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tv   Bloomberg Markets Americas  Bloomberg  September 7, 2017 2:00pm-3:30pm EDT

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we are live in new york over the next hour. we are awaiting president donald trump's joint news conference with the kuwaiti emir. he's expected to answer questions about his deal with democrats on the debt ceiling. florida is bracing for impact after hurricane irma pour through the-- tore caribbean. a price tag of $130 billion in insured losses. shopping for a second headquarters in north america. which could cost more than $5 billion. while we await president trump, let's get a check on where stocks are trading with taylor riggs.
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taylor: not a whole lot going on here. smaller gains wednesday. really nothing here on thursday. the s&p and nasdaq mostly unchanged. the nasdaq with slight green on the screen led by the pharmaceuticals. gilead is still continuing to lead the gains there after the takeover of kite last week. kite does more cancer drugs. that is one piece of good news with some small gain. i want to focus on the big losers we are seeing. comcast is one name i'm focusing on. they are continuing to see increased competition. they may see $150,000 in subscriber losses. shares down the most in two years. they are trying to slow those losses. you have other tv providers like hulu coming in cheaper with fewer channels. cutters, ithe cord
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should note. disney down 4.5%. they are seeing profit in line with last year, but that's not good enough for investors. is expected to be released in the 19. along with the new espn app as well. -- released in 2019. we are keeping our eye on irma. it is looking like it may hit florida this weekend. what it will do to the insurance industry -- we are looking at auto insurers like progressive and allstate. they are the third and fourth largest insurers in florida. they are stopping issuing policies on new cars. that's putting pressure on the car dealerships. the owners cannot get car insurance. you are seeing auto insurers down anywhere from 2-3% today. g #btv 9053.
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we've been talking about politics and perhaps we could see some tax reform after we've gone through the debt ceiling debate. the banks aren't quite benefiting from that. when will we see tax reform and deregulation? we are tracking the ratio of the banks versus the s&p 500 index in white and the regional banks versus the s&p 500 index in blue. since the election, they have been up all of those gains back where we started. once again, we are awaiting the joint news conference with president trump and kuwait's emir from the white house. kevin cirilli is at the white house. with us in new york, marty shanker. obviously, the questions that president trump will be fielding foreign policy
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and more on that he struck with democrats yesterday. deal he struck with democrats yesterday. does this make the prospect of a tax reform deal more or less it was going to be a difficult thing. i don't think it makes it much less difficult come especially if you talking about comprehensive tax reform. the democrats will never move from their position that you cannot have tax cuts for the wealthy 1%. as long as any tax plan includes that kind of scheme, they will not go along with it. and he will need democrats to get that deal done. scarlet: i hear more and more about how perhaps there's more of a likelihood. at you think expectations are being raised as a result of this? kevin: what taylor showed about the sentiment in the financial community about the regulatory financial policy, it is a genius
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point. i was just speaking last week with a banking lobbyist who suggested there's been behind the scenes competition that has not been as public as tax reform as some of these the regulatory -- thderegulatory dodd-frank policies. of course, i'm talking about dodd-frank rollbacks for community and midsized banks. we have been said any real chatter of lumping together some type of tax cut that omits comprehensive tax reform with dodd-frank rollbacks. all of that is super in the weeds. it for heading into the month of december as the president is looking for a major win, if he
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can't get his party on board and needs to reach across the aisle, he will have to give up some of those core conservative principles to attract democratic support. we areof questions waiting for the president to answer on domestic and foreign policy. julia: hasn't he proved he's willing to do that? he's willing to give up those -- kevin: it depends. decision to broker with democrats really could have been mostly because of the hurricanes. it also sends a signal to republican leadership. let's not forget about the back and forth. we always talk about the tweets targeting mcconnell and ryan -- let's not forget the signals that republican leadership has also sent.
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leader mcconnell said he wanted a little less drama from the white house. in terms of the tension between the leadership, republican leadership in the president, it really came to a head yesterday inside the oval office. if there's a recalibration of sorts, that would be the cl ue about whether or not the president will ultimately decide to work with this batch of republican leaders or look elsewhere. we are showing you live pictures of the east room. we are waiting for president trump and the emir of kuwait to begin that press conference. marty: they will get a two-minute warning before it starts. julia: to dive out the way. what do you make of that suggestion? this is donald trump showing heart and that he wants to get this funding through for the hurricanes and from a butter
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perspective, which is vitally mustcal for donald trump hang i took the deal because that's what we need. marty: we suggest presidential. i think donald trump in the last two days has reported himself quite well. among voters who don't care much for traditional politicians on either side of the aisle, donald trump has positioned himself to be above the fray and act in the best interests of the united -- theand the people tragedy that happened in houston and the one that's possible here in florida. and to concentrate his efforts on that and focus americans not on petty politics but on the common good. he has positioned himself really as a non-politician in a very political environment. scarlet: reportedly, he held
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calls with chuck schumer and nancy pelosi. this morning, he raved about the positive news coverage that was generated with this deal with democrats, suggesting he could work with them again. where do you think they could find common ground? kevin: community banking relief and perhaps even on some other smaller, more granular measures that impact the law enforcement community and potentially part of tax reform -- there was also some chatter about ivanka trump's role in the meetings. notingthink it is worth alsoancy pelosi reportedly asked the president to tweet out about daca. you could see a situation where daca gets some bipartisan
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support moving forward. reportedlynt has been someone who does pay attention to the news and what ,s written and said about him on television and in print and on social media. when you look at how this country has been gripped by the images coming out of the i spoke with several folks who work with this white house on messaging heading into the fallout and the aftermath of hurricane harvey. general view this as kelly's first opportunity to build some trust with his new principal, president trump, saying here is a strategy, here's a way forward for messaging in terms of getting help and working with local and state law enforcement officials on a response to hurricane harvey and the president took him at his word and trusted him with that.
