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dove others were injured. it was a flight from bangladesh. in new york, all five passengers were killed when a helicopter crashed into the east river. only the pilot survived. passengers were pulled from the wreckage. the helicopter had been chartered for a photo shoot. special counsel robert mueller is at a crossroads. a crying to -- according to current and former officials, his investigation is almost finished, but he may set it aside as he finishes other parts of the probe. there is concern that if he tries to in charge of, the president may shut down the investigation. president trump says that commerce secretary wilbur ross will speak to european officials about tariffs on u.s. goals. the president said that they are not fair to american farmers and europeans dismisses threat to
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put tariffs on european cars. local news brought you try for hours a day. i'm kailey leinz. this is bloomberg. 10 a.m. in new york, 2 p.m. in hong kong. i'm vonnie quinn. shery: and i'm shery ahn. >>come to bloomberg markets. from bloomberg world headquarters, here are the top stories that we are following around the world. life after lloyd. named beomon has been sold president at goldman sachs, putting him in line to replace blankfein as ceo. in biggest are still -- investors are still riding the way from friday, while keeping a close eye on treasury options.
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-- bill fox'socus set a price range, the valuation -- dropboxl below set a price range, the valuation well below the last rising round. abigail doolittle is with us. we are half an hour into the u.s. treasury -- into the u.s. trading session. the s&p, the nasa, and dow all modestly higher. up seven days in a row, is longest such winning streak since october of last year. the bulls are darting to take charge. we had volatility this year. now the major averages are all up. regains driven by strong payroll reports.
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volatility breathes volatility. let's see what is ahead. there is perhaps more to the downside. one of the big company stories today, goldman sachs. two-year look at the chart. david solomon has been named the soul president. blankfeincceed lloyd will be stepping down at some point. some investors are wondering whether more could happen in the goldman is up at 30%, though some may want more out of goldman's trading business, perhaps diversification.
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take a look at it until. there is a report that intel could have a bid for broadcom, the chip maker that is looking to take over welcome. qualcomm is down to slightly at perhaps putting that potential takeover into question. course, the ongoing concern about consolidation. companieschnology bringing those businesses in house and finally, let's look at what is happening or treasuries. thisof bonds on options week, about $158 million and we see the big options are later, today and tomorrow. a $10 billionhave option.
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bonds, arow the long slight rally for treasuries at this point. batch of $158 billion. abigail doolittle, thank you. coming up, life after lloyd -- david solomon named the sole president at goldman sachs. this is bloomberg. ♪
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shery: this is bloomberg markets. i'm shery ahn. vonnie: and am vonnie quinn. is now the sole president and ceo at goldman sachs, putting him in line to be
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the next ceo. harvey shorts is stepping down. no word on a timeline for retirement.eventual this after blankfein brushed off reports that he was planning to step down before the end of this year. he tweeted -- it's like it is story,ll street journal" not mine. i feel like huck finn listen to his own eulogy. erik schatzker is with us. no comment from goldman sachs. they are standing by their statement. but someone who is familiar with the liberations learned a few important things. first of all, lloyd blankfein told the board at a meeting on february 21 that david solomon should be the sole president and in line to succeed him as ceo, and the board accepted lloyd's recommendation. that is important. that tells us a few things.
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one, what we have learned today is not the product of hasty negotiations over the weekend that were part of the report in the wall street journal. the report in the wall street journal might have accelerated some things, including perhaps today's statement and harvey's leaveon to leave -- goldman sachs, but it had to be clear to harvey shorts on futuree 21st that his did not lie at goldman sachs. if you are a copresident of the firm and you are told you are not going to be the next ceo, on wall street, you do the graceful thing, which is to walk out the door and pursue the rest of your career doing something else. furthermore, i learned that david solomon impressed lloyd blankfein and the board on the board on a number of fronts that allowed him to stand out relative to harvey shorts, among
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them that he has assiduously courted the bank's investors, monthd 21 meetings in the that he has been copresident. he has a talent for building businesses. he came to goldman in 1999 expressly to build a debt financing business -- that is maybek being overlooked. he has a background in reverse loans and debt sales -- ik: that is debt capital markets, which is a business that goldman had very little experience in the for david solomon joined the firm. --h of the credit for his four that goes to david solomon. pushingeen a champion, for issues before they had
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firm.ous support in the he is pretty good at dealing with the younger cohorts at goldman sachs. there are a lot of young people at goldman sachs, but these are attributes that stood up for lloyd, stood up for the board. shery: he had his work cut out for him -- the chart on the bloomberg -- what will be solomon's key challenge going forward? erik: let's not forget that lloyd blankfein is still be ceo, but the number that you -- the moment that you name a soul president and likely successor, the clock starts to kick. it is a joint responsibility because harvey schwartz is out of the picture. he has to go back and do what he has done before -- to move
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goldman sachs in two where it currently is not strong. we know that they are building a consumer finance business. that is something to which he can lend his know-how and make ane that goldman emerges incredible force in financing. goldman still does everything it did before in the security's world, and in some cases some things wall street firms no longer do like commodities -- goldman is one of the last remaining commodities dealers on wall street. he is going to have to rebuild fic business -- and it's not like it has gone away, but they have lagged behind in the growth of fixed income revenue. that has to be job number one, and that is a challenge. he is not a sales and trading guide.
