Transcripts For BLOOMBERG Whatd You Miss 20180123

22 people were killed in the attack in the intercontinental hotel. Nasa tv returned to the airwaves to transmit light images of two to then astronauts International Space station. The International Space station passes over the north. The pacific ocean. Installing a new mechanical gripper on the International Space stations robotic arm. Repairs were because of wear and tear. Its been in orbit since 2001. Operations were largely unaffected by the three day shutdown. Watchial personnel kept at the space center in houston. Powered by more than 2700 journalists in over 100 and 20 countries 120 countries. Im Mark Crumpton. This is bloomberg. Live from bloomberg world headquarters, im julie hyman. Iscarlet im scarlet fu. Joe im joe weisenthal. Julie the s p is at record highs in the 10year is rising. Joe the question is, what you miss . Scarlet an industry led by china, but u. S. Companies may have both winners and losers from this new policy. Regulatory push back, but it may not be all bad. The chief Investment Officer says the attorney general opposition to legalizing marijuana could be the Tipping Point for the industry in a good way. Oscar munoz hopes to redeem himself today. Those that question his leadership. The s p 500 has risen over 5 since the start of the new year. Announced 150 billion dollars in m a and tiny shares are on an 18 day winning streak. How long before the sugar rush turns the market sick . Bloomberg macro strategist, asking that question today. Today,you pointed out thats not what its called. The alliteration was there. All measures of risk bond are at high levels. Julie what tips it over . That is quite literally the Million Dollar question. Seenprosaically, you have stocks outperform bonds. So typically when that happens, you see Pension Funds look to rebalance. Outperformance mean they are overweight equities relative to bond and they would push that back. It is a temporary phenomenon. The fed may hike rates four times rather than three times. You look at a full constellations of signs that exuberance is dominating world markets. ,ne chart that you have here eight shares in hong kong going absolutely ballistic. Tell us about the winning streak and how historic it is . Gone down since the first day of trading the day after christmas. That is sort of the western christmas, not the orthodox christmas. Days, which is basically longer than any streak youve ever had any u. S. Longer than any streak youve had in the developed market. Longer than any streak youve had in japan. Brazil in the 1990s when the currency was getting obliterated. China, when china was properly communist in the early 90s and the shanghai composite went up 99 Straight Days which i would argue, again, more administrated by the authorities than by supply and demand from private individuals. Remarkable because a lot of the scenes we were seeing continue to drive the market forward today. , we see a the case continuation of the bullishness. What has changed . Is there a reason why it is a rush of money . They have new allocations for their 401 k . It goes beyond Retail Investors and 401 k . You dont get these sorts of moves across without institutional allocations. In the context of global bonds going down and would suggest big money is taking some dough out of low yield bond markets and putting into that riskier equity market. Taxess you would argue reform in the u. S. Came in december when things were liquid. Playing some catchup in this country in january. The chieftalked to investment strategist from Goldman Sachs, and she was also on how markets globally and especially in the u. S. Are going to perform. When she talks about risk to gain, she talks about things north korea, unrest in the mideast, Cyber Security threats. Nothing that is particularly imminent. Those are all wildcards and might originally developed. There arent that many obstacles seemed to the growth we are experiencing. Ofwhen there are a number obstacles, you talk about the wall, going back 15 or 20 years. The real risk to markets is the unknown. Be on a davos panel and Say Something like that and they will think its very wise. Is very wise. It is very wise. I want to go back to something you said about taking money out of bonds and putting it into equities. Remember five years ago, people were talking about the great rotation. Is that what you are describing . It kind of is, i think. I believe that Public Pensions have a reasonably large allocation to equities. The calpers of the world, its really on the corporate and whate my work independence consultants independent consultants have done, Corporate Pensions have taken money out of the stock market and put it in the bond markets. , as is what were seeing reversal of that trend. Stocks surge in cash continuing to burn. Why did you include this in your list of the willy wonka market . When the market exclusively on the good news and ignores the bad news like burning cash like elon musk is running netflix these days. 99reminds me of some of the and 2000 episodes with a focus is so narrow and exclusively on the tech ratio. You do get a little uneasy. I laughed it scarlet yesterday for bringing up gap etfs. Which i felt guilty about. Something like Procter Gamble caught my eye today. Seemingly, the numbers looked ok. But you get it from volume growth and not from pricing pricing power. If the volume is growing up, it would seem to be a good thing. When you look at Something Like we find examples of companies that fit both . I am always been amused by earnings season. At, they do look fantastically well. You never really know what is priced dan on an individual stock basis, what in the price, and what investors are looking at. And what causes people to sweep some money off the table. The worldknow is stock values are not going to double this year, which is the pace we are on so far. At some point, youve got to figure that things will slow down. At of know how much time weve got, but Standard Poors published stock in 1928. The s p started publishing a stock index, there has been 144 months. In only one of them have you not three4 or more drawdown months before or three months after that happens. Uncharted territory. Coming up, President Trump is imposing tariffs on modules imposed by the renewal and Energy Industry in the u. S. Why are Solar Companies on the news . We will discuss. This is bloomberg. Scarlet what did you miss . Solar companies breathing a collective sigh of relief after President Trump impose tariffs on u. S. Imports that were lower than most companies feared. The duties may undermine the economics of u. S. Removal energy but wont raise the cost of a clement far beyond recent levels. Lets cover solar and clean energy for bloomberg news. Unpack this for us because the companies that brought up the complaint to the u. S. Or u. S. Entities of foreign companies. And solar Energy Industry in the United States were opposed to any kind of tariffs saying it will lead to job losses in less revenue. Who benefits . Its a mixed bag. There are u. S. Manufacturers a foreign entities and they want tariffs. The level they requested was much higher and so for them, it is sort of lukewarm. Its not to the level that we wanted it to be. If you are tesla, you think it might be