Finish the month on the european stoxx 600 by 1. 7 , the strongest monthly performance since september october, excuse me. The stock that has brought the for european benchmarks, one notable one, the , a negative in january primarily because of sterling strengthening performance against the dollar, rising 4 . Down on the benchmarks. Today. Currencies rising against the dollar, the major peers of the dollar has risen over the month. Bond deals, commodities, and the in full season is swing. Growth in Factory Automation and other areas upsetting a continuing slump in its power the chief executive of siemens try to navigate changes at the Global Energy market and orders for large gas turbines, its flagship product to drop significant. Thecompany surged 14 in Third Quarter with positive results from rail, wind turbine, and digital factory units were surprising, according to an analyst. H m, look a look at at the drop, big today, down 10 . The level of the share price is the lowest in 10 years, the worlds number two fashion chain , is biggest drop in profit in six years, adding pressure on the chief executive who is trying to correct the clothing chain after recent slumps, operating profit fell 14 . The Company Plans to close 170 stores this year and added new format, selling offprice merchandise of Online Shopping Online Shopping is soaring. The company is struggling to cut inventory and has been forced to sell items at deep discounts. Lets finish with the stock story of the day, shares of capital with its biggest decline down 45 , the new chief executive with a major Transformation Plan to months after taking over. The Company Provides Customer Services functions for the likes for retailers and suspended dividend payments. It will seek new funding through a rights. What a story today. For the 5 has been 45 has been taken off the stock price with the close minutes away. The rebound losing a little bit of steam in the u. S. Further into the session. All three major averages in the green after the twoday decline. In the green for the month. We are looking at the best genworth for the s p 500 going back to 1997 january for the s p 500 going back to the going back to 1997. You see the monthly changes for the month for the for the major averages and on a monthly winning streak. The past two days notwithstanding, a strong month. Lets look at homebuilders. One hour ago we told you about home sales that rose one half of 1 in december. , revenue topping consensus estimates and analysts said it was a Strong Quarter all around. There are concerns about higher rates and their effect on homebuilders, but that seems to be easing, at least temporarily. The other homebuilders rising. , am the home to the Office Couple of Office Service and equipment providers, pitney bowes, a provider of Mail Services to companies up 17 after their earnings beat estimates. Like so Many Companies reporting, benefiting from tax changes. Erox agreeing to see control to ji film, shares up 6 . See the yield we on the 10year note hovering around their highest going back to april of 2014. Also, we see the socalled rebalancing, treasury boosting the amount of longterm bonds to 66 billion this quarter, the first based in borrowing since 2009. Vonnie thank you for the wonderful update. The fed decision at two 00 p. M. Eastern, 2 00 p. M. Eastern. It is fed chair Janet Yellens final meeting as she hands over. Eadership to Jerome Powell it remains to be seen if investors notice much of a change with the new boss sounding like the old boss. We think it is important to gradually move our policy rate to what i will call a neutral level, which would be consistent with sustainably strong labor market conditions. The economy is now strong and unemployment is low. Have picked up, the economy, and it is time for us to be normalizing interest rates. Janet yellen wage increases our modest. We do not see tightness in the labor market. Janet yellen the labor market and economy are not overheated. No sense in overheating the economy or a tight labor market. Janet yellen inflation has been below are 2 objective for most of the past five years. Inflation has been below our 2 objective. Or maybegle month every month but once since i joined the board of governors in may of 2012. Janet yellen the fomc has indicated it intends to carefully monitor actual and expected progress toward our inflation goals. Is a transitory or are there more fundamental things that work . We are watching carefully to see and we will have to be guided by the data. Isnie joining us now somebody with many experiences in decades. Shared, the language is language that is particular to the fomc. What do we know about Jerome Powells views . He pointed out very well, he does not seem to differ very much from the chairman the current chairman for the next few hours, from her point of view. Quite close,e different backgrounds but not a lot when you think about it. He is part of the system and has been part of the discussion. Any change inpect view from him as opposed to janet. Vonnie the last time we spoke with you, and you moved a lot of your bond funds to cash, one third of it and said there were no bargains. Have you found any since then . Dan a couple of things. Tiny, bits and pieces, but not much. Vonnie where . Dan excuse me, where . I do not talk about that. Vonnie treasury market, corporate, high yield, can you give us anything . Dan strictly in high yield. Nothing in treasuries. Mark you have been getting more defensive, cash and equivalents climbing to 21 of assets at the end of the year, one year ago it was 2. 