Julie hyman is here with the latest. Julie hitting records for the dow and the s p 500. , thea bit of Economic Data job openings a little bit of a dated number, or december and it fell to 5. 5. Decline in those jobs openings, but the november number was revised lower, and the december number was a little bit lighter than had been estimated, so a bit more color on the job market in the u. S. As the fed says we are approaching full employment. Small. Ements are fairly our trip to these records has been quite incremental. Stats, it some of the has been 61 days since the last 1 move up or down, and the s p 500. 62 days was the longest in this current market. Sinceys was the longest 1945. If we extend into tomorrow, that will match the longest streak in the current bull market. As we talk about the day after day, this drumbeat of low volatility, this is what this is indicative of. In terms of todays session, one of the bigger moves we are seeing is in general motors. I want to show the movement in the stock which is now down 5. 5 . This is intraday price from the premarket. Came out withny earnings, the stock rose as gm was reporting profit that beat estimates. The stocks fell right around our interview with the chief Financial Officer as he talked about a border adjustment tax being too complicated. That may have been one of the catalysts for the stock coming down and the companys profit quarterid fall in the they just reported, even as gm says they could expand. Taking a look at the u. S. Dollar, rebounding for the second straight session, we heard from Philadelphia Fed sident patrick meeting reiterating of the fed is live. To ask thearts question, is the euro beginning to price in Political Risk . The euro is falling against the dollar. The stoxx 600 is rising, led by real estate resources. Blackrock raising its exposure to overweight from neutral. Investors have become too skeptical in the region well the risk priced into the upcoming german and french elections is overstated. A busy day for the oil companies, bp missing estimates. Higher oil prices failing to compensate for lower income from refining, that is a theme we are seeing across the industry. Unlike shell and exxon, which said cash flow cover spending and dividends of current oil prices, bp says it would not achieve that until the end of the year and only if brent crude rises to 60 a barrel. Deepening rates down writedowns in its u. S. Shale assets, it has been cutting costs to whether a slowdown in oil prices. And bp exxon and shell all releasing results that have missed estimates, showing that these big global oil majors still have a long way to go before a full recovery and lets stick to the french theme. As much as 5 , the biggest drop since 27th, they posted fourthquarter profits that missed estimates as the french Consumer Banking business, the bank is going to threat spend 3 billion euros over the next three years to upgrade Digital Banking services and increased automation and also squeeze out 3. 4 billion euros in cost. Those other three big players in france, all performing the same in the last year. Staying on the markets, the dow and the nasdaq are hitting records, overall, though it seems u. S. Stocks might be stuck in neutral. The s p 500 has not seen a 1 move in either direction since december 7 as investors keep a close eye on the rhetoric coming on President Trumps administration. Rate we go from here . Our next guest has been assessing the policies. Jeremy siegel is professor of finance in philadelphia and joins us now. You have been calling for doubt 20,000 since at least march of 2015, saying it will be fairly valued at that point. Now that we are here, are we undervalued . If trump follows the republican agenda, lower taxes and lower regulations, we could easily go 10 higher, from here. Veers into protectionism, currency manipulation, we could go 10 lower. Im pretty surprised the vix is as low as it is, that is the volatility index, given the fact that i can see a 10 higher or 10 lower, depending on which direction trump goes. The markets that it is going to be a standoff for a while and nobody is going to prevail in the short run. Vonnie how long might that take for these policies to be implemented or not, as the case may be . Everybody thought the Corporate Tax reform was going to be one of the very first and now it seems like trump has thrown everything into the mix, a little confusion on what will be priority. More more people are thinking tax reform will not be effective until 2018, i still think Corporate Tax reform will be effective in 17. It takes time to formulate it, and particularly with the controversy on the border tax, which i do not think is actually going to be put into the bill, hopefully the house will come up with a much cleaner bill in march, that the government can move forward on. Of thean you make sense lack of volatility, right now . This chart is the market risk index. The index of volatility for all the main Asset Classes and as we know, volatility is a monthly is at monthly lows and the gauge and put on top of it is the Global Economic policy uncertainty index, which is at a record level. Why are we seeing volatility so low across Asset Classes, when Economic Policy uncertainty is that heightened levels has of these geopolitical