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tv   Whatd You Miss  Bloomberg  March 2, 2017 3:30pm-5:01pm EST

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him to resign or recuse himself over conversations with the russian envoy. seems to contradict his sworn statements to congress during his confirmation hearings. reporters asked the president during his tour of the u.s. is gerald ford. >> [indiscernible] president trump: i don't think so at all. >> when did you learn he spoke to the russian ambassador? president trump: i wasn't aware at all. >> do you think he should of spoken truthfully? president trump: he probably did. democrats are demanding the attorney general resign over the contact while some republicans say sessions should step aside from a federal investigation into russian interference in the election. coming up in about 30 minutes, attorney general jeff sessions will be making a statement from the justice department. we will bring you his remarks
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live on bloomberg television and radio. the threat to u.s. airports from terror groups such as al qaeda an islamic state is expected to grow because of instability in parts of the middle east and asia. speaking at an aviation summit in washington, former deputy director of the cia mike morrell says the focus on fighting islamic state has allowed al qaeda and its offshoots to "rebound" in countries like yemen, pakistan, and afghanistan. morrell says that as islamic state loses territory in syria and iraq, tens of thousands of its fighters who poured in from other countries will leave comments and some will try to infiltrate the united states. egypt's top appeals court has acquitted former president hosni mubarak on charges of killing protesters during the 2011 uprising that ended his nearly three-decade rain. ministerhis interior were sentenced to life in prison
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in 2012. but another court overturned the verdict two years later. the 88-year-old ailing former leader lives in a cairo military hospital, where he served a three-year sentence in a separate corruption case. former president barack obama has been named the 2017 winner of the john f. kennedy profile in courage award. the jfk library foundation announced today that mr. obama was honored for "his enduring commitment to democratic ideals and elevating the standard of political courage in a new century." kennedy's daughter caroline and her son will present the former with the award in boston in may. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪
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from bloomberg world headquarters in new york, i'm scarlet fu. joe: and i'm joe weisenthal. we are 30 minutes from the close of trading in the u.s. scarlet: u.s. stocks pulling back from record highs. joe: the question is, what a miss?- what'd you scarlet: warm welcome on wall street for snap. questions mount -- president trump says he has total confidence in attorney general jeff sessions, and democrats step up their calls for sessions to resign. time, the0 minutes attorney general lee making a statement from the justice department. bloomberg television and bloomberg radio will carry his remarks live. skeptic at the fed at changing her jim. fed'srainard, one of the biggest critics of global expansion, signaling the u.s.
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may be strong enough to withstand a rate hike soon. now let's look at where the major averages stand as we head towards the close. abigail doolittle is standing by. after yesterday's historic record-breaking rally for the major averages in the 500, we have the dow, s&p and nasdaq for the worst decline since the end of january. some might say that is a bit more of a pause. some might also say what is next for u.s. stocks. s this a sign of a top? that may come to what is behind this rally. there is talk about a trump trade but others say it is a strong economy. of,rding to jonathan bell there was a. golub,ding to jonathan there was a period of time when we were in and an interception. in the third quarter of last your before trump was elected and in the fourth quarter, we
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saw a earnings started to grow once again on a year-over-year basis. at the end of the day, stocks trade on the corporate profit outlook so perhaps this is a stronger reason to see white stocks are trading higher and it may suggest that even if we have to clients today, perhaps records will -- if we have to clients today, perhaps records will continue. snap absolutely surging today as the company went public, defying the odds and away. surge in shares of snap. the company has a $29 billion market cap. there is a lot of skeptics out there. there is 2 sell rating, one neutral. daily user growth, they have only 115 million users. the reason i say "only," facebook has a billion. plus revenue growth. tremendous growth. it is really a matter of the company having to execute.