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oldman is going back to 2006 in some respects. -- goldman is going back to 2006 in some respects. that is when a paulson left for the treasury were department. has been run by these sales and trading guide, lloyd blankfein. for most of that time, gary cohn was the president and he is a sales and trading guy, also. but for someone who has been dealing with different parts of the investment banking .usiness erik: it's hard to know. i'm sure he commands respect. he is an extremely successful investment banker. but a trader he is not. so how much common dna is between david solomon and the people who run that business -- that's hard to say.
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they are not cut from the same piece of cloth. most of the people in that business at goldman sachs are career goldman sachs people. david solomon was one of the rare partners, one of the rare individuals hired as a partner outside of the firm in 1999. right, erik schatzker. thank you for all of that wonderful contacts. we appreciate it. goldman is up one and a half percent, and of course the market of fire. goldman higher than the broader market. shery: it is time for the bloomberg business flash. dropbox has set a price range for its ipo. the filesharing company plans to sell 46 million shares for $22 billion. at the high end of that range, $100uld drop off at
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million. one of vmware's biggest investors wants to end talks with dell about a reverse merger. he argues that it would be a turbo deal for -- terrible deal for shareholders. he is trying to bring all of the pieces off his empire together under one publicly traded groups. that is your business flash update. right investors are cpiing their sights on data. joining us now with what to , someone who knows a little bit about debt options, matthew mcclellan. let's start with inflation. we have the cpi number tomorrow, which will be quite important given that we are not sure how
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to interpret average hourly earnings. to set as have started premium for inflation. having said that, in terms of from the we stand back noise and the longer-term investment environment, where the challenges is that we have high levels of debt in the economy. we are very worried about secular analysis. there could be a headwind to inflation. talking about that debt in the markets right now, the beat to cover ratio for the 10-year, lows that we have not seen since 2009. bid tose, the average cover ratio, 2.4 at fixed. 2014, it was at
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3%. does this signal that we will see more pressure to the upside ceo? >> i think it signifies that policyntered uncertainty. we have interest rates. there are a lot of appointments on the governors or to be made. we have the ecb fiscal policy at the time of high economic confidence -- you do not see fiscal policy being used. is laying all of the semi-disinflationary trends. that creates uncertainty. stepping back from monetary policy, looking at the geopolitics around the globe, very uncertain. vonnie: it is also a strange time for value investors, would you agree, matthew? i don't know -- has it been difficult finding value stocks? >> it has been difficult finding
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value stocks. around the world are above average not above average. if you are a value higher, it is not absence -- absent values today. it was often does it was often defensive values that would perform poorly. was down. defensive stocks like staples were down. -- amazon and netflix. it has been a difficult environment for value investors, but if you stand back the principles of only allocating --ital when you see it is as relevant as ever. we are in an environment where assets have been a little frothy . aeas that are out of favor
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more interesting. so we have a little bit of , around 20% in cash. as ave 20% in gold bullion potential long-term hedge. people are not thinking about hedges in this environment that is very frothy right now. we are focused on defensive assets, and whether it is corporate staples in software or consumer staples, areas that are in a different state in the world. shery: when you were talking about geopolitical risk, you're not talking about brexit. is it because it could go the other way and not toward market reform? yes, the assumption with china, if we went back 10 or 15 lead to awould
