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tv   Bloomberg Markets Americas  Bloomberg  March 15, 2017 10:00am-12:01pm EDT

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mark barton. welcome to bloomberg markets. ♪ vonnie: we will take you from new york to london this hour to cover stories. here are the top stories we're following on bloomberg and around the world. we have got perspective on what projections the fed may make, apparently a cornerstone macro and -- of jpmorgan. in markets, on oil, due at the bottom of the hour. weekly inventory numbers reported. will falln stockpiles and that has oils rebounding today. u.s. politics, president trump hits the road today to meet with executives and union representatives. what is the goal of his auto agenda?
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it is the fed day in the u.s. trading day little quiet. julie hyman is here to tell us more. julie: i was glancing at volume on the bloomberg, 18% below the 20 day average for the s&p 500. it looks like some investors are sitting on their hands awaiting the is from the fed, both decision and of course the commentary from the fed. let's look elsewhere for some movement today. in the airlines, we continue to see them drop. they are not all dropping. they are mixed today and have been dropping because of weather-related issues and many are presenting a jpmorgan conference today. says it's non-fuel cash -- will be lower in the second half. continental also cutting its view, its guidance there as it
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raises its forecast for capacity. a mixed trade among the airlines based on the headlines. you heard what is going on with oil and we are seeing oil report on the industry that stockpiles actually felt. we will get confirmation or not at 10:30. off a little bit in advance of the fed. production to have from chile because of a worker conflict with management happening there that continues to happen there. check on rates leading up to the fed. we are seeing buying into the treasury market and the rates going down 2.58%. goingat you would expect into a meeting in which the fed is expected to raise rates. that is what we have seen historically.
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he expects the same thing to happen that has happened a few times. yields go down. it happened two times that the fed raise rates. an intuitive reaction to look for in the coming months. the fifth day, oil leading the advance. basicwriting -- rising, resources. this is all about valuation. stocks back in vogue after avoiding the regions equities. cautiously adding to european funds today in the last seven weeks according to bank of america and merrill lynch. in reversal relatively small 2017 compared to redemptions of
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$130 billion. the trend coincides with research on shares becoming increasingly positive even as the stoxx 600 priced average ratio is closing some of its discounts on the white line, the valuation of the s&p 500 earnings estimates, the stoxx 600, jpmorgan, and goldman sachs saying stock returns may exceed those in 2017. a big election taking place in the netherlands. all calm in the on market here the difference in yield between the dutch five-year and the seean five-year or you can in the last month or so, the yield differential is nowhere timethe levels around the of the brexit referendum here in the u k last year.
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than theyess anxious are about the upcoming french election. the results are important. you could see spreads continue to narrow. look at this tuesday chart, a wonderful chart. today came at 6:00 a.m. a different move and a different direction. demand, also, there was that 10 minutes. 57% of scottish voters wanted to remain inside the u.k. now it is all about when to reason they will -- and when negotiations will get underway. a wonderful chart a showing how the big action happened in the and after yesterday 6:00 today.
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we will see later again today. day with the fed with the rate hike almost 100 x -- 100% expected. joining us now is a former fed economist, at cornerstone macro. the market repriced the odds of the fed rate hike quickly a few weeks ago that up to 100%. data thatw inflation showed a hiccup but i wanted to corea chart which shows cpe. fed taking this to raise again?
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>> you are right the core 2%,ation in little under but they are in the same place they were months ago. i think the fed feels it is side and the inflation also on the unemployment side. the confidence the fed has in its ability to achieve objectives in the near future. change inll we see a the historical version, you can see how far it came down right , willn the green line that come up? early forably too this year to move up. economic conditions improve but they are not drastically better than in december when the
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previous came out. arithmetic,at the it takes one of two persons to put it up for 2018 and 2019 to move up a notch. those are more likely to move up today. in 2018 they move up and 2019, you say you don't think there will be a significant market reaction, why? historically, the market focuses on two things, you look at the current year like we are today and they focus on the rate, so i think that is important for the short end of and in the middle, the market thinks who knows what the fed will do a year from now, it depends.
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the market tends to discount that a little bit, a historical fact that it is probably wise to do. mark: what about the tone of the press conference afterwards? >> i think she will emphasize graduality. three rate hikes per year is gradual. i think at the same time, leave the door open for a bit of an acceleration in case later in the year, if fiscal policy, , ife will be more details financial conditions continue to she wantsrly easy to to leave options open but not signal drastic increase.
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>> will the policies work this year, will it take another year? nearing itsg it is peak and the rate increasing further, asymmetry for equities, is turning increasingly negative for the economy. >> i think fiscal policy, there is almost no chance they will have an effect this year in a macro sense. what it can do is number one increase confidence for the year and the fed will have to take that into account. the policy could have an effect next year and the year after in the years ahead. from a fed perspective, you probably don't want to wait too long before raising rates if you think fiscal policy will be distracted because if you wait too long, you will have to go too fast the next year and after.
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if fiscal policy does not affect things much this year, the fed will very much pay attention to that and try to anticipate the potential effect. how will they do that? a lot of talk for the longer dated on's, where do the yields go? >> the balance sheet is interesting. i would be surprised if anything came out today about the balance sheet. it is too soon for them to reach an agreement. there is not a lot of urgency to start the shrinkage of the balance sheet. the urgency is to come up with a light of the in fact that maybe next year, leadership will be different. that is the motivation. come up with a policy -- the balance she does not shrink this the rates willk
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continue with the terminal rate, so if you look at the federal gentry that came out in 2.8%ber, it implies about 10 year rate at the end of the year. not be thatrobably much different today. mark: on my doorstep. out of those, which one stands out excites you the most. >> i think the interesting thing to look at is what we saw last week from the ecb. provided was pretty
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close to achieving the ecb's objective or inflation rate. with a forecast like that, i would think the beginning of the end of the process, the ecb is not too far out in the future, i ahead at the beginning of accommodation, and that is not the markets. i would look for a higher rate because that is what it implies. vonnie: don't miss our special coverage of the fed decision and the news conference. atinning of programming is 1:00 p.m. new york time and 5:00 p.m. new york time at 2:30. let's check in with m a. -- emma.