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that according to bloomberg intelligence's paul sweeney. when we go into the bloomberg 6424, theseg hbtv are the other notable mega ipos. another bloomberg intelligence analyst has taken a look at a number of the very, very large ipos in recent times, and in 260% sincecebook, up it went public. in pink is twitter, which is down 39%. the big difference, clearly the fundamentals. facebook is growing revenue this year. there is a 6% revenue decline expected for twitter. he is saying that after the initial height around one of the big ipos, it comes down the fundamentals. interesting to see how it plays out for snap. joe: thanks, abigail what'd you miss? voices support
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for attorney general jeff sessions in response to a question he was asked aboard a navy aircraft carrier in virginia. >> mr. president would you still have confidence in the attorney general? president trump: total. joe: democratic leaders are calling for the resignation of the attorney general following allegations he lied during confirmation hearings about conversations with russia's ambassador to the u.s. we want to remind you that sessions will hold a news conference today at 4:00 p.m. and we will be bringing you those comments. here with the latest is kevin cirilli in washington. yesterday it seemed like the white house was having a good day and all these pundits talking about how presidential trump was at his speech, resetting everything. and today it felt like ok, we're back to the same old new cycle with this white house. what is the latest with the story? kevin: attorney general jeff sessions will give an address at 4:00 at the justice department here in washington, d.c., where he will look to put behind him these allegations that he lied
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under oath during his senate confirmation testimony hearing when he said under oath that he had no direct contact with russians, to his knowledge, that he could remember. of course, there are these reports following that testimony that surfaced last night where he did communicate with the russians, with the russian ambassador in particular. unitedow democrats are in their efforts to try to get him to resign and not only recuse himself from any type of doj investigation into this administration, but republicans are divided. i want to read from you a tweet from house oversight committee chairman jason jacobs, who said , who said,haffetz "attorney general sessions should clarify his testimony and recuse himself." that differs from house speaker paul ryan, who is standing by jeff sessions. let's see what he had to say at a press conference earlier today. rep. ryan: should he recuse
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himself? i think he answered that question this morning. if he himself is the subject of an investigation, of course he would. if he is not, i don't see any purpose or reason for doing this. earlierresident trump today also standing by jeff sessions. clearly, house speaker paul ryan doing the same. if this scandal is to continue, it will be because of the division within the republican party about whether or not he should recuse himself. democrats, of course, united on this front, with senator chuck schumer, democrat from new york, speaking earlier today to reporters also on capitol hill. here is what he had to say. there cannot be even a scintilla of doubt about the impartiality and fairness of the attorney general, the top law enforcement official of the land. clear attorneyis
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general sessions does not meet that test. because the department of justice should be above reproach, for the good of the country, attorney general sessions should resign. kevin: so another day, another bad headline with this administration's relationships with russia. scarlet: we should mention as well, kevin, since chuck schumer was outspoken in our jeff sessions needs to resign, we have a statement from new york attorney general eric schneiderman. he says as well that jeff sessions appeared to have lied under oath and that in and of itself is disqualifying him and therefore, he is looking for jeff sessions to immediately resign. for the good of the country, air schneiderman says, jeff sessions must immediately resign. i want to go back to the point about how republicans are divided. of those who are critical of jeff sessions, who are they? how much god we trust have within congress -- how much gravitas do they have within
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congress? kevin: it is people like senator john mccain, troubled believe most outspoken against this administration, as well as house oversight committee chairman jason chaffetz. he is walking a tight political tightrope with he in the majority party in the house has to present himself as someone who can be impartial to the administration. he was at the white house several weeks ago and he met privately with president trump. there was no readout of that meeting. it will be interesting to see just where he falls on this particular issue, because as we all know, the four jeff sessions became the attorney general, he was -- before jeff sessions became the attorney general, he was one of the most highest ranking members in the senate and he was the member of "the club," if you will.
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these allegations very damning, to say the least, especially with criticism from the same senators who were his colleagues for so long. scarlet: excellent perspective. kevin, chief washington correspondent. kevin will be joining us in a half-hour's time because we will be awaiting jeff sessions' remarks when he makes them at 4:00 p.m. eastern time from the justice department. you can watch it from your bloomberg on tv go. joe: and coming up, it may seem obvious based on implied probability. there is a 90% chance that the fed is going to raise rates this month by some measures. janet yellen walk back market expectations tomorrow. we will be waiting on the speech and we are going to discuss that next. this is bloomberg. ♪
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joe: it is time for a look at the biggest business stories in the news right now. caterpillar shares falling to the biggest one-they dropped since last june after the construction and mining equipment giant confirmed on enforcement officials had executed a search warrant. the department of justice says the irs, fdic, and commerce department were involved in the searches. caterpillar says it is cooperating. psa is said to be closing in on a deal to acquire general unit, according to people who are familiar with the matter who say an agreement could be on the table next week. and snap's evan spiegel and bobby murphy added $1.5 billion to their fortunes this morning after shares of the mobile app opened at $24 apiece, 41% above the listing price. the ipo tested investors'
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appetite for an investment popular with people under 30. shares difficulty a market valuation of about $29 billion. and that is your bloomberg "business flash." scarlet: what'd you miss? 90%-plus, the probability that the federal raise rates march 15. you have day care janet yellen giving an economic outlook speech in chicago tomorrow, and investors will be looking for any kind of update on progress towards the fed's dual mandate. joining us is the head of economics at renaissance macro research. i could hardly believe it that it is about 90% for a rate hike on march 15. as joe pointed out, if you look over here, 18% odds of another rate hike on top of that in may. is this what the fed wanted to communicate, what did investors take things a little bit further? >> well, i mean, they wanted to
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communicate it because they have communicated it. at this point, you know, those of us who were caught offside, on theevery economist side of consensus, i think at this point the most dovish outcome we can expect is that they take a pass in march and talk about upside risk and send a strong signal for make it we will see how janet yellen response. this week we basically had the desert before the main course. my sense was that the main course would be janet yellen. but dudley and brainerd basically put the nail in the coffin. both of them tend to lean on the side of monetary accommodation, all things being equal. joe: we have some commentary from brainerd. >> we're closing in on full employment. inflation is moving gradually toward our target. foreign growth is on more solid footing. and risks to the outlook are as
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close to balanced as they have been for some time. all told, it will likely be appropriate soon to remove additional accommodations, continuing on a gradual path. joe: so here is my question -- why? what happened in the last week where march was a possibility to probably not to everyone coming out and saying, hey, take more seriously? what changed? neil: i think clearly it is that bottom line financial traditions have eased. you could make a case that they think the easing of financial conditions are from what is happening in the economy. clearly we are getting a drumbeat of news every other day that will force investors to walk back perceptions of what is possible on the physical side. think this is about using a financial conditions, not only in the u.s., but globally. if you look at emerging-market stocks, they generally done well during this period, so that mitigates some of the risks around the global economy.