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i think that pop general kelly some more goodwill. you are seeing a pushing out of the more original campaign staffers and a reliance and emergence of a chief of staff who is in control. that's what you are starting to see, the president has said consistently on the campaign trail that he likes results. general kelly has delivered some political update -- political optics results. marty: kevin is absolutely right. the a lot of discussion before harvey hit that this was the first test of donald trump in a true crisis. the reviews are pretty clear he was up to the task. general kelly had a large role in that. provide the kelly framework but he convinced donald trump to follow the playbook.
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the fact that he did that and he's had such positive press just reinforces the notion that maybe this is a better way of doing things. scarlet: the you think it gives general kelly more room to put his stamp on this administration? marty: that may not be his goal, but he's a pretty tough character to begin with. he has had complete control over the president and post real set of discipline on everyone around trump that they have to go through him. will donald trump listen to kelly? if he does, he becomes even more powerful. his goal was always to control the environment around the president. that being the case, how much has he influenced the
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president's ability to tweet out or respond to whatever news he sees out there through social media? just think about the last three or four days. president trump has not tweeted anything particularly controversial. which is an interesting development. in fact, he tweeted something positive to democrats. tweet is a signal that he's willing to sign a bill of some kind that would protect these 800,000 people affected by lifting the ban. it will be interesting to see going forward in this press conference exactly how he handles the questions. marty schenker, thank you very much. kevin cirilli, we thank you as well. we will be bringing you this news conference as soon as it begins. let's get you caught up on the
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other headlines in the bloomberg first word news. millionre than one people are without power on puerto rico after hurricane irma blew through this morning. three people were killed, some 200,000 do not have running water. president trump declared a state of emergency for the island. -- pres. escaped trump: puerto rico escaped the brunt. it is heading right now directly into florida. hopefully it will take a turn and go east. this is a live look at the path of the most powerful category five storm ever in the atlantic. southexpected to hit florida early sunday and continue on to georgia and the carolinas. steve bannon says gary cohn should resign if he can't stand by president trump. the former chief strategist spoke to charlie rose for 60
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minutes. cohn was critical of the president's message after the violence in charlottesville last month. chiefropean union's brexit negotiator is showing his frustration. he's accusing the u.k. of reneging on promises of what it to leave -- position is it is only legally obligated to pay its annual membership fee until departure. the eu believes the u.k. is down by past obligations. spacex has successfully launched the pentagon's secret of space rown -- secretive space drone. the air force will not say exactly what the drone will be doing. it's the first time spacex was chosen to launch for the air force. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries.
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i'm mark crumpton. this is bloomberg. scarlet: once again, we are awaiting the trump news conference with kuwait's emir from the white house. , charles plosser says the mounting vacancies at the central bank are a sign of the politicization of the fed. we have his thoughts. from new york, this is bloomberg. ♪
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scarlet: we are awaiting the joint news conference with
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president trump and his counterpart from kuwait. it will take place in the east room of the white house. a live shot of the proceedings as we await for the two leaders to emerge. kevin's really is at the white house. joining us is marty shanker. -- kevin cirilli is at the white house. , the q&aight afterwards where most of the questions will be on the president's deal with democrats yesterday in which they would raise the debt limit for three-month and put off deliberating it until the end of the year. and of course the aid to harvey victims. julia: this is a very important meeting between the emir of kuwait and donald trump. given the attention we've seen in the region. kuwait is in the middle try to mediate here. questions about just where this administration sits in terms of that dispute and how they can help mediate this process.