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convergence of political norms between china and the west. i think we are seeing a divergence. the fact that we see she's in jingping -- jinping moving to abolish term limits is meaningful for this economy. vonnie: we will have to revisit this very soon. matthew maclennan. thank you for joining us. still ahead, what a potential trade war could mean for investors. that is next. this is bloomberg. ♪
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shery: -- abigail: you are watching bloomberg markets and i'm abigail doolittle. it's time to look at watching
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futures. today, how to play a potential trade war. this would be bullish on companies with a domestic bias with anish on companies international component. let's look at one company looking to have less exposure abroad. you see the russell 2000 is up to percent on the year. for the multinational component, let's look at the s&p 500. is there a trade war? that may shift. let's hop into the bloomberg. ratio of chart of the the russell 2002 the s&p 500 over the last year we've seen comes when the russell 2000 has outperformed, but really the multinational support -- component has been in control, but during this time when president trump announced tariffs, you see the russell 2000 and really overtaking the
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s&p 500. i would like to bring in michael .urks love this idea. very timely. can you talk to us more about how the russell 2000 should benefit from a potential trade war? theure, the revenues for russell 2000 or 80% to 85% domestic-based. the president was elected on anti-globalization caps on. -- platform. traders will be looking to short the s&p 500 in almost a pair capture the benefits that the russell should have from a trade war. >> let's hop into the bloomberg. i love this. is an historical function on the bloomberg. 500would be selling the s&p
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futures. these are ratios of three to two. a small net short position, but basically a pear trade.\ this chart is the russell outperformance. so, it were trying to almost go it's notutral, and like you will capture any benefits that would outperform s&p if the trade war breaks out. what about the correlation? michael: this correlation line shows and 87% correlation between indices. that means there should be a lot of bouncing around or separation where you will lose a lot of money short or long. capturejust trying to .hat on the russell
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>> is this something that you want to wait or now? michael: i think you want to go now. we have announced our terrace. the question is, what is the retaliation going to be? from that perspective, you want to have the traits it up for the next big bit of news breaking. us innk you for joining charting futures. great insight. from new york, this is bloomberg. ♪
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in almost the highest two weeks and the s&p 500 is being led higher by consumer discretionary stocks. almost all factors are in the green at the moment and the vix is also gaining ground or falling for six consecutive sessions area take a look at what yield are doing on the 10 year yield is now losing ground i 3%. the $158today on billion treasury auction this week and the 210 spread is narrowing. we could see some flattening of the curve as the outlook for fed rate hikes could eat in demand. the dollar reason earlier losses , little change after sending fresh eyes across the road, the pound, and -- the euro, the pound, and the frank barry let's get toie: the bloomberg first word news.
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north korea kim jong-un was designed a peace treaty after meeting with president trump. he also want to discuss the possibility of nuclear disarmament and establishing diplomatic relations. tosident trump has agreed meet with kim, although details have not been worked out. china is warning that a trade war with the u.s. can lead to disaster for the global economy. the trade minister says china will not start when it is still in talks with the trump administration. president trump has remitted the china reduce its trade surplus with the u.s. president trump says he is waiting for core cases to be decided before acting on raising the age limits to buy certain guns. the president tweeted he will back tougher background checks for gun buyers and the again pushed on letting trained teachers carry guns. soared 25%s exports over the past five years. the u.s. accounted for one third of the world arms exports.
