the gop affordable health care love replacement. riskthe bill, he said, or losing seats. the not so cryptic morning came one day after gop leaders made changes to the measure aimed at willing undecided republicans -- ooing undecided republicans. the house votes thursday on the legislation. the european union is signaling that it intends to keep it is prime minister theresa may waiting. the eu leaders insist they are prepared to begin talks on brexit, but they have canceled plans to hold a summit on april 6 to agree on the outline of their negotiating position. the meeting will be held until april 29, eating into their two-year bargaining. the world bank is lobbying for an increase in capital despite trump's cuts in foreign aid. the world bank president tells bloomberg that without a capital increase, the organization will have to step act from middle

income countries. the world bank has raised capital -- has an raise capital since 2010. two out of five americans said that they would need $1 million or more to retire comfortably, according to a survey from the employee benefit research institute. the organization has research showing that 10% of people with 401(k) retirement plans have at least $200,000 stashed away. news, 24 hours per day, powered by 2600 journalists and analysts in 120 countries. i'm a mark crumpton, this is bloomberg. -- i'm mark crumpton, this is bloomberg. ♪ live, from bloomberg's world headquarters in new york, i'm scarlet fu. joe: and i'm joe weisenthal. scarlet: u.s. stocks heading to one of their steepest declines

of the year. joe: but the question is, "what'd you miss?" scarlet: thanks ox seen relentless selling, falling as much as 3.7%, the biggest decline since the monday after the brexit vote. washington, top republicans warning that a failure to repeal obamacare could endanger the goal of a massive tax cut that the white house has promised. reports third quarter earnings after the bell today, taking a look at why they are tracking more short-sellers than ever before. joe: let's look at where the major averages stand as we enter the close. abigail doolittle is standing by. abigail: as for the just mentioned, we're looking at selloffs heading into the close. the dow, the s&p 500, the nasdaq, all's -- all sharply lower. it will be interesting to see if new lows will be factored into the closed. we have the russell 2000 down more than 2%, the worst days in september 9 last year.

for the other averages it is the worst selloff since october 11. reachedlier our team out to gina martin adams, bloomberg intelligence strategist, and she told us that because the banks are selling off -- look at bank of america, down more than 5.5%, the worst day since brexit, jpmorgan, citigroup, wells fargo, trading sharply lower, but because this was the worst sector dragging averages, she believes this has to do with a rally in treasuries . taking a look at the intraday chart of the 10 year yield, trade is inverse to price and we saw that earlier this morning for bonds were actually selling off. right around 9:00 they started to get a bit of the did and we are looking at 10 year yields down three basis points. third down day in a row, or put another way, a third day of rallying in a row. a bit of a risk off message year

, for sure, confirmed by the end , which is up five days in a row. yen, which is up five days in a row. bloomberg,ok at the g#tv679, this is the election. the s&p 500, the bloomberg dollar index, all rallying. this is bonds sold off with the 10 year yield shooting higher. but then at the end of february oil started to take lower, than the bloomberg dollar index, the s&p 500, bonds rallying, confirming the reflation trade. another strategist told our team that it could have to do with fears around the health care bill on thursday not passing, something that would put off fiscal stimulus and certainly cut the taxes, something that investors have been banking on that has fueled the rally.

perhaps a bit of a reversal, joe. joe: how let's get more insight into these market moves with our lead blocker, mike regan. great having you on the show. it's always one of those days like this where people come up with a story, playing into this nonsense, but nonetheless, what are people saying today? already don't believe it, but regardless, what are they saying about why? mike: you are absolutely right. you ask five people what's causing it in you get 10 different reasons. there are some obvious ones. obviously, the market has gone so long without a noticeable dip . 109 days without the market 1%, as abigail was saying, nervousness about the health care vote on thursday. [no audio] it's not a done deal for the

health care bill on thursday. back to financials, how far out is this push the dodd-frank reform? how far out does it push dodd-frank? yield curves, it's not just the 10 year, it's the flattening. it is like someone flipped a switch this morning and said risk off. elseld give you everything we have heard. you see these big down tech stocks. joe: we have a chart, the new york stock kick index. why don't you explain to us what we are looking at here. mike: this basically just measures stocks trading on an uptick. in other words, last price was higher versus the downtick price being lower. do you see that thousand, that negative thousand level? joe: where are we looking, 2 p.m.? mike: all throughout the day, it's negative for most of the day. those really had the cash heavy

negative numbers signal to a lot of people that people are aggressively program selling. not really being conservative with their programs, dumping stocks quickly. suggesting to some people that may be a fund is liquidating some positions. something that we can never really figure out. it is clear that people were aggressively selling throughout the day, for whatever reason. ,hey are serious about cpa's the commodity trading advisors. joe: the usual suspects. mike: absolutely, yeah. scarlet: is there one clear winner? are equities just catching up to for instance? abigail wasries, as showing, that risk off moves -- dashingms to have been to have occurred one hour before . treasuries picking up on the risk off vibe little bit for the equity market did.

getting back to financials, again, there are several different things that people are pointing at. the financial earnings warning is being talked about a lot. people have been worrying about this for a lot. that subprime auto lending would start biting banks. thatn stanley saying trading is not going to be as strong as people were expecting. that has been hurting the big supermarket banks. like you said, there is a lot to point at. i would say that probably all of the above, to some degree. joe: i mean, the degree to which banks -- if you look at a bank spread,dex over a 210 as you say, some of the underlying conditions, not so great. one thing, just looking at the market right now, we are exactly 1% off, we have hit his huge streak going back to last october without a 1% down day.

