Transcripts For BLOOMBERG Bloomberg Markets Americas 2017050

Italy a record for the s p 500, yes. The nasdaq has been far and away the best performer of the three average. If you follow our market live blogs online, there was Tech Leadership earlier in the day. Tech has been leading the rally we have seen. Not just tech stocks, but other types of stocks as well. The dow has been the laggard here. Kind of interesting action that we have seen here, after the nasdaq in the latest leg we have seen, i was curious a which stocks have seen the most to it. Im talking about the leg and april 16. Mov that looks that historical movers. Not surprising, apple, which is at a record, microsoft, amazon, at a record. Some of the familiar names, and then some other priceline, comcast, these are those that have seen the biggest increase, and not only have contributed game,st to the nasdaqs but broadly in the market, another manifestation of this technology is a lack of concern in other areas. We have talked so much about the drop in the vix. One thing we havent looked back look that is Economic Uncertainty in the u. S. That remains at relatively elevated levels. Showing very little concern about risk in the u. S. Stock market right now. Then you have this Economic Policy uncertainty, which is still relatively high. It is confusing what to make of that. Is there more risk aversion and the vix would let on . If you look at the vix today, you would see it is up a little bit, but still below 10. You have the japanese yen falling below the dollar today. We have selling in the treasury market, selling and gold. These show a lack of concern on the part of investors. Scarlet thank you for the set up. We are seeing the 10 year treasury yield rise. Chief Investment Officer of global credit sees yield climbing even further saying we could see a climb 3 . Could things that i think stop that would be more evidence that the fiscal stimulus could get delayed. There is inability of the senate to put forth a package on health care that could get through the gop, and then obviously north korea, i think if tensions were to heat up again, then we could see yields come back down. I think over the world, the remaining high trend remains. Thank you. We also see high rates as the market catches up to pace he joins us now. You think that rates will rise by the fiveyear point . Jeffrey i am a little less concerned than mark was. I think it is hard to get rates that high in 2017. When you still have global rates run end of yield curve, significantly ahead of negative. Of that may change, but it is hard to see a nature turnaround in the rest of the Global Environment this year to push rates up to 3 . So, sympathetic to the higher rates of you, but still a constraint on how high they can go. Julia defined eventually. When you look at the u. S. Perspective, our economy recovered better. We are talking about normalization, pulling back on reinvestment. When we look across the world, recovery, butar the economy, inflation data, and how willing central eggs are willing to come back from to pull back from accommodation. Late from the ecb, maybe 2017, and you cannot get u. S. Rates that disconnected from the rest of the world. That is what i meant by eventually. Julia of course we know, they are going to remain accommodative for a long time. What did they learn from the fed s example . Therey everybody remembers taper tantrum. They want to avoid that shift in accommodation. That was the lesson. However, isight, particularly tricky. You may still see difficulties from financial markets, the earlier segments of what everyone is talking about today, makes this exceptionally difficult. It exceptionally difficult for central bankers, because there is not a lot of margin for error. Julia right. A lot has been priced in. Brian votto who writes for us, the odds of a red hike in june, and ive in september creeping higher as well. Do you think this is a result of staying consistently on message . Jeffrey without a doubt. The big change was the bed feds communication around the data. Rather than what we saw in 2016, the slowdown report got them concerned, they were explicit in the statement to a knowledge that the slowdown was not going to take them off message, and that really helped the market. The markets probabilities around the june and september and 14 dub more hikes this year, and for twop more hikes this year, could come up dramatically. Just saying that u. S. Rates are angered by the ecb and the bank of japan, you are saying 3 in 2018, if that is when they bank of japan and the Central European banks do start to talk about replacement policy here. What does that mean for credit . Credit is already tight, can they get it tighter. Very tight. So, the flip side of the vix making 20 year low levels is spreads are reflective of that environment. That doesnt necessarily mean that spreads are going to go wider, you need a catalyst for that. Not it does highlight necessarily complacency, but we are pricing in the best a scenario. Unfortunately it means there is a skew to price returns. A modest amount of spread widening will a race will erase the carried income. Theyve bumped the door on those small moves, and liquidity has been its best for many years. And we have seen that credit markets tend to grind tighter, and when there is uncertainty, partly because of the il liquidity, you see the gaps widen. There is vulnerability there. We are emphasizing and up in quality stance and taking that it in equities, where if you are going to get the upside, youre going to realize some greater upside in your portfolio. Scarlet one thing we have noticed is there are a lot of Bluechip Companies issuing debt. In your recent survey of investors, that are looking at where the opportunities are, one aing you noted is, there is bias in fixed income investment. Does that extend to investment credit as well . Jeffrey it does. And the bias we talk about that we see people doing in their equity portfolios, you also see it in fixed income portfolios. It is even greater in fixed income folios, because the components tend to be underrepresented, both in term of investment portfolios, but also with regards to accessibility. Most of the markets are dollar denominated debt markets. You have markets that are small inside, but they are also underrepresented in investor portfolios. The final point is that is where the yield is. When you look at developed markets, you look at negative rates and white low rates ecb and boj. From ecb andrates boj. 10rlet only about three in critically noted that if i. E. Thet rates rise, relationship between falling price and rising yield, which terrifies me jeffrey it is good that we often in the media will read when when bond rices Interest Rates rise, bond prices fall. This highlights its a confusing idea, and it is confusing ause prospective returns that is if i am taking a new dollar of investment, higher yields are a good thing. But my existing fixed rate investments are harmed by that. That is part of the confusion or conflation between is it a new dollar or existing dollar, might be reflected in the assented. You, jeffo chat with rosenberg at blackrock. News check on first world with Mark Crumpton. Mark the United States says it tipped off france with regards to russian hacking. Mike rogers told the senate committee, the nsa became aware of the activity and total officials about it. Data from a manual macrons smpaign a manual Macron Campaign was leaked online. Why house Officials Say military advisers are urging President Trump to send 5000 additional butps in afghanistan, taliban militants have been gaining ground. Mey apparently gave mistaken testimony about Hillary Clintons emails. Sources tell the Associated Press there were not that many emails involved. The source also said no emails wered as classified forwarded. Ryan think he says he values ours whether the federal government is using the right way to preserve tribal lands. Ke is touring utah, part of a project ordered by trump. Environmental groups have about to File Lawsuits if the promises. Rescinds the global news 24 hours a day, powered by more than 2600 journalists