told bloomberg news that the impact could be devastating. it is of white-collar workers were set to become eligible for overtime pay last december under the new rules. they were blocked by a federal judge. the president toss labor secretary nominee won't be if the administration would defend the rules in court. the family of an american who was killed in last week's attack in london is expressing gratitude for the kindness of strangers. insisting that some good will come from the tragedy. curt coffman of utah was on the last day of the european trip with his wife melissa. an attacker motor down pedestrians on west mr. bridge before stabbing a police officer in a parliament yard. britain's has a planned trip to russia by foreign secretary johnson this week has been post owned. the trip is being delayed

because the foreign ministers meeting is being read digital. british officials they johnson has spoken to his russian counterpart are gay love rob -- look toavrov and will have the visit as soon as possible. justin trudeau will move to legalize marijuana by december of 2018. the prime minister's government will introduce the marijuana legislation that month. it would follow through on one of his campaign promises. global news 24 hours a day powered by more than 2600 and analyst in over 120 countries. i'm mark crumpton. this is a burden. -- this is bloomberg. ♪ scarlet: live from bloomberg world have orders in new york.

joe: we are 30 minutes from the close of trade here in the u.s.. darla: the s&p 500 all but .rased the loss almost 1% today joe: the question is, what'd you miss? scarlet: canceling voting on the health care bill, and the white house exceeded the other policy i already's? opec optimism fading. the bullish sentiment is almost all gone with the surgeon's of u.s. drilling rigs and mounting stock files in the world's biggest crude consumer. plus, the mayor of chicago rahm emanuel in new york today accepting an award is one of the world's most influential tech hubs. we will hear from him over the next hour. joe: let's look at where the major averages and as we head towards the close read abigail doolittle is handing by. abigail: we are looking at mixed in unchanged trade for the major averages. the dow down about point percent, the nasdaq up about

12%. the s&p 500 right in the middle, down ever so slightly. sharply after last year -- last week's health care bill that was not passed by the house, calling into question the reflation trade. a little bit of injured a follett -- volatility. day, the longest losing streak and april of 2011. the reflation trade. the gold and silver rallying on the way up about 1%, silver of nearly 2%. they also suggest the fed may a little bit more dovish, can send with the messaging. look at the energy complex. oil had been down almost 2%.

talking about stockpiles and it could take quite some time to reduce right through them. interesting to keep an eye on this. we take a look at g #btv 7181. this is the bloomberg commodity index. this is shown through a committee and function within the bloomberg. the color says it all. green is alleged, the red is harris and the in between colors show the uncertainty. we are clearly in the red, suggesting it is went to more bearish acts in -- actions. supporting the idea that we #dtv 7182. in yellow, we have the commodity. it see those rallied in a big way on hopes that president trump would reagan late the economy with programs policies.

it is all coming in the question. the commodity complex third of the all off and is basically up less than 1% to the election while the s&p 500 was up 9%. does the commodity complex suggest the reflation trade really is coming to an end? joe: thanks, abigail. what did you miss? is the trump really going to turn into a trump slump? the white house failure on health care might be raising concerns that the president's tax of warm plan can also be stalled. is what it means for reflationary trade. at hyman is the chairman and founder of ever core isi. number one ranked economist for 36 years. we were all set to talk about the trump slump and you get anything done.

nonetheless, there are some interesting questions about what has really been driving markets. reflation. what is your main story that you tell? >> my main story has been slow and steady on the economy. issue, what of this investors are thinking today is a chance that trump does something. maybe he brings forth the repatriation of profits. something that doesn't have any particular leverage to get past. second, the world economy, the u.s. economy is doing ok. and people are bright enough to understand that if the economy gets strong, the recession might come sooner. lastly, there's a lot of money in this stem. doing just ok is kind of

good. we've had this extraordinary rally going on his early 2009. we don't necessarily need more than that. >> i have become obsessed with what i see when i travel around. i was in atlanta last week. it is booming. down in that neighborhood, i just met with a guy from grand rapids. every place i go, it's enough to keep these individuals cities. joe: there had been some concern that the jump up and interest rates might take some of the wind out of the sails of housing. >> we have the number one housing in our shop and he reports to me that we're having a strong selling season.

>> the homebuilders survey is up into the right. >> one of the strongest readings for march on record. 64 is a very high reading. housing is doing fine and house prices are up on top of it. >> one asked act of this recovery, people talk about the reflation trade. it is sort of unclear what people mean. as we see commodity rices tail off, there was a positive impact on headline inflation but that was starting to fade pretty fast in terms of the year-over-year trade. what these he of the what do you see on this prospect? >> the signal they are sending me is weaker. oil has been at this level for almost a year now. we're almost back and it made the move up 30 to 50.