talk to us about complacency. there have been endless stories, low vix, never getting a down day, and how much that has permeated the market. mike: lpl financial said 109 days without a 1% drop, the longest streak since 1995. for sure, people, systematic funds, can get lulled into this march higher. people talking about marco at jp morgan again, another guy who comes out on days like this with his theories. joe: always a hero. mike: [laughter] always with the big series. we just had options expiration for march friday. the positioning leading up to that was very bullish. the calls was towards the imbalance, which tends to have an upward pressure on the market . for the first time in a while is towards puts, which has a downward effect on the market. there is some of that near 1000 different theories. joe: terms of the -- scarlet:

terms of the kind of catalyst for next month, you are going to have earnings to drive stock prices. on the political side, we are all in wait and see mode for concrete details, and that will be months in the coming. what are people looking towards in terms of what could determine whether we go into a bear market correction or just float at these levels? and the very near future, the health care vote and how trump response to it if he gets defeated. is he really aggressive, does he start insulting people? what does that say for the prospects of his policies going forward? that is the myopic, near-term focus of the market right now. after that, i mean, a bear market would be somewhat surprising just because the economic data is still coming in. the soft economic data, surveys, are doing really well.

i think people are willing to give that a little bit more time to see how it translates into better economic prisms. noting,course, worth down 1.1% is not the end of the world. it's just been so long. scarlet: we haven't seen that for a while. mike regan, you can find him onny -- you can find them on nlivego. from new york, this is bloomberg. ♪

this isscarlet: "bloomberg markets," the s&p 500 is down by 1%. we haven't seen some in like this in 109, 110 days.

?oe: armageddon panic? compared to what we have seen recently, it's been such a long streak of no decline. scarlet: it's been a strong markup, which you notice when there is a low decline. png, chevron, and coca-cola, gaining. president trump warning house republicans that they could lose their seats in the 2018 midterm election if they don't support is bill to replace obamacare. leading thean charge against the bill, dave brat, of virginia. representative brat: trump is a businessman, we want him to be successful, but the most important aspect is price. we have got to bend the cost curve down. a lot of people are saying, just vote for this and you can solve

that later, but you cannot. the insurance regulations have to be in the bill. they can't come later. his -- the secretary can work on them, but if he works on them, they don't become law. they would change every years that you get a new secretary and you will be playing bumper cars with 16 of the u.s. economy. we clearly can't have that. we are going to get the price curve down and we are all on board. that's the major piece we have to get right. >> to be clear, right now, it does not have your support? rep. brat: that's right, i'm a no vote until we have the insurance regulations in the bill. they currently do not allow a young person to go out and buy a cheap policy. you have to buy these minimal mandated federal policies from the u.s. government. no one wants to be buying health insurance from the u.s. government. we wanted in the states, we want a free market for health insurance and hospitals. you don't get $20 aspirin, m.r.i. rates from $20,000 at

this hospital to 5000 at this hospital. everybody knows that that is what is going on because we don't have a free market. you have to return sanity to the market to take care of those with pre-existing conditions. that's not hard to do. what milton friedman said 50 years ago, i taught economics for 20 years, hit a target. there is a policy target there for the folks. 5% of people are over 50% health care costs. we need to solve that problem, that's a market failure, but let's keep the rest of the markets fluid. as you all know, if you don't have fluid markets, you will get economic growth in the health-care sector will continue to hamper the economy. >> what did you hear this morning from the president? it aer ryan calling rendezvous with destiny? are you optimistic to the changes that could be implement it? rep. brat: he put on the big sales pitch and he is getting counseled that he thinks you can do the sales rags to the secretary. you can, but then it is not

permanent. we have a once in a century opportunity with the house, senate, and president, we have to get this into the law right now and we need that one change. he knows that. i think we will get the yes and have a big party. scarlet: and that was virginia congressman, dave brat. joe: the whip for the house caucus, a prominent supporter of the health care legislation. kevin spoke with the representative earlier today and asked if the republicans have enough votes to pass the bill. >> i believe we do. kevin: when the house freedom caucus chairman is saying that you don't have the votes, he's wrong? >> i believe we have the votes and i believe the president was the closer today. he made it clear that there is no more time for excuses. we have to keep our promises to

the american people and we have a mandate to do not only what is politically correct, obviously, in terms of the repeal and replacement of obamacare, but to do what is best and right ivy people. they deserve patient centered and affordable health care. obamacare is clearly in a death spiral, it's important that we do this work to make sure that we have health care that is again, affordable and accessible for others in the future. kevin: who are you focusing on in terms of the whip operation? changes were made to the legislation just the other night that were seemingly trying to appease moderates and some other changes to appease the more conservative members. who are the key players here? kevin: we're listening -- rep. wagner: we're listening to all members. this has been a very open process through the committee and the budget. what, it's going to come down to the votes at the end of the day and i think the president, leaning in on this, which he certainly did today, owning this bill --

kevin: you agree with him that if the bill passes, it will increase the majority for 2018? rep. wagner: i'm not worrying about the majority for 2018. what i'm worried about is doing right by the american people, passing the legislation, moving it to the senate for them to also vote on it. it is time that the senate not be allowed to try to jam the house and hide behind us. we are the leaders, we have worked on this reform with the senate and trump administration. this is the full united republican government plan going forward. and i'm hoping, to be honest, that we will be able to pick up some democratic votes, especially on the standalone pieces of legislation. kevin: there were some antitrust things in there. rep. wagner: things dealing with tort reform and medical malpractice. joe: that was missouri

representative and wagner. 10rlet: we have got about minutes left before the close. i wanted to show you the function of the index mrgo, the terms of the 30 dow jones industrial average, it is at a session low and coca-cola is one of the only two gainers here. everything else is declining right now. the dow falling as much as 244 points. we are at the biggest drop since september 26. joe: when people think that the things are going bad, at least they will drink coca-cola. scarlet: the banks, notable, set up for their worst drop since the aftermath of brexit. we will talk a little more about that in the coming minutes. this is bloomberg. ♪

