Largest coaching deal in nfl history, reportedly a 10 Year Contract approaching 100 million. Global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. Im Mark Crumpton, this is bloomberg. Julia live from bloombergs World Headquarters in new york, im julia chatterley. Scarlet im scarlet fu. Joe im joe weisenthal. We are close to the close of trading. The question is, bloomberg daybreak australia. What you mess . Herlet white house economic can gary cohn says the government may be pushed back. Drilling far and wide. The Trump Administration proposes to open almost all u. S. Coastal waters to oil drilling, sparking environmental concerns. We get firsthand insight. A hiring cool down in the u. S. As the economy added fewer jobs than expected, what does it mean for President Trumps goal of getting growth to a sustainable 3 . Julia whatd you miss . More salt on the wound for taxpayers. States like new york, new jersey, and california have been forced to circumvent state and local tax deductions. Gary cohn told bloomberg tv this morning that the federal government will be collecting on that revenue, regardless of what the individual states try to do. I understand what they are trying to do for their cities and states, and taxpayers. We still have to collect revenue, so we are going to have to evaluate what decisions they make in terms of what it does for overall collections at the federal level and tax system. Julia with us is Bloomberg White house editor alex rain. My first question should be how are they going to do that . Can you take us through the options that these states are throwing around . One was paying property taxes early for 2018, that have already happened in a lot of places. A lot of people went to their local governments in december and figured out how they could get a check to them in 2017 to cover 2018 property taxes. I dont know how the irs gets that money back. They shift guidance after people started doing this. Advising against it. Also suggesting it would be ok. Irs willnow if the perceive it further, regulatory steps to get that money back, perhaps. Ultimately, that is not sustainable, even if the states get to keep the money and taxpayers managed to write that off. It is a onetime thing. Other things you hear about, such as state putting more of the payroll tax burden on the employer, can still write off deduction, setting up state funded charities so people can say i am donating to a charity that will serve state like functions. Are these things that will be challenged in court by the federal government . I think the federal government can either regulate against those things, the regulations forbidding, State Government backed charities. Or congress can pass another law using the reconciliation process that scores as a revenue producer. It would only need 51 votes in the senate. There are a couple of different approaches the government can do to prevent states from that kind of gaining of the tax code. You were talking about people prepaying taxes, my town the week before new years, everybody was waiting in line trying to figure out their assessments. Talk about the resources the irs has to do all of this, to push back against this and come up with guidance. They are just scrambling to give instructions of how to follow the 2018 taxes. How do they inform people of what will happen . Ts a problem across the federal government. Thet of agencies dont have staff they need to do a lot of basic functions. The Trump Administration has been famously slow making political appointments. Theyre not too many in the irs. There are people at treasuries will havent been appointed that are involved in tax policy. Staffing is a problem across the government. Think it will be a severe challenge for the irs, both to implement this law and try to crack down on loopholes. Julia what about last resort calling this unconstitutional. I have heard governor cuomo, the latest to use that term. Is there any wiggle room . That would have to be determined by the supreme court. Governor cuomo would have to bring a lawsuit against the government. He would have to probably pass a Standing Task that he has reason to sue over the law. Eightt put a lot of w behind that argument. Scarlet speaking of longshots and lawsuits, lets talk about the reaction by the Trump Administration to Michael Wolffs book fire in theory. The president s mo has been to rattle cages with legal letters, lawyers, threats, all of that. How often does he take the next step to take legal action against what he feels is wrong . He has a track record of threatening but then not suing. These ceaseanddesist letters, the statement attacking bannon over things he said in a book the white house claims is fiction, he may as well have just put a billboard on the front lawn of the white house with Michael Wolffs picture on it. The sales of the book are through the roof because of the tote houses actions to try stop publication, but also to go after people quoted in a book that they say is false. Julia the president and his team have gone to can david to talk infrastructure plans, how likely are we to see some things concrete on either of these things . How concrete are you looking for . Julia pretty concrete. Probably in the near future we are going to get a barebones proposal from the white house on infrastructure. Back last spring, they showed a thin piece of paper on the tax plan. I would expect Something Like that on infrastructure in the future. I wouldnt expect anything more substantial, maybe not even in the first quarter. Julia wet concrete then. Scarlet might be an outline form, thats what we got for tax. Up, we speak to kate macgregor. We talk about the white houses plans about offshore drilling. This is quite a change. This is bloomberg. Scarlet whatd you miss . The Trump Administration we are going to start with the stock of the hour. Abigail doolittle is here, the stock of the hour