and analysts across more than 120 countries. Im Mark Crumpton. This is bloomberg. Scarlet thank you. Koreasin south president ial race, what does it mean for the Trump Administration . From new york, this is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Lets turn now to the president ial election in south korea. The jury is declared in the race , pledging to unify the nation after nine years of conservative rule. Joining us now is our correspondent, chief economist Michael Mcdonough appeared michael, we know that man is a softer when it comes to north korea been his predecessor. The question is can he bring north korea to the negotiating table . Michael i am surprised to see how little attention the election is getting. On north korea seems a very different from the Trump Administrations view. , it isearned in the u. S. Easy to say things on the campaign trail, following through is different. Know enough to guess whether they will be willing to act unilaterally . Mark michael again, i think that is is your said than done. I do not know how seriously they would take this. The regime in north korea hasnt to give a a lot of respected missy. I dont see how they conditions could be right to have that kind to give a lot of respect to diplomacy. Can focus on is Economic Policy. He has been critical of south koreas economy. Reform andey need to try to create more competition in south korea, but it is interesting. Ink where things matter mentioned the relationship with the u. S. , but also but the relationship with china. There is a Missile System deployed in south korea, china has been passively against it, lets call it. It could be interesting to see what happens with that. What about fiscal stimulus . They have the weakest growth since 2012, i think. Michael yes. And i think that is what markets have been responding to. 9think he was going to add million u. S. That would account for hitting record high after record high. Mcdonough. To michael still ahead, disney out with. Arnings movie business is a beauty, but its networks are more of a beast. We will take a look at numbers next. This is bloomberg. Is bloomberg markets. We have disney set to release earnings, the Company Making 100lines when it cut staffers including on air talent. It is dealing with rising programming cost, and in a roadie base. Base. Eroding you can see total revenue in white and Media Networks in orange. Networks are critical with than 40 tting more of sales from networks. They have lost the scribers for three straight years. As much as aport 15 increase stemming from sports rights. Is typically part of your cable bundle, and it generates much revenue from subscriptions. People are quick to cut the cord. Lost 630,000 subscribers in the First Quarter. Disney may be able to fight off some of these losses by being part of new streaming services. Beauty and the beast is a current Global Box Office leader and will be part of the First Quarter Earnings Report. They are expected to lead at the box office this summer. Piratesineup includes , and caribbean, cars others. Opens ind of avatar orlando. They expect earnings declined by 64 . Analysts do predict a return to positive revenue growth. Say a modest growth would be a anomaly. Notes, bobgramming iger will be joining post the Earnings Report. Dont miss that at the 5 00 eastern hour. At regional a look innovators from fortune 500 companies to buyer tax tech startups. Some chattertill that apple may be a buyer for disney. Citigroup analyst, apple certainly has the cash load for, right . Of their cash is stuck overseas, however. If they do manage to get it back even with a 10 tax, this is what they could be able to i. To buy this is an interesting question. The politics, one of the few things that will get bipartisan support, both Hillary Clinton and donald trump have been talking about giving these companies an opportunity to bring cash back. Bureau of Economic Research looking at the acquisitions we have had over 12,023, 80 years, of the time of buyouts decrease shareholder value. Work withys latest marble as well im not saying it doesnt work, but the question of the likes of tesla, how do you build especially with apple. It doesnt have a track record of making gigantic purchases. Beatse a purchase of headphones, and that was the biggest purchase. Yes. And hes very honest about that as well. On the politics side, bush tried this. Everyone wants repatriated cash. I think they also bought back a lot of their own shares as well. Still ahead, we have the commodities close here to we will take a look at why oil is closing higher today. Closing lower today. This is bloomberg. From bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. I am julia chatterley and the Commodity Markets are closing in new york. We begin with oil slipping today as libyan production climb to the highest in two years. Opec ministers will meet later this month to decide on extending production cuts. Meantime, u. S. Crude stockpiles are forecast to fall by 2 million barrels. We will get those numbers tomorrow critical for the markets, of course. Natural gas bounced higher today after yesterdays losses. Storage gains could be below average this season. Commodity whether groups also forecasting that below normal for cap temperatures in the northeast will return to seasonal next week. Haslet fu President Trump promised to revive the struggling coal industry in the u. S. And bring back thousands of lost jobs. Is this achievable question mark joining us, Jason Bordoff is this achievable . Bordoff, onis jason the staff of the National Security council. Professor, thanks for joining us. Blamehouse likes to obamas policies as the reason why coal has lost ground. Quantify for us what has caused the decline how much is driven by regulation versus competition from natural gas. Bordoff we want to know since 2011 what has caused one of the steepest market collapses we have ever seen. Part of the story was not that surprising, but we were able to quantify and put numbers on it. The biggest a mystic driver was cheap natural gas. Half the decline of coal could be cut attribute it to that. To the nobles. 0 renewables. Julia we are showing the chart. You are saying out the decline in market share, the obama regulations the obama admits the trump talked about the Obama Administration regulations, it is only natural responsible for 5 prof. Bordoff . Prof. Bordoff we looked at different methods to quantify how big an impact, but even if you assume every coal retirement was due to these regulations, these were old, inefficient coal plants. Julia so the big problem here is gas. Scarlet well, from coals standpoint, the big problem is the shale gas revolution. The thing that has not gotten as much attention was how important the collapse of the chinese coal market was to u. S. Coal firms because they make a disproportionate part of their revenue. China experienced this huge boom over a decade building with cities and cement new cities of a billion people or more. Coal prices we saw collapse, that brought down the price of coal and reduce the ability to export. Scarlet they have recovered a little bit they rallied late last year and earlier last year this year. Is that sustainable, or is it dependent on what kind of policies china takes . Prof. Bordoff part of it is weatherrelated and receive issues in australia with cyclones and other things that temporarily caused the price to spy, and it probably wont stay there. The other question is whether china sticks with policies. They backtracked as it had an impact on import dependence. Julia when President Trump is making thomas is to coal miners that he will reverse regulation, improve the situation, our way saying actually, unless he is providing huge subsidies to this industry, he is not going to be able to do that . Able bordoff if you are to on at unravel, rollback all the Obama Administration regulations, the best thing you can say is not that cold is coming back, the jobs are coming back you might be able to stem the bleeding, stop the decline, but that is only if Natural Gas Prices rise. Julia to what level . Scarlet prof. Bordoff if they stay where they are now