really high. Pretty modest. In my be 3 more to put panels in your roof than last week. Julie and when you are putting panels on a roof or there is utility building a big solar farm, how much of that is subsidized. I am thinking about putting a panel or installation on my roof, how much is this because i will get that back from the government. There is a federal subsidy. Its hard to unpack it. If you look at solar power versus natural gas fire, it is very competitive now, particularly in nevada, california, arizona, but it does rely on subsidies. Joe ok, so theres a tariff. Its not as much as companies wanted, its less than some companies feared. Is this going to meaningfully change the trajectory of the industry . Or will this be marginal . Because prices of solar panels have dropped so much, they are still cheaper than they were even in 2016. Is this a minor course correction . It is more minor than major. It is not the worst case scenario. Aroundight be job losses 23,000. In terms of the growth of the industry, it will continue panel prices pretty modest right now. It might fall further. Facts i want to ask about another country that you mentioned, tesla. Building a solar panel plants, so it will be more of a one. Cally integrated other]g over each a lot of the rivals dont have domestic panels. You said the plant is new and they are still ramping up production. We will still rely on overseas imports. Into your point, scarlet, it is not the worst case scenario. Tesla and the developer, theyre coming up to the country from china and taiwan. The mixed bag. President trump when he signed these tariffs said that a lot of people want to build plants and they havent been doing it because of the unfair Playing Field . Foreignow about manufacturers that do want to build installations in the u. S. . Is the talk about solar panels. The last eight to nine months,. T is not clear whether or not scarlet i thought trump was opposed to the clean industry. He favored fossil fuels and coal which is what he kept talking about on the campaign trail. Hes talking about bring jobs back when it comes to solar energy. Is this a zerosum gain . It is hard to say. Coal and solar are often pitted against each other but its not the actual competition. It is to hundred and six 2000 jobs. Prices, is the forecast that they are going to keep dropping . Is there any end in sight in terms of the incredible kulaks collapse we have seen. For the most part, it kept going down. I wonder if china will increase subsidies. Covering solar, climate, and cleantech, you answered every question we have. A look at the Bloomberg Business flash. A some of the biggest stories in news right now. Halloween cuts in 2016, the Worlds Largest asset manager says its overall bonus goal was in the high singledigit. They put greater focus the hiring could signal facebook is looking to apply ai research the joint business such as removing photos and videos that violate its policy. Melinda gates is backing the largest Venture Capital fund run by women. Aspect ventures rate 800 and 81 million for a second fund. Gates has been an outspoken critic of the gender gap in the industry. Our investments and women led ventures were not about being nice, but based on the big returns to be had. That is your Bloomberg Business flash. Press briefing is currently underway. Lets listen them with gary cohn, director of the Economic Council at the podium. It we were going to share President Trumps economic story and tell the world that america is open for business. We want the world to invest into america and create jobs for hardworking americans. President trumps economic agenda has unleashed the u. S. Economy and we are growing. This policy has led to a rising stock market, low unemployment, and strong gdp growth. Passing comprehensive tax reform to help level the Playing Field for our businesses and our workers. President trumps tax reform and tax cuts, 100 companies have announced policies that would create jobs, benefit workers, and grow our economy. This story will only get better as we continue to advance and rebuild americas infrastructure. Strengthen close ties with other World Leaders, and catalyze International Business support for the business agenda. President trump will reiterate that a prosperous American Benefits the world. The president will continue to promote fair and economic competition. We will make it clear that countries are not held accountable to the rules. , free president has said and open trade needs to be fair and reciprocal. I will handed over to general mcmaster to discuss our National Security priorities at the World Economic forum and the president s meeting with World Leaders. On thursday, he will have a variety of meetings with World Leaders. On thursday night, the World Economic forum will host a reception with World Leaders to honor the president. A small dinner with select European Companies to share economic Success Story and encourage them continued to continue to invest in america. They have invested in our economy, and we want them to continue to do so in encourage others to join them. Forward tont looks hearing from these ceos and how the administration can continue to grow their business in the United States. On friday, he will have more meetings with World Leaders and will deliver his beach that will empathize everything we have talked about today. Good afternoon, everyone. To president will use this reiterate the commitment to you mutually beneficial partnerships and to fair and reciprocal International Economic systems. As the president has repeatedly said and has made clear in the National Security strategy, Economic Security is National Security. The president will use his time to discuss other National Security issues including the International Effort to denuclearize the korean peninsula, our coalition to defeat isis, efforts to counter irans destructive agenda to perpetuate violence across the greater middle east as well as irans Ballistic Missile activity and the fundamental flaws. The president will meet Prime Minister may of the united kingdom. Shortcomings,s and the shared goal of denuclearizing the korean peninsula. We will also meet with Prime Minister netanyahu to reiterate americas strong commitment. To achieve lasting peace. To reaffirm the u. S. Africa relationship and discuss shared. Riorities he also met with the president of switzerland, the host nation of the World Economic forum, to discuss bilateral investment, Economic Growth, and innovation. In all his meetings, the president hopes to increase Economic Opportunities for the american people, to address and theecurity goals, president looks forward to a very productive trip. As far as Economic Growth, we just had a litany of businesses that are going to give back to the american people. Isnt it fair to give is it unfair to give the president credit for that . I would disagree with your premise completely. If they had their money in their coffers, they couldve done it last year, the year before, the year before. It seems like it doesnt seem like. As we passed the tax reform plan, all these announcements have been made. Specifically at the words of most of these press releases, all of them are talking about the regulatory relief. And we have seen the tax plan mentioned directly that companies