>> coming up on "bloomberg best," the stories that shaped the week in business around the world. the divide on immigration sharpens in the u.s. lawmakers battle over brexit. and he pen pledges to take france out of the euro. >> there was a very harsh tone to it. almost a trumpian tone. >> it's very unusual to have this focus on politics. >> we read the fine print in donald trump's corporate tax plan. >> the interest deductibility commeant is something that doesn't get enough air time. it's critical to understand. >> leading lights of wall street understand where they see risk and which risks might be missed. >> feels like we're moving from

global agendas to domestic. >> the trump administration and brexit, i think it's the best thing that could happen to the e.u. >> unpredictability is not necessarily bad. >> and don't forget about earnings. the week brings a bonanza of quarterly results. >> record revenue. record profitability, record margins. >> we delivered on all the promises we had done. >> it's all straight ahead on "bloom berg's best." >> hello and welcome. this is "bloomberg best," your weekly review of the most important business news, analysis and interviews from bloomberg television around the world. there was reaction to france's presidential candidate marine he pen that raises the

penalty of more instability. >> marine he pen unveiled a 144-point program for government that includes leaving the euro and holding a refer -- a referendum on e.u. membership. if she doesn't get a deal from the rest of the group. >> once leked i will announce the organization of a referendum within the first six months of my mandate on whether to stay or leave the e.u. >> pretty much the program she's been promoting since 2012. two points. one, there was a very harsh tone to it. almost a trumpian tone describing france as a country completely defenseless borders, ruined by the european union. it was a very dark speech, expressing a very negative view of the french situation. the second point about the euro. she never said leave the euro. she knows that scares some older people, they're afraid of what happens with their savings. she talked about restoring the national currency, which is the same thing.

here's some euro weakness. almost the widest in some four years. the question for you and the f.x. market what's going to be more important in 2017, rate differentials or politics? >> i think it's probably politics. i think that's very much the case in g-10 markets. it's unusual to be honest to have g-10 markets this focus obbed politics. i think france is again weighing on the euro, weighing on french yields. i think the euro is going to be ok for the next couple of weeks focusing on france. >> disney reporting results, missing on revenue for the fiscal first quarter. >> that's the headline for a lot of investors. a big deal for espn. $600 million increase in the nba rights fees, this was a big drop. >> espn was the crown jewel for

disney. it's also super consistent for the company. biggest profit generator. what other parts of the business does disney have that can make up for that? >> the two big areas that they've been leaning on, i think they'll continue to lean on because they continue to invest in them, the theme park business they just invested $5.5 billion in shanghai, building cruise ships as fast as they can put them in the water, which are all good business for them and driving good results from the theme parks and result resorts businesses, and also the theatrical business, the film business, has been an incredible, consistent profit generator, unlike any studio that has to deal with the hits and misses of making movies. for disney it's been a straight linear line up from their business. those two businesses are offsetting what has been a surprisingly i think greater than expected decline in the core cable network business particularly at espn. >> breaking news on brexit. the u.k.'s lower house of parliament gave theresa may's

government to -- the ok to begin the formal process of leaving. . it was approved in the house of commons. en it comes to theresa may's self-imposed deadline of march 31, is the government on track for that after this vote? >> absolutely. it's like looking pretty secure. it has to go through the upper house, the house of lords, but this was the state theresa may feared the most. a couple of amendment which is had quite a bit of support from even within her own party but she managed to clear all the hurdles. quite symbolically, as the last amendment was defeated, the scottish national party m.p.'s broke into singing the ode to joy which is europe's national anthem, which really shows that as far as brexit is concerned, it's now pretty much a done deal. >> president trump is

criticizing a department store chain that decided to stop selling ivanka trump's brand last week. earlier today he tweeted, my daughter ivanka has been tweeted unfairly by nordstrom. of course there have been so many concerns about a conflict of interest due to his own business, his daughter's business and here's a perfect example of what might constitute a conflict. what kind of reaction is this generating in washington? what's the buzz? >> clearly people, i think, are saying what you're say, which is that this is one of the most blatant examples, probably the most example we've seen at least since he took the oath of office of him sort of basically trying to do right by one of his family members' businesses while he's holding office. but what i think a lot of people here in washington are saying, and he he said this, is there's a difference between the sort of appearances of conflict and maybe potentially moral conflict and the law. but at the end of the day unless there's an insider trading aspect, there may not be very

much to do to stop him from doing this. and you know, people who are interested in transparency and god government may just have to sit back and say, well, i would prefer the president didn't do that. >> a san francisco based appeals court rejecked the trump administration's request to reinstate the president's travel ban. that means the u.s. will remain open to refugees and visa holders from seven muslim-majority countries. in the biggest legal setback yet for the new president. >> this is a 3-0 decision. there were two democratic appointees, one republican appointee on this panel. judge clifton, the republican appointee, sounded a little more supportive of the administration during the arguments. now, taking a quick look at the decision, it doesn't, you know, say that the policy is unconstitutional. it does say that these three judges say that it's likely that it did violate at least the constitution in at least some aspects, namely with people who have been in the country previously.

