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tv   Bloomberg Markets Americas  Bloomberg  March 16, 2017 2:00pm-3:31pm EDT

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scarlet: we are live in new york over the next hour. we are stories out of washington, toronto, and tokyo. president trump's first budget proposal includes massive cuts across most of the federal government. theepa seeing some of deepest productions, as trump attends to boost the military. march madness and bloomberg's bracket for charity. find out how much money is on the line. sharesch -- canada goose jumping almost 30% in the first moments of trading, still upper entrée 5%. -- still up around 25%. julie hyman is checking where things stand a day after the dovish height. julie: once again muddling
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along. there was a reaction yesterday to the fed raising rates in what scarlet is calling a dovish height. -- a dovish hike. reaction, but today we see a little bit of a downturn in major averages. stocks back to their holding pattern. 105 sessions know without a drop of at least 1% in the s&p 500. gopro is moving sharply higher after the company unveiled another round of job cuts. full-time and open positions are being cut. the company says it will be cutting expenses. analysts largely positive, but they still wonder where the growth will come from for the company. gopro shares up 13%. they are listing fitbit, as well . we are also watching momentum stocks, including tesla. the company's elon musk says he needs to raise about 1.50 $1
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million more to bring the more affordable model 3 to market -- he needs to raise about $1.51 million more. you normally see a drop and chairs, but because this raise was smaller than projected, we as somees jump, even analysts say the company will still need to raise more money. we are also watching oil prices. they have been bouncing around quite a bit. they were trending lower. in the past few minutes, they took a leg higher. we got headlines from the saudi oil minister saying his country would do what is necessary to keep the oil market healthy, even as we got headlines last week that saudi arabia was reducing some of its production cuts, easing back up on some of its production cuts. i bring up oil, because as we discussed the fed, oil's drop recently becomes more important. we are looking at the u.s. two-your breakeven.
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brent.e line is it is trending lower here. it is also looking at inflation. brakes on?ed put the and we have the correlation here, just about 0.6. they're relatively correlated, and fed-watches will continue to watch this. scarlet: thank you so much, julie. trump: president prisoners -- proposing historically deep cuts that would touch almost every federal agency. kevin cirilli is on capitol hill with the latest. where do the cuts start and end? to defensebillion spending. twice $5 billion for the wall. cutting costssts,
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at the state department, the epa, and nih. trumpe with a president political strategist outside of the white house who said it is bad news for big pharma companies. they rely on the trials of nih to speed drug administration approval's. good news for the business community. business is working with infrastructure. a is interpreted as largely political document, but it is also setting the tone for deregulatory policies that could promote private and public ownerships, which would encourage some infrastructure companies to work with their boostments to infrastructure spending. scarlet: anything mentioned on the entitlement program? kevin: devastating for entitlement programs. i spoke with a senior aide to a of president trump member congress who said this is "awful."
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when you look at several of these entitlement programs and how they have impacted impoverished americans, especially in wisconsin and indiana in the flyover portion of the u.s., this is devastating for them. another senior aide, a prominent member of congress here that is in the republican party, said that the bottom line is that this is largely apolitical document, and in order for it to budget will have to significantly change. oliver: when you look across the planned cuts, and the epa has been part of trump's dialogue -- whatg, some people will surprise some people? kevin: agriculture. there are big farming constituencies here, and that has stood out. i think this is what is called
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in the washington world a "skinny budget." the rub in washington and congress, when speaking with republicans and their staff, is that this is just a benchmark. tommy he was leahy left scratching his head -- told me he was left scratching his head about the lack of specifics, this is very light on specifics, so the big date on the calendar is april 28. that is when congress will have to pass the spending bill to avert a government shutdown. when you look at the different storylines impacting the news flow, it is interesting that you have some republicans, like senator john mccain, opposing the administration on russia but also arguing that the call for $54 billion increase to the defense community is not enough. then you have senators like senator rand paul, more
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conservative, arguing that his policies are not conservative enough, spending too much money. that division within the republican party has a direct impact on whether or not he can accomplish his other key taxslative goals, such as policy and financial directly toward reform. all of this circling on capitol hill and the lack of outreach from this white house has a direct impact on things like the thinking further out on the line. scarlet: i like how you bring up the senate and how different members are reacting to the budget proposal. john mccain says it is clear it cannot pass the senate. what are you hearing in terms of how long it might take to get through the house? kevin: house speaker paul ryan offered a tepid, at best, oforsement of the meaning the budget, saying he likes the increase of military spending. andn, so few specifics
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nothing really to encourage anyone up here that this is something that can be taken seriously. i have not spoken to one republican today who views this budget proposal as something that can't be taken seriously in terms of negotiations. look, i think in terms of this division within the republican a 62/40 majority for republicans in the upper chamber, to everett filibuster to pass any lessee, they need to make sure the party is unified. right now it is not. oliver: kevin cirilli, thank you. now let's check on first word news. mark: in a joint statement, the chair and cochairs of the senate intelligence committee have weighed in on each tribe wiretapping accusations, writing based on the information available to us, we see no indications that trump tower was the subject of surveillance by
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any element of the united states government either before or after election day of 2016. in europe, the british prime minister says this is not the right time for another referendum on independence for scotland. she spoke to itn today. >> the reason i say now is not our effortsbecause should be put into negotiations with the european union to make sure we get the right deal for the whole of the united kingdom. atyou look at this issue this time, it would be unfair. mark top earlier this week, the your -- this got us with demanded an independence vote as the fall of 2018. officials in southern france say an armed 16-year-old high school student has been arrested after a shooting at the school that left at least three people wounded. authorities are looking for a possible second shooter.
