tv Bloomberg Markets The Trump Economy Bloomberg July 14, 2017 1:00pm-2:00pm EDT
the trump economy. these of the top stories we're watching this hour. getting their act together, senate republicans calling for a health care plan and immediately start losing votes. politicallk to a strategist that thinks the odds are still better than 50-50. donald trump has a big problem with foreign company selling their steal in the u.s.. how will the world reacts? and paying our bills. the trump white house may be gearing up to use a once secret obama plan to avoid what would be the first time ever the united states defaulting on its debt. ♪ trump came tont office with a big agenda for growth. delivering all of those harder than markets had hoped.
j.p. morgan chase chairman and ceo jamie dimon addressed the frustration during his company's earnings call earlier today mr. dimon: we have become the most confusing litigious society on the planet. it is almost an embarrassment being an american citizen and listening to the stupid [bleep] we have to deal with in this country. in the actual call, they didn't bleep out that word. you can imagine what it might be. we have sahil kapur and alex wayne. and i'm joined by megan murphy. sahil kapur i will start with you. why is it taking so long to get any of these initiatives through? initiativenumber one legislatively was health care. they started off with that. this is one of the more difficult tasks to do in congress.
it took failing and trying again and again to get something that resembles universal health care. trump thought it would be so easy, kellyanne conway talking about doing a signing ceremony on the day he took office. it is clearly more difficult than that. toughly because it is a policy and very difficult to get these coalitions aligned but republicans have very slim margins where the senate majority leader has had to struggle uniting them. david: as we'll all know, the president is france. he wased about how eager to get this done. we have a tweet we can put up for you and read for you now. of senateership majority leader mitch mcconnell, they get health care approved.
simplify it. is this because the swamp was deeper than he thought it was? are their troubles on his own? alex: i think we see the consequence of electing a washington outsider that brought in a team of washington outsiders. they don't know how washington works. it would be unfair to call them incompetent. there certainly struggling with the levers of power in washington. megan: just touching on health care for a second, i think alex is exactly right. they have trouble getting moderates on. approval only has 20% rating.
will be a very difficult road for mitch mcconnell with rob portman to get this bill through. it is a difficult political cell. i'm sure they love the trump is tweeting at them is it of actually being there helping them with this legislative agenda and the ground they need to push it through. it would be better if they have the president trying to get his signature. david: we talked to haley barbour, former chair about what they really need to do to get things like tax reform. this is what he said. >> it will not surprise me if senator mcconnell brings health care reform up next week. and if it does not pay us, set it aside for a while. only to themove not
tax reform bill that is one of the pillars of economic growth, but also the budget. appropriations. there is a very big backlog i know has to be concerned about. be tended to. david: is that doable? put it to one side and get back to things like infrastructure and tax return -- reform. is that doable? sahil: it would be a colossal embarrassment to walk away from a seven-year promise in this manner after trying, trying, and failing. mcconnell needs finality. hanges no good to let it and keep debating because as megan pointed out, this is a very unpopular bill. that is a tough sell, politically. the president himself has not really engaged with the finer points of this.
i would say that he is tweeting a little bit as an outsider, putting pressure on mcconnell. i think what to look out for now , a revised bill. it would not only vote against the bill but to proceed to it. rand paul from the ultraconservative side. lisa murkowski, dean heller, rob portman. demands anding varying tasks. we can decide if this thing can even come up for a vote. apart from the difficulty and embarrassment if the have to walk away, is there a technical aspect where they need to know where the money is under health care before they get to how much they will save in tax cuts? see the obamacare taxes
left and on the wealthy to have the pool that they can to try to make some sweeteners and try to bring some of the senators over the line. i think the big question is, how much of the american people associating this failure with .rump he can't get his agenda through, how much does that benefit him or heard him? we will see that had toward 2018 and how far the smell from this mess emanates. people'selp pocketbooks, it is a different question. we want to show video, and maybe you can explain to me what is going on.
