tv Bloomberg Markets European Close Bloomberg March 22, 2019 11:00am-12:00pm EDT
headquarters here in new york, i'm jason kelly in for david westin. welcome to "balance of power your car where the -- welcome to "balance ." power t kevin cirilli is joining us from washington with the latest on trade, and maria taddeo joining us from brussels as the e.u. gives theresa may an extension on brexit. let's start with brian. those?we care about brian: this field curb has predicted the last recession. it says something about the economy because your three-month bills suddenly yields more than the 10 year treasuries, so people are buying the tenure protection effectively betting that the fed will have to cut rates soon to fight the recession. jason: i what you to stick around. brian, i want to go to you --
kevin, i want to go to you. so many people around the limb today. kevin, bring us up to date. the president has been talking about this, we have been hearing good reporting on our team. ?here do we stand kevin: bob lighthizer and steven mnuchin are headed to china to continue trade talks. the president says that potentially he is going to keep in place some tariffs he had delayed as an enforcement mechanism for one the u.s. and china sign of a get to some type of arrangement. that is what's going on on the u.s.-china front. the president also spoke to fox business network about europe, saying he will keep tariffs in place a guest the auto front. they don't like those tariffs in the e.u. finally on the u.s.m.c.a., the
president was at a roundtable here in washington, d.c. and they say they want to see [laughter]ss n.a 2.0, but it gets tricky in the house of representatives for -- see congress pass n.a.f.t.a. 2.0. jason: if i was producing your show this afternoon i would play a little tom petty, the waiting is the hardest part. it is a waiting game for mueller right now. what do you hear? kevin: everyone is waiting for mueller to drop. let's walk through what happens when bob mueller and his investigation team do complete the report. they would submitted to the department of justice and from there the d.o.j. would have time to look it over and potentially redact portions or citing national security concerns before ultimately releasing it
to respective closed committees in the house and senate. let timeline for how long that reduction takes -- redaction takes, we don't know. so the first step in the process might we close, and that is the rumor around town. from there, we truthfully don't know the precise timeline. the president for his part asked about it yesterday and he said he would like to see the report made public if it can become a but there is a lot of confusion amongst his supporters. that is where the politics will be impacted of the investigation as a whole. a four hundredis 20-0 vote in the house of representatives last week in which republicans joined with democrats to say they would like to see the investigation at some point released to the public. jason: a lot of waiting with ath.d bre let's turn to maria today are in
brussels, she has been following brexit issue. that you use giving theresa may three weeks. how is that being received? maria: hello. it is pretty clear by now that we have taken a step back from that no deal brexit cliff edge. extensiona two-week that the e.u. has granted the prime minister. she still has time to bring the to a vote. she remains defiant and thinks she can get it through, but it has lost twice by triple digits. .he looks very weak back home a big concession highlight by the e.u., saying they don't see brexit as a binary choice between the premises deal and a no-deal brexit. they think of you are many
scenarios. we just heard angela merkel say -- that revoking article 50 would cancel brexit. we also heard the head of the european council say that by april 12, all options will be on the table. the u.k. decides it doesn't want to run in the european elections, the prime minister would have to make a decision to ask for an extension, but we know that this be very toxic for the prime minister for her. jason: is that there is sense that a hard brexit, i feel like a couple of weeks ago, you were saying and many were saying, a hard brexit is unlikely. does it feel more likely now? maria: in the eyes of the e.u., they feel a sense of relief today, the fact that there is an
extension has taken the heat away. by definition, by law, unless we get an alternative to a no-deal brexit, the u.k. will crash out. not in a week, but by april 12. what we need is a positive majority in the u.k. parliament. unless they come together in an agreement, perhaps a series of indicative votes, the default here is that the main option is to go to a no-deal brexit. this is crystal clear. the au will tell you, everyone needs to stop playing politics. we all know that this is the default and we need to move away from that. the prime minister has deliver now. jason: thank you so much, maria for the latest and latest, not so greatest when it comes to brexit. brian is still here with me in new york. a week ago we heard chairman jay powell come out and essentially
changes to you and from what we've heard about fed policy going into 2019. is this the market today reacting to that? market?acting to the brian: it really felt like his move was premature today's ago, it feels like an eternity ago, but i think the data from europe sort of confirmed the idea that global growth is slowing and there was concern. you saw the german ten-year bones fall below 0 -- german ten-year bunds fall below zero for the first time in years. i think it is a combination of the fed reacting to a slow growth and slow growth showing up in certain data points and the market is kicking back and reacting to medically. jason: historically, this is a harbinger of recession. what else should we be looking for in the markets that would validate the theory this time around? brian: i think people forget
that this is the first time since 2007 the yield curve has inverted. the last time it actually did so was in january, 2006. there was a two-year lag between that and when the recession actually happened in 2007. so we aren't looking at a recession next month, maybe it is a 2020, 2021 story. year,p 500 is up 13% this you might when to reconsider whether you want to test the highs in risk assets because there is a signal this might be ending in the not-too-distant future. jason: we saw each other backstage before we came on air and you said, didn't see this inversion coming today. brian, thank you for joining us. let's get a check on the markets now. emma chandra joins us from london. emma: jason, we are looking at risk-off for u.s. equities.
