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tv   Bloomberg Markets Americas  Bloomberg  January 3, 2017 12:00pm-3:31pm EST

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bloomberg's world headquarters, we covered stories from detroit to moscow. ford scrapped plans to build a plant in mexico after undergoing criticism by donald trump. ceo markeat -- ford fields will join us. and according to year asia -- eurasia group, we are facing volatility not seen since world war ii. and european stocks rise after economic optimism. more on that data halfway into the trading day. julie hyman joins us now. julie: strong start though not as initially. s&p 500 of as much as three quarters of 1%. it has paired that gain to some extent -- it has pared that gain to some extant.
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paring of the gains seems to be a ripple effect from the announcement by ford. 500. look at the s&p the s&p taking its first leg down around 11:00 a.m., when we first got the headlines about ford canceling that project in mexico, the plant construction. that created an effect on the mexican peso. the pace of taking a tumble versus the u.s. dollar around the same time. here is the dollar spiking versus the peso. now up about 9/10 of 1%. concerns about investment in mexico, not just this forward cancellation but what else may of pressuresult from the president-elect. something longer-term is mexico's trading relationship with the u.s. is increasing relative to that of canada. imports from mexico have taken over those of canada.
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from china the highest, though they have been declining to some extent. imports from canada is the awkward line. and import from mexico is the purple line. this gives you an idea of the importance of the trading relationship. the final piece of that ripple effect is on oil prices. versus thear spiked peso, oil prices tumbled. they had been higher on the news we are seeing opec and non-opec nations carry out planned production cuts, so we see an oil rally around 2%. now, it is down nearly 2%. that has caused a hit on some of the energy stocks, which had been leading gains in the s&p 500. so a lot of injured -- interconnectiveness. and a lot of interesting effects from this ford-mexico announcement.
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vonnie: certainly. and we will interview their ceo in a couple minutes. first, let's get to numbers first word news. north korean leader kim jong and warns that he and his nation are in the final nations an intercontinental missile. north korea has conducted three nuclear tests while he was in power. the u.k. ambassador to the european union unexpectedly resigned. leaving so his successor can be appointed before article 50 is implement it. last month, prime minister remarksmay's downplayed from rogers that were pessimistic. officials are looking for a plane that disappeared over lake erie. that washed ashore near
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cleveland confirmed as coming from the aircraft. traveling with his wife, two teenage sons, and to their neighbors. and donald trump is hitting against the gop caucus, who voted to put an independent review board under the house ethics committee. on twitter, he wrote that with all that congress has to work on, do they have time to restrict the ethics watchdog? global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. the u.s. president-elect donald trump is taking aim at general motors. he criticized the automaker for building a version of the chevy
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cruz in mexico, saying, "general motors is sending the mexican "ade model of the chevy cruz tax-free across the border. gm is not the only auto company in trump's crosshairs. ford motors announced they will cancel plans to open a new plant in mexico. joining us now is bloomberg's sahil kapur and david welch. story.tart with gm's donald trump trying to affect some changes here. give us the back story about what gm has manufactured overseas and how global the manufacturing apparatus is. gm has plans all over the world. mexico is a big place for its investment. the compact car in question is the cruz. they make most of them in the u.s. the plant out of ohio. that is the one american
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consumers make the most. -- by the post. the hatchback has been embraced in mexico. so bringing that car back would not really help the plant or its town keep jobs, because there's just not enough reduction. but this is really symbiotic. -- symbolic. this saying enough of investment in mexico, you have to start bringing jobs back and i will threaten a terrorist if you do not. vonnie: ford saying in that news conference it is safeguarding -- 350.5 thousand thousand jobs. so there is a disconnect between what is happening economically in the u.s. because of trump's position and what is being taken from mexico. sahil: the structural forces here make it difficult for the
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president-elect to keep his promises over the long haul of reversing the tide of jobs being moved offshore. trump is very adept at previewing his campaign and now governing by anecdote, where he goes after one particular company, ends up saving a , but henumber of jobs got a lot of fanfare for it. he got a big rally, got good publicity for it. it seems this will be one way he will try to govern. try to score small victories. say he is fighting for the american worker. the overall structure in american forces will make it difficult for him to keep doing this on a global scale. david: we are bound to ask what this means for gm and ford. what kind of hit will these companies take? david w.: what it means for
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these companies is they may make small moves like this -- and keep in mind, ford will still make its compact in mexico. lot has changed in that sense. but you are seeing the carmakers starting to scratch their heads and wonder, what we have to do to still be able to invest in mexico and be able to make cars they build in the u.s.? i think you will see them negotiate with trump over things that fuel economy in order to make manufacturing in the u.s. economical and profitable while still being able to keep their manufacturing base in mexico and bring cars appear. vonnie: to transition a little bit, but there has been a series of tweets tuesday, including the ethics committee. and the new members of commerce getting sworn in now. the firstpirate he -- powered he from the president-elect seems to be
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obamacare. will that have been? sahil: republicans in congress say the first act they will do is starting to repeal obamacare. the big challenge for republicans if they do not know what to replace it with. about 20 million people will lose coverage if they replace it that repeal it without replacing it. that could be a delay and -- delay a repeal. for two to four years. they have a lot of things to work through. this is a promise they made to their base. looks like they will try to keep it. the question is if they will be successful. david: those are live pictures of vice president joe biden presiding over the swearing in ceremony on capitol hill. very quickly, let me ask you the ethics oversight vote and what it says about congressional priorities and
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about the relationship between the republican-led congress and the president-elect. sahil: it says a lot of members of congress do not like the fact there is an independent watchdog policing them. that is natural. no one likes an independent watchdog policing them. what republicans did last night in a closed-door session pretty abruptly and surprisingly was essentially remove the independence of this agency, putting it under the washington ethics committee. it also barred it from investigating members based on anonymous tips, and included a series of changes that would make it harder for us to communicate with the public. as we speak, house republicans called an emergency meeting to butuss -- we do not want, every expectation is they will discuss this issue. we have republican members of congress -- thed: across the bloomberg,
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house gop reversing course after donald trump tweeted this morning. he said he thought congress should have different priorities. sahil: trump criticized the timing of the move, not the substance of the move gave his was an interesting move by trump, to tweak them but not criticize the substance. vonnie: the other headline we should point out is bob corker says he will meet with rex tillerson today. so thank you. david: sahil kapur in washington and david welch in detroit. we will talk with david later after we speak with ford ceo mark fields. vonnie: coming up, stocks starting the year up. this is bloomberg. ♪
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david: this is "bloomberg markets." i am david gura. vonnie: i am vonnie quinn. of 2016,few weeks equity markets continued their bull run. the question is will there be more of the same this year? here to help answer that is matt maley, equity analyst joining us from massachusetts. we typically see a little bit of a bull run at the beginning of the year. will we see more records this year? matt: looks like we want to make another run at the 20,000 level in the dow jones. it will be interesting, because january usually is a good month. but the last three years, it has not been. this year will be interesting.
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if we get past 20000 and the market starts to run, it will start to feed on itself. we have institutional investors, we want to talk about their performance spear at the end of the year. but it is also reported at the beginning of the year -- their performances at the end of the year. it is also reported at the beginning of the year. you also have the individual investor who has maybe a bonus or 401(k), and if it moves higher, it feeds on itself, because they keep chasing it. now two markets that have people all on one side of the boat. one is the bond market, where everyone is negative. when is the dollar, where everyone is positive. if we get a bit of a change, -- crowded investments, andher a long financials
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things like that, it will throw them into a tizzy, which will create more volatility. david: what is your sense of timing here? are investors prepared to give the president-elect and congress to make good on their promises? matt: it is weird. some of the things happening with donald trump and his tweeting actually makes a precarious. every single thing he seems to do -- he says job, and everyone says, "how high?" that has not really happened in washington. usually they say "what's in it for me?" ,hey have a nice grace period which usually starts at inauguration. but this happened after election day. may be grace period shorter than we have seen in the past. say -- heard some people
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vonnie: how much fiscal stimulus and tax cuts is already priced in? matt: i think a lot of it has. is of the things we run into one of the key things we have going forward is we are making this transition from a central bank driven market and economy to a, hopefully, fundamental and gross driven economy. couldat transition period have ups and downs and create volatility. right now, we have a situation where valuations are stretched. bank of the central liquidity has taken valuations higher than they should be. allyone seems to think that of the stuff trump is talking about will get past the way he immediately and
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implemented quickly. the chances of that are low. we have heard people talking learn 2017 from 2016. we are the time when people want to sit back and take a better look and see. do it like they do in missouri -- show me what is going on rather than a belief based on hope. david: there has been talk about a repatriation tax holiday. what will govern the efficacy of that? what will make that successful or not, if indeed it happens? real this is one of the key issues. it goes back to the transition from a central bank driven economy to a fundamentally driven economy and market. if we see these companies take these huge amounts of money and just go back to buying stock, people will say that is great, because my stocks will go higher and the supply-demand equation will go -- be better. but that is only for the short and medium term. we need to be in an economy
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where companies go back to investing in their own businesses. if they start doing that again, it will be positive. i am not saying they should not buy back stock, but if they do it in the massive way where they are, for instance, taking on a lot of debt to do these buybacks , that debt has not gone to anything that will help them service that debt or create new revenues. they need to use tax dollars to and reach reserves escape velocity. that is something we will watch closely. if we can get that going -- it may not be as positive for the intermediate and short-term, but it will be positive in the long-term. vonnie: one of your themes typically is european banks. if you dip into my bloomberg, you see the european stocks index has come back to where it was several months ago.