and so i am concerned that it is not moving up further. on your question about inflation, i think it is fair to say, today, that inflation has peaked. the cpi got 2.8. joe: we have a chart right there. i anticipated where you are going. upts if the cpi keeps going point to a month, it will stabilize at two point evan percent. -- 2.7%. sounds kind of goldilocksy. we're not going fast enough for the fed to a tolerate and we're not getting the ticket really fast in nation by any measure but there are all kinds of good signs. it seems like things are going pretty good. >> you said it. goldilocks is sort of a cursed term. but a lot of times, it looked

that way. looks like what is going on in the market today. not too slow. capital spending is also clearly on the improving pace. joe: at hyman, chairman of ever core isi. we will be talking about the economy and china. this is bloomberg. ♪

miss? optimismou in china, the corporate leaders are more confident in the economy then they have in at any time since 2014 according to a central bank survey. we are back with the founder and anme in of ev -- chairmn

of evercore isi. often ons up every so the radar of concern in the global economy. what is your assessment? >> it was a hard landing picture with oil below $30. oil is back to $50. everything i see on china is looking better. those surveys you just showed are looking better. .ominal gdp has picked up i think that china has already turned the corner. we also survey about 25 companies every week that do business in china. survey was at maybe two points this past week, coming from 38 to 45 or maybe 35 to 45 on this index. as youfidence survey showed, nominal gdp was 6%. and now it is probably 10% in this quarter.

lacks these are multinational companies that have china business and you ask how things are going on the ground. >> same companies, same person, same question. joe: this is the peavy oc -- pbo c survey of bankers confidence. people suspect that it is a problem. they often talk about the bad debt, the management products. the tensions over short-term funding cost. at this moment, bankers are feeling pretty good. >> china is a mess and will at some point blowup. they have a ton of debt which is unsustainable. or deposits iny banks is $13 trillion. it got another $10 trillion and it is something like 11%. joe: that feeling that china

will blowup, as long as i have been following markets, people have been predicting that. why do people keep getting the timing wrong? >> because it doesn't have a fuse to it. it debt keeps growing faster than the economy. they are growing 11%. bank loans are up something like 13%. same is true for here. have debt grow faster than gdp. joe: another chart that you brought us, newly created urban jobs in china. how many more people every year are getting good paying jobs, adding around 13 million per year. what does this mean for the global economy, this new source of demand? >> it is pretty obvious what it means. so if last year, they created 13 million jobs, we created 2 million jobs.

they have a much bigger population than we have, but there's no law that says they have to create the jobs. think about that. 13 million. we created 2 million. we are 13 million more people working this year than last year to fuel autos and consumer spending, etc. joe: i was going to take it back to -- you talked all these national companies, they are feeling good. there are millions of more potential consumers in china every year. where do you look for the winners? >> everywhere. everybody is a winner. the last time i was here. it can be the biggest market. we would create that. veryhey are coming from

poor to not so poor income levels. toyou go for making 8000 9000, they get their first starbucks cup of coffee. we have already gone through every income trigger. >> we talk about the debt piling up. what about things like governance and restructuring of the economy? i always hear people talk about the need to switch more to a consumption-based economy, be less reliant on investment as a way to fuel growth. you see any sign that they are making progress on that? ,r does this additional growth the come back, is it on doubling down of the old model? >> you have the alibaba consent. they are growing something like 40%. it is more in the service sector now than it has been in the past. trumpinomics.ke take china great again.

they are turned much more insular favoring domestic companies. sound familiar? and they have a huge problem with corruption and pollution. you mentioned trump and one of the obvious reasons to be concerned about china from an investment or economic standpoint is whatever happens with the u.s. china relationship. if there will be additional tariffs. how does that factor into your thinking? trump is goingk to have a trade war with china. henry kissinger was over meeting with the president who is part of trumps policymaking entourage. they made the first ambassador. >> a longtime friend of chichi paying. >> huntsman made the appointment basset are -- ambassador to

russia. and so it seems to me as though trump is trying to put together a group of people that are sort of china friendly. >> perhaps not as antagonistic as people would of thought. final question on china. what would you look for that would make you concern? you talk about the blowup risk. the heads up that something might be happening here. >> it all goes back to $30. it's a very bad sign from china. correlationpercent between china nominal gdp and the price index. china is a novel player and when it gets weaker, it's a sign they are getting weaker. reason to think oil is dropping or something that you watch for? >> my best guess is that it's not, but i'm watching. joe: ed hyman, chairman of evercore isi.

i'm enjoying this conversation so much, we will be talking and looking at some charts. this is bloomberg. ♪

joe: dennis lockhart says he is upbeat about the u.s. economy maintaining a modest pace of growth in the vicinity of 2%. he is cautioning the failure to pass and obama repeal is a warning sign for the administration. friday's outcome of non-vote, thee health care situation, it suggests may be reality is that things will take a little bit more time. and they will be a little bit more difficult to get to the fiscal impact that was assumed in the search of optimism just after the election.