no surprise, when you look at the major indexes in the red, and by over 1%. the nasdaq actually falling 1.3% , really taking that led lower when we saw the headline about the inversion of the three-month 10-year-old yield markets. there are concerns about potential slowdowns in the u.s. and also the negative news about global growth. no surprise that financials are leading the s&p 500 lower today. let us see how the some of the big banks are performing. jp morgan down 2%, bank of america down 4%, both trading at their lowest since january, on a four-day losing streak. the s&p 500 bank index, every single member of the index is in the red today. not liking that dovish dig in from the federal reserve earlier in the week and also with falling yields. concerns about the u.s. and
global economy also impacting oil today, take a look at wti crude, falling more than 2%. the biggest drop since the beginning of the month. 2%, this oil services company also down 3.6%. i wanted to take a quick look at tech, look at this bloomberg chart. the s&p 500 tech index is in the red,. against the broader s&p 500 in the highest in 18 years. he would have to go back to 2000, 2001 for that ratio to be at its highest. the tech index is outperforming sectors in the s&p 500, up 20%. the last time the ratio was this high was right before the dot-com bubble burst. the turkish lira, we have breaking news in the last few 5%.tes, weakening by about
remember, we had that and expect did tightening move from the turkish central bank earlier today? emma: -- jason: amaq, thank you so much. coming up, president trump calls it a witch hunt while the -- robertresistance mueller's report could be coming. we are waiting for a. democrats respond? ask the next guest. this is bloomberg. ♪ this is bloomberg. ♪
i am jason kelly. new troubles with the trump administration. the u.s. office in charge of financial sanctions risks being hobbled by staff departures and private sector demand. we have our next guest live in our d.c. bureau, one of the hardest working reporters but certainly in the last 24 hours. every time i look at my terminal, you have another scoop. let's start with the sanctions staff. a really important group in this administration that has been bulked up, right? >> is right. under the trump administration, the budget for the terrorism and financial intelligence unit which is essentially the sanctions unit inside the treasury had increased even though trump once budget cuts across the agencies. a lot of people are leaving the department. two reasons. trump is using sanctions so much more and there is so much more -- they are so much more
sophisticated method private sector is poaching treasury officials to work for them so they can understand what is going on. as thatame time, the in the unit has not been great. there has been some underagement by the key secretary in charge. a lot of people came up to say that she is a little difficult to work for. the pace has increased but she is also difficult to work for. and the private sector was waiting to scoop them up as they left the service. story, i is a great really want people to read it. i want to take you to another store you had on the terminal, about potentially a new nominee for the fed. this is found to mind for everyone in wall street this week. stephen moore is a name being bandied about by the president.
