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

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from bloomberg world headquarters in new york, from washington to baltimore and atlanta in the next hour. euro the top stories. in markets, the trump train shows signs of fading as the president's approach to investors,nder stocks setting in for a fourth they are decline, the dollar getting its worst drop since march. democrats are renewing an assault on his pick for attorney general, questioning jeff sessions. the next supreme court nominee, we will get the latest from washington. shares of under armour are sinking the most in nine years. a dismal forecast rattling investors in days of rapid growth drawing to a close. julie hyman is standing by with a look at the markets. >> in the fourth straight day of
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declines, it is the first four-day decline we have had since the election. we have seen under armour tumbling at the worst stock in the s&p 500. the majork at averages, all of them down at least one half of 1%. folks have been selling stocks over the past days, they have been buying treasuries. you just heard funny speak with economistof the chief in the long-time veteran of the bond market. he says the firm is still long treasuries, like the 30 year. you see it is down three basis point in terms of eels today. he says that if you see fiscal spending, fiscal stimulus in the united states, it is not going to do much good unless you see a reduction in debt. he says he doesn't expect to see that. on the flipside, if you look at the ripple effect in stocks, you see interests doing better today as rates have been pulling back. estatelities and real
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and telecom stocks are all higher in today's session. that is not enough to lift overall stocks. another really fascinating phenomenon that we have been watching is sentiment right now. versus the actual numbers we are getting, we got the case schiller index that was an increase in home prices. we had costs coming in worse than estimates. the blue line is the hard data we get on a number of different fronts. talking about gdp and home prices, business and consumer surveys measured sentiment. that is the orange line, which is bearing much better. there is optimism right now even if the data is not necessarily yet bearing it out. finally, back to hard data, let's talk about the earnings .hat we continue to get out exxon mobil is disappointing, a rare disappointment and a broad one. the biggest in at least a decade is going to write down the value
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of some of its gas operation. ups being affected by currency, so it is forecast has disappointing and the same situation with mastercard hurting its european businesses in particular so both of those stocks are down on earnings as well. vonnie: thank you for that. let's check in on first word news, going out to our new york newsroom. house speaker paul ryan is admitting there is some confusion during the rollout of president trump travel ban. >> at a news conference today, ryan said he has spoken with the department of homeland security's secretary john kelly about how things should be done from here on out. >> no one wants to see people with green cards or special these is like translators get caught up in all of this. i think, regrettably, the but i amas confusing confident secretary kelly is going to make sure this is done correctly and give it a good review and make sure we get this
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program up and running with the kind of standards we all want to see. >> speaker ryan says the president has the responsibility to protect the united states. he also said he supports mr. trumps action to take a pause and make sure our country's vetting system is "up to snuff." democrats are warning they are ready for a fight over trust choice for attorney general. republican senator jeff sessions. last night the president fire the person temporarily holding the job, acting attorney general sally yates. lawyerstold government not to defend the ban on citizens from seven predominantly muslim nation. the judiciary committee has scheduled sessions today but house democrats want more time to question him and asked if he had the independence to stand up to the president if he disagrees with him. the trump administration has also replaced the active head of immigration and customs enforcement. daniel ragsdale will return to
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his previous job as the agency's deputy director. he was being replaced by executive director thomas hohmann. there has been no explanation for that change. brexit minister david davis is naming british lawmaker aston -- asking british lawmakers to trust the people. he called on the house of commons, warning there was no turning back on brexit. >> there must be no attempt to remain inside the european union, no attempt to rejoin through the back door and no second referendum. the country voted to leave the european union and it is the duty of the government to make sure that we do just that. >> the house of commons>> is the 17 word bill that would let prime minister theresa article 50y trigger of the treaty. 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 mark crumpton. this is bloomberg. david: thanks very much. to some headlines now, secretary kelly, head of the department of homeland security speaking outside that agency addressing that the immigration executive order was announced and he spoke saying that the u.s. will examine the ministration desk the immigration system over the next 30 days. he says foreign partners will have 60 days to cooperate and donald trump's orders will be carried out, in his words, " humanely." momentspeaking just ago. another busy day in washington with a focus on cabinet picks and the meeting he had with pharmaceutical executives on what happened so far. if you look at bloomberg's washington correspondent on capitol hill, reporting from the white house is jennifer epstein. at the white president trump sitting down with rudy giuliani, his advisor
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on cyber security matters. we expect an executive order on cyber security today. what is the focus on cyber security of the white house? >> the focus so far seems to be on preparing the trump administration, preparing all different parts of the executive branch for a potential cyber threat. we have been told that the trump administration is going to get started on the executive order. some of this has come from conclusions reached by the obama administration about what needs to be done to secure the agencies. , one, giveill do is the office of budget management over all, individual agencies throughout the government have their agency heads in charge of using private sector best practices to secure their agencies from cyber threats. something where there seems to be a lot of consensus in washington, that more needs to be done to secure
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every government network and email system and all of that. and that is a big area of vulnerability for the u.s.. this is one step in that direction. we haven't seen the full text. but included in this is some talk about free and open internet. we are told it does not actually address the issue of net neutrality. we have been talking much more about trying to avoid cyber threats and cyber danger and that is where this whole thing lies. be signed, this will and we will get more detail about what exactly it says. vonnie: let me go to kevin cirilli on capitol hill. we are getting word from the department of homeland security, the chiefs saying that the trump ."der is "not a ban on muslims
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john kelly saying foreign partners will have 60 days to cooperate. those are fighting words. in congress, the fight has escalated on the part of democrats because of donald trump's firing the acting ag. what is the latest on that? >> in terms of the immigration temporary travel ban, of course, republicans are consistently staying behind president trump but they are privately voicing concerns for the rollout. earlier today, house speaker paul ryan is admitting that there was a botched rollout regarding the temporary ban. in terms of the nomination fights, there has been quite a moment of surprise percent republicans on the senate finance committee when democrats boycotted the committee approval of both tom price as well as steven mnuchin. this caused finance committee chairman orrin hatch, a
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republican, off guard. he referred to his colleagues in colorful words. let's take a listen to what he said at that hearing earlier today. they ought to stop posturing and acting like idiots. stop holding news conferences and come here and express yourself here. and then vote. >> after the hearing, i asked chairman hatch about what is next in the process and he says he is confident that he would be able to come up with the procedural mechanism to get medicine through but democrats are sending a strong message that they are not on board with president trump's economic appointees. >> talking about vonnie, asking ,bout what happened last night what has the white house said about its approach to that
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matter, how they explain what happened last night? >> so far, what they had done is not put a whole lot today but what we heard last night was that they believe that she would not be doing her job as a justice department official to uphold the law. we will be hearing that again from the press secretary in a little bit, that the white house is very confident that the actions they took our legal and that the justice department should be defending them. and already, the justice department was defending them. this message, i think, was supposed to in some ways not just be legal but political, that she had these concerns and that she was going to voice them and make it clear that this was an issue. vonnie: jennifer epstein, our white house reporter. taylor's verrilli, bloomberg chief washington correspondent.
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the u.s. federal reserve is meeting this week and they will hold a decision for the first time since donald trump took office. this is bloomberg. ♪
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vonnie: this is bloomberg markets. i am vonnie quinn. david: i'm david gura. the federal reserve kicks off a two-day meeting today, the first gathering since president trump took office. all street is not expecting rise in rates and investors are wondering how president trump promises on tax reform and fiscal spending will impact the central banks. here's the head of u.s. credit interest rates strategies in new york.
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let's get a sense from you of what you are expecting. what are you looking for? >> in short, not much. we don't actually expect there is going to be much of a change in a statement. partly because the way the they haveis now, given over to a hike if necessary. they are not going to foreclose much, which is something markets are speculating about. they are going to signal something happening. part of the reason for that, there are two reasons. one is there is no inflationary approach. it is kind of disappointed. it gets in the first quarter before starting to rise again. there is no pressure for them to move fast. as you mentioned, there is a lot of policy uncertainty. we don't quite know what is actually going to get in from the fiscal side and for these other policies.
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i think it is a wait and watch for now. adamanthow are you so that there aren't any inflation pressures when we are seeing pressures building now? >> you might be talking about what we saw in europe today. some of this is headlines, something everyone has been expecting. it is largely based effects from energy. generally, central banks look through that so if you look at cold dynamics we are not seeing analysis -- , this vonnie: this is my term now. the five-year forward has been rising in the last few days. we are coming down slightly. but you can see we are way above where we were. >> that is correct. in market-based inflation expectations, they have gone up but the real question is what is happening with actual inflation readings that you are getting. pc, --look at red for
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red core pc it actually dropped. so there is still some room to the fed's target. even that rise that you have seen, this from extraordinary low levels you showed me, historically they used to be around 2.5% so we are still a few basis points below those historic levels. david: from the press briefing a few days ago, a reporter asked the new press secretary about the employment rate. what is the unemployment rate? how do you gauge it? there was a lot of back and forth. do you expect they will soon say we have reached full employment? there has been so much on the fed. is this a chance for policymakers to put a flag down? >> some members are saying that already. it is a question of whether a majority of the committee come to that conclusion. i don't think there is a disagreement that they are close to full employment. there willmist
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acknowledge that you don't know what for employment is until after the fact. so you realize they are close but the question is, what about the other part? are you seeing inflationary pressure? as long as you don't see it they have some room. >> year-over-year, 1.6% yesterday. more are approaching 2%. >> there is plenty of room to go from 1.6% to 2%. if you look at what is likely to move these metrics, we think, in fact, these are going to decline over the first quarter before actually going back up again. this is much more slow-moving than the headline. you have seen headline numbers bounce quite a bit and all of that is really in urging. -- really emerging. vonnie: how long until the president's changes take effect? originally, we thought some of it, in terms of tax changes and so on would get done by the
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second quarter. now it looks like those timelines are getting extended and the longer these timelines get extended, the harder it is for yields to actually rise. we are going to be in this range and grind a little lower. eventually, when you get this potential catalyst, move them back up. vonnie: he is the head of u.s. interest rates. bloomberg will have special coverage of the federal reserve. first my term policy of the year starts at 2:00 p.m. in new york tomorrow. still ahead, under armour is under pressure. what is behind the ugly earnings ss. this is bloomberg. ♪
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vonnie: this is bloomberg markets. i am vonnie quinn. david: i am david gura.
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let's go to julie hyman for a look at the markets. >> i am looking at under armour. the shares or falling 25%, by far the steepest incline in the s&p 500. looking at the a shares in particular after the company's first quarter sales came in lower than estimates. sales this year will rise 12% but that represents a slowdown. this is having a ripple effect among competitors as well as retailers that sell under armour . nike down, dick's sporting goods is the largest retailer of under armour products and foot locker is down as well. what is interesting is if you look at under armour, investors are betting the stocks will continue to decline. look at the bloomberg #btb 441. if you look at it, it is the highest short interest within the s&p 500. about 23%. you can compare that with foot locker and like he -- and nike.