uncertainties because of these geopolitical uncertainties . Jeremy the vix moves opposite the level of the market. When the stock market is at or near its alltime highs, volatility is low. When the stock market takes a big fall, he get nervous and they send premiums up. One reason the fix is low is a reflection of the fact that there is more confidence. The bulls are coming out. There is less fear of a big market drop. At the beginning of my interview, i mentioned if trump veers into a protectionist mode, i can see a 10 drop. There is political wrist risk. The players of these markets looking for the market is and as you mentioned, it has been how many days, 60 days where we have not anyone percent move. The data feeds into the computers that tells the players how to play the vix. Volatility, they say no future volatility. A lot of that is technical. I agree with you, that a trump moves in an adverse direction, you will see the fix jump up 15 you will see the next the vix jump up 15. Mark another chart is gold versus u. S. Bond yields. The fact that america has said watch up with a combination of rising yields and gold prices because if we see that happening combination for an extensive few quarters, the could herald a lot of volatility as it did in the 70s and 1987. Do you have preferred indicators that might tell us we are storing up possible volatility, Going Forward . Jeremy since trump has been elected, we have seen inflationary expectations as marked by the difference between the standard treasury bond and those inflation protected tips bonds rise. We have seen a rise in inflationary expectations, that we have not seen the longterm bond market fall apart in any measure, and i dont believe were going to get much above 3 , this year, maybe three and a half percent in the whole cycle. People still like these bonds, they are diversifiers, there is safety, financial risk, there is a huge demand for those treasuries. I dont know whether we will get a lot of challenge from that Interest Rate figure and inflation data, although it did move up, it is very modest. The dollar is strong. We have seen wages for more moderate than expected. There is not a lot of inflation, thereere and i think that arent that there is a lot of reason to crowd into gold at this time. Vonnie he said you might be a shortterm buyer of stocks, but for longer term investing, what would you be thinking of doing . Right now, i am in a balancing position. If we get more of the republican a 10 higher, see and if you ask me, i think that is more likely, but it is not a slamdunk, that we are not going see 10 trade war and lower. We could see a lot of things in between. We just dont know. That is uncertainty in the market and i think the market is a compelling value in the long run because i dont think Interest Rates are going to rise very much. I think people are going to still get think of stocks as incomeproducing and dividend paying despite a moderately rising rate environment. I am still for stocks in the long run, but i do see a potential past of gain and loss investors should be careful about and planning their nearterm portfolio allocations. Vonnie jeremy siegel, professor of finance at the wharton school. Mark coming up, House Speaker paul ryan and Congressional Republican leaders holding their weekly news conference. They are discussing the repeal of the Affordable Care act. Watch it on the bloomberg at live go. This is bloomberg. Mark live from london and new york, i am mark barton. Vonnie and i am vonnie quinn. The efforts of Senate Republicans to confirm President Trumps picks encountered a fresh wave of resistance. The showdown could force Vice President mike pence into the unprecedented position of breaking a tie on a cabinet nomination. Kevin cirilli joins us now from capitol hill with the latest. Why would this be so significant that he breaks the time and votes in favor of devos . The first timee the Vice President has to cast a tiebreaking vote on a cabinet pick. Signals thereit is growing dissension within republic vulcan ranks in the senate when you have two in the Republican Party coming out against this pic of President Trumps to leave the department of education, it shows that the grassroots community, particularly the Teachers Union have the heavenly flooded capitol hill with a bevy of phone calls urging lawmakers to vote against this pic. The white house is confident they have the vote, it is still expected with Vice President pence help to go through, but not accepting the argument they want to be having with the backdrop being a court ruling still underway regarding President Trumps executive orders on immigration. Vonnie the federal court of Appeals Holding a cap that telephone hearing there will likely be more pushback from geo peers surrounding and it is not going to be a good week for President Trump for solidarity of the party. Kevin i spoke with capitol hill aides who tell me they are disappointed that the way that this was rolled out, regarding President Trumps executive order on the temporary travel ban, and it also comes as many in the business community, particularly Silicon Valley have come out against the actions. To the white house lose this court ruling later this evening, that would set up an appeals process that could find this all the way to