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tv   Bloomberg Markets Balance of Power  Bloomberg  June 28, 2018 12:00pm-1:00pm EDT

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david: upside down with china. is cuttingdson production in wisconsin even as china is moving in. the business of justice. what does the replacement of justice kennedy mean for american business? crossroads. european leaders meet in brussels to tackle issues that could pull them apart. german chancellor merkel may have the most to lose. ♪
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shery: president trump is in wisconsin a touting his america first agenda. once lauded at the white house, harley davidson is now a pariah. latest is alex wayne from washington. foxconn promising to bring jobs into the region. we know that local officials offered about $4 billion in tax breaks to lure them. the presidentwhat plans to do the today. >> he will brag about this plant opening. talked it up a lot. he worked with wisconsin on developing an incentive package.
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but there is a lot of public opposition in wisconsin to this project. it is the largest state tax incentive package ever offered to any company anywhere in the united states, an enormous amount of money, $4 billion. job.s a lot of money per not everybody in wisconsin is happy about it. he is swimming upstream a little .it there just up the road is harley davidson, a company that announced that they will move production overseas because of the president's trade war that has resulted in european counterterrorist on harley-davidson motorcycles. keeping trackne of the promises of jobs. alibaba promise ability jobs. how many are exit being delivered? alex: the u.s. economy is doing pretty well. that is the ace up trump's sleeve. as much as he starts trade
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disputes with our allies and with china, he can point to the economy and point voters to the economy and say, look, we are adding something like 200,000 jobs a month, a little bit less. unemployment is as low as it has been in years. he keeps talking about black unemployment and hispanic unemployment. he said yesterday he expects female unemployment to dip to a new low . we will see about -- new low next month. we will see about that. that is the trump card, the steaming economy. he is able to lean on that, even as he provokes the straight controversies. julia: when it comes to foreign -- foreignhen it comes to relations, we expect them to meet with vladimir putin the summer. doing and what they expect to discuss? alex: mike pence told us last night that they will talk about he expects them to talk about russian meddling again.
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the president has raised that in previous meetings, that he has received assurance is by vladimir putin that the kremlin wasn't involved. the president has appeared at times to accept a that denial at and the u.s. intelligence community says the president is lying. we will see if the president will bring up election meddling again in the summit in july. they fear the russians will try to interfere in the midterm elections again and our election systems are not safeguarded against that activity. let's thank you so much -- thank is a much. let's turn to the markets. abigail: moderate gains for the major averages. we are looking at this point that weekly declines, significant weekly declines for
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the major averages, probably the third week down in a row for the dow. if it happens tomorrow, it will be the longest weekly losing streak since march 2016. but buyers are trying to step up. to stepe if they tried up, at least for the day. oil.a look at . this is over the last six days, up and exterminate 2.2%. includingf factors, an unexpected opec boost yesterday. the energy sector is down slightly, but the energy sector has been one talent for stocks on the week. let's take a look at some of the .rug distributors plus the pbm sharp declines here. these are the top six point amazon ishe news that buying the online pharmacy for
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$1 million. they're solid entrance into the health care space really causing investors to sell these other shares. finally, it has been a wishy-washy day for the s&p 500, same on the year. chart we havea seen before, the s&p 500 one-your chart. chart.year buyers were very much in control. now you stuck in the range between 2600 and 2800 on the day, flirting with that 100-day moving average and pink. it does appear the breakdown on the day suggests that selling pressure could be ahead, perhaps to the bottom of that range. a pretty reliable a range as investors contend with these different factors, including trade tensions and some of that drama in d.c. david: abigail doolittle, always back to the technicals. thank you very much. coming up, a swing vote vacancy on the supreme court. we will talk about the changes
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come to the high court could mean for business. that is next. and this is bloomberg. ♪
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♪ shery: this is bloomberg markets. david: we turn now to mark crumpton. mark: as tensions increased between nato and russia, the allies's secretary -- the isiance's secretary-general welcoming the meeting between vladimir putin and president trump. nato's approach to russia is one of defense and dialogue. >> it is important to meet because russia is our biggest neighbor. we need to work for a better relationship with russia.
