imposition of the migrant ban, i would myself have been strongly opposed to an address by president trump in westminster hall. after the imposition of the ban by president trump i am even more strongly opposed. prime minister theresa may invited trump to visit the u.k. later this year. it is customary for visiting presidents to address mps and lords in westminster hall when making visits. however as speaker, he has the authority to block visiting figures from doing this. french presidential candidate says he has nothing to hide and his wife's salary was perfectly justified. worked as anife assistant for 15 years. the practice is legal but he acknowledged it is no longer seen as acceptable and he apologized to voters. a french newspaper reported she

was paid $900,000 over 15 years. iran carried out more missile tests over the weekend. they took place the day after president trump impose new sanctions on individuals and theanies were supporting missile program, terrorism, or iran's hard-line. plan to spend the next 24 hours speaking on the senate floor in a last-ditch effort to derail confirmation of betsy devos, the nominee for education secretary. they vote tomorrow. she's in michigan billionaire and major republican donor who has spent decades advocating the use of public funds to help parents pay tuition at private and religious schools. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ♪

scarlet: live from bloomberg's world headquarters in new york, i'm scarlet fu appeared joe: -- i am scarlet fu. joe: and i am joe weisenthal. scarlet: stocks in the red. joe: the question is "what'd you miss?" scarlet: is the rally showing signs of falling? well. not in politics, a federal appeals court could rule as early as a saturday on president trump's executive order on immigration. could the legislation be contested in the supreme court? it'd finance, president trump may have signed executive order to scale back dodd-frank but lawyers and officials say it starts a long and complicated process. we will explain why. ♪ joe: let's look at where the major averages stand as we head towards the close. abigail doolittle is standing by. abigail: what we're looking at

is very small declines for the major averages heading into the close. all modestly lower. nonetheless we're looking at a bit of a pullback after last week's mixed action. this is considered to be one of the growth year indexes. it is interesting to note it is down a bit more. as for what is behind the push on the s&p 500, these are the top pushes and drags. verizon and wells fargo, verizon continuing to trade off after it's recently reported december isrter revealed the business a bit weaker than probably what investors were hoping for. wells fargo trading lower as yields fall. can you believe it, back above $130 a share after lots of volatility over the last year as there is much chatter the next iphone eight super cycle could really be incredible.

it will be interesting to see whether that happens. facebook also trading higher. they had a strong december quarter last week. theake a look at some of other classes, it confirms we have the 10 year yield down about five basis points represented in green. this tells us bonds are rallying. we do not see that tugging on the dollar. typically that would be a drag on the dollar next but today it is actually higher. but to the point of the haven bid we have the dollar against the yen down sharply even with the dollar higher. under the a bit of radar for the yen. lots of questions about what could be next. it is down on the year. resident trump is calling for a weaker dollar which will help u.s. companies. this is the bloomberg dollar index. since its inception in white.

a momentumom is indicator that measures the relative relationship between two moving averages. a bloomberg user sent us this chart. he says when it has been above 14 in the past it scheduled a 50% more or drop ahead. udc this is the case. recently we had a bloomberg dollar index in two different cases above 14. it could suggest the weakness we're seeing for the dollar could continue despite that very small gain on the day. scarlet: thank you so much. "what'd you miss?" according to our next guest, quite a lot. the founder and president of south bay research. impact of capture the minimum-wage increases in several states and that is what caused disappointing gains. he joins us by phone to discuss more about a potential which jump in february. also with us is vince cigna raw.

you are looking at a meaningful jump in february because of these minimum-wage increases. what will the effect of this look like in monthly data? we will get a one-time jump in february but will dissipate after that? shock and off situation. or 2016 you had companies and states slightly raise minimum wages. january 1 of this year was a big trigger for most of the big states. new york, new jersey, california, florida, michigan. 40% of the gdp is represented in the state that suddenly waste middle reasons. -- suddenly raised minimum wages. a 5% to 8% jump in costs. that puts a big margin squeeze on businesses. then if you are a consumer your prices are go to go up because they're going to pass those along. a big and sudden jump will not stop. you mentioned 40% of states

had these minimum-wage increases. what percent of the workers in those states are overall actually affected by a hike in the minimum wage? i imagine there are some ripple effects, perhaps people making more already get an increase as well. how many workers are really affected by it? >> what we're talking about, first i want to be clear -- 40% of the u.s. gdp is in those states that gets triggered. terms of who is and is not affected, as you said, there is a ripple effect. as soon as the inclination was with the states to mandate wage hikes, all of a sudden you had companies like mcdonald's say why wait? we're just going to walk into it now voluntarily and raise wages. that impression that once it is forced, everyone else will start to raise their wages anyway. to your point, this is the minimum wage.

