Vonnie gasoline inventories, that showed a build of 3. 3 Million Barrels. Is thaty the headline crude Oil Inventories showed a 1. 1 5wn last week of Million Barrels. It has been a risk off tone. Energy companies are benefiting from the spike in oil prices on both sides of the pond. Decline500 is showing a of 0. 75 . It is following the other indexes lower as well. Analysts showing stocks higher. Some of the Security Companies like Lockheed Martin is up 3. 4 . Guy european stocks are down. They are off their lows. The ftse 100 is now positive. The ftse 100 has lots of oil stocks in it. The dax is underperforming in europe. The aviation sector under pressure today. The bond market is catching a bid, moving six basis points on a german tenyear. Brent crude elevated. You would expect brent to be a little more aggressive of a move in the middle east rather than wti. The ism number today not exactly great, plus this story out of the middle east. Vonnie this will be all of the talk at the American EconomicAssociation Meeting in san diego today. Right now numbers Michael Mckee is there, and he is standing by with a special guest. We will hear now from chicago fed president Charles Evans. Michael thank you very much. Welcome to Bloomberg Television and radio worldwide. Thank you for joining us this morning. Starting off with some bad news, dismal numbers from ism on manufacturing, the lowest since the Great Recession ended in 2009. Does that shake your confidence in the durability of the expansion . It does not. I guess im a little surprised by the week number. Manufacturing has been struggling. It has been contracting recently. I think the train policy uncertainty has been part of that. The gm strike was part of that. It is over. One thing that has been good for ,he economy is with gdp growth in looking for 2 to 2. 25 2020 and a strong labor market benefiting the consumer. We think the economy can continue to grow even when manufacturing is contracting a little bit. I think we have a resilient economy. Michael why is manufacturing contracting . Is this a selfinflicted trade war wound . Charles obviously the Auto Industry has plateaued the previous year. It has been softer. You had the gm strike. That impacted suppliers. I think the trade tariffs on agricultural has had an effect. We have not exported as much soybeans and pork. The farmers are struggling. They are not buying as many heavy equipment pieces. That has been a problem. I think not knowing exactly where your supply chains might lie productively on either side of the border when you are uncertain about tariffs, and there has been a lot of uncertainty, so business has been slow to continue investment. I dont need your way to early hot take on iran, but let me ask you this, how fragile is the recovery and expansion at this point in terms of confidence . Business confidence is low already. Does that put the expansion and recovery . Charles i think it has been quite good. The labor market has been strong. The Unemployment Rate is 3. 5 . A lot of people have been brought into the labor market who did not have a strong attachment to the labor market in previous years. They are enjoying the benefits, Income Growth fueling robust conception at the moment. Eary ofses have been w investment. The president says the u. S. And china will sign phase one of a trade deal. Events current overnight questionre certainly a mark, and oil prices are up a little bit. I think we have a good, robust, resilient economy that is growing a little above trend. Michael oil prices at all worrying . Charles in general they harm consumers. We export more oil now, so it is more neutral than it used to be. That is not a problem. Michael you say basically a 2 economy, and unemployment is at 50 year lows, does that tell you we have had a very long expansion and that is why more people are getting jobs, or is it any kind of sign of strength for the economy Going Forward . Charles i think growth decelerating towards trend growth, and i put trend growth towards 1. 75 , so 2 is above trend. I think we have had a long expansion. The labor market, unemployment going to 3. 5 , more people going into the labor force in the face of declining Labor Force Participation trends due to demographics is a good sign for the future when people who previously did not have strong attachment to the labor force are getting jobs and moving to other jobs, so i think that helps. I think the fundamentals are good. It has been a long recovery. It has come from a very low point after the Great Recession, so it has been a good run. Im looking forward to continuing growth. After 11 years of expansion, everyone is looking under rocks for the reason it is going to end, what are you looking for . Charles what do i worry about . There are always risks, obviously International Events concern you. Inflation has been low. At this point in the cycle, we really need to get inflation up to 2 and above 2 . We have said for a long time that our objective is to percent. 