tv Bloomberg Markets Americas Bloomberg May 16, 2017 2:00pm-3:31pm EDT
scarlet: we are live from bloomberg world headquarters in new york over the next hour. we begin with politics. president trump says it is his absolute right to disclose intelligence to russia. alan patricosenate majority leah mcconnell says he is fed up with the drama from the white house. the vix is flirting with its lowest level in decades. why are investors still trying to protect themselves from an increase in volatility? in corporate news, ford is set to be cutting 10% of its global workforce. mark fields under pressure to boost profit and get the stock back on track. in two hours.lose let's get a check on how things are paring with julie hyman -- faring with julie hyman.
julie: stocks keep wavering between gains and losses. the nasdaq the only three of the major averages that is relatively consistently up today and still trading at a record. we are seeing a tight trading range once again. we are seeing the vix continued to trade at low levels. .e will hear from oliver renick if you take a look at the bloomberg for a chart we are watching, we did get industrial production beating estimates, but both building permits and new home construction coming in below estimates. which u.s. economic data is beating estimates, it is trending lower. even as the stock market is maintaining if not taking considerable legs higher.
the correlation between the two has been breaking down. afterentury fox declining berkshire hathaway revealed that it eliminated investment in that company. disney down 1%. reportedly, hackers have said they have access to one of the company's upcoming releases and will release pieces of it slowly i unless disney pays a ransom. we're looking at the latest acquisition by walgreens. man's --as issued the this might be a sign that they are not ready to approve a deal. they were going to sell some of its locations to fred's. scarlet: thank you so much. julia: sean spicer on camera
briefing with reporters today. instead, he will hold it off-camera. mcmasteruced h.r. during a separate his breathing. mcmaster once again asserted that president trump didn't jeopardize u.s. national security by sharing intelligence with russian diplomat's. >> what the president discussed with the foreign was wholly appropriate to that conversation and is consistent with the routine sharing of information between the president and any leaders with whom he's engaged. >> [indiscernible] >> i'm not going to be the one to confirm that sort of information. that could jeopardize our security. julia: joining us from the white house is kevin cirilli. -- ande up from our bc come up from our d.c. bureau,
robert. he wanted less drama from this administration. no shortage of that it seems today. kevin: there's a tizzy of turmoil here at 6000 pennsylvania avenue. the drama and fallout continues to engulf this administration. clearly, h.r. mcmaster doubling down, standing behind what sean -- trying to showcase different avenues of the administration. journal mcmaster saying the administration did nothing wrong -- in general mcmaster saying the administration did nothing wrong. quite frankly, they are facing questions not just from democrats, but from republicans were increasingly concerned that this will hurt their chances of passing a conservative but a slave agenda. -- legislative agenda.
pompeo: you've got mike who will be briefing members of the house intelligence committee later tonight. they reached out to the white house. this threatens to overshadow the other items on the white house's agenda. talk about how this will dominate the airwaves for the next couple of days. this. all the air out of washington until more questions are answered here. -- this will suck all the air out of washington. president trump didn't even know where the intelligence came from. that opens up a whole new line of questioning. it's a real can of worms that will continue to fester and distract from everything else. julia: the you think this does pose a risk to information sharing between the united states and their partners? this is something the washington
post alluded to. the report from the new york times says it was israel who provided information. do you think this is going to pose a challenge for president trump going forward? that he is seen as untrustworthy? concern's definitely among our allies, particularly when it comes to national security, that the white house is undisciplined. they are not handling things well, there isn't proper processes in place. that will give the allies some pause in dealing with the united states government. scarlet: we also have president trump meeting with president her to want today -- turkish president erdogan today. kevin: these meetings are getting lost in the shuffle. they spoke primarily about national security.
headednt trump will be to several stops, including israel. it will be interesting to see what benjamin netanyahu has to say. conversations getting overshadowed by the bevy of controversy pouring out of this white house. julia: the national security adviser did say everything that was shared was wholly appropriate. he also said just a there was a leak within the administration. what does that mean for this government? kevin: that leak could put national security interests at risk. that's what the administration now has to grapple with. who is the source of this leak? it does raise significant concern about people, top-level officials having concerns about how president trump interpreting highly classified information.