now feel more comfortable about the economic position they are in. And we feel like the lower tax rate allows them to share more of their potential earnings with their employees. There is a 100 correlation with what we have seen, close to 200 companies and what we have done from a regulatory standpoint. You mentioned north korea, they have said that they are in talks with south korea. Is the president s policy leading to where we are now . And how big of a threat is north korea now compared to even three weeks ago . President moon has said, it is the president s policy behind a campaign of maximum pressure that has made a significant difference. What we see that is fundamentally different from a commitment that denuclearization is the only acceptable outcome. There is a good deal of coercive and we cantr repeat the state the mistakes that have happened. Mocking in the status quote is the new normal. Undiminisheds with figures. And i think it is important to recognize the north korean regime for what it is, and how grave a threat this is to the world. On the wage increases, that is coming out of future earnings , and the stock grants. The president is traveling to davos to prevent present his America First agenda. How can one square and America First agenda with goals of increasing trade . The president has spoken many times of trade deals and other International Agreements in which the u. S. Is being ripped off and other countries are laughing at us. That all ofeve these negotiations and agreements are inherently zerosum . And for america to come first to other countries, they have to or can agreements be truly winwin . The president believes we can have truly winwin agreements. America first is not america alone. I said in my remarks, when we grow, the world grows. We are part of a world economy, and the president believes that. Hes going to talk to World Leaders about making sure we all respect each other, we all abide by the laws, we all have free, fair, open, reciprocal trade. If we live in a world where there are not artificial barriers, we will all help each other grow. The president truly believes that. He went to the g7, the g20, nato, the u. N. , he has talked about these positions consistently, and this is exactly what the president is going to talk about at the World Economic forum. General mcmasters, there have been reports in the news recently that authoritarian leaders in other countries, particularly southeast asia, are using one of the president s favorite phrases, fake news, to describe reporting that is not flattering and reflects poorly on their country. President trump has made a point of not publicly talking about things like human rights, freedom of speech, freedom of expression. Is he concerned at all, or are you concerned, that the president s rhetoric, combined with his silence on these issues, is creating a climate where authoritarian leaders feel they have free reign to do what they want, and the United States will not speak up publicly . It is just not accurate that the president has not spoken loudly, both in words and in deeds, against those who violate human rights. I would ask you to go to his speech he delivered in warsaw, where he asked about the importance of individual rights and rule of law. Go to his speech in riyadh, where he said all nations of the world have to come together to defeat this wicked ideology that perpetuates terrorism. Look at his u. N. General assembly speech, where he defined sovereignty as strong sovereign nations who respect the sovereignty of their citizens and the sovereignty of their neighbors. Ink at his deeds, confronting the most brutal dictatorial regime in the world, north korea. How could that not be a human rights issue . How about in syria, when the regime committed mass murder of its own people with the most heinous weapons on earth, the president struck against that regimes ability to deliver those weapons. How is that not human rights . Look at the cuba policy, when the previous policy had done nothing but strengthened the grip of that authoritarian regime. There is a new cuba policy which tries to encourage a more pluralistic economy and Different Power Centers within cuba that can better protect the rights of the people. Look at what the president has said and done on venezuela. The list goes on. So this false premise that the president has not spoken on human rights, it is demonstrably false in words, but also in deeds. Thanks for that question. Wasntmentioned it useful to shout about human rights there has been a lot of talk about you possibly going back into the military. Can you tell us if you plan on staying in your current role . I have a job. It is a tremendous honor to do this job every day, to advance and protect the interest of the american people, to do my best to provide options for our president , and once he makes decisions, to assist with the execution of those decisions. I have a job, and it is my intention to go as long and as hard as i can in service of the president and the nation in this job. Gary, i was wondering if you let mealk a bit about, ask you if you are staying in your current job, too. [laughter] i know first you will go to davos. I want to make sure i understand what went into the president s decision to go to davos. The first sitting president to go since 2000. A lot of what this forum is about seems to go against this populist America First agenda. Can you explain this . America first, not alone. The president is very proud of the accomplishments he has created in his first year. Gdp growth, unemployment numbers, what is going on in the stock market, what we have done in reg reform, what we have done on tax reform. We are competitive today with the rest of the world. We have a tax rate competitive with the rest of the world. The president is going to davos to speak to World Leaders about investing in the United States, hiring american workers, changing the direction of our economy to be one of the biggest and best, most efficient economies in the world. The president has done that, as he has gone around the world, thats what he has talked about. He is firmly committed to being the best salesperson the united dates has states has to drive Economic Growth and quality of life for american citizens. You talked a great deal about some of the positive economic numbers. Can i get you to drill down on workforce Participation Rate . 62. 