that their due process rights may have been violated. he court did not get to the -- did not say anything about the allegation that this is religious discrimination as well. but you know, in terms of the magnitude of this whole thing it's a pretty big setback for the administration. >> we have finally heard from donald trump on his twitter seesm you in court, the security of our nation is at stake. >> big news today as prime minister abe visited washington. this is interesting, he's going to the u.s. chamber of commerce before meeting with the president of the united states no coincidence, given the importance of trade with japan. >> it shows this is a meeting that will be focus odden the two economies, the u.s. and japan and the trade that goes on between the u.s. and japan. obviously the -- abe is not happy about the t.p.p. deal president trump scrapped but the two leaders will spend a lot of time together over the next 36

hours, specifically talking about how to restart trade between the u.s. and japan. they'll have a working meeting, go down to gsh go dawn to mar-a-lago and play some golf, trump talked about being a dealmaker, hopefully they coum out with a deal that works for both countries. >> is there a cent epiece proposal abe will be pushing for? >> i think the core of the package is the soft pledge that abe is going to make to have both private sector investors, banks mainly, and also the japanese government look at investing more in u.s. infrastructure projects. this is obviously a top priority for trump. abe sees it as a way to demonstrate he's wanting to work with frump to boost both economies. >> still ahead on bloomberg best, insights from some of the world's leading investors on where the global economy is going, plus more earnings reports from companies around the world with commentary from top commecktives.

and up next, more of the week's top headlines. china's cash pile isn't quite as big as it used to be. is that a cause for worry? >> there was a lot of speculation in the market that $3 trillion was a magic number. ♪

>> this is bloomberg best. let's continue our global tour of the week's top business stories in asia with data from beijing pointing to more challenges for china's economy. china's lending for january may have exided -- exceeded the previous monthly record, according to sources citing initial government data. we were thinking that the pboc was trying to curb lending. what happened here? >> this is a scoop that broke

about an hour ago. 2.5 trillion yuen is possibly the number that could come out for january for new loans. e estimates by economists is 2.14 million. 2.4 trillion equates to billion dollars. it highlights the question of what's happening with the deleveraging and the focus on winding in these asset bubbles that policymakers have talked about for so long here. >> china's reserves just below $3 trillion in january after the yuan capped its steepest decline in decades. this is the yuan going down, and the reserves it's an unholy trinity they can stop all at once. >> i think it's interest, there was a lot of speculation in the mark that $3 trillion was a magic numb. -- number. now we know the p.b.c. doesn't

care, they're happy to let the reserves fall below, so that's good. one reason there's been reserve outflows, there's been record outward f.d.i. from china and that's a good sign a sign of economic health. we're bullish on the near-term outlook for china. not worried. >> after the r.b.a. left ratesen changed. >> what's the takeaway from the decision? >> it was no surprise. we hadn't heard from the central bank in two months since last year and they held rates up on hold at 1.5% which is already a record. it was always much more of a fact finding mission if you will , in terms of really having a look at what the wording of that statement said and all in all it seemed quite upbeat because the r.b.a. did affirm its growth and inflation forecast, saying to expect g.d.p. growth trending over the next couple of years. they expect inflation to pick up

to around 2% by this year as well after that contraction in g.d.p. in the third quarter. >> bank of india surprising global markets when it not only failed to cut its key lending rate but also signaled the easing cycle may be over. it seemed like it was all based in a rate cut. >> it sure did. but you know what? patel has done this at every meeting since he took over in september as head of the reserve bank of india. 3439 economist told bloomberg, slam dunk. instead the r.b.i. held a key rate at 6.25% a two-year low, then in its policy statement it signaled the biggest surprise of all, the easing cycle may be over. here's what they said. the committee decided to change the stance from accommodative to neutral while keeping the policy rate on hold to assess the transer to effects. they think the decline in inflation may pass.