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school shootings are rare in france, which remains under a deadlyf emergency after islamic extremist attacks. prosecutors are expected to hold a news conference today. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: coming up is the vix the best way to measure volatility right now? we're going to look at some alternative indicators that investors are turning to, new kind of alternative facts. from new york, this is bloomberg. ♪
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is "bloomberg markets." the vix asot about an estimate of volatility in equity markets. it is indicating things are pretty calm right now. makes you auch calm little uneasy, you are not alone. we have alternative waste to gauge -- ways to gauge volatility. this has been so calm, it is almost like you do not have to look at it. >> when you look at what the vix is doing, it is a 30-day measure, so if you want to see what volatility looks like for the upcoming french elections in may, it will not capture that. it is looking of the entire distribution curve, so you will not get those tell risks versus sort of the mean move options traders are pricing in in terms of volatility.
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we looked at a few here. one is just the dollar. scarlet: there is the chart. ni: analysts proposed this theory that a rising dollar correlates to bank leverage. when the dollar is moving higher, there is less leverage put in the market. therefore, risk appetite is decreasing as the dollar raises. oliver: over time, at least up until now, stocks of gone up. over the past five years, the dollar has gone up as stocks have gone up. -- you have some other charts here. look it up starters in the vix. we're looking at whether or not vix is the best way to look at risk in the markets. dani: you don't like the dollar, there are a bunch more competitors out there.
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these are more new ones here. a smaller index provider. the vix covers the entire distribution curve. this just looks at that center hump, which has fallen a lot. so the mean distribution, traders are not pricing too much variation. is a group that launched their own vix, a volatility index they are measuring. there is not too much of a difference. the cb has madeo a lot ofe money selling different products off has made, -- the cboe a lot of money selling different products off their vix. oliver: this here, is that looking at volatility and options excluding tell risks? dani: exactly. we only getting the breakeven of the mean there.
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the vix covers that, but it is a small part of the vix. a samplingis is just of the alternative charts you can look at as you look for volatility across the markets. thank you so much. oliver:er, tech ipo -- still ahead, we look at tech ipo's. this is bloomberg. ♪
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--ver: "bloomberg markets this is "bloomberg markets." scarlet: we're focusing on goose begananada trading today. the timing is incredible. we will discuss it later on. we had this big snowstorm in new york city. incredible timing. and equities are near record highs. what better time to come up with
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a new listing? oliver: shares opened at $18. ipo price a little bit under $13. here.s the first day goldman and morgan stanley, the whole list. let's look at the bloomberg --minal and a valuation's and evaluations. we are to go to radio now. l: coming up, we talk to the executive vice president of global listing services at the nasdaq. interesting year. we have all been excited about the snap ipo. we want to thank everybody joining us through bloomberg tv. the executive vice president of global listing services is joining us from the nasdaq market site in new york.
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nelson, nice to have you here on bloomberg. talk about the market environment for new listings, especially after the snap ipo, which is down some 25% just after that ipo. is there less interest in terms of new listings? nelson: i think we have seen more since the snap ipo. there is a lot of resiliency right now. 6.5%, and we about have a pretty low volatility environment. a lot of companies are waiting to see how the year develops. there has been a muted number of ipo's this year, but their are large in size and perform fairly well. our calendar gets a lot busier in april, and we do have a lot of companies now coming to us and preparing for the may and june timeframe. we think it will pick up quite a bit. cory: snap was one of the many
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companies that used the jobs act rule to go public or they can file privately and reveal less information. weaker internal controls in terms of the company. theis that affecting listings? it did not lead to a big jump in listings last year. was 2012,e jobs act and the no one provision -- the number one provision companies are taking advantage of is the confidential filing. provisionse other were not something that the buyers were going to be comfortable with. theybuyers are doing what have done in the past, but they have used the confidential filing a lot, particularly sectors like biotech. once you do go public, all those documents do become public, so
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you do take them seriously in go through the process. but if you do not feel like you are ready to go at the end, it past. like in the companies are taking advantage of that aspect and testing the waters to understand how their story will hold in the marketplace. it has been about four years with mixed results. we're looking at working with the new administration on what is next. carol: do you think the new administration will be more or less positive for new listings? nelson: overall, i think it will be more positive. there are a lot of different , thets being talked about budget, infrastructure, repatriation of cash. if you look at -- the listing product has gotten a lot of and if you look at aw expensive it can be to be public company, that is in light
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right now. so we're looking to the house in congress to come up with smarter ways for companies that is not quite the burden it is today. cory: you guys have an interesting business on the private side, helping investors or employees of companies get out of the stock they are in. i wonder how that interacts with your business of getting companies out the door and listed on the exchange. nelson: i guess we are on both sides. we work directly with companies, so i would not say they're actually getting out of the stock, but they have the ability to get partial liquidity prior to the debut. private companies are staying private a lot longer, 10 to 12 years. 2016 was a big disconnect between buyer and seller in terms of valuations.
