from 2010 to 2012, and peek at the irs in 2014. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries.
i'm mark crumpton. this is bloomberg. vonnie: let's have a look at how things are faring on the dollar index. it was a blow -- below 102. the weaker japanese yen inching towards the 115 mark. oil in the u.s. still $49 a barrel, the first time this year a barrel has reached $50. troubles in libya and potential opec problems with the fracturing of agreements. in the 10 year yield, of the 2.58% selling in asia overnight. let's get the abigail doolittle now with more on treasuries. abigail: here is that 10 year yield today. we do see it of about three basis points to 2.28%, doing what is done for the last eight days.
the 10 year yield higher 90's in a road, the longest streak since 2012. we see volatility around the ecb the right now no information that suggests there is any reason to think the fed will possibly be raising rates next week i went quarter of 1%. that nine-day move may summit a big move in and away it is relative the length, let's put it into perspective in terms of basis points. around 27at move up basis points. butg move in a short period dwarfed by the move up last november. we note the tenured yield is in this range, flirting with the 50 day moving average, leaving below and above it. unless the 10 year yield climbs above 6.25%, it is more likely to drop back down into this range or to drop below 2.3% there could be a move lower. we have had this move in yields
taking effect on sectors within the s&p 500. this is a great way to look at sectors since over the last nine days. we see among the worst four are the dividend yields sectors, the rate sensitive sectors such as real estate, telecom and oil. these high yielding dividend stocks look less attractive in the context of rising rates. finally what might mean for the broader markets? 6640.is btb the bloomberg barclays high-yield etf and yellow. the s&p in white. the high-yield etf below the 50 day moving average. these two had tracked pretty closely over the last three months. it may suggest that could be a little bit of a pullback for stocks ahead. it is not a big move yet. it will be interesting to see
what high-yield may suggest for stocks. vonnie: thank you for that. fixed income investors are keeping an eye on that february table number. adding 200,000 jobs last month. charles, senior vice president and director of investment-grade fixed-income at pioneer investments. what has been happening over the last few days? we have seen buying in the intraday sessions only to capitulate in london and selling, and yesterday it was a reverse, selling in asia and things were unchanged in london. there has been a little bit of a risk off trade going on in some markets. it has been reversed in different sessions. what we are seeing now is basically that being manifested in treasuries.
off and risk on has changed from session to session, the trend has been to pull risk off after seeing some of the weakness yesterday in high-yield. i think there's been pressure on equities. we are seeing a little bit of rotation now. -- is: you say the trend that a short-term trend or your long trend? charlie: definitely short-term. everything is short-term right now. i think what we will see on on the 10 settling in 265 range.he 250 to as we work are some of the policy uncertainty out of washington, as we see more earnings reports and see were the equity market settles in, i think we will see treasuries model along. along.le
vonnie: we had the move up into the 240-255 range. are we stuck there now? charlie: i think we are pretty much stuck. what has happened is we had a change of language from the fed. they seem to be coordinating their communications among the different board members. you could say what's happening with this world, they are all talking the same i was now. vonnie: it is one world. a fairlynow we have coordinated message, i think we are seeing the market pricing in for rate hikes. in the 10 year where we have it now. vonnie: what would happen if the fed didn't raise next week? respective of whatever job never we get on friday.
the market has wanted to resent price in in in terms of probability. to.lie: it never has it is really backed itself into a corner at this point. when you have them all talking rate hike, they have to move now. i think what best there will be a lot of head scratching. their may be some moderate volatility in the markets. i think it will be mostly head scratching. the reasons when that would be meaningful would be if the market failed -- that there was some major risk on the market that we were missing as investors. --t we cease of consistency such consistency o that is unlikely that will happen.
vonnie: what's wrong with letting the market rental hot? charlie: it is heating up and i think there may be a recognition that productivity, growth is not going to get back to where it had been. i think it was some of the premise of letting these run hot and having ultralow interest rates. vonnie: you think there is a fear what might happen fiscal policy wise and even agenda setting wise and how that might rile markets? charlie: i think they are stepping back from that. you can't really adjust policy for the unpredictable. i think they have always been data dependent when working at economic series. i think the fed really has to be data dependent and working at changes in fiscal policy. they will always be a bit behind the curve. they have to see what will happen.
they can't predict with congress and the administration will do. vonnie: 25 basis points increase would be almost ignorable, but now 25 basis point increase really separates the u.s. from other parts of the world to a much larger extent. have event any big flows of money? are you guys doing anything in anticipation of that? charlie: i think the flow -- the interest rate differentials have been massive for some time. i don't think anyone will come off the sidelines with another rate move here. i think that would only happen if we started to price four or five rate hikes, which i just can't see at this point. i think that is done. interestingly, it does take a little pressure off the ecb and draghi at this point. essentially at tightening of policy here is allowing them to
potentially look at the december termination of their tv program -- que program -- qe program. if we continue with rate hikes and we continue to see european growth tick up, i think this could -- they can talk about a .uicker termination what are you doing at pioneer that i reflect the changing landscape over the last number of months? there has been a lot of changed, u.s.-wise. charlie: we are still favoring the dollar. we have the stronger dollar, stronger growth, higher real rates. negative real rates on the short end of the curve, but compared
to a we see elsewhere is fairly compelling. credit continues to be interesting. i think with all the changes we have seen it is really not much change over the fundamental side. we've seen a real economy level muddle -- that will muddle along . all the talk about infrastructure projects, itegulation, order tariffs, doesn't say to be pushing us off that trajectory. as investors what we are seeing is a movement on valuations that is far more important. if we dialed the clock back a hoa high-yield index breaking above 800, and before yesterday's pick up we were done it 380. we have seen a massive move in valuations against the backdrop of very strong fundamentals in
our view. we have been reducing risk and the portfolios overall. 's is time to pull in one horns a little bit. vonnie: cannot afraid of a big event? charlie: it is always hard to see the motivating factor there. we certainly have energy. we never anticipate these. we do see complacency. is not so much being able the forecast individual, but there is a lot of complicity with vix very low in the market. i think we have to be very conservative. vonnie: the vix for treasuries. .hank you charlie make sure to catch our do show bloomberg real yield posted by jonathan ferro each friday at noon new york time.