saleha: let's ride. he had been a long time supporter of president trump, he worked as an advisor on the trump campaign and helped put together the tax proposal, the tax reform proposal, so it is interesting -- the fed, all the members are appointed by political people, the fed appoints them, but the fed is supposed to be independent. you don't look at powell, or you never looked at janet yellen to say that. these are democrats or republicans but now, stephen moore will be the second, and it is out in the open that he is a trump supporter. , shether person, brainerd donated to the clinton administration and was rumored way back when to be one of hillary clinton's choices for possibly treasury secretary. those alliances are starting to come how to read a very
interesting time at the fed. jason: indeed. thank you so much to bloomberg's mohsin. it is wait and see time in washington in a big way. againstiminal counts about 30 people in more than two years, everyone is on the edge of what could be the imminent release of the special counsel's report. from orlando, we are joined by congresswoman val demings, as she sits on the house judiciary committee and homeland security committee. thank you so much for spending time with us on this friday afternoon. demings: you are waiting along with the rest of us. what do you expect to see in what form, and what will make you happy in
terms of the volume of this report? >> we are anxiously waiting, certainly to see what the report yields. we are anxious to get to the bottom and to know what the truth is, and no matter how many times the president says there is no collusion, we will see what the facts are. no matter how may times he says that bob mueller was on a witch witchhunt, it doesn't change the facts. so we are waiting to see what the facts yield. youoted unanimously, as know, in the house, for the report to be public. we are hoping that attorney general are bama will honor -- attorney general barr will honor it and make the report public. of course, he will be briefed by mueller and could do a report of his own, but i think the republican people, looking at
the duration of this investigation, deserve to know all the facts. jason: how much do you worry that congress will then have some investigation fatigue? reportworry that if the is not clear-cut, people will tune out or eventually side with the president that this was ginned up? let me say, having worked as a 27 year law enforcement officer, as an detective having investigated long drawn out cases, we will go where the evidence takes us. we have the responsibility to look at every piece of the evidence, and then make the right decisions, and provide the necessary oversight and the proper actions on behalf of the american people. time, butbeen a long
we have to stay in there and we have to be prepared for the long game. i can guarantee you that in congress, we are are you happy as you look around your caucus at the types of investigations being conducted by you and your colleagues? is the congress focused on the right elements in terms of these investigations? are there areas that maybe you aren't looking at maybe you should be? rep. demings: we provide the necessary oversight certainly on the judiciary, leopold the rule of law and protect the constitution, and for the last two years, we had absolutely zero oversight on this administration. -- i believe that through intelligence and judiciary oversight committee and foreign affairs as well as ways and means, we are focused on the right areas, we are
focused on the areas that the american people care about and we are determined to provide the necessary oversight. -- mueller miller report and what that yields. the bottom line is that regardless of what the mueller report actually yields, and i think it will yield a lot, we have work to do in congress and we are committed to that. jason: i want to ask you about your role on the antitrust committee. elizabeth warren and others are talking about a breakup of big tech. where do you stand on that? do you think the house and lawmakers should pursue aggressive action to maybe diminish the size and the scope of big companies like facebook, google and others? rep. demings: i certainly think that as members of congress, we have an obligation to make sure we protect the american consumer. had a well now, we
hearing a couple of weeks ago involving the merger between t-mobile and sprint. is to makeibility sure consumers are protected, that they don't pay higher prices as a result of big mergers. we think being competitive is good for the american consumer. sure consumers who live in rural areas are still protected and we also need to make sure that workers, that there aren't major layoffs. ourhose, i think, are oversight responsibilities and we have an obligation to take a look and make sure the consumer is not adversely affected, but is protected. you mentioned that your time and law enforcement. i wonder what you make of what we saw in new zealand, in terms of swift action there around gun control, the banning of assault
rifles. does it give you any hope that maybe you could see something similar here in the united states? rep. demings: jason, i do believe the united states plays a major role in what goes on around the world. taken as swift of action as a new zealand has. but i am very proud of new zealand and the steps they have taken to protect new zealand. passed two, we pieces of legislation in the house we are excited about, but we still have more work to be done and maybe we can take a note out of new zealand's a book and have more legislation as it pertains to gun violence, to protect innocent people. jason: i know that given the district you represent, you have some personal experience with that. congresswoman val demings, democrat from florida, thank you so much. have a lovely weekend. this is bloomberg. ♪
jason: let's look at markets. the major indices here in the united states are all down more than 1%. tech, nasdaq is a tech-heavy index, about 1.4% down. the dow and the s&p down more than 1%. clearly, the recession is on people's minds with that yield curve inversion. up next, we speak with the , on thepresident u.s.m.c.a., china, jobs and more. this is bloomberg. ♪ want more from your entertainment experience?
