Kurdish region. He said he hoped the kurdish leadership would abandon names of creating a separate state, and not forced turkey into enforcing sanctions. He added that the landlocked kurdishrdish region would not be able to survive without turkish support. Hillary clinton spoke to charlie rose. I believe he either has something on donald trump, or trump thinks that putin helped him so much that he is not going to turn on putin. Either one is horrifying. At can see the interview 6 00 p. M. And 10 00 p. M. New york time. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Julia live from bloomberg World Headquarters in new york, im julia chatterley. Scarlet im scarlet fu. Abigail im abigail doolittle. The s p 500 is turning toward that level of 2500. Scarlet but the question is, whatd you miss . Holding akers are are hoping tax reform will pick up steam. Chair markng weinberger weighs in, next. What is most uncertain is Janet Yellens future at the fed. And nike reports earnings after the bell, and shares of adidas take a hit after an investigation into sports bribery. Whatd you miss . The senate is moving on to tax reform, again. Ceos are pinning their hopes on tax reform that is 30 years in the making. President trump has called it a once in a generation opportunity, and executives are taking note, with the Business Roundtable taking on a multimillion dollar ad campaign. Mark weinberger, ceo of earnst young, joins us now. Mark, thanks for joining us. Health care failed because republicans couldnt agree, and we are talking about collins and paul. The uc more unity when it comes to tax reform, which is just as complicated if not more, then health care . Mark any legislation has to hit the four ps. Priority, politics, process. The republicans were not united on health care. They did not have agreement on the policy. Politics were very difficult. And the process did not work well. They came out with a leadershipled plan and try to sell it to the committees and got rejected and then they were touching up the rest of the year. I think that is a lesson learned. When it comes to tax reform they are operating differently. They are starting with, working with the house and senate, working with all the republicans on a unified plan, and then bringing it through committees instead of having it come from down come down from on high. Julia what should be included . You have to separate the signal from the noise. The Business Community is united by lower rates, competitive rates, and a Competitive International system. Which means moving toward a territorial system to get that 2. 6 trillion back into the United States. It has got to be fiscally responsible. We know it has to meet the budget window from the process standpoint. But you cant lose sight of the business side. Lower rates and a territorial system. The president promised middleincome tax relief and he has to deliver on that. Complicating this is that it requires the budget resolution and the debt ceiling. P. K that is my fourth process. It helps if you can get the 51 votes. Where it is hindered is that you have all these rules for instance, they cant lose every cant lose any revenue after year 10. And that is very difficult to design. But the problem is they are probably not can get 60 votes. If they dont use the budget resolution, that is the first test. Then it will go to the house. After they do that they start crafting the rules. Scarlet everyone is fond of round numbers when it comes to tax reform. Ken griffin of sifted out says rateuld like to see tax that, he says shrinking it from 35 to 50 is unrealistic, given the deficits. Rate youre looking at a in the low 20s, or 20, at the end of the day. Theyre going to repeal of lot , and theeductions credits. And they are going to see if politically, that can survive. Startdoesnt, then they putting stuff back in and the rate climbs up from the 20s into somewhere in the low 20s. Speaking of that third includeverall might repealing state and local tax adoptions, something that california and new york rely on. Is this Wishful Thinking . A lot of congressman from those of have already said, no way . Mark this is why it hasnt been done in 30 years. Everybody has some issue that they care most about. To get rates down for the middleincome people, to get passthroughs, theyre going to have to get some offsets to get to the lower rates. State andg rid of the local income tax reduction is one of them. Lets see if it survives the political system. You are at happens if congressman in one of those blue states and you have to sell that message . Upper income people are not going to get as big a tax cut, or maybe even have a little increase. That will still sell well in the districts if middleincome people get relief. The president is talking about doubling the standard induction, putting childcare in their which is really important to families and women. That will be very beneficial. How does all this play into conversations with your clients . How much does it actually affect Business Decisions . Mark the Business Roundtable found 76 saynd if we have tax reform this year, we will are more people. A 6 say they will invest more 86 sayequipment they will invest more in capital equipment. And if we dont have tax reform, 96 expect a slowdown in the overall economy. They are relying on this tax cut. Reform ined tax define tax reform. Because if we end up with some watered down version in the end, do they still make those decisions . Mark it has to have a low rate, in the 20s. It has to compete overseas. It has to have middle income tax relief. Those of the main things i think president the president is looking at. Scarlet there are so many things to keep in mind here. You see a pass through getting lower rates and a more simplified tax code, or are we doomed because of all these special interests . For upper income people and large corporations, the world is not simple. And if he tried to calculate where incomes are, where you can with the click of a mouse, move something around the