Transcripts For BLOOMBERG Whatd You Miss 20170417

Combat the taliban and the Islamic State. They stressed the need to confront terrorism in all forms. One of the biggest events on the social calendar, the annual easter egg role. President trump welcomed families and was accompanied by the first lady. The white has expected more than 21,000 children and their adults. Thanl news powered by more 2600 journalists and analysts in more than 120 countries. This is bloomberg. Scarlet stocks getting a boost in the final hour of trading. What did you miss . Scarlet firing on all cylinders and accelerate to the fastest pace in a year and a half but for how long . Or power for turkish president erdogan. We will hear later on about the referendum victory. Netflix and United Continental report firstquarter results. Joe now lets look at where the major averages stand. Julie hyman is standing by. They had been strong throughout the day and taking another leg up. It appears it is linked to the mnuchin headlines we have been talking about in that interview, talking about a stronger dollar. And it sounds like pushing off the expectations. Volume today is quite low. Wayill see if it stays that with a little bit. Some of the underlying measures of Risk Appetite are showing a little bit of faltering of that. That and the 20 day standard deviation. A technology listed a Company Called Financial Enhancement Group recently came out with a look atat said if you the 20 day standard deviations, its a better predictor. Pulled back before the big rush of water. Not as large as pass spikes and volatility. It has to do with gold prices in the 10 year here. We have gold prices and blue and gold actually was up for most of the day and it has turned a little bit lower. The trend has been higher. Gold certainly has been catching a bid mostly on concerns about tensions with north korea. We have the 10 year yield which is trending back lower here. It too is reversing direction today. We will see what the longerterm trend brings as we potentially get more geopolitical headlines. We are watching the results of the french election. Joe very much so. As julie mentioned, the dollar is strengthening a bit on the Steve Mnuchin headlines. Sort of pushing back slightly against the trump comments saying that over time, you still prefer a strong dollar. Its not like the administration wants to keep the dollar that much weaker. The healthcare reform failure maybe a little bit of a delay on tax return but demi but there. Ay be other ways and the Economic Growth will be prioritized. We see the dollar moving a little bit on these mnuchin headlines. Is this just clarification . Theres a policy change. Trying to walk the fine line of the strong dollar. Its going in the breach within anything else. If you have a stronger dollar, the import prices are going to be lower. At times, the dollar can get to strong. Out,u correctly pointed the administration would be trying to devalue the dollar after trump last week said the dollar is too strong. I wonder what this is treasury they want to set it and forget it. It they dont define what the strong dollar is or trade on it. Is the policy trading just jargon . Grexit it tells you that the ,eserves in the United States going for many years and having almost nothing for decades. The only thing thats happened. The only intervention we have seen. Having said that, you have communication problems. The swiss, the chinese, and the likes. The pressure is the soft pressure. There are headlining communications. Relative to parts of it. Scarlet still down for the day, but hearing losses. This is tied to the fact that a lot of european markets were closed today because it is the monday after easter. The movement into emerging markets, they were extremely cheap. These emergingmarket Central Banks were not intervening the way that they used to. Ins, and some of the game they were afraid of what the United States would say. It is really not harping too much on that. It is good for emerging markets. Mnuchin saying that the industry would prefer growth over deficit reduction. Has there ever been an administration in history that didnt ultimately decide they would rather have growth than deficit reduction . Up that wayto end because tax reduction is almost never deficit neutral. It is very hard to replace the revenues that are lost. They go into it saying they are going to end it doesnt happen. You can use dynamic scoring. It increases Economic Activity and increases revenue. You dont get as much revenue back as you lose so we are going to have a deficit problem. You look at 1 trillion over 10 years. We will go ahead and increase the budget deficit which the team party hates and will be very much against orthodoxy for years. Or do we try to make it revenue neutral . Scarlet we want to thank you for staying with us and we have headlines breaking right now. Relive pen Marine Le Pen speaking in paris. She would restore national borders. She also says italy and greece are unable to face the migration crisis and her first measure as president would be to put back frances borders. She says the European Union is not the solution, its the problem. We will discuss after this. This is bloomberg. Joe heres Marine