8 in june 2017. What can or is the administration doing to get that number to 75 , or higher . I talk about it the first friday of every month, sometimes the second, when the unemployment number comes out. We had two really disappointing components of the unemployment reports not just this year, but for the last five years. No wage growth, and our Participation Rate has remained stagnant at best. Part of our tax reform plan was to get people back into the workplace. We need to create more jobs. By creating a tax system that allows us to compete globally with the rest of the world, now a 21 corporate rate, a very effective rate for personal businesses, it allows them to compete with the rest of the world. When you compete against the rest of the world, grow your business, higher people. When you hire people, you compete for labor. When you compete for labor, you compete by wages. We need to see wage growth in this country, something we have not seen in almost a decade. As we see wage growth, we will make it economically realistic for people to come back into the workforce. It will make sense for them to come back in the workforce. The cost of staying out of the workforce will be way too high once we start seeing wage growth. The catalyst for everything is to create better jobs, higher paying jobs, bring more people into the workforce, grow our economy and tax a broader base. Thats exactly what our premise is based on, and so far these very early data looks very good. We are excited about where we are going. Announcedhe president new tariffs, and the Prime Minister of canada announced a trade deal. To critics who say that president is giving up the seat at the global trade table . I disagree. Today the president announced the culmination of something going on for a long time. These were individual companies who tried various remedies. If you read the cases, it is extraordinary what these companies have to go through to protect american jobs and workers against unfair practices from other countries. So you finally see Companies Bring cases in a bipartisan system, they go through the system, it goes up to the ustr, the ustr makes a recommendation, and the president makes a final ruling. The president made a ruling that will make the u. S. Competitive and help us grow our economy. It just so happens on the washing machine side, both of the companies that have been creating enormous problems for the u. S. Manufacturers of washing machines are going to open up manufacturing in the United States, hiring over 1600 workers. Thats exactly what the president wants to see, Companies Moving to the United States to build their products in the United States. We are getting the outcome we want to get. On the solar panels, he left in enormoustitude latitude in that decision, where we actually have a business, making the panels, not the actual cells, the cells can be imported, we are protecting panel makers, because we do make panels in the United States and we should continue to make panels and hire more workers. With canada taking the lead in this big global trade deal and the United States pulling out, are you not concerned this administration is giving up . The president said this through his asia trip. He said it in europe. We are very open to free, fair, reciprocal trade. If you treat us one way, we will treat you the same way. If you have no tariff, we will have no tariff. If you have tariffs, we should have a reciprocal tariff. It is hard to argue against that we should treat each other equal. That is our trade premise. A year ago at davos, president xi made a big splash internationally, seen as a certain asserting himself as taking World Leadership at the expense of the United States. Is President Trump to make any effort to counter that, and is his appearance any effort to counter that . The president s appearance is there to sell his accomplishments to remind the world that we are open for business, that we are a competitive country, that we have made america a competitive and everyone should understand what he has accomplished in his first year, and what we will continue to accomplish in the three remaining years. The ceos we are having dinner with, they are europeanbased companies with large presence in the United States. Theres no reason those presences should not be larger. The president wants to hear from the ceos, what do they need to have more business in the United States . Hes doing what he should be doing to grow our economy and create jobs. About china and the influence it is exerting now, a lot of people observing it is exerting because the u. S. Has pulled back from a lot of these international the u. S. Is pulling back from nothing. When the president was in asia, he talked about trade agreements, his willingness to have bilateral trade agreements with many of the countries he visited in asia, and we are more than willing to have bilateral trade agreements. I would like to get both of you to talk about [laughter] about the africa meeting. It deals with economics, with National Security, and immigration, in light of all the controversy about the alleged racist comments that were made, can you talk about that. And how you plan to talk to African Leaders after that . The president will be building on a very successful meeting with African Leaders on the side of the u. N. General Assembly Late last year. And it was in that meeting, in some remarks that could have received broader attention, the president laid out a very clear direction for our relationship with key african nations in particular. The need is obvious for us to Work Together on issues of security. Our interests overlap completely transnationalf terrorist organizations and others trying to create cycles of tribal and sectarian violence, that is a grave threat to security and prosperity as result. Our interests overlap in encouraging American Investment in africa, and African Investment in the United States. The president and administrator green have laid out a clear vision for how we want to evolve our economic relationships and Development Initiatives in africa in particular. In the National Security strategy. Africa is the Perfect Place for us to transition from just delivery of assistance to robust trade and economic relationships that benefit the people of the United States and the people of africa. As you know, there have been some tremendously successful programs. The program that showed the power, when the United States works with key African Leaders and communities to take on threats that are healthinvolved, but also tremendous Security Cooperation and relationships over time. Theres a lot they will be able to talk about, especially because president had gone a kagame is going into the presidency of the african union. It will be a discussion about how to advance an agenda mutually beneficial to the african continent and the United States. How would you characterize the relationship with britain at the moment, given the decision of the president to pull out of his trip to the u. K. . Do you think there will be a fresh arrangement made for a visit to take place in the foreseeable future . Of course the president has prioritized his meeting with Prime Minister may because we have a special relationship, not only in words, but how we Work Together on every issue. It is very hard to find any place where our interests do not overlap almost completely with those of the united kingdom, and we are working together in a very effective manner, at the u. N. For example, on some of these problems. Sense, thelateral president will talk about those key topics of mutual concern. You can imagine what those are. We have seen, obviously there is no diminishment, only growth and strength of our relationship and cooperation with a great ally. More, thenave two back to him in the back. The president has made it pretty clear he doesnt like multilateral agreements. What Bilateral Agreements are in the work right now works right now . Lighthizerambassador working on a bunch of different agreements as we speak. He is also involved in nafta renegotiation. We are also having conversations with korea on renegotiating some of the terms in korea. He has a lot on his