trump: i have made my decision, in my mind, pretty much, yes. i think this will be a great choice. >> the president said he will reveal his in court nominee next week. he begins his time with a , 36% of people proving him while 43 -- 44% disapprove. president obama scored a positive 59% approval in his first post back in 2009. president reagan obama -- once considered -- once confirmed by the senate, rex tillerson will have some jobs to fill, a way to top -- top u.s. staff have resigned as the trump administration starts control of bureaucracy.

reportedly the largest in recent history at the department. britain's government will lead to its exit from 28 nation european union. he has a tight schedule of just three days in committee. theresa may's's government forced to -- after supreme court ruling earlier this week. hours day pal by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ♪ live from bloomberg world headquarters in new york, i am scarlet fu. joe: i am joe weisenthal and we

are 30 minutes away from trading in the u.s. scarlet: extending games close -- extending gains closing. u.k. premise or theresa may set to begin any moment speaking infidel of death philadelphia. committee tomorrow with president trump at the white house. president canceling his visit with the u.s. this sincen the biggest risk the nafta trade the a and 94. we will speak with the economic head of the mexican embassy. after the close, we will get earnings, alphabet, microsoft, on -- and paypal. another name to keep an eye on. let's look at where the major averages stand as we head toward the close. abigail doolittle is standing by. abigail: not a lot of action heading toward the close. the dow and nasdaq trading with the s&p 500.

breeze -- a of a bit of a breather since early december, one that has the dow well above the important psychological mark but the big story around stocks, a very tight range and whipsaw's within the range. within that relatively calm service, we had earnings -- revenue estimates, ford missed saying thetimates, big draghi there is the forecast. stocks trading higher on the earnings, ebay up about 5%. mike is saying the recent stock is topping higher today. he does -- he is not convinced a turnaround is underway. real caribbean trading higher on a better than expected forecast. a place where there has been trading higher for most of the day, it did take downright -- right around noon.

one cause could have been president trump speaking around 1:00 p.m. another could of been the seven-year auction where there is a wreck it indirect bid. the 10 year yield has recovered to some extent but off after the auction. tension an interesting around treasuries and whether they should be bought or sold. money managersve showing they are buying the 10 year yield or i should say buying the 10-year note to yield, where in blue, it is hedge fund shorting treasuries. the question is which side is right? there was a guest on bloomberg daybreak: asia yesterday who said the short position for hedge funds could be more of a hedging tactic than an outright short which would suggest the money going on treasuries could be the correct that if you will their. an interesting direction to pay

attention to in the future joe and scarlet. joe: u.k. prime minister theresa may is said to -- set to deliver a speech in philadelphia. a topic at the top of the list is trade. let's go now to kevin who is standing at the event. thank you for joining us. this, u.k. prime minister speaking specifically at a party event like this? it is somewhat unusual especially on a day in which the premise or's own country is facing headlines about brexit and what will happen there. in philadelphia are drawing similarities between the rise of president trump and what happens in brexit caret all of this is being overshadowed by another negotiation that is happening.

that is what is happening with the mexican president bowing out of the meeting. canceling the meeting which trump alluded to. scarlet: i know you spoke with senator ron johnson earlier to find out what he and his colleagues were hoping to learn from prime minister may. what did you find out? >> they're looking at what this could signal for trade specifically between the u.s. and the u.k. with brexit, the u.k. will have key tradeiate several deals including with the u.s. toldor johnson told me -- me he believes president trump will be able to negotiate the trade deal and of course comparing it to developments with mexico. the same question in the hallway few minutes ago two house freedom caucus chairman jim

jordan. a wait me he is taking and see approach with what theresa may will have to say. clearly, a lot of expectations are to be met here, especially given the current political .ppetite across the pond they are trying to figure out what a trump residency will mean and how a republican congress will work in tangent -- with this white house. big dipper matt -- diplomatic ms. of the day where the talks between mesko breaking down. among thee buzz there folks at the gop retreat about the early aggressive stance toward mesko that we are seeing from this administration? >> democrats are passing on this. inside philadelphia, the hotel

where we are staying, so far, republicans are staying in line with president trump. they are saying this is the first step in what they view as a wide series of negotiations. they continuously raise the point that they argue president trump is a good negotiator. we will have to wait and see what -- how it goes. scarlet: live to theresa may, speaking to republicans in philadelphia. she will meet with president trump tomorrow at the white house. >> it will be interesting to see what she talks about. may: representatives of the house, i would like to thank the congressional institute for the invitation to be here today. the opportunity to visit the united states is always special. to be invited to be the first

serving head of government to address this important conference is indeed an honor. person to travel to this great country at any time and not to be inspired by its promise and its example. for more than two centuries, the , john fromf america history and rich in form in a small hole not far from here atop the world. that idea that all are created equal and that all are born free has never been surpassed in the long history of political thought. [applause] and it is here on and halls of the

