Plans going forward, very confident. Mark he spoke with matt miller Geneva International motor show where v. W. Unveiled a luxury sedan. The former french Prime Minister ays he wont step in to be a replacement candidate for president. The Republican Party primary. He faces pressure to step aside implicated in a corruption scandal. Dozens of Republican Party fficials have withdrawn their support. China is expanding efforts to reform the coal industry. Authorities plan to shut smaller dirtier power plants as part of against pollution and industrial overcapacity. Hina is the worlds biggest emitter of fossil fuel pollution. Lobal news 24 hours a day, powered by more than 2,600 journalists and analysts in over countries. Im mark crumpton. This is bloomberg. Scarlet live from bloomberg headquarters in new york. Im scarlet fu. Joe weisenhall. 30 minutes from the close of trading here in the u. S. The question is, what did you miss . Newlet is the president s irective, trump signing a skilledback travel plan. Growth tting lower targets. Warnings of protectionism on the rise. From dan, ctive c. E. O. , he joins us for a halfhour at the close about and how conomic plans he plans to work with the some stration to achieve of their goals. Joe lets look at where the head averages stand as we towards the close. Bloombergs Abigail Doolittle is standing by. Looking at small declines for the major averages, modestly. This follows last weeks gains, so it will be interesting to see it the week brings as trades on. Investors are consolidating and a row, the s p 500 as of last week up six weeks weekly , the best winning streak since november 2015. A little bit of a pause after bullish action. One of the worst sector drags, the financials. What makes this interesting, hen we hop into the bloomberg, this is a look at the world Interest Rate probability. Vernight out of nowhere, the odds have shot up to 96 that the fed will raise rates by of 1 next wednesday. It had been closer to 30 a in on the but nearly 100 that we saw in the december 2016 rate hike, investors are banking on fact that the feds raise rates. The payroll report is later this week, this should be positive the banks and were seeing a ittle more of sell the news action. He bloomberg dollar index, history suggests its more buy the rumor, sell the news. A hugelar index is up in way, more than 10 into the december 2015 rate hike, then a bit of a pullback and rate hike, e 2016 its been a bit bearish for the index. It may suggest we could see yields reverse back down, joe, is erhaps thats what weighing on the financials day. Concerning some interesting Market Action here. Thanks, abigail. Winning nobel prize economist questioned whether anyone can identify market bubbles that end up causing crashes. Definition is an irrational strong price increase that has a predictable strong incline. Esearchers say you can predict crashes in the equity market because they share common traits. Authorsus is one of the of that study, a Harvard BusinessSchool Professor of finance. And great to speak with you. Eugene also said with you, be scarlet. Scarlet he wants a systemic way of identifying bubbles. To you, first off, is how hard is it to call a bubble . Its hard to call a bubble, but its not impossible. In fact, we adopted the definition of a bubble which is increase. Ge price we said lets try to focus on all of those episodes where you a demonstrable large price increase and see what happens next. Four you identified characteristics that go into call, bubbles that you can you said an increase in price volatility, increases in share issuance, you see Companies Selling shares into the bubble, a relative performance of new old firms, people excited about the new stuff and an steepening in slope of the rally. It has the famous bubble shape. It curves upward and goes up. Ight is the key thing here that its not just enough that prices go just enough that you have to have exuberance, certain behavioral aspects here love of new companies that are necessary for to say, ok, this is a bubble and not a strong runup . Joe, thats exactly it. In fact, thats why we wrote the is that if you look at the claim just looking at prices, price runup, you can say almost nothing. N fact, about half of those episodes, you keep having an increase in prices and half of or a crash. Decline what we noticed, if you read istory and you look at bubble episodes there are all sorts of other things going on. Speculation, of there is issuance, its in the media, all of this kind of stuff. Can we try to quantify systematically over time and use to sort of predict of a bubble, if you will. Scarlet when you do that, you focus on industries rather than overall market, rather than the s p 500, why is that . One reason is because if you look at the market, you just dont have all of that many episodes. Point to one or two big price runups every 20 years and have that mucht statistical power. Thats not the only reason. He other reason is that if you read accounts of bubbles, what industries play a huge role. N the 1920s for example, utilities and Telecom Stocks played a huge role. Its dotcom boom. Each has this industry character. Of the things we found is if you look at the industry booms and busts, they coincide with periods when the market is doing extremely well. Dotcom is an example. It happened during a period when the overall market was doing well. Ely joe are there any examples you in kite with a huge runup the industry and everyone, all of the pundits were screaming bubble, but it didnt satisfy your characteristics and in fact it being vindicated . Yes, my favorite example of healthcare ally stocks in the late 1970s. There was a massive runup np stocks from 76 to 78. It was very fast. It looks like the dotcom bubble, if you will. Year after that, they continued to go up by an a itional approximately 30 year. Finally in 1981 or 1982, they and there elled off was a mini crash. If you were looking at the had ll picture, if you tried to call it a bubble in say, 1978, you would have been off and you would have got out of that industry or shorted that industry, you would have