in the three dollars range, coal and continued to decline when we have regulations in place or not. Julia what is the right answer for trump here . Prof. Bordoff the right answer for policy makers on both sides of the ill to recognize and be honest with people that structural market factors have driven a decline in the coal industry, which is have enormous consequences and coal that fores, generations have, at the expense of their own health, produced the energy that is powered the u. S. Economy. We need to develop serious policies. It is not easy. Im not saying it is. Julia a tough one. Thanks to Jason Bordoff, professor Abdullah University and founding director of Columbia Center on Global Energy policy. Scarlet lets check your headlines with Mark Crumpton. Mark scarlet, thank you. Senate democrats are asking Republican Leaders to drop their efforts to repeal former president obamas Tech Leadership<\/a> earlier in the day. Tech has been leading the rally we have seen. Not just tech stocks, but other types of stocks as well. The dow has been the laggard here. Kind of interesting action that we have seen here, after the nasdaq in the latest leg we have seen, i was curious a which stocks have seen the most to it. Im talking about the leg and april 16. Mov that looks that historical movers. Not surprising, apple, which is at a record, microsoft, amazon, at a record. Some of the familiar names, and then some other priceline, comcast, these are those that have seen the biggest increase, and not only have contributed game,st to the nasdaqs but broadly in the market, another manifestation of this technology is a lack of concern in other areas. We have talked so much about the drop in the vix. One thing we havent looked back look that is Economic Uncertainty<\/a> in the u. S. That remains at relatively elevated levels. Showing very little concern about risk in the u. S. Stock market right now. Then you have this Economic Policy<\/a> uncertainty, which is still relatively high. It is confusing what to make of that. Is there more risk aversion and the vix would let on . If you look at the vix today, you would see it is up a little bit, but still below 10. You have the japanese yen falling below the dollar today. We have selling in the treasury market, selling and gold. These show a lack of concern on the part of investors. Scarlet thank you for the set up. We are seeing the 10 year treasury yield rise. Chief Investment Officer<\/a> of global credit sees yield climbing even further saying we could see a climb 3 . Could things that i think stop that would be more evidence that the fiscal stimulus could get delayed. There is inability of the senate to put forth a package on health care that could get through the gop, and then obviously north korea, i think if tensions were to heat up again, then we could see yields come back down. I think over the world, the remaining high trend remains. Thank you. We also see high rates as the market catches up to pace he joins us now. You think that rates will rise by the fiveyear point . Jeffrey i am a little less concerned than mark was. I think it is hard to get rates that high in 2017. When you still have global rates run end of yield curve, significantly ahead of negative. Of that may change, but it is hard to see a nature turnaround in the rest of the Global Environment<\/a> this year to push rates up to 3 . So, sympathetic to the higher rates of you, but still a constraint on how high they can go. Julia defined eventually. When you look at the u. S. Perspective, our economy recovered better. We are talking about normalization, pulling back on reinvestment. When we look across the world, recovery, butar the economy, inflation data, and how willing central eggs are willing to come back from to pull back from accommodation. Late from the ecb, maybe 2017, and you cannot get u. S. Rates that disconnected from the rest of the world. That is what i meant by eventually. Julia of course we know, they are going to remain accommodative for a long time. What did they learn from the fed s example . Therey everybody remembers taper tantrum. They want to avoid that shift in accommodation. That was the lesson. However, isight, particularly tricky. You may still see difficulties from financial markets, the earlier segments of what everyone is talking about today, makes this exceptionally difficult. It exceptionally difficult for central bankers, because there is not a lot of margin for error. Julia right. A lot has been priced in. Brian votto who writes for us, the odds of a red hike in june, and ive in september creeping higher as well. Do you think this is a result of staying consistently on message . Jeffrey without a doubt. The big change was the bed feds communication around the data. Rather than what we saw in 2016, the slowdown report got them concerned, they were explicit in the statement to a knowledge that the slowdown was not going to take them off message, and that really helped the market. The markets probabilities around the june and september and 14 dub more hikes this year, and for twop more hikes this year, could come up dramatically. Just saying that u. S. Rates are angered by the ecb and the bank of japan, you are saying 3 in 2018, if that is when they bank of japan and the Central European<\/a> banks do start to talk about replacement policy here. What does that mean for credit . Credit is already tight, can they get it tighter. Very tight. So, the flip side of the vix making 20 year low levels is spreads are reflective of that environment. That doesnt necessarily mean that spreads are going to go wider, you need a catalyst for that. Not it does highlight necessarily complacency, but we are pricing in the best a scenario. Unfortunately it means there is a skew to price returns. A modest amount of spread widening will a race will erase the carried income. Theyve bumped the door on those small moves, and liquidity has been its best for many years. And we have seen that credit markets tend to grind tighter, and when there is uncertainty, partly because of the il liquidity, you see the gaps widen. There is vulnerability there. We are emphasizing and up in quality stance and taking that it in equities, where if you are going to get the upside, youre going to realize some greater upside in your portfolio. Scarlet one thing we have noticed is there are a lot of Bluechip Companies<\/a> issuing debt. In your recent survey of investors, that are looking at where the opportunities are, one aing you noted is, there is bias in fixed income investment. Does that extend to investment credit as well . Jeffrey it does. And the bias we talk about that we see people doing in their equity portfolios, you also see it in fixed income portfolios. It is even greater in fixed income folios, because the components tend to be underrepresented, both in term of investment portfolios, but also with regards to accessibility. Most of the markets are dollar denominated debt markets. You have markets that are small inside, but they are also underrepresented in investor portfolios. The final point is that is where the yield is. When you look at developed markets, you look at negative rates and white low rates ecb and boj. From ecb andrates boj. 10rlet only about three in critically noted that if i. E. Thet rates rise, relationship between falling price and rising yield, which terrifies me jeffrey it is good that we often in the media will read when when bond rices Interest Rates<\/a> rise, bond prices fall. This highlights its a confusing idea, and it is confusing ause prospective returns that is if i am taking a new dollar of investment, higher yields are a good thing. But my existing fixed rate investments are harmed by that. That is part of the confusion or conflation between is it a new dollar or existing dollar, might be reflected in the assented. You, jeffo chat with rosenberg at blackrock. News check on first world with Mark Crumpton<\/a>. Mark the United States<\/a> says it tipped off france with regards to russian hacking. Mike rogers told the senate committee, the nsa became aware of the activity and total officials about it. Data from a manual macrons smpaign a