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the dollar has flattened out. that could signal that neutral rates are somewhat higher. that is something that brainerd cares about. i think the easing of financial condition has been elevated in terms of how they order importance. clearly this is an about the economic data releases. it wasn't as if the march meeting wasn't live. a strong jobs number a week from now could easily have kicked the scales. -- tipped the scales. scarlet: if you go inside the bloomberg here, the fed's dual mandate is next employment and controlling inflation. they put a 2% target here. core pce at 1.7%. u3 is at 4.8%. pretty steady around these levels the past year. we said last year when the fed was pretty cautious about moving ahead with the rate increase that there may have been a third unofficial mandate, which was international development, international conditions.
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does that still exist, do you think? neil: i mean, clearly it does. the global economy strengthened significantly. it is probably at its strong's point now that it has been since 2014. remember this time last your we were talking about manufacturing activity contracting globally. it is expanding robustly now. i mean clearly, the global economy matters a lot more and they're talking about risks diminishing from the global economy. risk are diminishing, then you can make a case for another hike. joe: is there a trump trade or is it a rally on the fundamentals and the trump trade something the media invented? neil: there are plenty of people on the south side of consensus to buy into it, too. i don't really buy it. it has been in place since summer last year. scarlet: didn't call it the trump trade back then.
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neil: well, no. we had reflation is a base effect in some respects, and stronger global growth because we had easing of policy globally and with the lack putting pressure on gdp. front end in on the of a cyclical turn in the global economy. it is hard to determine how much of this is cyclical and how much of this is fiscal. attitudes about potential fiscal action later this year are getting clawed back. i go to client meetings all the time and people are more negative every day about what is possible on the physical side. and yet despite that, with the markets holding on the overwhelming majority of the moves since the election, no, i tend to think this is a cyclical story, not a political one. joe: ro quickly come i want to go into the terminal. i have a chart of global manufacturing pmi. you can see it surging since last summer. is there a global economic cycle
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or just a series of independent isolated economies that at this moment happened to be all randomly up at the same time? neil: welcome i think the manufacturing sector tends to be more cyclically oriented and there is more synchronization in manufacturing, so you are seeing that. again, it is important to remember that we had a commodity shock in the middle 2014. commodity shocks tend to impact all economies of the same time, because they are basically global shocks, and that drove prices down, tighten financial conditions, and we can manufacturing around the world. -- weakened manufacturing around the world. scarlet: speaking of commodities, we brought you back in part to take a victory lap because of your call on lumber. neil: well, i don't think you should be giving me much credit. i appreciate that you are, but i will point out to your viewers that i blew the call this week. i told my clients it would be
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prudent to go long on the front end of the money market curve this week bu because i thought yellen would be more dovish. truly i was wrong. for everyone: i get like i probably get 2 wrong. the good news is that is probably better than the consensus, and in financial markets we great on a curve. joe: one right for every 2 wrong, not bad. we mentioned, venture janet yellen at the executive club of 1:00 p.m.morrow at eastern. we will bring you those comments in full right here on bloomberg television. from new york, this is bloomberg. ♪
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a like bankt is shot rightnow of the department of justice, where attorney general jeff sessions will soon be making a statement at the top of the hour. we will bring you those comments when they happen on bloomberg television and radio. you can access it on your bloomberg at livego. joe: i want to take a deep dive
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into the bloomberg. i'm looking at the 1-8 isharemance of the performance allocation. what is interesting is the white bar you see at the right end of the chart. that is the performance of the etf. the reason it is interesting is this etf is a diversified sort of portfolio allocation that has a mixture of stocks and bonds. having its worst day since the beginning of the year. you have to go back to december for a worse day for a when you look at the overall measure of the equity losses, you are like, it is not really that bad. nothing compared to the gain we saw yesterday. today's characterizes everything is selling off -- stocks, treasuries, commodities, silver, gold, oil, emerging markets, corporate bonds. it is all down, and we are having a diversified portfolio, it is the worst day of the year. scarlet: contest yesterday when the etf went up.
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market closes next. take a look at the major averages pulling back from yesterday's record highs. this is bloomberg. ♪
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scarlet: we are moments away from the closing bell.
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what did you miss? the day after the biggest advance of the year. i am scarlet fu. joe: i am joe weisenthal. if you are tuning in life on twitter, we want to welcome you to our closing bell coverage. scarlet: in moments, we will take you live to the department of justice where attorney general jeff sessions is preparing to make a statement any moment now. we will bring you those comments live on bloomberg television and radio. sessions, under fire for conversations he says he never had with russia. first, market minutes. u.s. stocks giving back a lot of advances from yesterday. yesterday, the biggest advance of the year. today, steep decline. we are still accustomed to
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minute moves.e -- near session lows. joe: pretty remarkable. we had those huge gains yesterday, now, give back. we will talk about, in the market minutes, that everything felt off -- selloff. scarlet: one thing that did not selloff was not. it made a trading debut today. it opened at 24. closing around 24 and change. it got as high as 26.05. a pretty good day. in terms of the other movers, count the early -- caterpillar. the biggest drop in months. illinois did not give any details on why this was taking place. monster rising the most in two years, beating analysts estimates.
