You have seen a rise in return this year and another record today for u. S. Averages. Gains in big technology. The nasdaq is outpacing gains and being fueled in energy stocks. We see oil prices rebound. Elsewhere we are seeing repercussions of the Trump Administration decision to cut cost sharing reductions to Health Insurers. Hospitals are feeling the pain of this as well. Earnings are likely to high. Destabilizingo be and damaging to hospitals. Thatis from cheryl saying in a note this morning. You are saying the big hospital , they are taking a hit as well. Then lets take a look at the insurers. They have already pulled out of the aca exchanges but these smaller ones, they could have an impact. Theth care hasnt been in marketplace. The Obamacare Exchanges represent 15 of that company earning. That is why that stock is down more than the others. If you look at the Health Care Stock since the election we have a chart of them. You have the managed Health Care Companies in blue. And you have the Health Care Facilities and white. The hospitals have performed worse. They have more to lose here. The Health Insurers have been less effective because the Larger Companies in that space are more insulated. They have mostly pulled back from many exchanges. And the banks as well. We will get much more in just a moment. A quick check shows bank of america slightly higher. Eat estimates did because of costcutting. Flipside took the a surprise billion dollar charge. Previously, regulatory a time when it is already vulnerable because of the other issues. On whatwe have to check is going on with the european markets. Banks among the three declining on the stoxx 600. Higher for the week. Since march 20 from our studios in new york, this is charlie rose. Mark . Some individual news. For us, 8. 5 billion euros helping clear the way. 2016 sales of had 1. 3 billion euros. Roughly 3 80 5 million euros. 385 million euros. The worlds biggest publicly traded Hedge Fund Firm reported billion. Ws of 2. 8 investors allocating the emergingmarket debt funds and lowcost investment strategies. By investment gains of 3. 3 billion. To 103. 5 billion dollars. Doing, theyrs are are returning hedge funds as performance improves and they look to shield portfolios for volatility. Itsyear road is heading for biggest weekly gain after the worst losing run since april. Ecb officials considering cutting by half to 30 billion. Uros keeping the product active for at least nine months. The governors of the ecb have the need to identify an end date for purchases to keep dying thes until september with providers or it could be extended. The currency strategist at west ank says 120 looks like electric fence for the ecb. 118 is where we are today. Vonnie Bank Earnings season continuing with bank of america posting its best profit in six years. , a 1 billion charge. And todays earnings, yesterday of course, the director of bank index and strategies. He joins us on the phone. Mortgagessumer side seem to be holding up. You are recreating the possibility on the posit. You were winding out these spreads. They have been lagging productively relative to what is going on in the overall market and the sense of the rise we have seen. That has been a positive trend. Even when widening those spreads were still seeing growth and deposits. Banking holding up as well. It has. Mortgage banking has not rebounded to what we have been used to but the Business Model has changed. What a lot of these banks are doing, they are retaining 80 of what they are originating. Holding them. It is about being able to keep those mortgages on the balance sheet. Not sing the mortgage banking fee income bounceback that we are not seeing it collapse further either. Seen,from what you have for bank of america and wells fargo, what are the trends that encourage you . Anything that worries you . We think there are three catalysts. Historically low credit costs. We keep checking that. That is coming in nicely. Net Interest Income growth and wider interest margins . Where that is affected by the volatility. Third, a reduction in shares. We are now saying these banks be able to do, those are the three things we are watching for. The one thing we are also beginning to feel is what is happening from the hurricane. Some of these slight Revenue Misses are related to gulf coast business for the month of september. Mark what are the risks in the second half of 2017 that could stall the current performance . Right now the risk is there is this anxiousness around what happens in washington with all of these changes going on. The risk is in that we dont get a direction. Were sitting here in a stalemate. Interest rates went up earlier this year. Everybody was getting excited. Nothing is happening. Then revenue start to pull back. The cfo actually said plans they are borrowing more. Businesses are not waiting for health care to play out. They are doing what they have to do anyway. Would you dispute that . Saying we are just seeing the first signs of this optimism. What they are saying is we are starting to incrementally come out from under that because there is a hoax some of this is going to get fixed. If all that falls apart you will go back to where we were where things will slow again. Vonnie the efficiency ratio was worse than expected. What can be done about that . If you look at bank of america and citigroup, they are well