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tv   Bloomberg Markets Americas  Bloomberg  January 25, 2018 2:00pm-3:30pm EST

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with prime minister theresa may. he created the world economic forum. it has never been as fames globally as during that meeting. this is bloomberg. more coming up after the break.
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likes it is 2:00 in new york. 7:00 in london. welcome to bloomberg markets.
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julie: live in new york over the next hour for the top stories we're covering around the world. the world according to george soros. he shares his latest use on markets and the trump administration in a bloomberg exclusive. the anti-cash club. urging investors around the world to stop keeping money in cash as stock markets climbed to new highs. broadeninge of a expansion in the global economy. look no further than caterpillar. we have u.s. markets closing in two hours. we are back to record highs. the nasdaq has a little bit further to go. >> at this point we do have record highs, gains for the major averages. putting in all time highs, the nasdaq had been between gains
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and losses in the volatility we saw yesterday, the worst day of the year. overall a bullish tone. the nasdaq has the biggest wade into apple. apple will launch an e-book reader. weighing on apple, some analysts are talking about the possibility of week iphone demand and that that might weigh on the quarter. amazon up 1.3%. the target has been raised to a street high, expecting a strong quarter. let's take a look at the defense contractors. northrup did report. shares up 3%. it was good enough and we have the peers trading higher. general dynamics reported
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yesterday. nice strength in this phase. and the bloomberg dollar index. tv.ook to be this is a chart of the monthly gains and declines for the dollar index. on theow it is down month on pace for its worst month in seven years, not shown on this chart but amazing. steve mnuchin talk about the doctor -- the dollar. talking up the euro. that is weighing on the dollar today. rough times for the dollar. >> indeed. the euro specifically is at a three-year high versus the dollar today. let's check on the first word news. mark: president trump his administration has a plan in pace for peace in the middle east. he discussed with benjamin
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netanyahu. >> we have a proposal for peace. it is a great proposal for the it is good for israel. it covers a lot of the things that were discussed and agreed on. >> the president ingrid leaders when he recognize jerusalem as israel's capital. he said plans to move the u.s. embassy are ahead of schedule. paul ryan says morning's to be done to confront iran. he is in the united arab in rates, leading a congressional delegation addressing the emirates diplomatic academy, he said the u.s. wants to challenge iran's ability to threaten the region with ballistic missiles and stop its expansion across the middle east. the u.s.'s war can -- warning turkey to watch its step in syria. any miscalculation by turkish forces fighting u.s. backed
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kurdish militia could result in grave consequences. president trump want of a showdown between turkish and american troops. republican senators emerging from talks on immigration plan today say they like what they have heard so far. this is aboutid border security. >> it is about fixing the holes in our immigration system that allow criminals and others to take advantage of it, but also about a compassionate solution for daca recipients. the plan being discussed could provide a pathway to citizenship for hundreds of thousands of young people brought to the country as children come now here illegally. president trump said he is open to such a plan. global news 20 for hours a day powered by 2700 journalists and analysts in 120 countries. this is bloomberg.
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scarlet: thank you. we have some news here, the president told cnbc he wants to see a strong dollar. , itare seeing a move here is lower versus the yen and we see the bloomberg dollar index paralleling that decline. >> theme mnuchin dollar comment was taken out of context according to trump. thep has talked about helpfulness of a weaker dollar for u.s. companies. we are going to dig into this more later coming up. first, earnings. earnings season is in full swing. we heard from caterpillar that industrials maker posted sales that beat estimates. 2018higher earnings for and earnings estimated. surging chinese demand and that weaker dollar as well lifted
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sales of the yellow machine. roundup, an earnings and michael regan who leads our coverage. taking a bigger picture look, let's start with you am a job. it is such a topic right now. it is important for a company like caterpillar that gets so much sales abroad. >> the words coming from mario draghi this morning, i have covered gold in the past. the fact that it was affecting caterpillar struck us. after the earnings call, i asked are you worried about a trade war? referencing these comments? he said we are not worried about a trade war. we spoke about steel tariffs. the fact they are having to address this was massively interesting to us. >> the bigger picture story is it had four years of struggles. falling sales.