is cbs, one of the best performing in the s p 500. Are sayinge analysts the bold case for cvs could mean more than 61 upside from yesterday. This has largely to do with the aetna deal, that can bring the company back to the old trajectory. If we hopped into the bloomberg and take a look at what has happened over the last decade, we see a wild ride. We see out of 2008 and the financial crisis, a bull run hitting a high, then steadily down the last two years. A lot of competition, perhaps fears around whether amazon, but the growth has been slowing. It could bring the stock to a record high. If it doesnt go through, it could come down. Joe the analyst uses the word synergy. What is the mechanics of how the aetna deal would feed through to hire profitability, then return to rally . Abigail i think she is talking about how in 2021 the company could reshape the way Health Care Services are provided. It would take advantage of the cvs Retail Real Estate and incorporate that with the Aetna Services in terms of the urgent care type clinics. Putting it together in that way. The longterm picture. In the near term, it will be bringing on those numbers and growth from the members. Scarlet what is it look like when it closes . Abigail she seems to think it is definitely going to go through. They will upgrade the stock to an overweight and put a high price target of 70, then say it could climb to 121. Who knows, it seems like anything is possible. Julia whatd you miss . The Trump Administration made announcing ity, will open nearly all federal offshore waters to oil and gas drilling. It puts 90 of the u. S. Outer Continental Shelf on the block, including the atlantic pacific, and eastern gulf of mexico. Joining us is kate macgregor, secretary of the interior department. She is with us from washington. Thank you for being here. This is a hugely ambitious plan. We are talking about leasing on 25 out of 26 areas. What is realistic . Kate this is reality. We are looking to start at this Draft Program stage with a bold plan that meets his goal of creating Energy Dominance in the country. Joe what is the impact . Talk about this is going to open up new drilling, how much does this move the needle in terms of Domestic Production and by when . Kate right now, it signals we are planning to move it quite a bit. The program has 47 least sales scheduled. A departure from the last program under the obama administration, which had 11. 18 of domestic crude and 4 of natural gas comes from the offshore resources. They are critical to the nations. Domestic production this is a plan that signals we are going to open the area and have a strong dialogue about where we should be leasing. Joe in terms of 10 years out, how much more domestic oil would you expect it to create . Kate we dont have a predictions on the actual increased oil production, given that is based upon who would show up in the future. Productionl contributes one out of every five barrels in our country, that includes offshore. By opening leasing the two new areas, we can only have a positive impact on production. Producing. Is if we can open up more, we could definitely increase production. Scarlet federal law gives you eight main factors to consider in deciding what offshore waters to lease, then give the interior department discretion on what to give these different factors. What is the most important factor to the secretary at this moment . How much weight would he give to what local politicians, environmental groups, or residents say is not in their favor . That they dont want it. Kate i think the secretary is going to balance the different priorities when we look at what areas to lease. The secretary came into the department wanting to restore trust with the American People, make sure we strengthen our partnerships with the stakeholders and those we work with. As part of this process, we are going into a 60 day comment period. We will have dialogue with governors, local coastal communities, as well as congressional delegations. We are going to look to those comments to help dictate where we think they should be leasing. Julia one of the biggest prizes would be the eastern gulf of mexico. In proximity to florida, this could be a republican vote losing prospect or the people. Its more wonder that governor rick scott is up in arms. What is your message . Kate governor rick scott has reached out to the secretary and invited him to come down to florida to talk about this. We are currently working on the schedules to see how to accommodate him. The secretary has a great relationship with the governor. He is very respectful for the work Governor Scott has been doing. He wants to make sure his voice is heard. Julia what are the Big Oil Companies saying . Exploration, it is down 60 on 2015 levels. Prospects look bleak, they say they cant afford it. Were they saying about the plan . This a lot of folks think is the plan that will change the dial today. When it comes to offshore energy development, it takes 710 years to get from leasing to production. A lot of that is permitting, its environmental work that we do thoroughly, safety work, there is a lot of investment that has to come. These prospects are highly require quite a bit of capital. When you do a plan now, you are opening a prospects and economic developments for decades to come. Thats why it is so important right now. 2016, theget back to interior department justified the decision not to sell leases in the midand south atlantic, think it would barely make a dent in oil production. What has changed . Kate thats a hard one to predict. Our production stays strong, but these are Global Commodities needed elsewhere. We now have an ability to export resources and play them at a geopolitical stage. When it comes to what will happen in the future, it is hard to predict. Every study i have seen shows the American People will long be dependent on fossil energy long into