They breathe and the polluted air they breathe. They have responsibility to act. Consequences for the Member States in question. Commissioner did not specify which countries he warned, but his comments came with talks from several nations including the united kingdom, france, it germany, and england. Causes poor air quality more than 400,000 deaths in europe annually. Do you when it agency for Palestinian Refugees is seeking 800 Million Dollars for Emergency Operations in syria, the west bank, and the gaza strip. The United Nation saw its budget slashed after the Trump Administration withheld half of the first installment of payment this year demanding reforms as a condition for future aid. The u. S. Has historically been the agencys largest donor. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Vonnie it is noon in new york, 5 00 p. M. In london, and 1 00 a. M. In hong kong. Im vonnie quinn. And im shery ahn. Welcome to Bloomberg Markets. From the bloomberg headquarters, here are the top stories that we are following. , Berkshire Hathaway, and jp morgan plan to collaborate on a way to offer Health Care Services to their employees. Health care shares dropping on the news. The contenders emerge in race to replay jp morgans ceo who plans to leave in five years. We will discuss the treo eight executives, include two women io of executives including two women who plan to run. The uniontrump has address tonight to we head to washington to find out what more to expect. Julie hyman is with us. Were halfway into the trading day. Julie we have not seen many selloffs over the past year or so. It has been 112 trading days since all three averages simultaneously fell by at least 1 . That is the 10th longest streak from the conception of the nasdaq in the 1970s. It has been unusual that we have not seen decline. It is the biggest decline today since august. It comes on the heels of stocks getting tos unsustainable levels, all that although that alone is not a reason for selloff we have been watching indexes needed a gun to record levels and the rsi. It signals the s p 500 was overbought. Then we got the today selloff after the big gain in stocks that was the biggest since september on friday. What is leading stocks downward . Apple has been leading to declines. The shares are down 1 . Yesterday there was a report that the company was cutting its iphone x production targets. Today, the wall street journal is reporting a similar issue. We also have Deutsche Bank saying the new Iphone Models are too expensive to fuel a super cycle. We also have a report of bloomberg that apple executives are going to delay key features originally planned for this falls update. Broadcom and kohlberg are going in opposite directions. They may have been chosen by chips. O replace broadcom corvo is the best chipmaker today. Chipmakers not doing well. Ago record highs were posted. Since then it is down 1. 5 . Integrated Device Technology is forecastr companys disappointed investors. Boost from a a poor that a Japanese Company was interested in buying it. That Company Denies it. It is just another example of the chip related stocks falling today. The big three are bringing their talents to morgan berkshire, and jp are teaming up to provide a health care company. They will be offered it to the companys in place. This comes as a shock and Health Care Shares dropped. Joining us today is ana gupte from leerink partners. This was a very surprising announcement. I wonder whether it is just noise or there is more to it. i think it is a headline issue rather than fundamental. That being said, i would put it into pieces. Is amazon and jp morgan doing on the drug side . They want to results of inefficiencies in the system. The reason it surprised investors is that it looks like it is broader than just the drug supply chain, which was widely widely speculated. Shery with amazon, at the very beginning it starts slowly, and after some time when it learns the environment, the other copies become obsolete for the most part. Will that happen here and how long will it take before other Companies Join as amazon gains intelligence . Have a strategy and eventually become disruptive. I have been of the opinion that they could be disruptive to the drug supply chains. There are any petition the systems and they do have information. We have best in class leading retail Online Shopping platform. To be done. Y work how long it might take, it depends and i think it will take a while. The drugcautious on supply chain. Wholesalers and retailers are some fundamental risks. Shery work to be done given how unsustainable the system can be in the United States and leaders have identified that. Jp morgan is saying this about medical costs. The problem that we have which behalf to fix is that it goes like this and starting 10 years and 30 years out, it goes from 75 to 80 gdp to 150 . All of that is based on medical. We need to fix it. We have time. But the sooner we get at it the better. Shery they are not the first ones trying to fix it. We have seen caterpillar running care own for Health Benefits for employees. How is this going . Are 46 large employers trying to transform the health care landscape. Drugs, but also better worker consumer engagements for the employees and more efficiencies. A little cautious about the view that was expressed by jamie dimon that we have these escalating medical costs. At leastbeen going on on the hospital side for the last decade, we have seen an enormous slowdown in the inpatient hospitalization. The Hospital Companies have not performed as well in the stock markets as a result we are finally