Iran, leaving the deal intact for now. Releasepresident did new sanctions among 14 people and entities involved with the Ballistic Missile programs, and a crackdown on government protesters. President has repeatedly denounced the Nuclear Agreement negotiated by president obama, and in october, declined to certify that it was an interest of the u. S. He has stopped short of. Crapping that deal altogether south africas ruling party is calling President Trumps comments on african immigrants extremely offensive. The deputy secretary general of the African NationalCongress Told reporters that developing National Countries do have problems. It is not as if the United States does not have difficulties. There are millions of Unemployed People in the usa, people who do not have health care or access to education, and we would not make commentsto so derogatory about any kind of country that has social, economic, or other difficulties. It isand el salvador said expressing the countrys resounding rejection of President Trumps remarks. The foreign minister says that el salvador declares respect for its brave and dignified people. In venezuela, two days of protests have left three people dead and 16 more injured. Venezuelan Officials Say at least two farms were attacked by mobs of people, who slaughtered cows. An opposition lawmaker boasted ofposted a video on twitter, a bunch of men attacking a cow. Spanish finance ministers have agreed to push for a break the deal that keeps the United Kingdom is close to the European Union as possible. That is as close according to a person close to the situation. Both have close trade and investment ties and are concerned about the impact of tariffs. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Mark Crumpton, this is bloomberg. Going to ask wha what is going on. Scarlet might also out of my hand, mark. Julia i take full responsibility there. Scarlet lets talk about stocks. Higher today,ng almost a Straight Line up with the exception of wednesday. In the new year, nine trading days, and eight of those have seen record highs with a big overall rally for the major averages. Today is no exception. The dow, s p, and the nasdaq are all solidly higher. Reform,ct of tax optimism about earnings season, so it will be interesting to see what will bring this to an end. The technical signals already suggest that we will see a pullback later this month, but until the momentum turns, stick with it. That is according to kb stocks. We are looking at two weeks of big gains here, we see the s p 500 up almost 1. 5 on the week after gaining more than 2. 6 last week. It is also worth noting that over the last four months, we weeklyd only three declines, and they are quite small. A lot of bullish momentum, and this is where the dow as well. The dow up on the year almost 4 , gaining over 1000 points. It is a pretty remarkable thing for stocks. The dow is leading the path today. Lets look at some of the top point boosts for the dow on the day. Up 1. 8 ,oking at merck after the fda approved a merck and after zeneca partnered cancerneca partnered drug. Travel is higher for a second day in a row, and microsoft with bullish comments out there. Another record high for microsoft, so 20 straight for stocks. Keep them going. Julia for more on todays market moves and what might come next week, we are joined by scott. Great to have you on the show. Even more excited to have you, because at the back end of last week, we were saying that a lot of analysts have been caught off guard because we have rallied so far this year, a lot of the 2018, and targets are quickly approaching, if not being surpassed. You are one of those who, last week, readjusted your forecast for equities. Explain what you are for now . Scott the thing for us is our number that we had assumed had a 23 tax rate. We had a 53 right off of ff of capex. Writeo our targets were forced higher, and after that adjustment, we were looking for an 8 return this year for the entire year, as you just mentioned. We are up 4 already. We do not want to annualized what we have seen so far this year, and we are expecting some gains. I think at some point, it seems like a stock market wants to go about every day but at some point, we will see some more volatility. I think what is going on with , andback and forth trading what is going on right now, you are in the very early stages of seeing some chasing going on here. I would argue there is a lot of institutional chasing the back half of last year. The benchmarks, the s p 500, thing keeps going up every day and you have to be in it. Moree going to see some broad chasing going on, in the very early stages. And that can carry you for a while before anything that happens. Scarlet how can you tell that there is chasing . How can you tell this is here, acting out, and people are afraid of missing out. What should we look for to determine how much more is left . Scott you have to remember i am dealing largely with retail investors. Retail investors, many of them have had way too much cash on the sidelines for almost this entire rally. They are certainly underinvested in stock, at least in our opinion. So the day today, my phone is ringing, i am talking to our salesforce in the field, i am talking to other people, Money Managers i know around the , and interest has really increased. We have gone from the john templeton, bull market is born on pessimism, but it grows on skepticism, the nick rose it is born on skepticism, but you are looking at optimist him, because more and more people are optimistic every day, and the thing at the top will be euphoria, but we are not near there yet. We are moving along, people are getting more interested, they are underinvested, and so, to me, those are the signs that i aok for that this thing has ways to go. The bull market is not over, but