2 . We have been below it for quite some time. I think in that environment, there is no reason to be concerned about low Unemployment Rates. I think the strong labor market is an attribute. We need to keep focusing on getting inflation up. Monetary policy is accommodative, supportive of all this. It also has a bit of Risk Management positioning so if we face a few more obstacles over the next six months or year, policy is accommodative, and so we are wellpositioned to respond as necessary. Michael what is your best guess as to why inflation does not rise . Charles it is a good question. Growth rates,wer trend growth rates we have been facing have been a puzzle for monetary economists. For some time Central Banks have been thinking Interest Rates are very low, and they should be rising naturally to something more neutral. I think judging how low neutral policy rates are has been difficult for everyone. Looking back, i thought our rate increases in the past were well justified. I thought we were still accommodative even before we decided to pause and reduce Interest Rates. Accurate with an judgment on what neutral is and how much accommodation to put in place is difficult. We would have been well served if we had been a little more conservative and not raised rates as much. I dont think it was a mistake. I think it was a misunderstanding. Getael if you work able to if you were not able to get inflation up as unemployment fell, what makes you think you can do it now . Charles we need to focus on getting inflation up. I dont think we should be overly focused on the Unemployment Rate being low. I think it is a good thing. It is consistent with a strong economy. With our financial instability concerns that you might be worried about, because of low Interest Rates for a long time, you need to make a judgment as to what neutral rates are and whether we have the appropriate Regulatory Environment in place. I think we do. After doddfrank, we have banks. Ith more and Better Capital federal agencies have been looking at whether there are ways to make modest adjustments expandan continue to expansion and keep the economy going in a natural way. I think does have been good actions. We are wellpositioned. Michael this brings us to the policy review. We are about a year into it. Where do you think it is . Charles that is a great question. We have had a lot of great discussion. We have benefited by focusing on what do we mean when we say maximum employment . How should we think about how Unemployment Rates benefit people in a strong labor environment . Is that something we need to push against if we are concerned about inflationary pressures . Whated to clarify the we mean by symmetrical inflationary pressure. Inwas our objective back january 2012. I think we need to overshoot. We need to be not concerned about inflation even if it rises above two. 5 on a sustained basis. We need a framework 2. 5 on a sustained basis. We need a framework. There has been too much artfulness to the way it is described now. Michael it sounds like you are with the majority of the committee on doing something with inflation. Would you agree . What about changing the target to a range . Charles these are all options we have discussed a little bit. We need to make some judgments as to what is most effective. I think coming up with a pretty clear explanation of what we mean by symmetry is important. That,ange is helpful for we can articulate how we respond to different inflation settings within the range. I think that is important. Averaging could be a component of that. At some point, you need to be able to explain to the public why you are comfortable with sayation at 2. 25 when you 2 is your objective. We seem to be able to explain that we are comfortable with 1. 5 inflation as long as we are aimed upwards. I think we need to be more clear about that. Michael one of the questions this year is what was to you have for the next recession when Interest Rates, you have about 150 basis points on the short and and about another 30 on the long end even if you do qe . Charles i think the now standard tools would come into play, lower Interest Rates, lower Interest Rates for a longer time providing some type of Forward Guidance for what the circumstances would be for why you are in that situation as long as you are. One way or another, all of the tools and how you use them need to provide confidence to the you are public that going to do everything necessary to get the economy going again and inflation up to your objective. Whatever additional tools provide that confidence is really important. I think a full throated endorsement of a symmetric 2 inflation target is part of that. We need to get inflation up to 2 as quickly as we can. In the face of the downturn and slow recovery. Explaining why it is perfectly fine to go about 2 in pursuit of a symmetric target. Low rates, low growth, low expansion, are you happy with where the economy is . Is this about the best it can do . Charles i think you are onto something with this. It has certainly been the case that low real equilibrium Interest Rates and fiscal policy has not really helped out much in terms of adding aggregate demand. I think in terms of the first fiscal stimulus in 2009 was certainly helpful, but it could have been larger. There are a number of fiscal projects that need to be taken over the next 20 or 30 years, infrastructure improvement. Bridges and underpasses and things like that. Why not have a plan so that we have that type of fiscal support in place and ready when you need more of it . I think the physical environment is an important part. The International Environment is an important part. When the entire World Economy is growing strongly, that benefits us in terms of Interest Rate policy. There is a lot in play, and i think we need to be aware of it. Michael hopefully we will be talking to you about it throughout 2020. Charlie evans, chicago fed president. Vonnie our thanks to bloombergs Michael Mckee at the American EconomicAssociation Meeting in san diego. We will be hearing more from the Federal Reserve