3 . Do you see yourself becoming more defensive . That is the 64 question. At this point, probably not. The best guess, all you can do is guess, is that the fed closes out three times this year. Possibly four times and maybe two times. The plots are three and we agree with that. We do not think it is over at the end of the year, we think a gradual increase in interest rates, unless, and the unless list is very long, but, if the economy stays reasonably good and inflation rates climb a little bit, but not a lot, i think that is the pattern. The problem is that we are not the only central bank in the world. We are not the only economy in the world. Do willtion on what we be what happens in japan and europe, specifically. I do not seeing any signs there that they will really move very much. Over the next few months, or possibly even longer. That will limit us. If that constraint starts to go actuallyn we may increase reserves slightly. But we are doing ok with a large component like that, you say, my goodness, you will hold down the dividend, etc. On the funds. That has not been the case. We have been able to slightly increase it. I think one point four people to remember a rising rate ,nvironment is nominal terms that is good for returns on bonds, with a slight lag. You are doing better than you were during the flat period for rates which is important to remember. Being cautious, but being intelligent about how you deploy the assets in the cautious bucket. It adds value. Vonnie how much does this get repriced this year . There are varying concepts of how that will happen. How fast will it happen . Vonnie, that is the 64 question. I will confess, i am perplexed by the pricing of risk, lets say over in the insurance market, the casualty side. After the kind of experience we have had with everything under the sun, you can imagine on the casualty side, rates are still low. It is still a competitive market. That is my cut point for the pricing touch point for the pricing of risk. Close,e bond market there will be bumps along the way as rates rise. Gently. And the market deals more with discount bonds. The surprise out of the blue, if one comes, how will be handled. The fund flows have been very strong to the markets, liquidity is not a problem across any market. Specifically, you get into the some of the markets and it is not a strong number but it is very, very good. Last, if rates really start to move up . You not think so, because do not have the middle of the market as quick as it used to be. T is thin, relative as long as things stay within a certain range of bouncing around , you will have good liquidity. If you get outside of the range, i think what will happen is the bit will disappear. That is when the reserves get put into the market. You are staying with us. Dan fuss is staying with us, do not go away on bloomberg for full coverage of the fed decision at 2 00 p. M. New york time, 7 00 p. M. In london. Vonnie time for the first word news with taylor riggs. Pending home sales in the u. S. Rose in december for the third month and a row with the National Association of realtors index up one half of 1 . The group says the low supply of homes and the impact of a new tax law will limit rails growth this year. Sales growth this year. The cap Administration Director of the cdc has quit over a stock scandal, brenda fitzgerald. Shares in Japan Tobacco after she was appointed. One of their goals is to reduce tobacco use. The u. S. Treasury department will increase longterm debt sales for the First Time Since 2009, the recent growing deficits and the expectation of the fed Balance Sheet rolloff, sales of 3, 10, 30 year notes will rise to 66 billion. Theresa may is in china where she will be walking a tight rope between politics and trade, she says she will raise issues such as chinas human rights record and democracy in hong kong boss he wants to build a powerful postbrexit trade relationship. Global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Mark coming up on the european close, the stoxx 600 turns negative as the trading day marches on. The close is 14 minutes away. This is bloomberg. Vonnie live from new york, i am vonnie quinn mark i am mark barton cathing you down to the european close. Dan fuss for more on central banks. A quick question on the u. S. 10 year yield. Tohas risen quite steeply about 2. 