Cuspfeel they are on the of what they feel is their first major legislative victory. In the last hour, they are releasing a poll that 47 americans feel their taxes will increase. I spoke with dave brat who told me he feels replicants have to go on offense to try and convince votes this is a good plan for them. It becomes a mess shaking messaging war. Scarlet did they try to delay this vote . It is not going to do much in terms of putting it off the table but they had tried to raise different questions. They surly did not want to make it easy for rubble gens or seem like they are just sitting on their hands. They staged this big rally on capitol hill. Ultimately they probably want to tie the republicans to the effects of this bill in the 2018 campaign. They are saying bring it on. So unpopular . This when questioned, gop members say it is going to be fine three when the results come in and people start to see pay increases it is going to be fine. What gives them that confidence . They have pointed to the stock market was President Trump has tried to signal, the rise in 401 k savings. Then of course the lowering of the tax rate. That helps push President Trump to the white house, to get them that confidence they need to turn around messaging. Democrats have made the case this is only going to help wealthy americans. This is only going to benefit the upper class. We are living at a time when the Democratic Party has shifted. You have senators sanders and warned leading that charge. As of now no democrat has been on board for that. Thisanchin, i spoke morning she was adamant she was against a proposal they would not be able to get on board with. Democrats have been united in their opposition. They are going to take up welfare reform in a couple of months. That is something that will be six months before election day. Democrats feel this is the start of their Midterm Campaign more so than in alabama. Scarlet the democrats trying what they can to delay this vote. You are looking at a democratic motion to recommit. The house is voting on that. It will fail. Then they can move to voting for the final passage of the gop tax conference report. Lets get more insight on what the bill could mean for markets, and the economy. Now, former treasury undersecretary for International Affairs under president obama. This tax cut bill, you see strength in it because it reduces the corporate rate. I think that it is clear that there is going to be more corporations coffers. Theres going to be more money in individual and families pockets. That is likely to manifest itself in somewhat stronger gdp growth over the next couple of years. The bigger question, does it raise Business Investment meaningfully . And have an impact on potential growth over the long run . That is the open issue. Republicans are saying yes. Immigrants are saying no. Julia economists are also saying no and think this is a shortterm juicing and that the longterm will be a marginal impact. The skepticsnt of is based on the premise that Corporate America is already in strong condition. Is alreadymerica liquid. If they wanted to invest, they could. The flipside is whether the small and mediumsized firms sector is benefiting. We have seen sentiment in that sector rise significantly as this tax bill has made its way through congress. We are waiting for the house to begin voting. Mitch mcconnell has made a comment saying they will finish the tax bill tonight. Looking at senator cornyn speaking at the moment as well. Let me bring you back in here. When you look at the senate there were deficit hawks who was opposed to the bill because of how it adds to the debt. That seems to have gone by the why it wayside. They seem to have become extinct. That isnt to say that they will be coming back. There is a narrative out there that the republicans are passing the tax bill only to make a case for cutting back entitlements when the deficits swell. They will swell. All economists and studies agree with that. That will create a real battle between democrats and republicans on how they bring the deficit under control. That may be after the election but it may be front and center in 2020. Scarlet are the democrats going to make this an issue heading into the midterm elections . If you had to pinpoint which aspects they focus on to tackle the gop. It sounds counterintuitive but is a possibility . Absolutely. National deficits are deathly going to be something that republicans are going to be talking about. I think they will talk about it in january simple because based on reporting we have gathered earlier this afternoon, the se once they connect finish this plan they will vote on a continual resolution that goes to the senate. Susan collins has been pushing for expansion. That is a divisive issue amongst republicans, as is the Disaster Relief funding. These are the two debate issues in the cr fight. Cry are going to pass a expansion. Generally 20 is when those issues are going to come up. Daca, forpressure on republicans themselves Disaster Relief funding is where this battle is headed. The fight is only just beginning. In terms of what democrats will focus on, it is going to be about entitlement reform and medicaid in particular. You are going to be hearing a lot about that in the next calendar year. Julia im exhausted listening. No offense. Why is this tax bill so unpopular . We are going to see the senate sign off on this tonight. Theyre going to be congratulating themselves and saying this is a great thing. Ahind the scenes you see significant chunk of the mega population think taxes are going to rise. I think this is the big political question. I would infer from the polls democrats are winning the debate. The rhetorical contest. It may also reflect were in a time where people are deeply skeptical about government. This is an indication people dont believe