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that's what rex tillerson has been focusing on. the hope is that will som get se attention. we can all predict where the 50stions are going to -- minutes late. one of the good things about this president is that he's not afraid to continue these meetings if he thinks they're making progress. scarlet: general kelly walking in and taking a seat. perhaps that signals the end of the meeting. they will emerge eventually to begin the news conference. when we talk about rex tillerson, we talk about foreign policy. how understaffed is the state department overall when it comes to foreign policy? a lot of investorships are still ened. a lot of people wondering when
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those positions will be filled. marty: one of the big difficulties is who to speak to at the state department. people manning desks are now empty. there's been little flow into the state department. the white house has been making nominations for district judges and the like but hasn't done much on states. tillerson thinks the state department is overstaffed. threw out allans those americans, the president himself said you are saving us a lot of money. tillerson is still trying to get his hands around what the proper staffing levels are. there's no question that they are understaffed. to say that it's no problem, we have it under control. aside from north korea, there hasn't been a huge international crisis that required a critical response.
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scarlet: thankfully. julia: we are just seeing the brief standing up and taking pictures. i think this is the moment where donald trump finally takes the podium here. of kuwait arriving in the room. pres. trump: good afternoon and thank you for all being here. it's an honor to welcome the emir of kuwait to the white house. united states and kuwait share a strong and enduring partnership. we recently commenced the 27th day of remembrance of saddam hussein's invasion of kuwait, which we all remember so well. united states is proud to have contributed to the liberation of kuwait and for the friendship we have built together in the years since.
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today, we reaffirm our commitment to our shared security interests and recognize kuwait's critical contributions to regional stability. we also thank kuwait for its military leadership and for its partnership in the fight to destroy isis. ,uring my trip to saudi arabia i spoke to the leaders of more than 50 arab and muslim nations about the need to confront our shared enemies, murderous terror groups that threaten all civilized people. nation mustsible work together to strip these groups of their territory, their financing and the false the ure of theirall evil ideology. i encourage all nations in the region to do their fair share in defeating those who wage war on the innocent.
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each nation in the region must decide what kind of future they want for their own children. one of the violence or one of peace? that means confronting the iranian regime who support terror groups and radical militias. cooperation between america and kuwait has never been stronger. kuwaitiand the government are expanding our counterterrorism and intelligence sharing efforts. we are making progress on promoting kuwaiti investments in united states. they are making tremendous investments in our country. they have great confidence in our country. we are also entering a bilateral agreement with kuwait regarding customs enforcement. during the same trip to saudi arabia, which was my great honor representing our incredible
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personallys highness asked me to expedite a $5 billion agreement for the sale of american super hornet fighting jets for kuwait. the state department has now authorized this transferred purchase which will not only strengthen our mutual security but will greatly benefit american workers. investments in america through the sovereign wealth fund are profitable for kuwaiti people and they create many jobs in the american workforce. i'm pleased to report this year that kuwait has taken delivery of 10 american-made boeing 777 airliners. real beauties. american workers build the best planes in the world. madent them to be available for those countries that want them. ofait has been a big buyer
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commercial airliners made by boeing and others. our partnership extends beyond shared economic and security interests. we are signing a memorandum to deepen the close educational ties between our two countries enhancing english language and that's what we are going to be doing, enhancing the whole relationship through the use of the english language and that is something that is very exciting for both of us. i want to thank his highness for his leadership role and the role he's playing to help the nations of the gulf cooperation council follow through on their pledges -- we went to saudi arabia and the pledges of ending terrorist financing came from every country in that magnificent room on that magnificent day. we are addressing the ongoing
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'sc dispute and the emir leading those discussions and hopefully it will be resolved very soon. we call on our gcc and egyptian allies to focus on our commitments at that saudi arabia summit to continue our joint efforts to drive out and defeat terrorists. qatar, saudi arabia, bahrain and egypt are all essential u.s. partners in this effort. we have great relationships with all of them right now, maybe better than we've ever had. whenll be most successful a united gcc -- with a united gcc. tomorrow, secretary of state tillerson and foreign minister al-sabah will strengthen the dialogue. we send a strong message to both
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terrorist an organizations -- terrorist organizations and regional oppressors that they cannot win against us. our military is getting stronger and stronger and stronger. cherish and value human life will always prevail. i want to thank his highness for joining us here today. the united states values its ande friendship with kuwait its people and we look forward to strengthening these bonds even further. together, we will show the world that the forces of distraction and extremism are no match for the blessings of prosperity and peace. thank you very much. i appreciate it.
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,> president donald trump ladies and gentlemen, i'm delighted and my delegation to be here today in washington. this great city in response to the invitation that his excellency, my friend, president trump, has extended to me. i would like at the outset to that we extend our condolences to the president and the american people about the victims of hurricane harvey in texas. there deeply affected by human losses and the huge
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distraction of -- destruction of public facilities and property. that he to god almighty would make this coming hurricane int is about to hit florida harbinger group goodness, not evil. harbinger of goodness, not evil. i hope the losses will not be harmful. , note american people causing further sadness or grief. reaffirm that we stand by our friends in the u.s.