massachusetts, if you work in the service in your -- industry where you rely on tips, your min wage is three dollars and change. but that just went up 15%. you will go to almost four dollars. in terms of it hitting the white-collar, that is kind of where we are right now. where is the quality of job growth, where of the number of workers? most of the job growth, most of the wage growth we have seen is tempg from these kind of workers come construction workers, the people who will be affected. it is not a one to one thing. we raged minimum-wage 55%, everything goes a 5%. what you have that upward pressure. you factor in other kinds of inflation coming down the pipeline really fast, we have some inflation issues to deal with. scarlet: let's get back to that in a moment. how the factor in full this into how you view the dollar?

this rally it had after the election and has since petered out over the last six weeks? it depends. it is not necessarily dollar positive that we see higher inflation and interest rates. if the inflation is more of a cost pull and not a demand type push of inflation, it is negative, it potentially could bring about an issue if the economy does not keep pace. if the wages are up in big gdp states, that gets passed along. prices go up, it is counterintuitive to positive growth and that might stymie it. joe: after the jobs report cap friday, we saw stocks rally. the clear message from the market was there is no imminent pressure on the fed to hike. how much was that -- how significant was that wage meant in informing the market reaction? vince: that was the goldilocks number and it came from average out of the earnings.

the markets perceive this to be without this push in earnings, the fed would not have to do anything. the counter to that and would not a lot of people are talking about is because you have seen a jump in cpi, now a job in average hourly earnings, you see real incomes falling. disposable income. that is now going to have a negative drag on the economy. that is something else the fed will have to deal with. scarlet: you said inflation is coming and you also mentioned the private sector is unprepared for the inflationary squeeze. why is that? the public sector has been in a disinflationary mindset for so long. every quarter i look at consumer totiment polls, between 100 300 people and that is what we get consumer sentiment on. if you use google you can check in with millions and see what are people really concerned with. over time come inflation is not a concern for the american

public. take that as her backdrop. -- as your backdrop. remember, 70% of everything in the u.s. gets shipped by trucks and they pass along fuel prices. to give you a frame of reference, the cost of shipping is up 5% year-over-year just because they pass along higher fuel costs. you have this sudden jump in february and january and in march. every month you are going to start is to the cost of goods go up here this is not something a fed rate hike effects. it is looking from a deflationary period to reflationary. joe: dca risk out there in markets that inflation could come faster than expected? the fed has to move faster than markets are expecting? vince: it is more than a risk, it is more than likely. the fed has historically been behind the ball. preempt people.

because only react. the fed will not tell markets where interest rates should be. the markets set the direction, the fed plays catch-up. the big issue is how for behind it will be, that is the general question. andrew: another thing to consider is all last year the fed communicatively rate hike. placement months preparing the markets. they do not have that luxury this year. the markets no matter what the fed does will be unprepared for any rate hike, and they're talking about doing maybe three this year. scarlet: donald trump has been talking about how other countries are keeping their currencies to low. in other words, our dollar is too strong. if you look at his allegations that the euro is unreasonably weak, to the numbers back that up? vince: it is weaker. it is not unreasonably weak. 107. now

10 big figures from the inception. it is weaker. scarlet: is it undervalued? vince: not terribly undervalued. maybe a little bit. when you think about the monetary policy divergence between the countries it is probably a good level. joe: thank you very much. coming up, the vick nears historical lows while political uncertainty under donald trump is sky high. we will get insight from oppenheimer fund on how they're reading the new administration policy setting agenda. this is bloomberg. ♪

♪ the vick is near historic

lows while president trump's policy remains high. -- uncertainty remains high. we asked to display new disparity. >> after the election we were expecting lots of things. what is becoming clear is the fact that whatever we were expecting with take a long time to manifest itself, whether that is obamacare or fiscal stimulus, things like that. in that environment when you have things like the travel ban and other controversies shaking things up, the likelihood that business investment improves is small. >> you are not alone. every single person we get on the show says volatility will pick up but it truly has not. but you are seeing bullish options on the vix. is because correlations between s&p companies are really low? you are seeing a lot of rotation beneath the surface? >> i think there is some truth

to that definitely. but eventually if this political theater continues the way it is and you do not see concrete policy actions coming from the congress on the fiscal side, then eventually things will catch up. want you to weigh in. a couple months ago they said, play the small caps. it is the cleaner way of playing the domestic story and you avoid the dollar headwind. that has changed. the large caps are performing and the dollar is not strengthening, it is weakening. that rotation we saw, we going to see its net back? -- it snap back? >> you basically have to see significant fiscal stimulus. it has to come back and play in a big way and that only comes through in expanded fiscal impulse. is at prospect of stimulus