lost a lot of money. Other thing i would like to add, even in the cases where you were right and you were able to bubble, it turns out that its very hard to get the timing right. Cases where ose were right, were off in terms f calling the peak by an average of five months. Scarlet it can make a huge difference. Ou draw a distinction between predicting a crash and predicting returns. What do you mean by that exactly . Thats exactly the point get it right you and you predict the crash and we do that in a number of different episodes, if you actually want to earn a return from it, you only start earning at the moment when it actually crashes. So as i was saying earlier, by an average of about five months. Long holding y period if you want to time bubbles, if you will. F youre willing to wait two years, you have a twoyear horizon, our paper basically that you the ingredients you would need to be a bubble timer. Again, you need to have some patience to do it successfully. Joe real quickly, some of the haracteristics, a lot of them apply specifically to companies. Are there tools that you have developed that could apply to a other Asset Classes that dont necessarily have hings like share issuance or new versus Old Companies . Thats a great question. Were thinking about that, but one of the challenges when you research of this kind is you have to be able to compare istorical episodes in a systemic way. Ill just giffords you an example. Runup in 1920s utility stock similar to the runup of dotcom stocks in the 1990s . We can describe that in very general terms, but once you get that, you have to ick a set of characteristics that you kind of pull some data on. So thats a challenge when youre talking about the that you just asked about, say, commodities or bonds, you have to pick a set of that you can s historicaliably on a basis. Thats a challenge. Research. Inating professor, thank you. And coming up, well speak with served on the trump transition team, james jay heritage f the foundation. Hell weigh on the president s updated immigration order next. This is bloomberg. Joe after federal courts blocked the president s initial order barring people from seven ostly muslim nations from entering the u. S. , now comes round two. His dent trump replaced january 27 order by dropping iraq from the list, but critics ay this revised version contains some of the same constitutional problems. Bloombergs white house editor joins us now from d. C. So how do people assess the this one will survive the court . There is some thinking even by people who are opposed may is order that this one in fact survive. For one thing, he, trump has limited the number of people who may have standing to sue. If you have been issued avisa, permissionen granted to come into the country, you arent subject to the ban anymore. That wasnt the case under the ban. People who dont have permission to come into the country, are very difficult to establish grounds to the government here. Scarlet of course, alex, as the government has preemptively filed to head off stop theency orders to revised travel ban if filed . Alex right, that is to get ahead of the state of washington folks that led the successful lawsuit last time. They havent decided whether yet. re going to sue the attorney general said that he was still examining the order and theyll make a decision later. For one thing, the order doesnt take effect until march 16. Of not clear if the state washington would have grounds to sue before the thing is actually in effect. That changes il that iraq is no longer on the ist from which people are banned. Is there a legal reason for that or more about politics . Alex there is a legal reason and there is also a political reason. Caused some er blowback when former, at least translator. S. Army was prohibited from entering the country under the original ban. Also, the government of iraq apparently approached the united and worked out some additional measures, they can assure the Trump Administration that people traveling here from that country to be a threat. Those additional measures include some additional security screening there and also a romise by the Iraqi Government that theyll repatriot anybody in overstays their visa here the United States. Scarlet for more on this, i james jay come in carafano. On the home Advisory Counsel from 20122014. E supported the first immigration order saying it balances security and compassion. You to want to welcome the program. For supporters of the First Executive order limiting immigration, the flawed implementation caused a lot of pushback. The implementation left a lot to be desired. Can you tell us, first of all, it is necessary for the white house to take this specific action on immigration . Right, so first of all, its not an immigration order because immigration, those are immigrating to the United States. This is just in part, either to isit the United States under avisa or a refugee process, a action which is different. Why this order was created was o get ahead of the threat and so its not about the present tourist threat which is a lot to homegrown tourism here, but extension of thousands of oreign fighters flow into iraq and syria. As isis loses control over question there is a of where do those foreign fighters go from there. The countries that are countries in the addition to iran which is a state sponsor of terrorism where most likelyfighters to go and what they wanted to ave in place was a means to ensure that foreign fighters wouldnt travel from there, either in the refugee flow or avisa to try to come to the United States to do a terrorist act. Art of that concern was emanated by we have seen foreign ighters and terrorists use the refugee flow and visas to get into western europe to do attacks. Joe james, what is the clear argument on the safety . Ninth circuit struck down the original e. O. , they no real evidence that this e. O. Did anything to further public safety. Is your response to that or what is the response to the one . Circuit on this james first of all, im not a lawyer. I cant talk to the legal arguments. Talk to the efficacy of it. People