he spoke at the credit suisse asian investment conference in hong kong. and we are back with that hyman, the founder and chairman of evercore isi. is there still room in the cycle for fiscal policy? is that what is helpful at this point in the cycle? >> it doesn't make a difference. it will either happen or it won't happen. as i mentioned on a city by city basis, the u.s. economy is doing fine. there is a good rule of thumb that every quarter, it grows less than 2.5%. like dennis lockhart was talking about. at one more quarter to the expansion. it goes to 2.5 and you take a quarter off. slow and steady is a good thing. you get fiscal stimulus and it

could make the economy better now. or it could bring inflation, overheating, and the shorter cycle. joe: we talked about the u.s. economy and china. let's talk about europe. it is probably surprising to people but the data out of europe looks good lately. talked about how individual cities are doing great. i go there frequently. rome is no good. malan is a little bit better. frank for it is ok. -- frankfurt is ok. london is booming. sticking to the eurozone, i don't see anything taking off. last week, they had the composite pmi over 56. very strong. i am sure the european economy is improving but i'm not sure it's improving as much as some of the data show. we survey companies like we do in china. that survey is also picking up. someone going to europe are

going to these cities, that the data does seem to be turning around. i think it is doing better. the rate is still close to 10% so they are coming from a much weaker position. and so that could explain the difference. said, the data issuing an improvement in europe doesn't feel a strong to me as the u.s. does. politics in europe, it may be one of the big stories this year. the dutch election went by. the french election doesn't seem to be that close in the second round. is that a concern to you? that we continue to see these antiestablishment parties do well?

>> the view right now is that the french elections will go ok. joe: it makes me nervous to hear that. ed: we are the same thing about brexit. we have this odd thing were you get an unexpected event like brexit or the trump election. and the next a, the market starts to go up. i've almost been worried that you get favorable in europe. and today is another one. if it turns out that you have the unexpected, unwanted vote on health care and it looks like the market kind of goes up. job people had a hard predicting the outcome of these political events. ed hyman of evercore. great chatting with you and great insight. the market closes next. let's take a look at the major averages. less than four minutes to the close. basically no change.

everyone thought the selloff was starting today but not happening. this is bloomberg. ♪

>> we are moments away from the

closing bell. the selloff in riskier assets today. investors assessing the white house's ability to deliver on its campaign promises. i'm scarlet fu. joe: i'm joe weisenthal. if you're tuning and live on twitter, and we want to welcome you to our closing bell coverage. scarlet we begin with our market minute. while all indications were before the u.s. trading day began that we would have a selloff but as it turns out, not much of a selloff. joe: i say almost comical. everyone has been waiting for volatility to pick up. we have this great storyline about dysfunction in d.c., no tax cuts. it didn't happen. scarlet: the dow has declined four and eight straight day, the longest losing streak since august 2011. a six-year-long losing streak. levelso at the lowest

since every 14. within the s&p 500, if you look see health, you can care and materials the best performers. health care higher on relief, some of the names like hospitals, the status quo remains. telecom one of the big losers. a lot of those bond proxies like telecom, like utilities, like financials which move in verse two that, doing not so well. in terms of individual movers, i want to highlight dupont here, getting more than 1% chemical. dow chemical and dupont won european union approval for their merger. willospital company, i 2015 on relief is already. is in the s&p 500 iron ore stockpiles building and concerns growing the president may not be able to push through some of his policies.

snap up by 4.8%. goldman sachs rated it a buy. jeffries rated it a buy as well. it now has 12 buy ratings against all the underwriters. joe: finally some people with inclination to push it up and let's look at government bond yields. two-year yields unchanged, 10 year yields ended lower rate significantly lower in the earlier part of the day when we got the worst of the market selloff trade we talk about this 2.6. around 2.3 to we keep oscillating back-and-forth. a big jump, check that out, 30 year yields in south africa, one of the big stories, the finance minister was out on a roadshow to sell south africa as a place to buy debt from an assets. then he was called back, which is the least inspiring thing. there's been a lot of domestic issues for him. president, by the

causing investors a lot of concern. i want to take a quick look at 10 year yields, this is a six-month chart, and this range we are in, going back. a couple weeks after the election from around the two went three to -- 2.3 to 2.6 area. we are at the lower end of the range here. scarlet: when it comes to the u.s. dollar, the dollar down a lot more earlier today in the morning specifically but pared some of its losses. it has now given up almost all its games after november 8, stick -- still clinging to a gain of its postelection low. i'm glad you brought up south africa. the rand the worst performing major. there is a shoot higher in the dollar's value against the rand. no reason was given, that people are thinking maybe there's a cabinet reshuffle in the offing. you look at it year to date before today's slide, the

biggest gainer versus the dollar, up 10.5%. then you have that big leg higher for today. joe: let's look at commodities, starting with gold oil. not a ton of action here. some of those traits doing well. bonds rallies going up a little bit. earlierd been weaker today. coming back a little bit. only down modestly. been getting hammered lately. let's look at a one-month chart of iron or. and obviouslyg concerning, one of these industrial bellweathers. it has done 15% in the month. i want to show cattle futures. i have been trying to show this chart for a long time on the show but we keep adding preempted by the health care vote. cattle futures have done very well lately. there is a scandal with tainted meat in brazil and people are concerned about the quality of meat. brazilian meat exports collapsed.