the supreme court, again, a reminder, not all the judges are even on the supreme court. Mark we are hearing from the new secretary of Homeland Security, a bit later, he will appear before a Homeland Security committee. What are we expecting. Thats what we expecting . Kevin democrats will question regard to the Intelligence Community and will raise questions about how the illustration is interacting with the International Community and also with the Intelligence Community, and the second point that i would make is he is going to face questions on President Trumps executive order regarding the temporary travel ban. To pounce ontinue opposition and republicans try to hold firm in supporting the white house. Vonnie the president speaking in florida, yesterday, having maybe had a controversial conversation with troops and military did yesterday goes down a little bit better . To the broaders point of how democrats and even some republicans within President Trumps own party, people like senator Lindsey Graham and john mccain, who have consistently raised concerns about how the white house is communicating with the Intelligence Community, and you are seeing that at every twist and turn of the president s meeting with folks, but the white house is confident that he is able to maintain those relationships. Vonnie are thanks to kevin cirilli, from capitol hill. Our thanks from kevin cirilli, from capitol hill. We have breaking news on motorola. Julie we are watching the shares dropped by nearly 3. 5 . ,he culprit is Citroen Research which legally talks about shortselling targets and apparently Motorola Solutions by been mentioned cautiously citroen, they have a 45 price target on the stock. I am trying to look for more details on exactly what the company said and apparently, citroen saying that the book of the companys profits come from selling overpriced handsets into a Single Source contract. We will try to get in touch with Motorola Solutions for comment and give you more details. In the meantime, we see a decline of almost 4 in these shares. Vonnie we will monitor that situation, closely. More markets after this. Mark this is bloomberg markets. Vonnie it is time for our tuesday uts segment with julie hyman. Julie today, we are talking about smart beta, otherwise known as Factor Investing. Some are concerned the strategies are becoming less potent or maybe even could stop working and enough another wall street fat. Joining me to discuss is the senior etf annual analyst at bloomberg intelligence. We have seen huge growth in this area, that is one of the reasons we are talking about it every week, what are some of the arguments for and against it . You see these articles come out every quarter. Is look, as etfs open up this kind of investing, more fuel will pile in and it will run the way the factors work. Just to arguments against that, that this is really active, and we see a lot of money coming out of active mutual funds into eds and smart beta only takes 20 of that, so you could argue there is less money chasing factors and the second thing is Factor Investing really is just a result of investors behaving irrationally. Example,se value as an it has been around for 80 years and this year, it is up 13 and the market is up to six. The reason people chase something, they forget about something and then in return, the factor works, so as long as investors keep behaving irrationally, Factor Investing should be alive and well. Vonnie the performance jake julie the performance chasing you were talking about, is that an issue . Is it going to present challenges for smart beta, Going Forward . We look at returns of the smart beta etf, with a dollar weighted return. Investors are chasing smart beta etf and this is possibly a way that they feel sour on them, but the irony is reform is chasing is why the factors work in the first place. If you are disciplined and you stay home which is what some investors do, that is how you can do best with Factor Investing, but if everybody did the. That would decrease potency of the factors julie even decreased the potency of the factors. Julie s product confusion a concern, here . Overere are there is 500 smart data etf and the question you have to ask is how much exposure are you getting to the factor . You closerng to get to the factor because it is weighted by value, where is the weighted byue is market cap, so in the example drlier, blu e is up 13 , iw is up they are less exposed to the factor and that is a key question. Julie helpful criteria for looking at the smart beta etf. Still ahead, we are speaking with jim lockhart, ice chairman of wl ross and company. People vice chairman of wl ross and company. This is bloomberg. Vonnie live from bloomberg World Headquarters in new york and london, i am vonnie quinn. Mark and i am mark barton, this is bloomberg markets. Lets check in on the first word news with emma chandra. Emma happening right now on capitol hill, u. S. Homeland security secretary john kelly is testifying before the house Homeland SecurityHomeland Security committee about the security americas borders. Secretary kelly says he is committed to trumps wall plan and says that the president s travel order is lawful and constitutional. You can watch the full hearing on Bloomberg Live go. President trump was tweeting early about russias president , vladimir putin. The president wrote that he does have any deals in russia and that quote, the haters are going crazy. Sarcastically thanked President Trump for revealing what he says is the real face of the u. S. That ayatollah says iran will respond to unit the United States on friday. Afghanistan, a suicide bomber struck outside the country supreme court, at least 19 people were killed and more than 40 others were wounded. The taliban has been targeting the afghan judiciary since 2003. Back in the u. S. , harvard raised a record 1 billion in donations in fiscal 2016, more than offset by 2 billion in investment losses and spending at the worlds richest college according to the counsel for eight and education. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Vonnie thank you, for that. Where is wl ross and company investing, today . Vicechairman,he james lockhart. Boardved on the oversight seven private equity funds . Emma some james somewhere around there. Been very active in investing a lot of this in a lot of different industries. We go from industry to industry. We try to find Good Management teams and give them capital to grow. We are spending more time and Financial Services, which is one , and probably do selling more in the u. S. Because of the big recovery we have had and Financial Services. Vonnie what are you selling, and the u. S. And where did you get your value . U. S. , andthe Financial Services, we do a whole series of community banks, sort of three to 10 billion, rolled up and a five different platforms. We sold two of them already and we have a third one acquired by first interstate, and we have had a whole series of Mortgage Companies servicing and origination and we sold three of the four we had. We are still seeing a lot of opportunity, but mainly in europe. You are getting out of Financial Services, you think that is an area that has been picked over. James obviously with deregulation being talked about a lot, higher Interest Rates, that really helps banks. Not relations come back to normal levels, so does time for us to start thinking about exits. Vonnie what do you think about the Political Landscape in the coming 12 months . Are you more concerned . James there is a lot of uncertainty, no doubt about it will stop we have a new resident and brexit in the u k, i think there will be at least four elections in europe, maybe even five if italy does it. A lot of uncertainty out there. On the other hand, the economy is recovering and we are seeing better growth, unemployment is coming down. There are opportunities, out there. Vonnie we would describe this as a low growth, low Interest Rate world. Where are we in that cycle . James we are starting to see Interest Rate increases in the u. S. , but in the European Countries as well. France and italy and some of the other ones that are worried about Interest Rates starting to move up. The germans are still very low and the swiss are very low. We leaveust before Financial Services, i youre still interested in Mortgage Rates in the u. S. And where do you see the future of housing . James i think housing will be strong. Millennials will start to buy houses at some point, we hope. My kids have. Housing will continue to grow, and i think the real issue will be mortgage originations because we have had a refinancing boom with lower Interest Rates and Mortgage Rates have moved up, we will see less financing refinancings, but more people purchasing houses and getting mortgages. I would think mortgages will shrink by about 20 , this year but still be reasonably strong. Vonnie there may be opportunities in that space. Lets move to europe. We have been involved in europe in a wild you have been involved in europe for a while. Then brexit happened. Now what does europe look like . James there are still some opportunities there, but you have to be careful. We were very successful in the bank of ireland. We have a Real Estate Fund in ireland as well that is doing very well. Injust sold our last piece the that had grown dramatically in five years. We have seen some good opportunities, there and we are continuing to look in spain, the u. K. There are still some opportunities, certainly in scandinavia,ome in so there are pockets of opportunity and lots of different places. Do you mean commercial real estate or Financial Services . James real estate loans in ireland, and we also have a joint fund with invesco and real estate that has been fairly active in europe, as well. Vonnie you are betting on ireland more than germany when it comes to commercial real estate or even the netherlands on the basis of potential hubs for banks and so forth. James we spend a lot of time in ireland and we have done reasonably well with a good team that we partnered with, and we think it is going to have some ups and downs, certainly some of their exports are going to suffer with where the pound is, now, but on the other hand, there will be some Financial Services moving into dublin, and that should help our real estate. Vonnie you still have not touched italy. James we have looked at italy. We have not gotten comfortable with their legal system, and the Bank Regulatory system. It is a possibility. We look to spain, we are actively looking at spain at the moment, and we have