Central Bank Meetings later in the week. In advance of that theres not as much trading going on. Were seeing volume on the s p 500. About 15 below the 20day average. Were not seeing a lot of action here today as people are amazing those big news events. Also trying to figure out how to get into work tomorrow. If you look at the range in the s p 500, youll see that we once again see this tightening range for the s p 500. Now on the 103rd day that the s p has gone without selling at least 1 . Also related to the weather, were seeing some movement in the airlines. Downward movement as American Airlines cancels all of its new york city flights for tomorrow. And you can look at american, u. A. L. , and delta all trading lower. Flight aware dotcom reports that nearly 1,400 flights have been canceled today and 3,800 tomorrow. Not just new york city but boston, philadelphia, chicago being affected by some of these cancellations as well. Well continue to watch the airlines. Getting outside of stocks and looking whats going on in the bond market today in the runup to the fed and other central Bank Meetings, we have yields climbing once again as the bond resumes 2. 61 is where were for the 10year yield. Virtually a certainty being priced into the markets now that the fed with raise rates on wednesday. Its a matter of the commentary and what continued case about the future trajectory. In the meantime were also seeing yield curves flattening to some extent. This one 67. 40. What happened to the yield curve. Were looking here at the five and 30year treshry. We saw them touch the yellow line, which is an unchanged yield curve. Even invert at some point. Were seeing a flattening yield curve at this point. Still well above that inverted curve that has traditionally been a recession signal, but going in that flattening sort of direction here. Scarlett good stuff. Thank you so much. Turning now to one of the most read stories on bloomberg today. No secret many malls have been struggling for years as americans do more and more of their shopping on line. Now they are catching eye of wall street speculators who think some will buckle under their own debt. Much the way many homeowners did nearly a deck ago in the great financial crisis. Matt joins us with the story. The storys about malls and making the connection to the big short. Its the new n. B. S. Except its a mall. What are you looking at . Matt thats what were looking at today except this time instead of home loans were looking at commerg. They largely finance shopping malls and Retail Properties across the United States. The problem is now that retailers are struggling so much with amazon and online shopping, a lot of people not going to malls and making those payments. Scarlett this has been happening for a couple years. These malls seem to limp along and survive somehow because they bring in enough money from the anchor tenants even if they are struggling. Do we have any sense of some of the delinquencies . Matt slon some are serious. Were looking at a small section of mortgages tied up in 2012, 2013, and the trip the b sections triple b sections of those bonds, the defaults on those are becoming concerning. The losses that could come from it could be very serious. Thats one reason why investors are now looking to take short positions on the bonds via an index called cmbx. Similar to the type of index we had on mortgage subprime mortgages in 2007 and 2008. Conceptionually its similar. The big thing to keep in mind is the size and scope is much different. These are a subset of malls that are tied up in much smaller section of commercial Mortgage Backed securities. The scope is not nearly in line with what we had during the crisis, but something that is definitely catching investors attention. Something we should Pay Attention to. Who are the investors . Who are the steves and michaels taking things snout are the bets not quite as big . Matt weve got a few hedge funds saying that they are taking short positions on the sector. A report came out earlier in why ear saying, explaining they think this is a bet that should be considered. The problem now, the challenge is getting investors, our crossover bond funds interested in the short. And then also being able to get into the trade as a both attractive for them and worth their while. How risky is it right now for these investors to make the beds . What do the payments look like to keep collateral on the bets that they are making . Costly . Matt it is costly right now. Its getting more expensive and the trade could be reaching a point where its being saturated. The synthetic index, diverging greatly from the cash bonds and ending corporates which are lagging. The cost to get into this trade is getting more expensive. You also dont know the timing. How long it will take to play out. It could take two, three years to be before were able to see whether this trade is worth the investment that some investors are going into it. The same as being wrong, right . Scarlett good point. I like what you said about the size and scope of this is far different from what we saw in the subprime crisis. The commercial mortgage tract Securities Market is pretty huge. You have 365 billion in your story. How much of this matt i spoke with some investors who estimated that 1 3 of the Retail Properties that are in this subsection of 2012, 2013 malls could end up defaulting. When you look at that and boil it down, crunch the numbers, how much is that risk overall, you have a number thats much smaller. Closer to 10 billion range. It is a lot smaller section. The risk is is that like we all know, perception is reality. If the perception is that there is weakness in the sector, it could spark contagion that starts to filter in to other areas. Scar loathe dot hedge funds scarlett do the hedge funds default right away . Thats why the investors arent jumping into the trade. It could make months or years to work out these loans. A lot of people are saying it will be a slow bleed. Matt, quickly, a couple companies that we need to watch . Sears . Matt sears, j. C. Pennies, the claires of the world. Scarlett my childhood. The luxury malls. Matt they are doing ok. America online thank you so much. Check on the bloomberg first word news this afternoon. Go to our newsroom where we have mark with more. Mark President Trump is said to announce his administration will begin the process of reexamining obamaera vehicle efficiency standards. That announcement is expected on wednesday when the president travels to detroit for a meeting with auto makers. Report according to people familiar with the plan, the president will unveil plans to reinstate the Midterm Review of the standards and revume studying whether fuel economy rules are feasible or if auto makers need relief. Auto industry executives, including g. M. C. E. O. Are expected to be in attendance. Jared kushners family stands to receive 400 million from a chinese company. Investing in a fifth avenue Manhattan Office tower owned by the family. Jared is the son inlaw of President Trump and serves as the Senior Advisor to his administration. Some Real Estate Experts say the transaction includes terms unusually favorable for them. 2016 was the worst year yet for syrian children with more than 650 of them killed in syrias civil war. Thats according to unicef, the United Nations child relief agency. And a report out today says there is no letup on attacks on schools, hospitals, playgrounds, parks, and homes. New York City Public School students will have the day off tomorrow. Classes have been canceled as the northeastern United States braces for a late winter blizzard. The storm could drop up to 20 inches of snow object new york city. Winter storm watch extends all the way up to new england. The snow is likely to start falling late tonight. