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tv   Bloomberg Markets Americas  Bloomberg  February 23, 2018 12:00pm-12:30pm EST

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supportive. we have encouraged him to work with us. it was a productive discussion and he is looking forward to seeing the president. >> the 70% that goes to workers you mentioned to malcolm turnbull yesterday, is that all in wage growth or some in dividend? steve mnuchin: mostly in wage growth. i will take a couple of questions, you have not asked me , we are working on russia sanctions and i assure you it is in the process. i will be back within the next several weeks to talk about that. i want to emphasize -- under we delivered the unclassified and classified report. as i said, we are working on sanctions as a follow-up to that. the last question.
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we will look at election meddling. we are closely working with the fbi on getting information. suitlations to the recent and will sanction individuals. we already had sanctions against one of the significant people that were on their list. did not change anything. thank you, everybody, appreciate your help. vonnie: you have been watching the news conference by treasury secretary steven mnuchin, primarily on the new north korean sanctions. they are on 27 companies and 28 vessels, and one individual. he said that it is to stop ebay said maritime activities that are effectively ship to ship transfers. let's go to the treasury secretary. he is continuing to speak. steve mnuchin: we will continue to look at the abilities and the
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authority we have been given, huge bipartisan support in election meddling. thank you very much. vonnie: the treasury secretary underlining the fact that russia's sanctions are in the works. if they wouldim be in the works on russia so he brought it up. he said we are working on russia sanctions and we will be back in a few weeks. the north korea sanctions take place when ivanka trump is in south korea. he says it was to impose maximum economic impact and pain. he says the united states will not sit idly by, the one hole, ofmanent, denuclearization the korean peninsula. let's look at the ramifications. this may be a surprise to north
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korean regime, especially given the efforts, a little bit update olm- of detente from the pics. -- olympics. >> there has been a little bit of detente with the north korean athletes, we have seen the acceptance of a meeting between the governments. it made the u.s. nervous about how far south korea is willing to go in talks with the north. these are sanctions that may have been planned and thought about in advance. they are a bit of a warning shot across south korea to say we have to keep the pressure on. we do not want to strain too far from the united line. nejra: the timing is
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interesting. we saw sanctions in november and december with the united nations and what is left to sanction north korea on? >> i sound like a broken record that the u.s. does not have a lot of leverage or decreasing leverage. this is an area where it can say it is trying to address the smuggling that officials believe is a lifeline, not the most important lifeline or the biggest, but a way north korea continues to get hard currency, by using their coastline and the ships to smuggle goods out onto the international market. the secretary of treasury said that they will be talking to foreign governments whose flags are flying on some of the suspected smuggling ships about getting permission to board. not likely in the case of china or hong kong. the marshall islands, the u.s. may manage to get permission to get on the ships on the high
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seas. how north korea reacts is an open question. the u.s. is trying to find whatever leverage it can and work with china, which holds the biggest cards. vonnie: this is phenomenal. this would potentially bring u.s. troops, i guess, and north korean troops into contact. what if the ship refuses to allow united states officials to board? would notry secretary going to what the military would do or would not do. to me that has potential for a dangerous situation. >> they are talking about when north korea ships goods to foreign flagged ships and i do not think there would be north korean military officials or even north koreans aboard the ships. there is a question of national sovereignty and whether other
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countries will let the u.s. board ships hearing their flag. no ships can quickly go into international waters, chinese waters or waters of another nation and get out of international waters and avoid the situation. it is a sign that the u.s. is trying to find ways to ramp up the pressure on what they think is a key issue, smuggling out of north korea. nejra: the treasury secretary made it a point to mention russia sanctions. media reports today that we could see a campaign aide cleat guilty to the special counsel. what can we expect from the treasury secretary? >> there has been a lot of criticism about the administration, a week after robert mueller's big indictments, there were 13 individuals indicted a week ago. there has not been a lot of talk on the administration about next steps.
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the secretary seems to signal there will be additional sanctions but was a little they, said in the coming weeks. -- a little vague, said in the coming weeks but something people are looking for now that we have more information that russia was meddling in the 2016 election. vonnie: thank you to our national security editor. reaction, we have abigail doolittle. halfway into a friday trading session. >> the buyers are out with stocks at session highs. s&p 500 and the nasdaq nearly up 1%. s&p 500 trying to take out the 50 day moving average at not quite above yesterday's intraday high. s&p 500 yesterday at one point was up more than 1% and closed up 1/10 of 1%. a late day fade this week, let's see if it happens this week. a tailwind for stocks on the day
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, 10 year yield down five basis points right now and moments ago with a new low. in a motive when rates go lower, stocks go higher. the inverse, when rates go higher, we see stocks go lower. .et's see if we see a reversal solid gains on the day but on the week the dow and s&p 500 is slightly lower and the nasdaq is higher. a source of pain, relative to the rebound rally, is the 10 year yield. g #btv 9662. we had the two weeks a big selloffs. equity averages. still 5% or more below the peak s&p 500 and the dow. look at the gains for the 10 year yield, until moments ago when the 10 year yield went lower, on pace for the eighth of week or treasuries -- up week for treasuries.