plate right now. There are some new discussions we are starting to work on. I am not going to, i will let ambassador lighthizer handle his negotiations in the fashion he wants to handle them, and when he thinks it is time to make them public, he will make them public. Last question. You will be in a hotbed of globalization in davos. You are going to get a question about the tariffs. The question is often asked, isnt this just hurting American Consumers who want to go by washing machines or solar panels, they will pay a higher price at the store when they do that. How do you answer that . On the washing machine situation, as i said, both of these companies are opening manufacturing plants. One could be opened within the next 30 days or less, which will hire 1000 new employees there. They will be manufacturing washing machines here in the United States. We do have a very large domestic manufacturer of washing machines, so when we looked at it, studied it quite extensively this was a very rigorous process that went through bipartisan committee. They made a recommendation, and then the trade ambassador held hearings as well. He made a recommendation. And then there was extensive meetings with the president. The president understands that, the importance of the economy and the price of consumer goods to consumers. We have taken that all into account as we made the decisions. The president cares enormously about growing the economy and keeping the economy on the right track, making sure that our consumers have the best opportunity possible, but he also cares very much about the work force in the United States, make sure we create a great job environment and workforce participation and wage growth. We have to get both of those right. Thank you very much. You have been to davos a lot over the course of your career. The president has not been there before. What is one thing he might find there that he would not expect . A lot of snow. 14 feet of snow. Thank you. Julie that was National Security adviser, well, that was gary cohn, National Economic director, and also h. R. Mcmaster, director of National Security appearing at the White House Press briefing to give a preview of the president s trip to the World Economic forum in davos. You heard gary cohn saying they will be facing a lot of snow when they arrived. Cohn, i was struck by the emotional dissent he gave of the America First philosophy, which he really recast as not necessarily an America First philosophy, but what is good for america is good for the world, what is good for the world is good for america. Not something we have heard President Trump say exactly that way. Scarlet he said America First, not alone. It is all about the president selling his accomplishments to the World Leaders. As soon as the news broke that trump would go to davos, everyone was, how will this work, they are all into free trade, may be trumped not so much, and they are saying, it is not compatible. Who knows . You could try to drill down and see if it is or is not, but this was their answer to at least explain the next few days. Whether it ultimately is, who knows, but this is how they are squaring the circle for now. Scarlet in addition to having dinner with european ceos, the president will be meeting with World Leaders, with Prime Minister netanyahu of israel, discussing north korea, isis, and the iran nuclear deal. Quite the agenda. The newsantime, as briefing was taking place, we had breaking earnings. United, the stock is higher in afterhours trading after the carrier reported fourthquarter operating revenue matching estimates of 9. 4 billion. Eps was higher than anticipated, 1. 40 when analysts looked for 1. 34. They gave a hint of what is to come in this quarter. Will quarter capacity increase anywhere from 3. 5 to 4. 5 , and they added that as a result of the tax law, there are no material cash taxes to be paid in 2018, and they dont see any carryforwards to offset taxable income. Does not seem at the tax law changes things all that much for ual. Julie they came out a couple weeks ago and gave a forecast. Seemed as though the airlines are kind of holding the line on prices, there is some level of discipline, so does not appear to be anything in todays announcement that contradicts that. Earnings out from texas instruments, sliding afterhours about 5 after giving an outlook that is kind of meh. 1. 17 versus estimates of 1. 15. A revenue of 3. 7 5 billion, hair ahead of estimates. I want to just point out something, however. This was a stock that was up already 15 this year. So all these tech stocks are going ballistic, and this is one of them. This was a stock that a year ago about 120tock, today, so this pullback has to be kept in context amid an incredible rally. Julie it also complicates the numbers for semiconductors. Asml numbers seemed to indicate it was still going gangbusters, maybe notas mixed, quite as bullish. But still, wild optimism in overall in this industry. Julie and nonearnings related news. Working with Financial Advisors to explore options, including a potential sale, according to people familiar with the matter. We are not seeing trade in the afterhours. It is unclear if the stock is halted, or if there is not enough volume to create a trade in the afterhours session here. Looking at con score over the last year or so, the stock is actually down about 26 over the past year, so sharp divergence from the market. According to our story, the firm is working with Goldman Sachs to reach out to potential suitors, including buyout firms, all according to people familiar with the situation. No formal sale process has started, and we may not see something from all this, but we will watch comscore when it does start trading tomorrow. Whatd you miss . We talked about rampant optimism fueling the bull market at the top of the show. Lets continue the discussion as to when and how this bull market could eventually peter out. Our guest joins us from newton, massachusetts. Matt, you have been waiting for some kind of pick up or just a pause here, and we have not seen much in the way to stop this momentum. But you are looking for some signs that perhaps there is exhaustion here, and you point out several new Leadership Groups are showing that. Talk a little about that. Matt we have, look, no market moves in a straight line. If and when we do get a pullback , it would be normal and healthy. But we are starting to see, whether it be someone like industrial stocks, a great year last year and a particularly good run in december and through january, but kind of flattened out the last week or so. Transportation stocks, and until yesterday the same thing in Energy Stocks, kind of losing momentum. That tells me maybe the market is starting to run out of steam a little bit. January is such an interesting month. We talk about fear of missing out. That is really important from the institutional side of things. They dont want to fall behind at the beginning of the year and play catchup, but as you move to the rest of the year, that becomes less important. I think february we might start to see things balance off a little bit, and that will be normal and healthy. Something you have observed, with equities absolutely redhot, not so great of a start of the year for bonds of any flavor, whether it is