great city of philadelphia that setfounding fathers first it down, that the textbook of freedom was written, and this great nation that grew from sea to set -- to shining sea, was born. since that day, it has been america's destiny for leadership of the free worlds and to carry the heavy responsibility on its shoulders. my country, the united kingdom of great britain and northern ireland, has in proud to share that burden at every stage. [applause] theresa may: for the past

century, britain and america and the unique and special relationship that exists between us have taken the idea conceived by those 66 rank and file ordinary citizens forward. because we have done so, time and again, it is the relationship between us that has defined the modern world. 100 years ago it was your intervention that helped britain and france, our friends in the commonwealth and other allies, to maintain freedom in europe. a little more than 75 years ago, he responded to the japanese attack in pearl harbor by joining britain in the second world war and defeating fascism not just in the pacific, but

africa and europe. later, in the aftermath our countries led to the west in the cold war, confronting communism and ultimately defeating it not just through military might, but by winning the war of ideas and proving that open liberal and democratic societies will always defeat those that are closed, coercive, and cruel. but the leadership provided by our two countries have done more than win wars and overcome adversity. it managed the modern world. the institutions upon which the survived, was often

conceived and inspired by our two nations working together. there -- it has its foundation in a special relationship. drafted themselves by winston churchill and president frankland -- franklin d roosevelt. were conceived by our two nations working together. and nato, the cornerstone of the west's defense, on the bonds of trusts -- trust and mutual interest that exist between us. some of these organizations are in need of reform and renewal to make them relevant today. but we should be proud of the role our two nations played in

bringing peace and prosperity -- and prosperity to the people. because it is through our actions over many years, working together to defeat evil or open up the world that we have been able to for promise of those who first spoke of this national nature of the relationship between us. we must never cease, churchill said, the great principles of freedom and the rights of man, the joint inheritance of the english-speaking world, and which, through magna carta, the bill of rights, habeas corpus, trial by jury, and the english common law, i'm their most famous expression in the

american declaration of independence. it is my honor and privilege to to join handsou ofwe pick up the mantle leadership once more, to renew our special relationship and renew ourselves to our commitment to leadership in the world. it is my honor and privilege to do so at this time, as dawn breaks, in a new era of american renewal. i speak to you not just as prime minister, but as a fellow conservative who believes in the same principles that underpin the agenda of your party. the value of liberty, the david of work, the principles of

nationhood, family, and economic prudence, patriotism and putting power in the hands of people. principles my parents taught me in southern england, in which i was raised. these principles, you put in the heart of government. gives you the opportunity to put in the heart of the era of american renewal. victory,trump's achieved in defiance of all the indits and polls, rooted not the corridors of washington, but the hopes and aspirations of working men and women across the land, your party's victory in the congress and the senate, secured with great effort and achieved with an important message of national renewal.

because of this, because of what you have done together, because of that great victory, you have .ne america can be stronger, greater, and more confident in the years ahead. and, a newly emboldened, confident america, is good for the world. america is strong and prosperous at home as a nation that can lead abroad. you cannot and should not do so alone. you have said it is time for others to step up and i agree. sovereign countries cannot outsource security to america and should not undermine the alliances that keep us strong by failing to step up and play their parts.

this is something britain has always understood. it is why britain is the only country in the g-20 other than yours to meet its commitment to spend 2% on disk -- on defense equipment.hat on it is why britain is the only country in the g-20 to spend 7% growth on overseas development and why my first act as prime minister last year was to leave the debate in parliament and ensure britain's independent nuclear deterrent. elitewhy the government -- it is why britain is a leading member of alongside the united states as a coalition working

successfully to defeat isis, to send it had groups to poland as part of nato's foreign presence in eastern europe. while we are increasing our true defendstion to it terrorism -- why we reinforce the commission -- commitment to peacekeeping operations to south sudan and .omalia it is why britain is leading the way empire nearing international efforts to crack down on modern slavery. one of the great scourges of the world, wherever it is found. i hope you join us in the cause and i think senator corker in particular for his work in the field and it is good to have met him today. as americans know, the united instinct and

history a recognizer of its responsibility is to the world. and the british people -- quite resolved, we have the opportunity to reassert our believe in a confident britain, ready to build relationships with old friends, and new allies alike. we will build a new partnership with friends in europe. we are not turning our backs on the interests or the values that we share. it remains overwhelmingly in our interests and those of the wider --ld that the eu ships should succeed. for as long as we remain members, we will continue to play our four-part. just as we continue to cooperate on security, foreign policy, and trade. we have chosen a different future for our country.

restoresre that sovereignty and national self-determination. and to become even more global in spirit. the future to take back control things that matter to us, things like immigration policy, and the way we determine our laws, so we create a better and more prosperous future. uputure that sees us step with confidence to a new even withinternationalist role, our friends and allies, we champion the internet -- international operation in parliament that reject our values around the world and continue to act as one of the

strongest and most forceful advocates for business, free market, and free trade anywhere around the globe. this is the visit -- a vision of the future that i hope your country and closest friend and ally can welcome and support. as we rediscover confidence together, as you renew the nation just as weaver new hours, we have the responsibility to new the special relationship for this new age. we have the opportunity to lead together again, because the .orld is passing through change and in response to the change, we can be passive bystanders or we could take the opportunity to lead and to lead to together.

