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tv   Bloomberg Markets Americas  Bloomberg  October 12, 2017 2:00pm-3:30pm EDT

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more. hen more than when references the maintenance of nuclear weapons and modernization. that doesn't mean increase in numbers. not a lot keeps me up at night. the good news is we have a great state department. doing the diplomacy thing. as jim mattis and i have said many times, if we do not find the state department properly, by us more bullets. world, you have the state department doing what it does every day. you have the u.s. military, the greatest military on the planet. we do not like to think in terms of things turning to military, but that is an option. the great thing about our military is it is a deterrent effect, whether it is a nuclear deterrent or a conventional deterrent.
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reporter: just to get back to the thing that happened a couple days ago. the president tweeted that they problem with the emigration is the democrats don't want secure borders. they don't care which -- the safety of the usa. do you think that is a fair characterization? general kelly: how i would put it is that there is a an element -- let me step back and say i that honest men and women can disagree on anything politically or otherwise. for one thing, i draw a line on the security of the nations. there are people in our country who have the opinion that open borders are fine. people should be able to come and go. there are others, myself included, you can bet the
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president, i think the majority of americans feel as though security on the borders is important. how you achieve that is a different story. i have great relationships with the mexicans. we have great relationships -- relationship with the mecca -- with the mexicans. in my view, we suffer more from the hard drive demand which we do not seem to address. we are trying to under the trump administration. places like mexico suffer more from our drug demand and do more in many ways to stop that drug flow than we do in our own country. i was down in mexico before i took the stop -- this job and mexican military risking their lives pulling out tens of thousands of poppy plants that eventually turn into heroine and consumed by americans. we need to secure our borders. that includes the maritime, our reports. we have dedicated men and women,
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dhs, that are doing that every day. we need to reinforce what they are doing down on the border. we need more wall or physical barrier. we have about its hundred miles of that border security by some kind of physical barrier. 2006,cure fence act in you ought to check it out. who voted for that. certainly senator obama did, senator hillary clinton, senator chuck schumer all voted for it. we have a worse situation on our southern border. we have a worse situation and our borders 10 years later, yet this is unbelievable resistance to securing our border. some of that is physical barrier. all of that as people, technology, things like that. we have to secure our borders. that it is -- this includes our ports. we don't have the issues on the
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northern border with canada, great partnerships in there. the problem with our southern border is the drug flow. and the illegal immigration flow. it rides on a netflix -- on eight network that comes through the western hemisphere up through net -- up through mexico and into the united states. we have to do something about it. reporter: you talk about frustration. you are in a first row vantage point with the president. what are his frustrations now? a big decision that is, -- that is coming is the fed chair in the next few weeks or upcoming months. where does that stand? -- actively has the administration engaged at this moment? general kelly: one of his frustrations is you. all of you. not all of you, but many of you.
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as i say, when i first started talking, i am a reasonable guy. when i read in the morning, watch tv in the morning, it is astounding to me how much is risk report -- misreported or do i will give you the benefit of the doubt that you are operating off of contacts, leaks. but i would offer the advice and say, maybe develop better sources. some person that works way down -- justf an office develop sources. congress has been frustrating to him. our government is designed to be slow. it is. sense, i think as a man who is outside of the washington arena, a businessman, much more of a man of action -- his great
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frustration is the process but he finds himself because in his view, the solutions are obvious. whether it is tax cuts, tax reform, health care, infrastructure programs, strengthening our military, to him these all seem like obvious things that need to be done to protect the american people. bring jobs back. these are all the things he sees as vital to protect the american people or to advance american economy and whatnot. the process is so slow. and so hard sometimes to deal with. i think those two things. reporter: where does everything stand with the fed right now? general kelly: there is still interviews. but every candidate -- i am trying to learn about things that have to do with what you
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are talking about. all of the people that have been interviewed have been really first round draft choices. we have more to come. it is a measured process. he has advisers to help them make that decision. -- rter: are the people in the front row the most important people? [laughter] reporter: thank you so much. thank you for being here today. president trump has gotten into a world war with bob corker, the latest republican who he has had a public feud with. are you concerned he is jeopardizing his agenda by feuding with members of his own party? general kelly: i am not. he is a straightforward guy, the president. that is one thing i have found. , what am i, him nine weeks into the job? willing to work with anyone.
