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an advisor to the bank of japan governor says there's no chance rates will be raised until inflation is at or around the 2% target. he said the bank's commitment to that number means it will. find policy until it is sure of reaching its goal. the fed raised its rate this year with the bank forced to buy more bonds. the white house is pending president trump's immigration order after judges ruled against parts of the plan. protests broke out across the country. thepremise or canada and german chancellor has criticized the order. google has warned its employees.

-- he took 59% of the vote in the french primary and is marine le pence in the election in april as well as in may. toshiba president says he intends to stay on in the role until his term and in march. he says he accepts response ability for the companies current problems that could top $6 billion. toshiba is continuing to consider selling its chip business to balance it looks. global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. this is bloomberg.

caroline: this is the best of bloomberg technology where we bring you all the stories this week in tech. alphabet, microsoft and intel reporting this week as the dow was caught above 20,000. be the largest internet provider in the united states. but would it keep pace with at&t? how atweeps in -- dynamics terminated the first major tech ipo of 2017. first, to our lead, a huge week for tech earnings. alphabet microsoft, intel, , qualcomm all reporting. this at a time when the dow jones was beyond the 20,000 level for the first time. let's kick things off with alphabet reporting on thursday. take a listen. >> you have to take a step back.

here is a company that makes massive amounts of money, has massive levels of growth and yet people are finding those little areas. the problem is always expectations. obviously we will talk more about this, but the ad click numbers is clearly a challenge for them. what's good is we are seeing them spend money on some other of these other bets that i think will pay off. in the short term, there is extra money being spent, but i think they have a number of very interesting opportunities. google have to extend alphabet -- alphabet knows they have to extend beyond the advertising business model. these bets are surely going to start to pay off. we are starting to see spending in those areas where we will see growth later. caroline: let's take a look at the advertising element when you add them. i'm seeing cost per click falling 15%?

but they are still managing to lure in more people to buy those adverts. they are going up 36%. is there worry about that? >> to a degree, that the declining cost per click is interesting. conversion rates are still low on mobile devices, so therefore the advertisers that are marketing those businesses are less inclined to pay up for clicks that happen on mobile devices. that is all more or less to be expected. i think the bigger weston is around the click metric in general. we are hearing from our customers they are starting to value how much clicks are overall. caroline: explain that. >> obviously, the search engine is google's cash cow. it has been for some time. the default behavior for an ad on a search engine is to click it and to click all those blue links. in youtube, you are viewing an ad.

so that could be a very good thing for google. you are opening up to a whole new range of use cases, a whole new range of verticals. you can click to buy laundry soap unless you are shopping on amazon, that can open up a pbg category, but the whole click metric will get a lot of noise the more important you to get. caroline: we are just hearing from the ceo of the google admin of the business, and he said the key power, the three biggest bets, youtube is the first one, cloud, and hardware. let's dig in with you more on the hardware. cloud, they say, is their fastest-growing area of business. but they have tough competition from amazon and microsoft. >> they do. microsoft also showed big growth, but it is a large area. there is a lot of opportunity for everybody. this is a case of raise all boats kind of thing. i think we will see google kind

of expanse that cloud business, and if they can start to leverage some of their machine learning, some of their ai capabilities, into their cloud offering, that could differentiate from somewhat from both what microsoft and amazon are doing. each one of them is doing it, but they each have their own special sauce, special flavor. on the other side, this is a company that is heartily dependent on one area. it does raise some concerns long-term. how long can they possibly sustain that? so let's look at what they are doing. they spent a lot of money advertising pixel. that is part of the reason why the costs were so high. we have all seen the ads, nice piece of hardware. google home looks like a very nice piece of hardware. they have daydream on the virtual reality side. there are a number of areas they are looking at. they will take a while, but they are laying a foundation to do some nice growth in hardware and additional services on top of that hardware. caroline: back to the youtube

element of business, you think this could become the powerhouse going forward? when does it start to show its dominance? they don't really break it out for us. >> yeah, i absolutely think it is a huge opportunity. where people get it somewhat wrong or diminish the opportunity is thinking of it as tv dollars moving through online video. that is not all it is. it is actually a growing the pie scenario, because it is all kinds of businesses where the owner has an iphone 7 and can create a quick video and promote that on youtube and facebook. caroline: it might be a pixel. >> exactly, yeah, but that is an example of an advertiser who never would have bought a tv ad. so all those tv ads will likely move towards digital, but it also opens up a whole new set of demand because of lower friction and lower barrier to entry. for digital video. caroline: that was adderall president adam burke and bob o'donnell. speaking of alphabet, the company has ended its 12 year

relationship with one of washington's most prominent lobbying groups. the group is no longer lobbying on behalf of google. they had long-standing ties to the democratic party and hillary clinton. this change coincides with google's bid to hire someone for conservative outreach, and of course as a republican administration takes the white house. staying on the earnings beat this week, sap raised its targets for 2020, citing a surge in customer purchasing of the latest applications at a faster pace. the updated outlook came out with the company's fourth-quarter sales, which were in line with estimates. sap is transitioning from software installed on customer'' computers to online cloud computing tools. the ceo spoke with bloomberg tv about the company's strength in the u.s. marketplace. >> clearly any enterprise company operating in the global economy is almost always running sap, so we like to think that our purpose in the united states will only get stronger because

we can only help the new president take cost out of the equation where it should and focus on growth where you can. that is why you need mobile players like sap to be great partners, and we will be. caroline: still ahead, appdynamics was on track to be the first major u.s. tech ipo, that was before cisco snapped it up this week. we speak with the cisco ceo chuck robbins on the acquisition later this hour. and another possible megadeal as verizon approaches charter about a possible tie up. all the details, ahead. this is bloomberg. ♪

♪ caroline: and now to some big deal news of the week, verizon communications ceo has approached liberty media about a possible tie up with charter communications. a verizon-charter combo would create a telecommunications and cable giant, bolting the company to the number one spot of u.s. internet providers.

here is some of the background behind this move. >> a combination of verizon and charter would not be a merger. it would be a megamerger, and it is not the first one we have seen recently, like at&t $109 million bid for time warner. now valued at $103 billion, this acquisition may charter the second-largest cable operator in the u.s., just behind comcast. currently verizon is the number one mobile carrier and the number two telecommunications provider, but the company has been facing a slowdown in its core wireless business. this proposed deal would bring together thousands of miles of fiber-optic cable at a time of soaring demand for faster broadband. tempting as the industry gets more saturated and consumers cut the cord. caroline: quite a bit of information to go through in this potential tie up. joining us from new york is walter who focuses on this and

has a neutral rating on verizon. welcome to the show, walter. thank you for your time. verizon numbers as we saw this week were looking pretty intense earlier. with this tie up be helpful with charter? walter: the tie-up with charter would not cure the ills of the wireless business. their competitors are offering unlimited plans, and verizon has resisted that probably because they have 100 million customers, and it is unclear if the network could handle that type of usage. so with charter and 5g, that is a section of the market. it is unclear how high quality that charter has that would enable 5g versus comcast to have much better investments historically. it doesn't shore up anything. it just adds a different business and one that generates its own free cash flow. caroline: i think what is

interesting here, we are starting to see a division in the ranks of what the best tactic is for the future. you have at&t and time warner saying content is key, and then we see infrastructure isn't really up to much. walter: for a while, the ceo of verizon's strategy was to go wireless, and all of a sudden you have an issue where wireless is not the best thing or the only thing for them to do. so it seems there is a lot of pressure on the company in order to make some sort of changing transaction for them. i think your own, bloomberg's own alex sherman talked today about them looking at 10 companies. that makes a lot of sense to us. they have issues in the wireless business. there is a whole host of companies they are looking at, and now with the new administration, there tends to be this anything goes mentality where you can proceed with any type of transaction at this point, it seems like, right? caroline: maybe not and at&t-time-warner one. what about the other 10 companies that verizon could be looking at? who would be a good fit in your

point of view? walter: if they are interested in fiber, that would make a lot of sense if they want to have a wireless capacity. and her t-mobile's ability to get capacity, then they should buy dish. if they want content, maybe they should look at disney. if they want to diversify the slowing business that they have and get more slowing business and more diverse, maybe they should look at vodafone. there are so many different options that verizon could look at going forward. the fact that they are talking to charter is -- i think it is interesting. it is not really surprising given the challenges they face. and a bigger question for comcast, if we are in an anything goes environment, why shouldn't comcast also be looking at charter? maybe this whole conversation with liberty is just liberties saying to comcast, why don't you guys, take a look at us and really all these deal start together some pace?