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but we are still far from the peak of the year, back in july. what happens to european bank stocks this year? wet: this goes back to what see in the transition. this is positive. we talk about central bank liquidity and stimulus helping the markets. they can no longer do it. one of the key reasons they cannot do it -- zero interest rates and negative interest rate policies were killing banks, especially in europe. now that rates are moving higher, that should be positive for them. the key is we have to look at italy. problems there. deutsche bank, a lot of people saying it is out of the woods. but when you make a transition like that, it does not happen in a straight line. my feeling is you will be better off on a longer-term basis in the mastic banks than in the european banks, because we still have to see what have -- in the in thec banks than
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european banks, because we still have to see what happens in italy. vonnie: matt maley joining us. ceod: and coming up, ford mark fields talks to us after his company announced the cancellation to build a plant in mexico. this is bloomberg. ♪
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♪ vonnie: this is "bloomberg markets." i am vonnie quinn. david: i am david gura. let's bring in david weston, who ceo mark with ford fields. david w.: thanks, and thanks for joining us. a lot of announcements coming from flat rock a let's talk about the $1.6 billion you will not invest in a new plant in mexico. simply put, would you have made the same decision regardless of what the president-elect said? because you do not need those cars to be made there or because of the president-elect? mark: we would make the same
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decision. the main reason for canceling the plant is our next generation focus was going to be built in that plant. what we have seen is a market the client in demand for small vehicles in north america. so we do not need that capacity. we will take the focus that was supposed to be produced there and produce it in an existing facility in mexico. david w.: so you would have made the same decision regardless of what the new initiation -- demonstration is saying about this plant. but he did talk to the president-elect. why did you give him a call? mark: first, we wanted them to know the announcement we were making this morning. they were pleased we were making the announcement of investing $700 million in our plant in flat rock, michigan to build two high tech autonomous vehicle and fully electric suv's. and they are pleased we will add
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700 jobs the next year, which tilts on the 28,000 jobs we have created the last five years. they were pleased with our part to contribute to economic developing in the u.s. david w.: you say was a ford decision, not something the president-elect can say he did for america? mark: it is what was best for our business. but we look at all factors as we make these kind of decisions. positive u.s. manufacturing business environment under the president-elect. we see the progrowth policies he is outlining and the tax and regulatory reforms. this is a vote of confidence he can deliver on those. david w.: part of the vote of confidence is the 700 new jobs $700 million. will overall ford employment go up 700? it will go uprall
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700, which adds to the 2800 we have added the last five years. we are the largest employer of hourly automated -- automaker employees, and we are the top exporters of automated vehicles. david w.: when you talk about exports and imports, we all know about the tweets from the president-elect about another car company that has to do with the border tax amendment. if that tax goes forward, a require a congressional amendments. what would that do? it inwe have to look at total. the congress about to take office is going to be debating that. we will stay close to that and understand what it means for our business. but to put it under perspective, 80% of sales in the u.s. comes from vehicles produced in the u.s..
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less than 15% of our sales comes from imports from mexico. and we are one of the top exporters. it is not just looking out will there be, for example, some kind of tax, border adjustment tax, on imports, that we also have to look at exports. that is what we will look at when it comes to the impact of our business. david w.: you say you are a major exporter, not just importer. if i understand the proposal, you get a credit as you export, taxjust as you have a importing. net-net, would ford be better off? mark: we are running the numbers now. to understand what it would mean for our business. david w.: one of the things you have done with this move in talking with the president-elect is established a relationship with the incoming administration. you have given them a gift, in some sense. what would you like to get back?
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did you talk to the president-elect about that? things like fuel economy, tax reform? we informed the president-elect and vice president-elect this morning. going forward, our priorities is a level playing field for trade in opening markets. we would love to see tax reform. same time, regulatory certainty and regulations aligned with market realities. those of the type of things we would like to see going forward. david w.: as i say, there is a lot in this announcement. i think everyone will be focused on mexico. their result -- there is also the electrification of vehicles and what ford sees as the future of ev's. investing $4.5
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billion in electric vehicles and will bring out 13 alledge of five vehicles the next few years. we talked about several of them hybridincluding an f-150 and a few others. what we are doing as a company is taking our most popular products and what people love about them and making them even better. with our trucks, you get more capability. with performance vehicles, you get more performance from our sports cars. and from our vans, you get more productivity. it is a big commitment on our part to lead electrification in the u.s. and globally. david w.: and leading it is important, because you do not behind as customers think about alledge of five vehicles. can you be in a leadership position? mark: absolutely. we are the number one seller of plug in hybrids today.
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we want to build on that. you can see that through our announcement today. keep in mind -- we only talked about seven of the 13 alledge of five vehicles coming. david w.: david: thank you, david weston. vonnie: let's get to first word news with emma chandra. emma: house republicans will not weaken an independent ethics, this after president-elect donald trump criticized the gop caucus. republicans earlier voted to put the ethics office under the control of the house ethics committee. trump wrote -- with all that congress has to work on, did they have to make the weakening of the independent ethics watchdog, as unfair as it may be, their number one act and priority.
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vice president-elect mike pence has a message for capitol hill, it is time to get to work. he spoke at the trump tower in new york [indiscernible] for the first time in 2017. >> we will focus on appealing and replacing obamacare. we will look forward to legislation that will give us the tools to roll back the avalanche of red tape and regulation that has been stifling american jobs and growth. emma: pence also said there would likely be another cabinet announcement in the coming days. a jury in south carolina will reveal whether convicted killer dylann roof gets the death penalty. he was foun guilty of daintily shooting nine parishioners. yesterday, they [indiscernible] last week, he said he had no plans to call any witnesses or present evidence. secretary-general of the united nations said he is no miracle maker. he once all nations to come
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together to solve the terrible problems the world faces. speaking on his first day at u.n. headquarters, he said conflicts are multiplying and it triggers global terrorism. wasident-elect donald trump busy with his twitter account today. here is the latest that deals with guantanamo -- there should be no further releases from that no. these are -- from gitmo. these are extreme the dangers people should not be allowed back on the battlefield. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. vonnie? vonnie: thank you. a quick check of u.s. stocks. first trading day of the year, dow up .2 of 1% ad 8.4 game for the nasdaq --
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point for game for the nasdaq. down for the s&p 500 after the conduent started trading. more details from abigail doolittle. brent crudehad wti, and natural gas trading sharply lower. oil reversing gains from earlier today. natural gas plunging. worst day since august 2007. some could have to do with the fact that the bloomberg dollar up from up .7 of 1%, their worst date of december 14 of last year. behind the natural gas plunge is a three-day decline for natural gas. when we take a look at the great function within the bloomberg rolled out at the end of last year, bloomberg maps, we see some correlation to the punch and natural gas to the weather.
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in orange, orange circles, they show the flow of natural gas and we see the dense clusters are where we have warmer weather represented by the red, pink and white. fewer clusters were the colder weather is, so this could help to explain some of the big decline within natural gas. the decline is weighing on some natural gas stocks, including southwestern, energy oil and gas, and we see big declines in all of the stocks -- energy, oil, and gas, and we see big declines in all of the stocks. worst days having the since january of last year, but the stocks were up in a hugely last year. southwestern oil was up 52% last year. cavett oil and gas up 32% -- cab ot oil and gas up 32%. really take a look at and other chart within the bloomberg, g # me, g # btv 4228,
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a five-year chart of natural gas, last year around june, this is when the moving average moves up to the 300 day moving average, talking about loss of buying momentum. the last time this happened in 2012, the gains ahead, more than 100% gains for natural gas. decline for natural gas may be a pause as opposed to a reversal like last year. vonnie: interesting. thank you for that. david: kicking off the new year and talk about the trump administration and what it will do it a republican congress, but there is another institution with something to say about where the u.s. economy is headed. reserve.he federal to give us an outlook and 2017, we are joined by michael mckee. thes start with how much fed's job has been complicated
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by the election of donald trump. janet yellen alluding at the last press conference about the fact that there may be stimulus down the line. they go into the air saying we will have three rate increases by the end of 2017 but they could have more or less because they do not know what donald trump will do. he he managesif to get past a giant stimulus plan and it goes faster, inflation will pick up. do notellen noted we need a stimulus plan given where the economy is, so the fed may have to raise rates earlier and faster than planned. what if there is a trade war and the economy tanks? the fed may be forced to cutting rates, so there is a clone of uncertainty, as deutsche bank put it this morning, and the dollar is at risk to redo have brexit, european -- at risk. you have brexit, european elections, they could be in issue, and you have the fact
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that the makeup of the fed is changing, fo. you have four new voters, and three have never voted before, so we do not know what they are two, and trump can phifill and it is an uncertain world for the fed in 2017. vonnie: and janet yellen may not stay on. more this makes it interesting because the fed raised rates in december and now they want to wait and see what happens. the first three fed meetings of the year are at the beginning of february, then you go to march and may. probably by march, you have an idea of what the president has proposed, sometime before congress passes it. maybe the earliest the fed with would consider moving the game would be may, but then you get to the time of the when the president would say, i am reappointing or changing fed chairs -- what does janet yellen do their?
