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tv   Bloomberg Markets Americas  Bloomberg  March 7, 2018 2:00pm-3:30pm EST

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the fed's 12 districts. i'm scarlet fu here with julia chatterley. the dow is off by a must 1%, the s&p 500 losing .5 percent and treasuries are higher so you're looking at lower link yields, the tenure now it 10.70%. let's get the headlines on the beige book. >> more sides of a steadily improving u.s. economy in today's beige book report. more use of the words modest and at moderate to describe u.s. growth, but we do see clear signs that the screws are returned on an already tight u.s. labor market. several districts continue to data showing up particularly in construction, i.t., manufacturing area instruction is artie being squeezed by -- construction is being squeezed by high materials costs, things like lumber. so that is aligning to constrain growth in the construction
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sector, the report tells us. back to the wider labor market, i will quote from the report. in many districts wage growth picked up. most districts saw employers wage that employers raise wages and expand benefit packages in response to tight labor market conditions. so you may ask, what is that doing to prices? the report tells us prices increased in all district. most districts noted moderate inflation. the last beige book report referred to modernist fed speake upgrade in the language describing how strong those price pressures are. or monetarym life policy, i can say we know the fed projected in december 3 rate increases this year. its fair to say that this is going to add to speculation -- it is fair to say that this is going to add to speculation that we may indeed see four. julia: thank you.
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let's check where stocks are trading with abigail doolittle. abigail: declines in the neighborhood -- declines on a major averages, the dow and the s&p 500 lower. thanow has been down more 340 points, down about 1.4 percent and now down a little less than 1%. 500 lost has moderated. the tech heavy nasdaq is down the least. the impetus for the barris the bearish action we are seeing today is the resignation of gary cohn is the president's chief economic advisor. tariffs on steel and trade may spark a trade war ahead. -- steel and aluminum may spark a trade war ahead. at the highs, still down but still down less than 2%.
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it will be interesting to see where we do into the day but it is certainly a risk off tone relative to stocks. let's hop into the bloomberg. this is g #btv 611. its a longer-term chart. tonsuld see back in 2011 of up-and-down moves. over the last several years that has moderated, though, where we have seen the moves more contained. overall, during this time the s&p 500 rose more than 130 percent. but take a look at 2018. we are seeing a return to these big, outside, 1% moves. volatility breeds volatility so we are certainly saying that on an intraday basis. at one point today the nasdaq was higher, mirroring what we saw monday and tuesday, higher and lower. the far we have not seen that for the dow or the s&p 500, just more bearish activity. one sector getting hit today is financials. take a look at some of the financials trading lower.
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this reflects the fact that gary cohn has resigned from that white house post. we are seeing weakness year, despite the fact yields are lower to. that could be a little bit of a drag there. and finally, there are some pockets of strength if we take a look at autos and we can see shares are up 13.5%. the best day of the year. they did the estimates. and the recurring revenue loop for this year's more positive than the street had expected. h&r block is higher, the best day of the year as well. on a and d is up nearly 3% unconfirmed takeover chatter. speculation continues around amd . julia: thanks, abigail. treasury secretary steven mnuchin says he recognizes the risk of retaliation against the u.s. or the steel and aluminum tariffs. but he still believes the move will benefit american workers.
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bring in bloomberg's selena molson, and selena tell us more about your conversation. and looks like he is holding the president's line on the need for tariffs. treasury secretary mnuchin does align himself with the president. he knew what he was getting into when he joined the administration but he also claims we should not be surprised that such tariffs are on the table. secretary mnuchin said that since donald trump became president he is talked about three pillars for an economic trade deals. and these tariffs are part of that. what i heard from the secretary today was, while there are going to be consequences, anytime you are a negotiator you have to be prepared for those. but hewhat i heard from the secy today still sees the tariffs and overall better trade deals as good for the american people. did he detailed kind of
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consequences the administration has prepared for? into thoset go details. i pushed that retaliation is a key one that we expect to hear and that also investors, americans in the trenches, business owners and workers are aware that the retaliation will not begin for the economy. and the most he was able to say was, or he was willing to say, was that he continues to hold that tariffs will not hurt economic growth projections. he stills see the u.s. reaching 3% sustainable growth but it remains to be seen how that's possible with the stairs. but let's see if those threats are followed through, or whether other countries are able to come up with other ways of lowering the trade barriers to try to become exempt from the tariff, or soften the blow. julia: when the president of the steelworkers union says on this bew that he hopes there will carveouts for countries like australia, canada and the u.k., you have to wonder.
