tv Bloomberg Markets Americas Bloomberg July 13, 2018 1:30pm-3:30pm EDT
for hacking offenses. the indictments are part of the ongoing special counsel pro into potential coordination between the trump presidential campaign and russia. the russians are accused of hacking into the computer networks of the democratic national committee and the presidential campaign of democratic nominee hillary clinton. >> the defendant work for two units of the main intelligence directorate of the russian general staff known as the gru. the units engage in active cyber operations to interfere in the 2016 presidential election. before today, 20 people and three companies have been charged in the investigation. rosenstein says he briefed president trump earlier this week about the indictments. islamic state has claimed responsibility for a suicide attack on an election rally in southwestern pakistan. the bombing killed at least 70 people and wounded more than 100
. officials say a politician running for a seat and a provincial parliament is among the dead. it was the second bombing of a political rally in pakistan today after an earlier attack elsewhere in the country killing at least four people. algeria is reportedly ending his practice of expelling unwanted migrants into the sahara desert. an associated press report says the north african country has forced more than 13,000 people from sub-saharan countries to try and reach neighboring regions by foot after dropping them off in buses. vwo top security officials in algeria have been fired after widespread condemnation of the expulsions. queen elizabeth has welcomed president and mrs. trump to windsor castle. the trump's and the queen were scheduled to spend 30 minutes getting acquainted over tea inside the castle. earlier during a joint press conference with prime minister theresa may, the president backtracked on the criticism
that he made at a news conference interview released as he began his visit to the country. global news 24 hours a day, on-air, and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. >> live from bloomberg world headquarters in new york, i'm shery ahn. live in toronto, i am jon erlichman. we are now joined by our bloomberg and vietnam bloomberg audiences. shery: here are top stories from around the world. 12 russian officials have been in dotted with campaign hacking we have the latest in the ongoing special counsel investigation. banking on earnings. jpmorgan kicks off bank result
with a strong report. citigroup and wells fargo show mixed performance. we will discuss. i'm sorry. president trump apologizes to theresa may and says he did not criticize her to a british you taper over her handling of exit. . the justice department has announced 12 indictments in special counsel robert mueller's investigation into russian meddling in a 2016 election. well russian intelligence agents have been accused of efforts to have democrats emails and computer networks pacific retargeting hillary clinton's presidential campaign. the democratic national committee and the democratic congressional campaign committee. the move comes days before president trump is set to meet with russian president vladimir putin. joining us now is former -- thank you for your
time. we heard from deputy the title -- attorney general rosenstein that they do reserve judgment, however, the timing of this announcement is pretty jesting. said there was no intentionality to the timing, that it was just when the case was done. i think it is important to note that rosenstein said they had briefed the president on this. a couple days before his meeting with putin. if i had to guess, his train of thought is you cannot have a president going to meet with the leader of a foreign adversary without knowing this information. clearly, trump has been in denial. he denied the russians had anything to do with the hacking. not so. any president needs to be equipped with full information before he goes into a high-stakes meeting. mr. rosenstein emphasizing there was no evidence americans had knowingly tried to help russians.
this was quite interesting because we have about 30 indictments in mr. mueller's investigation, yet the connection between russians and also the campaign still has not been made. so what is next? >> those connections could be made, if you look at the indictment. there are several unnamed actors, and unnamed american company, and unnamed american individual who the indictment theresays was connected to the p campaign, interacting with these russian actors. there could be more shoes to drop. keep in mind you have connections on the other arm a russian interference, which is the attempt by russian agents to provide or sell information on hillary clinton george papadopoulos, michael flynn, others in the trunk campaign. ife we don't have it yet but you read between the lines of the indictment, that could be coming. jon: a lot of specifics around may have beenns
moving information, payments, cryptocurrency. is it fair to say that at the least we have learned new ways by which potentially there was interference here? >> it is really alarming when you look at the indictment. forget about republican, democrat. as an american citizen how vulnerable our electronic communications are. you read about some of the sophisticated ways the russians not only hacked into presumably very secure systems at the dnc, clinton campaign, but also managed to hide their tracks and how difficult it was to track them down. you can read about some of the sophisticated techniques they use, like this idea of spearfishing. some of us have experienced attempts, where you get an email saying you need to reset your password, but you notice one letter is off, or the punctuation is not right. it is hard to tell that. it is alarming when you see what the russians were able to do. shery: it is very scary but mr.
rosenstein made the point to say thatthis is not evidence they swayed election results in 2016. when we look at the mueller investigation right now, everything that has come out, the fact that president trump has yet to be interviewed, where do we think we are, toward the end, the middle, the beginning? >> my best guess, having done complex investigations is we are not extremely close to the end. a lot of things still need to be done. there needs to be some interview or subpoena of the president. if they don't work out terms of an interview, i would guess that goes to a subpoena. the president has indicated through giuliani that they will claim executive routledge. that will probably have to go to the supreme court. there might be cooperation forthcoming from michael cohen. strongave been
indications of that. that takes time for the prosecutors to brief michael cohen, get everything he knows, and turn it into a charge if appropriate. i don't think we are near the end. shery: thank you so much. i love coming up -- i love coming up. -- a lot coming up. jon: turning to u.s. bank earnings, the first round of banks reporting this morning. joining us to break down what we have seen so far is chris kotowski. he joins us from his firm's office in new york. chris, is there an overall take away from these results? chris: i think the numbers were absolutely fine. what we have is slow but steady kind of loan growth in the economy. fargo to the side for a second. the other three bags on average had 4% year on your loan growth. which is in line with gdp. with the rising interest rates
come you get a little bit more of a lift to the revenues. that income interest was up about 7%. expenses are up only in the low single digits. the pre-provision earnings and taxes are up 10%, 11%. you have all of this excess u are generating so you are buying back stock to the tune of 5%, 6%. double-digitg in earnings growth here and stocks are trading at nearly single digit multiples. i think it's very compelling. jon: i heard you before talk about the banks, boring is beautiful in a world where everyone is talking about highflying technology stocks. at this stage, given where we are in a rate hiking cycle, tax reform, would we be in a position where we could have expected strong performance? chris: i think it is pretty darn strong. you have to recognize, baking is a mature business, it will not grow faster than nominal gdp.
