>> coming up on bloomberg best. the story that shaped the week in business around the world. central banks keep policy in a holding pattern. no news indications of good news? >> the fed did not push back against the markets view regarding interest rates. >> how many ways can you stay neutral without staying neutral. business leaders react to orders from the white house. >> we are beginning to see cracks in this very brief embrace between big business and the trump administration. >> this man is doing exactly what he said.

alix: ge ceo illuminates the global trade debate. >> people are going to see globalization from 30,000 feet and don't know what globalization is. alix: the drumbeats stayed loud and strong with a slew of quarterly reports. >> our toolboxes rich. >> the revenue is the story and this is driven by new product introductions. alix: it is all straight ahead on bloomberg best. alix: welcome. i am alix steel. this is bloomberg best. your with the review of the most important business news, interviews around the world. this was a critical week for global monetary policy.

the decision coming from the fats and the bank of england. u.s. immigration policy dominated discussion. immigration trump's clampdown continues to spark a global backlash. allies from the u.k. to germany condemned the move and major companies said it threatens to strangle the free flow of commerce. executives from apple, and all electric, tesla and starbucks expressed concerns. >> short-term, we see impact on the dollar and equities. it is a hard one for traders because it is hard to work out a plan over the next week but a lot of this undermines u.s. assets. there is a structural blow that is slightly less attractive than it was just before this weekend. >> major companies weighed in on the order including ge ceo jeff him us. many employers from the named

countries do business all over the region. in will make our voice heard the new administration and congress and reiterate the importance of this issue." >> we did see a pretty responsey negative towards this ban on certain migrants. we are beginning to see cracks in this very brief embrace between big business and the trump administration. if donald trump goes ahead with his pledges on trade that could turn to a rupture. >> lloyd blankfein has broken with the administration over it attempts to crack down on some immigration. he sent a voice mail message to all employees, emphasizing that the order is not the policy supported by the bank. >> the notable thing about lloyd 's voicemail is how directly he said he and the firm didn't support the policy. >> bill ford and mark fields

spoke out against trump's travel ban. they said "we do not support this policy or any other that goes against our values." >> you can't fight everybody all the time and if every ceo spoke up and said that the so-called was antithetical to what we stand for, he wouldn't fight them. this is a time for people to be courageous. whatever side you happen to be on. >> breaking news out of the boj. boj now haspan, the a core cpi forecast up one and a half percent. we saw that earlier. boj maintained their 10 year yield target at around 0%. no change. also, maintaining their balance rate at -.1%.

>> the bank of japan still miles away from its inflation target. the question is, why didn't this do more? >> because it is doing so much already. and waiting for the impact for everything it has done over the last couple of years to bear fruit. it is very little bit of fruit. the bank of japan did not stop its 2017 gdp forecast to 1.3%. we had positive signals from the japanese economy lately. today, we found production slowing with retail sales weaker. there is a hope that the weak yen is going to boost exports assessments due to demand and corporate profits and higher wages. >> i think mr. kuroda is satisfied with the state of the economy. it is reasonable for the economy. deflation phase the and over, the time is right for mr.

corona to be somewhat optimistic. >> we are getting our bloomberg terminal set up. it will be an interesting decision, between the right guy in washington with decades of perspective on the fed. here is michael mckee. came, they voted, they went home and made no news, as boring as you can get. no change in policy and no change to the economic assessment. the fed policy bankers left their target rate at the range between one half and three quarters percent. they said they will continue reinvesting payments from returning securities on their balance sheet and that rates will rise only gradually in the future. >> i think that the powerful component of this statement was what didn't appear. it was the power of what was not said and the fed did not push back against the market's

sanguine view. with three rate hikes, the market was saying two hikes and the next is coming in june. if it was not happy with that schedule they would have leaned mildly against that notion. they didn't do that and they were ambivalent. that means they are tolerating if not validating that view. maybe the fed is also thinking june is a prime opportunity. we will know more about fiscal policy and the economy performing. >> that bank of england's decision drops now. rates unchanged. , we remains points at 0.25%. the program stays on hold at 435 billion pounds. in the corporate bond buying program, both of which are set to end by the end of this month or at 10 billion on target. >> comedy ways can you stay

