Chuck schumer is headed to the white house for a meeting at the president s request. Kevin cirilli is on capitol hill with the latest. Could we expect a breakthrough . That is what both sides are hoping for. Upperp democrat of the chamber is at the white house, meeting with President Trump. Get to ato be able to deal with republicans. The follow is continuing this morning from republicans and democrats as the midnight deadline looms and there is a shut down on the table. The Trump Administration is calling this is the schumershutdown. Democrats are pushing back, ype of daca some t deal be included. Lawmakers of both parties suggested this will come down to the wire. The idea of having a shortterm deal that would keep the government open for a couple more days might not be what the administration is hoping for, particularly with the president s travel plans to davos. Saying,he democrats are we have to have this in this continuing resolution. Vin that has been where the battle lines are. Some are suggesting the issue of the Childrens Health insurance there could be some kind of like in additional funding for Health Insurance policies. Beltway, the number one employer in washington remains the federal government. Many of whom would not receive payments if the government shuts down. They would receive retroactive payments once it reopens. This is no laughing matter. The National Parks service would temporarily closed. Stuistics agencies would be nted a bit. David thank you so much, kevin. To put the looming Government Shutdown into the larger washington context, we go to the head of Public Policy with pimco. Libby, you have said in the past that cooler heads will prevail. Does your view change . We were talking about the same issue back in december. This time, it feels different. Like bothday, it felt sides were digging in. Republicans want to win. Democrats need a win on daca. It feels like the parties are getting further apart as the deadline gets closer. Shery if the government gets that ship if the government members ofown, congress will not get paid. Who will get the blame . Ibby democrats would get the blame, according to yesterdays poll. But the Washington Post said republicans what. This does not look good for either party. Republicans do not want a shutdown. They are trying to placate their base. Same thing with democrats. Shutdown is not smart for either party. Said, normally, its he she said. Overwhelmingly, americans across the country want children affected by daca to stay. Libby there was a quite contentious white house meeting. On a bipartisan basis, it does there would be a deal. Deal. They do strike a but it seems unlikely with such strong rhetoric. Shery it will all come down to immigration at the end of the day. President trump seems to not be on the same page with general kelly. Who will take the initiative of breaking the impasse . Back to what go President Trump has said, what speaker ryan has said, Mitch Mcconnell and senator schumer, there is enough commonality. I think there is enough appetite on the democratic part to fund an increase in border wall or border security, and maybe try and change the lottery system. You have to get past the politics and heated rhetoric. David we have had shutdowns before and they dont last that long. What is left of the republican agenda at this point . Libby the longest efficient and we have seen was 25 days back in the 1990s. Government shutdown we have seen was 25 days in the 1990s. Forneed 60 votes infrastructure, and unless you can get a very sizable infrastructure package, you wont be able to get the democratic votes to go along. Republicans are afraid of the deficit. Whenrtunistic, deficit attacks come out. We wont see a big infrastructure package passing, although it will be in the headlines for the next month. We are going to see a deal on spending. From a market perspective the they get past shutdown, they will sort out a budget for 2018 and 2019. You are looking about 100 billion in both years. The other issue we are paying close attention to his trade. Is trade. We havent seen a lot on trade and folks in the market have gotten complacent. Ws the unitedmp vie states having gotten a short shrift on free trade agreements. Usegoing to uses heft heft to renegotiate nafta and china. Trade will definitely be a centerpiece of his davos speech. Shery i would love to see that dynamic with the chinese delegation there. Thank you so much. Lets go to julie hyman with the markets. Julie we are not seeing many signs of concern over this potential Government Shutdown. When we have the last Government Shutdown in 2013, stocks fell off to some extent, but they rebounded afterward. Dow is lower today by a quarter of 1 . The s p 500 index and the nasdaq are gaining ground. Another way to slice it when effects of the shutdown is to look at the footcall ratio on the s p 500 index. People are buying the more bearinsh options. Pretty much in line with the average is today. Averages today. We continueg theme to examine is taxes. Worldwide announced it was buying hotels. It is rising