how specific he will be on policy goals. the president is expected to incorporate his recent talks with law enforcement onto -- into the address. you can watch that live on bloomberg tv at 9:00 p.m. new york time. russia and china today vetoed a russian backed resolution that would have imposed new u.n. sanctions on 21 syrian individuals, organizations, and companies allegedly involving chemical weapons attacks in the war-ravaged country. the security council resolution would have banned all countries from supplying government with helicopters, which investigators were determined -- have determined were used in attacks. and china made an outrageous and indefensible choice today, refusing to hold bush are allah side's regime accountable to the use of -- regime accountable.

mark: the international chemical weapons watchdog determined the syrian government was behind at least three attacks involving and the islamic state extremist group responsible for at least one involving mustard gas. another said the only way to protect scotland's's interest, according to the congress passes first manager who said the u.k. must soft and its plan to leave the european union and its market. sturgeon set factions in the u.k. parliament want to use underminean excuse to the autonomous government in the capital. he has been pushing to remain inside europe'single market. malaysia plans to charge to does women with murder in the death jong-ilrother of kim

and pier 1 woman from vietnam and the other from indonesia. they could face the death penalty if convicted. he was poisoned by a powerful .erve agent global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, i am mark crumpton and this is bloomberg. ♪ scarlet: live from bloomberg's world headquarters in new york, i am scarlet fu. joe: i am joe weisenthal. scarlet: major u.s. indexes lower today with retail stocks on the slide. joe: the question is what did you miss? scarlet: lawmakers and investors and the american public eagerly

awaiting the -- the president to provide clarity. traits most at risk at record highs or roundabout, it begs the question which will be most vulnerable and what strategies would outperform. bond market, skeptical the federal reserve could hike rates in over two weeks. now, you areg looking at video of john williams speaking at the santa cruz chamber of commerce. headlines saying up march is very much on the table for serious consideration. you see the reaction to that, dollar higher on the news. he characterizes the current stance of monetary policy as, still has the pedal to the metal. easing mode but once to avoid the economy getting too

case for gradual easing. he wants to keep the expansion on sustainable -- not undermining the fed's hard-won game. >> interest-rate increase in march was pushed higher. almost 62% per earlier today, it was at about 67%. 46%. joe: a really big move yesterday, a big jump and people were not 100% y, further moved today on these comments. yellenn the week, janet will give a speech on the economy. that one will be big in terms of setting expectations for the meeting. at where the major averages stand as we head toward the close. abigail doolittle is standing by. abigail: the clive's four averages heading into the close. the nasdaq all trading lower. the nasdaq trading down the most come about .6%.

down today, finish it will break a long winning streak. yesterday marked day 12 p or 1929 and 1970, everyone is looking to see if the dow will finish higher today for the 13th finish higher close gain. dow may be down slightly but we are seeing interesting reversals at the end of the day. this is all ahead of president trump'speech this evening. a lot of sectors will be potentially vulnerable. none more than financials. the top sector out of the election up 24% gaining as yields climb. this represents the real inflation trade. investors are really hoping for growth and inflation. it will be interesting to see whether policies support that or if you see some sort of reversal. you take a look, this takes on two topics in one. in white, we have the

construction and engineering index. up 26% since the election and hopes that president trump and his policies will reinflate the economy through infrastructure and building and construction. a lot of uncertainty. in orange, the 10 year yield is very interesting. on the re-inflation trade, now stalling, investors are really looking for details as to what is ahead to break the sideways stall. joe: thanks. what did you miss? president trump to give more detail on his infrastructure plan before congress tonight, people hope. partnerrvine business helped to propose a plan promising to produce up to $1 trillion worth of projects at no net cost. our next guest says the plan is unlikely to succeed and could prove in efficient or even

unproductive. , a lot of now excitement in the market ever since the election. this idea it may be open again, how should it be funded? the question always comes up, where will you get the money? is presidentthing trump will focus on the fact that infrastructure funding has fallen on the list of priorities for too long. it is one of the issues if not the only issue supported with bipartisan support up and down the federal, state, and local level. it will be funded through good old-fashioned municipal securities first and foremost and will remain a cornerstone. there is an emerging model that will be used. model, you will see investment opportunity. try that at woody, private debt,

and equity bonds. we will focus on opportunities within private debt and the municipal bonds phase. >> you had written an op-ed in the hill. you talked about pe firms and how they raised a large amount as much a $16some billion. one good investment presented,es are investors will gladly accept tax credits but they do not need the subsidies. they want projects that make sense. plan, wheres to the does that fall short? you argue that investors do not need the tax credits to get it going. ongoing.already you take a look at local airports, a lot of capital is sitting idle and looking for projects. there is not enough to find good off theere they come sidelines quickly. hundreds of billions of dollars are sitting idle looking for good projects.