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you have seen him reach out to these people on the other side of the aisle. say that when members of congress say things that are unfair or critical, the president has a right to defend himself. things thatabout are what i would perceive to be unfair or critical, unnecessarily critical, i will call members of congress and ask, is there anything i can do to help you with that misconception you have? four explain to you why i did this or that? members will say, i did not realize it came out that way. i'm sorry. or no, i meant it. but it was a grown-up comment. others thatre are as the president would say,
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grandstanding. i am not saying senator corker is that way. i am just saying some people grandstand and enjoyed the attention. reporter: do his tweets make your job more difficult? general kelly: no. staff isf the chief of to staff the president, give him the best advice or go get the best advice i can give him, help advice, help him work through the decision-making process in an informed way. that is my job. that is what i do. you got it next. i will go to you. reporter: does the president believe that the government is responsible for these attacks on
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americans, and does the president plan on closing u.s. embassy in cuba? is the president aware of the visa crisis for cuba? general kelly: what is the role, how many questions? -- rule, how many questions? we believe the cuban government could stop the attacks on our diplomats. for the president to make a decision on the iran deal, can you talk about [indiscernible] general kelly: we have great partners in the persian gulf region. wearly we have a war that are seeing everyday being won in iraq against isis. in the last nine months, i never never thought i would feel sorry for them. that they are getting crushed
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every day. we see them trying to escape from iraq and get into europe in places like that. which should cause europeans much concern. act on your question about iran, the partners in the region, we are very close with. very great relationships with. we have footprints on the ground , naval and air forces there. to demonstrate our resolve, our friendship, and try to deter anything -- but any country out there may do. that is the approach we are taking to iran. is a deephe president in thought, to say the least, about iran. once again, he is not the only one that thinks that may be the deal that was struck under the previous administration is a deal in the long-term, even in the medium long-term, will protect america. i wanted to ask you
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about the efforts of repeal and replace obamacare. as we saw a few moments ago, the president signed an executive order that he says will group -- bring more choices for americans, lower premiums. the 12th.s october he has been in office since january 20. is there any reason why he did not sign this order his first week in august -- in office? the other question is very important. do you blame senator mcconnell, the leader of the senate, or the -- for the failure to repeal and replace obamacare? general kelly: on the first question, when i came in late to all this, but the idea was all of what was in that executive order today -- there was a sense that it had the big bill passed.
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all of that would have been taken care of. since the big builder not get past, and we probably will not have a health care bill until the spring, this was a way to take care of as many americans with anuld legally executive order. as far as the second question it is designed to be an extremely complicated slow-moving part of our government. but respect for members of congress and the staff that works for them. sometimes, i was talking to nancy pelosi once, but is it hard to lead. i would say the majority leader in the senate. 100 members of congress that look to their states, have
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their own political baggage to deal with. on only -- always reliable every vote to vote the way that the president or mitch mcconnell wants to vote. one more. congratulations. on your new job. recently, indian americans are paid and interviewed on 9/11 [indiscernible] , the time has come now for india and america to extend together [indiscernible]
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india is with the u.s., anytime, anywhere for fighting terrorism. where do we stand as far as india and the u.s. is concerned? general kelly: as i listened, that face i had on was my listening intensely face. the united states of america will stand with any country against terrorism. we stand with countries we are not so friendly with, and we stand with countries that we are extremely friendly with, like india. this cancer of terrorism, as we it is moving in other directions to include the west into western europe. the northern part of africa is suffering terribly and it will grow there. as it moves south in africa, it is moving out into -- it is already in south asia. conference very good
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that the king of jordan invited me where he had all of the southeast asia countries represented, particularly the big moslem countries to include the philippines. discussion was, what do we inas isis forms terrorism those parts of the world? these countries are very, very afraid of that. they have had to deal with it locally, but not, if you will, a placesthat will go into but typically you do not normally see islamic terrorism thrive. i would say that the united states will work with any country, does work with every country that is trying to get its arms around terrorism of all kinds. there are different types.
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it is not all religious space. there are various types of terrorism. that would be my answer. thanks a lot. reporter: i have a question. [indiscernible] in the war against north korea, show the american people be worried about a war? general kelly: which one should i answer? reporter: both. general kelly: the american people should be concerned about a state that has developed a andty good i cvm capability is developing a pretty good at nuclear reentry vehicle. i would believe -- i think i
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speak for the administration, that state simply cannot have the ability to reach the homeland. , right nowt matter there is great concern about a lot of americans that live in guam. right now, we think the threat is manageable. over time, if it grows beyond where it is today, let's hope diplomacy works. as far as the tweets go, it is funny. i read in the paper. you all know, you write it. i have been a failure at controlling the president, or a failure at controlling his tweeting. -- or i wasnt in not brought into this job to control anything but the flow of information to our president so he can make the best decisions. i have found that mr. trump, from the day i met him, he is a decisive guy. he is a very thoughtful man, i should say. he takes information in from every avenue he can receive it.
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i restricted no one from going in to see him, but when we go in to see him, rather than onesies and tuesdays, we go in and help him collectively understand what he needs to understand to make these vital decisions. i was not sent in -- or brought and, to control him. you should not measure my effectiveness as a chief of staff by what you think i should be doing, by -- but by simply the fact is i can's -- i can care and you -- guaranteed with options. are discussed in detail with his team. he comes up with the right decision. it is always, always, always focused on protecting america and advancing america's economic development, jobs for america, safety for americans. with that, i will let you go.
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i enjoyed -- will enjoy reading about it tomorrow. >> sean -- john kelly there addressing reporters at the white house during the daily press reefing. we are joined for analysis by margaret. kevin cirilli is our chief washington correspondent. margaret, i will start with you. he is an old pro. what did we learn about the relationship with john kelly -- the that john kelly has with the president? this is the first time he has spoken candidly about the white house. extraordinary and unexpected briefing carried one that we hope will continue once a week until the end of john kelly's tenure as chief of staff. we got a lot of answers to a lot of questions. we will get to some of the substance and a minute. obviously the idea was that the white house wants to shake loose this notion that they are in crisis and the president is in a freefall.
