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tv   Bloomberg Markets Americas  Bloomberg  January 10, 2018 2:00pm-3:30pm EST

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scarlet: we are live and world headquarters in new york over the next hour. . the top stories we're covering. market mania. with a strong start to 2018, we speak with investors about the five areas he thinks might cause the record run to continue. a busy day for president trump as immigration debate hs heat up. plus, the kodak moment for the ages. we speak with jeff clark about his company's market moving lease into cryptocurrencies. we havet u.s. markets closing andwo -- we have u.s. markets closing in two hours. rally be a fiend to kickoff the year, we are seeing the pause activity. the dow is trading a little
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higher. it was lower earlier in the day and now it has split tire by ge and some financials. the s&p sideways at this point we have been watching the bond market. broke above that keith 2.5. percent level. a couple of different things going o n. we saw the 10-year stabilize in the wake of that. a lot of queues being taken between the equities and bond .arkets today there are extended levels here in the wakes of the recent rally that took stocks to new highs. we are watching the spread between the s&p's current level and the 200-day moving average. it is currently the highest, the widest going all the way back to 2013. sort of extended here by that
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measure. elsewhere today in terms of what we are watching, we're taking a look at some of the health insurance companies. molina is saying it has been informed that new mexico human services department is not extending a contract between it and the company so it is under some pressure with 17 and today's session. sentine and today's session. the trend is higher in those yields. we are seeing weakness and some of the real estate investment trusts. both some of the power operators, not necessarily the first thing that comes to mind when you think of these. crown castle and american tower lower. and some of the others like public storage and realty income, a classic in verse rates play is what we are seeing on that front. in the past few minutes, there is a report crossing having to do with a potential takeover, at least discussions, that dsp systems might be the --
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$84 a share is what was reported by reuters. we see the shares spiking. on the rise as well. julia: let us get a check on the first word news. mark: the associated press is reporting that u.s. immigration about conducted raids at 11 convenience stores across the united states. they had audits and interviewed workers. they said it was the largest operation against an employer underdonald trump's presidency. ap thatbender told the the operation was "the first of many." one of hillary clinton's versus critics on capitol hill is calling it quits. republican congressman of california will not run for reelection. he is a former chairman of the house oversight and government reform committee. he used the post to investigate
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clinton's role in the deadly terrorist attacks and benghazi, libya. in southern california, deadly mudslides and flooding killed at least 15 people, more than two dozen others injured. heavy rains turned hills that were stripped of vegetation by last month's wildfires into rivers of mud. vice president pence and his wife karen will lead the u.s. delegation to the 2018 winter olympics in south korea. will also stop in alaska to review intercontinental ballistic missile defense systems. north korea has agreed to take part in the games, which began in south korea on february 9. countries agreed to hold more discussions on easing tensions along their border and to reopen a military hotline. global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. this is crumpton, bloomberg. scarlet? scarlet: thank you. let us get back to the markets.
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with stocks off to a strong start, this year's the current positive consensus likely to play out? it has in some places already. or should we expect the unexpected? us is the cio at federated investors predict came out with a list of surprises for 2018 and is sharing them with us first. inc. you for doing the big reveal with us. you have identified five areas rethink the consensus might be wrong. let us get to it. the first is a short-term impact of tax reform. you say it is higher than expected.we might be seeing that already. >> the analysts have been raising their numbers. since september, we started at 145 for this year. back then we were at 148. we think by the time we get through the earnings season, we will be probably looking at -- for this year. 55 -- 21 our number 41
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55. there is-- to 155. the markets will be more focused on the forward number. on 155, the market is not really expensive. julia: you have raised your 2018 $3100 from $3000 we came into this week saying a quarter of analysts out there are now half a percentage point of their year-end target with of the rally points we have seen this year. as an analyst, how do you approach this? do changer estimates? you say i still stick with my call because there is a long way to go here? steve: that is the thing. it seems to be more prudent to call for a pullback or sit on your numbers, but i think sometimes prudence calls for evaluating the risks. as i was going through them with our team at federated over the
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last couple of weeks, the risks are really to the upside here, not the downside. i think there are too many people who think it is prudent to wait for a pullback. if we get one, it will probably be back to current levels. by the time this plays out. we added equities again last week. we are pretty overweight, as you know. julia: 94%. interesting. scarlet: backs are an opportunity to get back in. your second surprise is the long-term impact of tax reform. we are looking past earnings into the gross potential of the u.s. economy. you see the tax reform, tax cuts adding to economic growth. particular boosting productivity. steve: right. that is we think -- that is, we think, a really big thing. it depends on your political perspective. traditional economists are the man slide economists.
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late and it is a lot to the deficit. this is a supply stimulus tax bill in a sense that it really increases the tax returns on investment by over 20%. that is just very likely to increase investment, which has been in the economy for the last decade. when you get the stimulus, it was a little bit tight on the labor side. you want to improve labor do it withoutnd getting a big boost in inflation. there is definitely not a consensus on that yet. as weld be wrong on this , there isgh the year more sense of that.