developed markets, sovereign bonds, highgrade corporate debt, all that stuff. I asked this to our macro strategist earlier. Thatis a great rotation people used to talk about, all the buildup in fixed income finally rushing to equities . Matt the one problem with that, and it is very true, we have had bouts of that where a lot of people sold their bonds and went into the stock market. We certainly saw that in 2013. However, one problem we have, this great bull market in bonds, where Interest Rates traded lower for 38 years, as prices went up, the real trend is they tend to move together. At some point, Interest Rates become a problem, because lets face it, there is still in enormous leverage in the markets out there. New York Stock Exchange margin debt and things like that. When rates get higher, that increases the cost of carrying that leverage, and that can cause the leverage to be unwound to a certain degree. Not the way we saw in 2008. Big rotation trades sound good theoretically, but usually if you look at history the markets trade together. Scarlet if we are in for pullback here of some sort, whether tomorrow, next week, next month, where is the best place to duck and cover . Is there anywhere that is going to be more resistant, if there is a selloff . Matt well, it is like anything else. It is hard to be a market timer. You can jump into utility stocks for a shortterm period on a technical basis. But that rallys probably going to be shortlived. I think you want to be in the highquality names in sectors that have been leading, and one of those is still technology. A a lot of people were worried in november, people will bail out of tech and go into the Energy Stocks and industrials, these new Leadership Groups, but we found obviously that has not been the case. Whether it be the fangs, a big leader, but as you talked about a few minutes ago with semiconductor stocks. They underperformed in september and have come back in a big way. Leadership is still there. You want to hide in highquality names, industrials, Energy Stocks, and still in the Good Technology stocks. I was going to say, 2017 from an equity standpoint, nasdaq outperforming, you see that as possible that tech will keep trouncing everyone . Matt thats the one thing. Will we get another 35 rally in 2018 in the tech group, like in 2017 . Very unlikely. That doesnt mean it cannot still do well, still perform in line with the market or slightly outperform it. Will it do almost twice as well . Probably not, but that doesnt mean it cannot do well, especially quality names. You have to be more discriminating then you were in 2017, but still a good place to play. Julie thank you so much. The most entertaining part of his note, was that tom is pivotal to the stock markets continued rally. Go pats. [laughter] matt every time he goes down, the market goes down, so good for tom brady. Julie united beating estimates. This is bloomberg. Mark i am Mark Crumpton with first word news. President trump says he is imposing new tariffs to protect american jobs and workers. He impose new tariffs on imported Solar Energy Components and large washing machines in a bid to help american manufacturers. Pres. Trump our action helps to create jobs in america for americans. It will provide a strong incentive for lg and samsung to follow through on their recent promises to build a major manufacturing plant for washing machines right here in the United States. Mark the administration is imposing them to immediate tariffs on 30 of most imported solar modules with the rate declining before phasing out after four years. A new International Partnership against immunity for the use of chemical weapons has been launched and there is. , championed by the United States and 28 other countries, seeks to better identify and punish anyone who uses chemical weapons. Secretary of state Rex Tillerson call that russia following new reports of a suspected chemical attack in syria. There is simply no denying that russia has breached its commitments to the United States. It has been trade the chemical theons it has betrayed Chemical Weapons Convention and Un Security Council resolution. And on these occasions has twice vetoed Un Security Council resolutions to enforce the joint investigative mechanism and continue its mandate. Mark secretary tillerson added russias failure to resolve the chemical weapons issue in syria calls into question its relevance to the resolution of the overall crisis. Canadian Prime Minister Justin Trudeau says the countrys remaining in the Transpacific Partnership have agreed to a new trade deal one year after the u. S. Withdrawal. Made theister trudeau Statement Today at the World Economic forum in davos. The tpp was confirmed by the Canadian International trade minister. The agreement could be signed by early march. The shape of water leads the race for the Academy Awards with 13 nominations. The fantasy drama was nominated for best picture, best director, and a handful of acting awards. The war epic dunkirk received eight nominations, including best picture. The oscars will be handed out in los angeles on march 24. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Lets get a recap of todays market action. Stocks rose, indexes at a record high. Another day, another broken record. We also had earnings after the bell, including from United Continental. Fourthquarter revenue matching estimates. You see the stock moving higher in after hours trading. The Earnings Call for United Continental getting underway at the moment. Joining us to talk about those numbers is Bloomberg Airline analyst george ferguson. Before we get started, i want s last audio from ual quarter, infamously considered one of the worst Conference Calls of all time. Lets take a listen to the ceo from us quarter. We have a little more work to do and will continue to ask for more patients. I just need a little more time. We have always been about proof, not promise. Right now i am doing more promising and the proof will come as we get more into the details. Again, and i know this wont help matters much, but i know everybody is getting scared about the fact we are not going to get these numbers because of some ominous reason. I cannot express to you how much in the middle of the thing we are. Ourselves in a hole from a competitive perspective. The team we have gathered together is about regaining the competitive advantage. George, not the kind of thing typically one wants to hear from a ceo. Lots of unable to answer questions. Been able tooz turn it around since then and regain confidence of investors . George we have not heard a lot since then. We will hear more today on the Earnings Call. Earnings really came in right in the middle of where they guided, so that is at least some efforts to restore faith that management knows what is going on. That was the big challenge was you got the sense that Senior Management did not really know what the drivers of some of the issues of the companies were and how to address them. As an analyst, it gets you very concerned. This Earnings Report came right in the middle of the guided 6 to 7 pretax margin, so that is a start. Judging from what we see in the earnings thus far without having the benefit of the Earnings Call yet, how much is United Airlines success of this point and for this