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earningsreporting beating as well. march earlyut this reporting on the table. concerns of more hawkishness. 10 year yield up. gon yields go up, bonds down. we are now at the highest level since june 2009. you have to squint. you can really see, people are starting to take into account the possibility of more height in the near term. scarlet: absolutely. really pushing the odds of a rate increase in march much higher. in terms of currencies, if we are looking at a rate increase sooner than later, that is boosting the dollar. the canadian dollar is weaker. canada's gdp report blew past
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estimates. on april 12, they will meet next. perhaps they have the room to move hawkish. i included the aussie dollar as well. , rathere surplus shrank than expanded. expanding forund a third straight -- decline for a third straight day. joe: let's look at commodities. the big loser, silver. silver has characteristics of an industrial metal and russia's metal, likecious gold. with everything selling off, it is both of them combined, down nearly 4%. platinum, similar characteristics. 3%. crude. we always come here and it is 53. it is still 53. scarlet: in the range.
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on the supply.f an ugly day for crude. scarlet: let's go into the bloomberg. i wanted to pull up cosco. in reported fiscal earnings. what is notable is investors have been driving cautious up. 11% so far for this year. this is the relative strength index. the shares have been in the overbought territory, about the red line, for almost one month. of course, you can stay overbought for a long time before anything happens. you wonder to what extent the earnings numbers will change this trajectory. whether we will see a little bit of give back. that is an indication management could raise membership fees this year. cosco does not make money on
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margins. historically, we know cosco raises membership fees every five to six years. the last increase was january 2012. snapchat.t to look at here are two lines on your screen. the white line is the bloomberg ipo index. that is like the rolling past 12 months. the blue line is just the s&p justthe same timeframe, up over 20%. a really speaks to how well speculative ipo stocks have been doing. if you have been thinking why there is a lot of enthusiasm for snapchat, overall, recently ipos have been done really well. it looks like a pretty good time for a company to go public. just wanted to bring your attention to the fact that we are awaiting jeff sessions, the turning general -- attorney
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general, expected to speak at 4:00 p.m. sean spicer saying that president trump has not spoken to jeff sessions in the past two days. earlier today when a reporter asked the president if he had confidence in the attorney general, he said "totally, total confidence t." sean spicer says the president has not spoken with attorney general sessions in the past two days. we will bring you to the department of justice wendy press conference begins. planehere we have, his arriving. the president expected to declare at any moment now. clearly, a dramatic moment at the white house. to somebviously, back of the old stuff.
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again, a headline -- what do you see there? scarlet: on bloomberg, a headline saying that jeff sessions will recuse himself. this is a headline, "jeff sessions to recuse himself." he is expected to give a press conference at four clock p.m., a little bit delayed now. secretary sean spicer said the president has not spoken to jeff sessions in the past two days. now we have a headline, recuse himself or among russian questions." lots of investigation into the trump administration whether there was improper contact himsr with russian officials. joe: it is one issue that does not seem to be going away with this administration. a lot of other politicians coming out today, either calling
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for sessions to recuse himself or resign. this is not a story going away. scarlet: not a story going away. we need to bring in kevin cirilli in washington right now. kevin, the headline, he would recuse himself from any kind of investigation when it comes to trump administration officials speaking to russia. am i reading that correctly? kevin: yes. it looks as though this is mr. is taking the advice of jason chaffetz, -- jason who tweeted earlier today that this is what he would like to happen. president trump saying that he had total confidence in jeff sessions, despite these reports that he communicated with the russian ambassador, despite think he had no medication with russian officials during his senate confirmation testimony. the president supporting
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him. it looks like we are moments away. here he is, right now. scarlet: let's go straight to him. a.g. sessions: jody, thank you for being with me. let me share a few thoughts. first, about the comment that i that hashe committee been said to be incorrect and false, let me be clear, i never had meetings with russian operatives or russian intermediaries about the trump campaign. "continuingt i was exchange of information during the campaign between trump surrogates and intermediaries for the russian government" is
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totally false. that is the question that senator franken askedthat is tht senator franken asked me at the hearing. that is what got my attention. as he noted, it was breaking news. that is the question that i responded to. i did not respond by referring to the two meetings. one, very brief after a speech, and one with one of my senior staffers, professional staffers with the russian ambassador in washington. no such things work discussed. in my reply to the question of senator franken -- my reply to the question of senator franken was honest and correct, as i understood it at the time. i appreciate that some have taken the view that this was a false comment. that was not my intent. that is not correct. i will write the judiciary
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committee soon, today or tomorrow, to explain the testimony for the record. secondly, at my confirmation hearing, i promised that i would do this. matter arose, where i believe my impartiality might reasonably be questioned, i would consult with the department ethics officials regarding the most appropriate way to proceed. that is what i told him at the confirmation hearing -- told them at the confirmation hearing. three weeks today, a lot has been happening in this three-week period. i wish i had more of my staff on board, but we are still waiting on confirmation for them. much has been done, much needs to be done. i did and have done as i promised. i have met with ingrid -- senior
