Hours, lets get a check on where stocks are trading with julie hyman. The big note big news coming after the market close on friday. We knew that the healthcare bill would get voted on, but we had an initial reaction that has faded. Julie it has been fascinating watching the reaction evolve or people make sense of it. This is something we have an having an ongoing discussion over as well. What does this mean for tax reform, according to investors question mark how important is it that it get done by a certain time and on a certain timeline for the markets and will the rally stop at some point if it doesnt get done . Today the assessment of these questions is relatively benign if you look at the market action. We have indeed come back from a deeper deficit earlier in the session out of the gate this morning. The nasdaq was up as much as one quarter of 1 , moderating those gains, but we are not seeing a big selloff in reaction to the Health Care News from friday moving forward to the prospects for tax reform, but we are still seeing somewhat of a risk off turn in the markets that is being seen in commodities as well. Nearly got spot gold of 1 , from the minors concentrating on gold, they are doing well. Copper futures earlier were down more. This is another example of the moderating of the risk off trade. 5 , coppergold, down mining outweighing whats going on with gold prices. In stock news we have been watching that big, big chemical merger that got approval between dupont and dow, basically the two companies had to make a number of concessions to win eu approval. Both the stocks trading higher today. In commodities we are watching weatherford today after the company was picked by partner inr as its taking on halliburton. One of the best performing stocks in the s p today, of a by 7 . Up i 7 . Scarlet up by 7 . Scarlet thank you. Holdingsean spicer is his daily news briefing right now and says that President Trump is serious about working with democrats and says that trump doesnt think that this is the end of repealing the Affordable Care act. For the latest, lets go to jennifer epstein, who is there in d. C. Comments on health care, looks like perhaps the white house is ready to regroup. Any idea on what that would entail . Jennifer there has been out reached her publicans and democrats alike to move forward, if there are specific issues, not a full bill, but issues where if there is some kind of coalition that would involve members of both parties coming together in some way. That sounds like one thing. Spicer also pointed out that the obamacare process took 17 months to go from kind of the early stages of the Obama Administration all the way to implementation. That, that is kind of what they are trying to see now. This is just one step in a much larger process in yeah, it didnt work out, but there is still a long way to go. Scarlet the president , active on tweet on twitter, saying that democrats are smiling today that the club for growth has saved planned parenthood and obamacare. That was sent out yesterday. You mentioned sean spicer said that the president is serious about working with democrats on health care, on other agenda items. To what extent is he thinking about working with the Freedom Caucus on these items . Jennifer it might be harder for him to get unified Republican Party, to have a full up or down vote on Something Like a health fullbill, to get the support of the Republican Party, which is more or less what he would need, minus a handful of members in the house anyway. The senate, you know, thats a whole different story, but hes realizing that going the purely partisan route might not get him to the point where he can actually pass more substantive legislation. So, he has to kind of look outside these other places. Again, remember, after he won, and again right around the time he was inaugurated in january, there was a lot of talk about the president may be reaching out to democrats, joe manchin, Heidi Heitkamp and other sort of moderate democrats, especially the ones up for reelection in 2018, they have been at the white house, they were at the white house at the beginning of the administration but havent been back since. It will be interesting to see if he tries to bring in more democrats this week or if he is really going to make that a real thing or if it is really just all talk and no action. We heard from attorney general sessions addressing sanctuary cities that dont abide by the law. Any idea of this is going to be taking it to the next conversation point . I think this is one effort by the white house to try to distract a little bit. The executive order that sessions was talking about there was something that the president signed right after he came into office, making it so that localities primed for doj money have to abide by sanctuary cities laws, which is to say that there are sanctuary cities and you cant in those ways, and that is nothing new, so it just seems that this is a way for the white house to try to start changing the sus subject away from tax or form as they are you charges soon as the same reform in any detail it gets complicated and there isnt really any agreement, even within the Republican Party about a loan in washington more broadly. Devin nunes, the congressman from california, at the white house today, did sean spicer say anything more about what the latest is there . So far we are waiting to her more on that, but what we have heard so far is that noon you as, who came less wednesday to meet with President Trump, was also on the grounds of the white house, it has been confirmed and reported by him, came to the grounds on tuesday, which was where he was able to get that classified information about potential surveillance involving potentially members of the trump transition team. Thats really all that we know at this point. The white house so far would only say would only go to congressman nunez if you want more information. Oliver all right, jennifer epstein, thank you so much. Briefing isa press taking place right now and you can catch it live on the bloomberg. You can check out everything that is happening with current and past interviews on tv. Scarlet we want to turn to the treasury market, 13. 