credit, and itax is unnecessary to attract a private capital. there may be a place for it in this lower profile type projects and the smaller regional type projects where you want to attract private capital but also monetize the revenue stream or there might not be a revenue stream. at the early stages, you do not need it. the i want to talk about big picture case for infrastructure spending. looking back over the broad history of nondefense public spending, you can see back at the eisenhower era, huge nondefense government spending as a share of total economy, then there was a little bit of the recovery act after the crisis and very little today. for infrastructure spending today, is it about creating an economy that can be it hasoductive because

better bridges and airports, or is it about the stimulus, money goes into the economy and puts people to work and get that money off the sideline -- sidelines? >> this story today is no different than five or 10 or 30 years ago. we need better infrastructure and to improve the productivity of the economy. infrastructure investing will spark the multiplier effect. it is no different today really. -- theydifferent is the do not have the capital to embark on large capital programs. why you need to invite the large capital. citizens of the united states will privatize infrastructure. what it does is transfers the economic risk of infrastructure project for a set time. but it just remains on the public allen's sheet. joe: on the federal level, the government is still borrowing money at the lowest rate in

history. is there really any shortage of money? why do we need private sector money at all? >> because the public talents sheet is spent. there is too much debt on the federal, state, and the local level. then you have to look at the social promises left unfunded. a lot of financial stress with -- stress within the public -- there are pockets of weakness and strength. broadly, flexibility is relatively low. >> you talk about australia and europe being accustomed to private of a structure but we are not comfortable with that idea. parkingnk about the meters and the disaster that turned out to be. how do we avoid a situation like that while keeping our mind open to private of a structure? >> we need to rework our regulatory process. it is literally out of control. it takes up to 60 years to get a permit.

then you need a surveillance system with in the structure, that will monitor the progress of these projects and make sure they are on time and on budget. projects will be 20 or 30 years in length. we will need that mechanism to make sure when the public aspect comes back to the public sector, that is in good working order. >> thank you for joining us. catch bloomberg's coverage of president trump's address tonight beginning at 9:00 p.m. new york time. ahead, the starbucks ceo talks to bloomberg news about corporate taxes. we will bring you highlights. this is bloomberg. ♪

scarlet: starbucks setting up shop in italy for the first time, it will open up a location next year. francine lacqua stoke -- spoke to howard schultz yesterday and asked him about the larger role starbucks plays on the global stage. >> we are living in a world today that is very fragile. there is a lot of uncertainty and we have the obligation and responsibility as a company to add value to humanity. if i could say it in my own parlance, it is a time where we as private citizens and business people need to build bridges and not walls. announced the you hiring of 10,000 refugees? >> that decision was not a political decision. it was based on the values of our company and guiding principles.

life,eve strongly that in your sexual preference, the color of your skin, the country you were born in, it should not define the opportunities we have as people. if starbucks as a company can create an environment where the entrepreneurial spirit and the opportunity of everyone is based on merit, i think then we are doing a good job. that is what i want to do as a company. >> do you see the fabric of america change in? aboutm still optimistic america and we are clearly going through a change and inflection i am theitically, but quintessential optimist about the promise of america, the american dream, and i want to do everything i can to be a symbol for american ashkenazi and a values-based company. >> do you thick a lot of ceo's's

will follow suit with what you're doing? >> i think more more people recognize we have a responsibility as business people to add value back to our society. for othertudy ceo's's. i can only speak for myself. i want america to succeed and to do everything i can. >> are you said you are stepping down as ceo? >> this has been planned for quite some time but i'm stepping down to do something quite exciting, to build an ultra premium brand. and most important way, enter italy. this is actually a sense of personal achievement? me, i was talking to my kids and my wife was traveling is a veryhis emotional moment for me. i've waited a long time to do it. i feel like it was just meant to

be, waiting for us. so this is a significant milestone for me personally. >> do you travel and speak to politicians a lot in europe? >> i do. i am trying in the sense to understand the world and bring sensibilityding and , i have been asked to speak to many places. i am to universities this afternoon. to be an ambassador for the country and also try and demonstrate a high degree of things ity about the think are really important, to build a great and enduring society, and that is to embrace humanity, once again, not to repeat myself, but this is a time in the world to build bridges and not walls. austrianke to the

chancellor a few days ago on our show and she was mentioned starbucks because of taxes. how do you respond to the criticism? >> without criticizing any particular person or minas a sometimes, a company as iconic as starbucks gets pulled into things that the whole story is not really told. of tax 18 million pounds .ast year in the u.k. i think that is emblematic of our commitment to do things the right way. i believe 100% interest pair in c and i want to make sure there is trust in everything we do. we are an open book. customers impact your , or du do it as a ceo to matter what? >> we want to pay fair and

equitable taxes. let's put that aside, 100% of the time, and never do anything else that could remotely be inconsistent with being ethical and doing the right thing. the decisiono about refugees and things of that nature, i think it is important to embrace your core purpose and your reason for being in all aspects of business. and leadership, and being a strong leader cannot be when it is convenient. it is easy to be the great leader when you have a wind -- the wind at your back. it is harder when the wind is in your face. leadership is defined, many times, when you have to make a tough but just decision. we employ 230,000 people. the question i ask myself, when we are making tough decisions is, will this decision make our people prior -- proud?