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there is no way we can improve that relationship with russia without meeting russia. dialogue is not a sign of weakness. dialogue is a sign of strength. mark: he added that nato does not want to isolate russia. melania trump is heading back to the southern border of the united states. she is expected to visit centers housing migrants apprehended at the border. mcallen, texas. she met with children it one of the facilities. a federal judge. ordered this week that thousands of migrants of migrant children and parents be reunited within 30 days and sooner if the child is under the age of five. hundreds of syrian refugees in lebanon began crossing the border today, heading back home to an uncertain future in syria. the refugees, mostly farmers, hacked up their belongings in -- packed up their belongings in
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trucks and went through identity checks at the border. a fire swept one of nairobi is largest open-air -- nairobi' us largest open-air markets today. rescue teams are hoping to find more survivors. the cause of the fire has not been released, but officials have declared the site a crime scene. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ david: supreme court justice anthony kennedy rocked the legal world yesterday when he announced he will be stepping down next month, ending a 30-year tenure. we welcome now professor dibella
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under -- professor duke dillinger. welcome. >> thank you, david. what will we be losing in justice kennedy, particularly from a business point of view? what was his reputation, his performance on the court when it came to business cases? >> justice kennedy was part of a very pro-business u.s. supreme court. ofe studies show, in the era chief justice roberts, it has been the most pro-business court really since the new deal. since before the new deal. he was not the most pro-business justice on the court. it is possible he will be replaced by a justice who is even more pro-business. was largely a stalwart for business, most importantly
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with citizens united, where the -- treating down corporations as persons with first amendment rights. a very expensive review of the first amendment have given corporations the right to challenge state regulations, including the right to work cases from this week. david: also, i think the wedding cake case as well. this court has shown a real propensity or openness on behalf of businesses to crack down on state regulations. is that likely to continue under his successor, as far as we know? >> it is likely to generally continue, but there are some subtle differences among conservatives.
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to oversimplify, there is a free market weighing -- wing of conservatism. the states rights wing is not over -- is not always horrible to business. you don't want to be regulated by 51 different systems of regulation when you're competing with a common market. part.s a very important but some of the judges that might be appointed by president trump, for example, william pryor of alabama who has debated on states rights and federalism, take a states rights orientation and preserved state regulation. kennedy was that way. sometimes his states rights view let him in that direction.
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he voted to allow a state lawsuit to go forward on an inadequate pharmaceutical warning, even though the warning labels had complied with the fda. on thenedy and thomas states rights perspective said the lawsuit to go forward. so sometimes you find states rights in tension with the interest of business -- rights tionension -- rights intension with interest of business. david: do you see any indication of people who understand how corporations work. we have had supreme justices before who have done that kind of work. looks like a lot are academics or court appeals judges. >> that's right. haveourt of appeals judges
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been academics before becoming court of appeals judges. ist the list is missing really anybody who has had substantial experience inside a corporation. litigators or corporate lawyers who have had major experience incorporation. the listn why we see like that is that academics are considered more ideologically reliable on hot button issues because they have thought about and written about those issues. so we have a body of published academic work, whereas, if you powell, he came from a substantial business experience, running a school board, but he had that deep experience. he approached each case by natalie -- each case pragmatically, where a professor
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like justice scalia was very predictable coming on the court, or a justice like pryor or kagan, academics who are much more predictable. but they are lacking that particular experience. david: you said this has been a largely pro-business court. what issues are left that business would like to make a difference on in the supreme court? >> in addition to preemption to eliminate a lot of state regulation and in addition to the big issue, which will be helpful to business, which is cutting back on the scope of power, iegulatory think punitive damages is an issue the court hasn't addressed. on behalf of my law firm, i argued the exxon punitive damages case. that was a case under federal maritime law. it was a tough case to win.
