Three major averages are higher and not only that, they are at records on a closing basis. Also a broadbased rally despite being relatively modest. Industry groups within the s p are higher and the bestperforming group is energy. Oil trading at a threeyear high in new york, wti that is. As we see the dollar pullback to some extent, part of that dollar weakness has to do with euro strength. Part of it has to do with Producer Prices missing estimates so after that, we saw the dollar extend its losses. A combination of stockpile data as well as that weakness in the dollar helping combine to boost prices. L percentage gains and losses on a relative basis, the bloomberg dollar index over the past year, down about 5 and oil was not getting any kind of benefit from that until in november when it started to take off and now it is up about 20 over the past year or so. Some of the out performers even within energy include stocks and some examples of the largecap names that are gaining and then outside of the world of commodities and traditional currencies, weve gram. Pple and money saying it iss working with ripple which is a blockchain startup, to test the use of its Digital Currency in order to move funds. They may not end up using it, they are just testing it for now. , even a mention of a cryptocurrency is enough to help the stock. X rp was lower and when this news came out, it turned higher. Mark we are down for a second day after rising for five days. , rising for its sixth session. The highest in almost six years but as you can see, we are down as a whole for the european 600, this the stoxx is a wonderful chart showing us how many indices are overbought. Equity benchmarks are looking increasingly ripe for a pullback. Suggests theon white line there, the only major considerederritory but that is over 70. The ones over 70 emerging market index, the s p as well,he world index so that means the region may be less vulnerable if equities come off the ball. Big day for retailers. 4. 1 . Blue line down by biggest decline since june, 2016. Investors disappointed by christmas updates by both companies. Both struggling with u. K. Consumer sentiment that has been described as fragile and volatile amid brexit related price increases. Tesco is a genuine disappointment after investors were expecting it to outperform its peers. Retailer, the luxury reporting lower wholesale revenue. It became more selective with its retail points. The luxury houses are cleaning up infrastructure. 7 ,l revenue did gain by excluding currency shifts. Driven in part by Economic Uncertainty and a crackdown on state corruption in china. Shares in richemont up by two thirds of 1 . The euro getting a bit of a boost. Theil minutes from the ecb meetings showing guidance on future actions. It could be revisited earlier this year. Is live and joins us from berlin. It seems as if the ecb is open to tweaking guidance. The obvious question is how soon . Richard more baby steps to the qe exit door is the way i described it and eventually, hopefully on the path to Monetary Policy we normalization. Ization. Y renormal even though the meetings have than backward looking, the messaging could change this year. We have already seen elements of this happening already. Not considered on the hawkish end actually talking a bit more hawkish leave than they normally would, this year. I think you add that with what we have seen so far this year. Shift. Ctually a tangible and steady a slow process and i think it will continue throughout the course of the year, but it is a definite shift in the messaging. Mark is today a reminder as if we needed one, after the boj earlier this week when it reduced the pace of its bond purchases toward the long end of the curve . Is it a reminder . Nature ofive investors to come in three i Central Banks as they look to unwind that crisis era approach investors to common tree the commentary by Central Banks as they look to unwind that crossice crisis era approach . With the ecbink and other Central Banks, they are trying to telegraph it in as much of a slow and steady way that there is no big shock for investors when 12 months down the road, the actual resumption of Monetary Policy normalization takes put takes hold. The ecb has been good in the way they have done this. We have seen hiccups in the markets, but they have been able to contain the really sharp kneejerk reaction that we used to see in the past. Right now, ecb communication seems pretty effective. Vonnie are they or are they not delinking asset purchases . Richard i think they are less concerned about that. And we mightncern get a bit more knowledge of it shortly, is that we actually get some wage gains in the euro area. We have seen broadbased growth. In germany, the growth has been very strong and the expectation is that we will get some upward traction on wage growth. That will be the primary concern. That is what they will they are hoping will happen. We should get some insight into that as we are in the midst of german pay talks. It will remain the ecbs main focus. Vonnie