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this global growth came just in time. >> absolutely. when you look at the fundamentals, they are in a good place. they have continued to give revisions higher on their revenue, they have continued to beat on top and bottom lines. we got from them in this latest quarter them saying across the globe we are seeing positive movement, brazil to china. things look good. i think at this point analysts are looking for something that suggests it isn't going higher. that is where we have this expectations game. are they going to surprise us more than we expected or are they going to come in slightly lower? that is the price action we have seen in the stock which has been all over the place. talk about these things helping caterpillar, they sound like a should be helping most companies must special with
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international exposure. >> they are. earnings season is coming off as advertised. we are at 9.8% growth for the 119 companies that have reported. obviously the expectations were for 12% growth. you say how is 9.8% good news? mainly because most robust growth is coming from the energy and materials companies. they are still very early in the season. companies. caterpillar is very much a commodity story in it of itself. the growth has been broad-based of the 11 sectors. 10 are showing growth. the only one that is not is industrials. that is really a ge story.
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but for the story going forward, the expectations for the entire year. i don't know how many times we have been sitting here saying the forecasts are coming down. this year is the opposite. if you look at s&p, it started the year at 145 and change. now to $152 per share. ongoing rally we have seen when these expectations continue to go higher. scarlet: a big reason has to do with taxes. what did caterpillar say on the tax front? >> they are going to pay a rate of 24% in 2018. people had kind of figured out -- >> compared with? >> i don't want to miss quote
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but it was in the 30's. a significant change. this is something caterpillar had been clamoring for since the trump presidency. we console he asked about trade but they kept saying we want tax reform are they finally got it. scarlet: they are also getting rising commodity prices as the dollar continues to weaken. we are looking at gold prices turned negative following comments out of president trump about how he supports a strong dollar. that is inconsistent with what he said in the past, and doesn't really mesh well with what the treasury secretary said earlier this week about how it benefits the united states and trade. when you look at metals prices and you cover gold, copper, are theyat extent moving in response to currency fluctuations as opposed to the supply picture? >> apply demand a picture has
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been the driver. the industrial commodities are a different story. when you have treasury secretaries and the president of the nine states discussing the dollar that is going to have a direct impact on commodities. they are priced in dollars. you are seeing that in gold now. it appears that is what is happening. >> our thanks. thank you. coming up, the secret to first-year success may be about the price of the hotdogs, beer and pizza. steve cannon, just ahead. you can contact us on twitter. also watch the first global news network streaming live on twitter. here is one of the highlights on the pay gap between ceos and their employees.
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>> ceos earned $30 million. 347 times more than the average at those firms. that is a big gap. it has why didn't drastically. this begs the question, why do bosses aren't so much? do they work that much harder? there is no clear-cut answer. there are clues. began paying bosses with shares of said of cash. that has been a good deal for them. time executives began comparing paychecks with those of their peers using data from consultants. that put pressure to pay well to show how valuable their ceo was. if everybody is paid above average from the average keeps
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going up. how much money is too much? that debate still goes on. companies say they have to pay top dollar to get skilled managers. critics say that is not true. u.s. companies must disclose the ratio of ceo pay and the median worker. that is what lawmakers put in place to narrow the wage gap. including starbucks will walmart, disney have said they are raising worker pay and giving bonuses. it remains to be seen if executives will get raises. twitter.ind me on get the latest updates at tick-tock.
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julie: this is bloomberg markets. scarlet: the side of next year's
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has a vintage year about. the stadium, home of the atlanta falcons and atlanta united finished first in the fans survey for food and beverage. the reason, a game changing new approach to concessions. here to explain and break down the numbers, the parent company of the falcons and atlanta united, five dollar beer, to dollar hotdogs, three dollar pizza. we live in new york. a bottle of water is six dollars. most stadiums around the country , you are going to pay inflated prices. 50% reduction in pricing. tell me about the numbers for what it means in revenue. upspending per fan has gone 16% despite a drop in overall pricing. we listen to our fans. is oned beverage pricing
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of the biggest pain points in the pain -- fan experience. you put that picture together and it is a sore point across the country and that is what this is trying to address. >> volume goes up and prices come down. does that have a ripple effect into other parts of the experience? do people spend more and other ways? >> they are buying more things. more transactions. we set a transaction record. during the national football championship the most transactions they've ever seen in one of their sports arenas. our three point is terrific. we are trying to create the environment that invites people in. we are getting people into our building earlier than ever your before -- ever before. the obstacle has been removed. before kickoff we have 6000 people in our building
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consuming, interacting. it is relieving pressure at the entry gate so we don't have that last-minute phenomenon. it is creating a better entry experience. they are feeling better about consuming, spending 88% more at the merchandise counter. there is a systemwide impact for this. >> it is not just about the experience -- whether the team is winning or losing. this is a pretty good season for the falcons. do you expect to have some stickiness. now that you introduce this in a good season, do you think that experience will keep people coming back even if the team isn't winning as much? thehis tracks all of elements of the fan experience during the game. they do move up and down slightly depending on a win or a loss. food and beverage stayed rock steady at the highest level.