bottling. Bottoming. On the medicalt side, we are not getting to situations way jamie dimon is saying. What thewant to get to ceo that the said. He said there is a need in consumers who want to say they will help address needs at the local level. Im encouraged to see other levels working toward the same goal. Who knows what he is thinking. That know if he thinks dominateand if cbs can. In the background, there is the government. How big of a difference of the make to these companies whether obamacare survives as is or is changed. Aboutbamacare is expanding access to the uninsured. The effort that was announced this morning is focusing more on medical costs, quality, and outcomes and less on access, which obamacare has made an effort toward, not perfectly but has done ok particularly on the medicaid side. Exchanges have had mixed successes. People are subsidize renewing their insurance despite the fact there was defunding by the Trump Administration. Shery to get a boost from privatizing . Ana will the effort this morning boosted . Shery change the rhetoric and debate around obamacare. Ana my view is that the u. S. System is a patchwork of different segments. Well accepted, High Satisfaction segment. Medicaid is doing very well. The employee sponsored market that all of us have access to is a strong market. There is potential to reduce medical costs. Amazon can do that. On the exchange side we have had a much narrower success that i think was anticipated or hope for by the democrat seven years ago. Youie we do have to leave there. Health care isnt the only reason jp morgan is in the news we will dive into the megabank pointing to president s and what that signals. This is bloomberg. Shery this is Bloomberg Markets. Im shery ahn. And im vonnie quinn. The bank announced that Ceo Jamie Dimon will remain at the helm for another five years. Have cochief operating officers, narrowing the field for the successor. There is good reason to believe neither will get the top spot. Two copresident s, why it might neither of them be contenders . You think copresident s are the she for the next ceo. Our reporting is different. Get both of these demonstrate there is gordon smith who is 59 years old and he needs the big leads the biggest business part of it, mortgages, lending. Then you have a dale pinto who is 55. He leads trading and ips. The folks who will jump in if something happens to jamie. If something happens in the next five years, these are the guys who are ready to take over today. That is very important. You look atage, if gordon smith at 59, he is not that much of a than jamie dimon himself. He is almost at retirement age in five years. That would kind of disqualify him. Shery he doesnt have to retire . Hugh that is the other thing we should talk about i have covered jamie for the last four years. Every time we asked him when he is going to retire and when will the younger guys have a shot, he says five more years. He has been saying that for the last four years. I think this time he means it and he has talked to the board and they all agree. Shery if it is not these two men, who are the other candidates . Hugh it cames down to marianne lake, mary who is in charge of asset management. Marysocus on the two for now. Vonnie tell us which one might be more likely and their path to the spot they are in. Mary is in charge of asset management. That is 12 of the company. For her to have a viable shot in the next half decade, you would have to see her be assigned to a bigger business, whether it is retail or on the wall street side. If she broadens her skill set, then she has a real shot. Doesthere is the cfo, she a lot of talking to the investors and knows everything about the company from macro perspectives. They need to run something more . In europe, you see it all the time. Why cant one of these women who has been at the bank for a long time just take it over from there . Think of jp morgan, it is for huge businesses. Each would be a standalone, large company. Certainly jamie dimon has talked about succession planning. He has said that summit at jp morgan is going to run the company. Europeans who look outside are in a different position. They believe they have a bench and culture. They will hire within. As to whether or not they need more experience, you really need to be running a business. To compete do need with smith and pinto . They run 80 of the revenue. Hugh by far the biggest part. Vonnie good news in their. Our thanks to hugh son. Time for the Bloomberg Business flash. Apple will delay rolling out key update features for the iphone as the Company Looks to fix the operating system and focus on Quality Assurance and performance. A person familiar with the matter says some features for the upcoming ios 12 including the home screen will be moved to 2019. The companys peertopeer Payment System is also delayed. It is a tale of two decisions on wall street. Bankers are in full celebration mode. The training positions are more subdued. Bonuses swelled from records with underwriting fees by chief financing. Colleagues in sales and training braced for smaller payouts. The gap will widen in 2018 as a tax overhaul spark hottest start in nearly two decades. Came up short in the fourth quarter. It missed the lowest analysts estimates for the final three months of the year. Motorcycles sale on every continent. They plunged 11 in the u. S. Sales projections that it could fall 5 more this year. That is your business flash update. Vonnie it is a night of features and a theater in washington. There are pressing fiscal issues pressing the president and where in washington with more, next. This