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tv   Bloomberg Markets Americas  Bloomberg  February 28, 2018 12:00pm-12:31pm EST

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intelligence committee that she has occasionally told which he termed white lies for president trump, but is not lying about anything relevant to the russia investigation. the panel is looking into russian in -- interference in the 2016 election. since democrats want -- senate democrats want president trump to push for more extensive background checks for prospective gun buyers. they are asking him to endorse legislation that would extend the prepurchase checks to online and gun show sales. the president will host a meeting of bipartisan lawmakers later today to discuss school safety and possible gun legislation. the city of charlottesville, virginia says it has complied with the judge jakey order to remove the blacks shrouds installed over two confederate monuments after a white nationalists rally last summer. charlottesville tweeted that city staff removed the shrouds this morning. ruledrcuit court judge
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the decision came during a hearing in a lawsuit against the city over the thames to remove the monuments. british from minister theresa may flatly rejected a proposal by the european union for northern ireland to remain aligned with the republic after britain exits the bloc. lashed out at the u.s. -- at the house of commons, yesterday. >> it would undermine the u.k. common market and threaten constitutional integrity of the u.k. by creating a customs and regulatory order and no u.k. prime minister could ever agree to it. mark: the eu unveiled its first draft of a brexit legal agreement today, outlining what issue still need to be worked out. says she will may make it clear that northern ireland will not have different customs rules to the rest of the u.k.. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries.
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this is bloomberg. it is noon in new york, 5:00 in london and 1:00 a.m. in hong kong. i am vonnie quinn. >> and i am shery anh. welcome to bloomberg markets. ♪ vonnie: here the top stories we are following on the bloomberg from around the world. powell surprises the markets. a movement is a movement is afoot, aiming to increase financial literacy and empower the african-american community jakey financial future. we will speak with one united bank -- we will speak with oneunited bank president teri
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williams on the challenge. all of that to come, but first, julie hyman is with us. julie: we have seen bouncing around in this trading day with stocks dipping lower than they were from the highs of the session and the dow now going negative and it looks like the first energy and health care were the drags we are seeing on the major averages. nasdaq continues to be the strongest of the three as we have seen, all month. i mentioned energy stocks rolled over earlier. that was after we got the weekly inventories number that showed a larger than estimated build in inventories. oil dropping to the lowest of the session with a 1.5% decline. we have been tracking all the
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monthly numbers as we close out february and for oil, it was not a good month. the monthly winning streak we saw leading up to this was the strongest since 2011. also today, we are watching this developing story with dick's sporting goods which says it is no longer going to be selling assault style rifles in its stores. it had previously pulled them from its namesake stores after the sandy hook mass shooting in 2012. it kept them in its field and stream stores. tois going to end sales anyone under 21 and will no longer sell high-capacity magazines. this is continuing the dialogue about potentially increased gun control following the mass shooting at the high school in parkland, florida. gun makers are trading lower, today.
