Mnuchin, laying out the case. How much detail was there compared to what we had thought, what was indicated in the hours leading up to the announcement . The key moment was when he says they would be attacked on the left and also the right. The question becomes politically speaking whether or not they can unify this public in party in order to advance Republican Party to advance their goals. Lead tore things that more questions, and we will have to wait and see as the reaction comes out of the House Freedom caucus whether or not they feel this is enough in order to advance their goals. How they choose to pay for this program truthfully the numbers are being crushed. Im sure people like bloomberg northwest are carefully crunching the numbers as we speak. , it is the you have been following for some time. We saw the s p reaching the closest high for the day, though why tf has almost doubled, certainly a big deal. What maderprised you, you do a double take . Sahil a few surprises so far. The white house released what is a mirror image of the plan that donald trump released of the candidate on taxes. It collapses the individual tax bracket into three rates. There are some tweaks from the campaign. He talked about repealing the estate tax, the amt, as a corporate rate of 15 , which he proposed in the campaign. A lot of these are shared by republicans in congress, a big Sticking Point is how it will be paid for. Secretary Steve Mnuchin talking about itemizing interest and charitable contributions, but it eliminates local and medical expenses which will be a heavy lift in congress. This is the beginning stage of what is expected to be a long, brutal slog their tax reform is like an airplane that is about to get to the runway. It has not taken off or have a destination. The plane probably hasnt even been built yet, but we have designed ideas. Scarlet very descriptive. Let me turn to you now. The president specializes on tax. What are your concerns . Investment income tax is an obamacare tax, and paul ryan has said obamacare taxes stay with obamacare. The white house does not think that. They will go ahead and get rid of it, which is interesting. Some of the other things you notice are the details, how many times they said the details are going to work out. The senate, the house, and the white house are not on the same page. Every single deduction, credit, or lukeville loophole has an industry that is priced for that. And how do we get there, how do you pay for it . Everyone wants their slice of the pie, soon you have nothing to pay for anything else. Scarlet and the border adjustment tax was one proposal of paying for these. We did not hear anything on that. Is it dead, for off the table . Kevin we got a statement i can read to you from the retailer industry which has lobbied heavily against the border adjustment tax. They say they welcome President Trumps outline for tax reform. They said the industry paid the uphest ineffective rates of they will fight back against the harmful adjustment border tax proposed by house republicans. They are still sorting through this right now as well. What we saw as was alluded to was the barebones, minimum skeleton of where this is going. The details of which quite frankly are going to be worked out by people like representative kevin brady and other republicans in the taxwriting committees in congress. But this is a benchmark. It is a start of the conversation. This is something that will start to move the ball forward and is an opening bid. Oliver i want to talk about how this olds into the political element. Gary cohn was talking about capping out the Capital Gains rate at 20 . He said he would never bet against this president. It is a bull claim because there will be a lot of discussion to be had about the tax plan from the outline we got here, how much pushback, is this the numbers and figures we see in the economy. Sahil the name of the game will be united the Republican Party. This is sure to save face a lot of democratic opposition. As low the Corporate Tax as 15 , that kind of passthrough, which could include President Trumps own business empire. Democrats will not be quiet. Senator schumer spoke out saying if this provides tax breaks to upper income people, the democrats will be opposed. This is a redline that have not crossed for a while, and they will not even with donald trump as president. Republicans have uniting just have to unite themselves of the things they like with rate cuts on the individual and corporate side, but how to make them permanent which requires paying for them. , you the senate rules cannot do it with a simple majority unless it is paid for after the 10 year window. The two things may have proposed to pay for include the border adjustment tax and eliminating deductibility of interest, are lobbyists,tered by the people that would lose as a result of them, and so it doesnt seem to be going anywhere, which could collapse the entire project. A lot of questions need to be answered. The good stuff they can agree on. It is the tough stuff they have trouble coming together on. Scarlet one of the pieces of spinach is corporate passthroughs. , they could speak to this have a 15 tax rate for companies from the 35 , and companies are passthrough entities, which means they have individual rates. What is being proposed, is it feasible . Telling anyare passthrough business these are small ones but also law firms, the top rate is 40 . They are cutting it down to 15 , which is a huge tax cut. The downside is it opens a big room for gaming the system so people can try to classify income i might have to pay individual rates on, that 35 , you can pay 15 , you will. There are a lot of smart attorneys. They will do everything within the bounds of the law to bring the income down to 15 . That is a huge difference with cavaliers looking at this plan and its cost. People dont want to pay the higher rate, and it could make the numbers not work on this. Create and we cannot Oliver Renick lp and pay the 15 rate . Oliver assuming it doesnt already exist . The flip get health care, something that might take on a lets look at health care, something that might take on a second