the future. I use it to heat our homes, would like to turn my heat on and make sure i can get a car that can drive me to work. Scarlet we are going to need ths en kate we are going to need this energy. When it comes to the atlantic, it is very gas prone. There is increased interest in Gas Production on the east coast. Ultimately, it will be up for decide where to and when they would like to have interests in leasing. We are doing our part by saying everything is on the table, we have a strong dialogue with the goal to communities and stakeholders to see where the final plan will end up. Scarlet you talk about increase production, it wont be a meaningful amount for the east coast. Given the oil flowing from the deepwater gulf and onshore shale, what is the argument on why we need call coastal drilling on the east coast . Kate that is another point i am trying to make. This plan is not opening up the atlantic to drill tomorrow. We are planning 10 years from now. Isot of things we are seeing there are different decline rates in different areas of the marsalis and other areas being developed. Today, to start planning replacing different geological formations that are depleting. This is not a holistic approach, the department of interior has a lot of opportunity to put on the table for energy production. Julia kate macgregor, interior Department Deputy assistant secretary. Scarlet coming up, as President Trump is closer to finishing his first year in office, we look at his latest job approval. As his recent job tax victory hiked it up or has the drama this week brought it down . This is bloomberg. Scarlet im scarlet fu, whatd you miss . New year, new record high, robust economy at home, the job reports today did disappoint. Investors should brace or more disappointment. My chart is from mark cudmore, our lead agent market blogger. He says this is an economic surprise index, buyer the line goes, the more data topping estimates. It was higher at the end of last year, now that everyone is upgrading estimates for upcoming data, we are likely to see surprises going the other way. A warning to u. S. Equity, be prepared. Joe maybe the job report is a good example. It wasnt bad, the expectations have gotten so high, and it oscillates around zero because the expectations meet. Scarlet it has to come back. Ppi, retail sales, people are going to key off of. Julia in the meantime, the bulls are going to keep smiling. Why am looking at is the monthly return, the balance portfolios. Equities versus treasuries. If you look at what we are seeing, the s p 500 total return index and the u. S. Treasury total return. In the first three trading days of january, we have already returned more to the pro for real in the average month portfolio in the average month over the last five years. This little green bar is the performance on the week. We keep talking about the record highs in equities, but a lot of boats are floating. Joe its a good reminder that because of that bond sale in november 2016 election, it underperformed recent. A lot of peoples portfolios are working now. I want to look at the latest President Trump job approvals. Past whened it in the it has gone down. It is only fair when i point out it is improving. And ae to put improving lot of context. Disapproval. 15 his job approval is up to 40 . It had gotten as low as around 36 . Synnex may say he went on vacation, didnt do anything, others say maybe this is a tax cut. They study it more now that their taxes are not going to go up. This improving is a matter of fairness based on the data we collect. We should also point out when it is going up as well as downgraded julia it was a popular tax overhaul. Scarlet the market close is next. We are looking at record highs once again. We start and end with that, because it seems to be the goal. The dow up to 12 points on the day, the s p 500 gaining a third of 1 , the nasdaq up by 8 10 of 1 . From new york, this is bloomberg. Inwhatd you miss . Underwhelming december jobs report. Chatterley. Scarlet im scarlet fu. We want to welcome you for coverage every day from 4 00 to lets begin. With market minutes. Over 200 points on the dow, pretty impressive. Ofwe are looking at advances. 7 on the dow and nasdaq. Lets get you a couple of things that were noteworthy. Fortrading overweight morgan stanley. The purchase changes the narrative for cbs. We had mentioned it as our stock of the area. Revenue Bank ReportingSecurities Unit 22 in the final quarter. Theres even greater pressure from shareholders to rebound from a year earlier. Secondwn almost 10 , the downgrade in his many days. The downgrade from citigroup is now at a cell. Lets take a look at the Government Bond market, not a lot of action. Two year unchanged, 10year up a little bit, not surprising to see a little bit of selloff at the long end. We had a job report at 8 30. We take a quick look at the intraday two year. The first headline was a mess. Its like a little bit of a buy on the short end, but the market has erased everything, didnt care that much about the report and we see two year yield ending on the day flat, but much higher than we have been. Jonathan in dollardid see canada, beating estimates lower after the u. S. One as joe mention there as well. We have had the bank of Canada Governor focusing on the economy being near capacity now, but remains focused on the rate hikes. Banks both calling for a rate hike on january 17, our very own correspondent saying not happening. Nafta negotiations will continue later this month. Get too excited about dollar weakness, because we did see euro under pressure as well. Headline inflation raising 1. 4 percentage deceleration from levels in november. Energy prices accounting for much of the slowdown, but just another reminder to the European Central bank that their job is far from done here. I want to show you what is going on as far as risk reversals are concerned. Lets go