handshake before. they must like each other a lot. and it goes on. it goes on. and it is still not over, they are still shaking hands, or doing something here. he's still shaking the hand while he is kissing the french president's wife. what is going on here? >> these two men have a history of handshakes. macron was very keen to get the upper hand. press, aa french european press. leader who is very determined to show his own audience in his rising tide of sweeping popularity that he is the man, he will not be
countdown lying to the american president, and that is macron shoring up his base and making sure they know he's not going to give one single inch to the very unpopular president-elect. david: white house editor alex -- alexd see okafor, hil, and megan.okafo >> we have all three major averages rising to rally the highs of the session. the high today despite the weakness we are seeing within the financial sector in the wake of this bank earnings kicking off. and this, of course, as we had to earnings seasons. to go look at the bloomberg here. g #btv 3861.
the yellow line here is the average. the 1517.7, we are above point. -- above the 15.6. in terms of individual index point games that we're -- gains we're getting today. apple has been up for six straight sessions. phillip morris representing consumer staples stocks today. and finally, nvidia. the chipmaker is up 54% year to date is trading at a record on a closing basis. and we're watching the precious metals that have also been rallying. we have weaker than estimated economic data that has been pushing down the dollar and helping push up some of these
precious metals. gold, silver, and platinum rallying today. we will look versus the dollar year to date. we have been seeing these declines down on the week this week as well. bitsilver is down a little on the year. now little more than 1%. it is the perfect line -- the purple line. coming up, next week seems to be a crucial one. at least one experienced washington hand think there is a decent chance we will make it. live from new york and washington, this is bloomberg. ♪
david: this is bloomberg markets, the trump economy. i'm david westin. mark crumpton is here with more. mark: senate majority leader mitch mcconnell's latest health care draft almost certainly is headed to rewrite again to find a way to appease the handful of republican moderates worried about medicaid cuts. no margin to lose republican support. the white house says president trump spoke by phone over air force one today with king solomon of saudi arabia to congratulate the president on the u.s. led coalition's victory over islamic state in the iraqi town of muscle. the leaders are said to have
discussed recent diplomatic efforts to resolve the dispute with qatar. the president emphasized the need to cut off funding for terrorism and to discredit extremist ideology. a russian-american lobbyist says he attended that meeting with donald trump junior and a russian lawyer that wanted to provide negative information about hillary and 10. the meeting took place in june of 2016 during the presidential campaign. he says he was present but the meeting was not substantive. it has raised for the question on if mr.'s campaign coordinated with the russian government during the election. he never thought the meeting would be "such a big deal. chief in a major jerusalem shrine. it is the third holiest in
islam. global news 24 hours a day. i'm mark crumpton, this is bloomberg. david: senate majority leader mitch mcconnell note 7 are came out with his latest draft health care than members of his own party started raising doubts. the bill already has to firm no votes from senator rand paul of kentucky and senator susan collins of maine, two people who normally can't agree on much of anything. mcconnell can afford to only lose those two votes. ar next guest thinks there is 55% to 60% chance that senator mcconnell will win in the end. kerry, welcome back to the program. >> thanks for having me david:. things are often not as they appear and you think this is one of them? lost twohear that he's
votes already and can't lose another, there are quite a few senators that are undecided. those are really long odds. >> there is signal, there is noise. and i'm just trying to differentiate. what you have is a situation where negotiations have been going on for a couple of weeks. the negotiations continue. what you had seen his bridging some of the gaps, but not all the gaps. what i look for fundamentally is, i think of legislation like a poker table. you have everybody still around the poker table. herself saysns she's going to wait for the congressional budget office score. they continue to make progress.
if looks like it will start to go south, my that would be on senator mcconnell. david: to those looking from the outside, it looks like there is a balance he's trying to strike. on one hand, it might be a little more moderate. and on the other hand, saving money. we might lose some of the other people on the other side of the vote. >> he's addressed money for the opioid crisis. he's addressed a variety of funding needs that are needed to make sure people get coverage. and at the same time, he's trying to appeal to some of his conservatives by including a version of senator cruz's idea to offer plans.
we're pretty much into pure politics here. and there are policy concerns here as well. this will continue for a while. david: take us to the timeline here. we need a cbo score. when will we get that? yesterday that i was looking for the cbo score by tuesday. there is rumor and it might come out monday. and either way, early in the week, what you have is essentially 24 to 48 hours where what needs to happen is that senator mcconnell needs to get his 50 or 51 votes together. he will actually bring the bill
to the floor and vote on a procedural motion known as the motion to proceed to consider the bill. if he has 50 votes and the vice 's tie-breaker. there is a limited time for debate under the special budget process. and then the bill is approved or it is not. he has a few hurdles to go through here. but fundamentally, what i see as a gradual narrowing of differences, that combined with the delay in the august recess make this likelier than not. ,avid: that is terry haines senior political strategist. this is numbered markets. markets." "bloomberg ♪
what is next for the gop health bill? bloomberg's chief washington correspondent kevin cirilli spoke to republican congressman jim jordan earlier today. if the crewrly amendment that's in there now that would give people options, create a marketplace. but you can buy plans you might actually want or your family might want. that.k we have to make that was the good part of this legislation. we wish they would've gotten rid of the regulations. it is still a good step in the right direction.