life. Kevin when you look at what is going on in terms of the senate, they will have a big meeting to talk about tax policy and also about where health care is. Seeing they could have an investment. Advancement. Speaking with the House Freedom caucus chairman in interview tomorrow morning. It will be interesting to see what he says. Oliver all right, thank you all. We will sift through the tax details coming. Tomorrow, kevin will discuss the gop healthcare bill with mark meadows, the head of the House Freedom caucus as we discussed. Tomorrowa second time on bloomberg markets. Oliver u. S. Markets close in under two hours time. We have the broad outline of the Trump Administrations tax reform plan, so lets look at how the markets are responding. A hugewe are not seeing stock reaction. My major averages are in the green. They have paired some of their advancements, not a huge swing. Lets get more details by looking at the s p 500 as a proxy. It is up nearly 0. 2 . The highs of the session reached at a couple different point, one of them before this press conference, a gain of. 25 . A couple of things perhaps that investors are considering when they look at this movement and listen to the broad outline, they have stock market surprises in this, a lot of details leaked over the past few days. We were coming into today with the gain in stocks since the election, but already a gain we were seeing for shares. All of this muting the effect of the tax plan. ,f you look at specific areas we are seeing a little reaction. Hr block is one of them, the stock coming down as we talk about specific action of the tax code. Simplification of the tax code. Now it is coming back. The software did not see much reaction. We are trading lower on the day. It is alreadyinto t did not change much. , we have reaction at the u. S. Dollar, the bloomberg dollar index. It came off the highs. We are talking about magnitude, not a huge move. The 10 year as well, consider the effect some of the details come out are having on the treasury market and is a similar story. Huge. Is movement, but not there has been quite a bit of bouncing around within the treasury market today. All of this could change. The last factor is as reporters were talking about, is because the details of the plan it does not mean it will get past. Scarlet the opening bid. Thank you so much. For the other headlines, lets check in with mark crumpton. Mark Kevin Cirilli reported the of freedom the house caucus is backing the latest healthcare proposal as the white house tries to revive efforts to repeal obamacare. The 40 or so hardline members who helped block the earlier bill announced their support for the plan crafted by tom mcarthur , a moderate, and mark meadows, head of the House Freedom caucus. While the new proposal is not a full repeal of the 2010 Affordable Care law, they are prepared to support it. Mexico is doubling down on rhetoric against President Trumps proposed border wall. They appeared to be slowing efforts to Push Congress for flood funding. This going slammed it, calling it unfriendly and a hostile act. He said mexico will not contribute a peso to construction and will pursue legal measures if the borders are infringed upon. In paris, prosecutors say they have arrested 10 people linked to the 2015 attack at Charlie Hebdo magazine and a culture store. The suspects are said to have been involved in supplying weapons to the attackers. 17 people were killed. Jonathan deming, the awardwinning actor, director of silence of the lambs and the manchurian candidate is dead at the age of 73. They say he died from a cyclical cancer and complications from esophagus cancer. Oscars. Ive acts dead at the age of 73. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton, this is bloomberg. Scarlet thank you so much. Oliver we will look at market moving on the report donald trump is considering scrapping the north america free trade agreement. Oliver this is bloomberg markets. Scarlet we want to return to our top story, President Trumps agenda, what it could mean for the economy and market. We will talk about the tax reform plan and the plan to withdraw from nafta, the announcement made. Here is the international correspondent. Also dani burger. As we were talking, you reminded us of a senate rule we need to consider when we talk about the tax plan being proposed. I dont want to harp on this too much, but if you are trading, think about what is in the plan but whether it can actually passed and it cant. Under the senate rules, it cannot increase the deficit after the 10 year window by cutting tax rates if you use the reconciliation process they plan to use to get this through. After three years according to the joint committee, a 15 corporate rate would do that, so you either could not consider it as a 10 year program, or maybe you could do two years, and that will not affect anyone thoughts on corporate earnings. This is not even possible as part of the problem. Scarlet you have that under the byrd rule. It cannot be done. All the other moving parts, or is this just Everything Else is zero, drop the Corporate Tax rate to 15 , that is what it does to the deficit over a time, how can you know where it is going if they dont lock in . It would bring it to deficit neutral, which is what you have to do the reconciliation. In theory it could be done, but at this point, it is not able to do that. The idea they will get enough growth to pay for Something Like this, it will not score that way. They end up either with a 10 year window for 10 personal tax cuts and two years for the tax cuts, or they will not get anything at all that looks like based on what we know now. Scarlet and of course another element is the tax holiday for companies that have a lot of cash held overseas. This is something people have talked about for so long are we know there is cash overseas, but what have we learned from history with lowering the tax rate or putting a nominal tax rate . Do they do anything meaningful with the money . If this seems like we get tax cuts, it will be to the temporary. As a company and from executives we have been talking to, they will not make big adjustments in what they