intelligence reports on dozens of occasions that connect to the trump transition and campaign. a pattern of requests was reportedly discovered in a national security council review of the government's policy on what is called unmasking the identities of individuals in the u.s. who are not targets of electronic eavesdroppin but whose communications are connected -- collected incidentally. normally, those are redacted from conversations. president trump met with egyptian president at the white house today. the administration says the goal is to rebuild relations that were strained during the obama years. egyptian president needs financial and military support to revive egypt's economy. he came to power after the 2013 overthrow of president mohammed morsi of the muslim brotherhood. british prime minister theresa may began her three-day visit to the middle east in jordan

meeting with king abdullah. ae expected to announce boost of cooperation by sending more military trainers to jordan to help the air force in the fight against islamic state. prime minister may is also scheduled to stop in saudi arabia. the white house is agreed to a request from the national archives and records administration to document each tweet posted by president trump. that is according to the associated press which reports the request includes even deleted or corrupted posts. the presidential records act requires such correspondence to be preserved for history. the previous administration used an automated system to keep copies of president obama's tweets. 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: live from new york, i am scarlet fu. joe: and i am joe weisenthal. we are 30 minutes from the close of trading in the u.s. scarlet: u.s. stocks kicking off the second quarter with modest losses. joe: question is, "what'd you miss?" scarlet: auto sales falling short of expectations. they are reporting some of the biggest declines, so much so that tesla has surged in market value. the country loses its investment grade credit rating for the first time in 17 years with a negative outlook. how the leadership put the economy at risk. latin american distress. the venezuelan opposition leader calls for the removal of the supreme court judges who stripped our from congress. we will look at the crisis in latin america. let's look at where the

major averages stand as we head toward the close. abigail doolittle is standing by. abigail: heading into the close, we are looking at small declines for the major averages. the dow, s&p, and nasdaq are all down modestly. these declines do not tell the complete picture. we have had a little of everything today. lows, the s&p 500 was down nearly .7%. the dow had been down .7%. now down less than .1%. anything can happen in the next 30 minutes. it will be interesting to see whether a turnaround can happen. one reason the averages are off the lows, we had recovery for the banks. the banking index have been down more than 1% earlier. a continuation of something we saw in march. march was the worst month for the financials since brexit. in march down fractionally. 500ink, we have the s&p

financial index having the worst month since june of last year. bank of america at one point down 14%. a true correction. some analysts say there could be more to go. this does include charles peabody. he did tell me earlier he thinks we are going to see a bear market for financials. there are a few reasons. one of the near-term reasons, he thinks q1 will mark peek profitability. he expects to see trading revenue around fixed income decline. this is the fixed income trading for morgan stanley over the last eight quarters. it had declined and so had the stock. around march of last year, the fourth quarter of 2015, we saw a big recovery. also for the stock. charles peabody expects to see a decline. he thinks some of these banks could start to offer guidance

ahead of their reports were on the reports given his recent conversations with management. he thinks this revenue will decline and could take the stocks with it. he thinks we could see a bear market for financial sector. also for long-term reasons, thinking in 2018 estimates will have to come down. the reason this matters, one must chart --one last chart. your to date, the s&p 500 is up about 5%. the financial sector is up more than 1.5%. the financial sector has been a big tailwind out of the election. this year, not so much. if we see continued declines for the banking sector, it could be a drive for the s&p 500. perhaps it will not just be a correction for financial but maybe for the s&p 500, the other major averages overall, after the worst month since brexit. joe: thanks. let's talk more banks. "what'd you miss?"

a wave of the regulation crashing onto u.s. shores and touching everything from relay for life to environment of policies -- from regulatory policies to environmental policies. sean tuffy joins us from london. great to have you back. lots of issues relating to banks. let's start in the u.s. goldman was out with a chart over the weekend pointing out some of the exuberance over bank regulation appears to be coming out of bankshares. where do you see the regulatory landscape in the u.s.? our thing still moving along in terms of changing the picture? >> i think unfortunately not. there has been a lot of sound and fury about a deregulatory agenda. the fact is there has been no momentum more movement -- or movement on that. the only thing trump has done his request a study to look at

the impact of the deregulatory environment. i think we are a long ways off from major deregulation. scarlet: that chart highlights how investors have pushed take shares up. goldman said the deregulation would not lift prices as much as share prices reflect. how confident are you the white house and congress will tackle financial deregulation in an effective way? unlike how they dealt with the health care situation. >> it will be interesting to see what lessons they have learned. i think with financial regulation, it is different in that the house has a few plans they would like to move forward with. i think there is more of a definite framework. i think we need to remember in order for substantive changes to happen, you need to get 60 votes in the senate. i'm not sure they can get all 52 republicans on board, let alone six democrats to the fact --

defect. joe: is there anything that can be done by the administration or does this have to go down the legislative route? >> there are some other avenues. i think that is probably where we will see action. there are a couple of avenues. the big one is the budget reconciliation technique which is the funding -- defunding items republicans have in their crosshairs. there are two big ones. one empowers the fda to wind down too big to fail entities that run into trouble or the financial protection bureau in the republican process. scarlet: let's transition to the u.k. theresa may triggered article 50 which begins a two-year negotiation for separation from the european union. when negotiating the relationship, do the sides tackle the challenge of financial services first or wait