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>> the message in the detroit area is likely to be welcomed by union workers. the president will reopen the review. he says those cost jobs. companies had been pushing to be revoked. general motors says it will retain jobs in the next year. an interview with the gm ceo later today. netherlands is voting today in an election that will be the first measure of the spread of or 14 part -- parties are to win seats there. to halto want immigration. they want to draw a line in the sand. he and other mainstream politicians say they will not demand an alliance with builders. the european union is ready to ratchet up the press on british
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prime in a stricter is a may according to eu officials. former brexit talks until june or that would cut into the time they have to come up with a deal. it starts the clock on the two-year negotiation and the power shifts. rex secretary of state tillerson has begun a three country tour. looking to a solution for a problem the u.s. has been working on for 25 years. recent tests showed north korea has developed missiles, closer and closer to the continental u.s. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. mark: the former governor of the bank of israel weighs in on the fed. do not miss it. this is bloomberg.
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vonnie: this is "bloomberg markets." mark: let's get over to frankfurt. a conference organized by the institute of international finance is taking place. matt miller is standing by with a top finance team. matt: i'm here with the chairman international. i want to ask first about the fed. this could be the beginning of a longer normalization cycle. what are you expecting from janet yellen today?
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>> i believe it is high time to continue with the journey of normalization, the nine states economy is robust, it is strong, the tried -- the criteria has to be met to launch the project of normalization has been met. so muchr market is better and unemployment is very low. the duration of unemployment is very low. inflation is around 2%. if you delay normalization, there is a rise from interest rates being so low for so long. the wrong activities, investment, and jobs. this is my hope. will janet yellen do it? i will expect do
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-- in 2017, i will not be surprised if we see three or four steps of 25 paces points each -- basis points each. still a way to go. interest rates are so low that most economies ballon to end the long run, with the economy sufficiently stable, there is another like this in 2018. it is good news for the markets because the vote of confidence in the markets is in place. now, it will be a strong message
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if the fed moves. people who arer long equities were afraid of rate increases. we are getting signs we will see an upward path for some time. investors are driving indexes to new highs. markets and the real economy must be synchronized at the end of the day. financial markets can have a life of their own but they cannot be attached to long from the real economy. they will fall, even if you are investing in financial markets and are looking for a return, you know this will remain with you for the longer term. only the real economy is also catching up. fed talked about
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it, but by now, there are solid indications. the fed was for too long the only game in town. an economic policy will come in. what we have seen is a serious discussion about the possibility policy, the possibility of regulation, some of them have hampered investment growth. that is the indication the market receives. too much to my taste, the discussion of protectionism, the discussion that has a mindset of a zero sum game.
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the nature of economics is a positive sum game. that is the only way to sustain a permanent growth. >> this is becoming the g-20 overarching message for the weekend, the warning against isolationism, it is a clear warning to the trump administration and the u.s. government. what kind of response to you expect from the trump administration? now, we have had a lot of rhetoric and they election campaign which i do not pay too much attention to. the important point is to recognize the economic growth, must be inclusive growth. therefore, pay attention to the fact that these are fiscal issues. these issues need to be addressed. when people say -- what does it
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mean? do they say i don't want to benefit from the gains of trade? of course not. they don't want to suffer from some of the negative consequences that have come occasionally. but we're not talking about trade. matt: it is almost a loaded term. they would say they are favored -- in favor of free fair trade. >> in that -- if that is the case, they will fall for trade a week parttargeted of society that has a specific watch it addressed to them, education, mobility. it has nothing to do with trade. tois high time to recognize have a healthy economy, you must have an inclusive economy, you must understand the mindset is a win-win and not zero-sum game. have done this, you
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have gone most of the way. matt: i have to ask you what you think of the increased central bank policy diversions that is an increase of the fed? how does mario draghi do with that? >> the reality is, each federal reserve ecb, bank of england, bank of japan, each one operates within an environment and each may share the strategy, but they in in a different position their cyclical journey. when the u.s. is now ready to tighten, or to reduce a little bit accommodation, europe may , we will see something that may look to you as diversion and. the mechanism that recognizes the apparent diversions is the
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exchange rate. if the u.s. is tightening and interest rates are going up, then we should not be surprised they transcend in world markets. it will be good news for europe and will encourage competitiveness of europe in the markets. for mario draghi and janet yellen, it is a win-win situation. matt: that would set up a problem between the trump administration and the fed but we will discuss that during the break. i have got to toss it back. thank you so much. trade, in aning of interview with bloomberg news, peter navarro saying nothing will be renegotiate nafta will be renegotiated. ♪
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annie: breaking news, in interview with bloomberg, white house director trade peter navarro says he wants the u.s., canada and mexico to form a
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"trade powerhouse" so essentially the old nafta but to toughen the origin. it dictates what percentage will be made in america and labeled. julie, let's get oil inventory news. sell by 237,000 barrels last week. that is more in keeping with lastwe got from the api night. confirming the data, and the a tickl leg in data is higher in oil prices. a looks like they did see built in oklahoma of 1.2 million barrels. they are both drawing down. gasoline down about 1.3 million barrels. so both of those are also good signs for the oil market. take a look at the bloomberg
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because it is a little more clear what happened with the oil price taking a leg up and now back down as you get that bouncing around in the wake of the numbers. we have had a downdraft as of late. i am concerned about the overabundance in the united states. the report goes toward concerns but it is only one week , so we will see if there is a broader trend. mark: one swallow doesn't make debate is so the big to what extent oil stockpiles globally coming down. opec admitting they are not fast. down as when you asked, our global stockpiles of declining at all, what is the answer? >> the answer is there is uncertainty because although we on huge amounts of data inventory levels in the u.s., we don't get anything like that from other parts of the world.
