house press secretary josh earnest, who said the president directed them to maintain a high state of vigilance during the ceremony friday. you can watch president-elect as the 45thin president right here on bloomberg. our special coverage sets friday at 10:00 a.m. eastern, three cup p.m. in london, and 11:00 p.m. hong kong time. wilborn ross's financial disclosure shows holding of apple and boeing shares as well as cash accounts with more than $150 million combined. the 57 page filing released today the government office of ethics also says the billionaire has an art collection that is valued at more than $50 million. a senate confirmation hearing for ross is set for tomorrow. repealing the affordable care act without an adequate replacement lined up would increase to america's uninsured by 32 million people and double according to a congressional budget office report citing numbers from a veto 2015 bill. the house started the repeal

process friday with a vote to adopt a filibuster-proof resolution to advance the ups -- repealed by a simple majority. theresa may is threatening to pull britain out of the european's single manuel seeking a new arrangement of the customs union. she spoke today and offered her most detailed outline of her vision of britain in a post brexit world. ms. may: we will pursue a bold and ambitious free trade agreement with the european union. this agreement should allow for the freest possible trade in goods and services between britain and the eu's member states. alisa: she also says that eu parliament will get a final vote on the brexit deal. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg.

scarlet: live from bloomberg's world headquarters in new york, i am scarlet fu. joe: i am joe weisenthal. we are 30 minutes away from the close of trading in the u.s.. scarlet: u.s. stocks declining and the dollar slipped into a one-month low. joe: the question is "what'd you miss?" the president-elect calling the currency to strong. theresa may outlined a plan for a clear break from the block, bowing that u.k. will leave the eu single market and answering "is about her vision for britain's future. global leaders are gathered at the global economic forum in switzerland. we'll hear from brian moynihan, john time, and -- of credit suisse -- john carney and -- ti n of deutsche bank and

jane thiam. breakinguld have a quote from the deutsche bank ceo. this comes from news earlier that the firm settled a suit with the government. that had been hanging over the firm's hea for a while. d scarlet: as part of the settlement, deutsche bank admitted to misleading investors could it was not a situation where they denied wrongdoing. joe: absolutely. it said the mortgage conduct was unacceptable and they apologize. let's look at where the major averages stand as we head toward the close. abigail doolittle is standing by. abigail: there is certainly a decidedly risk off tone to trading activity in u.s. stocks going into the close. we have three major averages all trading lower, near session lows. this follows the weekly decline from last week.

so, a continuation of the bearish trend. the nasdaq is on pace for its worst drop of the year. russell 2000. growth index is down nearly 1.5%. its worst drop since october 11. some weakness here for u.s. stocks. i was talking about weekly declines and intraday volatility. plus, a move toward haven assets. it has been happening for quite a bit of time. we had a 10-year yield down seven basis points. this tells us investors are seeking the safety of bonds. yields are falling, weighing on the dollar index. it is on pace for its worst drop since july 29, down 1%. when we have a confirmed risk to see ife, you want something does not confirm it. 1%.ave oil up 2/10 of

earlier it had been up 1%. beyond the strength, saudi arabia thinking they think -- thinking the oil mounts is -- balance tount is in we have golda trading higher by 1.5%, confirming risk off, and we have the vix off of the ties of the day, but nonetheless telling us investors are a little less complacent. we have increasing volatility. it is easy to think it does have to do with president-elect donald trump, but when we hopped into the bloomberg, this chart may suggested has more to do with the fed. in white, we have the dow industrials, which are still up nicely since the election. you want, we have gold, which is still down since the election, but has required -- recovered, and a key areas the 10-year yield in the blue. it is on pace for its fifth week down. it dropped ever since the fed it

did reach rates for the second time in a decade. it seems to move toward rates moving lower and the haven bid is throwing asset classes off. we could see volatility ahead certainly for stocks. joe: thanks, abigail. "what'd you miss?" heads of states have been moving currency markets. first president-elect donald trump said the dollar was too strong and said the currency reeling. across the pond, theresa may outlined her brexit plan and the sterling posted its biggest one-digging since 2000 and we are joined by greg anderson from bml capital markets head of global fx strategy. i want to start with the dollar. this idea that 2017 would be a good year for the dollar has been so embedded. people think there will be policy divergence -- this handoff from monetary, fiscal policy. now we have donald trump coming out and saying he thinks the dollar is too much. does he have the ability

long-term to influence? can he job on the currency -- job bone the currency lower? greg: right now we have the assumption that the u.s. will take policy such as raising rates, altering corporate tax policies that are, you know, pro dollar. that has been the assumption -- the u.s. wants a stronger dollar. for him to come in and say something different -- wow. that is an interesting thing to add to the mix. yes, at this moment, if he says something that is not we want a strong dollar, that is big news. scarlet: i like the way you put that -- an interesting to add to the mix, very politics of you and what is the downside of looking at the dollar from only a trait perspective, which is what donald trump seems to do -- trade perspective, which is what donald trump seems to do? there are multiple phases

of trade deals, and you can't berdych todd the market is going to respond and maybe how good the market is going to respond to your new policy. corporateis a new text policy, for example, you can predict this is how american multinationals will behave, but you do not know what other countries are going to do with their policies next year, and how that is going to impact the goods market with a foreign-exchange market. joe: you mentioned trump coming out and saying the dollar was too expensive, kind of a new element in the market, but should it really be surprising to people -- first of all, he talked in the past about the dollar hurting us. criticize trading partners for the dollar being too low. let's read this quote -- "our companies cannot compete with the chinese now because our currency is too strong and it is killing us. isn't this just the flip side of when he blasts other countries for having their currencies to week? is that really anything new coming from him?

