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tv   Bloomberg Markets Americas  Bloomberg  April 7, 2017 2:00pm-3:31pm EDT

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scarlet: we are live in bloomberg look headquarters in new york the next hour, covering stories that of new york, palm beach, and syria. here are the top stories we are covering now. president trump's decision to launch a missile strike in syria is heightening tensions with russia. and an ugly headline number in the jobs report, but the unemployment rate the lowest and's 2007. we will big further into this mixed report. and this will result in higher layoffs come up -- layoffs and bankruptcy. we'll be joined by more than the initial fallout. u.s. markets close in two hours time, so let's look at where stocks are trading after the march jobs report. we have made a comeback? >> we have.
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we are now looking at the dow s&p 500 -- dow, s&p 500, and the nasdaq on trading slightly higher. in dow is slightly higher the week, the s&p 500 about flat, and the nasdaq down. coming intofactors play, the missile attacks in , but, some uncertainty investors are slightly more bullish. small gains. the fact.on of more information is needed for a true trend change. on the day, look at acorn, up higher in a big way come more more than 80.5%, since may of last year. this am and is the european -- this on the news that the european health-care provider is considering a bid for the generic brands and moneymakers. we also have some other generic stocks in the u.s. trading higher, including endo international, valeant, and
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others. endo up more than 5.5%. not so bigh, relative to the volatility for these names. let take a look at the 10 year yield on the day. around all over the place, starting off higher earlier, than mainly lower on those events, and now at session highs. bonds are trading lower as we have the 10 year yield up, but the great bold bond market is still in place. topping the bloomberg very quickly. this is the 10 year yields since 1980. this represents the great bond bull market, price does traded bursting yield. there is the range everyone is talking about between 2.3% and 2.6%. this chartolved, but may suggest we could see the 10 year yield trend back down, perhaps below 2%. oliver: --
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scarlet: good stuff, thank you abigail. oliver: and florida now, where president trump is striking positive tones with his talks with xi jinping. waiting for this meeting yesterday. what do we know now you will give us the update? spicerollins sean telling reporters that they have a positive meeting and interaction between the two world readers of the world's largest economies. president trump speaking to reporters weekly earlier today with president she -- xi. here's what he had to say. trouble idea think we have made -- pres. trump: i think we have made tremendous progress in our relationship with china. our representatives have been --ting one-on-one, and it is
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i think truly progress has been made. kevin: the ministration saying it was a positive first meeting with a focusaders, on north korea and trade policy. they did not announce any new specifics, but there is a shadow looming large over both days of this two-day summit as the united states response to syria. scarlet: sean spicer spoke about that as well. what have we learned from the press secretary? kevin: sean spicer gave a tick-tock of sorts about the timetable about what president trump is thinking and when he decided to launch a 59 tomahawk missiles to syria to respond to that chemical attack in monday earlier this week. he said the missiles were employed at 7:40 p.m. last evening. that was right around the time that president trump and president she were having dimmer -- dinner at mar-a-lago, where i am now in palm beach. the night before, president trump was reached by the military generals about the
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series of actions he would be able to take against syria. he decided, according to sean spicer, on this particular action because he was confident and felt it was the more measured and appropriate response to go. we have had reaction on capitol hill as well as from world leaders. europe has been decidedly behind president trump on his action. russia, not so much. it donekevin, what has in terms of drawing lines congressnemies and were trump? it seems like this is an interesting mix where he has lost some of those who wanted him to promise to not get involved, but at the same time perhaps this in genders support across the aisle? kevin: that is a great point. i would note that internationally speaking, china, president xi and china officials are also saying that the -- they would have wished to see the u.s. is a more political
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approach. europe is backing him, and president -- vladimir -- russia is speaking out against it. critics arep's top actually voicing support for him. i would like to read what john mccain and lindsey graham had to say about republicans from south carolina and arizona respectively. he said unlike the previous ministration, president trump confronted a pivotal moment in syria and took action. for that, he deserves the support of the american will. some democrats are saying he auld hope that he presents plan to congress on his plan for syria, but they are still saying this with a measured and korea response, with an exception of a handful of lawmakers. oliver: thank you so much. we'll be checking back with you. is the firstthis friday of the month, so look at the jobs report, which shows that the weakest roles came in and's the month of may. we had employers added 98,000 aftern march last month
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219,000 increases in february. excuse me, we have the wrong map up there. the unemployment rate fell to andlowest level since 2007, average hourly earnings show steady gains. today, gary cohn said he was pleased with the jobs report, but there is plenty of work to do. gary: we also need to go through retraining. you have seen the president and ka trumpump -- ivan talking about filling out a war well-rounded labor force that can fill the jobs that we have three we have a lot that need to be filled, not the right applicant pool. trading our applicant pool be exciting for us, and we think we can do that very quickly. scarlet: joining us now from washington is our economics and national policy correspondent for bloomberg news. michael, the storm hit during a survey week, and it hit hours in a meaningful way.