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we get data on the monthly basis and if europe but that can be patchy and assessments of that very. once you move out of the western hemisphere, you move to asia, andkpile data is delayed patchy. in some cases, nonexistent. the chinese tend to regard their strategic stockpile data as a secret and that is a part of chinese inventories and the week on week and month on month change in inventories because china is still building their stockpile. we get much less clarity coming out of that. i think the one thing that is clear is that opec is out for cuts, however you measure compliance with them, there are all numbers floating around. those cuts have not yet had the impact, either on inventory levels or prices, that opec has
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helped. mark: is saudi arabia going to shoulder the bulk of the cuts? and if so, for how long? julian: the big question, in january, it cut more than it needed, below 10 million barrels a day. all the analysts we surveyed in the oil companies and other to putresurveyed together the monthly assessment for february, leave the same thing happened in february. that saudi arabia shouldered a disproportionate share of the burden. the numbers saudi arabia gave to opec yesterday showed that not to be the case or to be not as strong as had previously been thought. they showed their own back above -- back up above 10 million barrels, still below what they said they would cut to but not nearly as big a cut as they had in january. that could mean one of many
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things, this how dia rabia -- the saudi arabia in ministry is ready to say it is because they had taken some out of storage in january. that means the cuts were not perhaps quite as big in january in terms of supply to the market of production. think this is, i a clear indication that saudi .rabia is sticking to its guns effectively what it said, even since november 2014, that it isn't prepared to do this alone and shoulder the burden for others and that all the countries have to do their bit. piece, byead julian's the way, subsidizing shale 2.0, good to see you. vonnie: great staff, thank you and thank you to julian.
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groups opening on the new york stock exchange, shares of 16% $19 a share.at our debt is a global leader in global gas packaging solutions -- ardagh is a global leader in global cast averaging solutions. congratulations, you must be pleased the stock is trading up. do you feel you left money on the table? >> know, we are delighted. we have a great investor base and we are delighted with the shares this morning and the reception we have had. it has been great. alix: what does this -- vonnie: what does this say about highly leveraged companies like ardagh then i can put a percentage at per public auction because he did not do it in 2015 and they were opportunities last year, and you're finally doing it now. >> we thought it was the right time in the evolution of the
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company. we made a significant expansion into that last year -- in tibet last year and it gave us great scale. we now have a broad group and produce 85 billion units of packaging every year, which is about you could go to the moon back 13 times. it is an important milestone for us. i was describing to investors during the week, we have not reached halftime of the game and it is the key next step in our development. mark: what we do with the proceeds from the ipo? paul: they will be used for debt. mark: give us a little picture of your debt situation. paul: we are about five times leveraged pro-form of the ipo, but we delivered quickly. it is a cash generated business. .hat has been our history
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every time we made significant acquisition, we levered up and then go down again. we are comfortable with those levels. we generate a lot of cash. vonnie: one of the companies that analyzes your data says one of the challenges is commodity prices, input prices. what are you see for 2017-2018 in terms of prices for what goes into packaging? paul: i think this commodity inflation at the moment but we are in a fortunate addition where our arrangements has to increases in commodity prices and over the last years, we have passed through decreases in commodity prices. it is something we have to contend with but we have passed through. vonnie: your business spread across north america, also into latin america, what is your assessment of president donald
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trump's administration and what that means for trade relationships affecting you? paul: we see strong demand in our market. we are happy. our brazilian business is a domestic business in brazil and we are pleased. it is our first time in latin america and we're delighted with the progress. the u.s. is a must important market. we have a large manufacturing base in the u.s., some 29 plants with 7000 people, so this is an important place for us. we are delighted with the demand here in the market conditions. vonnie: finally, he said you would hold off on acquisitions, having made a big one recently, anything peaking your interest? call: no, -- focused, we have been reorganizing our capital structure and meeting to the great preventive today, which is a monumental date in the company history. absolutely.
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paul, congratulations and thank you, trading at 16% from the ipo price. let's check in on the price were the news with emma chandra. ,: president trump calls for pages fromfrom two his tax return. still, the white house confirmed the numbers that he earned 100 $53 million and paid $38 million in tax at your, a little more than 24%. they were reported on msnbc. the view now a president trump meeting with the saudi crown prince yesterday. the president seeks to expand cooperation in the energy sector with saudi arabia and they spoke about iran noted the importance nuclears regarding the agreement. at least 25 people were killed in a suicide bomb attack in the main judicial building in the damascus area. it is the latest in a series of attacks targeting syrian
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government controlled areas. in asia, south korea plans to question the president about the corruption scandal that removed trip from office. meanwhile, the government announced an election will be held on may 9 to take -- to pick her successor. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. is bloomberg. vonnie: coming up, senator david purdue joins us on his take from the federal reserve to the u.s. budget and president trump sported tax. this is bloomberg. ♪
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mark: live from london and new
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york, i am mark barton. vonnie: i am vonnie quinn. this is bloomberg markets. for theet is ready federal increase come up with it is hard to know what it will mean. joining us is david westin in detroit. david: thanks. i'm in detroit this the president will be coming out of here but attention is in washington. we are joined by the man in the ofter, senator david perdue georgia. perhaps just as important, he is the only ceo of a major corporation serving in the united states senate. he was the ceo of reebok and dollar general. thank you. sen. perdue: good morning. david: let's talk about this federal deficit limit that expires at midnight tonight. is this symbolic?
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there is something important going on here. downperdue: we won't call and credit in the united states government, we will pay debts, but i don't see that as the problem. our budget is the problem. they are talking about potential interest rate hikes, and every core .3 have seen is $50 billion of new interest, -- every quarter has seen $50 billion of new interest. we will have many more in less it under control now. david: you make an important point, which is an alarming percentage of our budget right now is with servicing existing in may haveat is had little interest rates. when happens when it returns to "normal" interest rates? sen. perdue: we had $20 trillion in debt. 5%,hey are the average of we would be paying $1 trillion in interest. last year, we paid a little over
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$2 trillion because interest rates were low. if the fed goes up, we will have had 150 billion dollars of interest we have responsibility for. this game is past the tipping point of a crisis. we have to get serious. david: let's talk about what it means to get serious about dealing with it. what are the things you think need to be done right away? sen. perdue: first, the president of the united states laid out a plan that starts with the solution to this long-term problem of debt. we have to get the economy going. job one, get the economy going. the have to fix taxes but the corporate tax rate isn't competitive. they are one of the only countries left with the repatriation tax and we have to deal with that to get the economy going. at the same time, we pull back regulations and see a change in the way would deal with regulatory issues and the damage they do to the economy.
