tv Bloomberg Markets Americas Bloomberg April 26, 2017 12:00pm-1:01pm EDT
from bloomberg world headquarters in new york, we will take you from washington, d.c. to paris and moscow in the next hour. here are the top stories on the bloomberg and around the world that we are following. cut in u.s.tax history. that is what secretary steven mnuchin says the president will propose as a way to spark economic growth. and a half, the secretary and gary cohn will speak at the white house about the plans to reform taxes. we will bring you those remarks live on bloomberg television and radio. plus, twitter surprises. the social media company showing plans of life -- signs of life. does it translate to a revenue turnaround? nasdaq past the 6000 mark. we have we through the trading
day. we are up of 6000, but unchanged now. julie: what gains we have seen on the dow and s&p 500 have moderated to some extent. we have seen the stoxx come off their highs. it has been a tight range. in the coming days, optimism. nownt to focus on the down -- dow now. boeing falling although the free cashnounced flow. it kept costs in check. the shares down 1%. procter & gamble, reporting a drop in sales, despite ceo efforts to turn the company around.
it did rise about the same for like organic like basis. finally, united technologies on the plus side. the earnings beating estimates. the otis elevator division performing relatively well. the cells over all up 3.4%. if you look at the dow, the relative strength index is getting heavy here. it is a percentage of members of the index and the s&p and nasdaq above the relative strength index of 70 which indicates the overbought condition. inmates we could see a little bit of a pullback. it is the purple line here, and you see it rising sharply within the s&p and nasdaq. something to continue to watch here. elsewhere in earnings, we have news from the fast food world or the fast casual world in the
potle,f chi bouncing back. they say that the payment system suffered a data breach or that can be capping some of the gains. restaurant brands international, known as the owner of burger king and tim hortons sees sales falling a 10th of a percent in the first quarter, trailing analyst estimates. they were looking for a gain there. a quick check on oil prices as well. we have the weekly inventory numbers. crude oil dropping by a larger amount than had been estimated. perhaps capping gains their. -- there. slightly unusual here that we seek crude oil pricing as the dollar index is also up. not necessarily slowing the oil momentum. vonnie: thank you for all of that. the trump administration to
announce the largest tax reform in history. steve mnuchin and gary cohn will unveil principles of the tax plan today during a 1:00 p.m. television briefing at the white house. joining us now is the bloomberg reported and washington correspondent kevin cirilli, both on capitol hill. having: i want to pull up now some of the new details that we know. first of all, it would lower the corporate tax rate to 15%. cut the repatriation tax to 10%. plus, official saying there would be no border tax in the
current form. i want to play for you now something that secretary treasury steven mnuchin said across town in washington this morning at an event hosted at newseum.um -- >> i hope they will not stand in the way of greeting tax cuts for small business, for making business competitive, for some behind competitive taxes. we are hopeful it is bipartisan. kevin: secretary steven mnuchin trying to get some democrats on board. sources weyou the are talking to on capitol hill are trying to unify the republican caucus. i was told moments ago that the border tax would be a nonstarter for several conservatives in the house. the house speaker said that 80% was agreed upon by the
gop. it seems to be a rosy outlook. does there need to be a democrat or two on board? >> it is easy to agree on 80% of the tax plan. the other 20% is where this sort of think collapses. tax isder adjustment unlikely to go anywhere, at least in the senate. housees divisions amongst republicans as well. in terms of democratic support, this is more of an aspirational thing that the white house is putting out there. this is highly unlikely to happen. we had chuck schumer in the last hour or two on the senate floor making clear that democrats are not going to go along with any white house tax plan that includes tax breaks for upper earners. haveis a redline that they
snuck by, and in not going to pass it now. allowingake clear that pass-throughs, not only for others,pop shops, but democrats are not going to go along with that. democrats have a slim margin of error. this is where the battle will be. vonnie: i'm wondering where the battle will be for the freedom caucus. quickly, i would say that there will be a markup later this week. hopefully sometime this year. i want to point out what the with of the committee -- whip of
the commitment told -- committee told the. >> today we are having a competence of title hearing on everything regarding that. we hope to go to market. kevin: there you have it. working on deregulation as well as tax policy. vonnie: as if those were not enough on this crazy week. more executive orders today. we also had provisions on health care that look to be getting more conservatives on board. to do white house wants everything they possibly can to pack accomplishments into the 100 first days. on health care, we are seeing a little bit of movement.
there is a new amendment known as the macarthur amendment written by a congressman in the moderate tuesday group that is winning over some holdouts on the house freedom caucus. one of them told me yesterday that the amendment has pretty much everything he asked for that allows states to waive the essential health care onuirements and the rating the health care status. if it ends up winning a significant number, this could go a ways towards passage in the house. the big sticking point is moderates. a lot of them have been quietly not like it.o it will be up to them if they allow it to disappear. vonnie: great stuff.