manual Macron Campaign<\/a> was leaked online. Why house Officials Say<\/a> military advisers are urging President Trump<\/a> to send 5000 additional butps in afghanistan, taliban militants have been gaining ground. Mey apparently gave mistaken testimony about Hillary Clintons<\/a> emails. Sources tell the Associated Press<\/a> there were not that many emails involved. The source also said no emails wered as classified forwarded. Ryan think he says he values ours whether the federal government is using the right way to preserve tribal lands. Ke is touring utah, part of a project ordered by trump. Environmental groups have about to File Lawsuits<\/a> if the promises. Rescinds the global news 24 hours a day, powered by more than 2600 journalists and analysts across more than 120 countries. Im Mark Crumpton<\/a>. This is bloomberg. Scarlet thank you. Koreasin south president ial race, what does it mean for the Trump Administration<\/a> . From new york, this is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Lets turn now to the president ial election in south korea. The jury is declared in the race , pledging to unify the nation after nine years of conservative rule. Joining us now is our correspondent, chief economist Michael Mcdonough<\/a> appeared michael, we know that man is a softer when it comes to north korea been his predecessor. The question is can he bring north korea to the negotiating table . Michael i am surprised to see how little attention the election is getting. On north korea seems a very different from the Trump Administration<\/a>s view. , it isearned in the u. S. Easy to say things on the campaign trail, following through is different. Know enough to guess whether they will be willing to act unilaterally . Mark michael again, i think that is is your said than done. I do not know how seriously they would take this. The regime in north korea hasnt to give a a lot of respected missy. I dont see how they conditions could be right to have that kind to give a lot of respect to diplomacy. Can focus on is Economic Policy<\/a>. He has been critical of south koreas economy. Reform andey need to try to create more competition in south korea, but it is interesting. Ink where things matter mentioned the relationship with the u. S. , but also but the relationship with china. There is a Missile System<\/a> deployed in south korea, china has been passively against it, lets call it. It could be interesting to see what happens with that. What about fiscal stimulus . They have the weakest growth since 2012, i think. Michael yes. And i think that is what markets have been responding to. 9think he was going to add million u. S. That would account for hitting record high after record high. Mcdonough. To michael still ahead, disney out with. Arnings movie business is a beauty, but its networks are more of a beast. We will take a look at numbers next. This is bloomberg. Is bloomberg markets. We have disney set to release earnings, the Company Making<\/a> 100lines when it cut staffers including on air talent. It is dealing with rising programming cost, and in a roadie base. Base. Eroding you can see total revenue in white and Media Networks<\/a> in orange. Networks are critical with than 40 tting more of sales from networks. They have lost the scribers for three straight years. As much as aport 15 increase stemming from sports rights. Is typically part of your cable bundle, and it generates much revenue from subscriptions. People are quick to cut the cord. Lost 630,000 subscribers in the First Quarter<\/a>. Disney may be able to fight off some of these losses by being part of new streaming services. Beauty and the beast is a current Global Box Office<\/a> leader and will be part of the First Quarter<\/a> Earnings Report<\/a>. They are expected to lead at the box office this summer. Piratesineup includes , and caribbean, cars others. Opens ind of avatar orlando. They expect earnings declined by 64 . Analysts do predict a return to positive revenue growth. Say a modest growth would be a anomaly. Notes, bobgramming iger will be joining post the Earnings Report<\/a>. Dont miss that at the 5 00 eastern hour. At regional a look innovators from fortune 500 companies to buyer tax tech startups. Some chattertill that apple may be a buyer for disney. Citigroup analyst, apple certainly has the cash load for, right . Of their cash is stuck overseas, however. If they do manage to get it back even with a 10 tax, this is what they could be able to i. To buy this is an interesting question. The politics, one of the few things that will get bipartisan support, both Hillary Clinton<\/a> and donald trump have been talking about giving these companies an opportunity to bring cash back. Bureau of Economic Research<\/a> looking at the acquisitions we have had over 12,023, 80 years, of the time of buyouts decrease shareholder value. Work withys latest marble as well im not saying it doesnt work, but the question of the likes of tesla, how do you build especially with apple. It doesnt have a track record of making gigantic purchases. Beatse a purchase of headphones, and that was the biggest purchase. Yes. And hes very honest about that as well. On the politics side, bush tried this. Everyone wants repatriated cash. I think they also bought back a lot of their own shares as well. Still ahead, we have the commodities close here to we will take a look at why oil is closing higher today. Closing lower today. This is bloomberg. From bloomberg World Headquarters<\/a> in midtown manhattan, this is bloomberg markets. I am julia chatterley and the Commodity Markets<\/a> are closing in new york. We begin with oil slipping today as libyan production climb to the highest in two years. Opec ministers will meet later this month to decide on extending production cuts. Meantime, u. S. Crude stockpiles are forecast to fall by 2 million barrels. We will get those numbers tomorrow critical for the markets, of course. Natural gas bounced higher today after yesterdays losses. Storage gains could be below average this season. Commodity whether groups also forecasting that below normal for cap temperatures in the northeast will return to seasonal next week. Haslet fu President Trump<\/a> promised to revive the struggling coal industry in the u. S. And bring back thousands of lost jobs. Is this achievable question mark joining us, Jason Bordoff<\/a> is this achievable . Bordoff, onis jason the staff of the National Security<\/a> council. Professor, thanks for joining us. Blamehouse likes to obamas policies as the reason why coal has lost ground. Quantify for us what has caused the decline how much is driven by regulation versus competition from natural gas. Bordoff we want to know since 2011 what has caused one of the steepest market collapses we have ever seen. Part of the story was not that surprising, but we were able to quantify and put numbers on it. The biggest a mystic driver was cheap natural gas. Half the decline of coal could be cut attribute it to that. To the nobles. 