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last, we focus on fair trade. things the president has already laid out but have to get the economy going to get after debt. david: growth is part of the solution but having read a major corporation, a couple, i learned in business it is almost always almost the top line and costly problem. it is hard to grow your way out of this problem, so what is the other side the cost? sen. perdue: in these major turnarounds, you can never grow your weight out and cut your way out. it is the combination. that is what donald trump is talking about. we are talking about growing the economy. taxes, regulation and energy. we have to fix the budget process. it has not worked since 1974. third, we have to focus on excess spending in the federal government. 50.9overnment grows
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trillion dollars, we have to save social security and medicare and arrest the spiraling nature of health care cost. if we get after those, we will solve the debt crisis long-term. david: you pointed at the so-called entitlement. a lot of that growth in the federal budget came in entitlement programs. yet, the president has indicated he doesn't want to go after entitlement. is he wrong? sen. perdue: he doesn't want to take away benefits from people receiving benefits. nobody in the republican party does. if we don't do anything, the trust funds of social security and medicare vote to zero in 15 years. parties have ignored this in decades. i don't think it is something to do this year. we have our plates full with taxes, regulation of trade, so this is a days to issue and the president talked about that a few weeks ago. david: when you talk about
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taxes, one of the issues coming up is the border adjustment tax. some of your colleagues in the house are smitten with this. you don't think much of it. don't you have to have a border adjustment tax to pay for tax reforms people are after? sen. perdue: absolutely not. the only reason we talk about the border adjustment tax is in order to pay for the real tax changes to make a difference in economy. in changing the individual tax rates would be much more meaningful. that will grow the economy. the but -- the border adjustment of lower andncome middle class consumers. it grows central government. when i lived in europe in the 1970's, we saw that happened. their government grew over two thirds in a decade after they put something in that was similar. the only reason we deal with it now is in theory to pay for under the current budget
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process, which i said is incorrect returning the economy around. david: if we need the tax reforms to get the economy growing and you don't pay for them with a border adjustment tax, doesn't that leave only to borrow more money, which is part of the problem? sen. perdue: i am not adverse to borrowing in the short term if we see that curve going down in long-term debt. in every turnaround i was a part of -- this is economic turnaround by the federal government, and donald trump is the right guy to get us in the direction to stimulate this economy -- there are plenty of cases we could find to pay for the money to change corporate tax rates. the united kingdom in 2009 eliminated their repatriation tax reduced corporate tax rate from 20 to 30. we can do the same. this is created by the budget process, which is broken.
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david: thank you for being with us, really illuminating today. he will go back here quite a few times in the coming months. thank you. back to you, mark. mark: excellent, david westin in detroit. battle of the charts ahead. we go ahead with oil prices today. this is bloomberg. ♪
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madness,honor of march date to battle of the charts, tournament of champions, where 16 bloomberg news contestants face up in a sudden death battle. vonnie: it sounds better when you sit march madness, mark. it is an american phenomenon, but you can access all the charts on the bloomberg by running the function retreat at the bottom of the screen. it is a special 16 runoff
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version of that love the charts in honor of march madness. today, emma chandra and kevin kelly. kevin, let's start. kevin: you will hear a little of the same, but i wanted to show is not been a lot of movement in u.s. equities this week but we have seen big moves in the oil industry. prices andlue crude in white, s&p 500 index production company index, so companies that are the most heavily tied to oil prices. and there is a three-day correlation between them. this past week into this week, there was a massive drop in oil prices. this correlation between the emp companies and oil prices was working down in the beginning of the year. year to date, some emp companies were the worst performers in the s and p so far. correlations broke down, but you could potentially predict the
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falling oil prices because we saw something similar in 2015, and we saw e&p companies selling off and correlation broke down and it was preceded by a fall in oil over the next months. the two takeaways are, one, is this the end of oil prices and could the run down further? second, when you see correlations breakdown, potentially big moves in oil prices. you can find that at g #btv 68 16. vonnie: two serious questions. emma? the slightlooking at in oil prices but going back to the real market events, the fed decision. g #btv, historically, they have been close correlations but even more so in the past few days when we see
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oil prices go below $50 a barrel. breakeven, oil is a component of inflation. the question is, could oil become the fed's achilles heel if prices continue to fall and put downward pressure on inflation and calls into the three rate hikes this year? there is one thing to keep the fed going toward this end that is hedging. are better prepared for oil price falls this times in the last time they plunged. nevertheless, we should look out for what janet yellen says today. 6806. vonnie: i love the mythology, great addition and about the question. for that reason, i think kevin edges it slightly today because he pushes it forward and the question i have not considered. mark: this is tricky.
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i love the way emma said the real market event today, that was her pitch but just by the smallest mark, i am with you ,vonnie. i think kevin. was the one who flew too close to the sun, right? mark: yes, for getting your mythology run. [laughter] vonnie: we are all about greek mythology. thank you.mma, march madness continues. are tough critics. we go to amsterdam for the latest on the dutch election. a check on european markets up today. up for the day in six. this is bloomberg. ifth day inhe third daf six. this is bloomberg. ♪
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mark:mark: 11:00 a.m. in new york, 3:00 p.m. in london, 11:00 p.m. in hong kong. i am mark barton. vonnie: i am vonnie quinn. this is bloomberg markets.
