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tv   Bloomberg Markets Americas  Bloomberg  January 31, 2018 12:00pm-12:31pm EST

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names of those on board the train have not been released. the european union is urging the united states to not work alone on any effort to make peace between israel and the palestinians. chief foreign policy warned that doing so what and in failure -- would end in failure. andhey must be multilateral in all all partners essential to the process. a process without one or the other would not work. it would not be realistic here >> her comments at an emergency meeting at an international committee for palestinian development aid and efforts. government ministers and a u.s. senior official attended detox. the trump administration director of the cdc has quit over stock scandal.
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she bought shares in japan tobacco after she was appointed, the cdc has a goal of reducing tobacco use. says it is -- fema not cutting up food and water supplies to puerto rico despite reports it intended to do so. a spokesperson tells the associated press that they had been evaluating whether enough stores and supermarkets had ending the justify supplies. fema will continue to distribute aid for the foreseeable future. global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. vonnie: it is noon in new york and 5:00 p.m. in london. i am vonnie quinn. shery: i am shery ahn.
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welcome to bloomberg markets. ♪ shery: from bloomberg world headquarters in new york, here are the top stories. television,st watch did president trump strike the right chord in his first state of the union address. we will break down the speech. janet yellen prepares to step aside as she hands the baton to jay powell, what to expect from her final meeting at the helm of the central bank. for tech earnings with facebook kicking things off later today. we will discuss what investors are watching. vonnie: all that straight to come. julie hyman is with us halfway into the trading day. after the bloodbath yesterday, may be an overstatement, how were earnings? >> relative basis, it was a
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bloodbath because of tepid action over the past year. the rebound today is becoming ever more tepid. fellh care stocks, which sharply yesterday on the news that amazon, jpmorgan, and berkshire hathaway were teaming up on a health insurance venture for their employees are the weakest group again today even though some health insurers are bouncing. aat is why the s&p is only of 10th of 1% while the dow is outperforming. the nasdaq up a 10th of 1%. this is a amid strong optimism on the part of consumers in the united states. excuse me. this is consumer confidence, the reading of optimism that stocks will rise over the next 12 months. this is a record high. thatf the market measures some analysts are saying is overstretched. getting back to earnings, number
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from electronic arts helping its peers. ea raising its fiscal 2018 forecast, relying more on the digital side of business and not the physical games. but subscriptions to mobile games. it is up. are watching a for jessica biel -- a potential deal. who ownsity realtors commercial and residential properties spiking after bloomberg reported that canada's largest alternative asset manager was in talks to acquire forrest city. it is not clear it will result in a deal. for now, it is resulting in a rise to the stock price. let's get to the chart i teased. .his is the yield curve we talked about the 10 year
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yield going ever higher, at its highest in nearly four years. we still have seen this flattening of the yield curve. flattest quite at the it has been this year. nonetheless, it flattens and is near the flattest sense 2007. something to watch. as we see a lackluster stock recovery. vonnie: thank you. president trump delivered his first state of the union last night. he made an effort to tie america's economic prosperity to his presidency. trump: this is our new american moment, there has never been a better time to start living the american dream. to every citizen watching at home tonight, no matter where you have been or where you have come from, this is your time. if you work hard, if you believe in your self, if you believe in
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america, you can dream anything, you can be anything, and together we can achieve absolutely anything. [applause] vonnie: let's bring in our washington correspondent from our d.c. bureau. on theughts with those train accident site, no injuries , no bad injuries as far as we know here -- as far as we know. was the state of the union's a speech that could bring both sides together? >> if you look at the theme at the capital, you had republicans very happy, standing up and applauding, democrats not very happy to see what the president was saying. while the president had a more laid-back tone, not as devices
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-- divisive as he normally is, he did not reach out to democrats to hold onto an olive branch. both sides are in the corners and getting ready for battle in the midterm. i do not expect much to get done between them, on infrastructure and immigrants, the president's -- congress -- the democrats are not onboard with what the president wants to do. yesterday in the chamber, most of them set down and did not clap when he set out proposals. it does not appear the president and democrats are looking towards working together in the months ahead. shery: the president highlighted america's new villains, the drug and health care industries and their high prices. >> he took on, something we have howd him do, talking about the drug industry and the high prices of prescription drugs is
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something he wants to take on. we have not seen much action or policy put forward. it could be bipartisan, democrats have also complained about drug prices being too high. we have not seen the president put forth specific policies to try to crack down on the drug industry. republicans in general liking and supporting the free market are weary when it comes to cracking down on a specific industry. he does not have the republicans on his side on that front and has not laid out a policy democrats can get behind. it is just rhetoric. the president voicing his concern about drug prices but not putting forward a policy. vonnie: do you know if you president has been notified of the accident? >> the president was having his daily intelligence briefing at the time and was briefed and is aware of what is going on at the train site. he said -- he was free that members of congress on the train are in good shape. only minor injuries.