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it was much more tilted towards the buy side. in his first quarter, we have run some of our biggest programs ever. it has flipped. side is a lot less seelll demand. that tells us how the year might develop and the confidence companies might have now to test the public market. it is a good indicator for us of the second half of the year will be more robust for technology yields. will behen you say it more robust, what kinds of companies? is it sector or geographic specific? we see a lot of infrastructure technology companies, not so much on the social media site. enterprise tech companies, mostly u.s.-driven. you see different places like stockholm or sweden, london, germany. china will probably be the largest from a technology perspective outside of the u.s.
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ggsol: nelson gri joining us from the nasdaq market site. new listings is a good sign of what is going on in the economy. scarlet: you can catch more of the radio interviews on psy rias -- on sirius. oliver: time for the bloomberg business flash. carlisle group negotiating its cell process. people say carlisle, working isngside goldman sachs, considering an listing vitamin supplement firm in new york. suitors want to buy parts of the prefers while carlisle a complete exit. dollar general could be getting back on track after a year marred by challenges. the discount chain posted better sales and profit than estimated.
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food depletion increased competition for discount chains. spending powere was hurt of some customers. carl ferdinand wants to open the table to hire offers a new players, including a chinese consortium deciding whether or not to join forces with a private equity firm. that is your bloomberg dismissed/update. still ahead, how the fed is bringing the party to the gold market. this is bloomberg. ♪ live-stream your favorite sport
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at the airport. binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv everywhere is awesome. the all-new xfinity stream app. xfinity. the future of awesome. scarlet: from midtown manhattan, this is "bloomberg markets." commodity markets are closing in new york. let's begin with gold, making a
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comeback thanks to the federal reserve. it futures up more than 2%. for the year, it is up around 7% . ongoing political risks, including the elections in europe and the brexit process. europe is slip ring -- of the euro is slipping. it advanced as much as 1.6% earlier. about u.s. crude stockpiles. .e have g #btv 5414 back 230s dropping seven barrel -- 237,000 euros last week from a record high. crude output increased, according to a report. oliver: i sat down with the president of u s concrete earlier today. a 40% jump in the companies
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shares after the election, so i asked if he thinks investors are right to be so excited about his own company and infrastructure companies across the nation. >> i think there is a lot of optimism in the economy right now, especially after the new administration was elected. enthusiasm comes from two parts. 16% of our business comes from infrastructure, so the plants that might be pushed out to 2019 are only part of the story. the other 84% deals with general economic activity. plans on regulatory reform and tax reform may take and that isto 4%, much more impactful for our business. there could be a kicker in the out years for big infrastructure spending. oliver: a great deal of your business comes from residential, from commercial building. if you look at new home starts,
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it has been strong coming in at an7, obviously part of economy that has been improving. if you look at levels relative 2007, we are at the highest it has been. how much more growth is there to come from that part of the economy? >> significant growth should come from residential construction. the 20 have in your average was 1.5. we are underlying -- under building. with all the pent-up demand in , single-family and multifamily, we think we have a long-run up yet for that part of the business. 2000,: if you look in those were moving up together. now it is sort of a shift towards multi family homes. this that affect your business? in denselyte
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populated urban areas, new york city, san francisco, san jose, washington, d.c. there has been significant additional build of apartment buildings. there are the vertical construction high-rise buildings, which are multifamily . but in the suburbs, we see increased intensity of residential developments. we have concrete plans to support that work. oliver: if you look at your share price, five years ago, single digits. a different story now, trading closer to $70. when i look across the market and the bloomberg tells me most analysts are looking at companies and expecting earnings , but they are pricing earnings down. theyou guys are about opposite. how does it work?
