Bloomberg casa julie hyman is with us. Julie pullback has continued and accelerated in todays session as investors are looking for more details on fiscal policy prescriptions that werent really given at that press conference. We still he is not in office yet. We will at some point presumably get more details. I wanted to look at the scorecard of where the three major averages stand since the u. S. Election. About a 5 gain for the three major averages. If you take a look at the bloomberg ive made a chart of the three majors going back to november. The dow has been in the lead consistently ever since the election. Whats interesting is the nasdaq was lagging throughout the month of december and as we got into the new year it played catchup and overtook the s p 500 in terms of its return as the nasdaq has been setting new records. He yesterday it was the three major averages to close at a record but its a different story today as we see tech stocks pullback including Companies Like apple and rbc trimming estimates ahead of the companys firstquarter results. Skyworks solutions cut to neutral from buy at goldman sachs. Sort of cautious on semiconductors and says the company could lose market share in 2017. Also in terms of movers we continue to watch the health care companies. Big drugmakers in particular pulling back after trumps comments yesterday that he would be in favor of a bidding process struckown drug price price costs for the u. S. Government. On the flipside we see the safety trade continue as well. Yields continue to move lower in the treasury market as people are buying treasuries. Buying gold as well. We also see a continuing slump. Fourth straight day of the dollar falling versus japanese yen. Market looks as though there is trepidation. Caution creeping into the markets. Mark similar story here. Even spied me to look at the stoxx 600 since trump selection. The ninth of november. 8. 6 led by up by basic resources. The only group thats declining utility. The bond proxy group thats been hit hard by the rise in body yields. What a turnaround its been for the stoxx 600 since the trouble election victory the trump election victory. Gr is your function its not working. Lets move on. Going to try once more. It does not like me. Lets talk about the ftse instead. Lower on the stoxx 600. We are a little bit low. We were higher yesterday. We had a 12 day will winning run. The record winning run. ,he record for the actual highs 10 days of highs within that 12. Thats a record as well. I looked at the stats, the top six performers in the past 12 days, all but 19 stocks on the index rose. The ftse is overboard according to the 14 day rsi as it has been since december. Will it be lucky or unlucky 13 for the ftse . Marks and spencer shares were up as much as 5. 7 . It reported its best Clothing Sales and more than five years delivering a confidence boost to this retailer which had a tumultuous year last year marred by management overhauls and plunging sales. Tesco today falling shares. They were up earlier down 1. 7 or as Quarterly Sales growth in more than five years failing to meet investors expectations or the stock did fall as much as 4 after reporting samestore sales. Pales in significance compared to the likes of William Morrison and sainsbury. 1. 7 . Will the ftse hit 13 in a row . Counting down to the close. Vonnie pretty phenomenal run. Lets check in on the bloomberg first word news. Alisa don trumps nominee to head the cia will try to convince the senate he could be objective. A confirmation hearing will be held for republican congressman mike pompeo, likely to be questioned about the president elects repeated criticism of u. S. Intelligence agencies. Senate republicans have cleared the first big hurdle in their campaign to repeal the a formal care act. To aattached a measure budget resolution that would allow them to repeal much of president obamas Health Care Legislation without any votes from republicans. Republicans have not agreed on a replacement. The u. S. Military in afghanistan says its investigation into a firefight with the taliban back in november has shown that 33 civilians were killed when troops fired on afghan homes. The probe followed claims that civilian deaths resulted in air strikes called in to support afghan and u. S. Troops targeting two senior taliban commanders. French National FrontLeader Marine Le Pen is in new york. Less than four months before the president ial election. A le pen who leads in the latest opinion polls is making a private visit to the city according to her campaign chief of staff. He could he declined to say if she would meet publicly with donald trump or anyone from his entourage. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. Vonnie thanks. Lets get back to the Affordable Care act as republicans begin to dismantle obamacare. Joining us from washington is an and kevin cirelli. What exactly did congress do last night . Kevin it was a late night into the Early Morning in the senate where republicans were able to lay the groundwork for repealing the Affordable Care act otherwise known as obamacare. What they did was enable to attach to a budget resolution. The groundwork that later on will allow them to dismantle this law. Of course it comes with several key questions about whether or not they have an alternative once they doment dismantle this law. It raises questions among moderate republicans as well as republicans were concerns about this that are up for reelection about whether or not they will be able to keep portions of this law and dismantle it without adding a new version. Mark you spoke to the trump camp about the obamacare proposals yesterday. What do they have to say . Kevin they hear the criticisms. They are carefully listening to those republicans that are concerned about repealing obamacare without a replacement could prove to have political implications in 2018. I ask this question to trumps Senior Adviser