u.s. ties never came up in conversation. it has been reported pence accepted the apology. donald trump has met with the south african president about trade ties and stability in africa. he said they talked about this on the telephone, read confirming -- reconfirming the strong commitment between their nations. there are many companies operating in south africa with strong american ties. perhaps confirm the treasury secretary choice. that when thelain man run west bank, he did not save people from unnecessary foreclosure. he said he would help with refinancing to keep houses. begunited nations has sending out formal invitations -- invitations to geneva.

the talks are to resume next monday. they were last held in april but were suspended when new fighting broke out. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra, this is bloomberg. ♪ scarlet: live from bloomberg world headquarters, i am scarlet fu. joe: i am joe weisenthal. we are 30 minutes from the close of trading. scarlet: the s&p climbed to a record after donald trump said he would unveil his tax plan. joe: "what'd you miss?" scarlet: stressing the importance of corporation for free and fair trade between america and canada.

and in cabinet news, leadership vacuum at the treasury -- it is weighing on key issues like budget and currency issues. in economic news, janet yellen makes her semiannual testimony to lawmakers starting tomorrow. investigators are watching for any hints about the meeting and the fiscal policy plans. let's look over the major averages to the close. abigail doolittle is standing by. day, morenother records. looking at lots of green heading into the close. everyone is on pace for this close. the reflation hopes that the trump administration will help the economy more and help people through their gains with the press conference with justin trudeau. some believe there could be had ah talks about nafta

border tax, but president trump alreadywill tweak an outstanding relationship with canada. we have one of the biggest uporters, nafta trend -- about 3%. this is the biggest carpark supplier to ford, gm and chrysler. they will export $20 million into the u.s. investors seem pleased they are only talking about a tweak. another sector that could be affected by some kind of tweak or change between canada and the u.s. are the e&p companies out of canada. this is what you see and read. see in red. bloomberg intelligence analysts told our team that while there is talk of this, it is really a wait and see to situation.

it is sensitive to oil. btv5972,a look at g# this is a two-year chart. white is suncor, orange we have oil. we see the strong correlation. michael also made the point that nafta could be changed, it could affect production. that would affect the stock. we have seen that in the suncor stock, quickly recovered, started to trade back with oil. oil is the big story for suncor, but it will be interesting to see what happens. thanks. there is the corporate side of the nafta story. let's look at the political story of what president trump calls the worst trade deal in history. he blames nafta for the loss of many jobs in the rust belt, but our next guest says it is time to stop pointing fingers at the agreement. he is the former secretary of

the u.s. treasury. now he is a professor at university of california berkeley. great to have you on the show. what does trump get wrong about nafta? >> 20 gets wrong about nafta is pretty much everything. if you listen to drop, if we had not signed nafta, we would have like 30% of americans at work in factories that we had back in 1950. but at most, and that is at most , only 0.1% of any decline in american factory jobs has taken place on account of nafta, and that is a price that president ,ush, the first president bush thought was very well worth paying in terms for stabilizing mexico and giving it a chance to develop and become a richer and more peaceful country. you look at sources of decline in manufacturing jobs, look first at technology, which has

made factory workers immensely more productive, but demand has not gone up all that much. most of us only need one refrigerator after all, and only two cars. look at ronald reagan. the passage of the reagan tax cuts and the budget deficits that it provoked, which pushed up the dollar, is 30 times more to destroy the midwestern manufacturing in america than even the most pessimistic views of what nafta did. and you can look at the process of globalization as a whole, but most of the process of globalization as we switch jobs which a relatively low-paying in the united states and gain jobs that are relatively high-paying in less or equal numbers. scarlet: so his fixation on restoring them make sense politically. i wonder if there is an economic

cost to prioritizing, rejuvenating the manufacturing sectors the way he is attempting to. to? how is he attempting all he has done his talk a lot. serious proposals on the table at all. there seems to be a republican congress that is desperate to do some form of tax reform and to include a border adjustment tax. toa way of allowing trump declare victory without even managing to do much harm to the economy, whether that will get any clearer or work is very unclear. , as theclear is that economy moves forward in time, there is always a bunch of disruption going on, altering our trade agreements will produce more disruption. it will add to the risk facing american workers and american companies as we go forward into

the future. joe: you wrote a piece on fox.com, laying out your entire argument -- brad: 8000 words. i originally promised 3000. -- it came out as 8000. i thank him very much. u.s.,n addition to the manufacturing declining precipitously, so has germany, and is often held up in manufacturing as a powerhouse. what is the lesson? here are the charts showing germany's unemployment manufacturing show since 1970. brad: germany has done everything right with respect to nurturing its manufacturing sector, and it has done a great deal right with respect to holding onto the blue-collar workers. it has very good apprenticeship programs which we love to praise for getting people who are not focused on formal education into