quarter because of what is going on generally in the industry . And how much of it is what ual itself is doing . George i would still stress that United Airlines continues to lag delta. Delta gets better yields, better fares for the markets mayfly in. Even this report, while it came in the middle of guidance, delta had a 4 growth in their average fair during the quarter. I use yield as fares. United was around 2 and domestic was 0 . This is a story about an airline that needs to take more market share in the u. S. Domestic market. They are adding a lot of capacity in that market and fares were essentially flat. There is still work to be done to bridge their performance with delta. That is what we are going to concentrate on with the call today. Again, it was an on target Earnings Report, but it wasnt it did not blow away any of the previous guidance. Perhaps that is why you are seeing the stock rise, but not by a huge amount. United continental does expect fare gains early this year because of a boost to travel demand worldwide. Talk about what kind of bench oscar munoz has with him. Obviously he is the ceo, but does he have the right kind of talent to get this carrier back on track . George there is a lot of questions in the marketplace. It seems like the number two man is scott kirby that came out of american. This Management Team at the top has been cobbled together from outside united. Munoz came from a railroad. There has always been some concern that at american, kirby was very aggressive in lowering fares to compete with lowcost carriers. He has got a bit of mu knows or seems to be able to steer things more than oscar munoz. I think that absolutely is a concern for investors. We will see how this plays out. Hopefully this call is going to be more orderly than the last call. Indeed. We look forward to getting headlines from the call and more color on the quarter. Thank you so much, george ferguson, Bloomberg Intelligence airlines analyst. Up next, can cannabis take on the Health Care Industry . We will speak to an investor betting on that. From new york, this is bloomberg. Whatd you miss. For the cannabis industry disrupt the Health Care System . That is what one new yorkbased Investment Advisor is betting on. He is investing in a wide range of cannabis products and therapies that address a wide range of conditions. Joining us to discuss is to be one capital chief Investment Officer todd harrison. In the Financial Community for a long time, then on bloomberg many times, but never to talk about this particular business. When we spoke about this, and you have been vocal on twitter as well you are very passionate about marijuana, but more the medical side as opposed to the recreational side. Why is it such an attractive investment proposition . Todd i have been in the market from owes 30 years. I look for offsides or disparities in terms of perception versus reality. There are several offsides, time versus policy, price versus institutional investors, but mostly perception, getting well versus getting high. This is something we are passionate about. My partner cured himself from epileptic disorder years ago using cannabis and exercise and diet. We think the efficacy is going to be pronounced moving forward. What are the plays theoretically one of the issues is that because you cant really patented, you cant have big markups. Where are the angles in which people can make the most money . Todd the first phase, as we are seeing in canada and just started seeing in australia, a lot of people are looking at that holistically and saying that is the trade. We think that is the first phase of the trade. We think biopharmaceuticals will be coming up as early as this summer and consumer goods could be massive. Lotions removing wrinkles, that is going to sell. We think this is an industry that is nascent. It is going on around the world. You have been optimistic about cannabis. In 2012, you are saying it was the best idea for the next decade. It did not pan out then. What is different this time especially with the attorney general pushing against federal legalization . Todd this time it is different. I know those are the four most dangerous words and finance, but this is an election year. 91 of the constituency are supportive of medical marijuana. The only thing politicians like more than money is being reelected. This is a hot button issue if it gets that far. Vermont yesterday, the legislature approved this. This is an inside out and outside in globalization. States rights is a big issue. If it goes to the court, we feel it will fall the states ways. Jeff sessions, the morning he made that announcement, you had australia and canada both declare they wanted to dominate the Global Market in cannabis. This is happening around the world. Somebody sees what we are seeing in terms of the efficacy. There is a lot of suffering, a lot of people who cant get their medicine right now. Not to mention those that are being targeted more than the rest of us in terms of the criminal justice system. There is a lot of inefficiency, a lot of things going on for a long time. 75 years, you could not test this plant for anything positive. I want to ask you about that. In the u. S. , it is still difficult to do research on it because of the federal ban, so wheres the research happening . Is it companies you are investing in . Isnt happening academically . That is usually where these things todd it is just starting. Can have annoyed wellness was offered for the first time as curriculum at oxford and four are five colleges in the u. S. A company has been doing this for 25 years. Their stock touched a 52week high. They have looked at this thing. They have an epilepsy drug coming out this summer. We think that could be the catalyst for the dea rescheduling this because there could be demonstrated medical ethics he medical accuracy efficacy. But they are not seeing minor cannabinoids for sleep s are different components, different chemicals that have isolated for the plant. Todd you have to understand the science. The human body, all living things, has a receptor network throughout our bodies. The cap annoyed the interacted with your system and we think that is a pathway to wellness. This was never taught in western medical school in college. Spain is testing it. The u. K. , they are running as fast as they can towards this. Legalizednia just recreational marijuana, but it had medical marijuana for a while. How embraced has it been by doctors in california . You see clinics on venice these beat im skeptical about how medically rigorous they are. You see people in a traditional medical setting in places where it is legal on a medical basis incorporating it into their therapies. Todd in the absence of water, people are so thirsty they drink the sand. One of our core tenets is this is going to go through the fda. It is the only way the government can get their hands on the taxes if the fda controls it. We think this is going to migrate from drugs from state dispensaries to medicine prescribed by doctors covered by insurance. Follow the money. There is about 300 billion Global Market per year moving into a taxable realm. I think this will be a huge story from a health care perspective, not from a vice perspective. I want you to break that down. Talk about the