neutral without actually staying neutral. mark carney said that the next move in rates could even be up or down. theyis in line for what were saying in november. if you were looking for any signal on where the bank of england i go next, mark carney was very resident -- reticent. >> i think it was the extent of the growth rate from 1.4% to 2% this year. the shift of the goal posts, because given the growth upgrade , the inflation is going to be above target for a long time. they should be thinking about moving rates. theway they avoid that was sustainable level of on employment much lower than what we caught the four. they changed that judgment in three months. they just want to hike. >> at the same time, on the other side of london, towards westminster, the houses of

parliament has brexit secretary david davis presenting the brexit white paper. take away is 75 pages long and financial services are seeking trade with the european union. and for the right of eu citizens to remain within the u.k. the u.k. is looking for a reciprocal deal with its european partner. >> it follows the point of the brexit speech last month. they provide more detail and also reiterate that slightly threatening tone she had towards the end of her speech. >> the key point of the issue is we have four freedoms in europe. one is freedom of labor movement. freedom of capital movement. freedom of good movement. freedom of services movement. you can have all four or not. i feel they want to have some kind of cherry picking.

>> 10 seconds away from the payroll, for 180,000, the leading expert -- estimate in a bloomberg survey >>. 200,000 versus 800,000. it looked great at 4.8%. they are taking up at 4.7%. the real shocker is average hourly earnings and only 0.1%. 2/10 of a percent worse than estimates. the december average hourly earnings growth was down to 0.2% from 0.4%. >> this is a final jobs report for president obama. i would suggest you want to step forward. this is a constructive report well.esident trump as >> as you just pointed out in the last minute or so, jobs risingstrong but wages are down by 2.4%. well.

i suppose that is good for corporate profits to keep wages down but ultimately we know that for consumption, that drive the economy. if they don't earn enough money or their money is only growing at 2.5% that is a slow growth economy. i can see how markets might interpret it one way or another. >> the upside to payroll is the market leading towards it after the blowout adp report. what do you make of the stock wages? >> it is disappointing. the cyclical factors are being overwhelmed by structural issues. two messages from this report. this will make the fed less likely to hike in march. reducing the probability of a march hike. secondly, it puts more focus on structural measures to enhance wage growth in the economy. alix: still to come as we review

the week, exclusive interviews and ge ceo jeffrey immult john williams. apple, sony, just a few of the week's biggest earnings reports. next, more top business headlines. a new leader in global car sales. the brand just suffered through the worst year ever. >> the key reason here is definitely china. this is bloomberg. ♪

alix: this is bloomberg best. let's continue our global tour of the week's top stories. in washington dc, president trump announced his first supreme court nominee. last night during primetime president trump introduced the nation to his new supreme court nominee. that is federal court of appeals judge neil gorsuch from

colorado. tell us what we should know about judge gorsuch? >> he is going to be a lot like the man who he is going to succeed if confirmed by the senate. he is very conservative and believes in interpreting the constitution in accordance with its original word and the intent of the founders. >> as you say, he is parallel to the man he would be replacing but there is one in respect to our audience that might be important. >> this is what is known as chevron deference. there is a statute like the clean air act and some words are quite clear. the courts have been saying for the past 25 years or so "we will defer to the agency in terms of how it reads the statute." judge gorsuch says that should go. we should just look at the statute and decide for ourselves.