caroline: so regulatory hurdles, we are seeing fewer in this new administration, or is the land not clear yet? walter: the land is not clear. doj should have major issues with these print-t-mobile transaction, and yet the market thinks with great confidence that that transaction can get done. on the fcc times of things, with the new chairman of the fcc, i think the perception is that there is not going to be as much problem with transactions or the sec using the power they have to evaluate these things based on the public interest, but the doj is a methodical type of organization. so we are skeptical that if sprint and t-mobile tried it that they would be successful. if we are wrong and the market is right, then again, why shouldn't comcast be looking at charter? caroline: we have to get back to earnings now as it was a big story in tech this week. cory johnson joined us with bob o'donnell to dig through the takeaways.

>> the azure business continues to grow for them, nearly doubled, and there is no sign of that slowing down. there is a huge opportunity, as we discussed weekly before, amazon, google, and microsoft all driving this business. a lot of interest there, and we are seeing each of these vendors and microsoft in particular trying to focus on adding interesting artificial intelligence, speech recognition capabilities, so that other developers can take advantage of this on, if they're going to use microsoft's cloud services. so we will see more exciting developments. the office 365 business is very interesting as well because they successfully moved from this model where we used to pay for a copy of office to now where we pay a subscription. and in the long run, that has some nice financial benefits. we are seeing some of the opportunities they are driving from that as well. interestingly enough, even the windows business did ok. caroline: that old chestnut.

>> they still had some opportunity. and of course they are heavily involved with gaming. that is a hot area as well. so they are nicely positioned as we move forward. caroline: what about the acquisition linked in, cory? did we get any hints about how that's adding? cory: they are very much separate businesses now, but how long that will be the case -- microsoft more than any company has screwed up merger after merger after merger going back decades, so can this one be different? they certainly hope so. they plan to keep this as a separately operated company. the results of course in the first quarter that it will be consolidated, but the question is, how much will this be in the future? bob: one thing i would jump in briefly, with office 365, there is a very interesting mix

between some of the linkedin capabilities with office as you tie contact information from outlook and other things into linkedin. that seems like a reasonable mix. we will see what happens. caroline: potential best. what about intel? i know you have been all over these earnings today, cory. cory: intel is really interesting. with all the companies we are talking about today, we are talking about this seismic change in computing, moving from companies buying lots of equipment to companies borrowing equipment and doing it over the cloud. so what you saw from the intel result is that intel tried to wrestle with that issue where they had this profitable business, pc contracting, server business also very profitable, trying to move into a lower margin environment with more photos, less memory. when i talked to the ceo, the chief financial manager, what he had to say about the pc market was interesting. intel saw rising sales into a shrinking market with pcs, so we enter the year with a somewhat cautious view for the pc cap here they expect pcs to continue

to contract, and they are worried about that, but at the same time, they think their datacenter business might be strong. so when they look at how it they can guide towards flat margins and growth that is still growing, you know, in its own shrinking industry, that is by selling better stuff in the data centers and by trying to keep those margins together on the other side. the average selling price will be a little bit better for all of their products as they bring new products for the data center business, then he looks down at the market and that this i'm time, we are looking for higher growth with low-margin products. more low-margin, which will hurt their high-margin business on the data center side. caroline: that was editor at large cory johnson and bob o'donnell of technical assist research. coming up, china's biggest internet giants are vying for the attention of smartphone

users for the lunar new year holiday. we will take you inside the tencent headquarters in shenzhen for a closer look at its mobile payment strategy. and a reminder that all episodes of bloomberg technology are now live streaming on twitter, check us out weekdays at 5:00 p.m. in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪

caroline: it seems samsung isn't the only company with battery issues. hp over recalled over 100,000 lithium-ion batteries from laptops. it is not new but instead an expansion of the 41,000 recalled back in june 2016. the reason for the recall is possible overheating that can pose fire and burn hazards. hp says it will provide a free replacement for each eligible battery.

now the chinese lunar new year tradition of handing out cash-stuffed red envelopes has entered the 21st century. it has integrated into the smartphone with millions of people are expected to send gifts to digitally this year. according to tencent, users sent more than $8 billion in digital envelopes in one day last year. bloomberg news reporter tom mackenzie went inside tencent's headquarters in shenzhen. ♪ tom: chinese new year is a boon for mobile payment companies, thanks in large part to the digitization of this centuries-old tradition. well over one billion mobile transactions are expected this year as people fire off virtual red envelopes via their phone. valued at just $32 million in 2012, china's mobile payment market was worth $1.8 trillion last year.

according to hide research. tencent's wechat and alibaba's affiliated alipay are the two biggest rivals in this space. their apps allow you to do everything from buying a latte to taking out a personal loan. it is all about getting an edge. >> in recent years, we have seen many players emerging in the mobile payments markets, including banks and other third-party payment platforms. the competition is so fierce, it is almost brutal. tom: with more and more chinese embracing mobile payments, alipay and wechat have come to dominate with 90% market share, and that has drawn the attention of regulators who are expected to ramp up controls this year. the people's bank of china wants companies like ant financial to register their deposits at state-owned banks. it is also developing its own crypto currency to be used in online transactions.

>> we follow all the regulatory guidelines in the institution of financial services, and as that adapts as it will continuously adapt and continue to adapt, we adjust our models to reflect what the regulations require. tom: china's banks are certainly feeling the pain. lenders here lost about $22 billion in payment revenue to alipay and wechat in 2015. that disruption is not stopping at china's borders. ant financial is trying to capitalize on the 150 million chinese who travel abroad every year, teaming up with spending in key tourist destinations. it has also invested in india's paytm and is eyeing further expansion elsewhere. >> most of the activity in this region, but we look closely at the u.s., europe, and what is the right strategy there as well, and so we really do have a global perspective and global

ambition, and we will roll that out as we determine the right partners. tom: china's mobile payment giants are on a roll, but succeeding abroad is likely to be their biggest challenge yet. caroline: bloomberg news reporter tom mackenzie joins us live now from beijing. thank you for getting up so early for us, tom. you talked in the piece, you interviewed a lady who spoke about the brutal competition that there was. who are the key competitors to the likes of alipay and wechat? how are they tackling it? tom: first of all, there is a lot of bloodletting between alipay and wechat, and wechat has expanded its market share in 2014 from 11% to 20%, whereas alipay has seen its market share fall off from 82% to 68% in the same period. you have the other competitors, apple pay, they launched. we also have huawei, they have their own payment system. samsung, of course, android.

most people have baidu or jd.com with a jd finance, the wealth management side of things. in terms of what alipay and wechat are offering, they have got this ecosystem, so apps within an app that makes it easy to do all these sorts of things, whether that is managing your wealth or buying flights to travel abroad. so for the challenges, they have to take on that element of things. apple has the brand strength, they are still a very popular smartphone maker, but they use the nfc codes instead of qr codes that are so popular in china, and it will lead to a challenge for apple to carve out market share here. caroline: you mentioned global expansion, india. what is happening there? tom: so alipay have been leading the margin when they teamed up with banks in europe, stores in london. they have also teamed up with verifone in the u.s.

so alipay making a big push on this. it comes down to branding and brand recognition. have they got that? they can have clout to take on apple pay in the u.s. that will go for the chinese tourists that travel abroad every year, 150 million as it stands. caroline: that was bloomberg news reporter tom mackenzie from shenzhen, china. up next, appdynamics' ipo was officially squashed. this week. we will see what this means for 2017's pending batch of ipos. and if you like bloomberg news, check us out on the radio. you can now listen on the bloomberg radio app and on sirius xm. this is bloomberg. ♪

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only xfinity gives you more to stream to any screen. download the xfinity tv app today. >> this is an update of the top stories. an advisor to the bank of japan governor says no rates will be raised until inflation is at the 2% target. bank says it will not tighten policy until it is assured of reaching its goal. the bank is potentially forced to buy war bonds. protests broke out across the united states and in cities for a field. prime ministers of canada, german chancellor and the mail of -- mayor of london criticize the order.