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does she push back and say, i do not. i am on the way out, i will raise rates because it is the right thing to do or do or did she keep quiet and to it happens for a little while? an interesting political dynamic. david: we have about 30 seconds left, but there is the direct political weight on the fed an indirect and it could raise rates as the stimulus package imports and force it all went is supposed to be happen or what trump would like to see happen. mike: historically, they have never let pressure get to them. they say publicly, they were not been to political pressure and do a desire for the economy. the committee makes it easier to do that. my guess is that they will do it the right thing that is. if inflation picks up, they will raise rates, whether donald trump likes it or not. david: michael mckee joining us on set in new york, to you are so much. this morning, the president-elect plans to elect
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robert lightizer as u.s. trade representative. he will turn around "they'll trade policies, which have brought so many americans of prosperity." andkeene asked ian bremmer roubini if it marks a return to mercantilism. mr. roubini: [indiscernible] of anti-trade, the choice commerce department, also against free trade and so on, and there will be nations of trade with significant more production and the world is starting a backlash against trade, migration, globalization in general. we see it with brexit, the referendum in italy, and now populist leaders coming to power from russia, to turkey, to poland. it is a global phenomenon. tom: you have an historical
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template to your work. is there a precedent make it work with with president trump, ian, or is this a new era? dr. bremmer: trump says we are the most powerful government in the world, but our leader is weak. he says the reason is that the interests are global interests and they have forgotten about the american people. we will see to what extent that render it translates its of the policy. that is what he ran on. if you will convince companies like ibm, softbank that they are lesser more about what they do for the u.s. and how they return to the shareholder, that is a different kind of u.s. president and globalization in the one we have experienced. on one side, the blue collar voted him in power, on the other side, there are the traditional trickle down
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supply-side kind of republican policies that favor the rich. the taxes will be cut mostly for the rich, income taxes, corporate taxes, state taxes, and the regulatory policies will be anti-labor, so there will be a contradiction. [indiscernible] and trickle done on most economic issues. tom: guy johnson in london? curious in london about the new trade representative we have. i wonder whether the u.k. will be top of the list. you have to do a brexit to get all of the trump administration? ini: u.s. policies will be more refraction is, the idea the u.s. will have a trade deal is far-fetched. very,k it will become very cumbersome and take more than two years to reach an and we will goeu
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to a negotiation that is limited market access for the u.k. and that will damage economic growth to the united kingdom, at a time when the eurozone is in a gradual slow motion of integration. [indiscernible] group comes to power in italy, that is a bigger risk to the u.k. and europe. tom: this is a top risks eurasia group for 2017 and the power of this study is it is this thick. i love the concision and brevity from eurasia group. there is always a quiet section in your top risks. this year, it is the reform needle. you are hugely skeptical of performing one of the country at is. explain that would capitol hill. i am usually skeptical because the leaders do not have the political capital. and you look at the world and
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say, where are the strong leaders, they are largely in asia. china has been trying to do big structural reform across the board but they have a major leadership party congress in the fall coming up, so that will quiet this year. you have india and mexico doing a lot and now they are quite into their election cycle. you have countries that need to do a lot, like saudi arabia, and it is a bridge too far for them. you have germany and france that cannot go anywhere. it really lost the referendum, so when you look around the world and ask, who is doing things politically that make you want to move your money, you don't see the answers. tom: i must ask you about turkey. -- cankey coalesce into they coalesce away from terror as the move into 2017? ubini: i think there are challenges coming from the kurds, internal turmoil, still
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crises with europe. i think turkey is on the path of a dangerous political and economic -- tom: how do they respond to this? roubini: it means forces are essentially more moderate and becoming less moderate and they are thinking, this pulls up an occasion for becoming [indiscernible] with presidential power. that is the direction turkey is inking. mer: turkey will have a referendum that he probably wins, but moving the country in a different direction. vonnie: eurasia group president and nouriel roubini on bloomberg's "surveillance." watchmaker, engineering that never needs to be around. we will take how the device works, next. this is bloomberg. ♪
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♪ you are watching bloomberg. i am vonnie quinn. mark: i am mark barton. this is a global business report. landed -- london could lose anchors to paris because of brexit. that is according to a new report from the city's lobbying group. vonnie: china is setting up networks to prevent money laundering. mark: we look at the so-called
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war between the u.s. and russia and my president-elect donald trump could alter the relationship. manufacturing and the united kingdom grew in december at the fastest pace in 2.5 years, helped by the pounds depreciation since the vote to leave the european union. sterling's 18% decline has made british factories more competitive. here is the outlook. >> what we see through here is that actually, this is the good news that the businesses that are looking to export say they expect orders to increase during the course of 2017, and that is particularly with the manufacturing sector. the mostrobably optimistic of all the sectors we have looked at. ask: brexit could lead to many as 20,000 bankers moving to paris, according to the city's lobbying group. toris will make their case
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london-based executives and global bank chiefs warned it could shift operations from the u.k. to elsewhere in the eu if the access to the single market is threatened. china is taking more steps to limit capital outflows, imposing new requirements on citizens who intoto convert yuan foreign currencies. they went to close loopholes to prevent money laundering and illegally challenge -- channeling money overseas. one of the highest-paid sbc,ories, according to h ex-pats living in switzerland said their work-life balance had improved in switzerland. for our bloomberg could take, or a provide -- where we provide context and issues of interest. u.s.-russian relations are getting cooler.
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once donald trump takes over the white house, the temperature could change once again. president obama and the u.s. imposed new penalties and expelled 35 russian diplomats after naming moscow -- after blaming moscow for cyber attacks during the u.s. presidential campaign. --ident putin said he would vladimir putin said he was not expel diplomats because he was waiting for president-elect to take office. they questioned key alliances that russia long opposed and tipped them toward the kremlin issues positions on syria's civil war and the annexation of crimea. the cold war began in 1947, when harry truman asked congress to help stop the soviet union from projecting its power. soviet diplomats saw it as imperial aggression from an american elite, claiming the right to lead the world. it wasn't until 1959 that the sought a true.
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the current standoff at the russia and the u.s. share teachers of the cold war, including deep mistrust. some analysts argue the cold war cannot repeat itself because russia has no ideology as alluring as communism. the counterargument is that while today might be a different cold war, it should be treated similarly because russia retains a vast nuclear arsenal and some of the military means to be a regional superpower. russia may not have communism to offer the world, but there are concepts of what has been called managed democracy and conservative values. or aer a cold war cool one, it can be a to both sides. you can read more on ni quick on the bloomberg. head to for more stories. ♪
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♪ david: this is "bloomberg markets." i am david go. not your average clock, the swiss maker watch was designed by mark and never needs to be round. it is charged by the temperature of the air. a closer look at this fascinating piece of engineering and design. >> this is the atmos 568. it will tell you the hours,
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faces of the moon and never needs to be wound because it is charged by changes of temperature in the air, and inside, a small gas chamber expands and contracts based on fluctuations of the air and impresses on the system that works like an accordion. a change of one degree hotter colder can charge it for up to 48 hours and no need for winding. madeesigner, mark, his name by designing luxury famously, hes most helped shape the apple watch. this is his third collaboration and in this version, he let the mechanics speak for themselves. statementfinitely a piece for someone who loves to admire the way timepieces work and for someone who has money to burn. it cost $20,000. -- it costs $28,000.
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david: for more, check out pursuits, destinations for the finer things in life. head to ni pursuits go on the bloomberg. vonnie: still ahead, a look at the top stories of the day, but first, get you caught up on market action. getting a little bit back, the s&p 500 up .4 of 1% and the nasdaq, up .6 of 1%. when it comes to currency, the dollar is strengthening, up .6 of 1%. debbie ti and brent crude hitting all of today's -- wti and brent crude giving all of today's gains back. the u.s. treasury at 2.45%. this is bloomberg. ♪
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david: 1:00 p.m. in new york, 2:00 a.m. in hong kong. i am david gura. vonnie: i am vonnie quinn. welcome to "bloomberg markets."
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from bloomberg world headquarters in new york, covering stores from san francisco to washington and beijing. de are watching for scrapping plans to build a plant in mexico after criticism from president-elect donald trump. we hear from their ceo mark fields. trouble for apple in india, poised to reject apple's request for concession to start manufacturing iphones there. and deutsche bank's former co-ceo joins [indiscernible] to help build businesses, anduding fixed incom equity trading. julie hyman has been here through the year so far. julie: i have so far. as we see stocks rise in the first trading date of the year,
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progressing the decline we saw last week, very typical of the first week-elastic flip-flop that has happened over the past years. all three averages trading higher and we have strength across a broad array of various groups in the s&p 500. we are watching closely the movement in the dollar and treasuries. resuming their moves respectively since the election, the dollar and yield up. this is a chart that looks at the 10 year, u.s. 10 year treasury premium versus g-seven debt, the blue line. andee that premium widen widen, and then this is the quarterly change we have seen in the u.s. dollar. in particular, a big game last quarter in the dollar, as we saw that spread wide and out very interesting phenomenon. the bloomberg dollar index trading around its highest since induction. it has touched its highs and
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2002 earlier today. this dollar strength has been one of the main trends characterizing the movement postelection. one of the faltering's of another trend we sought is commodities are not doing as well today, in part as the dollar strengthens, we have the bloomberg commodity index taking a tumble after the dollar took a late higher, in particular, the mexican peso regarding the ford plans. finally, one group worth mentioning, the best group in the s&p 500, telecom, notable, especially the fact that yields are trading higher. we see it mostly trading inversely to yield but not today, in large part because of analyst calls. citigroup upgrading verizon to buy, in part because of the m&a prospects. centurylink being upgraded over jpmorgan because of dividend yield, at any record yield versus the 10-year note and m&a
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there, closing on the acquisition level three and other telecoms following suit, including level three of 4% today. david: julie hyman with that market update. emma chandra has more. confirmation hearings >> tillerson begin january 11 and will likely continue into a tillerson begin january 11 and will likely continue into a second day. president-elect donald trump does not plan to completely overhaul the affordable care act, according to kellyanne conway. she says mr. trump is looking at the legislation to see which parts have been successful. kellyanne conway: he is committed to maintaining the pieces his advisers say are working. he'll be talking to his talisman tom price about it and other experts. it is an issue where the president-elect has received a
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great deal of counsel. emma: conway says one of his priorities is to make it easier to purchase health care across state lines. syrian rebel groups are suspending peace talks over what they claim are violations of the cease-fire agreement. the troops posted by russia and turkey were supposed be followed by negotiations this month between rebel factions and government representatives. adopted amously resolution to end the conflict in syria, and [indiscernible] in turkey are said to be on high alert. the private news agency says anyone [indiscernible] thought in the deadly attack on the nightclub is being stopped and questioned by police. turkey's state agency says they are holding two foreign nationals who were detained, suspected of having links to the attack that left 39 people dead. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
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i am emma chandra. this is bloomberg. vonnie? president-elect donald trump stepping up the attack against automakers. on twitter, he threatened general motors, saying they should build the chevrolet cruz at home or -- cruze at home. ford announced today that they are planning to open a new plant they plan to open a mexico was canceled. here is the ceo speaking to david westin. the main reason for canceling the plant is our next generation focus was going to be built in that plants. inhave seen a market decline the demand for sloppy vehicles in north america, so we do not need the capacity. vonnie: for more on the automakers and manufacturing,
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david welsh joins us from joinst, and eric martin us from mexico city. eric, taking a look at the mexican peso, almost 1% weaker than all day, what is the response from mexico, from mexican officials to these plans to move from the automakers? ric: the currency has been swift and powerful. lowestthe peso at the level since one week after the november election, and down about 1% today. we have not seen any statements from mexican policymakers, but we do know that this is an area, the auto sector, where mexico has been competing globally to bring in investment. it has been one of the motors for mexican economy in recent years, so this is an area of government has been focused on and certainly a disappointment in terms of seeing this
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ford evoked.y welsh talking about how the u.s. of become a magnet for innovation and manufacturing. how is he going to be able to do this piece, if at all, so in other words, could this add up? is he [indiscernible] enoughh year, is there coherence to that savaging right now? david w.: right now, all the can really do is through this approach is he is not in office to do anything about nafta, so he will pressure automakers one by one to send a shot across that, hey, i am tired of seeing jobs go to mexico, why do you invest in the u.s., and he will set the table for negotiations, whether it be on investment regulations. that is a pc has to trade. he could go easier on a few economy roles, in exchange for
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investment here, and maybe do something with nafta that makes it less or a lot less attractive to manufacturing down in mexico. i think the way it works is he is sending a warning shot using ford and playing their announcement against gm and putting pressure on them to perhaps scale back their investment to mexico. unlike other countries and world leaders, mexico is not playing the twitter game and not responding and it is singular and that respect almost to the andident-elect's tweets actions. is mexico getting weaker day by day when it comes to relationships at the u.s. and trade? eric: the question is what leverage does mexico have? there is border security and areas of security and intelligence sharing, but on the economic side, mexico depends on the u.s. for more than half of the foreign direct investment.