this causes a rise in everyone else's cattle. a very good month for live cattle. scarlet: those are today's market minutes. we want to take a deep dive now into the bloomberg. i want to start with something from goldman sachs's weekly report, to take a look at the performance of companies with high tax rates. basket of s&pchs 500 members were the highest effective tax rates versus the overall index. the line goes down. they have underperformed in the broader market. you can see they peaked as they were outperforming the broader market. since then it has been a steady drift lower. these companies have given back all their gains over the past three weeks. the house republican blueprint proposed reduction was 20% from 35%. goldman sees the tax rate cut to 25% instead. he says as a result of the earnings boost from corporate

tax reform would likely be delayed until at least 2018. joe: that will be a great chart to keep our eyes on for the next several months as a debate tax reform and it leads nicely into my chart. i have shown it before, president trump's approval and we can chartating, this and theoretically charted against other stuff. his approval rating is at its lowest in a long time. that is the bottom line, and his disapproval rating is 52%. that keeps going up. you just look at the gallup poll, it's pretty bad. we're talking about how this health care vote affects the broader things. you have to figure out why you think it affects -- one affects the other. one factor might be that trump's popularity is declining and so jump aboard his policies. a chart like this might be

concerning for stuff like tax reform. scarlet: it would be good to chart congress's approval rating as well. joe: it can only go up, i think. scarlet: a quick programming reminder on wednesday, the "what'd you miss?" team will take a look into the rise of populism and how it is changing the dynamics of this global economy. we will be speaking with experts on nationalism from around the world, the former ecb president, italy's former prime minister. don't miss this special hour of programming that begins at 4:00 p.m. on wednesday. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" is in newof chicago york city today, expecting the award for the city is one of the most innovative tech have

sprayed david gura is joined by the mayor at the nasdaq. i'm here with mayor rahm emanuel. when i think about innovation chicago, i think about a trip i took a two-year -- two years ago. i saw that action firsthand. how do you convince entrepreneurs to come to chicago to do business there? >> it's already happening. a recent study by kpmg show chicago is six in the world as a tech center, beating both boston, tel aviv,, berlin. we are the number one city for return on venture capital. vc's already know it and now they are further investing in the city. is alreadytion happening and what i'm trying to do is support the innovators. with all our universities, 16 of for, basically modified h1b innovators and immigrants who want to come and bring innovation and their patterns and research to our universities. talentinue to nurture

coming to the city of chicago, and creating a platform for that success. on money and talent, they are already showing up. visas toink with the university communities, and you see where it's growing, a lot of it has to do with universities. what is replicatable? >> nothing. here's the thing. we have more universities than any other city and the united states but boston. i meet with presidents of universities once every quarter, what are you doing on n r&d and what can we do to get that r&d. i know three engineering schools that are going up in the next year in chicago. them.ed that research facility in engineering, computer science, biomedical, helps us. that research diversified economy in the world and the united states. i have created innovation spaces, we saw 1871, we have matter and health care.

we take subjects were we have big companies, research, innovation for the entrepreneurs. capital yet, and give us collaborative space that are giant garages to work together and take their ideas from a concept into production. and that has worked in a way that nothing else. third, we have gone afterwe havd manufacturing research in the third, we have gone after major

research. we have the next battery research out of the department of energy. was you see. we set up a summit and now we are the number one city not only on returns. else was going down, we were going up in venture funding. it was anthe h1b, idea and entrepreneur gave me. i meet with them and say collaboratively, we are partners, you have your role, you create jobs and innovation. my job is to smooth out the problem and give you certainty. >> what does that mean for chicago where immigration has been so important to this city? >> is important to the history, that means it's important to the future. 100 years ago, chicago welcomed

my grandfather who was 13 years old, in 1917, leaving the programs of eastern europe. pogroms of eastern europe. his grandson became the mayor of that city. that tells you the power of america. if you come from ireland or india, you come from poland or pakistan, you come from mexico or mold over -- moldova, the american dream is alive and well if you work hard and play by the rules. we always welcome people who believe in america, because it keeps the american dream alive and well. i went to the head of the army. graduation. we met with 20 kits. nine of them are dreamers. want to go on to west point. they are in a military high school and they want to go to west point. it want to go to college and be civil engineers. what are we saying no to that for?

