Global trade debate. People who see globalization from 30,000 feet dont know a thing about how globalization works. Alix the drumbeats stayed loud and strong with a slew of quarterly reports. We never rule out any instruments, and our toolbox is rich. The revenue is the story and this is driven by new product introductions. Alix it is all straight ahead on bloomberg best. Alix hello and welcome. I am alix steel. This is bloomberg best. This is your review of the most important Business News, analysis and interviews around the world. This was a critical week for global monetary policy. The decisions coming from the fed and the bank of england. On monday, u. S. Immigration policy dominated discussion. President trumps immigration clampdown continues to spark a global backlash. Allies from the u. K. To germany condemned the move, and Major InternationalCompanies Said it threatens to strangle the free flow of workers and commerce. Executives from apple, ge, facebook, tesla, and starbucks all expressed concerns. Shortterm, we see impact on we see little impact on the dollar and equities. It is a hard one for traders because it is hard to work out a plan over the next week, but longerterm, this undermines u. S. Assets. There is a structural blow that is slightly less attractive than it was just before this weekend. Major companies weighed in on the order, including the ge ceo who said we have many employees from the named countries and do business all over the region. We will continue to make our voice heard in the new administration and congress and reiterate the importance of this issue. What we saw over the weekend was a pretty stridently negative response towards this ban on certain migrants. We are beginning to see cracks in this very brief embrace between big business and the Trump Administration. If donald trump goes ahead with some of his pledges around trade, that could turn into a full on rupture. Lloyd blankfein has broken with the Trump Administration over its controversial attempts to crack down on some immigration. Blankfein sent a Voicemail Message to all Goldman Sachs employees over the weekend emphasizing that the order is not the policy supported by the bank. The notable thing about lloyd blankfines voicemail was how directly he said he and the firm didnt support the policy. Bill ford and mark fields spoke out against trumps travel ban. They said we do not support this policy or any other that goes against our values as a company. You cant fight everybody all the time, so if every ceo spoke up and said that the socalled muslim ban was antithetical to what we stand for, he wouldnt fight them. In this is a time for people to be courageous. Whatever side you happen to be on. Straight to some breaking news out of the boj. Out of japan. It came early, the boj fullyear core cpi forecast of 1. 5 . We saw that earlier. Boj maintained their 10year jgb target at around 0 . So no change, there. Also, maintaining their balance rate at. 1 . The bank of japan still miles away from its inflation target. The question is why didnt it do more . Because it is doing so much already, and waiting for the impact for everything it has done over the last couple of years to bear fruit. It is bearing a little bit of fruit. The bank of japan did nudge up its 2017 forecast up from 1. 3 to 1. 5 . We had positive signals from the japanese economy lately. Today, we found production slowing with retail sales weaker. There is a hope that the weak yen is going to boost exports that will feed through to demand, corporate profits, and higher wages. I think mr. Kuroda is satisfied with the state of the economy. We are growing at 1 , which is reasonable for a mature economy. The deflationary stage is over, so it is a good time for governor kuroda to become somewhat optimistic. We are getting our bloomberg terminal set up for what will be an interesting decision. We have the right guy in washington with decades of perspective on the fed. Here is our michael mckee. They came, they voted, they went home and made no news, about as boring as you can get. No change in policy and no change to the economic assessment. By unanimous vote, the fed policymakers left their target rate at the range between one half and three quarters percent. They said they will continue reinvesting payments from returning securities on their Balance Sheet and that rates will rise only gradually in the future. I think that the powerful component of this statement was what didnt appear. The power of what was not said. The fed did not push back against the markets sanguine view regarding interest rates. The dot plot saying three rate hikes. The market was saying two hikes and the next is coming in june. If the fed was not happy with that schedule they would have leaned mildly against that notion. They didnt do that and they were ambivalent to the market rate view. That means they are tolerating if not validating that view. Maybe the fed is also thinking june is a prime opportunity. We will know more about fiscal policy and have a better sense of how the economy is performing. That bank of englands decision drops now. Rates unchanged. 25 basis points from 25 basis points recently. We remain at 0. 25 . The boe Asset Purchase Program stays on hold at 435 billion pounds. In the Corporate Bond buying program, both of which are set to end by the end of this month remains at 10 billion on target. How many ways can you say neutral without actually saying neutral . Mark carney said that the next move in rates could even be up could either be up or down. That is something in line with what the boe was saying back in november. If you were looking for any signal on where the bank of england will go next, mark carney was very reticent. What surprised you most out of this meeting . I think it was the extent of the growth rate from 1. 