government, whether it is tax or expenditure increase can make a difference in their lives. We have to see how this plays out. That might be why we see bit coring soaring as well. Marty shanker, here at bloomberg. Nathan is sticking with us. We have more to discuss. We want to get an update on the markets that close in two hours. Lets get a check on how stocks are faring. Stocks are taking a pause. Weve had a run of this tax bill on the perception with the cut that there will be companies returning to shareholders and we will see a bump up or next year. All of that said, were seeing a selling pressure today in the nasdaq. Tech companies are not perceived to be getting a benefit here. If you look at the highly taxed see a clearou reaction here. More of a reaction in companies that potentially have more to gain from that Corporate Tax cut that is anticipated to pass with this bill. Elsewhere the proxies we are watching are necessarily trading in unison. Transportation set a record today. The railroads for example pay a higher effective tax rate than the average s p 500 company. The perception has been for a while these are domestically oriented Small Companies that are going to benefit and yet it has been under performing after its big leg up postelection. Finally Something Else that is interesting, we are not thing the bond and currency markets react in the same way you might expect. If we are going to see an increased growth rate as result of this tax cut you would think the twoyear spread in white here would be going in the opposite direction. Generally as you can clearly see the trend has been down. There has been this disconnect between the stock market where we are saying that reflection of in Corporate Tax rate cut that but not necessarily saying that translating to Economic Growth in the background. A great point. Lets get your check now on the bloomberg first word news. Thank you. The house will begin voting shortly on the tax package. The bill is almost certain to pass. And then an expected bill in the senate this evening. The package would provide steep tax cut for businesses and wealthy and modest cost for low income families. Paul has told fellow republicans he has no intention of stepping down. In a closeddoor meeting the speaker indicated it made no sense to leave when we are winning and have momentum according to barry loudermill, who said republicans responded with applause and a standing ovation. The Trump Administration says it knows who is responsible for the Ransomware Attack that infected hundreds of thousands of computers worldwide. After careful investigation the United States is attributing the cyber attack to north korea. We do not make this allegation lightly. We do so with evidence. Other governments and private companies agreed united kingdom, australia, canada, new zealand and japan have seen our analysis and join us in denouncing north korea. Like the United States and south korea have accused north korea of launching a series of cyber attacks. Pyongyang has dismissed the accusations. The u. K. Wants to have better trade deals with the eu after brexit and the one canada has. That is according to the prime ministers spokesman. The cabin is unified behind the agreement made racially the eu last week. Global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. Im mark crumpton. This is bloomberg. Scarlet we are following all of the developments in washington when it comes to tax reform. The house is holding a vote. It is not yet the vote on the tax bill. When that begins we will let you know. The Senate Majority leader Mitch Mcconnell says a vote in their chamber will be held tonight. If all goes well it will pass. This is bloomberg. Scarlet this is the moment republicans have been waiting for. It has been a three decade wait. He house will vote on the tax overall. You are looking at a procedural vote taking place. This is a democratic motion to recommit, to stall the voting of the tax plan. It is not going to pass. And they can move ahead to voting on the tax bill. I called it in the taking. Than the house will vote. Then we move on to the senate. Mitch mcconnell as we said say they have the votes and they will vote on it tonight. We will continue to keep you updated. Economists, cheap under president obama. I want to start with what happened yesterday, the president naming china a strategic competitor but acknowledging cooperative elements in their bilateral relationship. This is a more realistic description of the state of play between these countries, isnt it . Tothe key question is how view the u. S. China relationship, as an economist i deeply believe this relationship has the capacity to be a winwin proposition for in order for that to happen it is important for the chinese to play by the rules, to follow international norms. The question is how do we best get them to do that . And is going to be more effective with carrots, sticks or a combination . The Trump Administration is veering towards sticks and less carrots. Julia how do you expect the chinese to respond . We have seen mixed with china in recent weeks reducing tariffs on consumer groups, opening the financial sector. Even if it is going to be over a number of years. We saw zero acknowledgment that these steps are being taken. The chinese dont welcome this rhetoric. I think in a broadway the chinese very much view the u. S. Anxieties and concerns about window oflobally as a opportunity to move front and center, to increase they are geopolitical stature. I think first and foremost that what theresidency president is about. You see that given the contrast between the president making this statement and China S Communist Party holding its congress where xi declared this new china how were. That is absolutely right. They have their eyes cast out word in a time where we are more looking inward. It isip side of this is