Now. We have spent enormous amount of time with democrats and republicans talking about our infrastructure plan. Money in the budget. We have a plan that we are confident will work. The president money in the budg. Will announce it over the course of february. We do think infrastructure is important. Lets get some details. Give me some color. Is that something you would support . Gary we have three key principles. We are going to invest a trillion and a half dollars. The approval process is the most important aspect of our infrastructure plan. We have to shorten the approval process to under two years. We have to take care of overall communities. You get it passed before midterms . Gary we think we have a good chance. We have been meeting with republicans. It has to be a bipartisan plan. We have momentum. Everyone is excited. We know how important it is. It is going to affect every american citizen. It polls at 84 positive. Everyone is excited except for the treasury people. Jon the final question for you, the fed vice chair, you spoke and said we might get it before the end of january. When are we expected to get the announcement . Gary we are working on it. The president will announce when he is ready. Jon a matter of days or weeks . Gary im not going to speculate. Were trying to get some of the details of what is going on with the administration. In the here and now, 33 minutes into the session, a solid jobs report doing nothing to lift this market. Treasurieshigher on by five basis points. He dollar showing some string that does it for us. We can now handover to Bloomberg Markets with vonnie quinn. Thank you. A great interview. This is Bloomberg Markets. Lets get to the jobs report. Wages rising the most on a yearoveryear basis since 2009. And the effect of the change in the tax regime has not even kicked in. Our guest is from morgan stanley. The impact of tax hasnt kicked in. We get a fair enough jobs report. Does it make the economy stronger . It could. Right now we are coming into the year with Business Confidence at or near alltime highs. Markets price for perfection. The expectation is there will be a tailwind to the economy from the tax changes. We have not had the hard data to start confirming that. The sentiment is going to remain high in anticipation of that. The payroll report, a good continuation of a good labor market recovery. I like to see the wage growth. Bonuses wont show up until we get compensation data. There is quite a wait for the hard data to start showing tax effects. Anticipatione keeps anticipations high. And there were some negative things. Labor force participation is stagnating. 95. 7 people not in the workforce. With every report there are a lot of moving parts and pieces. I want to tell a hawkish story i have fodder for that. If i want to talk about how it was not up to snuff, i can talk about that. There is always a lot of moving parts and pieces. The Participation Rate has picked up over time for prime working age groups. Are gradually continuing to pick up as an employment comes down. There is evidence we are closing in on full employee went. Employment. Investment is up. Forad a good investment 2017. Productivity rises. It is an overall positive backdrop were an economy that will get more tailwind. How it will be positive for the economy. We dont have the data yet. Mark im looking at the probability function of a hike in march. It is 92. 8 . We have almost moved beyond that. Has the narrative moved to possibly for rate hikes 4 hey rate hikes . Theost believe the risk to forecast word to the upside. If there is risk to the three hikes this year it would be 4 rather than 2. We have had people say that in public. That we could do three hikes this year. We start to get dated that confirms we are running ahead of the fed forecast, because running in line with that they believe they would hike three times this year. I would not expect that to happen until the june meeting. I think marge is too early to do that. Mark Jerome Powells day is nearing. Do you expect any difference in town, in leadership . In many ways if you look at longterm expectations, governor powell, soon to be chairman powell believes in the lower rates for longer environment, that we are going to be in a different world with large Balance Sheets and low interest rates, and the fed has to cautiously remove policy accommodations. All of those were in line with chairman yellens thinking. Where he will be different is that he will feed more off of the anecdotal evidence. He is not a trained economist. He will put the right people around him. But i think he is going to hone in on his specialty, Market Dynamics my anecdotal evidence. He likes seeing Companies Announce they are going to pay workers more on the back of tax policy. Forspect he is waiting basic pay raise on the back of the tax policy. Not just oneoff bonuses. It does depend on who his vice chair will be. So speculation he is turning more hawkish because maybe he is auditioning for this role. He could be, but he is just showing his colors and his current thought. The ebb and flow of his rhetoric follows with the underlying momentum of the economy is. He would be one that expects three rate hikes but could see upside to that. He would make a great vice chair. He is a trained economist. He ran the San Francisco fed board before she left the San Francisco fed. He is going to bring experience to the table. History, frameworks, that would be a great side kick. Vonnie you are sticking with us. We are going to be speaking to her in a moment. We want to get to the infrastructure comments. Lets check on the markets, they are moving again. 