that is why these are relatively low multiples. to that is fine, you have recognize that deserve some discount to the market that overall. however, there is a near panic attitude on a lot of the analysts that i hear on these earnings calls about the yield curve flattening. it doesn't really matter that much. that is this rule of thumb people who have not done the numbers have about how a flattening yield curve is really bad for the banks, when in fact, the last two years, the yield curve has nothing but flattened out, but their net interest margins have kept going up. the other current bugaboo that analysts have is, we have these rising deposit betas. we have to pass more along to our customers. almost a quarter of the banks earning assets are funded by zero cost liabilities, meaning by checking deposits, by float,
their own equity. the banks get a benefit from any rate hike just about, up until it turns credit negative. it might be that you are not getting as much of a bump from this rate hike as you got from the first one but you will keep getting benefits. when i listen to the question that a lot of these analysts ask on these earnings calls, they seem to me like analysts have only been through one cycle. shery: i was going to bring up the flattening yield curve. tv on the bloomberg library, you can see the 5/30, 2/10 spread, and we see the flattening yield curve. others have and said, there can still be a healthy environment. what are you paying attention to then? to understande rates are still freakishly low. the banks and business model was
built to live in a model of short-term interest rates between 3% and 5%. that is where it has been most of the last 60 years. that is the way the basic construct works. you give us the checking deposit, we lend out to primaries. it was all artificially compressed by when rates were that low. the fact that they have normalized a little bit helps. the fact that they will keep normalizing helps more. for banks, the worry signs are always if you see credit move. i don't see that. we are through eight or nine years of this fed stress test now. you didn't have that in prior cycles. jon: we have to leave it there. always good to get your perspective. always a colorful conversation with chris kotowski.
shery: this is bloomberg markets. i'm shery ahn. jon: i'm jon erlichman. when it comes to some of the news overseas today, u.k. prime minister theresa may was not the only person president trump criticized in his interview with the british newspaper "the sun." he also had some harsh words for the london mayor city time, saying he was doing a terrible job preventing terrorism and crime. trump singled me
out, in the tweets that he sends come in interviews that he gives. it is quite clear that here in london we love americans. americans contribute hugely to our city economically, socially, culturally. americans here in london, calling themselves londoners for joining in the protest today. we will see many of them protesting against president trump, the policies he has. it is not an anti-american march today. i cannot explain what goes to president trump's mine or what he picks on me. >> you have also been attacks in other parts of the britain and europe. you think racism is something that motivates him? >> president trump can why he says what he does. thetimes he can normalize attitudes that far right groups hold. for example, he retreated tweets from britain first who had been
banned from facebook, the leader banned from twitter. senior members of that party are in prison. it is up to him to ask what goes through his mind when he does these things. one of the great things about the u.s. and the u.k. is pluralism. you can disagree about certain things but in a respectful and courteous manner. i really enjoy the fact that here in london you can be a different religion, different ethnicity, and not just it on but embrace each other. >> the u.s. embassy warned americans ahead of the interview to keep a low profile. is that sensible advice? seen no evidence that americans should be worried about the response from londoners. yesterday morning i was addressing a conference of people including a leading american company. one of their old coverages is happening here in london. i meet americans on a daily bases that live in our city. some of them will be the protest today.
thank you for all you do for our city as americans, the controversial that you make. there is no reason to be alarmed about today or tomorrow. what is important about the protests today is that they are peaceful, and i'm sure they will be. supportersbrexit gain another ally, president, warning the u.k. prime minister that a soft brexit may affect any future trade deal with the u.s. in an interview with the sun last night, he said that. this morning in a press conference, he walked back that ultimatum. >> i don't know what they will do but whatever you do is ok with me. it's your decision. whatever you do is ok with us. just make sure we can trade together, that's all that matters. shery: joining us now is nik nanos. welcome to the program. president trump also saying that brexit happened because of immigration and also that he got elected because of immigration. how true is this? is apartly true but there
significant amount of economic anxiety out there among many citizens in major industrialized countries. the cost of living is going up, wages are going down, and people are getting squeezed. then they see immigrants, migrants, refugees, and they conflate those two things him and they feel threatened. it doesn't take a lot of voters who are anxious or concerned in order to influence democratic outcomes. why don't we say president trump is half correct. [laughter] jon: the president seems to be reminiscing today, a couple club,ago he was at a golf his glove in scotland, right as brexit was unfolding. sawt of people at the time that situation unfolding as political capital for him, looking forward to couple years. nik: i think it was. the irony behind all of this is
right after president trump was elected, among his first visitors, nigel farage, the onetime leader of the u.k. independence party, a main brexiteer campaigner, and read le pen from prints -- marine le pen from france. donald trump saw a lot of things happening in the u.k. in the six years leading up to the brexit vote. the cost of living had gone up 22% and real wages have gone down 10%. this speaks to the economic squeeze that many people in the u.k. had. he converted that to the u.s. in terms of anxiety about wages come economic prosperity, where jobs are coming from, and he mixed it all up, that economic anxiety, immigration, targeting globalization in order to activate the trump nation which helped to him into the presidency. jon: when we look at the data, you look at a lot of polling data. on that word immigration, it came up today, the president
suggesting it in a negative light. what are some of the key identifiers when it comes to the data around the subject of immigration? nik: the interesting thing is in polling in the u.s., canada, italy, the u.k., when they test on immigration, people always think it is worse or more than it actually is. it is a bit of a phobia. the reality is, yes, there are immigrants, there are refugees, but when you're asked citizens in each of these countries how many there are, they always estimate there are more. this speaks to the psychological threat. one of the things that has to happen is just a reality check in terms of what is actually happening in a lot of these countries so people can feel more comfortable. but they are playing on fear, anxiety. of politicianind taps into that, they have those citizens attention. shery: midterm elections are
coming up in november. in this environment, in an environment of anti-establishment politics, what does the left have to contend with? nik: what they have to do is basically say, we understand that for some americans there is a problem, that you have been left behind by globalization. what can we do to help you? they have to tap into their own kind of anti-establishment to say, the economy has not served you. that is basically what they have to do. ideological, it will play two donald trump. if he faces a similar type of candidate than he did like hillary clinton, i would expect there could be a similar outcome. what democrats have to do is reconnect with average americans . when you look at a lot of the exit polling in the last u.s. presidential election, one of the things that put donald trump over the top was a pickup among republicans among americans who
jon: this is bloomberg markets. i'm jon erlichman in toronto. shery: i'm shery ahn in new york. a very expensive city to live in. i always thought rent and housing was so expensive in new york but i understand there is another study of home prices and earnings across 100 major u.s. and canadian metropolitan is. vancouver is the worst. what is going on? jon: bloomberg put together some interesting data based on all of this. the reality is, the third-largest city in canada now requires more than 10 years of
annual income before on average you can afford a home share. it is pretty remarkable to see. that is more money than you would need to take home every a cityd building up than like san francisco. shery: so no point in moving to vancouver. what are some of the factors pushing up prices? it's amazing because we are also looking at the chart of average incomes. in a city like vancouver, are much more comparable to a city like kansas city. a lot of it has to do with foreign ownership that also some speculation with low interest rates. shery: everywhere else in the world as where -- as well. this is bloomberg. ♪ retail.