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equities will start to look a lot more valuable. we reallyould say struggled coming up to the taxable fall -- overhaul. no matter which side of the political spectrum. it was just the administration and those affiliated with thought it would not. steve: what is interesting about oft is we have had 20 years virtually anybody's so-called tax reform, whether it be bush or clinton or whoever. it was always kind of a stimulus measure focused on individuals, hand out a bunch of checks, everyone going to dinner that of jumpstarting the economy from a recessionary environment. that is not what this tax bill is, but everyone is used to analyzing it that way.
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even the republicans sold it that way because they want to hear what is in it for us. we think the point of this reform is to improve investment in the economy. that is what the consensus is going to start to realize as we get the 2018. -- through to 2018. scarlet: we will see the political winds shift, as well. when it comes to the midterm elections, you believe the republicans are going to sweep the midterm. that goes against consensus right now. november, we saw last they will talk about the democrats taking the majority in the senate and capturing the house. steve: i am really sticking with that. if you look at the las vegas alls, people are expecting fairly normal thing, a flip in the congress.
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sense -- in a sense, it is little more difficult in the house because there are so many democratic seats in red states that are up for reelection. the polls are big. the opposition party put these out there that a lot of people i talked to kind of believe this. i think as we get to the year and people start to say, oh my goodness i actually got a tax cut and my income tax has gone up and, most people do not expect that i think that might help the republicans hold on to more seats than people think. we will see. i think that would be more -- market supportive, if it happens. there are a little nervous that this textbook get repealed and the -- if the opposition party gets in place or whatever. in thea lot of optimism
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risk factors. the question is whether or not this means the fed has to be more aggressive. that is a great tees for people to go and have a look at your note when it arrives. scarlet: great job, scarlet. julia: i was about to say. [laughter] scarlet: you have lots more coming up, julia. julia: lots more, including the intense fight over immigration, not a laughing matter. as president trump orders the administration to continue the daca program. scarlet: the president will hold a joint news conference with the prime minister of norway. we will bring that to you live in the next hour. julia: from new york, this is bloomberg. ♪
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scarlet: this is bloomberg markets. julia: let us turn to politics as president trump hold a joint news conference with norway's prime minister. he is meeting with her right now. us on the white house is bloomberg's chief washington correspondent kevin cirilli. i should not get the wrong reason i interviewed her on a number of occasions. discuss,f topics to whether it is oil, security. what are we fighting from this press conference? norway is a country that has not paid 2% of its gdp toward nato. the president has insisted nato countries and allies do. a potentialt to be sticking point. atki haley scheduled to be the white house later this
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afternoon. it will be interesting to see whether or not they address that had on. the second case is russia sharing the border with russia and how they are going to work with them in regards to the growing russia situation for lack of a better word. in terms of president trump, couple of issues that could come up. the remarkable 55-minute public deyverson meeting yesterday. i was speaking with senators elizabeth warren and mark warner. they were both keuchel mens rea of that meeting. should that goodwill on daca stay? investigation. how of the developments moving along with him potentially setting up an interview with bob mueller? that bipartisan meeting that garnered a lot of positive press. what about the republican side? the pushback he is getting from the freedom caucus in other parts of the republican wing. how is the west wing responding to that? kevin: that is a great point.
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i was speaking with a prominent conservative activist who works within the heritage foundation. that being an ultraconservative think tank here that really has aligned itself with the house freedom caucus. what my source told me was essentially there has been a republicant in the and conservative strategy lately, and that has been deliver a win in order to rack up those wins heading into the midterm elections. does it help them keep the government-funded?does it address daca ? potentially. the president yesterday signaling on chain migration, as well as some other issues. he is willing to slice that off and put that beyond the gene green 19 deadline -- beyond the deadline as long as
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there is additional funding for the deadline as long as there is additional funding for the u.s.-mexico border. scarlet: canada officials said to see odds rising of president deadline as long as there is additional funding for the u.s.-mexico border. scarlet: canada officials said to see odds rising of president trump leaving nafta. we're seeing a reaction in the markets, as well. canadian bond deals rising. bolivian mexican peso tumbling -- the loony and mexican peso tumbling. preparing contingency for that withdrawal. it was a government official speaking on condition of anonymity. this is a troubling headline. obviously a lot of people on the outskirts of this are saying actually that the talks have been pretty fractured, pretty difficult at this stage. what do you make of this? kevin: i spoke to several sources earlier this week on nafta in particular and there is a growing sense that both canada and mexico are, behind the scenes, seeking bilateral trade agreements. i would note the europeans' involvement in this and how they are now making a direct flight
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to canada as a result with the canadians.e canada is thing that is a potential point of leverage to work with the europeans if the u.s. backs off a bit in terms of nafta. i will be blunt here. president trump campaigned on the notion of getting rid of nafta as a whole. this potentially, if you were to set up this bilateral -- it may have the same framework but it will not necessarily hurt him with his base. on the flip side, there are a lot of folks in the business community who want to see nafta maintains. julia: i'm showing you here on my bloomberg terminal, this is the dollar mexico. 0.6% of the rise in the dollar there. implications for both the canadians and the mexicans, not only the united states. will be meeting over the next week or so is in davos. we have the president in davos, it is freaking awful for the country.