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did the treasury secretary give any sense that they are willing to make carveouts for those , like canada, like the u.k., like australia? say they are looking as a wayut mechanisms to exempt some countries, the same way they will exempt mexico and canada should the nafta negotiations go the way the trump administration hopes. but i think it all depends on the details. selena molson, thank you, wrapping up her conversation with the treasury secretary. the treasury secretary will join us on bloomberg television live at 4:00 p.m. new york time. be sure to catch it on "what'd you miss?" gary cohn's departure from the white house after the battle over tariffs is raising a lot of questions. key among them, is the u.s. headed for a trade war, and who will replace cohn as the president's chief economic advisor. peter navarro told bloomberg today he believes tariffs will
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be good for the economy. the tariffs are very modest in terms of their level. it is to defend those industries. the president said very clearly that we can't have a country without a steel and aluminum industry, and i totally agree with him. the aluminum industry in particular, will go away and just a matter of a few years unless we take the actions that we are going to be taking. navarro told bloomberg he is not a candidate to replace gary cohn. let's get more insight from stephen englander, head of research and strategy atrophy capital. stephen we will get to your thoughts on it trade battle and a moment, by want to get first your thoughts on gary cohn's resignation, which had been talked about and speculated for many weeks. : i think the timing was a surprise and that fact that the timing was so coincidental with the announcement of the tariffs makes me think that tariffs and trade are to be a big part of
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the president's agenda, and the markets are worried about that. scarlet: and that gary cohn was holding him back as far? >> yes and also, one thing about gary cohn was that he could get things done. he was a good manager. so i think they are going to miss his ability to make things happen. julia: what is it say that the president and the u.s. administration itself that they even went to tariffs in the first place? steven: there should been a surprise. he tried to keep every election promise that he has made, and interfering in trade was one of them and he made no secret about it. so i think it is part of his agenda. he obviously wants to retain in the midwest and what he wants to do is get manufacturing workers their dream. scarlet: are you more or less -- julia: are you more or less scared about the prospects for
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nafta and this future trade war? i think nafta is going to drift into another world, where the u.s. will announce they are withdrawing but give no timetable. so the rules of nafta will be in place but the u.s. will sort of retain the option of just dropping out. retention is questionable. you say we are witnessing a dance rather than a battle, and there are cooperative solutions available to this trade dispute we are witnessing. the white house is interested in cooperative solutions rather than hard and fast tariffs? >> i think its because they don't like tariffs, they much prefer quotas. quotas give them more ability to price and push up prices and increase margins without having the tariffs kind of superseded by higher prices and more imports coming back in. .e saw that with automakers we had seen it with different industries in the past. i think over time that is what they are going to be pushing
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for. great for labor because if you are a worker, what you want to see is the maximum increase in production. that.otas tend to limit but it is very good both for domestic producers and it is actually good for four producers as well because they have the benefit of the margin. scarlet: that's an unintended beneficiary here. >> but it makes a cooperation more possible. julia: we are talking about cheaper incentives on imports and tariffs on steel and metal -- steel and aluminum. irrespective of how this progresses and the response we get, is the treasury secretary right when he says it is not going to impact the growth outlook for the united states? even: if it stops here, no. i think the issues that would emerge is if they moved into 31 tariffs with a much wider set of retaliation. scarlet: the way they're
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threatening to right now. what we could anticipate what happened. there is stuff we barely make any more, if you take a look at textile imports. with nickel most nothing. if you limit those you are going to get inflation, but you are probably not going to get much -- muchon run production a response and that raises all sorts of inflationary questions. that could be an issue. but if we stick it to percent, steel to the 21st economies like food was in the 20th century. its a big part of what we did its just much less important. julia: stephen englander a graffiti capital -- steven graffiti capital, you're going to stay with us. for now, let's get to first word news with mark crumpton. mark. mark: julia, thank you. the european union has rejected to keep access to
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parts of the single market, particularly for banks. conference today the european council president criticized britain's efforts to gain preferential economic treatment in any post-brexit free trade agreements with the eu. >> this positive approach doesn't change the simple fact that because of regulatory, in fta this would be the first in history that loosens economic ties instead of strengthening them. from brexit, saying there will be no winners. the u.n. human rights chief is calling syria's claims that it is doing all it can to protect the -- to protect civilians in today's ridiculous. he said today that syria's war has entered a new phase of theor, particularly in
