daybreak," on this monday. how many her -- how many times have you heard this in the last week? teachers negative, -- futures negative. in the fx market, switch of the board. a weaker dollar in the g 10 space, captured by dollar-yen. treasury stable -- treasuries stable. alix: here is what you need to know. the u.s. dollar touching a six-week low, global equities edging lower. and investors respond to trump's first days in office. the dawn of a new beginning. prime minister theresa may will become the first european leaders to visit the new america first white house. will they find common ground, or are there challenges too large to overcome? and president trump's first days in office show no sign of shaking off his embedded campaign persona.

with initial executive orders and the latest developments in his cabinet. that is what you need to know this hour. david: to bring us up to speed on the new president's agenda, we are joined by our white house correspondent, coming to us -- coming to us from the white house. what does he have on his agenda today? what are we looking forward to today? >> he started off tweeting about his very busy agenda. he will start off meeting with a number of ceos and business executives, specifically focused on manufacturing. he will go right from that meeting to signing executive orders. he wants to have a first day of executive orders on things like job creation and fixing the economy. he will go from there and meet with union leaders and american workers. it will be another meeting where he talks about manufacturing and bringing back jobs to america. finally, he will meet with leaders of congress, with the leaders of the senate, the house

. he will have a private meeting with house speaker paul ryan toward the end of the day. he wants to show that he has a close relationship with capitol hill, which is going to rely on to move forward his ambitious agenda in washington, d.c. david: he was busy over the weekend as well. how does what he did over the weekend move going forward? his focus over the weekend was on the crowd size during the inauguration and not on the very important issues that he is facing as president. the narrativeange and show that he is very serious, focused on creating jobs and helping the american people. that is why he has this agenda, where he will be with business leaders, american workers, and leaders on capitol hill. we now turn to kevin cirilli on capitol hill. what is congress going to do? toin: they are going to try

sort out exactly whether or not republicans will be unified to support president trump's agenda. i can tell you that capitol hill aides of senior republican members in congress are going to be watching carefully this morning to see what developments come out of that meeting regarding trade policy. as you know, there are several republicans who are not necessarily sold in ripping up the trans-pacific partnership, which many of these members helped work on with president obama. alix: also the question is, where is congress actually writing bills? to get stuff done, that has to happen first. kevin: ipo that to jeb hensarling. that to staffers of jeb hensarling, and they told me that privately they are beginning to have meetings with people from vice president mike orbit, and allal

of that of course has been put on hold as we continue on with the senate confirmation hearings. but on issues like tax policy as well as crafting deregulatory ways to scale back key portions of dodd-frank, those conversations are are ready under way -- are already underway. david: that is kevin cirilli reporting from capitol hill. this is president trump's first full business day in the white house. judging by what he said he would do right at the beginning of his administration, he has a lot on his agenda. president trump: my first day in office, i will order a review of every single regulation issued over the last 10 years. that begins with immediately repealing and replacing the disaster known as obamacare. you know, in this country we are going to go very strong borders from the day i get in. just think about what we can accomplish in the first 100 days

of a trump administration. we are going to masterfully cut taxes. on trade, i am going to issue a notification of intent to withdraw from the trans-pacific partnership, a potential disaster for our country. lists, job killing regulations will be immediately canceled. we are going to build a wall. i could wait until a year and a half when we finish negotiations with mexico, which will start immediately after i get into office, but i do not want to wait. david: to talk about how he will get all of that done, we are joined by libby cantrill. hadhat string, we deregulation, obamacare, borders and wall, cut taxes and trade, all at the very beginning. how is he going to organize all that? libby: he is going to be focused on the areas where he put points on the board, and those are the areas where he has executive

authority. trade is one of those. withdrawing from the tpp -- he can do that without congressional authority. he will do that today if not later this week. immigration, he can ramp up enforcement without congressional approval. on some executive orders that would scale back the obama regulations. the other thing, however, -- the other things -- obamacare, tax reform, infrastructure -- as we know, the legislative process is time-consuming, it is iterative, and those things will take much longer. david: there has been a lot of talk about obamacare. there are two alternatives -- repeal, and repeal and replace at the same time. what is the difference in terms of the timing for congress? congressionalct republican leaders want to a fan's with a repeal bill. that would have been easy and there is a precedent for it. a similar bill passed in the last congress. however, when donald trump came

out several weekends ago saying that he is going to replace simultaneously, i can imagine what congressional republicans were thinking. oh, goodness. that has a chance of hijacking their congressional agenda. a health care overhaul is incredibly difficult. president obama, when he entered office, had an approval ready of 78% with larger majorities in both the senate and the house, and obamacare took 14 months to pass. even then, it passed on a partyline vote. i hate to be pouring cold water over the animal spirits, but legislating is difficult. question is, on friday or saturday he had an executive repealing obamacare. no one knew what that meant. what does signing an executive order do for insurers or hospitals? libby: he gives discretion to the secretary of health and

human services, who has not even being confirmed yet, to evaluate where they can roll back some of the things that were done by executive order. the thing about obamacare, the bulk of it was passed by , with thebut it also executive, president obama at devil was in the details. the individual mandate is the big question. does he touch that? if he does, we know that could lead to pretty significant consequences for the insurance market. investor, say i am an i have just spent the weekend looking at crowd sizes, and i'm wondering -- i am playing this big reflation trade, and i hear nothing about fiscal stimulus. all i hear about is obamacare, inauguration crowd sizes, and things like that. i wake up monday morning -- where is the fiscal stimulus plan? libby: there is no mention of

tax reform over the last 50 hours. i was surprised by how much she talked about infrastructure in his inaugural speech. effect somewhat a side of his influence -- of stephen bannon's influence. rubber meets the the proverbial road. governing is harder than campaigning. these things, when subject to congressional approval, just take a lot longer. obamacare could take an entire year. that would push back tax reform and infrastructure because we have not even seen legislation about how those things would work. it could be pushed back farther. david: that is libby cantrill, pimco's head of public policy. coming up, it is the long versus the short when it comes to public policy. we explore who is in a position to win under a trump administration. plus, what is behind the rally in sterling? marc chandler is the global head

of currency at brown brothers harriman. this is bloomberg. ♪

jon: from new york city, this is bloomberg daybreak." futures are negative on the dow. the about three points on s&p 500 at the two weeks of losses on the benchmark in the united states. in the fx market, the total looks like this. a weaker dollar store line -- a weaker dollar sterling. -- 0.9% for treasuries up big

this morning. alix: confusion reigns in washington. there is a big showdown looming between fast money and real money. take a look at the chart on my terminal. the blue line, hedge fund short positions. theyare round around that are right around the record for the 10-year note. one portion of the margin is long, one is short. marc chandler's with brown brothers harriman, the global head of currency strategy. who is going to win that? before the election, there was speculation that we were at humility a large short trading position, among the largest ever. , lot of the data is dated because last week, on tuesday, we had the treasury yield that the 10-year treasury yield down 2%.

i think over the next several months, we will see a rising u.s. yield on a act of higher inflation, stronger u.s. growth, and the prospect of deregulation and the infrastructure spending. alix: what yields -- what leads the market, then? will it be the yield or the dollar? marc: today we are a little bit softer. the dollar is a bit heavier. jon: yields have been squeezed in the last couple of weeks in a significant way. what is the upside case for the dollar, given that? marc: we have seen the dollar go broadly sideways-on's middle of december. was veryeing the 2.30 important. since before the election, we have seen the rise and novel yield is mostly the real yield increasing. this is a reflection of the higher demand for capital area the news report you had on bloomberg today about foxconn,

talking about forming up the team with apple. this is big news. this is the kind of -- if it is america first, president trump is right about america first, maybe we should see more about not just jobs but investment. jon: over the -- alix: over the weekend, it was when isthat if trump -- that come into play? marc: i am worried about that as well. i am not sure it comes into play in the first 30 days of his administration. the important thing we are going to have right now is that up until now we have had him reacting to tweets and comments. going forward, his first work day in the white house, he will to-- we will be reacting things he does rather than things he says. first can you be america in this global fx market, global bond market? is that doable?