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sales were driven by demand in the middle east and asia. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz, this is bloomberg. special counsel robert mueller's investigation into whether president trump obstructed justice is said to be close to completion. kevin cirilli joins us with the latest. investigationhe had many different branches, and that means we could see the wrap up of at least one part of the probe. kevin: yes, that is what we have been hearing for quite some time. in particular on the issue of collusion and whether or not any of president trump's inner circle around him during the campaign knew about any potential collusion or they themselves collaborated. the senior administration officials as well as sources close to the white house tell me they are adamant that there have been no collusion whatsoever, however, that is your number
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one. as you point out, the second point i would make is there is a developing other storyline here that we've been covering for quite some time and that is the paul manafort, president trump's former campaign chairman, about what his business dealings were in the ukraine and the pro-russia faction of the you came -- of the ukraine, and whether or not any of those interest came into the united states. lastly, you have to remember that thursday, according to the intelligence community and core document filings, a long effort on behalf of russia dating back , before candidate trump even declared his presidency, of trying to meddle in the election using social media platforms, using a type of influence over the democratic process that has really shaken up washington. the keyone of questions, kevin, is will the president and his son be interviewed, and what is the timing on that? kevin: we just don't know
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whether or not they will ultimately agree to be interviewed. they said they are open to it, but they also said of the things that we've all been following. on the flipside, much of the focus in washington amongst the intelligence community is how is the united states better protecting itself in the midterm elections? last week, president trump told reporters he believes the you have to be more vigilant. he even went as far as to say that history paper backups for the midterm elections. that is something that is only scratching the surface of the bipartisan proposals that are on capitol hill. shery: the white house had a busy weekends, they laid out a series of proposals to increase school safety. it fell far short of president trump's promises he has been making in the past few weeks. particular, we think of that bipartisan meeting at the white house with top democrats and republicans involved in the school safety and gun safety conversation that has been going on in recent
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weeks, following the latest tragedy. and yes, it would appear that this is a much more fluid situation that others had hoped for. forward, sources on capitol hill in the republican and democratic party feel hopeful that there would be some type of bipartisan measure the could be completed by the end of the month, particularly focusing on mental health as well as macron checks. -- background checks. shery: tell us why you will be in pennsylvania? kevin: i'm headed to pennsylvania after i get off their and will be in the southwestern portion, a very special election happening tomorrow, the republican challenger is running in a district that quite frankly, president trump won by 20 percentage points. and as a democratic challenger who is pulling that can get it will be a major upset should the democratic challenger win. it has brought all of the high
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of all surrogates, president trump was there over the "junior will be there today. former vice president joe biden campaigning for the democrats, union leaders are out in full force about this and it will be interesting to see how the trade policy plays because union folks like that trade policy but not anything else republicans stand for. it a lot of folks, myself included are watching this is a potential bellwether for midterm elections. the ironic thing is that because the redistricting, this district and all the millions of dollars they are spending, both parties on it, is going to disappear come november. shery: they have a new map created by the democratic controlled supreme court, so it will be defunct, but still in choosing to watch. before we let you go, we have to talk about north korea. we are hearing from the south korean press the kim jong-un wants to sign a peace treaty after meeting with president trump. we know this has been an issue for quite some time the past as well. kevin: absolutely.
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intelligence committee sources tell me they think it is great that the united states is talking or open to the idea of conversations, direct conversations. there's been talk for quite some time, but direct conversations and you know this better than anyone, between the u.s. and north korea. but you have to do with skepticism and i think there is a great deal of skepticism right now. rex tillerson cutting short his recent international trip to come back here to again participate in these conversations. it's going to be a remarkable next couple of weeks as report on this. shery: as always, thanks to kevin cirilli. be one of it could the biggest tech ideals in the past few years. between $7 billion and $8 billion. we bring you the latest details, next. vonnie: this is bloomberg. ♪
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shery: this is "bloomberg markets," i'm shery ahn. vonnie: i'm vonnie quinn. ,he stock of the hour is moving we're talking about goldman sachs. as the biggest gainer on the dow today at its highest and's 1999. julie hyman is here, as a pretty benign for investors. julie: the stock is trading at a record and it gained over the past few days, the today magnitude of the game is only the most since last monday and tuesday. it's not unusual gain for goldman sachs, but it does seem like this a steady as she goes
