He delivered his budget speech in Parliament Today as the u. K. Prepares to leave the european union. He raise the forecast for growth from 1. 4 to 2 . The budget deficit will be less than expected, too. Can only workforce grow over the next two decades if new immigrants arrive to replace retiring baby boomers. Thats according to a new report from the pew research center, which projects that the u. S. Working age population will go to 183 million in 2035. 6 this is bloomberg. Scarlet live from new york come on scarlet fu. And im joe weisenthal. The s pe s p five 500 down. Treasury selloff, 10 year notes falling for an eighth straight day. The fed is almost certain to pull it folder trigger on a rate hike next week. Oil prices tumbling to near twomonth lows. Nasa talks says probably wont begin until later this year. He says the administration is in preliminary discussions with congress. Alix now lets look at joe now lets look at where the number stand. Abigail we are looking at mixed trading action heading into the close. Indexw and the s p 500 trailer, the nasdaq slyly higher. The s p 500 does not reverse higher, it will be the third down day in a row, the lummis since the end of january. Just a little bit of bearishness for the s p 500 after last weeks rally. Ther whats happening with s p 500, also helping to explain why the nasdaq is slightly higher, this is the imap. This is a great way to look at the sectors within the bloomberg. Energy is the worst drag followed by utilities. , oil is down more than 5 on record supplies. That is really dragging on energy. Ratesensitive sectors, like utilities, real estate and telecom, those are being dragged on by the fact that yields are up for an eighth day in a row. Less stocks tend to look attractive to investors against the backdrop of rising yields. The biggest drag to the s p 500 are the two big oil names, exxon and chevron, down in a big way today, down more than 1. 5 . While these are the big utility drag, duke energy and dominion. High dividend yields for those utility stocks tend to look less attractive when yields are rising. Thats one of the big stories today, that yields are up for an a today in a row. Bonds slumping for eight straight days. This is the 10year yield or the past six monster. We see the big rise out of the election. Then into the sideways range. Here are those a todays. This puts the move into perspective. Sinceht be the longest 2012, but it is twice five basis points. We did far more than that last november. Us, we have a 10year yield stuck in this range, flirting with the 50day moving average. It is not clear which way this range will break, upper down. We will have to see if it goes above 2. 65 or below 2. 3 . When the fed did raise rates back in december, the 10year yield a did go down. It will be interesting to see how all this plays out. Hedge funds have decreased their exposure to equities, suggesting that some bigger firms are preparing for the ,rump bump to peter out especially as the fed prepares to raise rates next week possibly. We have loright, hein oh, deputy global cio at state street global advisors. Great to have you on set. After the election, we saw the risky assets. It seems as though institutions had to scramble to catch up with it, that they were all sides of that move and they had to compensate. From your perspective, where do things stand today, how those sames in same institutions are situated . You heard a lot of the trump speech last week around the reflation rates continuing, deregulation, lots of things that will be constructive. At since we have had such fast run already, this is a bit of a pause, particularly as we digest the next fed move. We talk about the reflation trade, there is a sense that it will aid to inflation. How do you distinguish between the two . Lori were not concerned about inflation. Range of 2 ,in the which is what the fed and the ecb have been looking for. Some inflation is a good thing. To your point, the problem is what if it runs away . We still dont have huge final demand. Even though we have unemployment in the u. S. Especially low, that is not true around the world. So we dont see a lot of signs that we will have right away inflation. And it would be good for stocks. From the Portfolio Allocation perspective, we have seen treasuries have not done very well. Theyve done badly since the election. Days, they have got hit again. Hasnt acted as much of a hedge on down days in risk assets. So traditional portfolio construction not performing that well. Is this a temporary blip in the longterm . Staying away been from sovereigns and treasuries for a while because there isnt any value there. And especially if you see trends start, inflation stocks to pick up at all, those would get the heart get hit the hardest. Inflation protection, i want to point your attention to this chart. It as my deep dive earlier in the week. A ghost or the end of february. It tracks data from the cftc. Determine s indicate longterm asset managers. They are long. Are shortterm positions. It goes in different directions. Joe speculators have been doing very well lately, especially going into this fed decision next week. The belief that not only is there going to be a fed hike in march, but possibly several more down the road. How would you expect the market to trade given what we have heard from the fed lately . Lori a lot of it will be dependent upon what they say is the next move. If they come out and talk about highly about being highly datadependent and getting ahead of the curve, you could see a bit of a rally because people will start to see that it is not rampant, runaway inflation or a fed that will put that abbas on growth, so to speak. Abosh on growth, so to speak. Jeff says he sees the fed going back to old school. Where glad youre here because it is also International Womens day. I wanted to bring up some proprietary data. It is the Bloomberg Financial services generate quality index. Track the generate quality space. The white line here is the Bloomberg FinancialServices