can you advance our interests at the expense of others? marc: i do not think so, but i have been wrong before. the america first terminology goes back to win the u.s. rejected wilson's league of nations. i wonder how far we can have capitalism in one country, how much we can have america first. our generation and my parents' generation has learned that we cannot have peace and prosperity by itself. we need peace and prosperity in europe and asia. jon: quite clearly, president trump is after china and what they are doing with the exchange rate. theoretically they cannot close the exchange rate because it would mean weakness. that is a real story that is happening right now. that continues, surely. they have no choice. but to carry on with the proper currency? marc: even under president

obama, the argument was we do not want central bank buying treasuries, we want them to buy our goods. policies.mercantilist do not accumulate treasuries, buy our goods. private sector has been buying the bonds from the chinese, from the japanese. part of this is also shipping out of the build sector to the long end of the curve. jon: marc chandler is still with us. president trump and prime minister may will meet to discuss the future of trade. that is coming up next. even can with politics, former health and human services secretary under president bush michael leavitt will join us. from new york, this is bloomberg. ♪

jon: from new york city, this is "bloomberg daybreak." president donald trump will meet with prime minister theresa may. with us from london is john fry, bloomberg news executive editor for international government. how do i think about this meeting this week, in the context of ongoing negotiations that will take place in the coming months, with europe and britain? you hope that you can come back from washington with something that allows you to say to the europeans, i have already scored a victory in terms of the free trade agreement that i could get after brexit. i am not in as weak a position as you might think in the you that in the e.u., as the e.u. negotiators might think. she is looking to come back with

something tangible that she can use as a bargaining counter. willhow much common ground these individuals have when they meet this week? john: it is difficult to find. if you look at almost any everything -- almost everything donald trump has said, when it comes to nato and the concepts the growth since the election as well would be difficult for theresa may to go without mentioning, at least in passing. but the one thing theresa may has in going forward is that clearly there is a sense in the trump team that they want to give britain a free trade deal. there is a huge difference between what barack obama was saying,nd what trump is that the u.k. will be at the front of the queue. there are huge differences

between them, but the one thing they do have in common, probably the most important thing for theresa may, is the free trade deal. jon: i understand that back in the oval office -- just to wrap things up, the meeting between president trump and prime minister may is significant. how significant is the court decision that we get from the supreme court tomorrow, and has it diminished somewhat over the last few weeks? john: i do not think it has. there is a question over whether parliament will get a vote on theresa may's negotiating position. fraher, thank you very much. c, the data kept holding up and negotiations between the u.k. and the rest of the euro does not look like it is going to be as upbeat as many people thought it would be. at this point it does not look like it.

i am not so sure about buying the pound. but covering shorts -- it looks like we put in some kind of medium-term bottom, maybe on our area.ck up to 1.27, 1.28 the interesting thing between trump and may that they have in common is an antipathy toward a german-led e.u. the u.s. has been traditionally in favor of an integrated europe . now mr. trump says, maybe not. alix: how will the next 24 hours play out with sterling? if you get a potential deal with trump and may, that would reinforce the heart exit. hardat would reinforce the brexit. what kind of position will we be in regarding volatility? marc: i think it looks like it

will go against the government, but there will be a small block that still favors made possible position. i am not sure it matters so much. may last week indicated that parliament would have a final vote on the final decision. it seems unlikely that the parliament, not very pre-brexit -- not very pro-brexit, will trigger article 50. if they do not get the chance, she proceeds accordingly. the one theme of brexit that it will take longer ? realistically, the president cannot come in an entire week and negotiate a trade deal. marc: there is a lot of anticipation over what could be forthcoming. as your colleagues said from london, it is really a question of a difference between obama, last in line, between a $65

million country versus a larger block like the e.u. it was like he only has to say some warm and friendly things, and then go home and say it was a success. jon: moving forward, the big story after the brexit vote was the idea that foreigners would get rid of any sterling dominated -- sterling denominated assets. i think more of what the market is focusing on his the 10th of announcement we saw last week from the u.k. banks, and the foreign bank saying, how many jobs are we going to be taking out in london? chandler, thank you for being with us. administration may end the obamacare insurance requirement. we was the with michael leavitt,

on the future of health care. that is coming up next. from new york city, a marginal move for the dow. is down around nine points. the fx market -- things look something like this. dollar having yen at 1.1360. a stronger pound there as well. it is a weaker dollar across the board in the g 10 space. yields down by about a pieces point -- about a basis point. by 1.2 percentage points, $52.55. from new york, this is bloomberg. ♪

jonathan: from new york city, this is bloomberg. softer, downtly about eight points on the dow. in london, a negative day as well, down 4/10 of 1%.

the fx market appears to be very straightforward. market,to the treasury all near the front end of the curve, coming up from the treasury, throughout this week. here is what you need to know. the trump trade state, the u.s. dollar edging lower and gold hitting a two-month high as investors respond to trump's first day in office. u.k. prime minister theresa may will become the first european leader to visit the new america first white house. will the two find common ground? the first 100 days. first days inp's office showed no signs of shaking off his combative persona. initial executive orders and the latest developments within the cabinet. for more on president trump's

first days in office and the progress of the cabinet, we are joined by michael mckee. go, go down, a bunch to where do we get in his cabinet at the end of the day? he is going to get month -- mike pompeo a little bit later, today. he will have three, way below 43,ck obama and george bush so he is kind of minding an empty store. it will take a little while, i'm sure you are shocked to know that democrats are playing politics. the cannot stop any of these nominees, but they are delaying. peoplehe is deploying that are very invested in many ways and it gets very complicated with the ethics region. theyel: also the fact that

were very slow in getting some of these people's paperwork up to capitol hill. it has been a very difficult process, so far. weekend, he was signing executive orders, one declaring his administration would repeal obamacare. he still needs a health and human services secretary to do that. thatel: he put himself in position because he said he would affect -- he would have a repeal and replace plan shortly after tom price became dhhs secretary. he has to have two confirmation hearings for the senate finance committee and it may be february before he actually gets a final senate floor vote and gets and office. what he put out on friday was sort of a roadmap, a statement of intent. it is not have a lot of power to change much in obamacare. there are some things he can do at the margins, but what he needs is some sort of

legislative proposal and republicans are very disunited on that. there is no replace plan. they agree they don't like it, but they don't have something they can put up, instead. david: anyone drafting a bill? michael: there are about seven or eight bills that have been floating around, including one tom price has put forward, himself. it is called the empowering patients first act and replaces it with a number of features that cuts the amount of benefits available to people for lower cost. the government pays less, you get less. that is kind of the theme that seems to be running through most of the proposals. they know politically they cannot just throw millions of people off insurance, but they would like to lower the cost, somehow. david: many thanks to michael mckee. when it comes to repealing and/or replacing obamacare, there is no one more informed

than michael leavitt. he was named to run the epa and the department of health human resources. partnersads leavitt that advises on a number of things, including health care. let's start with the weekend. president trump signed an executive order instructing the government to sort of back off on obamacare. how important is that order? michael: there were two executive orders and the first one that is not being talked significant, as the first one is a fairly standard first move for an administration. essentially, interval -- in orders departments to stop making regulations and goes to the federal registry and pulls out of the funnel of regulation making anything that has not gone final so they can revisit it. administration's have a

lot of roles that are put in the place at the last minute and they want to get control of that and there were a lot of health care rules that are affected. david: so whatever you are doing, stop and let's take a look. michael: even if it was issued after the 20th of november, that allows them to bring it back, because it gives them control of things that they may not agree with. one on theis the affordable care act, for the president basically said let's go out and fix this. did not doling, it anything, but it basically said i am enabling you to do a lot of things. any of the departments that have affect on the affordable care act feel empowered to act. david: everyone seems agreed that agreed that it will take legislative act to fundamentally change the affordable care act. michael: there are a number of things they can do with administrative rulemaking.

there were nearly 2000 places were the affordable care act said the secretary shall and granted authority for the secretary to resolve something where it was war -- where it was more granular. a example of that would be the essential benefits. these are the things that have to appear in insurance policies for it to be considered good insurance. the congress could not agree on that. they said the secretary shall agree on. the secretary could not come to a conclusion and ultimately said let's let the states do it. they could change that. alix: help me understand, if i am a hospital or insurance company. how do i start running my business the next four years? michael: this has injected a fair amount of uncertainty, this entire change. we are in an atmosphere where people are navigating uncertainty and what we tell our clients is you have to be iterating your assumptions all the time and every strategic

plan, the first two or three pages is environmental assumptions that are written once a year and need to be written once a month or once a week. do we see insurers pulling back from the marketplace, altogether which makes any kind of replacement very difficult? michael: that is one of the first things this administration faces. a number of insurance companies declined to go forward, this year. many more have said they will not go forward in 2018 unless the actuarial soundness of the individual market is restored. there are many things that made it difficult for insurers to make money or have any kind of predictably, and they have said we have to change it. if republicans don't change that , they will get the blame if it collapses. jonathan: we have an audience full of investors hoping for

some fiscal stimulus. michael: the president has made it his first priority. he did that with his executive order6 is -- executive order. it is possible we could see that consume a lot of oxygen in the room. there are other things that need to be done. a tax plan that is integrated with health plan -- with the health plan because of the impact on spending. david: how dependent is that on whether they simply repeal as opposed to replace? michael: that has a great deal to do with it. one thing we can be certain of is that there will be a bill titled repeal and replace. the republicans have dined out on that phrase for three elections in a row and have been rewarded and have to deliver. what will the definition of repeal be and what will the definition of replaced the? that is what they are arguing be?t -- replace

that is what they are arguing about. thinkdisconcerting to about repealing, without a plan for replacement. pacesn break it into five -- five phases. the first phase was already started, the evidential transition phase where with a stroke of a pen, he can change some things. into thed is getting process of repealing and we will see that between now and the 15th of march, probably. that is if they choose to do it asynchronously. the third phase will be beginning to create a set of replacement bills. i don't think it will be one bill. maybe four to six bills. it will be easier to manage, that way and we will see those start in april and may.