greg: greg: greg: it is important to see the context in that quote there -- he was speaking specifically about dollar-china, and mably -- maybe not the dollar against euro, canada, all the major trading partners. but, yes, it is the flipside, and i pointed out we worked long and hard to get to a protocol first in the g7, and then into the g-20 when -- where heads of state, finance ministers, central bankers don't target and specifically mention levels of their currencies, and he just blew that. trump isthing tells me not going to be excited to abide by g-20 protocol. scarlet: i think we will have new protocol. greg: new protocol in march. scarlet: hasn't this been generated by the fact that everyone was crowded in the long-dollar position we came into the year? thinking the dollar was gonna a move higher -- we came into the year thinking the dollar was

going to move higher. greg: we came on the back of the fed break -- rate hike. we got excited about tax policy changes and other things. , would say that ultimately almost any tax policy change the u.s. banks will be good for the dollar and it will move higher, but people were thinking that is going to happen in the first hundred days, and it is more like july we'll get that bill. let's switch gears and talk about the pound/dollar having a massive day. isolatelittle tricky to because they leaked sunday night as soon huge, hard brexit speech, and they cite the market into thinking there would be something new -- and they were quotes about how they thought the pound was going to take it it ended up surging about 3% -- one of the best days in years. it did not seem like theresa may said anything new here. would we go for the pound here?

you know, i would be a seller on this little spike that we got here today could you are right to point out your dollar index was up, 1.5% -- today. you are right to point out your dollar index was up, what, 1.5%? this doing was up a little bit, but not a dramatic move here to call it .5%. -- move. call it .5%. i would say the market was short sterling. she came out with a nice, a little bit aggressive approach toward the european union -- we want to be your friend, but don't screw us. i think that might have caught the market by surprise. joe: that only gets us back to january 6 on the sterling. scarlet: nonetheless, you have to remember the data has gotten better -- they upgraded the assessment of u.k. gdp this year. it has been wrong on several

things in the past, but it is a little more bullish on the u.k.. how do you square that with the idea that inflation is only going to accelerate and we saw that with the data today? inflation does accelerate on pass-through from the exchange rate, but it takes a most a year. we have begun to see stilling dropping from 1.50 to 1.20. joe: greg anderson, thank you. a quick programming note -- fed chair janet yellen speaks on " the goals of monetary policy and how we pursue them" in san francisco at 3:00 p.m. eastern on wednesday. bloomberg will have live coverage of her remarks. scarlet: coming up, bank of america's ceo brian moynihan from the world economic forum in davos. will get his take on president-elect donald trump. this is bloomberg. ♪

joe: "what'd you miss?" bank of america ceo brian moynihan us from the world economic forum in davos and discussed the regulatory environment under the incoming trump administration and the strategic transformation of the bank's business. brian: there is not really any new news there. we do not lose the key parts of capital liquidity. i think it is more of a dialogue that will emerge about the balances that can be had about -- between safety and soundness and growth. i think they'll be an interesting dialogue. it will still be a lot of work to get all of this done. the campaignd on trail donald trump saying he wanted to roll back dodd-frank. some city legislation that would replace that is not so exciting. what you think is going to happen?

are we going to see a change in regulation, or is it more going to be the implementation of regulation? i think it will be the implementation of regulation -- there are things we have to fix after the crisis the weather capital markets business works. the way to principal investment, that is not going to change dramatically. i think there is a lot of focus on the word roll back this word or that word. the reality is this is a question of having a new dialogue, a new group of people about what the right balance and answer is. erik: what i am really trying to get at, i suppose, is the assumption that a president trump who talks about deregulation is going to be good for financial services, good for wall street, but maybe not, right? is it possible the trump presidency will not be such a good thing for wall street, and it won't be such a good thing for the biggest banks in the country?