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hours a day powered by our 2600 journalists and analysts in more than 120 countries. you are watching bloomberg. a whole bunch of markets shut for the chinese new year. caroline: welcome back to the "best of bloomberg technology". i am caroline hyde. cisco is making an acquisition, the world's biggest networking bank is acquiring appdynamics for $3.7 billion. cisco snapped the software maker before it planned to go public this week. that was the first major u.s. technology ipo. bloomberg's daybreak america team spoke to the ceo of cisco chuck robbins on the news. chuck: yesterday was a great day for us. we had on display two great levers of how we drive innovation. our portfolio. in the morning, we launched cisco smart board, which will

revolutionize meetings and business. one of the headlines is that it was one of the coolest products cisco has built. in the afternoon, we made the acquisition of acquisition of -- we made the acquisition of at dynamics, which we think is a fantastic acquisition for us. in reality, what they do is they translate application performance into his news insights for the customer, and they do it across private and public cloud, so we think the synergy of what we see at the infrastructure level and what they see at the application layer actually creates visibility that no other company in the industry can provide to our customers. we are excited about it. i was there yesterday. 15 minutes after we made the announcement, i addressed the employee base, and i think they are pretty excited as well. it was a good day for us. >> i have a couple of questions about the deal itself. you paid a pretty high price, $3.7 billion. the reports were the ipo would go in for something like half of that.

and is a startup, so it is not about making money. is it diluted, is the price right, and at what point does it become accretive? chuck: when we looked at the company, there were a few things we looked at that are important to understand. first, they are the best company in this space. secondly, they are growing twice as fast as their nearest competitor. third, they are growing faster than any publicly-traded software company today. caroline: that was chuck robbins. the record-breaking sale values appdynamics at about 18 times recent months. that is very good for investors. congratulations. and here is a huge number, the person who co-led series a, series b and i have to say, congratulations. how much did you put into series a, and what is the reward? >> we made the series a

investment back in 2008 i think a total round of $5.5 million, and it was about $12.5 million at the time. caroline: so it is valued at $11.5 million, now valued at $3.7 billion. that must be such a reward for you. how is it -- how long was this -- we understand there were talks. when did you get the offer on the table? >> we actually signed the agreement with cisco literally minutes before we announced yesterday. we were proceeding down the path to be a public company, and you know, i think the strong belief in the company management team and the board that this could be a multibillion dollar business looking forward. you know, cisco and the company did not know each other. a few days ago, chuck the ceo of cisco invited the ceo of appdynamics over to his home, and that led to intense

conversations. the cisco team and the appdynamics team came to the conclusion that merging with cisco could accelerate the mission of the company and gain market share much, much faster. caroline: do you think it would have got a $3.7 billion valuation anytime soon? >> you know, it is hard to really tell because we did not go public, but the ipo roadshow was very, very strong. within a couple of days, the offering was completely subscribed. that data we have is that we had gone public tomorrow, it would have been a very, very strong ipo and likely traded up. caroline: it is fascinating. you have been on the board of appdynamics, in fact, greylock helped this company grow. it was the first offices that were provided. they were working in greylock with you with the company was first born in 2008. do you think apart from the

price tag, cisco is the right way to go rather than listing? >> yeah, you know i think every company has to make their own determination whether they continue as a public company or are required at some point in the lifecycle. i mean, cisco is clearly a world-class technology company and world-class reached, so i think just incredible resources. i think cisco can be an excellent home for appdynamics, both in terms of extending reach for the product line very, very quickly over the world's largest enterprises and also in terms of synergy. with the infrastructure monitoring data that cisco has, combining that data with the application and business performance data that appdynamics has can be powerful looking forward. caroline: what does this say to a highly valued unicorn out there at the moment looking at the market, wondering whether to ipo, wondering whether to be acquired? do you think this might put off

others going public? >> i don't think so. because i think actually, the indication from the roadshow that the company undertook is that the public market seems to be very, very open and very receptive for the best of technology businesses. i was in the roadshow, a group luncheon san franciso two days ago, and it was standing room only. the room was full of public market investors. there was a very rich dialogue going on. just this morning, my email is full of email messages from public market investors around the country saying, hey, congrats. we really kind of wanted to purchase stock in this company. caroline: with the first major tech ipo down the drain, what is next for tech companies pondering going public? will this spark a flurry of tech m&a? we caught up with pwc technology leader and a bloomberg reporter. >> cisco did come in at $3.7 billion, a lot higher than the $1.7 billion they were going for, but this is not a common

occurrence. we saw bluecoat get bought by symantec, but they were not on the road yet. this company, appdynamics, had done all of their meetings, they had done their roadshows, investors were excited, and i guess cisco was more excited and willing to pull the trigger on a buyout. caroline: could this be a theme, could roadshows just make it all the big hot to buy in and then take them off the market? >> this coming year, there are a lot of companies coming in. there are 30 or 40 companies we are expecting to have a good chance to come out this year, but we purposely use the language that they will have an exit this year. that doesn't necessarily mean they will have an ipo, but they will have an exit. i think a lot of those companies, if you get into the midrange evaluation group, i think a lot of those companies absolutely are willing to do a dual track and see what their options are. caroline: there's one man out there who is hoping this does not become a theme. we did speak to tom farley am a

the president of nike earlier. have a listen. >> we are expecting 10 ipo's and the next three weeks, including four on friday, three operating companies ipos and a closed end funds. those 10 ipos, they are really big ipos. caroline: alex, this must have got bankers concerned? >> it does. and the deals tom is talking about, those are companies outside of tech that we have been waiting to see for a while. laureate, children, companies like window and door maker. they are clearing out the pipeline, because last year was so choppy in equities, and now we have this trump rally, and so people are taking advantage of it. it is a different story was some of these growthier tech companies. investors want to buy in, but there is no supply. and there is still no supply. we have heard about all of these companies going public, but it will be interesting to see who does kind of test the waters next.

so all of these smaller names, but to your point, they are also the ones that when the strategics feel like they're willing to write the checks that make the valuations they did for the last go around, these are the same enterprise companies we might see get bought out by the likes of cisco. >> i agree. if you look at last year, i get it was a record year after a record year, but there was something really interesting about that record last year. a lot of the big-name technology companies were not the ones who were doing the buying. you go off the traditional serial acquires, they were not actually buying. caroline: the pool is becoming wider. >> and yet they are interested. they have the funds to do it. they are interesting and see these companies bringing disruptive technologies, cloud, ai, deep learning. those are attractive assets that are disrupting every industry, and so it is not even just the cisco's, the hp's, the walmarts of the world.