today after a Goldman Sachs upgrade, citing shifts in consumer spending, Corporate Tax reform, and rising inflation. This will be a direct and indirect beneficiary of tax reform because it is linked to consumer spending. We are seeing analysts raise estimates in a pretty dramatic fashion. Tende earnings season, you to see analysts raise their estimates in gradual fashion. Dramatic increase in earnings estimates this time around. Is banks to tax benefits benefits they are accepting companies throughout 2018. David thank you. House republicans are seeing whether they have a deal in the senate. We will talk to the republican of oregon next. This is bloomberg. Shery this is Bloomberg Markets balance of power. David lets go to Mark Crumpton. President trump and Chuck Schumer are holding a meeting at the white house. The talks are aimed at averting a Government Shutdown. Mitch mcconnell continues to take aim at schumer for democrats refusal to back a proposal that would keep the government operating. Mcconnell said the country is being held hostage over illegal proposal that would keep the governmentimmigration and that e orned into this discussion about an otherwise agreeable piece of legislation. Leader hascratic convinced his members to filibuster any spending bill that does not include legislation for people who came to the United States illegally. If the president stands on the sidelines, we cannot solve this problem. Common we can find ground. That is what the American People expect and we should give them nothing less. The federal government has not experienced a shutdown since 2013. Trumps prototypes of his proposed ball with mexico are holding up well in testing. Custom agents are using a variety of tools to try and reach and scale eight different models. A report recommends combining elements of each to stop border crossings, depending on the terrain. French president Emmanuel Macron said he will boost defense spending in the coming years to guarantee the domestic security of his country and tainted maintainagement military engagement. He called the financial effort unprecedented. Global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. I am Mark Crumpton. This is bloomberg. House republicans passed a shortterm spending measure last night. The bill faces an uphill battle in the senate. We welcome the republican congressman of oregon, greg walden. We have heard that house lawmakers will stay in congress. The house is in recess next week. Is that because of an expectation you might have to vote on the shortterm emergency funding tonight . Rep. Walden we would like to get the bills done and move forward in a positive way. The schumer shutdown is unnecessary and it should be unavoidable. Mitch mcconnell says this is a nobrainer. Insurance isalth something we have passed multiple times in the house, and with democratic support occasionally. This needs to get done and there is no excuse. It is shut down the government or fund the government . Do you want to fund Childrens Health insurance or dont you . Outspoken have been in your support of the Childrens Health insurance program. There are children on the other side, in daca. Why is it that we shouldnt figure out a way to keep those people in the country . There have been negotiations underway in good faith. That deadline is not upon us. On the Childrens Health insurance program, seven states are running out of money in real time. We were warned of that weeks ago. The funding would get us through the middle of january. There has been no agreement reached on daca. Childrens Health Insurance has always been bipartisan. This is the longest extension. Cant we at least do that while we work on these other things . On put a American Children the line, pregnant womens Health Insurance, but we are having good faith discussions on daca . While we are having good faith discussions on daca . The house voted to keep the government open. The republicans voted to fund Childrens Health insurance once again. Shery after three stopgap bills, how do you have a guarantee you will get anything on daca, what the democrats want . Rep. Walden you have funding bills, and policy bills. We are trying to get the funding bills done. The house passed every single appropriation bill by the deadline. The democrats wont come to the table. There have been very productive discussions going on about making sure we have a secure border and we are taking care of kids, among other immigration related issues. I think those are bipartisan, but it is not right yet. We know Childrens Health insurance funding is running out. Millions of americans will get notices of cancellation. This is a crisis upon us and it is easily resolved. We cut why we thought have this continuing resolution that no one would object to. Why wouldnt you do this now, when daca is not resolved . Take your of American Kids first and get that done. David why cant you take tell care of all the children . 