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also, when we talk about that revenue slowdown, this is just a graphical representation. this shows the year over year gaining in sales, going all the decade, more than a back to 2009, excuse me. the prediction of sales growth since that. period of time. if it is going to be a sustained slowdown, investors are questioning what that means. vonnie: julie hyman, thanks for that. for more on under armour, let's bring in an analyst for bloomberg intelligence. i put in your name, sorry. -- i butchered your name, sorry. how do we do this without having to deal with the new in ministration -- the new administration taxes? tell us about the current state
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of affairs. >> for under armour, we are looking at a category that has been hurting for the past year. we have bankruptcies in sporting goods. the story weity, have seen, is the dollars are shift -- shipped to new retailers. it means those daughters -- those dollars go online and it how to be figure out their products. david: julie hyman cited the competition between nike and under armour and a fetus. -- adidas. >> that brings me to the second problem. sports can pull data formulas obit. in the last quarter, if you look it went up.ere, if you look at performance for wear apparel it went down. under armour is very exposed to
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the segment, unlike nike and adidas. it might be doing better, even in a challenging environment. whate: talk to us about they are saying when it comes to forecast in terms of the tax in the trumpet ministration. mentioned, they are effecting 12% growth in 2017 which is way below the growth we have seen since 2009. we don't know anything specific about the adjustment tax. are havingpens, we 90% of products imported throughout -- from outside the u.s.. that could be a major problem. david: what do you expect to change going forward? what sort of changes is this company going to make? >> that is a possibility. you will see more focus on the segments working for them. much smaller than apparel.
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it is much stickier in category. it does a much better job for international markets. about 60% for under armour. and inaking some strides terms of geography they can do better that. david: great to see you. thank you very much. the analyst for bloomberg intelligence joining us in new york. mosts of ups falling the in two years following third-quarter earnings falling short. we will see risks coming up. this is bloomberg. ♪ ♪
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david: live from bloomberg world headquarters in new york. vonnie: this is "bloomberg markets." let's start with headlines.
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at the first word desk is mark crumpton. mark: john kelly is providing more details about how president trump's travel ban will be implemented. secretary kelly said the executive action on foreigners entering the u.s. will continue to be carried out humanely and the order is "not a ban on muslims." the leader of the european union put the long time -- the united states, a longtime ally, in a threat category. president trump is "highly unpredictable." he mentioned the trump administration as part of a threat that meant -- that includes russia, china, radical islam, and the war on terror. president trump announces his first nomination to the supreme court tonight. according to people familiar with the process, the president will select one of two federal appeals court justices -- court judges. both are considered
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conservatives likely to be opposed by senate democrats. we will cover the announcement live at 8:00 p.m. new york time here on bloomberg television. democrats on the senate finance committee are boycotting confirmation votes for treasury secretary nominee steve mnuchin and health and human services nominee tom price. -- says both candidates will both be approved. new report predicts china will overtake the united states as the country with the biggest nuclear power capacity. bmi research says china will triple its atomic capacity by 2026. china has 20 nuclear reactors under construction and another 176 land or proposed. global news 24 hours a day, powered by more 2600 journalists and analysts in more than 120 countries.
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i am mark crumpton. this is bloomberg. vonnie: let's take a quick look on u.s. stocks and how they are faring. industrial average down by .7% and the s&p 500 down by .4%. nasdaq down .5%. ricks are -- risks are underperforming. let's go to abigail doolittle now for some more of what is going on. abigail: outpacing the decline for the major averages once again for dow transports. down more than 1.5% today. two-day chart. they are down nearly 3%, on pace for the worst does co-day to drop -- two-day drop. this counts. when we hop into the bloomberg 83, this at g # btv 56
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is a six-month chart of dow transports and the dow is in ofe and since the end november the dow transports and the dow have been consolidating in a range for the -- in a range. it looks like a bearish double top. it would be confirmed if transports drop a load 9000 -- drop below 9000. the reason this would matter is we see the dow is following the dow transports and suggest we could see a decline for the doubt itself. dragging on the dow, we are looking at goldman sachs trading lower in sympathy with a drop in yields and we have caterpillar lower on the news the company is shifting headquarters toward chicago. nike is down in sympathy from the awful forecast from under armour and apple down .4% ahead of the december quarterly report. what investors will be looking
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at is revenues. will they put up $77.3 billion in revenue? this would represent the first quarterly growth since december of 20 15 the revenue dropped. it caused the stock to be volatile. when we look at this chart, it suggests investors are more complacent about this upcoming quarter. in orange is the implied move after a quarterly earnings report. investors are looking for a 3.6% move after the report up or down. 4.6% movess than the on average in the blue bar shows the eight days of trading action into the quarterly report. it is about average. it looks like apple could be less volatile after the quarterly report after the bell today. david: much more on apple as we push towards a earnings. ups shares are down sharply after the company posted a 2017 forecast that fell short of
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estimates. blame onny places some the stronger dollar and about an hour ago i talked to the cfo from atlanta and asked him how difficult it is for the company to navigate foreign exchange right now. >> when you look at the u.s. dollar and we have been talking about this for the last year and a half, we had the advantage of head to that has protected us through the end of 2016. we guided and have been talking about all year that we will see a step down of that. the interesting part of the business is so much of the strength is the international stays on continent or within the area of the world we are doing activity. the strength really has to do with when it comes back to be recorded as dollars and we talked about almost a 500 point basis impact next year. formalhow do you balance global growth with what we see in the dollar?
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richard: i think the special part of the ups model is so much of the europe business stays in europe. it is about trade in europe. the strength of that business and how that business grows is much more dependent on how different countries across the continent are trading. at the same time, all of those have to come back into u.s. profits and we now use a dollar-cost averaging hedge program to protect profits so we can restate them correctly. that isow big a role of uncertainty or the lack of political clarity playing for ups right now? richard: there's been a lot of noise -- excuse me, a lot of news. david: both. richard: the environment for business looks like we are that willo a period be good. the competitiveness of the u.s. economy is something the administration is talking about, whether it be trade, simple
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fight regulations, or reform on taxes, they do things to help corporations and the u.s. generally compete better on the world stage. so much of the details are not out yet, it is premature to talk about any one of those. david: a few months back i was talking with your colleague, the ceo of ups about the transpacific partnership and he was a big proponent of that legislation. now that it is dead in the water, what does that mean for ups ? i think the important point to remember is the administration is really talking about making sure we stay competitive into the 21st century and what that means is in shoring we have fair trade agreements. when i step back and look -- listen to what they are talking about, we are hearing there is still support and will be support for bilateral agreements and some multilateral agreements
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with some of the participants in the agreements that the u.s. decided to walk away from. the important part of trade is no matter the complexity, it is helping to solve and make it simple for our customers. 220 because of the model and scale of ups, as the rules change it will help prepare customers so they can continue to do trade well. david: can you help us understand what percentage of revenues are tied to u.s. exports and imports? richard: if you look at our total business, in the international segment, there is something like about 50% stays within the europe continent, give or take and you have asia, so it is not a tremendously large portion of the total enterprise revenues. making sure about that customers who are participating for the first time understand what it does and also
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for companies of -- like ups to tell the story about how jobs are created in local communities and yound small factors. they compete and participate in global trade. david: you've been spending a lot of money to keep up with the demand for residential deliveries which are less profitable than business deliveries. what assurances can you give to investors that that kind of spending will not go on in opportunity -- perpetuity? the ups the beauty of model is that we are one integrated network. it means not only do the advantages of hub technology and automation help the business to consumer e-commerce volume, but it helps business-to-business , and our international packages. we believe when we are done we
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are taking on a tremendous opportunity and investing in the short-term and at the end our network will be more efficient and have flex ability to take surges on in a more meaningful way. david: you have been investing big in technology with the orion program. are we seeing results of that today? the --: we announced on day that we would spend about 4 million -- $4 billion in cap-x. billion aend over $1 year in technology. when you look at the project of orion, we spent two and a half years integrating it into our operations and what we saw this quarter was that volume was up 5% and the steps we took the volume two was at 4.6%. because of orion, we were only in miles. what that tells you is we are getting the benefits of our technology and we are lowering the miles we are driving for the
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increase in volume. what we are doing is taking the learnings from orion and continuing to accelerate our automation in hubs and different parts of the operation and it will deliver to the bottom line in the long-term. david: that was my conversation with ups cfo richard peretz earlier today in atlanta. is it too late to scoop up tickets to the super bowl? this is bloomberg. ♪ ♪
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david: --vonnie: you are watching bloomberg. mark: this is your global business report. leaves key japan
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interest rates unchanged. the central bank is watching a number of factors, including president trump's policies before making a move. david: the follow-up --vonnie: the fallout from brexit continues to -- a look at why americans pay more for prescriptions than anyone else in the world and whether president donald trump will keep his promise to bring down prices. japan hase bank of kept its stimulus unchanged and inflation forecast largely untouched. the central bank is waiting to see the impact of a decline in yen. they also want to see the policies of a new trump administration. protectionist policies could shrink global trade and a -- and economic
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growth, the importance of the global trade is recognized by g7, g-20, and imf. i do not think protection will is him -- protectionism will greatly impact -- brexitn the wake of the vote -- according to the which increase for a second month in a row in january. confidence is well below where it was a year ago and consumer's appetite for major purpose -- purchases declined. the average college fund lost 1.9% in the year ending june 30. the s&p 500 gained almost 4% during that time if you factor in dividends. walmart hopes it has come up with an answer to the success of
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amazon prime. they are replacing a program that offered free shipping, but had an annual fee. walmart will offer a lower fee shipping, faster delivery for 2 million items. time now for our bloomberg take were we provide context and backgrounds on issues of interest. americans pay more for prescription drugs and anyone else in the world. here is a look at why they are so expensive in america versus the rest of the globe. americans spend an average of $1100 per person per year on prescription drugs. that is more than anyone else in the world. it is true americans take a lot of pills. the real difference is the price of the drugs, management -- which many worn are becoming unaffordable. president donald trump has promised to bring drug prices down. resident trump: pharma has a lot of lobbyists and a lot of power
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and there is very little bidding on drugs. >> the pharmaceutical industry came under fire for what has been labeled price gouging. >> you try to get the highest price you can for a product. >> martin shkreli became the poster child for greed when he raised the price of an antiparasitic drug. ceo wasarmaceutical's grilled by congress when her company raised the price of an epipen more than twofold since 2012. how do drug prices work in the u.s. versus the rest of the world? drugmakers negotiate directly. in the u.s., drugmakers more or less set whatever price the market will bear. while medicare legally cannot negotiate drug prices, private insurers can.