9 trillion dollars. Brian joins us now. We are talking about japan here . Japan is the largest holder of treasuries, 1. 1 trillion of the market, they hold the keys to whether the market, the treasury market is in a bold their debate right now. Bears been this bull debate right now. Basicallythe clout to sway the market one way or the other. This was a big element of it, foreign buyers looking at u. S. When as a way to get yield their own was not offering much at all. Is this marking sort of the end of a trend . Is it about the yield with japanese bonds getting closer to something more tenable . That is what we are watching out for, seeing of these flows will go. Basically the hedge deal for japanese investors was 0 on a treasury bond and now it is almost close to 1 . Are that theys are still not really buying, even though the domestic aunt yield is 10 basis points on a good day. So, they are basically shunning treasury at the wrong time, because it has never been more attractive to hedge away the currency risk. Scarlet the reason they are doing this is because they got burned in the election . It was one of the biggest declines in the index since its existence began and 80s. If you are accepting expecting stability and you suffer costly losses, youre not willing to go back and very soon. To what extent are japanese investors represented . Or are they more outliers, more riskaverse . A good question. One investor said he was expecting the fed to hike seven times from now until the end of 2018. Pretty aggressive, given where the market is pricing in three hikes. There is this divergence of monetary and fiscal policy giving Bond Investors a positive. Pause. Oliver is this going to be something that they can debate, where you point out on the chart, hedging is now something that isnt necessarily going to break the bank . Brian the interesting thing is that they are sort of caught in limbo, this range on the 10 year , and all of a sudden they dont yields buy 23, because are going up in the u. S. , but then it confirms their fears that yields are going up. They are sort of caught and not really sure what to do. Thats what the strategist who was just in tokyo said, there wasnt any clear direction as to where to go next. Scarlet we should mention the timing. How will that play into the positioning . There is a lot of scrutiny on what is going to happen to the flow, starting april 1. This is the end of the fiscal year, the books are closed, generally it has been by domestic in march and then potentially add foreign Bond Exposure in april. Some indications are that it may be more tepid this year. We will be watching out on how, historically, the year is going to be. Scarlet all right, thank you so much. Lets future check on the first crumpton. With mark mark thank you. Attorneys of President Trump want the court of appeals to put on hold the Lower Court Ruling that blocked the revised travel ban while the Court Considers the appeal. The Administration Says that the nationwide injunction blocking it is fatally overbroad. A oneweekave forced delay for the Senate Judiciary vote on the Supreme Court nominees. At least 15 democrats and independents, led by chuck schumer, have announced their opposition to judge neil gorsuch, but he has solid backing from the republican majority majority. They will vote on the nomination april 3. The government of theresa may is bracing for a brexit\. Three senior members of bloomberg that their biggest single obstacle is an emotional reaction from the european union. One of the official says that the Prime Minister has not worked hard enough to charm the leaders. In russia it appeared to be the largest antigovernment demonstration in the country since 2012. Thousands of people gathered to protest official corruption. The Opposition Leader had called for the demonstration and was detained by authorities and has now been jailed for 15 days for disobeying their orders. Global news, 24 hours per day, powered by 2600 journalists and over one hundred 20 countries. Im mark crumpton, this is bloomberg. Scarlet question mark scarlet scarlet . Scarlet from new york, this is bloomberg. This is bloomberg markets. Oliver Congressional Republicans are eager to overhaul doddfrank, but theres one part they wouldnt mind putting off, a provision that affects banks and retailers. Joining us from capitol hill is elizabeth, she covers Financial Regulation and congress. This is a fascinating story, the republicans have obviously talked a lot about gutting out they haverns to decide who to offend. Elizabeth this gets to the heart of why the credit card industry can be so lucrative. Thanks and Payment Companies like visa and mastercard charge a fee every time a consumer uses a credit or debit card. Its a small percentage that adds up to billions for the firm. Retailers dont like his feet. They think it is unfair and have been fighting for years here on capitol hill, as well as in the courts, to change it. They scored a big victory in 2010 when there was a provision added to the dodd frank act that cap to the data card fee, specifically. Now, here on the hill, as lawmakers in the house debate a broader overhaul, banks are lobbying very aggressively to durbanand get rid of the amendment, as its called, the cap on debit fees. On the other side, retailers are lobbying very hard to keep the law as it is. Stuck in the middle are lawmakers on both sides, democrats and republicans, who either oneto offend of these important constituencies and political donors. Clearly scarlet this is something that will be very contentious and both sides are making vigorous arguments to congress. What are the arguments . Elizabeth retailers think that the credit card industry and how they set the fees is not fair. They want to keep they say that this is the law and it should be kept as it is. Banks argue that the durban itndment hasnt done what said it was going to do, which is reduced prices for consumers. They also argue that banks have seen less revenue, have had to make a lot of changes to their own business as a result of this , and so what is interesting about this is that the data is conflicting on both sides. The impact ons consumers and whether or not limiting these fees translates to lowercost for consumers of the register. What is clear is that the pot of money, so to speak, will either be going to the Banking Industry or the retail industry. The first step that lawmakers have to choose is which one is that . Who is the biggest beneficiary or loser . Has the most at stake . On the banking side its the biggest banks, all the way down. This is something that unites the Banking Industry on capitol hill. Credit unions, small banks, community banks, they would like to see this changed. On the retail side, the same goes across the spectrum. What is at stake for retailers . It affects small businesses, restaurants, really any business across the country that accepts a debit card. How does it move forward if both sides are vigorously far apart . Elizabeth we have yet to see the financial choice act, the package of mega slip legislation that seeks to overhaul the dodd frank act. The updated version is expected to come this year. It has been delayed in that we havent seen its reintroduction. From there, its sort of, aside from the fact of the prospect around the swiping fees issue becoming law, its a very likely chance that lawmakers in the house are going to have to vote on this issue of fees, depending on how they move forward in the house. Whether or not you included in the financial choice act or not, any vote or public stance that lawmakers have to make is of consequence in this sort of broader, decadelong fight over these interchange fees, as well as specifically when it comes than two debit card fees. Scarlet thank you. Oliver still ahead, down to the final four in the ncaa basketball tournament area and we will tell you which other investment titans are right on the heels of the leaders in the challenge. Thats next. This is bloomberg. Scarlet this is bloomberg markets. Oliver time for the business flash the biggest news of today. Pimco, that the money manager was ousted one year ago and the suit was filed. Pay 8 million to pay the claim, which will be donated [no audio] according to a person familiar with the matter, they ,greed to pay 80 billion donated to the billionaires family foundation. The new octane memory package will be programmed 14 five that 14 times faster than the standard drive, and attempt to diversify Revenue Sources the on processors for servers and personal computers. After just one day, the South African president ordered the finance minister to a weeklong andshow meeting in london the u. S. Raising concerns that the embattled leader could be preparing a cabinet reshuffle. Having left with the business ,eaders that clashed with him they will continue to meet with investors. That is your business flash update. What happened over the weekend . The final four is now set. It or break your bracket . Up t mine was broken oliver my broken along time ago. [laughter] scarlet if youre going to be our kt, you can track our celebrity leaders. Leaders . Participants. Thats a good word. Melissa and company, in the Charity Event that he would give win,oney to, if he should all doing well. If you look at the brackets, though, heres whats interesting. He had wait there we go, he picked kansas to be the champion. Oliver its hard to win unless you get the champion or a bunch in the final four right. Pick,gon is a part of his but not many people actually got close to that area some of these celebrities did retain investment knowledge. Im looking at jim chanos right now, while he doesnt have the file, he did short kentucky, which was a good move. He is, of course, the big shorter there. This is still shifting around a lot as we go into the final round, we dont have the top four, the final four, or the winner, so it will be tough to win. If you want to see it it willn the bloomberg, close soon. In july,rst months what could reverse a new trend . From new york, this is bloomberg. Careful joe, theyve got you outnumbered. The dinosaurs extinction. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Something for everyone is awesome. Find your awesome with the Xfinity Stream app. More to stream to every screen. Thank you so much for that down home welcome. Show me female vocalist of the year. Thank you so much. Thank you so much acms, i appreciate it. Show me acm best moments. I could never have wished for, asked for and dreamt of anything more than this. Catch your favorite moments from the acm awards and an exclusive encore performance by Kelsea Ballerini following the show on xfinity x1. The acm awards. Live on sunday, april 2nd 8 7 central on cbs. Commodity markets are closing in new york. We begin with metal. Gold is gaining on the day. It is up by. 6 . The failure President Trump and House Republicans to pass obamacare replacement bill creating demand for haven assets. The falling dollar helping to boost gold prices. If you take a look at a longerterm chart. You see the gold on an intraday basis approaching a key technical level. , goldenterm trendline yellow here. Tested that level back in late february but last time, it was above that level before the election of donald trump. It didnt really stay there for very long. It was there for almost a month before plunging below that level. Right now, we will see if it gets past that and it could turn the trendline into support. Opec members say that they will consider an extension of production cuts after the meeting. It is too early to