to what you back up hear from clients and customers, and the confidence levels of consumers and business leaders that come up. i think there is a feeling that people are in for businesses and growing businesses. whenever that happens, that is good for banking and the economy. erik: 20 economy grows, everyone benefits that i got that part. i am saying more along the regulatory side. brian: what i am saying is if the construct around the economy changes, the business we lend to are more aggressive, that helps us grow loans and deposits, and it will be a debate about what the right regulation is and how it will be mitigated over time, there is also a debate across all industry that will be helpful for growth. you think 2017 will be the first year in a long while that your bank and others might actually be able to focus on real strategic priorities

instead of reacting to the regulatory environment and being forced to cut cost because there has been so much pressure on the top line? brian: let's go back to -- we have been focused on that every day. think about what we did in the consumer business. had 5000came ceo, we 700 branches. we have 4500. -- 57,000 team members. now we have around 25,000. he did not know you could deposit checks -- you did not think about it, and now it is about 20% of all checks deposited there is a massive transformation going on in the business that will go on -- deposited. there is a massive transformation going on. it has changed the way customers interface with institutions. 20% of sales are mobile. 29.6 million banking customers. those are numbers that are not

going to change. erik: what can you do if the regulatory overhang goes away? brian: i think it is more about capital liquidity, those types of things. we will not change the way we operate the company in terms of doing the right things for commercial clients, our treasury services businesses it it might come easier at times, but what we do has not changed in its basics the last six or seven years, and we focus strategically on driving it or driving it. -- erik: the interest rate environment is getting more positive. can we streamline that out to the end of the year? if rates don't go down, they will be round numbers. they just generally, you can straight line that out. erik: that has more to do with the 10-year, two and a quarter, or the overnight rate?

it moved up, so it is both of those. after the end of the third rates went up 1%. now we are at $3 billion, and -- difference between that, you have to always look back and say this sounds like a science project at what drives that is the $60 billion in deposits that we grew, the $20 billion in loans. that math is what drives it. caps willise, the move. it takes both to make it work. as -- it is not just the rates rising. erik: after net interest income, will be the second biggest revenue driver in 2017, do you figure? brian: we make half the money on spread net interest income, and half on fees to the drivers of

these are the wealth management business. the consumer business, card fees, and trading businesses. those of the big drivers. if those go well, we go well. erikthat was bloomberg's schatzker with bank of america ceo brian moynihan in davos. scarlet: it is time for the bloomberg business flash. u.s. regulators have officially filed suit against qualcomm in a san jose court for allegedly using unfair practices to license its technology. the fcc says those prices caused higher cell phone -- ftc says those prices cause higher cell phone prices. qualcomm is the world's largest maker of semi conductors and makes most of its product for technology licensing. try to put an exact figure on how much is owed by the world's largest company -- richest company. eu competition watchdogs ordered island to clawback $14 billion plus in unpaid taxes.

apple and island both appealed and missed the january 3 deadline, but apple says the eu is satisfied with progress so far. digital ink has reached a judgment with the u.s. department of justice -- deutsche bank has reached an agreement with the u.s. department of justice, agreeing to pay 7.2 billion dollars, and agree to misleading investors. in a statement released in the past hour, deutsche bank ceo john cryan says the conduct was unacceptable and we are apologize unreservedly. -- apologize unreservedly. that is your business flash update. joe: up next, the pound surged speech in which she set out for the first time our government is determined to make a clean break from the eu. we will look at the pound and other currencies next. this is bloomberg. ♪

scarlet: i am scarlet fu.

"what'd you miss?" the dollar is supposed to be key to how emerging asset perform, right , or maybe it is actually the chineseyuan that host the key it the white line is the asian dollar index. biggestinbi is the component of the index, and as you can see, the white line is near its 2008 low. the blue line is the emerging markets stock index relative to the developed markets. it is a ratio. as the line goes down, as it has been since 2010-2011, that means emerging-market assets have underperformed developing markets. the bottom line is went raising thesian markets depreciate, country and investor should be tempted by emerging-market stocks and assets, but the assets remain hampered by china's devaluation of its currency which will continue because of the capital outflow that don't not look like -- do

not look to be ending anytime soon. of ai'm looking at how big day the pound is having and i'm looking at the historical return histogram to really get a sense of how big today is. this bell curve distribution here -- the blue line is every pound move, essentially, for the last year. what you can see is this move over 2.9% today is way outside of the normal distribution. most days are between .15% up or down. this bottom part here is another way to look at it. as you can see, the green bar at the end surging past the greater than two standard deviation move. there is a pound game, and dollar weakness, which really amplified the move. still, you can see on the chart how extraordinary the action is. scarlet: all the political risk embedded in currency prices. joe: hubble's people are caught on the wrong side. scarlet: the market close in

equities is next. look at the major indexes. the nasdaq closing down, off 38 points. a member, it had close at record highs last week. this is bloomberg. ♪ -- remember, it had closed at record highs last week. this is bloomberg. ♪

♪ scarlet: we are moments away from the closing bell.