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. Im mark, this is bloomberg. Scarlett thank you so much. Coming up, Goldman Sachs unveils its most am birs in years. Scarlett this is bloomberg markets, im scarlett. Im oliver. Scarlett Goldman Sachs is the latest firm to modernize its offices. Tearing down walls between Money Managers. We look at the new trading hub. You and i were saying that the offices will start to look more like bloombergs where we dont have walls. We dont have offices because were all work along the same open floor plan. Thats right. Id like to think we were the ones first to do this. Scarlett ahead of the curve . Thats right. Oliver Productive Work environment with transparency. As you see among us. I do know that city group, which did renovations before goldman, they did come here and look at our space to get a sense of what its like and what was working. Its certainly the trend these days. Scarlett you can see some of the pictures here that show what these are mockups, right, what the office space will look like. Oliver awesome right there. Has a different vibe. When you walk into a Trading Floor you usually think hordes of traders, tons of computers. That right there looks like a classroom. Its very open. I guess motivation behind it in terms of making the work better or easier . I think there are two things here. One is they are very excited, the folks i have talked to, about the client space. Being able to bring in people, have Conference Rooms that they can use. Have places that they can do presentation for clients. Theyve got big High Resolution screens, things like that. Then the other part of it is that they are now in the skyscraper part of the willed building, and they are scattered among three or four floors. Its easy to talk to people on the phone and with chat and stuff, but its not like putting them shoulder to shoulder. They think they are going to get some benefits from putting people on the same floor so they can see each other so that ideas can more easily sort of commingle. Scarlett this speaks to how important the business has really become. When you are talking about revenue contribution. I think thats really what this shows. The ambition that they have for the management business. Lloyd has talked about how hes counting on this unit for Revenue Growth and they have been growing quite a bit already. He thinks theres more room to be to go. Scarlett it started as a 10 billion Money Market Fund in 1989 . Thats right. They supervise 1. 4 trillion now. They are not quite as big as j. P. Morgan. Certainly not as big as black rock. But they have been making big strides. And their performance has been pretty impressive. So they have been attracting assets at a time when a lot of active managers have been losing assets. The fact that they were given a little money to renovate this floor and make a big slash shows the job they have been doing and sort of the job hes counting on them to continue to do. Scarlett dakin has one of the most read stories on bloomberg. Oliver still ahead, what does President Trump mean for the internet . How an opportunity the challenges lie ahead. This is bloomberg. Oliver this is bloomberg markets. Scarlett lets turn now to the opportunities and challenges facing the internet economy. How will the Trump Administration drive innovation, Economic Growth, and open communication . For more hand over to our colleagues in radio, talking about corey and carol. Carol . Carol thank you so much. I welcome everybody on bloomberg tv. This is Bloomberg Radio. Robert bell is with us, cofounder of zpwentbent community forum, looking at what President Trump and his Administration Means for the internet. Good to have you back with corey and myself and our bloomberg team. What does it mean for the internet . I think mr. Trump practically owes his presidency to the internet. The question is how will he treat it . Its been carol because of twitter. Because of twitter. His governing tool right now. The u. S. Policy has been consistent since the 1990s since the internet became commercial thing. It says the internet shall be open. It shall be interoperable. Meaning we can all access to it using the technology we have and free from state censorship, right . The question is, whats next . Well in january President Trump spoke at the us u. S. S. Yorktown, docked in south carolina, he said the following, were losing a lot of people, he said, because of the internet. We have to go and see bill gates and a loft different people that understand whats happening. We have to talk to them in certain areas about closing up the internet in some way. Carol thats got to scare everybody. Its response to that was freedom of speech, freedom of speech. They are foolish people. There are plenty of foolish people out there worried about freedom of speech. Oliver its interesting, too. As it relates to Net Neutrality, which is one of the issues the chairman will tackle on a different way than his predecessors, there are two philosophical arguments, they are both interesting. One says that the carriers that build the networks should have to sort of bear the actual dollar cost in making the Networks Open for everyone. That they cant charge a tiny little startup different than netflix or youtube who consume most of the bandwidth on the internet. The other argument says the companies that use the most should pay for that capacity. Allowing the carriers to charge that with the notion the carriers will upgrade their networks. I wonder what you think . There is nothing wrong in principle in saying a major provider of content, immense percentage of the bandwidth of the u. S. Internet comes out of netflix. Nothing wrong with that. The issue is the flip side. If every carrier that wanted to serve netflix build out new capacity, no one would have problems. In reality the concern is that theyll throttle everybody else back in order to create the capacity. Thats specifically what the f. C. C. Rules put into place under the Obama Administration prevented. You shall not do that. And john oliver, the comedian, said talking about Net Neutrality is about as interesting as listening to a pair of your pants talk about the weird dream they had last night. Thats generally