that people need to be can mess is coming or do they need to actually see it? >> the prospects have to improve and then they have to see it. after the election we all were appointsor -- that he a man all about fiscal consolidation. you cannot blame the market for being confused. >> we still have the puzzle of the vix and why it is so low. as someone who is -- someone told me we are underestimating the shift to passive. it tends to stabilize a little bit. is that true? >> i think there is some element of that. all of a sudden are entirely focused on passive investing, day today relative movement is perhaps not that correlationd the

going down certainly does not do much for them either. i think there is definitely an annulment of that. certainly have a lot of policy uncertainty, a lot of volatility as it were in policy. what would be the trigger that would have that kick over to show up in volatility with the vix? tea in thisd, the is fiscal expansion. if we do not have fiscal expansion, the trade dies out. that's the bottom line. >> i look at the sectors that performed best since the election. industrial, that's which will be hit the hardest if we do not get the kind of stimulus you're looking at? >> industrial. fiscal expansion to get the economy going again in a big way. inflation goes higher. financials is more certain because that was more

policy-driven. we are getting that already. >> fairpoint. we have the hope of that. we have an executive order of that. but an actual rollback of dodd-frank material changes to be hard to come by. what is baked into the financials right now and what could come out? >> i think there are lots of things that they can do on the side without rolling back dodd-frank entirely. i think there are lots of regulatory issues that they can deal with. example, there are things that they can do on the asset management side that can help banks who have asset management business. it's a doozy of a rule gets postponed, which is entirely --ough executive action, fiduciary rule gets postponed, which is entirely through executive action. >> if you had to pick out one rule and call out gary and say

that would help the most, not just how the banks operate, what would the? the one rule which could help that happen? >> if they can find ways of allowing banks to buy back stock or do those types of activities, i think that would change the outlook dramatically. was an oppenheimer fund on bloomberg daybreak: americas. scarlet: it is time for the bloomberg business flash. a proposed import tax by the trump administration will deliver the sharpest blow to jaguar land rover while favoring four. -- ford. jaguar land rover would these 2 -- need to raise prices by as much as $17,000 to recoup higher costs. about $282.eed that is followed by general motors with a hike of $995. china's first passenger jet will

make its maiden flight of the first half of this year. c919 had been plagued by manufacturing problems. the plane is designed to compete with the boeing 737 and airbus a320. tyson food says it is under investigation by the securities and exchange commission 4s chicken pricing. they say they are cooperating with the probe. tyson and its competitors have been named as defendants in a lawsuit that claims the chicken industry colluded to drive prices higher. they deny the allegations. that is your business flash update. joe: up next, what is the source of instability in 2017? it is not a market. this is bloomberg. ♪

♪ joe: -- scarlet: traders are seeing

instability coming from the government, not the markets. washington versus wall street. what you're looking at is the spread within the global economic policy uncertainty index andy biggs. the vix we know has been pretty -- uncertainty and the vix. this global policy uncertainty index has continued to ratchet higher and the spread is now at a record high. the uncertainty is showing up not in the vix but these other waves. lots of theories on why this is. perhaps because stocks are moving in different directions. volatility is higher and with it, index volatility, but it is not showing up yet in the vix. joe: perhaps it is the fault of some of the measures. nonetheless that is a huge gap. this is another side of greed and complacency perhaps. is the premium being placed on

bullish options. 110. bullish options come options which will pay off as markets rise. the premiums people are paying hitting the highest in a long time. you have to go back to june 2014 to see the last time people are paying this much for options that paid off in a rally. you are seeing split views. people really want that upside exposure in the options. they want to profit from the continued rally. you see other charts showing the high level. options that pay off in the event of a big crash. people want the rally but they also want protection against a big plunge. it is that middle area that no one cares about. the market closes next. after drifting around for most of the session we have settled on a down direction. the dow off by 23 points. the nasdaq, little change come

inching lower five points. from new york, this is bloomberg. ♪

♪ scarlet: we are moments away from the closing bell. u.s. stocks slipping.

theytors dialing back as await the next policy announcement from the white house. i'm scarlet fu. i am joe weisenthal. if you are tuning in live on twitter want to welcome you to our closing bill coverage every weekday from 4:00 to 5:00 p.m. eastern. scarlet: u.s. stocks closing lower. all finishing in the red. they were gyrating earlier but they settled on a down direction. modest losses. no economic data to speak up today. fairly quiet in the white house as well. joe: that is the will -- the strangest part of today. scarlet: if you look at the sector growth, only two of the 11 sectors rising. tech just barely and industrials. what you are looking at is the excel why -- xly, down for the

seventh day, the longest losing streak in a year. the worst-performing sector in the s&p 500 today, energy off by 9/10 of 1%. some of the biggest losers include marathon, devon and transocean. joe: let's take a look at government bonds. i want to start with u.s. two-year and 10 year, both down sharply. there was not that much news today. no eco data, nothing new from the administration. it is interesting to see that much of a move you -- move lower in yield. it might have to do with anxieties in europe. i'm looking at a chart of the spread between french and german 10 year yield and that is shooting higher. 20 basis points this summer, closing in at 80 now.