7 , highest in sense 2014. Is 3 the key level, the level which has great significance, not only for the bond market, but for the wide Asset Classes as well . Dan it will be a reference level. For a lot of people. They will look at that crossing the even number. I do not think it is the end. , it is not more important than any of other level any other level. It will get a lot of notice. It may trigger certain things. No, i think three for the u. S. Is about as expected. More significant is what has just happened briefly with funds on the fiveyear, all of the sudden you have a positive number, briefly, ever so briefly. That is significant. And that is the rate i would watch. I do not think that signifies anything. If thats of charts if that starts to creep up and if everything that has been said, someday the bank of japan decides to let rates go up, or not by as much as they do, then we will see the three in the four,tart to go to again, if. Assuming our economy stays as strong as it seems to be, and assuming that inflation rates gradually climb, and i suspect there is a slight lag in the inflation rate, then i would expect the fed to keep going. The open question then becomes, how far, how long . Does the 10 year go to four . That is a stretch. Does the 30 year push through five . I used to think it would but now i think it might. Because of the enormous demand at the long end. Really depend on stocks. The s p 500, when it was going up and up each day, you would have regular selling of stocks to buy long bonds, the liability match demand. Stocks dropped and that is the increment, your funding ratio of a prime benefit plan drops with them. That puts a pause in their. In there. Correlation may be changing. I want to ask you about supply. We got quarterly refunding and it is higher by 4 billion mostly on the long end. What does that do to rates on the short end, clearly people expecting that to balloon even more. Dan i think that is accurate. Again, left to our own devices within our own markets, that would help drive up interest rates. Unless the central bank decides to counter that. That really does become the question. I keep coming back to this point, because our central bank has a domestic mandate. We have gone over this in years past. It has a domestic mandate but has international concerns. Particularly in the current political environment. You have to handle that one very carefully. We cannot just manage our situation in isolation. The rest of the world isnt hinges here vonnie i want to talk to you about other things, that is legendary dan fuss. This is bloomberg. Tolde the fbi director the white house he opposes the release of a controversial classify gop memo classic revealing bias at the fbi because it declares inaccurate information. Billy on capitol hill. What is the significance of this . The memo which purports to lay out abuses in a surveillance application move by the Justice Department and fbi against donald trump and associates has sparked controversy and perhaps touched on the underpinnings of Robert Muellers special counsel investigates are investigation on russia collusion. The fbis objections could be valid or to spare itself from embarrassment. Vonnie President Trump said that it will be released. Who has the final say on whether it will be released and who can verify what is in there . It is a rare house of representatives rule which has really never been taken all the way through. The white house now has the to go through it with the Intelligence Community and go through potentially information that should be redacted for surveillance purposes. The final say it will be the white house. You are one of our washington, d. C. Reporters, i would urge you to follow him on twitter. Christopher wray said to oppose gop memo release. Into theopean markets close, three minutes away from the session. This is bloomberg. Mark live from london, this is the european close. Stocks finishing lower, we were high earlier. Since january 2. The best month since october for the stoxx 600. Headlineinflation, 1. 341, well below the ecb target of inflation, just below 2 . Employment figures are strong and price pressures failing to pick up to a similar extent despite unprecedented efforts by the ecb. Mario draghi did say last week developments were heavily reliant on stimulus, arguing it is too soon to discuss unwinding asset purchases this year. The strong euro weighing down on inflation. That is inflation data and lets get back to the earnings. The worlds biggest steel maker with its highest profit since 2011 and plans to pay its first dividend since 2015, small but shows a significant change in the fortunes of the company that was forced to go to investors for emergency funds two years ago as the industry floundered. View on the a mixed dividend bond Jefferies International says shareholders should be pleased go and Goldman Sachs says it is smaller than expected. Shares are lower by 1. 