it could be ford, png being acquired i these companies as well. caroline: coming up, more on president trump's meetings with business leaders this week. how some tech companies are aligning themselves with the administration. plus, president trump is making good on his pledge to take down his predecessor's prized initiative, but there is one that might be embraced by the new administration. more on that story, next. this is bloomberg. ♪

caroline: president trump met with business leaders at the white house on monday morning showing that job creation is a top priority. tech companies around the world are eager to align themselves with the new administration. let's focus on two of them, foxconn and ibm. first, foxconn, the biggest manufacturer of apple devices may build a u.s. factory, a major investment for the company

that could create tens of thousands of jobs in president trump's first year in office. then there is ibm. it pledged to hire 25,000 workers over the next four years, but a new report from bloomberg found big lou cutting jobs as it touts its hiring plans. we discussed president trump's job agenda in a roundtable with the gadfly columnist and bloomberg technology editor-at-large cory johnson. >> alternative facts are not limited to the white house press conferences apparently. the notion ibm is hiring and making press releases and talking at trump tower, meeting with trump tower, talking about adding jobs and spending $1 billion to do so, but at the same time, the company has been cutting jobs, and cutting them rather aggressively. in fact if you look at the number of employees for this country, what we see is already pictures at trump tower, who was part of the transition team, it

would. they would be hiring more in the u.s. and spending $1 billion on training, and we see ibm cutting. the number of employees has been cutting dramatically over her tenure as ceo. whereas at the same time, the revenue flow has been declining. if we go to the bloomberg terminal, there is this great thing called loss. you type in ibm loss, which you see is a list of all the job cuts. we can scroll through there deftly, and on and on. you can see there is a circle whenever it was cut and you can see the stock prices you can see coming down over time even as they have been buying back shares and cutting jobs, that's another way to visualize those job cuts. caroline: they could take half if they are taking cost -- cory: and earnings-per-share gets higher. even then, it has not helped. caroline: let's talk about foxconn.

you put out a brief on bloomberg gadfly. you are not buying all the pr around what seems to be a deal coming from foxconn and touting that apple might support them in building this big factory here in the united states. >> and one of the things we need to understand is that foxconn chairman terry gore pointed out it is a wish and not a promise. that is a really important caveat from the billionaire chairman of foxconn. he has make governments around the world believe that maybe he might invest in their countries, but has not always followed through. you can't always blame him for that, because often it is the government and the officials in the government that are getting ahead of themselves, but he has been patient, but also aggressive, going to various governments and saying if you want me in your backyard, you have got to offer incentives. he said that very clearly at the weekend, at the year end party, that he would be looking at stakeholders in the u.s. for the best deal that he can get. if that works out, that means tax incentives, cheap land,

electricity, all those things that cost money. if you can get the good deal, then sure, he would consider it. it would be bad not to consider it. caroline: tit for tat, not all one way for donald trump. david, weigh-in here and give us your view on all this pr and whether ceos are learning a new way to address job hirings and firings. david: we are living in a world where appearances seem to matter more than ever, and sometimes more than fact. in terms of foxconn's building a plant in the u.s., i think it is an interesting possibility. it would be politically hugely advantageous for apple if they could point to a considerable amount of their own sourcing coming from the u.s. from a very prominent plant. as tim points out, you know, these are auctions where companies are asking people to

bid for their business, and from foxconn's point of view, it only helps to have these reports out there. but ironically in my opinion, you know a plant like this is so automated today, that increasingly these companies really don't care where it is. in the past, they might have needed it to be in china because it was a very labor intensive business, but increasingly it will not be labor intensive, and so i don't think we are talking about nearly the number of jobs bandied about, and i think it is a matter of where they get the incentives. it is not about labor cost anymore because automation is what determines the success of these plants. cory: and i think one of the reasons these things were made in china is because the labor is so cheap. they created a process that was labor intensive that was the cost. but as the cost of labor has risen in china, there is more use of automation than any other part of the country, to david's point. that worldwide decline in manufacturing jobs is something that even alternative facts can't rescue us from, but is an

important issue in the politics. i think this story cannot be divorced from politics weather for foxconn or ibm. caroline: staying with the new trump administration, one important issue under obama may looks like it may continue under president trump, obama's tech surge. they pull people into the highest branches of federal government. bloomberg's head of global technology coverage brad stone joined us to explain. >> the tech surge, who will trump appoint? megan smith of cto? can trump draw the same group of people to keep this going? but on the policy side, you are right. there are plenty of questions. the fcc chair seems to be very much against net neutrality. that is worrying to some in silicon valley. all these other issues where silicon valley politically differs even at the same times as they look forward to tax holidays and a lower corporate tax rate.

caroline: interesting you say silicon valley differs from washington in some respects. it is fascinating what is going on with twitter, which we will get into in a moment. but elon musk said that rex tillerson, he isn't backing rex tillerson. he is exactly competent. his team is now the usa. he would not want to get in bed with the new administration. we look at twitter being deployed. does that surprise you? >> know, that has been his primary communication mechanism for so long. it was effective for him during the campaign. it is obviously a mouthpiece directly to the people. of course the masses aren't quite on twitter or embracing it, but it allows him to get an unfiltered message out there. but with elon's tweet and other business leaders take a role in the administration, taking the opportunity to get their policy

priorities passed in this new environment, so i think there is some cautious outreach on both sides, and twitter of course is the venue of choice. caroline: will it be adopted more widescale by other politicians? >> i don't know. trump is pretty singular in his ability to get attention via tweet. he tweets impetuously, let's say. it is not really in the character of other politicians. he is unique. we also looked at whether this is good for twitter, and i don't know that it is. caroline: for more on what trump's tweet means, catch the latest episode of our podcast. you will find new episodes on itunes every tuesday. coming up, online pharmacy help pack is aiming to shake up the pharmacy package business. we visit the pharmacy startups headquarters next. this is bloomberg. ♪

caroline: spending on prescription drugs in the u.s. hit a record $425 billion last year, and demand for pharmacy is growing as the u.s. population ages. and yet 54% of americans fail to take their frequently complex drug combinations correctly. pill pack seized the opportunity to simplify the process. bloomberg's donnie visited the startup's headquarters in somerville, massachusetts. ♪ reporter: pill pack is taking on the neighborhood pharmacy. >> traditional real start pharmacies, they don't think of the overall value of the consumer. reporter: the online pharmacy has a different approach. >> instead of seven or eight different bottles, you get one of these boxes. reporter: that box is delivered every few weeks. pills are sorted in individual

packets by the time and date they should be taken. >> this is one for 8:00 a.m., you have one for 12:00 p.m., and one for 8:00 p.m. reporter: the ceo is focused on 30 million americans who take five or more prescriptions a day. >> they are ultimately the highest in the market. reporter: parker launched pill pack in 2014, now with $120 million in funding. >> so down from about 200 people a year ago to roughly 600 today. reporter: at the headquarters in somerville, massachusetts, in a recently expanded 50,000 square foot distribution warehouse in manchester, new hampshire. ♪ reporter: here, robots help sort pills, and the majority of pill pack's employees employees handle claims, shipping, and program its online tools. how hard would it be for another player to just replicate that exact model? >> the system, the clinical system, the automation, all of that had to be built from scratch, and these are 1500

million dollar companies. so if they wanted to do it, they could. it would just take a long time. reporter: a bloomberg intelligence analysts sees little reason to mimic the model. >> they have their work cut out if they really want to tackle this problem and push cvs and walgreens off the pedestal. 90% of that is going to the retail corner pharmacy. 30 day prescriptions. reporter: and just like those competitors, pill pack labeled itself an online retail pharmacy, not simply a mail order service. >> this is not a regulatory definition. this is a business definition that varies amongst pharmacies. it is not new type of service model. it does not fit any of the existing buckets particularly well. reporter: that distinction is at the center of the public

contract dispute with express scripts. most prescriptions in the u.s. are managed by people like cvs caremark, united health, and express scripts -- >> typically mail order pharmacies are reimbursed at a lower rate than retail pharmacies or a specialty pharmacy for dispensing a prescription, so my guess is that pill pack is at higher rate than the traditional mail-order rate we see out there. reporter: part of the sales orders are at risk. >> part of that negotiation was around rates, but that was not the core negotiation. the core negotiation was do consumers ultimately have the ability to choose what pharmacy they want to use, and that is why we thought that battle. reporter: another battle is helping patients take the drugs they are told. according to the new england health care institute, a cost the u.s. $300 billion a year. >> there are handful of standups sort of doing the same day deliveries as pharmacies, but that is not the solution.