4 to 2 this year. Then the shift of the goal posts, because given the growth upgrade and that inflation is going to be above target for a long time, they should be thinking about moving rates. The way they avoid that was the was to say that we think the sustainable level of on employment much lower than what we thought before. They changed that judgment in three months. They just dont want to hike. At the same time, on the other side of london, towards westminster, the houses of parliament, has been the brexit secretary david davis presenting the brexit white paper. The takeaway of that, 75 pages long, financial services, the u. K. Seeking trade with the European Union. And for the right of eu citizens to remain within the u. K. , the u. K. Is looking for a reciprocal deal with its european partner. It pretty much follows the 12 points that theresa may set out in her brexit speech last month. There are a couple of points that provide more detail and also reiterate that slightly threatening tone she had towards the end of her speech. The key point, the key issue is that we have four freedoms in europe. One is freedom of labor movement. Freedom of capital movement. Freedom of goods movement. Freedom of services movement. You can have all four or none. I have the feeling they want to , have some kind of cherry picking. Cherry picking will not work. 10 seconds away from the payroll report, 180,000 the median estimate in a bloomberg survey. 200,000 versus 800,000. 220 7000 versus that 180,000 227,000 versus that on hundred 80,000. That 180,000. That was the number of jobs added last month. It looked great at 4. 8 . They are ticking up at 4. 7 . The real shocker is average Hourly Earnings at only 0. 1 . 2 worse than estimates. The december average Hourly Earnings growth was down to 0. 2 from 0. 4 . This is a final jobs report for president obama. I would suggest you want to step forward. This is a constructive jobs report for President Trump as well. Yes, and a little schizophrenic as you pointed out. Job growth strong, but wages revised down by. 2 . I suppose that is good for corporate profits to keep wages down, but ultimately we know that consumers and consumption drives the economy. If they dont earn enough money or their money is only growing at 2. 5 , that is a slow growth economy. I can see how markets might interpret it one way or another. The upside to payrolls kind of expected. The market leading towards it after the blowout adp report. What do you make of the softer wages figure . It is disappointing. The cyclical factors are being overwhelmed by structural issues. I think two messages here from this report. One is that this will make the fed less likely to hike in march. So reducing the probability of a march hike. Secondly, it puts more focus on structural measures to enhance wage growth in the economy. Alix still to come as we review the week on bloomberg best, exclusive interviews with the ge ceo and San Francisco fed president John Williams. , apple, facebook, sony, deutsche bank, just a few of the weeks biggest earnings reports. Next, more top business headlines. A new leader in global car sales. It is a brand that just suffered through the worst year ever. The key reason here is definitely china. Alix this is bloomberg. Alix this is bloomberg best. I am alix steel. Lets continue our global tour of the weeks top stories. In washington, d. C. , President Trump announced his First Supreme Court nominee. Last night during primetime President Trump introduced the nation to his new Supreme Court nominee. That is federal court of appeals judge neil gorsuch from colorado. Tell us what we should know about judge gorsuch. Well, he is going to be an awful lot like the man who he is going to succeed if confirmed by the senate. He is very conservative and believes in interpreting the constitution in accordance with its original word and the intent of the founders. As you say, he is parallel to the man he would be replacing, that is Justice Scalia, but there is one in respect to our audience that might be important. That is his deference to agencies. This is what is known as chevron deference. If there is a statute like the Clean Air Act and some words are not quite clear. The courts have been saying for the past 25 years or so we will defer to the agency in terms of how it reads the statute. Judge gorsuch said that doctrine should go. We should just look at the statute and decide for ourselves. Justice gorsuch would be more limiting on what agencies have the power to do than Justice Scalia was. Volkswagen has taken the crown as the worlds bestselling automaker, ending toyotas sevenyear reign. The carmaker bounced back from a scandal in which it admitted to cheating diesel omissions tests in california to sell a record 10. 3 million cars in 2016 globally. How is it possible that volkswagen, and audi and porsche bounded back from this scandal with such a strong amount of global sales . The key reason is china. The chinese markets, in china the amount of diesel cars on sale are very tiny. It is almost nonexistent. So the impact there in china from the Diesel Scandal has been very small. Where we saw demand declining in the u. S. , the impact in china with the demand in the u. S. Declining, china has proved a very stable, solid growth. Another sign that the chinese economy is holding up well. Manufacturer pmi coming up slightly stronger than expected. If you look at the uncertainty in the volatility in the market, especially for chinese exporters, the volatility of the yuan has stabilized. Then of course, all the uncertainty with donald trump as president. Keep in mind this is the Lunar New Year holiday so you have , aberrations in these numbers. Dont read too much into this other than that this is a good set of numbers, the sixth consecutive month we have been in positive territory above 50. Keep in mind they are working off excess capacity in coal and also steel, which is a longer process. So there are some improving signs in manufacturing. Apple is designing a new