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officials, shortly after arriving here. we evaluate the rules of ethics and recusal. i have considered the issues at stake. in fact, on monday this week, we and came to a final decision on this question. meetingy, we set that today. finalwe planned to have a discussion on handling. i asked for a candid and honest opinion about what i should do about certain investigations. my staff recommended recusal. i hadaid that since involvement with the campaign, i should not be involved in any campaign investigation. i have studied rules and considered there, and evaluation. i believe those recommendations
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are right and just. therefore, i have recuse myself in the matters that deal with the trump campaign. the exact thing which of that recusal is in the press release that we will get to you. i have said this. "i now have decided to recuse myself from any existing or future investigations of any toter relating in any matter the campaign of the president for united states." i went on to say, "this announcement should not be interpreted as announcement of any investigation or suggestive of this goal of any such investigation because we at the department of justice raises come from -- confirming or denying any investigation." in the end, i have followed the right procedure, just as i
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promised the committee i would, just as i believe any good attorney general should do. and a proper decision, i believe, has been reached. i thank you for the opportunity to make those comments, and would be pleased to take a few questions. just to clear up any confusion over this, can you discuss the september 8 meeting, who of your staff was there? a.g. sessions: the russian ambassador apparently sent a representative to my office and requested a meeting, as many investors were doing. we set up a time, as we normally did and we met with him. two of my senior staffers were there. and, maybe a younger staff or too.
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they are both retired army colonel's, not politicians. we listened to the ambassador and what his concerns might be. reporter: what questio? a.g. sessions: normal things. i don't remember a lot of it. i remember i said i went to russia with a church group in 1991. he said he was not a believer himself, but he was happy to church people go there. i believe he was pretty much of an old-style, soviet type, ambassador. we talked a little bit about terrorism, as i recall. somehow be subject of ukraine came up. i had the ukrainian ambassador in my office the day before, to listen to him. russia had done nothing that was wrong in any area.
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everyone else was wrong with regard to ukraine. it got to be a little bit of a testy conversation at that point. it wrapped up. he said something about, inviting me to have lunch. i did not accept that and that never occurred. reporter: [indiscernible] i do not recall. most of these ambassadors are pretty gossipy. this was during the campaign season. i do not recall any specific little discussion. recall meetingu with ambassador kislyak any other time? a.g. sessions: i do not remember any. it is possible. i do not recall having met him before. reporter: [indiscernible]
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i thinksions: ambassadors are always out, trying to find out things and advance their agenda. ambassadors i have met with, they would lay out the laidfor ukraine, poland out his case, lithuania, hung .ry, canada, japan i met with all of those ambassadors over the years. reporter: did you consult with the white house about your decision? to follow up on the last question, in hindsight, to think it is acquaintance that the russians asked you for a meeting or were you targeted because it was at the height of the russian interference? at the same time, present -- then candidate trump was giving
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an interview to rt. a.g. sessions: i do not recall any connection to that. we set of thewhen meeting, we knew what was going on in the world at the time. i cannot speak to what the ambassador had in his mind at the time. reporter: have you met with any of the russian officials? a.g. sessions: i do not believe so. we meet with a lot of people. reporter: separate from those two meetings you discussed with the ambassador -- a.g. sessions: i do not think so. reporter: the white house press secretary and present himself said today that you should not recuse himself from the investigation. a.g. sessions: i did share with the white house counsel, or my
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staff did, that i planned to recuse myself this afternoon. know the, they do not rules, the ethics rules. most people don't. when you evaluate the rules, i feel like i should not be involved investigating a campaign that i had a role in. one more question and we will wrap it up. reporter: two questions, if i may. you were considering recusal before today, correct? when you answered senator franken's question, were you not considering the meeting with the ambassador? a.g. sessions: i was taken aback a little bit by this new oformation and allegation surrogate. . was called a surrogate
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that is what i focused my answer on. in retrospect, i should have meetd down and said i did ae rubble -- russian official couple of times. that would be the ambassador. thank you. take care. scarlet: that was jeff sessions, the attorney general, wrapping up his press conference. he is accusing himself from any investigation or any matter relating to the trump campaign. it turns out that he met with duringsian ambassador the campaign. for more analysis, we want to bring in kevin cirilli. i found the most interesting that jeffat q and a sessions told the white house of his intent to recuse, even though the white house indicated that they did not believe you should do so. kevin: clearly that the ministration hearing the calls from within their own party, including those led by house
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oversight committee chairman jason chaffetz for the attorney general to recuse themselves not only for the existing investigations -- that was a interesting piece of nuance when he said any existing pieces of butnvestigation -- also any future investigations. pushing back against any future political rival for this administration. senator al franken, the democrat that engage in that political exchange with him at the senate confirmation hearing. he said at this recent press conference that he interpreted said of franken's question to mean the on just the word is that he asked about and he stood by himself, but clearly, attorney general sessions viewing himself as too much of a political distraction.