concerns growing about french politics. possible scandal around one of the front runners. people are getting those jitters again. the polls show the nationalist is way out there but nobody feels comfortable because every one been burned so many times. so many of these jitters perhaps spilling over to u.s. markets. this is your chart of the day on the government bond side. scarlet: it is another thing to see jitters from france. joe: totally different ballgame. ,carlet: in terms of currencies you're looking at the dollar weaker versus the yen but it is gaining compared to the euro or the pound. i included the mexican peso because of the weakness we see. rate decision the on thursday but keep in mind it is also a holiday in mexico so trading is fairly thin. joe: on commodities, let's look at oil and gold.

as scarlet mentioned earlier, energy is weak. gold has really been doing pretty well lately. perhaps uncertainty out of your. here is a six-month chart of gold. read around the beginning of the year, late december, a sharp turning point. we actually erased exactly 50% of the post-election crash in gold. keep an eye on the comeback in gold. scarlet: those are today's market minutes. joe: we have some breaking news. when he first century fox out with earnings. eps from continuing operations adjusted $.53. that is versus estimates of $.39. you see the stock, not a huge afteron come up 0.1% hours. network program revenue, $3.97 billion. that is a slight miss.

analysts were expecting $3.99 billion. perhaps this explains the muted reaction. a bit of a beat on the bottom line with the cable network revenue not that great. scarlet: of course that is a money generator for 21st century fox. day of then the same super bowl, the most viewed thing in history. we will continue to dig through the results but not much of a move in the shares in after-hours trade. joe: now second deep dive into the bloomberg. can find all the charts at the function on the bottom of your screen. we're talking about gold. i want to bring up this chart which shows inflows into the european gold etf. talk about the gld etf, but that is not the only gold etf. this one is the one that trades in germany. their ecb see the white line has really been shooting higher. which appears to be

the approximate source of a lot of anxiety in the world, seeing aly, you're much different attitude and appetite for gold that you are seeing in the u.s. recently picking up recently in europe. we talk about below picks all the time. the dog -- he low vix all time. that dog hasn't barked yet. something to keep an eye on. under the surface times of tension. scarlet: that is pretty much the theme for today. things that look fairly complacence like the vix, but at the same time there is a lot underneath that is concerning a lot of investors showing up in different ways. joe: lots to talk about. our next guest says a baseline scenario is most likely for june and december. joining us is bill lee.

he joins us from the city offices in new york. thank you very much to have you back. two rate hikes this year. let's go to friday's report. how did that affect your thinking? bill: one of the things the fed did was to say the world has gotten a little better because of sentiment. sentiment is a bunch of feelings. what you said about uncertainty, this is a strange way to handle uncertainty. i think with the markets are theg is pricing in -- feelings that have come about because of fiscal policy that have people excited. hard data has not moved yet. looking forward, everyone feels gate -- great but how long can this be sustained? i don't think we are going to get that much of a sustained fiscal stimulus because republicans do not talk about it. they talk about tax reform. the hard data will not be matching the feelings.

scarlet: how does the fed acknowledge the feelings that are so optimistic while pursuing policy that is reflective of the fact that the hard data is not shown the improvement? it in the you see commentary from the members of the committee. it could be that we could get increases if the data were supported. feelings, we are projecting a split decision. remember, we got the three hikes because four members raise their projections, one lord it. we have 17 -- one lowered it. whoe are a lot of members have not decided yet and that is what we're waiting for. the hard data to either support the feelings or show the feelings had outrun themselves. joe: on the gap between the hard data and the feelings data as you put it, i want to go into the bloomberg and look at

bloomberg's economic surprise monitor. i want to look at the bottom right corner, you cannot see it but i can describe it. this bar is survey business cycles and indicators. it is a really big green bar. the surveys are looking great. are the things like retail measures, industrial, housing, they are in the red. they had mostly been negative. here is the question. in your work when you see an increase in the feelings data, how often does it translate into hard data? furthermore, how much to the hard data really depend on us getting the fiscal boost that people were expecting? bill: i think it is the latter. board -- itreserve is almost never the case that feelings always anticipate hard data. sometimes they do and sometimes they do not. more often than not they do not. ie thing we have to remember

that as the economy chugs along in the u.s. we have a lot of hard data. once the hard data deviates from where the expectations are, i think that is where policymakers are going to have to face facts. we will start to see that towards the beginning of spring. data doesf feelings not translate into hard data, can a drop in feelings data spill over into hard data? bill: it can. it has become asymmetric. when wealth goes up, people spend one cent on the dollar in a year. when wealth goes down, people stopped spending by as much as three cents on the dollar. we have this asymmetry that reflect a high degree of uncertainty. regardless of how they say they feel now about spending it, when they do not have the dollars in their paycheck to make ends meet, that is when the spending stairs to be affected.

