Transcripts For BLOOMBERG Bloomberg Markets Americas 20170221

We had a long weekend. Abigail they are getting back to work with more records. We have the dow, s p 500, and nasdaq trading nicely higher, hitting another day of simultaneous highs. Anyway you slice this, we are looking at very bullish assets. It is the best monthly performance since march last year, a continuation of the rally out of the election. Administrationp will reinvigorate the economy. Have a 1 move up or down for the s p 500. If you go to the bloomberg, the top orange line is a 1 move up and the bottom orange line is a 1 move down. We are on day 50 without the move in either direction, the. Ongest streak since july 2014 investors are waiting for more information before they make a bigger move with the s p 500. Have a somewhat stilted rally of rally ofgh stealth record high after record high. The fed in march, what it actually does for stock. But we are looking across asset class, it is a bit of a reversal. The bloomberg dollar index was trading higher by 4 10 of 1 . The 10 year yields have been higher earlier by three to four basis points represented in red. It would have told us that safe haven bonds were selling off, but we had the 10 year yield moments ago dip telling us the bonds are starting to rally a little bit, perhaps explaining why stocks are just slightly off their highs. All of this as Patrick Harker is talking about the possibility of a fed march hike. A bloomberg strategist just told us the reason that 10 year yields could have slipped back down but because that is already priced in. When we take a look at the commodity complex and some of the oil movers, oil up nicely about 2 after opec has really suggested they are going after 100 compliance for the supply cut deal achieved last year. , andround 90 compliance the strength in oil is certainly helping two of the big energy names, chevron and con ago. Conaco. Vonnie other stocks movie today include macys and also walmart, two big retailers. Macys closed stores and cut costs. Walmart beat as the brickandmortar beat double digit online growth. Case of setting expectations so low that any kind of beat would have us happy . Isi think for walmart that definitely true and for macys, probably partially true. Theys was the first to say do not have a good year and they were disappointed, but they were able to cut costs. You are seeing some of those initiatives pass off. Let me go to you, shelley. Downgrade in doubledigit overall growth for walmart, but we are talking doubledigit growth and such a low base. They certainly have a long way to go. Thisis a big deal and that 3 billion acquisition is starting to pay off and it is not just one quarter but two quarters and three quarters, so you are starting to see the steadiness here. Also brickandmortar growth is good this quarter. Can get. Commuch compete with amazon . I think that is exactly what they are hoping. Instead of focusing on Global Online sales they are starting to focus on u. S. Online sales. They say this is the most important market for us where 60 of our revenue comes from so we will focus on brick and mortar and online. It had been under pressure to turn itself into a reit. Lindsay macys would not comment. I think it makes sense from a prairie view, if you can close the stores or monetize them maybe you do not need hudsons bay to comment by you. ,acys is making progress although a little more slowly i think as active investor list star board would like. They are hinting that maybe they will do something with their 34th Street Flagship store in Herald Square and have monetize their big assets in san places. O and other i think we will see more to come on the real estate. Even if they stayed on their own, how much more consolidation does there need to be . Department stores are not doing so well and macys is one of them. Lindsay i think that is the billion dollar question. They are actually in a lot better positioned than other department stores. Most everybody else has more storage than macys so i think we will see consolidation across the industry. The question is what do those become . What are we going to do with all of that empty space . Vonnie walmart, obviously it has got its act together when it comes to online and instore, it is going to have to do a lot of closing as well. What did they say about how many more stores will close and other minimumike how much wage increases are putting pressure on the bottom line . Shelly the interesting thing about the minimum wage increase is you will see that lapse in the next quarter. Walmart said that big wage increase they put through, you will not see that again this quarter or this coming year. That will be a big benefit for walmart. In terms of stores, and they are finally after years of people saying you need to stop opening so many stores, they are finally pulling back on that, taking that money that they were putting into stores and putting it back into online. That is where their Business Needs to grow. Right now they are focusing on remodeling the stores and retrofitting them, adding Online Grocery pick up. It ends up adding to online sales growth that is a big physical component. Vonnie internationally, are they keeping alive their hopes to expand internationally or are they putting them off . Shelly i think there pulling putting pulling back. The u. K. Is a big problem market for them. Good thatstill doing it remains to be seen in terms of President Trump and mexico and taxes. Vonnie this impacts the retailers more than anything and they are one of the groups that came out of the white house and did not say as much as other groups. In terms of the border adjustability tax, maybe the profit would be a tailwind that will it offset some of the other things . What are the rest of the retailers, does what we saw this morning bode well for others . There has been talk of more bankruptcies. Lindsay i think it shows that maybe the holiday was not that terrible for all of the mallbased players. There are a lot of retailers who are in trouble. Well, is performing very but we really just do not know. We think it will be another year of challenges and you have to differentiate yourself with products. Macy said there best performers where does their best performers were exclusive brands. Macys is flat and walmart is trading higher, thank you. Lets check in on the bloomberg first word news with mark crumpton. Anna in the United States, President Trump says a new immigration order will be coming out very soon. It would replace the one blocked the a federal Appeals Court. The Homeland Security department has issued a pair of memos on immigration the calls for a crackdown on undocumented , and thousands more Border Control and immigration agents will be hired. Both republicans and democrats are praising the president s choice for National Security adviser. Ey call h. R. Mcmaster a certified, cardcarrying grownup who is respected by his peers. John mccain called him an outstanding choice. In europe, European Commission president Jean Claude Juncker warns the u. K. Will have to pay a hefty bill when it leaves the e. U. He told the Belgian Parliament the british people must know they will not be allowed to leave for free. It is estimated the uks brexit bill could run 64 billion. In asia, chinas commerce ministers as a trade war with the u. S. Should not be an option. He told reporters in beijing that disagreements are inevitable but history shows the u. S. And china can overcome trade friction through negotiations. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Vonnie thank you for that. Coming up, we will talk Federal Reserve. Comments are hawkish. President hawker saying he will not take march off the table. This is bloomberg. Vonnie this is Bloomberg Markets, i am vonnie quinn. Time for our latest Bloomberg Business flash, a look at some of the biggest business stories and the news. Australias Prime Minister says countries need to fight back against protection a protectionism. Martin turnbull to spoke to bloomberg tv. Maintain open we markets and free trade. Trade means jobs. Australia is a trade nation. It means not just selling to australians but to the whole world. In the g20 last year, dder toionism is not a la get you out of the low growth trap, it is a shovel to did you deeper. Vonnie australia has walked the line between the u. S. And china. A federal Appeals Court upheld a ruling to overturn the government petition to capture billions in profits generated by fannie mae and freddie mac after their bailout. It allows the u. S. To recapture all of the 187 billion in taxpayer money spent to prevent the collapse during the Global Financial crisis. At least 56 billion extra without reducing the treasurys liquidation stakes in either firm. That is your latest Bloomberg Business flash. The bloomberg dollar spot index rose the most in more than three weeks on speculation the march fed mating is live. This meeting is live. Joining us from d. C. Is the executive editor of global economics. Harker is a Voting Member but we know he is a hawk and he has spoken like a hawk several times. Why are we getting so caught up in his comments now . Dan it is another time that the stars are aligning for an increase in the federal funds rate at some point in the next couple of meetings. I do not know that president harker has done the job long enough for us to quantitatively look at his voting record. He did not take it off the table and i do not think any of them will take it off the table. The chair said she wants to make an adjustment at the upcoming meetings. That means it could be march, may, or june. Each has their own dynamic. Vonnie there must be a little strategy. They do not just look at the data every day and decide that day. If her strategy was to bring up the odds for march but move in may or june, she has done exactly that. Dan march is definitely a chance. The problem is, if they start waiting until may or june, with may they keep saying every meeting is live but few people actually mean it believe it. If they want to test that and shake that assumption, may would not be a bad time, however you are bumping up against the French Election. Do they want to do something in such close proximity to geopolitical risk . If they wait until june we get into this situation John Williams described. The arithmetic starts to box you in if you want to credibly seen as doing two or three. June, say that means september, december, the element of surprise is gone, assuming they want that. Vonnie International Developments put a brake on the feds plans. Are they as fragile this year as they were last year . Dan it is interesting how we seem to be taking them by their word this year whereas last year the possibility of four increases through everyone into a tizzy. We had market directions in china, a disinflationary scare going in europe, and there was not any sense really of where the wages would begin to get traction here. Now they are looking at a pretty Benign International environment at a time when they are moving closer to their domestic goals. That is what gives us the sense that march is live it is not a done deal, it is never a done deal but march is something to consider. Vonnie we have a great chart yearshows the bernanke and the yellen years, and the mandate. If you look at chair yellen, her record is fantastic. The Unemployment Rate dropping and we are grinding higher with inflation at 1. 6 and in some measures it is above 2 . Judge giventory that the president may appoint six people to the Federal Reserve . Dan it is way too soon. Remember when paul volcker left people thought he was irreplaceable. When greenspan left it was, how will we replace the maestro . When bernanke left, that will be a tough act to follow. The history of the yellow narrow may not be written sometime yellen era may not be written until sometime later. She did take over midway through the current expansion. Vonnie great to talk to you, dan, about this particular subject. Dan moss, executive editor of global economics. Restaurant Brands International is adding to its menu with a popeyes chicken acquisition. Verizon gets a 350 million discount on yahoo , this and more when we discussed mergers and acquisitions. This is bloomberg. Vonnie this is Bloomberg Markets, i am vonnie quinn. A discount of sorts, verizon will acquire Yahoo Properties at a three and a half hundred 50 million freights price cut. Joining us now is an hammond, bloomberg deals reporter. We will talk more than just yahoo . Talk about the price slash. Negligible, a tiny, tiny some. It is not the quantum of the reduction, or that they have agreed to new terms and can move on with this issue which has been a big problem for both sides. For yahoo this is something that has come up in 2013 and 2014. It is very messy, a kind of a headache for them. For verizon, they do not want to spend the next six months beating up on it and saying it is a Terrible Company. They would rather draw a line under it, get this reduction, and move on. It was ruled or they decided between them that all of this stuff that now comes out relating to the data breaches, that cannot be considered part of what would be called a material adverse change. Now that we can get over this, what does verizon do . It has credibility problems and reputation problems. Tol 350 million be enough pay for fixing the breaches . Of yahoo rent company will also take on some of the responsibility for costs from the breach, particularly if new information and breaches come to light. For verizon, it is a slight credibility question. This is something they are very keen on, and that goes back to them not wanting to see up on this. It is going to be their baby and they will on it in the near future so i think it is hard for them to sort of have a good line on this. On one hand they do not want to say it is a Terrible Company but they do not want to look like they overpaid. Vonnie moving on to restaurants, it has been a busy day. Consolidation all of a sudden. Ed burger king has this morning announced the owners of burger king Restaurant Brands announced a merger with popeyes louisiana kitchen, a much smaller fast food company. They are essentially going to own it as one of three distinct brands. Noger king, tim hortons, and popeyes louisiana kitchen, and it will add Fried Chicken to their staple of burgers and coffee. Vonnie they will keep them all separate, right . As you will not be getting it were, a chicken with your ,offee but what you will have the current franchisees can do either brand. On one side of the store they can have tim hortons and the other side they can have burger king. The third is popeyes chicken, and the real thing that is going on for burger king Restaurant Brands is they plugged into a huge network for franchisees. U. S. ,a success for the albeit in several states. Key price senses . Expensivehistorically and also