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they came to the conclusion that one way to do that is to bring out the chief of staff and have him say he is not about to leave. he is not about to get fired. he is not about to fire anybody. and all the speculation is a bunch of hokey. nothing to see here. move along. the backdrop against all of this beating of the drums reporting from inside the white house exposing some of those concerns and risks, concern that the president has to letot up to be unable off steam. john kelly telling us they president is a thoughtful man. that the president is always concerned about the safety of the american people. jobit is not john kelly's to manage the president in terms of his tweets. he does not think you should be judged that way. he does not think the press
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should judge him on the basis we think he should be doing. he did it with a dose of humor, just to show he can take a joke. we learned a little bit of substance. no health care deal likely until the spring. another full round of fed interviews. no decision imminent on that front. a good deal of substance came out of that. what we are to expected that the iran deal to be announced formally tomorrow by the president. kevin, you were at the press conference. i was surprised how many questions there were about frustration within the white house. the john kelly do a good job and per train the right message? kevin: i would piggyback off what margaret said. that is just substance wise, what we saw is about pushing back of the timeframe on health care reform. hows taken aback by just forthcoming chief of staff kelly, general kelly was with the administration and president
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trump frustration with congress. the whole impetus for their having to be that executive signing was because of the failure of republican-controlled congress to a tomboyish -- to accomplish. he did not go- after any republicans. he backed off of criticizing senator bob corker and did not take the bait on mitch mcconnell as has been reported. in terms of substance, another round of fed interviews. the growing threat of north korea, he was careful there and said this is something they are continuing to monitor and they hope diplomacy works. again, pushing back the health care debate until at least the spring. david: there was quote -- a question about whether or not the tweets from the president makes his job difficult. one tweet was brought up about puerto rico. we cannot keep fema, the military, and first responders who have been amazing in pr
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forever. in terms of substance, we did learn about context and color about the president's approach from john kelly. also understand from john kelly a different message than the one that some of the president's colorful leg which has signal. the u.s. is standing by puerto rico which is part of the u.s. you see in general kelly's approach a desire to balance enough healthy respect for the president. criticisms to stop. at the same time, he is much -- to use calm and calculated language. the nuance is all there. whether he talks about this is difficult, he did say this is the hardest job he has ever had and not the most fun one. ist he seems to be saying that his job is to serve the president. therefore that is what he is doing. it is a careful answer to a much
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mark obligated question. shery: kevin, general kelly spent a chunk of time talking about the need for border security. how much more did we understand from the white house when it comes to those issues? kevin: just stylistically about how general kelly community -- communicated that message, he said mexico has been an ally of the united states in combating drug addiction and drugs coming into the u.s. he very offhandedly mentioned portions of the wall. he did not describe border security in the way president trump does. of this comes on the backdrop of nafta. and just reportedly, within today, commerce secretary wilbur ross suggesting there be a clause in the nafta negotiations. we did not hear that rhetoric coming from chief of staff kelly during this briefing.
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more appeasingch town toward mexico than publicly this administration has taken. -- to thank you both both. kevin cirilli, and margaret who is our chief white house correspondent joining us from the white house. more bloomberg markets. an extraordinary press conference by john kelly. there is more to come here. they will be talking about the cover story in bloombergs businessweek. still a big issue in washington. shery: planet comes to the agenda of the white house, we are expecting the iran nuclear deal tomorrow at 12:45 eastern. plenty more coming up on bloomberg markets. stay tuned. this is bloomberg. ♪
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♪ scarlet: this is "bloomberg markets." scarlet fu. let's begin with commodity markets closing in new york. and start with oil which is down
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after three days of gains, off by 1.4%. the weekly tally show that u.s. domestic stockpiles sell for a third straight week. that is being outweighed by a forecast from the international energy agency which says oil stockpiles may remain a bloated next year. we have a special spotlight on agriculture commodities after the first u.s. crop report since hurricane irma. orange juice. they are the big losers down by 2.3%. projects itthe u.s. will plunge 21% to a 71 year low. the big winner here is soybeans. up by almost 3%. outlook maintaining its for the crop when analysts had been expecting it is. julia: for more highlights from that caught -- crop report, let's get to alan. great to have you with us. talk to me about florida orange production. we were always going to be
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looking for potential hurricane damage. i'm looking at the forecast and they look pretty bleak. a little bit of controversy going on about these numbers. the usda predicted 871 year low on the florida orange crop. the last time the crop was this small in 1947, farmers did not irrigate their crops. this is a different era. we have not seen this before with oranges. futures went down today. the region for that is because florida citrus mutual, a growers group in florida, said the damage was going to be worse. since the usda has -- report has come down, florida citrus mutual has criticized the department saying the report came out too soon. we do not know the full extent of the damage. they are expecting a smaller crop. they think this bearish forecast does not adequately account for the damage that has been done by the hurricane. crop reports or updates could leave those