career tracks that offers them substantial security and relatively high pay. it has avoided having an overvalued currency and by avoiding that, it has not let the market sent its factories false signals that they should shut down, something that we have not avoided, that we definitely did not avoid that in the 1980's with the reagan deficit. there was all sent a signal that they should downsize, and the strong dollar is doing the same, and they have been careful to use government money to nurture the communities of engineering practice that enables rapid productivity growth into the future. the problem from the perspective though isllar workers that blue-collar factory work is going the way that blue-collar agricultural work did in the two and three generations before, and that is going the way

hunting and gathering did 10,000 years ago when agriculture was invented. the ability of people on the assembly line doing simple things because machines can't, that was a valuable thing that humans could do for six generations between the invention of the steam engine and the coming of modern robotic technology. that age is at an end, just as the age where we had 80% of our workforce doing farming is at an end. we have to realize that and look forward to the future rather than try to recover jobs which we cannot recover, and if we dold recover, we could only recover them by attaching very, very low wages to them. latest stepis the in a long cycle of economic history. you say the u.s. does not follow a strong dollar policy but rather an appropriate policy. what does that look like?

brad: the united states is a very rich country. in general, there is a lot of very poor countries, countries that don't have much capital or ,uildings or machines infrastructure, although we could use a lot more than we have right now. in general, if the world economy is functioning smoothly, a rich country with lots of finance and money should be helping the rest of the world industrialize. its investors should be looking abroad, and so capital should be flowing out from the rich country to poor countries where poor capital is scarce and earn a higher return. that is what the u.s. did before 1980. that is what britain did for the entire century in which it was the world's biggest superpower. that is what japan and germany do today. they are capital exporting countries.

because they are capital exporting countries, people abroad get lots of yen. used to be deutsche marks, now you -- now euros, and they have factories. we got out of this business, and we should not have. joe: you are aligned with the democratic party. yet you used to dominate in the midwest. despite your argument, there is a problem with the party connecting. what should be the message of democratic party politicians to people who feel that, even their area of the economy has been decimated by trade, technology, what should the message be to convince them the path that you prescribe is the way forward to that the democrats can do better among these voters again? brad: it is a great puzzle. if you want to do one thing to ,ake the life of people facing

blue-collar workers facing immense insecurity in america better, it would have been to give them access to the obamacare health exchanges with subsidies provided for moderate income people and access to medicaid for those who would otherwise fall into the gap between the truly nonworking poor and those who are working with wages and salaries high enough to actually buy into health insurance. president obama did that. that was the largest plus for the blue-collar workforce of america, those people who are not connected or do not think they are likely to permanently stay connected to very large american enterprises that offer employer-sponsored health insurance. if you want to know what political party and what candidates have done the very most for the people who are worried about economic security, it is indeed president obama and his obamacare.

and that does nothing to register at all. trump appears to be following policies that will strengthen the dollar, further weaken lossacturing, lead to the of many more manufacturing jobs than he can claim to have saved by having intel to an announcement that it announced well,ears ago, and yet -- basically let me say it is an enormous perception problem it appears to me, and i am not a message person. i am a substance person. you are supposed to be the message people. you are the communication link between us and the world. you are supposed to be a disinterested information intermediaries who get the message out. help us, joe and scarlet. you are our only hope. joe: thank you. your twitter on blog.

maybe you will help come up with the message. scarlet: we will transmit that message. we will hear from utah republican and chairman of the senate finance committee orrin hatch and why he thing dodd-frank is worse than obamacare.

♪ three weeks into his administration, donald trump's cabinet is taking shape. -- the vote for the treasury secretary will take place today. i spoke to orrin hatch, chairman of the senate finance committee. i asked him about changes to the border adjustment task -- tax. we are going to look at it very carefully when they come approach.he final

i had some good questions, but maybe they will have such good language, there will be something we can all support. approachi am going to be lookit very carefully, because that is going to be an important part of what the house is going to do, i guess. and i have great faith in the speaker of the house and of course the chairman of the ways and means committee as well and his ranking member. they are good people. hopefully they will come up with something that will get this country moving again and did it off the dime. scarlet: is it dead in the senate? orrin: i don't think so. i don't know what it is. we would look anything the house sends over. we will have an answer for what should be done, and we might want to amend it. but is the way it works between the bicameral legislature. we will look at a very carefully you whatever they send over will

be fine, but from what i have heard, i have questions. scarlet: what is your first question? orrin: there is a lot of questions about it. i would say the real question is , can we do this properly without increasing taxes or increasing expenses and costs on american citizens? is one question that has got to be answered. there are a couple of others. scarlet: what kind of responses from companies have you heard on the border tax issue? how would you characterize the volume? some companies love it, others don't because it would be detrimental to their online. some, it will help. you will have different points of view on something that significant new matter what you do. you just have to do the best. that is why we have this eye camera will legislative process, because the house might love

some language that the senate might not work vice versa. if we can get together and say, there is a good approach. ask you aboute regulation. the president signed an executive order to begin examining which parts of dodd-frank and other regulation should be changed. is there anything worth preserving? orrin: not in my eyes. i think it is a lot worse than obamacare. it is one of the worst ever passed for congress, and it is part of the reason why so many people are having financial difficulties today in this country. so it was an overreach in every way. , morend more requirements and more paperwork. it is incredible. i was with one of my bankers in footlake, he shoved a four -- showed me a four foot stack