are spending in capital expenditures. This will come back to dividends or buyback, which is something that looks better than capital expenditures. Oliver, i know this is something you look at before, but not only to Companies Like uncertainty, they will not put it towards, but the market rewards is buyback. Oliver if you look at the divergence between the soft data and hard data, there is a lot of term for. I want to jump into the terminal. She brought this chart, giving truth to a point in terms of looking at versus buyback. These are measures of the company to spend money respectively on each of those shareholder friendly sort of activities. Some of these companies that have the most money overseas, they are big Companies Like apple. They are in the big buyback plans. I wonder where that money might go elsewhere . Reporter at the same time, to put in, you do not know what is going to happen. At the same time, we have other geopolitical issues, we have nafta which will hurt multinational companies. Even if the money is coming back, there is so much uncertainty. It will be hard to commit to a longterm plan of spending money. Scarlet politico reporting the white house is to consider withdrawing from nafta entirely. This is a complete change of tune. Initially when President Trump met with Justin Trudeau, he talked about tweaking parts. Peter navarro talked about creating a north america grouping of strength rather than ripping it up entirely. Now we have another angle. Reporter it depends on how you define change in view, because this is what he said during the campaign. That he could say pull out of nafta. What it would do is start the thek, because with any of three countries, if they give notification it is a 90 day. If the issue right away, it would pull forward negotiations people thought would start in the fall. , it couldtually do it have a worse affect on the United States than the other countries because without that, you fall back to wga wto tariff rules. Mexico and canada can impose canadian orer on mexican made goods and we can on theres. So in theory, the administration wants a bigger part that brings canada and mexico to the table. It does not seem to be the way Justin Trudeau is thinking. Scarlet thank you from your perspective. Morer we will talk taxes, of it, trade, and the overall of doddfrank. Catch the exclusive conversation with Jeb Hensarling, chairman of the house financial committee. This is bloomberg. Scarlet this is bloomberg markets. Oliver it is time for the Bloomberg Business flash, looking at the biggest stories in the news today. After the close of trading, we would get results from 22 Companies Including amgen, oreilly automotive, and paypal. They will focus on the account growth, shifting to online purchases, and adoption of one test. Analysts estimate . 41 or paypal. Invesco is the frontrunner to acquire source from warburg pincus. The auction is ongoing, there is one other bidder in the race. Source could be valued at 500 million. Invesco might make it to the powershares armed, which manages traded funds. Generally shares nearly chipotle shares nearly 18 higher despite the recovery from the equally crisis e. Coli crisis. Improved about new and tortillas to be attract loyal customers. That is your business flash update. Still ahead, the white house is setting its sights on probing aluminum imports. This is bloomberg. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Scarlet from bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. We have Commodity Markets closing in new york. Oil is making a comeback, raising losses. They are following the latest government report showing crude stockpiles only for a Third Straight week. Crude inventory falling. That is according to the u. S. Energy information. We spoke with jeff curry, the head of Commodities Research at goldman sachs. He sees demand remaining robust. Demand levels have been getting higher and higher, and supply is playing catchup. When these markets going into a deficit, they stay at a deficit of several years. In a surplus, they stay in a surplus for several years. Scarlet that was just three of goldman sachs. Oliver and a developing story, aluminum is higher in london after wilbur ross is excited to announce a new probe into imported aluminum. Stocks are falling, century aluminum, Kaiser Aluminum and alcoa are all higher now. Lets bring in our middle editor. So we have got an announcement that looks a lot like what we talked about recently in terms of the u. S. Probing steel dumping by china. Reporter we will hear something similar to what steele was last the, an investigation into domestic alumina market here. Exactly. Scarlet what is in place for aluminum . Reporter we had the wto case that came up at the end of the januaryministration in that essentially said the wto would be looking into overproduction out of china on primary aluminum. We have cases on excursions, downstream products or products you and i might use in automobiles or airplanes, for example. We had a case that was put in front of the itc on aluminum foil coming from china. That is what is already out on the front. Oliver we know how regionally specific this will be . Is it clear it will be china . Or else do we get aluminum from . Joe i am not sure that the market knows what it is. You saw different types moving. You have downstream product makers who were moving. Import 4ion is, we million tons of alumina every , mainly canada, russia, the middle east and other countries. We import zero primary aluminum from china. Oliver so this is a certain type of material or metal, or will it be obviously the idea is they will look at the entire market. It will be downstream and upstream products, and they will come up with some sort of report or whatever that says here is as lay of the land as to to how they will frame it, i on certain. It is primary aluminum and why they are going after china, the key that i was i was speaking to a researcher before i got on here. He said, we import zero primary aluminum from china. But we do import aluminum foil, which we have a case going on with that, then, and she products. That is not even on the table at this