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clear validation from advancing we love what you are doing. keep doing it. >> have you heard anything from your peer group? what was the reaction? was there universal outrage? is anybody saying tell me more? skepticism, this early loss leader that is going to raise prices? we are committed to the pricing. you will see the same pricing at the super bowl. for our superof bowl next year when we are the host. that is part of our brand. folks are 100% behind it. now we have find -- found that skepticism is turning into interest. otherad basketball teams, soccer teams and football teams that have come through and asked intelligent questions. the conversation has started. anything like
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opportunistic price rising but volume prices have been rising. rising inflation is now a narrative taking place. what is your thinking about how you will do price adjustments? >> we are going to push hard to offset those input rises. that is going to be our challenge. we do not want to see prices increase at all. we want to make sure consumers believe us and don't think this was a one-year phenomenon. the burden is on us to become more efficient. they are creating more volume than they used to. weevil make sure the work committee economics work out in the way of the fan. julie: how about wage structures? in the survey, the service rating was quite high. that does not imply people are making less.
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>> we paid more than the georgia dome. we went through an extensive seven-figure training program for our staff. we knew if we can't deliver the human factor, the hospitality aspect, the best stadium in the world is going to be marginalized by that. we have invested in our people to amplify the infrastructure and the great pricing. scarlet: let's talk more broadly about the nfl. have been falling. there is cord cutting from a to another platform. also changing demographics as well. have you change the way you do things? the pushback against the league, these declining ratings? , theross the league atlanta falcons included, all of these inputs are being taken seriously.
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it is not like there is any attitude that says we are ignoring the ratings. board we are listening to players, we are listening to fans. our effort is about creating the most attractive experience, knowing if we bring the men and create an environment allows them to check troubles out the door and have an amazing experience ultimately that will be rewarded. while ratings have dropped it is still by far the best game in town. all ratings have dropped. the whole media landscape has been fractured so much. ,ith new consumption pattern everybody is feeling that pressure. valued is still a highly media property. we are not win to take anything for granted and we are going to continue to tweak the model. >> thank you for selfish reasons, we hope this catches on
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in other places. maybe it will hit new york city. we really appreciate it. time for the bloomberg business flash. the biggest business stories in the news now. bank of america trying to close the pay gap for women and minorities. they will impose restrictions on questions about salary history and interviews. the recent review found women make 99% of what their mellow -- , 90 hannaford's aren percent of what nonminority colleagues are in. weight watchers shares lower today. she said she lacked the dna to be president. this is bloomberg. we use our phones and computers the same way these days.
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so why do we pay to have a phone connected when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and ask how to get a $150 prepaid card when you buy a new lg x charge. it's a new kind of network designed to save you money.
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call, visit, or go to retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. scarlet: from bloomberg world headquarters, this is bloomberg markets. mark is closing in new york. .t is reversing
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president trump says he supports a strong dollar. precious matt -- precious metals had changed. since 2014,est before getting back the gain. crude had been helped by following stockpiles and robust demand. and cocoa, extending its move higher. it was down briefly but it is now up 5%. this is the longest rally since october on signs the global surplus may ease. talk about theo dollar following treasury secretary steven mnuchin saying a weaker dollar is good for the u.s.. trump saying his comments were taken out of context. he said ultimately i want to see a strong dollar. he has acknowledged it can be
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good for u.s. companies. we definitely saw a movement upwards. you can see downwards following this. we will see in the coming days as the president continues his time what other commentary we might get on the u.s. currency. let's check the headlines now with mark crumpton. is confident may of getting a satisfactory post-brexit trade deal with the eu. she spoke in davos. >> r.i.m positive we will be able to get a good arrangement for the future, which is a comprehensive trade agreement for the united kingdom. the reason i believe we will be able to come to that is because what i see talking to other leaders is we are pragmatic about it.
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mark: southeast asian leaders are celebrating ties with india. the leaders of the association of southeast asian nations met celebrate ties between the block. they said india favored a rules-based order for the oceans and seas, and respect for international law. jared kushner's legal team is denying the trump advisor and interview declined a with congress. the senate judiciary suggested spooked after the surprise relief of age -- release of a transcript of one of the interviews. top democratthe agreed to make other transcripts
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public including interviews with donald trump, jr.. forunited nations is asking $3 billion in aid for yemen and millions of civilians facing starvation during the ongoing civil war. in jordan the military and chief for human said violence and disease is increasing in the country as stocks and food -- stocks of food window. need andis a desperate people have an inability to look out for themselves. yemenu.n. sources said bannede rebels had agencies and relief groups from working in the territory. global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. i'm mark crumpton. this is bloomberg.