i believe it is in our national interests to do so. the world is increasingly marked by instability and threats that risk undermining our way of life holdhe very things that we dear. the end of the cold war did not give rise to a new world order or harold history. it did not lead to trust parity and predictability in world affairs. citizens of central and eastern particular, it has brought freedom. but across the world, ancient ethnic religious and national rivalries that have been frozen debt frozen through decades of the cold war returned. new enemies of the west, in particular in the form of radical islamist, has -- have emerged. countries with little tradition of democracy, notably china and

russia, have grown more assertive in world affairs. the rise of the economies, china, it is usually welcome. billions are being lifted out of poverty and new markets for the industries are opening up. coming as they have in the fallout, as well as a loss of confidence in the west following 9/11 and difficult interventions in iraq and afghanistan have left many to fear that in this century, we will experience the eclipse of the west. there is nothing inevitable about that. countries may grow stronger and big populist countries may grow richer. as they do, they may start to embrace more fully our values of democracy and liberty. even if they don't, our interests will remain, values

where -- will and/or hear the asd to defend them will be important as ever. so our two countries together have the responsibility to lead. when others step up as we step back. america, britain, and the world. [applause] is in oury: it interests, britain and america together, to stand stronger fourth -- for the ideas we believe in. the days of britain and america intervening in sovereign company -- countries in an attempt to remake the world in our own image are over. nor can we afford to stand idly threat is real and

in our own interests to intervene or we must be strong, smart, and hardheaded and demonstrate the resolve necessary to stand up for our interests. whether it is the security of israel and the middle east or the baltic saint -- states in eastern europe, we must always stand up for the friends and allies in countries that find themselves in tough neighborhoods. [applause] havesa may: we each different political traditions. we will sometimes have two different domestic policies and there may be occasions on which we disagree. the common values of interest

that bring us together are hugely powerful. many priorities that your government has laid out through america's engagement with the world. it is why i join you in your determination to take on and eat the ideology of islamic extremism that many other terrorist groups in the world today. it is in both of our national interest to do so. it will require us to use by the finest security agencies in the world and it will require the use of military might. it also demands a wider effort. lessons of fighting terrorism in the last 15 years or so, is, yes, killing terrorists can save innocent lives, but until we kill the ideas that drive them, the ideology, we will always have to live with this threat.

as they are defeated on the ground, the terrorists are exploiting the internet and social media and preying on phone or pull people in our countries, inspiring them to commit acts of terror. that is why the u.k. let the world in developing a strategy in preventing extremism and why the british and american governments are working together to take on and defeat the ideology of islamist extremism. i look forward to working with the president and his administration to step up our f still further in order to defeat this evil ideology. we should always be careful to distinguish between this extreme and theful ideology peaceful religion of islam and for hundreds of millions, including millions of our own

, whoens, and those further are so often the victims of the ideology's terror. nor is it enough to really focus on violent extremism. dress a whole spectrum of extremism, starting with bigotry and hatred that can so often turn to violence. defeat isis, we need to put all of our means at our disposal. that means a political solution at syria and challenging the alliance of the regime. when it comes to russia, it is wise to turn to the example of president reagan, who during his negotiations with gorbachev, abide by the as -- the adage to trust but verify.

this is "what did you miss?" we will bring you more coverage in the event. let's take you back to philadelphia now. we shouldster may: engage with russia from a position of strength. we should build the relationship, systems, and processes that make a relationship more likely than conflict. that, particularly after the annexing of crimea. theng them the security of their security is not in question. we should not jeopardize the security that mrs. thatcher brought to europe by accepting putin's playing -- mr.

claim that it is now in his sphere of influence. [applause] and, progress on this issue would also help to secure another of the nation's priorities. to reduce iran's malign influence in the middle east. this is a party for the u.k. too , as we support our allies in build an arke to of influence from tehran to the mediterranean. iran wasar deal with controversial, but it has new gillette is the possibility of the iranians obtaining nuclear weapons for more than a decade. removeseen iran 13,000 centrifuges, and eliminate its stock of 20%

enriched uranium. that was vitally important for regional security, but the agreement must now be very carefully and rigorously pieced. threats of theat modern world, we need to build confidence and institutions on which we all rely. in part, that means multinational institutions because we know that so many of the threats we face today -- global terrorism, climate change, organized crime, unprecedented mass movement of people -- do not respect national borders. in the turned towards multinational organizations like thoseu and and nato, multinational organizations need to work for the countries that forms them and serve the interests of the people's of those nations. reform agenda and

