Destroy evidence as that case continues to evolve. Chinese president xi jinping will meet with the president next week at maralago. It is the two leaders first meeting since mr. Trump took office. They are expected to seek Common Ground on issues rating from ranging from trade to north korea. Secretary of state Rex Tillerson told turkey the two countries face tough choices in the fight against islamic state. Turkey disagrees with the u. S. Position that the turkish government continued considers the kurdish fighters to be an extension of the kurds fighting a separatist war in turkey. Global news, 24 hours a day, 2600ed by more than 1 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Scarlet live from bloomberg World Headquarters in new york, i am scarlet fu. Oliver joe and im joe weisenthal. Scarlet pacing gains in the s p 500. Joe the question is, whatd you miss . Hear from awill Hedge Fund Manager who sees opportunity in clean energy. An unexpected boost. Mexicos mind finance ministry got a windfall. We will share with the government plans to do with that surplus. A likely trade deal according to to thes ambassador u. K. s ambassador to the u. S. Now lets look at where the major averages stand as we head toward the close. Bloombergs Abigail Doolittle is standing by. Bloombergs Abigail Doolittle is standing by. The nasdaq, s p 500, and the s p and the dow are all up. By the financial sector, along with energy. One mover on the day, first solar. Down about 2 on the day. This as ubs cut its estimates, citing pricing pressure out of china. Drop, we sawthis something similar out of jp morgan with the analysts there cutting analyst there cutting his estimate, saying there are pricing issues at play. Some bearishness there. One could wonder whether or not President Trump cutting back Environmental Protections Agency regulations is hurting this space for this stock. When we take a look at some of these other stocks, we see massive gains. The answer is most likely not. Of thelyst said most regulations that were cut back never boosted these companies in the first place, so we are basically neutral. The issues at play more so are tax credits. Now, tesla, as you can see, is also on this board, probably a company that many do not think of as a Renewable Energy company. We spoke with one analyst earlier today, and he says he thinks the tax credit issue will have very little effect on the car side, let people buy tesla cars for demand, the cache of the tesla brand. He says that tax credits, or a repeal of tax credits, thats the smallest issue at play for the Solar Industry. We have a great chart on the bloomberg that illustrates this point. A solar etf over the last year, down in a huge way. In white, that is solar pricing, down in a huge way from about . 55 to . 36 per watt. Analysts,nt of these pricing is really declining, putting pressure on this space. It seems this is a macro issue affecting the space, moreso th an anything with President Trump, at least at this point. Joe this week, President Trump signed in order to undo obama era Climate Change regulation. It looks to curb the federal enforcement of climate regulation by putting american jobs above addressing Climate Change. Some say his Environmental Policies will ultimately have little impact, including the former in venice trader of the epa who joined bloomberg tv former today the administrator of the epa who joined bloomberg tv earlier today. It will have no effect on the big rules that the Prior Administration did, because those rules are legally solid, scientifically credible. Its going to be a lot of years and a lot of litigation before those rules are undone. Joe some of the Biggest Companies are not taking any chances. Example, walmart, for are sticking by their pledges to fight time it changed because it boosts the bottom line. Our next guest says theres another Reason Companies need to keep these Energy Policies competition. He says the u. S. Is in danger of losing cuttingedge jobs to china. He joins us now. Thank you very much for joining us. What do you mean by that . Trump regulations or deregulation aside. What you mean about this idea of losing jobs to china in the Clean Energy Sector . The announcement came out on tuesday could slow the growth of these industries. They will continue to grow for four reasons. The costs are coming down huge. Im the chairman of the largest number one, costs are coming down. Number two, state demand is driving the growth in the industry. Thats not going to change, regardless of what happens at the federal level. Number three, corporations. The googles and the microsoft, etc. , are demanding clean energy. Many of them are innovating to create products that we will be using in our homes and buildings. Finally, china. I am fearful that we are going to lose a huge opportunity to china. Lets talk about the chess game of jobs, job creation. Job creation is something that is closest to what ive been working on the past five years. It was an idea three years ago. We had 3000 steelworkers building our plans last year. Another industry i helped start, we have 30,000 new jobs last year. The coal industry in the u. S. Employees 70,000 people. Scarlet that chart illustrates nicely how much the decline we have seen how much of the decline we have seen in the last decades. Decline, nowof 70,000. Every quarter, every three months in america, in our great newtry, we create 75,000 clean energy and efficiency jobs. Meaning we can employ the entire coal Mining Industry in three months worth of growth in efficiency. Scarlet these jobs that would be created in clean energy, what would they look like . What kind of education do you need question mark cant people who were working in coal mines simply move into this what kind of education do you need . Can people who were