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they typically rely on third-party -- 's often make exclusive and secretive deals with drugmakers which can result in an insurance company covering some drugs, but not others. paying 17% ofup drug cost out-of-pocket. pharmaceutical companies say high profits are necessary to fund research and development and that regulating drug prices might slow medical advances. advocates say lower prices would not start innovation and point out that some drug companies spend more on marketing than they do on r&d. vonnie: you can learn more about prescription drugs and all of our quick takes on the bloomberg. ♪ ♪
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david: this is "bloomberg markets." i am david gura. vonnie: and i am vonnie quinn. it is too late to thank tickets to the matchup between the atlanta falcons and it new england patriots, or is it? five dayse super bowl away, if you haven't bought a ticket is it too late or should you wait until the last minute? >> peers the good news because of this year, unlike other years, the ticket has been going down in price. what happened was everyone assumed the dallas cowboys were going to get into the game. >> america's team. team.rica's
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not the patriots. everyone thought if they got into the game there would be such demand. we know they did not get into the game and tickets are at the lowest point market value that i have seen in the last five years. >> if you wait more you could get a better deal? >> it is just like the stock market. it could go up because people could come into town. right now, if you want to buy a get in ticket you would be spending $2500. for market value, that is a great price. this year i believe the patriots have gotten into the super bowl three times since 2012. to the extent that they are not america's team, does that affect demand or two people turned up no matter who is playing? >> they will pay up no matter who is playing. they are going because it is the super bowl. have beend fans
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spoiled. back in 2001 they had that first trip to the super bowl and most people in new england probably mortgaged the house to go to the super bowl. there is not that feeling of i have to go, people sitting on the sidelines and waiting. for right now, they are not. some of thet package deals you can get with five days to go. what is included? robert: the super bowl ticket is really the most expensive part of a package and as we have said, the ticket is that a low point. here is what you can do. you can get a ticket to the game, hotel. the hotel is one of the hardest things to come by in houston because there is a limited supply of great hotels. the package will include the ticket, hotel, transportation, there are parties that we can include and there are add-ons in terms of gifts. there is a few -- a luxury experience that can be created even this late. >> could people say they want to go to a party with that person
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or get into this particular event? >> it is incredible what you can buy nowadays. for sure. some packages will include access to attend some big parties like the directv party with taylor swift or pepsi's party with bruno mars. the chain smokers -- chainsmokers are performing friday night. we could set you up with a dinner for a former nfl player or some of the coaches, announcers. there are so many people in town, so many celebrities that we can create these packages and they can include the most incredible things. >> you have been in this business for the past 20 years. if you could compare and contrast the pricing and transparency in sourcing and pricing of tickets over the last 10 years or 20 years? robert: when i started in this business back in 19 -- 1999 or 2000 there was no stub hub.
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there was no transparency. i had to make an agreement with a ticket broker who was going to deliver my tickets on site. i never knew really in terms of was i going to get those tickets and i had all of these corporate clients at the event. now there is an actual market. you can monitor the market like i advise people now. you can actually see that. the regular fan can see that. when i was first doing this, i was trusting some guy and meeting a guy on the corner on the street to purchase tickets. it is a whole different world. it is still very similar. one other thing is i would take 2000 i remember paying $1500 market value for a get in super bowl ticket, which is the cheapest ticket. this year we were paying 4500 before the market went down. 15 years and it has gone up $3000. experienceium
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executive. thank you so much. outd: coming up, check pursuits, your destination for the finest things in life. still ahead, we speak with antonio garza, the former u.s. ambassador to mexico. his thoughts on u.s.-mexico relations, the future of nafta, and investments in mexico. this is bloomberg. ♪ ♪
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david: it is 1:00 p.m. in new york, 6:00 p.m. in london. vonnie: welcome to "bloomberg markets." ♪
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bloomberg world headquarters in new york we will take you from washington, d.c. to san francisco and mexico city in the next hour. here are the top stories. poised for the fourth straight day in decline. the trump trade, so-called shows signs of fading. this after american advisers called the euro undervalued. apple, the world's most valuable company, is set to report earnings after the bell today. some analysts anticipate a weak forecast. we will speak to antonio garza, the former u.s. ambassador to mexico. his thoughts on u.s.-x ago relations, the future of nafta, and foreign investment in
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mexico. we are halfway into the trading day. julie hyman is here with the latest. julie: stocks are paring declines as we head into the afternoon. on the several groups rise. the s&p down the least, .4%. that's day gain as to what exact -- let's dig in as to what is going on. we have the interest rate sensitive stocks doing better today. utilities, real estate, telecom shares on the rise. we also have health care higher by nearly two thirds of 1%. it is specialty pharmaceutical and biotech stocks on the rise, that is after president trump met with pharmaceutical industry ceos and talked about trying to get drug pricing back down, increasing competition. he also talked about decreased
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regulation of the industry and so it looks like we are seeing a little bit of a relief rally that the rhetoric is not -- was not more heated. we are taking a look at cyber security stocks and that is as the white house said it expects to introduce a new order emphasizing the various agencies within the government responsible for cyber security efforts and should potentially partner with private institutions. , imperva and palo alto network catching on that. straight day down for stocks. in some of these cases, the fourth straight day we see the trend opposite. the vix is up once again, historically low levels, but up. gold is set for a very strong month. the dollar continues to fall as evil are buying the japanese yen and people are bidding up bonds.
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is julie hyman there with the market update. let's check in on bloomberg first word news. mark crumpton has more. has: senate committee approved with book and donor and school choice advocate betsy for education secretary. senators on the health education decisions and labor committee voted 12-11 along partisan lines to support devos' niminatiopn, sending it to the full senate for action. the vote will be rescheduled for health and human services nominee tom price and treasury secretary nominee steve mnuchin after democrats on the committee boycotted the confirmation hearings. >> nobody called me, there wasn't any indication. it is the rudest thing i have seen because everyone knows how include -- how important the market out is. >> what can you do to move the
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nomination forward? >> i think my colleagues on the other side will wise up and hopefully come to the next mark out. mark: chairman hatch said he had no idea democrats planned to skip the hearing. senate democrats are promising a fight against u.s. attorney general nominee jeff sessions. concern about senator sessions and whether he will be an independent attorney general have increased following president trump's firing monday night of the acting attorney general sally yates. she was terminated after writing a memo instructing justice department lawyers not to defend the president's immigration policy. yates was replaced by dana puente -- dana boente. democrats want more time to question it. in japan, researchers may have found what may be melted nuclear
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fuel underneath one of the nuclear reactors that has been almost six years since the fuel was lost in one of the worst atomic disasters in history. may sendiggest utility in a robot as soon as next month to determine how radioactive the material is. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. vonnie: thank you for that. since president donald took office he has made it clear he plans to follow through on campaign pledges, including a way to find mexico to pay for a border wall. mexico is adamant that is not happening. garza, as is antonio leading expert on u.s.-mexico relations and an advisor on cross-border business development. it seems like diplomatic relations have been
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deteriorating in spite of the phone call that took place following the tweets. former ambassador, where do relations stand between the u.s. and mexico? antonio: i think after a year of campaign rhetoric, most of it directed at mexico and characterization of mexicans as rapists and criminals, there was some hope in the wake of the election there would be a combing. -- calming period. betainly there would uncertainty that comes with any new administration. in a way. it peaked first, the sense that there would be a delegation of mexicans going to the united states to begin discussions of what nafta may look like going forward and president trump tweeting that the meeting should be canceled if mexico did not intend to pay for the wall.
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i think the call was helpful, but one of the things you see is mexico move from a level of anxiety about what might come next to frustration with the messages coming out of resolved andd more resolute in terms of going forward and how they will negotiate and what their expectations are dealing with the trump administration. david: there has been so much conversation especially among president trump supporters about revising nafta. is a similar conversation on the other side of the border? amb. garza: i think when you look at any agreement that has been in place for 22 years government -- given the dramatic changes in technology and the global marketplace, certainly there are areas that could be improved. i think what the concerns are for people in the united states and mexico are that ripping up nafta, that kind of language
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suggests not a renegotiation aimed at making it a better and more efficient agreement that can address the current marketplace, but simply moving towards a more protectionist kind of isolationist view in the united states and that is troubling. i think there is a sense in mexico debt -- mexico that renegotiation was limited to those areas not needing legislative or congressional approval, for example rules of origin. they are trying to modernize it, then that would be healthy. certainly this notion of ripping it up and moving completely away from nafta is not something that is welcome here in mexico and india united states. -- and in the united states. vonnie: what would it take to have a warming of nations? it seems the more that is
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tweeted the worse it is going to get in sort of a cold war type of experience. it needs to reverse just for border relations if nothing else. how does that happen? amb. garza: curiously, i think the meeting that was supposed to have been held today, as you know, was canceled. in a way, i think that allowed for a calming period. i think would be helpful is both sides leading up to actually sitting down to define the issue of a better and give context to the relationship. we talked about simply on economic terms and if nafta is going to be discussed and renegotiated, let's define clearly what that means. secondly, i think both in the united states and in mexico, better context in terms of the noneconomic nature of the relationship, we work closely with mexico on law enforcement,
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counterterrorism initiative, immigration certainly, mexico has worked very closely with united states in managing the movements or controlling the movements of the central americans up through mexico into the united states. i think better context and a clear definition of what will be discussed would be helpful and certainly, as you alluded to the to own matters and that we have to appreciate in the united states that we are talking about a neighbor with whom we share a border and along relationship. we have had 22 years of nafta and i think we have built up a respectful tone. unfortunately, the past couple weeks have seen the evaporation of a lot of goodwill in regard that mexicans had for the united states and i think many in the united states have four mexico. i think that is very unfortunate. david: what are you you hearing -- what are you hearing about the appetite for your clients?