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what do we take away from the report? noise or something we can glean from the economy? michael: probably noise, but not necessarily. whether the labor statistics counseled the number of people unable to work, totally in line for what we have seen for previous marches, not much more than what we saw in february and january. it is really more of a question of statistical noise of the white. a big again,ou get sometimes you don't. the government said 100,000 either way would be statistically accurate, so we cannot complain too much about that. and as long as you saw the woman rate drop -- on an -- unemployment rate dropped and wages rising, it shows that there is nothing wrong with the labor market at this point. about: the fed has talked trajectories for weights and how it is largely contingent on growth in the economy. in this noise to them as well? michael: this is noise to them
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as well. they're watching and employment rate because they're waiting for it to take down a bit for some months. theas been very steady, and four point 6%, 4.7 percent range. they expect that to start pushing up on wages of jobs are hard to get and employers have to pay more. that has been their signal point for when they think the economy is at full employment, and that just ratifies their decision to go ahead and raise rates. last month and probably again in june. scarlet: is this something that will cause a rethink it anyway for what the fed did for march, which was to raise rates and perhaps how they move forward with the rest of their rate and uses for 2017 -- increases for 2017? michael: the implement ray does ratify the drop of the fed did in march, but it will not cause anyone to seriously rethink what they are doing unless it is can --ed and subsequent boards confirmed in subsequent report. we have two more jobs report for the june meeting, which everyone would bet would be the next rate increase. may is off the table, and off
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the right after the one in which they move. they have more data to go on at that point. oliver: you have gone through some of donald trump's promises of analysis for jobs report. give us the idea of where this places him in trying to get a certain amount of jobs over a. of 10 years -- a stretch of 10 years. how does this fit into that? michael: he had a long way to go. he is not going to be able to create 15 million jobs if he is only going to get a 98,000 month , but we will see that number pickup. is the problem or trump unless he comes up with a stimulus package that really ifs jobs, and we do not know he is going to do that -- we are late in the economic cycle and we should he job growth slowdown. this is what fed officials have been expecting. 0 twonly need about 90,00 110,000 month.
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it would not be unusual for it to slow down for a couple of years before even perhaps going negative of it. thank you for joining us from washington. oliver: let's get a check on the news this afternoon with mark crumpton. the u.s.ction to missile strikes on a syrian air base showed divisions in the international community over the six year civil war. russia and iran, allies of the bashar al-assad government, contemned the attack, which they claim was conducted under foss the tax. israel welcomed the attack. france, which pushed for military action on syria after a chemical suspected attack in 2013, supported the move, so did angela merkel. a more muted response from china, with the countries leader visiting president trump's palm
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beach resort. china's foreign ministry constant -- cautioned against the escalation of tension with syria. a year-long political battle is now over. the senate today voted to confirm neil gorsuch to the supreme court. -- the vote was 54-45. yesterday, the republican theslators agreed to lower confirmation rate to a simple majority vote. 83-year-old utah republicans the were over -- 83-year-old utah public and senator has not spoken about whether he has decided to seek reelection. last month, he said if he could get romney to run, he might subside. mitch mcconnell said he would likert hatch if he would
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to run again, and romney will always run with patches blessing. hatch's blessing. i'm mark crumpton, this is "bloomberg." scarlet? oliver: -- scarlet: up next, from new york, this is bloomberg.
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oliver: this is bloomberg markets, i'm oliver renick. scarlet: let's take further into the march jobs report and look weak spot, construction jobs. for more insight on this actor,
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we are joined now by gary great to see you. gary, thank you. scarlet: so a lot of people are contributing this to a weber -- weather affect. --struction season sends tends to start earlier and earlier every year. what does that mean when it comes to the seasonality of demand for cranes and left -- lifts? it does get pushed forward. some of the industries have a little lull because of the leather -- weather. it is difficult to set the cranes when you have 18 inches of snow on the ground. that did affected a bit, but as far as the actual job numbers are concerned, one month does not make a trend, and i have learned that, through many years of business, if you look at the average of the last two months,
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we were in the 150,000 range, are on track for what i would consider is a gradual recovering -- recovery in the economy. wrote a i know you letter to the president explain how to structure program would impact your business and help you create jobs. you have not gotten a response yet, is that correct act oh gary: that is correct. but some of the other organizations we deal with have been in contact with the president. they know about the letter and our situation, and i am very confident that in the very near future, we will get to tell our story. oliver: what do you want to see from the president? do you feel confident with this president to has, on repeated occasions, dealt with businesses directly? is that the type of management you want? gerry: absolutely not. i want a level playing field. if you look at our business over the past 10 years, we have lost the most 2000 jobs in the u.s..