Quality equality index. Over two years, it has outperformed the msci allworld country index. My question here is, with deregulation coming for the thencial industry, with reflation trade gathering momentum, will Financial Companies that have more to look forward to in terms of Growth Prospects put aside their gender initiatives because writer days are ahead for the industry overall . Lori we hope not. Female representation in all corporations is pitiful. Is lessook at ceos, it than 5 . If you look at boards, it is less than 20 . Those numbers are not good enough. What you find is companies that have more that more gender diversity perform better. A have better return on equity. They are better managed from a risk standpoint. And we hope finally Corporate America has opened up to that. Scarlet you guys are doing that. Ing about youre going to companies that you have investment in and talking to them and say you have to do something about putting more women on boards. Lori we are indeed. 40 does not have a single men on their board. Fewer than 62 have 50 or more female representation. We will 15 or more female representation. Speakingwe have outside the white house on drug pricing. Theble to meet with president s of the black colleges and universities. I said to them, the most important thing for those colleges and universities right now, is that you need funding. They need more funding. He said he would work on that. Our next thing, again, we presented the proposal to him and secretary price. And hopefully, we will hear from them very shortly. Thank you. The meetingpart of was about the currently high cost of prescription drugs that is really hammering people. Our pharmaceutical industry does a couple of good things. They create lifesaving and life extending drugs and drugs that relieve pain, but the price is starting to kill us, we just cannot afford it. What we are proposing, something we have been working on a long time, is to put the medicare program, which is the biggest purchaser of prescription drugs, negotiate price discounts. President trump gets it. On the issue of getting a good price. Basically, what the medicare itm does is it advise buys wholesale but pays retail. Thats not the way you run a successful business or a successful costsaving program. We presented our proposal and the president seemed first of all, number one, verio top of it. Didalked about what he about what he did with negotiation and saved hundreds of millions of dollars for the american taxpayer. Third, he really expressed concerned about the lives of people who need these lifesaving drugs that are every day put in this terrible choice where they have to risk a lost they cant afford, a child who needs and epipen or pace of the the cap afford. Or ais not a choice drug they cant afford. This is not a choice. I was happy to be at the table to talk about this drug pricing issue. As president of a hospital and a practicing internist, this is the most important issue facing iarc patience. Im thrilled this issue is getting some traction. Thank you. When you talked to the president today, what were the issues what did he say about [indiscernible] when you speak about Voter Suppression and economics. There is also the question about to be ok youre talking about health and the high price of health. Cbo has yet to give an official score on trumpcare. Much intot get too the aca. The subject really was for prescription drugs. To the hbcus, i the thing that i told the president s of the hbcus when im with them, to ask him about the money. Because hbcus need money. Like you said, they never asked. So i asked. With regard to Voter Suppression, he seemed to get it. They seemed to understand that you cannot have Research Done on voting in the United States without dealing with Voter Suppression. I gave him a letter that we will give to you all, two letters, that we have sent to Vice President pence and to the president about that issue and it lays it all out. What was the other issue . We didnt get to the cbo. Me, buthe agreed with you cannot scarlet you have been listening to an impromptu News Conference with Elijah Cummings and Peter Hospital and the president of Johns Hopkins hospital. They gave drug pricing bill to president trump. Joe after that initial republican bill the other night, trump said there would be two or three more phases of health care reform. We will also do stuff on state lines and, obviously, the administration has more to come on the front. Scarlet so the process has begun. Trump, according to cummings, was enthusiastic about targeting drug prices. Lori, we were talking about state streets campaign to add more women to their boards. Youve done this in a visible way, by putting a statue up in wall street. Lori the most visible engagement we have with those companies. We have a statue of a little girl, a very defiant posture, in opposition to or the pending on how you look at it, the iconic bull down on wall street. We have this installation for the next 30 days. We are hoping perhaps longer. Scarlet hopefully, that is something that sticks around. Thank you so much for joining us. Long will it be before we see a revise nafta deal . We asked wilbur ross on that. We will get his perspective from new york. This is bloomberg. Joe part of you as commerce secretary wilbur rosss job is to put together a trade policy for a president who has made it there that he is with the status quo. Discussed a nafta and why the secretary of so eager to target the trade deficit. Prenafta, we regularly had a trade surplus with mexico. Now we have a substantial trade deficit with mexico. So its not true that trade nafta and postnafta others no change. Theres a big change. Goals is tof your reduce if not eliminate that trade deficit with mexico. Absolutely. We think there is no logical reason why one country, namely the u. S. , needs to have a trade deficit that roughly those the combined trade surplus of the rest of the world. Its not our fate in life that we have to absorb all the net exports from everyone