0 renewables. Julia we are showing the chart. You are saying out the decline in market share, the obama regulations the obama admits the trump talked about the Obama Administration<\/a> regulations, it is only natural responsible for 5 prof. Bordoff . Prof. Bordoff we looked at different methods to quantify how big an impact, but even if you assume every coal retirement was due to these regulations, these were old, inefficient coal plants. Julia so the big problem here is gas. Scarlet well, from coals standpoint, the big problem is the shale gas revolution. The thing that has not gotten as much attention was how important the collapse of the chinese coal market was to u. S. Coal firms because they make a disproportionate part of their revenue. China experienced this huge boom over a decade building with cities and cement new cities of a billion people or more. Coal prices we saw collapse, that brought down the price of coal and reduce the ability to export. Scarlet they have recovered a little bit they rallied late last year and earlier last year this year. Is that sustainable, or is it dependent on what kind of policies china takes . Prof. Bordoff part of it is weatherrelated and receive issues in australia with cyclones and other things that temporarily caused the price to spy, and it probably wont stay there. The other question is whether china sticks with policies. They backtracked as it had an impact on import dependence. Julia when President Trump<\/a> is making thomas is to coal miners that he will reverse regulation, improve the situation, our way saying actually, unless he is providing huge subsidies to this industry, he is not going to be able to do that . Able bordoff if you are to on at unravel, rollback all the Obama Administration<\/a> regulations, the best thing you can say is not that cold is coming back, the jobs are coming back you might be able to stem the bleeding, stop the decline, but that is only if Natural Gas Prices<\/a> rise. Julia to what level . Scarlet prof. Bordoff if they stay where they are now in the three dollars range, coal and continued to decline when we have regulations in place or not. Julia what is the right answer for trump here . Prof. Bordoff the right answer for policy makers on both sides of the ill to recognize and be honest with people that structural market factors have driven a decline in the coal industry, which is have enormous consequences and coal that fores, generations have, at the expense of their own health, produced the energy that is powered the u. S. Economy. We need to develop serious policies. It is not easy. Im not saying it is. Julia a tough one. Thanks to Jason Bordoff<\/a>, professor Abdullah University<\/a> and founding director of Columbia Center<\/a> on Global Energy<\/a> policy. Scarlet lets check your headlines with Mark Crumpton<\/a>. Mark scarlet, thank you. Senate democrats are asking Republican Leaders<\/a> to drop their efforts to repeal former president obamas Health Care Law<\/a>, and if they do they are improveto help them the Health System<\/a> for all americans. The plea comes to in a letter signed by all 46 Democratic Senators<\/a> and the two independents who usually caucus with them. They say they would reduce costs, stabilize market, and help Small Businesses<\/a> provide health coverage. Health insurers are asking for big increase in the cost of their obamacare plans next year in maryland, virginia, and connecticut, premiums will rise more than 20 on average. One reason, instability in the laws coverage markets that have been compounded by the Trump Administration<\/a>. Leader Jeremy Corbyn<\/a> has officially launched his parties general election campaign. He said he wants to take the nations wealth back from whom he calls ripoff bosses and greedy bankers. Jeremy corbyn. Corbyn ction jeremy the selection is not brexit itself that has been settled, but the question is what sort of brexit we want and what sort of country people want britain to be after that. Mark in the meantime, british Prime Minister<\/a> Theresa May Campaign<\/a> for reelection in york, saying she would be able to get the best brexit deal for the country. Rescuers in istanbul are consecutive life sentences for a man that attacked a nightclub during new years eve celebrations according to the staterun news agency. The attack killed 39 people and wounded 79 others. Islamic state claimed responsibility. Prosecutors want separate life sentences for each of the victims plus one more on charges of attempted to overturn turkeys constitutional order. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Ism Mark Crumpton<\/a> this bloomberg. Julia thanks, mark. A Democratic Senators<\/a> are asking to investigate carl icahn for his role in advising trump. This is bloomberg. Julia this is bloomberg markets. I am julia chatterley. Scarlet im scarlet fu. Julie hymano focusing on the congressional Consumer Discretionary<\/a> sector sector. Julie leisure is up. 5 , enough to put it at a new record. Among the records we have been talking about is the record for the xl why. Winner ins the big the lodging industry after the Company Raised<\/a> its forecast for revenue her available for the full year based on the Strong Quarter<\/a> it had last quarter. Those shares are also record. Priceline is also expected to report after the close, as is trip advisor. Those shares mixed in todays session. We see strength between the retailers and manufacturers with an Consumer Discretionary<\/a>. We have under armour rising. The company said it was thegning cap fault as Strategic Advisor<\/a> to ceo kevin plank. Jeff is saying that was the right move for the company to make today. Shares have been gaining strength, now up 3. 5 . Target rising as well. Cleveland Research Says<\/a> First Quarter<\/a> sales will likely be possible, even though the analyst says he is still cautious on the stock. We see strength in the retailers, macys, target, and manufacturers also on that list. We have seen strength in Consumer Discretionary<\/a>. We have been talking about this stocksleg upwards in going back to april 13. Year to date, Consumer Discretionary<\/a> has been strong. If you look at the groups, Technology Shares<\/a> are the strongest, up 17 . Consumer discretionary is in the second spot, up by 11. 5 . They are in the same position if you look at the. Movements is. April 13 scarlet thank you so much. April 13. Scarlet thank you. Julia a developing story democratic lawmakers are urging regulators to look into carl specialtall as they advisor as a special advisor to President Trump<\/a>. My understanding is this is a request and the Agency Agencies<\/a> dont have to respond. Can you set the scene for what is happening here . This is the latest salvo from democrats concerned about carl icahns the administration. He was appointed as Donald Trumps<\/a> regulatory czar, a position that is not actually a former formal title. It just means trump will listen s his old friend carl icahn advice. Scarlet it is not the first time democrats have gone all after carl icahn. What has he said in the past . Zach he has focused on a narrow issue a longtime hobby horse of his he has refineries losing money. He blames an epa regulation. He wants to change the regulation. Democrats are concerned he is using his position with trump to personally, or he is somehow trading on information he gets about the regulatory process since he is deeply involved in advising the president on how to change the regulation. Julia his argument has been if the regulation changes it will not just benefit him, but his competitors, and therefore that justifies the advice he is giving President Trump<\/a>. Zach he has been very open about the fact he would stand to he said other refineries would benefit. All a lot of refineries would actually be hurt by the rule. It is controversial in the industry. It is something that there are other people who believe they would stand to benefit. Julia do we think regulators will step in and investigate . Do they have to. Question about President Trump<\/a>s advisors a lot of them are businessmen. Zach it is, but it is hard to see what they would investigate the big question is his trading rims market. Scarlet it is very specific as opposed to his overall holdings. Zach i have written to every Government Agency<\/a> they can think of asking them to investigate carl icahn. Julia more to come, it seems. Thanks to zach mider. I believe we will be talking about this morning the future. Scarlet tip of the iceberg. Julia yes. Scarlet s time for Bloomberg Business<\/a> flash. Cell phone video has caught more trouble with u. S. Airlines after Spirit Airlines<\/a> canceled several flats. Angry customers fighting with employees and police. Spirit is blaming the cancellation on a dispute with the pilots union, but the budget carrier is right is the worst u. S. Airline in the skies. E capital will spend the more than 1 billion in renewals. This is the canadian lender that has been under investigation by regulators for possible mortgage fraud. Home capital report firstquarter results on thursday. Amazon is escalating its online better with walmart, reducing the minimum order to qualify for free shipping. You now have to buy 25 worth of merchandise instead of the 35 they require for free shipping. Business your your business flash update. Julia coming up, the race to driverless future. The details coming up. This is bloomberg. Julia this is bloomberg markets. I am julia chatterley. Scarlet im scarlet fu. Facebook was famously started in a harvard dorm room by Mark Zuckerberg<\/a> and it is often considered the one that got away. Facebook quietly returned to cambridge in 2013 and the company is taking advantage of top talent. Caroline hyde has the story. Caroline it is the heart of bostons tech community, and west Coast Software<\/a> giants have taken note, establishing a presence here. Bay facebook is always looking for an opportunity to hire the best talent. The lead ryan mac helped Facebook Open<\/a> the office nine years after Mark Zuckerberg<\/a> develop the social network at nearby harvard. The office has grown and employs about 100 engineers that tackle some of the companies toughest challenges. Ryan most of what we are working on is infrastructure. Two thirds of the office is working on the technology that is the underpinning that people see on a regular basis. Caroline the race it four pillars these are the systems theed to develop applications that reach facebooks 1. 