true, but there is a fundamental principle here thats scary. Let me jump in for a second. Im curious if anybody thinks this train has left the station in terms of the internet. How do you roll it back in a society like ours . Precisely. The internet is the internet is the network of networks. Most people dont know about that. There is no one internet that somebody owns. Its millions of networks all tied together. How exactly you roll it back nobody knows. The interesting part about it is that do you think that President Trump or his administration could really roll it back at this point . Considering it is so engrained in our society and culture . The 1934 telecommunications act, contains little thing called section 606 whichcies saste the executive branch can if there is a threat of war or public peril can actually seize control of communication facilities. It is at least in theory possible for an administration to say there is such a terrible public peril here were going to invoke section 606 and start issuing orders. Is it going to happen . I dont think so. Capacity wise, the internet was designed to survive nuclear war. Inpend nodes that couldnt be controlled. Seems like that would be very difficult although we have seen it in some countries when there are military actions going on. There are countries that have done a magnificent job of creating their own private internet. China is the leading example. It can be done. The nuclear war example doesnt work because were not talking about things being destroyed. Were talking about the companies that own them being required legally to do something. What i find fascinating when i look at this new administration, this is one that donald trump and his team on the campaign trail were committed to growing jobs and growing the economy. Thats what we certainly heard from them. So how does the internet play into that part of the equation . Thats the irony here, isnt it . Were talking about doing something to the internet because were afraid. But the internet has produce the literally hundreds of billions of didars of Economic Growth dollars of Economic Growth, value in peoples lives. The idea you would mess with that, that you would start experimenting with this maizing engine in potentially damaging ways is hard to believe. Is the f. C. C. A tool here, the thing we should pay most attention to . It is. The f. C. C. Transition team that the president is putting into place includes some appointees including rosalyn and jeffrey all of whom are on record against arguing against the current set of neutrality rules. With Everything Else in government it pays to Pay Attention. A minute or so left here. This is a president who is not one that embraces technology. Very different from what we saw with president obama who whether it was blackberry or ipad that was constantly out there. A very different environment. Having said that with so many things on his plate right now whether its health care reform, whether its dealing with tax reform, whether its dealing with fangs reform financial reform, whats the likelihood that anything really changes in terms of the internet as we know it and love it . Nobody knows. Were in the early days of this administration. This is an administration that puts out a lot of opinions, a lot of ideas, a lot of what some people consider threats. Everybody has opinions. Thats different from action. Thats what we all have to wait and see what does this administration actually do in any of the areas that it cares most about. Definitely be sensitive about it and watch it. Robert bell, thank you for coming in. Hes cofounder of the Intelligent Community forum joining us here. Toss it back to you guys in bloomberg tv. Scarlett thank you so much. Of course you can catch more of their interviews on sirius xm, bloomberg. Com, and bbrg. And Bloomberg Radio plus, an app on the iphone and pad. Oliver time for the bloomberg physical flash. A look at. So biggest stories in the nice right now. Shortterm investors are turning from an emerging market. Looming Interest Rate hike this week. Longer term investors ramp up exposure on the strength of equity and currency valuations lingering below their fiveyear averages. The divergence between both camps hasnt been this pronounced in a year and a half. Hedge funds posted their biggest outflow since december while Money Managers boosted inflows to the highest level in 16 months. Goldman sachs has unveiled the largest of the redesign of its trading hub since 2009. It was tearing down walls so Money Managers can sit shoulder to shoulder as part of the redesign goldman will move about 500 employees on three floors to one floor. The move will be completed by he end of april. Entell has agreed to buy mobli from israel. Its about 15. 3 billion equity value. That represents a 34 close on friday. It makes software that alerts drivers to pedestrians and unintended lane departures. Oliver that is your Bloomberg Business flash update. Still ahead the commodities close. How the impeding blizzard set to hit the northeast is going to impact the natural gas market. Is it hype or make a difference . Scarlett from bloomberg World Headquarters in mid down manhattan, this is bloomberg markets. Commodity markets are closing in new york. Begin with the soft commodities. The usda boosting its outlook for brazils soybean production. The number one export of that modity. U. S. Held that title for decades until 2013. Rising fly slie has driven prices to a twomonth low and hedge funds have cut their bets for a rebound for the Third Straight week. Prices settling. Off just a hair. Little change at 1006. If you look at oil, some choppy trading today, but whats important to know is oil is still below 50 a barrel. Drifting lower. Hovering around 48 a barrel. As record u. S. Inventories as well as a boost in drilling activity threaten opecs efforts to reduce a global glut. The drilling activity here in the United States. This chart illustrates that nicely. If we can pull it up, it shows rigs which is the white line sharply recovering from their lows last may. Mayjune of 2016. And they are now at their highest since september of 2015. If you look at oil futures, there is that lower, most recently drop there, last week breaking below 50. That level it had held since opec and the other 11 nations began timing supply on january 1. Breaking out of that range perhaps bringing us back into the mid for the range. Were currently in the high for the range. Oliver . Oliver speaking with energy. Turn to natural gas. New york city has issued a blizzard warning as winter storm stella expectsed to bring as much as 20 inches of snow and strong winds to the region. How significant could the cold front be for the gas market . We bring in maureen, this is a lot of hype on this storm. For some people it might mean a day off. For speculative traders in the commodity market, it could be meaningful. The speculators have been playing this for weeks. Natural gas hit an eightmonth low. Back in february. And three