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this and mistress and moving swiftly and quickly to try to put this behind them. the question now becomes who will lead any future investigations and when will that be announced. scarlet: we are looking at at airnt trump deplaning force base andrews, returning home. joe: break it down. what is the gap between what he did do and what he said at the senate confirmation hearing? kevin: there is no question that this is attorney general sessions viewing himself as too much of a political distraction and the pressure intensifying inside washington, in the beltway on this and ministration to provide some sort of answer regarding what exactly happened during the presidential campaign about that a legend communication with russia.
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for anyone who thought that former president barack obama, the report regarding the meddling with russia in the electronics of the democratic national committee, that this was the end of this chapter, it is becoming increasingly clear that it is not. ,gain, the question now becomes joe, who will leave the potential future investigation lead the potential future investigation. the republicans will be facing a lot of pressure. they do have one ally on the democratic side. that is of course senator joe manchin. he has politically defended the ministration and taken a much more tepid response, in contrast with democratic leaders, being led by the likes of chuck schumer, who has forcibly called for attorney general sessions' resignation.
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scarlet: thank you. analysis on jeff sessions recusing himself from any sort russiantigation into ofdling in the campaign president trump. chart want to bring up a we showed earlier in the day, the one-day performance. i like looking at it because it is a simple, clear way to look at how a diversified portfolio did today. scarlet: not good. joe: having its worst day of the year. diversifiedthe portfolio, not doing well today. joining us now, achieve investment officer. obviously, you are very attuned to portfolio allocation, thinking about those things with your clients. how are they -- you talk to them
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all the time. we have had this extraordinary market rally. people have gotten it wrong with the politics. how are they thinking about where they want to be invested right now? what are you telling them? >> they are trying to justify, basically, the difference between political headlines and what is coming out there and the discomfort they are feeling about that, along with what is and the in the market portfolio. there is a little bit of discomfort. the fourth -- diversified portfolios not only include , has done ok.nds they are feeling ok about that. scarlet: as we see the odds for march increase in seeing anare you
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increased as a good thing? >> they are starting to see them as a good thing. as central the way bankers take the training wheels and let the economy is run as they are supposed to run without intervention. joe: back to portfolio allocation, one of the extraordinary fax is the really hasaordinary allocation done very well, performing very solidly, not much volatility. will they continue question mark what you basically split down on?middle and let it move >> there are a lot of tactical aanges that happen throughout portfolio. for example, you have see a much broader divergence in terms of stock market up, bonds down. that is a key risk component. you cannot ever said and forget
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it, especially in this market. joe: stay with us. abbott downing investment advisors. as we mentioned, janet yellen be tomorrow at 1:00 eastern on the economy. we will bring you those comments in full right here on bloomberg television. scarlet: in the lead up to the speech tomorrow, make sure to program, "realew yield," it will feature the biggest names in the sector on the issues that directly affect net markets. from new york, this is bloomberg. ♪
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mark: in a press briefing broadcast on bloomberg television and radio, u.s. attorney general jeff sessions says he will recuse himself from a federal investigation into russian interference in the 2016 presidential election. he faced mounting pressure to from both democrats and republicans after he was found to have twice spoken with the russian ambassador during the campaign. it seemed to contradict his sworn statements to congress during the confirmation hearings. sessions: some have
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taken the false view that this was a false comment. and thatnot my intent is not correct. i will write the committee today or tomorrow to explain my testimony for the record. mark: the justice department says there is nothing improper about mr. sessions' meeting about -- meeting with the russian envoy. president trump met aboard a navy ship in virginia. he again called for a military buildup. the white house released a draft budget plan that would add $54 billion to the pentagon's projected budget, a 10% increase. former texas governor and republican presidential hopeful rick perry has been concern -- has been confirmed as secretary. he is the second trump cabinet pick confirmed today. earlier, they confirmed ben
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carson as the secretary of the department of housing and urban development. in the middle east, forces battling islamic state say they , therecaptured palmyra town known for its ancient roman monuments and amphitheater. it was hit with artillery and air strikes. global news 24 hours a day powered by more than 2400 journalists and analysts. this is bloomberg. >> let's get a recap of today's market action. u.s. equities after yesterday staging the biggest advance of the month. 6/10 of 1%.losing it seems as though risky assets declined and we saw treasuries drop. the only thing that really gained was the u.s. dollar. one stock that gained big was snap.it was the ipo yesterday .
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ipo'd at -- it did get as high to about $26.05, good for about a 44% jump. the question is where it remains at the end of the first quarter or the first year. >> you have to be pretty happy with that if you are a snap employee or shareholder. cosco camecarlet: out with results, missing the lowest estimate among analysts that we surveyed. revenue also trailing the .onsensus by a hair that holiday quarter did not come through for cosco. shares off by 5% in after-hours trading. costco has boosted some annual membership fees. it intends to do that every five to six years. this will affect about 35 million members.