is bloomberg. We are in washington with more, next. This is bloomberg. This is Bloomberg Markets. Im vonnie quinn. Shery and im shery ahn. Trump willesident talk about the tax cuts and possibly unveil plans for infrastructure and military spending. Deficit forooming the years ahead. We are at the white house with more. Great to have you with us. The chart is showing how the u. S. Deficit has shrunk since the financial crisis, but still a monster more than 2 of gdp. How difficult will it be for congressmen to get other legislation through after adding so much to the deficit with the tax cuts . It will be incredibly difficult here you have to remember we have not had a budget for the 2018 fiscal year, even though the air began on october 1. Continuingn going to resolutions because democrats and republicans cannot come to the table and get on board with an agreement on spending. If you cant get a budget passed, think how hard it would be to get infrastructure bills to pass legislation. It will be very difficult. Part of that is because they didnt pass the tax cut last year, and they increased the polarization and made it difficult to make the numbers work when it comes to passing other major legislation. The tech still was a 1. 5 trillion measure that could make a 1. 5ax bill was trillion measure that could make it difficult going forward. Vonnie what were hearing about the state of the union and the trump term is that weight will be a bipartisan effort and a reach across the aisle from the president. How does the president respond tonight . Are not reallye hearing democrats wanting to reach across the aisle. We are hearing the resistance continue flex to flex its muscles. They are getting closer to november and both sides are going to their corners and getting ready for the battle, which will be the midterm elections. The republicans feel the wind is at their back and they feel they can take control of the house and the senate. Democrats are looking to push back against the president. They have rejected his all of branch in the immigration deal, saying it is not something they can get behind. Even the infrastructure legislation, democrats say it is not good enough and not enough of an investment in the countrys infrastructure. You are seeing a lot of pushback from democrats and not many reaching across the aisle. On the congressional agenda, what is next, another stopgap bill . Yes, they have until february 8. That is when funding runs out again. They will need another shortterm measure before they can come to a larger deal. They could even need two shortterm measures. That is how things have become broken in washington. We can be six months into the year without a spending bill. Shery our thanks to you. Coming up, stocks and bonds selling off today after starting the year at records. What to expect from outgoing fed chair yellen. That is next. This is bloomberg. Vonnie that is a lovely shot of midtown manhattan from bloomberg World Headquarters in new york. Im vonnie quinn. Shery im shery ahn. This is Bloomberg Markets. Lets get a check of the major averages. Passion across the board as u. S. Stocks are heading for the biggest decline since august. The down it the dow is down more than 1 . Moving 340 points. Nina added health is. Health care shares slumping after amazon and j. P. Morgan announced a collaboration on healthcare services. The dow is also falling the most since may. The s p 500 down for second consecutive session. Nearly once rising is the nasdaq. Vonnie lets get to the first word news. Heres mark crumpton. Mark thank you. Speaker paul ryan is defending a vote by republicans on the house intelligence committee. To release a classified memo on the russian investigation. That memo appears to show improper use of surveillance by the fbi and the justice department, which ryan says could be in violation of american civil liberties. There may have been malfeasance at the fbi by certain individuals. It is our job in connecting transparent oversight of the executive branch to get to the bottom of that. Best is infecting. What we want is all of this information to come out so that transparency can reign supreme and accountability can occur. Mark speaker ride was adamant that the release of the fourpage memo is unrelated to special counsel Robert Muellers investigation which he says should be allowed to run its course. Environmental Protection AgencyScott Pruitts distancing himself from his 2016 statement that then president ial candidate donald trump is a bully who, if elected, would abuse the constitution. Rhode island democratic senator tried to use his words against him today during an oversight hearing. Made the comments while appearing on a conservative Talk Radio Program in oklahoma. He said he appeared on the show several times but did not recall making those specific comments. Huge crowds gathered in a park to witness kenyon Opposition Leader being sworn in at eight mock inauguration. The ceremony was carried out in protest over the president s midterm after months of deadly election turmoil. Elsewhere in the capital, police would gather to demonstrate. In the u k, a man was scolded from the arena bombing while pretending to help them is headed to prison. A judge sentenced him to four years behind bars, telling him it was hard to imagine a more reprehensible set of circumstances. Parker received worldwide attention after claiming to have helped comfort the in injured and dying after the explosion at an Ariana Grande concert in may of 2017. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Vonnie mark, thank you. Investors taking a cautious town today. U. S. Stocks on pace for their biggest twoday decline since august. The 10 year yield has been above 2. 