of documents they have to fill out to cover the requirements. what do all of the smaller banks do? they are going out of business. that webelievable to me would allow that type of system to continue. scarlet: what parts of regulation should be kept in place, or to make sure there is not a financial crisis as we had in 2008? orrin: we know there needs to be a certainn to require review of the banking system in our society, but it does not have to be legislation that kills the banks, especially the small banks or state banks that literally cannot afford all the paperwork burdens, so they are operating quite well anyway. to treat all these banks like they are a bunch of crooks, and you have to watch everything they do is i think beyond the pale. a portion of was

my conversation with orrin hatch of utah, chairman of the senate finance committee. joe: let's get a quick check on the markets. green across the board. dow jones leading the way, up 74 basis points. records across the board, number one sector, the financials, up 1.26%. prices are respected to rise in the eurozone, but how quickly? to different conclusions. we will look at the data. ♪

scarlet: "what'd you miss?" all the major indexes are record highs, and we will add another one, the waffle 2000, where demand is faltering, showing the rally may not last for too long. the white line is the iw m share price. he got a big boost after the election, made a record high in early december.

since then, it has been stuck in a range. -- can see the gyrations but before breaking out today. measure ofne is a demand for small cap. when there is more demand, the number of shares increases, because they need to create more etf to fulfill that. there is less enthusiasm for this latest breakout them back in early january when that was much higher. danny berger of bloomberg markets life reported that equate to bank of america, earnings are down 1% year-over-year. when you look at the result according to analyst estimates, they are 1% better than expected, whereas earnings are 2% better than expected. that might you a role as well. joe: there is a lot of enthusiasm for small because they did not have the exposure. i am looking at the eurozone, and there is all of that debate about the ecb, holy back on

easing. if you look at inflation forecast from major institutions, there is not a lot of imminent reason. the yellow line is inflation forecast, the orange line is the forecast.mber 2017, you see the european commission, the head still falling short of 2%. then it will fade in 2018 as the base effect from the oil rally starts to folder. -- falter. there is no real momentum for sustained action on the inflation, which is what the central bank wants to see. they does have a 49 forecast, but there is evening. despite the optimism in europe about the economy, the comeback is still not getting that inflation according to the forecast. scarlet: it is all commodity driven, not wait increase. not playing out at the moment in europe. here in the u.s., the market close is next.

we will look at the major indexes with less than four minutes, record highs for the russell 2000 and the doubt, the s&p 500 gaining five -- half of 5%. ♪

♪ scarlet: we are moments away from the closing bell. "what'd you miss?"

stocks all rallying, franchise for the investors including the russell 2000. regaining cap momentum on cyst -- on sessions. i is scarlet fu. joe: i am joe weisenthal. we want to welcome you on twitter. we have coverage every day from 4:00 to 5:00 p.m. eastern. scarlet: we begin with market minutes, the major indexes all climbing to record highs. it was not that close at the high, but new all-time highs for the major indexes. if you look at the references in the morning notes, a lot of people say it is a grand slam because all four of them closed at their best levels. and the all country world index which includes emerging markets and developed markets, it is at its highest level since 2015. this is a global phenomenon. we mentioned in europe, commodity producers are leading the advance.

asia is not bothered by the north korean tests. apple closing at a record high. atruary 2015, it closed 133.82. this is a new high here. a lot of analysts were fairly positive. goldman sachs raised its price market because of confidence in the iphone 8. it is the 10th anniversary of the iphone. joe: iphone ask would be 8 -- iphone x would be a good name. ubs says apple shares would be 10% higher if services were valued like paypal. joe: that was something we talked about during apple earnings. they did service the business growing -- growing a lot, but they need more justification from the street for this. sector: in terms of the groups, apple is what we are paying attention to, but other financials leading the advance,

the trump administration is going to look at how to roll back to mental regulations soon. they promise a phenomenal tax cut, also giving the sector abuse. jpmorgan closing at $88.15 a share. telecom was off by 1.25%. they were one of the bigger losers of the telco names because verizon is reintroducing unlimited data. at thet's look government bond market will quickly. not a lot of action in the u.s.. barely. yields up they were higher earlier in the day, 2.34%. yield last week at the end of the week is kind of a wild week, 10%. and then below 9%. picking up, still a lot of work to do, get to be done to a dispersed that. we will talk about that in the coming weeks and months, but

french 10 year yield is down a little bit, still fairly elevated on concerns of the election in may. scarlet: we are seeing that in the french government bond. in terms of currencies, the dollar was stronger. you looking at the dollar up 0.2%, it was higher versus the dollar -- the euro and again yen. on friday, it had the first weekly gain of 2017. we are extending that before janet yellen's testimony and key data on wednesday morning. this comes after her data on tuesday and then the second on wednesday. i also want to mention the canadian dollar. strengthened, got a boost after donald trump's news conference with prime minister justin trudeau. it was fairly steady during their meeting. preservingsed on access to u.s. markets. donald trump said he will tweak trade with canada as opposed to ripping up nafta completely and rewriting all of the rules