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futures pretty volatile. i want to move onto cotton. they were hurt more in georgia than in texas where does that create any kind of dislocation? alan: this is an interesting story developing it and cotton. chronologically, hurricane harvey came first. everyone was wondering about the tech is cotton crop. -- texan cotton crop. their yields were lower. most of texas's cotton is grown in the western part of the state. whereas irma, when it went north went into georgia and the carolinas. you actually sought more hurricane damage to the georgia cotton crop, the number two producer, rather than texas. julia: let's talk about soybean supplies. the usda changing their estimate for infantry's coming into the current marketing year. where does that leave us? alan: that did take the markets by surprise. the u.s. department of agriculture did not make changes to how much soybeans are being used or grown to what they did do is change their estimate of
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how much supply there is coming into the current marketing year. that made supplies tighter than what analysts were expecting. that pushed the market up. scarlet: let's move on to corn. estimates for yields rose from last month because what they call favorable harvest conditions. that sounds good and welker what that put that at risk -- sounds good and well, but what could put that at risk? alan: if you have an early season snowstorm coming you could see changes to that. at this point, a lot of the harvest is underway. crops in thelater season to make sure that core number does not go some ways a are not looking for to be going. to go on a different crop is wheat. world we supplies, the glut is continuing -- wheat supplies, the glut is continuing. they are exceeding any of
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the analysts out there, at least we are covering on bloomberg. to seet is interesting how productive russia is being this year. the black seed continues to roll more and more crops. you also see productivity gains in the european union and in and you and you -- and in india. we had problems in australia. the world is being very good at growing wheat. even smaller supplies in places like the united states are not offsetting this trend. scarlet: alan bjerga, reporter for bloomberg news with the latest on the crops report. thank you so much. let's get a check of the headlines with mark crumpton. mark: thank you. president trump's chief of staff surprised reporters today when he conducted the daily white house press briefing. he began by putting to rest rumors about his job security. ,> i read it all the time pretty consistently, i am not quitting today. [laughter] >> i don't believe, i don't
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think i am being fired today. i am not so frustrated in this job that i am thinking of leaving. mark: general kelly added that president trump is dedicated to serving the country. the president criticized harry kane devastated puerto rico insisting that the federal government can't keep sending help "forever," and he's adjusted the u.s. territory was to blame for its financial struggles. the debate is playing out in congress as the house has towards passage on a 36.5 billion dollars package. >> we need to make sure that puerto rico can begin to stand on its own feet. they already had tough fiscal problems to begin with. you have heard me talk about the legislation that is in law. we have to do more to help puerto rico rebuild its own economy so it can be self-sufficient. mark: nancy pelosi said the
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people of puerto rico and the virgin islands are "are american citizens fighting in our wars and die for our security." officials say fire crews are making progress on the deadliest of more than two dozen wildfires burning in northern california. a spokesman for the california department of the four street and fire protection says the blaze burning in sonoma county had -- is now 10% contained. gusty winds could impede firefighting efforts. that wildfire has killed 30 people. laces burning and three other northern california counties have left 10 people dead. saudi arabia plans to take a gradual approach to cutting energy subsidies and delay its budget balancing target beyond 2019. that is according to the country's finance minister who spoke today to bloomberg at an imf meeting of global economic policymakers. a balanced budget and subsidy cuts are is essential to the kingdom's plan to wean its
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economy off oil. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. julia: thanks so much. coming up, china holding its communist party congress next week. this is an incredibly important gathering that happens only twice a decade. what agenda will be chinese leadership center to their economy and what will this mean for markets? we will explore next. this is bloomberg. ♪
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♪ this is "bloomberg markets." i'm julie chatterley. scarlet: it's time for the sector spider report. shares are under pressure today. halfan see they are down
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of 1%. the worst performer of the hour. julie hyman has more. julie: we have to look at the xl why is down .5%. it has paced gains in the market for the year today. it has been a consistent performer. it is not trading that much below its record high. nonetheless, today it is taking a hit. it is a broad-based selloff when you look at the declines. a lot of it has to do with the media companies within this index after forecast from at&t that it will lose video subscribers. that is pressuring dish and comcast. we are seeing a decline in retail today. signet jewelers which has been a volatile retailer is down along with cap -- gap. our stock of the hour is the worst performer in the etf.
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ultra beauty, the beauty and cosmetic chain that has there is services it offers at its location. the company, the subject of a downgrade. it was downgraded to neutral. the analyst says there is a slowing cosmetic industry that is an issue. more competitor promotions that will make it harder for the company to see upside. you mentions of four as one of the companies that has been doing aggressive sales. i see scarlet is familiar with those sales. scarlet: it is kind of like sephora. julie: it is usually larger, in big-box centers. some of them have hair salons. that is one of its distinguishing factors. julia: what about revenue growth? it has been softening. yes.: exactly. this is a company that had been ripping in terms of its growth.