you can always finance feelings out of savings for so long. scarlet: kind of like when stocks go up it is on thin volume but when they go down it is on heavy volume. joe: it always feels more real on the way down. scarlet: bill is going to stick with us. this is bloomberg. ♪

♪ let's get to first word news. was in tab up, florida today where he got a briefing from military commanders. speaking after the meeting, trump said he man -- plans on making a big investment in the

military and our veterans. >> we will make a historic financial investment in the armed forces of the united states and show the entire world that america stands with those who stand in defense of freedom. emma: the president also said he will load air for -- the german chancellor says she that she will seek common ground whenever possible with the trump administration. despite the differences, she will look at each issue separately to see if there are places where the countries can cooperate. mike pence may have to perform a constitutional duty in his third full week as a vice president that joe biden never did in eight years, and that is to cast a vote in the senate. a should be in the -- cast tie-breaking vote in the senate.

two of the 52 republican senators have pledged to vote against betsy devos but the other 50 will vote yes. new england patriots quarterback tom brady did lose something at the super bowl. after the patriots' stinning win, someone apparently made off with his jersey from the locker room. he told a reporter it is going to be at ebay at some point. experts say it could be worth as much as half $1 million. global news 24 hours a day powered by more than 2600 journalists and analysts and more than 120 countries. this is bloomberg. scarlet: we want to take a deep dive into the bloomberg. you can find this chart using the function at the bottom of your screen. i want to highlight the number of instances the word uncertainty is showing up in stories published on bloomberg. instances --0 500

14,500 instances. measure, the world of bloomberg chronicles has never been on -- been as uncertain as it is now. the spike comes in 2016 around the brexit vote. joe: do you think it feeds on itself? a story aboutng uncertainty, then that is another story about uncertainty? let's get some more uncertainty with bill leak was still with us. we're talking about the soft indicators versus hard data. you call them feelings data. there's a gap certainly between expectations and the market versus real deliverables. people are starting to realize it will take a lot longer for the trump administration to deliver on tax reform, on d regulates asian of the financial -- the regularization --

why did the gap gets a big in the first place? bill: i have been saying that for three months. citi has always been skeptical about this package. reform, think about it, a tort -- why would they expand investment when they could have financed the lowest cost of capital and postwar history? i think it is going to go with dividend more than hit investment. these other things that markets are starting to realize. as congress starts to get into gear and begin a debate about whether the package is going to be in what the components will be. i think markets will be priced for extreme and early fiscal stimulus and they realize it may be less and later. the uncertainty in the two the uncertainty index you just talked about, it

consists of the best mix of hard data and feeling data. the uncertainty index you guys published has to do with the role of the editor. you know what is in the minds of the readers. kicks in and readership except, of course you're going to write more articles about that but it is a reflection of what people are concerned with. you know the decision is due less and do it later. scarlet: uncertainty begets uncertainty. the as you try to forecast 2018, let's2017, say the market will not get its ultimate wish list of tax cuts and infrastructure stimulus. but what do you see coming down the pipe? bill: i see the beginning of more congressional impasse and the possibility of getting back into political gridlock again. -- power of trump's twitter

he might be able to get legislation through. one of the things to be careful about is if he shames too many of these people, they will gang up against them and that will be a disaster. and shamingl naming loses potency if he continues to do it? it has been effective in the early days of will be as effective in year two of his administration? bill: great point. when i was in china last month, everyone there says you have to treat trump as a negotiator. everything out of his month will be the beginning of a negotiating position. you cannot taken literally. even the tweets he does is designed to get him a position. whether it is with defense department contractors or china. but the markets i think are starting to realize that it is going to be a much more complicated process that they had thought before. what is it the equity markets are actually seeing? by back, de-regulation.

risks on markets -- the markets on the trade side? if there is one thing he seems very into and is consistent, it is his use the rules of trade need to be rewritten. how concerned are you about the short-term and medium-term? bill: i think he has some real economics there. when a small and big country open up trade, the small country gains the most because their terms change the most. chubb's right to say that the u.s. has been at the raw and -- raw end of every trade deal. gains -- they know they hold the trump card because all they have to do ,s sit, smile for two years have congressional elections and

if he would -- the republican majority ends we know trump is in trouble. joe: whether it is a deal with do believe that are possible deals available which would change the rules that would be expectable -- acceptable and beneficial to both sides in theory? bill: absolutely. there is no such thing as free trade on this planet. we have customs unions all over the place. whether the eu or tpp or nafta, -- what trump is proposing to do change the source into favor u.s. employment gains. in that world, a bilateral set up trade deals, especially sector by sector, allows the trade deals to be dynamic. when nafta it was negotiated, there were almost no industry trade between mexico and the u.s.. now to find the trade between the u.s. and mexico. and canadians are both