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julie: back to our coverage of the world economic forum. larry fink of blackrock is urging investors to stop keeping money in cash as the stock market reach new highs. he spoke to erik schatzker. >> here we are, financial markets are up three times since the financial crisis. the pool of money in cash worldwide has never been greater. it is a problem. in china, 45% and bank accounts. prime speak to the minister of france, 72% of french savings is in a bank account. >> can you imagine what would if we had better financial literacy, more people investing over the long run? the financial gains people would have in their 401(k)?
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i think that is one of the bigger crimes we don't talk about. that is one of the reasons i believe we have more momentum because of the money sitting around. a he thinks we are already in bear market for bonds and reminded everybody of the map. a 100 basis point move will equal the worst bond -- in 1981. we had how long will it take to get there? you are not sure you agree with that? >> i am just doing the math. i was a bond trader. it will take longer than people think. i am more concerned about a flattening yield curve. 30 basis points. the wall of money that is isting out there substantial.
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to get to a 360, you would have to see behavior change by the bank of japan and the ecb. i don't anticipate that rapid change yet. finket: that was larry speaking and davos. we will go to a bloomberg exclusive. george soros has begun delivering remarks at the world economic forum. >> by protecting democratic achievements is not enough. we must safeguard the values of open society, so they will be better able to withstand future -- open society will always have its enemies and each in a ration has to reaffirm its commitment to open society, for it to survive.
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principledfense is a counterattack. the enemies of open society feel victorious, and this induces them to push repressive efforts to far, and this generates a offersent and opportunities to push back. that is what is happening in places like hungary today. i used to define the goals of my foundations as defending societies from their enemies, making governments accountable
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a critical mode of thinking. deteriorated.has not only the survival of open society but the survival of civilization is at stake. leaders such as kim jong-un and donald trump in the united states have much to do with this. both seem to be willing to risk a nuclear war in order to keep themselves in power. cause goes even deeper. harnesss ability to forces of nature for constructive and instructive purposes continues to grow.
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our ability to govern ourselves properly fluctuates. it is now at the low end. war is so of nuclear rend us. to lower it.ed but it is real. on anited states is set course towards nuclear war by koreang to accept north has become a nuclear power. incentivees a strong for north korea to develop its nuclear capacity with all turnble speed, which in may induce the united states to use its nuclear superiority
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preemptively, in effect to start a nuclear war in order to prevent and nuclear war. self-contradictory. is, north korea has become a nuclear power, and there is no military action that can prevent what has already happened. the only sensible strategy is to accept reality, however unpleasant it is, and come to terms with north korea as a nuclear power. this requires the united states to cooperate with all interested parties, china foremost among them. beijing holds most of the levers butower against north korea
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is reluctant to use them. on them,e down to hard the regime could collapse and china would be flooded by north korean refugees. reluctant to do any favors for the united states, south korea, or japan against each of which it harbors a variety of grudges. cooperation will require extensive negotiations. once it is obtained, the alliance would be able to confront north korea with both stakes. used to enter
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the carrots, to reward it for suspending further development of nuclear weapons. so-called freeze for freeze agreement can be successful there policy will be. success can be measured by the amount of time it would take the nuclearto make arsenal fully operational. i would like to draw your reports justtwo published under prospects of a nuclear world war in north
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korea. the of their a major threat to the survival of our civilization is climate change. ofch is also a growing cause forced migration. -- i have doubt with the problems of migration at great length elsewhere. i must emphasize how severe and intractable those problems are. into detailsto go on climate change either. we know what needs to be done. we have the scientific knowledge. it is the political will that is missing, particularly in the
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trump administration. clearly, i consider the trump administration a danger to the world, that i've regarded as a temporary phenomenon that will disappear in 2020, or even sooner. creditpresident trump for motivating his core supporters brilliantly. but for every course of border created aated -- greater number of core opponents, who are strongly motivated. that is why i expect a democratic landslide in 2018. my personal goal in the united aates is to have