working in coal mine simply move into this . There was the job retraining act of 1982. If you live in west virginia, the jobs may be in north carolina. Rick perry built the biggest wind industry in texas. They are training people to install solar or to be a wind technician or someone who creates your home to the more to be more efficient. Joe heres my question. Insaw this chart of decline coal jobs. You say several factors that explain the drive several factors explain the drive to clean energy. It sounds like there are fundamental drivers that have very little to do with government policy. In a number of ways. First of all, a lot of things happened in our nation because. F moves people follow leadership. Weve had tremendous leadership in fortune 500 companies, moving towards clean energy and efficiency. When the leader of our nation says it is not a priority, a mood change can be the growth can mute the growth. 300 new jobs in this space last 300 thousand new jobs in this space last year. I think the private sector will continue to march on. Youve seen big announcements from microsoft, walmart, google, apple, even ge Thomas Edison started the Electricity Energy industry with coalfired plants. China has been the greatest job creation engine in the history of humankind. The past five years, 65 million jobs. Scarlet for itself or for everyone . For themselves. A month ago, they came out with their plan for how they are going to create their most jobs ever in one industry. Whats the smartest job creator ever doing . They announced one month ago they are going to invest 360 billion typically when you are in china, its the 20 year plan. Over three years to create 13 million jobs just in clean energy and efficiency. They get it. They know that costs are coming down. They want these jobs. Jinping,rative that xi who President Trump is meeting with next week, has put forward as job creation for their nation. Make a compelling argument that there is a huge opportunity to create new jobs to employ people in shrinking industries, that they are all good reasons for this industry to continue to grow. Lets talk about profits, just looking at the chart before. Solar margins coming down. A lot of people who would knowledge the rapid growth of the Solar Industry and other clean Industry Clean Energy areas would say there is not a lot of money in this. Where are the money making opportunities, in your view . S power started as an idea three years ago. We just agreed to sell it for 1. 7 billion in the largest transaction of its size. Hugely profitable business. In my mind, when you start businesses, they have to have Good Business plans. It was a simple plan where we are building giant solar farms and we enter into 20year contracts with towns, municipalities, as well as powerations, to sell them. What youre seeing now, joe and scarlet, is the Renewables Industry is still embryonic. Lets go back 100 years when the car industry started, or the railroad. It started with 100 players and ended up with three. The rails started with 120 and ended up with four. You are going to see disruption and survivors. Scarlet china is moving on it quickly. Tannenbaum,um, thank you so much. Jeff i think there is a big path forward to create 10 million jobs. We have an infrastructure plan that is about to be announced. President trump said our infrastructure is crumbling. I totally agree. The average building is 50 years old. The average home is 40. Tohave an opportunity retrofit our nation possibilities to create 10 million jobs in about 1 trillion of spend on products made by american companies. Scarlet thank you so much for your time. Coming up, we will hear from sir kim darroch. He will join us with his take on what the u. S. And u. K. Should be focusing on in their trade discussions. This is bloomberg. Joe a programming note for you. Jonathan ferro will be discussing highyield debt and europe. That is 12 00 p. M. In new york. Scarlet whatd you miss . Negotiations will start between the u. K. And europe now that the Brexit Process is underway. I spoke to sir kim darroch, the u. K. Ambassador to the u. S. , who outlined what happens next. We will install the legislative protest today. A great repeal bill was launched in the house of commons by the secretary of state today. We launched the negotiations from our side with the delivery of the article 50 letter yesterday. Tosoon as the eu has agreed a mandate, we can get down to work. We are confident we can do what needs to be done over the next two years. Scarlet it had seemed the European Union was intent on making you an example to discourage other countries from attempting their own referendum. Does brussels have enough of an incentive to make a deal that is good for the u. K. As well as the eu . So, and we think so. Theres a huge amount that goes on between us already, more than worth ofon pounds trade each year and a huge amount of interaction on security, foreign policy, and other issues. What the Prime Minister said she is looking for is a deep and special relationship between the u. K. And the eu after we have left. That covers security issues, but at its center a comprehensive and ambitious freetrade agreement. ll of that is in both sides interest. We expect to be able to deliver that. Scarlet we have seen the European Commission president , jeanclaude juncker, hit back at President Trump lost support for brexit President Trumps support for brexit. Obviously, this was in just jest. What does it tell you about the state of fear about the euro breakup . Im the Prime Minister has said we want to see a successful, prosperous, and stable europe on our doorstep. She said that when she had an excellent meeting with the president a few weeks ago. Thats our position. That is something she said again in the house of commons yesterday, so