president s later on. First, it is interesting to hear Charles Evans talk about the spike in oil prices, how we might get a little inflation from that and the ism, he was surprised that we went deeper into the 40s. It is not that great of a sign for u. S. Manufacturing. Guy i wonder how much of this will change over the next few months, assuming that we do get some trade deal. December was about this news that inflation would come back, that the trade deal would get done. To changeame too late hearts and minds within the manufacturing sector. If we do get a phase when deal, if it does get signed a couple weeks, maybe things start to improve just a little bit, and maybe some of this data in the u. S. And around the world, you saw it in germany yesterday, starts to improve. At the moment the data is bouncing along the bottom. Could that trade deal provide that . Vonnie those data were much lower. We are talking the low 40s. We still have some room to go. We may not get there. Fedr, we hear from president loretta mester. This is bloomberg. Guy welcome back. Lets check the markets. Lower acrosss are the world. The stoxx 600 is down. Well off record highs we touched yesterday. The risk off tone is confirmed when you look across asset classes. When you look at safer assets, u. S. Treasuries down. You are looking at a bid into gold. A big boost into oil. Wti is up 3 . Energy stocks are also taking part in a rally today. Also defensive stocks getting a boost on the prospect of more defense spending. You have airline stocks, they could be potential retaliation impactedd negatively by higher fuel prices. American airlines down by vonnie 4 . Irans Supreme Leader vowing to retaliate after a u. S. Airstrike killed one of irans most powerful generals. For more on these developers, we leadsined by bill, who Bloombergs National security team. What is the current stance from the white house . It seems like they want to deescalate things, but is that even possible at this point . In,t is hard to reel this especially so soon after last nights attack. The u. S. Is saying it had evidence of an imminent attack on u. S. Facilities or personnel that justify this strike on the top iranian commander at a baghdad airport, where he frequently traveled to work with allied militias in that country they the u. S. Says it has justification that country. The u. S. Says it has justification. They are not interested in a war with iran, but given the personality they targeted here, it is difficult for iran to not look in the coming days and weeks and months for some way to retaliate. Guy can i come back to the legality issue of this attack . Atn and the u. S. Are not war. There is this anticipatory selfdefense defense that is being mounted him about the details are sketchy. When are we going to get the details as to why this is an acceptable attack . I think we are hoping or expecting some Administration Briefing later today. The administration is time to get ahead of any criticism that this was somehow a targeted assassination, which is generally prohibited, by saying we had intelligence that there was something underfoot, that they were going to target u. S. Assets in the region. You have some support from allies saying there was evidence that backs this up. We will be looking in the coming hours and days ahead for more details about what exactly the u. S. Had, what evidence backs that up and what might have been planned. Brigadier general do we know anything about this soleimani heike might be . Everyone is replaceable at some level, but if anyone was truly indispensable, he was that figure for iran. Has a tremendous impact on the politics in iran and the region. They are very big shoes to fill. I think people will do their best to replace him, but i dont think he is somebody who will be easily replaced by one person. Vonnie thank you. This is bloomberg. Vonnie check in u. S. Markets now, we are lower, reversing yesterdays gains and then some. The Dow Jones Industrial average down 0. 8 . The nasdaq is down 0. 7 . We are Holding Around those levels. Guy london is up. We are in positive territory. Lufthansa under pressure. We will deal with the details in just a moment. Three minutes and 40 seconds until the european close. This is bloomberg. Guy 30 seconds until the end of regular trading this friday. The second trading day of the year. Felt different than the first day. We cap lower on news out of iraq. With the ftse 100 is now flat, the cac 40 is flat. Is down overe dax 1 . There is the gap lower. Since then we have moved in a tight range. We are off the lows we hit earlier on in the session. The individual markets around europe tell the story of the relative makeup of these different markets around europe. The ftse 100,. 1 to the good. Stocks like bp and shell have had a big impact. The dax has been stopped by lufthansa. It is still exposed to the oil market when it comes to the fuel story, as a result of which it has suffered. The cac 40 as well. Only down. 1 . Already we are fading this risk off move we saw first thing this morning on the iraq iran news. Individual sectors tell the story as to why we are getting the differential around europe. The oil and gas sector far and away the biggest performer, up 1. 2 . Then we get into more defensive end of the market, the food and beverage sector, the real estate sector, the staples, telecom, health care, utilities, the defensive end of the market have been better beat and we have gone risk off. The bottom end of the market looks like this. The car sector is trading lower. That is germany. Chemicals, that is germany as well. Basic resources a little softer today, down 1. 