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in fighting and we've held deep and comprehensive discussions that reflect the depth of our historic relationship. at alld relationships levels. serving the mutual interests of our two countries and people. commend the to commitment that we have heard on the part of the u.s. about the security of the state of kuwait and within the framework of , we rememberns with great gratitude the great role that the u.s. played when it assumed the leadership of the international coalition that
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liberated my country from the forces andhe iraqi restored its freedom and this memory will remain forever in the minds of the kuwaiti people. we also highly value the strategic relations between our two countries. we have discussed the situation, for most dust the dispute t ofeen -- foremos which, the dispute between our brothers in the gulf region. fighting terrorism
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and ending the sources of funding for it. in this regard, i would like to commend the prominent role the in combating played marks terrorism, especially the recent victories against terrorism. we have also discussed the situation in iraq and the catastrophic situation in syria. the need to end the parting in syria and libya through dialogue. affirmed the necessity of the security council to shoulder its responsibility in maintaining international peace and stability. theh represents continuation of -- it continues
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to be a threat. with respect to the palestinian question, we have praised the u.s. efforts to move the peace process and we affirmed the need to join efforts in order to reach a comprehensive and lasting solution to this problem. on the basis of a two state solution and in accordance with the international resolutions and the arab peace initiative. once again, i think his excellency the president for his kind invitation to us and for his kind hospitality and we look forward to meeting with his thellency the president in state of kuwait within the framework of our efforts to further enhance our relations and build on our qinetiq relationship in the service of both countries and people.
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thank you, mr. president. -- build on our continuing relationship. pres. trump: we will take a couple of questions. go ahead. actually, we will go to somebody else this time, john. you've been doing enough, john. cbs. >> on the question of north korea, the country feels the crisis is coming. some lawmakers have almost the scribed situation as inevitably leading to war. , as presidentyou of the united states, would you izedrate a nuclear north korea that is detained or would it have to abandon nuclear weapons and would military action be one of the options necessary to achieve that goal? pres. trump: military action is an option. the thing is inevitable.
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-- nothing great if is inevitable. we would have to look at all the details. talking,s have been talking to my talking. the day after an agreement is reached, new work begins in north korea, continuation on nuclear. i would prefer not going the route of the military, but it's something certainly that could happen. our military has nothin never bn stronger. it's been tens of billions of dollars more in investment. each day, new equipment is delivered. the best in the world. the best anywhere in the world, by far. hopefully we will not have to use it on north korea. if we do use it on north korea, it would be a very sad day for north korea. do you have a question for the
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emir? >> is it acceptable for you as president for north korea to be nuclearized and detained and deterred? pres. trump: i'm not negotiating with you. maybe we will have a chance to negotiate with somebody else. i don't put my negotiations on the table, unlike past administrations. i don't talk about them. north korea is behaving badly and it has to stop. a question for the emir? >> your excellency, you mentioned in the general sense the situation with qatar. abouttimistic are you it being resolved and what role would you like the u.s. to play in achieving a resolution? hope -- weah: we still have hope that the dispute will be resolved between qatar
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and its neighboring countries in especially our friends in the u.s. and our other inends are assisting us resolving this issue. i am optimistic that the solution will come in the very near future, god willing. pres. trump: yes? >> my question is for you, mr. president. do you support a kuwaiti mediation role between qatar and the four countries and the you support the holding of a congress that would include all parties? pres. trump: i appreciate and
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respect the mediation. i would be willing to be the mediator. if i can help between uae and saudi arabia where i have a great relationship -- i spoke with the king yesterday. he is a friend of mine. we spoke on unrelated subjects but we had a long conversation. if i can help mediate between and saudithe uae arabia, i would be willing to do so. i think you would have a deal worked out very quickly. i think it is something that will get solved fairly and easily. kuwait has been the leader of getting it solved. we appreciate that very much. if we don't solve it, i will be the mediator right here at the white house. we will come together quickly and have something solved. >> in light of the regional
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conditions, has there been an assessment of the u.s. commitment to the security of the state of kuwait? thank you. emir al-sabah: thank you. you have heard what his excellency the president has said about the relationship between kuwait and the u.s. and its assertion of its commitment to the security of kuwait. this is not something new. forget that the united states has managed with other allies when forget kuwait was od and liberated. kuwait from iraq within a few months. and this is something that the
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kuwaiti people remember very well and everybody also. ank the united states and the american people for that. pres. trump: thank you. go ahead. thank you, mr. president. he dispatched a team to israel and palestine. you met with leaders from both expect the american initiative to move forward? assad has used chemical weapons more than two dozen times. is immunemean assad now from execution? pres. trump: first of all, the palestinians and israelis, we
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are discussing, we are working. they say it is the world's most complex and difficult deal. you know that. it is something that could happen. i believe the relationships that we have with both can help. it is an event that has never taken place. sometimes people think it's close but it never happened successfully. i think we have a chance of doing it. the palestinians would like to see it happen. i think the israelis would like to see it happen. usually when you have two groups that would like to see something happen, good things can happen. thatnk there is a chance there could be peace. again, i say that a bit reluctantly. we will give it our best. we have tremendous talent working on that particular transaction. the ambassador is very much involved. we have a great group of people.