thats where we are coming from. We want the eu to succeed. For the u. K. , our future should be outside. Scarlet got it. One thing that the Prime Minister obviously faces as well is the need to navigate a request from the Scottish National party for another scottish referendum. Its something she has held off for now. I wonder, in the grand context, does scotland need the u. K. More or does Great Britain need scotland more . Who has the power in this relationship . Minister, all of us are strong supporters of the union between england, scotland, wales, and northern ireland, and we want it to continue. There has been a referendum on scottish membership of the union , on scottish independence, and there was a clear result, a clear and strong result in favor of the union. The Prime Minister said yesterday now is not the time for a second referendum on scottish independence, especially since especially since we are about to go into the negotiations on our future relationship with europe and, surely, we should settle that first, get the outcome of that first, before there is any consideration of this issue of scottish independence. Scarlet it might serve as a distraction. Lets move on to the relationship between the u. S. And the u. K. President trump campaigned on breaking the rules, flouting convention. From where you sit, is he ripping up the script when it comes to the special relationship between the u. K. And the u. S. . Kim one of the things i have been most impressed and encouraged by since the new u. S. Administration came into office is how good and how positive and how strong the relationship is between the two governments. The Prime Minister was the first foreign leader into the white house. The foreign secretary was here last week. Our National Security adviser was here this week. Vibes are extremely good, extremely warm. Huge amounts of interaction. Its a very good feel. Scarlet that was u. K. Ambassador to the u. S. , sim kurt sir kim darroch. Tomorrow, bloomberg will have exclusive conversations with two fed president s, build ugly of new york and jim bullard of st. Louis bill dudley of new york and jim bullard of st. Louis. This is bloomberg. Scarlet im scarlet fu. Whatd you miss . Jeff bezos is now the worlds second richest person. Heres a scorecard of the richest. Jeff bezos is the white line. His net worth on paper is now at billion. 6 he has surpassed Warren Buffett and ortega. Warren buffett is in blue. Buteaked in late february, has been drifting down a little bit. , he is at about 74. 3 billion. This comes a day after amazon announced that it is buying a dubaibased online retailer. On the rich bloomberg. Its a great resource for how the rich are doing. So farzos, number two, this year, he has seen an increase in his net worth of 10. 2 billion. If we click on the chart section, you can see how he stacks up against the kochs. Overall for the threemonth average, his net worth is about 72 billion. The high was about 75. 6 billion, which is where he is at now we spoke with brad stone, who points out that jeff bezos not only has done very well with early, but hes also an investor in airbnb, google, and uber. It looks like hes got the midas touch when he thinks like a vc as well. Joe you are doing pretty well when you have your own chart on the ticker, your online. Your own line. I want to look at inflation in europe. We are trying to figure out what is going on with the inflation picture, one of the crucial questions of 2017. I have three lines. The blue line is spanish cpi. Two of these lines are german regions. I love that germany has regional cpis. Like if we got a new york, california, and texas cpi. They moved together. They went up. They took a noticeable move lower. All theeadlines, cpi, regions moved lower, missing expectations. This is headline cpi. This is about the fact that the Oil Price Gains are starting to solve stall. They were part of the bull case on inflation. They are starting to roll over. We are not getting those same yearoveryear gains. Headline inflation is really turning over. The question then is how much do those Oil Commodity effects bleed into core inflation . Theoretically, core inflation strips that out, but in practice there might be some effect still. Headline inflation is already rolling over across europe. Scarlet Something Else that people pointed to as well, that there are some seasonal reasons for why there is a pickup in inflation. I remember reading about german travel packages. Joe holiday travel, all kinds of stuff like that. Scarlet the market closes next. Take a look at how the major averages are faring with less than 4 00 to go less than four minutes to go. 1 . S p 500 gaining 3 10 of 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 scarlet we are moments away from the closing bell. Whatd you miss . A gain ofin of one quarter percent. Joe i am joe weisenthal. We want to welcome you to our closing bell coverage. Scarlet we begin with our market minutes. A record high with the nasdaq. Looking at green across the board for the s p 500 and the nasdaq. When you look at the data that came in, fairly encouraged by the Consumer Spending numbers. Joe how are we at the record high . I thought there were concerns about trump and tax reform. That was monday. Scarlet if you look at the industry groups, industrials gaining 6 10 of 1 . There is your answer to what happened to reflation concerns. Apparently people are not too concerned about it. Lets look at the daily movers. Lululemon getting crushed, or as one analyst put it, lulu is serving up limits. Plummeting the most in eight years. Offering a bleak forecast for the year. Conoco phillips up 9 . That is the biggest rally in four months. We broke the news yesterday that Conoco Phillips is unloading some canadian reserves. ,nalysts are happy about that cheering that. It will probably pump up the stock buyback. Vf corp. Down by 3 . Anthem gaining 1. 