eager to renegotiate a dead trade deal that is not reflecting the dynamics and structure of the u.s. and the three economies. the u.s. offeran countries like mexico and canada to make it palatable to them? bill: one of the things that will be offered to anyone negotiating with the u.s., especially mexico and canada, would be more market access to the u.s., huge consumer market, and access to markets that are in mexico and canada. has got trade ties to a good chunk of south america and that is a window for us to use to have our exports go freely into that world. that is something the u.s. would benefit from in terms of high-paying jobs and other things that the trump administration is after. joe: bill lee, thank you for coming on. that was awesome. scarlet: we have breaking news. gap reporting january copper

both sales rising 1%. the estimate was for a 2.1% increase. global comparable sales 3% better than what was anticipated. banana republic was disappointing, down 4% for january. analysts were looking for a 2.5% drop. -- updating is 2016 it sees fourth-quarter scored adjusted eps as much as $.51. gap shares rising. this is bloomberg. ♪

♪ let's take a deep dive into the bloomberg. i want to look at the dollar.

fast money hedge funds and other speculators are ditching their dollar positions. 201 --ow at the blue line is the bloomberg dollar index. it has been falling for six straight weeks. it has wiped out half of its gain since the election. at the end a little, that is basically just today. that is the way the white house likes it. joe: everyone was excited and said donald trump will be a strong dollar administration but that does not favor when he want to accomplish on trade. it seems perhaps investors may have run with the story. there was a narrative in place and evelyn stuck to it until it became apparent he would do exactly what he said and stick with the idea that exports will get us out of this. joe: in filling with the fact

that yields or rates are down for the year and have not gone up like people expected, we are about a month in. scarlet: it's a long journey. joe: plenty of time to still be proven correctly. i want to go back to europe. earlier at our grubby french, german spread. today i'm using on the spread function on the bloomberg to look at the italian, german spread. the 10 year spread between italy is uprmany is of to 2 -- to 200 basis points. there is not an immediate vote coming up like they have in france that people are nervous about. but the data has been really mediocre. there does not seem to be any progress towards anything. scarlet: nothing with the banks that inspires confidence. again youta, once feel the strain and stress being put on these weaker powerful players in the eurozone. the scary thing with italy is

either the third or fourth biggest sovereign debt market in the world is a tie in debt. u.s., japan, and either italy or u.k. this is a huge market. if this continues to widen, that 's another thing that could cause anxiety there are the world. keep an eye on that spread. that in thetion u.s. we talk about doubt 20,000 as a huge thing. spread, the cool it on tv as a key measure people watch. they're always talking about it on the news. scarlet: coming up, president tomp signed eight measure rollback dodd-frank regulations but scrapping the rules is not so easy. this is bloomberg. ♪

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>> let's start with news. house of commons speaker john bartow announced he plans to block president donald trump from addressing parliament. visitingtomary for presidents to address mp's. has the power to block visiting figures from doing this. israel's parliament has passed a law to retroactively legalize thousands of west bank settlement homes. it will legalize houses built illegally on palestinian land and.

the laws expected to be challenged in israel's supreme court. presidential candidate françoise said his wife's seller was justified. he said his wife worked in the parliamentary system for 15 years. the practice is legal but big knowledged -- but acknowledged it is not seen as appropriate. new england patriots quarterback tom brady did lose something at the super bowl. after the patriots' stunning win over the emma someone made off with brady's jersey. be worth asit could much as $500,000. global news 24 hours a day powered more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.

let's get a recap of the day's market action. looking at the major indices, lower today but not by much. the big loser is the s&p 500, down 0.21% with energy lower. another pretty quiet day in equities. you have to go back to october two when there was a 1% down day. scarlet is standing by with a look at disney earnings after the bell. scarlet: disney may be nearing an inflection point. the ceo said earnings growth could be modest. espn was once considered is the's crown jewel but it's subscriber base is at an 11-year low. suggesting

they should divest the network. the report on espn is apparent income.y's it made up almost half of operating income. it is the highest profit generating network. it leads its peers in monthly affiliate fees. it is also the highest risk as well, especially now that the tv losing favor. is ratings fell 11% in 2016. the subscriber base is close to 90 million. disney says they will launch an online version of espn this year. while the network is gaining streaming services, the network remains under pressure from an erosion of its traditional base. disney's movie studio has been a bright spot, leading the industry in market share in delivering record profit. it banked almost $3 billion at

the box office last year alone. it is the biggest themepark operator. parkingnt opening of a shanghai weight on profits. disney expects to be even on the profits in 2017. a dealmay make that has nothing to do with the costs from espn. there is speculation that disney could buy netflix or twitter. bobill get more from ceo iger after the company releases earnings tuesday. joe: what you miss? president trump looking to do a big number on the dodd frank act. workers are looking to dismantle part of the plan without help from democrats.