it's counterintuitive. do you believe in small business? you have to be pro-immigrant because 40% of small businesses are emigrants traded do you believe in entrepreneurship and innovation? nearly half the patents out of the university of illinois come from immigrants. the funding matter, the teeth of the matter jeff sessions brought up is funding will be withheld from cities like yours. how do you plan to fight -- >> i just heard about it. i'm not sure it's even legal. there's a question of whether it's even legal to do that. my view is, we welcome people who will work hard and play by the rules. that is what chicago believes. i will give you another example. we are the only city in the united states who if you get a b average, community colleges free. you have to earn it by getting good grades. it's the only public scholarship for dreamres. -- dreamers. workot a b average, your

is not warranted, not we lcomed here? my grandfather came to chicago. .hey work hard they're going to work hard and play by the rules. we welcome the dreamer to chicago. we want them to succeed. we want them when they come from college, from community college, come from the armed services, see chicago is the home. >> less question about the conversation over corporate tax. you are talking to business leaders in chicago. are you optimistic about the process of that having? >> as former congressman of ways id means, corporate reform, don't think it is everything everyone is talking about. city of chicago become the number one city for corporate relocation four years in a row, the number one city four foreign direct investment four years in a row? how did chicago also become the

number one city four return on vc? t's.led him five talent, training, technology, transportation, and transparency. taxes would probably be the sixth t. t's. talent,it is important because f certainty. roleublic sector plays a in ensuring that companies have the talent they are looking for, the transportation to get to anywhere their customers or clients are anywhere in the world, corporations lay a in ensuring the educational system is providing that talent, but your technology and transparency we are giving you the certainty to invest. the biggest thing companies are looking for to invest is certainty, not what the rate is. unless the white house has done a very particular thing, learned lesson over health care, the biggest way you advance in life is through failures. from failures. if you aren't honest and you don't learn from it, corporate taxes aren't easier.

ronald reagan took 2 years. >> thank you very much. rahm emanuel joining me. back over to you. scarlet: that was chicago mayor rahm emanuel with david gura at the nasdaq. joe: let's take a deep dive into the bloomberg. you can find this chart and all the charts we look at using the function at the bottom of your screen. let's look at relative valuations between s&p and emerging markets. in the immediate wake of the election we saw the s&p do really well, emerging markets sold off. emerging markets have come back quite nicely. we have done fantastically lately. but they continue to be undervalued. this shows this measure forward pe for the emerging markets shows people are still paying quite a bit for the s&p. theoretically more room for em. to talk more about this, i want to bring in our guest who made this chart, a strategist here at

bloomberg. we had a pretty surprising extraordinary em run. does this chart suggests it has more room to go? >> i think so. as you can see, we are basically at the top. certainly against the s&p, but think it was a very compelling valuation argument. it is compounded by the fact that you actually look at em earnings themselves. they have gone down basically since 2010. and have finally started to turn up a bit. scarlet: there's that turn right there, right? >> that's the one. morgante line there is a stanley indicator, leading indicator of global trade. emerging market economies tend to be fairly open and fairly sensitive global trade volumes. you can see the morgan stanley indicator, a pretty good proxy in real-time for global trade volume, is going up, and where that leads, em earnings follow. joe: it's a good reminder.

when we talk about u.s. stocks, earnings, when we talk about em, we tend to talk macro. it's a good reminder that the reason the macro is because the trade flows into real earnings. >> you like to think so. theoretically. joe: exactly. scarlet: it's interesting that em follows trade flows. do u.s. stocks follow trade flows in any way? the president and administration focuses so much on trade do u.s. equity fundamentals follow that? >> i have not run that particular -- those particular numbers. it is a somewhat less strong relationship. ng andll the offshori production the u.s. firms have taken overseas, which is enhanced u.s. corporate earnings, there's clearly a relationship there. the u.s. trade deficit with china is not -- chinese firms selling widgets to the u.s.

it is apple making iphones in china and bringing them back home. scarlet: perhaps the numbers don't seem to capture everything that is going on. a micro strategist who you can find, you can read all his writing on nygo. this is bloomberg. ♪

scarlet: -- permian is a great base, fantastic. if we still had our assets in the permian we would be happy but we don't. we have a portfolio in the lower 48, more gas oriented, but it has liquid in it. we're using the same technologies being used in the

permian to unlock new resources in our asset ace in the lower 48, and taking that technology and doing world scale projects in other places like oman, one of the first world scale tie gas projects coming on this year. scarlet: do you feeling you can get a good oil portfolio without the permian? >> yes. places in the world, i think they will unfold slower than they have in the u.s. because you don't have rabbit ownership in other places -- private ownership in other places in the world. how much shale, in the usa do you feel like is on offer right now? >> a lot. depends what the prices. scarlet: do you think there is a bubble in the permian? i think there are nice opportunities but they have to be at the right price. it looks pretty permian.iced in the

there are other areas where we think technology can apply, they are not quite as sexy or active as the permian and we will be concentrating on those areas. various areas around our portfolio in the west, san juan forn, and haynesville, those kinds of areas that are a little bit more gassy than the permian. permian. there are other areas where we think technology canthey still e in those resources. >> and those valuations? are not changing hands that much. if you have a strategic position and if you can add value to synergies or operations, there are opportunities. >> you are trying to target a breakeven by 2021. does that imply less m&a going forward? >> no. that's a cash break even that represents how much operating cash we would have, the we also would take for cap x and are dividends. wethose levels prices of 55, generate a lot of free cash flow, excess free cash flow we can use for balance sheet shareholder distributions,