there's mounting pressure on just who exactly president trump will look to appoint to replace james comey. just moments ago, senator john cornyn putting out a statement saying he is not interested in the job. he was a top contender. julia: thank you for bringing us up to speed on that story, too. also, robert levinson. thank you. let's check on the first word news this afternoon. mark: senate democratic leader chuck schumer wants the white house to release transcripts from president trump's meeting with sergey lavrov during which confidential information was reportedly shared. is "the only way for the administration to categorically prove the report untrue. >> if this report is indeed
untrue, it means the president may have badly damaged our national security. until a transcript is turned over, the public will doubt whether the president can handle our nation's most closely kept secrets while the interview process continues to replace james comey, mitch mcconnell has offered his recommendation on who he believes should be the next fbi director. he spoke to commence really early this morning. sen. mcconnell: i recommended merrick garland may surprise people. he was a prosecutor in your on the city bombing case. -- in the oklahoma city bombing case. continue thel tradition of the fbi of having and a political professional. apolitical professional. mark: a long friend of garland
says the judge is happy on the bench and has no interest in leading the fbi. there's a blame game going on over that global cyber attack. microsoft points the finger at the national security agency. hackers used a technique stolen from the nsa to target microsoft's windows operating system. theirompanies owe customers and reliable process for fixing security flaws. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: thank you so much. julia: quite excited by the mention of james comey. kevin took my question regarding a possible leak as people concerned within the administration about president trump's handling of the situation.
julia: every new -- scarlet: every new administers and has to grapple with that. -- administration has to grapple comingat carried -- with that. coming up, senate majority leader mitch mcconnell once less drama from the white house. julia: interviews from the animal salt conference tomorrow -- annual salt conference tomorrow. from new york, this is bloomberg. ♪
julia: this is "bloomberg markets." i'm julia chatterley, with scarlet fu. scarlet: the republican agenda faces another obstacle. earlier today, kevin cirilli spoke exclusively with senate majority leader mitch mcconnell about this latest white house controversy and more. sen. mcconnell: i read washington post story and i read general mcmaster's response, which tends to refute the story. but the story. we could deal with -- rebut the story. we could do with a little less drama from the white house so we can focus on our agenda. tax reform and repealing and replacing obamacare. kevin: i want to talk about that. a lot of attention on who the president will select to nominate to replace james comey. have you spoken with the president about this?
sen. mcconnell: i have. i recommended merrick garland. may surprise people, but he has a deep background in criminal law he was a prosecutor in the oklahoma city bombing case. president trump will continue the tradition at the fbi of having an apolitical professional. needs do you think he democratic support? sen. mcconnell: it would be good to have democratic support. if he picks someone with a deep background in law enforcement who has no history of political involvement, a genuine expert -- garland's neck sample of that. that's garland is -- garland is an example of that. kevin: i want to mention this tweet last week. president trump tweeting "james comey better hope that there are no tapes of our conversations."
should that committee have access to those tapes if they do exist? senator burr and senator warren are handling the intelligence committee investigation. they will decide what they need. in the meantime, for the rest of us, we need to concentrate on what comes next. we need to have a great choice for fbi director. i anticipate the president will do that and move on. how has all of the drama influenced you are ability to get across health care reform? what is the update on that? somebody republicans elected a republican controlled congress to fix health care -- so many republicans. sen. mcconnell: the bill finally passed the house. it won't be any easier in the senate. three days a week, we are in intense discussions with all the members of the senate.
my goal is to get to at least 50 votes to repeal and replace obamacare. those discussions are underway. we cannot take forever. the private health insurance market is collapsing. insurers are pulling out of the markets. i don't think we have forever to address this. i will not put a strict timeline on it. people, there's nothing more personal than health insurance. can you guarantee that whatever reform packages past that no one will lose coverage? sen. mcconnell: what we know is what we have now is a disaster. the status quo is unacceptable. we need to do better than the status quo. kevin: another big issue is tax reform. this has to be revenue neutral. the president is proposing a massive tax cut. there could be tension. is there tension? what is the timeline? sen. mcconnell: we will have to
be revenue neutral. we have a $21 trillion debt. we added an enormous amount of debt during the obama years. reform wasme tax done it took several years. we certainly want to try to complete it does congress. and make america more competitive. that's what it's about. we didn't have one europe 3% growth during all of obama. -- one year of 3% growth. kevin: i've spoken with a lot of senators were against the border adjustment tax. sen. mcconnell: it probably wouldn't pass the senate. the way we are trying to go theard is the secretary of treasury and this bigger and myself are trying to reach an agreement on a proposal that we can start with. it will start in the house. we have not reached that agreement yet.