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southern domestic suburb where he says a turkish offensive is threatening the lives of many civilians. hisade the comments during annual report to the human rights council. sobering and inspiring. that is how education secretary her visits described to marjory stoneman douglas high school in florida, the scene of last month's deadly mess shooting. called theevos discussion of arming teachers and oversimplification and a mischaracterization. >> i think that the concept is to, for those schools and those communities that opt to do this, as they have in texas and as they have in polk county and other places around the country, to have people who are expert in being able to defend and having lots and lots of training in order to do so. secretary devos indicated
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her support for a bill the house plans to take up next week am a to help school staff recognize and respond to signs of potential student violence. and the secretary devos indicatd her wake of the florida school shooting president trump is reviving the debate over whether violent video games can trigger violent behavior. the president plans to meet thursday with representatives from the videogame industry. after last month's shooting rampage in parkland that left 17 -- thehe president level president referenced vicious game and movie violence in the context of school safety. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ scarlet. steven: coming up, englander of graffiti capital stays with us to count down the president's policy decision. from new york, this is bloomberg. ♪
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♪ this is "bloomberg markets." julia: that's talk about the federal reserve. the pace of monetary policy tightening may need to accelerate. many respects the macro environment today is the mirror image of the environment we saw a couple of years ago. earlier, strong headwinds accepted the momentum of the thevery and waited down path toward prosperity. today the reverse could be true. brainerd's comments followed an upbeat testimony last week from fed chairman jerome powell. ven of graffiti capital is
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ofh us -- steven englander rafiki capital joins us. she included a sentence or two in the text saying the fed would welcome small, temporary overshoots of 2% in order to offset the undershoot of the past. the fact it was in the past i think is important. there is still a wing of the fed that thanks we have to make up that passed undershoot to some extent. scarlet: was she hawkish or dovish, if you have to make a call, which one is it? >> ultimately i would view this hs dovish, because it is muc more important that they allow inflation to run up to doing a quarter percent or 3% instead of 4%. given the stimulus that is in
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the system and the momentum that we had domestically and from abroad, four hikes is and hawkish. babyish -- four hikes is not hawkish. four hikes is babyish. its probably not going to do much damage. scarlet: when you talk about inflationary pressures, go back to our earlier conversation on trading tariffs. speaker paul ryan warned the tariffs could offset positive boosts from the tax cuts. would a trade war delay fed rate hikes? steven. : i think it would. even though they have an inflation target, i think they would see the price insulation coming from a trade war as kind of a one-off, whereas a pc the economy slowing down and jobs getting lost, i think they would really be worried that this could become something much worse. so i think that if we ever saw
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the first round of inflation become a second round, they hawkish.come uber- they might recover from the first round missing the jobs lost, i think would scare them. julia: we are talking about a and thefiscal stimulus, disagreement over three and for rate hikes is still incredibly loose as far as policy is concerned. so why the curve flattening? ven: i have a ballpark view on this, and i think it is that the market is worried that the the democrats if do really well it will be a stepping stone to 2020. and there is no democrat out there that they think is going to be market positive, certainly not nearly as market positive as trump and the republicans were. you can talk about the recovery for the next year or two, but once you start wondering what would happen if we have a regime
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change, i think the yield curve or interest rates don't stay so high for so long. us over i want to take to europe because we mentioned the ecb is making a policy decision this week. and we get the news conference i on thursday as well. they governing council may change the way of competing for ft we. are we at the point where the fcb -- where the ecb is ready to make an announcement? ven: the announcement is long overdue. nobody thinks they're going to cut rates. nobody thinks they're going to increase qe. so taking that out of the statement is about as a relevant as possible, but the market might interpret that as finally acknowledging that they are moving in the right direction. i think that is pre-much priced in. we might get an initial reaction but i don't think it will really persist.
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if that is all they did, for rates goingt up and then the market says, that's no big deal. scarlet: kind of how mario draghi wants it. , thank you. treasury secretary steven says the tariffs will benefit the economy despite risk. this is bloomberg. ♪
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♪ is bloomberg markets. i'm scarlet fu. its time for the bloomberg business flash, a look at some of the biggest stories right now. oprah winfrey's sale of 2 million shares of weight watchers netted 110 million dollars. according to a regulatory filing most of the profits came from exercising options. the billion are hold vote -- you bought a stake in 2015 sold the diversifiers
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investment portfolio. she also sold shares to her charitable foundation. coca-cola will break a tradition with its first i'll call it drink. the beverage giant has launched of a japaneseon up all of drink that can contain up to 9% alcohol by volume. continues tos it explore opportunities outside our core areas. that is your business flash update. up, a bipartisan banking push. we speak with republican senator richard shelby, a member of the senate banking committee on the latest when it comes to dodd-frank. this is bloomberg. ♪ mom you called?