stocks falling and financials and health care companies leading the drop. the u.s. dollar heading for the biggest one-day loss since july. i have scarlet fu. joe: i am joe weisenthal. if you are tuning in live on twitter, we want to welcome you to the closing bell coverage every weekday from 4:00 to 5:00 p.m. eastern. we begin with market minutes. scarlet: starting up with declines as donald trump tweets about the u.s. dollar being a little bit weaker than he had wanted to see. -- stronger. i am thinking of china. dow still a ways to go from . we don't even talk about that. farther anding further away. if you look at the breakdown of sectors, you have more defensive names leading the games like consumer staples, utilities all performing well. utilities and staples doing 1%

better. the financials are the big losers, even if morgan stanley came out with decent earnings. there were others better than expected as well, financials off 2.5%. they were the big gainers. i'm getting my terms mixed up today. they were gainers after the election. chinese stocks performed well, finishing higher after following -- falling 0.8%. xi jinping was advocated for globalization. heroes, the liberal head of the communist party. scarlet: they suspect the government was biting or directing biting for share prices on this big speech. joe: let's take a look at bonds in the u.s. with the ten-year and two-year notable moves lower, sort of consistent with the classical risk off behavior. down 10 year yield 2.3%.

that is kind of where it was last week. if we look at a one-month chart, you can see how far we have come, erasing the gains, the 2.56.'s, everyone said this would be the year of higher gains, but for now it has been low. scarlet: the big story in the markets was the dollar, which is heading down, the biggest single day loss since july for the bloomberg dollar index. joe pointed this out earlier, this is wtrs go. the dollar is one of the worst performing currencies this year. if you use the yen as your base case, what is interesting here is the dollar is right down 3.7% where the pace of his 3.7%. that is its own story. the british pound is 2.3%. it is noticeable how much the dollar has fallen off. joe: the pound was weaker this

morning, but now only the peso has done worse. scarlet: you have to look at the pound overall. it is stronger against all of these currencies. a bunch of different reasons, a bounceback of steep losses from yesterday. theresa may is putting to athing brexit related parliamentary vote, which some say it will take a while to unfold. it is not being done right away. the u.k. data is getting better and better. the imf raised its forecast for the u.k. for this year. joe: a quick look at commodities, not the busiest day, but across the board, nymex oil up marginally. 2.6%.s up 1.6%, silver the precious metals got really hammered after that trump election, but part and parcel of the reversals we are seeing today. the rally in treasury, the weakness of stock, and the strength in metals.

scarlet: those are the market minutes. joining us now is a multi-asset strategist at blackrock investment institute. i know you want to get high-yield when it comes to raise your -- measuring risk in the market, but i want to know how things are moving in lockstep once again. it is a very risk off scenario. kerry: we are coming back to this environment where it is risk on, risk off. the markets are trying to get some direction from where we are going with the fiscal policy and how it will tie into monetary policy. as we get more clarity, president elect from inaugurated on friday in his first 100 days, we will see what that looks like going forward. joe: the big story domestically, the selloff in the dollar after donald trump expressing his views that the dollar is too high. a key driver you pointed out is yield spreads. ultimately to some extent, or

yield differentials, u.s. rates and foreign counterparts -- how much can he push the dollar, and how much of it is going to be driven by the yield differentials? terry: today was all about the rhetoric, but the reality is we are still moving into an environment where u.s. economic growth is at a completely different cycle versus the european peers and japanese peers. we have this large fiscal stimulus that actually delivered. even though it is more of a 2018 story, it still beats to a stronger dollar. there will be pullbacks, and markets will trade strongly at first in one line, but as this materializes, fiscal policy will get more direction. we see a stronger dollar, but as we wrote about, we are expecting this to be more modest going forward. scarlet: we started off modest in 2017.

another chart you brought to us, it shows how high-yield bonds ours -- are paying a premium in the most of two years. what does this say about the markets right now? terry: one of the questions we get a lot is, what do we do with oil at these levels? how do we express trade. we look at energy credit is a good opportunity over the last years, but energy credit spreads and tightened significantly within high-yield, so what we are recommending to clients is to be neutral in energy credit. there is not enough spread being offering compensation to foreign investors. we are recommending neutral and see if there is any more pullback to get back in. joe: what about non-energy portions? terry: we still like credit, but one of the things we are trying

to do in the multi-asset portfolio is take down the beta risk. we are seeing strong performance in high-yield going back to 2016 versus investment-grade credit. investment-grade credit relative to high-level yield -- scarlet: so that is not just a two inspectors completely. terry: we want to focus on cyclicals at this point. we echo what the imf has talked about, higher global growth going forward in 2017. that should lead to cyclical range of sectors outperforming not only equities but fixed incomes. joe: you see the chart. there is a massive sarge -- surge in high-yield. it looks like the economy was going to horror. oil was crashing. going back to that, how is important -- how important is oil? terry: it is a significant

macroeconomic variable. you will seegher, some demand. if global growth is moving higher, businesses are investing, people are transporting across not only goods and services across the globe. oil is the basic frontal -- fundamental macroeconomic variable. president-elect donald trump will become the president friday at noon. what is the key thing you are going to be watching for? terry: we have to see what the trade policy is going to be, what the tax reform is going to look like. we may not get a lot from the speech on friday, but the first 100 days, we will see what this kind of tax reform looks like and the trade policy. that is tremendous implications on specific sectors and industries, notably oil. scarlet: what is the risk we

don't get anything specific? he is very vocal on big policy, but he kind of leaves the details to those he delegates to, and maybe they won't be as transparent. terry: there is a tremendous divide as we look within the republican party. a lot of people said as in his they gain control of the houses of government, it would be automatic fiscal policy. now we are seeing deficit hawks that do not want to continue to balloon the balance sheet. they want this tax reform something that is to -- revenue neutral. i would say the more hawkish members of the publican party work with the conservative members who want the fiscal stimulus to be delivered. joe: terry simpson, from blackrock investment, thank you. scarlet: it has been a busy day, but "what'd you miss?" theresa may outlined her plans to extract britain from the

european union. and in dallas, the deutsche bank ceo tells us what he thinks banking will look like in the next five years. this is bloomberg. ♪