1. 2 ,d nasdaq down by being led lower by exxon mobil done more than 5 . Chevron is down as well. S p 500 being led lower by alphabet, down 6 following earnings. A look at the other assets, the bloomberg dollar index is 1 . Following the jobs report, the 10 year yield has broken the 280 mark. This is bloomberg. Vonnie from new york, im vonnie quinn. Mark and from london, on mark barton. Check out what is happening to u. S. Stocks. A big fall here. Down for a bit consecutive day. On track for a second weekly drop. Drop the biggest weekly since november 2016. Stocks down 1. 3 . Something significant has happened, it has raised gains back on january 23. An annual gain of 5 disappeared. Vonnie stocks are lower. Earnings are turning, the dow down being lowered by chevron which disappear disappointed the street. Alphabet is the worst performer, also a disappointment. Ellen. Back with we were talking about the nac chiefs comments. There is momentum for infrastructure plan. Could that make a significant difference . Ellen absolutely. It is a big job creator. There is a lot of hard equipment investment that goes on to support infrastructure spending. Towould be a huge tailwind the economy. I dont think we get it this year. It is great the administration is pushing this. It does get bipartisan support. Folks in congress have wanted it for a long time and they have not been able to get it. But, you cant make America Great again unless you rebuild america at the same time. Dynamics congressional and the fact we just have a big deficit increasing tax bill, i dont see it happening this year. Vonnie what happened to Corporate America . We are seeing major headwinds. Not least of which, this tax regime change is a one off. We have a weaker dollar for companies to contend with as well. It has been an interesting story. Dids brought up while he go on to say in that same comment that the u. S. Has a strong dollar policy, he focus on the nearterm effects of a weaker dollar, good for company earnings. The interesting thing is it is ok to mention the nearterm effects of currency. We used to see them shy away from that. With the dollar was collapsing in 2015, she was the first to say this matters. It is went to push down inflation. Raising along then. It is a lot of volatility. She said the more the dollar appreciates the shallower the path for policy will be. It is not going against the strong dollar policy of the u. S. Mark can we talk about inflation. It brings me to the ecb who spoke in dublin, from a perspective,bility it may be a matter of concern about future adjustments. Underestimated the threat of inflation . Potential knock before markets if inflation is being underestimated . You hit the nail on the head. It is a huge risk for markets. When we have all discounted inflation forever, you are talking big reversals in trades, big volatility. The central bank does not want to see that. Moving partsot of that Central Banks cannot control. Goods inflation. Currency movements. Central banks cannot control that. They can control aspects of the domestic economy in price pressures. For the fed, one thing making it difficult to get Inflation Higher and keeps markets betting against inflation is the technological impact. It is greater than many are estimating. What do you do about that . The president of the new york said low inflation is a good thing. It affords us the ability to maintain a gradual pace of hiking. The rest of the economy, low unemployment or all moving in the right direction. In a way that low inflation is a good thing. But Central Banks have set this to percent goal and what happens is markets bet the fed is making a mistake every time it hikes. Mark if the fed isnt going to get to its goal what does it strongr the ecb and the euro . We have heard pulling back from the rhetoric suggesting the program in europe will not come to a sudden end. To what extent is the euro strength causing them to think on the inflationary front . Has the fomc as a nice guide because we are a few years ahead in our cycle. They are probably learning no matter how gingerly you think you are approaching the exit you probably even need to be more ginger. Taking away some of the hawkish ,anguage to ease expectations it is a good thing to do now. Especially with the euro rising by it has. You should be at least worried about the threat that is going to show in inflation in the euro area just like the strong dollar here over depressed inflation. At 283 on the 10 year. Where do treasury yields go from here . Our global head of rates strategy expects us to be shortlived. That the inflation data is not going to live up to expectations. We are going to have lower prints here based on tough year on year cops. The fed does look through that. Tosees global flows attractive and that is going to put downward pressure on the long end. He is not expecting it to just rise but we have seen expectations of where it will end this year have shifted rapidly. He thinks it is a move that has gone too far in that direction. Thank you for joining us. Mark we are going to dive into earnings from apple and amazon. What