chip for future mac laptops that would take one more of the functionality currently handled by intel processors. It would be similar to the one already used in macbook pro to power the touch bar. Basically they will be doing more with this arm chip than they are doing already. Right now it already does some security and payments functionality with touch id. Now they will expand this, which is a lowpower mode which saves battery life. As we mentioned, arm holdings is the Technology Supplier that designs the chip, but tell us about the inroads that intel is that is making on intels turf. Intel is the commonplace chip supplier from apple to dell since other laptop and desktop computer makers, but really failed in mobile years ago with the transition to mobile chips which apple and samsung have been building for phones and tablets for half a decade. They first iphone with its own, inhouse chip came out seven years ago with the iphone 4 and the first ipad. So now apple is looking to do a little bit more with its own mac components. Indias finance minister has delivered a budget aimed at boosting consumption and investment. The biggest winners this year appear to be the rural and real estate sectors. Really trying hard to strike a balance between fiscal prudence and spending. What were the Key Takeaways . It was a clean balancing act presented in the fourth budget yesterday. A few quick highlights. One, on a macroeconomic level, the budget deficit has been at about 3 . The only difference is he has moved the year towards 2019. This focuses on farmers and small businesses. The objective of the exercise is to get more money in the hands of the consumer that can offset the negative impact of demonetization. The overall tone of the budget has been positive, and most people have reacted positively. As i heard someone say yesterday, no negative news can be deemed as good news. Ralph lauren off over 7 as the ceo calling it quits. Stefan larsson will be leaving the company after a clash with brandt with the brands founder. That was after less than two years on the job. What happened . That is to be determined. They were open after saying we need to turn around this company. We just disagree on how. The most specificity we got was that they agreed on the operations changes, but they didnt agree on the consumer facing stuff. We are not sure what that means, but to me, it means ralph lauren, the founder, wasnt ready to part ways yet. He was not ready to hand over all control of the company to somebody else who he did not agree with on the Creative Direction that it was going. In one of the tech worlds most highly anticipated initial public offerings, snapchat s Parent Company filing for an initial offering with a size of 3 billion, but that could well grow. What does snapchat financials look like . It is surprising to see how unhealthy the financials look. In 2016, their cost of revenue exceeded their revenue, and they have yet to turn a profit since they started operating in 2011. Where do all their costs come from. It is very expensive for them to run all the servers. They have to pay hefty fees to google cloud. What are some of the biggest risk factors in all of this . There are a lot of risk factors. They rely on millennials coming back to their app, and they say user growth rate will slow down over time. Another big risk factor is their data. Their metrics are not verified by third parties, and critics and a lot of advertisers say their metrics go into this black box. Alix welcome back to bloomberg best. I am alix steel. General electrics chairman and ceo has spent his career riding the wave of globalization. Recent Political Trends around the world appear to be reversing that current. This week, we sat down for an interview with john micklethwait. He shared his perspective on the state of global trade. We believe in trade. We believe in the free flow of goods. Inherently we dont think things like walls are good. So, that is maybe the macro answer. At the same time, what i would say is there is nothing wrong with President Trump wanting to add manufacturing jobs in the United States. The president of china wants to add manufacturing jobs. The president of mexico wants to add manufacturing jobs. The chancellor of germany wants to add manufacturing jobs. So how do we find ways to help exporters . That is a good thing. What about the relationship with china . Is the prospect of any trade dispute worrying you . It does. In the economic context, there is no good case to be made with the two biggest economies on earth in a trade war. That relationship, a bilateral relationship, is significantly important for the whole world. You have brexit and the possibilities of le pen. Are you confident about the future of europe . We have never looked at europe as europe. We know the difference between france and germany. We were doing awesome, in we 2014, were stopped in paris by a set of positions that basically violated brussels rules. We were sitting there has an sitting there as an American Company sucking our thumb in paris, and we had to fight our way out of paris, and we had to fight our way out of brussels, and it did not feel like the European Union at that time so we have learned to manage the paradox. We have learned to manage subtlety. Globalization, people that see globalization from 30,000 feet at a resort or at a townhouse or a think tank dont know a thing about the way globalization works. It is country by country, deal by deal. I wish it was all free trade and that other stuff but it is not where we are. Alix you can see more of john micklethwaits exclusive interview on bloomberg. Com. Coming up on bloomberg best, more on this weeks controversy over immigration. Divergent views of the hall trumps executive orders from Larry Summers and tom barrett. Plus, blackstones joe baratta sees more changes coming in a trump economy, and it is already shaping his investment strategies. The