we will at some point. border adjustability is a pretty controversial thing in the senate. we will see what is in the final thing we agree to. kevin: have you spoken to the president since last night? sen. mcconnell: i speak with him frequent lee. -- frequently. kevin: we hear of the need for regulatory reform, particularly dodd-frank. sen. mcconnell: we are doing a lot of regulatory reform. on obamae 14 repealers era regulations already. i would love to revisit dodd-frank. community bankers have taken a hit. democrats don't seem to want to change it, even though all their community bankers are complaining about it. it would require some democratic involvement to achieve a statutory change in the senate. kevin: next week, the president
is unveiling his budget proposal. there's a lot looming in september, potentially even a government shutdown. what will you be looking for in the president's budget? sen. mcconnell: we generally don't pay a lot of attention to the president's budget, but we share a lot of his priorities. breaking out of the dollar for dollar -- when the democrats ran a dollar ofonth for defense spending increase, you had to have a dollar of domestic . most of the president's priorities i share. there will have to be a bipartisan negotiation. scarlet: that was mitch mcconnell. right now, you have sean spicer giving a briefing. it is off-camera. he says the intelligence leaks
julia: this is "bloomberg markets." i'm julia chatterley. scarlet: i'm scarlet fu. even though the volatility index is at a historic low and we are talking about the vix come investors are still finding reasons to protect themselves from volatility. oliver renick joins us with a couple of cards to explain what is going on. there's a lot of stuff going on with volatility. right now, it is the focal point of the market. as it pertains to money going into the part of the market you might think is not very active
at the moment, it's the u.s. and the minimum volatility etf. etfow of funds into this that bases itself on finding low volatility stocks in the market. if the volatility is low, why do we want to do that? this is the flows into the etf. in, in, and. their objective is to find low volatility. the market has not been very volatile. i want to point out the bottom panel. these of the correlations to the 10 year bond and the bloomberg barclays index and the actual vix index. lots of reds and greens. they don't see a high vix.
there's a slightly stronger correlation to the bloomberg barclays index following bonds. when bonds to well, people are putting money into the index. if we look into the content of the etf, we can find out why. this is where we have the biggest difference from the s&p 500. the utilities group is an 8.5% rating. health care almost a 20% rating. are begs the question, investors using this as a bond proxy play for the rate story as opposed to the mix in general? looking at what's been going on here -- flows, flows, flows. that's the story here that is very interesting. right now, a lot of it has been driven by what's happening in terms of investors still wanting that low rate play of utilities and real estate stocks and consumer staples. right now, it is certainly not
volatility driving what's happening here. scarlet: even with the federal reserve normalizing interest rates, people look for those interest-rate sensitive stocks. oliver: that's exactly why we started looking at it. this is still very much the play, especially when so many sectors are trading at high valuations compared to their historical norms. julia: thanks, oliver. still ahead, the commodities close. stay with us. this is bloomberg. ♪ these days families want to be connected 24/7.
we begin with oil, falling today as we await the latest numbers on u.s. supplies coming tomorrow. if opec extends output cuts until 2018, it would eliminate the global surplus that has kept crude prices in check for almost three years. this is the performinance of nyx crude. will opec agree? gold futures seeing the longest rally in four weeks as the dollar slumps on news of president trump's disclosure of classified information to russia. gold rising for the fifth straight day. let's take a look at a chart you can see on the bloomberg at g 8589.8589 -- g #btv
hedge funds cutting their bullish wagers on copper the lines on the bottom half show the falling price of copper. signs a minute factoring slowdown in china -- manufacturing slowdown in china. scarlet: we will stick with commodities related news. elliott management has come out with more demands for change -- the firm has called for a full or partial spinoff of oil assets. bhp's ceo defended his strategy, telling bloomberg that many shareholder support him. many supporters of the strategy. scarlet: bhp is considering whether to sell off more of its u.s. oil assets. the latest intelligence drama
from the white house may only serve as another distraction from the trump agenda. , bloombergek television is focusing on the state of tax reform. i want to turn playbook critic a vocalssue -- to critic on the issue. alan patricof joins us now to talk more. it was said that the way to understand the president is to take him seriously but not literally. based on what you've observed from the white house, do you take his comments that he is still considering changes to interest rate reduction and corporate taxes seriously or literally? alan: anyone who takes them seriously is not watching the news actively enough, not watching their bloomberg every day. it's hard to take them seriously about anything. you just don't know what's going to pop up the next moment. scarlet: what is the likelihood of carried interest reform? alan: i don't think that issue