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is there some trepidation? are you seeing a pullback from investors? amb. garza: i think as is true of all investment, a sense of what the rules will be and in certainty with the environment makes decisions a bit easier. aile i have not sensed pullback so much as perhaps a pause, a bit of a wait and see in terms of going forward and a lot of analysis being done. type of if, then top -- scenario planning. many of the discussions are of the what if nature and that simply is not the best environment to be making decisions about investment. arizona hades like actually been relaxing and welcoming their neighbors to the south in greater numbers and doing a lot more business with
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mexico and that is a state that was republican for all of these years. that hadot something to happen. i am wondering as a former ambassador to mexico from the u.s., how one goes about fixing this. you lived there and you know how the government works down there and all the different dynamics. who would be the best person in this administration or outside of the administration to be a go between? amb. garza: the government to government conversations have to assume a more respectful tell, have to have a very clear sense of what the items of discussion will be going forward. i think if you look at mexico and the united states, there are some real interest in the united states -- a domestic interest. i think sometimes we forget at the volume of ag product exported out of the midwest to mexico or taking a closer look -- we tend to focus
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on the trade deficit and we forget sometimes that while mexico is exporting -- 80% of tot they are exporting goes the united states and a fair amount of that product is u.s. content. it is government, but i think business and people impacted, whether it is suppliers jobs in the united states all across the country, have got to start realizing and appreciating they have a stake in this and when it is your own interest i think you start talking about mexico differently and mexicans will view the united states differently if we just manage the tone of the relationship of it better. david: thank you very much. that is ambassador antonio garza in mexico city. apple, the world's most valuable company, reports earnings after the bell. analysts are watching iphone sales and are anticipating a
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weak forecast. sean spicer is holding his daily briefing at the white house talking about the announcement, president trump expected to announce his pick for the supreme court. sean spicer saying it is a pick that will make americans proud, his words. sean spicer saying sally yates failed to enforce a legal order. elaine chao has been approved by the u.s. senate. if you would keep -- if you would like to keep watching sean spicer, that is on the bloomberg. this is bloomberg. ♪ ♪
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david: this is "bloomberg
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markets." report earnings after the closing bell and when it comes to apple, it is all about the iphone. in its last fiscal year, apple experience the first sales decline since 2001. let's look at apple in today's the numbers don't lie. apple has posted three great quarters of decline. bloomberg experts see revenue growth of 2% in the first quarter and analyst will focus on iphone unit sales, which have been declining. estimates put the number at more than 76 million. it is not just unit sales that will grab attention today, the average selling price is a key number. it is expected to come in at $688 million for the forced -- first quarter. iphones makeup 60% of apple's revenue. the iphone numbers could get a boost later this year as apple is likely to unveil a new
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version to celebrate the 10th anniversary. tim cook has highlighted the services business. its growth is the white line topping the orange line, that is the iphone line. any update will be of great interest to investors along with commentary on tax issues related to the u.s. with the european union. we will follow these earnings very closely. are talking with alex webb who joins us from san francisco with more. what are we looking for today in particular from apple earnings? alex: they are too metric to look like. the asp will be interesting because it will show the extent to which customers are really buying the iphone 7. the thing that is really like to move the stock is the forecast for the march quarter, the
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current we are currently in and it will show how quick the drop off in sales has been from the christmas -- david: there were -- they were of a few quarters of a -- quarters ago. there was a renewed effort to improve them. what has apple done since? alex: you have got to be slightly circumspect about saying it is not part of the business. $24 billion is the revenue. that is a fortune 200 company. if you compare it to the rest of apple, it is less than 20% of their sales. what they have been trying to do is push it because it means that it makes their hardware sticky. it makes it harder for you to trade in your iphone for an android because you have services linked into the phone. vonnie: the big hope on the part
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of apple is for people to buy the next generation of iphone, right question mark there was a change this time, but there will be a massive change and many people are waiting. does it really matter how many iphones are sold? alex: the question really is it is the long-term impact. if the number of iphones forecast for the next quarter and the asp for this quarter is disappointing, it shows people are not willing to buy phones just because it is apple. they want to buy phones because of the quality of the product and the features and a lot of competitors have come up with stuff that is compelling. that is the point these numbers will speak to and something that will be an interesting subtext of the headline numbers. david: with apple it seems like we are always looking forward to the next iteration. the one coming out for the 10th anniversary, any idea what we can expect to their? anything that might be novel? the talk of perhaps say
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things like a scanner built into the screen so there would be no home button, you just tap on the a screen that covers the entire phone, this is being reported in various places. expectations for something to do , augmented reality. tim cook has been talking this up a little bit, but he always talks slightly in riddles. upgrade for the broader market is going to be quite hard given the expectations that smartphone growth is kind of plateauing. vonnie: alex webb, thank you, i know you will follow earnings for us later on as well. much more ahead on bloomberg markets. the major averages are off lows and on pace for another day of declines. 19,810.down .8% to
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the s&p 500 is being led lower by companies experiencing earnings misses, big ones for under armour down 21%. ups down 6.5% and the nasdaq is down just more than .5%. this is bloomberg. ♪ ♪
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david: this is "bloomberg markets." i am david gura. vonnie: i am vonnie quinn. let's head to julie hyman with a look at tech movers. broadly is underperforming today and has been really since the election. here are some of the large shares today. microsoft is down, intel, facebook, mastercard is lower after the company's earnings missed estimates and revenue missing estimates as the company
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felt pressure from its european business, in particular the effect of the stronger dollar. i made a simple line chart is -- of what is going on with technology postelection -- technology is in white. it is up about 5% since the election. of the s&p 500 in the aqua color up about 6%. consumer staples are the worst performing, down by less than 1%. it is sort of a middle of the pack slightly lagging the s&p 500. session,ack to today's looking at apple suppliers, specifically we have seen weakness with broadcom, sky works, and serous. they have had a big run up and today we are seeing a pullback of the semiconductor index showing that. it is down by 1.6%.
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it is interesting on this day that we are waiting apple earnings from the largest tech -- largest company period by market cap that we are seeing suppliers do so poorly. we are that we will also be watching them in the wake of those numbers. david: julie hyman looking at those tech numbers. this -- the chair of the senate judiciary committee saying the vote on jeff sessions has been delayed until tomorrow at 10:30. it was supposed to take place at 9:30 this morning. why the company has already quit both -- most obamacare markets and why it may scale back further next year. this is numbered. ♪ -- this is bloomberg.
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vonnie: it doesn't exactly look like it, but there is beautiful snowfall happening right now in york city.
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-- new york city. david: this is "bloomberg markets." mark crumpton has more from our newsroom. trump willdent announce his first nominee to the supreme court tonight. the president will select one of two federal appeals court judges. either neil of denver or thomas of pittsburgh. both are considered conservatives. we will cover the president's announcement tonight come alive at8:00 p.m. -- tonight, live 8:00 p.m. daniel will return to his previous job as the agency's deputy director. he will be replaced by thomas holman.
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i was in her chuck grassley says the confirmation vote on jeff eensions has b postponed until tomorrow morning. european union and russian officials have weighed in on iran's missile tests. eupokeswoman for the foreign-policy chief says iran's ballistic missile program was not included in the 2015 nuclear pact with world powers and are not in violation of it. mexico's economy has slowed down from its fastest rate of expansion in three years. gdp rose at an annual rate of .6% in the fourth quarter. in the previous three months, it rose at a 2.2% right. mexico is still hurting from the slumping oil production. economists have cut their forecasts because of concerns over president trump's policies.
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global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. david: insurance giant aetna posted fourth-quarter earnings that beat analyst estimates. earlier, i spoke with the chairman and ceo about whether things are more certain now than they were couple of months ago. middle ofstill in the figuring out. that is an opportunity that makes it a little tougher to to the business. our individual business related to the aca is less than 4% of our overall revenue. it gives us an opportunity to find a better way to move forward and we are optimistic that we can make it work are all americans. david: still a $450 million weight.
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what is your plan going forward for interfacing with the affordable care act admits the midst thety -- a uncertainty? >> it is easy to repeal come up the replace has to be considered. to 2019 before we can actually implement a new program. to getlot of opportunity it right come a lot of opportunity to consider various methods of moving forward. we have to be part of that. we are having conversations with the administration and with congress on how to do that. david: you said the new president would have nine months to right the ship here. we are a week in. is the president headed in the right direction? >> too early to tell. we don't have a direction yet other than the fact that we need to do something. do need to get something in place sooner rather than later.
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david: you've pulled out of some individual markets. d you foresee doing more of that? what could get you back into those individual markets? >> we are not getting into individual markets we left in 2018. we have to file rates by april 1 and there is not enough news onion and only bad the exchanges. we don't see any opportunity to re-enter any of the markets that we left. think there's any pressure right now about getting back in. we will have to wrestle with that issue as we go through the year. we will be looking for reasons why. if we don't make the filings by april 1, we are not in. david: we await the confirmation vote on tom price. he is somebody who has advanced a proposal to rework the
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affordable care act. are you working from that as you think about where this law might be going forward? in theissue is not policy stuff, it is in the legislation and regulation of how it works. been steadfast since the affordable care act started that the wrist adjustment mechanism and the product offerings needs to be different than what we started with an funny 14. -- risk adjustment mechanism. the product offerings need to be different than what we started 2014.n how do we create a financing system that pays for it without increasing everybody's r ates and taxes in the process? to what degree does that outweigh the problems with a lot right now? >> we have millions of people who aren't covered yet.
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we have a set of financial over the that next year will prove this is not sustainable in the long run for the individuals covered or the taxpayers of the united states. david: we've seen executives weigh in on this executive order related to immigration. how do you decide when to speak out? employees all around the world. pays for health care in many places around the world. we have offices in the middle east. we run programs for middle eastern countries. we have to look out for our own employees. i'm also the grandson of an immigrant. weren't for my grandfather and grandmother coming here come i would have never been in this kind of opportunity. we don't agree with the current program.
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a believe we should find program that welcomes everyone to this country and keeps our country safe. for our own employees, we will make sure they get treated fairly. david: that was the chairman and ceo of aetna. u.s. tech leaders came together in unified anger in response to president trump's immigration order. google, facebook, sales force, microsoft and others saying this disrupts innovation. amazon and expedia have filed legal briefings. what is in them?how effective can they be ? thetatements of support -- attorney general of the state of washington has filed a lawsuit against the trump administration. expedia pointing out that
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thousands of reservations involve travel to or from the affected countries. amazon pointing out that it has many employees that are affected. is one manifestation of the opposition. a lot of techhat companies are set to meet and talk about filing amicus briefs. it is unclear what legal might that has. it's more evidence that a huge industry is up in arms and unified against those executive orders. david: how much cohesion or unanimity is there in silicon valley? brad: it started organically. one ceo after another making their opposition felt. maybe there is a little groupthink, too. employees are putting pressure on the leaders. it's also a cultural assault on the tech community. the industry.
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a large percentage of the are overseas -- the tech industry sees this as a threat to the way it does business. vonnie: look at and i homeland on the bloomberg -- john kelly says the agency did an outstanding job caring out president trump's executive action. he said it would be a short number of months for the initial vetting. this will not be changed. radical and the administration does not have to listen to the tech community. brad: the administration does not have to listen to the tech community. they don't want to see them drop out one by one. there's a lot of anxiety in tech
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land about what comes next with the visa program or cyber security. we are 10 days into this administration and when it comes to trump and the tech world, they are not off to a great start. david: california is solidly a blue state. it's become a place for a lot of big money. what is the level of political engagement? how eager are democrats to interface with washington to get involved with big issues like this one? >> historically, it was very small. tech was in its own bubble, heads down, working on their companies. it's been recently with the emergence of the ubers and with thesethe world companies having massive agendas in d.c.