80 of americans want to let children under daca stay in . Why dont you take care of all the children . Rep. Walden it hasnt been worked out yet. Children, including in my state, daca kids are covered by chip. I cant help the fact that democrats and republicans and congress has not worked out a major piece of immigration reform, which has not been done since 1986. Why would you turn off Childrens Health insurance because you cant get to an agreement on daca . Childrens Health Insurance should not be controversial. Why should you hold that hostage until we work out a deal on immigration . I have other things i would like to put on this bill. A very compelling case. Thank you so much. Part of that exclusive interview i just had eventhe ceo of cocacola, as the Trump Administration pulls back on the paris accord. This is bloomberg. David cocacola made a major announcement about a Global Recycling effort even while President Trump is dialing back. James to have a healthy business, you need to be community. N the we have done a lot on making things recyclable. This announcement is about the missing piece in generating a World Without waste, creating a market economy. Things that great help us grow into the future without creating waste. By 2030, you want to be getting a bottle back for every one you put out . James if every person brings collect every bottle we put out. Put in different systems in different countries. Every country needs a solution. There is going to be Different Solutions we have to work with. Industrial companies and governments will put the solutions in place. David what about in places like china . How big of an issue is this in china . emergence in developed countries are where more of the problem is. In a lot of these countries, informal collection already going on across a wide range of waste. We need to create value for the circular economy. In mexico, if you go back ten years, less than 10 of the plastic was recycled. 60 . T is the informal economy was collecting waste, but there was no market. We invested in factories to recycle and reuse bottles. The model therefore china and other there for china and other parts of the world. Young, you i was would buy another coke bottle at the circle supermarket. What is your bottom line going to be . Wash in the long run. Days, you made a car, people came along and said quality can reduce cost and benefit the consumer. It might cost us money in the but in the long run, if we can make this effective and efficient, we can make this competitive. A washn it will be economically for us and a better consumer proposition. David this is Bloomberg Markets balance of power. Being dragged down by tech and energy stocks. The dow. Index index is up 2 10 of 1 . U. S. Consumer sentiment is unexpectedly falling to a sixmonth low in january. The dollar holding. Gaining a little bit of ground. The 10year yield now at its since julythe of 2014. Lets go to Mark Crumpton with the first word news. The Trump Administration is running out of patience with nafta. The u. S. Is serious about its threat to pull out of negotiations if there is no progress on administrative proposals intended to rebalance trade. Talks resumed in montreal on tuesday. Countering chinas rapidly expanding military and an increasingly ingressive russia are the u. S. Militarys top priorities. Chinese official said the iranianxplosion of an oil tanker in the East China Sea was without precedent and created difficulty for rescue efforts. It was one of the worst maritime disasters in recent years, with all 32 on board believed to have been killed. Defense attorneys say other graphic evidence from the pulse nightclub attack should not be during therors upcoming federal trial of the shooters widow. Mateen opened fire at the nightclub in june of 2016, killing 49. The start of the trial is scheduled for march. Global news 24 hours a day. Shery . Shery lawmakers are running out of time to avert a Government Shutdown. Beyer of virginia is introducing a bill today to protect federal worker pay as the threat of a shutdown looms larger. Congressman, thank you for your time. You introducing this legislation because you believe a shutdown is inevitable . Congressman beyer we want to make sure it the one point sure the 1. 2 million federal workers will still get paid, they can make their mortgage, car payments, tuition. David greg walden was on. Said, we have Childrens Health insurance in the resolution right now, no daca. Why dont the democrats get and deal with daca down the road . Been asman beyer it has long time since President Trump basically rescinded daca. We dont seem to be that close on negotiations. Every time there is a reasonable bipartisan compromise, steve miller or someone there killed it. Have critically impaired the militarys ability to make decisions, which is why i think republicans will oppose it. General mattis and all the other military leaders say, give us a budget. Been called as schumershutdown. How concerned are you that democrats will get most of the blame . Congressman beyer he republicans controlled the white house, senate, and house. They can do whatever they want. Internal is so much confusion within the republican ranks. It is hard to