believe that by working together, we can make those institutions more relevant and purposeful than they are today. i call on others, therefore, to join in the effort, and make sure they step up and contribute, as they should. that is why i have encouraged the new you and secretary-general to pursue an ambitious reform program, focusing the united nations on its core function of peacekeeping, conflict prevention, and resolution. it is why i have already raised with my fellow european leaders, the need to deliver on their commitments to spend 2% of gdp on the defense. it is also why i have already the secretary general of nato, the need to make sure the alliance is equipped to fight terrorism and cyber where fit -- warfare, as

it is that to fight other more some visual forms of war. america's leadership in nato, supported by britain, must be the central element around which the alliance is built. alongside this commitment, i'm also clear that eu nations must similarly step up to ensure this institution, which provides the cornerstone of western defense, continues to be as effective as it can be. yet, the most important institution is, and should always be, the nationstate. strong nations form strong institutions. and, they formed the basis for the international partnerships and cooperation that bring stability to our world. nations, accountable to their population, deriving as the declaration of independence puts it, their just powers from the consent of the government.

choosing to join international organizations, or not, choose to trade with others, or not. which is why the countries of the european union choose to integrate further. my view is they should choose whether or not to do so. britain, as a sovereign nation, with the same values, but a different political and cultural history has chosen to take a different path. our history and culture is .rofoundly international we are a european country and proud of our shared heritage, but we are also a country that has always looked the on europe to the wider world. we have ties of family, kinship, and history to countries of bangladesh, australia, india, and countries across the africa, pacific's, and

caribbean. of course, we have ties of kinship and culture to these united as well. [applause] as churchill put it, "we speak the same language, neil at the same altars, and, to a very large extent, pursue the same to."s t to i am delighted that the new administration has made a trade agreement between our countries one of the earliest priorities. [applause] a new trade deal between britain and america must work for both sides and serve both of our national interests. it must help to grow our

respective economies and provide the high skilled, high paying job of the future for the working people across america and the u.k. and it must work for those who have often felt left behind by the forces of globalization. on modest incomes, living in rich countries like our own, who feel that the global system of free market and free trade is simply not working for them in its current form. the reforms we are making to our own economies, to make sure that wealth and opportunity are spread across our land to demonstrate that free markets, free economy, and free trade can deliver the brightest future -- the brighter future that they need. and, it can maintain, and indeed, build the stability on which our world continues to

rely. the u.k. is already the fifth-largest export destination for america. exports to the u.k. from the state of pennsylvania alone account for more than $2 billion a year. the u.k. is the largest -- somebody from pennsylvania. [laughter] [applause] the u.k. is the largest market in the eu and the third-largest in the world for exports here. the largesttates is destination for u.k. output. your company's expanding and investing in the u.k. at the rate of more than 10 projects per week. british companies employ people from the united states from texas to vermont. and, the defense relationship is the brightest, deepest, and most advanced of any two countries. of course, we have recently

invested in the new f-35 strike aircraft for our new aircraft carriers that will secure our naval presence and increase the ability to project our power around the world for years to come. because of the strong economic and commercial links, and our shared history and the strength of our relationship, i look forward to pursuing talks with president trump and the noon ministration about a new u.k.-u.s. trade agreement in the coming months. it will take detailed work, but we welcome your openness to these discussions. i hope we can make progress so that the new global britain that emergence -- emerges after confident to take it's place in the world. [applause] with cs takingnt that next step in the special

relationship that exists between us. cementing and affirming one of the greatest forces for progress the world has ever known. 70 years ago, in 1946, churchill proposed a new phase in this relationship. to win a cold war that many had not realized had even started. he described how an iron curtain had fallen, covering all of the capital of the ancient state of central and eastern europe. warsaw, prague, budapest, belgrade, bucharest. today, those great cities, homes of great culture and heritage, live in freedom and peace. they do so because of the leadership of britain and america, and because of mrs. thatcher and president reagan. [applause]

they do so, ultimately, because our ideas will always prevail. they do so because when the world demand leadership, it is this alliance of values and interests, the special relationship between two countries that is, to borrow the words of another great statesman, entered the arena with our faces marred by sweat and blood, destroyed know the and not strides of great achievement. and the words of president reagan, "as the sleeping giant stirrers, so let us renew the relationship that can lead the world towards freedom and prosperity, marked out in

parchment by those ordinary , so that 240 years ago we may not be counted by cold and timid souls who know neither victory or defeat, but with those who strive to do the deed that will lead us to a better world." that better future is within reach. together, we can build it. thank you. [applause] scarlet: that was u.k. prime minister theresa may begin and philadelphia to the republican retreat. let's get reaction now from kevin, on-site in philadelphia. her speech raise -- arranged on a number of issues from isis to trade deals, always coming back to the idea of a special relationship between the u.s. and the u.k.