8 billion users. The Cambridge Team<\/a> also supports some of the social networks more visual prospects projects like the facebook live, extreme. When you post a video live on facebook, anyone else looking at the video will see the common in real time. Caroline and the slide up that helps users buy and sell things locally. The Global Company<\/a> with a market cap of 425 billion the worlds fifthlargest, as even more ambitious plans in its 10year outlook. Mark we can give people more a voice. Caroline along with the Engineering Team<\/a> in seattle, london, and new york, the Cambridge Team<\/a> will play its part in conductivity. Ryan how do we get conductivity to the next one billion people, and we are doing that to visit technologies that can work as a greater ecosystem outside of facebook. Projects like paragraph and tips that are trying to change the to thosee to deliver internet of Network Availability<\/a> today. Caroline working on a global and a local scale. Scarlet that was Caroline Hyde<\/a>. Caroline all this week caroline is all this week Caroline Hyde<\/a> is reporting from the tech hub in startups,king at venture capital, and government officials. Bloomberg technology will be live at 5 00 p. M. Eastern time. Julia boston is not the only city vying for top talent. Detroits automakers are boosting efforts to lure workers away from Silicon Valley<\/a>. Naughtonr keith joins us from detroit. This gives me deja vu with banks and syntax. How do you make yourself sexy the you are gm and ford and Millennials Want<\/a> to work for a startup . Keith it is a tall task. They are remaking campuses, spending 1 billion to make them more ecofriendly. They are reorienting the way they work so that people come and go as they please. It is not quite as regimented as it always was. Early, work in your pajamas. They are trying to match the compensation Silicon Valley<\/a> offers, but they really cant yet. Julia Silicon Valley<\/a> in some onces offer a 1 million bonus, equity stakes all sorts of perks. Are they offering that . Case exactly. That is not the way to trade his built. Keith exactly. That is not the way detroit is built. You have to climb the ladder before you get money like that. In Silicon Valley<\/a>, that is something you can get straight out of stanford if you are a big enough star. Scarlet when it comes to technology in cars, detroit is motor city. Spoke with dan gilbert earlier this year at the International Auto<\/a> show. Take a listen to what dan gilbert said. Dan gilbert i think they can compete, especially in car tech. Distance dilute things. If you are running a car company and you can say im going to have a manufacturing, design, manufacturing all in one place, there are huge benefits. Collaboration, conductivity of it all. Cost everything else. Scarlet dan gilbert said distance dilutes things. Silicon valley has been working on auto technology, specifically as a relates to the selfdriving vehicle. How much traction can they get or have they gotten without being in michigan, detroit . Keith one of the big arguments detroit makes is we can get Technological Breakthroughs<\/a> on the road quicker because we actually make cars in detroit. That is with the automakers will say. So, if you want to change the world, which seems to be a driving force for these millennials, come here, and you will change it quicker. That is the argument. Much of the Software Talent<\/a> for Driverless Cars<\/a> remained clustered in the valley. Scarlet when it comes to anecdotes, you did speak to a couple of his millennials who found their way to detroit and are working in technology. Were they the minority what did this . Keith i talked to victoria shine. She works for ford. She is a california girl selfdescribed. She grew up in california, interned in the valley, but got hired by ford. She likes the lower cost of impact. And quicker she has 14 patents. She is 23 years old. She feels she is making a bigger impact in this is where she wants to stay. Julia i think it is interesting the opportunity for progression perhaps higher if you are not in a startup. I think it is interesting, a quote from Sergio Marchionne<\/a>, saying look, we have no intention of trying to recreate Silicon Valley<\/a> in michigan. They are saying if we try to do the things the startups are doing it would be a fast track to bankruptcy. He is right in a sense. It is about differentiating themselves. How else do they do it . Keith Sergio Marchionne<\/a> sees it as a fools errand, of course chrysler does not have pockets as deep as ford and gm, so they cannot make their own. On tech, so they have hooked up with the google driverless car project. Ford and gm want to do it themselves, so they are trying to get thousands literally thousands of engineers to come you to detroit, trying many different approaches, particularly loosening up their style. Julia great to chat with you. Keith naughton. Hub . Better to have a up, disney has reported backtoback quarters of negative growth. Expect in thetors company when it reports secondquarter results . We will be discussing all the details. We will have a preview for you very shortly. Stay with us. This is bloomberg. Julia it is to 00 p. M. In new york, 12 00 p. M. In san francisco. I am julia chatterley. Scarlet chaim scarlet fu. Welcome to bloomberg markets. Julia we are live in bloombergs World Headquarters<\/a> in new york over the next hour. Here are the top stories were covering on the bloomberg and around the world. In markets, one hour left in the trading day. Bank and tech stocks pushing the nasdaq to a new alltime high. The dollar and treasury yields also rising in the session. Is leadingthe beast the Global Box Office<\/a> this year the company told a different story compared to media network. Will the earnings be a beauty or a beast for investors question plus, a ceo tells us why he supports President Trump<\/a>s plans to renegotiate the north American Free<\/a> trade agreement. That, plus how it is expanding its global footprint in the middle east. Just one hour now from the close of trading. Julie with julie hyman. Another mixed picture day, lets check in with julie hyman. Julie another mixed picture day. A little bit of a sideways movement for most of the major averages. Lets look at some of the movers. We are saying more of a dramatic move. Gains. S a contributor to. T is at a record there is marriott, as the stock rises to a record on the strength of its Earnings Report<\/a>. Thatw some laggards company falling after its forecast after it fell well estimates. The owner of there is media tegna says and revenue will grow in the Single Digits<\/a> Something Interesting<\/a> to watch as we look ahead to disney, something we will do in a moment. We are watching airlines. Oil prices are down. American Airlines Come<\/a> in talking about its outlook, said the drop in fuel prices could help margins as etiquette and outlook for the seat mile. Ual rising after a recommendation from the stone conference yesterday