our profitability and financial success as a public company for 25 years, is a record of incredible achievement and that achievement is based on the fact that we have done the right thing achieving fragile balance between social impact and being a values-based company. we are not perfect and we make mistakes but our heart and soul and commitment is always at the front. a starbuckst was ceo howard schultz speaking to francine lacqua. joe: time for a look at some of the biggest business stories in the news right now. 64.2% stake in plastic maker after the value of the holdings soared. bordersess of securing started today after the market close in germany. be allocatede to tomorrow. fidel the investment is offering buyouts to 3000 veteran

employees to reduced cost and open opportunity for staff. that is according to a person with knowledge familiar. worked 10 years of the company, they are eligible. -- package will include's health care coverage and six months salary. update.your up next, with trump set to deliver his first major policy speech to congress at 9:00 p.m. in washington, we will look closely and see whether or not the records have been all that dramatic. this is bloomberg. ♪

scarlet: the dow had been on a tear to be for today -- before today. trading range minimal, record lows in fact. this is from dan, our bloomberg television producer.

blue bars show the daily percentage change of the dow. the low line is a 40 day after. on february 14, let's go all the way to the end of the chart. you can see the yellow line has come way down. lowserage of .5%, highs to in the last 40 days. the lowest 40 day average since 1987. back to 1987to go for a couple of different staff including the longest winning streak. the year is coming up a lot but it is interesting because does that mean the games are more sustainable because we are itching our way higher? it is hard to say. joe: it is a cool chart. we don't know if we see moving averages of volume that much but it cuts to the noise to show how quiet it has been. to try tong at europe look at another gauge of the anxiety investors feel going into those elections. this white line here is a chart of euro three month risk

reversal, the swiss franc, of course. it is a measure of how much people are willing to pay for downsized detection. you can see a big move, the may 2 round election comes into a three-month window. you can see a big drop signaling how much protection people want. for comparison, the blue line is swiss franc reversal. brexit never got this deep. even in the run-up to brexit, the amount people were paying for protection was not as expensive as people are paying out for euro protection. it is not just france. it is the netherlands, all kinds of reasons for people to be nervous and think about wanting to buy protection. shows how big beings ideas. scarlet: it is because there was not a rush to production because known believe that vote would happen. and believed it and now people maybe overcompensating.

scarlet: the market close is next. take a look at major indexes. the dow off by eight points. this is bloomberg. ♪

scarlet: we are moments away

from the closing bell. "what'd you miss?" a tone of caution spreads in financial markets before president trump addresses congress tonight. i'm scarlet fu. joe: and i'm joe weisenthal. ourant to welcome you to closing bell coverage every weekday from 4:00 to 5:00 p.m. eastern. ended,: the street has the dow falling for the first time in 13 days, ending its 12 day winning streak. the s&p 500 losing .25%. we did get a ton of data today, but did it change the future all that much? joe: not at all. this is a quiet day. it's interesting that the streak is over, nonetheless. scarlet: if you look a different sector performances, come inside the bloomberg here. you can see that three of the

groups are higher, utilities, staples, and materials. you neither here nor there, also have financials is one of and it didperformers not decline as much. we're looking at gains of 1% for the utilities and .3% for consumer staples. i also want to look at the vix as well. of moves of the last couple days have been minimal, but we've seen a little bit of a move higher in the vix, approaching 13. 12.82. the average over the pastor has been 14, so we are still below the one your average and certainly below the historical average. joe: perhaps in anticipation of tonight's speech. the big action in the bond market was in the two-year yield. a lot of that came this afternoon with the headlines out of williams that marx was in

play as a possible month for a rate hike. the last two days we've really seen that come up more and more. the 10 year yield is not really .oing anything today not a lot of action there, little higher on the day. so the fed is the big mover today. take a look at the dollar index. this is the intraday chart. the steady march higher in the afternoon. we hit session highs about the same time that the news about williams crossed. saying the fed is close to his goal. there's a live shot of the speech taking place right now. more headlines are crossing. joe: he mentioned earlier march on the table for serious consideration. he said he doesn't expect

