Transcripts For BLOOMBERG Whatd You Miss 20170712

Yesterday that he appeared eager to accept information from the russian government that could have heard clintons campaign. Secretary of state Rex Tillerson met with the king of saudi arabia today come in the final stop on his middle east mission to mediate the qatar dispute. They will not go into detail about the discussion, but there is no sign a breakthrough was reached. Saudi arabia is one of four countries that has severed ties with qatar. There was a great moment at last nights major league allstar game. Nelson cruz took out his phone and told him to take a photograph of him, the umpire was the first he was named the games m. V. P. Global news 24 hour was a day powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Life from bloombergs World Headquarters in new york. Scarlet fu is on assignment today. Were counting down the closing trading here in the u. S. Stocks and bonds jump. She did not offer much clarity. Key readings today and the outlook for wheat crop is looking less dire. A 1 billion day. With an analyst in todays focus on tech. Julia lets look at where the major averages stand. Abigail doolittle is standing by. Abigail indeed there is. , all solidlyn higher. On pace for their best days since june 28. The nasdaq leading the way up more than 1 as some tech stocks hit record highs including facebook. Look at the emerging markets index, really outperforming in a big way. All of this after fed chair Janet Yellens congressional testimony was considered to be dovish. Quite where the fed would like to see it. This suggests rates could stay lower for longer. We look at the 10 year yield we see that when the prepared testimony came out, a nosedive in yield as bond rallied. Still down about four basis points for the biggest decline for the 10 year yield and about a month. A big drop. At one point back below the technically important range of 2. 3 . This has shaped trading action for not just the emerging markets, those developing countries, but also for u. S. Trading. Look at the return function. A sea of green. All green. Of top we have the real estate s p 500 index being helped a lot by higher dividends yielding stocks look more attractive when yields drop. Tech up there as well. The financials not benefiting from the fact that yields are dropping. That is thought to perhaps depressed the lending activities. Plus, earning season takes off for big banks on friday. Wait and see. The best currency to react is up aboutabout 3 , 3 . To see how does todays rally really to the fed. He thinks no one can really related at this point to the fed even Global Economic growth. But what we do know is there has been a huge rally this year of 150 . He calls it a little suspect that is the crypto currency has managed to pull out of that before. Bitcoin is now consolidating in this range. Perhaps to the top of the range. The bigger question is does the range breakout to the upside to an alltime high or does it go down and perhaps consolidate back down . Watch the 50 Day Moving Average to see whether the buyers are in control where they lose control. Or if they lose control. Despite being todays top currency, perhaps on fed chair Janet Yellens testimony. Feda it was the first day chair Janet Yellens testimony before congress. She said the u. S. Economy should continue to expand over the next few years but she also stressed to continue to monitor inflation closely. 2 we reaffirmed our inflation target in january. We are very focused on trying to ,chieve our 2 inflation target and it is not a subject of discussion. Joe joining us now from capitol hill, republican congressman, member of the House Financial Services committee. Thank you for coming on. Lets talk about todays news with chair yellen. A lot of the discussion today she isfocused on how doing at her job and whether she will be back, where the she will serve another term. From your perspective, and you think she deserves to get another reup at the fed . Guest they really has not been too many changes of policy on her part since you have had a new Administration Come in. For the nature of the conversation she is having directly with the administration and what her vision would be for 2018 and beyond. But i think the Committee Members asking her what her plans are, what her asks might be, and her answers were all very telling. See whateel it out and she is thinking or what her interests might be. If i had to guess i would say in 2018 there will be a new chair, but who knows. We will see. As far as some of the items that were discussed, you have a lot of members of the House Financial Services committee eager to see the multitrillion dollar Balance Sheet, to be rounded down, the cleanup, invest in in treasury bonds. From that standpoint a lot of good news. We like to see our economy grow. I think from a Monetary Policy versus regulatory policy stand front, there are a lot of questions of the chair where the fed will get active at corporate board. The point about liability, where the boards liability to shareholders and there are Civil Penalties if they are not doing the right thing for shareholders. Versus when the fed comes in in their supervisory role, you dont have that same kind of accountability. That was also an important focus today. Julia in recent days we have had both janet yellen and wa rn about rich valuations. The cash that has been pumped into the system. Yet that was not discussed today. There was a gap. D wish the fed were talking more about concerns about price violations and the knock on concerns about that . Rep. Zeldin sure. Unfortunately when we have these committee hearings, each member gets about five minutes. When you have so many members on the committee, it ends up taking hours to get through each member having five minutes. For the fed chair, it is certainly in opportunity for her to answer followup questions, because what members will do is submit questions for the record, then the chair will have some time to respond. Who knows, maybe we can get Additional Information answering those questions. Julia there is always another day. I what to got back to what you were saying about Janet Yellens role and the potential future at the fed. Theres the possibility that gary