blame it on the little guys. Car i probably bought a or two from you in my day. Having had business experience, you look must think this is a bizarre way to run a show . How does it get fixed . Congressman beyer i am only in my second term. In all the years i have been selling cars, the goal is to get to an agreement. I dont make as much money as i would like and the customer doesnt pay as little as they would like. You find ways to work until you get something that works for both people. We dont seem to be very good at that here. President trump has undermined his own initiatives by republican congressional leaders. Leadill end up taking the on getting that breakthrough . Kellyssman beyer john laid out some fairly bipartisan positions the other day, which the president undermined. There are moderate proposals by republican heard and democrat aguilar. Be paul ryans and Mitch Mcconnells have to be brave enough to elect members of both parties both on it. Vote on it. Trump what isnt signed. Around and see how much business is being done. How much of this principle and policy, and political calculation for what is going to happen in november . Congressman beyer there is principle. Values. E conflicting you have very hostile antiimmigrant voices in the house, people like steve king, who will oppose any attempts to let the string markets have a chance to stay in the u. S. These dreamer kids have a chance to stay in the United States. Seem to be looking forward to november and making decisions that would maximize their chances to win. Shery amazons Second Headquarters could be headed to virginia. You are from that state. State doing to try and get that business . How would it change your state if that comes through . Three of theeyer top 20 where northern virginia, suburban maryland, and washington dc. Any of those three would be great for the Economic Vitality of our area, but we are pretty strong are ready. Already. A good job of selling all the incredible advantages of virginia a highly skilled workforce, and historic. Recently told a home in the washington area, he owns the Washington Post. It would be a great place for amazon. David congressman, thank you for joining us today to congressman today. , we will be talking about the widening u. S. Budget deficit. This is bloomberg. David this is Bloomberg Markets balance of power. Sheet and its time for the stock of the hour. Pace for ibm are on its worst performance. Estimates. Beat but if you recall back in the they really set the buy bar high. Growth,hat revenue there was the cloud that services invested in. Shares are over the six month higher. Look at that move up, the biggest move up since 2009. The quality is not quite where investors want to see. Shares are flipping. David investors really want that cloud. What does it mean for margins . Julie some analysts are concerned about kroos margins. Gross margins. Oppenheimer is saying that margins fell on a yearoveryear basis. That is a bit of a concern. This will come down to whether they can get cloud and services going. The Fourth Quarter that was just reported, growth would have been negative. The turnaround that everyone has been waiting for is not happening. Lets look at the chart. We have the stock going down. Fears over the mainframe being slow. Stocks are climbing higher as Revenue Growth expectations started climbing. These are your over your revenue expectations. Anything below red is negative. Year over year revenue expectations. Anything below red is negative. Been promisinge that cloud for quite a wild. Thank you. Alan simpson returned to Public Service as part of the Simpson Bowles commission. He has never been reluctant to cross the aisle when he thought it made sense for his constituency and country. Is now an attorney and was a former senator and was a senator from wyoming. But to talk to you. Good to talk to you. Sense of what is going on in washington. You spend a long time there. What is going on in the state there, sir . Alan i talked to my colleagues from the class of 78. Bill bradley, david pryor, a Wonderful Group of people to work with. The savagery is so total nowadays that you dont want to win. Win, younot only to want to rub the other guys nose in it. It is disgusting to watch. All of us are disappointed. You cant believe it. When you have schumer and mcconnell, give them a pair of boxing gloves and last a survivor stands. I dont know what to do with them. Nse thiss there deficit denial will continue in congress . Lan it sounds so simple. Theeople dont understand difference between debt and deficit, where are we headed . Deficit went down, great. People said dont worry. Tax cut, people will cut spending. Have a drink all that was done was increasing spending through the use of debt. Stimulus. T is a people said they needed a stimulus years ago. To lose mying marbles over it. A trillioned to dollar deficit. Says, dont touch these precious entitlements, and dont touch Social Security or health care. Third of theone national budget. Who is kidding . I hope you dont lose your head the way john the baptist