talk about an extension. Oliver in new orleans today, alix steel just wrapped up an exquisite interview at bp deputy ceo to talk about oil. 47 a barrel. It is going to take a while the work these inventories off. The price will go up and down. Weve been saying 55 reel for the next 25 to 60 over the next five years. We think supply demand fundamentals are working out. Only one of them is unconventional. At 47, what happens to deepwater for you guys. It is according to where you are in deep water. Dog. St sanctioned mad it works with very good economics. ,his range that we talked about it should stay there for a little while. We dont think theyre going to jump up but the project is very solid. They are about 35 better on a cash basis. What is the breaking point then . We go for a while with that. We think it would be below where the market balance is. We flex the capital programs, we flex potentially more divestments. Even at those type of prices. If they dont cut production, what happens to the oil price . I dont know what would happen immediately. We really believe supply and demand are going to balance toward the end of the year. For the rest of the world, they have been on a draw. To hearwhat you start from the service providers. Halliburton alluded to that as well as tweak. What kind of cash pressures are you expecting . World, i 55 to 65 expect to see massive inflation or cash cost increases. It may happen in certain areas. Industry having some inflationary pressure. We are not seeing that inflationary pressure. There is still this capacity in the service sector. With the contractor such that we dont get into this inflationary spike. To that point, you go to 17 billion and 5 a year, that would imply a lot of cash increase. Youre going to get a tighter market offshore. When does that turn . The 55 to 65 price range, i dont think we will see a lot of inflation because there is plenty of industry capacity. You can make a decent living, no doubt. But i think there is still excess capacity. Home at more efficiency can you get . I think quite a bit. Its not as efficient in terms of our own process and standardization, collaboration. We still tend to engineer. Urselves it there are many things were working on. Gore is still quite a bit to. It look at the Term Contract moving higher. Do you think you are an outlier with that . We expect production totals to tighten and we want them to move up. We tend to think that shale is exploding. That is what we see with wti prices. That there is a story to be told in mexico. It is leading this rebound. Where do you set . Wax we just sanctioned a new project. It is an example of a reserve base. And we can hook into existing infrastructure. You can see that in the world. I highest quality and closest infrastructures. When you talk about shortterm cycle versus longterm cycle, is your money still betting on longerterm . We like a balanced portfolio. We have investments across the world to cover those. Portfolio. Alanced is it 5050 . It is spread evenly across the categories. Do you expect it to run forward that they will be boosting production . Or the shale end up over taking it . We have seen a revolution in shale. It is growing. I expect price signals to affect shale faster. There is so much improvement that has occurred. You start to see the best he water projects. Its not just the gulf of mexico. Its other places in the world as well. Oliver that was the deputy ceo lamarr mckay with alix steel. Scarlet lets check the headlines with mark crumpton. Trumpsesident soninlaw has volunteered to answer questions before the Senate Intelligence committee about arranging meetings with the Russian Ambassador and other officials. The white house is Jared Kushner has agreed to speak with the panel but has not yet received confirmation of the hearing. Lawmakers have been investigating possible ties between President Trumps campaign and russian officials and if russia meddled in the 2016 u. S. President ial election. Oning a hard line negotiations will hurt the u. K. That is the message from sweden today. One of britains closest allies in the european union. It comes days before theresa may triggers article 50 and starts negotiations. Swedish Officials Say britons negotiating tactics are hurting the chances of getting a good deal. French president ial candidate says the plan is rejected by the french. She will resign. On european radio, she reiterated her planned a hold a referendum on the issue if elected president. Polls, thetop of the may 7 motive. Oakland will say goodbye to the raiders. Nfl owners have approved the vegas vegas where taxpayers will foot a large portion of the bill for a new stadium. The vote was 311 with the Miami Dolphins the loan objection. The team could potentially play an oakland until 2018 while the new stadium in vegas is under construction. Powered by more than 2600 journalists and estimates analysts in over 120 countries. Thanks so much. It the former ceo of Jcpenney Neiman Marcus will give us his take on retail and what lies ahead for u. S. Department stores. From new york. This is bloomberg. Oliver this is bloomberg markets. Scarlet there has been a steady drumbeat of negative headlines for retailers. A julie hyman has a look at how that has affected stocks. Julie if you look at the year to date chart of the retail index, its pretty much paste the overall s p 500 up i5 percent. But it doesnt really tell the full story. You have to look at what the components are in the index and realize that amazon is in here as well. When you see retail, its not this monolith. Here are some of the best and worst performers. Earnings price to the upside recently. Priceline is also in there. Something you dont think of is retail. Aren the downside, there big percentage declines, mostly mallbased or moller adjacent retailers. To look at todays session because there is a story out in the New York Times saying that amazon might be getting