3 . Even if obamacare survives, some trouble still on the horizon. Lets look at the Government Bond market starting with the u. S. Twoyear and 10 year yield higher on the day, seesawing in this range. Green across the board. Still kind of a predictable response there with the yield. A sharp pullback with a yields in 10 year South African debt. They have been getting slammed minister the finance looking to be fired. It has not happened yet. Lots of stuff going on. Today, people buying South African bonds. Scarlet in currency, the dollar is mainly higher there. It shrugged off an earlier debt. The u. S. Looking how to penalize countries whose currencies are undervalued. Overall, data driving the currency higher. South african turmoil going on politically. The rand recovering some of its threeday plunge recalling the finance minister. What you are referring to is uma faces oft z walkout if he fires the finance minister. Mexico raise interest rates. The pesto, the best performing currency so far this year, up 11 . Joe finally, a look at the commodity front. Not too interesting of the day. Oil back over 50. The floor not out under oil. Climbing a bit. Making some nice gain. Scarlet those are todays market minutes. A deep dive now into the bloomberg. You can find our charts using the function at the bottom of the screen. Lets look at u. S. Inflation. Have we seen peak inflation . According to the marketbased measures and expectations, we may very well have. The white light, the most about less than 20 basis points in six months. In march, a sharp reversal. Fed raiseen after the rates. Break even settled in about 40 basis points below the peak. The yellow line and the blue line have seen a more gentle decline, but, they too have seemed to have peaked now. Joe shortterm inflation marketbased measures of inflation, very sensitive to energy. Breaking down the bloomberg Commodity Index it is not uniform at all. The white light at the bottom is the year to date performance of energy. That has gotten hit hard, agriculture down 3. 9 . Other areas, industrial, precious metals, doing well. We have to be careful that we do not paint too broad of a brush. You see the Industrial Metals up this year, probably a good sign for the economy. Whatd you miss . The republican failure to repeal obamacare has sparked concerns pushPresident Trump can tax reform through commerce. Our be looking at and unwind of the gains we have seen since the election . Lets ask michael. Great to have you back on the show. I have to admit, im completely the views about what the story is, what the socalled on, trump trade. Im skeptical of all of the explanations we have heard. Where do size things up as far as the market and what is expected policy wise . In six months or 12 months, there has been a pick up in the global economy. It is doing much better. That is what i would call to true reflation trade. There is something going on. You talked about Industrial Metals earlier. All of the data looks better and looks better than it has since the financial crisis. This looks to us as if you are having synchronized global recovery. In the middle of this, the elected of trump being and a different trade came out of nowhere. That, i think, got way ahead of itself in january. It has largely been unwound. Into trade ande some came into others. There was some idea that doddfrank would be in and Goldman Sachs would be doubling. I think some of the enthusiasm metals wasial intensified. Demand for Industrial Metals has come up. Wayertain traits, they got ahead of themselves. things tend to settle down around here. We will start to see the wait foras people things to settle down here. I think the trade accelerates through the end of the quarter. Quarterly allocations will be put in place. You get a sense of how much more upside there is. I think globally there is potential for more upside here. Bernies, i think will also tend to be quiet good. Whether that is enough to get more capital allocated, i do not know. Years that start well tend to extend well. Joe when everything seemed to be going well, stocks rising, volatility low, people point to those very phenomenon as reasons to be concerned, like, volatility is low, there must be something around the corner, or the thing that people are talking about this week with margin debt. You have a chart looking at margin debt. What are we looking at here . You have been talking about nyc margin debt. What is the real story their . It seems it is overblown. , in the last part of it, it generally explodes higher. That is one of the signs that exuberance is going to far. We are potentially at the final leg of this market. Margin debts rapid move higher might be part of it, but you would probably be six to 18 months away from the market peaking. Until things are obviously getting worse at a fundamental level, i think you want to participate and be agnostic about things like valuations, measures such as volatility, and sensitive to whether or not things are Getting Better on the surface. I think they are now. Scarlet there is a good case to be made to continue to be exposed to stocks. Emerging markets have done very well. There are concerns that the stronger dollar may be somewhat of a concern for these guys. That has not proven to be the case as the dollars have stalled a bit. If you had to buy u. S. Or emerging markets, which would you buy . E. M. Was a very difficult place to be between the date of the election and roughly december 30. I think the dollar was very strong, and people got out of it. It has substantially. Utperformed its quarter quietk e. M. Looks exciting. Market, if they can push through, i think this is potentially the most interesting since