said there is no threat here. That missed the point. Whole idea is to get ahead of the threat and be preemptive. At where are we seeing terrorist threats emanate from now, well, one, you would of our terrorist threats are homegrown. Islamist d 94 terrorist plots since 20111. The foreign links, the overwhelming preponderance are pakistan, between 40 to 60 of foreignlinked terrorist some kind of link to pakistan. What this was trying to do is where do we d say see the threat coming from. Very clearly its from migrating fighters. I didnt understand the argument that says, well, youre not dealing with a threat. Happened yet. Nt i never quite followed that logic. Obviously part of this has to do with refugee flow and the oncerns that foreign fighters would slip into refugees and take advantage of that. Say there is already very intense vetting of refugees. His idea that theyre just being let in is false. What do you see is the gaps in the current refugee vetting need to be addressed . James so the department of security stated that the f. B. I. Has at least 300 of refugees currently in he United States for being investigated for terroristrelated activities. That could be a terrorist it could be material support. This could include cases of many, es who came here many years ago. The concern is we have seen isis particular try to put people into the refugee flow with the a a of getting them into country to do terrorist attacks. Administration, the perspective was we want to make sure that everything is in place to make sure there is vetting. I think the concern was, under the bama administration, overwhelming goal is whats the maximum number of people we can ush through the system to get the biggest number of refugees in the country that we can. What is the highest level of we can have that people are being screened appropriately. It was a difference in priorities. Through the numbers versus making sure that the was seen to the fullest extent. Scarlet i appreciate your gettingion for how its ahead of potential problems. Why do we presume, though, that we will start to see terrorists as refugees as has been the case in europe . Will be propose that the same formula in the United States . James two things. Foreigne know where the fighters are most likely to go, so thats why these countries identified. I think the other reason is this s a tactic that we have seen before. It becomes a more important isis for isis because as is defeated in the field, its very important for them to do to orist activities demonstrate that they are still a force to be reckoned with and still in the fight. Currently what isis is doing in putting out a net call saying go out and do a terrorist attack. Thats not osing, good enough for them. They actually have to deliver. Theyre going to try to be, we ould guess, being more proactive in terms of actually organizing terrorist attacks. To the want to go back question of refugee vetting. I didnt hear specific details versus how it now we should do it. The administration is interested n taking in large number of refugees, but what do we have to the vetting . James im not going into a lot of that. Most of the information i know that is government stuff that im not going to talk about. Joe thank you very much. Carafano, Heritage FoundationVice President of foreign and defense. Up next, the s p like most with the s fared well trump bump. How well to other indexes . Well look at the data. This is bloomberg. Scarlet im scarlet fu, what you missed . 500, youre looking at the 14day relative strength index. P 500 going back to the 1990s. 70, a red line, is usually the overbuy. T signals its a sell signal, last week, t topped 75, the yellow horizontal line, pretty areas you see here. Ari from to oppenheimer, thats a bullish sign. The reading comes during early stages of a new advance. He crunched the numbers and rises 929, the s p 500 above 75r. S. I. About 5 of the time. 7 r that, the s p gains over the next six months versus all other during sixmonth periods. We could be seeing the start a period. Rbought joe another way of looking at u. S. Markets, this is one of my favorite measures. Dont even know why, i just really like it. Its the ratio of the dow jones to the s p 500. Like a see it take off ocket after the election peaking in exactly the end of the year, since trump became demarcated from the blue to the red, its been taking off again. Has ow actually historically overperformed the s p 500 during republican administrations. It makes sense, more industrial and financial. Its kind of interesting this ratio is back at its high. Dont think about comparing the two because theyre both generally moving in the same direction, but kind of a fun watch, this ratio at new high. Scarlet i love this chart. Ts so simple and tells the story so well. The market closes next, take a major indexes, less than four minutes to go before the close. Insteadly, thety dow down 38 points, 20,966. From new york, this is bloomberg. Scarlet where moments away from the closing bell we are moments away from the closing bell. Neartors price in a certain Interest Rate increase next week by the fed. I am scarlet fu. Joe i am joe weisenthal. If you are tuning in live on twitter, we want to welcome you every weekday from 4 00 to 5 00 p. M. Eastern. Scarlet we begin with our market minutes. After closing little changed on friday, stocks retreating but off the lows of the session. The dow losing 50 points. The s p losing. 3 . Joe it had been lower earlier. Not a huge loss. 22 not nothing. Scarlet it is still a broad decline. Im looking at the group rate of returns for the first level of the s p 500. It is split into 11 industry groups. Ienergy the only group to gain. Materials, financials, health care the biggest laggards. Although none falling by more than. 6 . Doesrs declining, airlines not figure into the 11 industry groups. We saw delta cutting its forecast for passenger revenue. Felt us that it will be flat is quarter versus an earlier outlook that it would rise as much as 2 . You are seeing declines in at least 2. 4 for other major carriers. Snapted to highlight falling for the