on their way. Wells is in the throes of this reputational crisis. Because they are having to deal with that they are getting hurt on two fronts. They cant be stingy. They have to do Everything Possible to fund all that they can. They are pushing their deposit rates of faster because they have to give the customer something. They are pushing rates of, spending more on advertising. There is pressure on wells. Under that there is a lot of love rich that they a lot of leverage that they can use. By price have a strong theet, is wells, given repeat nacional issues in the shortterm, is it a longerterm investments . That is how we have phrased that. You have to be aware and watch for your point of entry. That will be an 18 number when you see earnings rebound and this efficiency leverage come back in. We have been saying technically this is not the time. It took jpmorgan three years to recover. We think it will take wells fargo that same time. If you bought jpmorgan when we are seeing this pressure now and held it for those years you outperform the other banks significantly. Definitely a longterm investment thesis on that. Vonnie thank you for joining us this morning. Lets check in on first word news. A speech President Trump is expected to disavow the Nuclear Agreement with iran but not abandon it. The president will refuse to certify that it serves u. S. Interests. He will ask congress to amend the law. He asked the world joined endther to ask iran to death and destruction. And just hours after the president signed an executive order designed to drive people away from the health laws coverage market, the administration is cutting tens of millions from groups that help people enroll in obamacare. It is the deadliest we go fires in californias history. 31 people have been killed ranging from northern californias wine country. Hundreds of people went missing 3000 homes destroyed. Keepingd is firefighters from reaching the fires. It could become the strongest storm to strike islands since 1961. The hurricane could cost 800 million in damages. Global news 24 hours a day powered by 2700 journalists and analysts in 150 countries. This is bloomberg. Vonnie thank you. Coming up, signs of rebalancing, pushing oil futures higher. This is bloomberg. Mark live from london, im mark barton. Vonnie and im vonnie quinn. Precious metals celebrating the cpi miss. Perhaps oil is headed for its biggest gains since september. Little hard to celebrate since her was a mess on the inflation data, but is that why it is 1300 now . , now toaw the reaction the 1305 level. It appears to be a reaction. We are seeing a weaker dollar. Vonnie that will be influential. It could be. Were seeing a shortterm trend higher. It does appear gold has a bit underneath it. Vonnie is this something that will continue through next week . It could be a friday the 13th thing. Expectations were that yields would move higher. That is why you are seeing repricing in the gold market. Talk about the dollar. We saw some consolidation. Would you say that there is a direction . That it is lower . It is trying to figure out the environment. Overall the trend has been higher. Interest rate expectations have been increasing. That is being called into question a little bit. Im not sure if this is a shift in the trend. The expectations have been changed somewhat. The managing director at take a. M. Financial. M financial. Mark a look at the biggest stories in the news now. Not renew its operating license. Transport says it had concerned about the right Healing Service safety and attempts to avoid regulation. The worlds biggest Hedge Fund Firm has made a bet against Italian Financial stocks. Overridgewater associates five banks and one insurer concerned about ecb rules have encouraged investors to short the italian bank. Mercedesbenz increasing its a lead. Deliveries rose 12 . The growthee times rate of bmw which sold 1. 5 million cars. It included revamped. Vonnie still ahead, donald trump in washington. We are going to bring you in the headlines. This is bloomberg. Mark this is bloomberg markets. Vonnie im vonnie quinn. It is time for our ctf friday segment. Appreciate it. We are talking cryptocurrencies. U. S. Regulators have been not yet approving a bitcoin etf. Pulled ahead in this race. Why sweden . It is the capital of cryptocurrency. There are now two. Has 3t bitcoin an that million. It has grown like crazy. When you look at the growth of these theres a lot of money coming in. How does the u. S. Investor, do they just talk to their broker, how does that work . You have to be more qualified investors. Jpmorgan came out. That is what they are using. They are using the sweden provider. This is the one mark cuban mentioned that he mentioned to emily chang last week. This tracks bitcoin. Was thews the Structure Private trust. That is attracting these pros. Etf is physically backed. It is a note from the issuer. There is credit risk. Where do we stand here in the u. S. . Whats it is all wiped out. Basically, what you have is bitcoin futures. Here you do not have them yet. They came out to all these people come you can see a bunch. They said withdrawal your funding. You should wait until futures are trading. Futures are the key. They allow an extra source of liquidity. That is huge in terms of the government being comfortable allowing this. That has helped people create markets and have the thing