It was his first appearance in public since his arrest nearly two years ago. He is on trial in his hometown of brussels on charges of attempted murder for a Police Shootout from which he fled. Global news 24 hours a day powered by 2700 list and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Vonnie it is noon in new york, 5 00 p. M. In london, and 1 00 a. M. In hong kong. Shery and i am shery ahn. Welcome to Bloomberg Markets. Vonnie from bloomberg World Headquarters in new york, here are the top stories from bloomberg and around the world that we are following. U. S. Stocks are fluctuating following the biggest oneweek loss on the s p 500 in more than two years. Do the recent declines represent the healthy correction many investors had expected after a stellar start to the year . Iset yellens final act perhaps an unfortunate one for wells fargo. The stock plunges as the fed puts a cap on wellss growth. And the death of clothing. We will take a look at why the world of retailers may get worse. That is all in the next 60 minutes. We are halfway into the trading day in julie hyman is with us. It has been whippy. Julie all three major averages made attempts at changes. Intoq was going higher, the green, but we have seen stocks going back down. The 10 year yield is little changed at the moment. It does not look like at least today that stocks are taking their cue from bonds as we saw last week with those higher bond yields causing concern among investors. Lets take a look at the groups on the move today. Checking on the energy group in particular because its having its worst twoday cycle akin june of 2016. We have earnings from these companies and other factors that we will get to in a moment. Health care as well is lower and financials are taking a hit, led by wells fargo and the story that vonnie was just talking about. We are also looking within health care at Johnson Johnson. In the past half hour or so, we saw the stock sharply down and it has come back to some extent, but still losing more than 2 . There was a report on mesothelioma. Net that an upcoming trial regarding that illness could reveal some sort of details about internal documents at Johnson Johnson that would be damaging in some way. This is an unconfirmed report, but as we know, sometimes traders Pay Attention to these things or at least triggers some algorithms. That appears to be what triggered that spike down. In terms of what is on the move both to the upside and downside, i mentioned wells fargo is the big drag today point wise. Thats after the action by the Federal Reserve that will prevent the bank from growing midst a number of areas. An analyst says the harsh fed Consent Order is rare and a strong sign of regulators frustration about the very wide swath of areas where wells had issues. That was over a jpmorgan. Apple on the flipside is one of the stocks bouncing today although it has pared some of its earlier gains. In energy, we do see crude Oil Prices Moving down to some extent. That gap set for its longest losing streak since june. Reporting another loss that was wider than estimated so those shares are down and Chesapeake Energy appears to be falling with natural gas in particular. Shery julie hyman, thank you. As julie was just telling us, stocks waiting deep into negative territory after swinging between gains and losses early this morning. The question is whether this is a correction or just a blip . This correction is not really that much of a surprise. We think the level from where its corrected is not really where we had expected it from. The timing was probably a week early. Its all logical. The bond yields rising and that is slowing a little bit into equities. It is all perfectly textbook stuff. It doesnt concern me at the moment. I think it is something we should be expecting. Idle think its a bear market yet. You have to see a correction. It cannot go up irreparably without correcting a bit. You have to go market by market and sector by sector. I think a minor correction at this point is pretty healthy. Shery for more, lets bring in jeffrey klein. Great to have you with us. Bridgwater weighing into the conversation through linkedin, saying the declines are minor corrections and typical late cycle behavior. What is your assessment . Jeffrey it is interesting to see how stocks have waffled a little bit as bond yields have as well. Be a certainly seems to connection between the movement in the bond market and what happening with stocks. This pullback, while we have had many over the last eight years or so, is completely different from everyone that preceded it. This one unlike the others that were about weakening growth and fears of deflation, this was about to much growth and fears of inflation and what a fed or other Central Banks might do to keep that inflationary pressure. That can also be a precursor to recession. However, thats way down the road from here. This being about way too much growth rather than too little