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got a $5 billion punitive judgment reduced to $5 million. that court seems relatively friendly to it. but there are some states rights -- in a states case, justice scalia would have said that the court has no business setting aside what states do. on punitive damages, this is whether a states rights oriented justice would not want to limit with states could do. david: thank you so much for being with us. --fessor walter dollinger walter dellinger. mexico's watershed election. we have a candidate, the key issues, and the stakes. that is coming up next. this is bloomberg. ♪
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back. welcome mexicans head to the polls on sunday to choose their next president. our next guest is antonio gaza. -- antonio garza. lopez the candidates is obrador. as you know, the campaigns closed yesterday. 's closed at aztec stadium to huge crowds. the two other candidates chose to close their campaigns, one in quiajuato, and the other in
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aila. a northern state. manuel lopez obrador has characterized his campaign as a stubborn one. arena.been in the public this is his third time running for the presidency. in past elections, he has been characterized as everything from mexico's version of hugo chavez to a populist who would up and the neoliberal open trade model. this campaign has seen a more temperate lopez obrador. possibilityopen the of reviewing the energy reform, not necessarily saying he would reverse it, but review some of the concessions under the
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existing framework. as relates to trade, he has been surprisingly temperate, talking about mexico's a to diversify its trading partners. and the themes of all three of the campaigns has been less trade and immigration and more focused on domestic issues of corruption, of crime, of haveity, and things that really spoken to the mexican people in a way that i think the two other candidates, by virtue of being institutional parties, had less credibility. y: nafta, how could it change negotiations? >> that is a very good question. we have gone through nine rounds of negotiation. there was every hope here in would beat the nafta finally negotiated before july so that, given the congressional timetables and all three countries, a final agreement could be entered into.
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-- in all three countries, a final agreement could be entered into. the president will be elected on july 1, but not take office until december. --ing that transition cap 80 transition period, it will be important how they handoff on nafta. it is fair to expect that a new administration has every right, if not the responsibility, to review the status of the agreement and then go forward with the negotiations. that is essentially what all three candidates have said they would do. the reading a subtext has really become quite the sport in the country. david: if i heard you correctly, effect president takes january 1. it sounds like we might be in a situation where, come january 2, we are essentially starting from scratch with a new administration of some sort who may want to revisit everything.
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so we spent two years without any real progress. >> you may be listening into some of the guidance i have been offering clients of late. during this period from july 1 to december, there will be an extended transition from one party, very likely, to another party. and we will be going through our interim elections. as you know, november midterms are likely to be very spirited and are shaping up largely as issues of trade and immigration. that seems to be those driving the president and those which he feels most strongly will appeal to his base. your prior guest talked about the supreme court vacancy. for the economy and taxes. i think we -- or the economy and taxes and i think we will potentially have a back-and-forth. i will counsel not to get into twitter wars and not read too much into the rhetoric of
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campaigns coming south. clinton? --dent president pena nieto's standing has in hurt. >> given the unpredictability of the trump administration's issues on immigration, all three candidates want to make the strongest argument for mexico, for free trade and immigration and opportunity for the region. if we keep them on that level, perhaps there could be a change in town. formerthat is a ambassador to mexico, antonio garza. this is bloomberg. ♪ two, down, back up!
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we see u.s. stocks fluctuating between gains and losses. the s&p 500 index and the dow essentially flat. investors are still trying to figure out u.s. actions on trade and invest 20 to china. david: we now turn to mark cardin. mark: president trump -- mark crumpton. mark: president trump and vladimir putin will hold a summit july 16 in helsinki. president trump -- this will be the third meeting between the two leaders. ahead of that meeting, president putin boasted about the countries respect to have nuclear weapons saying that they are ahead of four designs. the graduates a russian military academy, he hugel ssians have made a
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leap. conte is demanding that other countries share the burden of refugees arriving in italy. conte and merkel are meeting one-on-one in brussels. jeff sessions announced today what he called the largest health care takedown. chargingear, we are 601 defendants, including doctors, pharmacists, nurses, and other medical personnel, with more than $2 billion in health care fraud. mark: of those chars from a 160 two were prescribing and distributing opioids and other dangerous drugs. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries.