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one more way comcast is working to fit into your life, not the other way around. ♪ scarlet: tick-tock by
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bloomberg's will stream -- by bloomberg streams live on twitter. senate majority leader chuck schumer doesn't believe president trump's wish to impose a steel and aluminum tariffs will have the intended effect. senator schumer says the president must balance his desire to him to in the china with the interests of american allies. >> and if the president walks on that tight rope carefully and well we will support him. instinct to go after china are correct, but the policy he proposes doesn't fit the bill. it is not well targeted, it is not precise and as a result that could cause massive collateral damage that hurts america more than it helps. mark: schumer also said the u.s. must avoid a trade war and said
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he expects reciprocal tariffs if the plan moves forward. he favors going after china but once the president to back off his current plan. two conflicting arguments in one day is the brexit debate rages on. the u.k.'s chancellor of the exchequer laid out his vision thebritain after it leaves eu, saying the u.k. would mutualte an agreement of recognition which includes financial services. >> we must have the ability as necessary to deliver an equivalent outcome by different means. maintaining our commitment to to each other's markets on a fair and nondiscriminatory basis while protecting u.k. taxpayers from potentially uncomfortable risks. meantime the european council president who spoke in luxembourg less than two hours earlier, already shot down the notion of a unique agreement. he says a pick and mix for a
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nonmember state is out of the question. the head of the fda says a payment scheme has blocked access to cheaper versions of some of the expensive drugs in the u.s.. criticizedioner pharmacy benefit managers who withact with help plans -- health plans to administer drug coverage. he is pushing for ways to get lower-cost, generic drugs to the market faster. in sierra leone voters are headed to the polls to pick a new president. -- 16 candidates are running in a race that has sparked debate about dual eligibility. there will likely be a second round will receive 55% of the v. the incumbent has a served two terms and is barred by the constitution from running again. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton.
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this is bloomberg. ♪ you very much, mark. gary cohn's departure from the white house leaves the administration without his monitor rating influence. without is moderating influence, this as the possibility of a global trade war going forward. sits onrichard shelby the senate banking committee. let's start with gary cohn. how important do you think he was for influencing economic policy at the white house, and how concerned are you by his decision to leave? senator shelby: gary cohn was very influential. he was a heavyweight in the economic area. when he came to the white house, he had good success in the private sector, well-respected. i hate to see him go. i worked with him on other things dealing with the regulation in the financial system. worry that the white house lacks experienced
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policymakers and managers who can oversee process is now the gary cohn has left? senator shelby: i think gary cohn will be missed. i think you need a balance. there are others that can fill the void but i hope the president will find somebody that will help balance a lot of views at the white house. basicow, gary is a free trader. i am a free trader but i wanted to be fair. i see where the president is coming from but you have to realize trade is a double-edged sword, and you have to be careful how you implement it. we do not want a trade war but we want fair trade. how do we get there? julia: senator, secretary mnuchin today back to the president who said he ultimately takes this will be good for u.s. workers and won't harm the economy. you agree or do you think he has got it wrong? senator shelby: i think he is probably right and wrong. he is right that this will give protection to some jobs in steel, which we have some in my
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state, and aluminum. we need that for national security reasons. we don't need to depend on the world market for national security. on the other hand, if we enforce there is going to be some reaction to that somewhere in the world. what we really need is free trade, honest trade. we don't have that in the world. most of the chinese trade, most of it is government-owned entities or government-influenced entities. most of hours of private industries. so you have a real conflict there. look after we got to america but we have to be careful how we do it. senator, you say you are a free trader and gary cohn was a free trader as well. with the departure of gary cohn, are you encouraging the white house to find staff who can offer counterbalance to some of the economic nationalism that peter navarro represents. we have heard about larry kudlow , as a possible replacement.
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the head of the on d, whose hands are full with the on the as well as the head of the cpb. wouldr shelby: dr. kudlow be a good replacement if he were to take the job. he is basically an economist. he is a free trader. but on the other hand, when we talk about free trade we have to tap about honest, fair trade your that is underlying all of it and i think that is where the president is concerned. julia: there are those who say part of this problem is actually congress' own creation and that too much power has been demolished to the executive branch as far as trade policy is concerned, and someone to crack down on that. would you back those if they nsthe president were trade is concerned, going forward? here is theby: problem with all that. you have to have somebody to implement the trade bills that we sign and -- that we pass, and
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the trade bills and so forth. congress is not an executive branch of government. we can run business day-to-day, we are a legislative branch. so we have to deal some executive power to the executive branch to do this and we have doped that they carried out and that won't be misused. but sometimes it is. scarlet: i want to switch gears to what is sapping of the senate banking committee. you began the week reworking dodd-frank. there is a lot of division among democrats. moderates are in support of senator crapo's bill. progressives are concerned postcrisis reforms will be undermined area what is the key sticking point -- undermined. sticking point from where you sit in the republican party, especially when it comes to reconciling what republicans in the house are seeking? aretor shelby: i hope we together. we had a good vote. a lot of democrats joined republicans to move the bill forward the other day. i hope we can pass it. i hope it can ultimately go to conference, or maybe the house will accept it.