elizabeth deked timer. can you tell what the differences between something past via reconciliation and another law? what are the limitations that via regulation? news onh: the big friday was the executive order from president trump directing the treasury to do a review of financial regulation. move thelf does not needle, but it is seen as a first step forward that the administration is taking. they can do it on the promise that donald trump made to make changes on.-frank -- on dodd-frank. to avoido do that is

getting democrats to support it. i need 60 votes in the senate, which includes at least a democrats. they can get around that through budget negotiations. reconciliation. that requires a simple majority and is something that as long as all republicans are on board, can move much quicker. process obamacare negotiations are undergoing. scarlet: is that a solution that gets us through the next year? elizabeth: reconciliation is a complicated, messy process and the trick is anything that is attached to budget reconciliation has to have a direct impact on u.s. spending, on the u.s. budget, which limits what republicans can attach and limits what parts of dodd-frank could actually be included. the state of play right now is trying to figure out what

changes to dodd-frank that republicans would like to see could be included in that. joe: the you have any indication of what trump would like to do to dodd-frank, the big number, and what the smaller but also effective number he could do via reconciliation? elizabeth: the trump administration has not come out with a specific line yet. they indicated broad areas. were making the rounds on friday when the executive order came out. no, we have not seen specific policies in place on how they intend to do this. some republicans that are looking at this have identified changes to the consumer financial protection bureau, changes to the authority that regulators have to step in when banks are failing. another area is broadly the authority that regulators got that gave them more authority

over hedge funds and private equity and in general, more financial firms. if that is taken away, there is some suggestion that might be able to reduce government spending's, would qualify for reconciliation. scarlet: i'm glad you brought up gary cohen. he said there may be more selective enforcement. problem is the trust administration does not have political appointees in ways yet for these agencies. elizabeth: exactly right, starting with the treasury secretary. for studying financial regulations cannot be done until someone is in place for that. financial firms don't have a trump appointee. even then, it is hard to make changes. it has been seven years regulators have been implementing dodd-frank changers. there is multiple coordination

that has to happen to it is not a fast process. it is not something easy to do. joe: gutting dodd-frank doesn't seem intuitively in spirit with the populism that is happening right now. it is that a guaranteed -- is it a guaranteed thing that all republicans vote for this? could there be republicans that are disinclined to roll back these regulations? elizabeth: you raised a great point. that is not clear. in the houseans have been very vocal about wanting to see changes to dodd-frank for the past six years, but senate republicans have not yet proposed a plan and as you previously reported, there are some republicans who worry who would like to see some smaller changes. take the cf bd. they would like to see a different structure. instead of a director, they would like to see a commission. if they go too far, the chances

of jeopardizing that rise. his politically risky depending on how aggressive they are making changes to dodd-frank. joe: thank you, elizabeth. coming up, will the imf agreed dissipate in the latest bailout program for greece? i will talk with the editor of political and editor of website trollope this. ♪

joe: the international monetary fund is holding board meetings today to discuss the future of greece. there are issues whether the imf

will participate in the country's third bailout in 70 years. ,oining us is nick malkoutzis editor of the website macropolis. it means we are talking about trouble in greece. give us the state of play for people who have not had greece on their mind. what is the synopsis of what is happening now? nick: two-putted as deeply as possible, the imf's meeting to discuss whether it wants to continue to be art of the greek program. what we have at the moment is a kind of mexican standoff with the imf saying to greece, we don't think it needs more surety. it needs more debt relief. the european debtors said we are not really willing to give that the moment. the imf says i will go to greece thingsed for for more that need to be done.

that is tax and pension reform. those are top picks in political terms in greece given what has gone on over the past two years all the parties are trying to find a way to comedy each other and come to a compromise. joe: all of the things you just said, i am wanting more measures from greece, the imf wanting debt reduction, the european partners not wanting to give that, it all sounds like the same stuff we have been hearing for years. why has it come to a new impasse? what is it about this moment that has caused people to revisit these problems? the imf has a make or break decision to make. will it be part of this or not? it has to make a decision whether it will participate with funding, stay on as a fiscal advisor, or drop out completely. there are voices within the fund that maybe it should leave. the europeans are entering an

election cycle. we have elections coming up in the netherlands, france, and then germany. until can fund itself december and then it needs more money. we are coming to this crunch point. it is kicking the can down the road. we are coming to the point where they can't really do that anymore. a decision needs to be taken. the compromise lies around the greek government perhaps giving in a bit and adopting some measures of production of the tax-free threshold for incomes, the europeans agreeing to give more detail of the medium-term debt relief they are willing to provide, and the imf coming on board with funding in the program moving forward. joe: what does alexis tsipras'

