It is a stronger dollar story this morning. Yields much higher on treasuries by flavor basis points four basis points. Alix look at the two year yield. 1. 29 on the twoyear yield, up three basis points. Watching over in france, the yield up by thre two basis poin. Watching that selloff as we hear that fillon will stay in the race. David taking us to President Trumps speech to Congress Last night, we are joined by kevin cirilli. In new york, we have michael mckee. What were the highlights of the speech . What did you take away from it . Kevin it was a different tone from trump, but it did like policy specifics that traders on wall street were looking for. He did call for an increase to u. S. Notary spending. He also called for a 1 trillion infrastructure package plan to pass. He also vowed to cut funding from the Environmental Protection agency as well as the state department and foreign aid. Either way he did not take a position on the border tax or tax reform or a host of other issues, but he did look to project a unifying tone to this congress. David a tone that may be to include democrats as well as republicans. Is that the reaction from the members in the chamber last night . Kevin republicans viewed this as a political home run. He will have to work to attract more moderate senators like heidi heitkamp. Senator heitkamp was at the white house yesterday, participating in an executive order assigning. Theres no question that the white house feels they delivered on a positive speech last night. They actually canceled planned executive orders on the controversial temporary ban to seven predominantly muslim nations on immigration. They canceled that and delay that roll out until next week. David longrun tone and may be short on substance, but at the same time, how are the markets and business reacting . Is a positive enough with the tone itself . Michael it may be. If you strip out everything else, this was a laundry list speech running through Campaign Promises without any specifics about really anything. Itwas notable only because was donald trump and everybody was waiting for him to Say Something outrageous, which he did not do, and that made it notable. At the end of the speech, all the democrats got up and walked out en masse as republicans were giving applause. Even if he reached across the line, he didnt make a lot of progress last night. On the other hand, he didnt create a negative story. For the Trump Administration, right now thats a positive. On capitol hill, youve got to get something done. Talking about the promises you make isnt the same thing is proposing ways to get them a compass. David they walked out of the speech was over. Out duringtc not walk the speech. For things like tech chiffon, is it more likely to get done if he is want to reach across the aisle . It is hard to tell because he did not put forward any kind of specifics. Michael that the Structure Plan is something he talked about during the campaign. He offered no details. He offered no details as tax reform. They want to do it as a package, but what kind of rates are they going to put forward . Are they going to adopt the border tax . Memo that came through. The markets are left wondering and so are people on capitol hill. What are we going to be voting on as we go forward . He offered a little bit of specifics, looking for tax credits to help finance peoples purchase rather than some of the taxes that are imposed on people right now. Beyond that, not much you can hang your hat on if your trading this morning. David thank you so much, mike. Kevin, i suspect we will be coming back to this throughout the program. Jonathan we will have fungal height. Al we had several people come around the table and say that the hard facts need real details. Wake up this morning and futures are big. I know there was a big effect in the market right now. The market is patient and still patient. The market is more reacting to tone as you alluded to before them actual substance. Definitelyge of we need to flesh out Regulatory Reform in terms of doddfrank repeal. Pencilings plan is different than what the Trump Administration has discussed, so we need some consolidation there and we need better articulation of whether theres going to be import tax or not. Is this going to be a revenue neutral tax reform, which a lot of previous plans have been, or is there going to be a meaningful tax cut paid for by dynamic scoring . That is an issue that we think will end up playing out. They were very light on details. Traders and investors are left grasping still at the fact that trump is more optimistic, were going to get more progrowth Regulatory Reform. Even though there were not many specifics on infrastructure, at least you got the chilean doll number. Of elect to see how long they plan to spread it out. I love to see how long they plan to spread it out. He did specify it will be publicprivate partnerships, but that means a lot of the projects will have to be told based. There has to be some revenue behind it. There were more specifics and in some would say, but traders are waiting for the key information. Jonathan Mohamed Elerian was on the program yesterday and he said the three things important our content, timeline, and approach. How much longer to be have to wait . My perspective on the market side of it, i was looking toward health care, tax, and trade. On health care, there is still forward on aca reform. The longer they take on aca, the less time they have on tax reform. I put out a piece of an eye can see health care now getting pushback they were hoping to get it done in the First Quarter of the year. It more likely looks like early next year. Upgrading of america their end of your price target for s p to 2450 based on sentiment and technicals. Meaning of, do the markets