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he is not the traditional davos man. kevin: what a difference a year makes? it was last year when steve bannon says the president-elect not attend the economic forum in davos. they picked a surrogate, anthony scaramucci, to attend on his behalf. now, he is expected to go with a broad coalition. secretarythey told me -- treasury secretary steven mnuchin is planning to accompany the president on this trip. we should also note in addition to davos, there is a sanctions deadline on iran coming up on friday. the president, i would quickly foreshadow, might take a question on that at this particular press conference. sarah huckabee sanders earlier this week saying president trump is considering expanding oil
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sanctions and nuclear sanctions and iran -- in iran. that deadline coming up on friday. julia: we did not even talk about the shutdown. there is a lot going on. scarlet: that is always in the background. thank you for giving us the heads up there on iran. we will be bringing the president's joint news conference with norway's prime minister a soon as it begins in the next hour. also, we will be speaking with senator john soon, the number three ranking republican in the senate. toughgenda includes questions for apple. julia: from new york. this is bloomberg -- from new york, this is bloomberg. ♪
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scarlet: it is time for our smart payday etf report. 2018 is 10 days old but sentiment is forming. her to discuss -- here to discuss is our analyst.
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eric: let's look at the first one with the most influence. most influence. only 10 days we can tell what will happen maybe xpi. the biotech. biotech will not quit, right? xpi is the best-performing etf in the past 10 years. it is up 370% in 10 years. here's the thing. this is smart data because it is equal weighted. the other biotech's market cap and that makes it smart data. when you equal weight, you get a lot of the targets in there that has given x b.i. a nice kick. it is sort of interesting. the growth, that one could be a rotation, like a model portfolio rotation with $8 billion. jk, you never your about it but it is massive. vig look that dividend stocks. you can almost kill any dividend
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factor and hugs the s&p but gives it a story to tell their clients. that one is a beast. scarlet: it is passive in many ways. that last one. eric: a lot of ones are closet index by design because you can sell them better and the clients will not come back in it why is this dividend etf underperforming. scarlet: they want it but they want an extra twist but they will not stray too far. and the people in the middle need a job. they want to say i'm getting this new product from vanguard. it is the s&p mostly. scarlet: let's talk about one thing a lot of outflows. onre is a smart cap momentum their, as well as well. this is curious given that tax reform is a big story and it would benefit the small-cap companies more. eric: i sense a tepidness creeping into the market. ec money coming out of small coming out see money of small caps. that could have been rotation to the mid-cap that we do not know for sure.
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certainly, small caps are seeing some outflows across the board. iwm,d, not smart data, -- not smart beta. you are seeing that the tepidness is real. people are pulling out of that, people are thinking that momentum might die. you can see a lot of the developing trends eric: in the outflows and inflows. eric:their minds go calendar year so the first couple of weeks says a lot. scarlet: thank you so much. be sure to catch us every wednesday for bloomberg etf iq. this is bloomberg.
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scarlet: from bloomberg world headquarters in midtown manhattan, this is bloomberg market. commodity markets are closing in new york and we talk about how
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2018 has been such a bulldozer of the year for equities. but also for commodities, as well. let us get you started with oil. crude extending its gains, trading above $63 a barrel. stockpiles declined for the eighth straight week. when you look at brent, it continues to creep toward $70 amid renewed opec optimism. let's move on now to gold. it is rowling as the dollar declines on news that chinese officials are said to recommend slowing or halting of u.s. treasuries purchases. this is a speculation that comes up every once in a while. we see the dollar reacted we see gold react in turn. let us end it was a big picture here of commodities. commodities may be one of the best investments this year. "i thinkcast, he said commodities will outperform and 2018. commodities always rally sharply than theyre sharply
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have so far -- late in the business cycle as we lead into a recession." julia? julia: never mind up on to equity rotation. it is all about the equity to bond rotation and commodities. let us check the headlines on the bloomberg business flash. mark: they wanted deepening russian interference throughout westernnd concludes democracies have responded with counter efforts. is alsoat of maryland critical of what it views as a lack of urgency by president trump. the current president of the united states barely at the threat posed by mr. putin's repeated taxes and institutions, let alone represents the kind of leadership history has shown to counter the kind of aggression. mark: no republicans signed on
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to the 200-page report. north carolina's congressional map has been deemed unconstitutional. a panel of federal judges ruled that partisan gerrymandering gives republicans an unfair advantage in state elections. the decision calls for north carolina's republican-dominated legislator to create a new link above congressional districts by january 24. a group of voting rights advocates rallied outside u.s. supreme court today. heardathered is justices arguments about efforts in ohio to trim their voting rolls by targeting people who haven't voted in a while. >> we have elected officials and state like ohio better making deliberate attempts to take the fundamental right away from our citizens here in the united states. mark: opponents of the ohio process say federal law prohibits using voting inactivity to trigger purges.