kellyanne conway. Listen to what she had to say. If he can bring along the publicsector, meaning other republicans in the house and senate, other democrats in independence, it is a healthy conversation to have. We hear from people daily, as im sure journalists that bloomberg do, that they feel crushed by the costs of the drugs they need. We should have that conversation. Kevin i can tell you that last night on capitol hill secretary of treasury nominee Steve Mnuchin has been meeting with lawmakers. A lot of conversations on the hill. Vonnie drug stocks got hit. Biotech shares as well. What are drug executives saying so far . Drug executives and the entire Pharma Industry by surprise as far as we could tell. Trump waswent down as speaking about this idea of letting the government bid on pharmaceuticals. There was a little bit of complacency possibly that Health Reform repeal and replace of obamacare was the focus for the trump administration. He came out yesterday, made big now housed pharmaceutical executives are going to have to deal with that. I think they are having these conversations giving that this was not something they expected to come off like this. Vonnie have we had Public Comments because we still dont know what this bidding process would look like whether it would be generic bidding against brand names or how that would all work. Anna theres no details on how the bidding process would work. There were some executives yesterday at the Jpmorgan Health care conference in San Francisco while trump was speaking. A lot of them took a measured approach. They want exactly sure that this is something that was 100 going to happen. Kind of given how we have seen trumps discussions going in the past. They just sort of said it sounded like a wait and see approach. They know something is likely going to change. That this issue is not going away. The American Public wants something done that they are not sure what the details will look like. We want to be part of the process to work this out. Mark just give us an idea if and when the obamacare bill is repealed, what will ultimately take its place . Evin two things this could come as soon as hours of trump getting sworn in on january 20. The repeal, the replacement, that is where things are unknown. I think republicans would like to have this relatively wrapped up by the end of january or at least within the first 100 days. Theres an intense debate going withtween conservatives people like senator rand paul or spoke with earlier this week saying he believes there should be a replacement immediately and others advocating for a more a longer approach to implement. Yesterday at the press Conference Trump said h relatively quickly. The details of this plan have not been released and that is raising uneasiness for republicans up for reelection in 2018. Vonnie he said the same day, maybe the same hour so we shall see. Thanks to anna edney and kevin kevin cirelli. Mark signs that trump trade is unraveling. Sharinge strategy his playbook next. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. Mark live from london i mark barton. President elect Donald Trumps inauguration draws closer investors assessing the sustainability of some of the most popular including a strong dollar and higher u. S. Yields. Weve seen the u. S. Tenured touches lowest level since november after joining us,. Hilip guarco he sees the tenure at 2. 7 5 at the end of the year. Thanks for joining us. Is the trump reflation trade over . Philip i think what it is is the pause we were looking to get even a month ago. Rates have moved too far sue reflationve had exuberance. I think we consolidate here and wait to see whats going to happen in terms of execution right now. Mark the big fight in recent days if you can call it that is gross on the other. What is your figure and why . Philip i dont play in that league. There are some fundamentals. Still dealing with the developed world that has too much debt. Negative demographics. We cant go back 18 years to change that. We still have important disinflation coming from right now even a stronger dollar. We think all those things put a cap on rates. I think whats happening now is this exuberance of perhaps a disruptive change and Economic Policy that not only wants to get growth growing but that can get trend growth increasing and i think thats going to be a big focus Going Forward in the first 100 days. How much do they think they can get trend growth growing higher . Vonnie . How much is healthy philip we think u. S. Trend growth is between 1. 5 to 2 . Steve mnuchin was on an interview i think here last month saying they thought they could get trend growth going up. O 3 youll have to make a lot of structural reforms. I think that causes rates to go significantly higher over five years. I think theyre a significant execution risk Going Forward. Vonnie current tenure is 2. 33 the moment. Fear of the inflation the reflation trade, are there other things playing into it such as supply and duration . Philip i think the first thing is fundamentals. We are not looking for growth to go much higher. Looking at pce inflation still below 2 . Itselfk that will impose. The question right now is if we get some major changes that look like we are going to get higher trend growth or a cyclical pop. Hich could mean stagflation those are the risks for us. Its not really that far from where we were a couple of weeks ago. We are in a wait and see attitude for that. I think 18 will be more telling. Mark philip, what should investors be buying . Philip our theme for this year defensive on rates and offensive on credit. One of the things we do know is that we will have at least trend growth slightly higher this year. Thats good in general terms for credit. That being said its going to be a bit of a bond pickers market because as we saw yesterday Certain Industries to get hit by secular changes in retail or president ial address yesterday at