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but overall, it is a good bill. it is rolling back some regulations on small banks, medium-sized banks. it is not a wall street bank help at it is going to lot of the small banks and medium-sized regional banks that we have been, believe need regulatory relief. who say this those unfortunately is going to be watered down to such an extent it simply won't fulfill the promises in the hopes that the republicans in particular want to achieve with this? shelby: well, i believe we have overregulated the banking system. we overreacted, but on the other hand, the small banks and medium-sized banks that we are looking for regulatory relief for, they are not at systemic risk. there will not be a risk to the economy. some of our larger banks could be but not the banks we are trying to deregulate. it is a good deal. thelet: you're a member of
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senate banking committee and also a member of the appropriations committee. we know they had done the appropriations committee, fat cochran, is retiring next month. you would be next in line to head that committee. assuming you got the job, would be your first order of business? try to bringy: to back regular order. to meet our deadlines of october 1 come are somewhere like that, like we are supposed to by law, and not go from crisis to crisis and try to fund the government. we will work hard, working with our leader and also the democrats to make that happen, and i think it is essential that we move forward in the appropriations process. julia: i want to wrap up finishing on the tariffs discussion. there are those who say the president is going for the popular vote, that he is targeting votes ahead of the midterms. there are others that say ultimately this will be a net loss for americans, if indeed these tariffs go through, and the impact it could have if we see some sort of trade
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escalation. you think this will be ultimately a vote-winning oracle-losing strategy as we head to the midterms? senator shelby: i think it depends on where you are and where you're from. in the midwest, the steelmaking industry and manufacturing industries it is probably a plus plus for president trump. in the south, alabama, birmingham, we have a lot of steel manufacturing in alabama. it would probably be a plus plus. julia: a net net? senator shelby: he think it will be a net thing for the president. thanks to alabama senator richard shelby for joining us today from washington. thank you very much. of twoup, a tale countries. we think about the political challenges in mexico and the u.s.. this is bloomberg. ♪
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♪ scarlet: this is "bloomberg markets." i'm scarlet fu. julia: i'm julia chatterley. lots of political drama here in the u.s. with the departure of white house economic adviser gary cohn. we discussed the upheaval here in the united states, and in mexico. carlos: there are a lot of changes everywhere, not just in the u.s.. it is difficult to predict how, the new future of this area that we are seeing between mexico and the u.s.. and not only mexico and the u.s.. i think the u.s. is having on these new scenarios, and it is difficult to predict what is going to happen. how do you remain agile as an
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enormous company when you have political uncertainty elsewhere? carlos: that is a good question. we are changing things that we used to have. we have a new energy reform, and a new scenario for us. looking at is now that everything is changing, not just in mexico, and the relationship with the u.s.. oil -- the of crude prices of crude oil are changing. so we are trying to define all the priorities in this new environment of everything changing, and we frankly want to pekex, theculture in theest company -- pemex, biggest company in mexico. capital allocation rolling back in the capital because of uncertainty? carlos: no, not at all. we are actively trying to move
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faster so we can become the first big company in mexico, the and we want to assert these changes so we are moving forward with a lot of decisions. is not counting on the political uncertainty you have in mexico as well. you have an election coming up. how afraid is the energy industry? the election is a very important political part of mexico. we have very strong institutions in mexico. these reforms that president pain you put in place in mexico, he made these very important constitutional changes, so in a way we have a lot of certainty on what is going to happen in the future, no matter who wins the election. >> whoever wins the election, you are not worried and he is not to repeal any energy reforms? a most impossible.
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to change the energy reforms, anybody really has to change the constitution. to change the constitution in mexico is a big issue. you need two thirds of the lower and upper chambers. president they have, that amount of congressmen and women. and he or she also may need to have the states in mexico, to pass the changes in the constitution. so it is possible but it is almost improbable to achieve that in the short term. >> but if we get the opposition in power, what is the number one thing you worry about? carlos: they will slow down the energy reform peace. and away, we are moving real fast right now. we have, as a country, we have 90 plus contracts with new companies in mexico. and we did that only maybe i would say in two years. these --n keep that that piece if we have the same
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track. but if the position is for someone who doesn't believe in energy reforms, that may reduce the speed very much and that would be a shame. your performance a lot of benefits to the country, to the people, so the worst-case scenario from my personal point of view is that the speed that we are implementing the energy reforms wouldn't maybe be so much. >> when a new administration comes in, typically the ceo of p emex is replaced. you been in this job, how long now? >> maybe 12 months. >> would you like to stay in 2019? carlos: yes. >> do think you're going to? carlos: yes, it depends on the new president. was carlosat trevino, the ceo of pemex.