are the Key Takeaways . Differing share price performance. This isa check bloomberg. Mark this is Bloomberg Markets. A correction to some news earlier, we reported Dell Technology was exploring options of a Public Offering but those options did not include a cell to a thirdparty. That was incorrect. Dell is exploring options but they do not include a sale or vm ware to a third party. Etfs time now for friday. If you thought it might take a break after the record breaking pace, think again. Here to highlight some Key Takeaways, our senior etf analyst. Obviously that is a big number. Just because stocks were rallying . That is a big part of it. People assume this is an only u. S. Rally. , it islook at the flows u. S. , it is developed international, it is specific sectors. The money spring all over. That is the monthly passive flows. It is about 30 more from the record. I really thought there would be a break this year but part of the flows are people using selloffs or straight switching into the etfs, realizing some gains. It is not just people liking u. S. Stocks, it is people wanting that. Without the central bank mode that was always the flow catalyst in the past. This is without that. Does that tell us anything a few future . Things were positive here. No central bank. Vanguard was almost in the background of the flows. Those flows for people coming in every month, drip to madrid. They were third in terms of issuers taking in money. They were not even the top five. That means a lot of the trading crowd came in. 1000 etfs took in cash. That means there was a death to this low, it was not just people it hitting by. All right. Thank you. Vonnie thank you. Ahead, how Apple Earnings left a sour taste in investors mounts. Weak spam and that, next. This is bloomberg. I cover the Restaurant Industry for Bloomberg News in new york. Chicken wing lovers can rest easy. Prices have dropped in time for sundays super bowl after spiking to a record high in september. Prices have dropped 25 and are selling at the lowest price for this time of year. Good news for football fans and Buffalo Wild Wings and wing stop. Bake spec to sell 30 million wings sunday. Wing stop started getting ready in june. The ceo said he had never seen prices spike so much. He blamed the popularity of wings. With some restaurants dropping wings from their menus, prices came down. It was simple supply and demand. Twitter andow me on get your updates at ticktock. Vonnie that is just one of our highlights from ticktock by bloomberg streaming live on twitter 20 47. Live from bloomberg world headquarters, im vonnie quinn. Mark and in london, this is Bloomberg Markets. York. Has more from new likes the job market was on a roll last month. I better than expected amount of jobs were added last month. The Unemployment Rate remains at 4. 1 . That matches the lowest it has been since 2000. President trump said the at you and Justice Department have politicized the sacred investigative process. It aims can hours before the release of a controversial memo from congressional republicans. It argues the fbi has abused its power in the russia investigation. A dramatic moment in larry hearing. The father of three of his victims try to attack him on the stand. The man told the judge he would like five minutes in a locked room with him. In china the government is cracking down on micro blogs. To addes were asked measures the Chinese Government has imposed limit with the public can see and say online. Global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. This is bloomberg. Bonnie stocks we should mention are lower today. Earnings and revenue topped analyst estimates at apple. They sold fewer phones year over year. Demand for the iphone x was better than expected. Joining us, the Senior Research analyst, he has a buy rating on this stock. Is it getting punished of late . Market is the disappointed with the unit number in december but what has emerged from the results is it has been the most popular devise since it went on sale, and the iphone eight and the eight plus are doing well also. We have seen in the average selling price that customers are valuing the apple experience and we have seen in the Services Number and the additional paid subscribers that apples ecosystem is healthy. With a medium to longterm outlook we think this is an interesting opportunity for apple shares. Vonnie what excites you about that for the company . Its way intoinding so many different areas. In payments, apple pay is now accepted at half of all Retail Locations and you can use it on the phone, on the watch. I am using payments on the watch more and more. Experience ands applications find their way into new areas that is going to serve them well. Another interesting area is health care. They making a lot of investments and that could be exciting for the company over time. Said about the new super cycle. Is it still on . Has that label been put to bed . The label has been put to bed for the time being but i think what is important over the next 1218 months, apple is executing well on the devices and they were able to wrap capacity quickly. I think when we look back on this in the next 1218 months we will no apple had good unit sales, average selling price is. Customers value it and they are continuing to make progress in terms of how they are able to change lives in so many different areas. That