weeks ago people were thinking winters over. So this is a surprise storm and gold front started showing not the storm but cold front started showing up in weather forecast. Both have been playing this big turn in the weather for a few weeks. Its showing up. You have them layering on positions. Scarlett we have seen a gas glut jump recently. How significant is this old cold for the market . Its not unusual to get storms in march. Its significant because at least there is some winter. February and january were so disappointing, they were mild. Mild. We just got rid of the gas glut versus the fiveyear average in early january. It had been weighing down the market for over a year. Then all of a sudden we got this incredibly mild weather and the gas glut is now 18 above the fiveyear average. This storm isnt going to change that. Were probably going to grapple with a lot of supplies for a while. But we have this rare injection in storage. People are using gas. They are never taking it never putting more gas into storage than were taking out. So in february you had a rare injection. Now were going to go back to probably seeing triple digit declines. The gas market likes to see that. Oliver to your point on positioning, i wanted to jump in the terminal, im looking right now at the net noncommercial futures positioning in that gas. And to your point, this is basically more bullish trend positioning where you got to this sort of oneyear high here. Some down a little bit. To your point this is very much a market that has gotten bit up. Flip it over real quick, you are also pointing out if you look back sort of at the history on that gas, there is a move in december where people thought, all right, december was cold, lets perhaps get this positioning in place. That didnt keep up, right . There was so much anticipation in december. It was really cold. This was going to be the first winter we saw the effect of a Record Number of coal plant shutdowns that happened in 2015. The polar vortex was in 2014. We never saw how much gas we could actually use during the peak demand season. There was anticipation. Then it was disappointing. Scarlett what happens next . This storm will come through it, it will pass. Then we head into april, may, june, seasonally. Were past the peak demand. But there is demand for gas in air conditioning season as well. Definitely. Thats the next thing. Summer has emerged as bull season to play for traders in terms of volume tillity. You do now have a lot more Power Generators relying on natural gas. So on top of that you have a lot more exports. Our exports rising to mexico and through lng out of louisiana. It could make winter summer more interesting. Especially if you get a heat wave. Oliver you know the whether reminds me of the disclosure on financial statements, past performance is not particular particularive past weather is not the future. You can think anecdotal, it was 60 the other day, cold now. A lot of people very Strong Community that says Climate Change is affecting weather patterns in ways were not used to. Im curious with your reporting and talk to people, how do they bake that into their assessments whether its volatility on products like that . Some things i have been hearing more about recently is natural gas is always driven by weather. But traders are saying even more driven by weather. Which is surprising. If there is a heat wave or cold front, now you can get a bigger hit to natural gas because you just have it coming from Power Generators in winter from households. Then also you have these pipeline constraints that add another level of uncertainty during peak demand period. Scarlett to what extent does oils recent job have any bearing on the trade . Not much. For the most part. It does affect it more maybe on he Global Market because the llng exports out of the u. S. F. Its competitive to sell to europe, asia, or south america, a thowl of those contracts are benchmarked to oy. They are going to be comparing. Can i get u. S. Gas much cheaper plus transportation cost, theyll take t they have done it well this past winter just because you had u. S. Gas and maine tain a Good Discount in places like asia. They were hit by a fierce winter. Oliver i think its interesting because we talked about the positioning which has gotten a little bit more bullish. Also pointed out up about 19 , almost a bull market since the last drop here. Just quickly, when you think about the sort of pain that could be felt by traders on any surprise. More geared toward the down side or if gas 3406s higher . Whats been surprising to me on the data showing the bulls, they have been hanging in there. They piled in ahead of this winter like november, december. While they have trimmed this a bit here and there, they have been holding on. They are looking at what is going to happen with storage. We depleted we got rid of the inventory glut in the wirpt. We have a glut again. The risk is if we have a heat wave we could wipe that out again. Also, oliver there is a lot of writing on it. Im going to say dont forget check the weather on bloomberg wetr. If you hoover over the icon it says dense fog and blizzard tomorrow. Scarlett such an understatement compared to the media saturation. Bloombergs natural gas and reporter thanks for joining us. A check of the first word news headlines. We go to mark for the details. Mark washington and other states fighting to block President Trumps preadvised travel ban won a hearing tomorrow before a seattle federal judge. The complaint filed on their behalf says the ban is unconstitutional and harms state residents, universities, and businesses that rely on foreign workers. California, maryland, massachusetts, new york, and oregon all joined Washington State in pushing the legal action. The revised ban is scheduled to go into effect on thursday. Vice president pence is planning a trip to the asia pacific next month as concerns escalate among allies in the region that the Trump Administration will tamp down u. S. Engagement. An official for the Vice President says hell make stops in japan, south korea, indonesia, and australia in mid april. The u. S. Withdrawal from the Transpacific Partnership trade agreement has allies worried about the possibility of a new u. S. Agenda for the area. Scotlands leader wadgetses another referendum on independent pence from the u. K. The first minister says the country would like to stay part of the european union, but she says efforts at compromise have been met with a brick wall by british Prime Minister may. Once terms of brexit are clear, sturgeon says, there should be a vote on independence. That could happen next year or in 2019. The second strike in four days has brought air travel in berlin to a stand still. Almost all flights to and from the citys main airports have been canceled. 2,000 ground employees are on a twoday strike over higher pay. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. Im mark, this is bloomberg. Scarlett thank you so much, mark. Coming up, a growing rift between hollywood and china. Are the good times over . Well discuss. This is bloomberg. Oliver this is bloomberg markets. Scarlett time for the bloomberg this is flash. A look at some of the biggest business stories from the news. Bpg, distressed real estate assets. Properties are being seized as collateral for bad loans piling up on balance sheets. Thats according to the head of special situations. The bank is buying up 100 million in properties. Brazils five biggest banks hold more than 5. 7 billion from delinquent borrowers. The saudi arabias lion family is now considering selling shares in its local assets. The finance something considering setting up a Holding Company for. So assets. The family is creditle big big biggest shareholder. Olayan manages more than 40 companies in the middle east including the regionalburger king franchise. Toshiba wants to extend its tuesday earning reportings deadline because of continued uncertainty over the val wigse of its westing house unit. Thats according to people familiar with the matter. They already extended it after a chaotic preliminary Earnings Report last month. The Japanese Electronics maker expects to book a 6. 2 billion break down in its business. And that is your business flash update. A check on markets right now. We go down on not a lot happening for u. S. Jobs here. We have the dow and s p 500 trading down ever so slightly. Nasdaq up. All of this ahead of the fed on wednesday. Plus lots of other events to keep an eye on including other meetings, dutch election, brexit. Notable earnings, oracle and tiffany. Investors are a wait and see mode. Where we do have big action vite here. Shares of the israeli based Car Technology company are surging higher by 29 on pace for their best day since august of 2014 on the news that intel, down about 2 , will be buying the company for about 15 billion. Intel is looking to make a push into Car Technology to beat out competitor qualcomm. We do have big moves here. Interestingly the Technology Sector similar to the average is about flat. But on the Year Technology right now, surprisingly after a little selloff after the election is the top sector. We hop into bloomberg and use the grop ranked return function. These are all the sectors in the s p 500 all year. Technology up 11 . Energy down. The worst down 8 on oil. But again technology is the top sector on the year. Within technology there is one subsector outperforming, this is something we have not talked about. The fueng trade. On the bottom there in pink is the s p 500 on the year up about 6 . Then we have google. We also have netflix, amazon, and up top, up 218 is facebook. Bloomberg Intelligence Analyst told us moments ago what could be happening here are expectations on the part of investors if President Trump does put through a tax policy that are helpful t. Will help advertising budgets that will help lots of these companies. Plus a lot of these Tech Companies had a lot of cash abroad to lower taxes here. Potentially could help them repatriate that cash. Good things happening here. Of course those policies have to come through for this big bank trade. Once again alive and well in 2017. Scarlett long live the fang trade. Thanks. Oliver you want to be a stickler for tickleers. In hollywood, a reversal of fortune, when a record amount of chinese money poured in. Those days may be over. We have the story from los angeles. We have talked a lot about chinese involvement in hollywood. And now it seems like perhaps that may be stemming. Yes. Over the past few years theres been a hit between china and hollywood. Pick up, or the technology and knowledge about filmmaking, tv making, and generally. As their own Entertainment Market grows, almost exponentially, over the past few years. A series of regulations over the past couple of months and some comments from officials have really put a dampener on some of these deals. These deals have consequences for major companies. If you remember viacom at one point was looking to sell part of paramount to potentially a chinese bidder. That didnt happen. There are various deals we have seen collapse a tv company which makes the Golden Globes tv show, that was worth 1 billion, that isnt going to happen. There were expectations m. G. M. Was going to get taken over, that didnt happen. These deals really are being impacted by restrictions in china about outgoing investments. Scarlett absolutely. Beijing looking carefully at all capital outflows. I wonder whether the dreadful Box Office Performance of the great wall a joint venture between Universal Pictures and a chinese film group, may have played a role as well. It didnt do well. Its not likely going to pay off as a big bet on future ventures. I think that the global film market is going in one direction, that is china is going to be is a bigger part of it and its on course to overtake the u. S. There isnt anything stopping that transition. So china will have to have a more Important Role in movie making and its films will have to get better. I think its less to do with at and more to do with unsettling here what these regulations mean. For u. S. Companies, its a real big problem. They have had some successful investments to say paramount movies, Chinese Companies have been taking stakes in films Like Mission Impossible and transformers and those films do great box office. All around the world. There are films were seeing changes like films that dont do well in the u. S. That should do really well in china. And the film you mentioned, great wall more an experiment to see if chinese films can be exported internationally. While that film didnt do well, youre right, the question is could that happen in the future . Think its possible. Well have to wait and see. Oliver you have in your reporting chronicled the divergence between the u. S. Theater going community and that in china where the sort of Economic Growth in china has driven a lot of Chinese People to go to movies. Its still very much there. How much is this going to hurt u. S. Companies that want to potentially do business or get some of that chinese money . What youre seeing is a maturing of that market. For the past few years the the se box Office Industry moves out of the major cities into second or you are going to see a slowing in the number of screens built. Theres also been a removal of subsidies to ticket sales. That has slowed stuff down. Last year we didnt see the same growth but we did see still growth. And its still a huge market. Its not expected to stop. Oliver thanks. Continuing to cover the relationship between the u. S. And china. Coming up, central bankers around the globe are having a busy week of decisions from the d. O. J. To the b. O. E. Whats the other one . The fed. That one on wednesday. Well die jest all that next. And right now bring to your attention the tv go function on bloomberg. Scarlett theres abigail. Giving they are fang chart. Great function. Tv on the left. You can click through. You can bring up the actual chart at which point you can look at