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these comforts of the white house with press secretaries sarah huckabee sanders is underway right now. you can watch it on go bloomberg very this is bloomberg. ♪
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♪ this is "bloomberg markets." i'm scarlet fu. let's go to the white house press briefing where sarah sanders the press secretaries taking questions. we will monitor developments there and if you want to follow the events you can catch it on tv . y ono want to stat developments in washington because congress is cleaning up as medics. for the first time in 80 years lawmakers of want to stiffen oversight on hair and makeup rod x. renfrew,s now is gregg founder and ceo of beauty counter. to passrging congress
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in the personal care safety act. surprising, given divisiveness in washington. the verboten led congress is all about deregulating but this is a bill that would add to regulatory oversight. regg: we have not had a major federal law updating the cosmetics industry since 1938. you do have support for the act because everyone has been touched directly or indirectly by health officials -- by health issues we face as a nation and many of those come from chemicals we find in all sorts of products including our personal care and cosmetics. scarlet: this has been happening for decades and consumer safety groups have long called for more oversight and stringent standards. what has changed it now, that it is gaining traction and supportive members of congress on both sides? regg: answers are increasingly demanding of companies and the government, that there is increased transparency, that they actually know what they are putting in their food around
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their bodies. you had seen this movement in the food industry -- think scarlet: the beauty industry is following suit. scarlet:scarlet: you're not a multilevel marketer, beauty counter, you distribute to multiple channels. what is the conversation at the distributors like? how much of the impetus for more regulation is coming from them? egg: when i started beauty counter our mission was getting safer products into the hands of everyone. we knew that is a consumer brand we had to make our products available to consumers through multiple channels. though we also wanted to empower this movement for women and men want to lend their voices not only for selling products but also part of effecting change in this country. so our consultants to distribute our products are extremely involved are in fact are extremely involved. in fact, we just suck 100 of them to washington to show their support in recent days. scarlet: talk about what is
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happening in cosmetics and personal care right now? a bigger brands losing share to smaller companies who can really really -- can really afford to focus on natural ingredients? companies and conglomerates are struggling to increase their market share. it is in the low single digits. if you look at the emergence of all these independent brands, whether his company like ours leading the charge for clean and safer products, or just other smaller, indie brands, they are making a real shakeup in the marketplace. where the bigder beauty care and personal care markets stand on all this, like l'oreal and estee lauder? gregg: i can state their position but what i have found is that there are some of the larger companies that have been around for white sometimes -- quite some time are opposed to increase legislation. and then you have seen companies like target in cvs that is
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starting to self regulate and i think that is something that we think is the way of the future. so i do think it, it could go either way. scarlet: got it. thank you so much, gregg renfrew, the beauty counter founder and ceo. julia: the white house daily press briefing is still underway with press secretary sarah huckabee sanders. garyas just asked about cohn and said you wasn't getting into it. there were other headlines she is talking about. there's a bit of calibration as far as tariffs are concerned. potential carveouts for tariffs on national security considerations, she said it will be country by country, so again a bit of calibration. she said trump's tweets about china were based on talks last week and she is referring to a tweet from earlier from the president, saying the chinese have put forth a plan for a one billion dollars reduction in their massive trade deficit with
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the united states. when billion dollars is peanuts. i wonder if there is any numerical peculation coming on that. continue to watch sarah huckabee sanders, you can watch it on tv go. from new york, this is bloomberg. ♪ ahead oft going to get the president's announcement on who is going to replace gary. the president is often touting the markets. there is volatility today and the wall street markets in the asian market. ec concerned about volatility? is focused onnt long-term economic goals. the economy is stronger today than was -- than it was when the president took office. we are going to continue to fight for strong economic policy and job growth. ♪
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julia: 8:00 in london. i'm julia chesley. i'm scarlet fu. welcome to bloomberg markets.
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julia: live in bloomberg world headquarters over the next hour. here are the top stories we are covering around the world. terror of turmoil, a threat of the trade war looms over markets rattled by signs of rising inflation. exits the white house. leaders from all over the globe react. steve mnuchin speaks. he joins us live to discuss. one hour from the close of trading. let's get a check on the equity market. drama.ttle bit of d.c. major averages lower. but at the lows of the dow had been down 1.4%.
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now down 8/10 of 1%. s&p 500 in the middle. .he nasdaq slipping here is an intraday chart starting lower, gaining down and higher. after garyertainty cohn resigns. does that mean tariffs will be put into place? will there be a trade war? the nasdaq holding solid on pace for its fourth day in a row. let's take a look at the stocks. , we see investors going to high-quality technology names did netflix down 1.7% after gaining 8% over the last two days. positive analyst comments. shares, notng
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a bad call considering the stock is up 7% before today. after last year's 50% gain trading at a huge premium. an interesting call. we have a decline for oil. let's take a look. oil down 2.3%. decline.ncline -- the worst day since the beginning of february. that department of energy report weighing on oil. it may not be such a positive thing. finally we do have mixed trading for stocks at this point. class, go across asset we have gold down a little bit. flat.n about that haven asset not getting much of a bid. the quote here had been higher. the vix is once again lower.