will depend on him. he said he's in favor of carried interest reform. this has been a political football -- some of my good democrat friends have not been -- people of changing who are really honest with themselves, it's always been ordinary income and is not going to change. characteristically is not going to change. it gets down to politics. on?a: who does it depend mark: the lobbyists and how they affect the commerce men and senators. the lobbyists and how they affect the congressman and senators. anyone speaking off the record would say it is ordinary income. scarlet: capital gains rather
than ordinary income, which is a lower tax rate. interest, the way it is currently taxed, costs americans to billion dollars on an annual basis. -- $2 billion. alan: that is the slippery slope. everything is nonmaterial, but together, these things end up to be material. this is more symbolic. it's not fair. , so i'm really talking against myself. on the other hand, i'm willing to be realistic. warren buffett is willing to be realistic. larry summers certainly has spoken out on the issue. it is what it is. julia: is it better to focus on
other battles? there are big tech companies that have a lot of cash abroad that have been accused of doing things with subsidiaries around the world -- they have a lower tax rate than the guys that pay a capital gains tax. alan: why can't we do both? i'm totally supportive of figuring out some technique for repatriating tax dollars that have not been paid that are earned abroad. i do think that would help the whole infrastructure program. i'm very supportive to that concept of giving some kind of tax holiday for a period of time to get those funds repatriated and come up with a system going forward that makes sense. there is a repatriation discount or tax holiday, what would that mean for the pace of mergers and acquisitions in the tech industry? alan: it certainly will help, no
question about that the question is how much of it will be used for buybacks and increasing dividends. which is what a lot of people say a lot of these tax proposals will end up doing and changing volcker rule and changing dodd-frank will give the banks doingoney to start buybacks and paying higher dividends. julia: what would the change in the deduction mean for venture investing? what would it actually mean for investment? alan: i don't think it would make any difference whatsoever. when we make investments, we never stop and consider what is the text application. -- the tax implication. we like the company and we like the concept. i've never heard and not newer -- an entrepreneur talk about
what his tax status is going to be. scarlet: you are not changing the way you do anything based on any kind of expectation on what congress does or doesn't do when it comes tax reform. alan: so far, from what i've read, no. we invest because we are passionate about ideas and people and the people who run these companies are passionate about their ideas and they want to implement them. taxes don't even come to consideration. the taxes don't get paid until a long time, when you sell the company. julia: probability of comprehensive tax reform? alan: there's a good possibility. the environment is right. what will be part of that?
i don't know. i don't think it will happen this year. ofs a long list accomplishments that everybody wants to achieve this year. it will take a little longer. much, alank you so patricof. times citing york a current and former american was provided by israel. would notficials confirm that they were the source of that information. the revelation also raises the possibility the information could be passed to iran. trump is scheduled to travel to israel next week. general h.r. mcmaster is defending president trump's
sharing of that classified information. >> what the president shared was totally appropriate. the story combined what was leaked with other information. and then insinuated about the sources and methods. i wanted to make clear to everybody that the president in compromised any sources or methods in the course of this conversation. mark: mcmaster initially dismissed the story is false when it started to circulate. some officials say the disclosure might have impacted the safety of the key intelligence source involved in the fight against islamic state. senate majority leader mitch mcconnell has told reporters that he hasn't lost confidence in president trump. mcconnell says he has confidence in the intelligence committee
leaders to get to the bottom of what happened. in an interview this morning, mcconnell said he would like to see "less drama from the white house." syrian rebels and government officials are meeting separately with the u.n. envoy as peace talks got underway in geneva today. the meetings are the sixth round of talks brokered by the u.n. special envoy. the gathering has been overshadowed by a u.s. state of carbon a conditions that the syrian government built a crematorium in one of its most notorious military prisons to cover up dozens of daily executions. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. , the twitter up cofounder is rejoining the company after selling his start up. what it means for twitter's future, next. this is bloomberg.