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there's been a political awakening and we are seeing the fruits of that right now. vonnie: the three major tech that's advising trump what message will they bring behind closed doors? brad: peter thiel is truly an advisor and had a role in the transition. kalanick and musk have clear agendas. musk has an agenda he wants to forward. is takinganick advantage of the opportunity to have a seat at the table and realizing there is a pr crisis.
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i expect he goes in there and lays it all out and tries to sound a bit critical of these orders. vonnie: brad stone, thank you for that. is in bookstores today. warren buffett added to his stock portfolio in berkshire hathaway in a big way. this is bloomberg. ♪
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vonnie: this is "bloomberg markets." david: time for the bloomberg
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business flash. -- thene or single ruling could open the door for generic competition. pharmaceutical shares plunging. drugmaker will lose billions of dollars in revenue because of drugs that will now face competition from generics. a sign that the major oil companies are still stuck in the deepest market slump in a generation. exxon mobil posted the biggest profit miss in a decade and took a $2 billion write-down on gas deals in the rocky mountains. that is your business flash update. bought warren buffett $12 billion worth of stock from
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election day through last friday. this interview was taped friday and along with microsoft cofounder bill gates. buffett: $12 billion of stocks since the election. me guys that work with bought a little bit and sold a little bit, too. those are ideas that i've come from a different slant in some way or whatever it may be. >> is airlines one of those? it was shown on september 30 that we own some airlines. >> why did you do that? >> that i won't get into. get old joke is i didn't to be a billionaire buying airlines. >> is been a graveyard for a lot of money.
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>> transportation has been -- >> the railroads and airlines are not related. you cannot move the track. people, thererack is a certain romance to it. you can go into the business and more than 100 airlines have gone broke in the last 25 years. it's a different sort of business. bill enhancenowing your sense of how the world works? >> i've learned a lot from him. that is the fun of having france. -- having friends. hard for me to be a friend with someone i don't learn something from. >> what do you live in from him
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-- learn from him? >> an immense amount. he wrote an article for fortune magazine before i met him that it is not a good idea to leave large sums to your children. that was pretty fundamental and i remember reading that and i was convinced that that was right. now, you have to think about how to give it away. i remember warren showing me his calendar. i had every minute packed and i thought that was the only way you could do things. careful that he is so about time -- he has days with nothing on it. it's very high-tech. april ofs the week of
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which there are only three entries. this tells you what? not to crowd yourself too much? bill gates: that you control your time. thinking may be of much higher party than a normal ceo -- there's all this demand, you feel like you need to go and see all these people. is not a proxy of your seriousness that you filled every minute in your schedule. buffett: i can buy anything i want, but i cannot buy time. i better be careful with it. there's no way i will be able to buy more time. >> living in omaha makes that easier. i know the words to a lot
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more songs and that's about it. it really adds up. one hour a day difference coming and going, that is 2.5% of the work week. that means 40 years. politically?ee, >> on almost everything. a general sense that you've got to keep the economy turning up greater output and that you have to allocate it in a fair way. that basic framework we see very much the same. >> do both of you believe we can achieve a 4% growth rate? >> that is pretty high. last quarter was 1.6%. in one growth rate
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to 19,000 will add per capita to real gdp. a family of four on average that would be 76,000 more stuff per family of four in one generation. the goldene more -- goose will keep playing more: next. playing -- will keep laying more golden eggs. 2% will produce miracles. vonnie: that was warren buffett along with bill gates on charlie rose. be sure to watch charlie rose every weekday at six clock p.m. eastern right here on bloomberg. -- at :00 p.m. eastern right here on bloomberg.
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we will have live coverage of president trump announcing his pick for the u.s. supreme court. 6:00 p.m. eastern right here on bloomberg. we will have live coverage of president trump announcing his pick for the supreme court. david: coming up, the face of donald trump's experiment in government, wilbur ross. ♪
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david: your wilbur ross is pur -- billionaire wilbur ross is --arheading donald trump's so much of the focus these last few days has been on social issues. immigration policy, supreme court choice -- there are some powerful businessmen picked to be in the cabinet.
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tell us a bit about wilbur ross and where he fits in that cabinet max:. bloomberg has done great work on the $6 billion cabinet. wilbur ross is the richest of all of them. he may be one of the most powerful. he is really close to donald trump. traditionally, the commerce secretary job is not the fanciest. wilbur will be important for couple reasons. he will have serious influence over trade, maybe even over infrastructure and certainly over fulfilling the blue promises donald trump made on the campaign trail. people should be watching because he will be wielding immense power. andd: he is a billionaire he is pushing populist proposals. how hard will it be for him to thread the needle? max: it will be really hard.
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he has been a pragmatist or opportunist. he became a textile magnate and there's all for free trade. no one knows wilbur ross -- what wilbur ross wants to do. he will have donald trump's here. david: you can read max abelson 's story in the latest "bloomberg businessweek." check out the cover story on the latest issue. this is bloomberg. ♪
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scarlet: it is 2:00 p.m. in new york and 7:00 p.m. in london. vonnie: welcome to "bloomberg tokets." -- oliver: welcome "bloomberg markets."
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scarlet: we are covering stories out of japan, san francisco, washington and brussels. politics, key cabinet nominations are hitting speed bumps. orrin hatch goes as far as to say they are acting like idiots. apple is set to report earnings after the bell and the focus is all an iphone sales as some anticipate a week forecast. central banks meet this week. the boj keeping its policy settings unchanged. u.s. markets close in two hours. that's get a check on where stocks are trading. the selloff does continue. it has moderated a little bit over the course of the session.
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we still got a fourth straight day of losses for the major averages. a decline of 1%. the first four days selloff we've had since before the election. there seems to be investor concerns about the new policies of the new administration. amidst earnings season. ups coming up with earnings that missed estimates and a forecast below estimates. the company being hit by the stronger dollar and the effects of that as it did not hedge effectively. it is also pulling down fedex. stock falling on earnings and pulling down the others within the industry. elsewhere outside of earnings, we are looking at the 10 year today. money flowing into bonds. that is pushing yields lower in that 10 year yields down for basis points they that's four basis points today.
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we've also been watching gold closely. this is a look at the monthly performance of gold. for january, looking at a gain of 5.4%. the best monthly performance since june. we saw some buying of gold in that month that people were anticipating and reacting to the u.k. vote to exit the you -- the eu. also watching natural gas. a big loser this year. down 16%, the worst start to a year since 2012 in part because of weather and supply issues affecting the industry. year today, southwestern energy down by nearly 18%. chesapeake and cabinet oil and
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gas have also been suffering. oliver: let's check on the first word news this afternoon. mark crumpton is in our newsroom. mark: homeland security secretary john kelly is providing more details about president trump's travel ban . the executive action on foreigners entering the u.s. will be carried out humanely. >> this is not a ban on muslims. themission is to safeguard american people come our homeland and values and religious liberty is one of our most fundamental and treasured values. mark: secretary kelsey also said his agency did an absolutely outstanding job carrying out the executive action. by a vote of 93 to six, the senate today confirmed elaine chao as secretary of transportation. vice president mike pence will swear in chao tonight.
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she indicated during her confirmation hearing she expected the package to include public-private partnerships and direct federal funding. a senate committee has approved betsy devos for education secretary. after a heated debate this morning, senators on the health education, decisions and labor committee voted 12-11 along partisan lines to support the boss -- betsy devos' nomination. asking british lawmakers to trust the people. davis called on the house of commons to give the governor permission to begin the process of leaving the european union. >> there must be no attempt to remain inside the european union , no attempts to rejoin it through the back door and no
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second referendum. the country voted to leave the european union and it is the duty of the government to make sure we do just that. the british house of commons is discussing the 137 word bill that will let prime minister theresa may formally trigger article 50 of the lisbon treaty. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. oliver: it has been another busy day in washington with a heavy focus on trump's meeting with big pharma and a senate showdown. sender orrin hatch says this --sage to democrats >> i think they ought to stop posturing and acting like idiots. stop holding these conferences and come here and express yourself here and then vote.
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oliver: joining us now from chiefl hill is our washington correspondent and drew armstrong. earlier, we just saw the clip, what did he tell you about the postponed vote related to steve mnuchin and tom price? kevin: he said he was completely blindsided by senator sharon brown who organized a boycott just minutes before the senate finance committee was set to move along with the nominations of people like steve mnuchin. they are raising concerns about his time at one west bank come allegations that steve mnuchin refused.eam have i asked him about it after the hearing. >> nobody called me, there
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wasn't any indication -- it's the rudest thing i've ever seen. what procedurally can you do to move this nomination forward? >> a number of things. i think my colleagues on the other side will wise up and come to the next meeting. kevin: we just heard from now, theytch -- right still don't have a path forward to move those nominations as they continue forward. this provides a lot of uncertainty surrounding president trump's economic agenda, particularly when the treasury secretary will be a key player in tax reform and dodd-frank walking back. a lot of uncertainty on capitol hill on a host of issues. democratse the grandstanding, using this as an opportunity to get their views out or do they see the unrest and backlash to trump's
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executive orders and think they might people to get some republicans on board to stop these nominations? both. it's a bit of i do think this is a concerted effort coming from democrats on a variety of fronts to create the perception that this is a government and chaos. when there is a supreme court nomination that is going to be theunced later tonight and follow-up continuing from his exact of orders on a host of other things including the temporary travel ban from all of this is country bidding to frustration here on capitol hill on both sides of the aisle and democrats feel president trump will take the blame for that. oliver: thank you. scarlet: meantime, the president promised big changes today in his meeting with pharma ceos at the white house. >> u.s. drug companies have produced extraordinary
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results, but the price has been astronomical for our country. we have to do better. new drugs lead to healthier lives, but we have to do better accelerating cures could accelerating fda approval. oliver: let's bring in drew armstrong. scarlet: we know donald trump's main message to the industry was lower prices and getting medicine to markets faster. what was the main message the pharmacy is wanted to impart upon the president? drew: trump mentioned lower taxes, which has been a huge and issue for the industry. if they can get the u.s. business tax rate cut from 35% and get the regulations lifted they are willing to give some
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which thes on pricing industry has known for years now is a major concern. another reason we are seeing stocks up today, trump said he will not do anything price-fixing. he did say he did not want to have the government fix prices on drugs. he thought that would be problematic for innovation. a lot of the worst of the industry might be afraid of that she backed off some of that. -- he backed off on some of that. newsday ford d the farm industry. how much support does
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the president have from republicans in congress when it comes to pushing for lower prices? drew: there is a degree of holdover party loyalty. a number of republicans and we will take a look at it. the stands from republicans is they will not have medicare directly negotiate prices with manufacturers. that is statutorily inscribed right now. republicans have typically been opposed to anything that looks like price controls by the government. getting that through capitol hill would be a serious problem. donelikely what trump has with other businesses, using his to extractt concessions from individual companies or segments of the industry. this has already been happening because of the ongoing price pressure. tax policy was front
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and center. let's listen to what merck's ceo had to say. >> we had a great conversation, we talked about tax policy, the need to make our tax code more tentative, the need to make sure that trade deals work for americans. and finally, making sure the companies we represent continue to come up with the kinds of cures that will help people live longer, healthier lives. novartis' ceo was also in attendance. will this be a regular thing? what is the next step here? drew: the industry has been getting very involved on capitol hill ever since trump put them in the crosshairs three weeks ago. we will be seeing more and more presence of pharma in washington. they spent tens of millions of dollars on lobbying and campaign conservations. they are a huge political player.