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scarlet: we are live and 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. wall street report. jpmorgan, citigroup, and wells fargo kick off the bank earnings parade. review with sandra o'neill. and the mueller investigation in dice 12 russian intelligence days before hacking a crucial summit in helsinki. and the meeting with senior u.s. officials live in mexico city. we have u.s. market closing in two hours time. abigail doolittle is keeping an eye on everything. abigail: we have a mixed bag at this point. ade financials earlier h
been a big drag, but the s&p in the dow now are modestly higher. the tech heavy nasdaq is down a little bit. we will take a look at the chart in a moment, but on the week, ace forverages on p the second week of in a row. a small bit for haven bonds is supporting the mixed picture we are seeing for stocks. not a huge move up for stocks, and for the commodity complexes, although we have gains on the week for stocks, it has been a topsy-turvy week. the same thing for the commodity index at this point, down about 1/10 of 1%. oneis a nice recovery, up .17% -- 1.17%. fractionally, about flat, and gold down 1/10 of 1%. this is all having an influence on some of the big movers for the s&p 500. if we look at the big winners and the loser on this and the --
the s&p 500, we will see devon energy, one of the top performers for the index on that move up in oil. copper is downak 1.6% 3.6%. -- 3.6%. it now has a 49% stake in a mine in indonesia. over the long term, many of us think that will be a good thing, but now we have copper trading lower on that news. as for gold, various things happening here. at theook longer-term chart of gold, this goes all the way back to 2012, and golds nominal high above $1900 per ounce. a big crash and a downtrend here, but this has form support for where we have moved above it. most recently, we have actually started to move below the one-year uptrend. we are backing down to another level of support. this chart just suggests that
gold is going to drop back down toward the higher level of 12 --t in blue, below $1200 brown's. and -- brown's. and as for the nasdaq, cisco systems, look at this nosedive, coming off of the lows slightly but down 4.6 percent. this on the news, a report from the information that amazon web services, aws unit might consider selling its own networking switches for business customers. they are citing two people familiar with the model -- matter, taking a chunk out of cisco today and offering some serious competition if it happens. atie: and cisco is trading its lowest since about april. thank you, abigail. let's get the first word news now with mark hampton. mark? deputy attorney general rod rosenstein today announced indictments against 12 russian intelligence officers.
with hackingged into democratic email accounts during the 2016 u.s. presidential election and released stolen information in the months before americans headed to the polls. u.s. intelligence agencies have said the interference was aimed at helping the trump campaign, but the indictment do not allege that any vote tallies were altered by hacking. the kremlin is telling reporters in moscow that russian president vladimir putin is prepared to discuss "all key issues" in his with president trump. the meeting in helsinki is said to have no time limits, with the two leaders scheduled to speak alone before being joined by their respective delegations. a senior advisor to iran's supreme leader says iran will militaryquish its presence in syria. the statement comes on the heels of the meeting with president putin this week. iran says it will not bend as a result of pressure from the
united states or israel, and that the u.s. wants to drive a ehran andween t moscow. mike pompeo is in mexico, where he is repairing to hold a meeting with the incoming president and his team. topics are to include nafta, security, and regional development. he is also scheduled to meet with members of outgoing president henrique pena nieto for the administration. we will go to mexico in a moment for more on this story. global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julie? julie: thank you, mark. as mark mentioned, special counsel robert mueller has indicted 12 russian intelligence officers for hacking the 2016 u.s. presidential election. deputy attorney general rod rosenstein announced the
indictments at a press conference today. two units of the main intelligence directorate of the russian general staff known as the gru. the units engaged in active cyber operations to interfere with the 2016 presidential election. and this announcements comes three days before president donald trump and russian president vladimir putin meet, setting the stage for a very high-stakes summit in helsinki. joining us over the phone with more is a former federal prosecutor, jeffrey kramer. thank you for joining us here. so talk to us about how an investigation like this might work and what evidence would be necessary to bring these kind of indictments? jeffery: sure. it is not surprising, but we have seen it before, that special counsel mueller is using all the tools at his disposal in the fbi, specifically the cyber group. the indictment is very specific about how the gru went about not
only hacking to get the clinton emailed and the dnc, but then distributed them very conservatively. like we saw in the manafort indictment, mr. mueller seems to his got --. it -- dotted t's.nd crossed his on july 26, russia, and hope you're listening, i have you are able to final the 36,000 needles that are missing. this shows russian operatives targeted hillary rodham clintons the for the first time on or around july 26. how meaningful is that? jeffery: you could say it is a coincidence, but there is no such thing as coincidence in these things. you would hope not to be too conspiratorial to say that mr. trump's campaign was sending a direct message to russian said they responded in a few hours,
but he wanted the 30000 and the russian operatives thought they would give it a crack, literally, to try to find the 30000 and disseminate some of the emails. interesting, and the deputy attorney general noted this in his release, that there is no allegation for any vote tallies being affected. that makes sense. operation wasis not necessarily to change a vote from clinton to trump, it was to influence. so it is impossible to determine who might have been influenced by this information being disseminated. scarlet: as far as we know, none of the defendants in this indictment are american or directly connected to the trump campaign. so what happened to these 12 individuals who are charged? it is not like they will be prosecuted, is it? isfery: their travel certainly limited. it is a to say they will not be leaving the confines of the russian borders anytime soon. fly and landto
in heathrow, they would be tripped up, so their money and travel will be limited. but it is akin to what we saw in the other indictment that mr. mueller dropped with respect to the russians. it is not like we will see them walk into a courtroom anytime soon. but nevertheless, it is important and actually crucial that these indictments be thatht, lest anyone think mr. mueller is not doing what he is supposed to be doing, whether the american public listens to it or not, that is up to them. but there can be no question, regardless of who you voted for in the lack selection, -- last election, one and one makes two. it is very clear that the russians were trying to influence this election on behalf of the president. scarlet: and we can question the timing of the indictment being brought. isn't it at mr. mueller and mr. for thein's discretions