care about the specifics shawn is looking for . Troy clearly markets care, but what they are basically alluding to is that we are going to take it on faith that we are going to get progrowth reforms that lead to better revenue and earnings. Because of sentiment and technicals, we will get further multiple expansion, which is still a question. We are fairly high multiples, which you know. They are discounted future growth, but in order to have better gains, that is the missing piece of the puzzle that enters the question of their forecast. Jonathan may be a case of price at narrative for the guys over at bank of america. Their target was 2300. We are north of that anyway. A lot of people are chasing their tails. Alix we have not seen equity capitulation. That is still to come if we do get what is delivered from President Trump. The day question of courses tax reform. He did not mention border adjustment tax, but he did reference present obamas huge deficit and how much a group. Is that a reference that he wants something revenue neutral . Shawn i think his team thinks its going to be revenue neutral whether its a big border tax or they use the House Republican plan. Their goal is to create something revenue neutral. I do not see the path forward for border adjustment tax. You do not see the votes in the senate. As are other colleague just mentioned, from an investor point of view, they expect to see some of these changes. You talk about the repeal and replace of aca and we expect to see a repeal and replace go forward. David the present has set among others that they are going to have to do obamacare before they get to tax reform. He was fairly exposed on the outline of Health Care Reform. It sounded like what speaker wright has been talking about and secretary price , which is a pretty radical reduced. O. Shawn you basically say i want better care and better provisions but to cost less money. You have a lot saying they do not like the current draft in the most of noxious part of them is the taxes. If you get rid of the taxes on day one and keep the benefits, it becomes really spence of overtime. Alix after yesterday, do you change what your bets are on . Troy the base question for us in the shortterm is our banks. Banks have had a very strong rally. They have liked here recently, but a lot of the forward upside to banks will now be dependent on policy implementation, not promises. Again, back to tax reform. Banks are one of the biggest beneficiaries of a Corporate Tax cut. How long will that be . Its a meaningful difference. Doddfrank reform the big banks have really ripped here, but had siblings plan for reforming the banks is different from whats coming out of the Trump Administration. On the margin, given how they have run up what they have, they could trim back this quarter. There are still a lot of good cash flows out there and we really do for a correction, a real pullback in banks after this meteor rise they have had. That is one specific thing around banks and Financial Services we wouldve liked to see more details. It is not look like we will see it in the next week or two. N, you are and shaw both sticking with us. We welcome our twitter viewers. Bloomberg daybreak is streaming live. Dont miss it. Fresh reaction from President Trumps speech to congress. Center chris coons will be joining us. Later, check out shares of best buy. Down nearly 10 despite Quarterly Earnings beating estimates and revenue missing as well. Not enough to entice investors is morning. This is bloomberg. Time for other stories making news at this hour. Emma americas spending more on their earnings that beast at the the estimates. S released a forecast that was higher than expected. Uber Ceo Travis Kalanick admits for the first time that you need leadership help. That comes after the ceo got into an argument with the driver over the copies fares. Some people dont like to take this possibility. They blame everything in their life on somebody else. Good luck. A he says he apologized to the driver. Last month, more than 200,000 people uninstall their accounts after the company was accused of undermining a taxi trike protesting President Trump refugee band. Former president obama and his wife michelle have signed book deals. No details have been exposed, but the deal is in the tens of millions of dollars. They plan on dealing a portion of it to charity. Im emma chandra. This is bloomberg. Alix yesterday was bill dudley for the wind, talking about a potential rate hike increase in march. Take a look at the bloomberg here. Its one of my favorite functions. The green line is where we are right now. The yellow line is where we were just in the beginning of september. A bigly have we seen rewriting in the front end, but we have also seen a berating. And shawn are still with us. I thought was present trump leaving the market, but the fed it wasl i thought President Trump, but the fed is still leading the market. Troy is the Economic Data slows down, we doubt that. Its a very different outcome for Net Interest Margin going forward. Furthermore, a lot of the rally in anything Financial Services related has to deal with how much the yield curve steepens. If we get softer loan growth, it will be much more challenging. Finances is one of the sectors much more dependent on the fed. The Broader Market is still hyper dependent on monetary policy. That will never go away. Alix youre looking at one year the implied policy rate to be over one and a quarter percent 1. 