1 . The oil stocks have compensated. Individual names, lets take a quick look. There is lufthansa down 6. 5 , down more earlier on. Bp adding the most weight to the london market on the upside. The temporary nature of the flavored vaping band in the United States has caught the attention of the tobacco sector. British American Tobacco is still heavyweight in the london market, up 2. 51 . That has certainly helped out. It has definitely been and oil stocks versus autos and travel sector down at the bottom end of the market that has caused the differentiation in europe. Volumes has faded as the day has gone on. Vonnie you mentioned the auto stocks and we are watching auto sales. Gm and volkswagen drops more than anticipated. It is our top story. The u. S. Airstrike overnight killing the iranian commander in iraq. The s p 500 down. 6 . Giving back yesterdays gains and holding, the same with the other major indices. Most of the groups are lower, with the exception of energy. Some companies benefiting from the spike in oil prices. The 10 year yield at 1. 80 . Overnight we got down as far as 1. 79, then we got ism manufacturing which put a pall on the market. Crude is stabilizing. We are up almost 4 overnight. Golde now below that but getting over closer to 1. 550. The yen is below 108. Investors seek out haven assets today. Guy lets get back to the top story you are just mentioning. The u. S. Airstrike ordered by donald trump which killed one of irans most powerful general, Kassem Soleimani. By jim coors the markets reaction, the muscle memory teaches us that you fade this risk off mood we are seeing. Higher oil prices, you want to fade that. Is that the right response . It is surprising what you are saying before. The markets are actually fitting this. That is the interesting point. What happens is at the end of the day the Central Banks are saving the day. Everyone is saying that the politicians get on with the political plays, whereas the Central Banks make sure they injected liquidity ahead of the Holiday Season and they will keep that going. That is what is saving the day. Guy what kind of response you think would be meaningful for the markets . The iranians are going to respond. It is clear they have may have been calculated by killing americans attacking american civilians. They have not got a response when they target economic facilities. I think youre going to analysts,ies from political analyst. At the end of the day the big question is what happens to oil supplies. When you look at global pmi, we are seeing a bottoming out of 12 to 14 months of drops. The iran yields have been following. Equities have been holding on because of the liquidity that has provided assets. The big question for everyone will be at this time, are we going to see oil prices being hit on the upside because of any attack on the straits of hormuz, anything in that direction which would essentially hit 20 of global oil supply. As we saw back in september, the vulnerabilities in saudi arabia with the Oil Pipelines that go to the red sea, all of these into play over the next few days. Forie if it takes time iran to put together a response, to Oil Prices Stay elevated or does everyone calm themselves and wait for the next rocket to be fired as a metaphor . Simon it is a question we are all asking ourselves. I saw today there was an uptick in the morning. A drop after a few minutes, and then an uptick again throughout the day. We are stabilizing at current levels. Lets put it this way. Compared to september 2019, when oil prices jumped 13 after the attack on the saudi oil facility, this time we are talking about 4 price increases. It has been more contained. As we go into the weekend, everybody is going to be focusing on the iranian reaction, any reaction we can see. From that point of view, we need to be cautious because the opec trust agreement means to million or so barrels a day of cuts, but those cuts come from countries which are saudi, gcc, and also russia. The only country that can cut oil increase as we move ahead is russia. That is a big question mark. Vonnie what about emerging market economies that might benefit from this . There is not much benefit globally. Maybe for some economies, there will be a boom . Simon absolutely. If you look the Oil Exporters in subsaharan africa, like in 2017, to any 19 was in outperforming year 2019 was in outperforming year. Outperformance versus the rest of the emergingmarket. If we see Oil Prices Heading where they are are still above , theer up barrel subsaharan african countries will definitely be supported as we move ahead. Those are the ones who are the clear beneficiaries. As i mentioned, you have the likes of russia. Guy how does this change the politics in the gulf . Simon i do not think we see a change in politics in the gulf, but an neck celebration of negativities. It caught everybody by surprise. The events of the last week, with the u. S. Embassy caught everybody by surprise. The surprise element and the effect this has on volatility is the most concerning thing for markets. Guy what is this mean for the gcc countries . We did see the attack exposing vulnerability with the saudi oil facility. Nevertheless, the other side of targets present serious with the iranians have never taken. Dhabi, all of these places up and down the gulf. Bustling metropolitan areas that the iranians have always left to one side. What is the message i ran will send to the gulf about what