in emerging markets 2010. Joe 2010 when they peaked relative to the s p 500. Downhill since there. To be agnosticve about valuation, not get too anxious about them. Is the general idea that as long as the fundamentals are improving, the markets should do well, and ultimately the valuation will turn down went the fundamentals turned down. Basically. At the end of that you are paying too much for what youre getting. Passed theve longterm value in a lot of sectors. That in itself will not stop them going cai. When youre paying more for the deteriorating street, that is when you say, leave it to someone else. Right now, things are generally Getting Better. Scarlet thank you so much. A reminder here, nasdaq closing at a record high, up for the fifth straight day, the longest winning streak since february 15. This is bloomberg. Mark i am mark crumpton. It is time for first word news. The chairman of the Senate IntelligenceCommittee Says the panels channel challenge is to answer for americans whether President Trump was directly involved in the russian meddling of the 2016 election. Richard burr says that despite his support for President Trump indy election, he can lead an impartial election. The American People need to understand that malign actors are using old tech weeks with new platforms to undermine our democratic institutions. Mark the committees vice chairman, mark warren also pledged a bipartisan effort. , thisant to make clear information is not about whether next year d or and r name. It is about clearly understanding and responding to this very real threat. Mark in moscow today, russian president Vladimir Putin dismissed what he called aimless accusations of russian meddling in the u. S. Election. President trump lashed out today to conservative house members defended obamacare. He said the Freedom Caucus will hurt the conservative agenda is they do not get on the team. Environmental groups are seeking to undo President Trumps approval of the keystone xl pipeline. The sierra club and five other Environmental Conservation groups sued in federal court today, just days after native american groups filed similar complaints. These are likely the first in a series of challenges to President Trumps decision. Global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. I am mark crumpton. This is bloomberg. Joe whatd you miss . Following the huge gains following the election, markets more mixed in recent weeks. What should we expect from next weeks jobs report . Lets bring in a founder of south bay research. Think you for coming on the show. It seems people are happy that the economy is coming along. You look at Interesting Data points. How do things look for you . We are at a weightings waiting to exhale moment. They cut costs. You could look at all these steakhouses. They say, we are not getting as much foot traffic. The number one driver of this is the salesperson having the business lunch. They said, cut back, slow down hiring. It worked. They went usually too far. You want to the second half last year, unrelated to the election. Past the election, the trigger was, ok, now we can go out, start hiring, restocking. Int pretty much ended february. We are past that point. If you look at the corporate profits forestic the fourth quarter, what you see is kind of mixed. It came out around 2 . It was positive for the first time in two years. It was positive because the cops were so terrible the past year. How did they get their . By not hiring, by not getting a salary bump. They are marginally profitable only by not hiring as many people. That is contrary to what we saw last month with hiring. Tell us what you are seeing and how it compares to some of the official data. What im doing is tracking actual hiring going gone in 50 major metro areas. What we are seeing is joe how do you treat track that . This is actual activity going public in private and companies. A really good look at what is going on. Crafted idea. Good. Directionally you have the south data that says, look, things slow down a bit and the pace of hiring is lower than it was last year, but still positive. Good. We know that. When i look at the payroll data, what i see is we looked at december and the go to february. From december to february, what you see is seasonal layoffs were almost exactly the same number. What we saw was that the timing was different. This year, mild weather did some things. Totom line, it is a mistake read the last two strong months joe indicative of a trend going got. Lets talk about that because we look at the jobs report a week from tomorrow. We love jobs report around here. I do, anyway. We both love it. Down a little bit, indicating some giveback. That is in line. I was at 228 for private, and we came to 227. It pulled in. Youd literally had 60,000 payrolls for construction of loan. When we come here there is a little payback for that. You have to look at the rolling average. I think what we are looking at 170ish. Goldilocks, i think my number is exactly the same. Scarlet in terms of seasonal adjustment, there is a seasonal ining kick that comes in march, particularly in the retail industry. But it is slight. About 90,000 people were brought on. The bulk of that, 65,000 work lowes and home depot. This is kind of the inflection month. You get a little more restaurant hiring. Really the bulk of the hiring will be an construction, which we just saw was pulled in. A little payback. Just last month was a little distorted on the upside. There is always the give and takes. Bottom line, Companies Want to buy more. Int was the signal that came a couple of months ago. Joe you will be sticking with us. Up next, speaking about shipping and port traffic and what it means for the global economy. This is bloomberg. Miss . whatd you founder of south bay research is with