Le Pen speaking right now at a Campaign Rally in paris. She said if she were to win, her first measure would be to restore frances borders. One of the big themes has been turning into a fourway race. They have been getting into contention. Place, we have trending charts. If we look at this one, the polling and the red line has caught up with the yellow. Anyone could make it to the runoff. Final week pretty wild. What is the different scenario you have from a market perspective . A communist and the right wing fairly close. They will see that continuing to do poorly. People votingcond for radicals. They are there to defend the values. It doesnt mean much help. People are allowed to vote to make a point. Many regimes. Shocks are quite possible. They have the notion of change in literally, right now, it is captured very effectively. The problem he has is that he remains a communist and a very rich one. If people start to dig into it, he will probably start to have difficulty. Having said that, it doesnt extremely good job. They have considerable support. Joe we are sort of used to, from the american perspective, looking at european politics. As more leftwing and radical and socialist, but as you say, a communist and backed by the communist party. What are some of his specific policies . And were he to win the election, what would be the ramifications market wise . Theyre trying to vie for the same pool of voters. He doesnt get what he wants. Effectively, the eurozone ceases to exist. He doesnt spell it out as an exit out of the eurozone. Out. Ally exiting he basically has a lot of similarity. People have been buying into the image as well as his program. It means that the curve, the oit curve would be steepened significantly. Highwould anticipate injection out of the eurozone. You will be voting as well. The overseas Community Cares about is very much at odds with what you might see inside france, isnt it . 36 would vote for mr. Phil and fillon. The other candidates have lower presentations, so it is a very biased apple relative to what you get in france. When we 00 local time get the first set of results, they will be part of that in favor of these candidates. I am looking at the w crf function. If we go down to the number 22, the euro is one of the weaker candidates. , what doe wake up markets react to that . And it is a very large scale adjustment in the ot curve. [indiscernible] everyone has been buying it on a fairly aggressive faction fashion. Maybe 1 to 2 . And generally speaking, it will reinforce the trump trade. Risk disappears and they will reinforce the existing one. Following the netherlands people extrapolated what that would mean for the french election. Will the next thing happen this time around . There is a huge difference between france and germany. It is a small type of situation. Of theagement in terms past few years, they are wellknown. Also, the left versus right is a classic type of change. And there is really no concern in regard to germany. Having great amount of difficulty and remains a very small party. Micro strategist at Deutsche Bank securities, thank you very much. Joe time for Bloomberg Business flash. Omar stores could be closer to the Worlds Largest retailer is in final discussions for a deal estimated at 300 million dollars. Walmart most recently acquired jet. Com is part of a strategy. The pentagons approval for the marine corps to start buying lockheeds new helicopter came with a hidden surprise. The total cost of the project to 31sen almost 7 billion dollars. Its according to a memo obtained by bloomberg news. Each helicopter will cost 138 million. Stat them holdings, a from the guaranteed investors the Main Hedge Fund that it wont lose money is under investigation by the securities and Exchange Commission according to people in with the matter. The sec inquiry comes as regulators examine the firm. After the a probe company failed to submit to a. Urprise on it audit an investigation does not mean they will face legal action. And that is Bloomberg Business flash. Scarlet at 10 a. M. Eastern time, we will be speaking with Robert Kaplan of the dallas fed. From new york, this is bloomberg. Scarlet im scarlet fu. What did you miss . Netflix a bear reporting earnings after the close today. We will be watching for all the numbers, focused on everyone paying attention to net additions for International Streaming and domestic streaming. The International Streaming that add numbers, the domestic streaming that add numbers. Three pointking for 9 million for international. That would be the orange bar. And an increase of 1. 