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house and business groups have launched an assault on congress to push through the trade agreement between the u.s., mexico, and canada known as the usmca. joining us is afl-cio president richard trumka. good to have you back on balance of power. as you and i were getting into this conversation we were talking about how while robert mueller is taking up a lot of headlines, trade is dominating and it does feel like the usmca has gotten lost a little bit in the conversation. tell us where you are right now with the push through congress. richard: the labor movement, once we assure trade agreements benefit working people. this agreement, for it to be voted on, would be premature, and this is why kerry one of the
problems -- and this is why. one of the problems under the old agreement is mexico kept rates artificially low. in this agreement they have to change their laws and effectively reinforce it. until they get that done, this agreement will not be near right for voting on. if we vote on it before they do that, their incentives to do those things goes away exactly like it did in columbia. we are saying don't vote at all until you put these things in place and then we stop other problems with enforcement. tell us what you need to hear and to you need to hear it from to get behind this. you've been pretty clear in saying we are not behind this if it goes to an early vote. richard: the mexican government one, has to change their laws, and then they have to start enforcing them, and than they
have to demonstrate they have the resources necessary to enforce those laws. if you cannot enforce a trade agreement, it is useless. the second part of enforcement is the agreement as drafted so far takes a step backwards when it comes to enforcement. , whenever you had mexico and the united states had a disagreement, they would first talk to each other and if they cannot result that dispute, they would put together a group of people called a panel. they were arbitrators and they would decide the dispute. the new agreement says either party can block the panel. either party can block the arbitrator and you can never get a decision. that means it is unenforceable. we need a way for workers to enforce the laws in all three countries so we can make this agreement work for working people and not just bankers. jason: what you are describing feels like a pretty big piece of
this. do we need to reopen negotiations at this point among the three countries? richard: there are two ways you get enforcement. one is in the enabling legislation. that can help us domestically. in order to be able to get the enforcement we need and not just rely on hopes and wishes and we think they will do it or we hope they will do it, then we have to have a mechanism that allows us to enforce that. all three parties will have to agree to that. it is not in place yet. it must be in place for this agreement is unenforceable. jason: as you talk to your friends on capitol hill, give us a sense of what is being talked about. are you feeling like there is a growing movement for or against -- are you convincing people this is not the right thing? what are you hearing? richard: what we hear on the hill is the same thing we are saying. it is not ready to be voted on
because you do not have the mechanisms. we do not know what the enabling legislation will do. it is not enforceable because the agreement itself takes a step backwards from what it was before. it is like having an arbitration proceeding that does not go to arbitration so you can never settle anything. that has to be resolved. there is a great appetite to have an agreement that is enforceable and write for enforcement. until that happens, there will be significant resistance to this agreement. towould be a major mistake vote on this agreement prematurely because we would miss a great opportunity to .ewrite a bad trade agreement jason: you travel around a lot, you get to talk to folks at meetings. like it or not, we are already in the thick of a presidential election were the early stages of a presidential election. labor is a key voice for both
parties at this point, especially given what we saw in the last presidential election. what do you hear in terms of how the democratic message is or is not resonating as we see this doesn't are so canada's -- this doesn't -- this dozen or so canada's out in the field -- en ordoesn't -- this doz so candidates in the field. richard: what he going to do for health care, or education, to raise our wages, what will you do to make education more affordable? that debate is starting to bubble up. there are a lot of great ideas. our people are excited to have the opportunity to find out what that candidate stands for. we're going to encourage that. we will encourage those candidates to walk a day with our members, do what we do for a
day so you know how workers live and our communities are. look at our schools, talk about our jobs. look at health and safety. they are excited about having the opportunity to talk to people about those issues that affect them the most. jason: anybody taking you up on that offer so far? richard: i think all of them will. we are in the process of planning it. most of the candidates will, if not all of them. jason: before i let you go, have to go back to the trade agreement. what is the next big move for you? what you need to see? what is the next catalyst for action from your perspective? richard: we continue to work with ambassador robert lighthizer to make sure this agreement to start get voted on before it is ripe for voting. we are trying to work with them to make sure we get real