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>> let's turn to the french presidential race. i want to go inside the bloomberg and look at the .unction, eu-go headlines, credit default swaps on all the different countries, political conditions, charts in the top right. this is the betting odds. it is all awesome. if you want to know what is going on with the dutch election polls, that is really important. eu inflation, which i think he will talk about momentarily. is the investment advisers deputy chief investment officer. once again, political risk back on the radar. all about these european elections. how do you prepare for this? >> one of the things to consider
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is that maybe it is like event risk in many other categories. the first time, it is a big deal. the second time, not such a big deal. we saw it with brexit when it was a two day deal, we saw with the u.s. elections where it was a 12 hour deal. it is fundamentally something we are watching closely by think investors, especially u.s. investors, seem to be focused on what is going on in the u.s. and think same old, same old. scarlet: if marine le pen wins the first round and also goes on and does well in the second round, that will be a big deal, isn't it? carol: one would think, but one would have thought the same about brexit and the u.s. election. >> you talked to a lot of high net worth investors. the existing geopolitical economic framework is obviously
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being good to them because they .re high net worth investors there seems to be a global trend that wants to really shake this system, whether it is trump, brexit, marine le pen. people starting to really attack the essences of western wealth, so to speak. does this cause anxiety with the investors you talk to? carol: i think he commented in from a different perspective, many of them are business owners, former business owners, many of them are excited about the way we may recast the way we do business. there is a lot of different reasons to think about what is going on right now as being beneficial to the middle class. being able to pull up employment numbers in personal consumption. scarlet: i have to go back to the idea that perhaps a marine
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le pen victory is perhaps not that big a deal. spoke with the former prime minister of italy and he felt otherwise. >> french elections are sort of eu sliding doors. there are two options, leigh le pen winning or losing. if marine le pen wins, it is almost game over for europe. le pen, it is game over. scarlet: with marine le pen threatening to redenominate french debt into frank's, just that possibility will be a huge game change for financial markets, for investors. i didn't mean to make
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light of the issue but back in 2011, we faced the potential breakup of the european union. i think people would struggle with it, investors would struggle with it, but in much the same way as we struggle with which policies are going to be passed in the u.s.. having the right policies to make -- having the right portfolio to stay the course. hear, the similar to infrastructure of the economy don't necessarily allow to do it if they want to do something. scarlet: you can get all of bloomberg's real-time analysis of every major market event on #toplive. we have already highlighted tomorrow's janet yellen yellen's speech beginning at 1:00 p.m. we will have live blogging, all the highlights from her speech.
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of course, we will have charts that all of our customers can access as well. #tvgo is another one of our preferred functions. this allows us to watch what is happening on television at the same time. it has interactive charts, the programming you may have missed. actually go back to earlier in the day to look at what you might have missed. ♪
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scarlet: snap made its trading today. at least $2 million in ipo's. snap outperformed all of them including -- all of them except
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for twitter. we bring in cory johnson who joins us now from san francisco. thing that already -- that always struck me is that snap.mpany's name is as that mean it will move beyond this disappearing cap that made it pop -- disappearing app? to offer company has something other than the one thing that is already done. in the case of snapchat, they change the name to step -- name to snap. one of the first things they say there is that it is a camera company. they introduced this other product called the snap glasses which at the very least suggests there is more to it besides the disappearing message at. that really is what their business is. the hopes for the business are all directly connected to that.
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>> it seems to me there is a basic debate here. vc's say this is the future of social networking. wall street people and older people say, i don't get it. which side are you on? kids and their rock 'n roll. i decided when i was a crazy kid i would always be with them. i will stick with it. if you are old, you don't understand because you are old. when you look at the grove issue, it is a serious one. the fact that they are not attracting more, at least the page views, getting up to 178 million users is a big deal. but growing at an increasingly slower rate is a bad sign for any business. facebook, billions is a large number.
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the percentage changes where you really have to worry. really falling off a cliff just as this competitor shows up in the stories function on instagram. instagram has many more users. the timing is not great from that point of view. the other thing about snapchat that is different from the other social media companies is that its costs are high because it outsources the computing costs to others. theoretically, this should be an advantage. they don't have to go out and buy the servers and own data centers the way that old-school tech companies did. newer companies like google, facebook, apple building their own data centers, even laying their own fiber. snapchat is really relying on the cloud, particularly on the google cloud although they have spent billions of dollars with
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amazon. this is a great concern here. there was some commentary in the statement specifically about that. they said they have committed to -- $2$2 million on billion on google cloud and also $1 billion on aws. $3 billion additional spending is disconcerting particularly as the cost per user has gone up, not down with scale. snapchat would certainly like to address that. if you divide the cost of goods versus daily active users, you can see that problem. i don't know if it is the active users of the users are adding on the margin internationally, but the business is getting worse, not better. >> you and i were on the radio today and you say there is a lot on this deal.
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what do you see there besides the growth and the numbers? negative growth margins is a problem. there are 552 stocks on the exchange with over a 552 million -- losing money on the big sale. it got better over the past two quarters. gross margins, we are talking about. there was weird stuff like the ceo charged the company $800,000 in personal security last year. that is probably hard to do. that is more than double what marissa mayer charge the yahoo! -- charged yahoo! for personal security. it is the only stock out there where you have no right over anything the company will do in terms of voting abilities.