we want to see what it looks like but i think it has a real chance of passing. that is what we told the american people we were going to do. that's what we fought so hard on the house side and settled that long debate. it will look favorable. kevin: i was speaking with lawmakers that suggested that while this isn't a perfect health care bill, there are discussions happening. conversations? >> we don't want to put only tax on the american economy. trying to function in this revenue neutral world, it's ridiculous.
since when did republicans and conservatives adopt the position that allowing people to keep more of their money. revenue neutral is a washington speedway of saying the tax burden stays the same. in that scenario, it gets a good deal. this revenue neutral -- >> assuming health care gets --e >> when we get that, we call the meeting here in august and we think we should be working. what thehe outline of tax package is going to look like. so i think it happens in september. and him have a piece of legislation. kevin: the end of the year? >> i think we have to.
we make this job too complicated. >> i think it should be renominated. >> i will leave that to other folks. i think we should focus on what we told the american people what we're going to do. build a border security wall. employers across the district. ,n spite of all the craziness we have to move people to get to a better position and help the overall economy. ♪
david gura. let's start with headlines on bloomberg first word news this afternoon. mark crumpton is here with more. mark: the data and digital director for president trump's campaign says he will speak with the house intelligence committee later this month as part of the russia investigation. he said in a statement today that he is unaware of any russian involvement in the data and digital operations of the campaign. he said he's voluntarily appearing before the panel and looks forward to sharing with them everything i know. a federal judge has weakened the president's temporary travel ban. the judges expanding the list of family relationships such as grandparents with u.s. citizens. visa applicants can use to get to the united states. the supreme court hears the case in october. qatar's foreign ministry says it would be unfair to describe secretary of state rec ellison
after finding a solution to the persian gulf as a failure. but it cannot be solved in a day. speaking with the turkish they also said qatar would continue to work with the u.s. to end the standoff with arab neighbors. jimmy carter after the hospital -- out of the hospital after treated for dehydration in canada. for 90 minutes, he appeared to wobble and was taken to the hospital as a precaution. they returned to the building site. than 2700 more journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. beginning, what president trump and his team
talked about trade, they focused on steele. trump told reporters that steele is a big problem. they are dumping steele. not only china, but others. they are destroying our steele industry and have been doing it for decades. i'm stopping it. it will stop. the president said he could impose tariffs, quotas, or both. u.s. deal companies have had their best week in four months. joining us to talk about the steele situation are wendy cutler, former active deputy u.s. trade representative. she is from our washington dc bureau. and fred, former export -- right here in new york. wendy, let me start with you about steele because we've had the proceedings going along which would allow the president to restrict steele imports because of national security concerns. fully briefed and fully argued.
with how he's inclined to lean? it appears this decision is imminent, perhaps as early as next week. and what with the ramifications be in terms of trade relations? a rarely used part of u.s. legislation. >> the statute is 55 years old and has been used to times, only against oil imports. trading partners would react strongly, depending on the measures the administration announces. and all the industries that use steele. they would have to pay more for steele. it means their products would be more expensive for consumers and less competitive when they export to other markets. i don't want to ask you
to go too far, but can you explain from your point of view, why steele? 5% of u.s. deal is actually used in defense industries. it's not like we are building a lot of battleships. >> 1% of china steele comes to the united states. manyport from canada and countries. it's ought to claim that chinese steele alone is causing a national security problem. say that thereo is a global oversupply of steele. we do need to address that issue. it is a 55-year-old law that has been used twice. us to try to invoke it now is very peculiar.