julia: this is "bloomberg markets." let's turn to technology. joseph twitter higher today following news that co-founder biz stone is rejoining the company. -- shares of twitter higher today. cory johnson joins us from san francisco. what can he do? cory: what has he done before? it's an interesting move for this company that has seen such a revolving door of senior executives a company that is not quite in crisis but is certainly struggling to get better and get bigger. maybe biz stone can have success
were others have not -- where others have not. this is a company that has a part-time ceo in jack dorsey could probably use some help. scarlet: we spoke with biz stone last year. he told emily chang that he has confidence in jack dorsey but also cautioned that turning around twitter would take some time. >> i don't follow the small ups and downs. i don't look at the stock on a quarterly basis. i think great leadership thinks in terms of decades, not quarters. i'm just waiting this out. in the grand scheme of things, jack is just getting the job, basically a year. that is nothing. scarlet: should we speculate further and question whether jack dorsey will remain in this job?
cory: anytime you have a part-time ceo, you want to wonder what will happen long-term for the company. there's a whole level of response ability -- the band is back together. biz stone, and williams, jack dorsey. those are the three founders of this business. interesting that they are all back there trying to fix this. the biggest issue remains the number of users. they've struggled adding users for quite a while now. yes, they are up to 320 million. that's not a lot more than the 305 million they had 18 months ago. that is justsiness not growing that much. it's a problem for this business. the most disconcerting thing for me is not just the ability to they can charge
more and more from advertisers, it's ok to have the user base you want. you can convince advertisers that they've got some great tools for advertisers. down on ar is coming year-over-year basis. that's really disconcerting. it shows you that advertisers are deciding with a consistent trend that there's better vehicles were advertising than on twitter. julia: such a tough argument to make here that we can monetize if you are -- a fewer number of users. cory: there's an argument that -- half mya of advertising budget is wasted. i just don't know which half.
the targeted advertising is better. that could be true of twitter as well. advertisers aren't buying this notion that a targeted customer through twitter's technology will be a better customer for this adds. julia: half my advertising budget is wasted. i just don't know which half. bloomberg news is among twitter's video partners. scarlet: julie hyman has a check on our energy companies. julie: one of the worst performing etf's in the monitor. .75% if you look at the xle. within it, if you look at the worst performers, a lot of natural gas and oil producers. capital oil and gas down nearly 2%. ero down 2%.l
natural gas also taking a hit in today's session. right now, it is pretty mild. mild in new york and the northeast. the forecast is for it to heat up and then come back to more mild weather again. not a big demand for air conditioning. we are seeing that gas down by 3.5% today -- natural gas down by 3.5% today. we have money managers quite short natural gas at the moment. quite long natural gas, excuse me. low short bets on natural gas. there's the least short interest on record. we have seen a recent rebound in natural gas. that pullback today as a lot of
people are not short right now. julia: rate work. thank you. -- great work. thank you. , seven banksexico are the center of an investigation into possible collusion to rig bond prices. they include local units of bankamerica jpmorgan -- bank of america, jp morgan -- authorities are investigating whether the parties coordinated to increase yields. the finance affiliate of alibaba made the decision after losing ground in china's digital payments market. ant financial wants to improve performance before its filing. it was valued at $60 billion last year and. managed to escape the
problems that have plagued other american retailers. first order profit beat estimates and the company raised its full-year outlook. home depot keeps benefiting from rising home prices. that is your business flash update. julia: coming up, ford is said to be shrinking its global workforce. targeting salaried workers. we will give you all the details, next. from new york, this is bloomberg. ♪
price. keep, talk about the timing of this. -- keith, talk about the timing of this. is this in response to the slowdown in auto sales? keith: auto sales are turning down after seven years of growth. there's a particular pressure on ford and its ceo, mark fields. last week, the board of directors a scheduled extra time to have fields explain his strategy. profits were down 42% in the first quarter they will be down for the year. they wanted to know what fields was going to do to start turning things around. one of the things they will be doing is cutting staff. julia: what will this ultimately mean for the ceo? we are down 36%. have?ch more time does he
he's already cutting costs by around $3 billion. have to turn he this around? mark fields is definitely on a hot seat that is only getting hotter. that's why he's trying to take these bold moves. i don't think there's any eminent moved to push him out. that's move to push him out. onhas to be working developing the self driving cars electric cars. cutting the salaried workforce has to be done surgically. you cannot just wield an ax and take 10% out blindly. they had to keep the talent they've worked so hard to get well -- while finding some fat to trim. scarlet: i wonder, when it comes to what ford is doing with its
self driving technology, talk about the timeliness of that effort. everyone is behind tesla. how does ford compare or contrast with general motors or fiat chrysler on that front? >> ford was listed as the leader in this effort. they are pouring billions into developing autonomous cars. they are not getting much twitter buzz out of it. they are putting the investments in. that's what is pushing profits down. it is taking away from today's earnings. scarlet: maybe he needs to build spaceships. along with driverless car technology. julia: difficult, isn't it? it takes so much investment when you are looking at tech for the future. keep, great to chat with you -- keith, great to chat with you.