now let's check in on first word news with mark crumpton. mark: house speaker paul ryan says the latest effort to revamp is affordable care act law stopping short, but he did not promise a vote anytime soon, they will vote on it when they get the vote. this comes as lawmakers from ath parties try to agree on separate $1 trillion spending bill that would prevent a partial government shutdown this saturday. factor in booed at a his hometown in seven france after an ambush by his rival, marine le pen, forced him into a confrontation with some of her supporters. le pen made a surprise visit while macron was visiting with union leaders. the decision to meet with the contempt showed his
for their plight. saudi arabia and russia will meet within the next two weeks on expanding oil production cuts designed to firm up prices. so far they have not achieved the target of reducing stockpiles below the five year historical average. academy deming, the award-winning director of " silence of the lambs," and others, is dead at the age of 73. multiple sources say that he died of cancer and competitions from heart disease. silence of the lambs was the five oscars. win jonathan demme dead at the age of 73. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am mark crumpton. this is bloomberg. vonnie: thank you for that. let's get a quick check on the
vonnie: this is bloomberg markets. i am vonnie quinn quinn. investors assessing the details of the presence tax proposal as his 100 day mark approaches to the sentiment seems to be to not sell at all on actual changes in things like trade policies. it would take longer than markets expect. is the president of pacific heights asset management. this yield that we used to talk need for the market to grind higher. you say that will continue no matter what. >> i think as long as corporate earnings remain strong, in fact, corporate earning estimates are little higher than i expect.
q1 earnings have been good. recent quarters. as long as earnings are strong remain thet rates for, then, that bodes well the stock market going forward. we would be weighted more towards growth names, manufacturing, finance, those sorts of sectors versus consumer staples. we would be moving away from the equivalent names and more towards growth stocks, what we see as a longer-term growth environment. vonnie: how does that underlie the changes that we make it later on to lower the tax rate to the lowest in history? the re-page nation tax would benefit some things like the
tech industry. how will all of that changed echo -- change? >> my comments are based on what we get now. i cannot wait to hear what comes out in terms of the strategy in about one hour or so. obviously lower corporate taxes stockste down and make able to go up further. the bottom line is a lot of cash overseas. if you can bring that back at a reasonable rate that allows liquidity, and other measures policy a reduction of with respect to dodd-frank or immigration, there are a lot of industries affected by various components of what is being discussed. the net effect is if these pro-business initiatives become the law of the land, you can expect a further on them --
underpinning on stocks. that bodes well for more dynamic runs in stocks. there is a lot to get through before you get there. vonnie: getting this through congress will be difficult. vonnie: how would you describe this congress? in waiting mode or confused mode? >> the rally this weekend had me surprise. i guess it is a combination of relief rally in france with macron being more of an institutional candidate. also, the talk of the initiatives going on with the trump 100 days, the various things that congress administration are working on, there is a little bit of accommodation -- a combination of relief rally and progrowth in the u.s. driving stocks. i think stocks are getting a little overvalued here. obviously, individual companies -- vonnie: i want to briefly as you
about the nasdaq record of 6000. is it in any way important? >> psychologically, it is great optics. it makes sense. is, biotech,ly etc., it makes sense that the nasdaq number will move. it is great optics, good for the market, and makes sense given where the market is going. vonnie: thank you. he is pacific heights asset management ceo portfolio manager. great to stick with you. -- to speak with you. breaking news on trump's tax plan. we are getting more details, talking about tax brackets and the planting 25%--- the tax plan 50%, and -- 35%, and 15%. we will get the full briefing
vonnie: this is bloomberg markets. i am vonnie quinn. thanks rally following present comes election partly in hope for tax cuts and regulations. today, a conversation with mike mayo. his take on financials. >> when it comes to the bank stress tests, continue the stress test with things, look at the crisis like situation, and only after the results are given back, should banks admit the capital plan. now it is a rolled the dice exercise, like red light-green light. there are like practical changes and i think republicans and democrats could agree on it. mark: i want to bring the
focus here. credit suisse, the story today, raising capital, following unicredit. can you say that from where you are sitting, the european banks are addressing the capital related issues? >> european banks address the capital related issues eight years after the u.s. faced their banks. i would say that this was banks on some measures had more capital than some banks in the world. where thear below banks are. that hurt some of their business. .hey have been losing shares a u.s. versus european scorecard, we have seen obviously a big upswing in european shares on the lows of
last summer. have we seen the lows? giving theks backdrop or not? >> certainly there are some inexpensive european banks, but there are some inexpensive u.s. banks. look at the capital ratios. some of the highest in history. i go with the devil i don't know. vonnie: let's talk about bonuses. it has been very interesting to me. if european banks move there headquarters to london or other places and we're hearing more about it as negotiations get underway. franklin, -- frankfurt, dublin, the hague. will the structured change? >> i'm incredibly focused on
incentives which drive behavior. i think collectively what investors are fed up with is heads, i win, tails, i win. if the ceo and the management teams are not getting the job done, they should not get paid much. they should be allowed to get paid a lot. that is capitalism, the way the system should work. vonnie: you were at the citigroup annual meeting and you own some shares, we should andtion, to get of pass -- access pass to the meeting. what was your take away? >> i do go to the annual meeting. i know this is something people go for free food. they did have good food, but i would say, sweet and sour. the sweet part of the meeting was they have come along with a market share in the businesses, the best they have been since
the financial crisis. they are raising more capital. they are one of the eight largest inks. divested. on the other hand, the sour part is returns are still not where they need to be. they have worst in class return equity and stock market valuation yet they are saying that restructuring is done. targets, fine, but it wonder if they need a fasterring 2.0 to move forward. a greater sense of urgency would be nice to have. vonnie: independent bank analyst mike mayo. still ahead, no border adjustment tax according to white house officials. details next.