could be the fed. What kind of chairman do think he would make and would you support his choice . Rep. Zeldin for one, what i know of him, he seems to be exceptionally qualified. He is brilliant on so many aspects of understanding our economy, our Monetary Policy, the path forward. I have always been completely impressed where i have come in contact with him in his current role. With that means if he were the fed chair, thats a little different question. If given that opportunity, i am sure he would weigh in exceptionally but i certainly cant speak to what his vision would be as fed chair because i have not had that conversation with him. Joe i want to turn the page a little and talk about other stuff going on nbcs, on in dc, particularly things we have learned about donald trump jr. s meeting. But you tweeted yesterday that you voted for the president last november and wanted usa to but then saying that the mail chain was a big nono. Admonishing the white house in some way for various things the criticism has been tepid. What does that mean, a big nono . Shouldnd of consequences we see for what you describe as a nono . Rep. Zeldin i would certainly hope in hindsight that the meeting would not have taken place again. Frankly, it is a good thing that he did not receive information from the russian government at the meeting from all the information we have come in contact with, because there is an investigation going on and i believe the russians meddled in last years election, in the manner in which they obtained the information is highly illegal. I am somewhat greatly concerned with cyber security. There are many places to go with this conversation of where that he could have went, but from all reports did not. You donthere put yourself in that situation in the first place. If the russian government is providing you with information illegally obtained, that becomes a complicated issue. Its going back to last years campaign. I am sure that a lot has been learned since then. Is exponentially bigger than what it was last year. Im sure for the president , for the white house, for a lot of our country and certainly here the houses, whether arms Services Committee is trying to pass something this week there are many other issues to focus on. We dont want to be talking about these russian issues every single day when people are concerned about their economy, they are concerned about health care and other Top Priorities depending on who you ask. I guess the lesson is not to put yourself in that position in the first place because it couldve gone bad. Julia senator john mccain said, quote, it sucks the oxygen out of the room. Another person that wants to move on from these issues. It to ask you whether makes you less willing to expend Political Capital supporting him and his policies. Rep. Zeldin i supported the president last november. I want him to be successful. I want our country to be successful. I believe we live in the greatest country in the world. As i talked to my constituents and ask what their greatest concern is, you get a broad range of perspectives. A lot of people when you put on the news right now, during this interview we are able to talk about multiple topics but there are other interviews where they are just talking about russia all the time. Where that is the force from what is actually happening, where this week we are passing Human Trafficking bills, or the senate is trying to legislate the next at on health care. A tax reform package hopefully gets finalized by the end of the year and we see our economy ripping in 2018 like we have in a long time. I cant just take a step back from being supportive of not just a president , but also this Important Mission of a dressing all of these issues, because time goes by fast and a lot of people are relying for us to get these things done this year. I have to say upfront and continue talking about these other issues no matter what other distractions might pop up. Julia thank you so much, joining us from capitol hill. We will have live coverage of Janet Yellens second day of testimony tomorrow starting at 10 00 a. M. Eastern. This is bloomberg. Mitch mcconnell promising to release any Gop Health Care bill tomorrow. Went to idaho. Hes been critical of the republican plan to repeal and replace obamacare. I think it is a very important issue for the u. S. And i think frankly that the bill is wrongheaded. I think we are moving money around. Its not a Health Care Reform bill, it is a health fair we need to get to the root cause of the problem which is the increasing cost of health care. Fails, that this bill then we will have a vacuum in we can come back and hopefully have a bipartisan approach to the real problem. If you look at it there are two segments you need to deal with. How to reduce the cost of looking after people who are sick and do it more efficiently, and you also have to give to deal with the epidemics that are sweeping the country obesity, smoking, drugs which are raising the cost of health care. David are you surprised how little of the conversation in washington has been about the policy . Im not surprised, i am disappointed about how much is been about politics and Financing Health care and not about the cause of the problem. David you are on the president s Strategic Task force. What are you telling him . What are you telling those who are on the panel about health care . Were discussing a whole series of things, not just health care. I have talked with various members of the white house about certain things. They all agree is not about the cost of health care. That may be dealt with separately. David you get the sense they are listening . Do you get the sense they are listening . Does the president listen . Toby i think he is. It is an active interchange between all kinds of individuals at those meetings and the president is very much engaged in knows. David what has the president had to say about the process . How much of that the railing how much toby the rhetoric is way too political. It affects everyone in the u. S. And health care is one of those things everyone is involved in. Its universal. I wish we were getting a more bipartisan discussion. David is the Affordable Care act in crisis . When you look at that law