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-- campaign contributions. this is one of the first groups of ceos to meet with trump after that executive order came out. we saw little to no mention about the immigration issue. these are companies that employ people from countries where -- pharma putist out a statement and they said nothing about the issue whatsoever. interesting to see that fall by the wayside after these folks were saying it might be an issue for them. scarlet: thank you so much. says he told pharma executives he wanted them to manufacture in the u.s. and that drug companies produce extra three results for the u.s. -- extraordinary results for the u.s. up, the global head of
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private equity at blackstone weighs in on trump's travel ban and tax proposals. from new york, this is bloomberg. ♪
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scarlet: some breaking news on siemens. a bump up in their expected earnings. shares reacting there, up almost 2%. business in the first quarter two profit come also higher than expected. estimated 2.1 billion euros.
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some breaking news on siemens. private equity is under pressure from valuations to a cloud of uncertainty -- erik schatzker sat down with blackstone's global head of private equity, joseph baratta. concern as primary far as -- is for the well-being and stability of the families of our employees. we are vigilant on this to see how this will affect blackstone and our portfolio companies. i don't think it will have meaningful impact on the blackstone employees and their families and the portfolio companies. general come immigration is important. it is a poor value. our ability to hire the best possible talent is a core value.
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it is something that we look at and we are concerned about. a matter of principle, you share some of the same viewpoints that we've heard from fein or the ceo of microsoft? joseph: the public policy objective of national security and ensuring that terrorism is eliminated in the united states is important. difficult -- it is a difficult line to walk. maybe there is a different policy objective that can be pursued. that is just my personal opinion. let's talk about the range of policy outcomes that we are beginning to see take shape. how they apply to blackstone and your portfolio companies. what are you hearing from your
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whether it be about immigration or trade or what we might see on tax policy? the house tax plan has been pretty well articulated, has many variables. all of which would affect our portfolio companies in one way or another. level ofo heightened concern among our portfolio company ceos. we tend to have businesses that do not engage significantly in selling goods manufactured abroad. we have export led businesses for which all these initiatives will be helpful. there is no panic. i don't think it will change the way our companies transact. rateing the corporate tax and leveling the playing field with other nations in terms of the corporate tax regime will be
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area positive for our portfolio companies. k: what about the other contours of tax reform? limiting the deductibility of interest -- we have the potential for a border adjusted tax -- we have the immediate of what from the blackstone point of view becomes better as a result of those kinds of policies and what becomes worse? what kinds of deals become more viable and which become unviable? we've done a lot of thinking and it's creeping into our investment decision-making. businesses that stand to benefit our export led, capital-intensive in some way. where the capital intensity is
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in projects that can generate a high incremental return on the dollars invested because the tax depreciation will be a lot better. the government is tried to engineer a reward system for in thisnvesting country. most of the businesses we buy we buy because they been underinvested and we do engage in significant programs. it will be a benefit to export companies. the ability to have more favorable deductibility of the capex is positive for that. energy represent a quarter of what we do across the board. for the types of things we invest in, it is a real positive. things that would be under more threat or where there is more uncertainty would be retailers that sell goods imported from abroad or professional services
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firms that outsource employment to other countries. there will be a bit more uncertainty, a bit more volatility around the prospects for those companies. erik: when you are saying is already creeping into investment decisions, how? joseph: we have to take on board the seriousness of the rhine led -- ryan led house plan. to ignore it would be a breach of our duty to our investors. at things that have a heavy component of their cost of .oods sold offshore we have to factor some margin for error in the pricing of those deals. oliver: that was joseph baratta speaking earlier today with erik schatzker. still ahead, warren buffett reveals the major pickup in stock buying activity. more on his exclusive comment,
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next. this is bloomberg. ♪
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oliver: this is "bloomberg markets." scarlet: warren buffett bought $12 billion in stocks from election day through last friday. he revealed the common stock purchase on charlie rose on friday. max: we bought $12 billion of common stocks since the election. warren buffett: it is in my mind which ones we pick. those are ideas that i've either come at from a different slant in some way or whatever it may be. scarlet: buffett says he is skeptical of the u.s. getting to 4% gdp. warren buffett: that is pretty high. 2016, the last quarter was 1.6 or something. warren buffett: a 2% growth rate
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in one generation, 25 years, will add 19,000 per capita, -- 76,000 todp real gdp. oliver: still ahead, the commodities close. gold off to a strong start as investors look to safe haven investments. 5.5% year-to-date. this is bloomberg. ♪
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[ alarm clock beeping ] weather. ♪ [ laughter ] cartoons. wait for it. [ cat screech ] [ laughter ] ♪ [ screaming ] [ laughter ] make everyday awesome with the power of xfinity x1...
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hi grandma! and the fastest internet. [ girl screaming ] [ laughter ] scarlet: this is "bloomberg markets." commodity markets are closing in new york.
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let's show you how the sector is wrapping up the month. we start with the bloomberg commodity index, rising modestly on the day. eking out a gain just barely for january marking the third straight monthly gain. copy futures ending on a down note. year.a rising 8% this -- coffee futures ending on a down note. rising 8%tures this year. speculators for oil. saysort yesterday -- matt energy stocks represent a reason for caution as speculation in u.s. oil futures set records. hitting its peak a month and declining ever since. -- a month and a half ago and
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declining ever since. let's get a check on the headlines. mark arkin has more. -- mark crumpton. mark: orrin hatch will reschedule the votes for health and human services nominee tom price and treasury secretary nominee steve mnuchin after democrats boycotted today's confirmation hearing. >> nobody called me, there wasn't any indication. it's the rudest thing i've ever seen. what procedurally can you do to move the nomination forward? >> a number of things. i think my colleagues on the other side will wise up and hopefully come to the next markup. said he didr hatch not know the democrats were going to plan a boycott.
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after democrats on the senate judiciary committee gave lengthy speeches opposing jeff sessions for several hours, chairman charles grassley says the vote will be delayed until tomorrow. by giving lengthy speeches, democrats are able to trigger a rule that doesn't allow committees to be in session for two hours past the start of the senate day. the rule is generally waived. sessions is expected to be approved. president trump announces his first nominee for the supreme court tonight. the president will select one of two federal appeals court judges. either neil corset of denver or thomas hardeman from pittsburgh. gorsuch of denver or thomas hardimoan from pittsburgh.
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an online petition opposing mr. trump's planned trip to the u.k. has drawn 1.6 million signatures prompting what will be a nonbinding debate in parliament next month. the british government led by theresa may invites heads of state on the queen's behalf but the queen access hostess. the prospect of protests outside buckingham palace has but the queen in a very difficult position. put the queen in a difficult position. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. apple set to report earnings after the u.s. closing bell today. it's all about the iphone. apple posted its first annual sales declined since 2001 amid waning demand for its trademark smartphone. as you can see here come apple
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has posted three straight quarters of year-over-year sales decline and a yearly decline in 2016. bloomberg estimates the first order revenue growth will be 2%. analysts will be focused on iphone unit sales. estimates put this quarter's number at more than $76 million. -- 76 million. it's about the price of the actual phone. the key number has been sliding over the same period. the iphone makes up 60% of the company's revenue. all othert dominates parts of the business. those numbers could get a boost later this year as apple unveils a new version to celebrate the device's 10th anniversary. tim cook has highlighted the services business. , toppingsome growth
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the iphone and the orange segment. along with any commentary on tax issues related to the u.s. or the eu. for more on apple, we are joined by alex webb in san francisco. everyone is looking at the iphone unit sales number. and the average selling price. they are looking ahead to apple's rollout of the apple iphone x. it feels like this past quarter is a bit of an afterthought even though it was the most important quarter for apple in the year. alex: the thing that will be telling looking into the march quarter and looking back at the , they will beer
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reporting the earnings for the december quarter and the outlook for march, it is a tell on how well apple's brand is holding up in the context of modest improvement on the iphone 6s. the big update is coming next year. the iphone 7 are still good, that shows that people are buying into the apple brand. it is not purely about the quality of the product itself. tie that to the iphone 8 or suggests at the brand is holding up well and it has significant upgrades, it could make a big hit and positive impact on their sales. thatet: the expectation they will cut off the muted sales for the iphone in the past
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three quarters looks promising. whenis a cyclical period the first quarter is good -- what do we need to look at to determine if this is a cyclical type of deal or the end of the negative trend? alex: the sales numbers will have increased. the average sales price will tell which phones people are buying. if the asp is below the $691 a blaster year, that suggests people are going for the lower-priced handsets. china is of huge importance to apple. .e have seen a slowdown there how likely is it that we will get any kind of specific guidance from the company on china sales?
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ellis: they do tend to break out the sales in china. it will be interesting to see how much they attribute to tallied thatcts against their market share, there's two themes to examine there. the chinese phone makers have written about this to some lengths. they've come a long way. afering good products at far cheaper price point than the iphone. up with the bank of japan, federal reserve and think having one meeting this week. what will they say about monetary policy in the populist era? ♪
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scarlet: president meeting with cyber security officials. >> for the cyber security of their organizations. we don't have as much as we should have. we will defend and protect federal networks and data. we operate these networks on behalf of the american people. they are very important and very secret. we will empower these agencies to modernize their i.t. systems for better security and other reasons. we will protect our critical infrastructure such as power .lants and electrical grids
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electrical grid problem is a problem. sector work with private -- they are way ahead of government in this case, to ensure that owners and operators have the support they need from the federal government to defend against cyber threats. a pretty good example of this was despite having spent hundreds and hundreds of millions of dollars more money than we did, the democratic national committee was hacked successfully, very successfully. and terribly, frankly. the republican national committee was not hacked. it was hacked, but they failed. that it wasted hacked, but we had a strong defense system against hacking.
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despite spending a lot less money than the democrats and winning, spending a lot less -- we werewe want very successful in our defense against hacking. we will make sure that cyber security is central to both our the ships, planes and tanks built by great americans for our great american military and our military will become stronger and stronger as we go along. i just met with general mattis and he's doing a great job. we are really happy with him and everybody. you probably saw general kelly. in hisspectacular today press conference and we appreciate everything he said. with that come i want to introduce rudy giuliani. jerodl be working with and tom.