59. International has outpaced growth in domestic subscribers. It will be interesting for the First Quarter, of course, expectations for First Quarter profitability are positive. The launch of season five of house of cards has been pushed back. My guess is that they had to refilm parts of it to make it more relevant. Pales inthey made up comparison to reality. Joe it speaks to the important of content cost. Scarlet it makes a big difference. Joe i want to talk about data that came out on friday. We had the markets not open that day. It would be a shame to miss it. The latest cpi data and no matter how you slice that data, it went down. That faded a bit. The Services Excluding Energy has been rolling over for a while and that really peaked the middle of last year. Is a way of removing outliers that also faded. We talk about the reflation trade. Data is notng showing runaway inflation by any measure. It is just one month and we caution people, to say the trend is broken. It is interesting that this turned out. It will be interesting to see if that continues. We know that oil basically has slowed down a little bit. Not necessarily the other measures. Maybe it is not as much of a problem as people thought. The market close is next. Take a look at the major indexes. They got a bump up in the final hour of trading and it mainly holds onto those gains. The dow ready to close up about 180 points. He s p 500 gaining 19 points in the nasdaq up. 9 with a gain of about 50 points. This is bloomberg. Whatd you miss . Higher posing closing higher than several weeks. Im scarlet fu. Joe im joe weisenthal. If you are tuning and live on twitter, we want to welcome you to our closing bell coverage every weekday from four to 5 00 eastern. Scarlet we begin with our market minutes. With so many Global Markets closed, u. S. Markets went off on a rally. Joe gifting higher. Scarlet particularly in the final hour of trade. You can see some gains here for the dow, s p, and nasdaq. Marchne day advances 15. Releasing some gains pick up here. When i look at the imap function on the bloomberg, to break down the sections, how they are performing, it is green across the board. The bestperforming group you would be the financials, up 1. 6 . Energy, up 2 10 of 1 . You can see, with an energy, a lot of the names are higher. 71 percent of names are positive. It gives you an idea of the overall trajectory here. Movers, of individual blowing was a leader. It plans to eliminate hundreds of jobs, and may eliminate more later this year. Up 3 . , this is a stock that moves a lot when it is close to reporting. Incyte, what could be a blockbuster product, could be delayed for years. Moving as well. Disney, a possible buyer for this company. This is according to a possible report. Snap pretty much 50 profile. They are currently down, or close down about one quarter of a percent. Joe that would be interesting. Lets take a look at government bonds. Not a lot of action here at all. We can basically skip it. 10year, a little bit higher. 2. 2ad been lower, closer to earlier in the day. At the end, not much action. Scarlet a lot of markets are closed over seas. In terms of the dollar, this was an interesting move. Today, the dollar was weaker. If you look at an intraday basis, it did get a boost. Longterm, a stronger dollar is something we would want. Nevertheless, we look at the boo bloomberg dollar index, it s falling against other currencies. The turkish lira jumped 2. 4 . Obviously, tearing some of its gains as the day went on. Rdogan joe finally, lets take a look at commodities right across the board here. Gold slipping slightly, kind of makes sense. Early on the day, it got closer to 1300. That was an interesting decline. Oil down 13 . Iron ore getting clobbered. Lets take a look at a longer one month chart. On the month. Industrialn as a key metal. Perhaps a lot of it is supply, not necessarily indicative of anything else in the market. That is 21 over the last month. Joe staggering losses there. Lets take a deep dive down into the bloomberg. What im looking at is a growth later this year. It is not the United States. What it is if command of the canada, surprisingly enough. The x axis, the horizontal line is estimated 2017 to be gdp. The y axis shows the estimate over the past x months. They raised the gdp forecast 40 basis points, which is about what germany did as well, although germany has grown a lot more slowly. The u. S. Is runner up. In terms of absolute growth. It is projected to grow about 2. 1 . You can see the u. K. Here, italy, they have been cutting their forecast. Brazil is up slowly. The caveat here is the bank of canada raised their 2017 forecast but cut the 2018 outlook because energy is stabilizing but will not be a source of growth anytime soon. Joe breaking news. We have earnings out from netflix. Q1 revenue, 2. 46 billion. A hair shy of estimates. Q2, International Streaming, one of the key numbers everyone is watching. It looks to be very solid. Sorry. This is what it sees for q2. However, q1 International Net streaming adds 3. 53 million versus estimates of 3. 9 million. On this quarter, it appears to be a bit of a miss, but next quarter it sees higher numbers than originally expected. Percenteeing a downward continuing to look through the numbers. Again, for q2, looking at strong numbers. Lets keep breaking these down. Sweeney,ined by paul director of north american research. What is your flash assessment here . Paul in the quarter here, a little bit light. We see stocks trading off a little light here. The outlook looks strong to consensus. The stock has veterans amount of volatility, particularly around the describe numbers. We see a lot of volatility around the stock. I think that longterm trajectory for the bulls remains in tact which is the u. S. Market is a little more mature, about 50 penetrated by netflix. To the extent that there is another part of the story, it will be on International Subscriber numbers. Versus . 