written and passed by democratic congress, is that something in bad shape or in a crisis shape . Toby i dont see it in crisis. The bill started to do three things. Increase coverage, which it did. Improve quality, which uniformly across the country gradually is seeing improvement. Third, decrease costs. Long time the information inflation rate went down, now it is going up again in a think that is the root of the problem. I imagine you talk to insurers and executives in the health care field. What are they saying to you about the state of health care . Can you be sympathetic to when someone pulls out of the system . Toby i think they are starting down the wrong road, even with good intentions. David is there a way to get people on the right road . How do you get that conversation to happen . Toby the bill has to fail and i think it will fail. Backi think we need to go and address with the problems are. Howd when you look at different is the process of writing it . Toby not nearly as transparent as it was previously. Previously there was tremendous discussion that went on in both houses and a lot of testimony from a lot of people. This is not that clear cut in terms of everyone getting their say. Joe that was Cleveland Clinic ceo dr. Toby gautreau c osgrove. Expedia is looking to emerging markets to fuel further growth. Listen in. The travel market from the asiapacific market to the u. S. To europe is exploding and we want to be there in as a result we are investing very aggressively. Julia we have much more highlights on that. This is bloomberg. Julia Global Markets taking their cue from janet yellen made,in the comments she uncertainty with regards to inflation. The white line behind me. On the right we have seen a bit of a pause as investors are cautious about the prospects. In the blue line, two year, to give you a sense of what happened over the last several sessions. Janet yellen introducing perhaps a little more uncertainty. Markets saying lets buy emergingmarket assets. Joe it is not just emerging markets. Elsewhere people are bullish basically on everything. Heres a look at some fundamental data out of europe. Weve had a bunch of people here saying how they are bullish on year. Its about that on europe. This white line is industrial reduction for the eurozone growing 4. 0 yearoveryear. 2011 was the last time we got this kind of growth in the eurozone. France is blue. Italy growing, italy is sort of famous in recent years for being a country the economy is unimpressive, even it is growing nicely. Story,damental eurozone everything aside, the economy is growing. Julia great to see the Bank Earnings as well. Earnings. Cited about year Bank Earnings another reason to get excited. Julia i cant tell if you are being sarcastic. The market close his next. Is next. Ayear Bank Earnings another reason to get sea of green here. More to come. Stay with us. This is bloomberg. Everything is up. The dow closed at a record high. Janet yellen signal the bank is in no rush to tighten Monetary Policy. I am julia chesley. Joe i am joe weisenthal. Scarlet fu is on assignment. If you are tuning in live on twitter, we want to close you to our closing bell coverage every weekday from 4 00 to 5 00 p. M. Eastern. Again with our market minutes and give you an idea what happened. Janet yellen signaling a lot applying. The nasdaq performing higher by 1. 1 . All sectors in the green. Green, green, green across the board. Nasdaq up for the fourth straight day. The biggest fourday gains in months. Lets have a look at some of these individual movers. We have paypal with a record high. Apple is a strong signal, trading at a record high at 66. 50. Also watching American Airlines having its best day in two months. Investors liking what they are hearing. Also, a record high with nvidia. A massive market opportunity. Ability to see beat estimates. The top percentage performer in the s p 500. Higher by more than 29 . The company seeing they will to for billion 4lars of assets to billion of assets. Joe lets look at the bond market. Yields lower across the board. 32. 10year down to thre2 janet yellen concerned about inflation more than asset yields. Lets look at a chart of the 10yearold. 10 yields. At 10 00 a. M. , we got the transcripts. The word assets was not even in the transcript. Julia the dollar trading at a fresh low for the month. Obviously tied to what we are seeing. A question with people on the market is why cant the euro rally . Showing you what is going on with the euroyen as well. A lot of people selling in euroyen and sterling this fight what we got from janet yellen, the weakness of the dollar. Also, what is going on in dollar cad today as well. 25 basis point hike from the canadian central bank, the Second Central Bank to start raising rates. I want to point out some interesting levels here. I am showing you some resistant levels in dollar cad. The resistance zone we are looking at, 79. 5 to 80. Also want to point out the dollar brazil today as well and what is going on there. Brazil higher by 1. 4 . A couple of things going on, but the most important thing is labor reform passed today with more reform. Can they achieve pension reform . This is a prelude perhaps to pension reform. What a change there. Joe big move. Finally, lets take a look at commodities with oil and gold both higher today. Yellen dovish, dollar weaker, so Everything Else has to go up. We see the gains in crude and goal. At noon today, we got the usda reports inting light of the volatility in the grains market. Spring wheat, which wheat, corn, and soybeans all down. Total acresheat were going to decline. They did not decline as much as people expected. We saw a decline in corn down 4 , todays biggest commodity loser. Julia we will talk more about this later. Joe those are todays market. Julia euro stockton treasuries rallied after janet yellen signal the fed will not rush to tighten. Joining us with more on the Market Reaction to her testimony carl. Oliver and i like your term, pondering the inflation. More like the concerns we are seeing in the market . Absolutely, the fed and a lot of economists initially where ignoring the signs of disinflation. In march when we got the first data showing cell phone Contract Prices declining and it