we are about to undergo what might be considered a regime change at the Federal Reserve with a new chair coming in. For that impact any discussions or do you anticipate a smooth ride . Richard personalities matter and a change of personnel is important. In the new fed chair, we have a continuity cabinet in that he did serve on the yellen fed. Institutionally, we will have the continuity but there will be little nuances that we get with a new fed chair and with other members appointed to the Federal Reserve governing board. The continuity will continue. We will have a continuation of what we have seen on the yellen said. That is the thing to what yellen fed. That is the thing to watch. Mark thank you so much, richard jones. Bill gross shares his outlook on the Global Financial markets. Coming up, 2 00 p. M. New york time. Dont mess it. Dont miss it. Lets check in on the first word news. Ma states will be able to impose work requirements on their medicaid programs. Critics say that could increase the number of americans without health insurance. A sign that inflation pressures in the u. S. Are easing. For the first time in more than a year, wholesale prices fell last month. One big reason, lower prices of gasoline. We will get another look at inflation tomorrow. In southern california, rescue crews are searching for survivors from devastating mudslides earlier this week. At least 17 people were killed, another 17 are missing. One of the architects of the u. K. s departure of the from the European Union says the company should take says the country should take a second vote. A second voteays would settle the matter once and for all. Global news, 24 hours a day, powered by over 2700 journalists and analysts in over 120 countries. Time emma chandra, this is bloomberg im emma chandra, this is bloomberg. Vonnie coming up, currencies of canada and mexico following reports canadian officials are saying there is a chance President Trump will withdraw from nafta. This is bloomberg. Mark live from london, i am mark barton. Vonnie and i am vonnie quinn. This is bloomberg markets. The peso is under pressure. Say there iscials an increasing likelihood that President Trump will dump the north American Free trade agreement or nafta. A white house official tells bloomberg there is there has not been any change in the president s trophy. Residents position president s position. We are joined in ottawa. What is the position that canadian officials understand . The latest in this back and forth is a sign of hope on autos which is one of if not the biggest, most controversial issue in nafta talks. We were reporting that canadians are preparing what they call you ideas on the u. S. Proposal on autos. They say it is not a full council counterproposal. This comes after mexico has signaled that there is room for some type of a compromise on autos and if that is true, that raises the stakes of these upcoming talks in montreal this month and also raises the possibility that one of the to substantials progress. Vonnie negotiators must be tearing their hair out. Is the raise it is there a consistent u. S. Position . The u. S. Position on autos is the one that is pretty clear. They want to raise the base required amount of the car or auto part. If it does not have that much, i cannot be traded under the pact. They also want to make half of a part or car come from the u. S. , specifically. Canada and mexico have both said this is a nonstarter. I dont think it is going to get into haggling actual numbers between 62. 5 and 85 . There are a lot of mixed signals. There is a lot of posturing in the days and we have a couple weeks of this before the next talk actually begins. Mark it has been looking more likely that President Trump will signal that he wants to give six months notice and withdraw from nafta . Josh he has threatened to do that repeatedly. Officials say they think the odds are rising. What they would not say is whether they think the odds have risen past 50 . I think this is a case of trump threatening to do something for a long time if there is not a lot of progress. They think that means he is more likely to do it. President trump is unpredictable so it is a guessing game. Even if he does it, that does not mean nafta dies. The sixmonth notice is not binding. They can give it and then never pull out. He might risk he might meet resistance from congress. There is a difference between a new nafta and the end of the deal, full stop. Mark to what extent do tensions between the three countries would tensions between the three countries be inflamed if President Trump did trigger that process . Josh it would be huge. Tensions are already rising between canada and the u. S. On a couple of other things. Boeing has made a challenge against a canadian manufacturer. The pot is already boiling in that sense. With mexico, the withdrawn notice, in the past, they said it would signal that they walk away from the table. They would not negotiate with a quote, gun to their head. Would make element it difficult for them to see be seen caving to