an investment in greece and cyprus as well. Vonnie you were nibbling in the permian basin. Will there be more consolidation, has that been picked over . James there was a lot of opportunity in the permian basin. Ot of Companies Got to borrow too much money and now have to balance out straighten out the balance sheet. There are some that have attractive reserves, but ugly Balance Sheets and that will be an opportunity to buy debt. Vonnie you really examined the reserves. James we have a team that are experts in the whole area of Energy Reserves and work with consultants and they have done a good job. Vonnie when did we had the bottom of that cycle . James we may have already hit it. If opec six to the deal of cutting back, we may have bottomed out and this could be a prolonged bottom, but we may have bottomed out. Dont value it that much higher than today, maybe about 60 a barrel. Vonnie retail in the u. S. . James retail is something we have historically not done. A lot of Retail Companies are in trouble, but we like assets and retail candy pretty fickle can be pretty fickle. Building materials, construction materials, there may be calls for them in the next six months. James we have been active in Building Materials and we think given the infrastructure plan, the 1 trillion infrastructure plan that President Trump has talked about, certainly building the wall or even pieces is going to take a lot of Building Materials. We think there is an opportunity there between the infrastructure and potential. Vonnie can you give us any specifics . We have been mainly in the concrete aggregate space which is the real basics of building. ,onnie latin america and asia briefly, i know you have been looking at brazil. No more interest in mexico . James the Political Risk in mexico is very large at the moment, we are spending some time in brazil, we think that economy will come back, the government is changing, so it is somewhat more stable and in asia, we have been active on and off for a long time. We have a Clean Energy Fund in beijing, and we work well with the chinese, over the years. How many fed rate hikes in the next year and the dollar increasing in strength or decreasing and strength . James we have been wrong so many times, i do not want to have a castiron promise on that one. The dollar will they continue to strengthen with Interest Rates going up. Vonnie jim lockhart, thank you. Vice chairman of wl ross and company. Mark excellent interview. Coming up, entertainment giant disney reports earnings. They will give us a glimpse into the global media industry. We will look at media stocks, next. Vonnie the latest headlines from President Trump ticky meeting with county sheriffs. This tape just came out moments ago, the resident telling the sheriffs he is committed to Border Security and that the immigration fight could go to the supreme court, we have to have security in our country. He also mentioned the picked for attorney general, set just. Jeff sessions trump holds hopes he will be named, soon. Mark it is going to be a big day for media stocks. Disney reporting earnings after the close. You are looking at the Broader Media industry. Julie i want to start with twitter. Shares are up 3 because the company is making changes to its platform. It says it has come up with new ways to make abusive tweeters less effective. It will hide the content and prevent banned users from creating new accounts. Paul sweeney with bloomberg its a litan says this could be aimed at attracting new advertisers or even making twitter more palatable as a takeover target, so that is sending shares higher. We are looking at large media companies. Fox was out with its numbers after the close, yesterday. Revenue slightly missed estimates because of currency turmoil in india. The companys film studio came up short with new releases. Elsewhere, we are not seeing much changes. Disney shares by the way have youed over the past year, can see disney in white over the past year, fox in yellow, time warner in purple. If you go back the beginning of last year, we have seen that disney has done the worst. If you look at disney over bob iger and remember the wall street journal reported the company is trying to get him to extend his term as ceo, so this is an index of Media Company pierce in white and walt disney in blue. Line is in red, so you can see under his tenure, disney has handily outperformed the rest of the sector. We will see with the company says today and that there is any news on whether he will be staying on. That his grandmother has been pretty hot in recent days. Still ahead, what would marine le pens first act be should she become the next thats the latest national populist politician to upset. This is bloomberg. Vonnie you are watching bloomberg. Mark this is your Global Business report. Fourthquarter earnings fall short of estimates. Whatny cfo tells bloomberg the doddfrank repeal could mean for business. Vonnie another greek tragedy. The imf says the company will not meet targets set by euros and creditors. As President Donald Trump reviews the boko rule, a review of the history of the regulation. Vonnie Fourth Quarter earnings meet estimate we spoke to the banks cfo and asked what a potential repeal of doddfrank could mean for his business. We will have to see, because if you go back to the g20, which give guidance to banking regulation, they said any new regulation should have no material impact, so we will have to see if mark the imf is warning that greece will not meet fiscal surplus targets set by euros of creditors. Rise tok Budget Surplus 1. 