i'm not sure this is the way to do it. everyone sees this and overcapacity of steele. problem ofto the excess capacity and steele. what is the solution? this is been going on for quite a while. >> as you mentioned, the leaders agreed on intensifying the work. it's a global problem and not a problem we can do with bilaterally alone. we need a solution that addresses bilateral concerns. a bilateral meeting with the administration, addressing these problems. david: you negotiated a lot of
trade agreements when you were at the s er. steele has been on the agenda for democrats and republicans for a long time. i'm sure you've been involved in some of these issues. is this because so many people are employed here? on at steele.ook >> it is a look at an a lot of anortant and products and important industry in the policy community. if other countries, for example, retaliate in other areas like , we have to look at this issue very thoroughly. and our allies around the world >> h.r. mcmaster
gary cohn in the new york times, this is what they said. there is renewed prosperity and president trump, his vision enhancing american prosperity and advancing american influence. i put that quota because it illustrates the tension. >> the president is a little trigger happy to impose a stronger on american jobs. i'm a little concerned about the symbolism over taking a prudent and more thoughtful way to deal with this.
they hear america first. issue, i think people will be looking at nafta negotiations. we are quite concerned. it does tend to isolate us. agenda. largely set the people look to us. i think that is quickly evaporating. we actually have a much bigger control of the outcome. back to want to come the 232 preceding. if we did impose unilateral quotas, what would be the possible action other countries could legally take? i'm concerned that if we end up with tariffs and what is therist,
danger the united states government might actually raise questions about wto itself? >> other countries could respond by restricting our imports. they might restrict agriculture. they might restrict digital product. the list goes on and on. it would open the door for other based on national security concerns. this is a provision very sparingly used. gates just open the flood for import restrictions and a trade war all around the world. david: thank you very much cutler, former acting deputy u.s. trade representative. and thank you, chairman and president -- we will have the latest on the debate over the debt ceiling and whether president donald trump may be forced to use a want secret plan
is bloomberg markets, the trump economy. i'm david westin. but get a check on where markets stand with julie hyman. julie: i want to talk about financials. we have the beginning of the big banks reporting their earnings. and it hasn't been looking good here. jpmorgan, citigroup, and wells fargo are all lower. earnings per share, for example, beat estimates.
jpmorgan cutting its net interest income. wells fargo coming out and saying its auto originations growth has been slowing. there has been slow growth. jpmorgan's loan growth slowing in the quarter. same situation for wells fargo. they cast apollo over the banks. it's not just the bank that reported trading lower today. they are lower today. we've got the regional banks that are seeing the drop as well. part of it does have to do with the tone the jpmorgan is setting. also the fact that the bond trading revenue came in worse than estimated. it is coming in among the
exchanges. those relying on trading revenue. yields continue to pull back tonight. the s&p 500 banking index. thanks specifically. that's the blue line. it is spread between the 5-year note and a six-month bill of the yield on those because that is really a proxy for net interest margin at many of these banks. on the bottom here, you see the correlation between the two that has crept up to nearly a one-to-one correlation. right now, it is on the rise once again. you see the yield curve flattened and you see yield fall, you see pressure in the financials. you have the double whammy of some of these disappointing numbers in the bank earnings. on top of that, what is going on with the yield curve today.
has been hard today to sort out which is which. thank you so much, julie. it nobody knows exactly when, but soon, it will be opening up with the statutory limit with how much debt it can run. the question is, what can it run? what might be administration do for sovereign debt? president obama may have left behind the secret plan for just this situation. out on thepiece bloomberg explaining what the plan entails. welcome to the program. hassan eating piece here. existay it really doesn't . why don't we know about this plan? >> the conference call where fed officials were briefed about the plan that the fed staff and
treasury officials put together a contingency plan should the treasury department need to prioritize debt payments if the ceiling is breached. david: do we have a sense of what the priorities would be under this plan? who could get paid less or pay later? the details are unclear and those would be decided by whatever president or treasury secretary decides to enact the plan. david: would it be clear this would not be a default? is it possible that could be construed as a default in and of itself. >> he said prioritization is a
default by another name. say itody's and fitch has a different credit rating. david: you quote a rates expert from city that says this would be a really bad idea. steve king is in interest-rate strategist at citigroup and said using prioritization would set a dangerous precedent. if treasury goes to it, people will they can another prioritization two or three years down the line when the debt ceiling issue comes back. it wouldn't bode too well. markets would adapt and say if you do it once, you can do it all the time. >> congress would adapt. they don't want to a dollar that this plan existed. if congress gets a whiff that there is more time that they can