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a federal appeals court signed with the challenges, but during arguments today at the high court, justice anthony kennedy, usually the swing vote, said that states are trying to "protect their voter rolls." armany is maintaining highlight stance on brexit. angela merkel will demand the u.k. pay for the privilege of its banks having access to eu markets after it leaves the block. that is according to officials from two key german departments. global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton, this is bloomberg. scarlet: thank you so much. like sports broadcasting is changing as tech and media companies extreme games online to attract viewers.that includes nflmpany that will stream games on the yahoo! sports at. we had spoken earlier with the ceo, tim armstrong.
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right now we are joined with the director of the nfl players association. we hear that the power has gone out at the event in los vegas. the generators kicked in. thank you for staying with us here. there have been changes with how sports.me live streaming agreements have been constructed to address some of that. for the members in your union, why is ces and important events for the players? >> three real reasons. one, we want to understand what media and how our viewers will be consuming our game 20 years from now. there is no better place in the world to get a grasp of that then ces. number two, we have an active partnership with our one-team collective where we are investing in technology and thinking about how to collect data from players, how to utilize the information we're getting from our players not
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only to move into different markets but finally, we honestly believe the future of broadcasting our games is inexplicably tied to how younger viewers are going to connect with individual players. here at ces over the last few have been hearing pitches from several companies who want to partner with our subsidiary, thinking about not only had to benefit and drove revenue, but how to engage in ancillary content that helps broadcast media. scarlet: well said. you mentioned data demographics and how players are more accessible than ever. how to use technology to rebrand the game of football rather than the team that players play for? that will change through their careers or the leak itself that friendly has been badmouthed by the president. demaurice: [laughter] i will skip over been badmouthed
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by the president. we look at what we are seeing as we look at the former tv contracts and certainly the tv contracts that are on the cusp with being renegotiated is a desire by the networks and how toto figure out engage in anger viewers for a longer period of time. i think that is tied to how well they connect individual players. spent to go far you want to follow your individual player off the field during the off-season, i believe we as a union, and that players inc., the secret to making sure isincrease fan engagement connecting them to a player under the mask. not only to what he is doing on the field biometric leak a connecting to the player with what he is doing -- biometric ally, but connecting them to a player with what he is doing during the off-season. ces is a place were we will understand and know where we
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need to be positioned to the better partners in the future. julia: i think a lot of people would like to skip over some of the comments the president has made. i do want to take you back there. [laughter] julia: a lot of those comments were tied to the actions of the players themselves, however you choose to view them in the actions of kneeling during the national anthem. that says the nfl is one of the most divisive brands out there. and that does cut to the actions of the players here. how do the players themselves change that perception? demaurice: well, i think the players do not necessarily need to change any perception. our players are americans and love their country's income from military families. i certainly understand the sometimes heated rhetoric and certainly understand people's
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passions, but whether it is love of country or understanding the rights and freedoms that our country was based on, i think that is one thing that our players understand. that is why they have stuck together. that is why we stand behind them , and i think as we go forward -- and i think it is far more important to really focus upon the ideals and fundamental values that really make our country great rather than the things that would want to divide us. scarlet: some of that thesiveness shows up in following ratings. we have ratings down 9.7% from the year before. from where you sit as head of the nfl players association, what is the biggest driver behind the decline in television ratings? demaurice: i think i spent too much time looking at ratings and trends. deep dive but a nascar has lost 45% of its viewership since 2006. their championship cup series this year i think was off maybe
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28%, 26%. when you're looking at the demographic of nascar with a decline and a decline in nfl football, what you are seeing is declines across sports. i am more interested in what we can do to increase fan engagement, and i think looking at the declines across not only sport other industries, what we are seeing is a difference in the way in which people are consuming everything. rather than focusing on a myopic , we spend a lot of time thinking about how to son intoople like my his favorite player. how do we make sure younger people are more engaged in the players? if i were the networks, for example, i would be very interested in how we develop ancillary, off-season content
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that is wrapped around individual players as a way to bolster and enhance the broadcast. that is something they can only do through the nfl players association. julia: i hope the networks are listening because that sounds like fun. you have hinted about labor stoppage at some time approaching 2021. can you expand upon that? what you actually mean by that. what are you talking to them about, about programs that they can take? about saving for the future?investing for the future in particular ? demaurice: we have offered classes and engagement all of our younger players. we have done a lot of work with stressing financial literacy. i was pleased with the report couple of years ago that the bankruptcy rate mirrors the general population. at the same time, you happy to
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hear it is no higher than the population. the only bad news is it nears the general population. if i could wave a magic wand, what i would love to have deferred compensation contracts for players? yes. when i like to have longer payouts for players longer than regular season? absolutely. we propose that to the national to extend thee pay from 16 weeks to 34 weeks. the owners of the national football league league decided they did not want to do that. i think that reveals a lot more seout them and their fal statements about whether they care about financial literacy, but the goal of the players union is to accomplish those goals, whether we have an active person of patient by the nfl owners or not. if they do not want to extend the pay period for players, we will figure out other ways to make them financially stronger and more financially literate. scarlet: last question to you.