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another day of volatility. scarlet: thank you. let's get to bloomberg first word news with mark crumpton. betsy devos visited marjory stoneman douglas high school in parkland, florida today. a massle were killed in shooting at the school last month. she called the visit sobering and inspiring. she said some told her their healing process was a day-to-day situation. as for arming the nation's tolders, secretary devos reporters arming some teachers should be considered an option but not a requirement. the 19-year-old accused in that shooting is being held in solitary confinement. been released on behavior.
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he appeared to laugh and exhibited awkward behavior during and after a visit with an attorney and he has had only one family visit. jeff sessions is telling california we have a problem. he told law-enforcement officers at a conference the justice department sued the state because laws are preventing federal immigration agents from doing their jobs. demonstrators marked traffic outside of the hotel where sessions delivered his remarks. jerry brown called the justice department action unprecedented. >> it is not about the truth or protecting our state. it is about dividing america. concern about people before and people. now we have the attorney general doing that. >> governor brown the accused sessions of lying in trying to appease president trump. in other news, the u.k. prime
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minister theresa may meeting with the saudi crown prince. he also met with queen elizabeth. may has pledged to challenge him over saudi arabia's human rights record. the meeting comes after she challenged the eu to stop stalling serious trade talks. >> now is the time for the european union to get on the job of discussing the partnership for the future. may laidme minister out her vision last month. global news 24 hours a day andred by 2700 journalists analysts in 120 countries. i'm mark crumpton. this is bloomberg. julia: investors and economists have been reacting to gary collins resignation. earlier i sat down with his
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former colleague. uncertaintieshe on what his views are. his views are well known on trade policy and an approach that more market-oriented in a number of areas. a number of people with those views in the administration. but there is more uncertainty. we don't know who the national economic council director is going to be. a number of names have been floated but it is too early to tell. is awe do know is there tariff step that will have some impact. they will incrementally increase the size oft so far what we have seen in it of
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itself is not that big. the question is what comes next. it is too early to tell what the outcome is going to be. julia: less than 2% of imports, possible inflationary impact. it is tiny. the question, is this the beginning of something larger? >> that is right. this is something that can have an impact that is meaningful on specific industries. of aniously makes more impact there. from a macro perspective this is not something that leads me to recalibrate my thinking about what growth is going to be, what the fed is going to do or what is going to happen to inflation. julia: what about nafta? the canadians are up in arms about this announcement.
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are you more alarmed about the prospects in nafta in light of what we are seeing? >> incrementally, yes. we were concerned about an announcement that the u.s. might pull out of nafta. the probabilities of that have gone up and down. we thought early in the year the risk of that was quite high. then it seemed that was taking a backseat again. now again there are additional questions about whether that is going to happen. politically there are a number for trades negotiations like nafta. inhave an election in mexico july. we have the u.s. midterms. that risk is out there. goldman steel lloyd reacted, saying he deserves credit for serving his
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country in a first-class way. i join many others disappointed to see him leave. we are joined by max. you wrote a story on the bloomberg about how wall street is fretting over the lost white house ties. wall street has lost its security blanket. >> i love that phrase. he said he was disappointed but the reality is they are bombed. think to before the end of the election. he put lloyd blankfein's face in his closing at. this areakfein was looking simple. and then what happens? he hires him. goldman sachs executives. dana powell is gone. she just left to return to goldman sachs. it is not like eabsolutely fread
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terrified but it is fair to say that he was one of several friends of wall street inside the white house. people knew they could talk to. they are now gone. was because he was a friend to finance or because he was seen as a counterbalance to the more hawkish elements? or even on immigration. he was seen as a moderate voice. show theporting would answer is both. on the one hand they are glad to have someone new balances the hawkishness and populism that don't forget, what he helped push forward were actual things wall street had been craving for years. tax cut's were big. in particular they benefit the banks. let a phone wealthy individuals in the united states. deregulation is a huge thing. deregulation could continue.
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>> you have some fun and games. what should he do now? talk about the suggestions you got. you got high level names. >> i did not consider it fun and someone said i want to hear what wall street people what he is going to do next. i did have a good time talking to people. we heard everything from he should go to the bahamas. there is a place where he likes to go. >> baker's bay. go to space. >> one person was like he should run spacex. a guide to give a relatively cogent explanation for why he thought he should go to spacex. he said elon mucks is busily -- busy with with tesla. cohen. musk mcgarry
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bottom line is most guys see ,im as someone who is a builder and operating guy who can get things done. said if he really wants to be a hero he should write a once a week serialized tell-all about his time in the white house. scarlet: planting some ideas here for gary cohn. stay with us. max mention steve mnuchin will be joining us live. we will be discussing the prospect of a trade war. this is bloomberg.