that's conflicting but the trend of historically lows that indicated tightening labor market. the second-largest insurer and united kingdom is raising its dividend and said he'll return more cash to shareholders this year. higher earnings at the life insurance unit help to boost. the ceo spoke with bloomberg tv. >> are balance sheet is tense. we had is high quality problem, having too much capital. we invest in our business. we are going to give some of that back to our shareholders in 2017, and we are going to paid out some pretty expensive hybrid debt this year as well. we will see what they say about that. vonnie: shares rose the most in seven months of about 12% this year. -- boeingucky mark and lockheed martin are big winners. they are getting more money to
f--- the that is your latest bloomberg business flash. uber is making changes to a controversial tool that shows fake versions of his right healing app. it was reportedly used to make it difficult for authorities apprehend potentially lawbreaking uber drivers. eric newcomer joins us from san francisco with more. is this a thing -- a sting operation? they use different lots of different things, to protect drivers from angry taxi unions and that also to hide from transportation agencies that were looking for uber drivers in areas where it was illegal gal rate areale
if uber could operate. they were hiding from the government. vonnie: is it legal? eric: huber says they are investigating it right now. i think we are seeing some random regulators posing questions about it but i think it will be a long conversation about the legality of this program. vonnie: it is probably fairly obvious, but why did uber development the first place? would go into markets where was not understood by local regulators. it was not explicitly illegal or legal, and local authorities would try to go after individual uber drivers to ticket them or impound their vehicles. uber didn't want to give those regulators the power to find those drivers. they obscure the driver with believe theye uber
are operating legally. vonnie: it has been a tough, tough few weeks for uber. he seems to always be dealing with something. any signs the trouble of eight? ate?ell oab reviewing policies under claims of sexual harassments. we have seen to top exec's leave in the past couple of weeks. i think their problems are still very much ongoing. the company said they are looking for a here for travis, did chief operating officer, but that seems like a long way away. i think uber's problems will continue for quite some time. vonnie: there was a story about how at sxsw they will have to do without uber because
austin has banned uber. eric: austin is a super interesting test case. uber and lyft left. other companies fill the void. in new york we have seen competitors sprout up. and then all over the world uber has some sort of global peer computing -- competing. i don't think we have seen anything quite like austin weather is a full-fledged operation and then uber and lyft totally pulled out. vonnie: they were protesting a lot that require drivers to be fingerprinted. now there are a bunch of startups trying to fill the gap. we will see how that works. eric newcomer, thank you. wti dropping below $50 for the first time this year. $48 and change now. opec arethat costs by
♪ vonnie: this is bloomberg markets. wti dropping below $50 for the first time this year, falling for the fourth straight day. for more on joined by alix steel, anchor of daybreak. what does it mean? why is it happening? alix: they are right at the 200 moving day moving average for oil. that can be damaging on a technical level. the huge schema during oil conference saying we don't know yet if you want to extend the cut. six weeks ago they were saying things are great. that was a big one. vonnie: caution to the second half. alix: production picked up in the u.s.. inventories are increasing. officialbia cut it's
price to asia. the light sweet crude. been easier computing that the u.s. if there is not a lot of supply, you cut your prices. those three things to meet over the last 48 hours really stood out. vonnie what is it mean for market rebalancing? alix: goldman sachs says it will happen in the 20 half of 2017. look at the bloomberg here. this is a little bit of a tangled conversation. the wti is the white line can attract the contract from the summer 2017 to december 2018. the line does that for brent. it is shooting of the gusts of supply is tighter in the short-term and rolls over. you are looking at more supply in the short-term. this continues lower enemies markets are really repricing longer-term oil price. that could be potentially pretty damaging. it is not just oil. it is copper as well.
iron is getting hit. you see high-yield getting hit today and breaking even as well. vonnie: alix, thank you. dr. toby conscript joins us. we will get his reaction to the american health care act and what the legislation might mean for the cleveland clinic doctors and hospitals. a quick reminder, you can catch all our interviews with the function tc go. you can find the latest charts on the program. stay tuned . this is bloomberg. ♪
policy during trump's first 100 days in office. the ceo of the cleveland clinic joins us. perspective on the health care act, what it could mean for the cleveland clinic, it's ctors, and of course, patients. i will sit down with the ceo of molina healthcare, just out of a meeting with the president of the united states. what he told the president about regulation. ♪ david: after 18 hours of debate votes,oesn't partyline the gop health care plan cleared its first hill as it was pushed out of the house and ways and means committee before dawn.