justice gorsuch would be more limiting. >> volkswagen has taken the crown is the world's best-selling automaker. the carmaker bounced back from a scandal in which it admitted to cheating diesel omissions tests recordfornia to sell a 10.3 million cars in 2016 globally. how is it possible that volkswagen, and audi and porsche scandalback from this with such a strong amount of global sales? >> the key reason is china. the chinese markets, in china the amount of cars on sale are very tiny. it is almost nonexistent. impact in china from the scandal has been small. the u.s.demand in

declining, china has proved a very stable, solid growth. >> another sign that the chinese economy is holding up well. manufacturer pmi coming up slightly stronger-than-expected. >> if you look at the uncertainty in the volatility in the markets, especially for chinese exporters, the volatility of the yuan has stabilized. of course, all the uncertainty with donald trump as president. keep in mind this is the lunar new year holiday so you have aberration in these numbers. don't read too much into this other than that this is a good set of numbers. the sixth consecutive month we have been in positive territory. keep in mind they are working off excess capacity in coal and also steel, which is a longer process. there are some improving signs. >> apple is designing a new chip for future mac laptops that would take one more of the fox

currently handled by intel processors. be similar to the one already used in macbook pro to power the tough bark. -- touch bar. >> right now it does some security and payments functionality with touch id. expand, into will a low-power mode which saves battery life. mentioned, arm holdings is the technology that supplies it. tell us about the inroads this is making. >> intel is the commonplace chip supplier from apple to dell since other laptop and desktop computer makers failed in mobile years ago with the transition to mobile chips which apple and samsung have been building for phones and tablets for half a decade. sevenrst iphone came out

years ago with the iphone 4 and the first ipad. apple is looking to do a little bit more with its own mac. >> india's finance minister has delivered a budget aimed at boosting consumption and investment. yeariggest winners this appeared to be the rural and real estate sectors. they are really trying hard to stay -- strike a balance between prudence and spending. year appeared to be thewhat were the? actt was a clean balancing presented by this yesterday. a few quick highlights. on a macroeconomic level, the budget has been at about 3%. he is moving towards 2019. this focuses on farmers and small businesses. to give more money in the hand of the consumer, it can off sent

the negative impact of demonetization. the budget has been positive and most people have reacted positively. as i heard someone say yesterday, negative news can be deemed as good news. 7% ofph lauren off, over ceos calling it quits. stefan larsson will be leaving the company after a clash with the founder. that was after less than two years on the job. what happened? >> that is to be determined. they were open after saying we need to turn around this company. we just disagree on how. wasmost specificity we got that they agreed on the operations changes but they didn't agree on the consumer facing stuff. we are not sure what that means but to me it means ralph lauren, the founder, wasn't ready to part ways yet.

was not ready to hand over all control of the company to somebody else who he did not agree with on the creative direction that it was going. in one of the tech world's most highly anticipated public offerings, snapchat parent an initial $3ring billion but that could grow. what does snapchat financials look like? surprising to see how unhealthy the financials look. the cost actually succeeded the revenue and they have yet to turn a profit since 2011. it is very expensive for them to run all the servers. they have to pay hefty fees to google cloud. >> one of the biggest risk factors is in orbis. >> they say that user growth

rate will slow down over time. another big risk factor is their data. their metrics are not verified by certain parties. they say their metrics going to this black box. ♪

alix: welcome back to bloomberg best. general electric chairman and ceo has spent his career riding a wave of globalization. a recent trend around the world appears to be reversing that current. this week, he sat down for an interview with john micklethwait. he shared his perspective on the state of global trade. >> we believe in trade. we believe in the free flow of goods. we don't think things like walls are good. is the macro answer.

what i would say is there is nothing wrong with president trump wanting to add manufacturing jobs in the united states. the president of china wants to add manufacturing jobs. the president of mexico wants to add manufacturing jobs. >> how do we help our exporters? how do we find ways to help exporters. >> what about the relationship with china? the prospect of any trade dispute worrying you? >> it does. in the economic context. there is no good case to be made with the two biggest economies on earth in a trade war. that relationship, a bilateral relationship, is significantly important. for the whole world. >> you have brexit and the possibilities of le pen.

are you confident about the future of europe? >> we have never look at europe as europe. we know the difference between france and germany. when we were in 2014, we were stopped in paris by a set of positions that basically violated brussels rules. we're sitting there sucking a in inis -- sucking our thumbs harris and we had to fight our way out of there is in brussels and feel like the european union at that time so we have learned to manage the paradox. we have learned to manage subtlety. globalization, people that see globalization from 30,008 at a resort or at a townhouse or a think tank don't know a thing about the way globalization works. it is country by country, he'll buy deal.