point. Scarlet then what is the Trump Administration hope to achieve . Is a fair question. It probably goes back to what shannon and i were discussing on steel, which is it might be symbolic, showing they are out there, trying to show support for domestic industry, which has been very good. The past year has been good. It is a u. S. Industry that has struggled, especially the domestic producers. We were looking at 18 to 24 months ago the possibility of the entire Domestic Production of primary aluminum going away. So there is still a lot to be talked about, but is not as if the Trump Administration is bringing something up out of thin air, but what are they going to go after . A lot of people we import from our good trade partners. Trump is targeting a few commodities. You talked about lumber in canada. It has a direct connection to housing. He is talking about steel and whether we would use u. S. Steel for the pipelines. What is the equivalent impact for aluminum . You talk about small products, whether it can fit into infrastructure, what is the impact . Joe think about the ford f1 50. If you are thinking off of the top of your head, which is what people are doing, it went to aluminum body sheet. Comes down, on what what will that mean for the buyers of aluminum, the ones that make the products . We could go into one million different things, but we want to hear what wilbur ross has to say at 5 30. Scarlet given his previous announcement, what level of detail are you expecting . Joe i think the market is wondering the same question. They are hoping for some sort of gritty detail. But if they can Say Something whether it is primary were downstream products, that could get the conversation rolling in a good direction. Scarlet all right, thank you very much. We bring you uptodate with the latest of the white house planning to look into imported aluminum. Of gut check of the headlines on first word news with mark crumpton. President trump wants to simplify the personal tax code by cutting rates and eliminating deductions used by more affluent u. S. Citizens. Gary cohn, director of the National Economic council, promised a big change to the current tax bracket arrangement. We have a once in a Generation Opportunity to do something really big. President trump has made tax reform a priority, and we have a Republican Congress that once to get it done. And this is something that quite honestly i hope the democrats would support, because it is good for the american people. Rate would betax 10 , 25 and 35 . Againstmay faced off Jeremy Corbyn during Prime Ministers questions for the last time before the election. Is ad every vote for him vote for a coalition of chaos. A week need propped up by liberal democrats and the scottish nationalist. Every vote for me is a vote for strong and stable leadership in the national interest, building a stronger and more secure future for the country. Mark and corbin said Prime Minister may was not a strong leader. He said she and the conservatives only look after the richest people. Askedel macron was booed by factory workers in by his hometown after the ambush by his rival forced him into a confrontation with some of her supporters. Marine le pen made a stew surprise visit to the whirlpool plant while macron was meeting with Union Leaders from the plant in the center of town. Marine le pen said the decision to meet the representatives behind closed doors showed his contempt for their plight. President trump will be the keynote speaker at the nra convention. He will be the first u. S. President to address the Gun Rights Group since ronald reagan. The nra spent 30 million on the Trump Campaign and wants congress to pass legislation to make gun permits issued in one state valid for all 50 states. Groups on both sides of the debate are bracing for the gunfight. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton, this is bloomberg. Battle over the internet. The fcc chairman announces lance to roll back Net Neutrality rules Wire Supporters are vowing a tsunami of resistance. The impact on netflix. This is bloomberg. This is bloomberg markets, im Oliver Renick. Scarlet lets get a check of the market. Julie there is a choice of movers today on the earnings front, though we sort of group them thematically. Lets start with health care, the best performing group in the s p 500. Life science is using a having a huge boost. Their earnings are beating estimates, they race to the forecast well, total sales growth of 19 in the first quarter. Also a forecast coming up. Ofhas been the subject activism. The generic performed relatively well. Scientific,r another in the medical field coming up and beating estimates. Shares also higher. The members of the doubt reported earnings, and is more mac. We have boeing with positive Free Cash Flow the shares are down 1 . Procter gamble as well, their thes falling, although company is trying to turn around. That has not materialized in this quarter. Currency is one of the issues they face. United technologies a little stronger in contrast with the other earnings, beating estimates. The Elevator Division performing well, and they are working on the pratt and whitney engines. So there is a theme of food earnings as well. Otle kelly come chip beating estimates, showing a bounce back from their food safety issue that began in 2015. But the company did reveal its Payment System suffered a data breach, so that may be tapping the gains. Restaurant brands, the owner of burger king and tim horton, they are falling 0. 1 , worse than estimates. They saw declines at burger king and tim hortons. Pepsi as well on the move, a little down. Fritolay, which has been offsetting some of the gnation with soda scales sales, it is falling 1. 