world, it is very complicated. But remember, if they double standard reduction is the president proposed, some 80 of americans wont itemize. They will pay their taxes very simply. The other 20 will still have complicated taxes. And corporations, if you get away from some of these deductions and credits that are hard to enforce by the irs, that would simplify it, but i would not say was double. Mark weinberger is going to stick with us. From new york, this is bloomberg. Whatd you miss . Tax cuts in the bottom line. Of honeywell said tax policy that said policy would not be driven by tax cuts. He said, in general, tax planning would not be what drives my capex. David coteike does not make decisions based solely on tax policy. He doesnt say it is a driving force. Had you square that with this theory that tax cuts will prompt companies tire more to hire more . The tax system can distort any decision you have to make. The forbes 500 u. S. Companies have been reduced by 20 for been reduced by 25 since 2000. We look back over the last 12 years, and close to 5000 companies would have stayed in the nine states instead of going overseas, if we had a 20 tax rate. They are going to go where the aftertax return is at the highest, but it will be based solely on taxes. One point is important. When you have a tax cut, what is the Company Going to do with it . The company cant go on vacation. And asked to either increase capital expenditures, they were mages pay more wages, or create jobs are in all her positive for the growth, to get to that 3 growth number. The u. S. Lost 500 billion in business assets, over that. Period. That oeru so, 4700 companies would have remained in america. Is a problem. No ceo wakes up in the morning and says, i want to move my company overseas. But how Many Companies in the u. S. Were acquired by Foreign Companies in the last 12 years, and headquartered outside the u. S. For tax purposes . The 4700 companies. You should not be worried about where the headquarters is unless it is distorted by the tax code. This does also this tells us that the tax code distorted where they headquarters would be . Should they actually be forced to be allocating for some of these capital decisions, rather than pushing a shareholders . To forceis hard companies to put their company to put their money in one place. But this was a discussion back in president obamas day, when republicans and democrats were talking about that. Today, there is definitely going to be a proposed lower tax on foreign earnings. That money is probably going to go into reducing rates and providing for other tax cuts. And then, going forward, there would be a limited or no tax, especially except for attacks on foreign earners. Can we talk about the Trump Administration. You have had various roles in the administrations of george w. Bush and bill clinton. That advisoryn council before it was disbanded. What did you learn briefly on that counsel that could offer clues to Business Leaders on how to engage with the Trump Administration . Mark i really believe the Business Community has a responsibility to engage, to bring our expertise and knowledge to the table and help shape their decisions. They are to take the information and use it how they want. So i believe we should be at the table even when we disagree, and we should speak up when we disagree. I didnt agree with every president on everything, but i thought it was important to be there. The problem with the current administrations Advisory Councils is that they have been so public. That was distracting from our ability to work with them, because the story became us as opposed to the policy objectives. None of us are walking away from the table and saying, you decide all of this on your own. We are not going to be helpful. The cousin would want to be. We want to get jobs created and bring the economy back to close to 3 growth. Julia will it reform . Mark i dont think we are waiting for that phone call to restart the policy forum, anytime soon. Scarlet if youre going to advise the white house on how to respond to the echo faxed cyber hack, what would you say . That is kind of a cautionary tale on how to handle private data. Mark we are all of the same side. This is an issue that is not going away. It is one of the biggest threat to companies, governments, individuals. It started out coming after your credit card information and now is going after countries during the public and private sectors have to Work Together. We have to share information. We have to be able to do things that laws dont allow us to do things allow us to do today. This is one of the most important issues we have to address. Julia are people panicking enough . Mark yes. This is almost always a Business Issues that the companies are talking about. If they are not, they totally should be. Scarlet and what is the best way to advise on the company how the government can get involved and should get involved . Doctor lookvernment at the rules and see where we are prohibited from working with them. Witty and measly a government if we have a breach of security. They get involved and help trying to shut it off and recover what the data may be, or prevent any further theft. So, they are all active in helping out. I would say we just have to share more information and Work Together because we are on the same team. Great to chat with you, mark. Mark weinberger, thanks for joining us. Our stock of the hour, next. This is bloomberg. Headline just had a across the bloomberg. Bob corker will not seek reelection to the u. S. Senate. Bob corker will not seek reelection to the u. S. Senate. There has been speculation about this and we have now and we now have confirmation. He has said tax reform will be harder than health care reform. Time for thes Bloomberg Business flash. Morgan stanley expects more times on the road, three as many, as they launched the model three. The company says it has been generations since we have seen such growth from an auto firm. By 2040 estimates 30 million teslas