the details you want themselves. Also going on a schedule. Check out whats coming up. Up next we have whatd you miss . Click through. Scroll back. Check out the charts. I love t there i am right there. This is bloomberg. Oliver this is bloomberg markets. Scarlett big, big week for Central Banks this week. Tomorrow the twoday meeting with the Rate Decision delivered wednesday at 2 00 p. M. On thursday well hear from the bank of england. And the bank of japan. Joe, my whatd you miss . Cohost joins me. And a twoday meeting on friday. Huge week. Cant wait. I would start off by going to a function on my terminal. Im going to jump off of ecogo. Ecogo. Ive set the universe to world up here. Looking at central bank events. Its pretty lit. Its busy. We have Central Bank Decisions come interesting the bank of japan. From the bank of england. We had it coming from our own the fed. Whats most important to you . Got to be the fed, right . The fed is the big show. Its the world central bank, obviously. And at this point Everybody Knows that there is going to be a rate hike. We think. Of course the big question is, what do they say about the future . We now have this fairly rare situation in which there is a high level of convergence between what the market sees, the fed sees, and economists sees. A new bowl by bloomberg showing three hikes this year. It will be interesting to see if the fed does anything to shake that. Scarlett we get an update to the dasas. If you come inside bloomberg i have it up on the bloomberg. This is from december of 2015. Its a little dated here. Were looking for this green line which is the median projected by the members. The interesting thing about that chart is its close to the market desk. If you went back go back a long time, year or two, you see there is a wide space between the red and the green dots. That symbolizes the large gap between fed and market. Its different now. You see a high level of convergence. So the fed should be pretty happy. It has the markets on the same page. Oliver when you think about the notes coming in your mailbox, talk to reporters and people start to think about the impact of rates on different markets, is it sobering or is it confident . I was thinking, if you look at stocks, its a very positive relationship in the history of rising rates and markets. Yeah. Absolutely. Historically stocks have done well contrary to what people thifment several rate hike cycles. A lot of interest with whats going on with the bonds. 10year yields above 2. 6 today. Its been a solid selloff. Thats probably where the action is. Scarlett we have a headline, the u. S. House of commons rejects the lords brexit amendment in a win for teresa may. She gets a continuum moving ahefment it seems to be happening. Scarlett she has a selfimposed deadline for march 31, 2017. It wasnt mandated. She set it. If you look at how the pound is trading, i have it up on my bloomberg, no real reaction. This is a quiet time in curbcy markets anyway. After the u. K. Has closed. No one in asia is trading. It tends to be quiet. What you see the pound stay resilient even with scottland looking for another i think at this point there isnt much new news. Until we find information in the negotiations themselves, not much. Oliver this Brexit Process is taking a long time. Scarlett we knew it would take a long time. Just getting started. Oliver coming up in the next hour, bloomberg markets, one much President Trumps key legislative platforms is improving infrastructure. Well talk about t this is bloomberg. In new york, 12 00 p. M. In san francisco, im oliver renick. 7 and ims scarlet and im scarlet fu. Welcome to bloomberg markets. We are live from bloomberg World Headquarters in new york for the next hour. We will be covering stories from san francisco, washington, and london. Euro the top stories were following. U. S. Stocks and the dollar trading and tight ranges as investors anticipate crucial central Bank Meetings this week. Theres a mixed picture just one hour from the close, volumes also low ahead of this socalled blizzard. President trump us 1 billion infrastructure plan is still in its early stages, but some firms stand to benefit greatly if it comes to fruition. We will be talking to some of the biggest players. Intel purchasing an Israeli Company for 15 billion. Will it help it in success . And a burgeoning market for self driving cars . We would hear from the intel ceo. Just one hour away from the close of trading, lets get a check on the markets. Oliver are you julie are you a blizzard skeptic . Oliver im a blizzard contrarian. Julie are you saving the chains out there . We will see tomorrow. A lot of people believe that, obviously, but we are seeing lowvolume because of the central Bank Meetings this week. Toestors waiting on news come down the pike on the macro level. But i am actually looking at volume. As we heard all of her point out , it is lower than it typically is. Looks at theop volume, first on the 20 day average. The bottom, bluelines show where we are today versus where we typically are. 18 , thats the range we have had below the 20 day average. Volume has indeed been relatively low. The airlines, the airlines are already canceling a lot of flights and according to flight , the website, American Airlines has said that all of its nyc flights at the major airports will be canceled tomorrow. Some of the other Major Airlines canceling flights ahead of the anticipated storm. We took a look at what is going on with shorts within the s p 500. The selling that we have seen here that has been pushing yields higher going into we areays fed meeting, seeing more people shorting the fed treasury market. Take a look at the bloomberg for this year. One of our colleagues, writing about this today. The fiveyear and 10 year, the net short long position. Above this is not long, low it, net short. We are getting more deeply into the short area here is people are shorting treasuries, thinking that the declines in price are potentially here to stay. Oliver all right, julie hyman, thank you so much. We will be following the bad snowfall tomorrow. Scarlet lets turn to President Trumps infrastructure plans. One of the biggest suppliers for roads and commercial structures, the stock is up 5 since the president ial election. Joining us now is the chairman, president , and ceo of Martin Marietta. Thanks for joining us. Let me start first with the wall, i think we need to attack it first. As you know, the white house put out feelers asking for proposals. I wonder if Martin Marietta submitted any prototype concepts to the government. We are getting calls on that. What is important to say is that looking at texas by itself, were the largest ready mix in that marketplace. If there is any heavy side in withmarket, we will be that. Obviously, no matter where you stand, this is a very controversial plan, to build the wall. Are you at all concerned about what the public image might be if you take part . Ward infrastructure is underway. We will be a part of that. We