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it is about 80% of mexican exports echoed to the u.s., so in terms of countries globally that depend on the u.s., there is perhaps know if you has more at stake in this more concentrated on the american market than mexico, so we have seen officials over the past several months hopeful that nafta may be modernized or updated rather than completely mexicand and ended, but policymakers have to be nervous in terms of seeing companies react, even before president-elect trump takes office and before there is a formal sitdown and table sets a look at what happens with the rules of engagement and the trade relationship. in the interview david reston there with mark fields and how adamant he was that this was a decision ford what have come to on his own, do you think that is likely what happened? in other words, could they would stand the public pressure they
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were likely to get going forward? david w.: i think ebay is in the sense that the investment they are making has nothing to do -- i think it is in the sense that the investment there making us something to do with current investments. they will invest in an electric car made here, promising to do something in michigan, the plant that made the focus, and they will still make the car in mexico. buyer the way, the small-market -- small, market is slumping. suvs are king, and luxury sedans are not selling, so compact cars certainly are not. i think there are little truth to that -- there is a little truth to that. he had aof saying that big role in this, they are not really countering that. vonnie: no, and he gave them some publicity if they are coming to this decision anyway.
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apparently, they are just running the numbers now as to the gore makes the bottom line. that was one of david westin's to if they- now as make the bottom line. that was one of david westin's questions. not be going mexico's way to the same extent, right, david? they were not be able to afford to import the cars. keepsw.: if the dollar getting stronger, it will make the cars made a mexico cheaper, so trump will have to deal with that. really, it if he goes through the strategy, that would not work long-term. you will have to find something that will really change the tide and reason for automakers to invest. it is not just ford an gm, just about every automaker puts a lot of money into mexico. david: thanks to both of you. a bit of breaking news about what happens on capitol hill.
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we were focusing on this wearing and of the new congress. republicans in the senate released a budget resolution, in which they are beginning to make steps to a road obamacare, something you mentioned in the last hour that was a priority of theirs, the affordable care act, obamacare, and the senate of republicans offering a piece of legislation for a discussion with the liberation and the new congress that would do that. coming up, india pushing back on apple's request for incentives to make iphones in the country. what this means for apple's extension plan, next. this is bloomberg. ♪
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♪ david: this is "bloomberg markets." vonnie: i am david gura.
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i am vonnie quinn. -- david: i am david gura. vonnie: i am vonnie quinn. bank of america is extending their lead. they are the top underwriter of state and local debt for a fifth straight year. year, a new issues this bigger game than any other bank. you $100 billion technology fund that plans to launch this year. full, joint apple, which has also reportedly considered investing as much as $1 billion in the fund. about half the fun to be invested in the u.s. raised valley startups and million in their fifth final funding round as they ramp up manufacturing ahead of potential ipos.
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the electric transit bus maker plans to go public early this year or -- this year or early 2018. it can travel 350 miles on a single charge. that is your bloomberg business flash update. i went to reiterate the news that you broke before, that the senate budget committee released resolution,get setting up to partially repealed the affordable care act. moving forward, india [indiscernible] for apple to start making iphones in that country. they say india cannot change the rules for a simple company. cory johnson joins us from san francisco with more. i wonder if apple will reconsider their strategy in light to the degree that they're prioritizing their expansion into india right now. corey: it is a very big priority
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for apple because they lack other places to go into. their chinese market seems saturated and faces increase competition. domestic markets in the u.s. and like europe see slow growth or even negative growth, shrinkage, for apple. the company is focused on to getting into india. it would like to do so more cheaply but appears to be pushing ahead with plans. india could change the rules for a single company they wanted to, the statement is untrue, but they had decided not to change the rules and india recognizes apple needs india much more than india needs apple. vonnie: what can we anticipate will be the outcome? is their leverage on either side? corey: julie: -- hand: india has a strong to play. if you look at internationally the region's work apple has its wheress, -- the regions apple has its business, china was a market they added late and
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if you look at the numbers, you can see that china is a sizable portion of apple's revenue. i think we have a chart that shows the numbers and it will show you just how important china is for this business. apple was able to add in china and have a great benefit from pacific,he asia about 24% of that, numbers from fiscal year 2016, but adding india could give them a lot of growth. already what we understand from outside sources, apple has seen about 50% growth without manufacturing, so india could be very important going forward. david: give us the history about how india has these norms regarding local source and these government limits in place. corey: what is interesting is india has strong roles, and in the context of what donald trump been talking about with many faction in the country, india
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has similar rules to mandate that. the india smartphone market has been dominated by samsung because they are willing to make things there. apple has a tremendous presence -- has a small presence in the country and they went to be part of that and stay ahead, so apple on profits,ocused not just scoring on how that has become a popular business. in administrations past, they went after market share, topline markets, with that carried about the bottom line, nearly running them into the ground. that is important for the people of apple. vonnie: two we have much information on the appetite for apple products that there might be in india -- do we have information on the appetite for apple products that there might be in india? struck by that market and the it compared to china. a are told they needed
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smaller screen, and the biggest, most expensive screen with the iconic apple design and logo, one of the things that sold the best in china, so i would not be surprised if we saw the same in india, where apple opposes the best part of the market, bill and can most profit, use that, especially in advance of the 10 year anniversary of the iphone, expected to be a major release for the next set of iphones. getting into the india market -- we also seek contract manufacturers starting to set up indian india, perhaps for or competitors, but in delisting a lot of jobs for higher in india, managing production, toaging manufacturing slated happen in india, so it seems regardless of whether or not they get tax benefits, it is all systems go for apple manufacturing in india to be in the indian market. david: thank you and happy new year. you can hear more from cory
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johnson, joined by carol massar, on bloomberg radio. vonnie: still ahead, jain returning to the markets. we look into whether it is a good fit for both, next. this is bloomberg. ♪
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♪ david: this is "bloomberg markets." i am david gura. vonnie: i am vonnie quinn. tiltainmaker who helped wall street into a wall street giant. now, jain's latest rolled with fitzgerald. -- latest rolled with fitzgerald. apparently, jain has been friendly with cantor fitzgerald for some years now and there's
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no surprise, but what does he do it president? abouty started talking last spring, the future of finance and what it would look like, and that means taking share away from the banks as they shrink and that is an opportunity for cancer. by the end of last summer, they discussed actual jobs. this money, it is like bono joining your band, being the international head, leads expansion globally, and he will for cantorproducts fitzgerald and help them brought them what they do for their clients. ford: this is a guy known taking on a lot of risks when he was at deutsche bank. we expect a lot of changes with that role as president. sonali: i thought it was interesting that he will be helping them expand and meet the needs of new clients. we will see what risk means to them.
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they have been expanding and they want to expand in their debt and equity, sales and trading platforms, expand their investment bank, what jain did that deutsche, so we will see what that means in terms of taking on risk. vonnie: has jain said anything yet? sonali: not yet. i would love to hear his story and why cancer out of all the options. there are so many executives who started their own firm. cantor aqaba the options. there are so many executives who started their own firm. david: you talk about those guys and move onto something else. what does it say about his contemporaries in banking and what they will do or might do when they finish their jobs? that the second act is much smaller. cantor fitzgerald is 1/10 of the size of deutsche bank, much smaller but bigger than contemporaries.
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with that said, a lot of people have left deutsche bank to help others grow, for example, guggenheim has hired a lot to help build their trading platform in a similar way, so life after a big bank is smaller. vonnie: we will have you back on as soon as we know more. up next, part of my exclusive interview with the india minister of bank of on trade and manufacturing. this is bloomberg. ♪
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david: life from bloomberg headquarters -- vonnie: this is "bloomberg markets." the repeal process for obamacare
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has been kicked off with the senate bill that kicks off that process. we are getting some comments from the white house press secretary saying repeal and delay is nothing more than bait and switch. there is a meeting tomorrow between president obama and democrats to discuss opposing the obamacare repeal. you can see live pictures of the where the bill has been released which kicks off the process on repealing the affordable care act. up .7%.are index a nice gain following the beginning of that process. david: let's get to the first word is now. house republicans have reversed course and will not move toward gutting an independent watchdog.
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president-elect trump criticized the gop caucus. on twitter, trump wrote, "of all that congress has to work on, do they have to make the weakening of the independent ethics watchdog their number one act and priority?" trump's adjusted republicans focus on health care and taxes. mike pence has a message for capitol hill come a time to get to work. asce spoke in new york lawmakers convene in washington for the first time in 2017. >> we will focus on repealing and replacing obamacare, we will forward to legislation that will give us the tools to roll back the avalanche of red tape in regulation that is stifling american jobs and growth. emma: pence said there will be another cabinet announcement in the coming days. and why floor
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will be attending donald trump's inauguration on generate 23rd -- january 20. bill clinton has not said if you would attend. a spokesman for george h.w. bush has confirmed he will not attend. the south korean president's reviews and testify in the impeachment trial bul. the constitutional court asked her to testify tuesday. if she refuses twice to appear -- she is accused of corruption. the uk's ambassador to the european union has unexpectedly resigned. he is leaving so a successor can be appointed before britain begins to leave the european union. it can take 10 years to negotiate a free trade deal.