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mark: we will take you from new york to london and covering stories of the washington and amsterdam. here at the top stories on the bloomberg and around the world. in european politics, decision day in the netherlands. populism in the western world. ican the freedom party pull off a shocker? vonnie: president trump is on the way to detroit, expected to roll back fuel economy standards on automakers. how that impact them? we will dive into how much the republican's plan to replace the affordable care act will cost. jonathan bush, from a medical billing firm, is our guest. 19 minutes into the trading day
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in the u.s. and julie hyman has the latest on u.s. markets. what do we have? julie: you a holding pattern ahead of the fed with a slightly upper bias on stocks and trading volume relatively low. investors seemingly still relatively unworried about the pace of increases we see in stocks and expected pace of rate increases from the fed. even goldman sachs turning cautious but the next three months. a look at the bloomberg, if you there isptions trade, no sign of concern. at the s&p 500 in blue and the put to call ratio in white, if you see this line going up, it indicates higher bearishness. down indicates higher looseness and that appears to be the case as we continue to seek stocks climb. it looks like stocks are not buying a lot of foot to grub against further declines. in terms of advancing stocks,
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sent analyst calls are boosting individual names. adjuvants is one of them, upgrading to equal weight. organic growth at this company has a high correlation to global pmi, measures of global manufacturing has accelerated. davidson being -- harley being upgraded and southwestern of citigroup saying natural gas e&p valuations are upgraded to neutral. a check of oil in the wake of ontotories, we see it hang a gain of 2%. our: we are twiddling thumbs, five days of six, the gains in the last six days. by .4. bank up waiting for the outcome. i want to get to corporate spanish retailer,
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profitability shrinking to an eight year low. the world's biggest retailer confronted and the gross margin narrowing to 57 from 57 in the 12 month through january, missing the retailer school to ofp the measure within .5% the previous year. price cuts fueling demand, leading to sales growth in stores, the fastest rate in 14 years. at shining gravel h&m -- rival h&m reported february sales growth that missed out on the estimate but shares were lower at the start. today, the world's biggest reinsurer sees lower profit as prices for their products remain under pressure. the company is lacking alternatives to invest. they ar plan to buy back
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about one billion euros in shares before the 2018 shareholder meeting, returning cash to shareholders. also reducing demand for their coverage, causing reinsurance 10es to drop in the last year shares, down .75. the german utility posting a record loss after more charges related to the spinoff of coal and gas power generation business. they say they will cut more than 1000 jobs by next year. check this out, 900 million euros in the fourth quarter takes the total over the last four years to about 25 billion euros and signaled its strategy to increase capital that will increase the dividend paid in shares. shares down by 3.5%. vonnie: thanks for that. very complete. let's get back to the
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netherlands. hollins, the outcome may provide a gauge of how far populism has reached into europe's core. just heard from the dutch green party leader. take a listen. >> we want to break the populist vote in the netherlands. obviously, and i think it is important that they build on a message of hope and optimism instead of fear and anger. this is because a lot of young people are engaged in politics and democracy in that is how we want to go. answerings of you what it takes for you to actually do this, talk to me about how would that be? >> i would say it should be a left-wing coalition with social and christian democrats. when you look right now, this is actually the most -- this is one
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of the options -- i would say this my first option. >> what role do you want to that government? jesse: i would be the prime minister of the government. my envision is to be prime minister of the netherlands. >> with regard to that, would you run for prime minister in the coalition? today, ist important that everyone will ultimately get a key role in the information process after the election. annie: i want to bring in reporter with more. a lot of people going to the polls today. what do you sense? from the young mr. aver, the rainmaker who wants to became. there has been a shift in polls. the extreme right has come down.
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he has slipped to fifth place. the question for the netherlands, for europe is will the dutch put a firewall of populism? i have been here nearly 24 hours and the question is in my head aat does populism deliver more robust form of government? is it a defense against extremism? rutte and folders are up in the polls. up to five possible parties and it could take 72 days on average since world war ii. you love spreads and that was a that the dutch-german spread earlier and it says little concern about the results of this dutch collection. is that correct reflection of the deal of the dutch election?
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the big concern seems to be the french presidential election rather than the one in the country you are in now. manus: i know you like to go inside baseball, so let me go there for you. the result tonight with rutte being demand that perhaps puts together the coalition, you will see stocks continue to rise. the vix continue to drop. record levels of volatility on the amsterdam exchange. stock market is up 50% on rutte. it is a moot point. there is a certain mind of i will relax so long as it goes according to plan. i put it to you that everybody pull overa booth and the curtain and that is a private moment, something the polls have been wrong on, brexit , trump, moderately right on renz the. -- on
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questioni. renzi. the question is rising. i have had a lot of coffee and i might not be back in london. mark: [laughter] don't go anywhere. manus cranny in amsterdam. they will begin a two-day meeting. populism will be a big topic joining us. dominique, director of the global economy program at the center of international governance, thank you for joining us. big tension, steve mnuchin, investors want to know if he will carry out donald trump's campaign threat to get tough on trade and currency ion.pulates and
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what will be the tone? inaugural meeting. most importantly, it is a meeting of the trump administration on the multilateral seen. it will be the first time that this meeting will have an opportunity -- will provide an opportunity for several to ask questions and learn more about the trump administration's plan in economic policies. that the newly beasury secretary will pointing to fair and equitable trade as opposed to open trade that has been a feature in previous ways to communicate. he is also going to emphasize
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20e previously agreed g- government in terms of refraining from interventions to gain unfair advantage on informational trade. however, it is unlikely that the secretary will be confrontational. certainly, he is emerging as one of the leaders of the pragmatist group in the u.s. administration. he will not try to convey some concerns, some key points of the u.s. administrations, but i would certainly believe he will refrain from finger-pointing a specific country, in particular germany, the host country and china. he has already said he will search the china policies that he will send congress. vonnie: how does a world full of
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multilateral organizations deal with a country that now things things like trade, military compacts and so forth are not zero-sum games that one country needs to be the winner in the country needs to be american? is aico: certainly, there strong discontinuing the with .he u.s. administration president obama chaired one of the g-20 summit and declared it to be the premier form for corporations. most likely, the u.s. will disengage from the g-20. it was not regarded as the premier forum. however, g-20 focuses on financial matters, so it would be still affordable for discussion on trade, the global economy but not on defense
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policies. it is true that the u.s. administration has been highlighting a number of concerns, but the u.s. administration is also pointing to issues like market access, level playing field for u.s. companies in china, for instance, and also some features of institutional set up over debt single monetary area, where there is a competitive exchange rate. mark: let's talk about the relationship between the u.s. and china. li wrapped up the npc today. the mood music between the two nations improving and are the risks of a blown out trade war between the countries diminishing now?