7 , its highest since 2014. Fomcis ahead of the decision. Janet yellens last meeting at the helm of the federal reserve. Here with us this michael cloherty. Congratulations. You called us. By the end of q1. Is this the beginning of a major selloff, or we seeing pullback . Michael i think we will see one last push higher. Then we set stabilization into the middle of the year. One of the issues here is usually we are spoiled in the u. S. Fixed income market. Everyone goes home at the end of the u. S. Session, everything you own is up in price overnight. What we have had here is we havent had support from asia in this stretch. We think that will remain the case for a little while. One of the issues there is if you look at many of the japanese investors, they have had a great year. There is no reason for them to take on risk. Their year and is march 31. Theres is not a lot of reason for them to take on risk at the end of their year. They will come back in q2, but lee but be right like right now. Other asian investors, very expensive for them to do it. Much cheaper for them to buy euro assets rather than dollar assets to we think we will have to live for a while without this asian support. A little higher, but everyone will wait for them to come back in q2. Shery we have more treasury issuance is tomorrow, coming at a time when the fed is trimming its balance sheet. How much of an impact will that have . Michael i think tomorrows announcement is important. The treasury has said that they will issue the bulk of the sears financing need in bills. That supplyease, doesnt have an impact on the market. Maybe 1. 1 trillion. Next year will be 1. 2 trillion. You can handle that size just with the front of the curve. You have to spread the burden out. Supply shocks matter much more of a long end of the curve. If we think about how may treasuries are in the front of the curve, how many two years are getting issues doesnt matter. It is how many threes, fives, times, 30s, are rolling down the curve into the bucket. As you move further and further outcome you have a smaller pile to push. In that twoyear sector, change in issuance does not have a big percentage change. As you go further out, issuance matters more. We think they will in click increase 30 year tomorrow. We will start to feel that. We will have a direct affect. Shery will this be a steepener . Michael right. Even though there is more supplant the front, the impact is larger on the maturities. Vonnie where will we see demand . Michael again, i think we will have to cheapen up more to get those out the door. Strong pension demand in the last few months. That has helped this curve flattening to we think that will add in the next few months ebb in the next few months. The company that turns a profit in 2000 17 has to pay 35 tax. Your profit in 2018, 20 1 tax. One way you can ship shift aocess profits, is make pension contribution in 2017 that is larger than normal. Then make a smaller than normal in 2018. You will not make overall contributions in 2017. But that is what has helped the curve flattened. Fed has had this intense flattening to we think that will fade. At the same time, you get an editing of the pension demand. Shery will it be a nonevent tomorrow with the fed . To do anythingly significant with the change of leadership. It is more of a goodbye session. Shery we are seeing inflation pressures coming up. Will we see a more hawkish fed . Michael they have to acknowledge the uptick in growth. Some of the foreign risks have come down a bit. We also are seeing a little bit of a grind higher in inflation. We expect to get into the twos. Vonnie what other people that are saying this is the beginning ,f the end sort of for the bond bull market getting wrong, particularly when you look at this chart . It shows the s p 500 is for the first time yielding less than treasuries. Michael we do think what we have seen is a violent selloff since the year started. We will stabilize. As the year goes on, we do think yields will drive tire. We think we will get into the 30s. Just because we think the fed will be tightening. Shery thank you so much for that. Michael cloherty head of u. S. Rate strategy. Uphave plenty more coming about creating a new division focus on whether climate. Theill take a look at what markets are doing as we continue to see this dragging down of the markets. U. S. Stocks headed for their big today decline since august. Live from new york, this is bloomberg. Mrs. Bloomberg markets. This is Bloomberg Markets. Vonnie lets take a look at u. S. Stocks. Seeing a selloff. Off their lows. The indices are about 1 or more lower. The s p 500 down 1 . One of the biggest movers. Metlife, we will be talking about in a moment. Ever highereading in the session. The dollar to 15 on index, down 1 10 of 1 before the finish of tomorrows fomc meeting. That would be Janet Yellens last meeting. The 10 year yield, 2. 