investment, however we choose to use it. the signal would be held and resilience there with incremental free cash flows substantially different than otherwise. do you think cuts will be extended? i don't know. the meeting they held this weekend looked like it was a fairly positive meeting to roll the cuts forward. they said they would evaluate in april and make a decision in may. i don't have any specific information. many places in the world we operate and produce with opec members like angola, russia. however that works out, we will be participating in that. >> how does that lineup working? you are in most of the money from a seed each arrow -- barrel that is pumped. is that true for you? >> in areas where there would be

production response to the cuts, like an avid debbie, angola, russia, that would flow back to us in either fees or production levels. but by the time you get to our through those subsidiaries, they are pretty small for us. >> why the 24 stake in rosneft? we have a long-standing relationship in russia through multiple companies. gives us arosneft world-class position in the company that is one of the largest hydrocarbon producers in the world. a are a great company. we are also doing joint ventures, bp with rosneft in russia. >> that was lamar mckay speaking with alix steel. not gettingxt, oil excited by the latest opec crunch. we speak with a global

energy strategist at credit suisse. this is bloomberg. ♪

contractors to -- labor violations. the other three were rules mr. grabs,alls federal power including one on school accountability standards. british prime minister theresa may's government is bracing for a brexit\. three senior members of her administration tell bloomberg the biggest single obstacle to winning favorable exit terms is an emotional reaction from the european union. one of those official says the

prime minister hasn't worked hard enough to charm eu leaders. the russian opposition leader dayseen jailed for 15 after the largest antigovernment demonstrations in at least five years. ofnvicted organizing an unsanctioned protest. demonstrators rallied in more than 80 locations. after the vote the raiders owner spoke to reporters. >> i have mixed feelings. i love the fans in oakland. i know there's going to be disappointment and maybe some

anger. i just hope in the future as we play in oakland this year, they it looked like we were on our way to a selloff. end, the dow losing 46 points. the s&p 500 shrugging off 1/10 of 1% and the nasdaq up by 11 points. joe: still waiting on that catalyst that will get the volatility going. "what'd you miss?" oil producers over the weekend voice they are considering extending their pact to limit supply. for more on this, let's bring in at credit suisse straight there have been a lot of optimism about oil going into the year, opec deal all of that. so far it has been a disappointment. which way are we going next? >> it is a, that time of year.

b, we are generally underestimating the trends in the market which remain positive, the trends. we are in a correction. joe: when you say trend, you are talking supply demand trends. >> correct. i believe, and we can show with backward looking data, though we are in a supply deficit. that's kind of where we want to be. it would be nice if it was bigger, if a deficit showed up here where we could see it. globally we seem to be in a deficit and that's a good thing. everyone seems to be trading off of -- let's look at this chart first. brent is in can tango right now. anything below the yellow dotted line. it's getting closer to backwardation. this is the direction you want to see it moving, right? >> correct. scarlet: my mistake, that should be eight dollars.

seeing in thise chart? >> this differential looks forward. all my data looks backwards. if this chart is right, the aggregate of commercial -- those really shaped the curve, those that trade the most, they seem to be seeing an ever tightening market, a market that is becoming less loose. if this is right, the trend of travel, we should get backwards in the third quarter, right? joe: these trends, when you talk about improving fundamentals for supply and demand, how much of that is opec, how much of that is non-opec, and how much of that is on the demand side? >> i think it is to it half years of low prices. and now it is and opec and non--opec. until recently, america was declining. demand keeps on growing.

demand on the one side going up, supply having keeled over. scarlet: when you look at the demand side, what is at most risk of not delivering when it comes to demand? >> the data late last year, early this year, wobbly in ,laces like india, in china which has seen the look a growth, if you want. america, still clicking over positive. then we don't think the china stroke india are new structural issues. , we think broadly speaking growth, developed markets, a little bit positive in the aggregate, 1.4 point dollars, $1.5 million. joe: you mention the reason for the improve supply picture is we have 2 1/2 years of low prices. the cure for low prices is low

prices. the other people point to the fact that rig counts are surging in the u.s., inventory in the u.s. is high. the u.s. is not enough of a swing producer to change the global picture, is that what you are saying? >> we learned that back in 2013, 2014, the united states is capable of messing the whole thing up. this time around, the united states is beginning to lower, is now in third quarter. we need another couple quarters to hit that growth. two, non-opec outside america is in decline. number three, opec -- joe: what are the key non-opec countries you are watching decline? extend,a, russia, has and brazil -- kaz extent, -- kazakhstan, and brazil. we like to watch them all. if you are asking me for risks, how fast is china going to decline?

how fast can brazil grow? we think about 100,000 barrels a day, in the aggregate. and ifadd everyone up everybody outperforms just a little bit, you upset the apple cart. scarlet: when it comes to the supply side, we begin the segment by talking about how a is considering extending production limits. who is most at risk of not complying? that's kind of funny, who will fall off the wagon first. the saudi's are front and center of outperforming on the compliance side. uauae, qatar -- ministersthe russian was fairly constructive in that regard. iraq, probably, judging from the recent past, is probably most at risk of not complying. scarlet: we will look for that.