related to trade with canada, providing some comfort to investors. joe: not a ton of action. and on commodities, let's get oil and gold. oil tumbling below 1.8%, but it has been stuck in this same range forever every day for a year where he talk about something around $52 or $53. does not move at all. gold up less than 1%, kind of the same thing. is interesting because oil is stuck in this range in a matter if the company -- opec complying or not. joe: the compliance has been going well. here we are. scarlet: those are the market minutes. joe: now let's take a look into the deep dive in the bloomberg here you can see all of the following charts using the function at the bottom of your screen. give me one second while i bring up my chart. here we go. scarlet: 5965.

joe: it is a lot about government bonds, whether the rates will rally, this is a chart of u.s. investment and japanese investment. you can see a big selloff, worse since the taper tantrum. there is an element of growing concern overseas about this administration, a little bit unclear. but it started to catch people's attention for foreign investors in u.s. government in bonds. they have been selling off at a fast clip here he japanese are big holders, you can see the pace of the outflows. as is priced in yen. scarlet: these are japanese private investors. you also have the central bank cutting back their holdings of the u.s. treasuries as well. joe: we are showing no one adding to their u.s. treasuries right now. so stocks are rising to fresh records today, treasuries are lower. our next guest says bond bears,

beware. they risk the treasury market catching too many people on one side of the boat. joining us now is an equity strategist. great to have you back on this show. bet inhey are making one your view that rates are going to go higher, bonds are going to tolower, what are the risks your trade? what are the warning signs? >> we have a couple of things. we look at the commitment of traders data, cod data. it shows us the respect and the speculators who are usually wrong. they have record high short positions. so, and we look at the way the bond market has traded since the beginning of the year, we saw a nice little rally which no one was looking for. looks like we might be making a higher low. if we breakout higher again, we would follow that with a higher high, a lot of those will have

to scramble to cover. that is a big problem on the bottom side of things. scarlet: as the night we strategist from your perspective, we talked about the demand for treasury has moved from global to local. is this a good or bad thing? matt: in many ways it is good. we relapse so heavily on the huge ownership by both china and japan, both the people and the central banks, and we have concentration of holding outside of the u.s.. it creates a problem. it has not caused a big problem in recent years, for many years. is something we have to be careful of. joe: i am looking in my btv258, it shows the speculative position of traders of traders a very low, lower than it was in 2010.

another thing that you have been keeping your eye on and have been good for the last several months is the bond proxies in the stock markets, this etf that attract things like utilities. scarlett have a chart on her bloomberg. one of these telling us? matt: you look at the utility stocks, this is one of the probably most etf in the utility sector -- what we are looking at was the treasury prices, they are highly correlated for many years. but that broke down in the last few months. that tells me when utility stocks trade up, when interest rates go up, they go down. so the fact that the utility stocks are holding up, they just broke above the 200 day moving average and close at the highest level since before the election, that is telling us those people are not afraid of higher rates, but they are looking for lower rates. we are seeing that in the banking stocks as well. you saw a nice rally today, but

they are slightly above where they were two months ago. so it is a lot of things in the stock market, but there could be a chance for higher broad -- bond prices. scarlet: so the thing that attracts utilities is breaking away from tlt. do we see that in the other bond property type stock, whether it is the trust or the defensive names? do you get that same enthusiasm? matt: one of the things we are seeing is in the housing stocks. interest rates moving up would be negative for housing because people would get mortgage payments higher, but the itv, housing construction etf, that is testing its old high. both 2015 torom 2016. if that breaks up, that will be a positive breakup. i also look at lumber. lumber prices are highly correlated overtime with housing

stocks. housing equities. that is already broken up quite significantly. reasons to a lot of think if people are buying housing stocks, they were not expecting interest rates to fly out higher like people were expecting. joe: i want to ask you about something you wrote about the gap between financial media covering trump. if you point out you want that sunday shows, it is all about how trump's white house is a bunch of people leeching off of a terrible start, but if you follow some financial media, the trump rally, he is doing an awesome job. investors love it. why is this different? why is that interesting to you? one thing is, it worries me a little bit. you worry about people having taken news and some of the media is too right-wing, some of it to

left wing, but we have to worry about, what are they seeing? is it more pushback? we saw a couple of weeks ago, even though they are more bullish towards trump than d.c., they did talk about, they said flat out that mitch mcconnell and paul ryan hated donald trump and vice versa. is that telling us it will take longer for donald trump to be able to get these things past it ? if that is the case, interest rates will not go a lot higher if it is all people talk about. scarlet: all right, thank you so much for joining us. joe: i want to show you one of my favorite functions on the bloomberg. it is tv go. you can see live television programs. you can see all of the great analysis on the right, your deep dive, click on that, pop them up , save the chart, life takers, all right there on the bloomberg. even the bios of our guests.