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on a basis point move, 50 basis points, half a percent. and the prospect of inflation, repricing of risk and rates lower today on the day, helping stocks. s&p 500 on the day, session highs. all day it is higher, up 9/10 of 1%. the question is whether the buyers can hang on to control, especially into the weekend? looking at some of the big movers, looking at the chip sector. philadelphia semiconductor index outperforming with a strong week, up well more than 1% and outperforming the major averages , especially the dow and s&p 500. intel is trading higher. butclear what is the reason macron is also higher.
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speculation that if qualcomm rejects the broadcom bid then --ron could be a -- macron could the -- micron could be a replacement. thank you for that update. the fed is presenting an overall upbeat view of the economy in its monetary policy report out a couple of hours ago. the report says the u.s. labor market is near or beyond full employment. it finds pockets of elevated assets by rations. -- asset evaluations. jerome powell has his first testimony in the house on tuesday. it was brought forward from wednesday. fromis kevin giddis raymond james.
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how much of the movement in the last week is significant and where are your thoughts evolving to when it comes to the treasury market and yield? >> a wonderful week for the treasury market because we learned a lot about the market itself and the direction of the market. the treasury can sell almost $260 billion worth of debt without a hiccup. the fed used language, further gradual increases and the gradual part is key to the market, not as worried about inflation as maybe the market is. when you go into the marketplace and sell the debt, hold supporters resistance levels and get a benefit from the fed, saying maybe you thought of this too hard and that is good for the market. evident today here in -- evident today. nejra: earlier this week you said buying the 10 year anywhere close to 3% could be a great buy. even if we get to the present, will we retreat or go higher?
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how important is that level? >> the 295 level of the 10-year was a key support level and served as a resistance level. we held that level and drove it back down. once you get past it, 3% is a foregone conclusion and we worry more about three of five and 310. nd 301. -- 310. vonnie: do you listen to steven mnuchin? he says that you can have plenty of ways growth without stoking too much inflation and it was laughed at and someone said, if you have one it is not great for bond yields and if you have the other, a question? i i tried to be visual when think about that, hard to dig of wages going up and not being inflationary and prices go up and not being inflationary.
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it would be hard for me to grasp you would have wage inflation and not call it inflation. nejra: steven mnuchin reiterating that from policies will raise wages without inflation being problematic. now that we have these debt auctions, larger and larger, we have seen ok demand so far but as we have more financing needs, will it still be the case? >> probably my biggest worry going forward, we added $1 billion to each this week and we will add to the auctions. my fear is that this fiscal policy will get out of control and never get it back as you try to raise debt and pay for the things you want. the economy has to go at a level that may not be sustainable. the treasury has to still finance the tax-cut.
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that will have a hard time at some point keeping the economy growth where it needs to be. vonnie: what are you advising people to do? weight? -- wait? 10?n do we see 305, 3 >> lack time between now and the next inflation data and i think we will be in a range, unless some risk comes we do not anticipate, or a piece of information that would shock the market. in the absence of that, probably one week away and we will look at pc core and then employment rate, and then nonfarm productivity because that is where a lot of this is getting a bounce back. growth,ctivity is low, no matter what the labor force thanks, will remain tethered. -- thinks, will remain tepid. nejra: great to have you with us and thank you for your notes.
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,evin giddis of raymond james head of fixed income capital markets. the chinese government has seized an insurance group that was massively leveraged having purchased assets like the waldorf-astoria hotel and prompted beijing to head off what it saw as a looming threat and the chinese economy. we have a report from beijing. >> a major step in chinese efforts to tackle the financial risks threatening its economic foundations. regulators say they were called to intervene as illegal operations threaten the company's solvency. the move puts the chinese government in control of a conglomerate with more than $300 billion of assets on its books, including a waldorf-astoria hotel in new york and strategic hotel and resorts group and regulars will have to untangle this as toxic finances without triggering systemic risk. ,t will be political fallout the founder has deep ties to members of the chinese room --
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ruling communist party and the company was once in talks with a new york real estate project owned by jared kushner -- the family of jared kushner. china,more news out of manufacturing geely is requiring a stake of almost $9 billion in daimler to become the largest investor in the german automaker. equity,ns for private let's bring in melissa from unwinding of great china, inc. will this just be the start? >> it is a good question. only came onto the scene in the last couple of years starting in 2004 as an auto property and casualty insurer but really came onto the mindset or the radar of global investors when it bought the waldorf-astoria in 2014 from
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blackstone. since then, it has gotten a variety of huge assets including strategic hotels and resorts. a hotel operator in canada. new york city office buildings and life insurance companies in south korea. it has built a massive portfolio. the question among the investor community is -- what will be sold off? and what will the assets look like? vonnie: how quickly can this be done? fast but nowved umbrella of >> no one knows for sure as the government has control for at least one year. closely,e watching it blackstone is rumored to be in talks to get back into the waldorf-astoria. it sold it off for about $2 billion in 2014-2015.