>> oil falling a third day after stray data showed u.s. crude stockpiles surged, raising speculation that rising supplies from producers is offsetting cuts. >> i sat down with mohammed e stmbings ada, he was confident and positive and shrugged off any suggestion that the inventories weren't coming down in the u.s., that there was more oil coming into the market in the united states. he said you know what, give this opec-nonopec plan some time. we're convinced this is going to work then we'll re-evaluate for the future. here's what he had to say in terms of expectations as to when the market might rebalance. >> i think third quarter would be a good estimate. for the rebalance. and we can see that there are ifns of the market going up,

u like, from contango to backward, i think that process will help clearing more and more f the stock. >> shares of moles climbing, after winning an advisory role for aramco's initial public offering. i imagine this is a big deal for them. >> it's a big deal for them, that's probably why shares are up. moelis is known for being a boutique firm. what aramco was looking for, looking to raise as much as $100 billion in its listing which is dwarfing the next biggest i.p.o. by four times. >> and that's only 5%. >> 5% of the company, right. mass i have deal if this gets done. aramco was looking for an adviseor to help them pick the

underwriters and do some things like that. moelis won't necessarily be one of the underwriters we hear about in i.p.o.'s who figure out which investors get the shares but they are going to be a trusted advisor here. along with some of the other irms working with the company. >> the c.e.o. met with president trump today and announced that intel is expanding investment in arizona. the chipmaker will spend $7 billion in its production facility in the suburb of chandler. >> is this new spending? is it incremental on the spending already expected? >> it's in our capital forecast for this year but it will be the next big factory we build. and as you know, it takes several years to build it. what we announced today is that our next big factory is going to be built in chandler, arizona. it's going to be the most advanced semiconductor factory on the planet and it's a massive investment.

it's, over time will be $7 billion of cap ex, it will create 7,000 high wage jobs working for us. so it's an enormous investment, points to how we're growing, how we've transformed the company. >> there's a building in chandler, arizona, supposed to be online in 2013. no way intel would be making a decision based upon jobs, based upon what would make anybody happy. they've already made this decision that the time is right for them in terms of technology and in terms of the kind of product they want to be producing. >> big merger in the health care industry was officially killed yesterday. at least for the time being. a trial court in washington agreed with the government that anthem should not be allowed to go forward with its $48 billion proposed acquisition of cigna. what went wrong with the deal? >> anthem and cigna were hoping to combine, would have created

the biggest health insurer in the u.s. the judge said that's going to reduce competition. it's not going to help consumers. plus you guys don't get along. even if in some other world this would help consumers , in this one where you guys are fight, i'm not going to let this happen. >> what's next? >> anthem will appeal, they'll work that angle. cigna says, we're weighing our options. not clear how they'll participate in an appeal given the hostility. >> let's talk about donald trump. he's had his first phone call this time with the chinese president since taking to the white house. >> trump agreed to his request to honor the one china policy. trump has already called about 20 other leaders. why did this call take so long? >> let me give you a clue. let's look at what donald trump said about the one china policy in december when he said i fully

understand the one china policy but i don't know why it has -- why i have to be bound by one china policy unless we make a china to have to do with other things including trade. well, it's clear that actually donald trump pretty much didn't really fully understand the one china policy and that china was in no way going to actually start talking about the one china policy and trade in the same bag. looks as if donald trump has actually had to acquiesce to china's demand that the one china policy be honored.

rosalind: welcome back to "bloomberg best." president donald trump promised to enact sweeping u.s. tax reforms, including reductions in u.s. corporate tax rate to spur

economic growth. in an exclusive interview with bloomberg television this week, marathon asset manager bruce richards examined trump's tax proposal that isn't getting a lot of attention but could have a significant impact on business. >> with that corporate tax reform, the administration is talking about a very important other aspect. as you break down tax rates for companies, doing away with interest deductibility and depreciation. the interest deductibility component is something that doesn't get enough air time and it's very, very critical to understand. perhaps i can -- >> it's for highly levered companies right? >> particularly for highly levered companies. 25-30, 35-40. c, if you bring the corporate tax rate down that's good for company. more flows to the bottom line,