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even then, uk's parliament cuts couplet. -- could scuffle it. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. david: if you months ago, raghuram rajan finished a three-year term as president of the reserve bank in india. he joined me and tom keene this morning for an exclusive interview. raghuram: i think we are in the process of exiting. with the federal reserve seeing limited room for continued accommodation and starting to raise interest rates, i think you will see the pressure on other central banks also come off as much as it has been in the last fears to continue -- last few years to continue accommodation. we are in the process of exit. how fast it will be will depend
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on some conditions in the u.s. the u.s.d policies administration brings, how comfortable the federal reserve feels with those policies. david: as one pressure comes off, another pressure comes on. we heard the rhetoric about politics during the campaign. in the round of senators and commerce mint being sworn in today, many of them hell-bent on changing the relationship between congress and the federal reserve. it is a very important issue and it is there across the world. because central banks have been the only game in town for the last few years, they've also acquired a sense of political power that certainly creates apprehension among the political establishment. they would like to control that
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power. afortunately, it's coming at point when increasingly central bank independence will become as inflationary pressures rise and central banks are asked to do the normal thing, control inflation, for which we spent many, many years getting an apparatus which ensures the independence to raise rates at the time is needed without feeling constrained by political pressures. these pressures come at a time when it is a delicate situation for central banks. david: the backdrop to this is the possibility that we could see policy changes, tax reform. the fed is a real dammed if you do dammed if you don't position when it comes to raising rates. raghuram: given the political
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situation, this is a time they have to create carefully. given the tradition they have established, the fed will do what it thinks is right rather than cater to political opinion. professor, this is from eurasia group -- they focus on china. we spoke with secretary summers this morning about dollar strength. we look at the research from a group out of chicago, the research, the academics of it, you've had to live the reality of currency dynamics. do you have a concern over a strong dollar in this 2017? raghuram: i think a strong dollar is natural. saysiece of the research it is hard for anyone to predict exchange rates over any
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sustained amount of time. the expectation is the dollar will remain strong. that certainly is consistent with the federal reserve being first out-of-the-box in normalizing policy. countrieshelp other reduce pressure to adopt increasingly aggressive policies. be ahe u.s., it could because of growth the obvious effects on exports and imports. that said come i think with the kind of physical death fiscal packages being talked about, it may do more in neutralizing rather than reducing growth. big focus of this president-elect is on manufacturing, bringing jobs back to the u.s. come in sourcing. how difficult will that passed before donald trump? carrieren in meet with
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in indianapolis dealing with companies on an individual basis here. how difficult is it going to be to focus exclusively on manufacturing? raghuram: the data on manufacturing suggests over the last 30 years, the u.s. has steadily lost jobs. however, the extent of manufacturing in the u.s. as a share of gdp has remained constant. u.s. is losinghe a tremendous number of jobs to competition elsewhere. factories are shutting down, but new factories are opening up in different areas. for example, in high tech. the loss of jobs is not so much because the u.s. is on --parative in manufacturing uncompetitive in manufacturing, but because technology is replacing jobs. sense, you are working
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against the tide of history when .ou say we will bring back jobs are you also going to stand in the way of automation which is more important in terms of reducing jobs? has oney fine report sentence which worried me, a sentence that said something commitment people have not benefited from trade. that is the line that is going around which is tremendously dangerous for the u.s. and the world. anybody in the u.s. has benefited from creators -- look at the prices at walmart and target and so on. you will not have those prices if you did not have imports from other countries. david: that was raghuram rajan. former governor of the reserve bank of india. will firenald trump up gains of canadian banks --
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this is bloomberg. ♪
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david: this is "bloomberg markets." vonnie: the s&p tsx confidence index ended the year just shy of belsky.cast by brian he says the drug administration will fire up gains in canadian banks and industrial stocks. -- the trump administration will fire up gains in canadian banks and industrial stocks. how do you get the tsx others gotright when it wrong?
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brian: he was bang on. too many investors were too pessimistic about the canadian economy. remember back to the early part of last year, many said the economy was going into recession. but oil might get down to $20 a barrel and stay there. none of that happened. when everybody's zagged. three quarters of our trade are with the u.s. if the u.s. economy is doing well, canada should be going along for the ride. we certainly saw that last year with energy and mining. belsky predicted last year about this time 15,300 at the end of 2016. healy missed by 13 points. that is incredibly accurate. he only missed by 13 points. the first time in six years that
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canada outperformed the u.s. with belsky and sentiment that some canadian investors show, he says don't be so gloomy, don't be like eeyore, don't think like a canadian, think like an investor. david: let me ask you about the role brian belsky experts donald trump will play this expects donald trump will play. mark: canada has been a friend of the u.s. julie: the u.s. and trump -- he says the u.s. and trump need a friend? all the rhetoric trump was pouting through the campaign will be just that. a lot of his policies will be a lot more muted. even if nafta is renegotiated mexico canada, ne and the unit states he thinks canada will fare just fine. canada,ted states --
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mexico and the united states, he thinks canada will fare just fine. the expected easing of growthion in the u.s., and tax cuts, he thinks investors should be in canadian companies that have significant u.s. exposure and have them go to a 30% weighting in those financials. he picks you can benefit by capitalizing on some of the tweetsthat mr. trump -- that mr. trump sends out. vonnie: mark bunting, thank you. on thefor more context breaking news, sahil kapur on the hill. republicans in the senate have released plans are scaling back
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obamacare. what we know about what they proposed so far? are they proposing a whole scale repeal? sahil: what republicans in the senate put out was a budget resolution, doesn't get signed into law come in instructs the committee to produce recommendations on a repeal bill. they are not seeing anything about a replacement right now. they're asking the committees of to submiton recommendations to the budget committee on how to go about repealing the law. they have to do it through reconciliation. it allows them to bypass the filibuster. they cannot repeal the entire law. the reconciliation process is reserved for spending. this says nothing about a replacement. that will come at an unspecified date on the road. this gives the committee until
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january 27 to make recommendations to the budget committee. vonnie: josh earnest has already come out and said this is bait and switch. president obama will meet with democrats tomorrow to discuss how to block the repeal. what kind of options are open to the democrats now? sahil: the best thing they can do is to make the politics untenable for republicans. highlight the fact that 20-24,000,000 people are going to lose their health 20-24 million people are going to lose their health insurance. they agree on some broad stroke things like refundable tax credits and tax advantage health savings accounts and maybe allowing insurers to sell policies across state lines. they don't agree on legislative -- legislation or specifics. translating that into
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legislation will create a situation where fewer people will have coverage. republicans will have to and make itt debate about costs, lowering costs and increasing choices. some -- who is trump working within congress to draft that legislation? how much agreement to you sense there is between the incoming president and the senate? sahil: trump and his transition team have not been closely involved with the details involved in this process. the key thing to watch, there are a lot of disagreements among house republicans themselves and senate republicans themselves and sometimes between the chambers and between the committees. everyone has their own ideas about this. had six to have seven years to come up with a replacement.
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vonnie: much appreciated. david: coming up, the devastating consequences of china building bases on reit's in the south china sea. in the south china sea. ♪
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david: this is "bloomberg markets." as china builds islands on top of reefs in the disputed south china sea, american scientists are trying to stop the disruption -- the destruction. >> i used to be based in china, so i tend to follow developments in asia. the south china sea is one of those conflicts i haven't been following great i thought, what are they fighting over? in july, there was this big tribunal ruling. the philippines made a complaint
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against china under international law. it had gone on for years. i read the tribunal ruling about what they said about who had what rights in the south china sea and what was going on. there was so much about the environment and i had not focused on the element. this man's name kept coming up -- john mcmanus. how unusual to be this scientist who suddenly is thrown into the midst of geopolitics. his name came up because he had been the one to go and quantify all the environment will damage int had happened to david wel s the south china sea. i wanted to talk to this guy. >> john mcmanus is a professor of green biology at the university of miami. talk to us about the research he did and what he saw. way. goes back a long
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-- professor of marine biology. >> it goes back a long way. he had done this early study of exactly what was happening in the spratly. the spratly islands -- >> you take a look at the global map -- >> they are tiny. 1980's andck in the 1990's. he was trying to figure out where fish were coming from. everywhere was overfished. he was turned to figure out how these fisheries were getting repopulated. looking at study paper maps with arrows on them where ships had drifted off to in the south china sea. he figured out the spratly's were the source for the fisheries on the coast and providing these replenishing
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pulses of fish. >> did he call it a genetic reserve? >> yes. at the time, the spratlys were contested already. they were not overfished. there weren't fishermen from all these different countries going out there and taking on the fish. they were this important resource. he is a scientist, but he decided to make this policy proposal. the policy proposal was we should create a marine park. everyone should freeze their claims and manage this share of resources together. -- it seemedsed impractical. continue another large study with a bunch of other scientists looking at this aea of the spratly's as genetic reserve. he's done a lot of other work on
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and what they do worldwide and what is happening to them. >> he's also concerned about the ecological impact the chinese and others have had on that area. this number just blew my mind. 62 square miles of damage to that area in terms of the reefs, as large as to manhattan -- two manhattans and most from the chinese giant clam fishers. they are not easy to get from the ocean beds. live giant clams, but not enough to satisfy the demand in china. but also interested me about this story was it was a market story. it's about these market forces gone wild. david: you can read the story in
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the latest "bloomberg businessweek." , gene: coming up munster's bullish calls on apple. he will be discussing his new venture at 2:20 eastern. the first trading day in 2017. the dow is giving up some of its gains. the s&p up .3%. david: happy new year. this is bloomberg.
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scarlet: it is 2:00 p.m. in new york and 7:00 in london. oliver: welcome to "bloomberg markets."
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scarlet: we are live in new york, covering stories out of detroit, washington and san francisco. u.s. stocks ringing in the new year with some modest gains. s&p 500 pairing an earlier advance of one person after crude oil turns lower. the dollar trimming inserts surge. four describes its plan for a $1.6 billion plant in mexico. general motors also under fire for building cars across the border. hee munster will discuss why left piper jaffray's to start and what sort of investments he's now looking at, coming up later this hour. u.s. markets close in two hours time. let's check where stocks are trading with julie hyman. bang has faded a bit
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dowhe days gone on -- the up 25 points. .3%.&p up headlines that ford was ns to buildts pla a plant in mexico. the peso turned down versus the u.s. dollar and we saw a ripple effect throughout the market. this is the peso inverted, peso-dollar pair versus the s&p 500. the peso turning lower when we got those headlines. the s&p 500 paired its gains at the same time. both of them now around the lows of the session. effect through commodities, particularly with oil prices. oil had been trading lower, bolstering energy stocks and then turned around as the dollar
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took a leg higher, boosting the peso. opec members and nonmembers are beginning the cuts that were announced and agreed upon in late november. natural gas has been trading lower throughout the session. forecasts for warmer weather to come through. gold and platinum both catching a bid today on the flipside. the ford announcement and the ripple effect and the other announcement, this vote on obamacare. seeing drug distributors higher today on the potential repeal here. we can sendlth and -- mckesson. questions about whether the deal would go through. a note from analysts and washington advisors saying it is doubtful that deal will happen.
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others think it could get delayed. we will keep an eye on those. oliver: let's get the first word news this afternoon. courtney collins is in the newsroom. courtney: chuck schumer is pledging to help president-elect donald trump -- democrats will hold trump to a promise to make america great again as long as that means creating jobs, raising incomes, giving real opportunities to the disadvantaged and protecting civil rights. he issued a warning about the supreme court vacancy. we will hold the president accountable if you doesn't nominate a mainstream supreme court justice. president obama nominated a mainstream candidate in merrick garland. president-elect trump should do the same. warnedy: schumer also --inst twitter presidency
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meanwhile, the senate budget committee has released its 2017 budget resolution that sets up the process of partially repealing obamacare early in donald trump's administration. the senate will consider a bare-bones budget on the floor starting this week. say they areels spending peace talks over what they claim are violations of the cease-fire agreement. the truce was supposed to be followed by negotiations this month between rebel factions and the government representatives. un security council unanimously adopted a resolution supporting efforts to end the sixth year conflict. personnel said to be on high alert -- anyone resembling the an is being stop and question by police.