the question is how quickly will the transition occur? it is likely they will give somewhere between two and four years to be made. the truth is, they need to. the last and gets you into the tax bills and we will see tax bill start in the fall. day,: at the end of the will those 20 million people who came into insurance still have it? michael: republicans have made clear that is a commitment. the issue is how do they finance those 20 million people between now and when the bills become effective. that is where you get into the tax issues. how can you affect taxes if you are maintaining the spending for a period of transition. david: governor mike leavitt, you are staying with us.

president donald trump is inspected to sign a executive order today saying he will renegotiate the free trade the unitedbetween states, canada and mexico, known as nafta. you can see the mexican peso is reacting. jonathan: will the pipeline heat up after a slow 2016? jpmorgan gives their outlook. will deregulation give the banks another that tire? -- bad tire? from new york, this is bloomberg. ♪

emma: coming up with an x hour, ceo's on the trump impact on real estate.

next hour,p in the ceo's on the trump impact on real estate. david: still with us is governor mike leavitt. i want to talk about taxes and the obamacare and the -- and obamacare in the affordable care act. can congress walk and chew gum at the same time? can they move forward on replacing obamacare at the same time as text warm? michael: in many ways, the tax issues are interdependent with the health issues. to have 20't want million people off of insurance, they have to pay for that. the budget bill does not even include the white house, it is basically a memo between the house and the senate deciding ,hat the fiscal caps will be deciding how much they will

spend and giving instruction to people who had the committees. a lot of disagreement on just how tightly those fiscal caps need to be put in place and with the factions within congress, particularly with the house as how they should react to those. taxes,r for them to do they will have to have a pretty good sense of where they are going on health care. david: take us into the personalities. this is right in speaker ryan's wheelhouse. this is what he knows. how closely are they coordinating between the speakers on one hand and the white house to make sure they are on the same page? michael: it is a negotiation. the reality is congress will position themselves to want to lead. the white house will want to lead. one of the things every new executive realizes is that there were other people who got elected and they share power with, so there will be collisions and they will work it

out, in the end. it is hard to imagine donald aump will actually veto budget from a republican congress, but we have been surprised -- there have already been surprises. i don't think the white house has fully laid out their budget. i think they're in the process and will begin to frame it up. the congress will lay out its budget resolution, then the president will put out a budget, generally that will happen in the latter part of february, early march. david: can they have tax reform that is not revenue neutral? on --l: that will depend are you thinking about congress, themselves? david: can they get through with a budget that cuts taxes that is not revenue neutral?

do they have to pay for this deficit spending? michael: that is one of the disagreements that will be played out in the context of the different personalities and you have different factions in the congress and a two vote margin -- in the congress and a senate with a cisco vote margin. -- two vote margin. of negotiation and jockeying to go around in the next months and it is early to know the answer to that question. david: it all sounds a bit complex. thank you so much, mike leavitt, secretary of hhs and now you have leavitt and partners. and now we have other stories making headlines. emma: the biggest manufacturer of apple devices may build a u.s. factory for $7 billion. it could create tens of thousands of jobs in president

trump's first year in office. jointe considering a investment with a japanese display company. services provider halliburton reported first-quarter profits that the estimates. oil producers kicked off a year of recovery in north america. customers in the u.s. and canada increase the number of oil and gas drilling rigs 19% in the last three-month. germany vice president is returning to silicon valley, quitting the chinese phone maker after four years. -- former google executive he says it is time to return to the u.s., but he is not saying what he will do next. that is your " bloomberg business flash." alix: coming up, the slowest year since 2003. j.d. moriarty reveals why postelection stock rally means a

big pickup in listings for 2017. that's next, this is bloomberg. ♪

jonathan: from new york city, this is bloomberg daybreak. a trap of hungry investors are hoping it down trump presidency will turn things around. joining us now is j.d. moriarty alongside bloomberg's ipo reporter. indicators are up here for the consumer and businesses. talk to me about how the conversation has changed. we saw a material change long before the election. our investor clients were chasing the market, all year. there was very little supply. from an ipo perspective, but there was a much stronger bid from investors who needed outperformance.

post this rally, we have seen that fervor for deals, for new ideas, for new concepts accelerate. ask howok -- when you this changes, we can go to corporate with a great deal more company,e that their their deal will be well received by the market. the other material thing that has happened is other sectors are participating. we had a very market -- a very narrow market in 2016, we will have a diverse market in 2017. jonathan: gimme the ideas you are hearing a lot more. at this point last year, we were looking at a market that was largely energy and companies that needed to raise capital to fix themselves. biotech, a very narrow market. what we have seen sense is a big pickup and financials, a pickup thatnsumer and retail, and

of course technology, which investors have been waiting for, for some time. if you look at the technology deals that came to market in 2016, they were well received, particularly in the second half of the year. >> with trump, we know changes afoot. -- change is afoot. equitythat affecting issuance, whether it is on the ipo side or companies raising capital? jd: there is certainly an increased confidence in growth, which is obviously a good thing. you mentioned one thing that is not in our interest, which is uncertainty. the one thing that would run counter to a healthy ipo market's volatility. that has been low, so far. uncertainty is not our friend when it comes to taking companies public. the market is going to be watching closely, all the policy

announcements, and are they consistent with what the market has priced in? are you seeing urgency at all? to keep in mind that a company's timing has more to do with their corporate calendar than it does with trying to respond to the market and the things they cannot control. we advise companies to be ready and to capture windows. what you see right now, for instance, going into the end of last week, it were 13 ipo's on the road. that will make for the busiest part to the year sense -- busiest month since september of last year. that is in response to this rally. certainly a lot of issuers have rushed to market. this is normally a very quiet period for ipo's. jonathan: let's talk about a source of uncertainty and that is changes to the tax code. i want to hear how you

anticipate changes to the tax code will affect issuances and the like. jd: it is an interesting area and obviously affects our larger clients more profoundly, those with more complex capital structures. what it means is all of us from an investment banking perspective and capital markets perspective are partnering with , going torparts clients and working through the entire capital structure. in tax reform,es what does that mean for them? --n they have to refinance would they have to refinance? it could be a positive thing for us, but it remains to be seen. what industries do you think excitement will come from? seen a real shift, a disproportionate amount of energy. that shift from fixing the

company to actually proactive growth oriented issuance has been interesting. technology really is -- technology is certainly waiting for, to come back. one question we get all the time is the uniforms. the reality is, many of them will be a 2018 event, but there will be a lot of variance in companies, in between. david: great to have you -- jonathan: thanked a have you, j.d. moriarty. -- great to have you, j.d. moriarty. alix: kit juckes will be joining us, this is bloomberg. ♪

♪ jonathan: from new york city, good morning, this is bloomberg: daybreak.

in the markets, after the first two weeks of losses since the election on the s&p 500, we are negative, down by a quarter of 1%. the fx market, a weaker dollar story dominating the d10 space -- g10 space. alix: there is what you need to know. the trump trade phase. global equities edging lower, gold hitting a two-month high as investors deliver response to trump's first days in office. theresa may will become the first european leader to visit the america first white house. will the two find common ground? the first 100 days, president trump's first few days in office reveal no signs of shaking out the combative campaign persona. a tumultuous first weekend and the latest developments within his cabinet. david: joining us now from the

thee house is bringing -- new president jackie agenda on his first full business day in office. there are executive orders we know, coming down, do we have any idea what they might be? ofwe expect to see a rash executive orders on day one at the white house. he will be focusing a lot on trade. trade is a big part of his campaign, he will be trying to get the u.s. to withdraw from the tpp agreement, also focusing on nafta, an agreement he wants to renegotiate. he will be meeting with the leaders of mexico and canada, very soon and he once be a big part of that meeting and renegotiating nafta is a big part of that agenda. david: there are parts he will sign an executive order, starting the process on nafta. to be clear, when he starts the process, it does not pull us

out, it starts negotiating. >> it is just the beginning of what could be a long process with our partners, mexico and canada. we will have meters between -- we will have meetings between trump and the leaders of those countries. trump called himself a top dealmaker, trying to make a better deal for the american people on trade. hissed nafta as part of campaign, saying the reason we have so many manufacturing jobs that have left the country is because of nafta and he wants to renegotiate it. david: thank you so much. another thing on the agenda for president trump, he is set to hold his first meeting with a foreign leader, this friday. is u.k. prime minister theresa may after trumps administration expressed interest in doing a free-trade deal with great britain. editor.us is our brexit

trail -- a free-trade deal between the u.s. and the u.k., theresa may has not talked about that, officially. this meetingk is and how important is it for the negotiations with the rest of europe? >> it is pretty symbolic. discussions, just not negotiations if you want to wind your way or the rules. allowsretty symbolic and theresa may to go to the europeans and say we are not as reliant on europe as you would like to inc.. we can prosper without it. -- as you would like to think. we can prosper without it. it strengthens her hand. most traded from the u.k. is done with europe, double the amount with the u.s.. they were not very happy with donald trump at the best of times and it theresa may is cozying up to him, they could use that as a reason to punish britain in these talks. jonathan: tomorrow, a supreme

court decision for theresa may. -- that she will give a final vote to parliament on the actual deal when she comes back from europe. how important is that supreme court decision, tomorrow? >> still pretty important. that promise is for a vote at the end of the process, on the deal she has made. government aids say they do not believe they can actually derail brexit. the supreme court decision could demand a pseudo-vote on the filing of the divorce papers, if you like. theresa may remains confident that you can activate that withdrawal by the end of the month. a slightly more problematic route for her that she will have to ask parliament's post -- permission. jonathan: still never much the story, because in the fx market, it is heavily short on the pound.