will be in use. Acrossnd executives from europe think italy has done a good job reducing risk in the banking sector. From thee to Bloomberg European banking conference in milan. With two major this trend of negativity towards italy. The vast majority of the problem has been fixed. I dont see the risk anymore, but i see a weak banking sector. It is not enough yet but it is definitely progress. I think they had hit an inflection point, were banks in italy are becoming an investable again. Sayail the executives italy still has a long way to go, although jamie dimon says he is bullish on europe area that is your Bloomberg Business flash. Julia time now for our stock of the hour. Bloombergs Oliver Renick joins us now. Oliver we are talking about vapes. Ttes and by was raised this is a sector that has been hit pretty hard. The fda surprise them, a couple of months back, when they said they were going to investigate ecigarettes. The stock is headed down by about 20 . Gains, were as of nice reprieve for some in the market that otherwise, we are looking at a company that has had a rough summer. Oversight fda that fda overhang is going to trouble investors. Oliver this is their main product, this is the product tria and others have. Lets jump back into the bloomberg. Im looking at the Financial Analysis page and open up the earnings to chart that out. Heres what you want to look at for the fiscal, annual earnings. Au can see the dbs adjusted, solid climber. In dont see that kind of trajectory, often, over the course of a fiveyear term. If we jump in and look at the yearoveryear growth, this is where the picture becomes more muddled. Butbottom line is growing, the yearoveryear changes put it, abigail, the kinds of concerns about this industry, overall, which is what happens with traditional cigarettes, who is competing in vape space. Stack upw does altria against its rivals . The rvri am looking at function, relative to value, and it is in the top percentile in terms of cash that covers dividends as well as their operating margin. That is going to go a long wait for investors. Scarlet oliver, thank you. Julia breaking news. German Industrial Group siemens and all stone confirm they are in a packed to merge their rail units. Alstom confirming that they plan to merge in their rail units. Lets take a look and the major indexes. A little changer your. The dow, creeping lower and the nasdaq recovering a little bit, up one half of 1 . This is bloomberg. Julia whatd you miss . U. S. Stocks inching higher, markets not entirely shrugging off Janet Yellens speech. A 70 probability of a hike in december. I am julia chatterley. Scarlet i am scarlet fu. Abigail i am abigail doolittle. Joe weisenthal is on assignment. If you are viewing us from twitter, we want to welcome you to our live coverage. With ourwe begin market minutes, little changed for the major indexes, with the nasdaq coming up a bit after yesterdays decline of 0. 9 . I am looking at sector groups. Technology is the big gainer when it comes to the groups within the s p 500. Fairly tepid, only up 0. 1 . Abigail a rebound after yesterdays risk off. Scarlet in terms of individual stocks, what we have . Abigail were looking at apple, a five day chart, but for the first time in five days. Four days down, around the iphone 8. Demand was relatively weak. Investors have released, thinking it wont be that bad. That tech rebound extended to facebook and alphabet. Facebook yesterday had its worst day of the year, down 4. 5 . But today up about 1 . Nvidia the chipmaker, rebounding a little after a big selloff yesterday. Helped out probably by Ai Technology that is going to be provided to drones. Take a look at tesla. All these big tech names had been up about an hour ago, now closing not so high. Morgan stanley had a bullish comments that tesla could spike. Lets look at this, this two day chart. Look at that plunge, down 75 . This, after the companys alzheimers disease drug failed. Yesterday, this and been out greater than 1 billion market cap. Now, less than. Scarlet pretty ugly. Julia lets take a quick look at what is going on, you can see a couple basis points for the u. S. And 10 year. One simple basis point. A different following trumps announcement there and be an announcement wednesday on tax reform. Were looking at a twoyear auction. 1. 46, the highest since october 2008. A quick check on what is going on as far as europe is concerned, a crossreference in terms of germany, 41 basis points for the 10 year yield for. He bond bund a bit of cautiousness surrounding your. 117. 58, around 118 now. A lot of questions being asked if this is braced lower. We saw janet yellen speaking, we do not want to be too cautious about the lack of inflation. But there are the german election results. I also want to show you my chart, because i do not often talk about what is going on in eastern europe. I have talked in the past about concerns about poland and the judicial overhaul plans. Get excited. Name the polish zloty might test the lows. Poland is the greatest net recipient of e. U. Aid. S that fly in the face there are concerns about the ruling party and their efforts with this judicial overhaul and consolidating power. A thank you for sticking with me on that one. Scarlet love it. Oil with a breather, gains after yesterday. The bti climbed to a fiveyear high, just below 52 a barrel. Prices supported because of lingering concern turkey may disrupt kurdish oil supply. Despiteded on its gains raw ore. This includes think, aluminum, copper and nickel. Gold slipping by almost 1 . North korean tensions simmering and traders turning their attention to Central Banks. Cause of an increase in december are now up. Those are todays market minutes. Abigail whatd you miss . A little job owning from janet yellen. She struck a middle ground, hike,ing the fed rate despite missing the 2 target. A gradual approach is appropriate in light of subdued inflation, and the low neutral real interest rate. Which implies the fomc will have limited scope to cut