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turkey's state-run news agency says police are holding to foreign nationals who were detained at istanbul's main airport. -- two foreign nationals. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm courtney collins. this is bloomberg. scarlet: ford is canceling plans for its $1.6 billion plant in mexico. the timing of today's announcement comes as president-elect donald trump attacked general motors for making a chevy model in mexico. trump wrote "general motors is cruze across the border to mexico." he says his company's decision was a company decision that was not based on the incoming trump administration. >> we would make the same forsion -- the main reason
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canceling the plant come our next generation focus was going to be built in that plant come and we have seen a market decline in demand for small vehicles in north america. we do not be that capacity and we will take the focus that was supposed to be produced there and produce it in an existing facility. david: you would have made the same decision. you did talk with president-elect and vice president-elect today. why did you give them a call? to let them know the announcement that we were making this morning. that wee very pleased were making the announcement of investing $700 million in our build anmichigan to autonomous vehicle and a fully electric suv. they were also very pleased that we will be adding 700 jobs over the next couple of years which builds on the 28,000 jobs we've
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created in the last five years. they were pleased with our part to contributing to economic development in u.s. david: it was a poor decision. not something the president-elect should say he did for america. mark: it is what is best for our business. we look at all factors as we make these decisions. clearly, we see a more positive u.s. manufacturing business environment under president-elect trump. we see the progrowth policies he has outlined in the tax and regulatory reforms. this is a vote of confidence that he can deliver on those things. scarlet: that was mark fields speaking with david westin earlier today. oliver: for more on the battle over where carmakers builder plans -- it's been a busy morning here for you guys on the auto's front. what you make of the breaking news? gm has been flying under
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the radar on their mexican investment ever since trump took on or during the campaign. -- forward during the campaign -- ford during the campaign. wondering why he had not turned his attention to gm. now, we have it this morning. that announcement -- that tweet was not the most well-thought-out tweet in the sense that the hatchback he's cells -- does not sell well here. it was not great timing for general motors. suddenly, ford is making this announcement that they are going to scrap plans for that plant. the focus is still going to be built in mexico. it's not like the production was shifted back here. is not selling
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well, so they are pulling back their ambitions. scarlet: but they did not have any news in the u.s. to counter the tweet donald trump put out there. -- donaldtent is the won michigan. there's a lot of politics here to play with. beid: the ford seems to going along with this in a loving trump to claim victory -- allowing trump to claim victory. declining fortunes in the small car market and the need for less production and therefore they did not beautiful plant. they are still letting donald get his victory lap. they are sort of explaining it to us but letting him take his bakery lap. -- victory lap. they want a break on corporate
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tax rates and they want more flexibility on regulations. and fueleenhouse gas economy rules. thatey can get a break on and continue to make money selling suvs and pickup trucks without paying fines and penalties come i'm sure they would love it and invest more here. said we weres looking at this anyway but also doing this with the program policies in mind. -- progrowth policies in mind. will we see more of these ceos start to address what trump is doing? is there enough of a critical mass to reverse these long-standing trends? david: it is a great question. it will not happen piecemeal by pressuring every automaker. there are $24 billion in
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investments either starting production now or planned for the next few years. it is not just gm, it is volkswagen and bmw and nissan and toyota. everybody is building cars down there. a lot of it will still be coming to the u.s. he cannot go shaving every car company with tweets. -- shaming every car company with tweets. give us a sense of the -- paying workers in mexico versus paying workers in the u.s. union jobs in the u.s. pay a lot higher. give us a sense of how much more. isid: a worker in mexico making a dollars an hour. make around workers $40. wages are much less a factor in the cost of the car than it used to be.
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it is now 6% or 7%. for a car like the focus that already has been margins or doesn't make money, it makes a big difference. that is what he is up against. it's about a $900 per vehicle difference if you take away the shipping cost. that is quite a bit of money and you need a terrorist overcome that. -- tariff to overcome that. scarlet: that was david welch. we will dive into who is winning and losing when it comes to debt underwriting. happening right now on capitol hill, the 150th congress has gaveled into session. you see nancy pelosi leading the democrats. congress has
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gaveled into session. momentan will speak any now. he will lay out his legislative priorities for the session. ♪
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scarlet: let's head into our bloomberg to show you what we are keeping our eye on. today, it is about debt underwriting. jpmorgan downgrading indonesian stocks to underweight from overweight calling it a technical response to both. the government of indonesia did not like that. they will cut out indonesia from any kind of debt sale. this shows the banks issuing indonesian sovereign debt. jpmorgan is tied for sixth place with socgen and barclays. it's not like it's losing any
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ground here. it has not been doing as well as the other banks. oliver: pretty far down there. city and charter on the same level. still ahead, gene munster has gone from prognosticating apple potential to investing in startups. where he sees the future of tech. this is bloomberg. ♪
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scarlet: gene munster has become well-known for his bullish calls on apple. now, he has left paper jeffries to establish loup ventures. cory: gene munster for the last has been with paper jeffries. jeffries -- piper
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jaffrays. gene: that part is hard, leaving people that mean a lot to me is the hard part. cory: you are taking a research driven approach to venture capital. we will keep doing what we do really welcome which is research. that's what we've done. doug clinton and andrew murphy were two longtime associate of mine. they are joining me. we will keep doing that and keep driving insights in terms of these four major themes, the future of perfect. this is a fantastic feature that has to do with virtual reality, augmented reality, artificial intelligence and robotics. what is unique about loup ventures is our ability to continue to do research, welished that research -- will be showing our work. launched.p ventures
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we will be doing three research notes a week. we will keep doing that and keep doing our feet on the street fundamental research. vr excitement the index where we survey 500 people across the country and ask what their interest level in vr was. it is locum at 10% today, but something we will track over time. -- it is low, at 10% today. carroll: when you talk about virtual reality and br, we have conceptions about what it will mean and how it will impact the world. how do you see it impacting the world? gene: the world will change dramatically. we think the combination of these four teams will be a more dramatic change than mobile or the internet. 70% of jobs will go away. how we work indirectly will be different. vr will notthink
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be as significant as augmented reality. we think will be more important. people will be up to experience anything they want at any time. it will be radical from one-on-one interactions to how we work. cory: how will you structure the fun in terms of the size of the fund, what round of investments you will get an someone? gene: it is a small fund. we will be focusing on seed states. about 30 ofoing those types of investments. investmentsed stage in those four teams. carol: you see virtual reality different and how people can teleport, it is not just somebody who wants to go and be , you're at this moment
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talking about real practical uses. gene: there is. in this research we publish today come in you can see the way people are using vr today will over time that of all overtime. today, it is pure entertainment. will evolvetoday over time. the next is education. the third is games. most people think of vr is all about gaming. those are some examples of how vr can evolve over time. cory: you are based in minnesota. will you keep that base? there are some many public companies in the twin cities area. gene: we will stay in minneapolis. doug will be based in new york.
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we will continue to look for the best companies across all the u.s. there may be some companies outside the u.s. we will invest in. carol: are you going to be working with the well-known tech companies as well? gene: we will continue to write research on the six major tech companies we've covered in the past. will be primaries amazon, apple, google and facebook. how we interact with those companies in the future remains to be seen. have some level of interaction. today is our first day. we will see how that evolves overtime. count thehed you number of people in line for the iphone. do that level of research if you are looking at
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businesses in ai and robotics? gene: we think that will be a critical player in all four of those themes. to import and that we have a real sense of what's going on with apple. we think apple will reinvent itself in the next 10 years. the concept of an iphone will go away. ofwill not be a sheet aluminum and glass in your pocket. in order to nail these themes, we have to nail our coverage on these larger companies. cory: fascinating stuff. will you still make recommendations on these companies? what is the website? ventures -- oliver: time for the bloomberg business flash. invest in a new
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apple- qualcomm will join , which is also reportedly considering $1 billion into the fund. softbank's ceo told donald trump half of the funds he invests in in the u.s. -- are in the u.s. into looking to buy a stake in a mapping consortium -- intel. they must pass a german antitrust inquiry before the sale can proceed. the company will receive an answer in a month. that is your bloomberg business flash update. scarlet: we will move over to capitol hill right now. paul ryan is giving his opening remarks to the 115th congress. the speaker was easily reelected by the house today.
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he's lying out legislative priorities for the session and promising that this congress will deliver for the american people. oliver: still ahead, the commodities close. dollar strength weighing on crude with wti falling from an 18 month high, racing earlier gains. this is bloomberg. -- erasing earlier gains. this is bloomberg. ♪ wow, x1 has netflix?
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♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. anything with a screen is a tv. stream 130 live channels. plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. scarlet: this is "bloomberg markets." commodity markets closing in new york. let's take you look at where things in stanford we begin with
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crude oil, racing losses earlier in the session to end the day down, blame it on dollar strength. oil down 2.6%. started thefutures new year on the wrong foot. ,iving back some of its gains falling the most in three years, down 10.5%. that is because of forecasts for milder weather this month. futures extending their gains to a three-week high as the end of the quarter down by quite a bit/ . for more on the global outlook, bloomberg surveillance spoke to ian bremmer and dominic barton.