2 . Erickson, sure slumping as much as 9 . Biggestll today, the since july of last year with fourthquarter sales missing estimates. The swedish maker of wireless struggles to turn around its lossmaking Digital Services business, their chief executive spending his first year as steve executive trying to revive the Embattled Company which has been hit by lower carrier spending and competition from others. Under the chief executive, erickson has ended or renegotiated unprofitable Service Contracts and taken 35 billion krona in writedowns and other charges. Shares down 9 in erickson today. Vonnie equity markets may have a reprieve, not so much other Asset Classes with the dollar index down below 89 and continues to be there but it has bounced from earlier part of the session. We got the treasury quarterly refunding report with a little bit of a selloff. More or less what traders are expecting. There is some edginess. Crude oil futures at 64. 30, not as low as they were. The trend is lower. Recount last week is causing the market to take a Second Glance at data. The South African rand, the future of jacob zuma in question and the rand has been strengthening all week. Another three quarters of a percentage point today, 11. 87. Gmm , already yesterday. All red yesterday. More of a mixture today. Finding our footing in certain , and, the Chinese Renminbi the mexican peso, at 18. 60 following the nafta renegotiation round finishing up. Mark theresa may is try to secure a good trade relationship with china. She brought a large delegation of politicians and Business Leaders to beijing when discussing the future of u. K. Chinese relationship with the chinese premier. In terms of the future relationship between the u. K. And china when we leave the European Union, we agreed a joint review of trade and investment review, which i think towards looking towards what our future trade relationship can be, when we have the freedom outside of membership of the European Union. Mark our bloomberg managing editor is here. Did theresa may walk a delicate tightrope between politics and trade . She did not fall off the tight rope. Could ashe best she she has with the hand she has been dealt. It is not the strongest of all possible hands. You almost feel simply for a leader who goes overseas, leaders go overseas to dismiss escape domestic headaches, her headaches followed her. Mark the new music was pretty good, talking about the liberating, the effect of brexit back of help ties between them. David cameron promised the golden era of relations with china. Are we approaching a golden era . For the chinese, it is tricky. Im a Strategic Point of view from a Strategic Point of view, they would like to have the u. K. Split off from the u. K. , it weakens a global rival but from an economic point of view, complicate things in terms of Investment Decisions they do everywhere else. It is a tricky situation for them. Mark meanwhile, domestic issues cannot be ignored. Try as she might she has had to backtrack on one issue. The report on the impact of the vote of the economy. Give us an update . As you say, they backtracked on it, labor called a vote and it appeared the government would lose on releasing the documents. They relented and mark not in the public domain, in the committee . It is effectively the public domain. It is interesting, it is what everybody knew anyway at the time of the vote, the predictions for the Economic Impact of brexit was much more dire than what we have seen in these scenarios. Lovely,dictions for the steve e proven tolee, it is cause a lot of issues within the conservative party. Yes, but when it comes to leak reports in todays age, with the flow of information and confidential meetings being tweeted by people in the meeting , it is hard to keep things confidential. I am just starting from a position of, these are confidential reports. You are bound to lose. Mark thank you for joining us. Vonnie lets get to los angeles, where Erik Schatzker had an exquisite interview with tom barrett. Topics covered included the state of the union and steve wynn. Lets start there. Chairman executive saying nice things about steve wynn but shareholders not sure this story will end up well, no matter what happens in the investigation. That is a fair statement but lets point out that we have not heard a lot yet from steve when wynn. With possible he will come a full throated defense of himself and his actions concerning the Sexual Misconduct allegations. For as known steve wynn long time and toms name was floated around for president of the rnc. I asked tom whether the president had asked him to fill in void left by steve wynn the wake of the Sexual Misconduct allegations. Tom talked about steve wynn. This is a guide who runs one of the guy who runs one of the best female operated places in the world, two of his past president s are women and as a friend, he is a firstclass gelman and i have never seen any of this. He is saying it is a Women Oriented company and steve wynn is a cheerleader for women. He said also that he did not want to take over the job as rnc finance chairman. That is not an interesting job for the likes of them. We may have lost you. We will have to come back to Erik Schatzker later on. I would direct you to tv on bloomberg to check out the interview. Lets get the first word news with taylor riggs. Competitiong ploy in the u. S. Has matched its biggest 12 month gain since 2008 , the Labor Department says wages and benefits were up 2. 