againstsion comes out government, does that move things materially as far as seeing the up -- potential agreement we could see with the eu? >> if i could forecast currency markets, i would be at a better paying job in journalism, but the pound is sensitive to all these things. you saw the announcement and bloomberg reporting today that the ride that we saw last week could suggest there is a bottom to that brexit trade, for the moment. many eyes will be on that supreme court decision. of hardd is a barometer brexit or soft brexit. jonathan: not an fx forecaster, i will bring in one of those, now, kit juckes. does this move things on the margin for you, at all? kit: it goes against government

but does not change things too much. we are getting an idea of this debate, soft brexit, hard brexit. i think the reality of sterling enormousis still an amount of uncertainty, but it is the weakest of the major currencies. it has the lowest real interest rates of the major currencies and the biggest current account deficit. how much weaker could it get? that is why periodically, it bounces. until we get more clarity on the status of the economy, how much the economy is affected by the current uncertainty, i think we will just bounce around in this range against the u.s. dollar, probably feverishly, but i don't think we will see lasting moves below 120. out, the as you point media focus over the weekend were the size of the crowd inaugurations gone by. for you, you note the tone of

the speech from president trump, the message combative, protectionist, isolationist. what does that mean to you? kit: they got reaction you would have would be there was not enough talk initially about fiscal policy. i want to see his a administration get through at some of the people he appointed getting into their jobs, and i want to see the policies that have an impact on the u.s. economy. people bought the dollar does donald trump is going to ease fiscal policy, interest rates will go up and the u.s. economy will outperform. protectionism which is negative for global growth, there will be currencies we sell against the dollar, but the strongest currencies will be the ones of countries with big hit -- big accounts and after the french elections, the euro. we are going to get a lot of this, but what we need to get

into are serious policies as opposed to sort of grandstanding on this aggressive tone that we are getting toward the outside world from president trump. alix: where is the volatility? forlook of volatility sterling and for the fx market and it is nowhere. we are in tight ranges, having made this move. the volatility is behind us. we had a huge move when donald trump won the vote to become president, and now all the beds are made. what is happening is bets are coming off every day as people wonder about the size of that rise in u.s. treasury yield and the size of the rally, in the dollar between the ninth of november and christmas, and the volatility is coming down because people have not changed their mind, they still think the trump presidency will be good for the dollar but that for u.s. treasuries, but that confidence is being eroded as people say

this is not working out quite to plan. take bets off the table and try to start again. fx 101, rate differentials are what matters. been thely matters has politics and you bring up the currencies that would do well and you point out those withries, economies account surpluses, but they are also the countries that will come under significant attacked -- attacks from this u.s. administration, the likes of germany, japan and china. how do the politics in the fundamental issue of what should be a supported current account surplus the life of the fx market? kit: they collide in terms of capital flows. we are talking about what will happen to capital trade flows. capital trade flows matter more. germany and the eurozone fundament -- fund the world in terms of recycling saving and that is the biggest thing that can shake -- that can

shift here. jonathan: let's get your update on what is making headlines outside the business world. emma: talks aimed at ending syria's civil war -- syria's civil war got off to a rocky start. rebelan diplomat and a leader both describe the other side as terrorists. severesoutheastern u.s., weather killed at least 18 people over the weekend. seven died when in apparent tornado struck a trailer park in south georgia. the storm system stretched from texas to the carolinas. british prime minister theresa may's legal challenges will not end tomorrow. the issue is whether she or parliament has the authority to issue the brexit. one claims last june's vote is not give her the power to pull of thepull the u.k. out eurozone. global news 24 hours a day, i am

emma chandra, this is bloomberg. abouts&p futures up by 2/10 of 1%, off the lows of the session. 90 can see relatively flat, earnings came in better and a revenue came in better, but u.s. same-store sales were down 1.3%. the estimate was to be down 1.4%. andentary on the consumer the turnaround that mcdonald's has been issuing. one stock had left to cover is halliburton. that stock off by 6/10 of 1%. earnings came in better, but this was the headline, north america returning to operating profit. if the oil services have pricing power, does that put pressure on the oil companies in the u.s.? oil rig count up 19%. analysts say halliburton is in growth mode. rafe at -- wrapping up with

actelion. a test phaseled in for drug -- for lung disease but should not impact the merger with jefferies. coming up, you must financials have been big winners in the trump trade based in part on expectations of less banking regulations. hold up andumption what specific regulations need to be relaxed to have a real effect on the bank's performance ? we speak with the dean of banking regulation. that is next and this is bloomberg. ♪

david: this is bloomberg.

since the election of donald trump, u.s. bank stocks have climbed up to 10%. analysts tell us at least part of this has come of the expectation of less regulation of the banks. joining us now is the man who knows more about u.s. bank really -- regulation than just thet anyone, rodgin cohen, ceo of the prominent u.s. based law firm. rodgin: a pleasure is always to be here. david: -- as always to be here. david: what sorts of changes would make a material difference to the bank's performance? rodgin: there are a number of them, hopefully everyone will perfect is the enemy of the good and comprehensive is the enemy of the actionable. it is critical to focus on what makes a difference. we saw a fabulous play, yesterday, the revival -- there is a great mind i will

paraphrase witches you need to know the question before you get to the answer. the question is, what has made a difference to the banking industry. i would say any money laundering is the single biggest user of expenditure and personnel. if we could move promptly to an aml utility for the banking industry, it would not only significantly reduce burden, it would create a better program for catching the bad guys. david: we are talking about anti-money laundering regulations, is that within the power of the administration to do? rodgin: you could easily do this without congress if you had administration efforts to cooperate. important. coming -- that should be at the top of the list. mnuchin endump and

up agreeing on the rule? rodgin: i think the secretary designate got to the right point in his testimony, where he indicated that the real issue here was the bank itself and not the bank affiliate. it is a simple amendment of the redefinee -- to simply it to mean banks and not bank affiliates. that would solve 85%, 95% of the problem. david: a lot of focus has been on what regulations could be changed. we had john elliston on, friday and he had a view on who should be doing the regulating. >> i think we will get a lot of improvement in regulation by changing who runs these regulatory agencies. fdic, the compliance side of

the federal reserve, the occ, simply because regulators to make the law and they can decide what they want to fit on that spectrum. congress approves very broad context and regulators move based on the political wind in that regard. david: we do have breaking news. it appears president trump has issued it is -- an executive order, withdrawing from tpp. that is not a surprise. let's go back to what john allison had to say. i agree, fully, because if you look at the regulatory environment, there were three legs to the basic stool. legislation, regulation and supervision. the latter two are the more important. it is a function of who is sitting in those positions and the three key positions, the vice chair for supervision, the

fed as controller of the currency. they second will be open in april and the third in the fall. jonathan: that will be difficult just to get them appointed, and then how important is it that those three positions are all on the same page? rodgin: it is important impossible to have them on the same page, but not essential. the three today are not necessarily always on the same page, and yet they can produce. have seen, particularly over the last six years is the ability of the heads of these agencies to really drive regulatory policy. a banking ceo and you have all of these uncertainty and question marks. how do you deal with your business in the next six months? rodgin: i think the question is well put because uncertainty is always the enemy of a solid

business plan. i think what you would try to be doing is having as much influence as is possible with respect to the governmental priorities, with infrastructure clearly being one of them because of the immense job creation opportunities. david: rodgin cohen, you will be remaining with us. we want to repeat breaking news donald trump has issued an executive order, officially withdrawing from the tpp. it never went into effect, but this does deliver on one of his promises. we will learn more on executive orders coming up, we expect. uncertainty grips the market, a big rally following the u.s. election. the dow trading in its highest range since december. this is bloomberg. ♪

david: i want to clarify what i just reported. it appears president donald trump is expected to issue an executive order pretty soon this morning to withdraw from tpp. he has not actually issued it, as far as we know. joining us now to discuss this is michael mckee. this is not a big surprise. michael: it does not have a lot of effect. it is like saying the detroit lions are not going to play the super bowl. we knew that. this would not have gone through even if hillary clinton has been elected president. many members of congress opposed it. it is not clear exactly why there are a lot of different like it,eople did not but two made things most put criticize. the rules of origin are not strict enough which means if you

import television set part in the mexico because mexico has a free-trade deal with other countries and then sell it in the united states, then countries are taking advantage of the u.s. then there is investor protection, which is a controversial provision in a lot of trade deal that allows companies to sue countries if countries violate deviously agreed --orms -- violate previously agreed to norms. those are the things that will come up when the president tries three negotiate nafta, as well. both of those are in the nafta treaty. jonathan: this withdrawal from tpp, it is the worst kept secret srs trade deals. it is significant that it had a significant foreign diplomacy angle for the u.s. take a strong foreign position in asia.