the secret sauce of pill pack is not delivery. reporter: pill pack's goal is to make taking medicine easy. that might help patients take their meds on time. ♪ caroline: a story to leave you with, a disturbance in the force at disney this week can be described in one word, excitement. that is after the announcement of the next installment of the "star wars" saga, episode vii, entitled "star wars, the last jedi." the "star wars" spinoff "rogue one" released last month as a part of the $1 billion box office. "the last jedi" will hit u.s. theaters on december 17. and that does it for this edition of "best of bloomberg technology". next week, we have a terrific lineup of exclusive interviews, including conversations with the ceo of dropbox and the ceo of slack. two-minute 5:00 at 5:00 in new york, 12:00 in san francisco, 8:00 in hong kong.

remember all episodes of bloomberg technology are live streaming on twitter. check us out. that is all for now. this is bloomberg. ♪

♪ it is 8:00 a.m. in hong kong, 9:00 a.m. in tokyo. i'm rishaad salamat. the white house is defending president trump's immigration order. protests broke out across the u.s. and further afield. several companies including not to riskd staff leaving the united states. to theks has contributed debate, saying it intends to put refugees on the payroll. howard schultz said he is putting plans into higher tens

of thousands of refugees, saying the program who would start with people who served with u.s. troops as interpreters and supported personnel around the world. japan releases retail sales numbers, up .6% on the year, well below estimates for 1.7%. month on month sales seeing a drop, a big week for japan. ,he latest rate decision industrial production, and unemployment data over the next few days. meanwhile, an advisor to the boj governor says there is no chance rates will be raised and until inflation rises to 2%. the boj will be under pressure as the fed raises rates, with the fed potentially buying more bonds. toshiba's president intends to stay on the role until march.

he is accepting responsibility company's current problems, including the write-down of the nuclear division. toshiba is considering selling assets to rebalance its books. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. at the sessions so far, the lunar new year means the vast majority of markets are closed. .6%, the yenwn by strengthening by .4%. ♪ on this isp storieserg best", the

this week. the trump administration hits the ground running. >> he wants to create jobs in the u.s. >> we are going to start by getting fair shakes with our trading partners. >> a lot of people thought he was going to start with taxcutting and tax reform. hits 20,000 wes , ask what is in a number? ipo'sare expecting 10 next week. greed comes back. >> parliament will get to vote on brexit. >> it is similar to a frog getting boiled. anyone moves from london, we welcome them in madrid. >> corporate earnings we will , run down some of the results. >> i see investor confidence is there. >> we are reviewing our priorities. erik: it is all straight ahead on "bloomberg best." ♪

david: hello and welcome. i'm david gura. this is "bloomberg best." your weekly review of the most important business news, analysis, and interviews from around the world. let's start with a day by day look at the top headlines on monday. three days after his inauguration, president donald trump got down to business. begins hist trump first full week in office. we have had a business leader's meeting this morning. >> donald trump made a commitment to different business leaders, including elon musk and dow chemicals. he wants leaders to create jobs in the u.s. he wants to reduce taxes, reduce regulations, make it easier for them, but he says that they decide to take their business to other countries, they will face a big border tax. >> president trump is not

wasting no time in his first week in the white house. he has signed an executive order to withdraw the u.s. from the tpp. ,> he is pulling us out of tpp that was meant ironically as a way to contain china, his nemesis, but he has indicated he wants to renegotiate the north american free trade agreement with canada and mexico. i do suspect that what we are seeing in the markets right now is that for several days, the markets were all focused on less regulation, lower taxes. now they are beginning to wake up and say there might be things we don't like on the trade front. >> he did what he promised he was going to do. >> it wasn't unexpected, but what is unexpected is the fact you people like malcolm turnbull , the prime minister in australia, reaching out to shinzo abe and the prime minister of new zealand and singapore, saying let's take this tpp with its 11 members let's see if we can

drive that forward without the united states. in thehigh court ruling u.k. that theresa may needs the permission of parliament to trigger the countdown to brexit. >> today, by majority of 8-3, supreme court rules that the government cannot trigger article 50 without an act of parliament authorizing it to do so. >> this government determined to deliver on the decision taken by the people and then in the kingdom to leave the european union, so we will move swiftly to do just that. >> they will put the word a briefly worded document, the aim of which to try to give fellow lawmakers as little to object was possible. the third largest party in parliament, they said they will bring 50 amendments to whatever the bill is put before taliban. to the speaker of

the house, he is the man who decides how many of these amendments are allowed in and how many get airtime. that will be crucial. >> to what extent does this ruling delay the triggering of article 50? >> i do not think very much. the expectation is that most members of parliament and the house of commons, with the exception of some liberal democrats, and then some labor p, so apart the sn from that there should be , healthy majority for the implementation of the bill. >> as the market opened, let's cross to alix steel. >> we got it done. we got the dow crossing the 20,000 level. the dow now sitting at 20,019.46. up .5%. we have been knocking on the 20,000 or four days. we got very close a few weeks

ago. we could not breach that level. we have now done it. >> wall street has forgotten about the dow. all of the series analysis is based on s&p 500. the dow as a price-weighted index is not really practical in this day and age. it was fascinating to watch that 20,000 really become a resistance zone in early january. clearly, people were viewing it as a technical level, and now trump is in, and we have seen him in the first couple of days really focus on the equity-friendly parts of his agenda. >> it finally happened. it held above that level. as you can see there, a 155 point advance for the dow. what does it really mean for investors? >> the bigger picture is you had a breakout of the range for say the last four to five weeks, but some international indices as well. a technicalfrom

perspective that is pretty , bullish. sideways consolidation pattern followed by a broad-based upside breakout. >> republican lawmakers in philadelphia putting together a plan for working with president donald trump. the president of mexico tweeting that he will not attend a meeting scheduled to take place next with president trump. tuesday>> this is really stunning. the idea that donald trump would tweet out to the president of mexico, don't, if you are not paying for the wall. then he would get a response from the president of mexico saying, ok, i'm not coming. >> did he have any choice here canceling today's meeting? >> there is a lot of question about how the order of things and how they transpired. we are here report yesterday that the mexican administration were already thinking about potentially canceling the trip based on trump's executive order to begin work on construction of the wall. >> theresa may, the u.k. prime minister will be addressing the , republicans shortly.