limits the extent of the pullback. Theres a little bit more to go as bond yields rise, but the should be a well contained pullback. Vonnie what is the relationship with bond yields though . We saw at selling off as equities were selling off. Its not often that happens. Jeffrey thats right. Thats the market reassessing the outlook not just for inflation but across all Asset Classes. They were affected by this even outside the traditional ones. Thats important. This is a market thats really been focused on is there enough growth . Now its recognizing that there is. The thing that can calm them is that inflation is pretty good for profits. We will hear from a number of companies this week as well about how the results are improving. That is on the back of higher growth, butbetter also some rising prices and increasing Pricing Power for many industries. Shery the chart is showing you how the 10 year yield has shot up while the s p 500 has just plunged. As ubs says, they dont want to reduce their exposure to stocks as long as the recent rising bond yields moderate. Do you stay invested . Jeffrey i absolutely think you stay invested. This is about to much growth and not too little. Bond yields can continue to move up and the bond market is probably in a bear market. That is a different than what we think about for a bear market for the stock market, which is like a grizzly. Its more like a teddy bear. A 2 down here is a bad year for the bond market. That was friday or more for the stock market. If you stay invested, keep a balanced portfolio. The important thing is that usually before the meltdown, which may be could be as early as 2019 or 2020 as we head toward the next recession, there is a melt up. We have seen increasing signs we are in a melt up environment. Just to stay in your seats and doubledigit returns ahead of that downturn. Vonnie take us through the scenario because we are seeing in europe a lot of companies missing estimates even as we see signs of inflation here and there. Here in the u. S. As well, you are not exactly call it a stellar quarter. Its been a nice quarter with companies beating, but it has not been stellar. As we move out through the next quarter or two, if companies do continue to raise wages, if consumers have a little bit more to spend, if the dollar continues to get weaker so exports might be lifted, take us through the scenario that brings. Do we get more Consumer Spending . Do Companies Get stronger on all accounts . Is that strength offset by dollar weakness . Jeffrey usually when we see this type of rising cost pressures, we actually tendency revenues rise even faster than costs. That is good news for businesses. Across much of the world, the msci world index is showing profits on a yearoveryear basis up 30 . Dont expect that pace to continue as some of these costs rise. Certainly brought economic Global Growth is powering much of that. It is not just u. S. Tax cut. It is not just Consumer Spending here or there. Business spending is taking up. Cap x is finally beginning to pick back up. Almost the business spending side has been neglected for so long that it may begin to come back. Particularly in areas Like Technology where investors have been focused on the Consumer Spending side. Business might be an increasing place to focus. Shery would you stay invested here in the United States or abroad . Jeffrey the u. S. Market moves very much like the tech sector. We think tech could do very well. One of the key areas that benefits from a rise in Interest Rates and inflation is the financial sector. That is a sector that is much more exposed around the rest of the world. The rest of the world is overweight financials. Abroad globally diverse Asset Allocation makes that. Vonnie janet yellen was leaving. She left a couple things behind her, not the least of all the wells fargo act, which had nothing to do with her leaving. That was in the works anyway. There was also the idea that there might be bubbles. She was actually a lot more forceful than i wouldve expected and outgoing chair to be in raising that possibility. Do you see any potential for bubbles anywhere, jeffrey . Jeffrey in private assets, there does seem to have been a lot of money coming in and valuations very high. Thats an area to look at. The liquidity of that market means that if something were to happen come the selling in order to generate capital might come out of the public markets. The good news is that we are not seeing a bubble developed anywhere there is a lot of leverage among investors. We know during the housing boom that it was in the Banking Sector with enormous amounts of leverage. Where we see potential or bubbles is in the private sector and areas where endowments and other types of investors are overweight. What that means is that there is not the leveraged to create a cascading effect and a broad downturn. Hopefully the fallout from any doubles will be fairly more contained in prior downturns. Vonnie thanks to jeffrey kleintop, Charles Schwab chief global strategist. The Federal Reserve just devised harsh new punishment after wells fargo landed scandal after scandal. The stock is lower in reaction, down 7. 