look forward? it has been years of austerity and adjustments. can he do anymore? nick: this is the other factor in this. the government is tired, exhausted after the crazy 2015 we had. it has been implementing the memorandum, the bailout, 3% of gdp in fiscal measures last more cuts toforms, pensions, increases to social security contributions, and that has taken its toll. alexis tsipras, they are way behind the center right moccasin. some polls put that at more than 10 percentage points. he really does not have a lot of room to maneuver. that is why he needs to get something back from the europeans. joe: if the imf says we are

done, what are the repercussions of that? nick: that is part of the problem. according to the german finance minister, if the imf drops out the europeans need to design a suchrogram and they insist a program needs new approval from the german parliament. the greek issue become sensitive again in the political playground in europe and you can imagine going to the german parliament before elections in that country and asking for a withoutram for greece the imf is a difficult political equation to balance. the same goes for other euro zone member states. joe: what is the soonest we could see another vote in greece? nick: if there is a compromise between the greek government and

the lenders, things have to move very quickly in the february 20 eurogroup is the one where you have to have a preliminary agreement before the dutch collections kick in. if this carries on as it did before, greece can only fund itself until the summer and then there is a decision alex sippers has to make. if you feel he is being backed into a corner by the lenders, he would probably prefer to go through an election sooner rather than later. he's going to lose but he wants to lose without his party being decimated. if he believes there is a deal on the table, he will hang on and try to get that. joe: thank you very much. nick malkoutzis, head of website macropolis. scarlet: coming up, advertisers in brazil are focusing more on beer and less on base.

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scarlet: while budweiser's super bowl ads took on a political tone, beer companies in brazil are evolving case. more beer, less bikinis. they are hoping to tune into a more gender friendly way. in brazil, we are known for having a very sexist culture. for you to have an idea in the fall, class of -- last september, more than 40% of men said they think women contribute

when they are raped. it is basic. producers are getting more conscious of objectifying women. it does seem to be a positive as biased asture much as ours. scarlet: is the beer industry behind the curve in the way that businesses in brazil target or approach women? fabiola: the multinationals are leading the way. they are a leader in the sense that it is not only being more gender friendly, but the first one sponsored the lgbt parade in brazil. they really have an active policy of supporting minorities in diversity. the same happens to other brands of beer.

it is a noticeable change in the beer market. they are other sectors embrace that are more gender friendly with marketing and advertisement. scarlet: what prompted the change to big knowledge that female accessibility mixed business sense? did it happen suddenly, like a flip of the switch, or was it something evolving in this direction? fabiola: it was a very gradual change. it is still happening. we started noticing less of the sexist advertisements but there are still holdouts in general, especially in the beer market. you still see women wearing and ints on the beach situations that are not necessarily similar to date by day situations in brazil. where near summer and it does not look like it is right.

it has been, for the last 10 advertisements became less sexist. scarlet: what does it say about female buying power in brazil? fabiola: women are making more money. it is not only in brazil, it is all over the world. here women are getting more represented also in society. it is not just having more jobs. it is having more influential jobs on higher levels. there is still a long way to go. normally notices these changes before other areas in the company. that is the public they are trying to reach.

participation of women in the course have increased 24% in last two years. women are not only drinking more here, that they are interested in drinking better beer, which is a potential market for the beer companies. joe: it is time for the bloomberg business flash. a look at some of the business stories in the news right now. expansions cut back lands for the year, the filling a promise to gain more control over pricing. flight and see capacity will .5%ease from 5.5%-seven from last year. each was one percentage point lower than planned. there has been a shakeup at tiffany. they have replaced chief financial officer jeff kuhn all

after bad performance. tiffany has been rocked by a slumping u.s. dollar. ♪

scarlet: teva pharmaceuticals says its ceo is stepping down. joe: we see the stock is down 2.4% on the surprise news coming out just about a minute ago. aarlet: this is coming after company lost a court battle from a generic version of its multiple -- multiple sclerosis drug from coming out. thanks so much for watching. joe: have a good evening. this is bloomberg. ♪

elisa: let's start with a check of your first word news. president trump was at make ill air force base in tampa where he gave his first remarks to service members as commander in cheese. the president soften his tone on

nato, saying he supports it but once allies to pay their fair share. trump says he plans on making a egg investment in the military and u.s. veterans. vice president mike pence may cast a tie-breaking vote in the senate if the vote to confirm betsy devos ends up even. two republican senators plan to vote against her. if all 48 democrats vote no, devos will need the tie-breaker to get the job. defined sanctions -- define wantsons last week, iran more missiles. this comes one day after sanction for imposed on individuals and businesses supporting the missile program. legalizetes to thousands of homes built illegally on palestinian land.