21. . 15 it is like a startup, measured by revenue growth, profits. Paul thats right. If you look at consensus, there is a major legs up in earnings expectations. What is driving that forecast is business foronal netflix has been a losing business over all. We may see more profit. It looks like there is turned around or businesses turning profitable in early 2017 which will be the driver for growth in the year following. That is the story for this company, turning positive. Scarlet when you look at the share price, that seems sizable for most standards. A drop inx, that is the bucket. This function allows you to track how much netflix typically moves following earnings. This is a company that sees massive moves, generally speaking, up 19 since october. Why do you think it is that investors are taking todays results . ,e have a little bit of caution more than normally. Really is not a lot of wiggle room there. People in this particular case balance the Second Quarter subscriber numbers versus the Third Quarter forecasts which shows a little stronger than expected. Netnet, i think most investors will step back and say the longerterm story for netflix is still there. If that is the case, i can feel comfortable about revenue and earnings following along. That has kind of been the case for this company. If subscribers come, revenue will follow. They have programming liabilities and someone has to pay for that at some point. Scarlet the cash is spoken for. Speaking of cash, they see spending on marketing content. Is this a company that has seasonal patterns at all . Isl on the revenue side, it a subscription story. They add more such scriber his than others. The good news about this subscription driven earnings model is that revenues are anerally, if you have relatively low turn, relatively predictable. That is what the company is betting on. They can continue to grow revenue to cover the everincreasing revenue liabilities. Scarlet and this past quarter, they did not have house of cards. Joe you mentioned turn. How quickly our people to cancel their membership . Paul netflix, unlike cable, makes it very easy to cancel your subscription. It is just a phone call or click away. Some will drop the service until next we are next year when they restart their shows again. In the and a national markets, it is something they have to manage. Even when they raise their prices, which the company has not done very often in their existence, but when they do rise turns raise prices, the is very manageable. Scarlet paul sweeney, Bloomberg Intelligence analyst, thank you very much. Dont forget that we have united outinental earnings coming shortly. From new york, this is bloomberg. Lets get to first word news this afternoon. Russia plans to hold talks on syria next week with the u. S. And United Nations. Ofse will be the first round negotiations since President Trump took office. Russia and the u. S. Have been at odds ends the president ordered a missile strike on a syrian airbase in retaliation of attack an attack. Fraud inns of voter the turkish referendum. Ogan warnederd opponents do not challenge the legitimacy of the vote. No gore ships hitting the ground running one week after being sworn in. He took the bench today, filling the space next to sonya for cases. Hearing they involve the powers of the Securities Commission to recoup profits. Political polarization appears to be good for fundraising. Donors to both parties gave a record 96 million to house of Representatives Campaign in the First Quarter. That is a 45 hike over the previous record, set two years ago. Global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. This is bloomberg. Whatd you miss . Up. Ings season is ramping we just got numbers from united as well. Reporting earnings per share, beating analysts estimates. For . 38. Sus was First Quarter, 8. 24 billion, also higher than what analysts were looking for. Joe not moving much, but i said that suspect that on the call with investors, some may be asking about some current evidence. Some of the images may not be about these numbers. Scarlet as much as they would like to move the focus back. Lets bring in jan to talk through earnings season with us. Reported, we have never its well. What set the mood is the big banks reporting. , solid growth despite slower low growth. What can you extrapolate about the state of the economy and earnings from that. Just from financials alone, it is a little too early to tell. They did not address any of the core issues weighing on the side. Rates moving lower and this concern or disbelief around policy and deregulation. The report from cells did not the report themselves did not address any of those issues. When you step back and look at the overall read on the earnings season, i think it will be a good one. Putse looking at 3 which you at 12 year over year. That is the first time we get doubledigit growth rates in five years. A lot driven by energy and financials. What is key to understanding how the markets will react to the earnings season is really actually about what the bellwether sectors are doing and what they say about Second Quarter and recent trends. What they are on saying. It is really hard to get excited about Earnings Growth when you have these key earnings. Scarlet 9 Earnings Growth is what is projected for the entire s p 500. This is the bloomberg. We have not had a whole a lot of Companies Report on the s p 500. So far, what we know if they beat earnings by 6 in revenue by half of 1 . Again, you have not had any energy Companies Report, telecom. Very few Customer Companies have reported as well. On the growth side, sales growing 3. 