5 over the longterm, about half the forecast from european creditors who took part in the bailout. The imf said it would consider making a new loan to greece, but only if its Debt Reduction plans are credible. Ifs its Debt Reduction plans are credible. Areas, close to public transportation. The average home in the u. K. Costs eight times average earnings. If you cannot decide between a sportutility vehicle and a muscle car, Fiat Chrysler has a solution. Is building it as the worlds most powerful three row suv. It can go zero to 60 in just 4. 4 seconds. It is being unveiled, this week at the chicago auto show. Vonnie time for our blimp bloomberg quick kick where we provide context and background on issues of interest. Proposed volcker regulation, he did it in one paragraph. Four years later, regulators issued a rule based on his idea. Here is the situation. President trump has signed an order to review the rule and other regulations growing out of the dodd frank financial reform laws. A House Republicans proposal would waive the rule as banks increase capital, potentially allowing them to trade again for their own accounts, what is known as proprietary trading. In 1999, glasssteagall was repealed at the behest of big banks that promptly probably grew big trading operations. Beenrisis in 2008 had steeped in bad mortgages, but it was the trade made around those loans that the that did the bulk of the damage. President obama hope the towering stature of the inflation would lend us greater weight. The idea became law is part of the doddfrank reforms of 2010. Many on wall street insist the rule is unworkable, distinction between different categories of trades is highly subjective, they say. Chase saidjp morgan every Trading Group need a psychologist and a lawyer by their side to make sure they were not breaking the rules. Volcker responded the rule could accommodate a variety of trading. You can read more about Financial Regulation and all of our quick takes on the bloomberg. Frances National Front leader, le pen pledges to take control of the central bank and hold the brexit styled u. N. Referendum. We spoke to bloomberg for many yearsng a very topic, which is topic of hours. It is one of priority. The task force is working very hardly for some years. We have been drawing by highranking Civil Servant economic experts, people from private sector, also in a circle , which is basically a circle which is a new task force, much more related with Public Affairs than this task force is preparing, regarding all the administration the ministry of finance, there is a technical aspect of the frexit. We have the ideas and the theories, but we have concrete plans for that. Have yout least spoken to French Business about this, to the company that runs airbus, a huge employer in france that has a very complicated hedging book that would be difficult to deal with . Have you spoken to French Businesses . We have been talking to French Businesses a long time. Airbus was complaining in the past about the over evaluated euro, and its negative consequences on its business. Oppose this the private sectors and Big Companies and the national sovereignty. We have a partnership between and the private sector. The privategainst sector, we are managing and planning to make a new partnership in order to create a winwin strategy, for the people and for the country power and also for the private sector and its international business. The president ial energy coordinator. Vonnie i want to bring you some headlines from President Trumps meeting with county sheriffs. The president telling the sheriffs is committed to Border Security and that the immigration i could go to the supreme court, adding code, we have to have security in our country. Trump made mention of his pick for attorney general, senator jeff sessions. He called the delay in his confirmation quote, all politics and the president said he hopes that sessions will be nominated soon. Vonnie come mark coming up on the european close, we are following stocks. Incks are rising, second day three, stoxx 600 dollar is up, stocks up, even bonds are higher, yields falling today. The dax is higher. A slight decline in paris. A quick look at the currency board. 35 minutes away from the european close, this is bloomberg. Mark 11 00 a. M. In new york midnight in hong kong, 30 minutes left in the trading day in europe today. Vonnie this is the european close on bloomberg markets. Mark we will take you from new york to london to rome in the next hour and covering stories out of norway and china, here are the top stories on the bloomberg and around the world. How strong are the fundamentals pinning down global equities, lets explore that and look at how politics could up in the whole thing with Ronald Temple zard asset management. Vonnie paribas shares are slumping, what does this say about the state of european banks . European oil joints grappling with the new reality of an opec supply cuts boosting the price of oil, we will discuss the outlook for mark