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you will see what happens. as far as the chemical weapons, i find it hard to believe that after what we did the last time that assad would do that again. i haven't heard what you just said, but i find that difficult to believe, but nothing would change. we would be extremely upset if he was using chemical weapons. , wear as syria is concerned have little to do with syria other than killing isis. what we do is we kill isis. we have succeeded in that respect. we have done better in eight months of my presidency than the previous eight years against isis. isis is rapidly disappearing, as you know. that is because of our great military. the military has been absolutely incredible in terms of what they have done with isis in iraq and in syria. do you have a question for the emir?
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>> all the parties are holding on to their positions with respect to qatar. where'd you see a breakthrough in this dispute? do you see any indications to make us believe this crisis will come to an end? emir al-sabah: the hope has not ended yet. i would like to affirm that meet all they to demands. put -- the that were 13 demands that were presented, and is ready to sit at the table to negotiate and discuss with us everything related to the dispute between the parties.
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the gulf parties. , we have 13 demands that were presented. that not all of these are acceptable. but, if we were to sit down together and discuss these 13 demands -- and we have indeed accepted them -- we would be able to resolve all 13 demands, all the issues and points that and relayed the disputes within the region and hurt our friends. pres. trump: this all began
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because of the fact that there's been massive funding of terrorism by certain countries. what i want is i want to stop the funding of terrorism. and we are going to stop the funding of terrorism. if they don't stop the funding of terrorism, i don't want them to come together. but i think they will. you have a question? yes? go ahead. .o be emithe emir , we talk abouts kuwaiti mediation and supporting kuwait -- the meeting in kuwait
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received u.s. and international support. andeality, something clear a breakthrough that has been accomplished in this crisis. are we about to see the beginning of a breakthrough or are the same issues so complicated? we talked about a deep discussion about all this, what is the real issue and complicated issue at the heart of this dispute? we would like to find some information. where is the problem here? so that we can solve it. thank you. emir al-sabah: first of all, i there is noo say problem that cannot be resolved. it is complicated. tablee meet around one
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and now we have an affirmation to which somery demands were presented by its brotherly nations in the gulf region, when we hear it's ready to discuss all these demands, we are not among those countries, guaranteeing that we will pressure qatar because it's not in the interest of qatar to remain outside the flock. it should join its brothers in the gcc. thank know, think god -- god the wisdom of our brothers in the gulf region, they should appreciate the situation we are in today. iraqituation in syria, in
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and in libya. have tohe time that we .orget all these differences notave dissented into some very healthy issues, especially in the media, but in spite of all of that, we were affected by this situation, by what our brothers and qatar have done. dispute came into existence, we met with our brothers and qatar and put them into this issue and this is now in normal issue -- we met in the presence of president trump and there was no one to say that
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there was a dispute between us but certainly this dispute came into existence. we have stopped any military action. dispute, as i said, they are complicated and we have seen that isa campaign totally unacceptable to the people. coming out ofdia this country is against the people, not the rulers. , we havereason ineived from qatar a letter response to the letter i sent them and they are willing to sit down at the table and discuss all these demands.
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which the other parties have put down. we talking about 13 demands. i'm certain that all these 13 them, a greatof part of them will be resolved s, we mighter part not accept them because anything that involves sovereignty, we would not accept. but we are very hopeful. we have great hope in our friends come in the u.s. that they will assist them to restore thanks to where they used to be. -- things to where they used to be. pres. trump: that is a problem we will get resolved and i'm very honored and happy to know that you have problems with the media also. [laughter] pres. trump: thank you, everybody. thank you very much. julia: we just heard from
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president donald trump and the kuwaiti emir at the joint news conference. both talking about their hopes for a resolution to this standoff between qatar and saudi arabia. one of the strongest quotes was the fact that they shouldn't be outside of the flock, they want them to rejoin their brothers in the gcc. can president trump be a facilitator in bringing these countries together? marty: he seems to think so and he has a strong relationship with the saudi arabia and speed to the extent that he can exert influence on them -- we have great military interests in the region, especially in qatar. he could play a role. it is going to have to be solved by the parties in the region. , irlet: kevin cirilli thought it was interesting that the president took a lot of questions from the kuwaiti press rather than from the domestic press. kevin: great point.