that is what we were talking about. this is the future. scarlet: this is bloomberg. we will pick up right where matt left off with minute -- with janet yellen. she testifies. her term is up next year. she could give more clarity into the fed. ♪

scarlet: fed chair janet yellen will spend two days on capitol hill delivering her semiannual monetary policy report and taking questions from lawmakers. it is the first time she is meeting with the new conquests and president -- new congress and president trump in office. mike, let's start with you. the question of the hour of the week is really, will she give

any indication whether the fed may raise rates? mike: can you give half a loaf to somebody? she will try to options open and when the hearing is open, have the markets pricing the possibility but not the certainty. they don't want to give anything. they have a month worth of me data to go including numbers. half,or her to split in to continue using strange metaphors and try not to give a specific time zone or read on how soon they are going to raise rates. let's say everything is possible. of a big week between cpi and the yellen testimony. what are the currency traders pricing it right now? >> they are pricing in a small possibility the fed will hike as much as 30%. i think he is correct, she will

say this meeting is live, try to get that pricing option up a little bit just to give them that option. they always like to do that. pricing recession more in the past few days than more of what the fed is doing. what they are expecting is the fed will hike rates down one. scarlet: this is the work function, we have not brought it out in a while because we knew what the fed was going to do the last all around. but here we go. the odds of a rate increase, 36.4%. what is the thinking in the currency markets? does yellen want to get this to 45%? besomewhere around 45 would correct. i don't think the markets will put much emphasis on march. it is more looking like may or june. joe: what are people thinking right now with regards to the fed relationship and the house

-- and how the of ministration wants to reshape the fed? essential figures have been dovish, but now a more hawkish fed might be better with this administration's goals of getting 4% gdp. so as this administration filled these openings and eventually has to think about whether it wants to reappoint janet yellen, how are they approaching this now? the interesting thing is the man on every side of the issue and unafraid to take a stand on anything has said nothing about the fed since his election. donald trump at one point said the fed should be raising rates and criticized janet yellen for keeping them too low for political reasons, then he said they should continue to keep rates low. we don't really know the monetary policy side where he comes down. what we do know is that he is no fan of regulation. he is no fan of dodd-frank. dodd-frank is a big legislative monster that gave much of the

power in terms of regulation to the regulators to draw up. he does want to affect what happens in the banking system. he can do that through the appointments to the fed, particularly with a new vice chairman for supervision. the official title would be what ed has been doing unofficially for years. they could roll back regulation that way. that is something to watch. with three seats on the board, if he intends to get rid of janet yellen or stan fischer, he could put in some big names to serve for the rest of the year as a governor and then elevate them to chairmanship, january. scarlet: we have janet yellen speaking tomorrow and wednesday, but in between we get cpi data for january. this could be a difference. >> they are looking for 2.4%. that is a steep climb. we all know the fed likes to use the ecb, but driving this is

inflation. you cannot rule out how that income.disposable we will see real opportunities on wednesday which will give us that measure. joe: thank you very much. a reminder, you can catch the testimony beginning at 10:00 p.m. eastern tomorrow here on bloomberg tv. scarlet: shares of apple hitting a fresh record high and expending -- extending over alphabet as the most valuable company. they will help the company's business grow. alex webb inng in san francisco. we saw how apple shares are now at a new record high. apple out there communicating with analysts, giving them reason to be more optimistic? >> one of the interesting things, they talked about the

fact that the outgoing rate was relatively low, but they managed to sell more than that the most recent quarter. the added iphones they sold were from new customers. so apple with a large upgrade to be namedis tends the iphone 10, possibly the iphone eight. that inquires more people and existing companies will -- customers will upgrade. joe: one of the debates is how much credit they should get for the services business. some claim they don't fully get that price in the way other companies do. is there any evidence investors are repricing that source of revenue? >> it was one of the things they did highlight, but i think there is very much the expectation or perception that apple is the iphone company. they account for two thirds of their sales. what they do in services is significant for any other company. they did last year about $24 billion in sales, but that is a

small percentage of the overall pie. so that is not really affecting their valuation of this stage. comes to apple, we focus on the hardware. you mentioned the i-4 eight or maybe the iphone x. there might be augmented reality included in the phone. this would be a game changer. tim cook did an interview with the independent when he said if you see augmented a significant phenomenon as the iphone itself like the smartphone. but it is a broad spectrum. go could be pokemon considered augmented reality. it is quite rudimentary. you could take out any number of levels, things where you show your environment around you, and your shopping with that kind of idea. we don't know if something will come in the next iphone, to what extent it will be full a.r.

scarlet: in terms of the next level, everyone will look at what the company does with excess cash, dividends or vivax. apple only announces that once the year went turns to buybacks. we looking at more return to shareholders? >> that will always be likely, but look at their history. they tend to extend the buybacks and the dividends into a product lull. i look at analysis that that without the buybacks, their stock prices would be closer to $100. the expectation of a significant upgrade, they would not have to do that anymore to drive the stock growth, but the more considerate is what the trump administration is likely to do in terms of reducing the tax cost of offshore cash. that could free up money for that kind of movement.