happens next. There have been concerns that with the u. S. Taking a step back , a conversation with the iranians is critical. How will this change the narrative . Simon you use the right word conversation. Dialogue is the most important thing. We need dialogue. I do not to speculate as to what could happen in the region. I think what we can do is hope the weekend stays calm. It does increase the splits within the region. You have turkey, which just approved the sending of troops to libya, you have egypt which was attacked. You have the gcc. Something we have in last few months with qatar. This is all going to be thrown up in the air. I think these are issues we need to focus on deeply in the next week or so. Vonnie i dont want to be inappropriate, but is there a chance this could solve the fed inflation problem if we did see sustained higher oil prices, one at antiu. S. Inflation . Simon lets see what the fed has to say about that. Maybe their wording would not be the same as yours. What it definitely does show his we see the spike in oil prices already in december, about 20 plus, and this move toward 70 per barrel means this increase in oil prices becomes more protracted through q1 2020. If you add onto that the depreciation you have seen in the turkish lira or the brazilian real, then we are talking about 30 year on year moves in local currency prices. Concerned about what is going on in the repo market, and it should be, because we still need answers. In emerging markets we need answers. For Central Banks in general, what they will continue to do is provide liquidity in the face of geopolitical risk. Vonnie is europe more vulnerable . Is there any incentive for europe to try to tramp this down. Europe has been more of an importer of oil than the u. S. Simon europe has taken a different approach in the last one or two years given the change in policy and other countries elsewhere in the world. I think from that point of view they would like to look to appease the situation or calm down the situation. Most of their oil comes from places like russia, eastern europe, and we have seen the gas agreement between russia and ukraine reduce the risk of gas prices. We have seen a big drop in the beginning of january. That is something that is keeping them calm. Lets not forget all of these countries have substantial amounts of Strategic Reserves at their disposal if they need to be used. Many investors have talked about tiptoeing into the em investment story. Does this change the narrative around that . Does this raise the risk of investing in em . Simon i dont think so. It changes the narrative, or it makes it a bit more precarious. The investment narrative for Global Markets in general. I do not think you can say em should be written off. As i mentioned before, you have the net commodity exports who will benefit from this. Em still stands as an investment story to be invested in. If you look at 2019, stocks were the clear out performers. Bondsime around the should do something. Guy s maybe just an excuse to take a little bit of profit after that big move. Maybe that is what we are seeing in the market. Great to see you. Thanks for dropping by to see us. But stick a quick look at where european equities have settled. 40 both 100 and the cac in positive territory. The dax of clear underperformers today. The auto sector and underperform her, and more so the travel sector. We will carry on the conversation on Bloomberg Radio at the top of the hour on dab digital radio. The cable show taking to the air. We continue to analyze last nights events, todays events, and what it means for Global Markets. This is bloomberg. Vonnie live from new york, i am vonnie quinn. Guy from london, i am guy johnson. This is european close on bloomberg markets. Lets check in with bloomberg first word news. Here is courtney donohoe. Courtney the u. S. Is the airstrike that killed one of irans most powerful generals thwarted what it calls an imminent attack. Mike pompeo would not provide details about the threat. The u. S. Strike killed Kassem Soleimani who was in baghdad. Rumeila senator marco rubio said soleimani was plotting a coup in iraq. Flew carlosthat ghosn to lebanon says it did not know he was on board. Turkey is investigating. It detained seven people, including four pilots. Those deadly brushfires in australia have ended the political honeymoon for Prime Minister scott morrison. His plumlee his clumsy handling of the prices has led to judgment of the crisis has led to judgment from his fellow conservatives. He went on a holiday to hawaii the day of declaring a national disaster. In jakarta, flooding has killed at least 43 people. Hundreds of thousands have been evacuated. Monsoon rains and rising rivers left almost 200 neighborhood submerged in the indonesian capital. Landslides are another problem. It is the worst flooding in six years. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am courtney donohoe. This is bloomberg. Vonnie thank you. Oil is higher today on that story courtney just mentioned, the killing of a top iranian general in iraq ordered by president donald trump. Worlds biggest crude producing regions saw trade levels not seen since september. We are joined by bloombergs tina davis. Still just below 67 a barrel for brent. We are stabilizing a little bit. The market has absorb the shock, i guess. Wild swingd see a overnight when the markets opened in asia. Haveve since seen we seen the oil prices come down even after astute after huge stockpile drawdown in the u. S. Draw, the4 million biggest since june. A lot of that has to do with year end tax effect, which are complicated. You would expect the market to have some reaction. The market was already through off he enough there was not a much frothy enough there was not enough upside. Guy i would expect brent to trade stronger than wti. I was surprised at how little that story has developed. Tina it was still trading up 2. 