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when you have a motivated seller and a number of buyers with significant levels of dry powder, it can create a heavy mix and it could happen quickly. a lot to digest in terms of the speed with which the assets will be sold off. vonnie: a great story on anbang. thank you for talking to us about this private equity breaking news. u.s.: breaking news on the , counts against rick gates in a new filing, the u.s. has final conspiracy counts against rick gates and a new filing, he is the trump campaign aid. we are hearing from media reports he may plead guilty in the investigation into russia's interference in the 2016 election. rick gates was the advisor, the
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longtime political consultant who once served under president trump's deputy campaign german -- chairman. the u.s. is filing a conspiracy and lying count against rick gates and the criminal information filed is in federal court in washington. more details as we get them. vonnie: coming up, the present wraps up his speech to the conservative political action conference and double down on his proposal to arm teachers in the classroom. plus additional sanctions against north korea. ♪
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♪ vonnie: this is bloomberg markets. i am vonnie quinn shery: breaking news and a robert mueller probe as lying and conspiracy counts against former trump campaign staffer
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and paul manafort deputy rick gates. joining us now is our chief washington correspondent kevin cirilli who joins us from cpac. criminal information has been filed in federal court in washington which often precedes a guilty plea. could we see it anytime soon? kevin: i think you will hear the -- i hear you will have a guilty plea today. when you look at the indictment charges that came down yesterday , all from tax evasion dating back as far as 2014. thatlican sources tell me that was well before the time any of them got involved with the donald trump campaign. this does not touch the president's in a circle from their perspective and no question the robert mueller probe is continuing. vonnie: it is fascinating because there were reports from outlets earlier that rick gates
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may be thinking about entering a guilty plea. this would proceed that. informationg of the on criminal activity and rising the pressure to enter the play? kevin: right. the charges themselves, largely related to representation dating back to 2008-2014 and tax evasion. those are separate charges from the ones originally they were investigating. as this unfolds, where this is headed, it looks like the robert mueller probe is intensifying the pressure on paul manafort in -- and his business apparatus in the ukraine. shery: we have to consider that the indictments themselves on paul manafort or rick gates did not say anything about the key point of the investigation of
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robert mueller, collusion between the donald trump campaign and russia. what criminal information could we expect from rick gates? point, there has been nothing found that suggest collusion and nothing found -- if you are in silicon valley, the indictment from last week, you talked to tech lobbyists inside the beltway, they are worried about how to better protect themselves into 2018 midterms and the rumblings on capitol hill about potential new regulatory reforms and disclosure for the tech companies. as of now, that has been the focus on the tech industry and with the business apparatus surrounding paul manafort. fyi, the hearing is at 2:00 p.m. in washington, the hearing at 2:00 p.m. liedt mueller saying gates
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to the united states on february 1 about the 2013 meeting and lied about ukraine discussions and the 2013 meeting with lobbyists -- a congress member and paul manafort. information that i do not think we knew. interesting to see which congress member and which theyists those are here hearing at 2:00 p.m. eastern. a guilty plea should come then come a correct -- should come then, correct? kevin: it could. the president announced new sanctions against north korea. this comes at the closing ceremonies are set for this weekend. and when the president is trying to lay out the case for the 2018 midterms. the president pointed towards
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michigan, pennsylvania, wisconsin, ohio in the address and announced a new set of gun control laws -- gun control proposals and says lawmakers when they return from recess next week will take up a school safety package or even mental health package following the several rounds of listening sessions held at the white house. shery: thank you for that term is really from the conservative -- kevin cirilli from the conservative political action conference. vonnie: the hearing at 2:00 p.m. in washington according to the filing. rick gates said to be close to pleading guilty in the robert mueller pro. ♪
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jonathan: from new york city, 30 minutes to fixed income, this is really yield. ♪ jonathan: coming up, steven ds the market, and the federal reserve standing optimistic about growth. issues, aith the big big week for treasury supply. >>


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