5 percent from the same time a year ago and earnings growing from a year ago. Joe obviously, the Analyst Community always said the bar a little low for the companies and then they skip over it. They overly said it little for this quarter . They cut even more than they usually do, which set us up for the earnings that we are expecting. We can think we can get a 3 earning. Joe lets look, we have the sector call. Financials, and health care. Telecom,to avoid retail, a lot of the safety, boring stuff on the right side. What do you like about those four categories . Those are the ones that we innk it makes sense to own this quarter. I think those are the best poised to do well. Stepping back and looking at what you want to own this year, we still like health care, just updatednd we financials recently. If you look at positioning, people are still overweight tech. Financials, as you mentioned, after the big trump rally, there that trade was overdone. Everybody had piled in. It suggests that they just have equal weight now. Far from overdone. If you look at the valuations and positioning, it is far to go if you believe any of this is going to happen. From earnings to the macro economy. The has been a lot of debate about the market doing well. One theoretical clear answer is Economic Data for the past few months is looking good. Im looking at the terminal, the surprise monitor. It is basically a way to look at housing data coming in relative to expectations. If we blow up this chart, we have the surprise index. 2016ata, since the end of has really outperformed expectations. This is inherently reverting estimates. Ple up the b already declining a little bit. If we zoom in here, we can see the latest declines. Rolle soft data starts to over, if peoples expectations converge a little with reality, will that be a headwind with the market . Absolutely. It has been one of our key concerns for the market. There have been key drivers of the market. One was trump, the second was improving global growth, and third, improving confidence. Intorump put has been put question. When they come in with a pr push on tax reform come i think their figure out what they want to say. That gets the market excited. There are concerns with what you are talking about. We thought that confidence would start to slow and come in more choppy. When you lose your support for the market, i think you will see volatility higher. Scarlet certainly a lot of . A lot of questions about what will follow. Will companies be hesitant to raise their guidance for the guidancearters what can they offer . That is why i think you want to listen to what the bellwether companies are saying. Numberst need to put about it, but they need to give you a sense of what the recent trends have been. That is going to ask ago of long way. When there is this huge debate going on around the soft and hard data, they have the best opportunity to fill in the gaps there. Listening to what they are , the recent trends in the past few weeks, that will be a key to how growth will look in the Second Quarter. Joe dan suzuki, thank you very much for joining us. A quick programming note, dont miss two exclusive interviews with fed president s this week. On kansas city president ofsday, and Robert Kaplan the dallas fed on thursday. This is bloomberg. Joe i am joe weisenthal. Whatd you miss . French elections. Lets take a deep dive into the bloomberg. I first saw this on twitter. Look at this. This is a tenured chart of the risk reversal. It looks that how much more calls are. Kind of a look at anxiety or risk aversion. 2011, the height of the eurozone crisis when people wondered if greece might leave the eurozone. There is so much no one knows what might happen with frances weekend. Could it be the fear outcome of the nationalists versus the communists . Nobody knows. The degree to which people are this youction on have to go back to the financial crisis to see this much of anxiety. Scarlet this is remarkable, especially because 2016 looks like a blip. Joe that brexit thing, people did not care about that. 2011, people might not remember how hairraising it was. Scarlet data coming out of china that was fairly encouraging. It did not do much for chinese stocks. This is the shanghai index. It fell for a second day. There is a lot of noise sortusly for people to through. Over forhat may hang some days. Out, are days for the play for people to react to it. What you can see of course is shanghai comp index could slide towards the moving average, the yellow line. The last time it was below the line was the end of the Third Quarter last year. Joe i always wondered how much chinese stocks move on fundamentals, the economy. Scarlet people look at