the dow up 49 points. nasdaq 500 of in the above the 6000 mark in holding a 10th of 1%. >> small gains for the major averages you just outlined. let take a look at stocks outperforming and under performing. twitter and when resorts. -- wynn resorts. they gave a week shocking price outlook. one reason stocks may be relatively changed.
let's take a look at some of the companies that have the biggest tax rates to the government and taxes -- and taxes. taxes. thesethe election, bt -- bte 561. we see the election, those in a bigtperforming way. a failure around the health care plan a concern that maybe the tax plan would be passed quickly. thank you for that.
woolly expect the white house to come out with is largely repetition from the campaign trail. it is not necessarily a detailed plan. has sort ofthis remains to be seen. we understand paul ryan and to make their tax puzzle -- proposal work. retail behemoths like nike, jcpenney. want to see the corporate taxes brought down. they support that and border
adjustment is the key mechanism which is important if you want to get it through congress. vonnie: what about repatriation at 10%? >> in a global company would be for that. when this happened before in the mid-2000, it is good for -- it remainsut to be seen. what is supposed to come out today is a lot that he talked about on the campaign trail. --nie: >> i think that is part of it. the big idea is how are you going to pay for? is it just going to be a straight tax cut?
thank you for that briefing. overhaul will take -- affect retail. is can bernstein. how will it affect them? >> retailers are clearly concerned about border adjustment tax. at least for now, hopefully that is not the focus. what i would caution everybody weeven good tax reform if don't focus on the details can have a host of unintended consequences. we are going to watch this carefully. all the changes matter. real estatedo the companies get affected? >> depending on the tax changes,
interests, a wide variety of issues, it may or may not impact individual companies for it if it's done correctly and family, i'm confident -- vonnie: what is fairly? >> we need to make sure the real estate companies are treated as corporations. there are still a bunch of loopholes out there today that negatively impact our retailers and and -- and us. there has been legislation take around for many years to level the playing field. it is called marketplace fairness. it provides local retailers -- mom-and-pop retailers are tax as to the same sales foreign companies and internet companies, etc.. it makes total sense to level
the playing field and collect the sales tax they are entitled to, but that has taken years to get through. i understand the mom-and-pop store idea to be easier. the rate argument is a little hard for me to understand. ampanies have been enjoying preferential statement. that's what some of them have been able to survive. >> i don't agree. we are pass-through entities. our shareholders a taxes like any other mom-and-pop shop. it is a fair system. we don't have any reason to think we will be negatively impacted. we want to see growth in the economy, jobs, wages.