the takeaway is the happiest person in the room right now is xi jinping in china. what does the administration do about this? we don't know what donald trump wants to do as far as international agreements, except pullback from them. how he goes forward is still very unclear. this is a 12 nation agreement that the not include china, and the chinese have their own agreement that they are pushing, that they are trying to expand in the wake of the collapse of tpp. if they are successful, then china gets to write the rules of international trade. in the nafta case, it's been 25 years since that went into effect. for many decades, china would have the leading role in establishing what goes on in terms of trade around the pacific. david: the that put us at a disadvantage when negotiating with china? michael: yes, because they do not need as much of his they

would. jonathan: michael mckee, great to have you with us. coming up next on this program, volatility gaining a bit more momentum. the biggest weekly inflows since october. savita subramanian joins us. this is bloomberg. ♪

jonathan: from new york city, this is "bloomberg daybreak." futures are down on the dow. we have had two weeks of losses on the s&p 500 that only

marginal losses. we need a downside to the 1% since october 11, the longest streak since 2006. very tight ranges. if we switch up the lord, i will have a look at the fx market. the same tone through the morning. the dollar is softer. the dollar-yen moving back to to one point back -- moving back to 113 handle. movinglobal equities are . responding to trump's first days in office. and the dawn of a new beginning. theresa may will become the first european leader to visit the new america first white house. ?nly two find common ground

donald trump showed no sign of shaking off his tumultuous persona. that is what you need to know at this hour. we are joined by kevin cirilli. one of the things we talked about this morning is that there are two prominent buildings on pennsylvania avenue. one is the white house and the other is the capital. what are the issues with the affordable care act? what are the issues between the white house and congress? kevin: republicans would argue they need to repeal and replace is acare that where there vehement different is on the timeline for replacement. i have been speaking over the past several weeks with different offices here in washington, republican members. and there is a vision of some folks who would like to see an immediate replacement package implemented as soon as obama

care is withdrawn. and there are others who would like to see a more piecemeal approach. thatspeaking with aids and is in paul ryan's office and what they tell me is that they anticipate there to be the next piecemeal approach sometime in mid february. they recognize that an entire repeal could prove politically toxic for midterm elections, especially in districts where key aspects of obamacare remain popular, despite the broader bill being unpopular as a whole. david: one of the big questions how we areit is going to pay for it. how much are they on the same page as far as paying for these things? kevin: they are not. the division between the tea party and the more traditional republican party still exist. and how trump is able to navigate with steven mnuchin and his budget who grew still

remains to be seen. much more of a tea party type of republican but i can tell you, moving forward, the administration is going to hit one of their most public tests when they raise the debt limit because that has been one of the most contentious issues for republicans and it has divided them. last month -- last week in testimony, and steven mnuchin said he would like to raise the debt limit to send a signal to markets that the u.s. will not default on its debt. of course, when you talk to the upsetting.that is so this remains to be seen. it is very uncertain. david: one of the final questions in markets, what happens to the markets? when will we get some clarity for the marketplace on exactly what the tax bill is likely to

look like? the details of that are being worked out behind-the-scenes daily here in washington. steven mnuchin has met with the house financial services commission leader, not to talk about the senate confirmation hearing but to talk about tax policy. hill,st week on capitol he said publicly that he would be the point person on the policy.ration tax in crafting that. a senior white house official told me they are looking to have , comprehensive tax policy looking to lower the corporate tax rate and also to look at more individual tax plans as well. if they could put that up in the senate to get past the procedural hurdle, that remains to be seen. david: thank you so much. that was kevin cirilli reporting from capitol hill. for the first time ever we have

a real estate developer sitting in the white house oval office. what will that mean for the real estate office in this country? now by someone was has billions of dollars in real thete investment, this is hudson yards project in manhattan covering 28 acres. ceo and overseas the real estate portfolio. good to have you. platter.a lot on your as you look forward to the trump administration, how does this affect your climate? : i think it is pretty good will have someone who understands our industry in office. if you take away the theatrics of what we have been watching over the last couple days and months and focus on his economic policy, what he is saying could .e good for the country

real estate relies on jobs. and that has been the focus of everything he has talked about. and for sector spending is great for the industry. when you say go on a real estate projects, you start creating jobs right away. so we think he will focus on that. deregulation of the banks is critical. banks have been hamstrung and haven't been able to make loans the way they did in the past. we think he will bring that back. understanding incentive programs. he understands the business and we think that will be helpful. taxes, you talked about there will be complete reform on the tax code. and obviously that has a big impact on real estate, given that he is in the industry. we are hopeful the impact won't be negative. so infrastructure, taxes -- all green lights. projects, are new you changing your calculus? jeff: one thing we were thinking

about is the tpp change. we do source materials from around the world, but over the past couple of years we have been supplying materials from the united states. fact, we built a factory in rural pennsylvania last year to produce our own curtainwall for our buildings. our own facades. we have created 400 new jobs in this state-of-the-art factory built in pennsylvania where this product would only typically come from china. so we agree with it and we think it is good for the country and we will shift our business that direction. david: that sounds like a trump tweet. [laughter] alix: one thing we see is uncertainty. are you noticing any sort of uncertainty or businesses pulling back from renting? jeff: not really. last year was one of the strongest leasing years to date. in the past 2.5 years we have

leased almost 7 million square feet of office space around the city. you, in thetell last six months it has been very strong for us. they areeople are -- going to move forward with their business. and we haven't seen a lot of in leasingisions because of the impact of the trump administration. david: you have high end units in hudson yards. it is the lower and coming back? jeff: 2016 slow down at the beginning of the year. november and december of last year were actually a pickup at the high end. i break up the high-end into two parts. the very very high-end, the 57th street corridor door. and then the upper upper middle market. we chose not to compete with the 57th street corridor.

our first for sale development in september and we sold $400 million of product in three months. fastest selling for sale development in all of 2016 in two months. david: that'll get your attention. that is jeff blau, who will be staying with us. we will discuss brexit on the u.k. housing market next. the dow is trading in the tightest range ever since mid-december. bank of america head of u.s. equity strategy joins us with her outlook. this is bloomberg. ♪

>> this is "bloomberg daybreak."

in the next hour, paul christopher. ♪ might hit theit u.k. real estate market. starwood is set to sell its interest in a london tower over concerns that brexit will hurt demand for office space. joining us again is jeff blau. is this the start? will we see more big developers leaving the u.k.? jeff: uncertainty is bad for the business. and brexit has created uncertainty. wille don't know how this be implemented yet. and if it goes in one direction, corporations will have to break up the office space and go into multiple countries. and decrease the demand for a london office space. no one knows the answer yet but people in the investor community

are reacting ahead of that. alix: and it is also homes? anchors will go somewhere house and will not want to buy home in london. jeff: certainly have seen a decrease in the pricing of the homes in london. we formed a joint venture in london where we will be a -- we will be building middle housing. over thee developing next few years, 13,000 for sale and rental units in london to attack the middle market segment. david: more broadly, what about international financing? does an america first approach different eyes that in any way? jeff: i don't think so. we are all waiting to see, i don't think it will impact capital flows into the u.s.. the u.s. is still the greatest country in the world and the safest country in the world. from an investor perspective,

people are still trying to move dollars. alix: what about areas like paris, frankfurt -- other areas that potentially could move their banking operations out of the u.k.? jeff: certainly, would you read about in the press and everything is that investors are looking to follow where the offices are going to go. that is not what we're focused on. of the u.k., you mentioned the america first policy -- trade is still good you wind.k. so how do up getting your materials? do you worry about that? as you build the middle homes? jeff: we don't know yet. it is so uncertain. at the moment you could source you need everything there. but five years out it is only have to worry about it. david: when you look around the world, where is the most promising real estate market right now? jeff: new york.