25 . Can the fed stay in the way of fiscal stimulus . Where does this fall in your outlook of tax reform and obamacare . Shawn trump is talking about this 1 trillion infraStructure Plan. Those numbers i think are just way optimistic right now. In 2009 withs that the stimulus plan and recovery act that you had the dow at 10,000 and unemployment near 10 . He had a 900 billion total plan. 100 billion of that was Infrastructure Spending. That chilean dollar number is a little too high and will be tailored back of it. That trillion dollar number is a low too high and will be tailored back o a bit. There will be said members replaced. You have to think about the macro potential regulator. Who the we dont know fed chairs going to be next year. Given the conversation we had at the start of the program, its want to take so long to do everything else. Is the Federal Reserve really at the forefront of their minds right now . Shawn im sure it will way into the fed, but the fed does not talk politics when ive asked them about this. They always go around the issue. Alixjonathan does the of ministration think about the complexion of the fed . So, but fornk President Trump, he probably has a lot of friends in the markets he can talk to about this and they are probably putting forward names. Less so on this up in court and may be relying more on the senate and folks that they want to see as justices going forward. David this is not janet yellen. This is president deadly from new york. Withhing that baffles me this is that there is no new surprising piece of Economic Data. I do not see the day that they are dependent upon. They went from 50 to 80 likelihood. As President Trump is thinking of replacing some of the fed on a question that we should be more will dependent and less capacious . Troy the only new data is softer told growth. All one can think of is again that they have some type of insight, which they clearly dont, its a future government policy. We are all debating future government policy. Tax reform goes through, that should boost growth, but until now, theyre not really incorporated that into their forecast. Perhaps they are starting to do that and coming back with the feedback loop that leads to higher inflation. Jonathan i wonder if that is what is actually happening. Some investors sit around the table and say it should move. All this happened overnight. We have a key for member fed member saying we are ready for a move. David we should of been moving all long. Is that what is going on here . D. C. for the folks in thinking about this, they are only thinking through their own policy window right now. I do not think they are worrying about what the fed is when to do. And congress, they are a lot smarter on these issues and are worried about it. As a talk to members on staff, they are focused on a couple of things one Health Care Reform and then tax reform. Outside of that, they cannot worry about anything else. Troy there is no clear reason why those odds just went up and markets will be left scratching their heads. Back to your point, is it a rulesbased debt or more capricious . The more capricious, the more unstable markets are. Alix if we get a march hike, do you have to rebalance what youre doing . Troy one hike in march will not make or break us. Certain streams will go up and some will go down. There quite a bit of floating exposure right now. Anyone with any Financial Service exposure is going to be reading fro for more hikes. Going from 50 to 80 is not quite a shift our dynamics. Toathan troy struggling understand the reaction function of the curve. Troy im trying. [laughter] david always good to have you. Shall is going to be staying with us. We get news from both sides of the aisle on President Trumps address to congress. To talkons is here about why he agrees about bring new manufacturing jobs back. Later, the only former fortune 500 ceo in congress. David purdue on why he is against the border adjustment tax. Live from new york, this is bloomberg. I believe strongly in free trade, but it also has to be fair trade. Im not going to let america and its Great Companies and workers be taken advantage of us any longer. ,hey have taken advantage of us of our country no longer. David it was a big night in washington last night as President Trump addressed a joint session of congress for the very first time. Ive seen a lot of these state of the union addresses, and i do not member one in which the markets were this focused on what the president had to say in the chamber. Wilbur ross said his priority will be renegotiating nafta and leveling the Playing Field with china, which he calls the most protectionist major nation. He says the u. S. Will pursue tougher enforcement of trade rules with china. Take a listen. Much tougher enforcement. Theres not a lot of point making trade deals if you dont enforce. China the most . Everybody. Specifically with china, what are you looking to do . In force. Us. D troy is still with abouts this thought problems with trade or maybe even a trade war. What about the problems with investing . Troy theres a little of good trump and that trump. Bashing and no focus on trade wars, but there was focus on Corporate Tax cuts, but the same time there was a warning to other countries that we need fair trade and not free trade. He focused more on the progrowth side again and Corporate Tax reform than on the negative side for trade wars and protectionism. Jonathan the heart of this. Im thesident president of the United States another president of the whole world. There has been one big winner in the last decade and that is china. Troy and germany. Jonathan much less protectionist than china, but i really grapple with that at the moment. How do you go to the chinese and say i we do not like we do not like the trade barriers needed to lower them . Alix its about the other ways that there are obstructions to imports from the u. S. Do is you back down or we are going to put tariffs on you. Do. Than and then they coming up, democratic senator chris coons joins us from washington on what stood out from President