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if you look at the bloomberg, you see the revenue year-over-year. the revenue growth is in yellow. the estimated earnings per share is in blue. it has had solid gains. the stock prices here in white. the revenue growth has slowed down. the stock price has come down. we are still talking about 20% earnings -- revenue growth. same-store sales are impressive when you look across other retailers. it is a matter of what it once was and what it is now coming. scarlet: where does it fit in the beauty industry? is itk about sephora, smaller or bigger, how is it slotted in? it is if you look at how pricing, it is probably lower of a price point. if you take a look at the beauty industry and because medics industry, we have a chart of that. here you have it. according to bloomberg intelligence and the various
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researchers, it is -- also has market overall. that is $134 billion market. as that cleveland research analyst pointed out, that market is slowing down to some extent. that is one of the things of the things that is affecting it. i should mention, as we talk about slowing from a high level with the revenue, that is true of the stock price. start rise is down this year. if you look at a five-year chart of all-time, it is an impressive chart. was reported for that growth and now it is being punished as the growth slows down. you can see it doubling in the stock. julia: brilliant. thank you for that. happening now, president donald trump announcing secretary of homeland security nominee at the white house with the chief of staff when he was secretary of homeland security. keeping it in the family, so to speak.
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you can catch that event if you want to watch it online -- on live go. party officials meet next week for chinese communist party congress. three weeks before the congress bank is reserving requirements and hopes of aiding or supporting growth. hayden briscoe, head of fixed income, china may be experiencing a slowdown. he joins us now in new york. great to have you on the show. being aabout this as craziness similar to the election of 2016 in the united states. president xi is expected to carry on. what will it mean in terms of change as far as investors looking at china? when we look at china, we look at politics, politics, and politics. this is an important time. when he got into power in 2013, he did not get to pick his own party. he has been fighting this economy with one arm tied behind
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his back. he now has both arms which is great. he gets to pick the people that are in the party. that was more than 50% of his party that were not his own. -- his own people. what does this mean for markets? we think there will be high resolve to deleverage the economy. he wants to do that early in his new five-year plan. you can see this happening with the way he is transitioning a the head ofeaders, the csrc, a changeup undergoing in terms of the insurance regulator. he is putting his people in place or the q -- cleanup experts. scarlet: that sounds like there could be short-term volatility. how tight of a grip does beijing have on this cyclical slowdown? you wonder if they can lose control of it and things will spiral south. julia: defy what you mean by the many cyclical slowdown? hayden: we emphasize it as that's because in the west, people over exaggerate and it
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ends up becoming a bubble that will burst. scarlet: this is not that. hayden: this is just a slowdown in the economy. it is structurally happening because they are trying to clamp down on banking, put that back into the sector, shrinkage, slow down the pace. it has been growing too fast for too long. the reason why xi jinping has not been able to unwind that is because he still had not the political people backing him. this time he has everyone backing him. he can do that. julia: what does this mean in terms of investing in china? where should you be looking? the other thing we see is relative stability as far as currency is concerned. do you expect that to continue? describing a are slowdown, the number one spot you want to be involved in is bonds. you want to add long durations. it is giving you a lead indicator. when you are looking at these macro statistics, maybe you are mixing -- missing the picture.
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you don't have to be focused on the slowdown because it is the newer economy that is coming online. scarlet: i wanted to bring up a chart. this is something you see -- featured in your research. 774.v it shows the spread between the five and 10 year. china is in white. the u.s. in blue. germany and yellow. people look at the yield curve and draw conclusions about the state of the economy. when you look at this, this spells out many cyclical slowdowns, but what does it tell you in terms of where echoes next and the pace of reform that xi jinping will institute now that he will have his own people in power? hayden: i think -- if you are looking at this yield curve, we are saying to clients, pay attention to the chinese yield curve. chinese bond markets are getting important. it is going to double in size in the next five years.
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it is more important to driving the economy, more important where the states of municipalities are borrowing money, they are going out of the banking borrowing into the bonds. this is telling you it is a slowdown. this yield curve in this white line has gone negative for the first time ever. in the history of the 510-year-old curve in china. it is sitting close to flat now. when they less -- rest of the yield curves are still relatively stable. it is ok growth in europe and the u.s. there is something going on in china. the problem with china is whenever we see this policy nine-monthre is a to delay. on the numbers you are seeing now looking good. they should look at. now we are at that point where the we are starting to pivot. you will start to see the slowdown and the numbers will look week. what does this mean for investors? we think it does not mean a lot for china. behavioral impact
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outside of china where you will feel it. where has the money gone? it has gone into high yields. engineering and mining. countries are getting better balance sheets. it --drives and engineering and mining. focus on commodities. that will give you a little -- a lead when this is rolling over. commodities have and back down after we had slowdowns -- shutdowns within the economy on particular steel or iron. that is starting to roll over because you are seeing the weaker growth coming through. once they start digging through the lows, that is the indicator. julia: we will continue to watch that. hayden briscoe. is a story grayson the cover of bloomberg's business week and we will review that next. from new york, this is bloomberg. ♪
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scarlet: this is "bloomberg markets." julia: i'm julia chatterley. lumber business we cover story takes us to the center of global trade. i am talking about this place called warez in mexico. leaders are not concerned about donald trump and his policies. we spoke with bloomberg businessweek reporter lauren as her on this story. --primate beer muniz everybody knows him. he is the godfather of the industry in mexico. he really created this industry nearly 30 years ago. than 30 years ago. in 1968, he built the maquiladora which was assembling
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television parts. since then, the industry has grown. it has attracted multinational from all around the world. primarily the united states. increasingly other areas of the world. this is where all of the companies come. they manufacture their parts. they have been assembled -- assembled. they end up being a part of whatever product you are purchasing. take us back a couple decades, back to the 1960's. how does one guy create an industry of industrial parts and make it the global manufacturing mecca of the world? >> it is important to understand how he is a plugged in person in warez. a family that has a lot of land and this was in the chill while when desert. this was before it was a major city. cotton and there was not a lot of industry there. at that, there was a lot of about whatin juarez
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they wanted their city to be. this was during prohibition. this is before the 60's. arez towere coming to ju engage in activities they might not be proud of. drinking when it was illegally. there were divorces there. cap arrays. brothels and that type of things. they decided they wanted to remake the town of jurarez. they started thinking about industrialization. what is he saying in light today in light of president trump and all the mexican war? the threat surely to his development, his empire, is acute. >> it is funny, when i went down there i was expecting to hear a overf anxiety and fear what was happening in the united states and the trump administration. i asked him, are you concerned about the wall? are you concerned about the border adjustment tax that trump is proposing?