looks like a oneoff event and drug prices and cell phone prices, and now, we are starting to see more refacing disinflation in the economic data. We will see more evidence of that on friday in the cpi. Still know what measures. Thehe last couple of weeks, story has been the fed does not really care about inflation anymore. It is worried about asset prices. Even if inflation is not that hot, they want to tighten. Todays testimony seemed to fly in the face of that a little bit. Good people misinterpret the fed two weeks ago, or janet yellen change her tone . Carl there are 2 competing camps here. Concern about Financial Stability issues whether it was stock valuations, commercial real estate, residential real estate. They are concerned about the Financial Stability component to the economy. For example, John Williams is focused on that. Vice chair fisher has talked about that as well. But there is also another contingent at the fed, evans out of chicago, and likely janet yellen as well, that is concerned about the fed persistently missing their inflation mandate, so you are below 2 , well below 2 right now. You have been for most of recent history. Now you are ramping up the pace of tightening so this does raise questions about the metric objective of 2 . Julia i will steal a quote today. It is a revolution, not an evolution. Too. Think so, overall, there is the business and a hint of that, there is a fallback. They are used to liking it for so long. Probably we are more comfortable with higher rates than we ever have been, but it is more of an evolution. There is a few things that are interesting that we will talk a little bit about janet yellen. Lets talk a little bit about economy as well. Have not beennies spending as much. That is probably agreed by wall street. You can seehape, where that has swindled over the last three years to her point. The yellow box is showing you analyst expectations for forward cap expectations. There is a big pop after the election, which analysts started saying companies will spend more on good stuff that we want to see. That has dropped. You can see the optimism index in the bottom panel also drop. Has droppednding off a little bit from the highs we saw a earlier this year. Joe lets talk stocks for a second. Nasdaq up 1. 1 . Amazon within a breath of new highs. Nvidia closed at a closing high. A week ago, people were like rotation, this is it, now people are buying tech again. Good question. I think basically tech has a few things going for it. If you have faith in the cyclical strength of the economy, it will go for you. Some of the higher growth, higher returns the, still got all world right now. You see that in the nasdaq as well. That risktaking behavior has extended to a lot of places. The tech space and those names are no exclusion. Julia talk about cbi because we have that number on friday. I feel like that is more important than what we got today. Oliver i think that will absolutely be critical. Policymakers are looking for a rebound in consumer spending. Retail sales on friday. Also, they continue to ponder or mull the disinflation trend. If we see further backsliding friday morning at 8 30, this could potentially lead policymakers to really question. There is a possibility they would announce the Balance Sheet runoff timings at the july meeting for a start. The announcement and the actual start so it could come july and the start would be in october. If we get a weak cvr partners, they may decide they are not ready to make an announcement. For the evidence of cold feet further evidence of cold feet. Julia on timing. Thank you so much. Up, 2018 outlook shows the world is a wash in oil. Lee fromto eric citigroup. From new york, this is bloomberg. I am mark crumpton. It is time now for first word news. Mitch mcconnell is gearing up to introduce the revised Gop Health Care bill set for tomorrow after morning. Its success can hands on with the Congressional Budget Office has to say about the plan. Florida senator marco rubio said to bloomberg those numbers are key to the debate. You cannot have a factbased debate unless the cbo compares what we are proposing to the actual conditions in america, not what they projected obamacare to do two years ago that it did not do. They cannot claim there are 16 Million People being covered in 16 Million People are being covered. Mark at least a halfdozen republicans came out against the initial plan. The House Majority whip Steve Scalise seriously wounded in the shooting at a baseball practice last month has been moved out of the intensive care unit of a washington hospital, but he remains in serious condition. Louisiana Compass Minerals third ranking House Republican underwent surgery and is being treated for an infection. Elise and four other people were wounded june 14 when a gunman opened fire on a practice baseball field in nearby alexandria, virginia. The European Unions chief resident negotiator says britain must meet tough conditions in divorce talks and is not have long to do it before the two sides can start looking at a future relationship. Speaking in brussels today, Michel Cartier separate needs to make significant progress on all of the issues. Frances Prime Minister is outlining a new plan to deal with the nations my current crisis. It calls for a major reduction. Takes forime it a request. Over a third of Illegal Migrants in france last year were ordered out. 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. An assessment of oil markets for 2018 shows the producers are pumping too much crude. U. S. Shale producers are gearing up to fill in any shortfall that behind. Opec general speaking exclusively to bloomberg about the common efforts needed to restore my stability. Price stability. The Global Oil Industry not only needs the but also common and joint action as we talk. Because the show producers sh ale producers are an important part of this industry, they also need to join us so that together, we can restore the stability and maintain it into medium, and longterm of all oil producers. Julia joining us now is eric lee, Senior Analyst at citigroup. Great to have you on the show. Last to unbundle here. The pressures on the oil market. I want to go straight to the headline because you think oil can hit 60 per barrel by yearend. Why . Eric well, it comes down to a couple of things. Clearly, it depends on what opec does, that they hold their production down and some of the wildcards like libya and nigeria that have raised the above peoples expectations. Together as the two the as Everything Else in supply and demand parts of the letter, you still get what looks like a pretty significant inventory for the rest of the year. All other things equal, you should get a strengthening to defer prices. If you wanted inventories still, you would need crude production to not be at the current production of 9. 