expensive with other deals we have seen and the space recently. This is a growth asset, something a lot of people would have been interested in owning to take it into the network and make it much bigger very quickly. When burger king merged with tim hortons, they essentially redomiciled with canada, which means they pay a lower tax rate. You get that immediate hit from doing this deal, all of a sudden popeyes is a canadian company. Vonnie bloombergs and hammond, a very busy day. Today marks the start of one of the most important days in the oil and gas industry, petroleum week. With x1 you get the best of the oscars. Youre a funny guy. Funny how . How am i funny . Scorsese finally wins. Could you double check the envelope . Show me best picture. Whats the difference . Show me best actor. I do not take tonight for granted. Thank you so very much. Get all the greatest scripted and unscripted oscar moments on xfinity x1. The oscars, live sunday, february 26th 7ea4p on abc. In midtownazy day manhattan. I am vonnie quinn and this is Bloomberg Markets. Lets start with the headlines. Mark crumpton is in our newsroom. Mark french Officials Say three men have been arrested after widespread antiterrorism grades. Raids. The arrest comes less than two weeks after antiterrorism an adolescentd girl and three men and uncovered what they described as a lab. Hift explosives the divided Supreme Court cleared the way for the execution of a convicted murderer in alabama. The inmate tried to block the state from using a sedative linked to botched execution. Sotomayor said they would have taken it. It is a court case that has exposed deep lines in israels society. A soldier is sentenced to 18 months in jail for killing a palestinian attacker who was already immobilized. They rejected the idea they thought the soldier could still attack him. Israelis argue the soldier acted in selfdefense. Nasa is saying there has been a discovery beyond the solar system that has led to speculation that the announcement today will involve planets capable of sustaining life. Estrada merce have studied astronomers have studied xo planet and look for clues as to whether life could exist beyond the earth. Global news 24 hours a day, powered by more 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Vonnie thanks. Life we it seems is not as we know it. A quick check on stocks. In use for risk markets we can see the dow and the s p 500 are up half a percent. 27 715. Is up there at the nasdaq in the positive index, abigail when we take a look at the s p 500, it is hitting another record high. What really stands out, is the fact that investors are talking about this in the context of a postelection rally or a reinflation trade, the hopes t President Trumps it policies will reinvigorate the policy. This is a oneyear chart of the s p 500 up about 16 . A nice uptrend. Here is the rally out of the election. It is worth noting the s p 500 is up 30 since lows back in february. Speaking of those lows, that was the first time we saw something akin to a correction and Morgan Stanley is saying this may be a sign for investors. Investors are overlooking the idea we could see a correction for the s p 500 because they are somewhat common on an annual basis and Credit Investors are underestimating this risk. 135we take a look at g btv 6 this is the u. S. Corporate bond spread bronze bond spread. Trading now at lows of about 1. 2 . Very low on a historical basis and even a one year basis. Bond investors are not that worried about some sort of risk event. Morgan stanley says investors may want to consider reevaluating that strategy and instead of having outright equity exposure to lessen the risk of a potential correction by buying s p 500. We have another great chart that suggests Morgan Stanley could be right. We hopped back into the bloomberg and take a look at 60 82. This is the percentage of s p 500 members on a net basis hitting 52week highs. Over the last week there is a downtrend. There is a downtrend since the net a percentage of 52week highs following the bear market back in 2008 into 2009. We see that downtrend is similar to what has happened in the past ahead of big downsides. Basically stocks not hitting 52week highs. Perhaps a warning signal in terms of some of these macro trends. Doolittle, wel will be under advisement. Thank you i appreciate that. A deal in effort to support oil prices. Mohammed barkindo spoke in an exclusive interview with bloomberg from the International Petroleum week in london. He was asked whether the cartel will extend the agreement as it stands right now. First things first, the the occupation ofpre the declared countries entered into on the 10th of december is the fourth untimely implementation of the obligations of the participating countries. We have just received the preliminary numbers for the period h of this january numbers. These are very important. We will talk of what will happen in the next five months. All i can tell you is the level of commitment we have received from nonopec and opec member countries and we are in regular of contact with them. Tomorrow we meet in vienna. We are going to go for much higher levels of compliance because of the very high level of stocks that we have brought over with us from 2016. When you will you get to 100 when will you get to 100 compliance . We hope to achieve 100 in due course. I am hearing opec members are exporting more in the month of february. Can you allay fears on that . Ofthis is the first month implementation. The numbers that we have confirm that all the participating countries are struggling very hard to ensure that they implement their toigations 100 and i want align myself with the saudi arabia is that anything less than 100 is not satisfactory. The market is driven by a number of factors and one is compliance. The bedding in the market there are two things driving the market price and one is the hedge fund market. I put it to you that with either an extension of the deal and the hedge funds being committed, you will find it tough to sustain 50. Can the market sustain a new bandwidth of 50 and bed on bid on oil . On the contraries, the expectations of the Fund Managers including the Money Managers in the long positions that they have built up, despite the high level of inventories particularly in the united it, they find the most demonstrates to us the market the confidence the market has in us to fully implement our obligations. You take me on to the other issues, which is storage in the United States is the highest since the 1930s. A are talking about the microeconomics of the oil market. Frackers are backandforth, can opec survive this level of storage and can the oil market really be balanced with this level of fracking . I think tight oil and shell oil in general will always play a role in meeting current and future demand for oil. Arent they one of your biggest threats . As far as i got from intimate independent players recently, i look forward to meeting with them they have fully aligned with us on the decisions we have taken because they know they are also beneficiaries to these decisions. Compliance is the key thing for the market. I want to focus. In the runup of the deal i was chasing you and societies all over the middle east. Lets talk about the commitments to the deals. Q was outlined to you aligned to you. They are not exactly hitting 90 . Where are they and do they do you expect what hundred percent soon 100 soon . I have commitment from the highest government they will implement their bargain and their obligations fully. What you have seen is the efforts that they are making in achieving their targets. Each country has their own peculiar and challenges. Do you fear a great drop in the price of oil . The market seems to think we are in this corridor of 50 and 60. What could be the most disconcerting factor for the market and break us below 50 . I think there is a growing thatnsus in the industry the low level of prices we have was in 2015 and 2016 equivalent to growth and development of the integral to growth and development of this industry as well as oilproducing countries and the health of producing countrys it countries and there is also a consensus on the issue of the highlevel of inventories and stocks that way on the market weigh on the market and the rebalancing project process that has just begun is a work in progress. Vonnie i was part of our exclusive interview with opec secretary general mohammed barkindo. Tough sell. Naps why they remain skeptical ahead of the incoming ipo. This is bloomberg. Is Bloomberg Markets. I am vonnie quinn. Snap picked up its First Investor in new york ahead of the ipo. They are building slower user engagement. Joining us outside the meeting is ipo reporter alex. This is stock number 2 along the roadshow. How have investors received the pitch so far . Here at the Mandarin Oriental in new york where investors have been asking questions about that slowing user growth and about the declines in engagement and this interesting Ownership Structure snap has at once it is listed as a Public Company. Vonnie what are they saying when investors ask those questions . Alex when you talk about user growth, they are pointing to the versionin the android of the app. The company laid out that it is working on android versus the iphone version and that has slowed down engagement issues. When it comes to growth, you have to expect that today and the coming weeks we will continue to see questions about things like facebook. Facebook has instagram and their stories has been a direct competitor to snapchat and just this week, Facebooks Whatsapp released a set of snapchat like features. They are sure to be these are sure to be on the mind of investors. Vonnie there will have to be good responses because a lot of the things that were unique to snap are no longer unique to snap. What of you heard from investors . Is there going to be appetite for this . Alex there is going to be appetite for this deal. Fullstop. People seem excited. It is a full house in the ballroom up there. It seems like people are interested. You have to remember with the Ownership Structure, the shares being sold have no voting rights. When it comes to concerned and concerns and issues investors might have in this stock, they have no say once it goes public. These questions need to be answered and potentially we will have more clarity on these user growth issues in the u. S. As the android issues addressed some of the markets in europe. Vonnie i am sure we will hear more as the roadshow progresses for another six days i believe. Thank you alex barinka. We will get more on that story and the rest of todays top tech headlines on Bloomberg Technology. All episodes of Bloomberg Technology are now Live Streaming on twitter. A federal Appeals Court upheld a hearing that doesnt let hedge funds sue over investment in freddie may or fannie mac. That said sale shares plunging. Hedge funds and their executives are clearly not happy about this. Do they have any kind of a case here . It does seem that in 2012 the original plan was altered and meant that the treasury would receive all profits and not just the dividend. Basically this is a challenge to a 2012 decision by the government. Basically, foreclosing on the possibility private shareholders could get any of it. They challenged the decision and the challenge was dismissed in 2014 and what came today was an affirmation of the 2014 decision s, dismiss shareholders claim except for a very small part of contract claims that can be litigated in lower court. The decision today makes it much more difficult for shareholders to collect dividends from fannie and freddie. Vonnie it could still go to the Supreme Court at some point . It is not over, over, but this is a major blow . Joe thats right. I think it is right to call it a major blow. There are three things that could go on. There are a couple breach of contract claims the Appellate Court said should be litigated at the lower court. I am sure shareholders will pursue that. They could also ask for a wider hearing at the Appellate Court and bring in more judges to try to get them to rehear this case and if that doesnt work, the course the case can be appealed to the spring court to the Supreme Court. The shareholders will definitely continue litigating this case. Worth allowedt the u. S. To recapture taxpayer money that had been given to fannie and freddie to stave off their collapse. Have given more to the treasury. Taxpayers have been made whoel, but whole, but clearly not the taxpayers who were suffering in the first place. It is clearly an ira. Joe shareholders make the point that shareholders rett eholders of invested they make the point that 187 , it waswas not a loan an Equity Investment and even though taxpayers recouped more than what was invested, the rate of return is not what you would expect from such a risky bet. They also make the point that taxpayers still back fannie. The bonds the Company Issues are guaranteed by the full facing credit of the government and that is a guarantee that some believe taxpayers should be compensated for. There are definitely many kind of moral issues on the shareholders side and the government side. Vonnie thank you. We will follow your story closely. Luxury maker is selling watches online for the first time in their history. It is looking for younger customers. This is bloomberg. Vonnie this is Bloomberg Markets. I am vonnie quinn. Luxury watchmaker vacheron partnered with the online magazine for wristwatch enthusiast to make it online debut. The 35,000 watch sold out in less than an hour. Corey johnson sat down with the president of vacheron in north america. And he alsovincent sat down with benjamin. Watchy are digital connoisseurs and they seem together with iran the values vacheron the values of quality. Tell me about this watch. What makes it so special . This is inspired on my wrist at this moment inspired from vacheron from the 1960s. This was really one of the Collector Items brought back a few years ago. This is our own take on it. Fixed tweaked last thursday. This is a dramatic departure. It is one of those things where we have been cultivating a particular idea of aesthetics and a concept around watchmaking for the past seven or eight years. One of the things people ask is lets close the loop and we. Ould love to buy things were doing it very carefully and considered. Working with vacheron is a dream because they are one of the great it sold like crazy. Fore sold the 56 pieces 45,000 in less than an hour. Why not make more . We want to keep it limited and the scarcity of the product. Who is spending 45,000 for a watch . Who is this audience . It is a lot of people in cap havesable who disposable income for sure, but also art collectors. How old are they . Are they based here in the states . Our audience is a little bit different. Audience tends to be 35 years old. Young, professional, relatively welleducated people. We are days a distinctly younger audience than watch collectors. What is next . We have realized we have an audience that has wrapped potential a lot of potential for products like this. Working like legacy brands like vacheron is something we like to explore for them. Corey what is the thing you wish you were surprised about selling online . We did this because we definitely wanted to get to speak to an audience we didnt necessarily speak to until now. I was an interesting step with these and it was the first time we were offering the process online. It is a new expanse for us opening us to a new market and something we will likely explore in the future as well. Vonnie that was Corey Johnson speaking with hodinkees founder vacheronsan north american president. , tv ,go. On on the bloomberg. This is bloomberg. It is 1 00 p. M. In new york and washington and 2 00 a. M. In hong kong. I am david westin and welcome to Bloomberg Markets, focusing on policies during Donald Trumps first 100 days in office. If it first you dont succeed, President Trump says he is about to announce the 2. 