5 . That appears to be the decline in those shares. Scarlet twitter is up almost 10 after adding new users. Lets talk to all of her. Oliver oliver. Oliver social and governance metrics, the three central factors in measuring sustainability. Every ethical impact. They have been adopted by the financial community, especially by this guy. He is in los angeles, the ceo of aspiration. Thank you for joining us. Lets talk about your fund to get viewers acquainted with what exactly you do an offer at aspiration. Aspiration is an online financial company. Our main investment on is what we call the aspiration redwood and read it is fossil fuel free, free. Free buyer we invest in companies with strong environmental practices, diversity, governance. This makes the company more profitable and valuable over time. In the past year and a half, we have been the top 1 of all largecap funds. According to bloomberg, the number one topperforming sustainable largecap fund. Aspirations mission to bring different products to everyday people. This is core to that. Oliver you have a return of 29 over the past 12. Lets talk about the structure. You have an interesting structure over what your companys desk customers are paying for your fund, and is a large conversation about what investors are willing to pay for Exchange Rate versus active managers. You operate on generosity to some extent. We operate on trust. Trust is the biggest found challenge in the financial industry. There are specific that show 8 of Americans Trust their own financial institution. Weve attacked that head on. Our Business Model is pay what is fair. Customers decide what to pay us. They can pay us zero and get treated the same as any customer. We provide information on the , management of fee fees for products we have. We tell them the ranges from the lowest to the highest, and they choose. Even though they can all pay zero, we consistently see over 85 of customers choosing to pay the we are building a different kind of relationship with customers, the turning around and giving 10 of what we do earn to Charitable Giving especially microloans for people in the u. S. Oliver how much are they paying . How sustainable a is this . It sounds good in the bull market. Imagine generosity might fade if the market was down 20 and it is a bear market. I dont think it will. We are seeing people who want a different kind of relationship and their financial company, one where they feel their institution is on the same side of the table. When the markets are up or down, we see customers that are looking to see if this company is acting in my best interest, are they working for me as opposed to against me, to be have the same shared value . Fantasticd really performance over the past year and a half, but there have been times of course where the funds have been down. Even in those times, we see people paying a consistent amount. Oliver we are reaching something deeper. And according to bloomberg, you roughly something in line with the s p. Let me talk about your investors. When you are getting a fee, what is the average . It is a fair amount we dont get into specifics. Depends on the products and so on. We give people a slider from zero up to 2 as a maximum. That represents the range of Management Fees out there for these kinds of products we are offering. Then they pick the fee. We are seeing we are reaching a really different demographic, people that have been involved in the financial industry previously as well. Oliver so is it not your average investor . We are targeting all kinds, but the average is 32 years old. Investment other when they first come to inspiration, no stocks or etf. They are looking for a firm they can trust, one that is bringing the party frogs in line with their values. We offer the red ones the redwood as we talked about. You can see your on sustainability score based on where you are spending your dollars and how those businesses are impacting people and the planet. It speaks to people who are looking for a different kind of financial firm, one that is on their side. Oliver most investors regardless of how old they are, they like to see 29 return and the 99th percentile, which could becausecult for you they have a different Investor Base going for return. What is keeping them from fleeing and not paying the fee . I think it speaks to who is coming to aspiration. We are getting some people who are really excited about the kind of returns have had and quality of this product, and that will remain. If you think of the kinds of people coming to aspiration, mostly firsttime investors, people who have never invested before, they are coming for a whole set of reasons other than chasing the returns of one product or another. They want a financial firm, that is why they are signing up to be customers. Oliver certainly an interesting Business Model. The ceo of aspiration, thank you for joining us from los angeles. Over thethe battle internet, the new fcc chairman announces plans to roll back Net Neutrality rules while supporters have a tsunami of resistance. This is bloomberg. This is bloomberg markets. I am Oliver Renick. Scarlet time for the Bloomberg Business flash, a look at the biggest stories in the news. Pursue for thet dow chemical division. They say they will prioritize deals in agrochemicals. It is primarily interested in the cross care assets that fires one firm monsanto. Axl is considering selling the business as a part of a takeover bid from tpp industries. Join giddy this chinese rideshare is in talks from investors. People, they would use it to accelerate Global Expansion and advancing technologies. This will list their valuation to 50 billion, up from 34 following the acquisition of uber china. That is your business flash update. Oliver more news out of the white house, Tech Companies and internet providers are poised for another dramatic showdown as the chairman proposed rolling back the obama era Net Neutrality rule. Joining us is lucas shaw. Was a bigmething that deal in the past couple years, but we have not heard a lot about it as of late. How effective was it . Signals, not been a huge surprise, but it is a dramatic reversal from a few years ago when there was this fight over Net Neutrality, the Tech Companies winning that time. Supporters ofrong Net Neutrality. You had Companies Like comcast, at t, and so one who lost. This time you have a new administration, and they are getting their way. Might beso the losers netflix. Tell us about this. Reporter netflix has signaled it is concerned, but more for smaller startups. Is big things that enough and has partnerships with isps