"oe: "what'd you miss?

let's take another look at the s&p 500. go into the bloomberg and you can see this every day since last october. that bar, way down at the right, down 1.2% on the s&p 500, or about that, it would be the first time that we are down 1% since early october as you see this incredible streak of no big down days for a long time. for more on what this all means, let's talk to market strategist kevin karen, joining us from new jersey. thanks for joining us. what are you telling your clients today about the market? are we in for a rough patch? >> i it just random noise? think the market has depreciated the idea that there would be a slippage in the timetable for the bigger tax cut, connecting iswith health care reform something that the market has to price in for now. for months there has been nothing but improving sentiment

and data. given that the stock market has added several trillion dollars in market capitalization on the back of all of that good news, anything that would raise the specter of slippage in the timetable towards a fiscal form of some kind, a fiscal package, might cause some doubts to creep into the market and that is what we are seeing today. scarlet: i want to bring you into the bloomberg here, looking ,t the average volume for xls tracking the financials here. the blue line is what we have seen today, the cumulative volume throughout the day. of course, it is higher than what we typically see on average, the white line. the dotted redline is what we are projected to see as we head into the close. talk to us a bit about sentiment on financials. why have they soured so much in recent days? yeah, i think that if you look at the biggest proxy for the trump trade, it was

financials, which jumped of the most initially after the election and enjoyed a tremendous run on the back of verizon cap for short-term interest rates amid expectations for regulatory relief, where the need has been so acute. i think that anything that threatens, i guess, or at least temporarily interrupts the trump trade, that would have to come out first with financials, but i see it more as a barometer of sentiment these days than anything structural. joe: kevin, how closely are you and your client us watching the thursday health care vote? currently scheduled as a marker for whether the legislative agenda will keep going forward? it's important, looking at the calendar, april is not the particular month for congress to be busy. i think that the idea of moving something through, particularly now that the president has

attached a broader reform on taxes to the passage of this, really elevated that is a pivotal issue, this takes on a bit more importance. now it has become more important to watch as we head towards thursday. equitieshave we seen dry up completely? or is it still continuing, albeit at a four -- slower pace? the move overall? kevin: in a broad sense, the trade has been into equities, out of bonds for the last nine months or so, until very recently. obviously that has shifted a bit in the last couple of trading days. it's too soon to call that over, but what i would say is that enthusiasm has increased, month after month, and i think we get to a point where the equity trade gets a little tired. we see a pause and a breather.

-- scarlet: kevin, thank you so much. the market close is next. take a look at the dow, one .1% drop, the s&p 500 losing 30 points. this is bloomberg. ♪

♪ scarlet: we are moments away

from the closing bell. what you just? government bond yields, all returning this tuesday -- retreating this tuesday. i am scarlet fu. joe: i'm joe weisenthal want to welcome you to the closing bell coverage every weekday from 4:00 to 5:00 eastern. scarlet: we begin with market minutes. we have a selloff? joe: really. i think we can call 1.25% a legit selloff. scarlet: indexes closing right of their session lows. s&p 500 losing 30 points. nasdaq off by 1.8%. declining, so where are people putting the money? bonds? joe: finally a good day. they underperformed since the election, the bond market,

having a strong day. scarlet: i will pull up grr1 on the bloomberg. as we look at the numbers, utilities are the only sector in the green. here the bigtably losers come off by 2.9%. flattening yield curve is not helpful. consumer staples had been positive earlier. now declining by .1%. another way to look at this move in the markets is to look at the swing. from peak to trough, swung 314 points. joe: started with again. scarlet: then we turned around. this is the biggest intraday point move over the past three months. i will expand it to six months. the last time we had a move of this size was december 7. it has been a while since we have seen this kind of volatility in the markets.

joe: absolutely. let's talk about those bonds scarlet mentioned. two-year and 10-year, yields coming down across the board. over 2.6.ust been is this going to be the start of bill gross' market? scarlet: nope. joe: this really is the story, this remarkable range. shot right up in early december. then they have not been going anywhere for a really long time. 2.3, 2.4, 2.6. they have been in this remarkably stable range. back down again amid this broader selloff. scarlet: let's look at the bloomberg dollar index to down for a fifth straight day. that is the five-date intraday look. bank of america merrill lynch

had the latest flow data. wcrs ing at against all the major currencies, weaker against all the major success the canadian dollar and the aussie. the euro is picking up some of the dollar cost positive sentiment. but the dollar's sentiment that had been reserved for the dollar. the euro got within spitting distance of popping its high in early february, which would have waited it at the strongest level since november. you can see there we have moved higher at the end of today's trading. there is a change in sentiment towards the euro. ecb is one reason why because it tweaked its rhetoric a little bit. the fed sounds less hawkish. the dutch elections took away some of the concerns about political risks. joe: less concerned about france as well. everyone was long the dollar.