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i'm mark crumpton. this is bloomberg. ♪ david: we return now to the summit in europe. we welcome now our guest, senior fellow at the peterson institute. good to have you here. it strikes me that there is a lot of talk about this, especially angela merkel. she has gone on to say this could be the future of the european block. >> it is important to remember, whether refugee numbers right now are not critical, they have come down a lot in recent years, politically, they're back on the agenda in a lot of countries. we just had a new populace, antigovernment --
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ini-immigration government germany. if there is no solution or at least the outline of a relatively imminent solution agreed at the summit, i think that the basic issue is that europe will be left without an ability to act if there is a repeat of the kind of sudden migrant inflow we saw in 2015-2016. if that happens, you will have the election of a number of viktor orbans, anti-eu political leaders around europe. that will ultimately threaten the very future of the european project. is it we willely get a solution given that the austrian chancellor, who is an immigration hardliner, is expected to take the eu presidency?
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thisere is no doubt that is, in my opinion, one of the factors that means a solution will be found in the coming weeks and months. i think you will see a number of very short-term bilateral deals agreed on the sidelines of the summit between germany and some of the other eu members. greece has already declared its interest in doing so. others will follow. conclusionsncil's basically have to sketch out the broad outlines of a deal that include regional disembark main that may mean asylum processing and north africa, increased funding for exterior border control and the like, and then leave it to the austrian presidency for the eu to fill in the details. that will be the salvation fragile merkel.
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shery: given that we are now seeing this tense relationship between europe and president trump, how is this relationship going to have an impact on the eu unity? >> i don't think there is any doubt that these additional external threats to the eu economically from these trade policies from the trump administration make it more imperative for all the eu common stopome to a so they will be in a better position to confront the united states and the trump administration on trade. david: we learned today that president trump will meet with vladimir putin of russia on july 16 in helsinki, finland. what is on that agenda? do we know? >> we don't know in detail. recently assume they will be talking about russian interference in the u.s. election. hopefully, they will talk a lot
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inut russian policies ukraine, syria, national duty issues, -- national security issues. we know the dutch prime initial come to washington soon. he wants to bring up the issue of the malaysian airline that was shot down. so there are a host of issues on that agenda. david: you mention several things, such as ukraine and the malaysian airliner. will sanctions be on the agenda? -- willadimir putin vladimir putin be asking for this to be released? >> he will probably ask. the reality is that the u.s. sanctions regime on russia was significantly tightened by congress and taken out of the hands of the white house, leaving it in the hands of these sanctions. aske mr. putin may
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president trump to do so, i don't think he will succeed. shery: how much of a loose willis summit with the united states provide russia -- will a summit with the united states provide russia? >> there is no doubt that mr. putin will take this summit as a positive. foremost, because it probably offers him one more opportunity to do what is his strategic interest, which is to try to split and nato and split the western countries apart, he will try to see if he can get some sort of agreement bilaterally with donald trump that could potentially see a weakening of the u.s. security commitment in nato to some of the eastern european countries. but ultimately, like kim jong-un of north korea, he will welcome this opportunity to share the global stage with the u.s. president. shery: thank you so much for
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that. up, how asia is preparing for more protectionist -- a more protectionist future. we have more on the cost of tariffs coming up. this is bloomberg. ♪
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♪ david: this is bloomberg markets bounce of power. shares of amazon trading higher after they agreed to buy pill pack, jumping into the health care business that will give it immediately nationwide drug network. we saw the reaction in
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walgreens, which plunged in the dow. islor: i want to know what this deal for amazon? pharmacy.s an online is an't know -- pillpack online pharmacy. we don't know much about it. it is privately held. we otherwise don't know much about them. the deal is supposed to close the second half of this year pending regulatory approval. amazon got less than a billion dollars. pillpack seems to be a great company. we spoke with health care reporters and analysts about why they are doing this. this is the last frontier for amazon. anything you can get at cvs, the only thing you could not get online was -- on amazon was
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prescription pills. we knew they were trying to make some footprint. they tried to get some licenses in 56. i wouldn't made -- in 50 states. they had somee regulatory hurdles to overcome. it is a huge market, one that is easy to penetrate for now. david: may be last, but one of the biggest when it comes to pharmacies. pharmaceutical benefit managers have been making a lot of money. known for price discovery. there has not been any price discovery. we were talking with competitors in the health care space, what it means for them. cvs,entioned walgreens and all of those shares sold offer a 9%.