us. We want to take a deep dive into the bloomberg. Gdp today. Vision on lets look at gdp and the overall trend for the longerterm term. You added these lines because what you think it shows is Economic Growth is solid, but muted compared to years past. I call it lower for longer. It all comes down to the internet. It is about three important things that change the way the u. S. Economy specifically works. In the old days, recessions happen because you had too much stuff. You had a misallocation of capital. How we got there was pretty basic. We responded to economic symbols that shifted. That is where you get these big swings. The internet came in and said, i can do you two things. Bring in supplies. That opened up the big bottleneck. We know now we can go to china, germany, and not only that but it gave us the tools to say we know exactly what we have in the warehouse, and now there is no room for inventory overstock. Joe speaking of globalization of some of these effects, this is fun to look at. We have a chart of this. The yearoveryear change of inbound and outbound traffic from the port of l. A. That is a different image there we go. Yearoveryear change and exports from the port of l. A. Traffic. What you see from this . I am a big fan of the supply chain. Look attuff gives you a the global market. China is a big supplier here. This is a way to get another window into china and u. S. Trade but also consumer demand. What we are seeing is a slow down it is not negative, but what i mentioned before, i think february was the end of this big stocking. Now we will go back and slow down for a while. This is including the lunar new year. Generally and february are included here. I think isng on here very basic. One of the bigger concerns is not how many ships are coming in because we are ordering more stuff it is the same as last year. The other concern is how much is going got auntie. This is a key metric. Ships come in from china, and they are supposed to load up again. This ratio spiked last year. It is now going up again. China is buying less stuff from us that before. This is not dollars. This is going to be cargo. The is more important than ratio area effect. Joe thank you for being with us. Bloombergomorrow, will have exclusive conversations with two fed president s. Those interviews coming up tomorrow on bloomberg from new york. 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 mark i am mark crumpton. Time once again for a first word news. Russian president Vladimir Putin today dismissed accusations of russian meddling in the u. S. Election charging them as part struggle. Estic all of this is being used for the internal american agenda. This card is in the interest of separate Political Forces inside the u. S. To secure their position within the u. S. Mark president putin also denied any hacking in the u. S. Elections. Is white house investigating the russian bowl in the u. S. Election. Sean spicer says the letter was sent today to lawmakers, coming after a New York Times report that white house officials helped devin nunes view information links to President Trump. Jeff sessions is announcing a plan to speed up the deportation of immigrants in the country illegally guilty of federal crimes. He says today the Justice Department will expand an havingg program aimed at deportation hearings while they are still in prison. This allows them to deport them immediately after they serve their time. Asked launchesce preowned rocket tonight. Flew in 2016. Space x has discovered three rockets in total. The cost of the launch is restfully roughly 62 million. Global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. I am mark crumpton. This is bloomberg. Scarlet we want to give you some headlines here from bill dudley, the new york fed president. He says growth and inflation shifting to the upside. Inflation closer to the target as well. Of course, the new york fed gradualavors a tapering. Joe he says gradual tapering may be better than an abrupt runoff. Scarlet this is a great opportunity to let you know tomorrow bloomberg will have an twousive conversation with president s of the fed tomorrow. Joe dont miss it. Lets turn to the future of global trade. President trump walked away from the Transpacific Partnership and now his administration is planning changes to the north American Free trade agreement, also known as nafta. What do you think this administration will get out of it . There is always a little bit of and you gave me and you ambuguity. It looks they will make some. Djustments labor and Environmental Standards are now in the core of the agreement. Nafta had it in a side letter. That is one form to update it. They will updated to reflect trade and ecommerce. Around howill come much nor the candidate can north american content does it take for an auto to be deemed north american. Also, the snapback or safeguard provisions. In imports,a surge can the u. S. With trawled the that ductions protections that nafta provides. Scarlet President Trump is the one pushing for the renegotiation or ripping up the script, however you term it. Where are the u. S. And mexico that protections that nafta provides. Scarlet aligned, where did theye to eye . The most obvious place for alignment, strange enough are on the rules of origin. Why . A higher requirement for north American Auto parts would likely benefit mexico and hurt the major asian exporters. It also corresponds broadly to trumps buy america rhetoric. Scarlet we have a chart here that shows the trade deficit with canada, in white, and with mexico, blue. It used to be more with mexico, sorry, a usede to be with canada, and now more so with mexico. We talk about nafta, so much of the focus is with mexico. Where does canada fit into all of this . Canada is an interesting case. Our trade with