why is she doing it in this forum? why not go to washington and address congress and both parties? >> she will be at the white house tomorrow. the developments across the pond influencing perhaps the leverage that republican officials, including the trump administration, feel they have in negotiating a deal with the u.k. in terms of a trade agreement. now, of course, that was before the withdrawal of the mexico meeting, so a lot of moving parts today. washington?in because theresa may will be here later on. the british prime minister becoming the first leader to meet donald trump at the white house. from a financial markets point of view, how significant is this trip? >> i think it is really important, the fact that trump sees the relationship with the u.k. being critical to the success of his administration. to me, what is important is trying to flesh out what he has

in mind in terms of a relationship. for theresa may, clearly, the challenge in terms of a potential economic slowdown post referendum is out there, but what we need to see in 2017 are clear plans on how to seek investment into the u.k., i that enable the economy to grow. >> what is president trump expected to get out of this meeting? >> david, i put that question to his senior counselor, kellyanne conway. what she told me was that the focus is going to be all on trade. i can tell you that kellyanne conway also told me that perhaps something that they might be discussing privately is ways in which president trump and his administration could assist prime minister may in helping her meet that march 31 deadline of triggering brexit. so clearly a lot of different moving parts behind the scenes. >> what about for him? does he need a win? does he need to, way with

something, saying i got this from the prime minister, or is it enough given his problems with mexico sending it along with countries? >> the latter. the political orbit of president trump, the people in that orbit tell me that today the goal is , to have any hiccups publicly. still ahead on "bloomberg best", we dig into the week's discussion of donald trump and trade policy and whether doubt 20,000 calls for champagne or caution? can we go through earnings reports. and up next more of the week's , top business stories. >> what he is saying is i like pipelines. david: this is bloomberg. ♪

david: this is "bloomberg best." i'm david gura. in asia, electronic's giant

samsung is working to rebuild trust in consumer confidence after the note 7 smartphone debacle. >> samsung electronics has come from faulty batteries caused some of its galaxy note 7 models to burst into flames. what exactly are they saying? >> samsung said it regularly sized batteries were part of the said that they electrodes in the first batch of batteries caused a short circuit and the defects were in the design and in the manufacturing phases. the head of the mobile business in a press conference today apologized for the issues and said that is about 200,000 phones and about 30,000 separate batteries were examined, so quite a detailed examination into this issue. >> samsung has announced it will

buy back nearly a billion billion in shares on strong quarterly results. fourth-quarter profits double to $6 billion. the results show the samsung empire was not badly damaged by the overheating smartphone fiasco. just under $6 billion, rising prices in semiconductors, which has been doing very well over the last year or so. also, a recovery in their mobile business. they are saying in the first quarter, they expect earnings overall to decline quarter on quarter. >> opec and other producers have agreed on a way to monitor their compliance of their historic deal. >> they are not at 100% yet. the saudi energy minister says they hope to reach that in

february, everyone fully complying with their quota levels. they're setting up a committee levels.at they are setting up a committee that will look at secondary sources. it will look at the market. >> president trump taking steps to advance construction of a controversial keystone and dakota pipelines. memoranda is on , one transcanada, one is on the dakota pipeline, and the third is the idea that has got to be done with u.s. steel and u.s.-made products. and workers. this is an encouragement for transcanada to reapply. this is a direction to agencies to look at things quickly to number president trump is coming from. but these discussions and negotiations have not yet begun. >> one of them have something interesting, which is looking at regulations impeding american manufacturing.

he is asking for a collection of comments on that that will help them guide the regulatory process going forward and perhaps elimination of regulations. that one, you can say he did something. , what he ises saying, i like pipelines. if you want to be applied, i am in favor of it. >> president donald trump acted on two of the most fundamental and controversial elements of his presidential campaign could , building a wall on the border with mexico and tightening restrictions on who can enter the u.s. >> beginning today, the united states of america gets back control of its borders, get back its borders. >> this was an executive order in which the president ordered the construction of the mexican wall, but what needs to be done by congress to move this forward? >> this was campaign rhetoric executive in the branch, and now the ball moves to congress, where people like house speaker paul ryan are already meeting with their

advisors on how to move this president's agenda into a budget. >> there are some creative ideas that i have been coming up with , and others in congress, where the taxpayer makes the initial down payment, but then eventually, the security measures paid for by things like increasing putting a border , security fee on visa applications from mexico and central american countries that are the biggest offenders of illegal immigration. to things like a border security fee for crossing the border, and also finally looking at remittances going from the united states into these countries, a border security fee attached to that. >> networking giant cisco has announced yesterday that it will appdynamics.maker this comes ahead of the planned

ipo. so, you are trying to pivot this out of the hardware business. why did this particular company help you do that. appo>> if you look at dynamics it is a cloud-based , application performance management system, but in reality, what they do is they translate application performance into business insights for the customer, and they do it across private cloud and public cloud. we think the synergy will create visibility than no other country in the industry can provide to our customers. >> sources tell bloomberg that china's central bank is ordering the nations lenders to curb new loans in the first quarter of this year. so a tricky situation now where you have to balance and keeping liquidity and funding, but at the same time, credit risks. >> there are credit risks obviously, and a mountain of debt in china. you have to balance that always.

especially as the chinese new year is coming up quicker this year, and january also the time when banks frontload their lending for the year, especially in mortgages, so you have that concern. you need to balance the credit risk, but keep enough funding ahead and into the prolonged lunar new year holiday. ordered is said to have banks to strictly control spirit this includes increases in new mortgage lending in the first quarter below that increase we saw in the fourth quarter. after months of negotiation, johnson & johnson has acquired a drug for $30 billion. the deal will help change a to become a leader for medicines for patients with high blood pressure. what was it that finally decided

the owners to go with j&j? how did they structure the deal and the end? >> the answer is in the structure of the deal. i think everybody has been openly talking about the fact actelion wasof reticent in giving up control of the company, and this is the best of the critical together in terms of the structure. he gets to run actelion two, whatever you want to call it, and j&j gets the assets it wanted and sales growth. >> barclays bank has settled on for its main hub in the european union. the bank will move 100 its staff there. choosing dublin as a hub for the european union is one thing, taking a host of people out of london is another. >> barclays has never been on the end of some of the

apocalyptic warnings about the demise of london after brexit. we can see that with the plan to hire and moved to dublin. it will not change the overall structure of the group, which will still have hundreds of thousands of employees elsewhere in the world. what we can see our cities emerging as winners. a number ofin and banks looking to go there, and we have frankfurt and lloyds looking to set up in other cities. london is losing a bit, but this is not quite the end of europe's financial center as yet. ♪

david: welcome back to "bloomberg best." i'm david gura. it has been an historic week on wall street with the dow jones industrial average topping 20,000 for the first time. what does this milestone mean? that's something we covered in detail on bloomberg television. >> are we at an inflection point? is this an indicator of positive

underlying fundamentals? what is your take? >> that is certainly the hope. i remember when i woke up in the middle of the night november 8, november 9, the dow was down 600 points. since that time, we have come roaring back 15%. it is hope. and the hope is we are going to see a reform corporate income tax regime. we are going to see a reformed regulatory regime that makes it more advantageous to be a business maybe infrastructure , spending. it is manifest in the dow 20,000, and it has been a raucous day on the floor of the new york stock exchange as we get that milestone number. >> dow 20,000 signals momentum and sustained momentum. this change your forecast of how many companies you will see listing on the new york stock exchange? >> in the first quarter of 2015,

ipo's, zero, so obviously we did not raise any money for corporate america. companies were not able to take money and invest in their business. look at where we are now. we are expecting 10 ipos in the next three weeks including four , on friday. those 10 ipos are really big ipos. most of them are raising and the neighborhood of $500 million, $600 million. one of them we expect to raise $7.1 billion. this is good. >> where do we go from here? what does that tell you about what is around the corner? >> in the long-term when we look , over the balance of the year, we think both earnings and the economy are on track to essentially keep this bull market going. the near term is a little bit less certain because what we have done is that we have almost destroyed this wall of worry in

large part the 7.5 years of the bull market has climbed. whether you think about it in terms of the low level of short interest in the market, the very, very high confidence levels on the part of both consumers and optimism in small business, both of which those numbers are extremely spiky, and when we have seen those numbers dip in the past, it has been difficult for stocks to sustain the kind of momentum that we have seen the last couple of months. >> there are people out there saying round numbers don't matter, but a lot of people said to get the retail participation, you need those big headlines on the front pages to induce their appetite to buy equities. is that where we are at? >> i think so. one of the great ironies, and people are still calling this a rally. the market bottomed on march 9, 2009, so this is a bull market. what is amazing, the great

irony, that this has happened without any retail participation. there have actually been net so this makes a difference because there are good reasons why retailers are out of the markets. there are serial misdeeds on the part of corporate america and wall street, and obviously the financial crisis, but you know greed eventually comes back. ,>> you have a wall street journal it says doubt tops , 20,000. that is the kind of headline when my mother-in-law calls me and says, what happened to the markets? should the real money be selling? >> i don't think so. sir john templeton said bull markets are born grow in pessimism, growing skepticism, and in euphoria. it is hard to say you have euphoria if you have had net redemptions from retail investors. there are a lot of people that

have sat on the sidelines for the past eight years that may start to want to get in. david: coming up on "bloomberg best", we will revisit some of the week's most compelling interviews. donald trump's tough talk on trade draws thoughtful responses from economists and investors, and brexit could mean big changes for european businesses that may not be all bad. >> that will lead to bankruptcy, and it will be to opportunity. david: this is bloomberg. ♪