they pay less tax. but for a certain company that has debt outstand, depending on how much debt if they can no longer write off that debt, that's bad. the plus and minus offset. >> where is the tipping point? >> the tipping point is at about four times leverage. here's the scenario. if you're an investment grade company and lower tax, you have little debt relative to lower tax, you make out and it's a windfall to you. if you're a strong double d with three terms of leverage, make out it's largely beneficial for you, bringing the corporate tax rate down to 25 and doing away with interest deductibility. if you're around four timed levered, you start to lose. ive and six timed levered, you really lose and so let me just walk you through one last iteration. if you're a triple-c company, a will the of those do not pay tax currently because they have loss carry forward and they're losing

money, they're not currently paying taxes. it doesn't affect the triple-c today. it's the middle. it's that single b, weak double b, b-rated companies that's a profound affect. could cause restructures to happen because these companies,

simply put, have too much debt relative to equity. so -- >> are you preparing for that? where are you looking? >> we're looking at if donald

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>> the u.s. is saying listen, we will look after ourselves. brexit in the u.k. is doing the same thing. to come together and say if we are together or not. me that you to think the chance of a eurozone breakup are diminishing? is ae european breakup fantastic anglo-saxon wet dream. >> moments ago, we had a sudden selloff in greek debt, yields touched 10%.

i know that sovereign debt is not an oak tree specialty them about when you think about the unpredictability, how does that affect the way you think? unpredictability is generally undesirable, and in my opinion, the more unpredictability there is, the more you should build in caution. on the other hand, unpredictability is not necessarily bad. sometimes things go unpredictably well. an unpredictably good year, and i think that it exceeded everybody's expectations in terms of market performance, and the people who at the beginning of the year, i was on here a year ago and things looked dicey and everybody was saying the market is collapsing. i ran back to my office and wrote a memo entitled "what does the market no?"

you were the inspiration, or your organization. take ourhink we should signs from the market, but when the world is highly uncertain and unpredictably good or bad things can happen, i think we have to prepare for that by raising our level of caution, and in each of our strategies, that is done a different way. >> in other words, don't freak out when we see greek yields at 10%? >> that is the most important thing, don't freak out. you can't be a good investor unless you are emotionally stable. most people are wired with every bone in their body to do the thingshing, to buy when have been going well for a while, and to sell when things have gone badly for a while, which is the opposite of what we should do, if anything. ♪

rosalind: this is "bloomberg best". i am rosalind chin. we look back at earnings reports, starting with major european oil companies. oil has reported an unexpected loss, write-downs on u.s. shale assets, adjusted net loss excluding financial and other items was $40 million compared to a profit of 158 million a year ago. that thises my eye is is impart part tied to the long-term assumption on prices. this concerns me the most. well our results are obviously impacted by a low commodity environment. statoil is an oil and gas producing company, so prices are

very important for us. even this quarter, we have below $50 a barrel. in terms of and parents, we had impairments of $2.3 billion net. the main reason for that is related to the fact that we have adjusted downward on long-term price action, mainly for oil. for now, we are looking at an oil price in 2020 at $75 per barrel. bp's fourth-quarter earnings miss estimates after prices failed to compensate for lower income in refining. >> that is the same from everyone who has reported so far. oil prices have increased, bringing profits on the upstream units, the ones who produce the hasand gas, but increase been offset by lower profits on

refining. higher crude leads to lower margins. at the moment, it is the worst time for big oil. prices are not rising enough to bring profits for upstream units, while downstream, a key money generator in 2015 and 2016, they are coming under pressure. natural australia bank has released results. we have a few more details. quarter is an incomplete picture, but what we setting up for? >> it is clear the year ahead will be tougher for the banks. nothing bad about these results come in line with what they said, gross profits down a little bit, but not had. thes a probably a sign that whole run we have seen are probably drawing to a close. we saw an increase. is that worrisome at this point?

about a 5%alking wagesse for cost for nab, essentially come into to the fact you hope you get a pay rise, but they also note regulatory costs are increasing. investors will want to see more detail on how they are managing the cost program. missing estimates for the fourth quarter as earnings fell at the french consumer banking business. , but fell short of the $1.63 billion analysts expected. >> on french retail, do you expect to return to revenue growth in 2017 and when exactly? >> during the year, we have improved our lending rates, so we have increased the lending rates in the last quarter am improving by 4.2 percent lending out standings compared to the year before. however, the low interest rate

environment will most likely remain for the year to come, so next year, it will remain difficult, although the trend is positive. the retail growth could be towards the end of 2017 or even early 2018? how it goes, see but it is not the next quarter. fourth-quarter profit exceeded estimates, helped by a surprise jump in earnings from its french consumer banking unit. >> we could have in the second part of the year, what would be the new framework, which is still pending. >> so you don't think that it is dead? >> know, we don't think so. there are still discussions between the different authorities. >> if you have a new basil deal and no dodd-frank anymore, does that put european banks at a disadvantage? >> i don't imagine at all that