u. S. Demand. That is the gambit that President Trump will have to weigh. He could give notice as a tactic in hopes of getting a better deal but doing so might drive mexicans to walk away from the table altogether. Vonnie the next round is due to begin on the 23rd in montreal. Our thanks to josh when growth. Josh wingrove. Still ahead, uber has a new tool for keeping Law Enforcement in the dark. This is bloomberg. Mark this is bloomberg markets. Vonnie from new york, i am vonnie quinn. Most companies dont typically expect to expect police to regularly rate raid their offices. They have a secret weapon it seems for giving authorities in the dark. Its name, ripley. Uber has used it to blog lockdown equipment in foreign offices to thwart police raids. Joining us with more is Bloomberg Technology reporter bloombergs technology reporter. How did you learn of ripley and what exactly is it . The best reporters dont reveal how they learn about something or who from, but it is safe to say that many former and current employees told us about the ripley program because they were concerned that it was violating laws, especially in the eu with respect to search warrants. Ripley essentially in about 2015, uber started to have speculation from authorities and they would read the uber offices abroad, looking for tax documentation and driver records , so uber created a button that would lock down the offices whenever there was a police raid to prevent the police from collecting evidence through their warrants. Mark ripley is based on the Sigourney Weaver character in alien. Wonderful story by the way. How has uber responded to this story . Olivia uber sees this as within their rights. They felt the authorities were going on a fishing expedition and had really broad warrants and they thought that they have the right to protect not only their information but also really Sensitive Information about their customers. The Company Released a statement in which they said the reason was tore shut down protect Customer Data and that is how they see it. Everywhereit illegal or would this be acceptable practice . Olivia you would have to talk to a lawyer about that. Fully understand is that there there is a real patchwork of different laws around the world about this issue and we understand that the people working closely with the product felt very uncomfortable with it and it was right up against the line if not crossing the line in some cases. We do understand that ubers legal team solve the product oversaw the project at one point and felt comfortable with it. Mark i suppose ripleys existence gives officials looking into other uber incidents reason to wonder what they might have missed in their own raids. Olivia certainly. That is the next step in this story. With atalready dealing least five probes with the u. S. Justice department. All over the world, it has really ruffled feathers with authorities, so it does not bode well for them that they have not havingistory of a great bond with authorities and perhaps this could be another issue for them. Vonnie what is ubers response as you understand it . Olivia they feel that it was within their rights and they were very adamant to say that a lot of Tech Companies have this sort of panic button bigger you never know who is going to break into your office. A lot of companies in general have a security measure in place where you can immediately lock off. All the computers what was interesting here was lock off all the computers. What was interesting here was the frequency at which it was used. Vonnie our thanks to olivia zaleski. After ripleyss believe it or not that it was named. My favorite films, the second alien film. Vonnie resurrection . Mark that is another good one. Time for the Bloomberg Business flash. Capitalizing on a tax overhaul to stay competitive in a tight labor market. Retailer is boosting its starting hourly wage to 11 per hour. Walmart is also giving onetime bonuses. Delta airlines forecasting higher airfares this year. Will rise as much as 5 in the first quarter, the biggest gain in almost four years 4. 5 in the first quarter, the biggest gain in almost four years. According to a person familiar with the matter, for rare would purchase nestle. That is the latest Bloomberg Business flash. Still ahead, u. S. Stocks have been rallying to start the year. Will be season keep the momentum going . We will ask Tobias Levkovich of citigroup. This is bloomberg. Mark live from bloomberg in europe in london, i am mark barton. Vonnie and from new york, i am vonnie quinn. We are moments away from the release of weekly natural gas inventories in the united states. A drawdown is expected, which would be a record but the frigid cold in the last week has gone, so lets get straight to julie hyman with the data. Ofie we are seeing a drop 359 billion cubic feet. It is obviously a record. That is according to the Energy Information administration. We had already seen Natural Gas Prices rising. Now they are edging up even more on these numbers. We were seeing natural gas up by about 3 before and