julia: we are live from bloomberg world headquarters over the next hour. here are the top stories from bloomberg and around the world. in politics, donald trump says it is his right to disclose intelligence to russia, but not everyone is on board. congressman eliot engel will speak. and the trading day stocks are slipping from all-time highs, the dollar falling for a fifth straight day as investors digested the newest communication from the president. report on this company. we get a reporter talking about why the stock will soon be cut in half. let's get a check on the markets. changenot seeing much of
in the major averages. the s&p 500 hit another record before rolling back. the nasdaq, a record. a lowverall, we see volatility environment and tight change. take a look at the bloomberg. it is still very much relevant to today, the daily trading range with the 20 day moving average. pretty much near the lowest we have seen several times over the past several years. the trading range today is below just 10 points for the s&p 500. there are some numbers more significant. home depot shares are trading at a record after that company's sales beat estimates, but they have mitigated -- moderated the gains as it has gone on. this company missing estimates. staples, doing ok, but earnings
missing estimates. and dick's sporting goods missing estimates and the full year as well. the pains are continuing in retail. in terms of other movers, the best and worst performer in the s&p 500, advanced micro devices rising on report from a website saying -- confirming in speculation it likes the graphics change after the agreement with nvidia expired in march. they are declining to comment on that. then we have tetanus shares as the worst performing. the owner of cars.com said their revenue will be weakening, though cars.com still hurting. julia: it was a busy day at the white house today again with officials on damage control over trump's disclosures about
classifying information to the russians. and he is meeting president erdogan. let's bring in kevin cirilli who had an interview with mitch mcconnell. give us a sense, what is the ,ood in washington right now especially with republicans? .evin: confused and befuddled there is frustration this administration is stepping all over itself, putting itself at risk of the conservative legislative agenda. the new york times reported that the country in question of who trump leaked highly classified intelligence information to the russian diplomat's was in fact israel. in the bloomberg headlines, it suggests that is really ambassador saying they have full confidence in the united states, they will be able to maintain a proper and working relationship, some very important allies. this as trump will go on his first foreign trip to brussels
where he will meet his outer parts and also to israel. so his legislative agenda fully in question here at home. his attention now turning to where he will go abroad with all of the questions facing how he would unify the republican party facing criticism from the highest ranks including mitch mcconnell. scarlet: some great questions. the administration stepping all over itself. scarlet: let's get a democrat's take. kevin mentioned the reaction of republicans is confusion and shock. for democrats it is a ramp-up of criticism. the next guest says he is shocked with the abrupt firing and the disclosures. joining us is eliot engel of new york. he is a ranking member of the house foreign affairs committee.
mitch mcconnell told kevin cirilli he could do with less drama from the white house. bob corker was more critical. he said the white house is in a downward spiral now and has it to do something to bring itself under control and in order. based on your conversations with members of your committee, our republican members of the house foreign affairs committee similarly concerned? >> everyone should be concerned. it is mind-boggling. it reaches a new low and gets lower after that. for president trump to have told putin and the russians classified secrets is mind-boggling. when you have washington abuzz for the past several months, possible connections between trump's campaign and the russians, they should be the last people that an american president should tell anything it now apparently jeopardizes our relationship with the israelis who apparently were the ones, the sources of the information. it is one blunder after another
after another. i call it fly by the seat of your pants diplomacy. it does not work. scarlet: tell us about what kind of action you will be urging the committee to attack. sen. engel: i think that what we need in the congress is a special prosecutor so we can have -- take away the political investigations of trump and his ties to the russians. that has to happen. i am disappointed that my republican colleagues still have not seen this. i am hoping for the good of the republic democrats and republicans get together in the way we have down the foreign affairs committee throughout many years. that they try to do what is best for the country, not necessarily the president or one
party or another. that is what we have to do. it is unbelievable that every time you think you have sunk to a new low, there is another low. the president cannot do in our cherish foreign policy -- amateurish foreign policy. to united states needs sustain. betty: one of the -- julia: one of the points was the fundamental breach of security within the administration, whoever passed these details of the meeting to the press. what do you think is going on here? could someone be trying to undermine donald trump and the administration? rep. engel: i think it is a secondary question. the main question is, what is a person in the united states --ng to indulge in diet classified information to give to an adversary?