71 . It is time for our stock of the hour. The worst performer in the s p the shares of metlife down most in 19 months after it announced it was strengthening reserves. The treasury secretary speaking about metlife p are julie hyman is here with more details. Julie strengthening reserves is something we see from banks from some insurers. Essentially putting aside more money to back policies for annuity and pension. It is as much as 575 Million Dollars before taxes. The Company Also Announced a Material Weakness of internal controls for Financial Reporting spear the interesting thing about the term reserve strengthening, is it has this bad connotation. Warren buffett has talked about it. 2002, lecture halfway owns insurers, he said at the time of his annual letter, we recommend struck scrapping the term and its ugly reserve strengthening. Reserve strengthening applies have beenmounts further buttressed. That appears to be how some investors are viewing this move on the part of metlife. Metlife agreed to take on pension obligations from employers who are trying to limit their volatility related to interment related to retirement. They also lost track of some of the folks who were their clients, the individual. They announced this back in december. This is not the only company this has happened to. Nonetheless, it creates some issues for Financial Reporting and tracking. Shery tried mnuchin talked about this. What did he say . Had beentlife significant through the system. He is saying the release from that designation was a legal. This in testimony before the Senate Banking committee. He said metlife could be subject to a possible future risk label of some kind. It is not clear what. The shares which were are a down cell further to the lows of the session. It needs to buffer reserves when it is not, what will have to happen . Julie good question. [laughter] vonnie julie hyman, thank you. That is our stock of the hour. Shery 2017 was a dramatic year for weather events. From a string of hurricanes and the americas, to critical water shortages in cape town. Is there a market in hedging risk for weather events . Joins us now. E how big of a market and what opportunities do you see in the space . Barney thank you for having me on today. We are excited to talk about the climate. The market today is relatively small. It is billions of dollars, not tens or hundreds of billions. The exposure is much larger. You think about water, temperature, and the ways in which that flows through companies. That has been a clear and growing issue. Vonnie you are the first dedicated investment manager to reinsurance and whether weatherrelated risk. How are you packaging that . It depends on what the buyer most needs. In some cases, people are looking for an insurance policy. In some cases, Insurance Companies are thinking about reinsurance policies they have issue. In some cases, Companies Want an option as customized to the specific exposure they have. Vonnie are there other insurers out there, what makes this different . Barney really, our capital base. Rather than having a public capital base, we are an asset manager we have 11 billion of pension fund assets. Does Pension Funds are seeking a return that is not correlated to other financial markets. Shery how much demand is out there . What are you hearing from clients . Barney on the investor side, a lot of demand for something that has positive return and is an associated with all the other market variables. On the buyer side, one of the reasons we wanted to announce this division and not just have an internal team, is that in many cases, companies, governments, municipalities, arent aware of these tools exist. There is a lot of demand. Globally. But, in many sectors, companies arent using these sorts of tools because first they have to articulate the risk before they can transfer it. Vonnie what are the risks for you . Why are you the first to do this . Because we have a history of trying to solve larger problems in risk markets. If you rewind 20 years when we started, that was hurricane and earthquake protection, in florida and california. The Insurance Industry didnt have enough capital for those peak risks. Because we have that experience and those relationships, Companies Come to us looking for solutions for these other related problems. We feel like the weather market is in a similar position to that reinsurance investment market 20 years ago. Because we have a large portfolio of risk, we can hope that risk better than those companies can. Vonnie what kind of assumptions d make about whether assumptions do you make about weather . Barney one of the things that has helped to enable this market is there is much more data and appeared you have sensors and information and many more places than you did 10 or 15 or 20 years ago. You have to look at history as a guide, and then adjusted. What we are seeing when you talk about rainfall, wind, for when farms, is the behavior you expect in the next five or 10 years may be different than what you have seen in the last 10 or 40 years. Shery is that because you are seeing more weather events as opposed to the past . Or there are just opportunities because there are not so many of these products out there . Barney its both. There are opportunities because companies are more aware of this exposure. If you look at things like the task force for financial disclosure, if you look at events tomorrow where investors who represent 22 trillion of going to companies they invest, this is something i want to understand better. What are you exposed to . And how can you think about quantifying and hedging that risk . Vonnie how much of what you do is related to bad infrastructure . How much of it is related to Something LikeClimate Change and Global Warming . Barney it can be both. Bad infrastructure is often disrepair or a difficult economic model. If you look at water utilities, heart of the issue may be infrastructure. The issue may be how much rain did they get . Forward,t as you look how did they try to manage that volatility . Shery very interesting segment. Thank you so much, barney schauble. It is time for our Bloomberg Business flash. A look at the biggest business stories in the news. And giving when governor mark carney says disappointing Business Investments in the u. K. Is one irrefutable of brexit. Bloomberg business flash. A look at the biggest business stories in the news. Notiness investment is any way to the degree that a World Economy growing at over 4 , with the easiest financial conditions in over a decade, with the strongest Balance Sheets and probably 25 years, and with huge opportunities in an environment of greater certainty. It is not growing to that extent. Vonnie forecasts last week saw upgrades for a most major economy, except the united kingdom. Reporteds fourthquarter earnings that beat the highest analyst estimates. Sales are better than expected. Sales u. S. , mcdonalds grew 4. 