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as you consider the odds of the labor stoppage sometime in 2021, what would increase those odds? seeurice: i think when you visionlike the lack of by nfl owners to engage in things like extending the paid period, when you see quoted asers unfair, inconsistent, and sometimes incoherent, when you see those things that offer themselves for easy fixes but or unwilling to engage in those, it leads us to think that we need to prepare major work stoppage and that is what we're going to do. does that have a negative impact negotiatelity to
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favorable tv contracts? yes. i think it makes sense that if we resolve our differences early and can engage in as partners with the networks to make sure our again is growing not only on television but with younger audiences and if we can make sure we make changes to the health and safety of the game to make sure the game is sustainable for moral grounds, i think that is a way to make sure we have a healthy and viable sport going forward. i can only control one half of that equation. our players will be ready if we need to head into a work stoppage and that is my job. scarlet: thank you for joining us today from las vegas. julia: and putting up with the power cuts and the noise in the background. scarlet: hopefully the power will come back on soon. next hour, senator john thune
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will be taking on technology. he discusses his agenda, which includes tough questions and requests for apple over the iphone slowdown. from new york, this is bloomberg. ♪
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julia: this is bloomberg markets. i am julia chatterly. scarlet: i am scarlet fu. julia: stock of the hour, intel shares falling for a second day. where did things stand right now? >> was last week we found out from intel that the chips were vulnerable to hacking and that was what initially set shares falling.
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it happened after the company made the discovery about the chip vulnerability and that raised eyebrows about him having because heale sold about half of his right holding that intel. it measured about $25 million. there was a bit of concern about that. that italso skepticism was rearranged and done on an automated schedule. we will show you a chart at the point in which he made those traits. while a number of securities are pointing to the fact that the one we saw in november, that last drop there, was much larger than ones that have happened previously. the schedule was likely different to the previous schedules. julia: dramatically different. three times the size of the last sale. scarlet: not good on this matter what happens. emma: that is affecting what wall street analysts are saying today. the updates are not very good, and it is very surprising.
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intel had not considered that. if you are looking towards washington, you have two senators down there, jack reed the fcc kennedy, saying should be investigating this. julia: i'm sure they will, even if they can prove everything is legitimate here. ok, thank you so much for that. sticking with chips, emily chang the ceo to talk about how this is affecting the tech world. >> clearly, there are security issues that are really quite serious. it is fundamental about how microprocessors have been designed for many years. it is really important that people understand security updates that are being pushed out. it is important they get it
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installed in the sufferer gets updated to provide maximum protection in terms of trying to exploit this. it is a very serious issue but it is one that the industry as a whole is taking very seriously. ande thinking about design how to further mitigate against these issues. we are working very closely with our partners to make sure the are -- thatigations are developed over a series of months are being used and being installed correctly. want to provide maximum safety. emily: how long before these are fully in place? simon: it will depend on which system and which type of device you are talking about. very forward to update devices. in other cases, there is a vast number of companies involved in the supply chain.
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it may take some time. it will really be case-by-case. it will be up to the individuals who need to take on the software and get it pushed up. everybody is on this. there is a huge sense of urgency. andrew updates are pushed more haphazardly than apple, which means older phones might be less stranded. how much of a concern is that? do you feel android is more at risk? when of the things about some of those older devices is they contain less sophisticated processes, which are less .toceptible the issues we seeing here in vast number of these devices using cpus from arm, which are not susceptible at all to the security issues. it is not necessarily a characterization to say that every phone is at risk because that is not the case.
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particularly in the case of some smartphones, the carriers get involved in that, as well. there is some complexity there. that said, your phone is only at risk if you have malware on your device. it is really important that people realize their phone only gets protected if you download malware code. that is something people need to be really aware of and really looking out for right now. emily: when it comes to the actual hardware, is very fundamental way for you to redo your chip's architecture to avoid this? simon: with some of the issues, there are ways of avoiding the hardware. yet seen different device manufacturers -- you have seen different device manufacturers have a different ability and you can choose different performance
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features implement it in the devices. as i look across the range of products, many are not susceptible at all. some are susceptible to some issues and some are susceptible to more. the hardware features can dictate how much risk there is. atng forward, when you look anything that is easy to work around, we are going to do that. some of the more sophisticated teachers, it is about the combination of the hardware and software that determines if there is a risk. i think what you will see going forward are much tighter guidelines for how to write software that use microprocessors. what this effort has shown as we're in a new world of security and security risks are changing all the time. the definition of what safe looks like really has changed. julia: from new york, this is
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bloomberg. ♪
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scarlet: breaking news. canadian government officials say the odds are rising that president trump will pull out of nafta. the mexican peso is on move. the dollar spiking in value against the peso. josh, tell us more about what we need to know here. they're heading into the sixth round of nafta talks. rather than some big new issue emerging the governor -- government officials i spoke to thoughts are increasing that trump will give of what he is threatening to do, leave nafta. it does not necessarily mean they will leave nafta. they have to give a six-month notice. then they might never leave. there is an increasing view and
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their eyes that trump will start the process of a potential withdrawal. julia: do think this is a shock? the canadians going we need to come to the table and talk seriously. >> absolutely. we have seen many exchanges between the countries. fighting this week over newsprint duties. the tensions are rising.there is hope that that will tee up actual progress, believe it or not. some of the things will be finished up or at least part of it will be finished up. think you so much on that breaking news. w scarlet: i am scarlet fu.