think the i uncertainty around the world is forcing more and more capital here. from an investor standpoint. the market is still solid here. people are buying and moving office space. we have a great product at hudson yards and we are bullish on new york. david: jeff blau, thank you for being here today. with yourma chandra bloomberg business flash. >> halliburton reported fourth-quarter profits that exceeded estimates. they kicked off a year and recovery where the company generates most of its sales. customers increase the number of oil and gas really breaks 19% in the last three months of the year. in britain, lloyds bank was a cybery -- was hit by attack according to a person with knowledge of the matter. it is the world's largest mortgage lender. it was hit by an attack which the system byle

flooding it with traffic. galaxy -- seven smartphones 02 overheat. it was a financial disaster for samsung. from thebanned them planes and the company had to recall them. the total cost is estimated to be $6 billion. that is your bloomberg business flash. this is bloomberg. up, the trump trade shows signs of cracking. how do you protect yourself? this is bloomberg. ♪

alix: we hear what key banks are talking about. joining us now is the bank of america merrill lynch head of u.s. equities and quantitative strategies. great to see you. all morning we have talked about the uncertainty in d.c. but it

is not reflected in the markets. this is u.s. economic uncertainty versus the white line, the vix. so what gives? which one needs the other? this is one reason we are not optimistic on equities. weren't as high as they were, if complacency measures weren't as low as they are. so i think what the market has been focusing on since election of a trump positives presidency and the republican sweep. and there are many positives. the potential for tax cuts at it couldmer level and be great for consumer trends and earning power. fiscal stimulus, what is not to like about a big infrastructure plan. so i think these are the aspects that the market has been

focusing on. but if you notice this year, the .arket has been pretty flat and i think now it is time to digest policy and compare what could be good versus what could be bad and there is a lot of potentially risky initiatives in the trump tank. so if you think about tax reform , cutting corporate taxes is great that a border tax has taken locations for certain businesses that have imported raw materials. so i think now it is time to sift through the haves and have-nots. and some numbers come out looking a lot better positioned than others. picked out two themes. the tax cuts and fiscal stimulus. using the fiscal stimulus theme is overplayed. so where is the pain going to be felt? savita: one thing we noticed is

ron fiscal stimulus, like materials businesses, have seen massive multiple expansion but very little underlying earnings revision. so we have seen a huge move in the materials sector which is underweight, we think there is more risk than reward there. is ase fiscal stimulus complicated and messy story. how much money a reaction to going to see spent? when is it going to be spent? when is it going to be approved? sweep butrepublican public and's don't like enlarging the budget. so that is it pretty risky proposal to bet the house on at this point. tax reform could be really beneficial to domestic industries. so industries that pay the highest corporate tax rates, they have the most benefits of a big cut in the statutory u.s. corporate tax rate from 35% down

to 15%, or wherever we end up. and the sectors that look great under that theme are more domestic. for example, consumer discretionary, financials -- those who be sectors that could gain under that scenario. alix: the index of stocks that have a high corporate tax rate as well as domestic sales, have had a huge run-up. how do you find the right pocket of value? savita: where'd you go? that is a great question. there is still room to run in financials. that is a sector that just torted last year, the price book ratio is still fairly low and it suggests there is more room to run. there is a lot of runway ahead 20 financial sector which is domestic. small caps could have more room to run. and here, but we pay attention to are the dynamic that we have

noticed of the market shifting from the mentality of a said push, the fed would bail us out, to the mentality of a trump puts . economy that if the starts to fail, we will see fiscal stimulus to prop up the economy. as long as those expectations remain in the market, a lot of the smaller cap companies could have room to run. so what we are looking at is the rhetoric. and there is a lot of information that we are absorbing at once. the tweets and press conferences. the we are listening for whether that could derail the equity market like a trade war or border taxes, different aspects of the policy plethora that could be negative for stocks. versus the positives which are tax cuts that would be beneficial for corporations.

that is the balancing act we need. health care is another sector where we think we are discounting a lot more risk than we might need to. trump has been vocal about wanting to replace aca but the whole sector has sold off. that think there are areas have been unfairly penalized. herd: the white house have move climate change from the government website and this is something you have been focused on. is it dead under the trump administration? or in decline? savita: i think this is an area that we need to focus on. if you think about the next

generation of investors, millennials, they care about values-based investing. in a survey that u.s. trust put when i thinko, about the next flow of funds into equities is going to come from, the next generation of millennials, they care about investing in interesting theme. . we have written about this. they do outperform over time so i don't think this is a theme that is dead in the water. it could just be beginning. to getn: it was great you on the program to hear your thoughts. that was savita subramanian. coming up, rob thummel talks to us. this is bloomberg. ♪

jonathan: switch up the board, a weaker dollar with the dollar yen trading at 113 handle. -- yields are lower by three basis points. from new york, this is bloomberg. ♪

jonathan: from new york city, a warm welcome to "bloomberg daybreak."

i am alongside david westin and alix steel. openinges away from the bell. futures are softer. opening bell. futures are softer. we said it earlier, so many people sell for the inauguration. not must, out there in the equity market. yields are lower by three basis points. it is a weaker dollar story that dominates the g 10 space. trading at a 113 handle. reality bites. the trump trade unwinds. a six-week low off the worst start to the year since 2009. sinces the tightest trade 2007. hedge funds and other speculators boost their short movements. and the first 100 days. in the tumultuous first weekend,

trump sticks to his combative persona. we address his first orders and developments in the cabinet next. alix: we have relatively movers. there are big movers here. this is the broad story. apple is piling onto a lawsuit against qualcomm about the licensing for technology for mobile phones. this gets downgraded. target city lowering the loyalty rate outlook. flat.is relatively but some say this lawsuit could be a way for apple to improve the iphone margin via the lowest speeds. and intel is up .3%, a potential winner. intel may be the beneficiary from that suit. the other group of stocks to highlight here, t-mobile and sprint. t-mobile up over 2%. in the premarket.

updated t-mobile's parent company today. they said t-mobile is firmly in play. he called the t-mobile sprint the only most compelling case out there. so these are the stocks to watch into the open. we are joined now by our white house correspondent and kevin cirilli who is on capitol hill. what is happening right now? havingt now, trump is his first meeting with business leaders. a number of leaders from his manufacturing counsel. -- from dowhat chemical is the leader and he is meeting trump for breakfast and we also just saw elon musk meeting with trump this morning. other business leaders are meeting with him as well as morning.

a heavily focused manufacturing day. the dealsse are about that are about to be signed? were they have be signed? signus: he will go in and executive orders. we are told that withdrawing the u.s. from the tpp deal. he will be talking to leaders from x ago and canada later this week and part of that negotiation will be trying to change the u.s. and mexico and .anada there is a nafta that needs to be renegotiated. has he got the team in place to do the negotiations? is bob white house are in place? toulous: as we have seen, trump has had trouble putting

together's team and getting his officials confirmed. there are number of officials who have not gone through senate confirmation. obviously, the trump campaign has had a rapid pace of trying to get all of these various positions confirmed. i don't think the nafta deal will be renegotiated quickly. and it an open gambit will be a number of months before it is renegotiated. david: thank you. alix: we now turn to kevin cirilli on capitol hill. so that is what trump is dealing with but what is congress doing? atin: they will take a look later this afternoon when republican leadership meet at the white house with trump, they will take a look at two key areas. trade policy, which is driving the morning news cycle. talk about key aspects of how they're going to replace portions of the affordable care act. thatackdrop here is republicans will huddle in philadelphia on the house side later this week for their annual

public in retreat. so clearly, a strategizing session is underway today and i would anticipate key developments in how they will set their legislative timetable later this week. alix: when do we see bills get written? i put that question to a senior aide within the republican leadership office and what he told me is that the next step along the way for obamacare will be mid february. in terms of tax policy and deregulatory policy on energy and financial regulations, as well as trade policy, all of that is going to take a couple of weeks at minimum. but again, with trump facing ambitious executive orders, congress is going to be under pressure to not only follow suit but also to come up with key alternatives as they head into a

contentious 2018 midterm election cycle. alix: thank you. that was kevin cirilli. and we have markets that are expecting something now. you get volatility but we don't see much at the moment. in the treasury market there is a big showdown between the fast money and the real money. the fast money is speculated with the hedge funds and the real money are insurance companies and mutual funds. you see the fast money building up the bearish wagers and the real money building up the bullish wagers. how do the world collide? michael collins joins us now. that chart, is there a signal in that for you? michael: there is. hedge fund investors are trying to make a quick buck in the near term. insuranceal money, companies or pension plans or

retirees, they have a much longer term perspective. and typically, you want to sell depth of ae recession and you want to buy them when you go through a growth surge. because that is when yields are high. so i think this is an opportunity to take a long-term perspective and buy bonds. jonathan: you could take a long term perspective if you believe this is the new range and you could trade around here and you feel this is where we are at? michael: i do. i look at what is priced into the yield curve. i take the under on that. i think it is unlikely they will get as many hikes as they have priced in. david: there is an unfair model. of long-term guys have a lot money. so it will collect itself if you keep on buying? that into this year. stocks were up 10% from the

election and bonds were down. that is a big divergence. so we saw a lot of money this asr coming out of stocks pension plans rebounds and individuals rebalance. 401(k) plans,e the target strategies where they reallocate from stocks to bonds and they automatically rebalance. and as people get older, they always sell stocks and by bonds. that is natural. is a big tailwind for the bonds. alix: but what happens to inflation? i hear you making the case. but if you have real rates coming down, how do you factor that into your thesis? is a big factor, inflation and we don't think there is a lot of inflation on the horizon to be honest with you. the big component driving ,eadline cpi's up our rent energy costs coming up, health

care costs are continuing to be really stagnant. jersey we just raised our gasoline tax. so these are things that hit the giveut they don't companies a pricing power. these are taxes on individuals. this reduces the company ability to raise prices. jonathan: so in your world we theme away from the narrative and towards credit. and we have seen a move in investec grade issuance. do you see that going back into the sovereigns? michael: we are just starting to go back into that rotation. just like with all the euphoria and optimism on the potential optimism, bonds and structured products, they have ratcheted tighter since the election.