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announcement here and confirmation of who is going to succeed lloyd blankfein is somewhat reassuring to investors. mike mayo at wells fargo saying in a note today that it is not co-ceos, which would have been muddier, it's not a delay which would have been trickier as well. they are still mostly -- i haven't seen any analysts change the recommendations on the stock on the basis of this news. you still have the majority of analysts, 15 at neutral ratings,, two cell -- shery: lots of it for ratings tells you how many challenges the new head of goldman sachs will face going into his new job. although we have no clue when that will be. julie: exactly. if you look at the ford thunderbird blankfein's tenure, -- if you look at the performance under lloyd blankfein's tenure, when we talk
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to mike mayo on friday he pointed out this report doesn't have lehman brothers or bear stearns. this doesn't tell the complete picture of what happened in the wake of the financial crisis because there are banks that did not survive. and then also even though it hasn't done as well as jpmorgan, it has done quite well. when you look at the new for ratings, it's not just about the challenges for a new ceo, it's also about how well the stock has already done and the fact that it is trading at a record at the moment. hyman, thank you for the great stock of the hour. shery: she just mentioned mike mayo, we will be talking to him again at the top of the next hour. tune in for that. has set out a price range for its ipo, the filesharing company plans to sell 36 million shares for between $15 to $18 each. at the high-end of the range, drop-offs would have a market
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value of $7.1 billion. it's just one of the ipo's we are keeping our eye on. joining us from san francisco to discuss is bloomberg's allegory cut. -- alex barinka. what should investors watch out for? alex: now we know the market capitalization, it's valuation. this is a 25% cut from the last private value, which was $10 billion when the last sold shares privately in 2014. that is definitely going to be on people's minds. it's not necessarily operational indicator of dropbox, but it does continue to tell the story of the differences between the premiums that private investors are willing to put on these private share sales for these tech companies and with a public market is willing to pay. but i will be keeping a watch on the this dropbox deal as they hit the roadshow before they are scheduled to list next week is questions around user growth,
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specifically paid user growth. right now, dropbox has 500 million registered users but only 2% of those, 11 million, actually open up their pocketbooks to pay dropbox. i have been using -- hearing from the investor community that there are questions how they increase the number. the other thing i'm sure investors will be asking management is about churn. they didn't disclose any information on the stickiness of their customers. , howuickly other leaving are they keeping customers around? that is something that the public market by side will definitely want to know a little bit more information on. vonnie: why is dropbox trying to go public now? alex: they have taken the last three years to cut costs and build their own data centers, to get cash flow positive. it seems like the company has had a reckoning, scaled back a little bit of the sprawling
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growth and focus their product and now they are taking this opportunity to raise capital and they are not the only ones. it's been a big start to the year for you as listings, january alone there was a billion dollars worth of new stocks sold in u.s. ipo's, that's the biggest month since alibaba sold $45 billion in september 2014. market is calm and the company feels like it's mature and it's time for them to get out in the ring of the big public enterprise companies. shery: they are not issuing any new shares are raising money in this ipo, they are listing directly. that's for spotify. spotify will be the deal was listing directly. through a going classic ipo, they are marketing and selling shares, 36 million of them. 2,soon as the week of april according to people familiar with the matter, spotify, music streaming company, is looking to actually do a direct listing. very different than the dropbox situation. they are basically going to show
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up on listing day and existing private stockholders will be able to sell their shares. importantly with that deal, there will be no price discovery process. dropbox, dropbox of advisors are going on the road and try to figure out what valuation between that $7.1 billion to $6.1 billion investors will be willing to pay. spotify will just show up in the price of trading will be based on the supply of shareholders willing to sell, the demand of public investors willing to buy, and what price they agree for their shares to treat hands. -- trade hands. vonnie: what does it indicate that spotify is taking a different approach to dropbox? alex: i spent some time in san francisco and there is some angst in the valley over the whole ipo process and maybe that is some of the driving factor. they don't like the whole dog and pony show, they think the business speaks for themselves. playspotify, that might
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into it, but the company says they don't need the money, they don't need to raise the funds right now. and frankly, i think about the cofounder, he does like to do things a little differently. this is very, very different and unusual for a large company. perhaps they are just trying to do something new, but i know that we will all be watching what happens when those shares start reading and how volatile all of a -- are they, and what kind of distraction does that potential volatility landed to management as they begin their new life as a public company? shery: looking forward to investor day on thursday for spotify. alex barinka on spotify and also dropbox. latest time now for the bloomberg business flash, you look at the biggest business stories in the news right now. forman sachs paved the way a new ceo. copresident will be leaving. goldman has given no timeline