not working out so well. oil getting hit again, down nearly 2%. that is a big story. the bid into gold continues from hovering around two-week highs. the two diverting themes and commodity world. scarlet: those are today's market minutes. want to take a deep dive into the bloomberg. i want to start things off with the relative rotation graph. rrg on the bloomberg command shows what sectors are leading and lagging and improving. you have defensive improving. utilities, staples, health care as well. the only group to remain in the meeting quadrant at this point is cap. green line here. the energy light has gone straight from leading into lagging. it did not stop in the beginning phase. i want to end with financials because they are following a similar path.

down for the fifth time in six days. joe: they were in the extreme end of that meeting category. let's talk more about those financials. i have a technical chart of the s&p 500 -- financials index and they really got slow today. -- slammed today. technical look on the top half of the chart. financials versus the 50-day and 200-date moving average. 200-day is a ways from that. lower half of the chart we are looking at the number of companies within the index above the 200-day moving average. we are going to want to keep an eye on that. to get more perspective on the technicals of this market, we go to the head of technical at strategic research and he joins us now.

we have been floating along and then a day like this happens. does it contain -- change the technical picture much? >> no, i don't think it does, and we want to approach this as sober as possible. this is a shakeout after a really good value of six-plus months. the banks in particular are taking the heat over the decline. important to remember, 100% of the banking index is still above the 200-8 moving average. we're not seeing the internal deterioration that you often see. 2.75 on the s&p chart as the level where you want to step in and be a buyer. scarlet: financials strong candidate to buy on the dip. chris: this was a very big move on a short period of time and we are not seeing the internal deterioration that is often found at the top. joe: you look at all the categories with the idea that

were this the real thing, you want to see at least some evidence that somewhere around the board you are seeing the fall apart. we are seeing a general decline but not the bottom falling out anywhere. , we wouldt's right expect in advance of this to see the market now meaningfully and we have not seen evidence of that. while the s&p has consolidated, the rest of the world is acting really well. korea broke out this week. hong kong trades really well. i have a tough time getting to negative on the u.s. when the global markets act as for as they currently do here. scarlet: this is a chart that included 2 clients and it shows there is consolidation but internal weakness is not visible within the s&p 500. chris: more than half the s&p right now is within striking distance of making a new high. a chart tends to be turned upside down in advance of big market tops. you see the weakness internally

first before it hits the index. 2013, 2 pretty big drawdowns. the market was dk internally -- decaying internally in advance of those drawdowns. i'm inclined to give the market benefit of the doubt here. joe: you mentioned oversees the strong rally in korea. emerging markets is one of the first things that got hammered after the election. concerns over protectionism. how hard could i go? -- far could that go? chris: they trade really well, and when you look at the pessimism in that part of the world, it was pervasive. what is happened since? dollar has weakened. the dollar has been sideways for two years. em can operate well on that environment. markets,look in the broad-based as well, chinese consumer stocks, alibaba weror jd.com given the peripheral

european markets, italy is making new highs, stain is making new highs. this option stay in the u.s. is reflective of the rest of the world -- just not. the rest of the world is acting pretty well here. that is one thing struck a lot of people is the lack of volatility as measured by the vix. if you look at the skew index from cboe, that has moved higher. charturger brought this to us to show that there is fear in the financial markets, just not in the vix. what does this tell you in terms of willingness to pay up for protection against tail risk? chris: it tells of the margin sentiment is not as bullish as people think it is. when i travel and talk to clients come i don't get the sense that people are as bullish as some of the survey data might suggest. i think there is reluctance out there to embrace what has happened. we have seen in the newspapers and read every day and see in our client meetings every day so

the skew is reflecting that people that people are thinking about tail risk to the margin it is part of a package of data that says sentiment is not as malicious people think it is. --not bullish as people as bullish as people think it is. joe: one part that is down is retail. amazon doing really well and everyone else getting clobbered. our people just starting to think that the big-box retailers are zero one date? sentiment isk getting there and maybe the sentiment is so washed out it is time to look for other opportunities. i cannot call upon macy's or target or kohl's until they start to face a bottom. when you look at the group, it is not just amazon. netflix trades pretty well here. we have seen other consumer stocks act ok. the retail problems are a cease and coals and target -- are macy's and kohls and

target. scarlet: chris verrone, thank you for a timely appearance. coming up, we stick with the consumers seem because we are awaiting earnings from nike and fedex. this is bloomberg. ♪

mark: i am mark crumpton. time for "first word" news. a fanneil gorsuch is not of the supreme court confirmation process, including putting his family through it. the supreme court nominee appeared to get testy after a

round of tests to manage it when and politics,ney judge gorsuch refused to offer an opinion on the case but replied, "there is a lot about the confirmation process today that i regret. a lot, a lot." prosecutors in france have asked the judges to wonder the investigation into presidential candidate françois fillon. according to a french newspaper, prosecutors want investigation to look into charges of fraud, forgery, and falsification records. the decision to widen the probe follows a second search of the national assembly. lon is under investigation over whether he paid his wife eventually hundreds of thousands of euros from the public payroll for little or no work. the u.k. joined the u.s. in banning laptops and other electronic devices in airplane cabins on flights from several middle eastern countries amid concerns over security. may'sing to theresa