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our revenue at peak was $4ewhere around 4 billion -- billion. we need legislation that supports u.s. jobs. we are at a substantial disadvantage from this standpoint, particularly with coming fromion japan. we are at a regulatory disadvantage because what they are able to sell here we are not rele to elder -- sell thei because of regulations. what brings jobs back to your company? gary: regulations that we are looking to be advised, and on the lower end of the estimates, somewhere is around 2 million jobs, the high-end, 4.5 million jobs. if we can get this to where some of the private funding that is available to do some of these infrastructure projects, get
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that moving and taking away some of the burdensome regulations that are out there, i think this is a substantial increase in jobs in the construction industry in particular. scarlet: if the white house were to ask for your advice on how to rollout for this infrastructure spending plan, what would you advise them about? for everybarry: dollar you get in spending money, i would like to see a shows you have created jobs as a result of that. and not only for the short-term, but the long-term. if you build a hospital, you are building a hospital that will ase long-term growth in jobs opposed to something that a short term. i think that is absolutely critical and something i would advise the government to think dearly about. oliver: i would like to talks with suitably about some of the specifics of the company.
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i'm looking at function rvr, relative value ranging, and i qualitiesed on two here. sales growth on the past you much, which has been negative. on the side, we are looking at long-term growth. this is where you are here, left to the average. you are high to average on debt to capital. what happens when a leverage stays where it is or increases? is there and in -- a limit to the credit you can have on your company? arry: i do not want to see it increase, of course, but we have a program that blasts some of the waste in business. we are, in fact, freeing up cash through working capital. it has been precious for a long time. you will see the trend, even if we maintain flat revenue -- which i do not think we will -- but if we maintain that, used even cap come down to actually over the course of the next 2-3
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years. oliver: is there a liquidity restraints? when you have to start liquidating? arry: we still have about 500 million dollars within majority for a $1.5 billion business. that is too much. utilize theue to principle that we have adopted through continuing to try and figure out ways to expand our margin, as willie we will have no trouble with that as all -- at all. scarlet: if you come inside a bloomberg." this is the hds function on the bloomberg, which shows that this guy has a 7.5% stake in the company. how much interaction have you had with him since that move? do you talk to him once a quarter? multiplehave had meetings with carl, and what i think of absolutely the same is that we have the same interests. we have the same interest in
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growing the company. he believes in the strategy we employ, and we are moving forward, and as far as i'm concerned i am thinking we have a great relationship. scarlet: 7% of the companies revenue comes from the middle east. i know that the crane market in the middle east remains fairly rest. that is also tied there with oil, given what we have seen overnight in terms of geopolitical stress. are you concerned about the region? i would be, but i am not necessarily. barack obama when had a say about crossing the red line, we had a slow business in the middle east for 2-3 months, but nothing happened. it bounced right back to a historically high level. we think that based on what happened overnight last night, we think the target of the attack, we talked to some of the customers there today. they think it was a message sending activity, message received. but they will not sit back and stop investing in infrastructure
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that they have on the books. pennypacker,y thank you for joining us today. oliver: up next, we get a word on how trump's trade policies could the fact -- effect to the retail organizations. this is bloomberg.
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oliver: this is bloomberg markets, i'm oliver renick. time for the bloomberg business flash, looking at some of the biggest stories in the news right now. walters has just been convicted on all counts in his insider trading case. a jury found him guilty of fraud.acy and securities here and $43 million over six years that she earned $43 million over six years -- he earned $43 million over six
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years. according to people familiar with the matter who are also saying the move is to help the israeli drugmakers reduce their debt burden. the unit could reel in as much are workingn, and with morgan stanley to help find a buyer for the still process, which could kickoff as early as next month. that is your bloomberg business flash update. still ahead, we have the commodities closing, so we will take a look at what natural gas prices will be able to retreat after the best winning streak after four years. this is bloomberg.
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scarlet: this is bloomberg markets, i'm scarlet fu. we have money market -- commodity markets closing in new york.
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let's begin with gold. gold had jumped after the u.s. launched a missile strike against syria, and we have a jobs report that show that the u.s. added fewer jobs in march. in the meantime, if you look at oil is rounded off a second week of gains. also spiked in reaction to the u.s. military strike. there is that big like up at 8:00 p.m. last night -- hike up at 8:00 p.m. last night. makewill be continuing to a decision over whether to extend the price cuts -- reduction cuts. is something you can see on the bloomberg. natural gas on the longest streak of weekly gains since december. that is represented by the white line on the top panel. the bottom panel provides us with a cautionary tale. this is the raspberry -- relative strength index. it indicates the nasdaq is getting closer to the overbought at 70.