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for the retirement of ceo lloyd blankfein. executive chairman of the world's largest chemical company is stepping down. andrew liveris will step down april 1 and will remain director until the july -- resides in july. is planning to limit of three independent companies by middle of next year. shares of the largest bank in the middle east jumps today, it rose the most in eight years after announcing plans to almost double its foreign ownership limits. increase ownership from 25% to 49%. that's your latest bloomberg business flash. shery: coming up, the u.s. treasury said to auction 10 year bonds today and 30 year bonds tomorrow. traders,ite of bond next. this is bloomberg. ♪
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shery: this is "bloomberg markets," i'm shery ahn. vonnie: i'm vonnie quinn. add one more thing to the list of worries for the world's most indebted nation. u.s. treasury is that auction $21 million in 10-year note, and a lot more this week. over the past two years, the drop-off has been unmistakable with the average demand for 10 year notes down to the lowest since october 2009. us is brian devonte. some of this is to be expected. brian: it's an interesting mix. normally as interest rates rise, bond prices fall, which means losses. you expect people to be stepping back from the bond market right now but additional supply that's coming from the treasury to is theudget deficits right original whole process and
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that's why we are seeing demand fall unmistakably over the past two years on average, from auction to auction it may fluctuate, and there are more short-term dynamics at play. and that mightg serve to be a risk for the treasury. chart 6582 showing just that when it comes to 10-year note and demand falling. sinceg to the lowest october 2009, 2.246. this is a reflection we can see more pressure on rates going up, given the supply? brian: it's definitely possible. the trend is towards higher rates. we will see today, we have a three year auction in the tenure auction, 30 year tomorrow. we get a wide range of maturities, some will be interesting to see how each one of those goes in the 10 year a think is the really adjusting one because it has the most liquidity, it's the benchmark and if we continue to see week bid to covers, which essentially
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means the treasury is only getting $40 billion in bids to cover $21 billion, if that happens, that would be notable because the demand would be lower than it has been and people might not be interested in buying. vonnie: how much does a man have to do with inflation expectations and how much of it is we just need things safe-ish to put in our coffers. brian: the fact that the auction is come today and tomorrow you of cpi is aead major risk factor in why people might step back. strong cbi, you start thinking needed the fed is going to hike four times without three, that's the big question. there's a lot of risks around these auctions. so far, today, we are not seeing a huge concession being built in, yields are little changed. weaknesss to portend for options. if you don't get a higher yield
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move heading into the actual sales. shery: is the thing we should be watching, for the demand in these auctions? brian: the demand is something to watch in their various breakdowns, general breakdowns of the investor classes, proxy for foreign demand is going to be something to watch, especially, because there has been talk that japanese investors are pulling back. the tariffs that have come out now might lead to speculation that china might step back from their largest holdings of treasuries. european investors are that enticed -- are not that enticed. you haven't made your case either way, but i think if demand is down, it's going to be a hard case for the bond bulls. vonnie: we have treasury bears out of finally -- out of hibernation. cover orl bid to foreign demand will it take for people to say see, there is a problem in the treasury market
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and it's only going to get exacerbated? brian: it just got an update but the worst tenure it ratio is 1.22. we are nowhere near that, that was in 2003 at 2008, there were problems there. we are still at well above two. i think there is not going to be a real big issue, but if we ever got to approach the levels consistently, i think steve mnuchin or the fed would have to really start contemplating exactly what's going on here, given the trajectory of interest rates combined with the increased supply that we're going to get more and more throughout this year. that bidspite the fact to ratio cover might be ok right now, the environment seems very toxic for what could come in the future. interest rate hikes, but also the deficit ballooning right now. brian: exactly. some people say everything is
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big dinner everyone knows the supply is coming, that has ordered been reflected in the first two months of the year went 10 year yields rose 50 basis point. had one month of increased option status so far, and this is the second one. if this is getting big did the people expectations now as they see the results of these auctions, we could see bonds we can even further. vonnie: brian chappatta, thank you. we will get the 30 year results of :00 p.m. tomorrow. indications of a potential trade war. reminder, catch all of our interviews at tv . on bloomberg. ♪
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vonnie: it's 11:00 in new york, 3:00 p.m. in london and all :00 p.m. in hong kong. mark: i'm mark barton. welcome to "bloomberg markets." ♪
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vonnie: here are the top stories we are covering from the bloomberg and around the world. more big headlines from wall street as goldman sachs names dana solomon's sole president, putting him not in line -- next in line to succeed lloyd blankfein. we discuss with mike mayo. and will president trump's tariffs on steel and aluminum spark a trade war? hills, former trader presented. any key treasury auction, what this indicates about interest rates and inflation expectations. we are already 90 minutes into the u.s. trading session, with a change of because of bloomberg daylight savings time. abigail doolittle is here to


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