enforcement mechanisms. i am hopeful we can get that done so we can rid ourselves of a bad agreement. nafta was designed to give global employers power over their workers in all the countries. that is what caused a lot of the wage stagnation in all the countries around the world, particularly canada, the u.s., and mexico. we want to change that. we are working hard to get that done and hopefully we will get that done before it is voted on. jason: you feel like robert lighthizer is listening to you? richard: we have had a working relationship with them, yes. jason: richard trumka, afl-cio president. he is today's conversation in chief. thank you so much for joining me. richard: thanks, jason. jason: david westin spoke earlier with gm ceo. the plant closure
in ohio and her plans for those workers. >> we will follow the uaw agreement. we have over 2700 jobs open in the near term and we want every single member of the team to stay part of the gm family. we've been able to successfully move about 500 of those employees star other locations. we will continue to work with each and every one of those employees with the hopes they take one of the jobs we have across the country, some even in the state of ohio. there is more immediate term opportunity for all of those employees and this will be additional that will come later. david: i understand you've worked with the uaw as well as with the state of michigan in developing this plan. this announcement of the expansion that with your upcoming negotiations with the uaw? the things where we
are always aligned is on creating jobs. being able to announce we will create 400 jobs, especially in technology is going to be a strong part of our future. i think it is a positive day for our workforce and something that will be noted as we going to those conversations. david: we talked about the larger platform electric vehicle. this will be the smaller. you have a larger one coming and you want to emphasize cadillac. do you have an update on when we can expect to see an announcement about that larger electric vehicle? mary: we continue to work on it. that is our next generation new vehicle. the cadillac will be the lead brand. we do not have anything more to share right now but we look forward to doing that in the not-too-distant future. david: the big news this week has been about the global economy and the u.s. economy. we saw the fed chair say we really have had winds developing
because of a lack of growth. pmi numbers are disappointing. are you seeing a softening in the u.s. economy? mary: right now we believe u.s. industry will be about the same as last year. we continue to see pricing pressure but that is why we are taking the steps we announced last fall, making sure we are keeping gm as a strong company, and that enables us to do things like we are doing today to announce new investment and new products and technology that creates new jobs. we want to make sure gm stays strong. in the u.s. we enjoy strong economy. we want to capitalize on that. this is an industry that is under dramatic transformation. we are taking the steps and being responsible to make sure we can continue to grow in these areas and continued to have a strong u.s. manufacturing base
going on but we are waiting. president trump has frequently denied any collusion, calling the investigation a witchhunt. for more, let's welcome a former andassistant director homeland security program director. great be with you. thanks for joining. you and i were talking before we came on air about how much oxygen this has taken up. , much less thene two years we have been watching robert mueller work from arm's-length. why has this captured our attention so much? >> it is a significant issue. you wonder if people in iowa are is glued to the tv and news media as we are in washington or new york. clearly, it is a significant
event. we are talking about a two year investigation focused on the president of the united states. with understandable serious charges and implications. we should not be surprised. i feel like one of the big questions is whether the report may come out and people both in public and on capitol hill and what?"re will say "so what happens then? steve: you are right. everyone is anticipating this and when this report comes out, step inis an important this process, but not the end. you and i both know this thing has been -- from the very beginning, has been tremendously politicized. therefore this report is not going to satisfy anybody.
it will potentially be significant depending on what mr. mueller says but it is not the last chapter of this story. it may be the most important chapter, but it will not be the last. a lot of people took note of what james comey, whose firing kicked this, what he wrote in the new york times about what he essentially wants some sense that the system is working. that seems to be a big issue. it also seems to be an issue for your former colleagues at the their mojosome of back, maybe clear their name a little bit. how much to worry about how much the bureau has been tarnished? steve: that is a good question. i worry a lot about that. the cornerstone, the important
-- the most important the fbi has is the respect and the cooperation of the american public. enforcementcy, law is not pervasive. we do not have the kind of system they have been totalitarian countries where law enforcement is oppressive and in every nook and cranny. the reason we do not have that is because we hope and anticipate the public will cooperate with us and come forward and respect us. and help us. when you do not have that, it impacts. you've had that kind of impact on the fbi. some of it is their fault. you mentioned director comey. whatever his attentions were, which i believe were honorable, i think he made mistakes, particularly in the press conference he had that led to his firing. that should not have happened.