the allies don't have the information, and those that have the information have been let out bare naked. it is ridiculous. it is not something you could think of for a comic book, yet it is dangerous stuff that is happening. i don't think it is a matter of trying to do the president in. he is doing himself in, and my worry is he is doing the country end. exactlye don't know what information they shared or what intel donald trump received back. you are going to be speaking to the national security advisory as well. what questions are he going to be asking? rep. engel: the same basic questions that i mentioned, why are we talking to the russians with classified information? why is the president of the united states not feel he needs
to keep his mouth quiet when talking to our adversaries. secrets, important things that jeopardize things we are doing in the fight against isis, and the president of the united states apparently because he wants to establish some kind of report with putin -- rapport with putin think that is ok to declassify it. i will ask what really happened and want to make sure it will be steps taken so it will never happen again. this is a very dangerous thing. i would be saying that to any president, not a political thing. anybody who looks at this situation knows that what happened is dangerous. the president is leaving and going to different countries. i hope we don't have more danger after that trip. scarlet: what should the president aim to achieve on the trip? rep. engel: a lot of these
countries are our allies. certainly saudi arabia and israel, belgium. all the countries he is going to , we want to have good relations with them, and we want them to be part of the global struggle against terrorism. we want them to be part of things we are doing. so the president's trip is a good idea, because we want the president to meet world leaders. given the propensity he has to put his foot in his mouth, it makes me very nervous. but him going is a good idea because we are the leaders of the free world, and we have to act like it. we also have to know who are the friends, who are allies. mr. putin is not our friend. julia: a ranking member of the house or in affairs committee. thank you very much. -- foreign affairs committee.
thank you very much. julia: but diplomacy. scarlet: speaking of diplomacy, let's get you a check of the headlines with mark crumpton. mark: president trump were -- welcomed ricin order one to the white house -- president ricin order one to the white house today. donald trump said the united states and turkey must battle islamic state together. newld trump: we face a enemy, and we seek to face this threat together. the turkish people have faced horrible terrorist attacks in recent years and even recently. offer our passion and support to the turkish nation. will read thepeo messages of the house intelligence committee later tonight.
reportedlys were done before the story that donald trump shared the classified information with russian officials last week. labor leader jeremy corbyn plans to raise $62 billion in taxes on businesses and the wealthy to put more money into health, education, and infrastructure. according to the opposition for the june 8 election, there will be an increase in income taxes on those earning more than $100,000 a year. there will also be a hike on corporate taxes. a reform candidate has dropped election.n's it was a widely expected move aimed at strengthening the incumbent's campaign against a hardliner. the senior vice president under rouhani is withdrawing for candidates from the race.
votes will be cast on friday. 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. julia: still to come, speaking with steven mnuchin to voice operations -- opposition to the border adjustment tax. we have your updates. this is bloomberg. ♪
secretary steve mnuchin to reinforce their operation -- opposition to the border adjustment tax. we have met townsend who covers retail for us and the national political reporter. talk about what was discussed. we know the retailers don't like the border adjustment tax as has been the case a long time. scarlet: that hasn't changed. whiteer: mnuchin said the house is dedicated to a tax reform plan, working with an industry that will work with the houses of congress. he did reiterate concerns and skepticism of border adjustment that he has made in terms of people of the white house and when he has made throughout the whole process. retailthey are on the side. they don't want to see border adjustment. reporter: but he even went as start -- as far as saying it is dead in our lives -- our eyes.