which topics garnered the most of life? most o applause? parts are ink the russia. reagan -- at while these two nations should engage, but be aware. the semantics will be dissected and analyzed, but she is a month seemingly in line with trump, at least in being a bit more engaging with russia. there were moments when she did disagree with president trump's political assertions on other international issues. joe: go into the a little bit. she gave some pretty solid

endorsements for international organizations. she also said the fundamental institution still must be the nationstate. where is the daylight you see between president trump and prime minister theresa may? kevin: president trump ran on the campaign trail as someone who is a nationalist, someone who would adopt isolationist policies. , giving an endorsement to the imf, the world bank, nato, saying in the speech that, while the multinational organizations are in need of reform, they are still incredibly important. she urged the organizations to hold together, expand, if you will, the variety of issues that update theirto standards. many people would look at the comments coming from canada trump as well as president trump

. securitycisms of the committee and nato, as areas of daylight. joe: while theresa may was talking, a lot of tech earnings crossing the wire. here for a recap and discussion of the numbers, media analyst paul sweeney and software and i.t. analyst to look at microsoft. let's start with alphabet. what is the big take away? quarter formixed alphabet, or google. they missed on the eps line. docs trading down a bit. the two issues that investors are looking at are the top line revenue momentum. we saw the number of paid click clicks up.

caused -- cost. cost control has driven profitability over recent years. they want to get a sense from management that they are still committed to vigilant cost controls. scarlet: speaking of a good growth story, let's talk about microsoft. i'm looking at earnings per share on an adjusted basis. .evenue coming in the different business line all topped estimates as well. was there any flaw that you thought? cleanually, it looks very to me. the numbers are very strong. asn pc numbers were decent

well. overall, i would say a good quarter from them from almost all perspectives. scarlet: one number that came up was unearned revenue. talk to us about what that means and when we will see that actually earned? >> you have a large revenue on the balance sheet. a lot of times what can happen is the timing of a deal or a corporate deal, you can have an unen as -- on even as -- eveness that can cause his appointment. joe: i want to go back to out of it. while they maintained cost, they still have the challenge of diversifying away from the core advertising business. if anything else starting to fire for them? >> the bulls for the offer that for ahabet story look

couple of things. going mobile. they look for the ability to mobilize the mobile traffic. online video is the fastest-growing area of online advertising, digital advertising . of course, with youtube, and with youtube, google is at a fantastic place there. scarlet: one thing about google, we look at other bets, the moonshot businesses. $266 million, in terms of revenue. on an operating basis, a loss. can you put some context around the numbers? >> since the ipo, the company has spent a lot of money on other bets. now, they have broken it down for investors and we can look at the court dynamics of the google business and look at some of the

losses and investments in these ts.er be $1 billion is a lot, even for .lphabet investors want to know that they have a hand on the losses. joe: back to microsoft for a second. i'm looking at this headline. they say that the run rate tops $14 million. how does it shape up with amazon? so much spending off cash, a lot of it dropping off to the bottom line. how profitable is this for microsoft? appless not apples to comparison. for amazon, it is infrastructure work. microsoft does not break out the infrastructure. it is not a fair comparison.

for microsoft, a lot of it is the office 365. when you have applications moving to the cloud. a large portion is that. it should be, in theory, a lot more profitable because it has been there for a lot longer time. joe: thank you both very much. scarlet: coming up, the chairman and ceo of royal caribbean cruises joins us to talk about earnings, and whether he anticipates travel to change in the wake of the trump presidency. this is bloomberg. ♪

you miss?hat did tech company is not the only ones to report today. world caribbean cruises -- royal caribbean cruises beat estimates. october.t days since

the ceo says that they have never been no well-positioned. he joins us now from miami. great of the you. thank you for joining us today. >> nice to be here. youret: as we mentioned, outlook for the first quarter and booking look strong. what would you say is driving the business now? >> i don't know, but for quiet a while, we have seen a real enthusiasm by the consumer. here, in europe, and asia. they are spending, as we have not seen for quiet a while. they seem to be confident, booking further into the future, booking better accommodations, and spending more on board. sense of the us a customers. are they old customers coming back and taking more cruises? are they knew customers that you are taking from -- new

customers that your taken from competitors? >> one third are cruises who has never -- cruisers who have never cruised with us before. around thegions world seems to be firing on all cylinders, including europe. europe had been a very weak spot for quiet some time. when did you see the turnaround? spotrope has been a weak for quiet a while now. it is not as strong as the u.s. the biggest strength really is here. we're seeing it in all the market across the country. really quiet a level of enthusiasm we have not for a started,at europe really, from our perspective, to take up at the end of the summer, into the fall. scarlet: started to pick up after the outlook for 2017, especially with so many

political events and western europe that may cause people to cut back a bit? >> i think we saw, over the last negative years, a very attitude, due to the kind of geopolitical event that you are alluding to. that really has been a bit of a bummer. it is still not back to where we would like to get, and where was some time ago. somehow, they have gone with the flow, and seemed to be accepting that better. we are seeing not quiet what we would like to see, but strong, compared to where it has been. that't know any event triggered that. gradually, we are very data focused, and get in terms of booking and spending. joe: the big news today, the