timing? don't they have some latitude here? one would think it being a few days before president trump is set to meet with vladimir putin that it is not an accident. jeffery: yeah, you have to smile at that. that is certainly a little something too. could it have been brought three days ago? sure. could it have been brought next week? absolutely. but it was reported that the president knew about this last week, so you had a heads up from the deputy attorney general. again, not a coincidence that the president is about to meet with the russian leader, and that is appropriate. the topic has to be brought up. i do not care who the president is. the topic needs to be brought up. if the indictment was to be released next week, you would miss the opportunity to have a face with putin and confront him , if the president is going to do that. julie: he mentioned before the news came out today oh, even if i said something to him, what would he say? yeah, we did it? rosenstein was also careful to
say that no americans knowingly dissipated in that. going to bar the possibility that some point the investigation will find folks who perhaps colluded or somehow participated in this whole process? jeffery: no, it does not preclude that. that is the prosecutors' standa wordne, but the operative there is knowingly. americans certainly did retweet and like, whatever it might have been, from those two russians that disseminated the information under fictitious names. so while jim smith in montana might not have knowingly said something to his friend from a russian operative, chances are he did, just as the other indictment that was brought revealed that americans, unbeknownst to them, were attending rallies paid for by the russians. so americans did not knowingly do this. but we were dupes. scarlet: jeffrey kramer, well
said. giving usso much for your perspective, the incident analysis there on the charges against 12 russian intelligence officers. coming up, bank earnings begin and we breakdown results from some of the major players with jeff part of sandra oh neil. citigroup, and wells fargo coming out with second-quarter numbers. from new york, this is bloomberg. ♪ from new york, this is bloomberg. ♪
is this something you would expect to see across the board with these big banks? citigroup has showed it to. interest rates are still providing some tailwind. as we look forward, and one of the things people are really focused on in the quarter is are worldng to see the loan the side of asset things get a response. mixed messages so far, but the preliminary indications are we are starting to see signs of things like c and i lending picking up and that gives us hope. so on the interest rate front, the results we got today were good and the outlook -- nobody changed their outlooks. the outlooks were at least restated if not improved. julie: explain to us how these banks appeared to benefit from rising interest rates without being hurt by the flattening yield curve? unfortunately -- or fortunately, for analysts, i pretty- this is a complicated topic. people like to look at the
two-year-10 year yield and go with that, but there are fixed rates, variable rates, but a couple of things helped the banks here. be positioned to more to the shorter end of the curve. so with the fed hiking rates, that is more of a benefit in the long and coming down -- long end coming down a little bit. but from the duration standpoint, they maybe get closer to funding six-month and lending five-year, and the spread there has held a little bit better than the two-year-10-year people keep looking at. but what has helped us so far is the way there too straight -- the way their interest rate exposure has been set up, and that is the way the fed has been hiking. scarlet: looking ahead, if you believe we are in the late stage of the economic cycle, the credit cycle, where can you still find growth on the bank side in terms of loans? where can you find the stickiest growth? jeff: i would not agree with that. i do not think we are in the tail end. this has been a long recovery, but the pace of the recovery has been very slow. if you look at the aggregate
economic growth of this recovery, even though it has lasted a long time, it has been pretty anemic. i think there is a lot more to come, and specifically i am looking at sea and i loan growth toinset -- cni loan growth accelerate. i think that's one of the areas that will help drive things over the next year-and-a-half. julie: i want to ask you about something in citigroup in particular. is that the most vulnerable company when it comes to some of the trade tensions and potential trade wars? did talk about some weakness in its international business last order, and is this the most internationally exposed here? it is. it is a double-edged sword. given the fact that especially in the emerging market, there is a lot more economic growth there. u.s. remains healthy and the u.s. were markets in the rest of the world slowdown, that is a big deal to citigroup. it is not as materially
different us some of the other big banks, in where citigroup tends to focus on consumers with a higher net worth. on the commercial side, they cover the developing -- developed and emerging markets. i think if we are getting a slowdown, it is a matter of is this shifting and they can -- business shifting and they can benefit from that. the trade war, we will see what becomes of that. it is a bigger deal for sydney, but -- citi, but a manageable deal. julie: coming up later on what you miss, we have an interview with the wells fargo ceo. we talk about the banks results, which is sending the shares down in today's session. from new york, this is bloomberg. ♪
we sat down with paul mcauley, to discuss the economy and the fed. it is hard to argue with the truth. it is that a good place when you look at the traditional metrics, whether it is 3-d pre--- gdp growth, inflation closing the in a goode economy is place from a cyclical perspective. where i might push back on that -- and this is my hobby horse, as you know, is that i think income inequality is a big black but that iseconomy, a more structural phenomenon as opposed to a cyclical phenomena. the pointe made that it comes out of monetary policy, and monetary policy was the only game in town coming out of the recovery. where is the fed now and what policies should they be following. the fed first and foremost should pat itself on
the back that it was able to do textbooks said they would not be able to do, which is the liquidity trap after the financial crisis without any meaningful help from fiscal policy. i think the fed should take a huge amount of justified credit for the fact that we are in the 10th year of our economic expansion and it was all them in the first five years. so that is a positive. from the other side of the coin is i think the fed should appreciate the frugal environment they are working in. that income inequality, a byproduct of being the only bit -- game in town for monetary policy, really matters politically. i think they need to be very sensitive to that. in turn, they need to be less religious about the inflation target. and i think they are doing that. that they the fact
are consistently pounding the table that our inflation target is not a ceiling that we have symmetry around that target. i really do not have anything to complain about with the fed. i do not like that the fed was the only game in town 10 years ago coming out of a crisis, but they are becoming less the only game in town and i think that is a good thing for society. are not the only game in town now, because we have a lot of is the policy and a lot of fiscal stimulus. is that a good thing at a time when the economy is growing at a relatively strong pace? paul: i am a static about the return of fiscal policy as an active tool of macro management. the timing of it was miserable. policyld have had fiscal robustly expansionary early in the recovery. it was strictly a political decision on the part of the trump administration to do this.