scarlet: alex webb of bloomberg news, thank you. joe: in france, national front candidate marine le pen is rising in the polls. how her market is reacting to skeptic and protectionist proposals. we will look at that next. ♪

♪ a deep dive's take into the bloomberg. can find our charts using the function at the bottom of the screen. we want to turn to europe where marines a possibility of le pen being president. they are increasing around the first residential election in april, and options investors are now bearish on the euro since june.

this is the euro-dollar risk reversal. the difference that you see, we have circled them, show the bearish bets. see 2011, the greek referenda is the blue cycle. the referendum in pink, and the yellow at the end is concern about this presidential election. -- 236re now to start basis points down. during the greek crisis, they are higher. the trajectory was concerning. joe: we are not where we were during brexit, but you see the concerns start amount. 5962.ooking at gtb creditite line is the default swap. it has been surging. it was higher during brexit. they were not worried about france, but this is now about france. the blue line, which we have isn a lot, you can see there

lots of ways that this election is starting to seep into markets, including the cdf. ♪

♪ >> it is time for first word news. a judge rejected a request by two american indian tribes to halt construction of the remaining section of the dakota access oil pipeline until their lawsuit is resolved. the cheyenne river and standing rock sioux requested an injunction after energy transfer partners got federal permission to lay a pipe along the missouri reservoir. national security adviser michael flynn of the apologized aboute president pence his conversations with the russian ambassador. fox news cited sources saying

flynn apologized for saying u.s. sanctions never came up in conversation. it is reported vice president pence accepted the recall -- the apology. lindsey graham says he hopes trump understands that, quote, russian -- russia is not our friend. he says president vladimir putin is an enemy of democracy. senator graham said he will lead a push in congress to impose sanctions on russia for its interference in the u.s. presidential election. the un security council holds an emergency meeting tonight on the latest north korean missile test. the missile flew more than 300 miles and landed in the sea of japan. japan is urging china to take action against the north. one concern, pyongyang will be able to develop technology to develop a nuclear warhead. global news 24 hours a day, than 2600 more

journalists and analysts in over 100 20 countries, i'm mark crumpton, this is bloomberg. joe: let's get a recap of today's market action. green across the board. dow jones industrial average, rising 140 two points. s&p 500 and nasdaq both up 52 basis points. financial stocks led the way virtually all the sectors in the market, green today. the one sector to decline was telecom. you are standing by with a look at t-mobile earnings out tomorrow. scarlet: with president trump in the white house, analysts say the long rumored t-mobile-sprint merger has a chance of becoming reality. trump met with the sprint chairman, but -- who didn't believe he could get regulator approval. let's look at the company. already released preliminary subscriber data for

the fourth quarter and the key phone to watch here is postpaid customers. that number was 933,000, bringing the total to 1.2 million. the gains come at the expense of competitors. the back to the third quarter, t-mobile is the leading bar in the middle. postpaid net gains. t-mobile doing a better job of retaining customers. take a look at the declining term rate. an overall downward trend, which shows the rate of customers that stopped subscribing to t-mobile is falling. keeping the customers improves the annual adjusted earnings. eriod, last reporting p t-mobile raised its forecast to $10.2 billion. this comes at a cost. the average residue -- revenue per user is relatively flat.

1.5% from thedown preceding quarter. the ceo, who will be on this paston tuesday, weekend, in a move that highlights the price pressure in wireless, we saw verizon reintroduce unlimited data plans. the announcement drove t-mobile's share price lower. we will be following their earnings before tuesday's opening bell. joe: what'd you miss? the senate is poised to confirm steven mnuchin as treasury secretary as soon as today, three weeks after trump took office, making it the longest gap between administrations of the department. some of the leadership gap is ,eing filled by gary cohn trump's head of the national economic council. let's bring in salai how most in forow long, this delay

stephen mnuchin, how much will this harm him in terms of allowing gary cohn to become the administration's point person on policy decisions that are usually the domain of the treasury? >> it is interesting. gary cohn was the face of president trump's executive order calling for a review on dodd-frank. that puts him on the forefront of this effort. he doesn't have to be confirmed by the senate, so he can just jump in and start his job and doesn't have to wait, doesn't have to jump through hoops. meanwhile, steve mnuchin is hiding in the shadows. we haven't heard from him. if we are looking for quotes or guidance on what is going on with regulations or even the tax reform agenda, we can only look to gary cohn. it depends. once steve mnuchin is installed as treasury secretary, which could be tomorrow left of the vote tonight, it -- if he comes

out strong and there is a collegial attitude on the eco-policy team that trump put together, we could see him as a leader here. scarlet: i spoke with orrin hatch earlier today, and he gave me his response, his reaction to the fact that the confirmation hearings have been held up. basically him up for three weeks, it has been without honor, as far as i'm concerned. he is really, a very outstanding guy who i think can pull the country out of the mess it's in. usrlet: what can you tell about the dynamic between steve mnuchin and gary cohn? they worked at goldman sachs together for years. do we know how they work with each other, whether they have kept in touch while mnuchin has been waiting to be confirmed? >> mnuchin has been in some of the meetings going on in the white house. he was in florida with the team