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they had agreed to be acquired by cigna, the health insurer. so there may be a cushion. you know the amazon affect. the moment amazon comes in, people get nervous. shery: literally on anything. and we know we are headed for big changes in the health care industry. is brightic outlook for asia with growth in the hittingalf of 2017 seven point percent and china and 16.5% and the five largest economies in southeast asia. downside,are on the topping the list. michael, great to have you with us. we always talk about the u.s. tariffs on metals imports. we forget that the u.s. has imposed tariffs on washing machines and solar panels. do we have a dollar figure on what the cost will be on
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developing asia? >> everybody is watching what is happening in the states. the prospects are very good. last year, trade was up 5% overall in asia and developing asia. we are expecting a couple of good years ahead if things get not too badly derailed. front, i would like to turn it around a little bit and say there's a enormous --ortunities for the u.s. there are enormous opportunities for the u.s. in trade and energy imports. one of those is on the liquefied .atural gas front, lng the whole of asia is opening up for imports and america is extremely well-placed to profit from that, to export an enormous
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amount of new facilities being constructed here in the states. shery: we are expecting china to become the largest buyer of u.s. lng next year. what will be the impact if you get a trade war and these tariffs imposed on the energy sector? now, of course, the chinese are looking at what tariffs are coming their way. they have not included lng. we will see how that goes. there's an enormous amount of self-interest on both sides. china is rapidly moving out of coal-fired power. they are looking towards guess. america has a fantastic gas product to offer at a great price. right now, china is america's third-largest importer of lng. very quickly, we expect china to
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be the biggest potential importer. that positioning is great for the u.s.. we would like to see more of that move. it's not just china, by the way. we have been supporting financing for lng imports projects in places like bangladesh and pakistan. ande looking at sri lanka the philistines. a big -- philippines. , chapter that could come -- a big chunk of that could come from the u.s. are you seeing a slowdown in investment in new projects just because of the test just until the uncertainty gets sorted out? just until the uncertainty gets sorted out? >> we are seeing a bit of a slowdown. i'm talking generally. from the u.s. perspective, it is important to note the u.s. is a
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very important game in town in terms of gas exports, but it is not the only one. many countries around the world, particularly in asia, are wrapping up as well. countries like china do have other options. but at the same time, america has extremely competitively priced to gas, has a lot of it, the chinese would love to increase the amount of gas they bring a from the u.s.. what: even beyond lng, sectors do you see sensitivity in terms of making investments because of uncertainty? are there some areas, some objects, some products that are more vulnerable than others? growth, let mef put it in numbers, in asia, the next few years, annually, there is bound to be $1.7 trillion in infrastructure spend.
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more than half of that will be for energy and our-related investments. -- and power-related investments. the development of asia will be on lng imports in producing mark our. that's where a lot -- producing more power. that's where a lot of the opportunities will be. that's where the possibility for an enormous amount of trade with the united states will be. obviously, anything that locks that trade, blocks investments, renewals, solar, wind across asia, again, an area where the u.s. has a lot of potential for further investment, that is obviously going to be potentially disruptive. hopefully, we will not see that. david: thank you so much, michael. barrow. michael
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peter navarro says the president has made it clear that he is a free trader. he says president is just try to level the playing field. a changingre seeing of the guard at the house arvices committee, opening up battle between the parties for one of the most influential congressional roles for wall street. we sat with one of the contenders to talk about has a reform. >> i think it will be a part of the administration -- a priority of the administration. elizabeth: what is your reaction to the white house report the came out last week? do you agree with that approach? >> it has been discussed. at this point, we need more detail in it. it is not much different from other ideas thrown out there.