other issues that involve the fbi. i think some of the charges that are being leveled against them are way over the top. i do not believe there was any , unknowingat the fbi conspiracy to impact the election to go after one candidate or another, which they are being accused of. you are right, this has had an impact, it is a complex story and they are not without some blame. , and i amt over time confident they will, through the good work they do every day, will regain whatever they lost. it is not to their benefit, it is to the american people's benefit. the work they do in counterterrorism and counterintelligence, in criminal matters is very important and cannot go on successfully
without the respect of the public. jason: i am glad you mentioned counterterrorism because you ran that division at the bureau. how much do you worry we are not looking at all the things we should be because we are distracted -- politically and emotionally by all of this about the various things in the world? steve: i do not think that should be a concern. i'm at a briefing in the fbi couple weeks ago. they had their eye on the ball, looking at domestic terrorism here and the threat of international terrorism as it impacts here. you have to look at the result of not only the fbi but the collective activities of the u.s. government since 9/11 to know they have been largely successful. in the counterterrorism business , you can have years of success without dramatic incident and all that work can be undone in one day. sufficientvoting
resources to it, they have become much better at it over the last close to 20 years and i do not think that is legitimate concern. jason: good to hear. former fbi assistant director steve pomerantz. citigroup is our stock of the hour. shares of the bank following the most since the day after the brexit vote in june of 2016. emma chandra is in london. citi traders were ousted in hong kong and that is responsible for pushing the shares down. emma: certainly responsible for some of that move downward. citibank has a big presence in asia. eight traders outed and three others suspended after the bank had an internal investigation into trade with clients. officials at citigroup had been probing whether or not traders
had properly exposed to the banks financial interest when facilitating certain trades. this followed a probe along similar lines by hong kong sec earlier. this at a time when we are seeing trading revenues under pressure and shrinking. the move downward in the shares today obviously being impacted by the other headwinds we are seeing banks and financial companies face today. jason: other big names often -- also having a tough time, being hit by poor economic news. we are seeing the likes of bank of america, jp morgan, goldman sachs also falling. bankamerica down 5%. nearly -- you mentioned the poor economic data we are getting in the u.s. and in europe. in the u.s., pmi's missed
expectations. that helped set yields lower on treasuries. they've been falling anyway after the dovish tilt. you've been talking about the inverted yield curve. we also so german bund yields going negative. yields fell in japan. is where we are seeing a lot of volatility across markets. we show you just how low the volatility is when you look at equities are foreign-exchange and when you look at bonds. a lack of volatility makes it hard to make money when you are trading. jason: thanks so much to emma chandra in london with our stock of the hour. many stocks of the hour. coming up, everyone is watching robert mueller but they are also keeping an eye on the ncaa tournament. we will talk a little bit about the team everyone loves to hate except maybe wall street. business and finance leaders will all -- are all in on the
jason: this is "balance of power." i'm jason kelly. it was day one yesterday of march madness. there are a couple of almost upsets and a new ncaa record for career three-pointers. for the most part, the outcomes were predictable with the teams seeded one through six winning all but one game. wall street are playing it safe with their championship picks. out of 54 business and finance titans participating in our bloomberg racquets for a cause fundraiser, 24 of them, including former nec director gary cohn who also had a job at goldman sachs, they picked duke and coach k cut the nets down.
for pickingnown stocks, the ncaa tournament has proved more difficult. after only one day, there are no perfect brackets left. pam henderson of riverside is in the lead. they only missed balers whenever sir qs. they also have the -- over syracuse. they have the blue devils going all the way. we'll see if sign williams can zion williams's shoes can handle the big dance ahead. you've been watching bounds of power. this is bloomberg. ♪
european trading day. from london, i'm guy johnson. vonnie: from new york, i am vonnie quinn. guy: it is letting quite ugly. a strong risk on move. you're seeing that on both sides of the atlantic and into the emerging markets. it started first thing this morning with that negative press on the german manufacturing pmi. that has sent the german ten-year into negative territory. you can see the yield in negative territory but the market trading and buying the german ten-year. the euro is suffering for that. the dollar is strong except for the yen. i will show you that in a moment. european equities are lower. on the stoxx 600 we are down by 1.26%. ftse is being hammered. i will show you what the gmm looks like. i have this setup up with the g20 global macro movers. turkey is a big mover. a big move against