if it is good for the consumer it is good for retailers and us. what about immigrant proposals -- at a lot of different things out there. how does it all play out? tax is a adjustment concern for our retailers. real estate company. i'm not a tax expert or expert. you run a real sick company and which retailers pay the rent. many of them are sending offshore telestrate malls are looking for ways to keep people coming in. of ans this idea experienced small. have you can ask some of the proposals that will keep customers coming to malls? are complacent
burners come i don't think it is about taxes. i think it is about people the confusion out there. first of all, we as landlords are not nearly as connected to the ups or downs of any specific retailer. variety ofuy -- wide tenants and our cash flows tend to be stable. in retelling there is a combination of issues that have nothing to do with e-commerce. how much of the responsibility for reviving malls is on the malls owner -- the lease or, your cells and how much is on the individual retailer? enclosed not in the
business so i will refer to colleagues. havinge ourselves in well located properties. if the retailer is not doing well, the best location is not going to help them then they need to get out of the way and let a stronger retailer step in. it is also critical this day and age that landlords act responsibly, have enough capital to invest. one of the great things is we arewell capitalized so we in a position to redevelop those properties. vonnie: you have a real estate person in the white house. you don't think he will do anything to hurt retailers -- you have a real estate person in the white house pretty don't think he will do anything to hurt real estate people do you? >> i don't know. >> the company's position and a lumber dispute with the united
states has been upheld in the past and she is confident it will be again. >> i would say to my american friends, be nice to your clients. we work hard at our relationship with you guys and i think it is in the interest of the united states to keep the relationship strong as well. president trump imposed thisfs as much as 24% week. in paris, prosecutors say they have arrested 10 people link to the 2015 attacks at charlie hebdo magazine. killed in those attacks. russian foreign minister, sergey lavrov, is dismissing claims that international experts can't
visit the site of security cautions. razr off criticize the organization for failing to go and examine the organization. he said claims that the experts were warned by a yuan body against traveling there because it wasn't safe are not true. news, 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. this is bloomberg. vonnie: coming up, a toronto thefaction company in latest trade spat between the u.s. and canada. we will explain. this is bloomberg.
♪ this is bloomberg markets. i'm vonnie quinn. president trump is in a trade battle with canada over london and dairy. politico is reporting the administration is thinking about a withdraw from nafta. the canadian dollar weakening on that news. a bigger move for the mexican peso. by two 1925, weaker points. is reporting on one company that is in the middle of this battle. he takes us to let a mark, based outside of toronto. -- little more
casting came from mexico. now, it is in canada taking on the shape of an engine and soon it will head to the states. >> we have a huge amount of product that shipped across our borders, canada, u.s., and mexico. >> it is an example of the interlocking machine of free trade that america built. >> my father is an immigrant from hungry and he came to canada in the late 50's with nothing in his pockets. >> now, canadian manufacturer has 24,000 employees in 12 countries. supply chain is
under threat. nafta, whether it is mexico or canada, it is a is -- it is a trading disaster. they are at the center of an effort of why protectionism can only hurt jobs. >> i think the implementation of would be very negative. it has been cap related to had andverage $2300 to the cost price of every vehicle, so the obvious impact is going to be people buying less cars in the whole industry comes down and then jobs are lost.
>> to the extent that the united states runs a trade imbalance with the rest of the world, it runs a trade deficit with china. if the united states is were not trade deficit it should be looking at china, not nafta. it makes the united states more competitive than the rest of the world. >> she agrees that it makes north america stronger. are outsideto sales of north america and we should get a chunk of that. we reduce costs, innovate, come up with great products that the world wants. that is how the world create
jobs throughout north america. bloomberg's michael mckee joins us now because we will talk about this topic a little more. i do want to mention some headlines commenting in a statement that it is now anouncing report for obamacare replacement bill. we will get more details in a few moments. idea ofto wrap up this the u.s. possibly pulling out of nafta. we knew this was coming, but we did not know a complete pullout was coming. reported istico has they have drafted a pullout, but there's no indication they would actually do that yet.
we're going to look tough and waited big stake in front of canada. that is sort of what the administration did with the announced. vonnie: for canada, they could say go ahead because you are penalizing us anyway. mexico may be more impacted. do business that across the united states are getting hit hard today. the real question is take us back to trade wars which was a theme coming into the ministrations. does this mean the president is actually going to pursue this? that is the question this raises. whether or not they put the order back out.
congress -- in congress? would really change anything? -- will it really change anything? >> it is an important piece of news. what they have now is an amendment that would allow states to gain waivers from two critical provisions that they don't like. outould allow states to opt of the requirement that notrance companies can charge more for six people. the downside it could leave a lot of people out if they don't
have the regulations. house republican moderates don't like the fact that the bill cuts medicaid eligibility a lot. nott were silent and did want to vote on the bill. at this point, i would say that care bill has a pulse. we don't know if it is going to pass yet. is it possible that enough moderates were -- would back it that it could become legislation? >> so far we have not seen any moderates who oppose the bill change their position. if members come down on this. one of those who authored the amendment. the problem with that is he
doesn't seem to be speaking with the -- for the group. this is a different group of people. they want different things. member of the house republican conference in a swing district and he said he's not changing the position. stay tuned. hearing from steve mnuchin and gary cohn in the next hour. this is bloomberg.
watching at this hour. largest revamp of the u.s. tax system in history. that is what the white house is saying, but can they pay for themselves? just in the last hour, we heard that the freedom caucus is supporting the obamacare replacement bill. ♪ david: the latest on donald is -- tax plan, this kevin, let me start with you.