that might be why retailers are still pushing the administration to get on board their view. julia: what is a problem. -- but it is a problem. reporter: they said they were out of line, it could hurt consumers. julia: if the government wants to fund some kind of -- >> exactly. intoet: let me bring you this conversation. we know the border adjustment tax was not part of the one-page rhymer that gary and steve handed out to everyone. is that pressure from the retail lobbyist? been know the white house hearing a lot from the on this. the retailers spent a lot of money in the last several months hammering this idea every way it can and had a lot of success. they were including republicans
that are skeptical or opposed to this. republican senators have shown no real enthusiasm for it. orrin hatch has cast doubt on it. mitch mcconnell said it probably will not pass the senate. this is an idea without interest on capitol hill. the leaders, speaker ryan and evan brady have been concentrating, continuing to support it. but without the support where it clearly lacks support in the senate, it is very difficult to see them getting support for it. complications. scarlet: if the tax is killed as an opponent of tax reform, i go back to what julia was saying, they have problems funding the tax cuts it does want to proceed with. what do we have by way of alternatives? >> they want to tax reform to be permanent. you have to have something after
the 10 year window. it cannot add to the deficit in the long run. this is where there is tension between several things that senator mcconnell said earlier this morning, tax reform is to be revenue neutral, and you mentioned the $21 trillion debt. he took off the table the alternate. this is the key problem. any proposal you have that would raise the money republicans want to raise on rate cuts, it will be controversial. you don't do this without having winners and losers. the losers are powerful people who have a lot of money and don't want to taken away. this is exhibit a wide is so difficult. then you have this whole unending stream of controversy emanating from the white house. some say there are others serving in hysterical detail.
three to five years he said, good retailers will adapt. agree or disagree? >> i would agree with that. there are more sophisticated businesses, they can overcome this. but it was interesting the head of walmart in the u.s. said that. but like he was saying, how do you pay for a tax cut? we don't know. it is up in the air. it is easy to say when you are no longer in the job. our reporters covering the trump administration and the national political reporter. options, how to take advantage of global volatility. a new record. this is bloomberg. ♪
markets. scarlet: time for options insight with julie hyman. with me today is kevin lack of talk about the volatility going on. we are getting to the end of earnings isn't now. what tends to happen to volatility at this juncture. >> it tends to perk up, and everything starts trading on macro. companies are in blackout. we can't say things, then the tail end of earnings season brings the next one. so macro will move it around. the next six months, we have last six months we have seen it be 7%. over the last few days it has been around three. we get a doubling of that, what will be the impact because markets will trade in tandem as sector correlations go to one. the last time we had a big volatility bet, that was august
2015. we had a tech handle on the fix, then in the beginning of august -- by the 21, the vix broke. above 50. he could not be calculated. it can come back in spurts. julie: or not. >> absolutely. julie: everyone has been waiting for it. >> if you think about it, companies can manage earnings. they can go out and monitor -- borrow because interest rates are low or they can buy back shares eerie that is why you stopped 48% of companies doing this quarter. that lends a big help to the stock price. julie: you have support. one of the companies out today is home depot. it is unusual to talk about trading after a stock is reported, but that is what you got today. >> a great opportunity because implied volatility is around 17 on the stock.
so you can capture that volatility, sell the 165 call against it. 7% -- theet about stock goes nowhere, but they got it higher, you be the bottom and top, they have a great dividends, they are defensible against amazon, a well executed management team. this is how you play. you don't want to be in high yield six income because as rates rise, we get a june hike areas this lens on the bottom, and you get five rights upside. goes nowhere,t you don't collect, but do you think it will be persistent with what is going on with the rest of retail? to, theyt goes back are a company that can manage earnings or growth going forward, and they have approved of that. who will some -- cell home depot? no one.
,hey have the lack of housing or it is the stock market side where they are beating earnings on the top line, bottom line. julie: great to talk to you. scarlett. scarlet: still ahead, andrew out with his latest call. he says shares could go to zero. julia: and don't miss the special our from the annual salt conference in las vegas. the schatzker will be on hour with guests. we will have full coverage starting at 10:00 a.m. eastern. this is bloomberg. ♪
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private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. the shlike a bald penguin. how do i look? [ laughing ] show me the billboard music awards. show me top artist. show me the top hot 100 artist. they give awards for being hot and 100 years old? we'll take 2! [ laughing ] xfinity x1 gives you exclusive access to the best of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. mark: it is time for first word news. national security adviser general h.r. mcmaster said president trump followed regular procedures last week when he reportedly shared information
with russian officials in the oval office. he spoke to reporters at the white house. >> what the president discussed with the foreign minister was wholly appropriate to that conversation and is consistent with the routine sharing of information between the president and any leaders with whom he is engaged. >> received from an intelligence partner? >> i will not be the one to confirm that kind of information that could jeopardize our security. mark: yesterday, he initially dismissed the story is false but added today no one felt the conversation was inappropriate. the kremlin called the report complete nonsense. former acting attorney general sally yates has underscored last week's testimony about former national security adviser michael flynn. she spoke to cnn's anderson cooper. >> you warned the white h