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bremmer started by discussing the breakdown in traditional alliances. >> this geopolitical recession we've entered into means the traditional alliances are falling apart, the americans are going their own way and independent america is shedding the burdens of multilateralism and traditional alliances and that means not only that you weaken that architecture but also that the trust is evaporating. ,henever you do have a crisis those allow you to back away. spend an hour with guy johnson and ian bremmer and two hours with don martin and larry summers, about 10 minutes. if dr. bremmer is talking about a lack of trust and international relations, how does that fall over to the confidence of america? >> it does affect it. are used to we
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eight-tenure cycles of boom and bust. this is a long wave of cycles. people are nervous but don't see anything changing significantly. what i think is happening is people are wanting to keep investing and moving and figuring out where things are but i don't think there is a full realization of what this means. it is a longer wave shift that is occurring. tom: within that is a corporate -- how crucial is the message from president trump to corporate america before the inauguration? >> i don't think that is that important. what will matter is what he does. there's a lot of expectation of reform. radical reform, some government, getting rid of regulation, the stimulus program on the structure side. there's a lot of expectation. we know from previous presidential episodes, it is the
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first year that actually matters in terms of what happens. what does he have done by november of this year? what is actually being done? scarlet: let's bring in guy johnson in london. guy: how quickly will the world come to understand on trump? -- donald trump? ian: they understand certain things. the chinese government absolutely gets that they have opportunities to develop the importance of their economic models and preferences and build their alliances because the u.s. will not be doing as much. they are acting as such and you see it everywhere. that is different from saying how countries will interact with him directly. what is the u.s.-russian relationship look like? ,hen trump comes in irrespective what the
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intelligence committee says, he will work with potent. we don't know how long can the durable, how sustainable that is. the fundamental interests don't actually align. what is going to happen between trump and merkel? very cold and cautious the way merkel responded to trump when he won. what does the first summit meeting look like? in the run-up to this inauguration, we've been making history every day with what trump has been tweeting but he hasn't done anything yet. let's be clear that what trump does on the global stage is going to make history from january 20 over the course of 2017 and that is the principle driver of risk in the global markets today. oliver: that was ian bremmer. -- donaldlitics at
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trump has been tweeting about all sorts of companies since winning the election, taking aim at boeing, lockheed martin and gm. one industry is excited about a trump white house, the private jet business. we mentioned a few companies he targeted. why does thatthat translate into good things for the private jet industry? thomas: he will set a different tone for the industry than the obama administration. that could trickle down into more sales and a lot of companies are excited about the promise of tax cuts. that could boost corporate profits. us.let: set the scene for the heyday of private jets back in 2007-2008 -- right now, you have a lot of surprise, huge amount of inventory, a pickup in
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demand is what people are talking about. thomas: we are seeing used private jet prices fall. they would like to see stabilization there. some are starting to see that the memorial curries -- more inquiries. but helps the new jet sales as well. there will be more new jet sales. we have to look back at the market crash. it was almost like the housing crash. jets,of purchases of maybe too many were being made. , pricesnd fell out dropped and we are still recovering from that. we will probably never see those 1000 unit shipments per year, but we are gliding -- they're hoping the market turns around. we will still see a drop in new
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plane shipments in 2017. scarlet: what kind of numbers are being forecast for this year , then? forecastingrgan is 625 private jets. that is down from their estimate of 655 in 2016. in 2015, it was 689. it is on a path down. why 2018, they are forecasting it will start to turn around. oliver: when i saw the article, i'm thinking about private jets -- is there anything about trump's personality? it's about whether or not his policies will create more expendable income for rich, wealthy americans? thomas: we have to contrast this with the obama administration. he came into office when the economy was in freefall.
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we had the big three automakers fly in their private jets to washington to ask congress for bailout money. that was a low point for the image of the private jet market. they caught a lot of backlash from the president and congressman as well. mr. obama was also adamant about jetx break that the private industry had come a closing that loophole and he called out the industry quite a bit on that. they are hoping that will go will set amr. trump different tone and maybe corporations will be more willing to buy the private jet. andlet: a bit about policy personality. let's get you to the first word news. courtney collins is in the newsroom. courtney: house republicans have dropped their bid to weaken the
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independent office of congressional ethics. the move came after president-elect donald trump blasted the decision as counter to his call to drain the swamp. the amendment was stripped from the rules package by a vote in the last minute of the meeting. trump wrote -- he suggested republicans focus on tax reform and health care. meanwhile, president-elect donald trump digging deeper into allegations that rush interfered with the presidential election. -- advisor, kellyanne conway >> he will have a briefing with top intelligence officials. he will learn more about what they say -- we are tired of the insinuations rather than dealing directly with what may or may
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not have happened with the hacking. courtney glenn trump has repeatedly -- courtney: trump has repeatedly denied allegations. paul ryan has been formally reelected house speaker. he won the post with 239 votes. only one republican voted for someone else. ryan called the job a once-in-a-lifetime opportunity. south korea's president is refusing to testify in the impeachment trial that will decide her future. the constitutional court delayed the start of oral arguments and asked her to testify thursday. the court can proceed without her if she refuses twice to appear. she's accused of corruption. the uk's ambassador to the european union has unexpectedly resigned. a government spokesman says he is leaving so a successor t
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can be appointed before leaving the european union. downplayed's office remarks attributed to rogers which said it could take up to 10 years to negotiate a free trade deal with the european union. even then, the eu parliament could scuttle it. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm courtney collins. this is bloomberg. scarlet: thank you so much. coming up, one of the primetime stars of fox news old thing -- bolting to nbc. why megyn kelly is making this move. this is bloomberg. ♪
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scarletoliver: this is "bloombeg
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markets." scarlet: she's the only woman with a prime time show on the fox news channel. now, megan fox is bolting to nbc. she made headlines after donald trump criticized her after the first gop primary debate in august of 2015. is there a big business impact here? joining us is lucas shaw. fox news channel is a moneymaker for 21st century fox. lucas: fox news is the most profitable segment of 21st century fox unless you count all of fox sports. they had printed money for the past two decades. the real test will be whether a the loss of anyone personality will matter. they lost glenn beck if years ago. -- a few years ago.
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what megyn kelly has going for her is that she speaks to a younger viewer. that is something that could be very important to fox moving forward. oliver: what does it mean for the other party at play here, nbc? does this bring them closer to the ratings the cable news channels have? are they hoping to bring over viewers from another demographic? lucas: she is one of the biggest stars in television news. they are hoping she will bring viewers with her. nbc news fares pretty well in the nightly news. areas where nbc has not been quite a strong -- cbs does really well with 60 minutes. abc has nightline 2020.
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nbc tried something with brian williams if years ago. the hope is that megyn kelly will deliver hits of her own and the a valuable person to have during the election. she built her profile by confronting donald trump and other people in the campaign, giving tough interviews. scarlet: there's a lot of speculation that she was looking to move to another network. abc was in the mix, cnn was in the mix -- what was it about the nbc offer that made her decide on nbc? the head sounds like of nbc news met with megyn kelly and said, what do you want to do? we will make it happen for you. megyn kelly has made it clear that she wanted to be more than just a talking head at fox. she was different from bill o'reilly and sean hannity and that her show is news rather
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than opinion. she hosted a primetime special on fox broadcast network last year that did not get huge ratings but was a sign of what her ambitions were. she flexes a lot of different muscles, becoming a part of all nbc news coverage. lucas shaw a bloomberg news in los angeles. come for the bloomberg business flash. 40 is reacting to criticism from is reacting -- ford to criticism from donald trump. it will spend $700 million expanding an existing plant in michigan and adding 700 jobs. revlon set to cut 350 jobs across the world. thecuts are links to berkshiren -- hathaway will take on risk from
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the deal willid reduce the fourth quarter earnings by $423 million. the company said it expects to maintain its 2017 plan for share buybacks. that is your business flash update. oliver: let's head over to julie hyman for today sector report. from: looking at xlv one of the best performing sector etf's we watch. up 1.1%. tiedappears to be partly to what's going on in congress and that vote to essentially repeal the affordable care act. look beneath the hood, there are some winners and losers. overall, it is lifting that entire etf. terribly wellone
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over the past year, down about 1.4%. it has struggled to some degree because of some sector moves within it. one of them within specialty pharma. vanda pharmaceuticals down last year, up 6% today. affect and aaca bounceback affect, rotation affect as people take a look at the market with fresh eyes going into 2017. new genon energy oh also regeneron also-- bouncing today. --vergence herein incorrectly. up up.ot is up -- aetna is
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oliver: coming up, janet yellen's 2017 agenda. factors that may influence the central bank in 2017. this is bloomberg. ♪
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oliver: this is "bloomberg markets." the fed unveils the minutes from its december meeting tomorrow. will be an interesting year for the fed in 2017 as a strengthening dollar and the unknown variables of the trump presidency could force janet yellen off the rate hike path. joining us, mike mckee and joe weisenthal. what are we looking for in these minutes beyond rates went up? mike: not a whole lot.
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we make it some indication of they feel about raising interest rates again and whether or not there was any discussion of what the trump policies would impact -- what the impact of trump policies would be. if we get a lot of stimulus and people are worried about with the going up and fed could be forced to race sooner and faster. suppose we get a trade war. fed isnomy tanks and the forced to be on hold or even look at cutting rates. a lot of uncertainty. ngarlet: a lot of guesstimati going on. you have a new face at the fomc. in and, new members come others go outcome including three of the dissenters over the last year. joe: we get a refresh.
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of course, we are going to once again see how janet yellen does at creating consensus at the fomc. many think that is an important ability to corral the fomc around stimulus. scarlet: it will be more dovish this time. joe: a bit more dovish. over time, the new administration will have its own additions to the fomc. be one of our first real indications as we get those names going forward. whether they will be real tension between this fed and this administration -- people thisargued that for administration to achieve its goals and increased labor force participation rates, it needs the fed to play ball. it will be interesting to see if they can avoid a clash. mike: charlie evans joins the voters.
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he's been around for a number of years, he is relatively dovish. you have others who have never voted, so there's no track record. oliver: it seems like they have to ascertain whether or not the fed members want to hike based on all the fundamentals that we watched come into play before the election versus the euphoria in markets. we have seen gains in the dollar. breaking down what is what is what's important. mike: we will have janet yellen trying to corral all the voters into a particular move, whatever that move maybe. also suggested that maybe we are going to see too much stimulus and we don't need stimulus at this time. there will be different views on how this will impact inflation. therefore, how fast the fed has to move. they will not know for some time. has proposed all kinds of
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things on all kinds of sites. -- once we getes some sort of legislative package together, the fed will have a better idea. this will take months. on hold a fed to be unless the economy really starts to power ahead in the next couple of months. they will be on hold for a while. oliver: hopefully we get some clarity from donald trump and the fed. thanks so much. capitalp, sky bridge and investors in 2017. this is bloomberg. ♪
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oliver: it is 8:00 p.m. in london. >> welcome to "bloomberg markets." ♪
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oliver: we're live in new york for the next hour. here's what we're watching. stocks under their session lows as they wrap up the first training session of the year. percent gain after crude weight on stock market, and the dow still flirting with that level but about a 100 points below it. bank, we willche have more on that. sayshe indiana governor the fed rates louise pressure on other central banks. more from that interview is coming up. about an hour away from the close. seeing stocks hang on but as you said, paring the games we saw initially at the opening trade this morning, that
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has something to do with the dollar and crude oil as well. strongest of the three of about .5 person. it will be of a piece we have seen in the past five years care the s&p 500 was down about 5%. in each of the past five years, the first of the year has been a reversal from the prior year. the white buyer -- white bar final week of december in the blue is the first week of january in the last five years. whether or not there was a game or a loss, it was the opposite the first week of the new year. outee investors cycle in or to do now what happened at the end of the prior year. we will see if the same thing happens this year. if you look at some of the movers, that was another theme i am watching. we have got verizon higher on a recommendation over at citigroup
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on the company's and the day strategy. facebook along with other big tech stocks, google is significantly higher as well. top performer last year pulling back. we had commentary from wells fargo which rates the stock, sharplyt could flow this year. an analyst who said starbucks could overtake mcdonald's in terms of number of look haitians in the coming years. an interesting note there. outside of stocks, we're watching the dollar and commodities. the dollar getting a leg up today out of the headlines afford, which gave it a particular leg up over the mexican peso. was the movement you saw, still hanging on to a gain. the bloomberg dollar index is at a record high here in we're
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looking at the effect on commodities. gold is higher and some of the more safe haven commodities. .il is not natural gas is lower an inverse correlation with the dollar to some extent. it remained dancing along the bottom. oliver? oliver: thank you. an thetney collins is newsroom with your headlines. courtney: george w. bush and his , bill clinton and hillary clinton will also attend. jimmy clinton and his life -- jimmy carter and his life also said they were going. former president george h.w. bush confirms they will not be attending. dozens of the nation's capital scientists signed an open letter to president elect trump not to mess with the -- obama's nuclear deal with iran.