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not quite there yet, but getting close. that could indicate that nasdaq is ready to decline. according to some traders, the suggestion of moving towards that overbought line indicates the world has been moving to 7, 2 fast. it could be time to sell. oliver: let's check on the headlines with mark crumpton. mark? mark: the u.s. ambassador to the united nations, nikki haley, took a verys. " measured step last night when it launched cruise missiles into syria, and the u.s., according to her, is preparing to do more. -- syria," as the u.s., according to her, is very to do more. presidenthat syrian bashar al-assad must never use chemical weapons again. syrian president assad is condemning the missile's rights,
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calling them an unjust and arrogant aggression. that is according to serious statements agency, which says resident is warned the move would only increase the government's determination to "crush militant groups in syria. swedish police are hunting for the driver of a hijacked beer truck that slammed into a building in downtown stockholm today, killing at least three people and injuring many others and what the prime minister describes is a terrorist attack. purity has been tightened around much of the country, with areas around the government closed off and rail service suspended. i'm mark crumpton. this is bloomberg. oliver? oliver: mark, thank you very much. let's look to trade and get some insight on what policies could look like with the border adjustment tax and what it looks like for retail. our next guest paints a bleak
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picture for the industry in that is to happen. now, rick what happens in your eyes if we do something like the border adjustment tax? rick: it is a bad idea looking for a place to happen. that is a fact. it could kill jobs, jobs, jobs. administration, without it was going to build jobs, jobs, jobs. it is a bad idea for us. what 90%n is because of what we do in our industry is importing. if you are going to tax imports, you will hurt us severely. her member, this isn't something that happens at the border, it happens a long time later, when you are sitting with your accountant and you find out you -- know longer deduct does the cost of goods sold. they will drop attacks from 30% to 20%, but they will tax more.
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, our tax rateen will quadruple. and our taxes will be higher than our profits. do you that means for the retailer? not a good thing. you will either go bust or you have to raise your prices. if you raise your prices, you are sales go down. it trickles all the way down, and what do you lose? jobs, jobs, does. not a good thing. scarlet: it is a pretty compelling argument. i know you have made your case to those in washington. what has been their response so far when you lay this out or go rick: it has been -- out? has been a mixed response. the senate does not like it and wants to come up with their own plan. on the house type, washington is all about who has the power, and the orion is passionate about this -- speaker ryan is passionate about this. the taxes his thing. it is like an evangelical speaker when he talks about taxes.
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he is passionate. he is a believer. the problem is we do not agree with him on this portion of it. we like the better way plan, we like the idea of lowering taxes, but border tax -- it's a nonstarter. it is not good. he says you know, this is tax policy. not trade policy. 98% is'm sorry, imported, so it is trade policy. scarlet: clearly you do not like border adjustment taxes. -- what are altered and is alternatives you could offer to house republicans? rick: we want to help them. we want them to find a "real, better way." this is not a better way. they are coming up with all sorts of things. congressman brady, the chairman committee, the back taxes,id that
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carbon taxes. any tax that you put on it toomer, it will raise prices. that will crush retail. a taxes attacks. -- a tax is a tax. put the taxes in and take it out on the consumer. you are taking it out of your right pocket and putting it into your left, not helping. if they have a better idea, we are happy to make more in america, but we are not having taxed to pay for it. what jobs are specifically getting killed? the supply chain. the retailers will raise their prices, the suppliers will get hurt. i was talking with two members today in new york city. they are really worried, and they are suppliers. oliver: so you think companies like walmart, target, companies pushing back against this. walmart will have to make major layoffs that there is a border
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adjustment tax? rick: you bet. how can you do this? how can you pay such high taxes that will be higher than your profits you go you have no choice. you raise your prices, you cut your expenses, somebody's will going to get laid off. this doesn't work. four decadeshave of experience in the apparel, aware, and accessories industry. -- footwear, and assess recent history. you have quite a lot at stake when it comes to retail. we look at what is happening right now in retail, declining foot trafficd -- and come edition from amazon, is there a long-term solution that can be put into place to address the deterioration? rick: good news, no one is walking around naked. people are still buying close. they have changed their buying habits. there has been more of a shift to online. brick and mortar retail is offering. face it, we saw in the last couple of months, for chains not going bankrupt, but closing
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their doors forever. bankruptcies.ine nine bankruptcies and how many doors closing in brick and mortar? , but people are not naked. they will find a way to buy their close. the market will adjust. we are not so worried about that, but what we are worried about, not to go back to the back tax, but do not kick somebody who is down. the list grow the business, not sink it. scarlet: thank you so much. corporate talks between elvis waymo and uber rages on -- also's waymo and 's waymoes -- alphabet and uber rages on. this is bloomberg.