>> it's that 8:30 hong kong. our top stories coming to live from our asian headquarters. delta airlines saying they have grounded all global domestic flights saying they going to get the situation back to normal as soon as they can. this coming through on an faa advisory. that is all we have at the moment. they will make every effort to rebook options and are contacting customers affected by u.s. executives orders. a justice ruling against part of the plan.

the prime minister from canon criticizing the order -- from canada criticizing the order. there -- howard schultz saying he is putting plans in place to higher 10,000 refugees over the next five years. m night shall in -- the movie the six instructors centsdget thriller -- six -- movie which sparked protest

from animal rights groups took second place. we do have australia and japan in the session. ♪ david: you are watching "bloomberg best." i'm david gura. days after taking office, president donald trump made statements on trade, withdrawing american support for the transpacific partnership and promising to implement protectionist policies. throughout the week we discussed the possible global effects of trump's stance on trade. here is some of that conversation. >> we do think that trade barriers will probably go up. we don't expect the sort of numbers on across-the-board basis that trump was using during the campaign, 45% on china, 35% on mexico, but we

think this will be a major focus. what we have seen so far confirms that. >> how does this affect your outlook for 2017 for the u.s. economy and the global economy? >> it does to some degree. the economy generally is in pretty decent shape and the u.s. the main change is we are now building in easier fiscal policy should have an effect late this year and 2018 and sort of prolong this period of above trend growth into 2018. we think we will probably go beyond full employment. inflation will move higher and we also have a lot more in the funds rate. >> do you consider a strong dollar to continue as well? >> we do expect a strong dollar. is mainly based on interest rate differentials. for the euro-dollar we expect parity by the end of the year. our monetary policy view is that the fed does need to normalize

and will normalize, whereas the ecb and the bank of japan still can keep it for a long time to come. >> how confident are you the tpp will continue and live on? >> the decision by the president was not unexpected, but that doesn't mean you should walk away from these things. there is still a lot that can be gained and we intend to pursue that where there is opportunity potential for other partners to step into this. australia is a trading nation. australia-first policy is all of these things. oue economic interests are much aligned with that approach. we have had excellent arrangements finalized with china and south korea and japan. the tpp was an important part of this. we will just get on with it. >> a very major border tax. we had the idea that was coming. plusses and minuses for the u.s. economy, or just minuses in your

view? >> what we don't know is what form that will take. the republicans in congress have been talking about a border adjustment tax which would really be kind of like a bat. but donald trump previously said he doesn't want a border adjustment tax. this one sounds much more like a regular tariff. if that is what he is talking about, i don't think the market will react well to that. i think a lot of people were kind of hoping he was going to start with tax cutting and tax reform and that more protectionist tendencies would come later, if at all. his inaugural address and now these actions suggest maybe he is moving that to the front. >> there was talk about neo-mercantilism -- could it once again work for the u.s.?

>> it has not been working for china. and you know, you raise it in a good way in the sense that mercantilism and protectionism, economic isolationist thinking has been tried hundreds of times around the world and it does not work. it works the wrong way. it makes you poor, it does not make you rich. >> we will see real capital investment. we will see trade competitiveness from our corporations with a lower tax rate. we will eliminate off-shoring and europe stealing our tax base. we will start getting fair shakes for better deals with our trading partners. all those things will happen and

basically full employment. we will see a stimulative environment is trump is successful, with will be very positive for the united states and slightly negative for the rest of the world, but it is telling the globalist nightmare that they are trying to make it. the u.s. has been a wage giver and a price taker. and we are just going to be a wage-taker for the next few years. >> is it as simple as short rates, dollar strong? >> if you need to boil it down to a soundbite, i would say yes. they are idiosyncrasies of every trade relationship, but one would think if we get to the question is how to we pay for it? had a we pay for cutting the corporate tax rate?

it is my view, our view at our firm that border tax adjustability is the limited pay for it. that is basically taxing the trade deficit. alright? >> britons anticipated break with the european union is affecting the outlook for investors. interviews this week delivered insight on that issue. let's start with guy johnson's conversation with guy hands who expected to be represented with good for business. >> we will have to continue to borrow money. we won't have the -- the fact that we are with the european union so interest rates will start to go up. that will lead to bankruptcies. it will lead to opportunity. sadly, and this is always one of the strange things about business, i think it is probably bad for the majority of people and that for the country. but i think my business is probably going to be good. >> on what kind of scale? how good is a get? how big will the opportunity be? giving some other numbers. how higher interest rates going up? >> when i said a reduction of

wages, i was talking about real terms over 20 years. over 20 years, so that is very, very small over years. it's a small change each year. it is similar to a frog getting boiled. it is not going to be quick. it will be very slow. and terms of interest rates, that will take some time as well. but the u.k. at some point is going to have to continue to pay for itself. people talk about the j curve. the j curve in terms of devaluation has never worked for the u.k. the u.k. did it for 200 years before joining the european union, constantly devaluating. how much, i don't know. but the differential between us and europe will need to be several percent. >> my colleague francine sat down in madrid this week with anna botin.

>> you did 19% of your revenue in the u.k. we have not had article 50 yet. consumer spending has been holding up. what happens when article 50 is triggered? >> who knows? in the short-term the u.k. is doing well. the last six month seven good and they should be positive for the next six months. inflation will hurt consumers obviously. we are respecting lower growth in the u.k. for 2017. not as low as we expected before. we still expect growth, lending to grow less but still to grow. again in this context, the u.k. has a great job this year. we absolutely are totally committed to the u.k. is a local british bank. we have grown our lending, from loyal customers.

it will be less growth is still positive and this is important. francine: if the u.k., as it seems at this moment, loses passporting rights, does it make any difference to how you operate and manage the u.k.? >> for us it makes no difference. we are a british bank so we take the profits and we landed them in the u.k. what we care about is our customers. it will affect our customers and this is what we need to think about as we work out what's going to be the new relationship between the u.k. and the consonant. we are very close, lots of exports, imports, and we need to think about that and the people. there are a lot of british people on the continent. i think about 15 million visited spain last year. so let's think about the people and the customers, the small companies, trading between the u.k. in europe as we work out. francine: we expect to see you at davos. the big u.k. banks are moving to frankfurt in opening banks. do you have a sense that a lot of these bankers would move talent to madrid? it is a financial center. ana: well, of course if anybody is going to move from london we

will welcome them in madrid. we have great people and a great infrastructure. i think it's a great place. london is still the hub first talent, the market is there. i think london will remain the most important center in europe. ♪

♪ david: this is "bloomberg best." i'm david gura. a host of companies reported quarterly results this week, including prominent tech firms. a round-up begins with china's e-commerce colossus alibaba. >> a boost after china's biggest e-commerce company was it better than expected results.

where is this revenue growth coming from? >> there is not much growth and user numbers anymore. they only got about 5% or 9%. is the first time in a long time at single-digit growth. it is coming in. users are spending more. but we saw compared to a year ago is 30% growth in the average revenue per user. that is really big. on mobile, 50%. people are purchasing 50% more than the year ago. that is really important for alibaba because china is so large that they are almost hitting peak usage, over 800 million users. they will not be heavily a much more out of it so they need to get more per person. >> alphabet shares fell in extended trading at her fourth-quarter profits came in below estimates. it was dented by heavy spending to support its cloud business and a one-time tax payment. core ad business did show strong but they closed at a record high yesterday. how do you weigh the results?