3 billion barrels a day but 10. 5 or as high as 11 Million Barrels a day. Julia i want to go back to what you were saying about opec because you point out there was too much optimism about what opec could achieve here. It was that two month period between when they announced the supply cuts and actually enacted them. The point at which they are coming from is far higher than the market expected. Explained that and perhaps why the market is misinterpreting some of the data here. Eric sure. I think part of it is maybe not so much misinterpreting but having a very, very bearish sentiment right now. In the investor positioning data, but at the end of last year before the january 1 cut took place, that was a a lot of exports, and sentiment was very bullish. Actually, there was additional surges. We were all left questioning suddenly, went, opec wait, opec just cut. We did not feel it until the cut past in the second quarter. Now we are in the third quarter. We expect them going down even more. Todays u. S. Numbers provide continued signs of that. Joe i was just going to ask you about u. S. Numbers. Explain to us the role of shale and how it factors into the supply and demand equation, u. S. Shale. Eric sure. Shale, these are historically unprecedented times for the oil market. Nothing like shale has ever appeared. What we like that is if the price was 60, in the past before shale, it may take some a response to that. Shale is a new sort of supply that responds within six to 12 months to bring on new supply if prices rise. Julia what you are arguing for is an increased deterioration in the inventory levels and for that to accelerate into the second half of this year. I guess in line with that when you said there was bullish sentiment immediately after the open position, you are right. They got in there too early. Eric yes, i think that is part of the view. What the early bullish sentiment also did was have a real physical and fundamental effect, which was to allow shale producers to hedge in at a higher prices that we reached early on. That ended up walking and higher shale production trajectory. A lot of moving parts related to each other. Joe real quickly, i want to ask about your comment that we have seen nothing like u. S. Shale before. If supply can expand at a faster rate than it ever could before when price is demanded, does that mean we are in a new era of energy . Triplecrisis religio digit dollars for oil . Eric absolutely. We have maintained for a while that in the mediumterm, this is a ceiling on oil prices that is hard to break through. It is not that much higher than where we are now. As i mentioned, inventory is going down. Constructivee a factor this year. But if you look out three to five years, the fact that shale can come at higher prices, we see a ceiling around 65. Joe fascinating stuff. Directly, thank you very much eric lee, thank you very much. Next, we are staying with the commodity thing. How has it impacted u. S. Grains . Not quite the agricultural armageddon so expected. We will talk about the big usda report, next. This is bloomberg. Julia whatd you miss . The u. S. Department of agriculture releasing its monthly projections for crops. Futures falling. Joe for more on todays big report and the state of u. S. And global agriculture, lets bring in ellen. Thank you for joining us. Is seems like the story is there were declines in output, but not quite what people were expecting. It is all about expectations. You still season pretty good declines in projections from the previous year. The usda saying the spring wheat crop, the stuff that goes in macaroni and is in the Northern Plains, with 21 less projection. But the markets were expecting and even bigger drop than that. The u. S. The permanent agriculture saying the worstcase scenarios are not going to happen. Still declining in yields and production, but enough breathing room that in combination with some robust global crops, they are taking a little pressure off the markets. Joe i was just going to ask, what is the key factor here to give them breathing room . Production globally . The weather conditions have not been as bad . Where is perhaps the opportunity to reassess the situation . Alan the weather has been pretty bad. You still see severe Drought Conditions over the Northern Plains that are getting worse rather than better, but what you are seeing is Global Production places like the black sea and the European Union and such, they are still pretty robust. That is helping the markets overall. You are also seeing this drought areas, itng in some has not affected other Crop Production such as corn. The corn belt is unscathed in this report. That was not the expectation the markets had. Corn september futures went down by the most in two years as a result of this. That allows a little bit of substitution that can take place between wheat and corn, again alleviating the pressure we saw. Julia i want to ask you about soybeans as well. I wondered whether some of that positioning, whether there are concerns about the impact affecting the midwest market . Still more weather events potentially to come. Alan you are seeing some concerns continued about the weather. What happened with celebes today, you saw futures going down. Rallynded an 11 session in soybean prices. Even though the u. S. Reserves went down more than the previous months forecast, not as much as analysts were expecting. You saw believe in soybean markets as well. Right now, it is all about the weather. You can become an expert. Wheat crop, the harvest is later in the year. Corns key moment is later in july. If you see the drought move to the midwest, and then therthen e problems. The big weather questions will be coming after corn. We will be seeing that in the august report, but so far, the soybean crop is looking ok. Joe alan in washington, i love that lesson. Thank you very much for joining us. Alan thank you. Julia breaking news on donald trump. An excitingrs, opportunity for agriculture. Joe all the exciting stuff. Julia i know. You get it here first. Senators global to put together a plan b for the Republican Health care bill. Plus, President Trumps credibility taking a sharp blow. The latest from washington, next. From new york, this is bloomberg. Mark i am mark crumpton. It is time now for first word news. President trumps proposed tax cuts will lower federal revenue by nearly a trillion dollars 8er a decade and benefit trillion over a decade and benefit the wealthy. Finds 40 of the cap going to cut going to the top 1 . Other americans will see an average gain of 3. 