0 version of the immigration order. Will it be different and what difference will it make . Mike pence delivered a reassuring message to european allies, but they may have heard it differently. Keeping score. The Trump Administration considers train changing the way we consider our trade balance. I will feet with i will be speaking with matthew slaughter on the risk on and risk off affects this move could have. David President Trump said his administration is about to issue a new version of the order banning immigration. This one is expected to address the problems with the first edition. At the white is house. Tell us where we are and when we will hear from the white house . Kevin the sources inside the white house tell us this new executive order could come sometime this week. It will address the same countries that the original round of executive orders instructed, that was struck down by the ninth district court. We could see that go all the way up to the Supreme Court. He is facing questions on that from democrats and republicans and the Business Community with Silicon Valley out in full force about their concerns with what this does to economic growth. David two you have any idea what the white house could do to nullify Silicon Valley . Kevin they dont want to pour gasoline on what is already an explosive political fire, but they do want to show their critics that they still can pass policy that can get through, but keptpecifics have been under wraps. Stephenre has not miller has not put out any clues about what exactly will be in this new round of executive action. David the one thing you can be sure of is it will be back in court. Kevin absolutely. Stephen miller has not put out anydavidn the wall street journal that the white house has suggested we revise the way we calculate important Economic Data, such as the trade balance. Kevin this is interesting because the person who was in charge of one of the economic landing teams, the team during the transition that was hiring folks, whoeconomic sources say is in consideration to be an undersecretary, he is well known for having argued that folks recalculate budget deficits and trade deficits that would seemingly indicate giving new evidence that a new push for this administration to be able to advocate for new types of economic stimulus. I just spoke with a conservative right older a far conservative think tank and she told me it is awful these reports that they would change how the math is done to calculate this. Should they go this route, they are setting up or a encore with the Tea Party Members of their own party, folks advocating to rein in Government Spending and this sits with a broader trend of the type of policies this administration wants to get done and seemingly impacting everything from trade deficits to infrastructure spending. David and the president has not been shy saying he does not believe the employment numbers. Also hasnt appointed some of the key Economic Advisor post we have seen in the previous administration. Jason furman, the former economic adviser in the obama administration, that posted the post is still not filled in the white house. David thank you for joining us from the front lawn of the white house. For more on the Economic Data and what it could mean, we turn to matthew slaughter. He served on the council of economic advisers under georgent george dont w. Bush. He joins us from the campus in new hampshire. Good to have you here. When you were in the white house, you dealt with this data all the time. Thejob is to make sure president is getting Accurate Information to make informed decisions about the economy. What do you make of these reports of tinkering with the methodology . The trade statistics is one of the most important data the government collects. The reports that are out for how the export numbers would be altered, i know of no problem that that would solve. I know of many problems that would introduce of how we understand and see how we how are our how our economy is doing david my understanding is the specific change they are talking about is we would not report as an export a product that came into the country or a reexports, but that would be a important. Dean slaughter the reality of how so Many American Companies Compete and succeed is they have these elaborate Global Supply chains. Value is added by American Workers, but more and more American Companies are combining that talent with imports that come in from the rest of the world. Sometimes they sell goods in the United States, but sometimes it is back into other markets around the world. It is not clear at all what information is being gained by not counting as counting as exports goods and services we spend. David you were responsible for gathering this data and relying upon this data. Who gets to decide the methodology. Can the president assad that can the president decide that . Dean slaughter we have had an understanding that we would adequately fund and allow the integrity of process to play out in our statistical agencies. There is longstanding academic and policy research about how to measure different aspects of u. S. Economic performance. As the Global Economy becomes more intricate, the measurement issues are more important and yet the directors and their terrific staff have invested years and energies understanding how to put together reliable statistics. When you have settlement governments that infringe on the integrity of the process, problems can arise. David it is one thing when you are trying to formulate policy. You are the dean of a business school. What to do to businesses who need to take this data into account . Dean slaughter there are so many businesses in america that are looking to grow and create new jobs and opportunities by tapping into the growth in foreign markets. What is vital for companies to understand what markets to sell into is to see accurate eight on how large the imports are into those countries. If we tinker with how we measure affectxports, it will all business a lot of businesses in america, particularly young startups. It will impede their ability to understand conditions. David move aside from trade data to employment data. The president of the United States has not been shy saying he does not believe the data. He think there are more underemployed people than being reported. What would be the ramifications of changing that methodology . Dean slaughter they would make it difficult for Market Participants and companies to understand the changes over time that the u. S. Economy is realizing. Our bureau of labor statistics does a very careful and conscientious job of measuring a number of dimensions of unemployment. Comesadline figure that out on friday morning is only one measure of underemployment the u. S. Government currently tracks. The integrity of how we measure those things and changes over time should never be taken lightly. Standard that you periodically review this type of thing and consider possibilities or is this out of the ordinary . I think changes that have come from the statistical agencies are most reliable and i think most trusted when they come from the statistical agencies themselves and from other areas of policy and academic research. The Global Economy is becoming much more complex and so the issues of how we measure aresborder transitions increasingly important, but they are harder to see than goods that get shipped through rail and air. They tend to come from agencies and from conversations across sovereign governments. The process of creating new innovation when it is done by elected officials, history makes there he clear. Look at argentina. You can run important run into important problems. David for those of us who are not academics and economists, is there a range of possibilities . Is what is being talking about talked about within a range . Dean slaughter the important issue any talk about exports and imports is when you have Global Supply chains, the amount of value added by American Workers and companies can get harder to see when you have many stages of production crossing many borders and linked through International Trade investment. I have done Economic Research about this and there have books that have been written an. Ngoing conferences the issues of how we actively understand performance and business in a Global Economy are real questions. Who isp issue here is proposing asking questions and why and that should ideally be done in a transparent and meaningful way. David thank you very much, that is matthew slaughter. We are halfway through another record day of stocks. Lets check in with Abigail Doolittle to see what is moving. Abigail we are halfway through a day of more records for stocks. Andave the dow, s p 500 nasdaq. Trading higher on the day, putting in new records. Another day of record highs. When we hop into the bloomberg btv a look at g simultaneous record highs. The three major averages since 1990s or so. The blue line recommends represents simultaneous record highs. It is very interesting there was of time, basically the last 15 years prior to august of last year where we did not have those simultaneous record highs. Where we did was back in the 1990s. Is this going to continue as we saw this huge string of simultaneous record highs or is this a oneoff . Something that may suggest he could be a oneoff is the fact that when we take a look at assets on the year, they are not confirming these record highs. We have the 10year yield trading lower by about two basis point. Yen is on against the pace for the best year since 2011. It is going to be interesting to see what gives and very quickly as for what is driving todays move higher, we are looking at movement to the upside in retail including walmart and home depot. Earnings estimate and walmart strength is being driven by online and pricecutting. Home depot, yet another record high. Thanks so much. Coming up, the Trump Administration is about to roll out a new and improved version of the executive order on immigration. If the goal is to avoid future court injunctions, what does the new order need to look like . We will lay out the options. This is bloomberg. David this is Bloomberg Markets trumps first 100 days. I am david westin. Lets get started with a check on the bloomberg first word news. Mark crumpton has more from our newsroom. Abigail tensions mark tensions remain high in jewish communities as police in vandalismnvestigative at a Historic Jewish cemetery. President trump addressed the threat during remarks at the National Museum of African American history and culture. President trump this is a meaningful reminder of why we have to fight bigotry, intolerance, and hatred in all of its very ugly forms. Abigail the antisomatic threatsthe antisemitic targeting our Jewish Community and Community Centers are horrible. The report of vandalism came on the same day the president denounced bomb threats against Jewish Community Centers Across the country, including 11 threats recorded yesterday. Arine le pen refused to don headscarf for a meeting with a tunisian with a cleric. She was to meet with the country s shortly after, she was handed a white headscarf to put on and she refused and returned to her car. Views japan as the ultimate business opportunity. Las vegas fans would like to build a resort featuring 10,000 slot machines, four times as many as in the singapore resort. Members of the United Nations Security Council held a moment of silence today for their died suddenly on monday at the age of 64. Here in new york city. In the moment of silence was led by Security Council president of the ukraine. It wouldve been his 65th birthday today. Global news 24 hours a day, powered by more 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. David the court responded right away to President Trumps First Executive order stopping immigration from seven countries. Now he will give it another try. What are the options open to him . Our next guest says he has quite a few open to him. Welcome, eric. Starting with the president those remarks at the African American museum was asked about the new executive order excluding these immigrants and you he said it was coming up right away. What can he do to avoid the court those remarks at the challenges he faced the first time around . Eric the key issue would be allowing green cardholders to come in. Even if he does that and nobody knows what it will look like, he will have a hard time getting around the religious discrimination claims because those are made based on comments he made during the Election Campaign and years earlier in news interviews and it will always be there to back up claims he is trying to shut down muslims from coming in. David they were concerned about the religious religion question. They are seven countries that are preliminary muslims and they have exclusions. Is there anything they can do to fix that part . Eric they could remove the exclusion for christians and make them subject to the same rules regardless of religion. The same problems with what he said about muslims will be there. He said he wanted to have a total shutdown of muslims and like the judge in the alexandria, virginia case said, it may just be seven countries now, but at least that is a place to start if you wanted to have a full muslim ban. A lot of judges are critical of his comments and i think he will try to get around those in a smart way, but i think only the courts will be able to say. David there is another executive order we dont hear too much about dealing with the southern mortar southern border. I understand there is news on that today. That was issued two days before the travel ban and it is not just about the mexico border , it is about the Canadian Border and dealing with undocumented