fundamentals a lot. United contin know, trading higher in after hours. We take a deeper look at the airlines. This is bloomberg. Lets get the first word news this afternoon. President trump kicked off the 139th annual easter egg roast today, walking on the south lawn. Reporters asked for his message on north korea after the failed missile test. Any message for north korea . President trump got to behave. The president also said that his demonstration is on track to make the United States stronger, bigger, and better than before. Former afghan president is criticizing the United States for the recent use of the largest ever nonnuclear bomb, calling it an atrocity against the afghan people. Killed 95dly militants. Speaking to the associated press, karzai says his country was used very disrespectfully by the west to test its weapons of mass destruction. The advisor to french president ial candidate, francois brexit willthat likely take longer than two years. A change fromark the former adviser who said in separate that the exit should take place as quickly as possible to respect the interests of france and europe. A team of scientists that today that for the first time human caused Climate Change has rerouted a river. The Research Found that in 2016 the retreat of a very large glacier in the canadian Yukon Territory led to a be rounding of water from one system to another. The research was published in the journal, nature. Global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. I am alisa parenti. This is bloomberg. Ofrlet lets get a recap market action. Gains across the board for the s p, dow, and nasdaq. This was the biggest advance in six weeks. It comes as the market weekends weakens. All groups gaining ground today. Joe i want to do a quick check of netflix with earnings coming out in the last hour. The company reporting results of 40 . 40. In q1, the net ads where a little lighter than expectations. Streaming ads were just 3. 5 million versus estimates of 3. 9 million. The outlook, much more for bothe looking international and domestic ads coming in solidly, projected to be solidly above of expectations. We see the drop, but not much. You were talking about how typically they have huge swings. Scarlet this is like unchanged. Joe basically nothing. Whatd you miss . United continental also trading higher after hours. This Company Still dealing with thewidespread outcry of forcible removal of a passenger last week. For more, lets bring in George Ferguson from our princeton bureau. For Airline Weekly in our washington bureau. George, i want to start with you, ignoring the incident last week. The story with airlines is they are finally really doing well. The cost structure contain, they are solidly profitable. Even Warren Buffett likes airlines these days. Does this purport that we got from united, which is all pretty thatida this incident confirms airlines are doing good . We are still at a generational high for the profitability. We know fuel costs will be higher through the year for most of the airlines. Theyre more profitable than they had been. A lot more investors looking at them because of that. Scarlet have we reached peak profitability . There is a statistic that says united, american, and delta combined own more of the market than they did. They survived the oil spike, the security, all of that. Are they destined to not make as much money as they did last year . They are already not really living in the alternate universe that they were a couple of years. They still had the revenue structure that they had went the revenue was more expensive, capacity was more restrained, and yet, they have the new cost structure of a cheap oil environment. Now, they have grown some. Lowcost carriers in europe, in particular. Airlines, in almost any contents, context, doing very well, but less well than a year or so ago. Joe george, im not sure be would be having this segment if it werent for the incident last week. Lets jump to that. People pointing out that no one will boycott united because they dont have that many choices in the first place. Scarlet pointing out the degree of consolidation in the industry. How much does brand matter . For airlines, i think people go for the cheapest fare possible. In the shortterm, it may affect longterm,gs, but passengers really go for the cheapest fare. Scarlet if there is a boycott of united, and im thinking of the asian markets in particular because the passenger that was pulled off was of asian descent. Can united raise profitability . Be clear. Its like you are going to get on a united flight and it will be and two. This is not a black or white question of a boycott. United does indeed need to discount to fill the flight, that is an issue for united. Embedded in the numbers, united reported a pretax margin of less than 2 . Delta last week was 9 . Look, some of this is that united is a more seasonal airline, but some of that is delta takes of revenue premium over united or premium. They have a better reputation. What has just happened to united will not help to close that gap, the revenue deficit that it has. You mentioned the credit card sales and so forth. Really what united needs to do is what has been doing in more mundane ways which