ongoing antagonism between the u.s. and mexico. the relationship, not off to a good start, the meeting canceled. what are the risks to you if there is a trade war between the u.s. and mexico? >> the unfortunate thing is we are spread out all over the world. any problem that happens anywhere, including between the u.s. and mexico, is bad news to us. on the other hand, we have the opportunity to move our activities, as we need. so far, i think we are simply so good for the u.s. economy and so good for the mexican economy, i think we will probably do reasonably well, even if there is some service. scarlet: what is your level of concern that u.s. consumers will not want to travel to mexico because of the rhetoric between the two countries? >> i have to admit, watching what happens in washington, and

even philadelphia, is fascinating and a lot of fun. we don't actually have yet to see any real correlation between that and how our consumers operate. i think the world is going on, our customers are sailing, like never before, enjoy get. satisfaction rates are higher. people are happy on board. no one likes to predict the future. so far, we have not much correlation. scarlet: ceo of royal caribbean cruises. thank you for joining us today. joe: meanwhile, alphabet shares taking lower. we will have more insight into out of the earnings after the break. this is bloomberg. ♪

.> i'm emma chandra president trump says they plan to scrap plans to meet with the president of mexico was a mutual decision. he spoke today from philadelphia where gop lawmakers gathered. the president of mexico and myself have agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treat the united states fairly, with respect, such a meeting would be fruitless, and i want to go a different route. emma: the president said most illegal entry into the u.s. is from south of the border.

he is calling for a 20% cap on imports from mexico and a border wall. donald trump's transition team says he expects the transition team to seek significant budget and staff cuts at the environmental protection agency. he protects the president may seek to cut $1 billion from the epa's $8 million annual budget. he said trump will likely see significant reductions to the agency's workhouse of about 15 15 employees. >> customs and border protection said the last official day in office will be tuesday. this a day after president trump announced plans to build a wall at the mexican border and fire border patrol agents. haveystic engineers successfully grown an embryo that is part pagan part human. stemtists inject human cells into a pig embryo and then planted the embryo in the uterus

of a sow, allowing it to grow. after four weeks, stem cells developed into precursors of various human tissue types. research cautioned the hybrid was insufficient but is a significant step twoards the of animals with functioning human organs. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. let's get a recap of today's market action, the dow adding to its advanced closing and yet another record high, this time 100 points above that twice was a level. s&p and nasdaq are retreating a bit. here.e little changed financials and industrials the big gainers here, health care and consumer staples were the losers. we have to look ahead. for tomorrow trading a lot of names and focus. results, earnings

per share for last quarter beat analysts' estimates as revenue for the outlook. intel says first-quarter revenue will be higher than what analysts are looking for an first quarter below results, eas per share for last quarter beat its margin,timates the only profitability measure it gives. 63% plus or minus a couple of points. joe: paypal earnings also after the bell, that stock just under 2%. people not liking the outlook. the company did not reiterate its earlier three-year outlook 74, thecal year 2017 to 1 low end of the range. its margin, the only profitability measure itsame story on revenues a litte bit at the low end of the range. mediocre results, in-line earnings but not a great outlook. scarlet: let's move on to microsoft. as the quarter ended, profit and sales better than anticipated. ,his did not include linkedin which microsoft acquired because you don't really have comparisons that way. aboutou are talking

revenue and profit for the fiscal second quarter is ex-linkedin. joe: about revenue and finally, starbucks s after the bell. those are also pretty mediocre, sales missing estimates. slight miss on same-store sales. ing mediocre demand in europe, which is interesting. about european consumers coming back. not across the board with everything. you see the stock down there, over 3%. alphabets profit missed analysts estimate after the company spent heavily to market new consumer hardware. caroline hyde has more insight on the numbers. you just got off the phone with an alphabet representative. tell us what you have learned. what was the message they wanted to send? >> they might be rather distracted by the fact that share prices currently down more than 2% and all throughout trades, this is rare. usually the last eight times out

of 12 we see shares rise after the earnings. they might be surprised. it seems to be laid at the feet of earnings per share missing. this book -- person i spoke to, a representative of alphabet, --this has to do with u.s. taxes being recalculated. that's what they tried to say was at the heart of the earnings per share issue. revenue grew more than 20% operating. they say in particular, mobile, youtube, search -- i think it's notable, as you mention, many people looking at the ramp-up in costs. how much are they spending on the new hardware on the pixel phone? this is why we might be seeing those shares falling after hours. joe: it's kind of a mixed picture. on the one hand they are pulling back on some of those big moonshothours. joe: things, those projects that have no path to visibility for profitability. they are sort of more fun

projects. those other hardware things they really want to make a bet on and make money in the phone and so forth, that is still they are spending aggressively on? there is the other business and the other vets part of the business. the other business is what had to be happening right now, the cloud. they are trying to play catch-up with amazon and microsoft. they have the fastest-growing part of the alphabet business. 62% up. you also saw growth in particular in hardware, the likes of the new pixel phone coming to the frontier. they are also trying to make a hand at some areas of the business. it's notable at the moment, certainly they are pulling back from the other bets we talk about. cfo trying to get a handle on the cost here. scarlet: we are looking at the numbers here for those moonshot businesses which they put under other bets, operating loss of