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why friendly, i don't think we will get anywhere on housing reform unless the administration takes the lead. this is a really thorny issue. lead.eed to take the the administration is to take the lead, period. they need to second down and structure on how they want this to fall out and we can fill in the blanks. they will have to give us similar what they do with tax reform. this is our goal. this is how we would like to see you get there. . at the end of the day, we have a goal from them and we will fill in the banks of how to get there. i think, if we approach it from that angle with them lead in way, i think we will be successful. but for us to come up with an idea that is contrary to what they want to see is wasting our time. inzabeth: they did outline this report, putting it in congress's hands. with someve come up
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ideas. i would like to see the treasury secretary endorsed a plan. elizabeth: it is interesting that he does not endorse it. that understanding is there are still some discussions with the administration file that plans out. elizabeth: where do you see the thorny issues? wind start with how do you down freddie and fannie? do you want them down and then go to a private sector scenario? do you take them and privatize them, which is what they want to do? or do you let them keep doing what they are doing? if so, if you go to the private sector over here, the first scenario, what do you do with fha? do they become your de facto government agency guarantee? will they -- will there be a the fact of government agency? which scenario do you want? do you want a private sector solution with a government
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guarantee, which is what most people my gets a something along those lines? how do you want that to play out? do you want fannie and freddie to be transitional or wider than completely down and start with a new entity, whether that would be a secondary mortgage market purchaser? expecting if you are that the treasury will fill in some of these blanks, why did the white house come out with that report? >> it did have some info from the treasury. i would like to see more detail on it. we need to get more feedback from them and more leadership frankly. we will have some hearings this fall. i sit on the insurance of committee. i know they are wanting additional hearings.
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get some more info and hopefully there will be somewhere leadership from the white house to be able to write is in the right direction to see how they would like this to all play out. elizabeth: mitch mcconnell said he will hold a vote later this year on a financial package, this time focused on capital formation. what do you expect will be a included on that? and when do you think the house will move? sling has, with bills he is shopping around and discussing with the senate democrats and republicans to see if there is some interest in trying to do an additional package. he's working with senator crapo and senator brown to work through some of these bills and see if there's common interest in some of these bills. if we can get a package together, we would like to probably see if we can get a vote on the floor before the
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first of august to give the -- some time.e senator mcconnell has promised a vote on it. so we have floor time in the senate. we just have to figure out if we can put a package together that will attract democrats to it that will get the 60. senators,g with the wewell as the chairman, said, if you don't like one of the bills of the 25, kick it out. that's 20 bills we have passed that will make a difference. i think it is important, whatever we can get, we will take. at the end of the day, we understand that it has to be noncontroversial and we intend to make it noncontroversial. but there are a lot of bills, they're not, controversial that
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they will take if they had the desire to and would make a big difference. david: one of the top contenders for the house financial services committee. we will bring you further interviews from other contenders in the coming weeks. shery: we see a mixed picture for u.s. stocks. the dow is flat while the u.s. it -- while the -- while the s&p 500 is climbing. the nasdaq is up a quarter of a percent. we have seen investors being hesitant when it comes to trading, really trying to figure out u.s. actions on trade and investments from china. that will hurt other asset classes, including sectors in emerging markets. we see the end stock sinking to the lowest level in 10 months --
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we see em stocks sinking to the lowest level in 10 months. david cohen get the latest in global politics in your inbox every single day. bill thating up, the of the billionaire founder of bridgewater joins erik schatzker at 2:00 p.m. eastern. president trump will be speaking at the groundbreaking of the foxconn factory in wisconsin that the company says will bring 13,000 jobs to the region. if you missed out on any of our charts, gtv is your function. live from new york, this is bloomberg. ♪
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>> oil rises over 10%. is it a short-term supply issue from canada or a result of harsher u.s. treatment on a ron and supply adages? the trade battles claim another victim. china could buy 4 million tons of soybeans from brazil. the problem, recovering from a trucker strike and -- ♪ alix: i'm alix s


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