you can see the additional leg up that natural gas is taking. Ticking up by nearly 5 . Natural gas had been languishing before this most recent cold snap that is sending it higher. Now seeing more fuel for the rally that we have been seeing more recently in natural gas. Something else we have been watching has to do with exports because the u. S. Is now a net exporter of natural gas. That is the first time that has happened since 1957. Natural gas exports in white. You saw the do virgins happening late last year with the production of natural gas in this country, but that may have been a switch with the consumption of natural gas we are seeing here in the past month or so. Vonnie julie hyman, thank you for that. Ass turn to equity markets the u. S. Stock rally continues rising higher. Nasdaq up more than 3. 5 . Joining us from new york is Tobias Levkovich, citigroups chief u. S. Equity strategy that strategist. Equity strategist. Tobias the concern from my reformtive is as the tax issue is turning getting priced into markets, Investor Sentiment sentiment is getting a bit frothy. A better than 70 probability the markets are down in a subsequent 12 months. Good news on the earnings front, on the economic side. We may even have some inflation picking in on the wage side. Youve got this kind of interesting trend forming that ultimately suggests bond yields moving higher and investors should be more focused on how to position within the market as opposed to expecting 20 rallies continuing. It is deeply unlikely. Vonnie tobias, we have had jitters even yesterday with the china comments we saw the bond markets experience some jitters. That of this has affected the equity markets. What would it take to derail this rally . Tobias that is a good question. One, you get a bout of inflation that is worse than people think. One might be on the earnings front. Earnings side, a lot of people are pricing in tax reform benefits, yet some of those benefits may be competed away. Some Industries Like utilities probably cannot keep those tax reproductions on Commission Rate based on having to share them with the consumers who buy the electricity. I think all of the good news is being priced in, but companies are going to have to explain what the data is. Some of them all know it as quickly. That could be a bit of a wrinkle. You can get tripped up on some of those rates. Earnings are good, but they are not good enough relative to rising expectations. Mark coming up coming back to one of your earlier comments, how should we be positioned within this equity market . Over thes tobias last 20 years, when Inflation Expectations started to rise and we look at what we call the tips break even, the differential between the expectations, you want to buy cyclicals over defensives and when bond yields move up, you want to buy value over growth. In many respects, that is buying financials and energy over things like information technology. Investors are very excited. I went to ces yesterday and there was a lot of exciting stuff in technology. Markets are very aware of that. It is what is incrementally better coming to areas that are more cyclical and not those secular growers. Is it possible for the i. T. And Financial Sector to outperform simultaneously . Tobias yes. The relative trade, if you look at financials relative to i. T. Over the past decade, when bond yields went up, financials beat out the tech sector. When bond yields went down, tech beat the Financial Sector. It is which of them is the better trade . It possible that something outside the u. S. Would also have a major impact . China for example. I cannot tell you what china is going to do, but china is very important. It has accounted for 40 plus of Global Growth over the past three years. Is hugely important in the commodity section sector. If there is a hiccup in china, it is going to reverberate that way as opposed to being that catastrophic to the u. S. Vonnie depending on what happens with nafta, how big of an impact could that have on fortune 500 companies . Tobias hard to measure. Trade friction in general will be very disruptive. The nafta countries are little sensitive to it. Problematic for places like canada and mexico which rely on their trade with the u. S. Relations of north america are very important but in terms of relative import, it is far greater for places like canada and mexico. They are becoming more exposed. You have a lot of manufacturing facilities in mexico with import restrictions. It is not good news any way. Mark can we talked briefly about the relative trade, u. S. Stocks still outperforming their european peers as they did last year. What sort of year is 2018 going to be, u. S. Versus europe . Tobias it depends on how you look at it. Last year, u. S. Equities outpaced european markets in index terms but if you start putting the currency adjustment, europe beat out the u. S. Europe can end up outperforming on the currency side. Perspective,al strategist will tell you europe is more attractive. Youve got arguably cheaper multiples. I am a little less