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how do you sustain the higher movement? >> it is strategy. we tend to consolidate heard to operate urban environments, new york city, san francisco, where there is a limited number of companies that can do what we can do. not many companies can pump concrete 100 stories in the air. we are driving margins, driving volume, driving consolidation in hard to operate urban centers. and there is significant acquisitions. we have bought 24 companies since 2014 to make as the preferred supplier for very hard, specified, and high-intensity concrete projects. oliver: sounds like you're focused on the growth. what about that m&a section of your business? >> we will continue to expand, and we're looking for another region to replicate the conditions we have in our urban areas.
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oliver: what kind of companies and what kind of areas are most amenable to coming into this? andoncrete companies aggregate companies. we have 16 aggregate facilities. we like to supply our own aggregates. we're looking at opportunities in areas of high growth, los angeles, san diego, atlanta, phoenix, places with a large and growing population base. a large degree of your business comes from commercial and residential building. will there be a shift as more people talk about president trump's plans? >> we anticipated to shift somewhat in the coming years, especially if the $1 trillion infrastructure spending comes about in 2019 or 2020. we do a fair bit of infrastructure. in new york, we are doing some
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of the bridges. we do big infrastructure projects, as well, and we are on laguardia airport right now with a project. oliver: infrastructure roughly about 1/5 of your business. worker that go? >> probably about 25%. had a: president obama little bit of trouble in finding infrastructure projects. is donald trump to run into the same hurdles as he looks for shovel-ready projects? >> he said the projects that are going to be funded have to be ready in a short amount of time, i believe 120 days. overblown in the previous administration of what invel-ready really met, but this administration, they are targeting ones that are truly shovel-ready. oliver: that was the president of u s concrete.
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u.s. treasury secretary steven mnuchin, sue -- who supports a stronger u.s. dollar long-term, thanks it is an indicator of global confidence in the u.s. economy. he spoke today ahead of the g-20 meeting in germany. mr. munchkin: i believe in the long-term interest, the strengthening of the dollar is a good thing, and i think the long-term strengthening of the dollar is a sign of confidence in the reserve currency. movementsn short-term -- i won't comment on short-term movements in the dollar. there could be issues in the short term. creeds strengthening issues. but i have focused on a long-term aspects of the currency, the importance of it as a stable reserve currency around the world. mark top president trump today observed an annual white house tradition, meeting with ireland's prime minister a day
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before st. patrick's day. they were expected to discuss brexit and immigration policies. the prime minister has a luncheon scheduled on capitol hill and will return to the white house for a reception tonight. the senior vice president for supply-chain and operations at boeing will be deputy secretary of defense. that is according to a statement from the white house. he saw the company's manufacturing operations and supply management functions. he was previously vice president and general manager of boeing missile defense systems. advancing the troubled republican health care bill was voted on today. withote was 19-17, democrats, all democrats on the committee, voting no. if one more republican had joined them, the measure would have failed, which would have
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been damaging to the measure. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: coming up, we're digging into health care. from new york, this is bloomberg. ♪
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oliver: this is "bloomberg markets." looking julie hyman is at health care. julie: it is a group that is dragging down the major averages today. ofm looking at two versions the drops we are seeing an
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health care today. , whiche the broader xlv is down about 1.1%. then you have biotech, which is down a little bit more than 1.1%. although there is some overlap, they are fairly distinct, but there is one stock in both that is a big one that is falling today, and that is biogen. it is downgraded i two different two different analysts, one pointing to the spinal muscular dystrophy drug. another analyst says it is a timing call. you have several other biotech stocks. one stock falling after its loss came in wider than estimates. piper jaffray downgrading it can neutral, saying some of the drugs are not developing as quickly as they should be.
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united therapeutics is being initiated at credit suisse with an underperform rating. analysts say the reason johnson & johnson acquisition has sent shares of united therapeutics up, as will the credit suisse analyst says the company is unlikely to be bought. these are some of the more biotech centers. within the health care xlv, you have some of the medical toolmakers lower today. this has to do with the trump rajat proposal, -- trump budget proposal, which instead of the budget increase for the national institutes of health, it is suggesting a cutback. there are companies that have high exposure to academic and government world, and these are two of the world listed, two that are falling today. ae caveat is that this is budget proposal, not necessarily
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what will be in the final version. but this is some of the stock reaction we are seeing. scarlet: a starting point for further negotiations. time for the bloomberg business flash, a look at some of the biggest business stories. gopro cutting about 270 full-time and open positions. the ceo explained the reasons for the job cuts on a call to bloomberg. our numberstting and targeting double-digit revenue growth this year. why the cats? business isgh our improving, this will help us achieve a cost structure that keeps us on track to profitability here at it is not a reaction to new challenges. theelieve they are remaining steps necessary to achieve profitability in 2017. gopro faces skepticism that it can return to growth and profitability.