potential market for a health care versus a vice market or discretionary market, where people use it recreationally. Todd there are about 85 trials right now. The first one i talked about epilepsy, but there is autism, alzheimers, a whole host of them. The point being, this has efficacious agility. This is not just for pain, not just for epilepsy. Are noids are they i am losing my train of thought organic, but they are noninflammatory. Antiinflammatory. I hate when this happens on my tv. What they are finding over the last 75 years as we have gone from this hundreds and gatherers to sitting at a desk and eating trans that and processed foods and all these diseases started percolating that are not curable. Now they are looking at the endo system thatcanno could cure a lot of medical conditions. For a long time, people could not have access and we could not test that. Obviously you feel very passionately. It is great to have you here to talk about it. Hopefully we have you back as the situation progresses. Todd harrisons chief Investment Officer at cb1 capital. Coming up, barclays ceo raising warning flags at davos. We will have highlights from his panel. This is bloomberg. Whatd you miss . Saidarclays Ceo Jes Staley the mood at davos reminded him of 2006 when everyone thought they had solved the financial crisis. He spoke today along with the citigroup ceo and bloombergs tom keene. Stately warning against complacency and saying a combination of stock markets at record highs and volatility near alltime lows was not sustainable longterm. I think we saw the economic calamity at the last financial crisis and the damage that was done globally. I do think one thing that is different this time that we need think the is i connectivity and the collaboration between regulators and academics and private equity firms and investment firms and banks is at a whole another level then it was precrisis. You go back to 20052006, a bank would meet with the fed maybe once every quarter. Today the bank of england are at the bank every day. To the british do this better . Did they have a more focused, simpler format . On both sides of the atlantic , the degree of integration or work between regulators and banking community, not only to fix what happened last time, but now as most of the corrections through Bank Regulations have occurred, we need to work collaboratively with our regulators to avoid the next crisis. Pre2008 and 2009, the regulators were there just to bear with us. If something went wrong, they would use their ability to bring the big bank crime in order to try to course correct the economy realtime. Today, the political body have told the regulators, i want you to regulate the system, so you avoid the next financial crisis. In my on most fortyyear career in finance, we have never avoided the next financial crisis. What i think is incumbent upon banks at management firms and academics is to work collaboratively with regulators to try to avoid the next financial crisis. Rightly so, the political cost that the banks have endured because of what happened 10 years ago has been very high. I do think we all need to sit down in forums like this, even though it is all rosy, and say, what could we be missing . What could be happening in the nonbanking financial market, whether it is levels of debt, how much Short Interest is there and volatility . How much are we building structure around the world that are trying to enhance yield by selling volatility . It is a very smart thing to do. Are you worried about that, the present gains . Absolutely. You are not worried about this at citibank . If you look at the dampened volatility that is out there, is it 2003 you have to Pay Attention to it again. Think of where we are today. We went through a Government Shutdown over the weekend and the market is up. You go through these events and you have got to ask the question. The challenge is i think from the Asset Management or from the along the way,is you sold brexit, you bought it back. If you sold President Trump selection, you bought it back higher. I think people stop selling. So there is a numbness out there, there is an ambivalence out there thats concerning, because when the next turn comes and it will come it is likely to be more violent than it would otherwise be if we let pressure off along the way. You mentioned the new bank, if you will, with the media and all we worry about trading and jobs. Do you see a new trading process in banks as we go to the next financial crisis . Is fixed income currency commodities going to be Something Different for the banks than it is now or certainly than what it was in 2006 . One of the things we have stopped talking about, because Central Banks have largely taken on the role of being the center liquidity provider, but Bank Balance Sheets today around the globe are much smaller in terms of their dedicated capital and risktaking tolerance, to precrisis. When the great science fair project ends around qe and we are talking potentially level the Playing Field, i love that, science fair project. And we see maybe the bank of england start to pull liquidity to tighten, maybe sometime early next year we see the bank of japan, things start to change. What is liquidity going to look and feel like . We dont know because it has not been tested post crisis. This spring at harvard, science fair for a one, Something Like that. This wonderful banking experience. Chairman powell has some challenges as does governor carney. If Interest Rates rise faster than the market is expecting, inflation could come on suddenly. I think u. S. Inflation will exceed 2 this year and we may start seeing it elsewhere. We may already be seeing it in china. They start tightening faster than markets expect, how are Capital Markets going to take it . That was barclays Ceo Jes Staley and michael corbett, among others, with tom keene in davos. Coming up, what you need to know for tomorrows trading day. This is bloomberg. Whatd you miss . U. S. Stocks rose to record highs once again, thats the story. Coming up, the Brazilian Court of appeals will decide whether to uphold the conviction of former president. Economic data, i will be looking at pmi numbers for manufacturing and services out tomorrow. Dont miss this, whirlpool in the news because of the tariffs on washing machines. It will also report fourthquarter earnings tomorrow. That does it for whatd you miss . Bloomberg technology is next. 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. Anchor im a Alisa Parenti in washington, and you are watching bloomberg technology. Senate minority leader Chuck Schumer has told the white house that funding for a border wall with mexico is now off the table , according to a senior democratic aide. Schumer last week agreed to the 1. 6 billion President Trump or rested to build the wall while negotiating the Government Spending bill. Special counsel rock mueller special counsel Robert Muellers team interviewed attorney general Jeff Sessions as part of the investigation into possible russian meddling in 2016 election, and could seek to question President Trump in the coming weeks. Now that government funding has returnedored, nasa tv to the airwaves to transmit live images of two american astronauts making repairs to the International Space station. Mark manheim