-- it can take even longer. the political fallout would pressure them to act, but they'll, it would be a prioritization that could mean a downgrading of u.s. credit. and once the precedent is set, it can be repeated easily. david: so what markets are telling us right now about this this situation, it shows credit default swaps down at really low levels. it looks like the markets don't take this terribly serious at the moment. >> there is a bit, to be sure, secretaryory -- mnuchin said that he can fund the government through september. the cbo estimate is that we have early to mid october to give congress a lot of time to cobble out an agreement. traders at this time are saying because those fed minutes, the
transcript shows that prioritization is a plan sitting on the shelf somewhere in the treasury, it is more likely it would be used. at the same time, they really hope and see evidence that the agreement can come to fruition --ore it becomes a serious running right up against the deadline. for joiningthanks us today from the washington bureau. up next, we look at the big issues on the table for next week, including the revised senate health bill. and if mitch mcconnell can get enough support from his own republicans. my from new york and washington, this is bloomberg. -- live from new york and washington, this is bloomberg. ♪
bill makes it look less than certain before we get an updated cbo score on the proposal next week. expect, on what to which are toward chief washington correspondent, kevin cirilli. take us through next week. what is on the agenda? cbo scoring? kevin: the nonpartisan congressional budget office expected to release numbers on the health care proposal. we look at how many americans are going to lose health insurance as a result of this. it miscalculated the obamacare numbers. that said, they also speak to the budget scoring. i caught up with ultraconservative member house member and take a listen to what he said. >> the cbo yesterday, $720
billion deficit. that is a bottleneck. you have the border adjustable peace within the tax plan that is probably dead. that's another $1 trillion. we have several trillion dollar problems. the major concern is that the tax piece is the holy grail. that is not acceptable. grail.the holy get their health care before they get onto that holy grail. david: a republicans believing the cbo at this point are not? president trump says it will not be $720 billion, it will be a balanced budget. the tweetdepends on of the day, the time of the day, and the issue. it is hopeful that they will be able to muster the votes. people like senator dean heller and conservatives like senator jeff late, senator rob portman.
if they lose one more vote over the weekend on monday or tuesday, the senate or health care bill is dead. i spoke with several house numbers that said if it gets out of the senate, they are willing to pass it as soon as possible. david: the president to sitting at the desk with pen in hand waiting to sign whenever he wants. and he's changing lawyers. does the senate intelligence committee meet next week on the russia issue? jacobs joining the legal team for the president. yes, these hearings are ongoing. there is a new report out earlier today that there is a second russian affiliated lawyer in that meeting with donald trump jr.. expect questions about that. in congresss raising concerns about how this white house is risk wanting to better protect individual institutions from russia meddling in 2018 and 2020 elections. david: when you talk to
republicans, at this point, are they putting the russia thing to one side and saying, let's get back to business on health care, fundamental things to better the nation? kevin: that is a really good point. republicans are saying, we don't necessarily agree at all with the optics. on economic policy, we are in line with the president's agenda. line toa very tight walk, especially for several republicans like senator lisa murkowski, a republican from alaska who is also undecided. her partner in maine, senator susan collins has come out against the health care bill. the more the steady drip of bad headlines, the more impact it has on the lack of political capital from the white house. have not seen much market reaction. does impede the president's ability and the republican-controlled congress's ability to get through health care.
in order to get to the holy grail of tax reform. is a holy grail and i hope it's not as elusive as the holy grail was because they never found the holy grail. kevin: still looking for it. david: exactly. thank you, kevin cirilli, chief washington correspondent. the wells fargo cfo ranks the earnings today. that will be coming up at 4 p.m. eastern time. a quick reminder now you can catch all of our interviews on the bloomberg with the function tv . can watch kevin cirilli up there right now if you missed him a moment ago. you can go back and find him. live from new york and washington, this is bloomberg. ♪
scarlet: we are live at bloomberg world headquarters in new york over the next hour. here are the top stories we are covering from around the world and on the bloomberg. a muted start to earnings season optimism banks, as surrounding trump's election starts to fade. and frustration with washington stealing the spotlight on jp morning -- jp morgan turning salt -- earnings call, saying it almost and -- embarrassment to the american abroad. gas companylian already overtaking fossil fuels. u.s. markets are closing in two hours time, let's get a check on the record high once again. seeingre