♪ reporter: let's get to first word news this afternoon. the man suspected of fatally shooting five people and wounded six others at a florida airport returned to federal court today. the hearing in fort lauderdale was over whether 26-year-old esteban santiago to be released on bail. he is accused of a shooting rampage at a fort lauderdale hollywood international airport

.ackage claim area he could get the death penalty if convicted. president-elect donald trump transition have the approval of 30% of the american people. that is according to a national poll. his number is well below those of his predecessors, including president obama at 80% and george w. bush with 72%. former president bill clinton and h w bush had transition approval ratings above 80%. elizabeth moran is not sold on thee's ability to fulfill human housings services secretary. grievances, his effort to repeal the affordable care act and active trading in health-related stocks and legislation. the hearing is tomorrow. president obama made a surprise visit to the daily price --

press briefing to pay respects to josh earnest. it was the final briefing. mr. obama touted his integrity and the actual interests in the issue. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am a lisa parenti, this is bloomberg. scarlet: we want to bring you some earnings, it is earnings season. csx reporting profits that missed analyst estimate for the fourth quarter, missing it by a penny. higher, and cargo has increased. it is the first quarterly profit increase since 2015. although it was a profits miss, it was also a profit increase. adobe did not report earnings but did say it is going to buy back to $.5 billion of equities in the end of your 19

-- 2019. theresa may's plan for brexit. in a speech, she vowed to seek a smooth and orderly brexit,'s budget remains committed to honoring the voters. theresa may: i want to be clear. what i am proposing cannot mean membership of a single market. european leaders have said many times that membership means accepting the four freedoms of goods, capital services, and people. being out of the e.u., a member of the single market, means complying with the e.u.'s rules and regulations that implement those freedoms without having a vote on what those rules and regulations are. rallied pound also today. theresa may said parliament will get a vote on the final deal.

joining us now is megan green from manual asset management. welcome back to the show. what is the big take away from theresa may's highly anticipated speech? shen: this is the clearest has been, but there was nothing surprising, or nothing we didn't know already. the markets i have spoken to have been disappointed, but they were really going with hope over experience or logic. there was no way the u.k. could stay in the single market and limit the movement of people. joe: it seems pretty definitional. she said herself, she wants free trade, but the e.u. defines the single market including free flow of labor. she is against that, so by definition they have to exit the single system and find something new. it did not seem like any other way, just like it has to be that way. megan: it was unsurprising.

what was surprising was the conciliatory vote she adopted towards her country apart. she had things like -- her counterpart. she had things like the defense that was active. not a shot across, but maybe she will bring this out later. she also mentioned parliament will end up voting on the final deal, which we knew we had to if it at some point, but votes against it, the u.k. is not even a member of the wpo. it is only a member of the e.u., so they have to negotiate everything. joe: it looks like hard brexit and harder brexit. over whatr the hope is being done. one thing that is being done, investors and traders have been frustrated about, is the lack of details. she did not want to disclose much, because she did not want to tip off her partners in negotiating, give them advantage

. we presume we are getting the whole story? she is withholding stuff. megan: there are a lot of details that need to come out, but the thing the rest of the you does not really know, i think it is probably wrong. not really know, i think that is wrong. they have agreed they will have to leave the single market. they would like to maintain part of the union, but not sure how they can do that. all of the details will come out. we know roughly the issue were the u.k. stands, it is a bigger question for the rest of the year. joe: to discourage the e.u. from theng -- she discouraged e.u. from taking a stance against england. there was a lot of cross-border manufacturing flows and changes. it would hurt a lot of european countries if they try to hurt the u.k.