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this is thertainly answer we get. from the latest report from keyed geysers president trump -- key advisors from president trump, there are a number of important issues between the two countries. mainly, the trump administration is appointing -- is pointing the finger to an unfair level playing field that chinese companies enjoyed versus u.s. companies. there are discussions in terms of how to address remove these obstacles and fair competition between the companies of these two countries. is a leadingina player in the global economy, a leading manufacturing powerhouse and it is clear that these two countries need each other to preserve a certain degree of
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stability and prosperity for the global economy as a whole. omenico lombardi, thank you for joining us. joining us today from waterloo. vonnie: coming up, as republicans work to build consensus around their health care plan, we will speak to jonathan bush, the ceo of athena health. this is bloomberg. ♪
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live from london, mark barton. vonnie: from bloomberg world headquarters in new york, i am vonnie quinn. asked about president's
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assertion that he was wiretapped by president obama, jeff sessions was speaking when a reporter asked it yet given the president any indication his phones were tapped. no, but the answer is what happened in my case was that i was active in the campaign. vonnie: we will have more later in the hour. let's turn now to health care, to ag republican bill replace obamacare is been blessed. jonathan bush has written extensively about this, ceo of athena, a company that provides the ability for hospitals to have electronic records for people across the country and with other modern ways of delivering health care. your overall take on what we now have as bargaining legislation. jonathon: a tiny shimmer to the
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right, thanks for having me. a little more room for markets to operate. the problem in the u.s. is as a staunchly individualistic free country group of people, we don't have a lot of freedom in the way we purchase health care and as a result, it is a sclerotic market and unit cost and all the little ingredients are health care are high. that leads to high premiums we struggle with. there are two basic social -- vonnie: but the scoring shows premiums will go up much more and for longer than they would come down. they start coming down in 2020 and by 10% from now. if everything goes to plan. jonathon: i don't know how they score it exactly, but i'm glad they show it going up a little and then down. the point is with more market power, there is more price competition and more room for price to come down.
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if you look inside of the neck, we have 93,000 providers, over 10 -- inside of the, we have 93,000 providers. counterinsurgency are not spending their home -- surgeries are not spent half the day, they are higher than it is in europe and they would love to make us much or more money doing more surgeries, but they cannot steal market share by driving down price. it is like watching this slow-motion disaster in a tom clancy film, or they want to go down in price for the cannot get the reward permit. vonnie: you are acting like this is a good thing on the move to the right, maybe it is, maybe it isn't, but prices won't go down in the next four years. what makes you say they will? ahca is the the idea of relieving penalties for plans that offer nonconforming
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products. it is illegal to operate the ansumer anything but all-you-can-eat buffet with in vitro fertilization to four years old and every gourmet product lawyers and programmers at athena health went to have the force that on the farmers of western massachusetts can be frustrating. unbundlethe ability to what we call health insurance into smaller things creates the ability to buy something cheaper. vonnie: but that isn't the only argument. in turn, for that situation another argument is to allow people that don't make the kind of money that people who can afford the core make service might be but to get better service for themselves because everyone pays into the system. obamacare was good to athenahealth, not just because of obamacare, but what do you imagine for athenahealth going
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forward if it becomes law? jonathon: our goal is to get doctors on to our health care internet. in order to do that, we offer services that eliminate bureaucracy, cost and frustration from their lives. nothing that either side of the i/o is talking about will make the bureaucracy and cash cost and frustration go away. we have plenty of work to do. we had a weird run on the bank during the high-tech act, not obamacare, but a separate bill before, which pay $39 billion to doctors and hospitals to buy electronic medical records. the problem is they but whatever they could find right away before the program went away, which is frustrating to us, the only cloud-based medical record service in the country, may be the world, and folks do not know the difference in time so we have to go back through and get them off the old systems and onto the cloud. it will be left going in the in theng -- rough going
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beginning to get used to what is next. i'm pretty sure it will be big. vonnie: the company with global health care i.t., health company, are you comfortable under new legislation that there will be this new will to have all of this sharing going on? all this cooperation, all of it under one roof to pass records back and forth between hospitals? because it seemed that is the spirit of the new law that would not bode well for htfm. do not agree. in health care system that has more market forces, people will be much more interested in the paying twice for a blood test. they don't like it either way, but if you have to pay for it twice, that is a much more strong incentive to make sure your records are in the cloud and shareable from dr. to dr., hospital to hospital and lab to lab, etc.
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the idea that people may want to get double tested or treated with the wrong blood type because records did not pass along, i don't buy that. i believe everybody would like to share their charts with doctors treating them. vonnie: what do you like and dislike about this legislation? you said you have not read scoring, so we should put that out there but what do you like about it? as i said, market forces -- i think both parties, republicans and democrats, believe there is something to this notion of market forces. when you can gain market share and grow your business or practice by offering a cheaper product and profit by reducing your price, that is good for the world. saying what about ceos 40 million people be left uninsured and that that grows in that by 2026, that will be 26 million people? jonathon: less people covered is not good for athena.
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the people in all-you-can-eat buffet is not good for clients. it forces them to do product management and marketing and grow market share. i don't think that is such a bad thing for our clients and athena tapped to do. we think it will draw doctors and hospitals on to athena and evolve, so we are ok with it. we also think that our clients are enterprising groups, the first 10% of doctors and hospitals to move their practices to the cloud. these are the folks that know how to and are willing to product manage and offer a guarantee. we have surgery practices that will offer you a golf lesson and hip replacement in the same day to show you their product managing. vonnie: thank you, jonathan bush, ceo of athenahealth, the stock up 9% this year. mark: a new provider has not received any indication of interest and they are in talks
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with third parties. trading halted right now and an evening standard report saying msci rejected a dollar approach from s and p global, citing people familiar with the matter. shares in s&p 500 global down there, but it is a story that mcsi is denying, saying they had no talks with third-party shareholders and they have no indication of interest. a look at european markets trading until the end of the wednesday session. dayks rising for the fifth in six. this is bloomberg. ♪
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mark: live from london, this is "bloomberg market." vonnie: letter to check on the first word news.