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julia: i am julia chatterley. welcome to "bloomberg markets." ♪
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we are live at the bloomberg world headquarters in new york over the next hour. here are the top stories we are covering. getting setump is to hold a joint news conference for the prime minister of norway. what will they say about the future of nato, and their views on energy markets? and what he wants for the tech giants. why a fix has been so long in coming up. we are one hour from the close of trading in the u.s.. julie hyman is taking a look at markets. there is breaking news on nafta. julie: first the currency side of the picture.
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officials declined to say whether the chances of that withdrawal notice is more than 50%. officials are speaking on the condition of anonymity. nafta talks were set to resume in montreal on january 23. there is a spike in the u.s. dollar, versus the canadian currency. also seeing a move in the mexican peso. this is the dollar versus the peso. we are seeing in companies that have relationships that are across the border. manufacturing companies, as well as railroads. , all of these in the red and all of them taking a
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leg lower after these headlines. thee is a ripple effects to broader world of equities. we are seeing all the major averages at the lows of the session. the dow is now back in the red. are in thehe nasdaq lows -- s and p and the nasdaq are in the lows. we are seeing the buyers coming into a treasury market, with the yields holding at two point 55%, a relatively high level given what we have seen recently. and the strongest options we have seen since 2015. if you take a look at the terminal, we have been talking a lot about jeff good luck -- goodlock's comments, where he was saying a drop in equities could be possible this year.
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and analysts from goldman sachs said the same thing. a yield above 2.6% is when you start to see the pain in equities. this heat map is getting close to that 2.63%. we are at 2.55% today. i want to focus on the home builders. lenar came out with a share that missed estimates. they initially fell, but analysts came out and said overall, the numbers look pretty good. this was due to lower income from land sales, a one-time situation. nnar is in the process of buying, but other home remain lower in the wake of this. julia: we go to the bloomberg first word news with mark crumpton. president trump is criticizing senator diane feinstein for releasing a transcript of an interview with the cofounder of a political
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opposition firm that commissioned a dossier of our nations mr. trump's presidential of mr.gn it and russia -- trump presidential campaign and russia. said she trump released testimony "totally without authorization." said it will not quite great with the united states and your watchdog if the trump administration fails to expand deadline.by a people familiar with the matter say the president is expected to announce on friday he is extending relief. the south korean president says he is willing to meet with the north korean leader under the right circumstances. he is promising to never accept north korea's nuclear weapons program. these comments came one day betweene first talks the koreas in more than two years. president trump told president
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moon the u.s. is open to talks with north korea when it is appropriate. says news president rebel attacks have prompted him to pull his chief negotiator out of peace talks with the country's last remaining insurgent group. president santos condemned the he is askingaid him to return from talks in ecuador to evaluate the process. representatives from the colombian government and national liberation army were scheduled to meet today to discuss the terms of a new cease-fire. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. apple still has some explaining to do. a republican senator is demanding answers. the appleletter to ceo asking for details about the company's practice of slowing
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iphones and handling consumer complaints. senator thune is the third breaking republican in the senate and is on the commerce committee. he joins us now from capitol hill. offered explanations on slowing down older batteries to improve battery performance. ne: this didn't happen until just recently. this has been suspected for a long time. apple just recently a knowledge wledged they are slowing processing speeds to prolong life.y but we don't think they have been sufficiently transparent with the american people. thet of customers notice changes in some of these apple thoses, and the fact that devices are degraded in terms of their capabilities without them knowing why is what we're trying to get at. we think apple needs to be more forthcoming and transparent and hopefully answer some of these
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questions. julia: has mr. cook responded? what action do you want apple to take? sen. thune: he hasn't responded yet. we have given him until january 23. we will then figure out where we go from there. right now, we want to explore this a little bit further. if they are responsive and their answers are satisfactory, that will probably change the calculus of what we will do next. at this point, the real issue is getting to the bottom of this, and answered for american consumers who have been harmed. julia: isn't this always the case? times whereoo many these companies are forced to opening up and responding? it is the same with russian interference in the election. i am talking about a number of
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these tech names. is the consumer being let down by lawmakers who are pushing these guys to do more, to be more honest? isn't more regulation essential? sen. thune: i think oversight is. i am not a big fan of heavy-handed regulation. we need a light touch and have to have transparency. we will announce that next week at a hearing we are going to hold at a commerce committee to tol them what they can do prevent the extremism happening on social media. with what is happening in the ofld, you mentioned some those things, these are tremendously powerful platforms that are incredibly important to our economy, and now our national security. some appropriate oversight is what people expect. the question with regard to the iphones is one we will try to get answers to.