is to continue to improve itself. United is actually a much more Reliable Airline than it was a few years ago. The problem is Something Like last week and bailey said it back in terms of the perception, catching up to the every day reality. Joe here we have a chart of domestic passenger yields, speaking to exactly what you are talking about. Delta clearly the leader on this front. United continental scarlet on the bottom. This chart points to how the Different Airlines have absorbed their merger partners as well. United continental merger was considered as rocky. Delta and northwest went off more smoothly. Is the united and continental merger more streamlined now . Are we seeing the benefits . I think we are. It took united a long time to get its act together. I think oscar munoz has helped as well. We are seeing a more Cohesive Team out of united. You used to hear from a flight that it was either a united or communal crew. You dont hear that anymore. Contractmaintenance seem to have smooth with some nice pay raises. Joe the incident last week, some talking about the practice of overbooking, some calling for biggest rate changes regarding that practice. Is that at all possible that newthing could catalyze a regulatory review . It would not be the first time. A few years ago back, we had the delays. Of lengthy sure enough, there came the tarmac delay rules. The ceo of american saying, we did this to ourselves. This would actually be more harmful if they were to impose if they were to say, you cannot sell flights anymore. Getting someone to volunteer nestead of yanking someo off the flight, these are things that airlines can do. Joe george and seth, thank you very much. Scarlet coming up, chinas economy, back to back acceleration, we take a deeper look into china. This is bloomberg. Joe we have some breaking news out of cabelas, the company that sells all of the fishing, hunting, sporting goods. Their stock is up after hours after they have entered into a revised transaction agreement in connection to the Bass Pro Shop merger. They have agreed to sell off their subsidiary bank. We see the stock of their 7. 5 after hours. Scarlet we will continue to follow these headlines. Meantime, whatd you miss . President trumps reversal on china as a currency manipulator. We will see what happens. That came after fridays report where the Treasury Department put china and five other companies countries on the monitoring list. Broad, when we talk about labeling someone a currency manipulator, is there a standard definition to go by . Are the parameters by which to judge if manipulatings currency . There arent. Currency medivation is thought to occur when a country a significant surplus. Interesting, trumps reason for not, for essentially violating one of his campaign promises. He can use this in leverage of diplomatic issues surrounding north korea. Is this possible . The threat of labeling a country like this unless they play ball on a seemingly unrelated front. That is pretty unusual, i would say. I would note that in general, when you are thinking about whether or not to name a country a currency manipulator, you obviously assess how that would affect the relationship with that country. You link it with behavior or chinas willingness to sanction north korea makes that very explicit, and implies that if china were to manipulate, the u. S. Might let them have a free pass, which is probably not what was intended. Scarlet china seems to have escaped being labeled a currency miggy player for now. What does not being a currency manipulator allow them to do . It really doesnt. I dont think china with all that afraid of being labeled a currency manipulator. Right now, the overwhelming consensus is that china is trying to prop up its currency if china were to allow its currency to float freely, it would slow down. China is trying to keep the currency from floating down. China was not really scared or afraid of the designation because it is clear that it does not meet the criteria. Joe lets talk about where china is. Donald trump a site, be have gdp and other data out over the weekend. It is indicating much faster growth. What are the indicators what is the key indicator you like to look at when you try to ss where china is in the cycle . How would you rate the economy at this moment . I actually like the leak a kajang indicator. Think, at least a window into the true amount of cyclical variation in the economy. Headline number is almost smooth, to some extent. Therefore, it probably does not indicator. Seful in addition, i like to look at import volumes, which are also signaling quiet strong growth. My basic take is china slowed more than reported in 2050 and 2016, and is now probably accelerating at the headline rate. Scarlet ok. 6. 9 is a fairly accurate representation of where the economy is. Is this sustainable . Probably not over a long period of time. I think china has already achieved some of the easy catch up gains from growth. In my view, the longrun growth has slowed. In the short run, china did have some slack. Putting that to work in lead to a short run acceleration. I think more portly, the fact that chinas Economic Cycle now with a little more in line the u. S. Economic cycle will probably make managing chinese currency a little easier. Back in 2014, 2015, chinas economy was slowing went the fed was tightening. That contributed to instability in the market. Joe the next data point we will get tonight out of china, economy prices. The bears. 