i don't think it makes sense to do it that way. us a grandis giving experiment in running a hot economy. janet yellen talked about the benefits of running a hot economy. we are running a hot economy on the back of fiscal policy. so i am not against it, but the big thing for me is that fiscal politically ready as well as economically to be used in the next economic downturn, i think if we look out longer-term, the biggest risk i the fabric of our democracy is if we have to fight the next recession with monetary policy and loans. that was former pimco chief economist at current cornell loss will professor paul mcauley at the rocky mountain summit with mike mckee. time for a snapshot of some of the biggest business stories in the news today. blackrock intruders are
frontrunners to oversee about 120 billion dollars to lloyd's. no comment yet, but bloomberg has learned that a decision from lloyds could come in the third quarter. a single winner could be selected, or employees could split the mandate. invited good for the contract after ending a partnership with standard life aberdeen. and johnson & johnson will appeal a multimillion dollar verdict. a jury in st. louis ordered --nson & johnson $40 billion -- $4.7 billion. off -- now kinds is now meet of all kinds is now off the menu at wework. wework says it will no longer expend meals with any red meat, poultry, or pork at events. the company's cofounder says avoiding meat is even more beneficial to the planet than
switching to a hybrid car. and that is your business flash update. a top level u.s. delegation is out in mexico for talks with the president-elect as well as other officials. to accomplish?pe they come from different parts of the government, so we will see how it all without and to actually is in charge here. this is bloomberg. ♪
scarlet: that is some of our tictoc on from twitter. from new york, i'm scarlet fu. julie: and i'm julie hyman. let's get the first word news with mark crumpton. -- jeffesident trump's flake's comments come three days ahead of the president scheduled summit with mr. putin in helsinki. if the white house is as confused about the nature of the threat we face from disturbed putin as it deems to be, a
meeting between our president and his russian counterpart for which there is no record could not be more concerning. it issenator flake says vital that such meetings between leaders not go unrecorded, especially "when the world hangs in the balance." trying to's avoid another record year for wildfires. -- in first euro 2016, 2017, we set records for death and destruction. is problem -- the problem 85% of california's landscape is abnormally dry. power companies are blamed for some of the fires and say they are taking steps to avoid another disaster. a new report from china underscores the calls of a trade cause of a a -- the trade war between beijing and washington. china's monthly trade surplus rose to a record $29 billion in june. chinese exports also rose to a high. both the u.s. and china imposed
tariffs on $34 billion of imports a week ago. president trump is threatening duties on another $200 billion of chinese exports. cameroon's 85-year-old president announced today he will run for president again in october in response to what he described as "overwhelming calls from his countrymen." he is one of africa's longest-serving leaders, having been in office since 1982. he rid cameroon of term limits in 2008 after pressing to change the constitution. global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. julie: thank you, mark. a u.s. delegation is in mexico right now, including secretary of state mike pompeo, care stimulus in, steven mnuchin, -- kierstin nielsen, steven
mnuchin, and others, meeting with the president-elect of mexico. bloomberg'sow is amy stillman. thank you for joining us. from these we expect talks? what topics will be on the table? thank you. i am standing outside currently the headquarters of the next , who won af mexico landslide election victory on july 3. we know that secretary of state pompeo has already met with the current administration. he then went off to a meet and greet at the u.s. embassy and his entourage, consisting of about 18 suvs, has just arrived here at the headquarters. what we understand is there is a lot that will be on the table, certainly there will be discussions of immigration,
trade, and most likely security. table,: so a lot on the and we have three principles attending. the secretary of state, the secretary of the treasury, the homeland security secretary, and the president's son-in-law, jared kushner as well. who is really in charge here, amy? amy: right, right. certainly, i think it is important that we are seeing the beginnings of discussions between the next government of mexico and the current administration. obviously, there is a lot of concern regarding how relations between the two countries will progress under a different administration, one that is ofsiderably more on the left the spectrum in terms of the politics of the country. right now, outside the headquarters there is a number of protesters that certainly want to see some strong lines
them regarding issues of immigration, but we do not know yet exactly how he will approach that. certainly, what we have heard so far from them is a more diplomatic approach to relations with the u.s.. being takens it there that it is this team, admittedly a high-level team, but not the president himself who is making this first outreach? amy: right. time,k at this point in it is still very early days. let's keep in mind that the president elect will not actually enter into the new government until the first of december. so as of right now, i think it is a good first step. we will not be expecting to see anything concrete. wet we have seen so far is can say it is a fairly optimistic approach to relations. and --
said he will invite president trump to his inauguration, and he has already congratulated the president-elect on his landslide victory. i think we can say the outlook is optimistic a la but a lot can between now and december. julie: absolutely. in terms of the different areas where they need to tackle, whether it is immigration, organizations,al opioid epidemics, on what topic to mexico and the u.s. see eye to eye on the most. -- most? right, right. i think certainly trade will be an important discussion. so far, the big issues for mexico's new government right now are the energy reforms that were implemented by the current administration and how mexico will progress with those. security is also a major issue. we do not really know how the
new government is going to approach things in terms of the border wall that trump has discussed with the previous government, which certainly did not help to improve relations between the two countries. but i think both parties very interested in protecting their borders and working together in this aspect. stillman joining us from mexico city, thank you so much for covering the latest there with three principles in mexico city, along with jared kushner, the president son-in-law. coming up, house republican conference chair representative cathy's enforce rodgers will be joining us. why she says america is better off today. from new york, this is bloomberg. ♪
scarlet: this is bloomberg markets. i'm scarlet fu. julie: and i'm julie hyman. plenty of political headlines to digest today. kevin cirilli is standing by with a top lawmakers today. kevin? kevin: we are here today with representative cathy mcmorris rodgers, the house republican conference chair. thank you for being here? -- thank you for being here. rep. mcmorris-rodgers: thank you, it is good to be here. kevin: you have launched an interesting campaign, #betteroffnow. tell me about it and what the main argument is? rep. mcmorris-rodgers: sure. two years ago, the house around ans' agenda was better way. a better way on the economy, national security, and