canada is actually in a small surplus. We run a manufacturing surplus with canada. Broadly speaking, with respect to canada, we export manufactures and import inergy. The really is not a deep fundamental imbalance in our trade with canada. Of course, there are sectoral difficulties with dairy and timber, as we have with most countries. Joe Global Supply chain. People may have an overly sympathetic view of international trade. We have these complex Global Supply chains that crisscross borders. Is it plausible to create more north american centric supply into, and move it more say, mexico . I think it is possible to have more north american centric chains. Change mexico will be much more competitive with the low which parts of asia or lowwage assembly. The u. S. Competes more with top and manufacture producers such as japan and germany. Definitely possible. Coupleter navarro a weeks ago said he wanted to create a north american powerhouse. Obviously the mexican peso got slammed when trump one scarletwon. Based on what you said, rather than the u. S. And mexico being antagonistic with each other, i dont know if it is winwin, but the situation in mexico emerges better than the status quo. Also, the peso had a great year. Year last year. Generally, it is still weak. I think it depends. If the rules of origin work north American Continent requirements, that is a win for the United States. If the rules of origin become american content requirements rather than north american content requirements that it becomes a lose for mexico. The difficulty part for mexico seems to be the safeguard clause and how that trades off with the rules of origin strikes me from the very beginning of the process as a key issue. Be lookingina must at this from the sidelines with a great deal of interest. Agrees to,e u. S. China seems to loose. How does china use this information to negotiate a better position for itself . Toit is hard for china negotiate the terms of a deal between the United States and mexico. China will be trading on debbie t oh rules. The level of preference is something for the u. S. To negotiate with mexico. China is necessarily a bystander. Im not sure china can use this. What china can do is form its own reverential trading deals with its neighbors. There, it is a question of how willing china is to open its market in a real way to the goods of its neighbors. Whom justly have not found china the easiest market to get through. Joe the idea that nafta can be updated to the 21st century or there can be a north american winwin to bring the supply chain to mexico, what is the opposite end of the spectrum in terms of what nafta negotiations look like. The attempted renegotiate fails, the american the u. S. Ithdraws from nafta, the peso innd we are all worse off the end. Joe you say, a little worse off. At the worst scenario, you would not seek an Economic Disaster . Efficiency, a situation where most people are worst off them where they are today, but not something that on its own, by itself would lead to a massive recession. Joe thank you very much. Crossingsome headlines here on Steve Mnuchin. He received 11. 2 million from cit for 2016 where he had served as a chairman. Again, a little . 2 million in pay. His 2016 conversation from cit severance. Ist of we will get you more details as they cross. These are the latest details on Steve Mnuchin and his compensation from cit. This is bloomberg. Joe i want to bring in some of the mentions of headlines from new york president said president dudley. He says that outlook shifts risk there mayide and eventually be fuel for the inflation rate approaching the target. Also talking about tapering investments of the runoff. You can also, on the bloomberg, watch remarks on bloomberg go. A quick programming note. Tomorrow, bloomberg will have two exquisite conversation with two fed president s. You do not want to miss that. Miss . whatd you cityng us from our mexico bureau, isabella. The central bank raised rates by 25 basis points rather than 50 basis points, what it had done the previous four times. Why the slow down . They are following the fed with the feds own hike. We are talking about the worlds most aggressive bank, at least among the 35 tracked by bloomberg. This comes at a time when the o has depreciated. This has given them a little bit bit less. O tighten a we got a 25 point basis hike racing rates. Want to as further about that. Ofiously one of the striking vince of this year. How much does this make the easier . Banks job it does but it does not much. Waspace of depreciation generating a lot of pass through. The pastor was a big concern. A newame january and Pricing System for gasoline was introduced. That itself was a gigantic hit to inflation and of course Consumer Confidence. When it comes to Consumer Confidence for the central bank, they are no longer very concerned about the puzzle abe they said they are alert about the pass as well. They will look at things that will impact inflation such as gasoline prices again. Charte are looking at the of the Central Banks inflation rate and the dollar pencil dollarpestle rate. They were forced to hike significantly. There has been a sharp turnaround but they are marginally tightening. Scarlet im glad that joe brought up that chart. Over the longer term itself, a lot of weakening. It is the weakening that helped to give the finance ministry an unexpected windfall. Talk about that. That is right. It is really very simple. Bank of mexico has International Reserves which are denominated in dollars. These reserves get revalued in falls and prices in local currency every year. The math was done. It turned out that due to the short depreciation that we saw last year which was about 17 , there is a windfall, a surplus coming out of the central 17 billion. These were