spokesman, in down direct flights from turkey, lebanon, jordan, egypt, and saudi arabia will be affected by the ban on laptops and tablets. phones larger than normal sized mobile's or smartphones will be permitted. authorities have confirmed an incident of vandalism against the dakota access pipeline in south dakota. pipeline developer energy transfer partners said today in court documents that there coordinated physical attacks along the $3.8 billion pipeline. the lincoln county sheriff's department said someone burned a hole in the fight at and above-ground valve site on friday. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: we have some breaking news. nike reporting results. its fiscal third-quarter earnings appeared to beat the

highest analysts estimate in our survey. $.60 was reported while the consensus estimate was $.53. the first brush in terms of trading reaction is the decline here. we will look into that a little bit more but we also see that for revenue we did have a miss for nike. $8.4 billion versus the expected $8.7 billion. if it had reported $8.7 billion, it would have been a 5% increase. slower increase than that would be the slowest revenue increased since the fiscal second quarter of 2016. of course this is not adjusted for currency as well. you have to keep in mind that saleselies on overseas quite a bit so we need to take that into consideration as well. nike inventory increasing 7%. looking at the shares jumping around in after-hours straight and now marginally lower. fromwe have earnings out fedex, the logistics bellwether, always one to watch. revenue coming in right in line with estimates of $50 billion,

but adjusted etf's missing, $2.35 a share versus $2.62 a share. on the other hand, fedex reaffirming its full-year forecast. i see a headline that fedex is cutting its forecast. we will keep an eye on this one far, inkey headline so line on revenue and missing on the low end. scarlet: 490, the key metric for everyone is worldwide futures and in particular the north america futures because that was a disappointment in the previous quarter. we will monitor the headlines generated by the conference call. nike will not say anything about it in the statement. we will wait for it on the conference call. joe: what'd you miss? top republicans are telling party members that failure to pass the health care act good jeopardize president trump's goals for what he calls a very big tax cut.

let's bring in a national political reporter covering the health care debates, sahil kapur, on capitol hill. we got this market selloff and a bunch of people saying that there is this new concern about the fate of all of trump's legislative agenda. has something changed? is there some new reason that happened today that we did not know yesterday about how imperiled he's tax cuts and spending plans are? sahil: not if you were paying attention, joe. everyone who follow the health-care debate new this would be extremely complicated. 80 years tocrats pass and major overhaul the health care system and republicans are trying to undo that. this should not be a surprise, but understandably, the fact that republicans won the 2016 election, all branches of it, they set this forth as their big agenda item after campaigning on it for the last 4 elections, sure, there was expectation they would move quickly on it.

probably false, but that was the expectation and the fact that it has taken so long seems to muddy the waters ahead for what is to come. scarlet: right, and the chatter now from republic and congressman if they do not repeal and replace obamacare, the tax cuts are in jeopardy. who says the legislative obamacaref fixing first and then addressing tax cuts? sahil: scarlet, that was a political decision made by republicans. according to my reporting, the thinking was republicans unanimously campaigned on this since the 2010 election on repealing the affordable care act. few republicans, by comparison, have campaign on tax reform. and there is the desire for tax cuts barely registered as a concern for ordinary republican voters. only 4%, a going the bloomberg national poll -- i'm sorry, for the general public, only 4% according to our bloomberg national poll come in december,

and health care ranked five times that amount. they are responding to voter concerns here. for the current schedule is there to be a big vote on thursday and it is going to decide the fate of this legislation. last night they rolled out some new changes and offered more subsidies to seniors and stuff like that. is your sense that those changes that they rolled out last night meaningfully change the arts of getting this law passed? sahil: joe, i think it helps their vote count. there are some things they put in there, including the medicaid work requirements, other limitations on the medicaid program, that some conservatives in the conference one and it seems to have moved some conservatives to yes, at least be hesitant ones who are looking for a reason to -- who want to get to guess but couldn't quite get there, this seems to have helped. another provision they put in, very interestingly, winning upstate new york republicans come seems to have worked in winning over or close to winning

over three new york republicans, which could be the margin that decides this. this is going to be a very, very close vote. i think the changes helped. i'm not convinced they are there yet. this will be a close vote and we will not know what is happening until the votes are in. scarlet: who is leading the effort to round up all the votes? is this house speaker paul ryan or is the president making phone calls? is mike pence involved in any way? sahil: speaker i and president trump are kind of splitting this up. speaker right is trying to court best speaker r -- speaker ryan is trying to court the moderates. many who won in swing or democratic-meeting districts, that is where speaker ryan and the republican leadership come andnd they have the nicc the campaign arm to give them

certain assurances. the conservatives in the conference like to go against speaker ryan. they like to go against their own party leadership, but their constituents love president trump. that is why the president came to capitol hill today and attended house republicans meeting and made the case directly to conservative members, singled out the chairman of the house freedom caucus, mark meadows of north carolina, and said i need you behind this. kapur, covering tax and health care. it will be very busy in the coming weeks. joe: remember when i showed you this exchange trade note on the vix? it essentially that's on lower volatility. 2011, a bloomberg analyst noted this earlier -- from 2011 to today, this exchange traded note is up nearly 1400%. xiv.