so we are actually fading some of that, looking more at the risks that are coming our way with it being a european political risk or a trump policy risk or the fed about to raise rates. david: where are you on duration? michael: we have been adding duration since this election. rates have gone up almost 100 basis points. we have been adding so we are longer duration. alix: going back to corporate get repatriation in cash and we see less issuance, doesn't that go against what you are calling with tighter spreads? michael: absolutely. that is the challenge. the fundamentals are getting better and the technicals will be strong. so you need all three facets. fundamentals, technicals and valuations. and i think it is prudent to caution with that.

jonathan: you talked about the political risk. how do you factor in political risk in a time when what you see is the rally? how do you factor that in? michael: when you look at the peripheral countries, and that is where the risk will he felt. that is where the pain will be felt. a populist gaining power in europe and marine le pen, god for bid she is the new leader in france and wants to pull the frank out, that could really caused a significant widening of spreads. bonds have been seen as core europe. do they start to be seen as a peripheral europe? yearsl: of the last five they have gone through the cycles where they acted like a peripheral credit and then they act like a core credit. and the jury is still out. but to the extent that the populous gains momentum, you will see the spread widening. jonathan: michael collins, great

to have you with us. thank you very much. david: news coming from the white house. trump's meeting with business leaders and it is reported that he has said to them they will cut taxes massively and will also cut regulation massively as some of it is hurting business. so that is what trump is meeting with business leaders. jonathan: let's go to emma chandra. emma: -- a rocky start in a kazakhstan. a rebel leader and syrian diplomat described the other side as terrorists. by talks were sponsored russia, turkey and iran. the u.s. is attending as an observer. -- has offered to deal with the u.k. business sector by sector by comparing the economy to leave the union. that includes artificial

intelligence and mobile network. cracking down on gulf. more than one hundred courses have been closed. communist party officials have been told to stop playing in order to conserve water and land. closed due tore improperly using water or were built on land designated for other purposes. global news, 24 hours a day. powered by our more than 2600 journalists and analysts, in more than 120 countries. i am emma chandra. this is bloomberg. i don't know, i have trouble recovering from that gulf story. that is disturbing. coming up, oil rigs get back to work. session lows after the the u.s. -- after three years. we had to chicago to see how this impacts the opec efforts to get production down. this is bloomberg. ♪

alix: today we put oil as the future in focus. this is the chart that tells an interesting position story. this is the net long positions. you can see it is that a 2.5 year high. we haven't seen this level since 2014. so are we seeing a shakeout? let's turn to the trade. joining us now is scott bauer. all the headlines are for the rate count but we had that on friday. of theseeing a shakeout long? scott: i don't know. you look at the oil market and the news coming out, there is such a divergence of what we thought might happen a few weeks ago. you actually have russia and

saudi arabia following what came out of opec. they are cutting back but our rate count is up. we are in the biggest production we have been here in almost three years. so there is just this divergence and that is what is keeping this big pressure on the price of oil right now. and really capping any short term upside. alix: what does that tell you that the dollar is weak or at the oil is also weaker? to putif i had probabilities on it based on technicals, i would say we certainly break $50 before we looking at the'm $48 level right here. we are seeing this with the production cut coming out of the middle east which everyone was hoping for and we thought that would propel the price upwards of 60. but now because we see shale producers come online and receive you break count up, things are actually working in a

positive manner here in the u.s.. that is what is driving us down here and it is keeping pressure on the market. and producer short positions are the most since 2007 which also shows they are in the market and their hedging and they will sell oil matter what the price over the next few months. arere you shorting now and you buying when he gets to $48-$50? scott: absolutely. you want to have a stop to the upside not far away. i think $55 will be tough to get through. rally,, on any sort of i'm coming in and the $48 level is what i'm looking for. alix: good to see you. that was scott bauer from trading advantage. halliburton kicked off with quarterly results. we look at other companies poised to move markets next. this is bloomberg. ♪

david: this is bloomberg. breaking news. donald is meeting right now with leaders at the white house. there are headlines coming out where the president says he will cut taxes massively. he also says he will cut regulation massively. he has gone so far as to say you can cut regulation by as much as 75%. aump says we will be imposing major border tax at the same time. so some of that will be music to those leaders ears. but i'm not sure all of it will be. isathan: seemingly this stuff people didn't want to hear. protectionism, border tariffs and the like. less taxes, less regulation. they love that. but some of these people worry businesses will be hurt by the border taxes. alix: i thought he didn't like border taxes?

paul ryan likes border taxes. that is what counts right now. jonathan: we have already he heard from mcdonald's and halliburton. tomorrow, lockheed martin report earnings. although that also comes out later this week. joining us now with what to expect is joe staley. a busy week. what will set the tone this week? joe: we will get yahoo! and that will be an important one to watch. give you an idea where tech sectors are this earnings season. people have to separate between that to see what that will happen to the position with verizon. but if they have good earnings numbers, we will get some relief. and later in the week on thursday we have the grand daddy is alphabet and google. a lot has a made of the impact

that those stocks have had on the market this year and they are a leading indicator for the market will do. so a lot of eyes will be on that. jonathan: and better question than i would ever ask -- whether -- macro of legislative initiative? joe: the jury is out. you are seeing a lot of hedging under the surface right now. there has been a big round flow into the long fix instruments used to play with future volatility. the vix right now is low. and that is hiding the anxiety under the surface. so if you weigh the earnings tradition we are seeing, people are expecting a great earnings growth of 4.4%, and that you get is out of the earnings slump we had. but then you have the hedging the surface. under which indicate that people think something is amiss or we have gotten to overexcited. alphabet, google or

they're looking at a 23% jump in profit but the stock is already run 21% since june of last year. so with the 22% already priced into the stock? then it becomes, how much do they need to beat to move further? be see revisions downwards but we haven't seen that this time. joe: they like to kind of cut their forecasts and make it a little easier for these companies but that isn't happening as much. so they are giving investors some confidence going in. but that the same time, there is a higher hurdle to climb. macro, youo versus think it is easier when the animal spirits kick in but it can be harder because people start to back off and not worry about the cost. so how much of a danger is it that the company is waiting for the legislature? joe: there is a danger to that. a lot of companies are probably

making adjustments based on tax cuts that they perceive themselves to be receiving in the next 12 months. so it is deftly very interesting at the same time, analysts are pricing in good expectations for the small that are more domestically oriented. tax cutsding on how come in, we could see big adjustments. jonathan: last year, people i have to exclude energy to make things fair. do i have to do that now? [laughter] energy is abuzz be one of the big -- for the stock market in the earnings seasons. [laughter] crawling its way back into irrelevance. [laughter] jonathan: that is pretty much it. joe ciolli, thank you very much. the markets look a little bit of something like this. stuff but it is

a tight trading range. we haven't had a move to the october 11.ce looking at the futures, negative .1% on the s&p 500. the ftse 100, if you switch up the board, in the to 10 space, the fx market, the dollar-yen with the cable rate. the dollar yen at 113. by two basiswer points at 2.45 on the u.s. 10 year. alix steel talked about it earlier. the oil rate count popping up. but crude is lower. this is bloomberg. ♪

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look at what is happening in the fx market. about one third of 1% on the dollar index. yields were up about two basis points. and crude software as the cache olson gets underway. let's crossover alix steel. trump saying he's going to cut taxes massively and go with deregulation. we have not had a 1% down day for the s&p since october. it is the longest streak since 2006. some really tight trading range is persist. mcdonald's up by a tenths of 1%. have salesdid

falling less than estimated. halliburton actually went back to profitability. do they pass that on here in the u.s.? still going to take some time on that end. the big question is what is trump's potential on the market. this is a chart of the s&p on friday. this is one donald trump started speaking during his inauguration speech. stocks were immediate slower, hit their lows at about 12:30. then slowly evens out and was able to climb a touch higher. the question is is this the

volatility we are going to wind up seeing? >> it is particularly fitting you take a look what happened last friday. the markets have been about the new president and the policies he will bring with him. the day before wells fargo head paul chryst deferred -- i'm going to interrupt myself. we have president donald trump addressing businesses. if you look at: china, if you look at many other , they can't believe what we do. if you want to sell something into china and other countries, it is very hard. cases it is impossible.