interest rates to get dramatically high so it will not steepening.ense yieldts to normalize, the curve slope to be more normal. a lot of talk about this need to normalize. policy is still easy, we just don't want to go crazy. we want things to normalize that were not going to hike like crazy. williams is not a voting member of the fed this year. joe: but he is influential, exactly. scarlet: let's take a look at dollar-yen as well. traders reducing their risk exposure before tonight's speech. there is a move higher for the dollar following the williams comments, but for the most part, you can see that the yen is still stronger on the day. this is a two day chart there. the stock rebounded after better than forecast data out of

sweden. the swedish krona was the worst performing major currency against the dollar in february and were seeing a little bit of a give back right now. quick look ate a commodities, oil, corn, and gold. gold down there at the bottom, not doing much. corn is one of the big gainers on the day. corn futures had been up over 3% on a possible proposal to deal with renewable energy credits, and ethanol, which is very controversial in a lot of political debates. so corn is having a good day. scarlet: that is today's market minute. joe: president trump expected to give more detail on his defense ending planned when he addresses congress tonight. bloomberg has learned his administration is proposing a 37% funding cut to the state department and the u.s. agency for international development. immediate pushback

from senators on both sides of the aisle. here with more details about what we can expect is shannon, who is with us from the white house. a few very much for joining us. this is the day we have to get the details, this is when we really need to know what the administration is going to do on taxes and all this other stuff. what is the answer, or were going to get some real stuff tonight? shannon: i haven't seen a copy you'respeech, but if expecting everything to be crystal clear about health care, taxes, the budget, you're going to find yourself very disappointed. we will probably get a little more clarity and insight than your typical campaign speech, but i think it will only be in very broad priorities and i don't think he will get any granular details to remove any of the uncertainty overhang in the market right now. scarlet: having said all that,

when the president speaks in the joint session of congress within the first 100 days of his presidency, typically his audience is to the lawmakers. he's trying to get them on board with his agenda, rather than to the larger public. it's not a campaign speech anymore, is it? campaignno, it's not a speech. everyone keeps saying they're hoping for a trump pivot, going deeper into policy and of these broad teams. so far, what we've heard is it will be around the broad themes and no one just wants to leak out the details. it still the idea of america first, still talking about obamacare and big ideas of everything is going to be great, obamacare is terrible, we are going to exit, it will be wonderful, but not laying out here are the five things we need. maybe that will say something like we have to have a safety

net for people who lose coverage. lose a planing to because of what we do. maybe we will see some priorities around obamacare, but on infrastructure, it's probably going to be a broad idea. where we going to do it and how will we pay for, i don't know. some of's talk about these budget priorities. we know the administration wants a big increase in defense spending, and also some controversial spending cuts to usaid, things that have already been criticized publicly. bid,in called an opening but what is the white house signaling by specifying these areas for cuts? shannon: they're signaling that they won a budget that's focused on defense and national security, which the president said he promised the american people what he feels are the

important priorities, defense and security. so that's what the budget signals, that he's carrying through on that promise to defeat isis and protect our budget -- protect our borders. the epa will continue to be a target in this budget. it's a little unclear what signal he's trying to send with the state department, but it comes across that defense and military and building that up will play a more important role than diplomatic negotiations. scarlet: what will not be a target are the entitlement programs, which sets an interesting tension between the white house and paul ryan, this eco-, who has made clear for years that there needs to be some kind of reform of medicare, medicaid, and social security. shannon: and the president promised on the campaign trail that he was not going to touch those and he would keep his promise to the american people, so sticking with not touching those entitlements, which could

set up about a with congress. towould not be surprising see a few battles with congress over this proposed budget as things get going up on the hill. scarlet: jpmorgan ceo jamie dimon weighed in on some of the priorities of the administration. let's take a listen. isone fundamental issue whether a obamacare comes first. that will maybe make it hard to get something done, so the timetable is very important. if obamacare comes first, it will take 12 months to do tax. the presidenthat has suddenly discovered that obamacare is very complicated, are we pretty much not expecting anything on tax reform in this speech? shannon: i'm glad you raised that, obamacare is no simple solution. you have moderate to don't want people to lose their insurance without some safety net, you have conservatives who don't

want to pay for a safety net. for decades congress has struggled with it and it's not going to be an easy fight, so yes, it's how they get through that and what costs will be associated with that, a lot of other things will be locked down and the -- the agenda the president has could be stalled if they don't figure this out. but it is complicated. scarlet: shannon, thank you so much. you can watch the speech live in full on bloomberg television. special coverage begins at 9:00 p.m. eastern time. joe: and more breaking fed relevant headlines. new york fed's dudley saying in an interview with cnn that the case for tightening has become a lot more compelling. he said the fed should not overreact to every stock market move, but that the data is currently consistent with above trend growth. earlier in the show we brought