until they find common ground on other issues? how high is it on the must address list they have? >> it is a great question. it sometimes depends on the day when you are looking at daily news reports. the financial sector is a big part of the u.k. economy. it does feature prominently. there are larger issues structurally around the framework of the relationship between the e.u. and u.k. i do not think they will address specifics of the financial relationship right away. i think it is clear at this point we are looking, you talked earlier this year about a soft to hard brexit spectrum. i think the u.k. has admitted they will end up outside the single market. i think the financial sector has braced itself for a hard brexit. joe: how much of the u.k. financial sector is really at risk? we have seen reports about major with staff in other

countries. from your perspective looking at the total size of the sector, how much could get hit in a hard brexit? >> it is a hard question to answer. see the threell major pillars of the financial sector, insurance, asset-management, and banks, all moving operations to remaining e.u. countries. i think it will be significant. the other thing to remember is there's going to be movement in the jobs we do not see. i mean typically people would by default it is set up in european -- set up european financial head quarters in london or put jobs there. i think you will see new jobs created outside of london. joe: they will not be counted as job losses because they were never there in the first place. but in some alternate scenario, they probably would have gone

into london. >> exactly. it is the losses you cannot see. scarlet: how patient global banks will be during the negotiation depends on they have a standstill arrangement until the rules take effect or they thate a phase in period theresa may referred to in her letter. do we have a sense of the timeline banks are working with when it comes to planning out how they proceed? >> think most banks -- i think most banks, the bigger question now is orderly versus disorderly brexit. i think most financial institutions are looking to have the decisions made before the end of this year and any movement necessary in 18. they will have to move ahead of the deadline because they cannot wait to find out if there will be a transition or not. scarlet: a lot of details will depend on who is negotiating

them. cohen has said personnel is policy. can you tell us more about david davis who is responsible for negotiating the u.k.'s exit from the european union? brexiteer.n ardent he was clearly on the side of the u.k. leaving. against the former european commissioner who is very experienced with the type of negotiations. it will be interesting to watch how it pans out. joe: theresa may explicitly mentioned financial services in her letter and the importance of maintaining that relationship. what does the dream scenario look like froor may? she came out with the negotiation exactly what she wanted. what is a plausible upside for the future of financial services

in the u.k.? >> i think theresa may's dream scenario of the plausible upside are different things. the likely outcome is the u.k. will not be outside physical market and certain financial sectors may have negotiated equivalent regimes but not be full-fledged access they enjoy today. scarlet: you noted in your research if negotiations are not extended, wto rules kick in. we know how they treat financial services? are more for goods. i think that part of the equation is more for the real economy than the financial sector. , thank youan tuffy so much. coming up, he has litigated some of the biggest court cases of his generation. david boies takes us through the

nomination of neil gorsuch. from new york, this is bloomberg. ♪

♪ scarlet: "what'd you miss?" senate democrats appear to have enough votes to block neil gorsuch. signaling they could change rules for confirmation. earlier, we spoke with attorney david boies who argued many landmark cases in front of the supreme court. asked why wall street should care if gorsuch is on the supreme court or not. >> more and more cases are going

to the supreme court. not just on constitutional issues but on statutory interpretation issues. one of the things you are looking for is what the court is going to be doing on issues that involve the regulation of business. one of the things that happened starting in the depression with president roosevelt is more power to regulate the economy was given to administrative agencies. that has been cut back a little bit over time. the real question is how much that is going to be cut back in the future. i think you are looking at judges like judge gorsuch and others on the court to see how much leeway they are prepared to continue to give administrative agencies in terms of controlling the economy. >> there was a day when we had supreme court justices who had worked with the companies and knew the ins and outs. we don't really have much of that on the court now. should we be concerned about that? do these judges understandably

business works? >> i am concerned about that. i think we have gotten away from having people on the court who practiced law and represented businesses and individuals through most of their career. some of the people on the court have done some practice. predominantly, they have been in academic and government life on the bench. those are important qualifications. but i would like to see people like powell and white who i think brought to the court a perspective on the way businesses actually operate. >> gorsuch is up for a vote today. is there any question in your mind he is qualified? you know something of him. is there any question in your mind he is qualified? >> there is no question this is an extremely qualified person. he is very intelligent, works hard, person of enormous integrity. great judicial temperament. the problem is if that was enough to get on the supreme court, there would not be a vacancy.

garland would already be on the supreme court. one of the issues the senate has to face is what the criteria are for putting somebody on the court who has been nominated by the president. i think we got off track with garland. ifhink one of the issues is the republicans are going to play one way and the democrats will play a different way, you'll get it unbalanced. you have a very qualified candidate here. on the other hand, you have a that emphasized with garland it is not just how qualified somebody is in terms of advise and consent. >> is there a larger issue if they cannot get the 60 votes to support judge gorsuch and go nuclear? does that likely lead to a more partisan supreme court? you have 51-49 judges.