reverse the vix. today we have a different story and i will update yesterday's chart. i'm going to explain why, next. this is bloomberg. ♪

joe: i'm joe weisenthal. what'd you miss? yesterday we looked at the inverse vix, and today we are updating it. classic example, show it on tv and it marked the top of the trade. the red line is the xiv, extraordinary rally. the white bar line -- if we zoom into the left, we saw massive onlines today, 3.7 percent

this, one of the largest drawdowns in a while. extraordinarily short vix etn. it rally for two reasons. one is the general decline in volatility which we talk about every other day. the other is the steepness of the vix curve, the fact that people systematically overpaid for downside protection a few months out. the ctm takes advantage of that. people have made tons of money on this etf. over 1000% since 2011. we talked about it yesterday and at least for the very brief moment it was the top of the trade. scarlet: people who listen to do you yesterday when out and bought -- joe: i don't make recommendations. scarlet: that's why we don't. the u.k.'s says it will trigger article 50 on march 29. gdp is holding up. one thing that has been consistent is pressure on the pound. this is a 12-month chart of

cable, pound versus the dollar. this is the average monthly rate of the pair. 142.xchange rate was about after the vote, the pound was 7.5% weaker. it stayed around those levels the next two months, and then you have this big drop in october. now in march we're looking at an average monthly weight of 120 to 70, the lowest in more than 30 years. joe: kind of amazing could after the vote, everyone knew what was going to happen, but it kept going lower with each of these developments here it is each of these development straight scarlet: we looked at it for so long and it really hasn't been that bad but if you are in the u k and you are looking at the pound getting you less buying power -- joe: or thinking of visiting the u.s., that hurts. scarlet: nike at fedex out with their earnings. what that says about u.s. consumer, next. this is bloomberg. ♪

mark: i am mark crumpton. time for "first word" news. president trump has a warning for house republicans -- pass the bill to replace the affordable care law or risk losing you see in next year's election. the president sounded more upbeat after leaving a meeting with lawmakers at the capitol. president trump: we had a great meeting and i think we will get a winter vote. we will have a real winner. great meeting, terrific people. they want a tremendous health care plan and that is what we have. i think we will get the votes. mark: republican leaders have made several changes to the bill , including limits on medicaid enrollment and an accelerated

phaseout of some taxes. the white house has instructed cabinet heads and agency officials not to elaborate on the president's proposed budget cuts beyond what has been provided in a blueprint submitted by the administration. that is according to the associated press from which reports democrats had labeled the move i gag order. the ap sites a memo from budget director mick mulvaney for the warning. completeistration's budget request is scheduled for release in may. a former irish republican army commander who helped negotiate peace in northern ireland is dead. martin mcguinness was 66. mcguinness denied allegations that he took part in terrorist activities during the time known as the trouble. he later became the chief negotiator for the ira's political arm, sinn fein. mcguinness eventually became the deputy leader of northern ireland's power-sharing government. the only person with whom a dylan roof shared his plans to

kill worshipers at a south carolina church has been sentenced to 27 months in prison for failing to report a crime and lying to the fbi. he tearfully apologized at his sentencing today, saying, "a lot of beautiful lives were taken." roof killed nine people in a trusted church in june 2015 and told him of his plans a week earlier. prosecutors said he lied to the fbi about knowing of roof's plot. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. let's get a recap of today's market action. a lot of action because tranquil and he was shattered as the s&p 500 declined the most in five months. the dow losing 238 points on the day. i wanted to include the russell 2000. we were texted, or he bloomberg'd me saying that this

double drop in the s&p is more significant, the selloff in small caps. joe: pretty remarkable. 2.7%. the nasdaq as well have been doing very well. aspect running into a brick wall. scarlet: a lot of red. also red when you look at nike and fedex in after-hours trading. nike missed analyst estimates even as earnings-per-share beat consensus estimates. there you see fedex is off by 4.1%. it is off in after-hours trading. joe come you were telling us about -- joe: revenue came in line but etf's adjusted came in at the low end of expectations. i want to bring in bloomberg gadfly columnist brooke sutherland. quite a big miss on earnings.

revenue basically in line. brooke: it was a big miss and i think there were negative expectations just because ups had such a big miss and the peak season for these parcel delivery companies -- christmas season, delivering all of these packages. people worried about fedex and expectations that come down significant coming into today, but not this much. this deftly caught a lot of people by surprise. there will be questions about what the impact of the tnt acquisition was on this. seemingly the integration have been going well. you see this disconnect between the atf numbers and is there some kind of impact there. that is something we will be watching for details on the call. scarlet: how much can we really green from the state of the u.s. economy from a company like fedex when it has to integrate tnt into its financials? brooke: it used to be interesting because fedex was considered a bellwether for the overall economy, and it is moved away from that because it is so much more dependent on consumers.

numbersing at their etf might not be their best indication because like you said, revenue is in line, and they have seen this huge boon to sales because of the surge in e-commerce shipments, but it is not as profitable a business for fedex, the traditional base of business-to-business shipments where you are sending reams of paper to a place like bloomberg. joe: high volume but low-margin. scarlet: right. my question here is if it is catering to consumers and not one-off andis it a the company will make up margins later on, or just not as profitable period? brooke: not going to be as profitable taking shifts to a business because you are taking a bunch of packages to one place. if you are going to consumers, you are dropping off one package and you make a bunch of different stops all over the place. they have been making significant investments in a networks to alleviate some of the cost pressure. fedex is doing interesting things around e-commerce.