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rudy is next for non-cyber security. on cyberexpert security. >> congratulations on a historic start to it administration. i've never seen so much done in such a short period of time. we used to sit in this room every thursday and i remember how fast they got up to a start and you are about three times ahead of them. you are doing it without a cabinet. so, congratulations. you've been keeping your promises and this is what you promised, to shore up our country because one of the dangers we face, national
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security and crime come a cyber security. isarge part of our country made up of the private sector. the private sector is wide open to hacking and sometimes by hacking the private sector, you can get into government. we cannot do the separately and you were wise enough to decide that we should have a council where we can bring in the private sector and they can explain to you the problems they have and the administration's better --which may be plus, we can search around the world, including in countries like israel and places where they are doing a lot of advanced cyber security analysis, we can look for long-term solutions. so, here, you are addressing a national security problem and the fastest-growing form of crime in america, fiber that -- cyber theft.
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by speaking out on this and holding regular meetings on it, you're using the bully pulpit of the presidency to get the private sector to wake up. some of the private sector has awakened to the fact that they have to do more about cyber security. some of it hasn't. as president, you are in a unique position to get the private sector to realize that they have to pitch in and help the government and i will work tom closely with jerod and and sebastian and all the people you have that are working on it and we will take a priorities -- first, look at the grid. we will bring in all the private grid companies and solutions companies. look at financial institutions. we will bring in financial institutions. you want to look at hospitals,
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we will bring in hospitals. we will let you set the priorities so we have a close working relationship. congratulations on fulfilling another one of your campaign promises. it but i knewe you would do a great job informing your committee. we will do something very special in many ways. thank you for being here, senator. do you have anything to say about cyber? clearly, it is a top priority because of the impact it can have. confirmed -- my job come if confirmed, is to make sure the intelligence community provides every bit of intelligence they canceled the policies that can be affected are the right policies to deal with it. enormous challenge but something that needs to be -- we have to get after this right away. -- presidentk you
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trump: thank you for everything you've done. your knowledge is amazing and everybody has great respect. so, thank you very much. i called him, how about going a bit longer? we really do appreciate it. thank you for being here. anything to say about cyber? the believe the key here is partnership between the private sector and the government. in both duty to bring -- trump: john kelly just give me a very important news conference. well go for another one minute or two minutes. >> i have a lot of things to say about cyber. president trump: a lot to do with the border.
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it will be very important. thank you all very much. we will get the meeting going. [indiscernible] >> general keith alexander -- scarlet: this is video of president trump meeting with private security experts and rudy giuliani, who is now the chief adviser on cyber security advice to the president. let's head over to julie hyman for today sector spider report. julie: take a look at biotech companies. getting aares also bump up as trump said he was going to decrease regulation and speed drug industry approvals. is up 3.2% etf xbi today. one of the best performers of those sector etf's we track.
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there is some specific company news. the mentum pharmaceuticals that momentum pharmaceuticals one -- momentum pharmaceuticals won over teva. shares of 24.5%. looking at research from bloomberg intelligence. another topic trump talked about this morning. look at the average increases predicted for drugs, the biotech sector has the smallest average increase versus large pharmaceuticals, 8% versus 6%. if you look at how the xbi has done versus the xph, it has done much better. here is the biotech etf which has been quite volatile.
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thes handily outperformed pharmaceutical industry as we've had all this drug pricing rhetoric. it will be interesting to see if that continues or if we see the pharmaceutical stocks catch up to some degree. the federal reserve holding its first policy meeting right now of 2017 with a rate decision out at 2:00 p.m. tomorrow. the bank of japan already announced it would keep its monetary easing unchanged and bank of england meets on thursday. , dang us now to discuss maes and joe weisenthal. let's start with you, dan. the bank of japan kept everything unchanged. do we presume the fed and the boe will do the same? dan: this is not a forecasting meeting or a press conference meeting. it is highly unlikely they will change interest rates. areks to the statement
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expected, but not a dramatic overhaul. this no press conference afterwards. did --y do with the boj they will have language in the first paragraph that is more upbeat about the economy. business investment seems to be picking up with a job growth is still strong. it will be that sort of thing. don't look for a big bang. i think that is an interesting idea. they are out of the spotlight in some sense because now we are all talking about fiscal policy, what trump is going to do. is that going to change how markets operate or how the fed operates? joe: it still feels like that. it is incredible the degree to which the attention has been
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moved away from the economic data and is now all with the administration, lots of talk this week about whether the events of this weekend are extinguishing the administration's political capital or making it less likely we will see actual legislation. we are talking so much about the administration and politics. there's still economic data coming out today. we have the employment cost index lower than people expected. is it possible that things aren't quite as tight as we thought. maybe the market is getting ahead of itself on inflation. dan: one of the things we talked about on this show, it is the flation,he de disinflation scare. one thing that has taken the banks out of the spotlight come
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in the eurozone and here come inflation is heading back toward the target. core pce and pc numbers we saw yesterday around 1.7% getting closer to the 2% target. the disinflation narrative is gone and the same with the ecb. the question with easy become in places like germany, do these numbers start spurring domestic debate? mario draghi will win that debate internally because core is still low, but it's happening. driving al prices are lot of the signs of reflation we are seeing. transitory in it the past. they thought that way and did not want to move on it. will that continue to be the stance as inflation continues to creep higher? >> they will welcome it heading back to 2%. we are not seeing anything that
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ships from the 200 bid projection this year. tomorrow is not a forecasting meeting. there are no dots to obsess about and no press conference. you are looking purely at where the fed is in terms of its congressionally mandated targets , they are probably feeling pretty comfortable. x they have tor worry about. oliver: there's a lot about expectations -- this is well shown in the start looking at. -- looking at cap x. there's a pretty substantial take here. how much of this expectations for the fed and central banks in general will rely on trying to get ahead of what will happen instead of what's going to happen?
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joe: that is a great chart. -- lots of gaps, but one between expectations and hope and sentiment, the soft , but wee survey data have yet to see it in the hard data. all these companies say they are super bowl is. look at the small business optimism index come that has exploded higher since the election. now, let's see the evidence and start spending money on new equipment and hiring. dan: the guts of the durable goods orders is starting to see some movement there in cap x. it is coming from a pretty low base. how sustainable is it? got joe to glad we say inflation is not that tight. scarlet: we will get more data coming on friday with the latest
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jobs report for the month of january. joe will be back in 30 minutes. coming up, we will be speaking universityia professor. he has worked at the imf and japan's financement history. his name has been floated as a possible boj had as well. president trump is expected to issue more executive orders in attempts to fight back in service security. this is bloomberg. ♪
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oliver: it is 3:00 p.m. in new york, 12:00 p.m. in san francisco, and 8:00 p.m. in london. i'm oliver renick. scarlet: i'm scarlet fu. welcome to "bloomberg markets."
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♪ oliver: we are live from bloomberg world headquarters in new york for the next hour. we will cover stories in san francisco, washington, and london. here are stories we're following on the bloomberg terminal and around the world. itident trump is set to sign -- an executive order -- personally responsible for securing their computers from hackers. will the steps make a difference? we will be live from the white house. in markets, u.s. stocks down for the fourth straight session as earnings, to focus. one report speaking out today about under armour. shares are sinking after dismal forecasts for the company. in a little more than an hour, apple reporting fourth-quarter results. anticipation remains high for the iphone maker. we are one hour from the close of trading. julie: i want to bring you
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breaking news. consider is said to options for its diabetes unit p or we will update you on that developing story although we do not have a trade here in the u.s. for the stock. maybe we do. it is not heavy volume on the u.s. traded shares but it is up 1.5. getting back to the broader markets, we have the fourth straight a of a stock selloff. it continues to moderate as we head toward the close with the s&p and nasdaq only down a quarter and 1%. some of the downdraft today has not just to do with the trepidation about new policies, perhaps, for the trump administration. it has to do with fundamentals here, earnings, as exxon mobil is missing earnings estimates here as it raced down the value
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of a natural gas business. estimates because of foreign currency fluctuations. mastercard also being affected by that and under armour seeing the steepest tumble as we just heard oliver point out as the company critics sales will slow down to some degree for this full year. that is all weighing on things. one group under the radar to some degree, gunmakers are higher today. ofh of them higher ahead trump's announcement of the supreme court pick, that pic might be more favorable to the second amendment to it will continue to watch them tomorrow. money generally has been flowing out of stocks and going into the so-called havens that we tend to watch. the vix is higher today although its gain is moderating to some extent. gold is higher. we have got the dollar trading lower against the japanese yen and folks are buying bonds as well. on the dollar front, i wanted to
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point out we have seen this recent down movement and heard rhetoric from numbers of the trump administration, most recently peter navarro talking other currencies undervalued. most recently, he was talking about the euro. this is the bloomberg dollar index in blue versus speculative longs on the dollar, which you can see are also going lower. this reflects the recent turn in sentiment regarding the u.s. currency. oliver: thank you. to the: let's get back markets with the s&p 500 now falling for the fourth straight session, the longest losing streak since before the election even as most company's report earnings that beat analyst estimates. running us now is the cohead of global investment management at jpmorgan asset management. is the inflation trade over? for a to continue and get another leg, we need a different catalyst in what it is driving it so far? >> after four difficult days of
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markets, it is easy to lose sight of the bigger picture. we think the bigger picture is emerging markets and developed markets are in fantastic shape. in the u.s., consumer balance sheets are healthy. consumer sentiment is strong. riskink there is not any to the consumer at this point. the dollar weakness you were just talking about, that has been good for risk trades around the world particularly emerging markets. we have a moderate pro-risk stance. we do not think that has changed in the last few days. oliver: let's jump into my terminal. a dive into the ea function for the s&p 500. the top line is showing average sales. last quarter for q4, earnings on the same side here. obviously, this was negative throughout this entire period here. stocks went up despite selloffs in the last year. markets and investors did not .eally look at earnings
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expectation, lack of alternatives elsewhere, is earnings going to be enough to drive growth if they did not hold it back? earningsink the picture looks positive and we are in the midst of earnings season right now. earnings picture looks healthy. you mention valuations per yes, certain markets around the world, u.s. equities to start with, fairly valued relative to their 25 you know your average small caps which have done very well since the election. but he healthily valued. there are plenty of places to look around the world like europe and emerging markets where we are seeing a lot of value. be ald not necessarily seller of risk based on valuation. i think earnings will continue to be a catalyst for stocks even in the u.s. scarlet: when you look at what is going on around the world, we see spreads between the french and german bonds. even as data in the region looks fairly solid. this could be a canary in the
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coal mine? jed: i am not sure. the europe story and the recovery in europe i think has been under waited for some time. has been hawkish talk and pressure on the ecb to think about taking a more hawkish andce from the germans mario draghi has been clear until we see inflation hitting the 2% range, they will not move. i think you will see fairly accommodate of policy out of europe which should continue to be a catalyst for the recovery. but the bigger picture is what is important. i think investors have to be careful in moments like this not to lose confidence in the broader picture and for us, the broader picture is still that pro-risk in a moderate way stance. oliver: you were on the show and we talked about how investors react to political events, how they bet on that. behavioral finance is in some sense.