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donohoe: rex tillerson has begun a three country tour. he is looking for a solution to a problem the u.s. has working on for 25 years -- north korea and the nuclear ambitions. recent tests show north korea has developed missiles with ranges edging closer to the continental u.s.. rex tillerson will have meetings in tokyo, steel and beijing. part inerlands taking an election today that will be the first measure of the spread of populism. , geared-islam candidate wilders, has called for the netherlands to pull out of the eu. he also wants to halt immigration. and other mainstream politicians say they will not enter an alliance with geert wilders.
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-- two eu officials, that may start the formal brexit talks stalled until june which would come up -- once theresa may triggers the exit and starts the clock on the two-year negotiations, the power shifts to the eu. in the u.s., officials are planning to charge for people in an attack against yahoo! two of the suspects are linked to russian intelligence services. the justice department is said to give a news conference on this any minute and we are monitoring all of this for headlines. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i'm courtney donohoe. this is bloomberg. vonnie: joining us now from washington with more is covance a really. ask you quickly about the attorney general and his comments in the last hour. what can we tell from them and
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where does this lead? comments are about russia. but it is still developing. i was just speaking to lawmakers about russia, specifically. and some democratic senator sav-a-stop of concerns that this administration is not pushing far enough. people are concerned about that. speaking with them, clearly, this is going to be ongoing. and republicans -- including senator lindsey graham, becoming the driving force on this issue in the senate. trying to get more answers. next week, the fbi director will testify before the house committee. so this is the story line that is rapidly developing and is staying in the news. vonnie: the house intelligence chair is holding a news conference right now and if you go online to bloomberg, you can go. what is he telling the general public. kevin: they will continue to try
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to get answers. the big question, as we are listening as it happens right now, is whether or not they have evidence provided by the of ministry in about the wiretapping allegations coming from president trump. , the top u.s.ek intelligence community officials will testify before the committee. and this will continue, despite the administration trying to talk about other things like health care and the budget, which is coming out in the next 24 hours. mark: it seems we have some clarity on president trump's taxes. what has been the reaction there, where you are standing? kevin: msnbc releasing last night that they had obtained 2005 tax returns from trump -- the bottom line is that in terms of the republicans i'm speaking with, they laugh it off. you get the allegations during the campaign trail was that trump didn't pay taxes and now it has come out that he has paid a 25 tax return rate for at
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least 2005. but the democrats i'm speaking with before the banking hearing committee telling me that they hope easels the promise of releasing the returns. vonnie: dallas kevin cirilli there in washington. yes, it was. we will try to get kevin back in a few moments. we do have breaking news? vonnie: i can tell you right now that the u.s. is filing charges over the yahoo! hack and is detailing a link to moscow. this is massive breaking news. water people are charged in this yahoo! hack including two ties to russia. this is stunning news. the u.s. is describing a year-long russia conspiracy to steal secrets. verizon did offer to buy yahoo! assets. the u.s. is charging for people
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over the theft of hundreds of millions of accounts from yahoo! users from a computer breach that threatened to derail the acquisition. we are continuing to monitor this and will bring you the latest headlines. mark: the mexican president may take a reserve stance when commenting on donald trump, that the man who is currently positioned to be his successor is showing no such restraint. the early front-runner in the next year's presidential election in mexico sat down with erik schatzker on tuesday. trump's of hatred against mexican immigrants. took on theld trump role as president and offended wasmexicans, our position to reject the hate policy
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and his by donald trump counselors. we always defend the migrant workers. not only the mexicans, but those from central america, from latin america and from the world. the city of new york was built on the financial, commercial with the contributions of migrants from the whole world. borders, we must torantee the right of humans live with freedom and justice. >> you reject the politics of hate, you say. what about your perspective on trump has changed since last
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year? now that he is governing? >> yes. i thought he would change his policy against immigrants. during his campaign as president, he won't mollify his attitude. >> you expected a change? but he hasn't changed. >> no. and it is a mistake. i huge mistake. in my point of view, you must not hate against migrant veryrs -- he is authoritarian. he is confrontational. that policy is not good for the united states.
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and it is not good for the world. and it is not good for him because if it continues like this, he will lose the next election. he will not be reelected. president,t type of how can mexico renegotiate the free trade agreement, nafta? without being disrespectful to the president of the united states, donald trump, acting with independence. with sovereignty. not themexico is economy of any foreign government. >> but if president trump insists on imposing tariffs on imports, how should the mexican government respond? >> we have to appeal to the international trade markets.
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and present complaints. if donald trump continues with his hate campaign against the , we will go tos the u.n. and we will report the united states government for violation of human rights and racial discrimination. >> specifically, mexico has duties are not compatible with free trade. so that is a position you support? that we haveport to look for commercial freedom. and not apply a protected policy. mark: that was erik schatzker inh the early front-runner next year's presidential election in mexico.