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hostile takeover bid, and the ceo rallying for support while hunting for potential acquisitions. hasle say that akso assembled a task force of executive and advisers that meet daily with the expectation that sweetened.ill be it was rejected by the amsterdam-based company last week. and that is your business flash update. oliver: let's talk college basketball. what do you get when you merge basketball and good causes? the bloomberg's bracket for cause, of course. global titans are going head-to-head to raise money for charity. jason kelly explains. this is hugely exciting, the third-year we are doing this contest. it is amazing how many people participate.n to
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the spirit of competition is alive and well on wall street. thatve these big names philip up brackets and take a charity. whoever wins, the bulk of the money goes to the charity. we have first, second, and third we willis year, and have three winners essentially, and all the money will go to them. we are looking at upwards of $350,000 this year. vonnie: that is so awesome. there are some newcomers this year. jason: bill ford from general atlantic is playing. a private equity guy who is in the sports world, owner of the atlanta hawks. a newly appointed copresident of goldman sachs. of an investment
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firm. they are all joining us this year. vonnie: talk about some of their picks. who gets to the finals area? the defending champion is from sap, and there is a lot of pride on the line. we have bill ackman. we have a guy with a couple of guy andt jobs, a senior co-owner of the boston celtics. vonnie: anybody pick duke? jason: it feels like almost everybody is picking duke. funnyamazing, duke is a one because a lot of people expected them to be a number one seed. they were not but they are showing up in a lot of brackets, including our chairman. vonnie: i want to know about the
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different strategies. on: cliff has butler and smu. david einhorn has iowa state. these guys do not become successful by going with conventional wisdom. talking to everyone as the term and it -- as the tournament goes on. there is smack talking that goes on. we will bring you the results as we go on and on. vonnie: how can people follow it? if youon the bloomberg, want to participate and you are , you canrg customer fill out your own brackets. ledust phil mine out -- fil mine out. we will launch a special website.
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vonnie: there is a women's bracket, as well. isver: for terminal uses, it .racket pretty cool. on the left is bill ackman's bracket, and mine is on the right-hand side. right here, and indexer versus active manager. scarlet: you being the active manager? oliver: maybe. did you do one? scarlet: i did not get around to doing it. i needed help in filling out my bracket. i would rather do a hockey bracket. oliver: i do not follow basketball and you can watch online at bloomberg.com. it is on the front page. you can see the breakdown.
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it will be updated by the minute. you can see that i am rooting against my home state school. you can see where everybody stands. coming up, the maker of $900 fur-lined parkas goes public today. more details on that, next. this is bloomberg. ♪
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oliver: this is "bloomberg markets." scarlet: canada gives has made its trading debut on the new york stock exchange today under goos. $18.s opened at the ipo was $12.70 last night. joining us now is our ipo reporter. leading up to this ipo, we were
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talking about how the timing was perfect because we had equity hsrkets near record hig and then a storm on top of it. >> snowstorm right as they were pricing. abel asked if it mattered, -- people asked if it mattered, but during the spring, some investors might get fatigued on the winter wear. old andany is 60 years has been taking off since 2013. now they are taking it public. i spoke to the ceo earlier today, and he said it was just the right time. they are at the beginning of their growth trajectory it i thought that was interesting. we have seen a few brands really miss their window. so big timing here for canada goose, currently trading at about $1.7 billion.
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ll of her pot buying when you -- oliver: when you buy a stock, what are you buying? >> the near term, it seems to be pushing these coats, their flagship parkas. expensive, coyote lined fur on the hood. these were kind of made famous by james bond. you have seen them in new york and toronto. they picked up on fashion. that is the near-term growth. i said, look, this is an item you bragase one of the about how well made it is. so where do they get customers back? he said the longer term is looking about different product lines, like spring wear or bed ding. it is an interesting play. when you look at the luxury companies that are publicly
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traded, michael kors or kate spade come into mind. one they expanded from product, it diluted the brand. scarlet: they could branch out into accessories, but it will not make the kind of money the codes do. >>-- the coats do. >> exactly. he is hoping that the authenticity, the realness resonates with customers, so that is something he will try hard to maintain. you dilute the brand, and this could go off a cliff. if they figure out how to find the next thing like the parkas, that is the long-term growth. scarlet: it is the hot item of the moment. one to eat said the canada goose ipo.he heelies
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anybody noteworthy in terms of who bought the ipo? >> we don't know yet, but it could be canadians, could be u.s. investors. it is listed in both exchanges. scarlet: she mentioned the ceo. we will be speaking with the ceo and cofounder of canada goose at 4:40. president trump is proposing historical budget cuts to increase defense spending. we will have leon panetta. this is bloomberg. ♪
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oliver: i am oliver renick. i am scarlet fu. welcome to "bloomberg markets." ♪
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oliver: we are live from bloomberg world headquarters in new york for the next hour plus covering stories in moscow, washington, and paris. here are the top stories around the world. a pretty quiet day for u.s. markets with health care stocks posting the egg if losses in the s&p 500. we will talk about carl icahn emerging in the trump administration. his influence could shape regulations and policies that could impact of the portfolio. is proposingmp historic budget cuts. we will have reaction from the former cia director leon panetta. let's get a check on the markets with julie hyman. more of a downturn now than earlier. scarlet called a dovish raise