important to differentiate between rhetoric and actual policy. At the end of the day the United States is a fundamentally open economy with deep integration in the global economy. China remains a closed economy. That is why it is important to continue to vigorously engage with the chinese. Julia in terms of trade relationships and the concerns, what concerns you more . Tensions between the United States and china, suggesting it is not a trade war, or a collapse in tensions around nafta . They are both risks. Is the one that is more likely to materialize in 2018 is an unwinding of nafta. I think that the administration u. S. Chinaving the trade relationship to a place of disruption would be bad for the u. S. Economy. Whereas there would be adverse implications, and pressing mexico but not to the same extent as would be the case for china. I think china, if that trade relationship is disrupted that may be for 2019 or 2020. An interesting messaging tool. Staying with us as we await the tax reform vote. This is bloomberg. Julia the house has started to vote on tax reform. Democratic motion has failed as predicted. The chief economist on the hill, kevin cirilli, this is expected to happen quickly. Around five minutes. They definitely have the votes. They are underway. Republicans feel this is going to be an easy target for them. The treasury secretary and the chief of staff are on board watching the vote as it occurs. Ike pence here as well the administration trying to drum up the historic nature of what they feel today represents. This. Atic opposition to this is a big deal. This is their first major legislative accomplishment since they have had control of this. For theis mustsee Tv Oval Office as well. Talk us through what happens after . To what extent the senate can go through this vote just as quickly. There is a bit more procedure than they are going to have to get through. Democrats will try to use floor time to give speeches of their own in order to note their opposition to this. Me, mike note, behind pence should be coming here shortly. Lets see if we can be shaking hands as he makes his way into the house gallery. He will be watching this. This is a big moment for this administration. Mr. Vice president , what does this vote mean for the administration . We tried to we saw him give a thumbs up as he makes his way into the house of representatives. The vote underway. This is a sign of support from this white house. All in on this. We go to secretary mnuchin. From there it goes to the senate. They are anticipating president ismp will sign it once it out of the senate sometime tomorrow. The house has the votes to pass. Good work there. Pivotal. He put his thumb up as well. We talked about the importance of this tax reform. The debate whether it is voter concern, concerns economists as well as the longerterm impact of this. Julie, the dollar has not. It is a disconnect about the longerterm implications. The case can be made either way. I think ultimately it is going to depend on what happens in the sea suites. What happens in the boardrooms. Now the fact corporations are paying less tax than was the case before, does that increase their willingness to raise investment and increase hiring . Certainly this tax package ships incentives to do so. It remains to be seen. U. S. Corporations have been cautious. Unleashis will help animal spirits in the corporate sector. Which will be a key to help productivity growth. We have heard from so many that the u. S. Has an uncompetitive tax rate. That this was holding back corporate profits and corporate growth. Full potential. When it comes to this tax bill how in court how enthusiastic are these ceos question mark have we gotten any concrete details . Rather than bring back some cash to buy back their own sales . The tone from the Corporate Community is positive. When i go and try to nail that , theand say sentiment data one place where it is clear, the small firms and the business survey, the has moved up significantly in recent months. The question is ultimately are they going to use this money for versus buybacks and dividends . Which may lift the economy but not as powerfully as investment. Vote to wait for this finish, we know the republicans have enough votes. They are still voting. Ite the senate addresses what you expect from the white house . How are they going to respond . A party. Do we have any indication of what the president plans to do . They are going to make a lot of decisions. They are going to try to sell this plan for the American People. Saying this scarlet we are one to jump in to senator listen ryan. Hitting the gavel. That is it. A done deal. Julia that was dramatic. Scarlet for him this is something he has been personally invested in for years. It is a sigh of relief of sorts. Many people questioned whether he would be able to get this done. Now it is on to the senate. It will land on President Trumps desk where it will sign into law. They are hoping to see momentum as they head into the next calendar year. That when you look at where this started with the Corporate Tax rate, it helps the level of tax brackets at 7. There were concessions that they ultimately had to make. Secretary mnuchin, gary colin, wings toto balance the bring this over the finish line. It appears that has actually happened, they have those votes and now it is out. We are joined by congressman mark walker just coming off of the house floor. Now what is onward to the senate. It looks like this is a done deal. It is a good day for republicans. We believe we have tangible results. You look at what came out just this afternoon, americans feel their taxes could go up under this plan. How do you respond to those americans concerned about that . Question. Go back to 1986. They thought their taxes would go up. It is relative. It is an educational process. I believe it is going to be hard to push back in february when hardworking americans keep more of their paychecks. Things like a Disaster Relief funding. You are going to pass a onemonth extension. Inh the president won infrastructure plan, our deficits back . Are republicans wind after have to raise concerns about the deficit . Absolutely. Part of the process we put forward, a deficit reducing legislation. 