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are you concerned about the idea that the nafta neighbor negotiations might put wages higher? he was very unconcerned about it all. maybe unconcerned is not the right word. he was very sanguine. he said, we have been here since the 1960's. we have been here long before nafta. i have seen 10 presidents in the white house. there is not one person that is going to come and with a pen stroke a race this industry. is so deeply rooted into the global manufacturing supply chain that it is going to be difficult for a to go away. goit does go away, it will somewhere else. probably not the united states. you can read the story available on newsstands on line the app store. hear more of the magazine reporters every saturday and sunday on bloomberg television and radio with julia and carol massar. coming up in the next hour, facebook ceo -- coo says
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congress should release adds. we will discuss their strategy on the russian probe. this is bloomberg. ♪
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julia: it is 3:00 p.m. in new york. i am julia chatterly. scarlet: i am scarlet fu. omberg markets." ♪
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we are alive and bloomberg world headquarters in new york over the next hour. here are the top stories we are covering around the world. up earnings for financial. one trend emerging is consumer credit card debt, it is piling up. facebook is going on the offensive. is washington to address the russian added probe. can they come out of the controversy unscathed? let us get a check on where markets are trading with julie hyman. all of them down. julie: yes, simultaneously.
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is a cosmicgh, this terror -- oddly enough, this is a cosmic tear in the universe. some really interesting movements under the surface today. comingthe big moves is from at&t. the stock is down the most in a 2008. day since telecoms collectively are down the most in a single day and 3.5 years. this is after at&t in its preliminary results said it lost 390,000 satellite and cable subscribers in the third quarter. further evidence according to craig moffett that we are seeing cord cutting not just for at&t but in the industry. keep in mind at&t is the largest satellite-tv provider, following its acquisition of directv that closed last year. at&t shares off 5.5%. dish network is also down. and then you have charter and
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are talking about a negotiation between the two that may lead to a blackout of viacom programming. all of that not equally a good day for media or telecoms. elsewhere, we're taking a look at equifax because it has got more trouble potentially. the company said it pulled its website off-line following in -- following a report citing an independent security consultant that there was a siteity flaw in equifax's that was allowing malware is infiltrated potentially. price since equifax announced the big hack of its systems that happened in september. the stock is down about 24% since that time. we're looking at the bond market today, not because -- that is because we have the strongest in two years time. a $12 billion option.