transferred already to the finance ministry. It is ironic to think that this k mexicosll lin finances. The bulk of this has to go to pay down debt. It was field mostly by trumps antiimmigration rhetoric. Of financenistry has things it has to pay in pencils. What has the foreign currencies, and converts them back into pencils, it has a lot more of them. Exactly right. The Mexican Finance Ministry has to pay down debt. It will likely lead to a reduction in the bonds, and it will reduce the debt to gdp ratio from 50 of gdp in the broadest measure of debt to 49. It will definitely be a welcome to boost. Scarlet scarlet it gives the government some breathing room. How does this play into politics . You have an election coming up. Thats right. The surplus it self may not play a very big role. This is obviously the biggest one we have seen since this has been happening. Immigration concerns will play more into the elections to be held in 2018 than anything else. People have really been writing since january, rallying to get the prices to go down again. This is a government decision. This really looks bad for the pe na nieto party. What to keep in mind, going forward, just like the central bank said they will keep a close look at it. Scarlet im glad you bring that up. Joe has the inflation chart up on his terminal. The blue line is market expectations. Joe are there other components besides the week has so and weak peso and the effect it has on import prices . So far those have been the two that the central bank has mentioned as the most impact full. In part, what we have seen so far this year, which is the fastest since 2009, at least according to the report out this month. Some of the effect from the pestle that happened peso that happened in the first days of this year. It was falling at such a dramatic speed. These are the two factors that the Mexican Central Bank has pointed to as the most important what it comes to inflation. Joe great stuff. Thank you for the update on the mexican economy. And, a emerging markets will be one of the topics that bloomberg real yield will be covering tomorrow. Jonathan ferro covers everything in the fixed income world. The show is back at his regular time at 12 00 p. M. From new york on friday. This is bloomberg. Joe whatd you miss . Over the course of his career so has served altman as deputy secretary and assistant secretary under president carter and clinton. Founded they, he bank, ever court. We asked if tax reform will ever get done. At the moment, no one knows how this will come out and if a tax code. Ndeed be i personally think there will be, but it is like 7030. Speaking, the broader the reform that is sought, the less likely you will get a bill or the longer it will take. I think ultimately the likelihood is it will be relatively narrow, centered around rate cuts and changes like repatriation. Probably a modest individual cut along with it. The core question, and there are many questions, is how to pay for it. We saw through the obamacare debacle the fissures in the obamacare party. Hat will play out in the taxes you will have another contingent that will be supplyside focused contention. Growth higher investments. And it will be Big Questions as to whether you can get them a craddick votes, under some circumstances, you could, and if they will foreclose democratic votes, saying it will be a big wouldt and how to pay for be turning off tax cuts. Complicated. Ly it may or may not happen in 2017. Or less ifis 5050 it happens in 2017. No one at all knows how this will play out. How long it will take and what the final shape will be. You remember 1986 when the was the last fundamental reform. It took many years to complete. Simplify. Lets cut the marginal rate and do away with some reductions and other things so we can pay for that way. Basically broaden the basis, as they say. Why cant you do that this time . If you have several years, you could possibly do it. It emerged from a much less polarized era. That though, the famous 86 bill, took, depending on your measurement, four years from start to finish. Some of the greatest masters of the game shaped it and negotiated it. You could do a broad tax reform bill if you have three or four years. I dont think that is what the demonstration obviously wants. I dont think thats what the Business Committee wants, and i dont think it is in the cards. Joe that was ever Court Founder and senior chairman roger altman. Scarlet coming up, what you need to know for tomorrows trading day. This is bloomberg. Scarlet nasdaq closing at a record high. Dont miss this, trading and manufacturing pmi tonight. Joe cant wait to watch that. I will be watching tomorrow for pt, inflation, personal spending. This, toand dont miss fed president s tomorrow. You are watching bloomberg technology. President trump calls its first meeting with denmarks Prime Minister today. The country wants us your and says wants assurances in the wake of brexit and nato uncertainty. White house invited the headsup congressional intelligence committees investigating russia to view materials found by the National Security council after reports officials showed devin nunes information links to trump associates. The president is shaking up his staff. Deputy chief of staff katie walsh is leaving the white house after the house the Health Care Repeal failed. She will join a nonprofit group. In official says she was not fired. Attorney general Jeff Sessions plans to speed up deportations of Illegal Immigrants guilty of federal crimes. He will expand an existing program aimed at Holding Hearings for immigrants serving sentences, then deport the right afterwards. North carolina governor ray cooper has signed a bill to repeal the bathroom law. Legislatures in charge of policies on restroom while local governments are barred