5 . Why this decision could haunt every big bank next. Shery lets now take a look at a live shot of President Trump leaving joint base angers. He is heading to cincinnati to give a speech on his tax reform bill. He will talk to a Manufacturing Company there and he will be speaking to the crowd before this, coming at a time when house and senate staff are working on another stopgap funding bill. Live from new york, this is bloomberg. Vonnie this is Bloomberg Markets. I am vonnie quinn. Shery i am sherry quint. Yellens final act. They filed a ceaseanddesist letter with the lender having its rating cut by three analysts and fell the most in more than three years after the fed band the bank from growing until convince his authorities it is addressing shortcomings. Michael moore is bloombergs team leader. This was a pretty harsh Consent Order and also pretty unique. Michael the fed itself called it unprecedented. Typically you see the fed talk about board oversight and putting in controls, but the asset cap was what was unique here, saying that wells fargo cant grow its assets until it shows it has made progress on this. That can have some longerterm effects than just a fine. Vonnie it is great really. Its like an adult disciplining a child. It is saying you cannot taken deposit until you are old enough to be able to manage those deposits and know what you are doing with those deposits. Wells fargo was defrauding people that were depositing money. It should not be allowed to taken deposit. Michael that was the case the fed was making. It also seemed to indicate that it was not happy with the pace of wells fargo cleaning up its act. Wasember 2016 was when this first disclosed. Since then, number of other scandals have come out in the auto lending and mortgage lending. I think that is really what it has been about. Its not just one issue but a number of issues. There had some time to clean it up and i think the fed is looking for them to speed that up. Shery the cap on total assets how much is that going to cost . Michael it could impact profit by 300 million to 400 million next year and puts them at a disadvantage if other major banks are looking to grow in the Consumer Lending areas. Wells fargo is somewhat restrained in that. They could take some measures on the wholesale side to balance that out, but certainly its a disadvantage. Vonnie who is this an opportunity for . Who might the next direct competitor be . Michael the obvious candidates are the other large banks like chase, bank of america, but you have also seen growth in other areas. Quicken has certainly boosted its mortgage lending and become a competitor with wells on that front. You saw the ad last night in the super bowl calling themselves the largest mortgage lender. It is by some measures yes and other measures no. Certainly the banks are seeing a lot more competition. Shery i missed that ad. Usually when you get these crackdowns on thanks, you had jpmorgan also being investigated. How do banks come out of it . Michael the difference here is that the banks have all had their turn in the spotlight, but when you face the fine or have to do consumer relief, it has not had that long of an impact. You saw jpmorgan pay a lot of money for years ago. They bounced back pretty quickly angry assets the next year. Last year jpmorgan was setting the profit records. The fear for investors here is that this will weigh on wells than for a longer period you have seen in past cases. Shery despite what is happening here with the fed, the losses continue. The investigations continue. They are still in the background for wells fargo. Michael that is what a lot of analysts have pointed out today. This may not be the last shoe to drop. There are a number of outstanding investigations or probes out there. Wells fargo might not be done even if they satisfy the fed. Vonnie michael, great to have you here. Shery thank you so much. Michael moore leading our u. S. Finance coverage. Vonnie the reason i jumped in as we have breaking news crossing the bloomberg. Disney is set to be repairing for a competing bid for fox according to cnbc. Cmcnbc saying the competing bid coming from comcast. Comcast had engaged in a review of fox assets. Several months later we got the news that disney was going to buy fox assets. Now according to cnbc, disney is preparing for a rival com comcast bid. Disney right now is down 1 in the overall market that is down. We have comcast also moving today. It is down 2. 