they partnered with walgreens to have these drop-off locations where consumers can bring in their packages or pick them up and it saves time from going around. they have fedex fulfillment. they are really trying to compete there. it is just a question of when we get good results on the profits. i know there have been stories about amazon wanting to get into that last mile of delivery. it has almost every other aspect of the logistics supply chain. it doesn't seem like an immediate thing, but is that this was of anxiety for fedex shareholders? brooke: i definitely think it is, and analysts are very divided. some think it is death coming to fedex and ups, and others are like, when you look at how big they are, the amount of investments in our network, aircraft and shipping facilities they own, it is going to be hard for amazon to catch up to that, but the question is, do you lose amazon as a customer and they start becoming a competitor and take away some of the small to medium-size business revenue

that ups and fedex benefit from now? joe: brooke sutherland, bloomberg gadfly columnist, thank you for joining us on breaking down fedex. scarlet: nike also reported results, third-quarter earnings, ups beat analyst estimates, but revenue missed consensus. let's bring in an apparel and bloombergnalyst for intelligence. everyone is still waiting for the futures numbers orders, which will be revealed in the conference call. in a littleock came under the street expected. gross margin was a little weaker than expected. said, the big numbers, futures, we are going to get them on the call. probably going to get a glimpse into nike, fiscal 2018 guidance. for a while with these big global companies there was a lot of anxiety about the strong dollar and what that would mean.

it has been a lessons the dollar rally. it has been flat for the last couple of years. down since the beginning of this year. as that faded as an issue from a few quarters ago? chen: on the conversion site yes because you look at the current -- currency numbers. for gross margins, you look at the lack of currencies, they can affect your margin. we see it on the gross margin line. scarlet: i wanted to bring up this chart, which bloomberg intelligent published about short interest in 19 shares. short interest is the blue line and it is been up, up, up over the past year, 2.5% of the overall flow. the share price has been on a bit of a roller coaster ride. this year so far it has made a recovery. second-best performer in the dow , a 14% after apple. there are a lot of skeptics out there on nike. what is that these is for people to be very doubtful on nike's

prospects? the: four years nike was only player in the athletic category and they dominated the segment. months, both companies came out with new products that took away share from nike. a lot of people are skeptical about the ability of 19 to fight back, especially -- ability of nike to fight back, especially adidas. about two armour years ago were getting so much hype and it seemed like they were the next nike, but people of soured on under armour. but adidas could still be rejuvenated as a brand? chen: under armour came from the apparel world, hoodies. it is different when you try to do footwear. there was more skill involved and you have to have credibility with the consumer to buy your products. i came from adidas headquarters last week and there's a high level of energy over there. very happy with performance in the u.s. and coming out with new

products. scarlet: and everyone is wearing those sneakers everywhere i look. one thing i want to get from you as we await the futures orders from nike somehow indicative are those futures orders of actual revenue growth and given that it was revenue growth that disappointed investors? chen: directionally it gives you a good idea. rest of theis, the consumer channels which are not reflected in the futures. this becomes a big portion of their sales pitc. it is not as good as it used to be. scarlet: we will await futures orders particularly from north america. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. footwear -- chen grazutis, footwear analyst, thank you so much. coming up, caroline hyde. here what is on the mind of the ibm ceo. from new york, this is bloomberg. ♪

scarlet: what'd you miss? caroline hyde got a chance to sit down with the salesforce ceo marc benioff, who met with the president on developing apprenticeship programs. she asked about the promise of artificial intelligence and the impact on the workforce. we have incredible ai technology ourselves as salesforce but it is tightly integrated into our core platform. it is called salesforce einstein and it has been available to all of our 150 salesforce customers all over the world. the opportunity for watson is to bring a general purpose ai platform that is programmatic so customers can extend our

solutions with what watson can do. caroline: you mentioned insurance companies. well else -- where else in your product line -- what is the low hanging fruit? marc: you see it really in almost every industry i could be much smarter, and honestly, you find employees are able to extend their capabilities through artificial intelligence, and with salesforce einstein, for example, we are seeing salespeople being much more productive than ever before. they are able to know exactly who to call on, when to call on them, how to call on them, in a prioritized way. that is done by einstein. that is the power of ai. caroline: you are announcing a partnership in australia, you have had a significant growth in europe and asia. is to getraphically into artificial intelligence? marc: you see that across the whole world. software is eating the whole world, but ai is starting to

percolate into that software across the world. we are seeing ai inside all of these different jobs and work streams. the advances in ai far exceeded our industry's expectations over the past several years, and outfitters like salesforce and ibm can extend and complement our solutions with the amazing technology. not just machine intelligence, but even deep learning as well. you saw two weeks ago coca-cola announced with us they will be building these coolers that have cameras in them and the cameras are able to do real-time inventory management so you know what is happening inside the coolers as people take those and they of the cooler are automatically rolled to the stores knowing that they need to replenish. caroline: you mentioned how ai is going to be affecting jobs/ two people in the united states realize how much it will make people lose jobs? 64,000 dollarshe

question, and that is why i went to washington, d.c., on friday. the workforce will dramatically change the next one to two decades and will be driven a lot of artificial intelligence. that is why we need to start retraining for new types of job development before the technology really has. scarlet: that was caroline hyde speaking to salesforce ceo marc benioff. joe: at the same conference, caroline hyde got a chance to sit down with the ceo of ibm and talk about why she worries about the future of tech talent. in -- any country i go the china development form, we had this discussion. the same concern, the workforce in front of us needs a different set of skills than the workforce behind us. what we are both talking about is here in the united states, how to build -- we have coined them new powers skills. they are not white color, --e-collar that is not white

not white collar, blue-collar, but you need a curriculum in technology, and each of you to come whether it is manufacturing, this intersection. china has that challenge as well as every country in the world. whether it is germany, the united states, building this new set of skills. that is something we have been really focused on, something we started several years ago, technology schools, public private partnerships. these are public high schools in conjunction with the community college and they turn into a six-year high school and the kids are given a curriculum and they come out at the end of the six years with a high school degree and an associates degree and a college degree and they are employable. just grassroots we have gone to 100 of these schools in the united states and we are going 300 other companies to come in with us on these, and what we do as a company can we give the curriculum and then we provide mentors, and all of our employers are happy to do this and mentor these kids. by the end of this year it will be 40,000 kids, and i fired