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this shows the savviness on behalf of general kelly who is really receiving a lot of praise from a lot of folks here in washington, including general kelly's staff for how they have elaborate, effective and presidential communication dni directory be and was speaking across town. donald trump, jr. made public his testimony. you've seen the media get away from trump -- this was a focused message on foreign policy and the democratic short-term deal. a level of shows maturation and a level of savviness that the president
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seems to be enjoying. scarlet: just to recap those headlines -- donald trump jr. has finished his testimony to the senate judiciary committee staff. in the statement that he delivered, he says "i did not collude with any foreign government. " julia: i don't think we would expect him to say anything else. marty: he is trying to be transparent. he released a complete email chain to get ahead of this issue and now, he's doing the same thing. i think it is an effective strategy. julia: i want to ask you about north korea as well. -- weook a lot of focus could perhaps see another missile launch this weekend. it is clearly having an impact on the markets, some degree of nervousness. heard a more moderate tone
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saying a military response here is not inevitable. speakingesident trump on message on the issue of national security saying he was not going to rule out a military strike or take down off the table. he would hope that another option be on the table for him to look at. areerms of what next steps for this white house administration, there have been some rumblings that folks in russia and china are beginning to prepare and praise for a new round of sanctions steve mnuchin has said new sanctions could potentially be on the table for that. the president speaking just days ago with leaders of japan and south korea as well on that front. clearly, the president not ruling out the possibility of military options for north korea. scarlet: i thought it was interesting that the reporter tried to press the president
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whether he would tolerate a nuclear north korea. he's: consistent with what said in the past, he's not going to suggest where he stands on any particular issue. he's consistently going along with that. marty schenker and kevin cirilli, thank you for standing by and sticking with us as we listen to the president's news conference. julia: subprime auto warnings about junk. where are we in the credit cycle? from new york, this is bloomberg. ♪
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julia: it is 3:00 p.m. in new york, 8:00 p.m. in london. i am julia chatterley. scarlet: and i am scarlet fu. welcome to "bloomberg markets." ♪
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julia: we are live in bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and around the world. justdent donald trump wrapping up a news conference afteruwait's emir, a day the president made a deal with the democrats. president donald trump's decision to end the daca program sparking protests and a political backlash. in markets, high yield still have room to run. we will dig deeper to find opportunities in the credit market as junk bonds lose favor with investors. and we are one hour from the close of trading. let's get a check on markets with taylor riggs. not a whole lot of reaction from those comments.
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i was monitoring that as president trump was speaking during the news conference. still unchanged from where we were an hour ago. nasdaq is perhaps the one bright spot. ,ormer companies and biotech gilead, still leading the gains after the takeover of kite a few weeks ago. perhaps that is the one good news we are seeing. thent to look at some of winners and losers and break it down for you. we know this as restoration hardware --, on over here -- seeing big gains today. recovery process, they are out of the worst of it. looking for it to grow. coffee bars, wine bars in there to drive the foot traffic into the stores. --nings perhaps of the anti-user of that whenever -- at the height in each of that. disney one of the worst performers of the day.
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basic profit will be in line with where it was last year. is coming out in 2019 nextth the espn app spring. look for that. not a whole lot of improvement in profit until next year. disney shares heading lower. there focused on irma, hurricane perhaps hitting florida this weekend. we are seeing florida-exposed banks getting hit. for the week we are down about 10 basis once. -- 10 basis points. regional banks getting pressure. financial is up here down more than 3%. they get a large portion of their deposits from florida-based customers. 19%. getting a little bit of a hit as we approach the weekend and a hurricane there. finally, to wrap it up, and 191ing on the theme, g #btv in my terminal, we are looking
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vs.he reinsurance stocks the s&p 500, taking a big leg lower over the past months or so. some of the bonds that are issued come taking a bet against natural disasters. they do welcome there was no hurricane, and if there is a catastrophe, and a lot of these losses could be -- the gains could be wiped out overnight. taylor, all right, thank you so much, and for continuing to remind us what is at stake with the hurricane bearing down. some people are bringing an alarm bell on the credit market. aanks like ubs are warning of likely downtrend of the business cycle causing a jump in spreads. right now we are nowhere near a jump in spreads. this chart shows high-yield spreads well below the five-year average. u.s. high-yield spreads are at a three-year low.
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here with his take is a longtime dan's work -- dan zw irn. where do you think we are in his credit cycle? long in the tooth as a credit cycle can get. 2004, can compare this to 1998, this is as extreme as we have seen in modern times. we have not seen this kind of tightness with this type of underlying deterioration of credit in many years. scarlet: do you see cracks in confidence. some people are pointing to people find protection. -- find protection. dan: for at least 24 months we have tried to belong-put that tried to be long-put credit. option allergy
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is high. you have a huge amount of buying interest 10 at the same time you have very little conviction in the spreads. julia: when you are trying to search for deals, it is tough to come by, and you buy into these assets. about what you are just saying, we talk about the spreads being so tight, but you have not seen spreads remaining so tight previously committed a situation where the fundamentals are becoming more concerning. when the analysts are warning about the high-yield market, not the fundamental basis, what is the difference with what you are seeing? , i think what you are seeing is there is a whole confluence of things happening. you have historically low spreads can historically bad credit statistics. it is amazing that the confidence remains there, but the supply-demand in balance in
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terms of flows and the need for yields is so great that it basically pushes people into owning things in which they have relatively low confidence, as cost-put by the option allergy. julia: should you be moving up the credit quality curve, or what about looking at the areas where you invest, where you need to do the due diligence to understand the opportunities? is hard to move up the credit curve, because you are moving towards zero. where do you go? there is a tremendous premium paid in the marketplace for the perception of liquidity. in other words, if a bond is issued in the mortgage market, credit markets, etc., i pay a premium because of the perception i have that if things go badly, i can sell it. the reality is that the particulars of the crisis, the ability to get liquidity in those things is very low. we have not really seen that
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truly, truly tested. thereafter little shocks -- there have been little shocks since draghi threatened rate increases. it remains to be tested. in addition to the three factors i mentioned, ultimately, there is no market capability left in the marketplace will compound the problems when and if they have been. -- happen. julia: you have given me two big questions. the energy market, the concerns about the selloff we have seen, whether or not these companies would be able to refinance. it seems that they did and everything went ok. and in the concerns seemed to die away again. do you see even now the opportunities in the oil and gas sector? based on what you are saying, we are seeing the likes of pimco talking about investing in mortgage funds. and move into those assets are considered even before the financial crisis. talk about those 2 things.