6 thanks to higher pay any private sector. The increase shows employers are making more generous offers to compete for workers in a tight labor market. Addedys u. S. Companies 234,000 jobs in january, that beat the average adjustment from economists as the government has a monthly jobs report on friday. New data today highlights the challenges faced by the European Central bank, inflation in the euro area slowed at the start of the year while Consumer Prices rose 1. 3 in january. The ecb is trying to keep inflation close to its 2 target. The moon put on a cosmic show today, a red, blue moon super big and superbright, the first time in 35 years a blue moon has synced up with a supermoon and a total lunar eclipse. The east coast that most of south america and africa were out of luck. Hawaii and alaska had the best view with the canadian yukon, all trillion, and asia. This will not happen again until 2037. Global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Vonnie coming up, counting down to the tech earnings. This is bloomberg. Mark live from london, i am mark barton. Vonnie in new york, i am vonnie quinn and this is the european close on bloomberg markets. The stock of the hour, broadcom is topping higher on a bullish announcement. They are known as an apple supplier, 20 of revenue comes from apple. They put up a bullish statement that they expect the fiscal First Quarter that in today in today is better than expected. It tells us that the company is not out there scrambling on the last day of the quarter to get deals done or compromising on pricing. We put this with the earnings function in the bloomberg. The company has been tracking well into the quarter. This is a threeyear chart. White is the stock and red is the street estimate for the First Quarter which had been for 95to write around and now 495. Destocked taking a the stock taking a dip today. A relief. Precursor for a positive read through for apple who has seen its shares decline . Question. A big interesting the idea that we have apple slightly higher today, though on the week, mainly down. Down 9 from its recent peak, with concerns around iphone demands. With 20 h this of its revenue from apple. Even with the announcement, i spoke to a colleague who said the his work suggests that sellthrough to apple for their march quarter was relatively weak. It is an art and not a science and that could mean a week june. It does not suggest all is clear for apple, there could be some head of take up hiccup a for apple. Vonnie facebook, microsoft, and ebay reporting after the bell here bell. Paul sweeneys director for research for bloomberg intelligence. A preview of what may be the most interesting earnings report. It may be amazon because there are so many moving parts for amazon, health care announcement they made a couple of days ago and they are moving into the grocery business. With the acquisition of whole foods. Put that on top of what has been an extraordinary story for placee for amazon, stock stock price reflecting it after a strong 2017. Amazon may be an interesting story and probably one of the strongest topline stories out of the earnings of the next few days for big Tech Companies. Vonnie may it caused a turn in the market . We saw a drop yesterday. Once the fomc is out of the way and jobs friday, people will scrutinize these earnings reports. Generally speaking, the tech sector has led the market in 2017 had over the past several years. We will get strong numbers, particularly on the top line for a lot of these companies. Alphabet, they will have good stories to tell about the underlying growth of their business, the core growth of users to and the core growth of advertising. The Tech Companies could give a strong numbers across the top line. A love of that would translate to the bottom line. Vonnie what about apple . We had Warning Signals in the past few days. Delay, and the possibility the iphone x was not as five alert as they hoped for as popular as they hoped for. Concerns that this is company that is clearly a phone company, handset company, and you saw the x not resonating from with the customers as much of the market anticipated. We are seeing some analysts pull back on the stock over the last several days. Thatis a stock historically has needed the refresh of the phone to drive the sales. Generally, it is a good story. More cautious investors longerterm are saying what is the next big thing for apple . Their Services Businesses . Vertical for a new apple we have not seen yet . Vonnie paul sweeney, thank you. You will watch the earnings reports. Breaking news, brookfield is said to be in talks to acquire forest city realty. It is said to acquire forest city realty. Reporter edr deals hammond. What do you know . What we know from people