3 . Tried totors still figure out why a military plane crashed in Mississippi Monday night, killing 16 military members. It is a difficult task. The debris is spread over several miles across the countryside. Authorities are pursuing a criminal investigation against at least one person for taking debris from the scene. Former brazilian president was found guilty today of corruption and sentence to more than nine years in prison. He was convicted of taking bribes and moneylaundering as. He was president of brazil from 2003 to th200111. The current president is also under investigation. Recent budget has been approved by the European Union, which now says the budget is no longer breaking the blocks rules. The crisis first emerged in 2009. Greece is ready to open a new chapter of growth, investment, and employment. 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. Joe lets get a recap now of todays market action. Really only one way to characterize it. Everything is green today in the wake of that dovish janet yellen testimony in congress. We see the winner of the big three indices. The nasdaq up 1. 1 . Everything is up. Bonds, emerging markets, commodities for the most part were up. Everything is up. Julia that is the message for today according to the markets at least. A dozen republican and thetic senators republican eight familiar with the plan told bloomberg the republican plans have dropped plans to provide tax breaks. Kevin cirilli caught up with the republican senator from wisconsin, senator ron johnson, and asked him what he wanted to see changed within the. The bill. What i would like to see the new Senate Version is an effort to legalize Affordable Health care plans. I am not sure what will be in there, but in the end, my is, does it put it in a better position than we are today . That is my manufacturing background. Let me ask you one follow up in terms of the latest proposal. There is a 3. 8 tax on invested income that is there as well as a few attacks on highincome households. Is that something that you are ok with or no . The firstmaintaining Senate Version, Something Like 443 billion over obamacare subsidies. I am highly concerned about the fact that we are 2 20 trillion in debt over the next three years. We are going to maintain a benefit, we have to maintain funding mechanisms to pay for the benefit. So we can stop mortgaging our kidss futures. I dont have a problem maintaining the funding mechanism for the benefits we are living in for whatever our Health Care System will be like. Julia joining us now on the phone is kevin cirilli. Kevin, i was half joking earlier about how many different alternative versions of the bill we are expecting to get tomorrow that are currently being worked on, but when we spoke with a senator, he is coming out potential things he would like that does not spec to be in there and he has not heard anything. I wonder what version, if any, we will get tomorrow. Kevin these lawmakers are expecting the nonpartisan Congressional Budget Office, we could get that as early as tomorrow. I spoke with marco rubio about this, totally essentially, they are going to very much be waiting on these scores to make their decision, but there really does not seem to be a consensus as to whether or not the Senate Majority leader has the votes. He is not going to bring this to a vote unless he has the votes at all. Joe i think it was a week and a half ago or a week ago with reports that if they do not have the vote for a reform that maybe just do a straight up repeal vote. Does that seem possible . Kevin seems possible. Said, you cannot bring this to a vote unless you are able to attract some of these more conservative members like senator ted cruz and rand paul of the world. Judging on the past 24 hours, i am after the majority leader is there. Joe i want to go now to capitol hill. Interviewrom kevins with the senator from wisconsin talking about he does not know what is in the bill. He is waiting to find out like the rest of us. , theyms of the politics are expected to vote on something that suddenly gets handed down without their input . Julia again . Joe i got . Again . The short answer is yes, that is what they are expected to. They will have a few days to explore it. The cbo score will come out on monday. That is the expectation. I spoke to a republican from tennessee a few hours ago who separate much every republican senator will see the bill for the first time tomorrow, and they plan to pass a next week. A very short timeframe. But as we have discussed before, senator mcconnell had made this decision early on. He was going to take the political hits for all the secrecy because on some level, it seems like he believes that would be less painful than leaking the details to the public where critics can follow this as every taxpayer for corporations, the wealthy, and a big benefit cut for low income and poor people. That is bad politics. Look at the sheer impact that would have to republicans. That is why it is happening mostly behind closed doors. Julia how much do the optics of the cbo scoring matter to the senators that are throwing out different options here . Is there a level on which and a number on which when we are talking about the numbers of the uninsured as we keep alluding to in the previous snapshots the cbo has provided, is