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for interest rates. we are seeing a little more movement. a pause than like anything else. take a look. health care is one of the underperformers and concerns we have seenget treasury rates go higher. financials in today's section -- session. a day after the fed raises rates. yesterday, where we saw yields lower, a reversal after weeks of climbing that we had been seeing for those yields. now going up once again today. yesterday down in the wake of
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the fed decision up once again as we see selling resume in the treasury market. i want to talk about a big corporate story today, canada going that company public. up 28% of its first day of trading after the company raised to the equivalent of $256 million, it is a canadian company. it is interesting to talk about the evaluation of this ipo. , withhart is put together lubricant halogens, -- bloomberg intelligence. globally, valuations have been expanding, except for the u.s., which has gone sideways. it makes sense it would have gone public now. she estimates it would be valued at a higher valuation than the most highly valued company in
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the universe. the sametinues with sales growth we have seen for canada goose, something like 80% last year, that evaluation will come down. it will be interesting to see if they can keep up the pace of growth. we might see more direct to consumer sales for canada goods. we will track it in the next coming days and months, we will see. totally different company but we will follow the ipo. scarlet: a jampacked week for economic data releases. today, data shows higher momentum is building. jobless names for the full -- first full week lower. another piece of soft data outperforming and housing climbed to a four-month high in february. for more on what this means for a data dependent fed, chief u.s. economist.
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not all data is created equal and you say the fed is particularly focused on core inflation. >> the fed has pretty much said mission accomplished and what they happen looking for is for a low rate of core inflation to move higher. the data we have gotten, i think essentially they are saying we're feeling more confident today about inflation than we were last year when it was running low. for me that will be the key metric moving forward in terms of where the fed rates go. it was a concern yesterday, the markets were concerned for 18 and 19. goes, ife inflation the phils and objective and for here, that will determine how many rate hikes we get this year and next year. >> i want to bring up the terminal to show the fed fund rate versus the 10 year yield. it was not the only thing removed as a result.
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99, same situation. but at the end as well, you look from start to end, and what is happening in terms of what we have seen astelection, it seems like move higher has been related to expectations and what has happened in donald trump's infrastructure land as opposed to what the fed is doing. days like yesterday, yields go down -- >> yesterday was more of a relief rally here the year was we would get a steeper rate path and really for the first time in many years, a strong sick all of what they will do on rates. yellen last friday. the concern was, is the fed going to be less gradual than expected? that was the concern. people took solace in that and said they will remain in the last couple of years.
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what happened at to yields after, there is a move down as well. is there a structural entitlement to get in? >> the fed keeps saying we will hike rates four times, we come this year and we are looking for three. this is the first time the fed would deliver when they said they would hear it a little skepticism in terms of the market saying we don't know what that can go to more times this year. quite, skepticism in terms of the market. they'llas plunging, have found some stability and has fallen below the $50 per barrel again. always look through movements. up or down oil price min -- oil, even when it has gone up, the lows $20 a barrel.
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the last several months, but -- they put in a statement that they are looking at the core. in much better picture of headline inflation. let's talk about housing because we got some numbers. i want your take on the trend. i want to look at multifamily versus single-family starts. , this is no news here. in 2007, we saw single-family homes growing. the opposite is happening. a nice pickup today and we are rate inat the strongest
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2007. how important is it to get that growth higher? >> hugely important. one of the key metrics coming out of the report is single-family apartments. they were up about 17%. that bodes well going forward and an impediment going forward for realtors, that is encouraging in terms of supply coming online. that will alleviate demand we are seeing now. cannot talk about this without checking out the mortgage rate as well. the latest increase by 25 basis points does not really have an effect on the housing market yet but the steady, gradual pace of increases will at some point. what will be the signal? >> mortgage applications are one to look at. now is thateeing
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they have been really stellar in the last couple of years. -- gains have been gradual. but that should offset the moves we have seen. seen any real impact on home sales so far. i suspect those gains will offset any further increases. thatere were speculations perhaps maybe they were getting behind the curve. it was a clear indication yesterday that they don't feel that way. >> i don't think they feel that way at all. they feel pretty comfortable right now with where they are. really clustering around the median, a much wider does version in 2019. everyone comes together in the view that three hikes this year and next year is appropriate and that is enough to keep core
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inflation gradually higher. are you bothered at all by the can's -- the dissent and what that could signal? >> he is fairly new to the fed. fact that he voted with the committee to raise rates is more telling than even the most dovish folks are buying into the rate hike now. it is overseas risk i think. she joins the fed, which is the most dovish element. to me, it is quite clear in the minutes. -- in her speech last friday, this is what prevented us in 2016 and kept us sidelined , given that is the main concern, a lot better than where we are in terms of global risk. scarlet: all right. thank you so much.