2. 7, 2. 8 growth, not only will we make up that, we will add another trillion to it. A final question. Democrats are going to make this a 2018 issue. Do you feel confident the president has done all he could selling this plan to the American Public . I believe we all have more work to do, even the numbers that you talked about. What i believe, when you have people who literally are getting tax relief, a tax cut, that is the greatest message of all. We appreciate your time. The largest constituency of republicans. Scarlet great job, kevin. Nathan, kevin mentioned 1986. At anre getting your be economics at this time. Remind us of the level expectations or skepticism heading into the tax rewrite . How long did it take to say this might benefit me . That effort was fundamentally different than this one in that it took several years of working and reworking and controlling and lobbying. This has gone through there he quickly. I also think that in some deep it was more reform and more revenue neutral than this one was. In that instance it was less about tax cut. More reforming the tax code. Expecting toe are see lower taxes and in general they got them. Julia talk about the economic backdrop and the importance of the direction they were traveling in, to assess the Economic Impact and feel good factor. Point the u. S. Economy was coming out of high inflation. Was unwinding rates. Was risingmarket rapidly. Gdp growth was expanding at a rapid clip. Those were positive days as the u. S. Economy recovered from a deep recession. One heck of a tailwind. We have Sarah Huckabee sanders beginning her press briefing very they had been delaying it until after the house finished voting on the tax bill. We will bring you relevant headlines as they cross. Kevin has another congressman following the vote. We will send it over to you. Congressman french hill, a former amenity banker community banker. Now you have to the American People. Off camera. Ing 12 republicans voted against it. Those republicans feel their taxes are going to go up. What do you say . I think this bill provides tax relief up and down the income ladder. Specifically people working, who have kids, they are going to see a doubling of the child tax credit. They are going to see relief on the alternative minimum income tax. Theyre going to see a doubling of the standard deduction. Almost nine of 10 families will be able to take the standard deduction up from seven out of 10 today. Walker made the point that in the Reagan Administration they thought taxes would go up. Democrats are united. They are going to run on this and 2018. Our deficits a concern . Going to vote tomorrow on a bill to keep the government open. What do you say to republicans looking at the next few months . They look at national deficits. They are concerned. Spending is a concern. If we are serious about deficit reduction when need to tackle mandatory spending. We have had 10 years of slow Economic Growth and stagnant wages. It can lower deficit risk not increase deficit risk. We are focusing on what is next in terms of legislative priority calendar. The Senate Banking Committee Earlier today, i was talking with some sources, community regulatory relief for banks is something that is a realistic possibility. Two votes on the house later this week advancing out of committee. Reliefgetting regulatory next year . I am optimistic we can get in thewith the work done House Financial Services committee. I would say to everyone listening on bloomberg Regulatory Reform continued costs and tax reform both help our economy and raise productivity. Infrastructure. That is what President Trump wants next year. Is that realistic . You know the politics of your party. Some folks on the fed suggest that can be a concern. How realistic is it to get reconstruction done next year . I dont know what it means in terms of how to pay for it versus private partnerships. Definition, how would it be paid for . Sounds like you made more answers. They got it out of the house. Now it goes to the senate. Folks are already talking about next year. Doddfrank rollback and infrastructure. There is still a lot to do before the week is over. Kevin, thank you. The last piece of legislation. Just wrap this up for us in terms of these success for the gop here. We assume they will anticipate this, the impact that it is going to have. The two big thoughts are for political now, the republicans do have something to run on. The Second Thought is economic. There are a lot of strengths in this bill. And also weaknesses. The increased complexity and so forth. Economic agents, firms, individuals, families are going to net this out. We will see where the economy is headed. My instinct is this will be a modest positive on balance for the economy. Can the democrats capitalize on the weaknesses . They are letting the republicans have it and they are going to run on that. Pushback for the midterms. Thank you for sticking with us. Just a recap of the breaking minutes,last 40 holding the White House Press briefing, Mitch Mcconnell saying it will happen later tonight. We will bring you more updates as we get them. This is bloomberg. Julia this is bloomberg markets. The Crypto Company has surged more than 17,000 in three months time, making paper billionaires out of its top executives. The fcc took notice. It halted trading. Joining us now, this is pretty standard. A penny stock world. This is a company that was a reverse merger over the