a number where they go, i did not get what i want, but that is not owceptable acceptable. Sahil many senators want to get a yes. They voted on it when it was a symbolic thing when barack obama was president and sure to veto it. Now it is real and will no they will not vote for it because it is real. Someone like the represented from ohio or california, i keep coming back to these two because they made a specific as for more openly funding for their state. They are getting that. Beyond that, as kevin alluded to earlier, i do not think they have the votes yet. I think he helps the momentum he gets from releasing the bill and making one final case to republicans, especially the conservative members, is now or never. What Senior Republicans tell me is they hope to at least get on the bill tomorrow that requires 50 votes to begin debate on the senate floor. After that, you can have unlimited amendments. They are not sure they are going to put the ted cruz amendment in because it is possible it will alienate more moderates than it will convince conservatives holding out. If you do not knew that, i am not sure you can get him or mike lee. Joe earlier today, President Trump talking to cbn saying about Mitch Mcconnell he has to pull it off. Tdoes the white house have any sway right now . Sahil of course it does. The Republican Base still support President Trump by 85 . He is more popular than any of them are, more than any republican senator with the base, so yes, i think it matters. The president hasnt disengaged on the details. He has a Bigger Picture matter. It can have an impact. The president said in the does not if the bill succeed i will be very mad. That would create some ripples, i think. That will send some chills down some spines of the Republican Leadership offices. Julia Mitch Mcconnell raised eyebrows over the weekend when he alluded to not be able to get this done and what happens next. What are we hearing about a bipartisan option, a plan c . Sahil exactly. This is what my colleague laura and i reported on this morning. Andblican senators of th democrats have already begun talk on what a plan b would look like. Everyone agrees the aca markets are flawed and need fixes. Things are certainly going south in a number of them around the country. As you b or plan c identified it would focus on stabilization funds, reinsurance, and cost sharing reduction payments, which is a subject of a republican lawsuit. Complainedompanies this is externally problematic for them if they do not get those payments that they will have to raise costs for consumers, so the idea would be to get enough reinsurance to prevent interestfrom raising the costs. That is something republican senator support. They are openly saying they are willing to support that. Itocrats are very much for although we up from the leadership down to the members. File joe great stuff from both of you. Kevin cirilli and sahill, Bloombergs National political reporter on capitol hill. Thank you very much. Members. Julia you know what happened . We spent a whole segment talking about policy in washington rather than mentioning the r word. Joe a record. Coming up, amazon prime day wrapped up in the Early Morning hours, and according to our next guest, they may have raked in 1 billion. We will talk about is extraordinaire day for amazon, next. This is bloomberg. Julia whatd you miss . Stoplight in the wake of a successful prime day for amazon. While amazon is not releasing exact figures, it is estimated the 30 hour sale generated about 1 billion in revenue. Joe joining us now is john, senior internet retail analyst and managing director. Prime day has become this thing that amazon conjured out of nowhere. Explained to us how important this day has become to the company. John pretty important. They debuted in 2015, so this is the third year of it. The biggest day in sales they have had was yesterday. They did about 1 billion in revenue i. 2. 5 billion in gross volume, with was a pretty fast growth for them for the Small Businesses selling on prime day. Importantly, they had the most prime members in a single day in the history of the company. For us, prime is the biggest driver of the retail businesss growth over the longterm. Julia this is where you get the repeat customers. 60 on the same day. Have had a generator that kind of momentum . H, we estimate about 53 million prime members in the United States for our proprietary data. Julia wow. What we have seen the last. Ouple of years is a bump we have seen a 5 increase in penetration of prime subs second half of 2015 or 2016. Then you have back to school and holidays. Our data with say 30 million households by some the on amazon every month. Gete day, holidays will more prime subs overtime. Joe here is what blows my mind. Many prime members will be recurring revenue for years to come. Companies will be a lot of money to get a boost in new members. They get paid. They get sales. Then one of their, topselling things was in amazon owned device. Device,s, so the echo they sold seven times more echo devices than last year. It was the biggest selling global item globally. You are totally right. Our data would say that going into prime day, there is about 12 penetration of equity prices in the u. S. That was up from 11 earlier in the year. About 85 of users use it at least once a day. 60 use it multiple times a day. A third of them do direct voiceenabled purchasing. Obviously, we are expecting a bump in echo penetration after yesterday. Or morehere wa ollanta is browsing amazon. Com for supermarket staples and everyday essentials. That is possibly something we should look at as well. N of course, we are apparel we will be the drivers of the business over the next right to 10 years. The whole foods deal, our data wit would suggest that amazon will be the number two consumables player in the country in a couple years. Consumables, personal care products, household goods, which are tailormade for prime, right . You skip a trip to the store. Get your toothpaste and hotels and garbage bags the amazon. Via amazon. The whole foods deal will help on the food and beverage side. Madeand apparel, which we a couple years ago a call for them to be the number one by this year. Julia weak this year . Joe