thank you so much. coming up, moments after their hopes of undoing obamacare unravel, president trump and house republicans say they are moving on to another ambitious goal, overhauling the u.s. tax code. this is bloomberg. ♪

joe: moments after the american health care act unraveled, president donald trump and top republicans announced their plans to shift focus to the u.s. tax code. a quick solution won't be in the cards. earlier today the white house press secretary addressed the panel. >> the secretary talked about august is a target rate. and i think it depends. joe: joining us with the latest

is -- will tax be easier than tax reform? is. don't know that it the last time comprehensive tax reform happened was 1986. speaker paul ryan was in high school. the number of members of congress who are still around today with that institutional memory, you can probably count them on your fingers. this is a difficult task that requires taking a painful vote that will have winners and losers. there's a lot of similarities to healthcare. the reason it will be so challenging as we have seen on hasth care, speaker ryan moderates on one hand flexing their muscle and making clear they will not vote for legislation if it doesn't have things they want or if it moves too far to the right, and you have the freedom caucus a driving a hard bargain making clear they will not compromise.

the big question now for republicans on taxes is whether they end upthe big question nowr republicans on taxes is whether they end up making a permanent overhaul which would require revenue raises in the long run, or whether they end up doing something like president bush the big question now for republicans on taxes is whether they end up making a permanent overhaul which would require revenue raises in the long run, or whether they end up doing something like president bush did, which is essentially tax cuts that are up after 10 years. joe: you are saying they can't just come in and say, cut a a bunch numbers and lop off of everyone on taxes. you will be more complex than that. what are the key moving parts they will be haggling over? >> there's going to be a big income tax cut, the corporate tax cut. tax codes from seven tax 3 tax brackets. on the corporate 3 tax brackets. on the corporate side it is mark obligated, they want to replace the corporate tax code with a border adjusted tax that effectively raises taxes on importers. they want to change interest the duct ability, and they are looking at a variety of other things they have not made a decision on what to do about carried interest. there are a lot of moving parts.

the most controversial thing about this is the border adjusted tax. that is a key revenue proposal. we are talking about roughly $1 trillion in revenue. joe: it's easy to understand the dividing line between paul ryan and the freedom caucus when it came to repealing and replacing obamacare. the freedom caucus just wanted to rip out as much as they could, paul ryan wanted to do more around the edges. what are the key ideological differences this time around between, say, paul ryan and the more radicals in his party? >> i would say the freedom caucus right now is not convinced this needs to be revenue neutral. there are members -- the chairman of the group said yesterday on the sunday show that he doesn't personally believe this needs to be offset. if that and suddenly case, they will not be able to make this permanent. he will have to sunset in 10 years. freedom caucus is made up of

hard-core conservatives that you know whose belief is that we should not have to raise revenues to compensate, but to offset tax cuts. if anything, governed spending -- government spending should be cut and the government should keep his hand out of the country's economy to the extent it possibly can. that is one of the big dividing lines. beyond that, we don't know. the freedom caucus has not put forward a list of demands. i suspect we're going to see them making demands. joe: nobody has the definitive story about why health care reform failed. one line of inquiry is that house --trump house --trump

really didn't care that much about the nitty-gritty of details. did the one house have a more clear agenda when it comes to tax reform? >> have a more clear agenda when it comes to tax reform? >> i don't know about clear. i think the white house has signaled that president trump is going to be more involved in this. we had white house spokesman sean spicer saying a couple of hours ago that the white house is going to be driving the train on this. it seems like they intend to take a different approach on it right what house republicans have told me is it would help if president trump were more active and if he did not get distracted by other issues, if he did not fire off wayward tweets, which is something that leader mcconnell and the senate, the leader of republicans in the senate, is also pointed out as something that doesn't help republicans' efforts to get things done. joe: thank you very much. >> thank you. scarlet: midlife mortality rates for white men continue to rise. from someone who co-authored research on why this might be the case. this is bloomberg. ♪

a brookings institute study found that while midlife mortality rates continue to fall generally in the u.s., middle-aged whites with no more than a high school degree experience increasing midlife mortality since the late 1990's. earlier today i spoke with nobel laureate angus deaton, professor of economics and international affairs at princeton university, at co-authored a study princeton. began by telling me what has changed since the last conducted this research a few years ago. >> we have two more years of data. hoped that partsgan by tellinge of this like the opioid epidemic might have eased off in the last two years. in fact, trends have gone on to getting worse. the second thing that we highlight here which we didn't really highlight before is how education is increasingly dividing the country, police dividing whites between those who have a b.a. and those who do not have a b.a.