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there may be more significant injuries for the people driving the truck that was struck by the train. the president is aware members of congress for the most part, including paul ryan, r.o.k. -- are ok. shery: thank you. let's continue the conversation on the first state of the union with andrew laperriere, head of u.s. policy research at cornerstone. he joins us from our washington bureau. clearly ignored during the state of union was the soaring budget deficit. is president trump not addressing it? >> he did not mention it. he did not talk about it much during the campaign. the pros a bigger tax cut that congress enacted. bigger tax cuta that congress enacted. not a big surprise he did not
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talk about it but a notable absence, given the fiscal policy outlook. it should not come as a surprise he did not talk about it. vonnie: he got tax reform done and deregulation done to some extent. people will say he will get infrastructure done but will the? a complicated procedure. >> it on infrastructure bill will become law, it will have to get support of some democrats and i am skeptical that can pull that off. the president does not have a way to pay for it, increase spending he will propose, whenever the plan comes out, presumably in the next few weeks, that is the biggest hang up. ,e will propose spending cuts but that is not a viable option because democrats will not supported. agreeing on a pay for for the additional spending will be a major problem. i do not see how they will come
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to a solution. it is possible, but the best case i think is they will not agree on a major infrastructure package this year. shery: the president proposing to crack down on what he considers unfair trade. listen to what he said. pres. trump: america has finally turned the page of decades of unfair trade deals. they sacrificed our prosperity and shipped away our companies, our jobs, and our wealth. our nation has lost its wealth. but we are getting it back so fast. the era of economic surrender is totally over. from now on, we expect trading relationships to be fair and very importantly, reciprocal. shery: what best case scenarios are you breaking into your forecast when it comes to nafta and the korea-u.s. the it --? >> that was like bill clinton's
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line like the era of big government is over. that was something he talked about in the campaign and is a big priority. in my opinion, this is not mainly political for the president, he really believes that china is hollowing out the american economy and i expect him to be aggressive on trade, particularly as it results to china. maybe not so much on nafta here the korean agreement is up in the air. vonnie: if we do not get an infrastructure deal or the outlines of one, will that be what turns this market? >> if we do not get an infrastructure deal? i do not think so. that would be positive for the equity markets but it is a pretty small issue, relative to how important the tax cut has been. tax reform, in particular. as well as the regulatory reforms. aose are the big drivers in
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sense policy has played a role in the markets, i think it has a lot in the last year. infrastructure is less important. the biggest change in the outlook if you think about this biggestade presents the risk and i see more downside risk in terms of policy development this year, whereas last year we sat outside from the tax and regulatory changes. vonnie: we have to leave it there. andrew laperriere at cornerstone macro. the fomc decision today, the last meeting that janet yellen is provided over -- presiding over. this is bloomberg. ♪
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shery: this is labor markets.