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you can see when the results of that came out right around 1:00 p.m. and we started to see yields go further down. they are now down by three basis points. why are we seeing so much demand here given the fact that the fed is expecting to raise rates? you have to compare the u.s. to other nations. you have got to look at u.s. debt, the 30 year node. 2.4%, but more than we are seeing in japan, which is the aqua line, as well as in germany. still on a relative asus, it is looking -- relative basis, it is looking more attractive. julia: thank you for talking about the cosmic tear. scarlet: let's move onto to facebook because the coo says congress should release adds links to russian accounts. one -- inrview with washington, sandberg outlines what to expect when that happens. get released, we
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will be releasing the targeting for those at. we will be fully transparent. scarlet: with the latest on facebook's russia as a controversy, let us bring in a tech reporter from san francisco. i know we will get to the strategy, but first i want to set the scene a little. why is there controversy over making the ads public? why wouldn't facebook or congress just released the ads? be scrubbed of personally identifiable information, according to sandberg. that is one of the things she told congress about in private meetings yesterday. if they want to release that has, she said you should probably remove the information and that it would be up to them to do so. sandberg'slk about broader strategy. what is she trying to accomplish? arah: facebook is on communication offensive. they are being blamed for a lot of the russian interference ahead of the 2016 presidential election. sandberg really is trying to lay
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out what they are responsible for and what they are not. she is saying yes, we take responsibility for these ads running out on our platform. they should not have come from accounts that were not real people. with that said, it is ok to have incendiary political advertising out there. a lot of the things that people hate about it is that they do not agree with it. she thinks that dust she kept making this point over and over in the interview that facebook protect the range of ideologies on the platform. there is not an issue with that. fakeit comes to foreign accounts trying to influence an election, there's a lot will have to do. julia: there is a balancing act because facebook wants to be able to have as maximum leeway as they possibly can. at the same time, she has to put out as trying to do more to protect users from being targeted by advertisers like
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this. what did she say about what they are doing to protect users? sarah: facebook is doing a lot of things that are different from what they had from the election. they are trying to work more closely with the government to get a sense of what else they should look into. they hired 1000 people to try to go through the ads that are politically targeted in nature, targeting people by race or anything that could maybe be a red flag. they want to miss a look at those ads, just not have to be automatically filtered through. finally, the company is trying to be a little bit more transparent about its process and what it works on. there are so many unanswered questions, when it comes to reviewing ads or what is good and not, they do not say what their parameters are. what they are trying to do is establish trust with the public without going too far into the details. not want to does
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commit or overpromise. you talked about how they will have human vetting of political act. how's that different from the as facebook already had in place? all?here no human vetting before him was a something that just went out on facebook automatically? facebook group to the size it is because of the self-serving advertisement system. people do not have to go through facebook salespeople to target people specifically with advertising on the company's sites. they can go through the automatic system and do it themselves. there is a mix of manual and automatic review of those ads. this will not talk about the secret software. it is very opaque. they will screen them for obscenities, nudity, things like that but they will not deal with the content. the point from sandberg in this interview is she does not think
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you want facebook to be dealing with the content. she thinks it should be pretty open and that the content should not be taken down until later when people flag it as inappropriate for facebook. julia: the bottom line's facebook has been fighting for years to seek exemptions from disclosure rules. we cannot forget that point. scarlet: no, but people get tied up with what they see on facebook has to do with the company itself. you can see that and their feelings about facebook. this is a chart on the bloomberg were we track the sentiments on on twitter, if that makes sense. this is the content on twitter that shows how people feel about a company like facebook. there has been a lot of chatter. that.ue bar indicates most of the commentary yesterday and last friday was negative. you can see that in the red bars. positive bars showed a
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sentiment, and the really is not a lot of positive sentiments. julia: do you think this is not only because facebook has to present in front of congress as well and talk about these things alphabets?s of ultimately, there is a risk surrounding facebook and the risk that people feel like they are being influenced without realizing it and can damage them going forward. sarah: i do think the bigger risk to facebook's future is not the regulation of whatever might come from congress but the perception that the company is at all partisan or biased or working for a certain agenda. a lot of people believe that facebook new about the ads -- kn and didn't says anything. facebook was very clear that they released the information to the public as soon as they found it. there will be a lot of back-and-forth here, people suggesting facebook may have had bad intentions or intentions of preserving their business over
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handling what is best for their users. facebook coming out and saying no, if we did that we would not survive. we really do care about our users. this is a congressional testimony -- it could be an opportunity for them to explain how it works. julia: quick question. i want to go back to where we started. whose personal information is being removed? ersonalhe users' p information? whose information is being removed here? sarah: everything on facebook could be shared, lights, commented on. you can imagine that as an ad that was run by a fake accounts could still be interacted with people on the platform, which could be an embarrassment for them. addresses or it is anything like that. i think it is more protecting
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the anonymity of facebook users and how they operated on the platform in ways that maybe only their friends can see for their privacy settings and do not want the entire public to be able to see it now. julia: i'm not sure they know either. [laughter] bloomberg tech reporter speaking there are thank you. let us get a check of the headlines on the bloomberg first word news this afternoon. mark: president trump signed an executive order designed to expand health insurance options for some americans in a move he eringwill result in "stagg competition between insurance companies," but it may also undermine insurance for those who remain under obamacare. my administration will explore how we can expand something called short-term, limited duration insurance. these health insurance policies are not subject to any very
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expansive and expensive obamacare coverage mandates and rules. mark: the president added he believes the votes are there a littlek grants at bit later time. the european union says brexit talks have hit a wall under how much the u.k. will pay when it leaves. that increases the risk that the british departure will be a messy one. the eu representatives that is team toeresa may's unlock the talks. the gridlock means eu leaders will decide next week not to start discussions on a post-brexit trade deal with the u.k.. the associated press says florida health officials are confirming a case of zika virus for this year. the couple -- a couple who returned from cuba is infected. localreported 296 infections last year. wants gas cars off the
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roads by next year. plan tows the mayor's ban all diesel cars from the city by 2024, when paris will host the summer olympic games. global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton, this is bloomberg. scarlet? scarlet: thank you so much. coming up, 90 offering discounts -- nike offering discounts on groupon. this is bloomberg. ♪
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is bloomberg
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markets. slowing demand in the u.s. has prompted nike to do something it has never done, offer heavily discounted products. 8-hourounced a 48 -- 4 sale. there is an urgency here when it comes to nike and getting sales going. guest: yes. i think the sports industry is a good industry to be in. i do not think there is a's slowing demand in the u.s.. a couple things have happened here. one, there is a shift from brick-and-mortar which is something happening in retail. for some reason, the athletic category state resilience four years. i think this is finally happening. ships withinng is the category. there are definitely issues
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here. i think it is kind of a temporary thing. julia: when you say with being a bit of brand shift, it is shared out among other names. scarlet: trainers. julia: people are just buying other brands. chen: i do estimate a big change around 2014 that they adopted a new strategy. they went back to models that have not been around for years. the superstar partnered with celebrities. its owna victim of success. when you own 90% of a category, every market share shift is going to look like a big problem. i think the combination of all these things together look alarming. scarlet: nonetheless, if you look at sporting goods in other retailers, you see a drop in sales of the gear. this might be cyclical, but i wonder if the same forces doing this to nike will eventually hurt adidas, as well.