track correctly. Youre going to see futures launch through nafta. Vonnie they are going to have to wait a little more longer. President trump is speaking now at the value voters summit in washington. So far, remarks on las vegas. Vonnie live from bloomberg world headquarters. Mark this is bloomberg markets. Lets check in, more from new york. President trump is speaking at the value voters summit. Later he will speak on iran. He will say it is time for the world to join the u. S. Putting pressure on iran. The iranot abandon deal. He will ask congress to amend it. Susan collins is staying in the senate. Collins is one of the few blican [inaudible] i think it is a fair saying. The United States asked for more defense spending. We need to share within the alliance. Allies have started to step up. Maybe. Says be the next country to join nato. Estimates suggest they will be extended. 20 700s a day, journalists and analysts in 120 countries. To washington. The Trump Administration facing rollbacks of the Affordable Care act. The white house said the bailout of insurance companies, he has another example of how the pretty decent ministrations skirted the law to talk about a broken system. Here with me in new york, bloomberg news. Let me start with you. Democrats saying . Asked immigrants are coming out against this. This is the second act President Trump has taken. Im told that this is something they are trying to do to read jumpstart conversation on capitol hill to get something done on health reform. First and foremost, with senator rand paul, issuing a new executive order that will allow for businesses to join associations to get health insurance. In the Obamacare Exchanges, i put that question to senator rand paul. He says that is what should happen. The white house is saying Health Care Reform could be done by next spring. By refusing to fund these exchanges, destabilizing the market, sending a message the president wants that. Vonnie the president is speaking at the value voters summit. He has been talking about religious freedom, respecting the flag. Let me turn to you now. Insurers are falling. Clearly this is not good for industries. The way insurers are going to make up for the end of these subsidies is increasing premiums. That is going to be difficult do folks who feel they cant this on their own. Do this on their own. They are going to see premiums going up next year because of the action they took today. In the action to in the payment could face legal obstacles. The district of columbia winning the right in a court case. What are the legal hurdles from here . We have seen last night the attorneys general of california and new york both said they would take legal action to defend these payments. We were likely to see some action today as they go to court to change these payments. Mark vonnie what about people trying to enroll for the next year . This confusion is going to be a big problem. They are not what is going on go now, open we , the main obamacare subsidies continue. People shoulding know going into this. There is a lot of political noise. Mark the president will speak on iran soon. He will refuse to recertify the iran nuclear program. He will not go far as abandoning it. Certified the iran deal. It starts 60 days of for congress to decide whether or not they want to continue this deal. This is where it gets interesting and the personalities meet the politics and the policy on capitol hill. Corker areand bob talking the how to deal with iran. To takee a bill out away irans leverage on this. Democrats are somewhat divided. Says congress cant allow Donald Trumps recklessness to in danger National Security and undermine credibility. We must address iran but this creates a new crisis that threatens the security of our country and the world. Some democrats really were critical. Is, very pro israel factions of democrats are happy with this. Vonnie thank you. The president of course is speaking at the value builders summit. Thank you to health care reporters. Read his story. Up, President Trumps eventual pick for the fed will have much scope to charter new policies. Vonnie President Donald Trump speaking in washington at the values voters summit talking tax cuts being a Christmas Gift for the american people. Lets have a listen. [laughter] [applause] regulation than any president has cut during their term. We are doing that. The jobs are coming back. That is one of the major reasons. Regulation. What we have done. The stock market has hit an alltime historic high. Just on the public markets, we have made since election day, 5. 