they won't even take your product. but when they do they charge a lot of tax. we don't call that free trade. we want fair trade. if they're going to charge tax to our countries. if as an example we sell a car to japan and they do things to us to make it impossible to sell cars in japan, and yet they sell cars to us and they come in by the hundreds of thousands of the biggest shifts i have ever seen, we have to all talk about that. it's not fair. it's not fair. never was. i can't believe it took so long for something to come along. essentially i'm talking about no tax. if you stay here there is no tax. no tax, none whatsoever. all you have to do is stay. don't leave, don't fire your people in the united states.

we all have great people. this is not that kind of competition. if we are going to fire people and build a product outside it is not going to happen. with that we will take some questions. marilyn, do you want to start? [indiscernible] jonathan: those president trump speaking in the white house to the business leaders he was meeting. discussing the question of fair trade, saying there too many instances where we are not charging any import duty, but when we turn around and try to export the to those countries they charge a large tax. it's unclear to me how he will handle the speed he just said there will be no tax. unclear how you are going to

collect -- how you are going to correct that problem. china in thengs up market again and again. the facts speak for themselves. when you have to go to the country of origin to produce because the tariffs to win are so large -- the tariffs to import your vehicles are so .arge what i don't get is on the one have companies in the united states and they can't fire people. >> that sounded like a border tax as well. >> i think it is very difficult to look at these headlines and understand what they mean to you.

is that campaign trail stuff or is it something immaterial that is going to impact? >> paul chryst for his joining us from st. louis. -- we interrupted ourselves as we were introducing you. focus particularly on what was said at the inauguration address. of what we make out are learning from the chart administration? guest: he is very serious about things he said on the campaign trail. you heard him talk about trade. he mentioned immigration, taxes. we think those will be big points for them going forward as well as health care. they have internal contradictions, you were just discussing one. were discussing

is the uncertainty in the market place. ceo react to this? guest: you don't really know. i get calls from clients who said we had the inauguration speech on friday, what should i do now? the answer is stay with the economy. if they eventually implement some tax cuts and deregulation, that could help further. the invective -- be invested in those sectors. although sectors are sectors that should improve with the economy. some of the direction he is talking about but you can't play day-to-day. too many questions have to be worked out. >> there is some kind of border

tax. iss that mean the trade going on? >> the problem is the congress wants to do a border tax. we don't know yet. more days that we had since december. stay with the economy, stay with the cyclical sectors. this is really a new kind of president with new kinds of policies to grow the economy. you are going to have time to get into those traits later. >> we have a reluctant hedge in the shape of the united states which has provided the global order for 60 years. if the backdrop to that is

changing, what does that mean to you? >> i'm not sure how the backdrop is changing. he is the designated replacement for commerce secretary. they are backing off the strong statements, carrying the stick and we want to have a negotiation. it reminds me of a large fire that sits down with all of the suppliers and says you guys are my suppliers. ii'm not too worried about the worst-case scenario. >> we have earnings. >> i think earnings are part of the uncertainty. the markets are expecting a first derivative change, going to at least tire. the earnings are going to follow that pattern.

the earnings uncertainty need to be resolved. we took some money off of the table at the beginning of this month. >> the worst-case wouldn't happen. across thee bloomberg 20 minutes ago, we are going to be imposing a major border tax. how do you draw a distinction between those two things? >> congress is not completely on the side of the president. the two of them don't agree. a lot of companies would be damaged. think of oil companies that

import oil. just some internal contradictions that leg some of the policies being presented. not quite as bad as what we could be afraid of. >> coming up, continuing the policy uncertainty, trump is taking big swings at obama's policies. capital portfolio manager --ghing in resealing weighing in, revealing his stock pick.

coming up, economists and former

chairman of the canceled economic advisers under president obama offer -- that is at 10 a.m. eastern time. from new york city this is bloomberg. let's get a check of the markets. 14 minutes into the session. stocks opening marginally lower. down about nine points from the dow and a single for the s&p 500. getting outside of equities into bonds and affects. if you look at the affects market, treasuries a bit lower. >> taking a look at stock movers. there is some pretty decent to

weakness today. oil is down 1%. noting as this index is dropping, typically they will help these commodities. of course dropping on the news that more reeks were added. that has created a downdraft. natural gas is down in the year 4%. weather has been relatively warm in the commodity whether group wondering whether to remain warm and continuing to weigh in on natural gas. natural gas made a move up 16%. #.take a look at the this is a five-year chart of natural gas. a bullish golden cross happen. the last time this happened back in 2012, we see that natural gas

at about 130%. of we may have volatility at the beginning of the year but the outlook looks pretty bullish. >> got to stay cold. day innt donald trump's office also encompasses energy regulation. >> there have been a great deal of executive orders. and getting rid of those, that is one of the first things. hundreds of these regulations, someone said 131 just this past week. >> he ridden rates the importance of an oil reserve here in the u.s..

we must take advantage of the estimated 15 trillion in oil and natural gas reserves, especially those on federal land at the american people own. is capital managing director and portfolio manager as the firm has 16 billion in energy assets. you have herald saying let's get rid of all regulation. he have donald trump saying let's take advantage of all that shale we have. what do you buy on that? >> the economics don't lie. what the economics is saying the u.s. has become a low cost producer of oil in the world. if you look at how much the breakeven cost has declined in 2012. it was half what it was in 2012. there are a lot of low-cost oil reserves. the us is going to be a significant supplier to the rest of the world in the years to

come. >> that makes me what think you want to buy a natural resource. at some point does this become your own worst enemy? are we going to be back in that kind of environment again? >> we really have to put it into perspective. shale oil production is 5 million barrels per day. that is 5% of total production in the world. increasing shale production is not going to have a significant impact for a while on global production. saw that come out of opec this weekend. shale willers said probably increase. we don't see increase production having a significant impact on the grand scheme of things for a while. >> those cuts are crude.

the oil we hear is light and sweet. this is a huge glut of oil in the market. that is going to be lowering the wti price. we are investing for a $5,360 $5,360il environment -- through $60 environment. it also keeps global demand rising. we have seen global demand increase in 2015, 2016. that really is an important piece of the equation. >> get me your top three picks. chain entire energy value , our top three picks his halliburton and if you look at what is happening in oilfield now the oiltor,

price is higher. if you look across the oil and gas producer sector, we like resources, in the delaware basin. its stamp ofut approval on the delaware basin. by buying 250,000 acres. company rather own a like 500,000 acres in the delaware basis. paid -- il lastly midstream. mr. you is a great place to be. you get a high current yield with the potentials for growing dividends and distributions. director and portfolio manager, coming up at the top our -- withdrawing from the tpp.

we are going to speak with the economic advisers about what they might be -- what they might mean. we're going to be seeking political activists later in the program. of alliances kind they might anticipate under this new administration. news ofmost recent putin, turkey and iran and syria , they will have any impact on futures for resolutions. program, weto the will have more on trump's latest executive orders from this morning and discussed the markets reaction.

president donald trump is meeting business leaders at the white house. >> we are going to be cutting taxes massively for both the middle class and for companies. and that is massively. we are trying to get it down to 15% to 20%. >> we are joined by michael mckee, bloomberg economics correspondent. massive reducing regulation. how is he going to do this? guest: that is a huge question -- that is a good question. he could cut taxes, and taxes,cans love to cut the problem he's going to create a massive hole in the deficit. the proposal he suggested would leave under dynamic scoring, the idea that tax cuts fetid to economic growth. a $2.6 trillion: the deficit.

and a lot of republicans were elected on the idea of not increasing the deficit, so he's going to have trouble convincing people on capitol hill to go through with this. to ignorein yourself it or do you factor that into your thesis? you can't make any decisions right away. you look at what he does versus what he said. now he has to govern, now he has to make this happen. say it willlysts take until the second half of the year before we see any real -- before we see any real tax cuts. as david said earlier, overpromising and under delivering, is going to be difficult to deliver. >> there were two responses to the inauguration speech. they set a high bar for all the

things he's going to do. do people believe him or do they give him a pass? will he be able to get it done with his low approval ratings? >> michael mckee, great to have you with us. 25 minutes into the session. equities opening a little lower. about down a 10th of 1%. and treasuries as well, yields lower by two basis points. up next vonnie quinn and mark barton with bloomberg markets. this is bloomberg. ♪

vonnie: from new york i am vonnie quinn. mark: fly from london i am -- live from london i am mark barton. welcome to bloomberg markets.

vonnie: we are going to take you from washington dc to paris and cover stories out of london, hong kong, and moscow. we aree stories following around the world. president donald trump is set to find executive orders on trade deal, including the transpacific partnership and nafta. that would fulfill a promise to rewrite policy during his first days in office. mark: u.k. prime minister theesa may unveiled industrial strategy for the country as it readies to exit the european union. vonnie: in markets stocks decline in europe. a little change in the u.s.. investor still looking for more