immigrants across the interior. Homeland security secretary john kelly issued the directive to implement that order today and that will include hiring thousands of new agents and increasing the types of people who can be immediately the and may beeported trying to increase immediate removal to mexico regardless of what country they may have come from. A lot remains to be seen. Larson. That is erik whatever the legalities of the immigration order, what are they affects likely to be on the affects likely to be in the real world . This is bloomberg. David this is Bloomberg Markets trumps first 100 days. Economic survey reporter cowrote the story on the subject joins us from washington. Answer my question, why are businesses so up in arms about this if it isnt going to have that much effect on the economy . I think the larger concern will be moving forward, what these policies could look like. There is a stay on the current ban and the administration has told us that we are to expect something this week. Depending on what is proposed Going Forward and what issue order is issued and what congress may do, it could have a fairly large impact on immigration that we see into the country and active have impacts on the economy. For example, if we see the ban at all expanded to more countries, it could mean fewer people coming into often high skilled jobs and a have an effect on productivity in the economy and if we see any curbs 1b visa for highly skilled workers any restrictions on those would mean more difficulty in filling high skilled jobs. H1b visa is sort of a third rail, especially in Silicon Valley. I dont know how many computer onentists we have from yemen a regular basis. Is it really a concern that it will expand beyond seven countries and is there anything the Trump Administration has said or done to suggest that . I think right now it is an unknown. People are really taking it day by day. We have not had too many details about what the revised executive order will look like. I think a lot of people are saying it will remain for the seven countries and they will let in people with these is an green cards, people that already have those and it will be restricted to people mostly that havent traveled to the u. S. Before. It really may not have much of an economic impact, it is just something to watch for and to see how it develops and if it expands to other parts of immigration. David you will have an update to go back to the economists and resurvey them. Thank you so much. The she is the Economic Service reporter for bloomberg. Up next, we hear from Nicholas Burns and his thoughts on how u. S. Allies in europe are taking the statements from the new president and his administration. This is bloomberg. David this is bloomberg bill gross first solar days. Im david westin in for david gura. Lets start with the headlines on the bloomberg first word news this afternoon. Mark crumpton has more from the newsroom. S choiceesident trump for National Security adviser is an army general with a reputation for speaking his mind. General mcmaster has been named to replace Michael Flynn who resigned after allegations he misled Vice President mike pence about contact with the Russian Ambassador. John calls mcmaster an outstanding choice. Callstlook John Mccain Mcmaster an outstanding choice. Eight months after the brexit vote, 28 of those surveyed by nielsen say the economy is either their first or second concern, up from 16 year ago. Terrorism ranks second, followed by immigration. An Austrian Court has approved a u. S. Request to extradite the ukrainian tycoon on corruption charges that clears the way for him to be sent to the u. S. For trial. Led prosecutors say that he a conspiracy to bribe Indian Officials regarding a mining process. He denies the charges. Regulations and china are drafting sweeping new rules for countries expanding Asset Management product. According to people familiar with the matter, the rules make it clear there are no government guarantees on such investmentgrade Asset Management products are growing more popular among chinese investors seeking higher returns than Bank Deposits offer. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im mark crumpton, this is bloomberg. David thank you, mark. President trump may have come into office on promises of jobs and growing the economy, but he is spending a lot of his time zone Foreign Relations great. Vice president mike pence sought to reassure nato and other allies the president is committed to the region. On bloomberg daybreak americas today, we sat down with Nicholas Burns of Harvards Kennedy school. Toserved as u. S. Ambassador nato in greece. Mass weather whether pants succeeded in his efforts to offer reassurance. Prof. Burns i was in munich when Vice President pence spoke. They said all the right things, and then he met with eu leadership. Areproblem is the europeans also listening to donald trump, and they see donald trump over the weekend castigating nato forn, openly rooting choosing brexit, saying he will support frexit and holding other countries relieve will leave the eu. Weak trumpweek attitude towards russia. He wants to accommodate putin when most europeans want to keep economic sanctions on. The message fell flat over the weekend, theyre looking at the president acting one way and the Vice President and secretary defense acting another. If you are a european leader looking to the United States, who speaks for the United States in your view . Prof. Burns rex tillerson, secretary of state was in europe. They are hearing reassuring words and they want to work with these people. There is great admiration for tillerson and madness in particular. But like a lot of people, they , andet beyond the tweets last weeks erratic press conference. They are worried. The United States has been the leader of the west for seven decades. Think of eisenhower and reagan and george h. W. Bush, to name three republicans who stood for democratic freedoms however liberty, for market economics, and for strength against the soviet union and russia. They are not hearing that consistently from President Trump. I can hope he recovers from this, but it was a sobering weekend to be in munich and to hear such concerns about the United States and about what the europeans see as weakness of the United States. David that was Nicholas Burns of Harvards Kennedy school earlier today on bloomberg daybreak americas. For more the relationship between the United States and europe, we had to washington with bloombergs executive editor for international government. , from europeans perspective, what was the message that was heard by the europeans as opposed to what Vice President pence and others thought they were delivering . John they dont know to whom to listen for that message. For vicee appreciative president pence talking about what was fairly traditional u. S. Foreignpolicy view. They heard similar things from matus and rex tillerson. Spice saying added europeans and to spend more on defense. As Nicholas Burns just said, theres also the donald Trump Twitter feed that seems to contradict if not all of them, that a lot of what they are saying. People are confused. David what are the consequences of confusion and anxiety about the u. S. Position toward zero . Towards europe . What does that cause you to do that might be different . John you try to find people in the administration you can talk to. Thats difficult given the fact that some of these positions still havent been filled. Tuleclassic traditional foreign policy, try to eke out as much time as you can with the president. His time is very limited resource, and then coordinate. With the europeans are trying to do is they are trying to impress a certain number, three or four key policy messages that when whenever theyt meet him, they will try to give him the same message. Russ and sanctions are very important, free trade, very important to european countries. The eu, even the british would say the world needs a Strong European Union and these are the court messages that eu leaders are trying to impress on foul trump when they do manage to get him on the phone when they do get him in facetoface meetings. David there is one leader of the United States, and he is the president. There is not one leader of europe. There are various leaders at various levels. Which of the most bilateral most important bilateral relationships . Is it merkel . Is it france . Is it may . John its not the u. K. , its not francois hollande. Right now and for most of the time, it is the chancellor of europes largest economy, Angela Merkel. She is one of the key persons right now who is in the strongest position domestically. She also has her own elections coming up in germany. Its interesting to note that there has only been one phone and between Angela Merkel donald trump and no News National meeting between them. That is certainly something that people in berlin find a lot of this point. So far, is not on the agenda. Merkel has been the dominant politician in europe for the last decade and the most on a politician right now. Adding to the uncertainty of Global Affairs right now, she is facing her own tough election in september. Even she may not be around in a few months time. David we have a tough election coming up in france, which seems to be very full with Marine Le Pen gaining in the polls. How much instability is the inserting into the european situation . John its the most credible election race. Not quite as incredible as always on the u. S. , but by french standards, its the most open race in living memory. And you are right, Marine Le Pens iconoclastic candidate. She wants to take france out of foreuropean union and bloomberg viewers, perhaps even more concerning, she wants to take france out of the euro, which could have an incredible number of unintended consequences and ricochet factors through Global Markets. So looking at her polling, we tend to be skeptical about polling, but until the last few days, she struggled to pull 40 in the second round runoffs against any of the major candidates she is facing. But the momentum is with her, shes now to about 42 . So clearly, she is on a bit of a roll. Interesting to point out, there was a poll just this afternoon fillonancois hollande is running a close second. So finally, john, we talk about europe and the United States. We left our russia. s referred to how russia is observing this and what it might mean for russia. How does your regards russian situation in respect to the United States . Theyve been concerned sense trump was elected. That is cautious optimism the view from d. C. Or the policy from d. C. Will revert to a much more traditional u. S. View of skepticism and containment when it comes to russia. But its very interesting whats happening right now. Even if that happens, theres a growing sense that europeans need to stand up for ourselves more, we cant just rely on the u. S. To come to our defense. We the europeans love to come up with a more robust, defense against russia. Those conversations are happening in european capitals right now. David john freire, thank you. Bloombergs executive editor. Coming up, Malcolm Turnbull. Australias Prime Minister spoke exclusively with bloomberg sydney on the important of trade with his country and how he is getting along with President Trump. We hear from him next. This is bloomberg. David this is Bloomberg Markets, trumps verse 100 days. Im david westin in for david gura. Lets get it checked on where markets stand with bloombergs Abigail Doolittle. Abigail looking at more records for the major average in the u. S. The dow and s p 500, and nasdaq all trading higher. Simultaneous record highs for once again. Were looking at a bullish week for stocks of the s p 500 up more than 10 of election. The dow and the nasdaq up close to 14 since the election. These inflation hopes that President Trump policies may reinvigorate the economy, investors are looking at really getting ahead of that with record highs on the day. We may have record highs, but what we still do not have is a 1 move for the s p 500. If we hotly to the bloomberg to 5611, look at g metv this is a great chart, longerterm and on the top is an orange bar that shows a 1 move up. To the bottom, a 1 move down. A are now on day 58 without 1 move up or down. Thats the longest streak all the way back since july of 2014. Investors are really waiting for more information before theres a big breakout to the upside one downside. You can see her has been some pretty big volatility in between. When this does finally move, perhaps in march as we receive more information about trumps tax policies along with obamacare, not to mention the fed, perhaps we will see some similar volatility. Taking a look at a market thats not really doing too much on the data. Looking at the 10 year yield, its now trading slightly higher shown in red, that shows us haven bonds are selling off just a bit. We see well off the highs investors try to figure out whats happening with the fed, with Patrick Parker suggesting a march rate hike could in fact be on the table. David thanks, abigail. Australia has been one of the staunchest allies of the United States for decades. Today, Vice President pencil me with julie bishop, australias mr. Perform affairs. Her boss, Prime Minister mart Malcolm Turnbull gave an exquisite interview on his outlook for global trade and u. S. Relations under President Trump. Turnbull carolan is president turnbull australias of trading nation and our future depends on not simply selling things to 24 million australians , but selling them to the whole world. As i said at the g20 last year, protectionism is not a ladder to get you out of the low growth trap, its a shovel to digit today to dig it much cheaper. Andralia has committed china has committed to free trade and opening up more markets. Its been a very important element in our Successful Transition from the peak of historic onceinalifetime terms of trade boom, the peak of a massive mining construction boom. That wenomists said would have a hard landing, but we didnt. Thats in large part because of opening up those big market in asia. I want to move on a President Trump. Its become something of a parlor game, guessing game over whether the president means what he says. In your interactions, its been welldocumented in the media. President turnbull welldocumented, whether they are accurate. There are parallels. Politicscame in to from business. Do you have things in common . President turnbull we had several conversations, theyve been constructed, frank, and forthright. We have a very deep engagement with the American Administration and every American Administration. The australian u. S. Alliance relationship is very deep. Ofbuilds on over a century fighting sidebyside in every major conflict, its an alliance , is an Economic Partnership that builds on millions of people to people