hundreds of my own. this is a model that is scalable across the world -- i have hired hundreds of my own. this is a model that is scalable across the world. caroline: is the current administration helping? the administration understands it is an important thing. i think it will give us a chance to scale schools like this, and others have all the models, too, but we can scale them through a public-private partnership, then you have to work on apprenticeships and credentials. those three things are the recipe to really help prepare for the next era. joe: that was bloombergs caroline hyde with ibm ceo ginni rometty. scarlet: coming up, younger and lower paid employees are making a greater percentage in fx. what does this mean for the ultrasensitive currency market? from new york, this is bloomberg. ♪

scarlet: what'd you miss? arecuts on wall street leading currency traders to black swan events and is amplifying the markets most crucial moments. take a look inside the bloomberg here. this is cable, pound-dollar in the intraday trading. gpo going back to last july. we want to highlight this right here. october 7, the pound fell to as low as 118.41 in a couple minutes. joe: i remember i was out at dinner and i picked up my phone because i was bored or something like that and i couldn't believe the pound, how dramatic that move was. scarlet: you and everyone else. here to discuss it is our

foreign-exchange reporter lynn nguyen.lananh getting rid of expensive talent and replacing it with cheaper john is leading to huge swings. the younger traders have less experience and they didn't have a lot of experience with the pound itself. lower risk limits now because the banks are so cautious about taking risks. when the pound started to move, they didn't stand in its way. joe: there seems to be 2 moving parts here. traders are inexperienced and they don't know what to do. 2, they have these low risk limits so they have to sell faster. and they build on each other because other people are starting to lose money. the international settlements report sort of explains how these factors are causing big swings. lananh: yes, and there's another important piece, that the markets are going electronic. as they move away from expensive

human traders, they have moved to the markets onto the commuters and used algorithms in order to automate a lot of the training behavior. when the flash crash starts to happen, the computers see a signal and they say sell and the selling keeps going because no one is standing in the way. scarlet: you talk to humans on this, you talk to recruiters. what did you learn from them when it comes to recruiting? them thatlearned from the average recruitment age for people with experience in this market is between three to five years worth of experience. a number of senior people on the fx desks are now -- the ratio between senior persons versus juniors is much bigger. for everyone managing director you have opted seven more junior people. five years ago it was one to four. there are fewer grown-ups on the desk. the pound plunging at 8:00 in new york, not a big deal, not the end of the world. markets recover quickly. is the fear that you have it with a bigger currency in the

middle of the day when equities are trading and there is more action and it has ripple effects? lananh: sure, well, the pound movement was really important signal. it is the fourth-largest traded currency. humana what happened at a strange time, the market fated that -- even though it happened at a strange time, the market fated and move, a lot of people contacted me today and said this is happening across many financial markets. not just fx, the biggest financial market. it is also happening in the bond market and muni market. scarlet: that is certainly worrying. fx is the deepest, biggest, most widely used financial market. day? -- $5.1lars a trillion a day? lananh: it is huge. scarlet: you can read her story on bloomberg.com. joe: time for the biggest is the stories in the news right now. nike released its earnings scorecard for the third quarter

after the closing bell today. the world's largest apparel company posted sales that just missed analyst expectations. analysts had estimated earnings per share of $.53 and revenues of $8.47 billion. the company posted $.68 per share on revenues of $8.4 billion. that was the worst-performing stock of the doubt last year. earnings forported the fiscal third quarter after the close. the parcel delivery giant missed on estimates by posted revenue roughly in line with expectations. fedex reported earnings per share of 2.30 5 billion -- $2.35, up $15 billion in revenue. fedex earnings are considered by some of the weather for the u.s. economy and it reaffirms the full-year earnings forecast. flashs your business update. scarlet: coming up, what you need to know to gear up for the trading day. this is bloomberg. ♪

scarlet: what'd you miss?

u.s. stocks falling today by more than 1%, s&p 500, to get decline in months. up,erms of what is coming japan releases its trade balance data tonight at 7:50 p.m. eastern time. joe: i will be watching the third day of neil gorsuch's confirmation hearing on capitol hill as well as the labor secretary nominee's appearance before the senate to start his confirmation process. scarlet: more on the political docket. james mattistary will testify before the senate on the fiscal year 2018 budget at 10:30 a.m. eastern time. joe: still some economic data, home sales data at 10:00 a.m. eastern. scarlet: thanks for watching. joe: have a great evening. this is bloomberg. ♪

mark: i am mark crumpton. you are liking "bloomberg technology." that's watching "bloomberg technology." judge neil gorsuch back in the hot seat in the hot seat today, giving testimony on the second

day of his confirmation hearing to build a 14 month vacancy on the supreme court. neil gorsuch is unanimously supported by the republicans, but some democrats have made it clear they will not simply rubberstamp the nominee. in a close -- closed-door meeting, president trump had this meeting. pass the obamacare replacement bill, or "risk losing your seat." this came a day after republicans make changes to the bill, aimed at undecided republicans. the u.k. is banning some electronics in eric greitens -- somerplane cabins to middle eastern countries. under the rule, any electronic device adrianna smartphone has to be checked in. hawaii the chinese general -- hawaii, attorney general was to secure a mp