when trump was meeting with his japanese counterpart. so he is not sitting and waiting and twiddling his thumbs. he is working out of an office, it's not the secretary's office, but there are a lot of strong figures in, on the economic policy team. it remains to be seen how they actually work together. once mnuchin is officially the secretary, it will be interesting to see what statements come out from treasury on dodd-frank and tax reform, and what statements come out of the white house with gary cohn leading. job,when he takes the assuming he gets voted in, which nobody doubts, what will be at the top of the agenda, besides dodd-frank? what else in the tax policy does treasury need to deal with? has been a lot of talk from trump and his advisers about currencies. they have job owned the dollar and talked about the euro and , theou one and -- the yuan

yen, the canadian dollar and the peso moving markets globally. there is a grace. the g-20 members will probably give to a new administration, and oncewill end mnuchin is at the treasury, his counterparts around the world have a number to call to talk to their counterpart and find out what is going on, when are you going to talk about currencies and what ever diplomatic way to want to talk. i imagine this will be on his list of things to do. scarlet: they can always talk to david, the president's nominee for treasury undersecretary. what is the thinking from him when it comes to the u.s.'s currency policies? strong dollar or weak dollar? >> we haven't heard much from him. he will have to go through the senate, and if there is a conversation -- a confirmation

hearing are any questions you has to answer, maybe he will come before the news media before then. joe: has anyone talked about the debt ceiling? what is happening with that? >> there is talk. a lot of it came out during mulvaney's hearing and mnuchin's hearing, and mulvaney himself and mnuchin actually have very strong contrasts in how they would approach a looming debt crisis. mnuchin's words are something that market participants would like to hear, that he would not want to broach the ceiling, whereas mulvaney seems to be a bit more brazen. i guess we have to wait to hear from the president on what the approach will be. this will be a big topic in a few weeks. scarlet: a lot of the treasury department to tackle. thank you so much. coming up, we hear from the former aig ceo on reaching a settlement with the state of new york, putting an end to one of the most high profile cases on

wall street that has dragged on for more than a decade. this is bloomberg. ♪

♪ scarlet: former aig ceo hank greenberg reached a settlement with new york, putting an end to a high-profile case. he spoke with bloomberg anchor betty liu today. has been going on for too long, 12 years. of your life. >> lots of people spending a lot of money. think about that. we settled for $9 million. scarlet: betty, this is a lawsuit that eliot spitzer

brought on against hank greenberg way back when. betty: it led to the ouster of hank greenberg from aig. he voluntarily left, but he was threatened by spitzer, either you go or there will be criminal action taken against you. the $9 million, this was a $5.5 billion case when it first began. that is how much damage the new york state was looking to get out of hank greenberg and aig. is this a victory? in divorce court, there is never a winner on either side. but he is ever actually that happy. you heard the new york attorney general say this is a vindication for them, but at the same time, they came away with $9 million out of $6 billion. joe: greenberg seems to blame has ouster for the eventual downfall of aig, in the sense that would he have been there, they wouldn't have gotten downgraded and that wouldn't

have triggered all the margin calls. the incident is massive. to this day, he says that if he had been there, he would have watched out for the financial products and would not have allowed aig to get into those trades. this is what he said about what he thinks of aig today. >> they are shrinking the company, selling off assets. i'm sorry to see that happen. it is no longer the preeminent company in the international field. i'm not sure if you can call aig a shell of a company. they still have 50,000 plus employees. they are pretty substantial, one of the largest insurance companies in the u.s., if not the world. they are shedding assets and becoming a different company. they are reporting the results they ares week, but

deemphasizing hedge funds and going into mortgages, selling off international assets, becoming more domestically focused. in terms of activist shareholders and investors, they seem quite pleased at least, with what aig has done. ae: i want to talk about shell of the former self. this is a chart of aig market caps that i am looking at in the bloomberg, at its peak during the bubble, it was over 200 billion in 2005, around $180 billion in 2005. it has come back quite a debt, but you could say based on market cap, all the dilution from the bailout was a massive hit to market caps. a long way to go until it is near its old heights. betty: it has bounced off of the lows. tom not sure, you would have , does it want to be as big as it once was?

they may well be happy with the trajectory they are going on right now. but not hank greenberg. scarlet: he still thinks back on those days. state sought to bar him from participating in the securities business as part of the lawsuit. scarlet: what is he doing now? he is a shareholder, but he is not involved in aig. he is still certainly, he watches what goes on there. he is still a shareholder. he lost a substantial part of his wealth in the whole downturn of the company. still anespect, he is interested observer. you raised the point about barring him from the securities industry, the attorney general also wanted to get other actions against him in the settlement. they didn't. for instance, not allowing him to serve on public boards.