convinced of that one. 24 of the u. S. Markets is 4 . In europe, tech stocks tend to trade at high multiples. Multiples. Are global view is the over whites overweights are in europe. A neutral. , more of perspective on a global view, we were more bullish on u. S. , the last year on the u. S. , last year. Our biggest concern right now is the sentiment it has gotten a bit ahead of the stocks. Certainly that must imply caution. Tobias it does and i will say this. As we have seen that model start to shift the last seven or eight weeks and really pick up, it was kind of stuck in neutral territory and just at a two ratchet up just started to ratchet up. When we saw that happen as we raise that issue, our clients are saying dont harsh my mellow. Everything is good, just enjoy the ride. I would say the qualitative feel is backing up what the quantitative data is telling us. Vonnie when you came in and solve walmarts saw walmarts news, what does that minimum wage increase have on the u. S. Economy given that walmart employees are practically what 1 of the population . Tobias i will take your word on that. I will not comment on the company but i will comment on a lot of the work we have done showing wage increases coming. There has been concern we have not seen this activity. The nfib hiring tension survey with a oneyear lap on the atlanta fed wage growth tracker, you can see that wage growth is coming. That is one part of more details. I just think the news you are talking about is further evidence of it. It would have happened anyway. Because of all the work we have done around this issue and labor cost, pressure is building. We have been hearing anecdotally for at least a year, companies talking about shortages of , the opioidrkers prices holding back some of the availability of the workforce. We have real real skills mismatches in this country. Mark thank you for joining us, Tobias Levkovich, citigroup chief u. S. Equity strategist. Lets check in on bloomberg first word news. Emma chandra has more from new york. Emma ryan zinke may have given ammunition to opponents of offshore oil drilling. Less than a week after unveiling drilling in coastal waters, he said that florida would be exempt. That appears to circumvent the process laid out by federal law. Floridas governor opposed drilling plans. He is expected to run for the senate this year. European unions foreign minister says an agreement curbing Irans Nuclear deals continued. The deal is working and the eu remains committed to making sure it is a limited. They spoke after talks in brussels between ministers ministers from the u. K. And equivalents. In paris, Armed Robbers made off with millions of dollars in jewels. Three suspects have been arrested but to others got away. French media estimates the stolen merchandise could be worth as much as 5. 4 million. Nothing has been recovered so far. Global news, 24 hours a day, powered by over 2700 journalists and analysts in over 120 countries. This is bloomberg. Vonnie coming up, jumping ship. We speak with the ceo of norwegian cruise lines as the Company Leads the nasdaq. This is bloomberg. Mark live from london, i am mark barton. Vonnie and in new york, i am vonnie quinn. Norwegian cruise lines running the opening bell of the New York Stock Exchange. Norwegian is a newcomer. Why the change and how is the crews industry prepared to take on 2018 . Frank del rio joins us now from the york strike New York Stock Exchange. Why the move . Frank good morning. Move to thethe nyse . A few months ago, we were admitted into the s p 500 and we are very proud of that. All of our competitors are both in the s p 500 and listed on the nyse. And nyse is the largest Trading Platform and given the size and growth of our company over the years, we are celebrating our fifth year anniversary, we think the New York Stock Exchange is the place to be. Vonnie congratulations. Seas,ve 15 ships on the another one being delivered this year. I want to ask you about the impact of tax reform. You said that it will boost profits. By how much do you anticipate . Frank we actually have 25 ships in the water across three brands. Six more ships on order. The next one will be arriving in new york city this spring. The macroeconomic picture has not been this good in a long time. Record low unemployment, record low interest rates. Stock markets at a alltime high. Now with tax cuts, consumers are going to have more money in their pocket to spend on discretionary items like cruise s. Cruising offers the best value in vacations and we expect to get more than our fair share. We think that the strong looking environment we have seen in the industry for the last six quarters is going to continue. Vonnie what kind of passenger growth are you expecting . Frank we will grow by 8 this year with a delivery of norwegian bless. We will also grow organically. Of ourw the Occupancy Company and of the industry at large is about 110 . These ships are full to the hilt on every single sailing. Quite frankly, it is a matter of what the perdiems one the one can garner. Strong