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reestablishment of a functioning two-party system. this will require not only a also ade in 2018, but democratic party that will aim at redistricting, the appointment of qualified judges, properly conducted senses, and other measures that a functioning two-party system requires. i want to spend my remaining time on another global problem. the giant i.t. platform companies. these companies have often
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played an innovative and liberating role. havecebook and google grown, evermore powerful monopolies. they have become obstacles innovation and they have caused a variety of problems of which we are only now beginning to become aware of. companies earn profits by exploiting their environment. exploitnd oil companies the physical environment. exploitedia companies the social environment. particularly nefarious because social media companies
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influence how people think and behave without them being aware of it. has far-reaching adverse consequences on the functioning of democracy, particularly on the integrity of elections. the distinguishing feature of internet platforms is that they are networks, and they enjoy rising marginal returns, and that accounts for the phenomenal growth. is network of fact unprecedented and transformative but it is also unsustainable. facebook eight and a
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to reach the first billion users. half of that time to reach the second billion. at this rate facebook will run out of people to convert in less than three years. google effectively control over half of all internet advertising. to maintain their dominance they expand their networks and increase their share of users attention. this by providing users with a convenient platform. spend on the users
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platform the more valuable they become to the companies. a content provider also contribute to the profitability of social media companies because they can't avoid using the platform, and they have to accept whatever terms they are offered. the profitability of these --fidence companies companies is largely a function of their of avoiding the contentty for of their platforms. merelyaim they are
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distributing information. the fact that they are near one of the distributors make them into public utilities. that should subject them to more aimed at regulations preserving competition, innovation and fair and open universal access. the business model of social media companies is based on advertising. their true customers are the advertisers. gradually, a new business model onemerging based not only advertising but selling products and services directly to users. control,rt data they
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bundled the services they offer, and use discriminatory pricing to keep for themselves most of the benefits that otherwise would have to be shared with consumers. this enhances their even further but -- but the bundling of services -- underminestory the efficiency of the market economy. companies deceive users by manipulating their attention and directing it towards their own commercial purposes. they deliberately engineer
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addiction to the services they provide. ,hey can be harmful particularly for adolescents. there is a similarity between the internet and gambling companies. casinos have developed gamblers too hook the point where they gamble away all of their money, even money they don't have. something very harmful and may be irreversible is happening to human attention in our digital age. not just a distraction and addiction, social media companies are inducing people to give up autonomy. the power to shape people's
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attention is increasingly concentrated in the hands of a few companies. it takes a real effort to assert and defend what john stuart mill called the freedom of mind. once is a possibility lost, people will grow up in the digital age and will have difficulty retaining it. far-reaching political consequences. people without the freedom of mind can be easily manipulated. this danger doesn't loom only in the future. a role ineady played the 2018 presidential elections.
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but there is an even more alarming prospect. allianceld be an and largethoritarians data rich i.t. monopolies that would bring together systems of with ane surveillance already developed system of state sponsored survey ants. in a web ofn result totalitarian control, the likes aldus huxleyeven or george orwell could have imagined. suchountries in which unholy marriages are likely to
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occur first, russia and china. the chinese i.t. companies in particular are fully equal to the american ones. supporto enjoy the full jinpingection of the xi regime. the government of china is strong enough to protect its national champions at least within its borders. are based monopolies already tempted to compromise themselves in order to gain entrance to this vast market. dictatorial leaders in these countries may be only too happy
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to collaborate with them, since they want to have their own over theircontrol powerpulation, and expand and influence in the united states. scarlet: you have been watching george soros deliver remarks are you can watch full remarks at life go, -- live go. we have much more with lloyd blankfein. reform told us about tax . this is bloomberg.
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♪ scarlet: -- julie: its 3:00 p.m. in new york. i'm julie hyman. scarlet: i'm scarlet fu. welcome to"bloomberg markets."