2 trillion in value. Think of that. The level of enthusiasms, the highest it has ever been. E have a 17 year low we are doing some work. It does the family and the church, not government officials that know how to create strong and loving communities. Above all else we know this. In america we dont worship government, we worship god. [applause] inspired by that conviction we are returning moral clarity to our view of the world, and many grave challenges we face. This afternoon, i will be giving a speech on iran. Nation like few others. I think you are going to find it interesting. Yesterday things happened with pakistan. Openly said pakistan took tremendous advantage of our country for many years. We are starting to have a real relationship with pakistan. They are starting to respect us again. They are starting to respect the United States of america again. I appreciate that and want to thank the leaders of pakistan for they have been doing. In this administration we will call evil by its name. [applause] we stand with our friends and allies. We forge new partnerships in pursuit of peace. We take Decisive Action against those who would threaten our people with harm. We will be decisive. We know that the first duty of government is to serve citizens. ,e are defending our borders protecting workers, enforcing our laws. Like yout every day have not seen it in many years. In protecting americas interests abroad we will always support our cherished friend and partner, the state of israel. [applause] we will confront the dangers that have harold our nation and the world, including the threat of radical islamic terrorism. [applause] we have made Great Strides against isis. I dont know if you have seen what is going on. They never got hit like this before. Stand up. He is a path guy. Rough guide. They have been ruthless, ruthlessly slaughtered innocent christians along with vicious killing of muslims and other religious minorities. We have made their lives very difficult. [applause] we have done more against isis in nine months in the Previous Administration has done in its whole administration by far. Dealt onew being defeat after another. We are confronting rogue regimes from iran to north korea. We are challenging the communists of cuba and the socialists of venezuela. We will not lift the sanctions on this repressive regimes until they restore religious freedom to their people. You have been listening to President Trump speaking at. He value voters summit he is talking about terrorism,. Nd the Islamic State making strides against the Islamic State. He spoke about business regulations at an alltime whole hi. Debates about the anthem , free speech and so forth. Still ahead, bridgewater associates. This coming up on bloomberg. Vonnie live from new york and london, im vonnie quinn. Mark this is bloomberg markets. Bridgewater associates, the biggest Hedge Fund Firm going after italian banks. Againste made a wager Italian Financials including tesla. Is this unusual . Unusual buten found not unusual at all. That is a 1 billion hedge fund. Be unusual for bridge bridgewater. Not much Short Interest is there. 1. 2 of shares are out on loan. Has 5 of shares outstanding. It is significant for these banks. That is the trays that are public. In case of a few banks, we will see in a few days what happens. Any other sector in europe now . If you look at the short positions of bridgewater they have sectors across europe. Seven are in italy. Five are in banks. This in europe. I woke up to your buyback asset story. It is buying back shares. Absolutely. Business,ment and this is backed by 2. 8 billion in the third quarter. The money is coming into their quantitative funds. Trend over the last two years. Investors are coming back into lower margins and quantitative hedge funds. News hedge fund reporter. Bitcoins rally has picked up speed. Surging to above 5,600. Is this just the beginning . Look at the chart to my right . The pace ofs how gains has been rapidly accelerating through each key level. Our people piling in now that it has hit 5000 . It is significant now. When china crackdown we solve that dip. Below 4000. All of a sudden it is headed to less than a month. Wall street may actually be responsible for driving the price. With every announcement they are thinking of embracing bitcoin. We start to see this surge. Mark what are they up to . Investment like many banks and in the u. S. Is trying to get their heads around is this a new asset class, could we do something to present it . Doorts are knocking on the because they are saying how do i get in . Our charge, the 9599. We can see the pace of gains is quickening. 907 days to reach 2000. Only 44. Is that a metric of anything . It is classic bubble behavior. Againstere to put it bubbles we have seen in commodities over and over again, it fits that pattern. We are reaching the point where people are like i dont want to miss it. Mark and how governments decide to regulate the virtual currency. That has been stepping up pace. I thought that was an interesting column. The story is going to be candy regulators playing whackamole ath icos, can they rein in security . Can they rein something in that is decentralized . There is no central hub. There is no one to haul before congress. How regulators will check that, that is fresh territory. We will see again and again, i am sure. Coming up, the european close, next. We are less than 35 minutes from session. I will leave you with the currency. This is bloomberg. Mark little it hong kong. 30 minutes left in the trading day, on mark barton. Vonnie im vonnie quinn. This is the european close on bloomberg markets. Top stories we are covering from the bloomberg and around the world. Weve learned that the ecb may cut qb flow and half next year. Qe flow in half next year. Cut qb flow and half next year. President trump is due to decertify Irans Nuclear program. We explore what it means for Companies Looking to do business in iran. And more questions are swirling around former berkeley chief executive. Does guggenheim inappropriate was beer muncher beer money in its ventures. European equities are trading 30 minutes until the end of the friday session, werep