links and family links. Its very strong and very deep. How do you view him as a man . President turnbull hes a very Big Personality and he has a very big job. Of the added difficulty of decisionmaking, this is a brandnew world. He is someone who works mostly by social media and twitter. There is an element of the unexpected. This at change the way you deal with the u. S. . President turnbull no, we pursue our National Interest methodically and we make our case frankly and for rightly forthrightly when we speak to our american friends. Expect, as good friends, we are fairly circumspect about what we say in public. Its important we give very frank advice and a Frank Exchange with our american counterparts, but we dont lecture them through the media. Thats very important i think to be able to talk frankly as good friends should. In the markets, weve been trying to work out what is trump the president versus what is complicated . Trump the candidate . Do you think he means what he says . President turnbull thats a judgment that you have got to make. I think as president s are always going to be, people will always assume the president s and Prime Ministers mean what they say, naturally. But in terms of a commentary on u. S. Politics, i will leave that to all the collected talent of bloomberg. Its not my job to comment on u. S. Legal development. David i wasnt your Malcolm Turnbull, Prime Minister of australia speaking on exclusive interview. White House Press Secretary sean spicer is holding the Daily Press Briefing right now the white house. Watched as live on your bloomberg terminal by going to tv. Among the headlines he is making to the president had a meeting on the repeal or replace of obamacare, something we have all been waiting for. This is bloomberg. David this is bloomberg first 100trumps days in office. Im david westin in for david gura. In, andow one month those awful lot left on his agenda. To give you a look ahead, we are joined by bloombergs chief washington correspondent, kevin cirilli. Give us a sense of whats coming up next. Kevin this is most racial wants to work with the congress to put forth legislative ideas. Last week, paul ryan suggesting after the Congress Returns from this weeks recess, we could finally be able to see some of the alternatives to revealing key parts of the Affordable Care act or obamacare as its commonly referred to. A behindthescenes whats happening right now is that a key proposal for repealing parts of the aca is actually being explored by the congressional budget office, the nonpartisan budget referee, so to see. That could launch a myriad of different attacks, not only from democrats, but also from Tea Party Conservatives who have concerns about how much the president s policy proposals could cost. David i understand that sean spicer, who is giving a briefing , says the president is meeting at maralago on this very subject. President Trump Campaign on repealing parts of the aca. Its a big reason for why he was able to get elected office. Sean spicer, the white House Press Secretary, has remained tightlipped about the specifics of this plan. Behind the scenes heavily on congress utilizing Vice President mike pence to be able to work the congressional outreach efforts to his allies on capitol hill. That Division Within the Republican Party, particularly in the house of representatives, how President Trump is able to walk that political tightrope remains to be seen. David is also a lot of talk about tax reform. The president says it will be out in two to three weeks, the people on the hill expressed surprise at that because they hadnt seen it yet. Any update on how we are coming along with that plan . Kevin no. People i speak with tell me they are drafting a title legislative bill that would be able to carry the service of backdrop for tax reform. Theyre going to lower the Corporate Tax rate, but they also have Division Within the Republican Party about whether to include the border adjustment tax. How spiegel House Speaker paul ryan has included that tax, supported by some groups. Retailers like target, walgreens as well as walmart proposal border adjustment tax. In the senate, the border adjustment tax basis a really tough road ahead should it be included in the president s proposal. That being said, you have to remember that republicans like speaker ryan, advocate that it would raise 1 trillion in revenue to allow for there to be able to pay for some of the other taxcut that President Trump to see pushed through. We started the program and hour ago talking about a new executive order on immigration. The first one came out without much consultation with the hill or anyone else. Do you have a sense that they are doing a lot of consulting before they bring out the new executive order . Kevin a stateoftheart, but they also say this is going to work in juxtaposition while they wait to see how the original io comes up. The new executive action is quote unquote imminent, but we will have to wait and see the details. David finally, tomorrow, 2 00 in the afternoon, does the white house pay any attention to these all . Kevin right now, we dont have any indication that they do. A couple of weeks ago when Federal Reserve chairman janet yellen testified, she didnt take a slight jab at President Trump saying that some of his economic policies would impact the deficit. Its going to be interesting to see if we get any clues as for how the fed board views the newer ministration. David the new administration. Have a great job. There is some new surprise coming your way every day. Kevin cirilli, bloombergs chief washington correspondent coming to us from the white house. Coming up on Bloomberg Markets, the fed is set to release its fomc minutes tomorrow. We preview coming up next on Bloomberg Markets. You can catch all of our interviews on the bloomberg with the function tv. You also find breaking news, charts, and a range of other things we discussed in the program. You can even send us a message and we will read it. Thats it for your 100 days edition. Its 11 00 a. M. In san francisco, im amanda lang. Oliver im oliver renick. Welcome to Bloomberg Markets. Amanda were live in bloomberg World Headquarters in new york. Plus, we are covering stories from los angeles, london, and paris. The top stories on the bloomberg and from around the world we are following. Business, burger kings parents having a pop eyes, craft of unilever craft and unilever. Earnings breach and Commodity Prices surge. And why they are warning iron doors rally could come to an end this year. In politics, the focus in the French Election is ramping up. Investors are digging into data and bond yields see which way the voters could be taking. Hours,rkets close in two we look at where stocks are trading with annual below. Abigail the dow s p 500 and nasdaq all trading higher. Simultaneously carving out new record highs, this is having that been happening with some frequency recently as investors are cheering the idea of the reinflation trade as a Trump Administration is getting ready to roll out tax policies and talk about obamacare, plus we have the fed coming up in march, a potential rate hike, investors ahead of all of this are very bullish with another day of record highs. The s p 500 is on pace for its best month since march of last year. Interestingly, this is not necessarily the picture on the year. Five 706. Btv with the exception of the nasdaq and white, the other lines represent assets in orange and yellow, told and the yen in blue. When that trades up, it tells us that bonds are trading down. Last year was very distinctly risk on a stock shot higher in the haven assets shot lower. Now we have haven assets on the year also trading higher as we have stocks hitting alltime highs. It should be understood to see how this resolved. Turning to the commodity complex, looking at a mixed picture here. By about 1. 5 up off the hides, but nonetheless, trading higher. 9. 5 on paceown for its worst day since early january as investors are really fearful that winter is over with, we have this warm weather weighing on natural gas, and is mixed picture for oil and gas showing amongst the mpn will movers. We have conoco and chevron trading higher. Some of the big point boosts for the dow and the s p 500. Some of the more gas sensitive stocks including resources and Southwestern Energy are both trading lower. A bit of a split in the commodity complex. Amanda thanks, abigail. Mark crumpton has more from the newsroom. Mark President Trump visited the National Museum of African American history and culture for the first time this morning. He was joined by his daughter, ivanka, and housing and urban development nominee ben carson. Following the two or the tour, the president vowed to fight hate against minority. President i continue to promise to the freedom of americans. Mark the president announced the horrible antisemitic threats targeting jewish communities across the United States. The new head of the Environmental Protection agency today laid out his vision for reshaping the way the federal government safeguards air and water. He tried to convince a skeptical workers that he received agency to remain effective, he addressed the epas workforce, including hundreds who actively battle disconfirmation in his first speech since he was sworn in. He said we as a nation can be both proenergy and jobs, and we can be proenvironment, and we dont have to choose between the two. European Commission President warns that the u. K. Will half to pay large bills when it leaves the eu he told the Belgian Parliament that the british people must know they wont be allowed to leave for free. It estimated of the uks bill could run 64 billion. Chinas push for and more Nuclear Power may be delayed by next generation reactors. The worlds fastestgrowing Nuclear Market has announced plans to green light eight reactor projects this year. China wants to become the first country to bring online a socalled thirdgeneration reactor, it but construction delays have slowed the process. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im mark crumpton, this is bloomberg. You. R mark, thank u. S. Investors came back from the long Holiday Weekend to a flurry of merger and acquisition headlines from yahoo s saga to a Fried Chicken combo and a scrapped megamerger. Edg us is at hammond, hammond. We know that they are now going to be moving together with burger king, but you had also some new details. Ed the deal announced this cg,ing is controlled by which we will talk more about in a minute. Reportedpported the story which we had a rival bid from arbys point by another private equity firm. They came in with a slightly collocated bit of cash, but they were also going to reverse merger arbys into pop eyes, so they would have a new Public Company and they would give the shareholders some portion of that combined once the deal had been sealed. Tonda one of their claims fame is that they improve Operational Efficiency and it seems to be working with the recent at recent acquisitions. Do you think there is room for efficiency gains . Ed i think thats part of it. They were quick to come out and brutal and are very they have lots of fairly novel ideas about reducing costs by making people print doublesided and get rid of lets fences. The other opportunity that i talked about on the call this morning is they can expand this Brandon Ashley quite quickly. They get taken into the network and they have a huge Franchisee Network in tim hortons and they could offer this as an opportunity for their franchisees. Oliver lets talk about another deal. Its a big deal because its yahoo and verizon, waiting to see how this is going to resolve with all the hacks and it looks like theyre going to cut the price. It doesnt seem like its going to be biotime. Ed really whats happening here is they are both motivated to try and find solutions so they can get this deal done and clean up the mess. Asset, theirhis big push in a digital. Yahoo needs to do this deal so what theyve really done is cut the price in a small and insignificant way, but yahoo said we want to know what their legal ramifications of future stuff that comes out about these bridges. They said nothing the now materializes from the breaches considered in the exchange. This is something were going to do this, lets draw the line on the whole thing. Amanda lots of focus on the Food Industry as a potential grounds for m a after kraft unilever fell apart. Heinz,3g behind kraft this is one of the most liquid firms probably of all times. They are buying everything at they are doing it in the Food Industry already with kraft heinz. They are probably going to go off of some other enormous thing. Slightly reflected with Companies Like kellogg and campbells all on the rise just on the basis that these guys are now back in the market and theyre going to pull the trigger on some multibilliondollar m a deal. Being they are known for able to go in and find companies they see as having a bit of fat around the edges, cutting it up. Which one of these companies or any in particular seem the most right for that kind of involvement . Ed any of them is the honest answer. One of the things 3g is good about is to identify brands that are so strongly could get rid of a lot of the r d and the bloat around the edges. Burger king is a good example of that. They can do that with kelloggs or General Mills with monfils. Monfils well to hersheys and that put them in the play. Whats your view on the petition authorities would have said about craft unilever . Ed ultimately, the overlaps were not that severe. Food heinz is primarily in although they do have international presence. Unilever is a much more diverse business with products portfolio of consumer goods. Hammond ed hammond with bloomberg news. Amanda we hear from in mckay on plans to buy back at billion dollars of shares today. Is of his its was of unity bloomberg. Amanda this is Bloomberg Markets, im amanda lang. Oliver im oliver renick. Hsbc stock plummeted after the bank missed estimates on a surprise drop in revenue. Hsbc also announced plans to buy back an additional 1 billion of to 3. 5bring the totals billion is the second half of 2016. Earlier today, the banks cfo ian mckay talked exclusively with Bloomberg Europe by phone. He asked if hsbc is considering further buybacks. I wouldnt read too much into the 1 billion we announced today. As we did say in the release, this is very much related to the completion of the sale of our result in business, which would close down in july of last year. To 2. 5 billion in the second half of last year and another 1 billion now, that will be a total of 3. 5 billion between august of last year and now. I certainly wouldnt encourage any of our investors to read too much into the 1 billion now. We clearly have a very strong tier one ratio at 13. 