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let's get you a check of the headlines this afternoon with mark crumpton. mark: president trump is proposing restoring budget cuts across government to pay for the big increase in defense spending he wants. defense spending would be cut by 28% and the environmental protection agency would be cut by 30% and the pentagon budget would be increased by 10%. lindsey graham of south carolina has already called the budget cuts dead on arrival. cleared from british prime minister treason may to formally start the process of leaving the european union. queen elizabeth has given royal assent -- consent. when she wants to invoke article two of the treaty which will begin the exit process. a letter exploded today at the paris office of the international monetary fund, injuring one person. the incident came as a group
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for -- responsibility sent to the german finance ministry the day before. officials determine whether there is a link to the imf letter bomb. ukrainian president petro signed an order today proposing sanctions on russian owned banked -- banks. the latest protest against russian support in the country. moving capital abroad, paying the second and second largest state-owned banks. global news 24 hours a day powered by more than 2600 journalists and analysts in over one hundred 20 countries. oliver: coming up, how carl icahn may benefit from his advice to president trump. that is next. on shares ofg eyes
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snap falling for the first time since beginning trading. those shares have come under quite a big -- quite a bit of as we approach the market close here. this is bloomberg. ♪
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oliver: this is "bloomberg markets." >> we have an america first budget. it is in the details. $54 billion of additional defense spending. details on where that money is going. we see increases at the v.a., increases at the department of
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justice in law enforcement, things that include border security and immigration control. increases within the department of energy to deal with a nuclear triad and reductions and similar amounts offsetting dollar for dollar in other programs. 31%largest reduction is reduction within the environmental protection agency. , department oft state, and the others produced a lesser amount. 1% as with many of the agency. line items within the budget. this is the message the president wanted to send to the public and the press, he wants more money for defense, border enforcement, law enforcement generally, the vets, school money, and to offset the
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with savings elsewhere so all of that is done without an additional dollar added to the deficit. as i mentioned before, the budget does not balance the budget. the budget reallocate's and has anytize is spending family or business would do. pictures not adjust big items such as policy changes, revenue flows, tax policy, mandatory spending. this is the top line spending budget. full budget will contain all of the rest of the pieces and parts, that will be released in may. i willi take questions, do something i don't ordinarily do it i call on the new york times because they are in trouble. where is my new york times guy. matt and alan are in big trouble. i will give you the first press -- question, printed this miami
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father 17 triplett girls. my 17-year-old daughter wishes that had happened but my 217-year-old sons are really upset. [laughter] that, thatd clarify would be great to give you the first question. go ahead. >> we're not great at math obviously in the new york times. >> the gender was wrong. >> during the campaign, president trump talked about the national debt. you mentioned in your watch it message this morning. as the president talked about last year's campaign, is there a plan to eliminate the national debt? to limit the debt in eight years, is that something the president is trying to do? >> a good question but i would suggest it is not the right time for it.
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it is the first part of the appropriations process. the appropriations committee, the house, the senate, congress controls the power of the purse, and this will be the first step in the process. the issues ofs longer-term deficit and longer-term debt in the budget. we have to deal with revenue flows to the government. a fair question but i do not think now is the right time to ask. of the stateout department. i know you are leaving a lot of discretion to the people in charge and all the agencies for implementing these tests are how much is intended to come out? >> a lot of it. as i have said before, a reason you have seen dramatic reduction in the state department on a percentage basis is not of the president thinks diplomacy is not important. nothing could be further from
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the truth. we have seen secretary tillerson have a tremendous -- on the deal he cut with iraq. we believe this budget protects the core function of the state department. it so happens much of the foreign aid the president talked about, much of the money that thoseo climate research, types of things, are actually in the state department budget. if the line items had been in the department of commerce, you see that go down by a similarly large percentage. directly to foreign aid, yes. >> the budget showed a .8% decrease for nasa. you have talked about the administration using private companies likes a sex for more of that. will some of this be shifted over to the private sector and does this show a commitment on the administration's part toward
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science and nasa? >> go back to the president's speech, talk to him and try to identify his priorities. i'm still interested in america being involved in state exploration. though the overall topline is 0.8%, individual line items that deal with specifically spacex intentation, part of the is to promote what you talked about. -- expense in the house tells you a lot of these cuts have not been voted for before. do you expect a lot of pushback for republicans to these cuts? travely, those who around, you want to touch security and medicare and big entitlements.