did. A plan made under president obama was supposed to get us on the right direction toward entitlements, and it never happened. Alan five democrats and five republicans and one independent voted for that package. We used phrases like going sacrifice. Shared everyone ran for the exits. People were asking, who are these guys that did this . Who voted for this . Dick durbin, that commie rascal, you dont mean that. Tom coburn of oklahoma, that republican rascal . There is your country right now. Demonize him. A sick thing to do. Shery we dont see well for reform welfare reform advertised in the white house. Who will have to take the leadership . Alan dont ask me. You have a bunch of wondering guys with guitars wandering u guys with guitars singing into the east. Say, save us from ourselves in congress. How is that for courage . David is the public behind congress . If the president steps forward and says, we will get through it even though it will be tough, do think the American People will accept that . Alan the partisan guys will with close the government. The others will say, we want to do something with the chip , and if the dreamers anyone believes the other party is going to say to the people of america, waiting for their forget Social Security, it. Former senator from wyoming, alan simpson. Coming up, we will tell you how this years World Economic forum is set to make history. This is bloomberg. David this is Bloomberg Markets balance of power. The chinese president made headlines in davos last year. He took a staunch defense of economic globalization. The president said we should receive from our Respective National positions and embark on a pathway toward economic globalization. President trump took on a drastically different tone, taking to twitter to criticize the country attending davos leading up to the annual meeting. Theweeted, we must have. All mexico will pay for it through we immerse meant. Reimbursement. How will this rhetoric play out among the elite of davos . It looks like it will be a colorful meeting. I cant be sure if the audience will like the America First rhetoric. Be one thing that will be interesting to see. The davis gli davos glitterati have realized the rules are reversed. The chinese president argues for more globalization, the was president argues for less the u. S. President argues for less. On the surface, there is a counter argument which says, you two siis noise from the butd thee United States iss still where the, money is, the most important trading partner in the world. Youre not really seeing money flows change that much for all of the rhetoric from the president. But it is expected to be a pretty fiery speech he gives targeting chinas trade practi ces. It . D why is he doing what is the win in davis . Strong America Firsts speech that reiterates a lot of the themes he is had over the past, how the United States has been a victim of unfair multilateral trade agreements for his base, that will be davos stick it to man, as it were. Shery the attending delegation is huge. What will that look like . You seereflects what from china lately, going out into the world. China strategy for decades was to bide their time. It seems the time is now for china to go out into the world. When you see a big delegation, that means meetings of foreign leaders trying to fill the void the United States will be leaving as President Trump looks to pull the United States out of a lot of these international pacts. David what about cybersecurity or fighting terrorism . This would not be the venue for him to do that. You will see a tough message on trade, specifically with china. Outre expected news to come where the administration will be issuing a report and a certain punitive action over what it sees as unfair trade practices with china. There will likely be standard affirmations of the importance of international consensus, but you will see a sharp edge in the speech. Thank you so much, bloombergs state department and Foreign Policy reporter. We have jpmorgans investment and Global Market strategist will be here on whatd you miss at 4 p. M. Eastern. This is bloomberg. Scarlet its 2 00 p. M. In new york, 11 00 in san fransisco, and 7 00 p. M. In london on friday. Im scarlet fu. Julia and im julia chatterley. Welcome to Bloomberg Markets. Scarlet we are live and bloomberg World Headquarters in new york over the next hour. Here are the top stories we are covering on the bloomberg and from around the world. To thecounting you down shutdown. A flurry of activity on capitol hill and the white house as republicans on both sides of the sylvania avenue work to pennsylvania avenue work to pass a stopgap spending measure before the midnight deadline. And rumors about Jared Kushners real estate empire. Familyis means for his business and one of the biggest names in banking. Ass, the outlook on Oil Prices Slide after the iea predicts six was of u. S. Oil output explosive u. S. Oil output this year. Yulia, back to you. Julia lets get a check on the first word news with Mark Crumpton. Mark . Mark defense secretary chairman