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nuclear arms manufacturers say this the best chance to prevent iran from developing a nuclear bomb. trump has declared the deal a disaster and said dismantling it is his number one priority. a jury in south carolina wilbur deal whether convicted killer will get the death penalty. he is accused of fatally killing nine people. roof says he plans to have no witnesses or present any evidence. the new secretary-general of the united nations says he is no ofacle maker but wants all hundred 93 nations to come together and solve the terrible problem the world faces. after taking the reins, the former portuguese prime minister
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said conflicts are multiplying and have triggered global terrorism. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. thank you. headlines last year when he thank you. headlines last year when he decided not to seek a second term as governor the central bank. the professor spoke exclusively today with bloomberg and they asked him about distortions in the bond market. listen. process with the federal reserve seeing women for accommodation and starting to raise interest-rate, you will see the pressure of other inch -- other banks, as much as it been in the last few years.
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my guess is we are in the process of an exit. how fast it will be depends. how comfortable the federal reserve feels with those policies and whether they feel the need to move faster or slower depending on what administration proposes. >> it seems to me as one pressure goes off, another comes on. you hear the rhetoric during the campaign. is happening what on capitol hill. members of congress's win in, many hellbent on changing the relationship between a congress and the federal reserve. how does the bank deal with it? >> it is an important issue there across the world. because central banks have been the only game in town for the last few years, they acquired a sense of political power that creates apprehension amongst the
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political establishment. because they would like to control that power. unfortunately, it is coming to a point when central bank independence will become , as inflationary pressures rise in central banks are asked to control inflation, for which we spent many years getting an apparatus which ensures independence and that they can raise rates at the time needed without feeling somehow constrained by political pressure. these pressures, the time when it is a delicate situation for central banks. >> delicate indeed. the backdrop is the possibility we could see policy changes and tax reform, infrastructure spending package. it seems to me this said is a dammed if you do dan do if you if you do,mned
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damned if you don't. givenave no doubt that the tradition they have established, the fed will do what it thinks it is right -- is right. rather than cave. tom: this restaurant the top of 2017 for eurasia group, we spoke with secretary summers this morning about dollar strength. when you look at the research from robert mundell and jacob years ago, we can look at the academics of it. you had to live the reality of currency dynamics. over ahave a concern strong dollar in this 2017? >> i think a strong dollar is natural. of course, one piece of research
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that may be hard for anyone to predict, the exchange rate over any significant time. the expectation is dollar will remain strong. that is consistent with the federal reserve the first out-of-the-box and that will help other countries in the sense of reducing pressure on them to adopt increasingly aggressive policies. to roof be a headwind because of the obvious effects on exports and imports. with the kind of fiscal packages being talked about, it may be that it does more in neutralizing rather than in substantially reducing growth. here of theus president-elect is pretty and just that to the u.s., in sourcing. how difficult is the path forward going to be for donald
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trump? in indianan him eat and deal with companies on an individual basis here. difficult will it be to focus so exclusively on >> you know, the date on manufacturing suggest that the u.s. has steadily lost jobs, however, the extent of manufacturing in the united states, the share of gdp has remained constant. it is not that the u.s. is losing a tremendous number of jobs -- clearly factories are shutting down but new factories are opening up in different areas for example in high-tech. the bottom line is the loss of jobs is not so much because the u.s. is on compared in manufacturing, but because technology is replacing jobs, many of them, because we have manufacturing in a smarter way you'ren that sense,
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really working against history when you say, we are going to bring back jobs. are you also going to send in a way of automation, which is probably more important in terms of reducing jobs? report, thisong was a sentence where we said something like, many people in the u.s. have not benefited from trade. that is the line going around which is tremendously dangerous both in the united's and the world. hasody in the united states benefited from trade as a consumer. at the prices at walmart and target and so on. you would not have those prices if you did not have imports from other countries. scarlet: that was professor at the university of chicago school of business and of them are governor of the bank of india speaking with surveillance team. oliver: coming up, the former
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deutsche bank co-ceo -- it's trailed as its president. looking into whether it is a good fit on both sides next. this is bloomberg. ♪
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scarlet: this is bloomberg markets p ryan scarlet fu. oliver: i am oliver renick. , a $2 negotiating a stake billion private equity portfolio who say on the terms, will place asset in a new vehicle for which they will pay $1 billion for a 50% stake. the french firm could also provide about $200 million in capital for other deals.
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spacex plans to return it by next week, launching several satellites from california. the first wash since the fireball destroyed if the spacex rocket last september. this happened during a test firing of the rocket engine. the u.s. federal aviation administration is still investigating that incident. bank of america is extending its lead in the bond business. it held the top spot as the head of the u.s. state and local debt for a fifth straight year. running to data compiled by bloomberg, they boosted their share by two percentage points, a bigger gain that any other bank. that is your bloomberg business flash update. scarlet: he helped build deutsche bank into a wall street giant. now, he is planning his sex -- second act at a smaller rival. more,, going from one of the
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big bracket firms to a boutique investment bank, before that he was doing something -- >> he was. he was an advisor and we do not know whether or not he will stay in that role. it is something a lot of banking executives have been doing. we see people investing a lot of companies. he did see a lot of that and now, he has returned to the banking world. thanking looks a little brighter with president-elect trump. oliver: is that the mindset behind this? do we know whether or not he had been wanting to get back into the more core financial aspect of the industry, or is it saying, here's what we're looking at in the next four years, the oldest truck the about deregulation, banks coming back, why not be a part of that? >> a lot of things we were talking about is the ceo at fitzgerald, having conversations
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in the spring of last year, friends for about five years. in spring, they said, this is what the financial landscape will look like. there will be a lot of clients moving away from large banks because the banks will focus on the biggest clients. a lot of room to take a lot of debt and equity sales and that is what they will be building on and on top of that, they have a lot of room to build certain regions. >> do we presume fitzgerald will build its fixed income priced commodity, specifically aggressively? that was really the baby. >> we do presume that and we are raising capital to help finance the goals and make it all possible. dayid say this for the next -- they have been trying to grow for a while. we will see if they can really rebuild something that is only 1/10 of one side -- of the size deutsche bank was. oliver: give some back trap
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because recently, deutsche bank has been in the news for not good reasons. talk about his tenure there and what the opportunity provides let's get back, on track and do what we did somewhere else here. >> according to the ceo, he said we will not rebuild the bank here and that is not what he is here to do. a lot of people are saying this is his revival, a chance for him , what he really build his name for since 1995 before rising to see eln being ousted. pushed out due to all the regulatory things that exist. scarlet: a lot of people see what happened to deutsche bank over the years is his fault, though does back many years. saying extent are they that he is sidestepping a lot of
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fitzgerald,ms, and kind of a tainted man in many ways. he brings with him some problems. >> a have not seen that addressed actually paired with this is former reputation me for his next reputation? we have seen clients come to his defense and say, he still brought as a global perspective. people have also set all of the years of learning with the mistakes are in the system, maybe he can figure out how to sidestep it here. fitzgerald does not have the same regulations as deutsche bank would. maybe you could take some of the risks in a way that is a little less threatening and not systemic institutions. >> obviously, it has been rebuilding on september 11. it puts a big dent in the company. they have rebuild themselves by acquiring other companies. will that be a model for growth?
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or will it be with the new leadership? >> they have said they will seek new clients. a lot of people, some european leaders have left but they will thoseo hire to rebuild businesses. we will see if they will acquire more companies as well. theyf i was a program acquired a couple of years ago. we have not seen them do anything major. but they did go hostile. for now, the story is that they will continue to hire and expand their client count. scarlet: thank you. ahead, today's trade is paypal and shares are up 9% in 2016. our next guest says the rally may have more to run as well. this is bloomberg. ♪
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oliver: this is bloomberg markets. scarlet: it is time for options insight with julie hyman. joining me today is kevin kelly, chief investment officer at recon capital. we talked about the flv rallying the besth one of performance today. you're looking at health care going into 2017. why is it attractive? at a lowerading multiple than the rest of the market. four point five times earnings versus 17 for the overall. if you went into doubt sectors and put them on for onshore energy and financials, it works out. next week, the jpmorgan conference.
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a lot of management talks up this year. well.ill be a big play as the population is getting older in 2018. the average baby boomer is turning 65. illnesses, it bodes well for health care. when people actually do eat healthy, they do need research and development. a couple of things are in play here. is donald trump supposed to say about how do you feel about drug prices? he has to say -- >> reacted when these were made. strategy where you are protected to some extent from political risk? >> absolutely. people can actually buy the etf and they can sell a call that is higher and use those proceeds to get the upside and not have to worry about the downside.
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a lot of times there is a cost but it does not cost you anything. your trade of the day. -- >> that is a one-year call option again. lower your thesis, 3850. 44 down to 36, it is in the suite spot. lowering your cost, but the best part is the economy is recovering. emerging fores all
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bloomberg, airbnb, stub hub. of financialaws services. and want a amazon better valuation, they have the same customers. >> we have got to leave it there. back to you guys. scarlet: still ahead, we will discuss the top macro issues for investors this year including china, oil, and europeans that's. this is bloomberg. ♪
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regulation. a meeting was requested with senator sharad discuss key issues and that he will cooperate with the protocol of the finance committee. the nomination is subject to approval. senate minority leader chuck schumer is pledging to hold donald trump and congressional republicans accountable. the new yorker says democrats will hold on the promise to make america great again as long as that means trading jobs and protecting civil rights. he issued a warning about the supreme court vacancies. hold the president accountable if he does not nominate a mainstream supreme court justice. president obama nominated a mainstream candidate in merrick garland. president-elect trump should do the same. >> he also want against a twitter presidency saying the


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