7 now, dropping sharply on that news. This is bloomberg. Abigail you are watching Bloomberg Markets. Time for our new segment called charting futures where we dive into the future markets through charts. We are looking at the two two most basic Asset Classes out there stocks and bonds. The s p 500 last week having its since january 2016 and many think that the trigger for the pullback for stocks was the rise in rates. They may make a lot of sense to figure out what could be next for yields. If we look at a longterm chart of the 10 year yield the bloomberg, this is g btv 3652. It goes all the way back to 1980. This downtrend in the 10 year yield is the great bull market in bonds. We also see that in the past that the 10 year yield has tended to climb back up to the trendline. Right now below it suggesting the 10 year yield and other reasons having to deal with congestions above 3 and maybe above 3. 5 which would concern a bear market and bonds. That could be bearish for stocks. Joining me to talk about this is Michael Rourke who has nearly 25 years of street experience with a third of that as a traitor. Thanks so much for taking the time. You think one of the top trades is to be short both stocks and bonds. Lets handle the stock side of it today. Before we do that, why would you want to do this for the futures market . Trades sixe s p 500 days a week nearly 24 hours a day and its one of the deepest and most liquid markets in the world. The futures market allows you flex ability because it affords leverage and low transaction costs. Abigail that is the why. Lets look at the s p 500 futures contract table, which most professional traders use. Can you talk about this and outline your trade using this contract table . Michael on the bloomberg terminal, when you hit the contract table up, you can see the mini futures have quarterly expirations. The most active contract is going to be this front one march 2018 contract. If you see over there, the open interest in the volume is very active and very liquid. If you want to sell futures, you can sell this contract. If you want to extend the trade beyond expiration, you would just roll the contract forward. Abigail i would think of professional traders is using this, but this is for Retail Investors using features as well. Michael we are seen this democracy tatian democratization so you see many retailers offering this to their clients now so Retail Investors can be involved. Highly available so the leverage and liquidity attractive to Retail Investors as well. The trade you just outlined is speculating. What about hedging because that is the other purpose for futures . Michael youll see many portfolios have stocks they love and they want to hold. If you trade in and out of those stocks and have. Th periods of volatility, you use the transaction cost. You hedge your transition and that low transaction cost allows you to hold on to your stocks while hedging some of your risk away. Abigail can you talk to us quickly about the contract side . Michael one contract is about 140,000 worth of exposure. It is 50 times the price level of the s p 500 index. Abigail relative to the volatility, we were at one point slightly higher in the s p 500, but down at this point nearly 1 . You continue to expect to see the downside. To see morexpect weakness, but i think the hedging aspect is key for those who want to remain long. You can use this as a way to reduce your risk and exposure while hanging onto the stocks. Abigail great insight. Really appreciate all the insights you brought to us around the chart of the futures market. Very helpful. From new york, this is bloomberg. Welcome, from bloomberg World Headquarters in new york. Shery this is Bloomberg Markets. The selloff continues in equities after the worst week for global stocks in two years. We are seeing the dow falling more than 1 , the lowest in a month right now. The rally in tech is helping a little bit, but not enough to green. Index in the energy and Health Care Stocks are leading the decline. 500 is down 1 10 of 1 . Natural gas, wti, all falling. Nasdaq is down 6 10 of 1 . Take a look at what the dollar is doing. The risk appetite, remaining surprise that the dollar is getting a leg up, up 3 10 of 1 . We are seeing the 210 spread widening for the third consecutive session, though the selloff in treasury seems to have halted for the time being and we are seeing a bit of a bounce back. The emerging markets index is losing more than 1 and is at a threeweek low. To bloomberg get first word news with taylor riggs. Protests over Health Care Funding and the u. K. Are being utilized by President Trump to attack democrats were pushing for universal health care. Inusands of people marching london on saturday, demanding more government money for the u. K. s overburdened National Health service. Jerome powell hasnt sworn in as chairman of the Federal Reserve, replacing janet yellen. She was not reappointed by President Trump for a second term. Howell outlined his goals in a video message. Unemployment is low, the economy is growing. Our decisions on Monetary Policy will support continued Economic Growth and price stability. He also promised better communication with the public. The former sports doctor that sexually abused 