what could possibly go wrong . What can go wrong here . John investors often talk about the margins. I will often hear from people that they are not making money, but they are in north america. Aws is extremely profitable. International, they are losing money because they are investing in indian and other markets, but it is tough right now. Things are going well. Julia a little business model. Great to get your insight. John thank you. Stephen gave us his take on the private equity landscape. Here is what he had to say on a media conference, straight after this. From new york, this is bloomberg. Ulia whatd you miss . Lets get back to the annual sun valley conference in idaho, where lots of talk is expected this week. With thes spoke chairman of bain capital and coowner of the boston celtics. David asked him what stock valuations mean for private equity. Is veryood news good firms have developed a lot of very good value waiting cap capabilities. We are trying to do deals with we can transform real companies, and we have developed about 1000 people across the world that can do that. The energy has grown from a small where we started three or four years ago to companies that can really transform and make companies that are. We are very proud about doing that. David where do you see opportunity . That can be geographic. That can be sector wise. What stands out to you halfway through 2017 . Stephen there is always opportunity where there is disruptions so technology, health care, also to things going on when you look at some of the dynamics in technologies, about 50 billion will be spent on the cloud alone this year. Zero. Bly 15 years ago, we are still in the third inning of the internet, how it has revolutionized retail and everything we are doing on a daily basis. Disruption, that is a great place for private equity to take a long view, supply capital, built companies, grow. You are not affected by markets going up and down and eps at a quarterly basis. David one cannot help be in awe of or gawk at them at this point. The you have concerns they are getting too big . Stephen we try to stay a similar size, always a little smaller than the rest. We are trying to be a firm that can deploy capital in a disciplined way to get high returns for investors, and that is that we are focused on so we really size our funds and look every year where the size of the opportunities. You really do not want to have excess capital causing you to invest so we watch for that everyday. That being said, it is interesting. That is a lot more use for private equity. It used to be big infrastructure going into industry. We have been a leader in tmz for many years. There has been a huge amount of investment in this dynamic happening today as we speak with the internet and cloud and those types of things. David the former chairman of the security anything Commission Set a request enough and more companies to go public. There are companies in the pipeline waiting to go public. What is the environment look like for companies weighing to go public with thing private . Stephen my view is that Good Companies can always go public. We have never had a problem taking our companys public. Companies public. There is capital. What may be happening is there is a large ecosystem that has been built in private equity from 100 million funds to 25 billion funds. What is happening in todays world is a fun can take a company to a certain level, and 80 globalization, more capital, more expertise. They can move to a midsized equity fund and a large private equity fund. It has created more demand for the capital coming in to put people to work. Joe that was stephen pagliuca, coowner of the boston celtics, talking with david gura. Julia a busy day. He caught up with the ceo of expedia. One of 70,000 Tech Companies taking a stand for net neutrality. There is a lot more uncertainty. There is generally more volatility, although Capital Markets dont reflect that, but the environment is more volatile. As a company, you have to stay flexible. You cannot gettoo sent in you cannot get too set in your ways were comfortable. Where there are issues like net neutrality, you speak out. Julia it is time for the Bloomberg Business flash, a look at the biggest business stories in the news today. 1. 3 billion french cap. The court decided today the tech giant cannot dodge paying taxes by moving the company out of ireland. Googles European Headquarters cannot be capped as it has a base in france. Looking to get as much as 2. 5 billion to ipos. They are looking to make up for 1 billion losses at nesting joe coming up, what you need to know for tomorrows trading day. This is bloomberg. Julia whatd you miss . European equities en the they hired. A record close to the dow. Pondering over inflation. Data drops at 8 30 a. M. Eastern. Joe ijoe will be looking at janet yellen second day of testimony, this time in front of the senate. Same testimony, but different questions will be asked. Julia President Trump arrives in paris to celebrate bastille day. A joint News Conference with emmanuel macron. Joe finally, watch out for possible revelations on the gop Senate Health bill. The cbo score of which is due later on. Julia that is all for whatd you miss . Joe alisa im Alisa Parenti in washington, and you are watching bloomberg technology. President trump says russian president Vladimir Putin would rather have had Hillary Clinton in the white house. He spoke in an interview set to air tomorrow. Trump also says his meeting with putin at the g20 went well and that he would be very angry if the senate does not pass a health bill. President trumps take for fbi director says efforts to interfere with u. S. Elections should be reported to the bureau. Christopher wray made the commons under question today by senator lindsey graham. Wray does not consider the investigation into russian meddling a witchhunt. Senate majority leader mcconnell plans to introduce the revised Gop Health Care bill tomorrow morning. Republicans can only afford to lose three gop votes or the bill is doomed. At least a halfdozen republicans came out against the initial plan. President trumps proposed tax cuts will lower federal revenue a nearly 8 trillion over decade and benefit mostly the nations highest