you will have an agreement without the u.s. announced motors fourth-quarter earnings 30 minutes ago, a record year . >> record performance across the ,oard, record revenue profitability, margins, record free cash flow, earnings per share, just a strong year, and importantly, fueled by north america, which had another record year of $12 billion of 10 percent less margins for a second straight year, and china, so we are pleased with the overall results. sanofi saidugmaker profit may drop this year as the company pursues new drivers of growth to offset declines for its best-selling diabetes treatment. let me ask you first of all what you think of donald trump's comments that drug pricing is a

problem and we could see negotiations for medicare soon? >> the increase on prices which have been happening in the past years are not necessarily all cases justified. the same time, we need to find a way, and i think this has been recognized by president trump as well in the meeting he had with the pharma ceos in the u.s. that there is room for innovation, and innovation has to be priced properly. i think that as long as industry shows responsible attitude when it comes to price increases, there should be a way forward. biggest drugmaker glaxosmithkline warned profit are able torivals sell copycats up one of their top-selling drugs in the united states.

drugresident supports company negotiations. i want to understand how that impacts glaxosmithkline directly and how it may shape the industry as a whole. >> market-based solutions are the right way to go, specifically from a gs k perspective. medicare part b, we have no action in that space. medicare part d, a bigger weiness there, but whether get generics th year or there is reform and pricing in that space, you can't lose it twice, if i can put it that way. so the impact of gs k is not not massive exposure for us, and a tree if you think about the guidance we have given for this year where we have said if indeed there is have shown people what the impact is and we can hold our own. mining company rio tinto has delivered on its promise to

reward investors emerging from an industrywide downturn, blasted dividend estimates and said it would purchase $500 million of uk's listed shares throughout this year. on all thedelivered promises we have done. the last time we talked was in november when we went to the are proudd today we to say we have delivered everything we promised to deliver in terms of cost savings, cash generation, strengthening our portfolio, and last but not least in terms of cash return. today, 3.6 billion dollars of cash returns which is above expectations, and we have done it in a way where at the same time we were able to invest for the long term and strengthening our balance sheets. shares, let's have a look at what they are doing because what we have here is the japanese company posting third-quarter profits of $814 million.

2.6%, the best results since a $50 billion investment in the united states. what did these earnings tell us about softbank's business? thehe business in the u.s., sprint business, continues to be challenging for the company. they did add subscribers in the last quarter, but the business continues to lose money, and that is a problem for them. down to numbery four behind t-mobile. fortunately for softbank, the japan business is stable and profitable, so the profits from the wireless business and internet business in japan has helped give them the cash a need to make the kinds of investments that they have been making going forward. twitter's shares are tumbling after quarterly revenue and profit outlook missed estimates. the social network is having trouble luring advertisers to the platform despite president trump's frequent tweets.

though expectations were stellar going into this report. why does it seem to be such a surprise that twitter is struggling? >> hope springs eternal? i don't know. twitter has been consistent. hadter has consistently this long-term problem in bringing new users onto the platform. thathey have masked somewhat by getting more revenue per user's and had some progress in the most recent quarter, revenue growth per user did a positivend it is thing, particularly with the super we can they put up last year in the fourth quarter. nonetheless, it is not making up for the lack of growth and users, and that lack of growth is disconcerting because it suggests that twitter universe we see now is the twitter universe we are going to get. ♪

>> eu gives you a breakdown of the financial and political conditions of the european union. you can see the two candidates are doing better than the other now. >> i'm looking at the mrv function looking at market valuations for price to earnings, price to book, and dividend yield. the s&p has the lowest valuations, meaning it has gotten to this point where you could argue it is a little frothy. rosalind: there are about 30,000 functions on the bloomberg, and we always enjoy and you showing our favorites on bloomberg television. maybe they will become your favorites. here is another function, q u i

.ic here is a quick take from this week. ♪ > isthe nation of china responsible for almost half of america's trade deficit. ♪

>> bringing down your taxes, getting rid of regulations. ♪ rosalind: that was just one of quick takes you can find on the bloomberg could you can also find them on bloomberg.com with all the latest news and analysis 24 hours a day. that is all for "bloomberg best"

this week. i am rosalind chin, and this is bloomberg. ♪

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