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there are other issues as well that the tech companies need to be forthcoming about. we are exercising the power that congress has. scarlet: the white house has indicated there is no change in the president's decision on nafta. this follows after bloomberg is an increasing likelihood the president will give the six-month notice to withdraw from the trade pact. officials think odds are increasing he will start to begin the process of leaving. what do you make of this potential move by the president? would this be a negotiating tactic? thune: the administration is trying to keep all options on the table, to get the best possible after -- options on the table in terms of modifications to nafta. many of us are concerned about
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the prospects of the united states withdrawing. a thousand like this latest rumor may just be that, that we try to can -- although this rumor may just be that, we tried to convey to the president that agriculture is our number one industry. 70% of corn and soybeans go to mexico. these are important markets for us. they are trying to keep leverage, but i think the united states withdrawing from nap would be incredibly harmful fta would be -- na incredibly harmful economically. julia: i want to talk about immigration reform. does a deal contain? hune: if there were 40 security measures involved with migration,g chain
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immigration, and dealing with the issues of these diversity lotteries, we can get a path forward that allows the daca issue to be dealt with. people who came here are not little anymore, but figuring out a way to allow him to stay here -- them to stay h ere and some measures that would help prevent that thing from happening in the future. that has always been a priority for congress, with border security. that is the contours of the deal. it seems that people who come to the table in good faith will get there and hopefully in a short amount of time -- i doubt that happens by friday of next week -- but i hear everyone is negotiating in good faith. julia: great to speak with you. we will go to the white house now. president trump and the prime minister of norway are having a meeting. mp: and also, a great
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future for our respective countries working together. the prime minister and i are both committed to strengthening the nato alliance. norway has made contributions to the nato-led mission in afghanistan, where we are doing very well. nato, and its enhanced presence in poland and the baltic states. i want to think the prime minister and the norwegian people for their participation in these efforts. i encourage norway to follow through on its commitment to meet the 2% of gdp defense spending obligation, so that together we can confront the full range of threats facing our nation's. i believe norway will get there quite soon. vital and valued
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member of the campaign to defeat isis. us, isis has now lost almost 100 percent of the territory it previously held. not so long ago, in iraq and syria. we are grateful for norway civilian assistance efforts and generous humanitarian aid to the region. they have been doing an incredible job. i am pleased to hear the economic ties between our two countries are robust. the united states has a trade surplus, shocking. can you believe i am saying, we have a surplus? you have to go back and check your people. we are getting more and more surpluses all over the world. our two countries are robust and growing. largeited states has a
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contingency with products we sell, back and forth with norway. i want to thank the people of norway for their commitment to fair and reciprocal trade, a word you will hear more coming from this administration, and it should have come from other administrations before. all nations benefit when trade is fair, and it has not been fair with the united states. reciprocal. word, in november, we started delivering the first f-52s and jets, and they delivered a number of them already. it is a $10 million order.
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american businesses -- norway, one third -- norway supports hundreds of thousands of american jobs. very well with your investments in the united states. thank you. norway's commitment to mutually beneficial commerce is a model for other nations. it is an amazing country. i look forward to an even stronger economic relationship andeen the united states, norway growing its record of success with even more jobs and job creation. we are proud of our increasing cooperation on health and health security, and also on by your defense -- on biodefense. i commend the prime minister's efforts to promote vaccine development and disease prevention. we can save and improve many lives.
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we are working hard and in some cases together on many elements. want to thank, i you for joining us at the white house. for decades, norwegians and americans have stood side-by-side against common threats to our security and values. we face threats always, together. we are partners. advancedership has peace, cooperation, and respect for human dignity around the world. toare united in our efforts seize new opportunities and to build a bright and beautiful future for our countries, our people, our children. we are doing very well working together and we have a newfound friendship. thank you and god bless you.
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prime minister solberg: it is a great opportunity to be here at the white house. the relationship between our two countries is stronger. -- is strong. norwegian constitution is the second oldest in the world and is still enforced. it was inspired by american ideals. continuedlong and history of serving shoulder to shoulder on battlefields around the world. the u.s. remains our most important ally and major trade partner. today, we have discussed issues of importance, how we can keep our country safe, how to grow how to serve corporations in areas of mutual interest.
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i have ensured president trump that norway remains an ally, one you can count on in the future. nato afterer two in defenseman -- in terms of defense spending per capita. we are making significant includingvestments, in american industry. the investment in lockheed martin is the largest single public investment ever in norway. we are investing in intelligence capabilities in army assets. the american economy is doing well. our economic relations are flourishing. that is to the benefit of both countries. it is important for our ability .o trade across borders
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we think it's important for the future. norwegian investments and companies support half a million jobs in the united states. substantial revenues from the oil sectors are being invested in u.s. assets. the u.s. has an impressive business community. i have played a leading role in the transition to a green economy. that is the one big area we are now importing. norway is combating climate change. it's an important issue for us. two american business, we are selling cars in norway.