Consumer Confidence not just in the u. S. But internationally. The future looks very bright for our own company and for the cruising industry at large. Vonnie how our cuba bookings doing . Frank fantastically. Cuba is a home run. We started with one vessel and starting in may, we will have two vessels visiting havana every week. Canaveral sot those going to orlando to enjoy disney world can take a side trip to cuba. They are selling like there is no tomorrow at high prices. Vonnie how are you getting bannd china, there was a on korean ports. How are you getting around that . Frank our China Business is strong. We arrived in china for the first time with a brandnew purpose built ship for the chinese consumer. We were profitable in our first year in china. We expect to be even more profitable in 2018. 2018, we are hopeful that the situation with south korea fixes itself. If it doesnt, we think 2018 will be stronger than 2017. One of the reasons will be there will be less capacity. China has been a fast growth market. In 2018, there will be a breather with a number of ships coming to china. Anytime you have a declining supply and steady demand, pricing should improve. Vonnie it is shaping up to be a good year. What is the biggest risk that you are worried about . Frank the biggest risk is that you cant control. Our industry, it is typically geopolitical events. This is a forwardlooking event business. We can see what the future brings, but with a lot more clarity than a lot of other our events, we cant control. See smooth we sailing ahead unless something i expect that happens, 2018 will be a record year for our company and for the industry at large. Vonnie frank del rio, president and ceo of norwegian cruise lines down at the nyse. Thank you for joining us. Mark time for the Bloomberg Business flash. Today of xerox are higher and there was a report the company is in talks for a potential major deal with japans fujifilm. Fujifilm already has a joint venture. They are discussing various possibilities. Has emergeda, bp from a trial that could have cost them hundreds of millions of dollars in damages. No word yet on how much bp will pay. The company says the claims were entirely without merit. In the u k, investors were disappointed by christmas sales from tesco. Tesco sales rose less than expected. Clothing sales were down almost 3 . Sentiment is described as fragile and volatile. That is your latest business flash. Vonnie still ahead, our stock of the hour. We are talking a swedish company. Hexagon. We will tell you the maker of Measurements Technology is rising. Vonnie in new york, i am vonnie quinn. Mark and live from london, i am mark barton. This is bloomberg markets. Are stock of the hour is surging after its chief visit give was cleared of Insider Trading chief executive was cleared of inciting trading Insider Trading. Julie this is the bestperforming stock in the stoxx 600 today in europe. Butgon is based in sweden this was a court case in norway because Insider Trading allegations had to do with a Norwegian Company called next biometrics. s broker hadxagon allegedly bought 2000 shares of next just days before next announced a private placement of shares to roll with Holding Company green bridge partners. It is convoluted. Green bridge was a business that started that rollen started outside of his role as hexagons ceo. Of timing of the purchase those shares and apparently the purchase closed just before that placement of shares was decided upon by nexts board. That is upon which this decision hinged. You saw what the shares have done. Those next biometric shares are rising as well. Soared ashexagon have the ceo has built the company into a testing giant. Climb inhat 4200 shares. Shares were climbing before this decision happened. The analysts at Bloomberg Intelligence told me it was widely expected that he would be cleared of these charges. He is not totally out of the woods. The prosecutor in the case has 14 days to study the verdict and decide whether to appeal. The market is behaving as though this case is shut and done with. Mark thanks a lot for giving us an update on that stock of the hour. Coming up on the european close, we are following stocks. Gains in london, declines elsewhere. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Mark it is 11 00 a. M. In new york and midnight in hong kong. 30 minutes left in the trading session in europe today. Is the european close on bloomberg markets. Mark here are the top stories we are covering from the bloomberg and around the world. The stoxx 600 pulling the most in over three weeks today. Caution in the ecb weighing on the markets. We look at whether european equities will continue to lag their global counterparts. How much is brexit affecting the u. K. Retail landscape . Marks spencer and tesco the latest companies to report some gloomy holiday sales. We will look into the reasons why. Bitcoin slumping. Ongoing concerns about south koreas crackdown weighing on the volatile cryptocurrency. Regulatory crackdown could be coming sooner rather than later