is she right about that? megan: she is to a certain degree. there is some truth, and trade wars hurt everyone ultimately. but i think also what european leaders have to go up against is how they are going to fair in upcoming elections relative to anti-european factions and their own countries. so it will be primarily domestic, not really thinking about the trade aspect. scarlet: one thing in the u.s. might be a border tax adjustment. donald trump said to the wall street journal over the weekend, anytime i hear border adjustments, i don't love it. usually means we get adjusted into a bad deal. that is what happens. when you did analysis, this is something that was part of paul ryan's proposal. megan: it is supported by a lot of republicans who are not traditional protectionists actually, more moderate. but trump said it was too

complicated. it is actually not, but it is a bad deal. whether it happens according to theory or not, and there are questions, it will probably push the u.s. into inflation and the rest of the world into debt deflation. those two things are perfectly terrifying. joe: trump obviously would like to move the policy in some way in more favor of domestic companies, even if it does not help them. if the border tax adjustment one approach to doing that? megan: it removes the current institute we have on the tax structure for companies to move profit and production abroad. more companies might be incentivized to say in the u.s.. -- stay in the u.s. ultimately i think in the past we have seen current account adjustments affect the currency

after five years on average. it will take a long time for the u.s. dollar to adjust, which is what people are hoping for. , you aren greene staying with us after the break. scarlet: we have earnings from united airlines fourth quarter, $1.78, beating the consensus by three pennies. this matches the consensus estimates. it was down 1.6% when the company had anticipated a drop of 1.25%. well within the range it had defined. but the shares are falling 1.4% in after-hours trading. ♪

♪ scarlet: we are back with megan greene. we want to take a deep dive into the bloomberg. you can find the chart using the function at the bottom of the screen. i'm looking at the debate over the bull market with bonds. you would not know this by the wall street forecast. this is byfc. you can click on the line and go in to it. you can look at that history of what economists are forecasting. 22 -- actually 33 of the 60 economists we surveyed expect to year yield to go up to -- here, we want to go to fourth quarter. 2.5%pected to and between and 2.7%. is a third end, that

of a percentage point from where it ended at the end of 2016. seems like a fairly tepid forecast. joe: it is not that much. everyone sort of clustered in this like safe range. megan: that has been the case for a long time. ever since the election, we have seen more bullishness. it is being tempered, and everyone has turned a bit bullish. consensus trades are continuing. scarlet: the bigger question is how you get to that by the end of the year. it could be up or down. i wonder if a trade war with china would show up in the 10 year yield. megan: it could, because it would revolt and higher inflation -- result in higher inflation for the u.s. speaking of higher inflation, we got the u.s. empire state manufacturing mandate. the headline was ok, but looking at the prices of data, they

manufactured in new york, how much are you paying more for your goods? are you receiving more, and both of the lines have shot up, the highest level in three years. you see companies saying yes, we are seeing pricing pressure, the ability to raise prices and pass them along. is this the real deal inflation wise? that is the big question, is this a real turn? --look at 2011 and the fed transitory. but is this the real thing? megan: i don't think so. i think inflation will look fabulous for this month and next month. that is because of oil prices. the year on your base affect falling out of the comparison that we have to worry about from march onwards. inflation was better for statistical reasons, but not structure at all.

in order for inflation to look better and growth look better, we need to see a logic productivity from the u.s. there is a chance we can get that with structure projects that deal with education and roads, but i don't think companies are interested in those because they are not profitable. joe: asset management chief economist, thank you for joining us. and a quick programming note, tomorrow janet yellen will speak to the commonwealth club in san francisco on the economy. we will have live coverage at 4:00 p.m. eastern. ♪

♪ reporter: let's get to first word news this afternoon. president obama has commuted most of the remaining sentence of chelsea manning, the army intelligence analyst convicted of the 2010 leak that revealed american military and atlantic activities around the world and put wikileaks on the map. she was jailed for nearly seven years, and the 35 year sentence is the largest ever in the united states for a leaked convention. she will be released in may. prez obama met with his team to discuss preparations for donald trump's inauguration. that is accusing -- according to josh earnest, so there can be a

high state of vigilance on friday. you can watch president elect trump sworn in as the 45th president here on bloomberg. coverage starts at 10:00 a.m. eastern, 3:00 in london, 11:00 p.m. hong kong time. the bowling seat -- boeing ceo is meeting with president trump since the november election. to build theracted next generation version of air force one and the f-18 super hornet. >> i think mr. trump is doing a great job. where working through simple fighting requirements and streamlining the process and fighting commercial best practices. that will lead to financial cost reduction, something we are working together. i appreciate the approach on this. reporter: trump has put public pressure on boeing and other companies to reduce cost. amazon areanies like vulnerable to unfair competition

from internet service providers if the internet rule is reversed. that is according to tom miller said no one is safe. the gop willsays not find it easy to reverse the open internet rule also known as net neutrality. it for bids isps like comcast and at&t from slowing web traffic. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. joe: let's get a recap of today's market action, kind of a classically risk off day today. you see the dow industrials losing three point. had been gaining, up 6%. the dollar had its weakest day since july 29, and the pound it strongest after theresa may's sort of goals, outlining her

goals with brexit. scarlet: it took the pound down to below 120 after words. before deutsche bank announced $7.2 billion settlement with the u.s. department of justice, tom keene spoke with davos and john cryan. as part of the panel, he asked him what he expects banking to look like in five years. cryan: we are placing our outlook on technology. we are not sure of the fundamental product of -- nature of products will change much. we don't think the demands of clients and counterparts will change too much for the delivery mechanism. that will help us protect ourselves to use technology to produce our own controls. we can improve our efficiency, and we can use technology to