summer. Rallied,ryptocurrency this company has been rallying along with it. On paper. Right. They are concerned that investors are being told exactly about concerns with insider sellings. The company has to show it is in compliance. That is what the fcc disclose. These suspensions happen quite a bit but they are not always tied to bitcoin. Scarlet thank you for this amazing story. We want to take you now to capitol hill. House republicans in a victory lap holding a news conference. You can see the chairman of the house ways and means committee. Taxpayers torican think of three days and keep them in mind. New years day, america will have a new tax code for a new era of american prosperity. On february 1 look at your paychecks. You will see tax relief we delivered. On april 15 you will for the last time by your taxes under this horrible terrible tax code that we are putting behind us for the American People. We did this. That has been done by the American People, through their representatives, we are delivering a new tax code. To thank chairman brady for the work he has done bringing this conference together. And having this bill passed the floor today. Theill move forward to senate and pass today. For every american who fought for a pay raise, for every parent, for everyone who dreamed of opening a small business, i want you to know we heard you. We heard you loud and clear. That is what this bill is about. The american come back. You opportunity to let you keep more of what you earn. To make america competitive around the world and to make sure Small Businesses have an ability to compete. The lowest rate they have seen in 40 years. Is going to double their standard deduction. February, check your checks. You will get a raise in your payroll of what you were going to see based on what happened today. This is an historic day. If you are somebody working hard and you just want to keep more of your money, this is an historic day for you. If you are an american like those of us here, tired of seeing jobs shipped overseas because america have the highest Corporate Tax rate in the industrialized world, this is an historic day for you to see those jobs come back to america. If you are somebody sitting on the sidelines, after eight years of sluggish growth and the economy growing at less than 2 , you gave up looking for work. This as an historic day for you. You have that shot at the American Dream again. We are building a tax code that works for families and creates jobs, makes america competitive again, and allows hardworking families to put more money back into their pockets. Ryan,an brady, speaker ways and means, all of those who work tirelessly for months. Our attitude was failure is not an option. The American People have been waiting too long for this relief. The last time Something Like this happened was 1986. When Ronald Reagan was signing that bill into law he talked about how hard the journey was but how he never gave up. The headline read this was a day many thought was not possible but ultimately became inevitable. The impossible became the inevitable again. It is a hopeful day. A brighter day for all americans and their families. If you think of the impact of this package on everyday so clear. It is moms, dads, students, seniors, everyone is going to have an opportunity for a better life. That is why we are excited to and jobs billt passed the house with a big vote. We are going to move to continue to celebrate what this bill has to offer. Bringing down tax rates for all americans, to grow a business, create jobs. This is the beginning of a bright future. We stand here excited about what it means for people, for everyday americans, that have been doing all of the right things and feel like they are falling behind. They have a brighter future. Start by thinking our constituents for sending is here to do this work for them. This is one of the most important pieces of Legislation Congress has passed and decades to help grow the american economy. This is profound change. This is change that is going to put our country on the right path. For all those millions of men and women living paycheck to paycheck, help is on the way. For all of those businesses that are tied with one hand behind their back having a hard time competing, help is on the way. I want to thank chairman kevin brady. This has been a long work in progress. What this marks is a promise i promisedty made, majority is keeping. We said it would take real tax reform for families and businesses to get the economy growing again. We were serious. The American People place their trust in us. We are making good on that promise. We are fulfilling that promise. This promise being cap is one of the most important things we could do to get the u. S. Economy growing faster, to help people get bigger paychecks, to have a fair tax system, to simple five the system so people could have more peace of mind. On january 1, americans are going to wake up with a new tax code. In february they will see withholdings go down. April 15 will be the last day they have to comply with the old bad system. This is a good day for america. A good day for workers. A great day for growth. We are excited about this moment. You have spoken about the tax cuts amalies will see in the first few years. What can you say about the tax cuts individuals will see at the end of the next decade. Analysis showed we have every intent of making those permanent. It is obviously our intent like times past to make those permanent. Congress doesnt have the greatest track record of planning to do something later and following through. How can you guarantee americans they are still going to see the benefits of this tax cut . Look at what we have done right now. It all year. We ran on in 2016. We spent 2017 working on this legislation. This is a promise made, a promise cap. They lack of the credit