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let's get more on the breaking news on yahoo! vonnie: in the last few minutes, we have learned that the u.s. has filed charges over the yahoo! hack, charging for people in connection with that. we are monitoring a news conference by the justice department officials. you can watch that live on tv . the house, intelligence chair news conference is live on tv . and you have the justice department also doing a press conference. this is bloomberg. ♪
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vonnie: you are watching bloomberg. mark: this is your global
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business report. here is what we are following. today, china says it will keep it store open when it comes to trade, saying the current policies have helped create almost one million jobs in the u.s. vonnie: the spanish parent of chain -- marco and we look at the big coin rally. virtual currency could become increasingly important in the future. china is downplaying the possibility of a trade war with the u.s.. they say they will keep opening the door. trade andlateral investment created almost a million jobs in the united states last year. mark: germany's central bank is signaling it is ready to strike a deal on the revamp of global capital rules. they have been divided on key
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elements of the plan. anchors -- matt miller spoke with the head of the institute of the international finance. >> gathering the world isernational financials important. financial regulation is an important part of the dna. and wrapping up this process is an important part of the work stream. mark: the world's biggest clothing retailer reported a decline in profitability. said that high government costs and more discounts squeeze earnings and that they put more emphasis on online sales last year. looks like and is in talks with banks to assess the corporate bond market as soon as next week. have discussed selling at least $3.2 billion worth of bonds according to people familiar with the matter. it would be the first major
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offering since it was rocked by the emissions cheating scandal. time for the bloomberg quick take where we provide context and background on issues of interest. bitcoin broke into public consciousness in 2013 and it was used for everything from drugs to cupcakes. -- an aspect of bitcoin that has the potential to reshape the global financial system. here's a situation. after years of volatility, it reached a new high into the 17th. that search was tied to global political uncertainty. meantime, more than 50 banks joined the consortium -- exploring ways to use bitcoins technology. nasdaq is already using the blockchain for trading security
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in a private companies and the australian stock exchange is using the technology to speed up the settlement services. it is also being tested by retailers like walmart as industries explore what advantages that technology holds over traditional databases. here is the background. the creator of the bitcoin solved a key problem -- how to prevent counterfeiting. blockchain, ahe publicly visible, online ledger which records every single it quite transaction. no more than 21 million bitcoins will ever be issued. here is the argument -- since bitcoin boomed, it has been called a bubble and argued that the currency has no intrinsic value. what those focusing on the price are missing the point. it is a proof of concept for a new kind of payment. not reliant on governments or big banks. -- butprovide promising
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they say they are hyping a new kind of database. you can read more about bitcoin and all of our click takes -- all of our click takes. go to the bloomberg.com for more stories. mark: i want to turn to the hedge fund industry. eco-several executives are said -- this is another hit. now from london -- several executives are leaving. what is happening? >> we don't exactly know why these individuals left. we don't have a story behind each individual. is in terms of outflows. and after the shares dropped. and some of these individuals have been in talks for many years. so in london, one of the very senior top equities analyst, he
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left. he was part of the equities team . edwin crocs and -- the equities head. in -- played a major role the profitable and big bet. a very significant part of the team. mark: yes. there has been a five-year probe as well. >> absolutely. --ther analyst from london he also left. and a have been a few departures in the u.s. as well. that was the chief compliance officer, that was among those who have departed. so performance is not something to shout about. withdrawals of $13 billion in the last 13 months. -- isear, with outflows
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2017 any different? has the tide turned for the hedge fund industry? far, it hasn't. last year we saw more than $110 billion. so we have made up for january and there is another $5 billion left. -- investors look to rebalance portfolios and pull less money from underperformers. and give it to those who have good performers. the story hasn't changed significantly. fundsare signs that hedge made about 2% in performance and equity led hedge funds. is inrnaround this year
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the computer-driven hedge funds. so they did not perform well last year. they lost money. and yet, investors gave them $10 billion. but this year, we are seeing that they are joining the hedge funds who are seeing outflows. the trend has reversed for them so far this year. great to see you. think of for joining us today. right, coming up here on bloomberg television. in on the latest on the global capital rule. this is bloomberg. ♪
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vonnie: i am vonnie quinn in new york. mark: this is "bloomberg markets." germany is signaling its
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residents -- is signaling its readiness. -- says the confident meetings will result in a deal and spoke earlier with matt miller in frankfurt. cracks it is my understanding and feeling that these meetings, if they go well, we keep on narrowing and discussing things. and all of the meetings have progress. , it would bertant good for the global industry. they want certainty. what they have to face with regards to regulations. so we as regulators, we are clearly under pressure to produce, over time, an agreement. but you have an agreement, you need to compromise. and we need to look for common ground from a german perspective. we are looking for common ground with everybody else.
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we are under no time pressure. matt: it was a sticking point on the german side that you didn't want output floors. are you willing to give that up? -- mentioned to me earlier that you would be willing to compromise on that? >> yes. we are in the same camp. we would like for an agreement sensitivitye risk remains. and that is very important risk, the lesse regulation, that is a good concept and i like it and the outputthe output, the floor, the more you take away and the longer the incentives you said. so a very high output would not work for us. secondly, we have agreed that there will be no significant increase in terms of charges to the banks. that is a medium perspective, of course. some banks will have capital
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increases, they have to have increases to have more requests for capital and others will have relief. to in the medium, we have make sure that there are no significant increases. and thirdly, we need people at the negotiation table with a willingness to compromise. if we have these three ingredients, we will solve all the issues. matt: on that third point, i spoke with marcus schenck on his way into the symposium here, the new deputy co-ceo of deutsche bank. the u.s.rn was that team isn't fully put together yet. that they don't have a team they can put together and fully engage. you feeling you have a partner in the u.s. right now? >> the colleague of mine who is responsible for supervision has put in his resignation for the fifth of april and the new person has not been nominated by the u.s. administration.
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but that is kind of usual and we do have to wait for this person to come in from a german perspective. i can only tell you that we are at the negotiation table and set the united states should have all the time in the world to find the right person, put that person in place, formulate a position and that we will negotiate with them and find common ground. matt: so it isn't imperative to get this deal done by the end of april? late, anyhow. we wanted it ready by the end of 2016 but now we have postponed it until the end of 2017. speed is less important than having a good results. ♪
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mark: it is 12:00 p.m. in new york. 30 minutes left in the trading day in europe. vonnie: this is the european
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close on "bloomberg markets." mark: we are going to take you from new york to london. plus, covering stories out of amsterdam and detroit. here are the top stories we are following. around the world. european politics -- decision day in the netherlands. has already cast his vote. are we in for another brexit-trump like shocker? vonnie: in the u.s. it is decision day for the federal reserve. two hours from now. will be fed boost the timetable for the rate hike? and president trump is due to arrive in detroit later this hour. his message to auto executives

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