you those headlines from the san francisco fed williams. now this is dudley. so this is to fed speakers in a row making that case that the time is coming for more hikes. it will be interesting to see the market reaction. once again the case for tightening becoming a lot more compelling. scarlet: and the odds of a rate hike in march have climbed heavy 5%. this is a massive move from yesterday. ago,s at 56.6%, at a week it was at 43%. we are now at 5% on four of march i on those comments from john williams and build ugly. .e also -- and bill dudley fourth-quarter adjusted earnings per share beating highest analyst estimates for sales first -- salesforce. the stop bouncing around a little bit, all but .4%.

we will keep you posted. this is bloomberg. ♪

joe: earlier in this hour we fed officials, john williams in santa cruz and the new york fed president, build ugly, most making -- both making -- new york fed president bill dudley, both making the case that tightening is becoming more compelling. the drumbeat is really building up and as you have noticed, it's being priced in quickly. scarlet: if you look at the work function on the bloomberg, were now looking at 78% odds of a

rate hike in march. just a few minutes ago when the headlines broke, it was at 75%. 56%.er today it was at a week ago it was at 43%. so there is a march higher in the on for a rate increase coming later this month. with our more on this guests. headlines fromse fromwilliams and john williams and bill dudley. is there concerted effort at the fed to make sure -- >> giving the message it's definitely going to happen march 15-they're trying to reduce speculation in the market, much as they did, if you recall, in

the august 2015 jackson hole told youhen they almost for certain in the september meeting that were going to hike. i took the position they were not going to do that, and at the last minute they back off and nothing happened in september. and they blamed international considerations. now are coming up on march 15. we have the netherlands elections and we will be getting close to the developments in the french elections, the first round of which takes place in april. the global conditions are going to be very murky as well for the fed to do it. finally, look at what happened just this morning, 8:30 a.m. new york time. with her that the fourth order gdp was a meager 1.9%, and this has been the slowest recovery bar nine since the great depression, especially when you compare this recovery with what the 1980-19 81

recession. much lower, and were still talking about a rate hike despite that. scarlet: and to bring up that point, this is a chart of the gdp breakdown. the red line is the one we are all focused on because that is consumer spending. you take that out and it looks like everything else barely grew. joe: that is the big question here. now it looks like march is a real possibility. if there is a hike in march, it would inevitably be perceived as a hawkish hike. what do you see happening to the dollar in that scenario? our equity markets pricing in that sort of possibility? .> good question idle think it's going to happen in march, for other reasons. earlier laidou had

out what the speech is going to be tonight, without specifics. with the tax stimulus not coming until 2018, the fiscal stimulus gives the fed ample opportunity. if it does hike, i think it would be a quick blip and with this cool stimulus being delayed, the potential for the head to file -- the fed to hike again for the rest of the year is limited. >> i have to agree with vents, even though we don't want to agree at all times, i do have to do that. going toanet yellen is keep her title, she will be once a year yellin. scarlet: does that mean the fed is being politicized? is there pressure coming from the white house for the fed to stand pat and not do anything?

>> i think the fed has always been a political organization. we've had time and time again when the fed chair has been fully by the president -- has been bullied by the president. it happens when brother burns became the chairman. it increased in 1971-72 to finance the vietnam war. we had g william miller, who was very much under president carter's thong. -- under president carter's thu mb. governor we had a fed who contributed to the hillary clinton campaign. so there's not too much evidence of political independence in the fed. alluded to it earlier, ,he dutch election coming up

and the second round of france in may. how does this fit into the currency market and where could the euro go from here? >> the markets have fullback on this political uncertainty, which may be a mistake. france is looking more and more is going to win the whole thing. angela merkel seems to be doing ok. aeece and italy could become problem. you can skirt the main elections everyone's talking about and not hit the issues. normally what hits europe is what people are not looking for, is a good thing with the entire election coming up. >> you are spot on, scarlet. unlike mexico, for instant,

which is a favorite target, the europeans are much better able to react. and it'sh wealthier very important on a global scale. that's the reason why president trump has focused not just on europe in general but against chancellor merkel in particular. his focus has been to say that the eu is not a credible entity. he has supported the breakup of britain and the brexit, and has , the u.k.heresa may prime minister, to washington dc. all of this suggests to me that he's tackling europe in a way different from what he is done with respect to china and mexico. scarlet: let's bring it back to currencies before we let you guys go. thence, i'm looking -- thence, -- vince, this is the pear to watch tonight.