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elsewhere, we see a divergent trade within travel stocks. booking holdings came out with numbers that beat estimates. non-hotel reservations up 53%. hertz flipside, we've got which missed estimates on higher turnaround costs. utx is up 2%. named an investor as bill ackman. we have not confirmed this, but we are still seeing some stock reaction. vonnie: thank you for that update. shery: all of those moves that julie mentioned, after fed chair jay powell -- jay powell given updated view of the economy
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before congress. the optimism may open the door to more than three rate hikes this year. swonk,th more is diane grant thornton chief economist. we have data showing the wages, higher for the third and fourth quarters. to these only back in support what chairman powell is thinking about? diane: we have seen an evolution. we know from the minutes and statement in january, they are already thinking they put that further. they are serving to lean toward a stronger economy and more rate hikes and since that generate meeting, we have seen the fed itself admit that it is marking up its forecast. we have the additional fiscal stimulus that we got out there. thes not surprising that governor gave his speech at the
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national association for business economics and said the risks are now to the upside. the optimism was more of an evolution of what we have seen run the fed since the end of genuine -- the end of janet yellen's tenure. vonnie: it was funny because yesterday, we not only had the new fed chairman speaking, but two of the previous fed chair people speaking to each other as well. has it all been one nice narrative that started with bernanke? what happens when fiscal stimulation comes into the mix? it is one of the reasons the fed is optimistic, also a reason i would be somewhat cautious on the fact that
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chairman powell was so optimistic about the idea that there is not a recession insight. -- in sight. we would rather have the fed complementing fiscal stimulus early in the cycle, rather than combating the fiscal stimulus later in the cycle. this is something that historically, the fed has really sort of said something about. was verygreenspan aggressive in his remarks about trying to reduce deficits down the road because it complements -- complicates monetary policy. chair yellen did not have to do is much of that, but now we have chair powell in a position of actually combating congress. you have the federal reserve watering down the punch is congress acts like a bunch of adolescence and sneaks linker --
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sneaks liquor into the punch to spike it. shery: the key question right now is what happens to productivity. will it rise fast enough that the fed will not need to react? diane: that is something the fed is thinking about. it came out in governor corals piece -- governor quarrel's speech. i think we will see some investment. i don't know how much of it is tied to tax cuts and how much of it is fundamental. tight labor markets on themselves tend to produce more productivity growth, which will dampen and keep those rate hikes holding. an think we are going to see enough productivity growth to eliminate the need, especially that we have an administration that wants to make good on its threats on tariffs. shery: that is where i was
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going. risk can more tariffs bring to the inflation mix? diane: this is not just the tariffs alone, this is retaliation by other countries. if we were to push these tariffs, we could get retaliation from other countries. candidate would be affected as well because they buy a lot of these goods from us and the retaliation is where you really worry about it. it is hard to estimate from the top line numbers, you get some from that, but you get into this -- if china just slows its purchases as the fed is reducing its -- you could have much higher interest rates than we are expecting. that is an uncertainty that the fed is not really banked on, yet. for in what do you look
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terms of a dollar impact because we have seen the dollar all over the place. suddenly, we are at 90.5 again. diane: that is one of the things that the fed has been counting on. it has helped investment already in the latter part of 2017. the concern is the fiscal stimulus works in the opposite direction so it is undermining some of that dollar weakness that we have seen utr -- we have seen uttered by the illustration. this is the least place to be accurate as an economist. as we get upward pressure on interest rates, you could get pressure on the dollar with the fiscal stimulus as well. that would mute inflation, then you would offset it with inflation -- offset it with
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tariffs. onry: give us your thoughts jerome powell, his bringing in two outside advisors. is it a concern about how much sway he will have over the fed? diane: it is very smart to bring in these advisers. they are very highly thought of. they are severely understaffed. the administration needs to start nominating more people. a council those people in washington to not only execute on many of what the president would like to have done and deregulation, but to just do the process of what they have to do, the number of jobs they have to do. it is wise of him to bring in these advisers it is a counter -- advisers. it is a counter to the fed staff trying to speak with economist
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at the table. they are going to denominate the vote and there is a more hawkish -- that is something that chair powell has widely done, to counter and be able to speak the same language or at least be a translator so that the economists don't get the upper hand. shery: thank you diane swonk, grant thornton chief economist. vonnie: breaking news on oil markets. it turns out u.s. oil output in november was revised to a record 10.05 million barrels a day the u.s. produced in november. crude production obviously set a record for february and we have a little pressure on crude prices today following inventory data. today.s the price, this is bloomberg. ♪
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shery: this is bloomberg markets. i am shery anh. vonnie: and i am vonnie quinn. secretary. treasury still believes in the current global trade order. he spoke with erik schatzker in abu dhabi. >> i think the whole question mrs. what the single most important point is about trade with respect, which is that it is a win-win game and it is not about our doing well so they can do badly. it's about our both doing well. i can't answer a question in , nor willho will win i want to.