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there are other weird things like the ceo was able to sell shares in the company last fall at about $30 a share, $31 a share. you don't like to see that kind of stuff. every ipo filing is interesting in its own way. >> thanks a lot. cory johnson, bloomberg news, editor at large. up next, he has been considered one of the most vocal analysts on wall street. we hear from mike mayo in his first tv experienced since departing from the company. ♪
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>> he has been considered one of
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the most vocal analysts on wall street but this week, mike mayo is one of several u.s. based employees can't in the equity research unit. earlier, the self-described free agent analyst spoke with in hisrg's vonnie quinn first tv appearance since his dismissal. mike: i am proud to be the only analyst to testify before congress for sarbanes-oxley in 2002. if you play ball with corporate management and get all sorts of perks, and if you are aggressive with management, you get whacked upside the head. 15 years later, things haven't changed too much. things change is as much as they stay the same. having said that, i've had enough experience that i'm able ande a bit more aggressive still be able to do my job.
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a lot of times when you talk to management, you do much better research. in a way, the lack of access i have had over 25 years, it is detailed in my book and the testimony to congress, has helped make me a better analysts. vonnie: so you don't think anything has changed much. does that mean regulations don't matter whether there are more or fewer of them? mike: regulation is good, red tape is bad. keep the safety and security of the system. as an analyst at a brokers firm, you have to fill out a paper once every three months saying your views really express what you think they mean. the reality is, in an era when we are pulling back regulations, it is even more important for investors to hold top corporate management accountable. what does that say about the environment as a whole for banks, for research units, for
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corporations? jpmorgan had the annual investment day on tuesday. the fastest region for growth for jpmorgan is asia. they are expanding with equities, fixed income investment capital markets. the large global banks that roll out the full spectrum of products aren't -- can gain share. there is always a role for what i do and others like me, and that is, to the extent that you hold management accountable to be acting in the shareholders' best interest, that is not going away anytime soon. there is a lot of encouragement from investors to say, mike, keep doing what you're doing, especially going to annual meetings. is a disconnect between the management and the board of directors. vonnie: you own a little bit of these banks just to be able to go to the annual meeting.
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explain to me how much you think the u.s. will hang on to its dominance as a banking center? britainseen signs that might be using some of that. how long before asia has the dominance? mike: not too soon. the u.s. investment banks, goldman sachs, morgan stanley, they gain market share last year. the u.s. banks have the strongest balance sheet in a generation. -- they canplay deploy those balance sheets for investor activities. u.s. banks right now in a position of relative strength. vonnie: it turned bearish and then last year, there was a major news story that you changed your outlook for the bank. now you think there might be a little bit of rest. mike: i'd say, for the first time in the last year, i am now saying that perhaps too much of
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the trump bond has been -- the trump bump has been priced in. i think we will hear two words over the next several weeks, "sector rotation." first-quarter earnings should be pretty good but then i think you will see a rotation out of bank stocks. the aware of the short-term. vonnie: that interest margins look to be rising. that is a good and a bad thing for banks. which outweighs which. mike: the net interest margin is down 1/5 this decade, the lowest level since that's 55. it has been done. our earnings forecast, i think that net interest margins to increase. there has been some structural changes but that headwind has been absorbed. vonnie: but they have to start
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paying out again, too? mike: not yet. but the industry has record capital and record liquidity. over the next few years, you could see more the pilot competition, just not right now. -- more deposit competition, just not now. >> that was former clsa analyst mike mayo. income: it turns out the fund is bigger than pimco's total return fund. that fund has lost about three quarters of its asset since 2013 so it is now smaller than the pimco income fund which had $74 billion in assets as of february 28. coming up, when you need to know to gear up for tomorrow's trading day. ♪
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>> u.s. stocks pulling back from record highs. the dow -- losing more than 100 points. most assets decline. since october 20
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that s&p euro singapore dollar gold, crude, and copper all in up on the same day. the exception was the u.s. dollar index. >> don't miss this coming up tonight, china's composite and pmi data comes out at 8:45 eastern time. >> i will be looking at markets u.s. deposit and services at 9:45 eastern time. and non-manufacturing 15 minutes later at 10:00 a.m. >> janet yellen will be speaking tomorrow in chicago. we will bring you those comments in full on bloomberg television. thank
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" bloombergatching technology." jeff sessions says he will accuse himself from any investigation. jeff sessions faced mounting
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pressure to step aside after revelations he had talked with the u.s. on doing the u.s. campaign. the senate voted to confirm ben carson to head the department of housing and urban development. he has promised to make homelessness and lead hazard's department priorities. rick perry also confirmed. he is now u.s. secretary of energy. he is the second truck cabinet pick confirmed today. u.s. environmental chief scott pruitt says he will fight to protect federal grants from the budget cuts proposed by the white house. the white house management of budget has recommends slashing the epa budget by 25% and eliminate thousands of jobs and more than one dozen programs. the threat to u.s. airports from terror groups is expected to grow because of instability in the middle east and asia. the former cia deputy director said the focus on fighting the islamic state has allowed

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