x i think so. you're talking about the euro with political uncertainty and brexit, etc. dollar-yen and yen in general will likely be the focus for traders. there could be a lot of trouble tonight. joe: an awesome conversation, both of you. thank you verythank you very mu. yield, everyg real friday at noon. i'm excited about that show. this is bloomberg. ♪

scarlet: "what'd you miss?" the enday be great at of president trump's possible eight years running the country, or perhaps not great at all. take a listen to larry summers. is thatoncern right now a lot of things, starting with the stock market, or very much looking the way they did in march of the herbert hoover administration. that was an administration that didn't work out so well for the economy. scarlet: larry summers of harvard. when you look at the chart for a very long trend

channel that shows things have been going very well, but it may be at the end of its rogues here, because we are at an inflection point and it could very well top 4000 if things continue moving, or to plunge. there's a lot of room for upset. chart becauseat what it really shows is that stocks go up. maybe you could say the s&p 4000 under trump. i want to talk about france and the possibility that populism unlikely rise may end up being a winner in the french election. to candidate marine le pen made the case on bloomberg surveillance this morning. onthey were completely wrong

brexit and they've been consistently wrong for weeks and months prior to those two major elections. i can to you one thing, they will be wrong this time also. an election is about dynamic, and it is clear to all observers and to all french citizens that the dynamic is really on our side. that was the business advisor to the national front, earlier on bloomberg surveillance. scarlet: coming up, will get one investors take on what he thinks of the increased odds of a march rate hike. some.ccording to this is bloomberg. ♪

scarlet: breaking news, time inc. is set to ask suitors to submit their offers next week. five havehows that expressed interest, including meredith. one of the other three bidders is a publicly traded company. shares up by 1.7% in after-hours trading. let's get you to the first word news headlines this afternoon. mark: president trump today signed to bills aimed at helping women in science, math, and engineering. bill requires nasa to submit

a plan to support retired astronauts doing outreach to students.2 the second bill authorizes the national science foundation to support entrepreneurship by women scientists. towed and china today be a western backed you in resolution that would've imposed sanctions on 21 syrian individuals, organizations, and companies allegedly involved in chemical weapons attack in that war-ravaged country. repeated security council resolution would ban all countries from supplying the syrian government with helicopters which investigators determined reuse in chemical attacks. >> russia and china made an outrageous choice today. they refused to hold the assad regime accountable for the use of chemical weapons. turned away from defenseless men, women, and children, who died gasping for breath.

mark: it followed a joint investigation by the u.n. and the international chemical weapons watchdog that determine the syrian government was behind at least three attacks involving chlorine gas and the islamic state extremist group was responsible for at least one involving mustard gas. president of france was speaking at an event to inaugurate a high-speed train line in a western town today when he was interrupted by a gunshot. president hollande remained composed throughout the event which police say happened when an officer accidentally discharged his weapon. two people were wounded and there is no word on the extent of their injuries. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more

than 120 countries. i'm mark crumpton. this is bloomberg. thanks, mark crumpton. let's get a recap of today's market action. slight selloff across the board, the dow cannot like continuing streak, ending down 25 points. the nasdaq down .6%. all the anticipation is on tonight trump speech. we had some fed speakers today at 3:30, not helping the markets turn green. a bit of a selloff, and we have some news about the next chapter in the potential trump immigration been policy. the original plan was struck down. to new order may only apply -- the administration trying to figure out how to create a workable version of that plan

that will pass muster with the courts. this is one detail of how they might do it by not applying the order to existing visa holders. scarlet: we will wait to see if that is part of tonight speech as well. all eyes on capitol hill tonight, the president preparing to give his first primetime speech to congress. thoughts fromng two fed leaders saying the case for tightening in march is compelling. , the odds oft ois a rate increase in march has gone up to 78%. here's another way of looking at it. in odds for the rate hike march have spiked up because just a few days ago it was nowhere near that level. earlier this month it was in the neighborhood of 32%. a pretty remarkable move. let's bring in a portfolio manager who joins us from

sarasota, florida. i'm sure you heard the comments from san francisco fed president john williams that there's a compelling case to be made for a rate increase in march. why do you think the fed officials are coming out in such forced to make clear that march is very much on the table? next the fed wants to restore its own credibility. they're just basically telling the truth, there is a good chance there will be a rate hike in march and they want to prepare the markets for that likelihood. joe: the other story besides the fed is the big trump speech tonight. what are you looking for, do you buy the story that there's a potential for disappointment if we don't get real details? >> i would love to have the president lay out a specific plan, but that's not realistic. that's not what usually happens in the speeches. we will look at exactly what he