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oliver: this is bloomberg markets, i'm oliver renick. scarlet: let's get a check on markets abigail doolittle. abigail: we looking at small change for averages. the dow, nasdaq, and s&p 500 are all up slightly. we have seen some uncertainty, but overall on unchanged message. we are probably tired from all the events that have led to those changes. plus the missile attack in syria, on that we have one pocket of strength -- defense stocks all trading higher. a few minutes ago, i did speak to doug ross accor. he says that this is a bit of a visceral reaction, and unless it affects a profit outlook for these companies, it should not mean anything for the stocks. but there is some report that these strikes are creating creating $30 billion
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extra in defense spending. turning to another sector affected by the attack since syria, the travel sector is not doing so well. the s&p 500 hotel index is down, hilton, marriott, and royal caribbean all down. this, too could be a visceral reaction. you would have to see the train -- same trend, that travel would be lower on some of the sustained military action, otherwise this might be more of a one-day reaction. finally, a five day look at twitter. it is on its longest losing streak since december. on pace for its worst week since early february, today after twitter did drop it three speech lawsuit -- it's free speech lawsuit under the trump administration. nonetheless, shares are down quite a bit. scarlet: far from ideal for twitter. thanks, abigail. the u.s. visa process
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opened this year, making the applicant process even top or -- tougher. caroline, takeaway. caroline: great to see you. happy friday. friday means i have a dream team of technology here in sanford this go. francisco. great to have you with me. thes kick off with chronological start of it all, monday 81 and b visas -- h one and b visas. does it mean they are not being as effective this time around? >> with others trickle in friday afternoon, and we have more indications of the government was finally carrying out with what donald trump said he would do during the campaign, which was curtail the h one b visa program.
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here is what is different from the immigration ban earlier. this one is actually probably going to help the alphabets, the -- apples,utflo the big tech companies. they want to avoid letting and lower skilled high skilled workers, and the difference is that of the googles of the world pay these workers a lot more. they bring in higher skills. this has started trickling down and is and on the lower end. they bring in these indian-based firms, bringing in firms, and sending them back overseas. google stands to benefit. what the serb community? how much do they depend upon age one b visas to bring in the kind of tech talent they need from not only india but china, u.k., france, all those using the visas to bring people based in these countries into the u.s.?
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of lots of a culture immigrant founders here. many of the top tech companies were founded by immigrants, and they hire a lot of people from the united date. .- outside the united states this is a very work program to them. it does not have the same a moral force. people understand a little bit more, even if they depend on the workers. i think we have not seen the same backlash as toward immigration man. -- ban. scarlet: some -- carolyn: some hoops to jump. verizon wouldat be buying and rolling out the yahoo! andcounts of aol. inant to first of all bring the ce 00 aol -- bring in the
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ceo of aol. >> it brings us the stream to yahoo! and aol and half post -- huffington post. carolyn: he actually said that $50 million worth of marketing was be able to guarded by this week, but there was a quick bit of chuckling. >> they got quite a bit of heat on twitter for this one. they have integrity. this is my thinking on it. it is not a bad name. i do not see the problem with it. it is an umbrella name for that organizationally to sell ads for all of these different properties. the property names of individual brands do not go away. these are companies that have a lot of brand recognition. ,ech run, yahoo! -- techron
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yahoo!, even though it is an aging population, there are billions of people who comes to the underside does come to the yahoo! -- comment to the yahoo! site. people are tied to their evil providers. my question is does this really hurt them? i do not see it as a bad thing. think both are pretty ok. it is palatable. if this was a hibor company, they would get more credit for it. company, they would get more credit for it. >> verizon itself is a made-up name. member, 15 years ago we had bell -- tge.hing he they have done very well with that brand. rebranding is a tricky path for any company.
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and so now this scandal between uber and weimo in the courts, and -- waymo, and some breaking news this morning? themselves low, saying we are not using waymo's technology. whatever happened with those 40,000 files, that is what our radar, we are not using waymo technologies. we're fine. we should not get what is called april and are injection against us. right now they are fighting over whether tort will snap its fingers and say uber, you need to stop operating wider way, because it looks really, really bad for you. not is saying no, we are using that technology, and the consequences of this ruling would be really bad for us. caroline: they were saying this could destabilize their whole business model. that shows how much they are
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depending on self driving vehicles. word bible,the which is not a word you want to hear when you are thinking about a startup business. they said it threatens the bible it is they cannot have a self driving car program. i think they're thinking a little bit more long-term. google is allowed to have a self car -- self driving car program and hoover doesn't, that would does not, that would be strange. but they are still so far away. this -- remind us that alphabets is not really going to court often. >> it depends. it is more on patents, they're willing to go toe to toe with that. they are going to bat over this. there is a real talent were going on in silicon valley if stakes in aus taunus bugles, if you understand
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lidar, and are a startup that rochus is online or, these companies are getting big valuations and a lot of funding from venture capital firms. i think this is the way forward. it will not be here for a few years, but everybody wants a piece of it. caroline: and the battle continues in the courts. all of her, scarlet, that is a route from the week in silicon valley. oliver: you have your hands full for sure. thank you so much. later today, on bloomberg --hnology we hear from clears a big hurdle, with the fda. up, how much to trust or ignore the big data offered by financial companies. this is numbered. -- bloomberg.