250 women and girls was sentenced today to a 143 years behind bars. Larry nassar pled guilty to molesting girls at the michigan gymnastics club. He has already been sentenced to 175 years in prison in another county and to a 60 year federal term for child pornography crimes. The maldive government has declared a 50 day state of emergency in the political crisis between the president and the judiciary, coming over the orders to release a group of imprisoned opposition leaders. The surprise ruling last week directing the release of the leaders lead to rising tensions, with protests filling into the streets and soldiers in riot here trying to control the crowd. Global news, 24 hours per day, powered by 2700 journalists and analysts in 120 countries. Im taylor riggs, this is bloomberg. Jerome powell has officially taken over at the helm of the Federal Reserve. He inherits the u. S. Economy and on third longest expansion record, with unemployment and inflation near historically low levels. As last weeks drop in equity prices suggests, there could be complications. Joining us now, you lena elaine a. Elaina. There will be a lot of challenges. Actually, astime, we mentioned. The Unemployment Rate is run is low. Inflation is still pretty low. I think that in terms of challenges, there will be a lot. The main one is how the fed will manage the next crisis. Power will mostly most likely preside over the next downturn in the economy. So, you know, in the previous expansions, the fed raise rates by 3. 5 . Theymbat the downturn, lowered rates by five point 5 and 5. 25 percentage points. So, big moves. They dont have the buffer to do that this time around. They will probably have to play with unconventional Monetary Policy tools. This will be up to the new fed chair to manage. News forally great powell, coming in. At the same time he will have to convince investors, or sort of pressure, there will be a lot of and a faster rate hike than expected. Yelena the markets might help them, to some extent. If the market is correct, there is not so much excitement. The global prize, financial conditions, pricing a little bit. They might do some job for the fed, actually. But the fed will probably not need to hike as fast as many expect. Hikesnk that the rate will be gradual. The data is still allowing them to do so. Dont think that these globalization signals that we have been seeing portend disastrous times, in the sense that the fed is already behind the curve . Yelena the keyword is little signs. I think we will continue to see gradual increases in wages. We have already seen them in the data. Not just in the average early earnings. Index has been picking up gradually. Startinguct they do is to rebound. I think we will continue to see that throughout the years. We will see it pick up with inflation for consumers on the back of that. But in no way will it be a big flareup. The fed will be able to raise rates gradually. Talking about running out of options when it comes to the monetary side, what about the fiscal side . Nearly 1 trillion now . Exactly. That will complicate the feds job as well. It will be up to the fed again to save the world. Powell put out a video today, thats the first time any fed chairman has done that, right . Yelena i havent seen one like that. It was very straightforward, up to the point. Shery can we in for anything from that question mark is he saying that continuation best there will be a continuation of communication . Is he saying there will definitely be fed increases in the rates . Yelena i think that the purpose of that was to portray the sense of continuation of policy from the yellen fed and calm down the markets, saying that this is what we are going to do, we are going to continue the same type of policy, this is our dual mandate and this is what we are here for. The same time, we have so many new governors. The people coming in could be so much more hawkish yelena . Yelena one of the most hawkish said that hes not going to pursue the position, right, that he was considered for . I think, you know, mainly there will be economists and the names that were there, they are economists. They are respected. It will be more likewise economists. Wise economists. They will do the job. , here thank you, yelena with the latest on the fed. We will have more on the path forward for the central bank, with an exclusive interview with minneapolis fed president Neel Kashkari. Up, could the crisis keep sliding as bitcoin continues to thousand 18 in the red . There are only more concerns ahead. This is bloomberg. Shery s isshery this is Bloomberg Markets. Vonnie a potential big deal in the agricultural business, shares of bundy are rising. Julie is here with the details. Julie Archer Daniels midland could be the acquirer, in this case. Its really interesting, the Agricultural Industry is not that large. They act as a middleman between farmers and end markets, processing of seeds, things like that. Is in advanced