2 the real estate bubble, they had been talking about it for 10 years. Sometimes they slow down price appreciation a little. It seems to be surging ahead. The outflow of the industry, it tends to cause people to put money into property. What is that sector of the economy looking like . I think property prices have clearly picked up. That is reflection partly in the fact that china has lowered interest rates. There is a real basis. I think, more important, back in 2014, there was clearly an overhang of new construction, weighing down chinas economy. Now, think there is legitimate acceleration on the back of the acceleration and construction but that will not be enough to sustain china over an extended amount of time. Joe always appreciate you coming on. Up next, we will hear from turkeys Prime Minister following the referendum victory that gives president erdogan sweeping new powers. This is bloomberg. Scarlet im scarlet fu. Whatd you miss . Yahoo expected to report earnings on tuesday. On thers want to tilt purchase by verizon. Lets look at yahoo . The data has deteriorated stably over the last four years. Their data still represents about half a million eyeballs. Verizon things that can generate 20 billion of ad revenue by the year 2020. When looking at yahoo financials, the Company Posted a 64 million operating profit for the final quarter of last year. It was yahoo s final operating profit in two years and came mainly from costcutting. The revenue decline is slowing down. The third 4 in quarter. This implies a bit of a turnaround at yahoo , but what really matters from investors come tuesday is how yahoo plans to monetize the remaining assets remaining after the verizon deal. Its taken alibaba and the stake in yahoo japan. As verizon, we have seen Tim Armstrong get a lot of heat already for the sales unit represented the internet properties. Following yahoo s earning releases on tuesday after the closing bell. Joe whatd you miss . Shortly after turkeys president turkeys president a ,rdogans referendum victory a discussion in ingres ankara. Turkey has gone through quiet if youd dramatic expenses. It has been difficult, challenging, on top of a failed coup, we faced terror threats, and all of the geopolitical drag. I think, going forward, now that the ability to debate has improved, banks, more mundane, the agenda, that would improve include structural reforms. One of the things that investors have in mind, one of the first concerns is whether or is interrupted. Promised ardogan possible referendum on whether or not turkey should reintroduce the death penalty. How confident are you that you are able to go to the general election as scheduled without a referendum was not float in between . First of all, the ruling party, my party, has never acted opportunistically and never tried to go for early polls. That has never been the case. We have been in power for almost 14 years. There has always been talk of early elections. We have never had early elections. That is one. Number two, president undergone erdogan also made it clear that elections would be held in 2019. I think has been very clear that elections are not on the agenda. Punishmenton capital , a referendum on that is a separate issue. To come tot was agenda, that would not be as kind of timeconsuming as it has been in the past. That was Turkish Deputy Prime Minister earlier today ankara. Omberg in coming up, what you need to know to get out for tomorrows trading day. This is bloomberg. Scarlet coming up, dont miss this. Tonight, china property prices out at 9 30 p. M. Joe i will be looking at u. S. Housing starts at 8 30 a. M. Tomorrow morning. Scarlet the Bank Earnings season continues. Bank of america and Goldman Sachs reporting tomorrow. Yahoo and ibm after the close. Joe you wont want to miss this. To increase. To exclusive interviews with fed president s this week. Scarlet that does it for whatd you miss . Thank you for watching. Joe have a great evening. This is bloomberg. Alisa lets start with a check of your bloomberg first word news. President trump kicked off the annual White House Easter Egg Roll today, walking on the south lawn, reporters as the president for his message to north korea after the failed missile test on saturday. Any message for north korea . President trump yes. Got to behave. Alisa in europe, the top advisor to the french president ial candidate francois on thesays negotiations exit from the European Union will likely take more than the two years estimated. Ministerr french prime tells us he does not believe two years will be enough for efficient talks. In the middle east, nearly half a million iraqi civilians have fled mosul since october when u. S. Backed iraqi forces launched an attack to retake the city from Islamic State militants. The United Nations says 500,000 still remain and food, water, and medicine are running low. A team of scientists says today for the first time, humans caused Climate Change has rerouted a river