8 versus 2. 1 , but not a huge dichotomy. We saw the huge spike in september after the attacks in saudi arabia. That was a record in terms of the percentage number, and then the oil prices came back as the market reassured there would be plentiful supply. What we may have is a quick initial reaction and then a subsiding throughout the day and the coming days. Guy we were talking about the airline stocks. American is down because of exposure to oil prices. There are beneficiaries, not just companies. Tina we have already seen money flowing into etf, etfs linked to oil futures. For exploration of production companies, particular in the u. S. , one day is not going to change their fortunes necessarily, but it is a chance for them to hopefully lock in and hedge prices so they can survive the rest of 2020 and have an up and have enough capex to do all the drilling they are planning to do. Guy how much capacity with there being opec where there to be a response from iran . Break me down how the production story looks and if there was a problem, how much capacity there is . Largestaq is the second producer at opec. If there is a disruption, that will be impossible to fill entirely. I ran is the fifth largest, their numbers are dwindling under sanctions and some of those numbers are not entirely accurate because we cannot track everything moving out of iran, but there is no magic wand you can waive if there are wholesale cuts in either of these countries. What we have seen from opec in their last meeting, they have gone to extra steps, saudi arabia has gone to extra steps to pull more oil off the market, an extra 500,000 barrels a day. That can be returned quickly if there is some sort of supply disruption. I reporters were talking to the u. S. And Strategic Petroleum reserves. Yet releasing that, but it was released after the september attack. Vonnie that is tina davis, our commodities managing editor. Later she will be explaining why inventories fell 11. 5 Million Barrels last week. Coming up, our stock of the hour is american airlines. This is bloomberg. Guy from london, i am guy johnson. Vonnie from new york, i am vonnie quinn. Affectedstrike in iraq many industries, one of them travel stocks. Our stock of the hour is american airlines. Already struggling before today. Here to survey the damage is taylor riggs. Taylor and improving picture at one point in the last few days. American airlines was down 3 . Only down 1 to 2 . A lot of factors going on. You mentioned the increase in the price of oil, up 4 . Tourism implications as well as people get nervous. American airlines was already dealing with a lot of other issues given the grounding of the 737 max, one of the most levered airlines. They are the greatest risk of an economic slowdown. All of the others, united and delta as well, given their exposure abroad heading lower on this news. I mentioned oil because jet fuel continues to be a big cost for all of these airlines. Delta coming in spending about 18 of their total sales for some of the fuel cost than american and united as well at about 20 . I also mentioned terrorism because some of this impacts travel. The tourism industry. Take a look at the Global Airline index. In the last few years it is down 20 after the paris and brussels attacks in november 2015 and march of 2016. Also got underperformance there. All of this is a perfect storm for some of the airline stocks. Guy what is the picture globally . Weve seen lufthansa down in europe. Taylor exactly. Take a look at the Global Airlines that are more impacted by some of the domestic u. S. Stocks. Air france down 8 . Lufthansa op 6. 5 . Some of the others, air canada, iag that have blessed exposure to the middle east that have less exposure to the middle east market are still down. They will be a Global Airline issue. Vonnie taylor riggs in san francisco, thank you for that. Coming up, balance of power with david westin on Bloomberg Television and Bloomberg Radio. Thomas pickering, former u. S. Ambassador to the United Nations and a slew of countries during his career joins the show to discuss geopolitics. A quick look at markets as we had toured the midday hour in the United States. The dow jones down. 6 . The s p is off its lows, still down. 5 . The nasdaq down. 5 , giving up some of yesterdays gains. This is bloomberg. David from bloomberg World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. The brief today, bill faries from washington on the National Security implications of the u. S. Drone attack, killing a Senior Iranian general. Also jordan fabian on what we have learned from the white house about that attack. Abigail doolittle is here with Market Reaction and michael is in san diego where he is heading attending the American EconomicAssociation Meeting. Well be interviewing very important people from the fed. Lets talk about what happened with that attack. Lets go to bill faries in washington. What do we know . Bill the u. S. Has said President Trump ordered this attack on the most Senior Iranian dilatory official, someone who has been deeply involved in irans activities, not just in iraq but in places like lebanon and yemen. Next it is a marke