support, does that mean this tax overhaul is vulnerable the same way the Affordable Care act was vulnerable . The comparison is non sequitur. The Affordable Care act was nonpopular. Health care. This is going to grow the economy, increased paychecks, increase takehome pay, and that i believe is going to be popular. The victory lap begins here for the gop. Whether or not democrats will onerse this like obamacare this a story day for the tax overhaul. Big win for republicans. Think know a lot of folks this is only going to help the wealthy. You need to look at what is going to do for main street america. What people are seeing taken out of their twitter every month. Deficits. A lot of republicans are concerned about deficits. What do you say to folks concerned about the deficit . You have to look at history on this. When you lower the rates you are going to get more economic activity. When you get more activity you get more revenue. The goal is to turn our attention to cutting back on what the federal government spent. Should take the next several months and focus on getting things off of the books. Maybe have a repeal agenda. Get down the cost of doing government. Lawmakers and the president have said they want to pick this up in the spring. Social security democrats have said we are in the middle of the thick of it. What do you make of entitlement reforms . Folks saying they should not be touched. Medicaid back to the states is one of the big ones. As we move forward with looking at the cast the granville that is one of the provisions we will discuss. Send itrnors are saying back to the states. It would have a big impact on what is happening with the cost of delivering health services, and having access to health services. I know you just introduced a bill on Net Neutrality. What would this do . A lot of folks have concerns in silicon valley. That is a concern. But you have the Tech Companies running the show. What my bill does, it is the open internet preservation act. We say no blocking, no throttling. Internet Service Providers will disclose terms of service. And have a preemption clause so that you do not have 50 different regimes in different oftes approaching the issues and open internet. No blocking, no throttling is where there is agreement. You have the fcc do the enforcement on this. Did silicon valley, do they get it . Are you confident they understand the regulatory structure of washington as they are about to face it . They have an appreciation for the fact our goal is to preserve access to a free and open internet, and to make certain that we are continuing to see innovation in this space. And that individuals have a right to their privacy online. It should not be your browser that owns the virtual you. It should be you, the individual that can direct that data. Eye of the storm, quite literally year right after the major historic vote on tax reform, thank you. Her first interview on her Net Neutrality legislation. Julia i think you were the one whipping up a storm. Scarlet just to recap if you have not been watching the house. As passed the tax code rewrite Sarah Huckabee sanders is holding her press briefing at the moment. She says the president is pairing to sign the bill in coming days. Preparing to sign the bill in coming days. We will bring you live updates as we get them. It could be a live long night. Julia it could be. This is bloomberg. It is it 00 p. M. In london. Scarlet welcome to bloomberg markets. We are live in bloomberg World Headquarters in new york over the next hour. Here are top stories were covering around the world. Win on taxes. House lawmakers just concluding the vote on the landmark overhaul. Orthe as are to 27 ands 203. The report is a doctor adoptive adopted. Taxes, more with and why he thinks most in her death only have a modest impact. Approval, pretty skeptical on the currency. Check him markets with julie hyman. It is softer today. That if we are not seeing reflected this early in the stock market today. We have seen it reflected in the runup to the final vote. Selling this kind of situation because of the corporate profit the Corporate Tax rate cut is seen as benefiting earnings per share for many in the companies. The russell 2000, which for a while had been seen as a proxy for prospects for the tax bill to get through, it is trading pretty sharply lower today and outpacing declines in the larger cap averages. It brings me to an interesting chart brought to us this morning. President trumps Approval Rating overtime versus the ratio for the s p 500. When the white line here is going down, it means small caps are going growing relative to small caps. That is close to what you can see here with the Approval Rating. You can see this as the proxy here. It has been steadily going down even as we now get passage of the tax bill. Stocks we are watching tied to the tax bill. Underperforming today and part of the reason is we are seeing an increase in bond yields today. They tend to go down when yields go how go higher. And a couple of other stocks related today that is earnings that is earnings per share for 2018. It is affecting the health systems. It has to do with the limitations that tax bill places on the deductibility. I the benefit that company could get from the bill. Scarlet thank you so much. Lets check on the headlines with mark crumpton. We start with washington. Mark i wonder what. The house of representatives passed the gop tax overhaul. The senate votes later tonight on a measure that would be the biggest rerate of a rewrite of u. S. Tax laws in three decades. From 35 tousiness 21 . Used by twoeduction thirds of american households. Majority leader Mitch Mcconnell says the change expected to finish the tax bill sometime tonight. Brexitopean union chief negotiator is taking a tougher stance. Show barnier says there will not be any special carve out the british Financial Services industry. Warned that the ky have to follow any roles passed by the eu during a transition. 