keep that in the back of your mind. People are starting to get excited about the market. Julia what does that mean about positioning . A debate we have been hacking is the backup in rates that we have been seeing, and you are one of those saying look, take a look at fixed income and rotate some cash into small cap equities. Talk us through that . , wet relative to large cap have been underweight smallcap, and that worked out just fine. But this tax code change is a lot more beneficial to the russell 2000 type stocks than it is for the large caps. They pay a higher tax rate, and if you look at the earnings number, pretax we thought the 38,ll was going to earn 30 nine dollars. We are at 52 now on 38, 39. We are at 52 now. It is different in terms of large cap. ,e do not think that long overweight large caps, or short, underweight short caps were going to help. We shifted things around. You need to have u. S. Economic growth, domestic Economic Growth meaningfully increase. Our number is 2. 9 for gdp this year. Some people are calling for even higher, but i think you need to see at least that. Of gdp in the u. S. Comes in at 2. 4 , 2. 5 , smallcap is not going to be the outperform or this year. Scarlet i like how you are talking we are shifting between skepticism and optimism and moving in the direction of optimism. Earnings season began for the fourth order, and in the coming weeks we will get a lot more results. If there are any expectation misses, and those are quite high, do you expect people to forgive pretty quickly, meaning they will look for the Silver Lining and continue to bid shares higher . Scott i think the last couple of quarters in 2017, the second and the third, people were paying attention to earnings. They did not for a lot of this multitier rally. Rally. Iyear but i think forgiveness will be the big word, because it is all about what the tax code is going to do for you . What is it going to do for your clients . What is it going to do for your top line . I really think the outcomes in this Fourth Quarter are going to be fine, and the market knows that. I think that the actual results are going to be very little looked at, it is going to be all about the outlook. When we have talked to our analysts, it is how hard are you going to press the cfos and Company Executives in these Conference Calls . How much are you going to press them to find out what this tax situation means for them and that is thes . Important thing. What i think will happen, and some early indications are if there is a lot of vagueness these companies do not want to give a lot of guidance, they do not want to go out on a limb. They know it will be beneficial, but it will be tough to get a good gauge on how beneficial. It is tough for them and certainly tough for the analysts. ,ulia the risk to the upside we are still underestimating the bang for the buck on the tax overhaul, is that true . Gdp. we are at 2. 9 they think if they are wrong, growth will come in higher. I think there is a potential for that. Come intoe fed will play here. Right now, everyone is thinking wetaxes, but the fed are looking for two hikes out of the fed this year, the there are some permit will competitors of ours formidable competitors of hours were looking for four, sometimes five. If you grow 2. 9 or less and have five rate hikes, that is a bit headmanned big headwind for the market. There is some risk to the upside, i would lean to the upside, but the Downside Risks are definitely there. We had a huge run, and i think you do not want to just aim for the stars, so to speak. You do not want to add a lot of risk here this late in the cycle. You want to be in this thing, but you do not want to swing for the fences, i do not think. Scarlet be in this thing, but dont swing for the fences. Scott wren, thank you very much. Coming up, where theyll be fewer analysts on wall street after the changes to nafta . Will discuss. This is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Scarlet m scarlet fu. President trump is still facing questions about his profane remark about immigrants from haiti and african countries. Here is a scene, shortly after the president signed a Martin Luther king day proclamation earlier today. [applause] mr. President , will you give an apology for what you said the other day . Sir, did you ever mr. President , are you a racist . Scarlet lots of shouted questions, the president ignoring them completely. Lets bring in our white house reporter. We have heard democrats to list and tested missing stinson themselves,stancing but has anyone in the Republican Party denounced him or separated themselves from the president . We are starting to see more and more republicans come out on the record and separate themselves from the president. We heard House Speaker paul ryan say he was disappointed with the statement, we heard a few minutes ago from senator don john mccain, saying the statements are not in line with american patriotism. We heard from mia love, whose parents both came from haiti, saying the president needs to issue an apology and calling his statements elitist. We are seeing more speaking out, but there are not many republicans who are trying to just move on from this without addressing the issue. This will make it harder for democrats to come to the table and Reach Agreement on immigration, which is already a very difficult issue. The president using language like this makes it harder for both sides to come together and reach a deal. Julia and that is the key. Scarlet that has become an art form, pretending what you did not you did not hear the president and move on. Is not just bad for the immigration deal, but for the shutdown. I wanted to talk about chiron iran as well. U. S. Holding to the iran nuclear deal, but they are saying the europeans need to do more as well. Everyone