improve the cost. major bank? ut a have you pull in technological innovation? i was here to three years ago. -- two or three years ago. how do you pull on that innovation first lower developed economy banking and finance. -- first lower developed you ower developedl economy banking and finance? john cryan: we are a multinational corporation. it is not an institution young people want to work in these days, so we find new ways of working particularly with younger people. they want a different employment contract than a simple employer-employee relationship. they are much more fluid, and they want sometimes some equity, so we work with them as a

third-party, but with some exclusivity. we can capture this without formal employee. we have three or four different approaches so we always have the right idea. it varies from country to country, but in germany, we have took three different approaches with how we deal with our trainers and innovators. -- entrepreneurs and innovators. tom: moment to moment in the future, everyone is working on the expense side of the income statement. i can only go so far. then do we see consolidation weather in your banking or in baseds more portfolio products? john cryan: there is a lot of pressure on the controls. innovation,uct there have been plenty of other

innovations, digital currency is one of them. but the products have not changed because we have been regulated. they are more and more regulated. as regulation becomes more granular, traditional institutions tend to be figurative. we are looking elsewhere for disruptors. joe: deutsche bank's john cryan betting on innovation, but credit suisse is betting on continued cuts. and credit suisse's ceo tidjane thiam talked about his bank's priorities going forward. ofjane thiam: we took a lot global markets in 2016. there is a number coming out, but it is not material. and we are continuing efficiency programs across the bank, really.

believe, wey what i should improve productivity to 12% per annum. that is how a bank should be run. productivity. i really like big different between productivity and [indiscernible] -- it can be most having better people. things like compliance, we are investing a lot in knowing your customer, in the systems, so initially we are investing, but that will generate savings later on, because we are hiring. so looking at cost per employee, there is productivity per employee. sometimes you have to pay more to get more. so to present activity productivity- 2%

improvement, my preference is we never have an efficiency program. every three or four years, you get 15%, and you don't need big cost-cutting forms. >> when will that end? tidjane thiam: 2018. >> in 12 months or the end of 2018? tidjane thiam: in 2018. we are already seeing it. there will be more in 2017. in 2018, there is this big legacy. we took it that $75 million down to 15,000,001-year. we can take it -- $15 million one year. when 2018, it is the first year where you have the base, relative efficiency, stable, you can focus on driving the platform. >> rdc the main driver for the investment bankers?

-- where do you see the main drivers for the investment bankers? tidjane thiam: with equities we have a good franchise, doing well. there was very specific activity, which i will announce with the external lighting. i think we will have a reasonable mirror, and it should compare to last year. this will be impacted by [indiscernible] we saw what was happening to the acm pipeline. certainly the brunt will be around [indiscernible] tidjane thiam: are you expecting -- >> you expecting more volatility? tidjane thiam: i can only say i don't know. [laughter] tidjane thiam: you can make an argument both ways. frankly the reality of what actually happens, you can make

an argument. scarlet: that was juliette: joe: -- joe: that was credit suisse ceo tidjane thiam. inrlet: we go inside netflix the numbers don't lie. they will report earnings tomorrow with the cost of content and original programming. ♪

♪ scarlet: netflix's original programming strategy has remade the media landscape, but it comes at a huge cost, and it may not be sustainable especially with competition from amazon. let's look at "the numbers don't lie." in the third quarter, they added 3.5 million streaming customers

in total, topping estimates domestically and internationally. they have 47 million members in the u.s. and 39 million more in the world. generate 40% of sales in the third quarter versus 16% a year ago. the growth is the orange line for international right now. is above the u.s. which is the white line. it is 50-50 international revenue split. original factor is -- original programs is that commit major factor internationally. fifth, the yellow places, streaming things like netflix. that is a much bigger piece of the pie compared to five years ago. the original content comes with a higher price tag. even as netflix's original catalog has been cut in half, they have doubled, estimating $5

million in 2016. whatever happens with the results, netflix will be a start to watch. on average, the stock price has moved 15% in either direction after each orderly reports in the last seven years. lastarterly reports in the seven years. we will see how this goes as content increases. thanks. intong us now today deeper netflix is paul sweeney and lucas shaw. cover storyrote a for this and focused on netflix as an international success especially in brazil. this has been a huge issue for netflix, its ability to expand internationally. how is it looking? lucas: it is going very well in the places they have been the longest or that are most similar

to the u.s. the biggest markets are the u.k., english-speaking, similar media climate, canada on the border, and latin america with brazil and mexico being the biggest, brazil significantly bigger than mexico. where it is less clear is the newer markets they went to, asia, africa, the middle east -- the numbers from those markets are quite small. i think netflix is aware of that. i spoke with the ceo of that for the story. he acknowledged it is still a work in progress. these places were present half of the world. scarlet: he has big ambitions as well. 85%as international to be of the user base. for revenue split, they are looking for 50-50 international and domestic. are these feasible? paul: i think they are. they were aggressive last year