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start with energy. dan: i think energy, unfortunately, as much as it seems like it was on a relative basis of buying opportunity, they really not that they really did not get to places anywhere close to where it bottomed out. we were never able to make it work on a valuation basis. alternatively, we were able to go into the private markets where banks were caught flat-footed and suddenly receded , and put ourselves in a position to do what i would call a special situation negotiated transactions, where we were able to get paid considerable rates of return without actually taking on commodity risks because we were able to force borrowers to hedge. julia: you were able to where others weren't. dan: correct, which is what we do most of the time, particularly in markets like this. given that you are not really going to -- not taking less risk in terms of the provision of liquidity in the markets can whiten even stay there at all if
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you could possibly not do so? we spend the day focusing on transactions that are typically not large enough to access bond markets so that the notion of let's prices on a yield pickup basis is the basis for the discussion, as opposed to no one else is there and we will start with a clean slate. scarlet: if you go where others don't want to or are scared to go to come what are your thoughts on the subprime auto market? there is a lot of noise about how that might be the next thing to blow up. question of the next thing to blow up in terms of bond prices and the next thing in terms of credit deterioration. the latter is already here, from my perspective. i think we have been in the e igth or ninth inning for quite a while, actually. we have searched for ways to play the market, suggesting
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there could be an edge in some way, and haven't found it. scarlet: why do you think that is? julia: -- dan: 2 issues -- to be a better subprime auto lender, it is difficult to differentiate in any way other than price. furthermore, there is a transfer of origination to risk assumption that is disconnected in the way that the mortgage market was. the people who are incentivized to originate don't really care that much how it all ends up. there are a lot of credit markets were that is the case. oncethis turns around, this turns to where it is going to go, in our view, what are we going to do? there are opportunities in defaulted auto loans where we can buy them on a charge-up basis. there are situations where deep subprime is much deeper than what you see in the market place, where people are either able to charge enough, or
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advance much less, so that the recovery from when i have to foreclose, is much better. julia: i want to ask you more big-picture to wrap up where we started the conversation. apple raising money hand over fist, and it feels like it is a market of haves and have-nots. if you are well known, you can raise money and literally nothing, yet the rest of the guys are seemingly struggling in certain cases to raise money here. just given where we are in the cycle, do you think the diversions we are seeing will only continue? , the world of the have-nots only increases. it is a big world out there. there are very few people willing to service them. people talk about more conventional market lending funds and how they are servicing an area where banquette not been good -- banks have not been. the reality is that it is an area they have been. there are ever more numbers of
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have-nots out there. at the same time, there is no bottom to have cheaply companies like apple or tesla for folks who have a story can borrow that. paid to borrow. very quickly, does regulation in the united states change this, if donald trump can continue to give regular the market -- de regulate the market? dan: i think the answer is, from our perspective, it is helpful in that there are things that banks can do with us and for us that they are more reluctant of late, up until the most recent administration, to do. that is helpful. for them to get back into our business on a wholesale basis requires not only deregulation in the united states but also things like rules that are not in a hands of regulators. you will not see proprietary groups and investment banks roaring back into this business. julia: fantastic to chat with
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you. remain investors ceo speaking there. let's get a check of " first word" news with mark crumpton. mark: after barreling its way through the caribbean, hurricane irma continues on a collision course with miami, likely to hit on sunday. according to the national, the category five storm may reenter the atlantic and make second landfall monday, somewhere near georgia and south carolina. georgia's governor has issued a mandatory evacuation order for the city of savannah starting on saturday. president trump's eldest son told a senate committee today receivings open to
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information about hillary clinton's
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skills gap become even wider? this is bloomberg.