18 Million People in need of food. This is the largest food in the world, to make sure it gets to those who need it. Taking away, and the result pushing back will be lost. Met with pope francis at the vatican today and the two leaders spoke in private for. Pproximately 20 minutes set to contain water from the jordan river. Olive tree branches symbolizing peace. Global news 24 hours a day powered by 2700 journalists and analysts in 127 countries. Scarlet investors just published a look for 2018. Measuring Portfolio Manager in california. Why is there a disconnect with the bond market and the equity market. From a bond market perspective, it is largely and itin the bond market is expecting this to pass in the coming days in the coming weeks. Corporate a direct channel impacted by the tax plan, we think it will really provide a modest boost to stocks and highyield credit and investment credit. We do not see it moving the yield too much. A lot of it has to filter through to see what the actual effect would be. Despite low volatility and healthy upturn, this tax reform is a good reason for companies to open a check book. It remains unclear whether they would do it. We watched that space closely to see what would happen over the next coming months. We talk about a loss on the show despite the rate hikes we have seen. You point out essential policy changes. Why, what do your he about as far as washington is concerned . It is one of the major hurdles they were able to achieve. The jurys still out as to whether or not or how much more they would be able to accomplish. Tax reform is done. It looks like that will get through the evening. Trump and his cohorts want to put it through, the bulk of this is synchronizing growth, nope it no doubt about it. China is growing and we are bullish. Backingcentral bank leading to the bernanke you helicopter money, mario draghi doing whatever it takes. They will not reinitiate qe if we if there is another downturn. Yes, we will see what happened in over the longterm, the stock market has been telling you, it. S bullish for the economy longterm, it is bullish for the economy. Are these coming for a bad time . We are looking for that wage inflation. Will it had to an overheating of the economy . Not believe so. Inflation is one thing the fed has been very dismissive of as of late. Couple of in the last years, what youre seeing over the last few quarters is that janet yellen and she are being quite dismissive in the sense they are not really talking about wage inflation, doesnt is doesnt exist, advancements in technology really made inflation nonexistent. There, thatwhich is is going to be the primary focus come into the 2018. , it is really what has been priced into the market. We have not had a downturn inequities in nearly two years. I think that is coming. Poundseady to sort of and put money to work in the stock market in credit, highyield, and Investment Grade bonds. Outside the United States and europe and the ecb, a lot of different get a and that capital from the United States, all the risk as a result of that. Risks is thisbig global balance sheet. You had many Central Banks engaging in largescale quantitative easing. You know have a situation where the fed is starting to unwind the balance sheet. The ecb is hinging hinting at it. You look to unwind what is arguably the greatest experiment known to man. There is no doubt there would be it has the potential to have policy risk and policy missteps. Our belief is if the ecb decides to start unwinding quantitative easing, german yields will be trading higher. I cannot imagine a situation where the german tenyear bonds are trading at roughly four basis points now and they will trade at 40 basis points and the a year from now after the ecb started to unwind the balance sheet. Be a delicate situation in Central Banks will have to tread delicately. The timing here for investors as well as you are talking about a lack of coordination between policy and moving in different directions. Do you protect yourself and how do you make money in 2018 . What we are seeing in 2018 is thinking it will be a repeat of 2017. The beginning of 2000 17, everyone said the same thing. Equities look expensive and highyield look expensive. Investment grade credit looks expensive. The fact is it is more expensive than a year ago. Be able to produce some game . Our belief is yes but you need to be particular about where you need to invest. We tend to take a global approach. We are looking at parts of europe for investment. We do not believe the front end of the u. S. Offers much value the front endieve of europe offers much value. Green to be dynamic and nimble and generate returns for 2018. We have never been that is summing to change in 2017 sort for 2018, theres not much juice left in the highyield market. The market of safety and highyield fund is not as appropriate as it once was. We believe it is natural there will likely be a pullback at some point in 2018. I do not think it will be a large one. We would have to see largescale correct collection. Correction. Janet Portfolio Manager. Janice henderson Portfolio Manager. Promises itonnell will be taken up tonight. We speak with one Central Bank Official thinks a rewrite may not have as much of an impact as ceos is think. This is bloomberg. Julia the Federal Reserve has the taxars but now reform has good house and is well on the way to become law, focus shifts from monetary to fiscal policy. Mike mckee sat down with dallas fed president Robert Kaplan for his thoughts on where the economy stands after three rate hike this year. I think time will tell. It is a key thing to me. Of your forecast is based on the impact of tax cuts . Is modest. Of your forecast is based on theover the