are there to increase shareholder value and doing what we need to do for our employees, company, and shareholders. If there is a large project of that sort underway, we would likely be a part of that. Well, it will be in your backyard. But xray much so. Scarlet you pretty much cant be involved, by virtue of her you seen anything regarding the cost of the project . Ward i have not. Its pretty early days. Im not sure that they know what the phase of the project will look like. One thing to keep in mind, all the numbers that we put out this year, giving guidance for next year, none of that is baked in at all. Ward oliver its not being reflected in the numbers yet . Ward not at all. Talkr we are going to about other infrastructure in general, but i think its interesting because as we look closer to this becoming a reality, what are the specific materials question mark any idea the actual products that will be most needed to get the thing done . Ward its hard to know exactly right now. My guess is they are looking most likely at a concrete wall, and that will have lots of aggregates, those will be the two primary inputs into the concrete on the wall itself. Probably steel and reinforced concrete. Scarlet switching gears of it, talking about m a, it was key to expanding your position in california. You used the low for california and georgia as well. Is that the blueprint for the deal that you would likely make in the future . We have beend very careful in the markets we want to go into. What we have in the number one and the number two [no audio] is it people are moving there and the job creation is strong, you will see more than just public words. You will see the residential following, than the nonresidential that would tend to follow with that. If we think about how the business works, 45 typically is infrastructure. 30 is nonresidential, 15 is residential. Uses have those three moving in any direction in a given market, it means good things. Oliver a lot of the talk about launching this has been public partner Public Private partnerships. Is that the best way to get work done . Ward the investment pieces the big piece, but that will have to be something with a good, sustainable Revenue Source going forward. Historically with a few infrastructure primarily through a gasoline tax it hasnt been raised in over 25 years. Looking at that, things have simply gotten more and more expensive for that has not gone up. There are two different parts of this financing. What will the funding look like . Its going to work well in places that have large populations where toll roads or bridges work. Its a tougher solution to Middle America today. What i labor costs . It will likely rise further because the labor market is tighter. How are you folding that in as you plan five years, 10 years out . Labor to us is our single largest component, but what is moving to us is moving to us as our record year last year. Well may produced and sold about 160 million tons of volume. That is only off what used to be 205 million tons per year. So, really, where we sit today from a labor perspective and ant we have done from investment perspective, we are at a good place to be able to put whatever we need to on the ground for the use of the contractors today. From the arrieta perspective we feel very comfortable. Oliver can you keep it up with that muted volume . Ward we believe that we can. What we saw last year with incremental margins, it was 90 quarter three all by itself. Telling us that we have our labor costs under very corporate control today. , thank you forye joining us today. Chairman, ceo of Martin Marietta analysis,23. 93 return according to the bloomberg, for the stock. Time for a check on the first word news. Mark crumpton has the details. Mark the house of commons has rejected an attempt to make the government promise before exit talks begin that they will guarantee the right to remain for u. K. Citizens, eu citizens, rather, living in the u. K. , lawmakers overturning an amendment to the government us brexit bill inserted by the unelected house of lords. They now have to decide whether to accept the common vote or resist. Delaying the bills passage. If they back down, it could be approved later. President trump will be in detroit on wednesday to discuss jobs and the auto industry. A white house aide said that the president will meet with automobile ceos. Reuters is expected to announce a restart of the review of auto emissions rules. The executives had asked for that in an earlier meeting with the president. Democratic leaders have set up a showdown with President Trump over his border wall. The Senate Minority leader, warned republicans that attempts by Defunding Planned Parenthood would result in a government shutdown. A stopgap said spending bill must pass a 60 vote threshold in the senate. If it doesnt, a partial shutdown would begin on april 29. This weeks dutch election has been upended by a diplomatic dispute with turkey. Analysts say that the instrument can we instant could incident could we energize the Campaign Just as it appears to be fading. Politicians on both sides criticize turkey for sending ministers to the netherlands for domestic purposes. The dutch escorted one turkish minister out of the country. The dutch willt pay the price or co new york citys cap Public Schools will be closed tomorrow in anticipation of a monster storm bearing down on the northeastern United States, which could lead leave up to 20 feet of snow in the city. Fromast a foots forecast philadelphia to maine. In some places the wind is expected to gusts up to 60 miles per hour. 2600 andws, powered by analysts in more than 120 countries. Im mark crumpton, this is bloomberg. Oliver question mark oliver coming up . Oliver coming up, what did bria tell bloomberg . That news come out today. Well get more. This is bloomberg. This is bloomberg. Im scarlet fu. Oliver and im oliver renick. Scarlet israel announced that an israelirchase auto company, being purchased in a 15 billion deal. Cory johnson asked Brian Krzanich why he wanted to do this now. Brian we think that combining allows us to have a singular platform, end to end, for our customers. More importantly, as you take a isk at where the driving going, they are working today on the 2021 models. You have to make a deal, you have to build your platform today in order to be there when the models are really going to start hitting the road. What has the intel approach been . How might a change . In a we are already number of Autonomous Vehicles out there today. This really brings the best of both ends of the computing spectrum for driving together. Think about it this way, the car will have two brains. One is a vision brain that is going to take the radar, the cameras, combining them to build a view of the world. There is another brain that intel currently plays in that will take that information and basically drive the car. This puts the two brains together into one company, allowing us to provide an end to end platform for our