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and you look at markets get a little bit weaker, you see tension in the white house, should people rethink how when we see the push back from democrats? jed: one of the best examples is if you look at the s&p since 1980, the average entry year drop is about 14%. over 75% of the time, the s&p finishes the year in positive territory. last year, the lows of the s&p in february were down 12%, finished the year at 11%. these are times where we think people should be rebuilding positions if they were not there or staying on their plan and staying focused on strategic allocation. scarlet: i want to play -- bring you inside the bloomberg for a charge owen i talked about earlier. this is the gap between reality and expectations. the gold line their tracks soft data, survey-based data, whether it is on the consumer side or the business side. the blue line is hard data, so housing industrial, labor
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households, hard data on things that have happened. the gap here as you can see is pretty wide it can get wider as we have seen in 2011. how long does this gap persist and how does it reconcile itself? jed: it is a great question. the consumer confidence and exuberance can be an indicator of late cycle behavior. we think we are still squarely in the cycle in the u.s. and a recession in the next 12 to 18 months is very low. we think the consumer is healthy. there have been mixed readings of competence levels over the past few weeks. i think the fact remains that balance sheets are healthy. oliver: when you talk to clients about how to think about where they hedge and where they protect themselves, volatility has been very low. is it right now time to go in and buy some options and give protection or is it time to say
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it is cheap for me to get leverage on the upside? jed: i think staying diversified is critical. the different types of investors will do that in different ways. the correlational breakdown of stocks and bonds in a reflationary environment, bonds do not offer that same protection. i think clients do need to be thinking and investors need to be thinking about ways they diversify to you mentioned the vix. it has been incredibly low. a higher vix is not necessarily a bad thing. it just me is a wider range of outcomes. it could be good for long and short form investors. , thank: jed laskowitz you so much. let's get a check on the headlines on bloomberg news. taylor riggs has more. john kelly is providing more details about how president trump's travel ban will be intermittent. kelly said the executive action on foreigners entering the u.s. will continue to be carried out humanely. kelly: this is not a ban on
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muslims. the mission is to safeguard the american people, our homeland, values, and religious liberty is one of our most fundamental and treasured values. agency he also said his did an outstanding job carrying out the executive action. a panel has voted favorably for the nomination of formal wrestling entertainment a second -- executivem linda. s nomination has been moved to a full senate. is asking british lawmakers to trust the people. davis called on the house of commons to give government permission to live european union. the house of parliament is discussing the 137 word bill that would let prime minister theresa may formally trigger treaty.50 of the a new report per dekes china will overtake the u.s. as the
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country with the biggest nuclear power capacity. china will almost triple its atomic capacity by 2026. china has 20 nuclear reactors under construction and another 176 already planned or proposed. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. so much a coming up, president trump is expected to sign a directive this hour that will hold the head of government agencies perfectly -- personally responsible for cyber security. that is next. this is bloomberg. ♪
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this is "bloomberg
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markets." i'm scarlet fu. oliver: i am oliver renick. time now for the bloomberg business flash. the bankers association wants the trumpet minister asian and republican-controlled congress to address an unresolved issue from the financial crisis, a proposal to overhaul fannie mae and freddie mac. the groups plan to turn the mortgage giants into privately owned communities. to --oposal is an attempt lawmakers to reform the housing finance system. a competition watchdog may extend their march 13 deadline the takeover of the london stocks by another five to 10 days. the extension gives regulators more time to review clearing operations. takeover is valued at $12 billion and would create everything from indexes to stock markets and clearing. colleges stand to lose
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as much as $700 million in annual revenue from immigration restrictions if president trump's ban on visitors from iran, iraq, libya, somalia, sudan, syria, and yemen becomes a permanent thing. that is according to estimates by a higher education research website. university presents fear the could jeopardy -- presidents fear the policy could jeopardize for the world's smartest students. back to let's get politics and president trump, who is expected to sign a directive in the next few minutes that will hold the heads of federal agencies responsible for managing cyber security. we are joined from the white house with the details. we also have bloomberg's national security team leader joining us from our washington bureau. give us more context around this directive in which the heads of federal agencies would be responsible. responsible in what way and what will be the consequence if something were to happen? i i am smiling because i wish
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had more answers for you. like all of these executive orders the president has signed, he has not signed this one yet. he plans to sign it soon. the text untilve hours after in some cases. it is a guessing game as to what exactly is in there. it, it iswe do get not clear what that means. wills we do know, they require the agency heads to do long-term planning and get them in compliance with what the best standard practice is, for industry. one thing that has not been talked about and that we will not get clarity on today is who will pay for this. my reporting on companies and cyber security issues in the past, it is expensive and that is one of the reasons every company in america does not have the world's greatest cyber security because of the cost. we do not have clarity on where the money will come from. that is another thing that will probably be a bit of a long-term question that remains. oliver: let's bring you into
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this because this is the area you cover. on the surface, this is everything everyone can agree on. implementu able to something like that question mark if someone who is an expert on this has to come in and meet every group, i'm not sure how it gets implement it. have a lot of big questions. cost is always a huge issue for these companies. we know president trump wants to reach out and work a lot more with silicon valley and the private sector to figure out how we can strengthen cyber security measures. one provision that has been reported, that perhaps agency heads will be held responsible. it raises a lot of questions if the epa or the department of interior suffers a major cyber attack, does that mean he will fire his secretary of interior or head of the epa? it is what we would imply from what we have learned about it but we are still waiting to see what the details are. there is hacking to get
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into computer systems and networks and there is also hacking to get into critical if a structure. to critical if a structure such as power plants viewed? bill: what we heard from the trump team during the campaign and what we have heard from him u.s. is that he thinks cyber security in general is very weak. he said he thinks that is an issue for companies as well as for the government. he continues to say the republican national committee didn't suffer the same kind of hacks we saw the democratic national committee and hillary clinton campaigns suffer from because they had strong cyber security. there is a lot of question about whether that is true. i think he feels like there is a lot of room for improvement all around. angle, on the politics hacking played a big part in the election. trump, and we just saw from the meeting he had where he referenced, the rnc was greatly
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protected. the reason the dnc got hacked is because they were able to be hacked. is there some kind of a political response here as well? shannon: instead of like trying to rub it in the face of the dnc or something? i don't know but i am pretty confident if no one had been hacked this election cycle, the president probably would not be talking about cyber security. into2 or whatever we are the administration. that certainly raised the issue to the top of the table. in part because of the outcry around democrats and the accusations about what is going on with russians and the findings from the intelligence community about what has been going on with russia this election season. scarlet: let me change gears. president'sing the been for his pick for supreme court justice. that is due out at 8:00 p.m. it will be done with quite a bit of fanfare. what can he tells about what they have let us know so far? shannon: they have officially told us yes, there will be a
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gathering at 8:00 p.m. prime time, as you know. reports that abc, cbs, will be breaking away from prime time to bring this live. i can only imagine that was the intention of scheduling this at 8:00 p.m. my colleagues have reported the two finalists, judge heideman , a name igorsuch always stumble over, will have been flown in here. i do not know if there will be some bachelor style rose ceremony, we will see, but all the details about how it will be announced are yet to be determined. scarlet: i want to jump in with a headline, the trump executive order on cyber security is now on hold. they were scheduled to sign at about right now, but that has now been put on hold. this is according to the white house. we will keep you posted as we find out more details. our thanks to shannon pettypiece at the white house and bill faries from our washington
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bureau. still ahead, options insight. the financial sector etf up significantly since the presidential election, but it has kind of sagged of late. this is bloomberg. ♪
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oliver: this is "bloomberg markets." scarlet: time now for options insight with julie hyman. from: joining me is joe, the cboe in chicago. where wed a few days have had an increase in the vix, an increase in volatility. from the sentiment out there, does it feel like it will continue? joe: yes, we saw interesting action on friday. we had the market down in the vix down. the vix making a new low on the
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market not on an all-time high were making new highs. that is a warning sign, little bit of complacency to me, that are selling volatility a little too readily. on friday, it could signal some trouble on monday and of course it did. we are seeing a little more volatility today. atstart to increase, the vix historically low levels still for volatility. your trade today is on xls, the financial select at site or etf. this group had done remarkably well postelection. there was optimism about regulation. but it certainly has not been immune to the selloff in the past few days. joe: absolutely. election. after the the thought process out there was a republican president, a republican congress, we will see a reduction in regulation, the
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financialts, and the sector specifically would benefit tremendously. it had a great run. as the presidency is getting underway, there are political fights not involving any of the bills the market had expected and we are stuck in the ,mmigration political fight trade were political fight. cabinet picks political fight, and the supreme court political fight. the market now is say maybe we will put that on the back burner and wait until we get the market benefits of those potential bills. julie: what is the trade you are looking at? if you could walk us through, that would be great. joe: the xls currently around 2320 right now. i am looking at selling the 2324 call spread in march that will play out over the next 45 days. you $
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if you own bank stocks, if banks do not go up over the next 45 days, they will at least collect on that options trade. julie: thank you so much, joe tigay. some skepticism here on financial regulation getting done. scarlet: thank you. still ahead, we will be speaking to one of the top economist in japan of columbia university central-bank policy p are we will also talk about fiscal first-quarter earnings with the bloomberg news and boomer intelligence team. you can see the shares down .3%. those are due out at 4:30 p.m. new york time. this is bloomberg. ♪
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taylor: let's get to the first word news this afternoon. utah senior senator will reschedule the cabinet votes for health human services cap -- cabinet nominee tom price and steve mnuchin after democrats
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were a no-show at their confirmations today, a visibly irritated hatch did not hold back when he spoke to bloomberg tv. hatch: no one called me and there was no indication. was the rudest thing i've ever seen. >> what procedurally can you do to move the nomination forward? mr. hatch: a number of things. i think my colleagues in washington, hopefully it comes in the next -- taylor: he says he had no inkling the democrats plan to skip. senate democrats are using an up secure role to delay the committee vote on attorney general nominee jeff sessions after democratic senators on the senate judiciary committee gave lengthy speeches opposing sections for several hours. the chairman says the vote will be delayed until tomorrow. by giving lengthy speeches, democrats are able to deter a rule that


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