needs to come together to hold this nuclear deal and improve compliance as far as the United States figures it. What do you think here of the decision from the president and the Administration Today . Toluse we just heard from several administration officials, who briefed reporters on this deal. They said the president is calling for the european leaders and has already been speaking with a number of them to make nuclearto the iran deal, otherwise he will pull the u. S. Out of the deal and try to impose new sanctions on iran. Over the next 90 days, four months or so, we will expect the president and the white house to be trying to increase some of the pressure on iran. They not only want to change the current deal, but they want to add a new deal on top of what has been negotiated that will take away any sunset provisions from inside the iran deal and impose harsher harsher strategies harsher strategies and sanctions for iran on various things they have done on the Ballistic Missile site. The president is driving a pretty hard bargain, trying to get European Countries to increase some of the things they have already agreed to and go further than what they put on the table during the deal when it was agreed to a couple of years ago. We have not seen any sign of the European Countries are willing to do that, that they have a few months to come to a final decision on that. Julia to lou on already but olorunnipa, thank you. U. S. Firms have used the resignation of economists to get visas for Research Analysts from the u. Mexico and canada. Is our reporter, who broke the story. Doug, thank you for joining us. I know something about the excitement of trying to get a United States visa, but explain the difference here. What ability to disease up under nafta did this visa under nafta give the analysts the ability for Company Transfers rather than coming in on a different visa into the country . Visas arews part of the nafta agreement, and what we are seeing is a tightening of the immigration policy. In specifically, this seems to be a visa that was used for many years by the canadian banks and analysts,bring over and it was because it was a very sort of openended, vague description, and what we have seen now is the eight u. S. Immigration department is saying look, there have been issues with this broad definition. We will actually narrowly define it, and by narrowly defining it, they have basically said if you are not an economist, if you are an analyst, you do not qualify for this visa anymore. Scarlet what are you hearing in terms of workarounds for banks and employees who are in the process of trying to renew their visas . Perhaps they are on the socalled tn visa, but they need a new version because they are working in new york . Doug this is fairly new. There was an immigration memo that came out in november, and a press briefing december 18. We are only now just starting to hear and see some action on that. There are alternatives, but they can be more costly and a little bit more onerous. You could have the prospect of these are, but1b they are a lottery system and cost a lot of money, and there are limitations there. You cannot be in the country for over six years without applying for a green card. , andther is an l1 visa intercompany transfer. Those can be done, but they are more expensive and there are limitations as well. The third alternative is that they could be repatriated back to their countries, but it leaves a bit of a gap for those on wall street. Scarlet certainly some vacancy that might result. Doug alexander reporting from toronto, thank you very much on that breaking news. The wall street analysts from canada and mexico at risk here. Julia gamestop getting crushed today, despite the strong holiday sales report. What is putting a dampener on their forecast . We will be discussing, next. From new york, this is bloomberg. Scarlet this is bloomberg markets. Im scarlet fu. Julia and i am julia chatterley. Gamestop is our stock of the hour, shares falling over 11 today, despite a bounce back in holiday sales. Emma chandra is here with more. Why the disappointment . Emma the prices have mostly benefited from an easy year ago comparable. This chart shows they had fallen in the Fourth Quarter of the previous year, and the forecasts are not looking really good. They looked at fullyear adjusted eps in the middle of its range, shorting analysts estimates, and expecting a noncash charge for the Fourth Quarter, and due to the longer upgrade cycle for a number of devices. We have seen analysts say the holiday sales look good, but overall, it does not look that good. And at loop capital, they cut their price target for gamestop. Scarlet emma chandra, thank you so much. You aree will miss you, glowing. You look amazing. Scarlet emma is going to take some time off to be a mommy. [laughter] scarlet lets get you to the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. More industries are facing trouble in 2018. According to loan market data from highland capital, Moore Industries are weakened or stress this year, up from 9 in 2015. And a broader range of sectors are affected, with broadcast and media joining energy and retail. This wide range could push a domino risk. In the wake of the tax cut, this company will spend over 1 billion in ad and at 25 billion jobs they will spend 2000 checks to 60,000 workers in the u. S. That is your business flash update. Julia still ahead, the commodities close. Latest crop reports in the u. S. Show ample supply. This is bloomberg. From bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. Im scarlet fu. Commodity markets closing in new york for the week. Lets get you started with oil. Little changes on the day, but if you look at brent crude, it it is, in the last couple of hours, moving higher, up 9 10 of 1 , 3 for the