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we see tremendous economic business opportunities in the future. we are also discussing difficult issues for the development in afghanistan. it is important we are all working together to find solutions in north korea, south korea, syria, and iraq. since september 11, 2001, norway has contributed to a range of missions, including the fight against isis. we remain unwavering in our commitment to the fight against terrorism. i am looking forward to future cooperation, and thank you for meeting. pres. trump: some questions? how about sarah westwood?
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"the washington examiner." sarah: in a meeting with lawmakers, you said you would be open to signing about any immigration deal with a lawmakers.group of would you be willing to sign an immigration deal that ultimately does not include funding for the border while? -- border wall? pres. trump: it has to include the wall. we needed for security and safety and to stop the drugs from pouring in. i believe both parties will come up with a solution to the dock a that has been going on for a problem thatdaca has been going on for a long time. without the wall, it doesn't work. israel.what happened in they put up the wall to solve a major problem. we needed for security purposes,
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number one. >> from norwegian broadcasting. recently, an american general, told americans based in norway there is a war coming. president, how imminent is that big war? trump: you are saying what? >> and american general. -- an american general. pres. trump: maybe he knows something i don't. [laughter] trump: we have a very
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powerful military. we are getting more powerful by the day. we are building up our military to waypoints that we have never been asked before. we are very much weekend -- weakened, not wtih me. i don't expect that. we will have peace through strength. i hope we will have peace for a long time. energys a lot of good with south korea. i spoke with president moon this morning. he had some really great meetings. 's representatives has a great meeting -- his representatives had a great meeting. i had some very good feedback. i think we will have peace through strength.
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our military will be stronger than it ever was in a short time. that is my opinion. that is not the general's opinion, but my opinion counts more right now. we areinister solberg: so happy to have two training as marines in norway is that it is part of a strategy to make sure we don't have a war in the future. pres. trump: did you have a question for the prime minister? said theent trump has investigation into russian collusion makes our country "look very bad." he said "the world is laughing at our stupidity." are you laughing at the russian investigation? i thinknister solberg: it is up to every political system in the country to scrutinize and discuss their own political agenda in their country. i respect that very much.
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this is an issue for american politics. it has impacted europe. all european countries with elections this year have been looking into tampering. ofcould not find any proof any emphasis on that from countries outside norway in our elections. there is collusion, but it is with the democrats and the russians pres. trump: more than it is -- more than it is the republicans and the russians. the collusion continues. john, go ahead. >> thank you mr. president. i have a question for the prime minister as well. sarah brought up the russian investigation. says that team
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special counsel robert mueller will ask for -- will ask for an interview with you. the legal team believes he is wrapping up his investigation. are you open to meeting with him? would you demand a strict set of parameters? john, there has been no collusion between the trump campaign and the russians. no collusion. when i watch you interviewing all the people, the democrats are running for office. they all say there is no collusion, and there is no collusion. had an interview where she wasn't sworn in, she -- they didn't take notes or record. it was done on the fourth of july weekend. that is perhaps ridiculous. a bodice people are looking on
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that as being a very serious arech -- a lot of people looking on that as being a very serious breach. there was no collusion. i have been in office for 11 months. they have had this phony cloud over this administration, over our government. it hurts our government. it is a democratic hoax that was thatht up as an excuse, frankly the democrats should have one because they had such a won because they had such a tremendous advantage in the electoral college. was noconcluded there conclusion -- collusion by virtually everyone. we will see what happens. when they have no collusion and no one has found any collusion, it seems unlikely to even have an interview. >> prime minister, norway shares a straw and -- small and
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strategic border with russia. president trump wants to work with them, rather than against them. where do you come down on that idea? russiainister solberg: is important in the international world. we have a line with sanctions, as the european union has done. nafta. interconnected to we have suffered some economic difficulties in some areas based on those sanctions. we have a good relationship with russia. we very much have a free movement of people over that border. large cooperation in this area, the coldest area
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in the world, but sustainable resources. we think it is important to do two things at the same time. there was a breakup that with the situation in crimea and the ukraine -- break with the situation in crimea and the ukraine. but we do day-to-day work on things we have to solve with the people in that area. think it is much better to work with russia. it is very much better having to do with north korea, that should've been a problem solved many years ago, when it was much less dangerous. it was given to me, along with a mess of other things. i am for massive oil and gas and everything else. and a lot of energy. putin can't love that.
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i am for the strong as military the u.s. has ever had. putin can't love that. hillary was for windmills, and other types of energy that don't have the same capacities at this moment. is a lot better to work with other countries. we are working with china and north korea and various other countries and i think we are doing very well. as you reported, we had a great talk with president moon. a lot of good things are happening and we are going to see what happens. working with russia or china or india or any other country around the world, that is a very good thing. mr. president, prime minister,

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