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julie: we are live in bloomberg world headquarters in new york. over the next hour here are the top stories we are covering on the bloomberg and around the world. tugboats, day three. lloyd blankfein says president trump's tax bill has brought the u.s. more in line with the world. highlights from our interview in just a mim -- just a moment. hedge funds are getting more involved in washington lobbying, not just on industry issues but on decisions that could affect their portfolios. details behind that action, this hour. plus i'm of the intel on intel. the chipmaker, after the bell, will the results reassure concerns about lingering vulnerability? let's check on markets with abigail doolittle. abigail, another day where we are seeing some with sawing -- with sawing --
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be day: a top teacher and now we are looking at mixed action similar to what happened yesterday. we have the s&p 500 and the nasdaq lower, the dow higher all day, putting in another all-time high. the s&p 500 when it was up, actually put in and all-time high as well. the source of pain at this point appears to be the dollar. let's take a look at the dollar, onart of the pace for its fourth down day in a row and on pace for the worst month in about seven years, down 4%. president trump told cnbc that ultimately he wants to see a strong dollar. at the highs the dollars had of 1%, its tenths best date since october of last year. at this point we are looking at a gain of about one quarter of 1% in the dollar is on pace for its best day in about two weeks. the reason this could be a source of pain for stocks, not just the carry trade aspect and a weak dollar that would support
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investors going into riskier aspect that into riskier assets, but take a look at these big multinational companies. lower aftern a leg those president trump comments about the dollar. but coca-cola, procter and gamble and exxon mobil, all these companies derive a lot of their revenue outside the u.s. and the weak dollar helps them to sell their products. ahead of those product -- ahead of those comments these stocks had been higher but now we see huge -- not huge losses but presser -- but pressure on these stocks. i'm trying to make sense of what this is with the euro. it is slightly up after being down but it is well off of its highs. i think this is a one-year view. we saw and intraday reversal for gold and the euro and blood coin -- and bitcoin
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was flat. there is will see if any more currency commentary in the coming days and. bowsprit let's look at tesla because those shares are taking a bit of a turn, in this case downward, almost two and a half percent. this is after a report by cnbc that teslas problems with gallery -- with battery productions in nevada are worse then revealed and could cause more delays for the model three. this report cites unidentified current and former tesla employees. we will track what is going on with tesla. scarlet: let's check in with headlines and "bloomberg first word news." mark: president trump delivers the keynote address at the world economic forum in davos tomorrow. he says he plans to tell the world how a ready america is and booming andnomy is
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that, with all i am doing it will only get better. ". president trump is the first president to attend at summit since bill clement in 2000. ireland's prime minister wants the european union to have a closer relationship with the --. than i currently has than it currently has with nonmember norway. >> i think it will be a specific agreement for the united kingdom, but of course as ireland we want to be as close as possible so we look to have norway but i think we need to get into details about what that now means. mark: norway is part of the eu's single market but not the union. is a tougher u.k. fit for the norwegian model. china is promising action against u.s. sanctioned companies if it sees solid evidence that they illegally helped north korea. it also cautioned against imposing foreign laws on chinese citizens. trumpnesday the
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administration announced sanctions on north korea and business networks in china and russia as it pushed to cut off revenues for the nation's nuclear program. people are dead and several more in serious condition after a commuter train and route to milan derailed this morning in northern italy. climbed through the crushed sides of the cars trying to get to crashed -- trying to get to trapped passengers. the cause of the crash hasn't been determined. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ julie. you, mark.k coming up, investing in influence. how hedge funds are pushing for policies with millions of money and dark -- with millions of dollars and dark money. from new york, this is bloomberg. ♪
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♪ scarlet: this is"bloomberg markets." i'm scarlet fu. and i'm julie hyman. investing in influence. as hedge funds exploded in size they are using that influence in the washington beltway to help their portfolios. as republican senator bob corker said at a 2016 hearing, quote, "its been shocking to me to see the lengths hedge funds will go to to shape public policy in a manner that might reap huge benefits." behind these efforts is one consulting firm. --ning us now is blitzer pulitzer prize-winning bloomberg investigative reporter zach. zack, what is this firm and what have they been doing? is a public affairs consulting firm in washington,
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not super well known to other people in the country. but if you look at political campaigns that have been run in the past decade, where the product was actually to make a stock or bond increase in value, we were able to find six campaigns like that that were organized to make a stock or bond payoff. was behind all six of them and usually a hedge fund was a client and had a particular investment in a particular bond or stock and they used tci to create this campaign. all these people coming out of a woodworkrk -- at to advocate policies that would pay off. scarlet: the person behind this is james glassman, you actually under theually served george w. bush administration. so he has some credentials behind him. >> he has an incredible resume, publisher of "the new republic," a top american diplomat, he has
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done it all in d.c.. and it turns out at the same time he was doing a lot of these things he was working for a series of groups that were affiliated, essentially front groups for this consulting group , tci, and taking public positions where he was advocating for exactly what the hedge funds wanted at the same time the hedge funds were hiring tci. julie: the question of disclosure is a big part of it, right? are there any rules of someone comes before congress? don't they have to say who is paying them? >> sort of. case, for instance, it was never brought up. nobody asked him about it. he didn't bring it up. scarlet: he only has to tell you if you asked him the right question. a form you have to fill up called the truth in testimony. he didn't include any of that on their but none of the stuff we are talking about is really lawbreaking. these are gray areas.