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scarlet: this is bloomberg
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markets, i'm scholar fu. oliver: -- scarlet fu. oliver: and i'm oliver renick. peter joins us now to talk about the latest into continue will coverage of active management, and what we can expect from our investing products. you are looking at back testing, the wise and financial data. how did you decide to talk about this now? >> we have seen more and more people to do something beyond plain old vanilla index investing. smart data, of course, is a new trend. smart data is a very vague term. it seems to be, and most tape is desiccated, the people who promote these products are saying look how well this in our testing. they cannot promise the same performance in the future, but there is an up location that if it is done well when we take this program and apply the historical ups and downs of the
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market and it made money then, it should make money now. and yet, it turns out that is surely a fallacy, because there is no reason. -- what happens is you're not finding a real effect. you're finding random -- the more you search, the more you torture the data, the more likely you will be able to find some patterns. it does not mean it will work anymore. so they are doing the data and a certain way or fashion to come up with something that supports your thesis. >> there are more than a thousand different indexes that are tracking. hand and glove together. the index goes with the etf. where does this leave us for the in between passive and active's? the stuff like faster based qr --ing at stops like a
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aqr? very heateda very, debate over whether are there factors out there that do reliably produce -- beat the market? oliver: in the way they have done in the past. >> and in the way they will continue to. people will stay value stocks. some high school say momentum. and then there are others who are more controversial, like quality stocks. between heated argument rob and cliff. they have been arrival -- rivals for years. i don't think that debate has been resolved, but it is something that you have to be extremely careful about, not to assume that the patter you found that pattern you found in the past will keep working. scarlet: you start out pointing out that there are flaws
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physical techniques in academia, and you certainly see that an etf. it is not a new concept, you just have not explored as deeply in investing as we have elsewhere. >> there are some funny example. one person with were database of united nations data to see which was of the latest series most closely tracks the s&p 500? it would be butter production in bangladesh. highest that had the correlation? ofver: a classic case correlation versus causation. you can read his story in the latest business bloomberg -- bloomberg businessweek. this is bloomberg.
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it is three p.m. in new york, 12:00 p.m. in san francisco, 8 p.m. in london. scarlet: welcome to bloomberg markets.
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oliver: we are live and bloomberg world headquarters over the next hour. berlin, and syria. here are the stories we are covering on the bloomberg and across the world. one hour ago on trading day stocks will change following a margin report that missed its mark and a missile strike against syria that did not. defense contractors and gold have been hired throughout the day. wantsump and ministration to bring back the glass-steagall act, but doesn't have any chance of passing with washington lawmakers? we will ask a member of the banking committee what he thinks. -- slams jamie dimon about regulatory burdens. we will bring you more from his interview from earlier. and a check on the markets with abigail doolittle. one question would
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be if the major averages hang onto the very small day. unchanged, investors trying to digest what that weaker non-form payrolls report means. though syrian missile attacks are surely helping the defense you we have all the defense contractors trading sharply. on aoments ago, i was told phone call that he believes this is a visceral reaction unless it really helps it profit outlook -- profit outlook for these companies. perhaps a missile attack could his president trump gain request in defense spending. that would hit the bottom line of these companies. one stock trading sharply higher on an upgrade, walmart. we have shares of walmart trading higher by 1.5%.