6 . Thats well above the top end of the range that we targeted in terms of ensuring that we are well capitalized in our businesses around the world. Continue to focus on investing capital in the growth of our business what is the opportunity arises from time to time, we will certainly contemplate as we have done, share buybacks. The one other thing to note is the dividends and respect of the year are a little over 10,000 to shareholders. Shareholder to the in 2016 has been a very strong performance, both in terms of cash and in terms of total shareholder return. How you evaluate buybacks. How do you evaluate share buybacks versus the other things you could be doing with that money . Growth, dividends, and social dividends . I mentioned earlier, we are sitting at the 13. 6 tier one ratio, as we shared with investors back in 20 15,000 of the targets. We sent out a range of 12 to 13 . When we are operating comfortably above the top end of that range and with wellcapitalized subsidiaries around the world, will capable of supporting growth in the market that weve targeted, we certainly contemplate that surplus and the most appropriate mainf it across three dimensions. First and foremost, investing in the business and growth. Secondly, the sustainability of the dividend in the longer term, and thirdly, the opportunity to return cash to shareholders in the form of a buybacks. The second half of last year and now the First Quarter of this year, looking at the propensity of our businesses to grow, we concluded that this occasion, it was the opportunity on the back of our brazilian business to return some of that to shareholders in the form of buybacks. Another member of your Management Team has spoken out with returns with concerns around protectionism as we had further into 2017. Are you preparing the business and preparing the finances at all for maybe some trouble around trade financing, if we see antiglobalization and protectionism measures being brought in . Theres no doubt about it, we live in interesting times, both geopolitically and from a regulatory perspective in the Financial Services industry. What hsbc does. We operate in 70 countries around the world. Our businesses cover 90 of global trade across the corridors that we support for commercial banking and Global Banking and large corporate customers. Very much on having both the products and the capability across the network and we support the customers regardless of the environment. Onver that was Ian Mckay Bloomberg daybreak europe. Still ahead, kraft heinz, 143 billion bid for unilever collapses just two days. What this teaches about warrens aversion to hostile deals. This is bloomberg. Decisionraft heinzs to back off so quickly after unilever says is not interested may seem illogical. Lets take it over cory johnson. Welcome everyone to bloomberg radio. Mostnt to bring in the read stories on the bloomberg. It has to do with Warren Buffett taking his own advice and walking away from a bid for unilever. Tell us what he did. Buffet was financing kraft heinz is potential bid to buy unilever as part of his partnership with the Brazilian Private Equity Firm 3g, its been super profitable. They cut cost and merged with heinz. Buffett has made tens of billions of dollars on this. But they were going to expand this by going out and buy unilever. Was not Company Interested in the deal, they walked away rather than raise the bid. Even though buffett has a lot of money that he needs to put to work, it seems like this would have been a profitable opportunity. Aboutbuffett talks intrinsic value, you have to know how the business works. He also has said these are the kinds of businesses he understands. He famously once said i understand koolaid when i was in a solution target. Value, theyinsic mustve been pretty close in the bid they were offering. He has a hard and fast rule is not going to go hostile. Even in cases where that might make sense, its just not for him. He likes to come in with an aggressive initial offer confidentially, and he doesnt like to negotiate after that point. Carol was it interesting that floated in the media . He on purpose, doesnt normally . Its hard to find examples from the past where buffett approaches became public. Often people are happy that he is into good and you will not screw a deal by looking at. The british takeover law requires that the company has to disclose that they have been approached in that they rejected it. His plane out very differently before this played out very differently. Cory its interesting to see him step into the role of financier, and other favorite role from buffett is when you combine a euros with borrowed money, ignorance with borrowed money, you can get an interesting result. It was a different role for him. He departed from his traditional ways of doing business when he started partnering with these 3g capital dies. It is done so well, they are taking companies you think would be totally mature and they have been able to increase their margins by 5 or 10 . Its not hard to see why buffett would want to put more money to work with these guys. Whos been a follower of bloomberg, we had a story a couple of weeks ago talking about Warren Buffett and alliance paide offense regulations that every couple of years, Warren Buffett does a big deal that he does like this kind of package products food product based. Should we assume the buffett is going to come back with an offer General Mills has been talked about, not necessarily for Warren Buffett, but there has beens regulation he wants to do another deal in the space. All the stocks in the industry are up just because they think theyre interested in unilever, thats not going to happen so maybe they will buy a different company. We dont have any information that they are going to do that, but that is what everyone is speculating. Cory there have been so many laster was i think the biggest ever in the history of m a in the Food Industry. You wonder how much more is left to be done. 3gs burger king just bought popeyes, so they are clearly your to consolidate and use their costcutting formula to improve results. Carol its interesting you talk about Jeff Matthews who wrote a book on berkshire says buffett is not afraid to walk away from deals. He really doesnt have a problem with it. But by that, should we assume that hes done with unilever . Or should he take another go at it . An interesting question. I think by being friendly and not doing hostile deals, he preserves the possibility that maybe they would be willing to sell part of the company or they wouldnt be opposed to dealing with him then. I think its one of the benefits of him having this reputation as a white knight, as a friendly acquirer. Cory there is the suggestion that unilever, because of this m a activity, or near activity, that unilever could be a tighter ship. We could manage things more conservatively. They could cut costs in some places. Chum is in the water. They have these executives that are trying to run the company is best they can would already be cutting costs. Putting pressure on them to cut costs more to do some sort of deal. Didnt goh buffett hostile, he did put them in play, because it leaked out. Deal, in terms of another should we assume that hes getting ready to do those some kind of big deal . Billion in cash to play with. Crises and was looking for deals. Id imagine he is looking for one right now. And who knows when you will find exactly the right one for him. Carol theres a steady pipeline of deals. I appreciate it. , back to you guys. Amanda carol massar and cory johnson. Catch more interviews on sirius xm, and bloomberg. Com. Oliver a look at the biggest business stories in the news right now. Wells fargo fire the head of its consumer trade Solutions Department and three other senior managers as part of the ongoing investigation. The bank is facing calls for tighter scrutiny after was fined 185 million by regulators for allegedly opening more than 2 million retail Bank Accounts without customer approval. None of the executives role receive a bonus and will also forfeit their unvested equity awards and vested outstanding options. A federal Appeals Court upheld a toing that part hedge funds sue. U. S. Etwork suite allow the to recapture all the 187 billion in taxpayer money it spent to prevent their collaborations during the global fiscal crisis, and at least 56 billion extra without reducing the treasuries liquidations take in either firm. Citing Anonymous Sources said the family received a takeover offer. In terms of gaining 20 this year, making them the best performer in the index of asset managers. The baltimorebased global asset manager has to work 14 billion under management as of january 31st. That is your Bloomberg Business flash update. Still ahead, the commodities a barrel as the opec says it compliance with a steel cuts. With its deal cuts. How high thats in the commodity . Could that send the commodity . This is bloomberg. This is Bloomberg Markets im oliver renick. Markets are closing here in new york. The forecast calls for warmer than normal weather across the east coast. Oil is rising for the Third Straight day as opec reiterates its agreement to further production cuts. Citigroup raised its shortterm price outlook for oil, saying opec cuts and drawing demand in asia. Lets look at what is going on in metals, coppers climbing on the London Metal Exchange today. Citigroup also sees the return of that commodity calling for the Industrial Metals to top a thousand dollars. Citi forecasts a Global Market shortage for copper throughout 2020. The bank says the dearth of new minds and rising demand are seen underpinning advances. Amanda . Copper was one of the discussions today with the ceo in an exclusive interview on bloomberg daybreak americas. The caution is based on the fact that some prices are now a little higher than we would have expected them to be around now. Longer than we would see them being in the long term. Although we are heavily invested in things like petroleum and copper where we see promise of price risk to the upside trade the other caution is it is a very uncertain world. I have been listening to the previous part of your program. We are not quite sure where the Trump Administration will settle down and what that will mean for World Economic growth, but we are slightly alarmed by the sentiment around protectionism. Ultimately that is going to have andd impact on world trade, we are a business commodity that flourishes when the World Economy grows straight the World Economy grows when world trade is growing. I want to highlight 2 metals you have deep exposure to, copper and iron or. On the one hand, iron or processes, even you were skeptical about a rally. How do you protect your cash flow. How do you hedge that . We dont hedge it. The way we protect our cash flow , we protect our margin. Have driven our production costs quite low. What would but we can believe we can try them lower with the things we have underway. That is the best way we can protect that. At the same time, our productivity agenda, we will both reduce our unit cost, but increase volumes trade in that way, even though prices are falling, we can look after our gross margin. For copper its very different. Citi out with a note yesterday saying they see 8,000 a ton or more before the end of the decade for copper. Do you see that massive rally and deficit that citi does . Not as quick as the end of the decade but certainly into the next decade. When we look forward growth and demand for copper, it exceeds what we see as the new supply that will come on to match that certainly by 2020. Of thoser is one metals that even if china is moving into more of a consumption phase, it will you want to use more electricity and most of our electricity at some time will go down the copper wire. That is why in our Investment Program Going Forward, it is much more biased to adding copper production that it is annual production. Lets talk crude. Your shale assets, is now a good time to sell . So. Dont believe i think the price could go higher. I also feel that in our shale business we are working very hard to continue to drive down our cost. And by driving down our costs at the same time as we see the price rising, we are getting ready, probably. We are doing some experiments, we are fracking our uncompleted wells. And, i think we will start to as a priceisks back improves and cost goes down. I dont think we would get that kind of value, if we were to rush to a sale right now. At least for our core assets which we value very highly. But we also have a number of offshore, conventional investments underway with bp and chevron. We are investing in a big project in the gulf, and we of course want the competition won the competition to be the First Foreign Company back into mexico. In a weeks time i will be going to mexico to sign that deal and that is another investment we will make to grow our oil production. Oliver you could have been any ceo involved in the oil market and you would have told me, we are going to put rigs back to work. Reconcile the idea of putting more rigs to work, but you also think crude will go higher. What will underpin the price growth of oil in the coming year if a lot of ceos like yourself are looking to put rigs back to work . Well, i think two things. The opec cuts are probably as large, if not larger than promised. I see a larger growth in the demand for crude than they would have expected a year ago. We have 2 signals. One, to your point, that is slightly more on the bearish side. The volumes of oil that will come simply within the year for Companies Like us, putting a few more rigs, and some of our rigs are good to work on gas, but not oil. Are not that large compared to some of the things going on in terms of increased demand, and some of the opec cuts. That was ceo Andrew Mackenzie on bloomberg daybreak americas. Mark crumpton has more from the newsroom. Mark french Officials Say three men have been arrested after widespread antiterrorism raids. One of the arrests was in paris. Todays arrests came less than two weeks after antiterrorism forces detained an adolescent girl and three men and uncovered aat they described as makeshift explosive lab. A divided u. S. Supreme court has cleared the way for the execution of the convicted murderer in alabama. He tried to block the state from using a sedative linked to botched executions. Andices Sonia Sotomayor breyer said they would have taken it. An israeli soldier has been sentenced to 18 months in jail for killing a palestinian attacker who was already immobilized. Judges rejected the idea that the soldier thought the palestinian could still attack him. Many israelis argue the soldier acted in selfdefense. The leaders of americas midsize businesses have not been this opportunistic in seven years. According to jpmorgans Business Leaders outlook, 80 of Little Market companies are optimistic. The survey shows an overwhelming majority of the executives expect policies of President Trump and the Republicanled Congress to have a positive impact on their business. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Amanda still ahead, what to look for when imax reports its earnings later this week. This is bloomberg. Oliver this is Bloomberg Markets. Im oliver renick. Amanda and im amanda lang. This is this actor sector spiders report. We are looking at the Retail Sector etf, up 1 . This after being down as much as 5 earlier this year, if you recall there were a string of disappointing holiday reports that had weighed on the sector. Now looking at a rebound, some of the top earnings boosts, top boosts for the average is today, walmart, home depot, macys. All these Companies Beat earnings estimates. Home depot by 8 . Adjusted earnings really being helped. By macro transit straight plus, spending on bigticket items. As for walmart, one of the top boosters of the s p 500 and dow. They beat earnings as well. It looks like they are succeeding on their strategy. We have a great chart that shows that online sales ive really grown. In the last quarter of last year, up 29 following an acquisition of, 3. 3 billion acquisition. Told our team earlier that they succeeded in terms of boosting online sales plus aggressive costcutting helped to bring about that quarter. Finally, macys. They also beat in terms of earnings. R Bloomberg Intelligence analyst was not impressed by this. She pointed to a disappointment, the fact that same source sales for 2016 were really disappointing, down to 3 . She thinks this weakness will extend into this year in blue. We have samestore sales over the last 10 years, back in 2012 of the 6. 4 . Last year down about 3 . They could be week going into this year, through this year, if that happens, it appears it may just drag on shares of macys. Today, strength for retail. Amanda time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Walmart posted profit that he estimates. Samestore sales in the u. S. Also did better than expected grade walmarts Online Stores online sales were up 29 . We continue to invest in ecommerce to accelerate growth. We are gaining traction and moving faster. We are the second largest u. S. Online retailer by revenue. One of the top three online retailers by traffic, and the walmart app is among the top three apps in retail. Amanda walmart, the Worlds Largest retailer, acquired jet. Com and put that cap as founder in charge of its online strategy. Macys reported fourthquarter earnings that beat estimates. The company is continuing to close stores and fight costs cut costs in an attempt to fight a slump. Samestore sales were down but by less than forecast. That is your business flash update. Oliver this week investors will be watching imax. The Theater Company is scheduled to report its Fourth Quarter and yearend results in 2016. Our reporter has the story from los angeles. What are we going to be looking at here for the Theater Company . It has been a tougher Fourth Quarter compared to last year. The Previous Year we had the first star wars from disney, which was a huge global hits. This year in the same period we have a similar film, but it did not track as high. Analysts are positive about the company, expected etfs and revenue to be down on last year. What will analysts be looking for in terms of looking forward and hoping looking for what is coming, given the tough comparisons this year to last . There are some interesting developments for imax. One of its biggest markets is china. China is going through an evolution in terms of its box office and theatergoing habits, set to overtake the u. S. Last year it had a slowdown, singledigit growth where it has had growth of 35 on average for Previous Years. That will weigh on imax and analysts will be looking there. They are also interested in the noncore businesses such as virtual reality, and assets imax started creating exercise classes, linked to their screens, like spinning classes, which is interesting. They want to see that turn into profitability and how they will monetize that. Oliver it seems like some of the negatives here are largely the result of having very good trends in these areas before. 2 billiono beat from the reboot of star wars. Then you look at chinese numbers, hard to beat doubledigit growth. What about competition . Im curious whether im starting to have an effect. I know here in new york, they are moving regal is moving to a higher price point. Are they looking at in terms of competition within theaters in the u. S. . You raise a good point. Imax has for a long time been the standup rant when it came to premium cinema experience, and now they have competed to try to keep moviegoers coming. They are dropping off in numbers when they are choosing to sit home and watch netflix. So, imax has been rolling out innovation. One of them is laser projection, to increase the resolution of their 3d and other kinds of showings. There is that, and analysts have been focused on that. Other areas will be the rollout of imax theaters in amc. What we have seen amc do over the past year or so is expand itself. It becomes the biggest u. S. Theater chain. It also bought uci in europe. The expectation is that imax will potentially be put in an even better position because it has a close relationship with amc, and could you start to see more imax theater turn up in more theaters around the world because of imax amc. Amanda this is an incredibly volatile stock. Is there growth in the backlog, some that might help smooth out the right for investors a little bit . Thats possible. The industry is going through a challenging time, not just in terms of attendance. Box offices arent becuase ticket prices keep climbing higher and imax is set to benefit from that, because they are a premium offering. Beyond that, you have structural issues in the industry. Our theaters will continue having exclusivity over new movies. This is a hot debate in the Entertainment Industry right now. We have written quite a lot about this in the last couple of months. Studios like warner bros. , fox, universal have come out recently and said, one thing we want to do is want to capitalize on the buzz around our films so a couple of weeks after a film opens in theaters, you can see it at the home. That is a big challenge for theaters, because they make their money on you turning up and buying popcorn. A lot of volatility. It probably might not affect imax the same way as other theaters, because they stand out with the kind of offering they do. Those bigbudget films which they rely on, its a stable, those arent expected to be affected. Oliver thank you so much for joining us. Coming up, fears of a populist surge in europe. Gains ground in the polls. A look at what that is doing, european bond yields, next. This is bloomberg. Amanda we want to turn out to europe, as antieuro president ial candidate Marine Le Pen gains ground against her rival. That is causing a slight to safety. Chart g btvt 6112. You can see the spread is the widest since 2012. The french process is extremely complicated. Despite what might happen next, theres always another next. Joe it does seem like it. The various parties have their there is, and then going to be around in april. Assuming no one gets 50 , which seems very unlikely, then there is going to be a runoff of the final two. Who is Everybody Knows is the nationalist antieurope candidate, is probably going to come in first in that round, and that is going to cause a lot of jitters. But, beyond that, she has been gaining in the theoretical headtohead matchups in the second round, which is a few weeks later in may. There are a lot of steps, a lot of headlines that will probably be coming no matter what which will make investors anxious. A chart here. Looking at spreading bond yields. German 10 year bonds versus french 10 year. You can see where a little bit this divergence here, you can see it has become a little more exacerbated. It has broadened out a little bit. Does that to you that perhaps people are starting to get a bit jittery about this to some extent . I think people are getting jittery. Is verys situation, it complicated moving parts from the trait perspective. The polls still show her considerably behind. Some polls last week showed her 20 points behind in the theoretical head to head at the end. That is probably too wide of a gap to overcome. But then people look back at we have thisump, all wrong, we dont even trust the polls anymore. Then there is another factor, even if the odds of her victory are low, the ramifications market wise could be very big, itcause redenomination would not happen immediately. Even being on the table can cause serious losses. It seems like it is a very tricky thing to trade. Oliver i know we like to give our hot take on things. Hot means it could go terribly wrong. Joe just trying to get some attention. Everybody said this would be a disaster to the economy. Have not seen that crop up in the numbers. Trump situation, well known to economists saying we are going to be in recession the next night. This is a last chance for the doomsayers to get it right. Joe there are two interesting things going on. Nobody wants to be the person the fool, pick up those extra 40 basis points because la pen wont win. Its like youn, didnt learn a lesson. It is true that people got the Market Reaction and economic reaction to trump and brexit wrong. At the risk of saying it would be different this time, the fact there are so much money at stake in a theoretical renomination, and the fact that if france were to leave the eurozone, people will say, the french will not be the last. Theres a lot of money on the table. Amanda i want to dive inside the terminal. This is the odds of Marine Le Pen winning versus the spread on the bond yields and they dont always track perfectly, but you can see them converging their, just to this point of how worrisome. It is kind of reminiscent of the wildcard a President Trump when she is refusing to wear a headscarf to meet a lebanese cleric. It is that kind of behavior making people nervous. Do you expect to see these yields continue to rise . Joe i dont know. I not going to try to guess whether her odds of winning are going to fall or decline. Right now the betting markets, about 1 3 chance of winning. I dont think markets are thinking she has a 1 3 chance. 1 3 chance of her winning, we would see spreads even wider. I think people still dont think she has a realistic shot. If people start to fear that, i would expect to see more volatility. Amanda thanks. Coming up, Cumberland Advisors chair david co. Dr. Joints us with his latest perspective and a look at the markets. Oliver coming up in the next hour of Bloomberg Markets, u. S. Stocks once again sitting at record highs. Retailers report earnings and Energy Stocks helped by gains in oil today. This is bloomberg. Oliver im oliver renick. Amanda im amanda lang. Welcome to Bloomberg Markets. Oliver we are live from bloomberg World Headquarters in new york for the next hour. Your are the top stories on the bloomberg and from around the world that we are following. In markets, the final hour of trading for u. S. Markets and stocks once again hitting record highs. We will dig into the technicals and see if there is more room to run in a socalled trump rally. Deal. Ll break down the speaking earlier today, the Philadelphia Fed president says he wants to factor in all the data to come before making a final decision on Interest Rates. We are one hour away from the close of trading. Are looking ate gains for stocks in the u. S. Once again, the major averages higher, hitting simultaneous record highs. And the dow less than 300 points away from the dow 21,000. Seems like the days we hit doubt 21,000, but we are bullish here. We go cross asset class, its confirmed. We have a safe haven type assets trading lower today. This includes bonds with the 10 year yield trading slightly higher, up one basis point, represented in red, telling us bonds are trading lower. The dollar is climbing against the safe haven yen, as that haven also falls. One curiosity here is the vix, up nearly 2 . Typically that would not happen with the fear gauge, the quote, unquote fear gauge. One of our options insight guests last week did make note of this. It could have something to do with options expirations friday. From a macro standpoint, there is a relationship to take a look at. This is g btv 4350. In orange we have the vix again, fear based on options action, trading action. In white we have the s p 500. This is over the last year. When they tend to trade apart, they then converge on macro riskoff events. It was true into the brexit, and true into the election. Now we are looking at a fourmonth spread, similar to the one into the election, thats the just we could see at some point the s p 500 pull down and perhaps the vix will trade higher with the technical suggestion that he could trade up closer to 20. He will be interesting to see what could trigger that. As for the dow, also hit a record high. An eighth day for in a row, the longest such winning streak since march of last year. Unitedhealth group up nicely as well, recovering from last fridays decline after the department of justice joined a lawsuit against the companys practices a run medicare. Goldman sachs also trading higher, as yields are climbing. This tends to help the bank. Finally, one of the big owners on the day, walmart. This is a twoday chart. Its best day since may of last year. They beat earnings estimates. Our team earlier this morning the what really stands out, the company is clearly succeeding with its strategy around online sales, really improving and driving the results, plus aggressive costcutting, and very interesting, the First Quarter is actually a little bit light, which jennifer sees as a bit of a blip with the company saying it is a delay in tax refunds. It will be interesting to see if other retailers potentially cite that about guidance for the first half of this year. Oliver thanks. Amanda time for a check of the headlines. Mark crumpton has more from the newsroom. Says a newdent trump immigration order will be coming out very soon and would replace the one blocked by a federal Appeals Court. The Homeland Security department has issued a pair of memos on immigration. It calls for a crackdown on undocumented immigrants. Thousands more Border Patrol and immigration agents are scheduled to be hired. French president ial candidate Marine Le Pen refuse to wear a headscarf for a meeting with a top lebanese sunni muslim cleric today and walked away from the scheduled appointment. La pen is on a threeday visit to lebanon and was to meet with the countrys grand mufti. Shortly after she arrived at his office, one of his aides handed her a white headscarf to put on. Following a discussion with his aides, she refused and returned to her car. The Italian Coast Guard released video today showing refugees in a packed boat about to be rescued in the mediterranean. 