else. David to get those concessions out of mexico, there will have to be some threats i dont think that is too strong a word about tariffs. Could that really disrupt trade overall with mexico . What does that mean for General Motors . First of all, i am not a very threatening figure. [laughter] so i dont know about the word threat. But the reality is the mexicans know, the canadians know, Everybody Knows times are different. We are going to have new trade relations with people. And they all know they will have to make concessions. The only question is whats the magnitude and whats the form of the concessions . Told the ive president repeatedly that he has made my job easier by softening up the adverse parties. What could be better than going into a negotiation where the fellow on the other side knows he has to make concessions . David what is the time horizon now . When do you expect negotiations to begin and how quickly would you like to have them resolved . I would like to get the results tomorrow. [laughter] but thats not the way the world works. We are now in the early stages of the tpa process, the trade promotion authority, the socalled fasttrack. Nature,cess, by its own has a couple of months starting point before anything any very serious happens. So youre talking probably the latter part of this year before real negotiations get underway. Prior you know from your role, a successful investor, business does not like uncertainty. When they make investment decisions, they like to know what is happening. There is a lot of urgency to get this thing resolved, to know what we are dealing with. They dont have any more sense of urgency than i do. You are well aware that the president has a welldocumented sense of urgency as well. David so we are going to get this says get this done as quickly as we can. Rules of origin, environmental restrictions, there have been a list of things people have suggested should be taken a look at. We are roughly 20 chapters to the original nafta and there are several chapters that need to be added because of the Digital Economy and other things that have developed subsequently. So the marriott points of discussion that will come. Which ones will bear the most fruit . To discuss. Remature but there is a lot to be dealt with. That was u. S. Commerce secretary wilbur ross with david westin earlier today. And a quick programming note Francine Lacqua has an exclusive interview with j. P. Morgan chase Ceo Jamie Dimon at 7 45 a. M. Eastern tomorrow. The conversation will focus on Donald Trumps first hundred days. This is bloomberg. Hey shout out to bloomberg other day when he hosted his webcast and included this line. This tracks the number of mentions of the word reflationarys is deflation. Deflation. N versus early 2015, that was the heyday of deflation mentioned. Of late, since the u. S. Election, reflation has been moving up. The fed may go old school and raise rates sequentially. Joe pretty remarkable. The white line has not been above the orange line since 2008. Why have stocks been rising . Maybe the answer is super simple. Because earnings have been better. The white line looks at the city global earnings revision index. It has hit its highest level recently. All around the world, more and more companies are advising their earnings expectation higher. The earnings are good. Scarlet its pretty fundamental. Lets look at the market close as we head toward that point. You can see the dow losing 73 points. We have been up to them we have been down. Right now, we are mixed. From new york, this is bloomberg. Scarlet we are moments away from the closing bell. The s p 500 set for Third Straight loss. Big story was yields on the 10 year getting pushed up after jobs data bolstered the outlook next week. Im scarlet fu. Joe and i am joe weisenthal. If you are tuning in live on twitter we want to welcome you to our closing bell coverage. We begin with our market minutes. We should make clear when you talk about the blockbuster jobs data it was a private payroll. Joe has a sort of shaky connection. Nonetheless, if you are excited about fridays report and the good data come exciting number. Scarlet we will get to the data on friday in just a minute. Here is how today is about to close. We were up, down, a bit of everything. You are looking at the dow off by almost 70 points. Straight dayhird of decline for both the dow and s p. When you look at the Industry Groups and how they perform im going to pull it up on the bloomberg. At the end of the day were talking about four sectors higher versus seven lower. But a lot moving by not much. Only three sectors moved by more than 1 . Utilities, real estate where the common trust. You see energy getting clobbered. Xle following the most in what the six months. Those are some of the big decliners. Marathon among the worst performers. Lets take a look at the Government Bond market your scarlet bond market. People getting hyped for this fridays report. Yields are up. 2. 08. Ear yields up to highest since around 2011. 10 year yield creeping out near the top of a range that has been at 2. 55 everywhere. Lets look at a longer chart of fiveyear yield. 2011ave to go back to basically until you see levels like this. And expectation not just of a nearterm hike but signifying a series of hikes. Comes after the signal that he thinks the fed might go back to his old School Methodology of raising rates sequentially at every meeting. That is how it used to be done once upon a time before the financial crisis. The jobs report spark a boost in the dollar. A leg up around 8 00 a. M. New york time after data showed payroll increase by almost 300,000. I also included the sterling pound. Falling to a sevenweek low. The 2017 growth forecast was resigned was revised up to two point to two points and to 2 . The pound is the worstperforming currency so far this year, down 1. 4 . Joe now lets look at commodities. There was a lot of action today and it was very ugly. Here we are looking at a oneday chart of oil getting absolutely clobbered, down 5