last coupl, our 2018,y firmed 2019, 2020 once, created a little bit affirming in our gdp for forecasts and anarchic an aggressive overshoot and a lower unemployment rate. The impact was on the margin, a modest impact in the next three years. It does not seem to have any effect if you look at the fed consensus on longterm potential growth. Yes, there are two parts of the tax will. One i have been very positive dout, to the extent you Corporate Tax reform and locate your business in the United States and invest in the nice dates, that could be positive on a sustainable basis. The part of the bill that is a tax cut will give us a shortterm on, modest increase in the short run and we will tell that down to the trend growth and we will be more highly red leveraged at the end of it. U. S. To gdp debt to gdp is unsustainable. There is a lot of talk about what companies should what companies would do. What are they telling you about your business and whether they would invest in more . There is not a ceo i talked to who did not want that tax will to pass. It would improve earnings and earnings per share. The bigger question is what it caused them to change their investment and one thing you have to emphasize, corporate profits are at record levels. The capital cost of debt and cost of equity is historically low. I talked to, the bulk of them may not have an explicit impact on their investment. On the margin, it may be positive. For those thinking about i talkg facilities offshore, it may more likely toe stay here. I understand we are at or near fulltime limit, we have record profits and it means the impact of this when i talked to corporate ceos is probably mark modest and on the margin. Scarlet it is time for a look at some of the biggest business stories in the news right now. Billion of deals made in the Food Industry this year could just see a sample of the next wave of consolidation. Food giants like craft and General Mills are dealing with sluggish growth and growing challenges from amazon and walmart. Jefferies group took in a record andnt for advising walmart. Jefferies group took in a record amount for advising companies on deals and securities in the fiscal year that just ended, the Investment Bank reported 120 billion in fees. That offset a slump in fiscal and trading revenue that declined 37 . The force continues to ripple across theaters rolled ride worldwide. Star wars last jedi raked in 22 million across america yesterday, bringing it into just under 242 million. That is a little less than the force awakens. And that is your business flash update. Do you dont do you know anything by the star wars movies or are you perplexed by it. I watched for five and three, and then i watched seven and i missed eight and i watched nine. It is still confusing to me in a matter what. Rages on today. Options traders are taking a look at how one crypto overexposed stock. Com, this is bloomberg. All you julia this is bloomberg markets. Scarlet timeout for julie hyman. Julie joining me is kevin kelly, a managing partner at benchmark investments. We will take a little break from taxes at the moment and talk about a big trend we have washed in the market unfold and that is cryptocurrencies as we have futures, and we have been talking on bloomberg tv a lot about the various crypto proxies. We had Trading Halted in the Small Companies today. Overstock. Com, which was initially a head scratcher. They put bitcoin in there and the stock goes up, but what is the real Value Proposition tied to bitcoin . Retail atck is not a all. They announced last night they are launching a 250 million up to 500 million initial Coin Offering and it has to do with their regulated exchange for cryptocurrencies and coins. Owned subsidiary of the company and they made a lot of investments across the crypto land. Symbian is one of them. It is the Technology Behind vanguard using this for their indexes. Say,ave seen the ceo, and we are a Technology Company and we will get rid of our retail company, takes about 20 or 30 and sees another big rick and retail. Because they have one of the most efficient even retailing platforms, they do not want it anymore. So there are a lot of catalysts for this stock but they will all be in the crypto market. What is the risk because folks who are skeptics because even if they are just skeptics on the Price Movement we have , riskoes overstock getting caught up in that if it sells off . There is a certain amount of risk in bedded. It is not necessarily on the technology or stock because we have seen the shifts and that has an inverse affect. One way you can see the up, and yous actually want to go sell a 60 foot up to march. , take theo sell that proceeds to seven dollars and 8,100t to go by the spread, which costs about the dollar 25 you will pocket about a dollar. 5 from it. There is a lot of volatility. We have got to leave it there. Thank you so much. Julia thank you. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Mark cohen has represented as pass the most sweeping rewrite of the american tax law and it in more than a decade. Republican seat to deliver a major victory to President Trump before the end of the year. Is one of thes most important pieces of legislation that congress has passed in decades to help the American Worker and to help grow the american economy. Country on theur right path. For all the millions of men and women in america living paycheck to paycheck and struggling to get ahead, help is on the way. Mark the senate is expected to vote on the measure tonight. A commission that approved the rest of the keystone xl pipeline is declining requests to changes edition. The Public Service commission denied motions today by a pipe wind developer, trans canada, and leaving proponents of the concept. They said it denied due process due
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