saying the stock could double or triple over the next couple of years. Spirit airlines is talking the up bucking the uptrend after some canceled flights in Fort Lauderdale<\/a> led to some altercations. Also on the transportation fund, we are looking at hertz, the car rental company. They have been trying to change its strategy, updated its car fleet, but they are having to at depressedcars prices and investors are not happy about the results they just showed. Julia thanks, julie. Fiscal disney reports secondquarter earnings after the bell and this is the familiar question of whether a dynamic theme park and movie business can offset prices. Paul sweeney joins us from Bloomberg Intelligence<\/a> or we will get to espn in a moment, but there has been a hall cast over the Big Media Companies<\/a> because of what time warner said earlier this month when it reported a 2 drop in cable advertising revenue. There seems to be a slowdown in ad growth. Paul media stocks have been under pressure the last two and a half weeks, and there are concerns one is advertising we have seen weaker than expected advertising and the First Quarter<\/a>. A lot of copies are expecting it to improve in the second quarter. Advertisers are concerned about that. The second is paid tv subscribers very weak. They lost the paid tv industry to the cable industry lost about 700,000 video subscribers in the First Quarter<\/a>, the biggest loss in about five years. That is stoking concerns about the cord cutting issues, which affects the media ecosystem. Vulnerablepn is because of fees associate with that network. Paul right. Espn makes the most money from the paytv universe six dollars per subscriber per month. On the flipside, they have the most to lose to the extent that the bundle is fraying. Challenge for disney is to say we have a digital planned for espn properties a directtoconsumer solution that will help us defray some of those subscribers. We have nothing that come out of disney. Those that is what investors are looking for. Julia . Do we get that today . Paul they are not really telegraph do they do we get that today . Reallyhey have not telegraph anything. We know the cord cutting issue is a real issue. See it across the board in the media ecosystem. It is affecting the bluechip player, espn, so the management has to come back with a Digital Strategy<\/a> to offset losses. Scarlet is in part of disneys Digital Strategy<\/a> who live . Paul expectation is pretty high ulu live a skinnier bundle that will include espn and a lot of the Library Content<\/a> hulu has, and the broadcast networks. It looks like it will be a competitive product. Disney benefits as an equity owner. Julia but it is not enough it feels like a pot shot the global strategies. They have been making layoffs at espn. I saw one analyst mentioned the point that they have laid off 100 people the best paid employees, apparently, but if you compare that to the cost of 17 games a year with the nfl, are they paying too much for sports rights . Is that a question theyre going to be asked, and are they asking it of themselves . Paul absolute or did is a tough model for espn they have fixed costs with longterm rates deals and they have deals with just about everybody. They have very set, longterm fixed financial obligations, but revenue is under pressure because subscribers are declining. It is having a negative impact on margins. That was a cause for them to take down there longterm growth outlook. It is a challenge. Julia just reiterating the importance of looking at the ad spend. Scarlet paul sweeney will be back with us when disney reports earnings had 4 15 p. M. Eastern time. Disney ceo bob iger will join Bloomberg Technology<\/a> later today to discuss earnings coming up in the 5 00 p. M. Lower on bloomberg television. Tomorrow at 6 00 a. M. In new york we have an interview with democratic senator elizabeth warren, who will give us her take anything from tax form tax reform to doddfrank. Julia absolutely. We wont be asking her about beauty and the beast. Lets check the first word headlines with Mark Crumpton<\/a>. Mark Senate Democrats<\/a> astronomic is to drop their bid to retail president obama third Health Care Law<\/a> in the form of a letter obamas Health Care Law<\/a> in the form of a letter sent to Republican Leaders<\/a>hip. Schumer here is our letter and it was easy to get the entire caucus to sign it because we are united in this belief the belief we are committed to acting in a bipartisan, transparent way to improve our health care system. Mark Senate Majority<\/a> leader Mitch Mcconnell<\/a> said the Health Care Status<\/a> quo is unsustainable confidentthat he is differences with the bill can be worked out in the bill will pass the chamber. A Democratic Senators<\/a> are calling for an investigation of carl icahn. He is an unpaid adviser to donald trump. They say he bet on the drop in the noble fuel credits and was able to influence decisions that cause such a drop. Has claimed victory in residentialrean election. The election followed months of political turmoil caused by the ousted president Third Corruption<\/a> s corruption scandal. French police are searching for three men suspected of plotting an islamicstate inspired attack. Police say ticket vendor thought she recognized one of the men listed on Police Wanted<\/a> notices. That prompted the Police Operation<\/a> and evacuation of the , one day after an intense election won by independent emmanuel macron. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am Mark Crumpton<\/a>. This is bloomberg. Julia coming up, ups ceo david abney joins us to explain his Company Third<\/a> major deal with companys major deal with dubai and whether talk of protectionism could hurt shipping companies. From new york, this is bloomberg. Scarlet this is bloomberg markets. I am scarlet fu. Julia i am julia chatterley. Makeet tps is hoping to inroads in the middle east and asia as they hope to boost their presence. They have been chosen as lead the just expensive for expo dubai 2020. Less toss it over to betty liu who is standing by with the ceo. Betty scholar, thank you so much. Im with the ceo david abney. Great to see you. David abney great to be here. Betty pending announcement why is this partnership so important for you . Sponsor of this great event they are convinced they will make this the greatest expo ever, and our expertise, our worldwide presence, and the fact that we have handled big events like palin in beijing and london. Betty where would you put this, by the way, on that scale . David i would put it right there with these two. It is a big, sixmonth event that will showcase dubai and the middle east. It will give us branding exposure in that part of the world, and more important, if we can handle business for that event, we can handle it for customers throughout the region. Betty a showcase for operations and global reach. Tell me, is this important not just from a branding perspective, but from a business perspective as you expand globally. Talk about where internationally is most important for ups. David internationally is our growth engine. Emerging markets naturally you would think of china, india, but the middle east has a lot of potential. Betty why is that . David one, the population is so young. Area,a pretty affluent and the United Arab Emirates<\/a> is aslly focusing on not being oil dependent, and their goal is to be the next singapore, hong kong, where they are a trading hub for the world. Betty you mentioned china. There are always concerns about china in terms of are they going to slow down are they protective of their own markets. What is the potential bearing china specifically . David we are very optimistic about china. We have had a good experience there for all the years we have been there. The last quarter, and at the end of last year, china has really exceeded expectations. There are people that still rate. Ed to the 10 number. Pretty good we are optimistic. Exports are important for your business. There has been talk from the white house about protectionism. At first he said he wanted to scrap nafta, and when he looked closer, said he wanted