i wish it was all free trade and that other stuff but it is not where we are. alix: you can see more of john micklethwait exclusive interview on bloomberg.com. best, up on bloomberg more on this week's controversy over integration. -- immigration. more from larry summers and tom barrett. blackstone's joe barada sees more changes shaping his investment strategies. >> the government is trying to engineer a reward system for people investing in this country. >> this is bloomberg. ♪

♪ this is "bloomberg best." i am alix steel. donald trump's executive order on immigration provoked

responses, with strong pushback from ceos. critics and supporters have their say on bloomberg television this week. i have been gratified by what we heard out of the tech or. we have heard sector. i will be watching the members of the advisory board that president trump has appointed to help him make america great again, because this action is an important test of that. we will see whether they go along with it or whether they will speak out. i think what john mccain and lindsey graham did is really a good example of principled leadership, and at moments like this, everyone is tested about whether based beat out on what they believe or whether they

decide to accommodate. >> to what extent are ceos influenced by the threat of that trumped tweed? an extraordinary thing if business leaders in the united states are being intimidated by a president's threats of calling them out when the president has been in office for one week. that is an extraordinary change in what the united states is about. it is not all new. richard nixon had an enemies list. there are other instances historically, but if that is happening and working, it seems shouldhat every american be deeply concerned. there you taken aback by

lloyd blankfein lines of the world and the reaction to that order? no, business relies on predictability and transparency. people are confused as to what that means. the reason that man was elected because that segment of america is fed up with the elitists, including the business even eat us, with business as normal. i don't know why anybody expects anything different. this man is doing what he said. he is communicating in a harsh way. we expected something different because people tell us to expect something different, so why should people have expected anything different? >> what is upsetting at the moment? the policy of immigration, if you talk to the arabs themselves, it is a ban, but

saying we will have a timeout and go to our country counterparts and analyze and say you have to help us. it's not refugees causing the problem. it is the exporting of what people consider radicalism, but the only way to end radicalism is to end goodism. mosquese imams and good curating the refugees who come here. immigration and security are major focus this week, investors wait for president trump to turn his attention to tax reform and infrastructure spending. bloomberg howd these expectations are influencing his company's plans. >> we have done a lot of thinking, and it is beginning to

creep into our decision-making. businesses that standard to benefit are those export-led, capital intensive in some way. where the capital intensity is in projects that can generate a high return because the tax depreciation will be better. trying toment is a rewards system for people investing in this country. most of the businesses we buy, we buy because they have been underinvested and do engage in significant capital expenditure programs. it will be a benefit to export-led companies. the energy complex will be a beneficiary with rolled back availabilityso the abilit of favorable capital expenditure -- think for the types of

things we invest in, it is a real positive. things under more threat or where there is uncertainty would be retailers that sell goods imported from abroad or business services firms that offshore and outsourced them to other countries. more is going to be uncertainty and volatility around the prospects of those companies. >> there is a lot of interest and infrastructure. blackstone doesn't do anything unless it can be relevant. how big do need to be in infrastructure to be relevant? >> infrastructure is at an inflection moment in the united states where both parties agree on that one thing, which is we need more fixed investment in infrastructure in the u.s. need to rely increasingly on private capital because the leverage levels are quite high. it would be the first time that i think at really large scale,

government entities engage with private capital to do major infrastructure projects. in that end of the market, you need to be of dollars ations a time, not hundreds of millions, so you are probably talking about a vehicle that is 20 billion dollars, $30 billion, $40 billion of equity. >> the largest vehicle ever raised? >> correct. that would be the ambition if this comes to fruition, which we think it will to invest in the fabric of this country, which is necessary. closelyrkets were also watching central banks, and as rates,c stood pat on bloomberg caught up with john weems for the story behind the story. view on wallsus street is the jobs report, the week rage growth makes march and