into the furniture and Home Appliance business in actual stores. That is something it is considering according to the paper that was familiar with the companys plans. The retailers that might compete with that. Amazon itself is a little changed. Its been on quite a roller coaster. Best buy and jcpenney also higher. Amazon has really been the winner over the longer term. Take a look at the bloomberg here. If you normalize this chart, amazon is up here and Everything Else is pretty much flat. But you get the idea. Stores,st department and amazon is the purple line that has just kept on going up. This is one of the Biggest Challenges for rick and mortar or traditional retail, the amazon juggernaut. The changing way that people are spending their money. Another thing we have seen characterize the retail landscape is a lot of store closures. Numbers compiled by business insider. Payless is closing 1000 stores. Radioshack, jcpenney, staples. All of them closing a lot of locations. Scarlet thank you so much. Retailers,ying on julie just outlined the Overall Industries coming off a difficult season. We want to welcome the Equity Partners and Senior Adviser and former ceo of Neiman Marcus and jcpenney. They join us from dallas. Ant think of a better voice amazon going to instore sales. Is this the beginning of the end as we see a lot of these bigbox stores continuing to struggle next amazon. Retail expansion over the last 25 years. In america, we have four to times what they would have in the u. K. And twice what we have in canada. We have too many stores. Many of these models were built over 50 years ago. The big change, the internet has a lot to do with the iphone. The iphone is 10 years old. The change is much more dramatic in the last 10 years. The iphone allows you to take it with you as you walk. People going to stores. It reduces the number of times that they go into the mall. Saying all that, you will not ever see a day in my lifetime where there will be no more brickandmortar. Brickandmortar is the foundation of where it all comes from. Saying what people are focusing on is the internet. But remember, there are not many retailers that do 30 of their more of business in the internet side of the business. Most of them are down around 10 . Or 65 of your0 business is going to be brickandmortar, you can lose focus on how you make that attractive to your customer. That is the issue you have today. Cut back the number of stores and focus on those to make them an attractive and exciting place to shop. Let me put the question on jcpenney to you. We have a chart that shows how Short Interest is rising. It is now 33 of shares outstanding. Year, they were not planning largescale closures but they have reduced reversed themselves. What is getting in the way of a penny or Department Store chain figuring out the balance of how many stores it needs to have versus how many stores it should have in the internet driven age . A lot of companies have made the decision. A little late to the book on that one. Will the terrier rate deteriorate. Take the sales away from other stores. , you have a down better chance of improving your margins and cutting back your expansions. It doesnt mean that you couldnt have done it a lot earlier. The Reason Companies go out of business, they dont stay in tune with their customers. We have a baby boomer who is getting older, a closet full of , and you have a millennial that has come along. Most of those stores have not adapted to what she or he needs. And you always have to know what your customer is up to next. Not what they were up to yesterday. When we go out of his this, its because we lost the focus of who the customer is and what he or she wants today. I want your take on the idea that m a can save some of these companies. We illustrate how difficult this may be. Neiman marcus has looked at the potential buyout. They have a huge pile of dead here. What are the limitations m a has for these solutions . In the case of Neiman Marcus, its one of the greatest brands in the world. Company that is a was bought out by three funds. The first is owned by the smith family. Not gave it we are interested in what you do today or tomorrow. Beenast two players have more typical and private equity. You have to be longterm thinking. You have to be a longterm investment. You dont know when the fashion trends are going to change. Its been really no hard fashion. It is very difficult to capitalize on that. Think many of the stores have a good job of identifying the needs. We just havent made the excitement right for them at this point in time. They a good fit for Neiman Marcus . I think hudson bay is an interesting company. But from the point i have seen them, it is basically a real estate play. Retail has to have is someone who really loves the retail business, loves dealing with the sales associates. They spend their time thinking about using their staff. If you are interested in doing two to five years, they want a rate of return. Quite frankly, when they bought the company, they bought it just the end of a peak fashion period. It wouldve been two years of the downturn. When everybody talks about amazon, theyre not really a retailer. They are a distribution channel. They work retail in the sense of books but books are a lot different. Think theyre the most talented people in terms of distribution of ideas. Theyre trying to get into the fashion business. Look at how much business they do for other people that are retailers and they distribute the product for them. Equity partner, Senior Adviser and former ceo of jcpenney. Thank you for coming. Scarlet the risk route seems to be easing today, u. S. Stocks trimming from their earlier losses. Look at the reaction from the trade and then trump agenda. This is bloomberg. Oliver this is bloomberg markets. Scarlet the risky assets are raise are easing just a bit. In theracks remain socalled trump trade, republicans have added trade