>> they beat on sales, they missed on the bottom line but the core business is very strong. it was 36%, the highest in four years. what is really driving this growth is the you tube and mobile search. that growth momentum will continue. the cloud business, which is a new growth avenue for the company, might induce margin volatility going forward. it's a large market so all in all the growth opportunities continue to be there but the margin volatility might surface. >> microsoft second quarter and profits exceeding projections, both by rising customer sign-ups and office cloud computing services. the first earnings reports since they completed their $26 billion purchase of linkedin. >> the business continues to grow for them. nearly doubled.

there is no sign of that slowing down. the office 365 business is interesting as well because they successfully moved from this model where we always paid for a copy of office to now only paying a subscription. in the long run that has some nice financial benefits. we are starting to see some opportunities they are deriving from that as well. interestingly enough, given the windows business did ok. they are heavily involved in gaming. that's a hot area as well. they are nicely positioned as they move forward. >> earnings update from yahoo! the company's fourth-quarter adjusted earnings per share beat analyst estimates, rising to $.25. yahoo! also saying revenue also beat estimates at $960 million. more important is the state of the acquisition by verizon.

despite disclosing that it suffered the two largest corporate data breaches of all time, the deal is still on. it is now pushed back to the second quarter. >> we see the company trying to bail itself out of a situation. the hole it's dug itself into over really the better part of a decade we saw declining revenues of about 4% a year over year basis, but that's better than previous quarter's we saw double-digit declines. the question is can they find a business underneath all the garbage that is yahoo! that actually is a profitable business for them to run? >> they deliver their numbers. the fourth-quarter adjusted at one billion euros. that is a slip below. a slip below. a billion euros is what we earned in the fourth quarter. was a little bit of a shake in the fourth quarter? if it is fair to represent it that way. >> i look at a slightly different, but it's important to

know the philips group had a defining year in 2016. we separated out lighting. brought it to the stock exchange. we are still consolidating lighting but phillips is growing as a health technology company. within health technology in the fourth quarter we saw 5% sales growth and 190 basis points of profit improvement. so you can conclude our health technology activities really have momentum. >> shares of boeing on the rise this morning after the jet maker reported fourth-quarter earnings better than analyst estimates. topline, what is good in these numbers? >> the improving global economy and increasing demand for passenger and cargo jets. that is helping boeing. >> as you look forward to growth, the military is not that big. it is less than 50% of the revenue. it's not really in the forefront. do they plan to grow that military? >> they key is their cyber security business. the biggest concern for governments and corporations are

cyber attacks, more so than military attacks. boeing is a key player. people don't know how big they are in cyber security but they are a very big player. that's an area where trump said we need to focus on, for the expenditures are producing and -- expenditures are increasing tremendously. and unmanned aircraft with a defense spending is increasing. cyber security and unmanned aircraft are a big growth areas. >> the swiss drugmaker announcing plans to buy back $5 billion in shares and a potential spinoff of its eye care unit. how far down the path are you? are you actually talking to potential buyers? >> we announced we are going to conduct a review over the next year. this will include all options, including retaining the business to exiting the business the best through -- business through

capital markets such as an ipo. this without a clue the pharmaceutical part of alcon, we took that part of the business and we integrated it into the innovative medicines division. we are just starting to review now. we are not down the path too far but we thought we should be so our own associates everyone knows we are conducting this review. >> an 18 month high this morning, 2% in sydney after releasing production numbers for the second quarter. it seems like both numbers are in line with estimates given just no surprise given how much iron ore has rallied. copper was the big disappointment. >> we are in the media so let's do the bad news first. copper a big letdown. 357,000 tons with a quarter. the market expected 411,000. that is down 7% on year. the risk is much better. iron ore second quarter output was upbeat. up 4% on year. petrol production was down a

little. coal pretty broadly in line. overall the markets welcoming of these numbers from bhp. >> ericsson. those shares up after higher fourth-quarter revenue that analysts predicted. it is some relief to the ceo who took the helm last week. 10 days and and you have cut the dividend. what is next? >> we are reviewing priorities and investing in areas where we can and must win. and here i think we have great opportunities. we have a strong platform, a strong position on technology. and we have a very good financial position as a starting point. >> ford is out with its earnings. spot on at $.30 for the fourth quarter. slightly better than forecasted on revenues. some saw the number of vehicles sold in the u.s. europe was much stronger for

them. they also got guidance in the next year. they say the investments and strength is in autonomous vehicles and electric vehicles. are they shifting towards europe and china? you are profitable and europe -- in europe for the first time last year. >> one of our objectives as a company is to get a better balance of profitability. as we get into 2017 we do expect that our profits are going to be continuing to be strong, but also at the same time in europe and china we will continue our positive performance. we do expect europe to be done a bit this year. that is based on the weakening of the sterling because of brexit. >> numbers out of ubs this morning. beating estimates because of a surge on their equity trading revenue. the u.s. wealth management business have a record period.

dividends look broadly in line with expectations. ubs has seen improved investor confidence in the u.s. >> investor confidence is there. we are talking regularly the -- to clients and we do see a readiness in planning for investments and not only financial markets, but the underlying businesses. it's quite clear investors are looking for concrete actions by the new u.s. administration before they go into investment mode. ♪

♪ >> just digging into some bloomberg functions, if you go into analyst recommendations, alibaba, you will see phenomenal 90% of analysts buy this stock.

that is 42 out of 47. david: about 30,000 functions are on bloomberg. we enjoy showing you our favorites. we hope they become your favorites as well. another function you will find useful, quic . and get fast insight into timely topics. here is a quick take from this week. >> taiwan is a constitution, and army and an elected government. get the united nations is not formally recognize it. the reason, china considers the island one of its provinces. the government is illegitimate and the talk of independence is deeply hostile. a new president in taipei and the leading aggressive party is testing china's tolerance and the new president in washington. taiwan's first female president provoked an angry response from china by speaking to donald trump by telephone after he was elected.

in deference to the beijing government, no u.s. government leader has talked directly to a taiwan president in almost four decades. she wants peaceful ties with china while resisting the china principle. that principle has underpinned relations with china in the past. it's the understanding of both sides belong to one china, even if they had different ideas about what that means. trump says his support for one china policy hinges on cutting a better trade deal with china, prompted a complaint from the chinese government. president trump: i don't know why we have to be bound by a one china policy unless we make a deal with china. >> polls show strong support for maintaining the status quo and little immediate interest in independence. here is the argument -- taiwan's 23.5 million people have built

their economy into a technology and manufacturing powerhouse. the average income is three times that of china's. apple iphones are made there. they want to keep the peace while keeping international ties and a future less dependent on the mainland. while many china watchers say there is too much at stake in a military confrontation, trump's election has added uncertainty. and an increasingly assertive china has more than 1200 missiles pointed at taiwan and no peace treaties in seven decades. for the u.s., some say it's allowed the u.s. to sell weapons to taiwan which has encouraged china to stay the course. david: that was one of the many quick takes you can find on the bloomberg. you can also find them at bloomberg.com, along with the latest business news and analysis 24 hours a day. that is all for "bloomberg best."

i'm david gura. this is bloomberg. ♪

the white house is defending president trump's immigration orders as judges ruled against parts of the plan. protests broke out across the united states and across the field. the german chancellor and the mayor of london all criticized the order. google has warned staff not to risk leaving the united states. delta airlines is the latest carrier to suffer problems that has grounded its entire domestic fleet. the faa confirmed systems are down