5 . The chain has been relying on discounts. Competitors, such as taco bell, have fought back with their own specials. Twitter shares continue to surge. Following unconfirmed speculation last week about a potential takeover. It shares climbed nearly 5 today. The highest level since the november 2015. They have rallied eight 18 since friday. , breaking news on twitter is called tick tock. Day foroming up, a bad apple with shares suffering as analysts ratchet down sale forecasts. Take a look at those shares down. Check again on the doubt because we continue to see downward pressure. 360 points is the loss right now, falling the most since may. We are seeing a dragged down by united health. Health care shares slumping after the news on amazon, berkshire, and jpmorgan art collaborating on ways to offer offer Health Care Services to their employees. The vix continues to gain ground. 15. The dow down more than 1 . Live from new york, this is bloomberg. Shery this is Bloomberg Markets. Im shery ahn. Vonnie im vonnie quinn. It is looking like a rough day. Apple shares down after a warning from Deutsche Bank. The firm claims iphone x prices are too high for the device to fuel its socalled super cycle of sales. Ahead of apples earnings as week, Bloombergs Mark Gurman has been looking into analysts forecast. He joins us from san francisco. If that wasnt enough, we are hearing about delays, mark . Mark that is exactly right. Not a good week for apple. They have earnings coming up on thursday. Which is sort of a quiet period for the company. They cant come back to review these reports are a comment on them. I found Sales Numbers are anticipated to be lower than it acted. We are getting cuts reports out of the asian supply chain. We reported this morning that apple is delaying key Iphone Software features. These are Software Functionalities the Company Comes out with in the fall to sell new models, especially in years where there will not be a Major Overhaul like last year. They will be delaying the flashier, new features they had focusing on performance improvement, improving the quality and speed of the os, and adding new things for parents to monitor their kids. Thank you so much. We will have to leave it there. We want to bring you breaking news. The u. S. Commodity Futures Trading Commission sent subpoenas last week to virtual currency. A company that issues a widely traded coin and claims its pegged to the dollar. Joining us now from los angeles to discuss is matthew lysing. What was the problem with this . Matthew the back story here is that tether is supposed to be paid to the u. S. Dollar. For every tether that is created, and tether is a virtual currency, for every tether created, they are supposed to have received one dollar. They are supposed to hold that dollar in a bank account. That means that tether would be a stable coin and not really fear in price away from one dollar, unlike bitcoin that can go 20,000 and pound back to 12,000 in a span of the week. Companyern is the tether will not confirm to people that they actually hold this money in reserve. Vonnie that is so hard to believe that situation could arise. What is the future for Cryptocurrency Exchanges now this investigation is underway . Matthew the link to the exchange, but the next, is that tether might have been printing tethers with no u. S. Dollars backing them. And then using them in the them in the market to use the dollar for each tether. And then buying bitcoin with that money. It might have been pumping up the price of pit of bitcoin. There is a lot of obvious retail and institutional interest and demand for bitcoin. That thisn is here, is a significant source of demand for bitcoin. It might be phantom. Potential fraud in the cryptocurrency and cryptocurrency exchange. Will continue this conversation later on. Thank you for joining us on that exclusive. This is bloomberg. David it is 1 00 in washington, 6 00 in london. From bloombergs washington bureau, im david westin. Shery im shery ahn. Welcome to Bloomberg Markets balance of power. With a focus on politics and the economy. David here are the top stories we are watching at this hour. The union. President trump delivers his first state of the Union Address in eight hours from their from right now. Will he reach across the aisle or preach to his base . Democrats the union. President have found much to disagree with President Trump you we will hear from a policy expert on what the democrats have to offer and whether they can find Common Ground with republicans. Expanding primed to your health. Amazon says it will tackle health care, teaming up with jpmorgan and Berkshire Hathaway to find a better way for their one million employees. Shery lets keep kick things off with a check of the markets as losses continue among u. S. Equities with the dow down the most since may. Julie hyman had the details. Julie we have a selloff for the second straight session