with other policy priorities that wall street has been sharing. Preview is joe weisenthal. And a lot of the ways we are seeing people kind of wait things out is move out of u. S. Equities and into emergingmarket assets. Joe emergingmarket assets benefit from the weakening dollar. Is basically where it was around election levels. Gains arehe dollar gone and they benefit from lower u. S. Interest rates. We see 10 year yields at the lower end of the range. They generally also benefit from low volatility and the lack of we see this sweet spot combination. On a chart, i want to get your take on it. This is looking at the put call skew. The more bullish it is. If you look at what happened after the election, things got pretty bullish. The market has gotten less bearish. Doesnt seem like anybodys changing their mind on banks. Joe i find that chart to be nonintuitive because if you look at actual volatility by equity levels, banks come off a little bit. There has been the flattening of the 210 spread. The idea that banks will benefit from borrowing and lending has come off. And concerns about regulatory reform, local banks selling off on concerns that the regulatory rollback agenda is going to be delayed. An interesting chart. Scarlet there are a ton of fed speakers out there this week that i wonder if it makes a difference at this point. Everyone is prepping for rate hikes including the one we already have. Do they matter . Joe the thing that might matters if we learn anything more about portfolio run off. People dont seem too concerned about the pace of hikes but it might be something in the nature of the tightening. Any shrinkage would be a can do some kind of tightening. Joe weisenthal will be back in 30 minutes time. Dumb as our conversation with ed hyman at 3 30 p. M. Eastern time today on what you miss. Oliver two exclusive interviews with current fed had president s. This is bloomberg. Attention homeowners age sixtytwo and older. One reverse mortgage has a great way for you to live a better retirement. Its called a reverse mortgage. Call rfree information kityour with no obligation. It answers questions like. How a reverse mortgage works, how much you qualify for, the ways to receive your money and more. Plus, when you call now, youll get this magnifier with led light absolutely free when you call the experts at one reverse mortgage today youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree cash from the equity in your home. And heres the best part. You still own yohome. Call now take control of your retirement today oliver it is 3 p. M. In new york, 7 p. M. In london. Scarlet welcome to bloomberg markets. Where live and bloomberg World Headquarters in new york over the next hour and covering stories that of toronto, washington, and madrid. There are the top stories from the bloomberg and around the world. Andhour ago, trading day stocks paring losses with investors. A witty the next move from the Trump Administration after the health care defeat. There are two to three rate increases that are appropriate this year. And in the ceo talks business with us. We will get an update on the dupont spin off. Defying gravity in the last year. His one hour away from the close of trading in a good check on those markets. In your thetocks highs of the session here. You and i have talked about this a lot. From tax form given the failure of Health Care Reform and the repeal of the aca. It looks like at least today, investors are taking a sort of waitandsee approach. There is not the sort of end of the world feeling in the markets here. The dow is down for the eighth straight session. Here is the intraday chart over the past eight days. It hasnt been that big slump considering how long it has been. Slide is the longest we have seen on a consecutive basis going back to 2011. Although that was much larger in terms of magnitude. The worst performing group is the financials. We are seeing many of the trade heavy firms. Morgan Goldman Sachs heavily weighted. Bank of america, morgan stanley. Defeat of the a hca is something that is positive for the hospitals. There was concern that if there was shrinking of the program, it would leave them with more uninsured patients that are not able to pay. Outside of stocks, we see something of a risk off tone. It is sort of moderated as the day has gone on. A lot have been pulling back on their bets. It is below the 200 day moving average. Of ae seeing a little bit decline in yields and crude oil is selling off although the decline is also moderated. Although they have not yet agreed to do so. And on the subject of treasuries, we have seen people cutting their short. It seems like last week or two weeks ago we were having a debate over whether the market in treasuries was over or below this redline. Were looking at the white line in particular. The blue line is treasury futures. We have seen people net short treasuries this year. They are a lot less short now than they were just about a month ago. This is something we will continue to watch is the debate goes on if the market is over in treasuries. Grantedthe eu additional pairs to a doubt takeover of dupont. One of three major mergers currently pending. Reinforcing the extent of changes that have been sweeping the industry. Split off of dupont in 2015. Great to see you. Started at dupont in 1980 and have been at the front of all the changes we have seen in the industry. In 2015,nt spun off there was quite a bit of bearishness. More selvin buy rating on the company. What did investors and get wrong . Its interesting. We had a 200 year history with the dupont and we like to think of ourselves with a 200 year head start. Number one, the company or with lower products, we had liabilities that we had to deal with. That now has gone behind us. We delivered the company. Legal liabilities are behind us and people are starting to see the businesses we have turn up. Liabilities, that has been something a lot