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scarlet: this is "bloomberg markets." i am scarlet fu. julia: i am julia chatterley. scarlet: let's turn to the federal reserve and the challenges it faces after vice-chairman stanley fischer is stepping down. "bloomberg daybreak" spoke to the president of the philadelphia fed about what fisher's departure's means for the central bank. >> i think it is a loss for the federal reserve. i have known stanley 430-plus years. he is an accomplished monetary
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theorist. i think it is a loss. but let's remember, he wasn't expected to be around much longer anyway. he was unlikely to accept the nomination to be reappointed next spring when it comes up. really, this is accelerating a decision that was likely to come about anyway. that said, i don't think it changes too much, except for the surprise in the short term, because it was going to happen anyway. the bigger concern is, as you noted, the federal reserve board has not had 7 members in a long time. i think what worries me about that is it is a sign of the legislation that politicization -- it is a sign of the politicization of our central banks, and that is a bad framework to be stuck in, not being able to make appointments, not being able to make nominations, and frankly, the workload on the governors increases. i want to pick up on that
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particular point. and what the potential consequences of that could be. >> the entire crisis, the entire last 10 years or so has been a gradual independence for the fed. it is just administrative. the fed is an organization of some 20,000 people across the country, and a lot of administrative stuff has to get done at the board of governors, and there is management issues, and the workload on now three remaining governors is quite high. they are very busy people doing
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a lot of things other than just mulling over monetary policy. i think efficiency is going to suffer from i think workload goes up under the remaining governors. they have less time to focus on the things that they think they need to, because there is administrative work to do. regular tory work to do. managing the reserve bank and the oversight of the entire system of theirs. it is just a stressful environment when you don't have enough senior managers, if you will, to oversee what has to get done. i suspect everybody agrees we would be better off if we had all seven members of the board. give us a sense of what has changed. is it increasing partisanship across the board in washington? two extent is it because the central bank has become so much more a part of the economy? we talk in the mainstream press so much more about the federal reserve today than years ago. >> i wish you didn't. [laughter]
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i think -- i think it is increased partisanship. i think people who become governors, individuals who become governors come try not to think of themselves as partisan, and they don't want to be partisan for the most part. but they are thrown into an environment where partisanship plays a huge role. i'm very worried, for example, that partisanship is going to change in a way where is the balance she doesn't shrink, nomination -- balance sheet doesn't shrink, nominations for governors will be stuck in debates about what the fed should be buying, what it shouldn't be buying, how big the balance sheet should be. things that are largely irrelevant for monetary policy. it takes the fed in the wrong direction. julia: those the former philadelphia fed president, speaking earlier on bloomberg. insigahead, "options ht." how to trade the financial sector, which has been a notable
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underperformer of late. from new york, this is bloomberg. ♪
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julia: in the last few moments, and poor committee yesterday and packaging company, is said to be takeover of the current market values more than $4 billion. a quick look at what you are seeing. trading on the spike on the suggestion that amcor, looking to buy them. if we see anything else can we will get you the headlines to let's get to julie with "options insight" now. chief joining us is the option strategist at interactive brokers. there have been signs -- we had a selloff a couple of days ago, there is an interesting action in the bond market -- that does indicate maybe some caution, at
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the very least, under the surface of the market. >> i deftly get a sense that the waters are churning. if you look at the broader indices, relatively flattish. there are a lot of stories -- you have been covering them all day -- a lot of stocks moving a lot of sectors. that is the precursor sometimes to something that may happen. i think in september there was volatility with the debt deal framework agreed to yesterday. there seems to be a little bit of stuff roiling under the surface. julie: let's get to the trade you are looking at today. we don't have much time because the breaking news. has been selling off today as we see the bond yields fall. do you think there is downside for the financials? steve: i do. fail at the 100-day moving average today. if that fails, you are down to
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the low range of the trading range. there is a lot of bad setup. banks basically make money borrowing short and lending long. i think the undercurrents you are seeing in the fixed-and got markets and the dollar to some extent are weighing on the banks in a way that are causing it to underperform. julie: they put up the trade just quickly. expiring september 29. got to leave it there. thank you so much for steve sosnick of interactive brokers. scarlet: still ahead, the nfl season kicks off tonight, showdown between the patriots and the chiefs. we will discuss this with leo hindery. from new york, this is bloomberg. ♪
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mark: i am mark crumpton. it is time for "first word" news. british, french, and dutch rescuers are rushing aid to a string of caribbean islands today after hurricane irma left
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10 dead and thousands homeless as a treat a course that could lead to a catastrophic strike on florida over the weekend. >> i would make clear to them that these are our people, british nationals, and we will do everything possible to get help to them in this appalling devastation of the hurricane has caused, to help in advance of the hurricane that is coming behind it. the most potent atlantic ocean hurricane ever recorded, appears increasingly likely to slam into heavily populated south florida early sunday. house speaker paul ryan today made his first public comments since president trump cut a surprise deal with democrats on hurricane harvey and the debt ceiling. ryan: the president made it really clear that what he was aiming for in a meeting yesterday was a bipartisan moment while the country is facing 2 horrible hurricanes. mark:


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