talks to buy the company. There could be an agreement as early as this week. They report earnings tomorrow. Ge, if you look at the market cap, there are only four companies that dominate. Adm, bunge, cargo, and the we dreyfuss. Because of whats been going on in the Agricultural Industry to prices, we have seen profits fall for some of these. That is why it might now be a time for it to look like a deal. What implications with this have for other industries . Julie looking at some sort of combination, there would a deal for falling prices. We are hearing about rising input costs. Would also be getting additional Pricing Power. Weve got the stats surrounding the deal here. You are looking at, particularly when it comes to revenue, a Sizable Company of 100 billion in revenue. There you could be talking about a more formidable negotiator when it comes to prices, if you got a company of that kind of size. Julie hyman, thank you for the latest on bunge. Julie fun to say. Shery i know, it is. [laughter] as the, going lower Global Equity selloff deepened and investors migrated towards havens. Annie. Us to discuss, great to have you here to talk us through this. What is the biggest concern right now . . Ust more regulation there have been big, regulatory selloffs. Including in the u. S. They are starting to ask some tough questions about some of the big problems we have seen at bitcoin, recently. On top of that, you have big banks and credit card issuers putting big freezes on buying cryptocurrencies. Banks dont want default rates going up on credit cards for the lincoln sees, so they are not prepared to allow someone to gamble on bitcoin . Theres a general feeling that it could be to risky to allow Credit Card Companies to buy on credit, especially those who are more suspect or less wellknown. Or, for example, to get a stake in an ipo the could turn out to be fraudulent. Someone could call their Credit Card Company and say that that turned out to be a fraud. Chart 3665, showing you that its off from the alltime high in december. Its not really the most it has fallen in the past, its just one of many selloffs that bitcoin has seen. Yet each time it sold off, we saw the prices recover. Analysts saying right now . Could we see another bounce back of this magnitude . What are investors saying . Its an employing important point that there have been much larger selloffs. Its just that this one, there was such a rally in december that we saw and now it has been such a dramatic turn down in the new year. Other thing to witness, bitcoin is a lot lower share of the market now than it used to be. Used to be 80 of the entire market, now there are so many cryptocurrency competitors getting more and more popular. Annie thats right, there are all of these different competitors coming in, coins that no one ever expected to take off that have risen through the ranks, a little bit. One other point is that some supporters have compared it to stored value and we have seen, as gold has held steady, bitcoin has seen this huge slide with risky assets falling vonnie . Some noted strategists are calling this a very interesting. They are not telling you to buy, but they are not saying that they are not going away anytime soon. Annie plenty of people are saying, listen, you will see selloffs. Like we have seen in the past, genetic selloffs of greater magnitude, bitcoin has bounced back from all of those, so why not, again . Shery also, you never know when the where the buying is coming from. When you have political instability in some countries, they have used bitcoin as a isrce of stability, which intriguing. Like venezuela. We have seen african countries do that, anytime we have Political Uncertainty there. Annie thats right. Its interesting that in some places where the sovereign government doesnt have an as in easy of a timekeeping currency fluctuations under check, it can be a better stored value, a better place for you to put your money. Vonnie so, what is next . Toie a couple of things keep an eye on, reports that north korea might be hacking into targeting south korea on the cryptocurrency front. Thats definitely something to keep an eye on. Keep your finger on the pulse of various governments across the world, including india and south korea and how their thinking evolved around cryptocurrency trading. Vonnie a wealth of stories on this on the bloomberg from out her stories. Thanks for covering cryptocurrency for us. Shery time for the Bloomberg Business flash, a look at the biggest stories in the news right now. Deutsche bank, returning to an aria of credit derivatives. According to those familiar, the german lot german lender told clients that it starts to wants to start making some markets tied to individual companies. The bank at start trading as early as the second quarter. Planning to spend 7. 4 billion on electric cars by 2022. According to business insider, thats double the 3. 