of people have pointed to as an overhang. Oliver i want to visit the bloomberg terminal a little bit because there is still, relative we look at net debt overall. You guys still are above your peers. What will be the case to work that often bring investors in . We put together a fivepoint Transformation Plan and that was going to get us where we are today. We executed every element of that plan and did exactly what we said we were going to do. We are where we want to be. This is about the right place for us in terms of debt level. Theant to get down maybe three. We bought down about 400 million of debt. I think from the debt level, we are exactly where we want to be. Scarlet your biggest product is titanium dioxide. Talk to us about the pricing. Were at the bottom of the cycle and it is a cyclical industry. We are a leader, most profitable. We start to see things turn as prices turn up. Is other half of our company other products. It is really helping us grow. We also have some great new products. Youre looking to triple production. What is the revenue split in five years time . 2 and floral products will be close to 5050 split. But another will be the lion share of the floral products business. You see us shift away from some of the more commodity chemicals like the base refrigerant or some of the older polymers to some of the brandnew polymers as well as the brandnew refrigerant that is the lowest Global Warming refrigerant in the world. Oliver when we look at the diversification of that, a lot of the highest margin product is titanium technology. If you diversify away from that, what will happen to the margins . I think that is where we want to be. Margins are based primarily on price. Productsng these new on the floral side, youll see them be in the mid20s. Be the same get a position as where titanium dioxide is right now . Exactly. Ph tct this is the function that shows you the biggest shareholder. Right here at number four is greenlight capital. Taking a stake last summer after Citroen Research recommended a short on your company. Wrong in the end, or lease at the time when they said the company was going to go bankrupt. To what extent do you still get inquiries . Do you push back against his assertion . You see a lot more long investors coming into the stock. I was a david and greenlight have been a tremendous partner for us. You have been wonderful. He has done really well in the stock and hopefully we can get him to do even better going forward. Scarlet what kind of suggestions has he made specifically about returns for shareholders and that kind of thing . The they are impressed that we have executed off of it completely. From that standpoint, the feedback we get is that not many startups actually execute the plan they put in place. We have been able to do that. He has been a great cheerleader behind us, making sure we are executing off the right plan. Oliver theres a great deal of legal battles ahead of you. The settlement addressing the lawsuits, it had been an overhang. Is that now past now that youve gotten the settlement split between yourself and dupont . Will that be the end of the conversation . Will we see more cases come forward . A think that was the big issue that investors had. Thatt was able to settle with the plaintiffs in we were able to settle with the dupont because we indemnify dupont through that process. Those 3500 cases were the big cloud that overhang that is behind us now. You came onto the scene with an expectation of a very big dividend. Pointing out some of that debt and moving to other places, what will happen with the Company Dividend . The use of cash has been to deliver. It has been used to invest in our business. The largest facility in the world just completed. What is the best way to return cash to the shareholders. Mark a senior british counterterrorism officer says authorities have found no evidence that westminster attacker was associated with Islamic State or al qaeda. Commissioner says he clearly had what he called an interest in jihad. But police had no evidence he discussed his attack with others. He was not a subject of interest for Counterterror Police or the Intelligence Services before last weeks deadly attack. President trump will reverse much of former president obamas efforts to address climate change. Tomorrow, the president will sign a sweeping executive order and promoting domestic oil, coal, and natural gas. Thats according to details shared with Bloomberg News. Some of the changes would take place immediately and others would take years to complete. And extending oil supply cuts into the second half of the year. The Russian Energy minister spoke with bloomberg at a meeting of Oil Producers in kuwait. We have decided that in order to make decisions like this or any recommendations, there needs to be a meeting. We have discussed with the secretary to prepare more materials. Big maple leaf. Burglarsn how the avoided setting off the museum alarms. We we hear from charles evans, president of the chicago fed in a next list of interview. This is bloomberg. Oliver this is bloomberg markets. Scarlet looking at the fed possibly a hike path now, we see two increases this year if uncertainty lingers. Michael mckee spoke in an exclusive interview from madrid. In this conversation, they focused on the data behind the feds decision. I think there has been a good amount of optimism right after the election talking with business contact. There was optimism that policies might be more supportive of Business Activities and growth going toward. I think sentiment measures picked up on that to some of that. The incoming data had been quite good. The labor data had been really very good from strong Payroll Employment to the labor force continuing to move sideways against a downward trend. More people are thinking about coming into the work force. We definitely heard a lot of optimism among wide variety of contact. Terms of how things