$1.09 billion. were they able to give some context around those numbers? caroline: yes. those costs don't seem to be reined in that quickly as far as i can see. they were $1.2 billion last year and $1.1 billion last time. notably, i think they are seeing some growth in revenue and that coming from the likes of nest, likely to be seeing fiber adding to that revenue growth, and notably, the medical area of the business which got them investment today. they have been doing outperformance in that part of the business. i think according to the spokesperson i spoke to a alphabet, they are excited about the opportunities. they are seeing the move away from these moonshot -- won't be seeing the move away from these moonshot bets anytime soon. joe: the bread and butter of the entire company, is that showing any signs of fading? caroline: no.

36% growth. we saw the pay per click rise. the cost per click, that is starting to fall at a faster rate. the advertisers aren't paying as much for clicks. is this mobile creeping in? the dominante is force for google. they have 98% of the advertising market trade is it because they can't charge as much for mobile adverts? you are getting downward move in cost per click. luckily you have more people wanting to buy these ads. joe: bloomberg news from san francisco, great overview of those alphabet earnings. thanks so much. scarlet: one more name to add to tradingings mix, stock late in after-hours trade right now and it is moving up by 5.7 4%. when you look at the numbers, mixed read fourth-quarter adjusted earnings per share

missing consensus estimate. revenue slightly better than anticipated. macau operational revenues, $500 million, looking for a hundred $60 million. -- for it hundred $60 million. ahead of lastas year. in addition, the wynn resorts ceo says construction barricades are coming down in macau as well. joe: this will be a chance to bring up one of my favorite shirts in the world, macau gaming. here we can zoom in, back in our early 2015 it was down 40% year over year of the growth in macau. a little bit of a tick down the last month. such an acceleration coming off. so interesting to see, reiterating that macau is wrong. scarlet: this is bloomberg. ♪

reportedintel fourth-quarter results moments ago. cory johnson in san francisco to help us break down the numbers. cory, intel has been on a mission to turn from a pc chipmaker company to a data center and internet of things type of company. how is that transformation going? pay: it is continuing to straight this is a story intel likes to tell us all the time. think about other kinds of chips, memory and modems and so on. new business is an open question mark as to where those rockets come from. -- profits come from. the quarterly report whispered produced strong. the margins were pretty solid

here. our reporter here at bloomberg, a quick conference call with the cfo, some notes on what they are seeing there. he said, we have to have a somewhat cautious view on pc tam, total addressable market size for pc. they have seen their share of the pc industry increase. in a world where there are fewer pieces being sold, intel has and revenue in pc's grow, margins remain pretty strong. what that suggests is they are not chasing the very bottom of the pc industry. they are gaining market share with every consecutive quarter. the total addressable market, the number of pc's sold in 2017 will be a headwind for intel. joe: this idea that they want to expand beyond that core chip market seems to be a theme of all of the tech companies. all of them have these really

profitable core businesses don't want to be known for something new. the company as you mentioned once to get into the internet of things, cloud stuff. do we have any kind of numbers on profitability of that stuff? what do we know about how these are moving the dow for them? cory: they're categorizing it as other business outside of servers, data center and pc's. that business has been growing faster than the rest of their business. cory: they're categorizing it as having someem to be success there. the overall gross margins have been solid. part of their reluctance to raise gross margin guidance for the coming year is the notion that these new businesses have lower gross margins. the other quote i got for you, where he talks about this business of being in other businesses. you expect the average selling price to be better. --at the same time, higher growth of low-margin products of memory and modem. that is the key here.

they've got to grow. they're going to sell a lot of modems and memory chips to make up for the loss of profits and their other businesses, because fundamentally those are lower margins businesses that that is where you would expect most of your growth. scarlet: lower margin businesses where the growth prospects are better, it was their competition and how do they stack up against those competitors? cory: it's across the board. companies are doing smart, logic like qualcomm, two companies that are putting out chips like texas instruments. it's a question about what those chips will look like at the end of the day. it's not so much about standards, although that has something to do with the radio size of the business. it's about what the use cases are, how smart will the chips the in automobiles when there is so much more in automobiles? what will internet of things chips look like? complex stuff that can process this information, which will

most likely be powered by intel. scarlet: i was looking at analyst notes before the earnings report. the company offering an attractive dividend deal. useintel say anything about of cash and returning that capital to shareholders? cory: they talked about buying back shares and their big efforts there to buy back, reduce the share count. we get more questions on the call about that, as they start to address their entire base i conference call momentarily. scarlet: we are seeing intel shares trading lower by 4/10 of 1%. cory johnson in san francisco. joe: the feud between president trump and mexico's president enrique pinion you tell -- pena . this is bloomberg. ♪