the press conference Certain Industries and individual stocks got hit just because of comments. When you have policy coming out in this kind of fashion i think it does have some risk. Generally we like credit take the spread, be defensive on rates. Onwe get a pop to that 3 treasuries i think we will be more buyers the defensive. Vonnie we saw brazil cut its Interest Rate today. Your constructive on brazil plus sovereign bonds. What about now . Philip brazil is a fundamental change from the last two years. Negative growth for two years. Probably going to get some growth this year. Ofs is an idiosyncratic case a country thats turned a corner. In emerging markets is going to be stock picker for us. With the pace of going over 22 thats going to be subject to political risk. For that too far away to matter. Whats good about brazil is those improving fundamentals will impose themselves and that is going to be good for credit in brazil. Guarco. Philip thank you. Mark happening right now on capitol hill information hearing for trumps defense secretary choice. Eneral james mattis general mattis is facing questions from the Senate Armed Services committee. John mccain. You can catch the hearing on the bloomberg at live go. I think right now the most important thing is that we recognize the reality of what we deal with with mr. Putin. And we recognize he is trying to break the north atlantic vonnie this is bloomberg markets. Mark breaking news from angela merkel, chancellor of germany. Of the refugee crisis. Shes also talking on brexit. She says we must use the brexit decision to bring the eu closer together. The eu must be able to make decisions faster she said. The eu Member States must stand. Also by eu decisions. She said the eu is confronting its greatest challenges of the last decade. Lets get over to julie for the latest on the markets. Julie i wanted to check on the major averages because weve been seeing the seller accelerate in the past 20 minutes or so. The nasdaq is down. The is the first nasdaqs first down day. A seven session winning streak going into today. Now announcing the steep decline. Merck, bucking the downtrend even among large drugmakers. The company said early yesterday review. Got priority were buffeted about with other drugmakers but today at least three analysts are raising ratings so that appears to be contribute in to gains in the stock. Were watching media shares as well. A lot of selling going on. Disney, cbs, and twitter are trading lower. Downgrading disney to sell from hold. Among media broadly he is not very positive at the moment. He says there is a riskier political environment post the election. He says violations are not reflecting that environment because he says theres a lot of uncertainty surrounding policies of the incoming administration. Hes downgrading cbs and downgrading twitter. Twitter also getting a double. Hammy from Moffitt Nathanson he is more confident in the cell rating. He gives five reasons including the unprecedented leadership changes and struggle to attract new users. Selling among and steelmakers as well. The steel sector is being cut to market weight from overweight at credit suisse. Analysts talking about the trump rally we have seen on hopes there would be renegotiation on steel tariffs perhaps increased state their steel tariffs into the u. S. Besays that rally can overdone and analysis suggests limited benefits from Infrastructure Spending growth. Steep selling within the steel industry. Vonnie thank you. Continuing to keep a close eye. Berdeen Asset Management negotiating a deal between 20th century fox and sky. And his outlook for the markets and and a day in the new year. A couple of currencies moving today. Cable at once with the two. 79, stronger by half a percent and the russian ruble is just above 59. Stronger by 8 10 of 1 . Wow, x1 has netflix . Hey, drop a beat. Show me orange is the new black wait, no, bloodline how about bojack, luke cage oh, dj tanner maybe show me lilyhammer stranger things, marseille, the fall in the same place as my basketball . Narcos, fearless, cooked the crown, marco polo, lost and found grace and frankie, hemlock grove, season one of. show me house of cards. Finally, you can now find all of netflix in the same place as all your other entertainment. On xfinity x1. Anything with a screen is a tv. Stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. You can even download from your x1 dvr and watch it offline. Only xfinity gives you more to stream to any screen. Download the xfinity tv app today. Vonnie shares of cs chrysler down 10 . A huge drop in the last few moments. Julie headlines from reuters saying that the epa in the u. S. Is going to accuse the company of excess diesel emissions software. According to reuters reporting. Certainly the stock is reacting. This resume a boy would be similar or at least it seems as though traders and investors would be linking it to the situation we saw with volkswagen. Reuters is reporting that the epa will accuse Fiat Chrysler of using software that allowed access these omissions in about 100,000 vehicles according to reuters. We will be following up on anything further on this developing story. We are seeing those shares react and this news coming as we get additional news of the settlement between volkswagen and the u. S. Government. Mark shares in italy also down by roughly 5 . Alisa parenti has more from our newsroom in new york. Alisa the lights have gone out a confirmation hearing for president elect trumps choice for cia director. The hearing for congressman mike pompeo was interrupted minutes after starting after the lights and a microphone went out in the room. Senator richard burr says hes been told the lights will come back on although he did not say when the hearing will resume. The u. S. Intelligence chief says he has told president elect trump he is dismayed by leaks of a classified report. The report outlined unconfirmed details t