two years later we have kept those promises and now we see a result. right a booming economy now, so better off now is answered in the question that many americans have every day -- am i better off? we are here to say look at the numbers. you are better off than we were two years ago when we put together the better way agenda, and i would encourage people to go to better.gop. we have had over one million jobs created since the tax cuts and jobs act was signed into law. than are more job openings people looking for work. unemployment last month was 4%, the lowest in decades. low blackecords for unemployment all across the board. it is a good news story, and we want to take some time to celebrate it. is interesting, because the president is traveling overseas, and one of the things i hear from your colleagues as well as from yourself in your public statements, a concern about trade negotiation's. it seems like there is
unification on the issue of how the president is negotiating against china on intellectual property, but there is a concern aboutues in your district agriculture. are you satisfied with how the president is negotiating some of these trade deals bilaterally and getting his multilateral response? rep. mcmorris-rodgers: right. we need to get the trade deals in place. i have anxious to see the president move forward with these bilateral trade deals. concernffs of -- are a to me, and i hear it a lot, especially from the farmers i represent, and i encourage the administration to lead with farmers in mind. but even with the tariffs, the economy continues to boom. manufacturers, 95% of manufacturers now are optimistic and expanding, and that is part of what our goal was, to bring the jobs back from overseas, to produce and manufacture here in america. that was our agenda, to lift the
debtatory buttered and burden, pass tax cuts, and get america's economy booming. that is the good news story. and that is what i want people to highlight right now. week, thelier this house representative committee chairman shared her concerns in --ard to your concerns shared your concerns, and steven mnuchin testified in the house earlier this week. there is a report out about national debt. i hear you on all of the numbers you are porting out, job -- pointing out, job creations and folks looking for work, but what do you make of the national debt? a lot of republicans are concerned about the national debt. what do you make of that now? rep. mcmorris-rodgers: it is all connected, and we do need to address the debt. had a priority of building our economy, rebuilding our military, now we will work on the debt. we have a select committee that is looking at the budget
process. our budget process is broken, and we are working right now, house and senate, republicans and democrats, on reforms to the budget process, which is fundamental to addressing the debt. the debt is the number one threat to america right now. admiral mullen said that many years ago, when he was asked what is the number one threat? .e said it is the debt if we don't address the debt, we won't have the economy and we will not have a strong military. so absolutely, we need to look at that. you look ahead over the weekend, a massive news flow coming today and a lot of investors trying to gauge trade as well as the other geopolitical events today. you had rod rosenstein coming out, charging 12 russian spies for hacking into the d and e. the president is set to meet on mondaydent putin in helsinki. what do you hope the president conveys to russian president vladimir putin? hopemcmorris-rodgers: i and have every confidence that president will go into that meeting very strong.
russia and president putin have a history of being an aggressor, and president trump just needs to stay strong. do you think there was a u.s. delegation, congresswoman, that traveled there a couple of weeks ago? they said they will be talking about a host of topics on monday, including the ukraine, syria, as well as meddling. do you have any response to what the deputy attorney general came out with earlier this afternoon? rep. mcmorris-rodgers: well, i have not looked myself at what the -- i have not seen that myself, what was put out this afternoon. i have had the chance to travel to ukraine. to respecte putin the people in ukraine and their desire to be separate from russia. this is an example where russia has been an aggressor. we see it in eastern european countries, where russia continues to be an aggressor. that is why these meetings are so important, because putin used
energy and other resources he had to influence those other countries. we want those countries to be independent. kevin: and president trump taking that issue of the energy sector head on while he has been overseas. it gets back to this issue of trade. a lot of folks looking at trade and to how it is tied into these meetings overseas. two policies of the republican party have been something that you and others advocatedated for -- for to boost economic growth, but when the president's over there talking to heads of state and arguing about the connection between whether it is germany or the u.k., the reliance and ties to russian energy, what does that mean for folks in the u.s., particularly, and how the energy market and russia's involvement in it impact them and the u.s. economy? rep. mcmorris-rodgers: well, i would like to see, whether it is germany or other european
countries, i would rather see them get their energies from other sourcesy. putin has used that in the past in ways to manipulate and influence their decisions. whether we are exporting lng or other resources, there is an opportunity for us as americans to be exporting, but as well as other countries around the world. and instead of these european countries relying on russia for important energy supply or the ukraine for important energy supply to be able to get that from elsewhere, to do it themselves. get the pipelines going in the european union or ukraine. ukraine needs to have an opportunity to be able to import important energy supplies rather than being so dependent upon russia. kevin: a political campaign is called #betteroffnow. cathy mcmorris rodgers, head of financeblican
committee. democrats say there will be a blue wave and they are pushing hard, but we consistently hear that democrats are going to win back the house. it sounds like you disagree. rep. mcmorris-rodgers: i do disagree, and i disagree because americans are better off today. their paychecks have increased, they are optimistic, they are hopeful. a sluggish economy, stagnant wages are gone. it is a new day and people just need to take a look. it is public and policies and policy than the republican vision of everyone being empowered -- republican policies republican visions of everyone being empowered. rodgers,thy mcmorris thank you for coming on bloomberg. we very much appreciate your time. back to you. scarlet: thank you to kevin cirilli for that interview. do not forget to check out gt v on the bloomberg. we have a ton of charts that we feature here, including the
julie: this is bloomberg markets -- scarlet: i'm scarlet fu. that was julie hyman. president trump has just left london for glasgow, criticizing london's mayor and saying he was doing a "terrible job" at preventing terrorism and crime. we spoke with mayor sadiq khan earlier today. >> [inaudible] in interviews that he gives. i am quite clear that here in london we love americans, we love america. that i have met many londoners, and they call themselves londoners who are americans. they joined the protests today, and today we are seeing londoners and others protesting not only against america and americans, but president trump and some of the things he has
said and policies he has. it is not anti-american protests. whatnot explain t goes through president trump's mine. >> do you think racism is something that motivates him? >> what i do know, sometimes he can normalize and give credibility to some of those far right groups. for example, he retweeted tweets from two groups that have been banned from facebook and some that have been banned from twitter. some of those members in the party are in prison. it is hard to explain what goes through his mind when he does these things. the thing i want with the u.s. and the u.k. is pluralism. you can disagree about things in a respectful, courteous manner. can be a london you different religion, different ethnicity, and not just get on, but be respectful.