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i am -- bloomberg markets. i am shery ahn. vonnie: i am vonnie quinn. turns to theay language of the statement, will it be more hawkish than the one in december? how will janet yellen leave her mark on her last fomc meeting? michael mckee is back from montréal to answer the questions. does it become a more hawkish fed? >> it does, you have three new voters, but not at this meeting. there is no reason for them to raise rates and it would be difficult to make the case given inflation figures have not moved. they do track inflation expectations, so you may get a change in the statement, because the consumer-based side has stayed steady but the market based site has picked up here and -- picked up. the idea that the inflation rate is stable, they may be able to
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tweak that a little bit. a chart showing you what is happening with inflation and the unemployment rate. i have to wonder if we will shift into -- they will shift the tone given the tax cuts we got and how that could spur price growth. >> that is a wait and see issue. we do not know how much stimulus we will get out of it. economists think maybe 310 of the gdp over the year but it depends on how quickly that hits. not right now because they have not started lowering withholding. your paycheck is not bigger yet. with janet yellen leaving and jay powell taking over next week , they probably want to leave him with as much flexibility as possible. they do not want the markets to come out of the meeting and saying he has to raise rates, even though they are ready there in terms of futures trading, they do not want a binding
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thing. vonnie: he does not have a vice chair, is that a handicap? janet yellen does not have either, maybe some in the us since he is not an economist and an investment banker. he knows the drill. , manyd bank presidents are distinguished economists, including john williams, the san francisco fed who is a potential candidate for vice chair. shery: the outlook for the economy? because of no survey this time, next time we will get an update of economic projections in march which will be interesting to watch, because by that time, maybe a little bit of the tax-cut starting to hit. and more time for higher commodity prices and oil prices have gone up. and labor markets keep getting tighter, we will see the employment rate on friday and if they keep dropping, it will convince them things will get tighter faster. maybe they tweak the number of
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fate -- fed rate increases they expect for the year. vonnie: we may see some dissenters. will it be similar types of descent? >> i am thinking that this time because neel kashkari is not a voter. and it is janet yellen's last meeting, why send her out with negative waves? because there is no dispute about what will happen at this meeting, it may seem to be pretty much on board with what their policy is. the economy changes direction. i do not think you will see a dissent. vonnie: our international economics and policy corresponded michael mckee. stay with bloomberg for full coverage of the fed decision at 2:00 p.m. new york time at 7:00 p.m. london time. breaking news, the republican trey gowdy from south carolina says he will not be seeking reelection, the house oversight committee chairman will not seek
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reelection. he says i will not be following for congress or nor seek any other political office and instead return to the justice system. another person not seeking reelection -- trey gowdy, south carolina. shery: facebook reports its fourth-quarter earnings after the bell, the key things you should watch coming up next. this is bloomberg. ♪
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♪ vonnie: this is bloomberg markets, i am vonnie quinn. shery: facebook is set to report before quarter earnings today after the bell, the first earnings report since the social media giant announced major -- amidto news feed and mounting criticism over its influence on users while being that in political elections, a risky move as that is the most prominent product they offer.
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joining us is our technology reporter. what do we expect from the company? ,> and terms of the numbers they are expected to have another strong quarter with record revenue. analysts are not concerned about that. what we will be listening for, we want to hear what these changes to the newsfeed will mean to engagement for growth, for their measurements of itself. mark zuckerberg talked about things like optimizing the newsfeed for time well spent, for meaningful interactions. what does he mean by that and how will facebook measure it? vonnie: since the last earnings report, a lot of negative things said about facebook. davos, billionaires pounded facebook. how will they react to those negative headlines? >> and third-quarter earnings, mark zuckerberg is not afraid to say facebook messed up.
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he spent the last earnings call useogizing for the russian of facebook to manipulate users around the u.s. presidential election. this quarter, i think he will try to bring a more positive these new see changes and try to make facebook a more positive thing for society. ,n the last couple of months they have said that social media may not be good for democracy and may not be get four people's mental health. that's good for people's mental health. when it comes to other businesses, instagram, it will help their bottom line. they are expected to have strong earnings. >> absolutely, the company has so much room for growth. they dominate the mobile advertising market with google and instrument is a huge part of that. as he grows in popularity, they
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get closer to one billion users around the world. that moneymaking opportunity is growing. i have seen a lot of advertisements on my instagram lately. on facebook, there is so much made on mobile phones as they get into new markets around the world. especially on video advertisements. video is becoming more popular on facebook and the ads can be lucrative for the company. vonnie: our technology reporter, thank you for joining us. we want to break some news, there was a fatality at the crash site. the president has been briefed on the situation in virginia, gop lawmakers were on their way retreat.rier for a they would get together to discuss policy and strategy for the rest of the year. ,ne confirmed fatality
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according to the white house press secretary weird and one serious injury. there is a statement from the white house, the president has been fully briefed on the situation and is receiving updates. senior administration officials in contact with amtrak and state and local authorities. we do not know who the fatality was but we know there is one. coming up, bloomberg etf iq, the first show on etf and features industry data and analysis. that is coming up at 12:30 new york time. this is bloomberg. ♪
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scarlet: this is "bloomberg etf iq". ♪ doing good but not getting much love in return. -- soors urging companies why are flows backing up the rhetoric. at thet help but look next downturn and ask how much money will be in mutual funds today if it weren't for all those unrealized gains.


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