30 people were transferred to the Italian Coast Guard ship at dawn. Include 70 women and children. According to the United Nations refugee agency, more than 12,000 people arrived by sea and europe. Today members of the United Nations Security Council held a moment of silence for their colleague, Russian Ambassador who died suddenly on monday at the age of 64. He became ill while at russias u. N. Mission here in new york city. A moment of silence was led by Security Council president of ukraine. Today would have been the ambassadors 65th birthday. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Amanda . Averagesll three major enjoying record highs. The s p 500 is already reached the average year and target set by wall street analysts. The only other time the average exceeded the target by february was in 2012. Mike regan, the Senior Editor and blogger for Bloomberg Markets life, find that on the terminal at m live. What is the significance of hitting the targets early . Yearend targets, after all. Obviously its very early in the year to be touching this medium target already. Interesting to me that no one has sort of thrown in the towel and increase their estimate. Also notable to me, some of the ones at the bottom rung of the estimates table. Real familiar veteran strategists that are pretty well his target is 2300. Good 60something points. Tom lee is at 2275 or hes the lowest. The people at the low end of the letter are very well known sort of famous strategists, famous to people like all of her and i. Into theets jump terminal real quick so we can quantify some of this discussion. This is looking at a chart, redline at the bottom shows the lowestyearend target, green the highest at 25. Here are the averages we are talking about here, where you have surpassed this a little bit. You were only pricing in roughly a 5 gain on the year, which is about 1 2 of what they typically do. I think where they found this trump bump postelection would not last long. They also change their estimates throughout the year a lot. I do not think you would be too surprised if we would see some of these strategists increase their estimates. But not yet. Its sort of speak to the skepticism that abounds from a lot of people. Has momentum in the market just been astounding. If you look at some of the technical analysis, 101 ways of gauging stock market momentum, relative strength index on the s p 500 is about 80. It hasnt been that strong since 2006 the nasdaq. 100 etf is at a record. People are getting caught off guard on this. This last leg of the rally, specifically. Amanda he would expect strategists would raise yearend targets, they would also be raising their targets on earnings for the s p. But we are seeing in the market, the momentum, is any of that driven by rational expectation that profits will go up as taxes come in . Theres definitely a mix. The earnings outlook is doubledigit Earnings Growth for this year. The last several years, those estimates have proven to be too optimistic and they have gotten ratcheted down as the year goes on. There are so many variables, so many questions. Its a moving target what the socalled trump trade is. Right out of the gate after the election, retailers went bananas. Banks went bananas. Obviously banks are still the focal point. Even if you dont get the tax credit, the tax cuts, the infrastructure spending, you have the rates going up, and you l most likely get doddfrank. That is the fascinating aspect of this, this moving target of where the trump trade money is going. Oliver when other momentum indicator, one other momentum indicator, this shows you the blue line at the top there shows where we would be trading in the dow is everything were trading at a 52week high. The white line is where it is. It is pretty darn close. There was an article talking about how optimism is peaking right now. One of the lowest estimates among our strategists the way he looks at it is, people are going to be a little bit disappointed about the tax plan. There enough budget talks in congress that is not going to be this big urgent deficit widening tax plan, and its not going to get sorted out until very late in the year, and the effects on corporate profits are not going to be as robust as people are expecting. He has a very specific outline. Muchthe s p 500 go not higher than we are now. By the end of this quarter, and enclosing the year at 2300. A drop of about points. You have to assume it dips below that, overreaches at the bottom. Oliver last time you sort of had a double pronged call like that amanda yeah. The lead blogger for bloombergs market life. Oliver coming up, is a popular destination for wall street ski fans and soon it will have a new owner. Those details are next. This is bloomberg. Oliver im oliver renick. Skiing apparently no longer fits into the portfolio of insurance giant aig. The company is selling its ski operations to colorados bill resorts. Aig will maintain majority ownership of the base area. If you were to say whos better to own a ski resort, vail or an insurance company, i dont know. Aig owned it for 7 decades. In 2008 they were going through a 400 million renovation of sell itd still did not then. This is pretty his story. Insurance do hold real estate. They are still keeping some economics. 312room lodge. They will help develop it. But yeah, for vail it might be better economics on their. There. Amanda as a strategic investor, aig has been very patient. It was probably really good for stowe to be owned by that kind of a player. Now aig is keeping the stable parts of this business. Vail is taking on the volatile stuff. Is this good for vail . Vail said it could add 5 million and profit by 2018. They have been spying a lot of resorts near cities. It is their first east coast location. It could. For aig, just like you said, long patient capital. With aig, when we see money moving it is usually billions of dollars at a time. Maybe means more for Smaller Companies than it does to a big insurance conglomerate like aig. Oliver youve pointed out rightfully that there are some reasons why they had it. What is the history behind this . How did they come to possess this particular property . Is a funny story. The founder of aig was waiting in line for a lift that stowe, according to a local historian, and he hated waiting 2 hours for a lift, so he decided to put up money for the rest of it. Now if you go to stowe, the double Black Diamond run that is named after Cornelius Vander starr, Hank Greenberg himself went up there for many years and went skiing up at stowe. Aig has meetings there sometimes for their commercial insurance folks. Amanda what are some of the trends on real estate that aig is looking at . They reshape their entire Real Estate Division with new leadership. They recently sold center in korea. Seen is ont we have their not real estate portfolio but theyre investing portfolio, they have been making a lot of mortgage loans. Theyve been shifting to mortgages. That is really interesting on the aig investment front. Oliver very interesting, thanks for explaining. Amanda australian Prime Minister Malcolm Turnbull said the companys relationship remains very strong despite between the two leaders prayed in an exclusive interview with haidi lun on open bloomberg daybreak australia, he was asked about his current dialogue with trump. Weve had several conversations now. Theyve been constructive, frank, and forthright. We have a very deep engagement with the American Administration and every American Administration. Alliance,lianu. S. Relationship is very deep. Its built on over a century of fighting sidebyside in every major conflict, it is an alliance, it is an economic millionsip builds on of people to people links and family links. Its very strong and very deep. How do you view him as a man . A very Big Personality, and he has a very big job. Of the added difficulty of decisionmaking this is a brandnew world, he is someone who does diplomacy via social media, twitter. There certainly is an element of the unexpected. Does that change the way you deal with the u. S. . No. We pursue our National Interest methodically, calmly, consistently. We make our case very frankly, and forthrightly, when we are speaking to our american friends. As youd expect, with good friends, we are fairly circumspect about what we say in public. It is important we give frank advice and have Frank Exchanges with our american counterparts, but we dont lecture them through the media. Its very important to be able to talk frankly, as good friends should. In the markets we have been trying to work out what is trump the president , trump the candidate. A lot of that has come to fruition in terms of pulling out of the tpp, his views on immigration. Do you think he means what he says . You have the judgment youve got to make. I think people will always assume that president s and Prime Ministers mean what they say its in terms of a commentary on u. S. Politics, i will leave that to the collective talent at bloomberg. Its not my job to comment on u. S. Political developments. In a world we are seeing the borders of trade seemingly closed, where does that leave australia . What this free trade look like get thentinue to populist uprisings in europe . We have a number of european elections. Get the populist uprisings in europe . It does look like we could end up with a similar result to trump, to the brexit vote. We have a Free Trade Agreement with the United States, which is working very well. We have entered into new Free Trade Agreements with china, korea, japan, and enhanced effort with singapore. Were working on Free Trade Agreements with indonesia and with india, and we are open for business. We are looking to see how we can continue, with the intent of the tpp, even though the United States has pulled out of it. We are focused on new markets all the time. Its easy to get pessimistic because of the few political developments. I think the trajectory in favor of free trade will continue, but certainly from our point of view, regardless of what happens in other places, from our point of view it is manifestly in australia interest to have access to more markets. And of course, it benefits australians being able to have cheaper goods. Trade, bothrom free on the export side and on the import side. Winwin. That has been very clear for a long time. Trade means jobs. We are a much more trade dependent economy, for example, then the United States. It is critically important for us as a big trading nation, big exporting nation, to have access to more markets. That is what we are set to do. Amanda that was Malcolm Turnbull in an exclusive interview on bloomberg daybreak australia. Still ahead, home depot keeps on humming as the retailer posted 19 gain in fourthquarter profit. This is bloomberg. Lang. im amanda time for options insight with Abigail Doolittle. Abigail joining me is kevin kelly, Investment Officer at recon capital. Great to see you and thanks for taking the time. Another day, more records. You are talking about depressed volatility under the Trump Administration. What does this mean . Since he has been elected we have seen volatility about 12. 2. Look over the last five years, theyve averaged about 15. 6. That includes all the crazy monetary policies that have happened, with quantitative easing, things like that, low Interest Rate policies. Its hard to imagine that volatility could have fallen even further, but it is at 12. 2 since hes been elected. It is kind of one of those things where, why is it like that. One of the reasons why is that sector correlation since hes been elected actually have dispersed. Everybody is worried about complacency in the marketplace, but it is simply not true. 57 lastons are around month and they have average between that and 65. Before the election, correlations were at 80 . Everything was riskon. Actually cyclical stocks and noncyclical stocks are starting to have this version. Abigail that sounds Pretty Healthy from the dispersion standpoint. With the vix near record lows, are we setting up for some sort of a selloff . Was even more interesting is that you were talking about we are at 12. 2. Can you see a selloff . That has been implied volatility. Realized volatility, this last month was less than 6. It was at 5. 98. Even though its implied at 12, or even less than 12 right now that is very low. If we dont start to see some marketstimulus with the anticipating, we could see that happen. Earning season tends to lower volatility and we have been in that. Once we start seeing macro events, that is what lens in. Greece is starting to perk its head up again. That was a big volatility catalyst in Previous Years. Abigail indeed trade he will be interesting to see how all this plays out. Yet anotheritting record, and yet i know you have a bullish trade. How to investors possibly buy a stock that continues to put in record high after record high without having fear around it . Home depot has been a stock that is growing on the top line. It is eight quarters out of a quarters, denver a well. People are worried about the consumer. The great part about home depot, even though it has performed so well, it is implied volatility is still higher than the markets. Around 17. We want to capitalize on that. One way you could do it, going to april, that is less than 60 days, you can sell the 140 put, collect about 2. 05. You are going to own the stock, should it be put you, i 138. That is a great cost basis. One of the biggest highers of the stock Going Forward, its home depot themselves. They came out with a 15 billion buyback plan, about 9 of the stock. They increase their dividends. This is a great place to be. Guess what . If the stock does not put you, you are going to make 2 in 60 days. It seems like a great way to play home depot from here. Abigail amanda, back to you. Amanda still ahead, david k otok. Mark the Foreign Ministers of mexico and canada presented a unified front ahead of potential trade talks with the Trump Administration, stressing the north american Free Trade Agreement has benefited all three countries. They say nafta should be renegotiated with all three nations seated at the table rather than end bilateral discussions. There talks come after President Trump said trade with canada only needed, in his words, a more as opposed to a thorough reset with mexico. The comment he made after the canadian Prime Minister Justin Trudeaus visit to the white house last week. The publicans and democrats are praising the president s choice for National Security adviser. Quote, aalled certified, cardcarrying grownup who is respected by his peers. Senator john mccain called him an outstanding choice. The economy has become the biggest worry for britons. Nielsenhose surveyed by said the economy is either their first or secon