renegotiate nafta. What you think needs to change . David what i agree with the president on his we think nafta should be modernized. It has worked well. It is 25 years old. Nafta started, no one even knew what ecommerce was. To modernize it, which we felt tpp had a possibility of doing, but to hear the three leaders of the three north american countries talk about modernizing, making it more a adaptablemmerce to ecommerce . Betty what does that mean, making it more adaptable . David colonizing tariffs to where the small and Midsized Companies<\/a> that dont have experts, they could easily follow the rules and be able to ship packages across three countries without expensive and timewasting delays. How about tpp where do you stand on that . Do think it was right for the u. S. To pull out of that . David we were supportive of tpp, and the president has chosen to go more the bilateral route. We were in preference of the multilateral, but what is really important is we continue to do trade deals, continue to give small and Midsized Companies<\/a> access to other markets. A bilateral deals would do that, too. Betty tax reform is something you have spoken out about. We have the outline of the plan from the white house. Speaking about china, some of the chinese copies have spoken out and said it is going to mean that Chinese Companies<\/a> move to the u. S. , reduce oxford exports out of china, heard emerging markets. What are you saying to that . We are a highly taxed company. Our expected tax rate is expected to be 35 . It puts us at a disadvantage with our foreign competitors. To talk about a lower tax rate, 15 or so, and to also give a territorial provision where we could give earnings back, it would make the u. S. Competitive, and it would allow u. S. Companies, instead of looking in the directions, to really focus on the u. S. We think it is a positive development, but still much to be done. As the ceo of us here miss company with a global reach when you see a tax rate there could be the possibility how do yourm prepare ups for that . What could that mean specifically for the company . David it would give us equal Playing Field<\/a> with competitors that operate outside the u. S. , and then it opens up opportunities to where we can reinvest into the company and really be able to make a difference for our shareholders, because right now with a 35 tax rate, that is a burden, and it is very difficult to overcome. Betty before we go, i want to talk about saturday delivery, which a few months ago you had announced. Why did you decide to open up ups to saturday delivery . Was it someone in response to the growing ecommerce shipments . Growing consumer demand here . Online retail . What was that in response to . Betty david it was simply in response to demand from customers. They fell saturday was another part of doing business, so when we decided to make a decision to go on saturday, we did not just , too, offering. What differentiates our services is we can pick up on saturday and deliver on monday, which competitors are not doing. We jumped full speed ahead, and now we are offering something that wasnt available to our customers. Betty david, thank you so much for joining us. David abney, ceo of ups. Thanks, betty liu. Great interview. Happening right now in washington, commerce secretary wilbur ross is speaking about trade to the conference of the americas at the state department, talking about the Transpacific Partnership<\/a> that washappening right now in washington, commerce secretary wilbur abandoned by the Trump Administration<\/a>. He has also been saying the tpp had good elements on markets access and gains achieved in tpp will not backslide. You can watchs full remarks on the bloomberg at life live go. Mr. Ross formal negotiations with nafta partners julia thisjulia is bloomberg markets. I am julia chatterley. Scarlet prime scarlet fu. Time for options inside with julie hyman. Julie joining us is kevin kelly. We have been talking about the vix, the decline in the vix, and the debate over the usefulness of the mix. You have brought back something we have not talked about in a while in your note to me today which is we have not had very many plus or 1 moves this year, which is another way of saying volatility has been low, but what you make of it . Telling, but if you look right now, people will talk about the vix being below 10, but what they should look at his actual realized volatility. It has fallen below six. We are not seeing a volatility because we have not had 1 moves in either direction. We are supposed to have them just about 22. 5 of the time. If you look at over this year alone, 87 trading days it has only happened three times. That is pretty interesting because people need to focus on what is vix. Vix is looking at the availability of largecap stocks. They have a lot of tailwinds behind them, whether they are the new administrations fiscal policies, whether they are doing well overseas whether sector correlations have diverged and you are having cyclicals counteract the noncyclicals. There are a lot of underpinnings that have made the vix low, as well as the actual and realized. Julia julie quickly, should people be worried about these various breakdowns in correlations the low vix, low realized volatility . Is it a cause for concern . Kevin no, they should look at other end of this inventories. Abovessell 6000, it is five. It can look at financials is about 16. There are sectors underneath that actually have the volatility. Now, is sector dispersion lending to the credence of low overall market volatility. Julie lets get to your trade of the day, certainly a large cap stocks. Disney, out after the bell we have talked a lot about looking ahead to the earnings do you not think theyre going to do terribly well . Kevin one of the things you want to do in a low environment like this is see what you can do for portfolio insurance if there is a lot of uncertainty. For disney itself, you can go out to july and for about 2. 4 of the underlying stock price, you can hedge the 110 point you can buy it and you can buy a few have limited upside if you own the stock. If you are bearish, you can buy the put. We know what is happening scarlet highlighted it earlier today and last night about subscribers and cord cutting. That is a big concern. The succession issue is a giant concern. Espn has weighed on them in the sentiment. Well have to see what happens because bob iger is bullish on espn. He cited numerous porters ago and it has not panned out. He will be at the helm until 2019, so the need to figure something out soon. At least have the movie studios behind him. How long can that play out . Who knows. Julie either way you get insurance without put. Kevin it is a cheap insurance policy and investors should look at this because you can get the upside is that you want, and the stock is up 7 year to date. Last quarter move 0 on earnings. It did not move either way. This year you can protect yourself and market down terms because it goes up to july. Julie thanks so much, kevin kelly. Scarlet thank you so much, julie hyman. We will break disneys earnings at 4 15 p. M. Comment later, bob iger will join Bloomberg Technology<\/a> following the Earnings Report<\/a> at 5 00 p. M. Eastern time. This is bloomberg. Mark i am Mark Crumpton<\/a>. Time for first word news. The top u. S. Cyber official says the United States<\/a> watched russia penetrate frances Computer Networks<\/a> prior to last weekends president ial election. Says theike roberts u. S. Gave france a heads up about what was going on. Look, we are watching the russians, seeing them penetrate some of your infrastructure there is a we have seen, what can we do to try to assist . We are doing similar things with german counterparts, british counterparts. Were all trying to figure out how can we learn from each other . Campaignnces Election Commission<\/a> says a significant amount of data with fake news alerts was late. Palestinian president mark amodei bus says the president has accepted his invitation to join him in the west bank during his visit to israel in two weeks. 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