partners. Cory you talked in any milk to your employees about data, how important is that . Brian the roby several flows of data out of the car, the first is learning data. There will be a data center that is built by the oem, driving that through their algorithms. Theres another set of data coming out of the car that is mapping data. You saw the investment here earlier this year, really oriented towards building these precision maps, maps with a lot more information than the ones that you use today. Third, these cars will be able to see the world as they drive around. Visual data will be able to be gathered up. People on the streets, the cars that are passing, it will all the used to gather information models on whats going on. Cory given where we are with a global, macro sense of technological change and spending, do you feel like you have to get ahead of competitors that might have looked at it as a central target . Brian you bet. We felt that gathering these technologies and building an end to end platform was important. The deal is immediately accretive to our earnings share and Free Cash Flow for the company. It was a good deal from that perspective, for the company. Cory but expensive. You paid for a company that is trailing in revenue, thats a hefty price tag. The market had priced in the premium. Take a look, compared to the price. But yes, you have to take a look at the fact that its growing at a significant rate, we think it will be a billiondollar plus business. Remember, for us it is much further than that. We are looking beyond just the revenue that it is allowed to grow into. Tie this, now,to this visual data into the data centers, into our whole Artificial Intelligence engine business that we are growing, which really kind of completes this circle of capability that we think of when we look at how data is going to be used across the world. I understand you are going to be moving a lot of the operations to israel. What kind of cost savings do you expect to pull out of it now . We built brian we build synergy into the deal. We are moving our autonomous driving resources to israel, where it is centered. R d that isot of overlapping between the two companies. That will bring those synergies to that 175 million over time. There was a lot of options trading in the days before the deal was announced. Before the purchase of the calls. Moving higher and really soon. It seemed to be near record levels. Excited for the stock, but nothing like this. I wonder how long you have been working on this deal and does it concern you at all . We have been working on this deal for a while, but we take a lot of care with anchors and pr teams do you disquiet. If you take a look, it has been pretty quiet, from what we have seen, relative to other deals that are out there. So, we are pretty comfortable with the level of secrecy in order to keep the deal down for the last 12 to 24 hours. We took a look at what we were doing and what was going on in the market and it seemed like it was everything was pretty ok from that perspective. Scarlet that was the intel ceo, Brian Krzanich, speaking earlier. Look attime to take a the Bloomberg Business flash. Ancestry. Com and owners are considering an ipo sometime this year. The Genealogy Company is owned by premier. The Singapore Sovereign Wealth Fund took stake in the company a year ago. Weighing in an offer for the German Renewable Energy facility that has a market value of nearly 20 billion according to a person familiar with the matter who says that the former french natural gas monopoly is already speaking to advisors. They own about 77 of energy, the french government owns on a 5 . It sold 4. 1 in january as it continues to reduce its holding in the company. The royal bank of canadas former cfo won the title of highestpaid female anchor in the country last year. She brought in 3. 4 million, making her top among women in the countrys eight largest lenders. Still, women were a minority when it came to executive jobs, garnering only nine of third 43 positions. That is your Bloomberg Business flash update. Scarlet bullishness ahead of the fed meeting . This is bloomberg. Oliver this is bloomberg markets. Scarlet time for options insight, with julie hyman. Jules . Julie joining me today we have a special guest, are stocks reporter who covers options, as well as the general stock market. As we see this runup to the fed on wednesday, and the other central Bank Meetings this week, what kind of sort of expectations are being priced into the market . Besides the obvious Interest Rate increase thats going to happen . Joe its been a mixed bag. Barometer [nofear audio]. Fear barometer. [no audio] dont panic, we are right where we need to be for this point in the cycle. Dont be afraid, dont necessarily bid up this volatility. Of give andttle bit take there. We are surprisingly seeing people in financials not hedging much at all, they are hedging at the lowest it has been in a year , which is surprising considering the s p 500 financial index being up 24 since the election, the most in the s p. On the other side of the spectrum you have utilities perhaps whipsawed by a rate hike , being a rate sensitive sector, with hedges very high on that despite minimal gains. Its kind of counterintuitive, but it just goes to show that people are expecting more beyond the same sectors gaining be on the meaning. Meeting. Right, theres this definite overall benign attitude we are seeing in the market right now. I think hopefully either oliver or scarlet has pulled up a chart for the select spider [no audio] but it looks like here there is not any concern about valuation, given that the run, or any kind of wavering of the rally we have seen in financials. That is surprising. Maybe we have talked about this run, a lot of that is exact expectation being priced into higher rates. People i guess are expecting to not be surprised. It would seem like maybe this is already baked in and it would be time to hedge, but apparently they are thinking not. If you talk to some of these strategists about who is going to help the s p continue to gain this year, a lot of forecasters have up to their targets. There was a note from Goldman Sachs today that said as long as things kind of level off, the only areas that will be growing are those growing profits, banks among them. Julie back to you guys. Scarlet thanks so much. More bloomberg markets, next. Mark im mark crumpton. Time now for first word news. [no audio] that meeting has been pushed back to friday. Her chief spokesman told reporters that the German Government believes that they would discuss vocational training. Iraqi forces have mobilized the next offensive state fighters as fighting remains on hold today because of bad weather. Iraqs federal police is believed to be in charge, confirming most of the area has been emptied of civilians. The battle launched two years ago. Neighborhoods held by the extremists are now completely surrounded. Egypts state News Agency Says a cairo prosecutor has ordered theous ter of