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this is a two dave you. upgraded shares to outperform, saying there are four factors in place, especially and including the company's big move into the grocery space, but not all retail doing so well. on that non-form payrolls report that could help walmart with the lower pride poised -- lower , jcpenneyt, macy's and coal also trading lower. this could translate into weaker retail spending. across asset classes, really interesting, a cross asset class check would have told us it was a loss today. but now we have the bloomberg dollar index higher. we have bonds trading higher with the 10 year yield higher. have the yen falling against the dollar. a look at this, gold just up 3/10 of 1% earlier. of 1%./10 earlier it was --
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oliver: think so much for that. scarlet: jamie dimon wrote in his annual letter that government imposed capital requirements are holding back lending and to fail has been stalled. the minneapolis fed president disagrees with that. riskr job is to call out where we see them and propose solutions. when a wall street leader, and i know jamie dimon, what he says are incorrect,e it is my responsibility to speak up. too big to fail has not been solved. the american people in congress need to know that. offered them potential solutions in the form of substantially higher capital requirements. >> there is a narrative around you that neel kashkari is looking for publicity to steamroll on the fomc. argue --en 70 can't
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when somebody can't argue with the substance end values, they are left to criticize the messenger. i interpret that as a white flag. they can't argue with the analysis. the first time you have raised a question with two big to fail. many people will federal reserve governors or presidents agree with you? others in the fed share your view? guest: several do. my hope is that if we keep talking about it, we keep pointing out the facts, showing where other folks are wrong and we have solved this, that we will motivate people. i like the fact that there is some new stories coming out of the administration looking for financial reforms to a dressed to big to fail. i think we all need to keep pushing in the same direction and the -- and let the american
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people decide. do we want a more rational system where taxpayers are not on the hook? to give them the facts and information so they can make that decision. kashkarithat was neel speaking on daybreak america. oliver: joining us with more on that topic right about banking. we have two sides of the debate we just heard from. i feel like cash kari -- i feel is out of the consensus view when we talk about deregulation. are there other people that could potentially voice the same kind of concerns that he says and prevent regulation from getting rolled back? guest: even though there is so much talk of deregulation, let's not forget that one of the big voices in the republican party
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was the house financial services chairman. his proposal in the last couple of years also calls for higher capital. in that way they are not that far apart. there is some contradiction there. we will is where increase capital so we don't have to regulate on other things. he is not alone. high up there. he was 25% capital at the big banks. that is like five times more than what they have now. capital issue and the other regulation issue sometimes can get separated. then it comes together. scalping everybody agrees the higher capital thanks need to hold onto valuables. you have covered european banks coming have covered u.s. banks, compare how
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much capital u.s. banks need to hold on their balance sheet versus european banks. guest: even though we are all part of europe, u.s., asia, all part of the committee that since these capital rules, the u.s. regulators for many of these rules have goldplated and made the u.s. requirements much higher. which isle leverage, one that i pay more attention to, because it is the simplest one, how banks face 5% capital requirement on a simple balance sheet argument while the european banks are at three. our banks have exceeded 5%. average ofre at the 6% on simple leverage requirement. in european banks are hovering around three or four. we have more capital in our banks. they have managed to make profit.
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oliver: easy transition to set us up, deutsche bank has roughly a billion euro. what is next for them? does it sell the capital problem? > there are -- guest: their structuring problem -- nobody really wanted to buy it. they say nobody wanted to buy but the price wasn't what they were willing to accept. there is always a buyer. they weren't willing to take the lower prices. now they have to integrated and now they have to do a lot of -- is they haveblem to reclaim market share they have lost. people are worried about their capital. remember the bailout concern? now they have to go out and get that market share. that's not easy.
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it is much better to get it back. scoping a difficult proposition for deutsche bank. thank you so much. let's get you a check of the other headlines on bloomberg first word news. mark: reaction to that u.s. tomahawk cruise missile strikes on syrian airbases show division in international community. russia and iran, i lies condemned the attack, which they claimed was conducted under false pretext. welcomedd saudi arabia the missile bombardment, calling it a courageous decision that sent a clear message. after a suspected chemical attack in 2013 also supported the u.s. move as germany's chancellor angela merkel. a more immediate response from china with the countries leader visiting the palm beach resort. china's foreign ministry
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cautions against what it called the escalation of tension with syria. thatdent trump says of first eight -- that first face-to-face meeting that deftly does continue to hold talks in florida. trump: the relationship developed by xi and myself is outstanding. we look for to being together many times in the future. i think lots of potentially very bad problems will be going away. mark: both -- will spend parts -- oday sweet's say one person is been arrested as they begin a preliminary investigation into what is called a suspected terrorist crime. officials say four people were killed and 15 wounded.
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nine of them seriously. a global news to four hours per day powered by 2600 journalists and analysts in over 120 countries. i am mark crumpton, this is bloomberg. oliver: coming up, weighing in on the 20 century version of -- try for century version of glass-steagall floated by the president. this is bloomberg.
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scott angus bloomberg markets. national economic council or pushing for a twitter for century version of the glass-steagall act.