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the fact that those programs will remain untouched and as the committee said, it ignores 70% of spending and 90% of growth over the next decade. >> the president will keep his promises that he kept over the campaign trail. no reference to medicare or medicaid or any of the other mandatory programs and some people call it entitlement programs because that is not what the budget is. half of it is defense and the other half is everything else. here,ecause it is not that does not mean we are dodging the issue. to your other question about it not been popular on the hill, yes, i recognize that and have been on the hill to know some of these have been very unpopular. the president has -- is in a unique situation. i had my constituency, a district.
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we are always dealing with special interests back home. the president is beholden to none of that. budget.ident drafted a he did not have special input for interests on this and did not focus on how the programs might impact a specific congressional district. we know that going into it and the message we're sending its we want more money for the things the president talked about, defense being the top one, national security, and we don't want to add to the budget deficit. we are happy to talk to congress if they have another way to do that. says theited nations road is currently facing the largest manchurian crisis since the end of world war ii. countries.in four yet you are cutting funding to the foreign aid budget.
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are you worried some of the most vulnerable people on earth will suffer? >> we are producing funding to includings programs those run by the u.s. and other agencies. that should come as no surprise. the president said hundreds of times, i'm going to spend less money on people overseas and more money on people back home. >> given your focus on dollar for yourr offsets, fiscal year 2017 request, you did insist on dollar for dollar offset. why are you not concerned any to the deficit? >> the question deals with 2017 request, a $30 billion, a billion and a half and therefore the wall, and it is not entirely offset. a couple of reasons. one is time.
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some of that is overseas contingency operations. colored somewhat history with the overseas contingency operation. we went through this and made sure the money being requested is focused truly on areas involved overseas. iraq, afghanistan, and those kinds of places. not all of them were offset. yes, ma'am. >> the president's call for publicting planning for broadcasting and the national endowment for the arts, if the republican congress sends appropriation bills that fund nea, will he veto the bill's until the republican leadership -- and send bills that defund those? >> the message the president is sending now is we want to defund those and he has sensible reasons for doing that. a simple message.
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i put myself in the shoes of the steelworker from ohio, the coal mining family in west virginia, the mother of two in the troy and i say ok, i have to ask these folks for money and i have .o tell them where to spend it can i look them in the eye and say want to take money from you and give it to the corporation of public broadcasting? it is something we do not think we can defend anymore. it does not come over one by one. large appropriations bills and we work with congress to go through the process and we make determinations on whether or not to veto them at the appropriate time. in several places, you talk about eliminating funding for unauthorized programs. are you laying down a marker? spending discipline would be approved if congress authorizes? >> we hope.
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we spend a lot of money in the federal government on programs not authorized at all. to break it down, a three-step process to spend money. it first, then authorize it an appropriate it. a lot of the programs we spent money on for years have been unauthorized spending. most of them used to be of them wered some never in the first place. they were appropriated without any authorization. yes, that is not the right way to do it. it is the wrong way to do it. you heard the president talks specifically on the campaign trail about at least 5% reductions and that is what generated the budget. housing, urban development, the budget blueprint calls for a 13% reduction, $6 billion. president trump said to specifically to urban black voters, what do you have to
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lose? it turns out they have to lose at least $6 billion that goes to programs to benefit those communities and what do you say to those americans? >> no one will get kicked out of the house. we looked at the budget and what we saw, and i talked to dr. carson today come we went to the analysis of the hud budget and a lot of the money got spent on government housing and building. it is infrastructure. what secretary carson and i talked about was figuring out a way to do that better. we are working on a large infrastructure program and what we want to do is take the money, not really well run and move that into the program. you see similar items for a similar reason. it does not mean the president is changing to infrastructure. we are saying for years, we have built of a structure and it does not work right well.
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taking ite doing is out of the discretionary budget and moving it into the infrastructure plan in the summer. exclusively about housing the support, including meals on wheels, a lot of americans, and one organization delivers the males to thousands and say though citizens will no longer be able to be divided. what you say about americans losing out? is not aon wheels federal program, it is part of the block grants we give to states. that is what we fund p are we spend $150 billion on the programs since the 1970's. these were identified since i believe the second bush administration as ones we are not showing any results.
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we cannot do that anymore. meals on wheels sounds great. to take federal money and give it to the state, and say look, i will give you money for things that don't work it we cannot defend that anymore p we are $20 trillion in debt and we will not spend it on programs that cannot show they actually deliver the promises we have made. are you talking about programs that do or don't work? rural divide afterschool educational programs for individuals in the area, which happens to be what helps president trump in the white house. i'm curious to say -- to hear were children will not be provided in the communities for the educational care they need.

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