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people are speaking out. they are exercising their first amendment rights to free speech but you have got to be skeptical sometimes because you don't know , if there no requirement for disclosure you don't know how money is changing hands behind the scenes without your knowledge. scarlet: how is this different from companies lobbying their positions to congressman? exactly the same thing. they lobby. scarlet: and we have disclosure data. would call itt astroturf because it is fake grass roots, finding allies to speak up on your behalf, sometimes paid. companies invented this. its been going on for decades. but hedge funds are newer entrant. they have only been doing this as far as we know for about 10 years. and if you think about it, a investedd isn't even in a policy for any longer than their stock or bond they own is. they might turn around and go short. so it raises it to kind of a new level of mercenary activity. asrlet: and you saw that
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well with some of what james glassman did. he will advocate for one position and later on he will change his mind because, presumably, the hedge fund that had hired him had a different outcome affiliated with that position. our "business week" story that he testified at a hearing that bankruptcy for puerto rico would be a great idea. less than a year later he writes an op ed where he says it would be a terrible idea. at the time he was testifying before congress, tci was working for a hedge fund that had an interest in something quite different, that he said would be terrible to go bankrupt. then when he turns around not too long after that, and dci comes at working for hedge funds that would be harmed in a bankruptcy. there any sign that this is going to be stopping, now that he is sort of out did in his article. is he still going to get called up to make these kind of comment? how much. sure
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14 years ago mr. glassman had a very similar story written about kind of shrugged and his career continued to skyrocket. so it may be that a lot of people don't care that much. scarlet: and that's why they call it the swamp. our thanks to pulitzer prize-winning reporter zach .ider you can read on president trump is selling his america first agenda to global leaders in. most while the debate continues at home over the role of immigrants in the u.s.. our chief washington correspondent kevin cirilli is standing by with a former member of the trump administration. talking with mark advisorormer senior vice president mike pence. let's start with bottles. president trump is going to talk about america first, does that mean going alone? all., not at
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it means if you are a business leader looking to invest your money, american is open for business again. we are no longer constrained by overregulation, over taxation. you guys are reporting a constantly. kevin: its very constant. >> its a great thing for the american economy so he's over there telling global leaders, if you went to expand your company and hire more workers do it in america. that's what presidents are supposed to do. kevin: in his state of the union address he will likely layout infrastructure plans and call on that kind of investment to pay for it. on the flipside of that the president is facing criticism from many global counterparts, particularly on the issue of international environmental agreements. i guess on the when hand he is saying, come and do business with the united states but you've got to be honest year, some of these global leaders don't like president trump. >> they got a make the best business deal for their companies and that's why to good business deal to be in america. and let's not forget, even without the global environmental
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trade agreements, the united states is led the world in reducing co2 emissions. we had't do it because to be her would you do american companies renovating and doing the right thing. we are great to see that kind of development. those of the kinds of messages these leaders need to understand . america is still the leader in technology, and innovation, and in hell. its a great place to invest. heaven: do you think the executive orders earlier this week on trade, particularly with -- withon machines washing machines and solar panels, up to a 50% tariff on those, is this the beginning of a policy from this administration or is this just a signal to china on what is to come? >> i think its warning shot. the president has been very clear that he believes in fair trade and free trade. and in many cases what we have seen is the existing trade deals are not fair to american workers, not fair to american
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companies that are looking to gain access to those very important global markets. so in this case i think the president is sending a strong signal, we will renegotiate, we will try to be good partner but we need to do it on fair and equal terms. and in this case he stood up for the american worker. shut down government february 8. will there be another one? >> i think that's in the hands of chuck schumer and the democrats. i don't think its a good idea to take pay away from the military for something we are already negotiating. at a: when you look government shutdown of makes washington look bad. i asked senator mike leigh this yesterday and what he told me is essentially, he is not too optimistic that there is not going to be another government shutdown because it is just cliff after clip. had we get away from these short-term extensions and provide some stability for folks? right.president had it we need to eliminate the filibuster in the senate as a
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relates to the budget and appropriations. the house did their job, they passed appropriations bills last year. the senate hasn't been able to move forward because you don't have 60 senators that will come forward to approve a budget. if we can do that with a majority we can make sure the budget is funded. he can make sure the government stays open and that policy debate is very real and important, and make sure they are done on policy levels not cliffhangers. kevin: one of those policy debates is daca, and what is going to happen around the march the march deadline. what is going to happen with daca? >> i think you will see congress come to an agreement. it is somewhere where republicans and democrats agree. the president wants border security and funding for a wall. he wants congress to deal with chain migration and the tery and heot wants to be compassionate to daca recipients and pry -- recipients and provide them with a legal path forward. kevin: there is the mueller
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probe going on and yesterday before taking up president trump suggested he was open to sitting down with bob mueller and his investigators. the president's attorney since then has said maybe that is not the case. do you think that president trump should sit down with bob mueller? is very important, the president said with his lawyers in agreement when he made his comments yesterday. kevin: he gave himself some wiggle room. the lawyersomething will work out. they have done it with previous president and one thing that is important here is that the white house has been very open and cooperative with the special counsel from the beginning. i have faith that the lawyers and president trump will find the right agreement where he can tell his side. it again, we are more than a year of this and there is no evidence of collusion whatsoever. i think the president is anxious to tell that story directly to the special counsel. gavin: -- kevin: marc lotter, thank you.