does have to say. the chances he will say exactly what the market wants her pretty low, so there could be some negative surprises. if you look at the way the market has acted, they pretty much suspended disbelief and are willing to bet on the longer-term story of equities. goodundamentals are pretty also. scarlet: given where we are right now, the dow had 12 straight gains -- days of gains. if we get no details, as most people expect, do we continue to grind higher, or do we get a selloff? >> there's always the possibility of a modest down drop in stocks. that's just the nature of the beast. , that trite observation could be said it anytime about the market. the trend is still higher, there , but the fact is

the underlying fundamentals are pretty good and progrowth policies would just be the icing on the cake. -- anyone could, on and say the market could fall 5%, it's not a very bold prediction. what causes a real bear market? factors the triggering typically and do you see any of them potentially being on the horizon? >> we looked at bear markets going back 100 years or's auto and they tend to be triggered by types of events. sessions, shock, excess evaluation -- excessive valuations, or policy changes or mistakes. i think the odds of recession are pretty low over the course of the next year or two because we've had pretty good growth and were likely to get port run more aggressive policies. ,aluations are little stretched i'm willing to admit that could be a negative, but they're not

so out of control but they are likely to cause a bear market, in my view. shocks are always possible, that is the nature of the beast. if we could prevent them, they would not be shocks. in policy changes, i think we'll get more progrowth than antigrowth policies. i think this fed has been very careful to be cautious. i think they are still haunted by the ghost of 1937 when aggressive fed actions put us back in the great depression. i think the drink -- general trend higher is likely to continue this year. we got the revision that showed the headline number was the same, 1.9%. economy ist the u.s. more reliant on consumer spending as opposed to other parts of the economy. this is a chart of gdp.

first, to donald trump's promise of a 3%-4% gdp economy. is that something that is feasible in the first term? 3%it's possible we will get for short periods of time. the challenge is to get to that level on a more sustained basis, and that will be very difficult to do because the baseline people compare, u.s. growth after world war ii, was assisted by two big things. the baby boomers entering the labor force, and by women joining the labor force and much higher numbers than they had his roaracle he. have stallednges and are going in reverse a little bit. so we will get slower labor force growth. 3% for year two with very aggressive policies is quite possible. i hope by doing that it will

jumpstart the growth prospects of the economy. for seven to do that or eight years is going to be very difficult. but we should hope for is that improve growth will improve per the highowth and maybe be the target to shoot for. you point out, the fed is disinclined to take any sort of real risk of choking off the recovery too soon, making a policy error. let's say we do get a hike in march or may. what does that mean for the case? >> my guess is we will get three hikes this year. point it would still be

the middle 1% or so range, which is still white low historically. but it's to the point where we in alose to normalization relatively low inflation world. but there are signs inflation is picking up. some numbers have been stronger and some not so much. some measures are still fairly static and starting to show upward movement. growth host financial crisis world where no one knows what normal should be, my guess is it will be in the middle ones or so and i will try to get there over the course of this year. scarlet: how do you want to be positioned? to stayou want overweight stocks, but what about the other asset classes? >> we continue to have a favorable view of real estate. it's hard to find any asset class in the world that is really cheap. but we've been rotating a little

toward non-us equities because the valuations are two or three multiple point -- points lower in europe in other parts of the world. to that little bit that equity prices will continue to trend higher. , thank you very much. be sure to catch bloomberg's coverage of president trump's address to the joint session of congress tonight. p.m. newarting at 9:00 york time. the best way to watch the address and everything else, all of our interviews on the bloomberg, you get live footage, the charts were looking at, it's interactive. you can see what fed pricing is in real-time. scarlet: you can even message are producers and give them instant the back.

we have breaking news, carl icahn stake in a texas refiner grew on tuesday after the billing erin best are an friend of donald trump and special advisor to him helped broker a proposal that has prompted a lot of criticism as well. one thing we should make clear is that he advises the president on an individual capacity, it's not a position he had to be approved for, some perhaps the rules do not apply to him. this is bloomberg. ♪

scarlet: "what'd you miss?" snapchat will be the first tech listing of the year.

some analysts a mark or's are enthusiastic about treating -- creating ads, but will it sustain long-term investors? we have the perfect person to ask the question. revenues that snap has achieved, is it sustainable when you consider that user growth has tapered off? >> this company has been able many times over to multiply its ads over the last year, but this is a company that also has a lot of ailing up to do. advertisers, when i spoke with many of them last week in new york, they see it as an experimental part of their spend. to scale it long-term, they need to make some technological advances in terms of advertising so that people can buy it a lot easier. right now they have several advertising products, but we