2016, really accelerating the international launches, so they are everywhere around the world with the exception of china. jointl go in through the venture type of arrangements. they are essentially everywhere. it is simply a question of building up the user base in each respective market. what you find in the european and asian markets, it has been difficult from the earlier english speaking markets that had entrenched competitors, local competitors. the u.s. programming is not traveling as well to the non-english-speaking markets. it is slower on the international growth markets. scarlet: and you really don't deep into how netflix one over brazilians. -- won over brazilians. it involved teaming up with companies and the infrastructure itself. lucas: when netflix went to latin america five years ago, internet was not particularly

widespread or broadband. even today it is an issue where you have pockets in sao paulo and rio. they have internet, others not so much. the key where it goes is the ability to stream video at a high-quality. if you can't do that, you cannot use the service, which is why netflix enabled off-line viewing so you can download it someplace where there is internet, then go somewhere else. now in brazil, what they did was partner with the local telecom companies. they have a program called open where they provide servers you can stream video, and the data does not paying around the world. -- ping around the world. the quality is higher. they could not get a deal in brazil with the biggest media company in the market, but they did get some stand up. they got popular movies, then they recently released the

original series, a strategy they are adopting around the world. they will have original in almost every big country they have. like paymentthings and piracy and smart tv -- netflix has to take a slightly different approach in every country, but it boils down to things like infrastructure and programming. joe: when you get the earnings tomorrow, what is the number that decides the obvious, that you are looking for, and what are the key things that drive this? paul: this is a momentum story. it is not earnings but subscriber momentum. , not so mucht that domestically because we know maturerket is more relative to the international market. investors are focused on the international subscriber heads, because that is what will support the huge programming the company has. joe: all right, thank you both

for joining us. scarlet: we will talk to the saudi aramco ceo about how he plans on making one of the biggest ipos more appealing to investors. ♪

♪ scarlet: saudi arabia intends to reduce the overall tax rate paid by saudi aramco to make the 2018 ipo one of the biggest in history, more appealing to investors. dominic away sat down with the away satt -- john mack down with the ceo. here inlan is to go

2018. ofould say in second half 2018. john: what do you need to do between now and then to get this to work? when will you announce the further plans? amin: they will be selecting the banks that will be helping us for the listing. hopefully that will come sometime soon after we are selecting the banks. it will be followed by selecting which markets we will be investing in. we are looking at the front and this will happen in saudi arabia. john: you mean canada and london? absolutely. looking at luke -- hong kong, london, u.k., i mentioned canada . all of the markets being looked

at to decide what will happen, listing. will be dual it depends on the income evaluation. john: you will be surrounded by bankers here. have you got any progress in narrowing that down? amin: we see a lot of bankers, not listening to ipo, but we have seen a lot of bankers. demos, a lotcan to a bankers -- demos -- davos, lot of bankers. not all related to ipo. there is a lot of discussions. we are in different markets, financing for our deals outside saudi arabia is also done by these banks. scarlet: that was the ceo with

the editor-in-chief. joe: it is time for the business flash, looking at the biggest stories nine now. -- right now. like rock has reached a settlement with the government. it will pay $340,000 to resolve allegations it did let employees keep whistleblower rewards. and mark zuckerberg is denying claims virtual reality headset maker acquired by facebook in 2014 stole the technology for the oculus rift. he was called to the witness stand today by setting max media. they alluded to international property. the $2 billion cases in the second week. rolls-royce has a green light

from the u.k. judge for a settlement proposal with british prosecutors. an unsealedith parol agreement with the parent company in the u.s. they were to pay to resolve bribery cases in the u.s., u.k., and brazil. they've followed this dating back as far as 1989, and in the u.s. 2000. that is the bloomberg business flash. scarlet: what you need to know for the trading day. ♪

♪ -- u.s. u.s. that stocks finishing the day lower. that follows record highs, but we did not get any upside in equities. joe: and the nasdaq was the big loser. scarlet: financials dragging things down. in terms of overnight and what we are looking in tomorrow, we have a lot of interviews starting with stuart gulliver.

that is at 6:00 eastern. we will follow that up with jamie dimon and more. joe: i will be looking at u.s. cpi and industrial production tomorrow. i imagine folks will be playing -- paying close attention to the cpi number for hints of inflation. and later in the day, janet yellen speaking on the economy at 3:00 p.m. eastern. we will have live coverage when it happens. scarlet: earnings from goldman and citigroup before the bell and after that, we will break down netflix. that is it for what you miss juliette:

♪ haidi: you are working bloomberg technology.

president obama has pardoned 64 people and commuted the sentences of more than 200 inmates including chelsea manning, the army analyst convicted of the 2010 leak that revealed the u.s. military and dramatic activities across the world. it put wikileaks on the map. manning had been doing seven years when she became transgender female and a male prison. --s would increase america americans uninsured by 20 million. that is according to a congressional budget, citing numbers from a veto 2016 bill that would have vetoed most of obamacare. the man suspected of killing five people and wounding six others at the fort lauderdale airport returned to federal court today. the hearing was over with a 26-year-old esteban santiago could be released on bail. he could get