we thought it was an extraordinary finding,, the whites with only a high school degree or less now have higher mortality rates than african-americans. forever, african-americans have been on the bottom of the mortality pile. they have been replaced by the white working class, in some sense. the final thing is, we emphasize very much at the end of the paper, it's not just morbidity and mortality, it is marriage trends, socializing, disability. it's a whole bunch of bad stuff, tracking along in parallel over the last 40 years. joe: one of the things you noted in this research -- they're still doesn't seem to be a clean answer in terms of what happens. you might assume that the economic situation is a big factor. of course, the economic situation has been bleak for

minority groups in this country for a while and it has also been bleak and europe, which has also had to deal with a large financial crisis and a big surge in unemployment. what are the other factors that you think could be driving this? it's perfectly clear that it is not prosperity, for just the reasons you have given. there's no spike in bad stuff after the financial crisis, and the financial crisis affected different european countries in different ways and you just don't see any relationship between mortality patterns. we may not have the final answer, but it is clear that whatever this is, it's a long-term process. i think of it like the trip of a cap. longually if the tap drips enough, you get a hole in the marble underneath, it has been scooped out. you raised some hard questions for which we only have partial answer. are mores -- blacks

optimistic about the future. in the 1970's, 1960's and 1970's they had major gains relative to whites and they are much more hopeful about their future and their position than whites are. we don't really know about europe and it's a good question. if i were arguing this from the left, we would say that there is a much more vigorous trends for a social safety net in europe than there is here. guy whore a 53-year-old a -- and of pain and has been a dead end jobs for a while, you can retire on basically full income in her early 50's. that is just not an option here. yoursomething you noted in paper, historically it's not always the case that you see these big declines in health or other related things alongside stagnant economies, as you mentioned, after the 1970's u.s. growth started to fade.

however, we continue to see a decline in mortality across all groups. what is the relationship generally, between economics, growth, and health outcomes? angus: it's a pretty weak and inconsistent one. i wrote a book called "the great escape" in light of the argument in this book is historically and geographically across countries, there's really no consistent relationship between economic growth and health improvements. a lot of health improvements come from behavioral change. sometimes they come from medical advance. from talkingy come about poor countries from clean water systems or vaccinations and those require governments to acts together or they require new discoveries straight

what happened after 1970 in the u.s. was people began to quit smoking. there was a lot of new antihypertensive. people got their blood pressure under control. that saved a lot of people from having heart attacks who would otherwise die. economic growth is clearly sort of a positive factor. know, there's a lot literature going back in the u.s., the 1920's that suggest mortality rates are higher in good together or they require new discoveries straight what happened times than in poo. joe: one driving factor that has gotten a lot of attention in recent years and lately is the academic. how much could it be simple policies related to academic. the prescription of strong painkillers and the addiction brought by that? angus: that's a very important part of it. those thingsw that are grossly overprescribed. it's not even clear that the fda should ever have approved the

use of things like on sick -- moderate pain, which is something they did. the addiction and risk is greater than the benefits in that situation for which there are other therapies. i think this really has been a disaster, and i think -- that said, this is clearly not a deep cause. the phrase we have been using is it is like throwing fuel on the flames. there's a lot of unhappiness, a lot of pain, and we believe unhappiness, these lives coming apart, dysfunctional marriage , thehildbearing patterns decline of the white working class would have been there had opioids never been invented great when you bring opioids into that situation, it really is making things a lot worse. joe: that was nobel laureate professor of

economics and international affairs at princeton university. scarlet: wednesday beginning at 4:00 p.m., the team will be taking a look at the rise of populism and how changing the dynamics of the global economy. we have experts on nationalism from around the world. don't miss our special hour of programming at 4:00 p.m. on wednesday. joe: coming up, but you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" losses in u.s. equities. the dow and eight straight day of decline. some disappointment over the health care bill.

joe: it was much worse earlier in the day. scarlet: in just a couple hours, the credit suisse losses in u.s. equities. the dow and eight straight day of ceo will be joining the bloomberg daybreak: asia team in hong kong at eight: 10:00 p.m. new york time. joe: i will be looking at the scottish parliament. they will be expected to vote on whether to demand powers from the british government to hold a referendum. maybe another referendum in the future. scarlet: in the u.s., february retail and wholesale and inventory data comes out at 8:30 a.m. eastern time. joe: don't miss this, we will have live coverage of fed chair janet yellen's remarks in washington at 12 1:50 p.m. attention homeowners age sixty-two and older. one reverse mortgage has a great way for you to live a better retirement... it's called a reverse mortgage. call rfree information kityour with no obligation. it answers questions like... how a reverse mortgage works,

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required respective federal contractors to disclose their labor violations. a senate panel will delay a vote on neil gorsuch, the nominee for the supreme court. independents announced their opposition. in favor of corporations. house intel chair devin nunes has not revealed the source behind claims the communications were captured in a sweeping surveillance. a spokesman admitted both met at uneswhite house before ne made the announcement. the afl-cio is planning on suing the government. millions of workers were eligible for overtime last december over the numeral, but they were blocked by a federal judge. open will say goodbye to the -- oakland will say goodbye to the raider. they approved a move to las vegas.