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thanks kevin cirilli, our chief washington correspondent. you can find all of our interviews on the bloomberg with the function tv . you can also find charts and if you missed it, not to worry its all here in front of you at the touch of a button. this is bloomberg. ♪
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♪ julie: -- scarlet: is time for the bloomberg business flash. walmart is cutting up to 500 itsorate jobs at headquarters this week. as part of the retail latest effort to streamline amid competition from amazon. walmart shuttered more than 60 sam's club warehouses earlier this month. american adding ceo to its board.
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airbnb has struggled with accusations that it is unwelcoming to african-american travelers. whenew year has seen hundred $64 billion of merger deals, the most since 2000. jpmorgan and deutsche bank expect the trend to continue as companies use chip funding for acquisition and to sell more shares to the public. they also expect ipo's to increase in 2018. and that is your business flash update. julie: it is time now for "options insight." today am joined by the chief options strategist at interactive brokers group must steve sosnick. the past few days we have had some bouncing around, good news for guys like you and people trying to play the options market. wherever we seeing the volume and options growing? its been following the news flow and i don't want to knock the fact that we have had
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back-and-forth movement for the first time, seemingly in weeks. that it is very news flow driven. we had the steve mnuchin comments and then we had wilbur ross throwing cold water on trade and then you had the market resuming its uptrend and then meandering a little bit. and then, the president saying something, more or less contradicting his treasury secretary. from a trading point of view that means there are trading opportunities and that means that finally your options, you are getting to watch a payoff for the first time in a while. julie: typically the markets bread and butter earnings are coming out even though the attention is on davos and the dollar comments. your potential trade today has to do with boeing, the big ,inner in the dow last year although it was a winner in the snp also. when you look at a stock like this that has performed for what -- that has performed so well going into earnings, how do you approach it? steve: the first impulse is, this thing is up so sharply,
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more like a rocket ship trajectory, pardon the pun for boeing. your first inclination is to pull back but that is very treacherous because there hasn't been a pullback. volatility is the market pricing and the right volatility for the options, versus whether the market is nervous. is there a neutral way to do it just in case the stock continues to surprise on the upside? julie: and if you look at our page on the bloomberg epically you see 3% movement in the stock following earnings but right now the options are pricing in more like a 5% move. wrench inrows another the works when you are trying to strategize. steve: exactly. from an option trader point of view your always try to sell high volatility and preferably hedge it with something that's a bit cheaper. there isn't an really any cheap volatility with boeing. what i proposed today that we take a look at was a strangle swap and the strikes are going to be fairly fluid because the
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stock moves for dollars or five dollars a clip as it has today. but basically, we would take one spread and $10 on either side around it. $337.50,,e stock was we would sell at $327.50. the strangle is when you are buying the put on the call. in this case we are basically selling the strangle that expires february 2, which is the closest to that boeing's earnings date, which is trading annualized55 volatility, and we would be heading that by buying the same strangle that expires week later, at 45 volatility, so you are try to capture about 10 volatility points. what it does is hedges you in the event that the stock has an outsized move in the short-term, so you don't want to be telling
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people to do something that has got unlimited risk. and then the second part, you kind of at that point of a very cheap option in case something happens to boeing the following week. julie: thanks so much. the earnings, by the way, come at january 31. steve stivers net -- steve sosnick, thanks. coming up, we break down the chip makers number and when they come out, and look at some major vulnerabilities. starbucks, also voting -- also reporting as well. we will get you those numbers. this is bloomberg. ♪
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♪ mark crumpton with "first word news." the u.s. will cut off funding with palestinians unless they resume peace talks. president trump made the threat during a meeting today with
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israeli prime minister benjamin netanyahu in davos. -- mr. trump said palestinian leaders disrespected the united states are refusing to meet with vice president mike pence during his trip last weekend. the state department says it will withhold $45 million in aid to palestinian refugees this month. the iraqi prime minister says the iran nuclear agreement should remain in place. he made his a comments during -- comments during an interview in davos. >> its harmful for a. its harmful for the region. it means there will be some conflict, some friction somewhere. and iraq will not be immune from that so i think we need to work very hard to keep things together and this is beyond us, the nuclear agreement is outside of us. the prime minister said the stoking of tensions could open cracks in the r


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