who know, brookfield is in talks with forrest city about the acquisition of the company. This Real Estate Company, some commercial and some residential, a difficult asset to acquire because it is not the real estate we often see trading. Rook field were among a number of people looking at this for a bit, sounds like it is down to just them, although potentially someone else could come into the process. We have learned is that the premium that is being offered is not usually where forest city is trading currently. Activist in the company for a long time. He has been in the stock for a while. Looking at different options. To they sell assets or split the company, or go through a sale . They resisted for a wild. While. They came around and have been running a Strategic Review for two months and attracted interest. An issue with this kind of Real Estate Company is it has to diverse of a portfolio. Brookfield is a natural buyer. One of the few people, along with a blackstone, who this asset would make sense for. Mark why does brookfield need for city forest city . They do not in a way, brookfield is a true real estate empire who went up through this kind of acquisition. Billion to 5 billion companies. They are not afraid to expand in the mall area, more traditional commercial real estate, or residential real estate. They are very very big in infrastructure. A highly inquisitive company that does this kind of thing, fitsdo not need it but it in with their strategy. Vonnie both sides have declined comment. Our thanks to the person who wrote the story, ed hammond. Vonnie more breaking news that we will come to in a moment. This is bloomberg. Vonnie a train caring republican members of congress collided with a truck and all members said to be ok. Kevin cirilli joins us on the phone. Where are you and what do you know . Virginia going to west for the republican retreat. I got off the phone with congressman french hill who was on board the train. The train is located just outside of charlottesville, virginia. According to the congressman, he says there are no apparent injuries to any of the lawmakers. The two folks in a garbage truck that was on the track with the guard rails down, they appear to be injured. Authorities are looking into it. They say terrorism does not appear to be behind it. The White House Press secretary said moments ago that there do not appear to be any injuries to any of the republicans on board this train. This is less than 24 hours after the state of the union. Local police are also very much looking into this matter. Vonnie how many of the gop lawmakers that were headed to localgreenbrier were on the trad are they continuing to greenbrier . Kevin within the last 10 minutes, according to the congressman and other colleagues , i have been in touch with lawmakers on board. It does not appear they will they arer planned waiting to see what happens next. The train did not go off of the track. It did come to a complete stop. As a result, a striking this truck. They are in a hold. It does not appear they will not continue with their plans. Just about every republican member of congress, this is the main route, the main route of transportation for republicans to get there. Matters, at these local, state, and federal authorities are working in conjunction with the sergeant of arms office on capitol hill in terms of security when this many members of congress are moving from one place to the next. Vonnie that is Kevin Cirilli reporting that a train carrying gop lawmakers to a retreating greenbrier hit a truck but members are ok. Some injuries. Mark stay with ours us for full coverage of the fed decision in a couple of hours. A reminder of how european stocks ended, down for a third consecutive session. We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . Thats why Xfinity Mobile comes with your internet. You can get 5 lines of talk and text included at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And now, get a 200 prepaid card when you buy an iphone. Its a new kind of network designed to save you money. Call, visit, or go to xfnitymobile. Com. I am Mark Crumpton with the first word news. A train carrying members of congress to a republican retreat in West Virginia collided with a truck in charlottesville today. No lawmakers were hurt. Further details including the names of those on board the train have not been released. The European Union is urging the United States to not work alone on any effort to make peace between israel and the palestinians. Chief Foreign Policy warned that doing so what and in failure would end in failure. Andhey must be multilateral in all all partners essential to the process. A process without one or the other would not work. It would not be realistic here her comments at an emergency meeting at an International Committee for Palestinian Development aid and efforts. Government ministers and a u. S. Senior official attended detox. The trump Administration Director of the cdc has
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