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what i can be sure of is that because there are far more americans who work using steel and aluminum, then work producing steel and aluminum -- than work producing steel and aluminum, an effort that is successful in protecting the american market and raising the prices of aluminum and steel is to be the next job steel or -- job stealer. erik: where does that take the country in terms of economic leadership? there are mixed signals coming from the administration. on the one hand, they want to put tariffs in place. on the other, the treasury secretary says the president is open to starting talks on reentering tpp. larry: the united states has had a remarkably good 80 year period.
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since the end of the second world war, and i think our commitment to building a truly global economic system after the berlin wall fell, including russia and central europe, seeking to work to enable emerging markets to emerge, all of that has been a crucial part of it, so i worry about any philosophical move away from american leadership of a global economic system. i think the evidence is overwhelming. that trade with each other and talk to each other and countries that talk to each other are less likely to shoot each other. as any as important other a case for open trade. erik: is there anything that you
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see that you approve of, that you like, that is worth making note of? larry: i think the trump administration has tapped into some deep strands in american thought that have elements of legitimacy. a large number of people who feel that we have a government that works for the top 1% and works to help those who are poor and not working and is not there as much as it could be for hard-working americans whose income is that neither extreme and i think that group feeling for represented is something that is important to our society. i think the orientation in thaty toward recognizing in a changed world with an increasingly restive population
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with emerging markets, having emerged, that the united states cannot carry quite as large a share of global burdens as it did before, carrying that message to other countries is a burden, too. i may detect elements of hypocrisy to the approach being taken, but i think it is illegitimate impulse. that it is a legitimate impulse -- i think it is a legitimate impulse. shery: time for a look at some of the biggest business stories in the world right now. goldman sachs has submitted a final bid for commerzbank's unit that houses the etf business. the german bank with -- but the unit up for sale to focus more on retail and corporate lending. $465 millionrated in revenue last year. chicago has reached an eight and toalf -- $8.5 billion deal
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expand o'hare international airport. however, american airlines says it will not support the revamped due to a secret vision that awards united additional gates. more coming up, live from new york. ♪
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abigail: it is time for charting futures, we dive into the futures market through the charts. we are taking a look at whea t. , more than 4%, it's best day of the year even as the dollar hold steady. typically arising dollar would hurt commodities, but that is not the case.
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we see this five day gain of about 5%. a few factors at work, including a u.s. drought in the wheat belt. the u.s. is exporting about 54% of total production. the technicals may just a jot -- i just but the buying action will continue and even strengthen. v 485.s g#bt this chart that we wanted to look at with wheat is a longer-term chart of wheat and it shows that wheat is breaking up and out of range, suggesting that we could see wheat climbed to above -- climb to above five dollars per bushel. wheat is climbing into a bull market of of its september low. how do you trade that bullis chart of wheat? here is the contract table of
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the wheat futures contract. there are a few interesting things to take a look at. we are going to see a few interesting factors. for we are taking a look at is the fact that the best volume is actually in the second month of wheat. typically, it is in the first month, the march month. the curve is rising. that does not necessarily mean that futures trader thing -- traders think the price is going to go higher. relative to some other trading factors, one contract is equal to 5000 bushels of wheat. alittle more than $24,000, value of a one point move is about $50. for a 25 point move, that equals $1250, so a pretty decent return.
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relative to the chart, wheat is going back above five dollars a bushel, even six dollars a bushel. the opportunity to play that upside potential. stocks are always important for risk management. that is one way to trade wheat in charting futures. vonnie: abigail doolittle, thank you. coming up, we have bloomberg etf iq. the first show focused solely on etf. it features bloomberg intelligence, data and industry analysis. ♪ retail.
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♪ scarlet: i'm scarlet fu and this is bloomberg etf iq, where we focus on exchange traded funds. ♪ scarlet: are passive funds looking to engage? taking up the issue of gun violence with weapons makers following the florida school shooting. vanguard goes where it has never withbefore, and we speak john merrick's about why the firm is making the leap from plain-vanilla passive index funds. and technology takes flight.

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