they didn't get that is part of the settlement. as i say, it is not a win-win for either party, it is more like a lose-lose. scarlet: no one comes out of it happy. betty: they are putting it behind him. tomorrow,etty liu, aig will report earnings after the bells. we will break those numbers when it happens. joe: next, we hear from ambassador michael froman, former u.s. trade representative who spoke to david gura about globalization. this is bloomberg. ♪

president trump posted canadian prime minister justin trudeau today at the white house. the agenda included trade, president trump says he wants to renegotiate parts of nafta and said in a press conference that he and trudeau agreed that they will tweak trade. two thirds of canadian trade is with the u.s.. >> our economy benefits from the over $2 billion in two-way trade that takes place every single day. millions of good, middle-class jobs on both sides of the border depend on this crucial partnership. bloomberg's today,

david gura talked to former u.s. trade representative, ambassador michael froman. he broke down what trade issues exist between the countries. mr. froman: when people talk about renegotiating nafta, there is greater focus on mexico and the concerns that some people have about the relationship with factories moving across the border, and into mexico. the fact is, we haven't -- we have an integrated north american production platform that includes canada as well as mexico and the united states, and in certain areas like auto production, it is very much integrated across our northern border, as well. there are a lot of issues there. with tpp, we were able to renegotiate nafta by getting access to canada's dairy and poultry markets, by strengthening intellectual property rights and improving the investment regime for american firms in canada.

the question will be, when it comes to renegotiating nafta, what does the trump administration seek from canada? there are a number of outstanding issues. canada has a deeply protectionist regime, and we have a dispute over lumber that should get resolved it there renegotiation. keeping our wine out of their grocery stores. there are a lot of issues to talk about if trump is serious about renegotiating. david: you think it is written -- worth renegotiating? nafta is 23 years old. whenroman: senator obama, he ran for president, talked about the renegotiation of nafta. that is what we did with tpp. represents a significant improvement over nafta of 23 years ago. the question is, what further steps does the administration want to take to go beyond that? we haven't heard a lot of specificity, with mexico or canada, but that is the question on the table. of office been out

for a few weeks. i imagine you thought a lot isut where multilateralism headed. is it too early to write an obituary for multilateralism? mr. froman: globalization itself certainly is not dead. while the administration has taken a step back from some of our international trade commitments and our approaches, the rest of the road is moving ahead. they are furthering integration through trade agreements. china is leading negotiations with 16 countries ranging from india to japan. they will try to get that done this year. we have seen, even in the context of brexit, the u.k. is focused on not pulling back from trade, but negotiating further deals with the u.s. and a lot of other countries around the world. globalization continues. the question is, is the u.s. going to be part of that and help lead it and shape it in a way that reflects our interests

and our values, or will be sit him the sidelines and let other countries like china define the rules of the road? that was former u.s. trade representative ambassador michael froman with david gura earlier today. scarlet: it is time for a look at the big business stories in the news. is really drugmaker -- an israeli drugmaker works to reduce debt. according to people familiar with the matter, the business could be valued at several business -- several billion dollars. they may selloff non-core assets. verizon will begin offering unlimited data. it is an about-face for the provider, which has steadfastly refused to offer unlimited data plans. they will charge $80 per month per user and $180 monthly for a plan with four phones. facebook redoubled efforts to reach an agreement with the

music industry, according to negotiators. a deal would cover user generated videos that include songs, and it could pave the way to get professional videos from the labels. glencore agreed to buy out an israeli billionaire's stakes in cobalt mines in the congo. the deal is valued at 960 billion -- $960 million. cobalt has risen 75% in the last year, due in part to demand from tesla, which uses it in its lithium-ion batteries. the chairman of bloomberg lp is a nonexecutive director at glencore. that is your bloomberg business flash. joe: coming up, what do you need to know for tomorrow's trading day. this is bloomberg. ♪

♪ all four major indexes in the u.s. rising to record highs.

joe: more green across the board. scarlet: financials were the leading advance as everyone awaits details of the tax plan. what's coming up, don't miss this. the bank of japan governor will speak at a map -- an economic conference tonight. tomorrow, janet yellen testifies before the senate banking committee. that will be 10:00 a.m. eastern and we will have full coverage on bloomberg. scarlet: credit suisse reports yearly earnings, t-mobile and aig report fourth-quarter results. have a great evening. this is bloomberg.

♪ >> let's start with a check of your first word news. president donald trump and canadian prime minister justin trudeau use their first

face-to-face meeting to promise action on improving access for capital for female business owners, and adopting policies to help women stay in the workforce. trudeau lauded the leverage that in businessuccess provides to the u.s. and canada. in taiwan, a tortoise flipped on a highway -- a tour bus flipped on a highway. most of the passengers were believed to be senior citizens. this is bloomberg and we will go to breaking news. caroline has more on that. caroline: the trump administration, now breaking, saying it is readying sanctions against venezuela's vice president. the announcement comes after a year-long investigation and has into his alleged participation in drug trafficking. an amazing piece of journalism.