nonfactor. june would be the earliest you would move. do you agree? thee have to analyze all data coming out between now and then and learn more about the .rajectory the economy is on data changes month to month and gets revised. my own view is the employment report was consistent with good job growth, steady improvement in the economy. >> the other argument is you can't move in march because you don't know enough about the fiscal policies coming out of washington. disagree. there is a lot of uncertainty about what policies will be, but i look at where we are today, essentially full employment, inflation moving back to 2%, so given where we are today, we expect to make decisions based

on that without knowing what happens in terms of fiscal and other policies later in the year. is formedian forecast three rate increases. there is a school that says you should not raise rates because the economy still needs additional stimulus, and they look at the phillips curve model the fed uses and say you cap rates at zero for seven years and got no inflation, high inflation and unemployment coexisted in the 1970's, basically the phillips curve does not work. the phillips curve has died many times, and arisen other times. hard push the economy too for too long, inflation pressures will build up. we are seeing some pressures and parts of the economy. we know from history that the economy again runs too hot for too long, you will see and balances and inflation pickup. we know from the past that high

inflation is damaging, so we want to avoid that. ♪

alix: you are watching "bloomberg best". i am alix steel. a busy week for corporate earnings reports. let's look back at the most interesting results, starting with apple. shares popping in after-hours trading, its first-quarter revenue of just under $78.5 billion, 3% year over year. also, the beat on iphone unit sales, selling almost 78 million units due to strong demand for the iphone 7 plus, and its services business saw 18% revenue growth.

i'm speaking to the cfo, and across wasming doubling down on the services area, they will double the size as big asit, which is a fortune 100 company. how much do you think services is the right bet? >> it is absolutely the right bet. there are only so many and apple tvs you can sell, so there is upside in , butces, like apple pay there is upside in the services market. and theue was up 3.2%, stock is up 6%. is that justified? down. ipad sales were the company did not do that well in china. the apple tv did not do that well.

the watch did not do ok, and yet did great, partly because the competition went up in flames with the samsung note. 78 million iphones, and incredible quarter for apple. >> facebook share surging after hours. hold ontoighs if we these gains. the company reported a 51% jump in sales, topping projections. , advertisersriver push to reach consumers on mobile phones. grow,er base continues to and reported just under 2 billion monthly active users. were there any clouds here? clowns, i can't really think of any. i'm sure there are some people who would be upset that the numbers aren't better than they .re, but come on

analysts were expecting some incredible results, and pretty much everything eat it. growth driversat and think of where the real prospects are going forward, it is truly the global nature of their business. asian revenue was up 69%. that is really impressive. world, 52t of the percent. so even though the numbers are small, this is where the opportunity is long-term. inamazon shares dipping extended trading, the company reported fourth-quarter revenue over $43 billion, and the e-commerce giant miss forecasts for net sales. spot, it'sbright cloud business, amazon web services, up 40% jump in revenue growth. investment is heavy at this company.

is he spending more easily. >> i think so. this is the difficulty of being a public company. you get measured on the stuff you worked on 10 years ago, but the real work is happening cash flowt won't for 5-10 years, alexa, advanced research in ai, but you won't see that in mainstream numbers for a few years. sony's latest results missed expectations, and the company cut its outlook. still, shares soaring in tokyo. where is the optimism coming from? all about semiconductors. chips, chips, chips, sony showing they are happy at the turnaround in the semiconductor business. chipsompany makes camera

for phones. it upgraded the profit outlook for its semiconductor division by the most out of all divisions , $300 million. there have been headwinds, the movie division expected to see a $1 billion write-down. a taste of what to expect when it announced yesterday. some not so good news in terms of third-quarter one hundred $74 million, versus more than $1 billion a year ago. >> deutsche bank has missed estimates. the ceo also said he expects the bank to be profitable in 2017. this is a big step forward. he expected the outflows to be less. >> they said the flows have turned around. in all aspects of the bank, of

course, we have not seen the numbers. legalhe bank still has issues on the plate it has to result. >> capital increase by a share sale you did not announce today that you want to tell us about, or maybe asset disposal? >> my answer is similar to the past. we never rule out any instruments in our toolbox. the primary tool we want to use is organically generating profit. fourth-quarter earnings today after the deal to buy humana was blocked by a federal judge. of $1.63 billion. >> you are taking stock in deciding what to do next.