joe: i'm joe weisenthal. "what'd you miss?" president donald trump says the plans to scrap a meeting with the president of mexico was a mutual decision. he spoke earlier at the annual gop retreat in philadelphia. pres. trump: the president of mexico and myself have agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treat the united states fairly, with

such a meeting would be fruitless and i want to go a different route. scarlet: headlines now from the white house press secretary sean spicer. you are looking at the mexican peso right now. sean spicer saying a 20% border tax is just one solution. the mexican peso gave back some of its rally yesterday after spicer said in his daily press startingthat a plan is to take shape to pay for this wall along the border with mexico through tax policy. he floated this 20% tax on imports from mexico. now he is saying this 20% border tax is perhaps one solution. it is the cost-benefit analysis to consider the tax, according to sean spicer. joining us now to discuss is antoniomexico through tax polic. he floated this 20% tax on imports from mexico. ortiz, the former economic head of the mexican embassy and the current albright stonebridge advisor. antonio, let's get your context here on the initial tweet by

donald trump to mexico, saying you will pay for the wall and the president's response. was he left with no choice but to cancel his meeting? >> yes. president enrique peña nieto was left with no choice, even -- even before the tweet, leading political figures in mexico across the political spectrum, from the left and the right, had strongly voice their opinion that the president should not go. and after the tweet this morning by president trump, there really was no option but to cancel the trip. veryi know this is difficult, especially with the seeming unpredictability of the new administration. wait until you see this going. already trump has called for a renegotiation of nafta. response toco's that call from trump? the mexican government

was willing to engage with the trump administration. the foreign minister and the minister of the economy are in d.c. and they held top-level discussions with white house advisers to president trump, and this tweet this morning eliminated any possibility of president pena going there. the trump administration and particularly the tweet by president trump, really the range of possible agreements between mexico and the u.s. the mexican government had been very constructive, very cool- headed and trying to have a constructive engagement. under these circumstances, it is very difficult to do so.

i would say that president trump with his latest tweet has managed to do something that perhaps no president from mexico had done since the 1938 nationalization of the industry. all is to basically unite mexicans. this is a pretty unique situation, and pretty troubling developments. scarlet: one thing that needs to be pointed out, as i look at further headlines from sean spicer, he is saying the trump administration is talking erratically about a border tax. as a negotiator, antonio, do you take what donald trump says literally or perhaps theoretically, metaphorically? even with the wall. it may not be a physical wall, it could be a fence, it could be drones, it could be a virtual wall. >> yes. the problem witheven with the w. it may not be a this is that you cannot negotiate everything

in politics. you have to agree about some basic guidelines, and the main end of the negotiations to reach and to seeolution, how mexico and the u.s. can work together to create employment on both sides of the border. if you start unilaterally saying, i will build a wall and it, and one way for you to pay for it is for me to impose a 20% tax on mexican exports to the u.s., i don't think that creates an environment where constructive discussions are possible. following, the mexican government would be following the same position. and future would have a trade surplus with mexico, then we would tax u.s. exports to mexico. it makes no sense. it makes absolutely no sense. the discussions should be focused on how the countries can work together to address real economic challenges in both

countries and create jobs in both countries. this is the way not to go about it. joe: what would a real constructive negotiation focus on in your view? what should be up for discussion? >> first of all, i would say clarity. what happens until mexico and the u.s. reach a new agreement on any trade deal? there should be something like a peace clause. don't create any noise, don't come out with strange proposals that are completely inconsistent. don't tweet while you are negotiating. we will live with nafta, we will negotiate and make sure that negotiation benefits those countries. among the issues that can be discussed, rules of origin. does he have regional, north american production can be enhanced? we can discuss about trade and environmental provisions. e-commerce,ss about

state owned enterprises. what about energy? energy, we can discuss. telecoms, no. mexico is being faced with a barrage of ideas that create a lot ofenergy, uncertainty for te mexican economy, that pressure, the mexican peso. i don't think it would be right to negotiate under such an environment. scarlet: all right. senior adviser antonio ortiz. thank you for joining us today. >> thank you. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

joe: -- scarlet: theresa may will be meeting with president trump at the white house. will most certainly discuss any type of trade agreement between them. joe: i will be looking at u.s. gdp. scarlet: this is bloomberg. ♪

>> i'm alisa parenti. you're watching "bloomberg technology." president trump says the scraps plan to meet the president of mexico was a mutual decision. the today from a gop retreat in philadelphia. president ofthe

mexico and myself agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treat the united states fairly, with respect, such a meeting would be fruitless, and i want to go a different route. president said most illegal entry into the u.s. was from the south border. he wants a 20% tax on imports for mexico to pay for the wall. the customs and border control agency says patrol chief mark morgan is stepping down. morgan's last day will be tuesday. his departure comes after the administration's decision to greenlight the wall of the mexican border. departmentop state staff has resigned as the trump administration takes over. it's reportedly the largest wave and recent history of the department. genetic engineers have successfully grown an embryo that is part take, part human -- pig, part human.