it is not in trouble. It is nervous about fledgling streaming Video Companies that may be more adversely affected. You look at the history of discussion over Net Neutrality, and they get less concerned because they are so powerful that nobody will mess with them too much. Tover what are the tools which the government can step in . There is the fcc looking at that, but what is the rollback of the obama era rules look like . Who will be involved . Gradual,ect it to be something that transpires over the next several months and even years. The specifics, mechanics of that, we will see, but the sec will be involved. They have been talking about this for a while now. Scarlet so how is the rest of the sec staffed up . Staffed up . They want to put their stamp on regulation and rules, what does it look like happy fcc . Cc . T the f they have had problems, but the sec is actually running fcc is actually running. You have someone clear about what they want to do and actually able to effectuate that, more so than trumps other departments. Oliver so we are targeting about a specific element that says you can regulate broadband as a telecommunication service. . O is going to be leading there could be Corporate Giants getting involved in the lobbyist side. Yes, the companies that sell you the internet will probably get involved but want to take a backseat at first. They dont want to repeat last time, but a lot of telekom companies, the biggest lobbyists in d. C. Then you will have the Tech Companies. Scarlet re thank you so much. Catch an interview with the fcc chairman later on. That is on bloomberg tech. I am Oliver Renick. Scarlet welcome to bloomberg markets. Oliver we are live at bloomberg World Headquarters in new york, covering stories out of mexico city, toronto, washington, and paris. Here are the stories from around the world. The white house unveils its opening bid for the biggest tax cut ever. How those proposals benefit businesses, the middle class, and the highest earners. One hour in the trading day, stocks rising to a record as investors digest policy news from the Trump Administration, the s p up. And the president planning to pull out of nafta. We will be live in internet and mexico as currencies react to the latest threat to trade. Lets get a check on the record with the julie hyman. Julie we are seeing the stocks hang onto gains, the s p touched its closing high, then pulled back from levels. We got the outline of the tax plan that did not have many details. It was unclear what we will get past. We have transports up as well, because there are interesting headlines in the transportation industry. This is one of the Things Holding back further gains in the major averages. Lets go through here. I want to talk about the rails. These two are higher, but they came off from their highs of the session halloween headlines about nafta, the report that the Trump Administration is drafting a policy or executive order to pull out of nafta. These companies do a lot of crossborder business. Kansas city southern coming out with earnings a couple of days ago, but its shares are doing poorly today. Norfolk southern with earnings that beat estimates, union south ahead of the open. Look at the bloomberg you can use the math function. Map isthe things you can real lines. You can see the outline of the United States and the rail line going to canada and mexico pretty deeply. Obviously these companies are reliant on crossborder traffic. The yellow is amtrak. That is not affected by any kind of nafta elimination. Then the pink is canadian national. You see a lot of different railways have a big presence not only in the u. S. But in the northern and southern neighbors as well. Not just the, we are watching other types of transportation. Have a Logistics Company on the list, ch robinson. Earnings quarter beating estimates. But the truckload revenue fell, intermodal sales, different modes of transportation, those bowling, implying suffering from lower pricing. Downyder system was following its earnings. So it is rebounding. And transport stocks in the industrial sense, but carmakers are in focus after Fiat Chrysler reported better Profit Margins in north america. Those are up 10 . G. M. And ford are getting caught in the as well. Oliver great analysis. Scarlet the Trump Administration unveiled the tax plan today and the trump saying that it will put people back to work. The goal is cuts that would benefit businesses, the middle class and higher earning individuals. But how it would be paid for was not said. We have Kevin Cirilli and matthew townsend. Lets start with you. What we understand, this was a onepage tax proposal. Not only was there no detail on how the tax cuts would be funded, there were missing pieces, things postponed in the past. Walk us through what was not there. Kevin we heard from the president a series of proposals that have been reported earlier, lowering the Corporate Tax rates to 15 . I have spoken with several lobbyists in the white house getting here who raise two issues. The corporate rate, 15 is an opening bid number that could get to 20 once negotiations over the next couple of months are finalized. That would be one of the mechanisms to pay for it, because what we have also heard in the second point i would make is the border adjustment tax, which is a revenue stream put toth by paul ryan as a way get more than 1 trillion worth of revenue for other tax cuts, but it is something Administration Officials have used as rhetoric against, because the votes are not therefore it in the house and senate. Lobbyists would work against the border adjustment tax, or feeling quite confident now because of the rhetoric coming out of the white house, they still feel this is something that could potentially because the rhetoric was not as aggressive as they would have liked. Oliver it was not as aggressive as what some were looking for. Is that going to be the explanatory reason for why the markets are not surging, even though we talked about how much investors were looking at it from the company side, investors side . What is your take away . Matthew i dont think they are breathing a sigh of relief. You are feeling