usually talk about their video at. these geo-filters and sponsor lenses you can buy in this very complicated product. advertisers need to be a to understand the whole scope and bl to buy it in a more seamless way. joe: if you're a big consumer brands company are packaged goods company like procter & gamble or something, right now snapchat is not a must buy. >> it is a must buy for some of the bigger brands you need to show that they had a very innovative way of looking at the market. their testing and experimenting and of course they want to try the newest platforms to reach young people. that said, there needs to be a way for them to have a sustainable spend on snap that's not just one off experimental buys. there are some ways they can make it easier, not just for the

biggest fortune 50 brands, but for people down the chain, the small businesses, making it snap adseryone to buy the way you can on facebook or twitter. scarlet: is facebook the main competition, or is it a case of convincing advertisers to put their money from traditional media into snap? alwaysbig competition is going to be television ad dollars. that is more than $60 billion in the industry. for snap, they are trying to sell something that is quite different from what advertisers are used to with tv. there used to 30 second spots in a horizontal format. snap is trying to sell you vertical ads, in the shape of your phone so you don't have to tilt them to watch the video and they want to sell them in 10 second segments.

it's a completely different set of requirements than people are used to with television advertising. joe: are people feeling good about the ipo buzz? >> something to be the next facebook. the slowing growth you mentioned earlier, something that will harm them down the road. scarlet: we will stay on the topping of the ipo. coming to staff cuts harvard university endowment's. we will have the details. this is bloomberg ♪.

joe: harvard university's endowment is planning to lay off

it to people in april, as it seeks to cut its 230 person staff in half this year. let's turn to michael mcdonald in boston. why are they cutting staff? >> they are going to take his organization and turn it around and turn around the performance of harvard's in daum and. that is the plan. -- harvard's endowment. this is part of a much larger overhaul of the organization. dozens of others will be walking out the door over the course of this year as they liquidate investments over there and outsource and seek to spin off a number of their internal hedge funds that they decided they no longer want to do internally. they want to hire outside experts to manage their money. this is something michael is familiar with. harvard university is at the top

of the list when it comes to assets under management. when it comes to one-year returns, it's nowhere near the top. there's been a turnover in leadership at harvard universities endowment for a while now. why's it so hard for the university to find the right 37 -- $36manage its billion of assets? a very unique organization there that was crafted back in the 1990's and early 2000. they've not been able to find someone who could write and organization, really a multi-asset hedge fund, if you will. they did have stability for some years but there performance has not been there. fromhey have this new ceo

columbia university and he's trying to turn around the queen mary. he wanted to look like what he ran at columbia, which was about 20 people overseeing about $9 billion. he doesn't want to have a bunch of people internally managing money. he wants to find outsiders to manage the money for them. about the talk difference between the harvard endowment and the one he ran at columbia. a huge difference in headcount. does that mean simpler strategies, more outsourcing to other managers? what are the key differences between the two styles? 8 billion dollars or $9 billion internally that you could call house money last year at the beginning of the year. you had a series of internal hedge funds type strategies. in a addition, you had what you would expect with an endowment, private equity, other different asset classes. i don't know that you will see them have more managers

necessarily. streamlining the number of managers they have as well. you might see some different styles. the new ceo is known for his quantitative skills, so he may be open to some aqr type strategies where other managers might be less likely to dip their toe into those kind of asset classes. i think you will see a simpler, leaner operation and something that's a lot more like everybody else. the days of harvard management are clearly over. great story, michael mcdonnell of bloomberg news. scarlet: hershey is cutting its global workforce by 15%. revenue forecast missing analyst estimates. analysts were looking for the

neighborhood of $455 million in sales eric coming up, what you need to know to gear up for tomorrow's trading day. this is bloomberg. ♪

scarlet: u.s. stocks giving back a little bit of their recent

gains. comments from san francisco fed president john williams about how marches on the table. president trump will address a joint session of congress beginning at 9:00 p.m. eastern time. at: tomorrow we have data beige.m. and then the fed book out at 2:00 p.m.. scarlet: and snap prices shares for its ipo. withdon't miss our sitdown paul krugman at 3:30 p.m. eastern. scarlet: that does it for

>> i'm alisa parenti and you are watching "bloomberg technology." --sident trump is continuing considering a compromise on immigration. we might hear about that tonight when he addresses congress. that is according to cnn, whose

as the president is eager for a bill. he also ordered the administration to rewrite and obama era environmental ruled that critics say the government had too much power to regulate waterways. you can watch the president's speech on bloomberg tv. that will occur at 9 p.m. wall street time. meantime, the push to injuries defense spending is starting with a $30 billion amendment to this year's budget. it could boost funding for more supplies and the links super hornet jet. the $30 billion amendment will be setting the stage for the $54 billion increase announced yesterday. the battle over the dakota access pipeline enters federal court. a judge says he will decide within a week whether to halt construction on the disputed pipeline. indian tribes save the use of the pipeline threatens their water supply and