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chen: right now, they are very popular and the sales are still up double-digit every quarter. will a slowdown? probably -- will it slowdown? probably eventually. julia: his attention to the word do that scarlet just used. [laughter] what are we looking at in terms of quarter sales? it iswe saw a decline but very restricted to north america. if you look outside the u.s., it is still in double-digit increases in the markets. the u.s. market is very different, a lot more competitors. scarlet: no evidence that this is spreading to asia where e is doubling down. chen: right. julia: are you shocked by this? they have 40% discounts. it is unprecedented. chen: we really have to check with the company.
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if you go on groupon and look, a lot of different other brands are there. new balance is there. they use it as part of their off-price kind of strategy. scarlet: matt powell said the sneaker industry is going in the way of retail. is he going too far with this? chen: i disagree with that. i think it is a temporary thing and more focused in the u.s. i think once the markets get rid of the axis inventory, it will get back into a good rhythm and we will see the category take off again. that is my belief. julia: i like it. a bit of controversy here. thank you. ibm's stock has clipped its earnings. -- we haveoptions options for a potential fall. from new york, this is bloomberg. ♪
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julia: this is "bloomberg markets." scarlet: it is time for options insight with julie hyman. julie: joining me now is the cheap options strategist at interactive brokers. we are entering earnings season. bring thingst of up for you because of volatility's? furthermore opportunities here to make money in the options market in the next month or so? hope certainly as he reported numerous times there is very little going on on the broader surface. this is one of those times when you can pick your spots and look at spots that moved one way or the other. one way to make it more interesting on the stoxx specific level is there are very
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few pre-announcements. a lot of times, you have the stoxx in advance and you can take the volatility out of them. in many cases we do not really know what is happening.considering the relentless advance we have seen, many stocks are extended. that can make it interesting going forward. julie: already, the earning estimates for this season show a deceleration in growth, especially given things like the hurricane. will also cause of some uncertainty as volatility? steve: one would think. if you have this phenomenon were you have the estimates decelerating -- and analy sts are usually more optimistic than the companies -- are you have people saying they are too pessimistic, and on the other hand you have this relentless march, something has got to get. in some cases there will become the news that will just disappoint, but it is really
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hard to pick winners and losers. in some cases, your standing in the way of a freight train. the flipside is if you do run into that factory with your mind field -- sealed. julie: one of these has to do with ibm. this is an interesting one because we talk a lot about large cap technology but we do not talk about ibm as much as we talk about the fang stocks, which have outperformed this year. partly because ibm has not been participating in that, right? steve: yes. i was thinking about ways to highlight earnings reason. i was looking at companies with all-time highs and high linear, parabolic moves. i was looking at something that was not getting in the way of that freight train and along came ibm. it started muddling along again. it's very interesting there is they have a remarkable -- pattern of disappointing after
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-- disappointment after earnings. julie: even though the company has been estimates. steve: yes. there's this wave of pessimism. it is not like a ge, which is falling out of bed. ibm is sort of fighting at the level. that is what makes it successful -- susceptible to another down take. the trade would highlight that. julie: the trade you are looking at is a straight up buying twist. that said, it is not looking for that much downside. steve: what i'm thinking here is it may fall 4% from current levels. that is about 1.41. you do not really want to buy that put if you think that is where it is going. you want to buy something that the i am thinking the $145 gives you a bit of leverage, as you can
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see from the graphic. if the stock would decline to $141 level, well if it doesn't you would have risked. much. we will see if that pattern continues. julie: one way to play earnings. we should mention the company is out with its earnings later this month. steve: i believe the 17th. julie: thank you. good to talk to you. back to you ladies. scarlet: thank you. we have a headline here. a storm aid bill with floods in puerto rico goes to the senate. julia: we will be discussing it. from new york, this is bloomberg. ♪
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mark: i am mark crumpton. it is time for first word news. john kelly conducted today's press -- press briefing. he put to the speculation that he is resigning and then talked about a range of topics from
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puerto rico to north korea. >> the american people should be state that has a --capability and is developing a nuclear capability. i think i speak for the administration that that state's cannot have the ability to reach the homeland. aboutgeneral kelly added tensions with north korea to let us hope diplomacy works. -- the statement today made no mention of the hundreds of north korean laborers already working in the emirates. plans to pull its nonresident ambassador and stop north kores


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