7 billion previously estimated. Travelingapable of 400 to 600 miles on a single charge and it is expected to arrive in 2019. The starting price is around 75,000, similar to the starting price of teslas model s. Customersing attention spans, five seconds, thats the timeframe the company to capture online consumers. They are seeking new relevance and will be looking into instagram and youtube to drive future sales. The five seconds will be devoted to how to videos and personal chats. That is your business flash update. Is ourconds, that attention span. Vonnie i want to dispute that. Vonnie sorry, you lost me. [laughter] vonnie coming up, has a peril lost its appeal . Lost itsel appeal . This is bloomberg. Is Bloomberg Markets. Im Shery Ahn Bloomberg markets. Industry haspparel a big problem. Blamenot just amazon to for the industrys decline, as this has been brewing for decades. Joining us to discuss, lindsay. We talk about the amazon affect and how chains have been going out of fashion. But really, the answer is that people dont care about clothes as much anymore. Thats a big heart of it. You only need one wardrobe, now. You are not dressing to fully for work than the weekend or going out. Are more interesting interested in mixing highs and lows, you can get a great deal on basics but maybe you spend more on a hand bag or a down coat. There are just a lot of Different Things coming at the retail and Apparel Industries that are cutting things away. Be online to to fix your problems. The answer is you have to have a great product at a great price and no one seems to have the right answer right now. Look at that chart. Look at that chart. Experiences, holding steady, slightly up. People are just not as interested. Is it just fashion, or clothes . I cant imagine people not caring about fashion. They still care, but the way that they express that is a lot different. You dont have to pick up vote to figure out what is in style. Brands have been trying to react to this, but the power has really gone away from the fashion houses and towards the consumer in terms of setting what will be on trend. Larger trends are hanging on for a lot longer. We saw technology and apparel in that, right . Technology, more on more on your experiences because you want to have a great instagram photo. The fact of the matter is that a lot of clothing has gotten a lot cheaper. People are much more brand loyal and value conscious. How many others will go bankrupt . Weirdly, we are seeing a resurgence for brands like gap or whatever. The people i have talked to think that there will be more store closures in the next couple of years. We will see more companies go away entirely. If you dont have a reason for existence, your Loyal Customer base is in just going to prop you up. For many of them, that doesnt just mean being smaller. Maybe you are really good at genes. That is how madewell got to be as successful as it did. They wont he a huge multibillion dollar brand. I love how this has to do with the social development of an economy. In china you see them buying less physical goods and getting more experiences, which i guess is what has been happening in the u. S. For a long time. Specifically,cans we express status through social media, now, and in a lot of ways that means experiences. I will take a photo of this great state that i had. Im curious, how did we get consumers to change their behavior . Seems like at one point, you couldnt stop evil spending. They just couldnt save. Is it that wages have been stagnant for so long, people dont have the discretionary money that they had, and they have to save . Or did they feel it was frivolous to care about things like this . Lindsey the discounters, the fashion players have pushed prices downwards. Clothing is one of the only things thats gotten less expensive over time. Its not buying new clothes, its that they dont have to spend as much of their budget on it anymore and they dont. I called at the end of capitalism as we know it. Am i going too far . [laughter] shery thank you. Coming up, an interview with Neel Kashkari on the path forward for the Federal Reserve. Thats 1 p. M. , in new york, 6 p. M. In london. Aery a quick vonnie quick reminder, you can always catch everything on the bloomberg at tv. Its our own streaming service. This is bloomberg. London inin washington, 6 a. M. In hong kong. David welcome to Bloomberg Markets balance of power, with a focus on the intersection between politics and the economy. Shery the battle over immigration heats up. The president , repeating that he will not accept a daca deal without funding for a border wall. Senator mccain and senator kunz, floating a new bipartisan proposal. The path forward for the fed, will strong wage gains lead to wageterview increase in hikes . An exclusive interview with Neel Kashkari, coming up. And we have an interview with as a hutchinson. What about immigration . We will explore that and more. David markets are moving again, today, and not in a good way. Heres julie hyman. Julie