ultimately is what is important for stakeholders here. For customers and shareholders as well. Mark another posited is signs of progress in china. As it turned a quarter corner . The results suggest they are making good progress. They are doing well in a lot of the big cities. The company having seen a lot of strength in china, last year it was a little weaker. They are making progress and i think from the work we have done, the chinese consumers value the devise. They appreciate the apple ecosystem. Across the seeing products and services the Chinese Market is strong for them. Is piece on the services underappreciated. Vonnie are any metrics out of line here . Anything . Across a variety of metric the shares look relatively undemanding. What i would say is the company has a tremendous amount of cash and a Management Team that has shown they are disciplined in terms of investments they make and shareholder friendly. What we heard last night is with the recent changes to tax policy the board is likely to remain aggressive returning capital to shareholders. That is another posited in the story that is being somewhat overlooked. Vonnie elsewhere, it is the worst performer in the s p 500. Is this a turning point or are people just taking a pause. Google orults for apple that were strong. People were disappointed in the margins and earnings per share. If you look at their growth cloud, youtube, google this is a company that is wellpositioned. Welongerterm shareholders want the Company Making investments and we appreciate there are going to be quarters where they may this up white the market given expenses were higher than people might have looked for. The company is executing well. Vonnie all right. I mention this conversation is not going to go away. Mark. Up, Big Oil Companies reporting earnings. Investors are not too impressed. This is bloomberg. Mark live from london, im mark barton. Vonnie im vonnie quinn. This is Bloomberg Markets. A developing story, still weighing options including a potential ibm ipo. It is not considering a sale to a thirdparty. Is the bloomberg deals reporter, following this story. What is the current state of play . That is exactly right. The company is coming out this morning confirming this scoop we broke, that they are considering taking dell public through some strategy, either a traditional Public Offering, or they would use the m where. He controls the vast majority. They would use it basically to inherently acquire dell and bring it public. What they did make clear, after we broke that news, there have been scattered reports. They are not considering selling any pieces of their company. He is keeping it together. No one else is involved except for michael dell. They are maneuvering their way through their options for finally getting this Company Public again five years after the massive lbo. In this filing it says Dell Technologies is considering maintaining the status quo. What would be the advantage to just distance financial backing here . If they do nothing, if they , business does continue as usual but everything indicates he wants to simplify these companies. You have dell that was taken private. Those have combined. Emc held a majority stake. Deal, help finance that they basically released a tracking stock that only trades on evaluation. If you are looking for the ticker, you have this tracking stock that trades, basically to mirror the value. The kind of combination of two in figuring out a combination would help him simplify that and bring some of the cash onto the same balance sheet. To get all of this done they have at to raise a ton of debt. Vonnie what about the performance of the company . There is only so much we can know. What do we know . They have performed well but the growth is not aware the him where is. That would be the rationale for getting the debt onto the balance sheet. They have a lot of debt coming due. They will have to think about the Tax Implications and the loans and debt coming due in the next two years. Oft is 8 billion worth securities coming due. When you think about them continuing to service this Going Forward it would be helpful if they did have this sizable piece throwing off cash for them to continue servicing this. Michael dell is an ambitious guy. He says there is no thirdparty involvement but you never know if this would enable him to have one big company to look for other acquisitions. I have no news for you there but this might be something that he looks to do down the road. Vonnie thank you for joining us from San Francisco. Mark lets talk oil. Oil stocks falling short of investor hopes. Both below estimates. Production and cash flow still disappointed markets, all three stocks sliding. For more, lets bring in kelly. I love our story, exxons chevron usually trendsetters, woefully off of the pace. This should be a good time for big oil. We have the oil price rising. What you saw with exxon was the downstream side of things. , refining business outside the u. S. Has been a struggle for them. In the last quarter, that had a lot of people. Tradingas up, refining fell short. Since 2000ow weaker 16 2016. The cash flow is going to be important for investors to look at. Recovering from these programs they did to survive, they were issuing dividends in stock. They want more cash to be coming in to reduce that. Mark art investors happy with the surplus of cash . They were not that happy about what happened yesterday , with the chair price reaction. Mark they have announced a share buyback. That was the anomaly unfortunately. They had a pretty good quarter. The three large ones did not. It be oils best year in decades or is this dampening the enthusiasm . It still could be optimistic. In they a lot of costs particularly focused on getting barrels of oil with a lower breakeven level. We saw one time tax charges that happened in this last quarter. It could still be a busy year. On which metric are you gauging this . The continuous battle. You saw a very significant thing, shall profit beat exxon. That is the first time in 20 years. Market, shell has a far way to go. Mark that is the long coveted prize. That is right. You see the shell ceo say that is a big goal. He is still working toward that. Our oil reporter. We are on memo watch. Memo allegingl abuses in the rush investigation. The latest in the life report, this is bloomberg. Reportlatest in the live , mark this is bloomberg. Vonnie janet yellen will print chilling Brookings Institution as a distinguished fellow. She joins a superstar Economic Team that includes ben bernanke. Willed chair, janet yellen join brookings monday. At least we know where she lands. Colleague in old crisis. Mark we now know it is where outgoing fed chairs go when they. Jerome powell is sworn in as the next fed chair area fed chair. Vonnie exactly. Maybe she will write a book. We did get one from ben bernanke. Startt point we need to figuring out who the next fed vice chair is going to be. It leads to the question, personnel could be policy. The narrative switches to four. Vonnie and when do we get that . September or later . President has decided to allow the release of the republican memo arguing the fbi has abused powers in the rush investigation. The president is unlikely to reject the content. Joining me now, bloombergs chief to washington correspondent live from west virginia. What are republicans saying about this memo . Republicans are backing President Trump for the most part on their support for the release of this. The timeline could come as early as today. It is unclear. It would be up to congress to release this memo. There has been ongoing controversy surrounding this. Democrats are saying this is going to be edited. Republicans are saying released both versions, get it to the matter of transparency. President trump to the fbi. Osed schumer goingck as far as calling on paul ryan to suggest devin nunes has no longer be a part of the house intelligence committee. The changes that have been made to this memo are nothing more than grammatical according to the house freemen caucus house meadows member meadows. Ofnie the future Christopher Wray would be in question as well. What is the upside if this comes out and rejected . There are things to think about including a looming government shutdown. Would this be to his advantage . Here in west virginia, senate leadership, Mitch Mcconnell and speaker rye grass about this directly yesterday. Issuing ofined the this memo is for the sake of transparency, for folks to understand what is going on with regards to this investigation. On the flipside you have started to see some republicans saying maybe this is going to fast. Jeff flake from arizona and frequent critic of this administration saying perhaps folks ought to slow down with the timetable of the release. Vonnie hard to believe, but the state of the Union Address was this week. That was this week . Vonnie what of that bipartisan pair of it . Remarkable to think we were just covering the state of the union when so much has gone on since. President trump is speaking here at the replicant retreat reiterating a host of policy issues he has made during his state of the union. From a policy standpoint, a key take away from this gathering, how they are going to pay for that one point 3 trillion proposal remains to be seen. A lot of different things. Chairman schuster coding tax, as a wayas to garner some of that fund. On the flipside you have asset recycling, which would draw on public and private partnerships and foreign investment, which has been a significant part of the conversation. Our thanks to kevin. Mark coming right up, we are following stocks, less than 30 minutes until the end of the last session of the week. The dax index, the benchmark has given up all of its gains for the year, down by 1. 3 . It was up by 5 against the dollar in the wake of the jobs are ordered. Sterlings winning run is touch and go. I will leave you with the bond board. We are seeing it yields rise. Stocks falling. That is the market trend on both sides of the atlantic. Mark 11 00 a. M. In new york and 4 00 p. M. In london. 30 minutes left in the trading day in europe. From our european headquarters, i am mark barton. I ame from new york, vonnie quinn. This is the european close on Bloomberg Markets. Mark here are the stories we are covering, stocks dropping worldwide. Equities falling for a fifth day in europe are u. S. Stocks heading for the worst week in two years. A strong gaza report increasing the likelihood the fed rights raises rights and mark. A professor says this is the biggest bubble in human history. Committee that a special committee to supposedly recombine the companies that split more than a decade ago and we will speak with btig analyst richard greenfield