better border adjustment is not part of the white house plan, but the only plan with real detail and waste of paper things was the ryan plan. So the entities that are supportive of the border adjustments they, lets see what happens. Houses umbrella of bullet points on one page did not give us more details. , noer so no huge winners huge losers either. Matthew there is still so much to go, so much to happen. During the press conference, mnuchin was asked about, how are you going to pay for this . He said scarlet we had trump speaking moments ago. Donald trump i want to thank also education secretary betsy devos for spearheading the effort to restore state and local control of our sale our schools. With her help, we are empowering those who know our students best. I would say by far the best, right, betsy . Every child has a chance to succeed. We are proud to have some of those wonderful teachers with us e today, and we would with we would like to welcome all of them to the white house. It is a great honor. [applause] donald trump thank you. I want to thank members of congress, local leaders and governors, for joining us today, including governor ivy of alabama, the new governor. [applause] donald trump fantastic. I have been hearing about you for years in the most positive way, so i and not surprised your governor, congratulations. Governor branstad, who will be heading out to a place called china. They love him. They really love the soon to be ambassador, but he also loves china, so it was a good combination. They are looking forward to seeing you very much so. Thank you governor. [applause] that is donald trump moments ago at the signing of a new executive order on education regulation. Lets return to Kevin Cirilli and matt townsend. There talking about how is no details on how the tax cuts will be funded, likely for companies, they dont know if they will win or lose from this proposal. Kevin mnuchin was very broad. He said, Economic Growth created are the tax cuts will pay for some of this, then getting rid of deductions and loopholes, which brought a bunch of other questions from reporters in the room. He did not want to answer those either. So not a lot of details. You cannot just walk away from being excited or that you will get hurt you dont know. Well he know there is a house plan that ryan backed. To address that point from your reporting, what have you learned in terms of what could potentially be some of the sources for paying . Kevin Economic Growth. Rates,s of some of the these are not lowball. These are the opening bid. Roger talk about what said, one of the staunch opponents of the border adjustment tax, what he told me early this morning on capitol hill. Take a listen. It is a nonstarter with me because it is a tax increase. Why tell the American Public we will lower your taxes, but helped raise your taxes to pay for it . They will pay for it in that they have more people paying taxes. But we need to take these seriously in washington, massive cuts in the federal government. Kevin there you have it. Some folks are still waiting, people like representative williams, for how they will pay for the proposal. There are certain ways that are not starter issues moving forward. Scarlet kevin some really, thank you very much. We will have much more. We will have a meeting on financial regulation. Kevin walsh will bring us an interview with Jeb Hensarling. Tierney and in 20 minutes. Lets get you to other headlines. Paul ryan said the latest republican effort to revamp the Affordable Care law is winning support but sharp stopped short of promising a vote anytime soon. He said we will vote on it when we get the votes. This comes as lawmakers from both parties are trying to agree on a separate 1 trillion spending deal that would avoid a Government Shutdown saturday. The white house is weighing whether to pull out of nafta in the coming days. That is according to politico officials. It was a reportedly under final review and could be unveiled earlier this week or next. They could change as talks evolve and other officials weigh in or there are better nafta terms. Dismissingov is claims that International Experts cannot visit the site of a suspected chemical weapons attack in syria because of security precautions. He criticized the organization for the prohibition of chemical weapons for failing to go examine this site for the deadly attack in northern syria. He said claims the experts were warned by United Nations against traveling there because it was not unsafe are not true. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Oliver we will have more on after coming up. And the mexican peso ballooning on the plans to scrap the trade agreement. This is bloomberg. Scarlet this is bloomberg markets. Trump administration is said to be preparing a draft of an executive order to withdraw from nafta. The Canadian Dollar and the peso are falling after this discussion on terrorists from softwood lumber. We have josh when growth and another reporter but start with you. About was talking softwood lumber, now we are talking about the allout pullout from nafta. Doesnt seem like we will get into a longterm spent with our neighbors . Reporter something longterm, but we dont know what it is. , itlast time we did this went into five years to settle, so that will be a long haul. Nafta we dont know, because donald trump has triggered a 90 day consultation progress to start talks. And they will not comment. They will deal with talks with a,. Donald trump has the power to give the notice to restaurant, and the reports are hedged on what he will do. They say he plans to one day give notice on nafta, or will he actually higher the starting pistol . A lot of moving pieces, but canada is bracing for trade fights with the u. S. Can givedonald trump notice, mexico as well. Now from where you sit in mexico, whatnow from where you n mexico, what is the discussion [please stand by] would only have to out of 3. 