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he spoke first a bloomberg today. , we talked about lending, small and medium-size lending. know small medium-size businesses are the job creators in the country. scarlet: is there any appetite on capitol hill to get legislation through? joining us is republican a south the coda. senator rounds served on it banking and affairs committee. president trump had mentioned this as well campaign trail. what the level of this action in that of action in the senate banking committee? >> one is being discussed is the taylor both of them try to do
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something to separate out based on the business models the type of regulatory responsibilities we would enforce on them. glass-steagall sounds good, but when you talk about breaking up major organizations, now it may be tougher than what some people have imagined. at the same time if we can get the regulators to recognize that the different regulations should be put in place based on the business model, that may be easier to do. i personally prefer the taylor , but at the same time allow for the regulators to split the regulations at the different organizations would have. glass-steagall would put in effect 1933 different sections that were basically taken out of 1999. a lot of ill have said the changes may very well have led
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to some of the problems in 07 and 08. large financial institutions right now, you could really impact the economy. you also heard mr.: suggests a strong and medium-sized banks and businesses are critical to our economy. let's regulate small banks and big banks and come to an agreement. depend onh does this the interplay between the vocal rule and what could be repealed as dodd-frank and these new rules to be created? do we have to wait to see what gets rollback before we can move on anything else? yes bank i think you hit it on the head. look how tough it was to create the vocal rule. about identified to talk the same issues that we are talking about right now with regard to totally separating
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larger institutions from the investment banking and non-investment banking site. that is gradually wore closer and closer together because banks became closer and closer with their business models. he had not only the regulators making changes but you had activities involved in it as well. it may be tougher than what some people would suggest to actually create a new 21st century glass-steagall. the ideas are there, the concept of regulating car -- regulating large banks versus small banks. and pegs that have traditional banking models. -- banks that have traditional banking models. scoping what is your best -- scarlet what is your best guess in a timeline? guest: begun hebdo dress and issue the report of the end of
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april -- we're going to have to address an issue at a report at the end of april. a national appropriation bill, that has to be done. we have a number of things that will take a priority over this particular issue. oliver: i wanted to ask you quickly about what could potentially happen here in syria while we have you, just shifting gears. we have this news overnight. what was your reaction to this? what do you think the next move is here? have: i think it should been done three years ago. it was the right move to make at this time. it sends a clear message and directly addresses the issue of using chemical weapons, which have been banned internationally. the president acted decisively. he sent a very strong message and i think the world appreciated that.
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oliver: does this to spell this speculation that trump and putin have 10 in bed? that there would be a restart of relations their? this is obviously going to create quite a bit of tension between the two countries. we want to have good relations with russia, but that doesn't mean we let them get away with some of the things they have been doing. russia is there, they are in syria. there may very well be some understanding, the fact that chemical weapons still exist in syria, the assad regime has them. of mr. putinally and i think mr. putin has a responsibility to see that these chemical weapons are not used in the future. this is not a good thing for russia. i think they will recognize that. most certainly miss her side will recognize he cannot get away with that again.
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scarlet: the intelligence committee has been caught in the crosshairs. what is your confidence of the cia's information ability when it comes to syria? guest: i have a high confidence level in their ability to provide us with good information. the challenges we don't have a great syrian presence there. could it be better if we were actively engaged? of course. that is not necessarily where we want to be either. we have good information. our satellites are available. we have radar information and so forth. those are added in the total picture. the information we are getting and what they relate to us -- -- y to us scarlet: thank you so much for joining us. oliver: straight ahead we are treating the vix in today's options inside.
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this is bloomberg. ♪
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>> this is bloomberg markets, i am oliver renick area described bank it's time for options inside with abigail doolittle. : joining me is the partner for option pit. you, the worst selloff of the year. , goodid by on the dip call near-term at least. the percentages are up. are you still a buyer? guest: i think there is going to be upside from today as well. there is some really screwy things going on in the vix, which traded directly behind me right now. andave a cash vix at 12
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recorders for you i have an april future trading at around 14 and a may .5. -- 14 and half. comes ahead of the april futures. att i think we are looking our futures are a little bit wary about what is going on this week. will there be some sort of retaliation out of the sod or assad or- out of russia? more down to 13. i think you will see another pop in the s&p 500. intould pop one or 2% earnings. what companies stays will be driving the world markets a lot more.
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scarlet: -- abigail: what would worry you? what is the tally echo -- tell? that has to be an inflection point where markets tend to pop. the second month trade over the third month at the third month trade over the fourth month area -- a month. those are times where little panics turn into serious problems. saw a situation like that was at the end of of5, between -- beginning 2016. abigail: so your trade on the vix, take us through. with how overpriced april is, i have to play it back. like buying the april 13 .5
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put. paying about $.60. if the vix goes back to once it came, the april future back down below 30 teen come it will be worth at least a dollar, maybe more. pretty easy quick doubling of my dollar. abigail: back to you scarlet and oliver. scarlet: still ahead we speak with -- on the strikes on syria and what happens next. from new york, this is bloomberg. ♪ ways wins.
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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. [ [ screams ] ] [ shouting ] brace yourself! this is crazy! [ tires screeching ] whoo! boom baby! rated pg-13. [ screams ] >> time for first word news. eetched erdogan -- reccip
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began to rally today president erdogan said the u.s. has made positive initiatives in syria and that turkey supports all efforts to ensure the safety of the syrian people. president erdogan says he would like to seek a's it -- cac zone declared. belgian authorities have dropped terror charges against a tunisian man who drove his car around a busy shopping area last month. the 39-year-old man identified as mohammed are was originally charged with attempted murder and a terror context because of reports that people had to jump out of the way of his speeding car. no one was hurt in that incident. a year-long political battle is finally over. the senate voted to confirm neil gorsuch to the supreme court. the vote was 54-45. republicans lowered the number of votes needed to advance the supreme court nominee toward a simple ma

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