what is the calculus? >> number one, we can't keep going on for a long time. we have been doing this for 19 months, and we need to come to a conclusion relatively soon, so we are looking at the opportunity to do that. if we can't come up with the conclusion, then we will consider terminating the deal. we have until february 15 to figure that out. >> it is your first earnings as and you are as ceo, up year over year in revenue and earnings per share, and you had a lot of sales. >> we reported a strong quarter in q4, global revenue up 7%, costs flat, and that creates tremendous leverage for the 20 2% eps growth year over year in q4. this is driven by new product introductions, diabetes,

oncology, and psoriasis, so that is really our strategy as we came out of a difficult patent window. on the backgrowth of new product introductions. shares trimmed a little bit, this as it trims its outlook, saying prices for insulin will continue to decline in the united states. saysorld's biggest maker revenue may drop 1% this year. providedidance we have for 2017 is reconfirmed compared to what we did after q3. it was prudent to broaden the range to a five percentage point range because of volatility in the u.s. >> one stock we are watching exxon, edging slightly higher after earnings that missed estimates after a $2 billion

write-down in its u.s. natural gas fields. tatian's were high for big oil, a pro-energy white house, oil rowling 18% since the election. what is happening here? >> it is not who is in the white house, it is where oil prices are and where they are going. it is not the government. at the end of the day, it is a nomodity price they have control over, but let me correct one thing, adjusted for the $2 billion write-off, exxon exceeded analysts expectations, and we are looking at 2017 to be significantly higher for the for exxon, so exxon is expected to double its earnings in 2017 from 2016 levels. missed estimates and

the fourth quarter, earnings numbers, adjusted profit, $1.8 billion, below analyst expectations. to be a world-class investment case for investors, meaning strong returns, a strong free cash flow per share, and a resilient financial framework, and we are right in the middle of the transformation of the company. >> you say you are right in the middle, are you on target? >> i think we are. 2016 was a transition year where we completed the bg acquisition and combined to large accounts and delivered the synergies, and as i look back on the year, first of all, a world-class delivery of the deal, a world-class integration, synergy delivery well ahead of plan, and if i look at the last two quarters, our strategy is starting to a off. ♪

are a bloomberg customer, you can watch the show using your terminal and tv . you can follow our charts, functions, and message us directly by using the function at the bottom of your screen. onthere are 30,000 functions the bloomberg, and we always enjoy showing you our favorites on bloomberg television, and maybe they become your favorites. function, quic . the debate on drug pricing has been front and center this week. here is a quick take that adds perspective. ♪ spend an average of

$1100 per person, per year on restriction drugs, more than anyone else in the world. it is true americans take a lot ills, but many one prices are becoming unaffordable. president trump promise to bring afterrug prices, but meeting with former executives, he focused instead on reducing regulations on their industry, while still complaining about their "astronomical" drug prices. >> we have more people working on regulations than working of the companies, so we have to lower drug prices. >> the pharmaceutical industry has come under fire for what critics label price gouging. getn capitalism, you try to the highest price you can for a product. >> one person became a poster boy when his company raised the price of a drug. in 2016, mylan pharmaceuticals

ceo was grilled by congress when her company raised the price of the epipen. so how do drug prices work in the u.s. versus the red of the world. in europe, governments negotiate to limit what their state health systems paid. company set whatever price the market will bear. while medicare legally can't negotiate drug prices, private insurers can. private payers typically ride rely on -- to negotiate discounts. bm's often make deals with insurance makers. in the income americans wind up paying 17% out-of-pocket. pharmaceutical companies say that high profits are necessary

to fund research and development, and that regulating drug prices might slow medical advances. advocates say lower prices would not stop innovation and point out some drug companies spend more on marketing than research and development. that was just one of the many quick takes you can find him a bloomberg. you can also find them at bloomberg.com with the latest business news and analysis 24 hours a day. that is all for "bloomberg best" this week. thank you for watching. i'm alix steel. this is bloomberg. ♪

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