warned for some to keep a low profile. is that sensible advice? actually, yesterday morning, i was address telling -- addressing annual conference at an american headquarters here in a dailyand i meet on basis with americans who love living in our city. some of them began the protests today. look, thank you for all you do for our city as americans. take you for the contribution you make, and there is no reason at all for you to be alarmed or worry about today or tomorrow. that themportant is protests today are peaceful and in good spirits, and i am sure they will be. scarlet: london mayor sadiq khan speaking earlier on bloomberg. a time for a look at some of the biggest business stories in the news today. britain's takeover panel says disney will have to bid for all of sky, 1837 per share if it
fox's entertainment assets before the conclusion of a bidding war between comcast and fox. disney and comcast are competing for fox assets, including a 39% stake in sky. the panel can uphold interests of other sky shareholders by forcing disney and comcast to buy them out at a minimum price. the big money in london real estate right now is in small warehouses, thanks to amazon. dwindling industrial spaces in the city are soaring as they hubs to cutocal down delivery times. the e-commerce giant accounts for 1/10 of all u.k. warehouse space leased in the last year. totter took a sledgehammer the followers and egos of some of its most popular users. former president barack obama reportedly lost more than 2 million followers in the ongoing purge. lose them,rd to bringing his counts down to about 101 million, the most
followed person after katy perry and justin bieber. president trump also took a hit, losing about 320,000 followers. that is your business flash update. scarlet, did you lose any followers? scarlet: i don't have that many. itid not notice any, but would be interesting to see if joe did because he has a many. julie: we will have to look at a four and after snapshot. scarlet: the department of justice is appealing a merger that has already been cleared. about how the at&t's-time warner deal is under threat, next. this is bloomberg. ♪
julie: live in new york, here are the stories we're covering around the world. a second up week for stocks. nasdaq could be heading to a new high. we will speak with wells fargo cfo john shoes very earlier -- later. indictsspecial counsel 12 russian intelligence officers for hacking offenses days before the trump putin summit in helsinki. let's get a check of the markets with abigail doolittle. >> very close here. interesting to see how the next hour plays out. 500, major averages higher for nine out of the last 11 sessions. the nasdaq fractionally lower.
this makes trading action not entirely surprising. investors higher. bonds have been higher all day. is moving the s&p , they are having a one-day sale after amazon prime day sale. disney up 1.6%. all five days since the middle of may. 5% on the week amid the bidding war between comcast and other , up for its best week of the year, up 5% on the week. helping to explain why the nasdaq is lower, cisco down 5%. amazon web services business may
be selling switches. earningsreported monday after they close, on the week, we look at the s&p 500. we have the s&p 500 over the last to -- 10 days. despite the trade war, investors optimistic. on the week for the commodity complex, let's take a look. these are the weekly moves over the last couple of years. we see big down weeks. row.econd down week in a down 2.8%. the worst since february. the big selloff we saw wednesday, copper, grains, not enough to lift the index overall. week, it ison the
confirmed to some degree with a small pullback. the haven down against the dollar. confirmation there. stocks gaining on the week. a bit of a risk appetite this week. let's gethank you p to first word news with mark crumpton. >> three days before president trump is scheduled to meet with vladimir putin in helsinki the justice department announced charges between 12 russian intelligence officers for hacking offenses. it is part of the special counsel probe into potential coordination between the trump campaign and russia. the russians are accused of hacking into the computer networks of the democratic national committee and the presidential campaign of hillary clinton. worked for twots
units of the main intelligence directorate of the russian general staff known as the gru. the units engaged in cyber operations to interfere in a 2016 presidential election. in three companies have been charged in the molar investigation. he briefed president trump about the indictments. queen elizabeth welcomed president and mrs. trump to windsor council -- windsor castle are the were scheduled to get acquainted over tea. thousands of demonstrators marched to protest a visit to the u.k.. the associated press sides organizers against the together against trump organization estimated 100,000 protesters joined the march by mid afternoon.
officials say a small bottle found in the home of one of the victims tested positive for novacek. to findl be carried out theif it was used to poison ex spy and his daughter in march. a cabinet level delegation to meet with andrea's men well and his team. , nasa, security , he wants -- he will meet with the outgoing president. 2700 journalists and analysts in 120 countries. it is time for the deals report. at&t says the appeal against the merger with time warner doesn't
change anything because the deal is close. the department of justice which is a very busy is challenging a judge decision allowing the takeover. reednt to bring in jeremy to discuss this further. on what basis is the doj appealing this case? the judge did not think much about the argument. >> he was abundantly clear about that. we do not know what the basis is. we just have a one-liner saying they plan to appeal. they must feel there are many reasons they are doing this. he must feel strongly enough about their position this deal is harmful and their theory of harm was valid to take the risk. it was a risk to begin with. i think it is a risk again to appeal the decision. >> they must feel strongly about the danger of this.