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scarlet: this is bloomberg markets. time for the bloomberg business flash. the biggest stories in the news now, carl icahn dismissing speculation he had prior knowledge of the announcement of new tariffs as categorically untrue. he reduced his stake in construction equipment i week announcedsident trump his tariff idea. has helped gun and ammunition companies access $430 million in loans and bonds. the bank also has a long-standing relationship with the national rifle association which includes a $28 million line of credit. that is your business update. the proposed tariffs have left
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many countries uncertain about the future of global trade. bloomberg spoke with the ceo of siemens about the impact of these tariffs. >> a lot is going on in the country. i feel sorry to hear that gary is leaving. he has been one of the best about, visionary responsibility and the meeting of a nation like united states. i feel sad to see him leave. tariffs, i am a strong promoter of a three world, free trade and fair trade. not fair believe it is people should talk to each other instead of bout each other. me, i havestates to lived in this great country for
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five years, the u.s. has been the inventor of a global world. if the united states says we have to impose tariffs because we do not like to be in global competition, that is a new sign for the country. >> how do you manage that? you change where you are going to be doing business, you change or capital allocation plans? >> we doubt. the united states is the most important country in the world. 25 billion u.s. dollars revenues. we have operations in all 50 states. >> really? >> yes. we have 40 manufacturing places here. so, we feel well, we do well, we
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like what i am more into the gle of things which i believe the government could do better to lead the global world and not lead it up -- leave it up to the chinese. >> would you need to lay off workers or raise wages at all if we see more tariffs? >> this is about the customers than politics. . >> you would have to pass the cost on. that is the microeconomic topic in our country. the topic is our customers are the ones to have the benefit or who suffer from it. it is about our customers. that is what they are currently focusing on. fromlot of companies here energy companies are talking about china and how that is the growth engine rather than europe
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or the u.s.. do you see that? >> it is a natural question. there is nothing new to that. >> but have you change your business model to adapt for that? >> we have a similar amount of people working for siemens in china. we are a well-established company in china. they have 1.4 billion people. if you look at the issue along with india they have 70% of the global population. you have to take that seriously. energy, in -- manufacturing, health care, they all correlate with the amount of people in the nation. innovation has traditionally come from the united states. united states is the most innovative country in the world, especially software and things
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like that. germany and europe has been the innovation powerhouse and engineering. we have to be mindful not to lose that to other countries. we need to stick together and having we can balance 300 million people in the u.s. and 500 million in europe, which is more than 10% of the global population. julia: i want to point out on the note of tariffs, sarah huckabee sanders talking about carveouts for mexico and canada. signs of softening perhaps on this announcement at some point going forward. this is bloomberg.
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julia: it is time now for options insight. julie: joining me in chicago,
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scott bauer, great to see you. thank you for doing this. i want to ask about the big picture and what you are seeing in terms of options activity as the market continues to digest the prospects for tariffs. >> what is unbelievable is for such a long time we had no volatility. now every time we get an event like this the first reaction is hit the cell button. one of the first things i learned was sell when you can cannot when you have to. that is when we got this news about terry cohen. the first real action, that is one of the reasons why we are .eeing so much volatility sell first, evaluate later. that maybe there
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is not going to be any tariff issues for canada next mexico. so we're seeing the market rally on that. that is no more indicative than what we saw happen in the vix today. the vix was up a little bit today even when the market was down. now we are down on the day. all is well in the world. >> all is not well in the state of discount retail. we got the dollar tree numbers. your trade has to do with another company in that industry, big lots. it will report earnings friday. do you think dollar tree bodes badly for big lots? so specific. is the reason i like the glock is there have been a bunch of analyst recommendations recently. earnings revisions to the
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upside. sometimes that is a precursor to a good report. waylots is trending to large support area around the 200 day moving average. a half. ratio is 13 and way lower than the rest of the industry. half spread,and a i can do that for $.65. phenomenal reward to risk. what i like about it is i know my risk. $.65. what's the option market pricing in is almost five dollars. will be watching those big lots numbers later in the week. scarlet: coming up, steve mnuchin speaks to -- big's. we will discuss gary cohn's
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possibly a carveouts for mexico and canada. >> anything can happen at this stage. >> the tariffs are going to be announced thursday as well. .e will find out the timeline a next picture for u.s. stocks. the dow losing ground off by 100 points. steam asg up a bit of we head to the end of the trading session. from new york, this is bloomberg.
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the snow coming down in new york city. a nor'easter tearing up the east coast for the second time in less than a week. you are looking at a live shot north toward 3rd avenue.
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the storm is grounded 2000 flights and coul power to many who just had service restored following the earlier storm. a foot of snow is expected. secretary of state rex tillerson arrived in ethiopia. he is the most senior u.s. official to set foot on the african continent since president trump took office more than a year ago. he was to mend the damage done by the derogatory description of african nations. current secretary david schopp and took no action to fix long-standing problems that put majorts at risk and veterans hospitals according to investigation that finds failed leadership at a climate of complacency at the v.a.. the


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