5 mostfavorednation terrorist status. Manyt may not affect that items that are actually shipped to the United States. Even so, the fact that the bedrock of u. S. Mexico economic relations could be pulled under the rug from mexico is major, we are seeing it in the markets and the peso. Oliver i want to look at the trade relationship that exists between the u. S. And its peers. , this isat mexico going in a single direction. Look at canada. These are two of the three after china, biggest trading partners, bringing goods into the u. S. Lets talk about canada. What is the two we might the we mighteau tune see from trudeau . About a package on the lumber side, and putting that in court. And out nafta, trudeau said he is ok with negotiating nafta. He has tweaked it several times. New. Dont think it is but i dont want to seen it thrown out. They have a bit of a safety net giventhis trapeze show, it grew out of a bilateral deal that was in some way kicking in after donald trump or to pull the plug and back out. But canada does not want to get there. A lot of people think it is bluster. They think trump is in a negotiating position. Like we see the terminal, canada is the number one buyer of u. S. Goods, mexico among the top buyers. Trump pulling out of nafta would dramatically affect some of the biggest customers, so there is a lot of people that think you do not want to do that. Oliver and the Foreign Ministry of canada said nafta has not started negotiations. It seems like there is a negotiation that they want to happen. Scarlet and they are starting that conversation. Mexico needs to deal with his trade relationship with the United States. It is negotiating with the u. K. As well. They have a lot of pots on the burner now. What can you talk about what mexico wants to ensure in the trade discussions . Of the of the reason computing with the u. K. Is to diversify as a trade partner. It is 80 of its exports to the u. S. , and they to change need to change to become a stronger partner with the u. S. In the bargaining table, so they are going, looking at brazil and argentina for free trade agreements. They are trying to diversify across asia, africa, whatnot and the e. U. So it is not necessarily stepping away from nafta, it is protecting itself in case negotiations dont go well. Scarlet important contacts. All right, thank you. Still ahead, we have todays options inside, looking at starbucks with leading earnings. This is bloomberg. Oliver this is bloomberg markets. Scarlet plenty to talk about with washington. Lets get to options insight with julie hyman. Deming. Oining me is dan he joins me from the cboe in chicago. A lot politically to talk about, but we also cant forget about earnings. I love your analogy me in the note today, if the earnings were announced before a music festival, the lineup would be the biggest. Is that being overlooked because of the politics going on . It was overlooked going into today, the anticipation was for the press conference and the tax reform. Now they can focus. Markets are starting to like their time into tomorrow. Bide their time into tomorrow. The fact that the market has pressble to hold gains conference after, it is a positive for tomorrows announcement. Scarlet it is typical for the earnings season to focus on individual names, trade around earnings. Are we seeing that happen again this season, or are you seeing big options visions being put positions macro wise because of the tax plan . Your seeing both. If you look at individual names or American Airlines and that microsoft, big option plays going into those announcements tomorrow. Saw starbucks with a big options play. Also the vix, macro indicators, big volume in the vix. You are seeing both sides playing amount. Playing them out. Scarlet starbucks has earnings tomorrow. Are you optimistic about what we will hear . I am. They are my favorite cappuccino provider. I think i am optimistic, and im looking at a short data count spread. The optimism is extreme. We see the stock going up into the Earnings Announcement. You see it very high and the weekly option, so i will take , so iage of the plateau can capture the previous indicator. Playing up range post announcement. Julie so you are looking at 61. 5 call and 61. 5 selling as well, almost a month apart, thinking maybe there is too much expectation for a move priced in . Right. I am selling this week 61. 5, that buying the regular. That will collapse if the orkets days here, stays here go slower. If it is higher, they will work in tandem to buy back that weekly option. Think if the volatility on Earnings Announcement after it comes out. Julie my favorite part of all of this was the way the graph looks like was the unicorns horn. Bringing it all together, joining us from the cboe. I have not tried one. I have no plans, but maybe starbucks will be ok without it. Scarlet thank you so much. Lets get a market check. Get the same levels on the s p, hovering near alltime highs, 25 basis points on the day, strength in the nasdaq. Pretty much all across the equity indexes, you are seeing the gains. Paired off a little bit. The 10year yield is going down. Strengthening on the bond market. Scarlet the dollar has been holding up all day, though it did take a dive as the announcement came up from gave her gary cohn and Steve Mnuchin. We are speaking about financial regulation, how Jeb Hensarling thinks about doddfrank. What he has to say about reinstating. Mark it is time for first word news. As we have been reporting, the white house today made its opening bid for tax reform with cuts that would benefit businesses and the middle class and some affluent citizens. Treasury secretary Steve Mnuchin spoke to reporters at the white house. Are objective is to make u. S. Businesses the most competitive in the world. Right now we have a 35 corporate rate on worldwide income in deferral. Is perhaps the most complicated and uncompetitive business right in the world. Not a surprise that companies leave trillions of dollars offshore. Mark Administration Officials say the tax reform will be the largest in u. S. History. Any white house event with thisnors, mr. Trump call tax proposal great and said it will put people back to work. Simplification of the tax code by cutting rates and eliminating deductions also discussed by gary cohn, the director of the white house economic council. He promised a big change to the cu