does this have to do with president trump's personal ?endetta against cnn can we make those kinds of leaps? >> people have made those kinds of leaps. you can say there is circumstantial evidence that suggests that or looks that way. we will never know. raise this issue. he said no. i'm not going to think about politics. evidence, any evidence that might exist of political influence never got into the record and is not available to us. there is speculation that it is politically motivated. has the doj pushed back? mergers.inst vertical or is it against the media sector or the particular companies? >> it is just this deal.
this doesn't suggest a broader policy. i think it remains to be seen. we do not know what they are going to do yet. there was speculation the deal would he cleared without conditions. we do not know what is going to happen there. the other time it was clear was before we had our current attorney general. it remains to be seen. process how late in the can the doj intervene and say we are not going to go through this? if we are thinking that deal will go through and the last the government intervenes, is that the reason to have that would go through? >> the timing depends on companies. they have the government -- the government has 30 days to make a decision after companies have complied given 99% of materials asked for by the government.
that process, we usually don't know, it is not public. if the companies do not make it public we do not know. the companies will enter a timely agreement giving the company more than 30 days. sometimes they will make those agreements public. sometimes they don't. we could be in the dark on that one. they have had enough time to get those materials in. scarlet: what happens now with at&t, time warner? what did we have to wait to find out? what kind of time is this going to take question mark >> this will be faster for sure. it can take a year. i do not think it will. i think department of justice will ask for expedited treatment. it will probably be down six months or less. anthem and signal when they lost the district court level, that was from the filing two decision
sit down put will together and will touch on every major point of tension between their countries. military incursion with the ukraine and syria. sabr rallying -- saber rattling. the upside for trump is less clear. it worries some in washington. republicans including jeff flake and john mccain have cautioned trump to be careful baltimore kratz say the president must stand up against putin on election tampering issues. trump downplayed expectations saying i am not looking for so
much in his meeting with putin. this is an opportunity to demonstrate he is uniquely qualified to negotiate deals. follow me on twitter. all of your updates on tictoc. >> that is some of our reporting from tictoc by bloomberg streaming live on twitter. from new york, i'm julie hyman. for the business flash. a snapshot of the biggest business stories in the news today. web services is considering selling its own networking choose. therding to the information plane could mean a deeper dive for amazon into the enterprising computer market and proposes a direct challenge to the leaders in that sector. is planning to launch a for -- full version of photoshop
part of a strategy to make products compatible against multiple devices. adobe is banking on users who like to media edit on the move. up 50% this year as adobe's new subscription model gains in popularity in. persian -- asia's richest person, worth $44.3 billion thanks to shares of reliance. replaces jack ma. that is your business update. >> that is significant. president trump has promised to keep consumer products out of the trade war to protect american wallets. that will be challenging since chinese goods affecting clothing
and electrical goods. >> the level of consumer goods is inevitable. if we get into a trade war and widen the scope of the goods affected by terrorists, consumer goods are going to be enacted. i think we are not surprised. that is the way it looks like it is going to go all along. julie: you call it reckless. why? >> there is no code here is to it is ategy print multi-front trade war that has businesses with our and retailers.
given the level of sophistication and complexity of global supply chains it is a matter of time before this is going to start impacting consumers in the pocket book and americans will get punished. >> can they eat these tariffs? i have had 25-30 ceos, independent businesses that owned retail companies over the last several months. all of them are concerned about this. this is a competitive market. , pricingcompetition very low, ability to push through price increases. there is no confidence companies are going to eat these increases and bury the tariffs.
they will get pushed on to consumers in the form of a higher price. >> higher prices for the consumer. >> that is right. investing, tax reform and regulatory reform, we are some optimism in the marketplace, looking ahead, thinking of expanding those businesses. opposite effect. a chilling effect on investment am a downward pressure on consumer consumption. >> are we going to see companies go out of business? >> i think that is a possibility. particularly manufacturing businesses that use imported chinese parts and supplies in the manufacture of goods, built here in the united states for export. some of these plans have announced plans to shutter or
lay off workers and relocate manufacturing the silly these. they have already seen them. that is the leading edge of where we are going to go. >> you had a lot of praise for the president and the trump administration. do you agree that? >> no. tax or form has been a boom to the economy. we have seen it put to work in stronger more confident consumers. businesses investing and growing. >> the good work is going to be undone by the tariffs. >> the retail industry is in a good place. in the month of may we had growth better than may 1 year ago. our three month average is four and a half percent. we will do for and a half percent for the year. tradel indicate
conversations that there are lots of things happening that we don't want to undo. >> a reminder, you can catch all of our interviews with the function tv . become part ofnd the conversation interacting with us. here we are talking to jeff hart about bank earnings. citigroup and jpmorgan. we have more on bank earnings as well coming up.
spending the weekend for relaxation and golf before the president heads to helsinki. julie will keep an eye on these images. it is time for options insight. >> it is. with thech scotland president, let's turn to the markets. joining me is that schapiro. joining me from chicago, as you watch the recent market action here we see the nasdaq trying to press towards record on a closing basis today. this submits the trade talk. the market is shaking up trade concerns. is that what is happening in the ?ptions is ignoretell clients
trade war chatter. it is like trying on strike news when there was a walkout at gm. you must ignore it. it will eventually be negotiated out. >> you think they are going to keep on going here? would slowe that things down. >> i feel most investors have amazon, they have microsoft. they may be looking elsewhere, which is why today i was talking about stitch fix, the direct to consumer online retailer for the options trade today. part of these new trends stocks. in the past 10 years, handling client accounts and you are not an apple, you fill way behind. investors might try to look at what is the new trend the what
is a great stock that i can get along, get confident in and have a dynamic trend that is going to double or triple my money. >> stitch fix has done quite well. what kind of trade are you looking for here? you're going to december to make the trade. walk us through. >> the key to get aggressive and a stock like this is take advantage of the volatility. by the december 30 four and sell finance, december 22 to as a long position. you pay $3.85. we will keep an eye on that and see how it performs. nice to see you. thank you.
email accounts during the 2016 presidential election releasing stolen information before americans headed to the polls. the interference was aimed at helping the trump campaign. the indictments do not allege full tallies were affected by hacking. democrats are urging the president to call off his summit with president putin in three days. the meeting is said to have no time limits with the two leaders scheduled to speak alone before by their delegations. he will address interference in the u.s. elections. th