play out in the district, Business Leaders are telling you they are going to act on that . That is a key part of this. Seems to be hoping for things to play out in a more favorable way in terms of policies, regulations. Everybodys attitude and people going out and spending more. For the moment, we havent seen that translated to Firm Commitments to expand floorspace , factory size, and things like that. Time, they feel like the right size for the demand. They have been able to innovate and meet stronger demand with the existing resources. I think they will just have to see these demands actually show up and have a strategy to expand before we see it happen. It did you incorporate any possible student fiscal stimulus effects into your projections . We did that back in december. As chair yellen said, half of the participants had some assumption. The reason why we did that was longterm Interest Rates have gone up. They went up in part because of the op him is him after the election. A little bit of a credit sprees. Quite squeeze credit squeeze. There was an assumption there would be some amount of skulls millis over the next two years. It is relatively modest. We see it legislated to have enough act. The amount of boost we see in the outlook was not really out of line with other good fortune that could occur from around the world or businesses being more optimistic. It is a little bit of when i say, when i have more confidence in my outlook so it will be 2. 25, that would be really nice. We will be driving the labor market. We have more confidence that we are likely to get inflation moving up. We see that moving strongly in getting ahead. Youre not confident in that yet, but are you nervous about the possibility that the fed . Ight have to move site knowledge Something Like that could happen if we saw very strong growth. If it is really on track and Inflation Expectations moved up, it was more quickly than the 2018 in 19. Adjustments would be more than enough to handle that. Policy might be a little tighter. Before i let you go, a policy question. The structuren on in the conduct of the federal reserve. Are you doing any lobbying . Are you doing anything to head off any possible regulatory changes to the head . The fed . We are a nonpartisan is to ship. Re focused on mandating meeting the dual mandate objections. A lot of times, Central Banks are complicated. They tend to be misunderstood. We have definitely try to explain to his many people as we can what we are doing, why we are doing it. Answering questions. And when we do that, people have a better feeling about the thing. Scarlet you will have more conversations. And on friday. Todays options insight marks the return of volatility. The trump trade has some of the biggest. This is bloomberg. Oliver this is bloomberg markets. Scarlet time now for options insight julie hyman. Really joining me is kevin kelly, chief best an officer week on capital. It has been an unusual double of days, and we have been asked in a lot of people questions about the sort of reaction we to the failure of health warm. The Market Reaction has been muted. What have you been hearing about what the thinking is . Health care reform wasnt going to move the needle much, only affecting a couple sectors. Want taxt really reform. This is sort of a sideshow. Well see how well the house will get along with this and it another is a lot of uncertainty about that. That is why you see the spread from the lows to the highs. Has beenbelow 15 which the average over the last four years. But you are starting to see a lot of people trade friend sectors as well as the broad market. We leaned off wanted of easing as well as Monetary Policy and post focusing on fiscal policy that this admin nations promising by august. Julie we have it up on the bloomberg. There you have it. They are now thinking that volatility is going to be elevated versus the short term. The same amount being traded today and you see the widespread of financials. It is not precipitously trading inputs. The larger banks are there, but the regionals have gone down over 10 since the Health Care Fiasco happened. People are not seeing a lot of volatility going out because they are picking and choosing. Julie it has to do with something sector specific. You think we can see downside . Volatility is extremely loan consumers consumer staples. The market is at 15 right now. We are seeing an expensive part of the market at 21 times trailing earnings. The biggest constituent in this etfs Procter Gamble at 12 area they are at 24 times. They pay about a 3 dividend yield. If earnings dont deliver and if we dont see this happening, we put on a conservative strategy. You want to do the 5450 may foot put spread. It will protect you on the until may. Its a great way to cheapen the insurance policy. Scarlet thank you so much. Still ahead, an interview with the chicago mayor. This is bloomberg. Mark im mark crumpton. Time for first word news. The aflcio will sue if the Trump Administration tries to water down and obama era used in overtime eligibility. The labor federations chief told Bloomberg News that the impact could be devastating. It is of whitecollar workers were set to become eligible for overtime pay last december under the new rules. They were blocked by a federal judge. The president toss labor secretary nominee wont be if the administration would defend the rules in court. The family of an american who was killed in last weeks attack in london is expressing gratitude for the kindness of strangers. Insisting that some good will come from the tragedy. Curt coffman of utah was on the last day of the european trip with his wife melissa. An attacker motor down pedestrians on west mr. Bridge before stabbing a Police Officer in a parliament yard. Britains has a planned trip to russia by foreign secretary johnson this week has been post owned. The trip is being
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