they do not have the broad support we have expected from supreme court justices. >> i think that is right. i am not a big fan of the 60-vote requirement. i think when you are dealing with the supreme court, somebody who will be on for life, maybe 30 or 40 years, you want to have somebody that represents a broad consensus. i think the 60-vote requirement plays a role in making sure you do not get people on the court that are 51-49 in terms of approval or that you had that kind of divisiveness. the last you judges have had 60 votes. i think that is important to the court. on the other hand, i think if they do go nuclear, that is a rule that in a lot of respects has held back progress. i think if you eliminate the 60-vote requirement, in the long run that is not a bad thing. scarlet: that was david boies speaking with david westin

earlier today. joe: time for a look at some of the biggest business stories in the news right now. panera bread exploring a range of strategic options after receiving interest about a potential takeover according to people of knowledge of the matter who say one option is a potential sale. the bakery chain is said to be working with advisors. it is not guaranteed any deal will close. shares climbed 20% the last 12 months closing friday at an all-time high. another setback for j.crew. the president and executive creative director will step down when her contract expires in december. provided the creative vision behind the brand for years. it is dealing with heavy debt and a shift from mall-based retail. same the -- same-store sales fell.

imagine plunged as much as 70% after apple notified the company it will phase out using its graphics technology within two years. it is the latest example of the tech giant's affect on smaller providers with apple providing over half of its revenue. from finding fresh support hedge funds. leveraging investors turned forish on the mexican peso the first time since donald trump became the republican nominee. 11% aftereso surged 11 consecutive quarters of losses. that is your bloomberg business flash. scarlet: next, volatility at near record lows. we will look at one indicator that closely hugs the vix. from new york, this is bloomberg. ♪

♪ scarlet: i am scarlet fu "what'd you miss?" with the vix moving higher, i want to put it into perspective. long-term, the vix is fairly low. you are looking at the vix since 2000. that is the blue line. the white line is the high-yield index. the high-yield spread. cameron argues it is not out of whack when you compare it to credit spreads. as you can see, both are below the long-term historical averages. those are the dotted lines. they both measure the current market risk appetite. many people say we are near an inflection point. you should look for these metrics to perhaps signal a turn. i love this because this is a great way of putting into perspective the vix's move. it is not really an outlier. joe: it corroborates with what the market did.

i am looking at unemployment in the eurozone which fell to its lowest level in several years. it is still up at 9.5%. although it is at its lowest level in several years, it is still high. people say there is room to improve. i looked at the spread between the u.s. and eurozone unemployment rate. there is a 4.8% gap. it is not that out of whack with history. structurally, the eurozone unemployment does tend to be higher than u.s. unemployment. one more interesting thing. two. when the two converged both had to do with recessions in 2001 and 2008 which suggested u.s. unemployment is more volatile. probably has something to do with our weaker safety net. europe is stable but higher and hours swings more wildly. interesting perspective. scarlet: within europe, the unemployment rate, in germany and greece on the other extreme.

joe: there are a lot of economies in the number. scarlet: the market closes. we will look at the major indexes. this is bloomberg. ♪

♪ scarlet: we're moments away from

the closing bell. u.s. stocks falling just barely. carmakers reporting worse than expected market sales, making them one of the biggest drag on the s&p 500 today. i'm scarlet fu. joe: i am joe weisenthal. we are doing your cozumel coverage -- closing bell coverage. scarlet: we begin with our market minutes. in u.s. drop here stocks if you look at the major indexes. they were kids losses triggered by disappointing auto self for the month of march. ofauto sales for the month march. the s&p 500 only using -- losing 500 points. let's look at the imap for the bloomberg. automakers are included in the consumer discretionary and you can see autos and the consumer

component sector off 2.3%. in terms of another group that disappointed, look to bring you to the restaurant index. i bring this up because a bring large -- because of bloomberg is in play, it received inbound interest. april 1%.rising overall, the index is a down. actually it was up barely. how some testament to of these bigger names listed the group. general motors and ford reported u.s. market sales, gm down by 3.4%. o'reilly automotive and autozone getting downgraded. joe: let's take a look at the

government bond market. starting the new quarter with lower yields. the u.s. 10 year yields down to 3.24. it had been lower in the earlier part of the day. once again heading down to the low part of the range we talk about, right around 2.3. same story in europe, german two-year going into negative territory. the ecb is not going to be in any hurry to remove this existing state of accommodation. scarlet: let's start with the south african rand. s&p reducing south africa's credit rating with a negative outlook and warned that a further downgrades may occur as well. the local currency rating was also cut. the dollars increase in value versus the rand. has given that

all of its advance. and by the way it is now lost ground for six straight days along with losing streaks since august. the british pound fell as much percent.s of one just over 50 which it shows expansion that it does reset expectations a little bit because we have services pmi and industrial output data coming out later this week. joe: let's look at the commodities starting with oil. pretty quiet on the oil front. gold of a little bit on some of the bid in safe heaven -- safe havens. iron or has been on a bit of a losing streak. if he can there in mid-march and has been fading. 650 down to 550.

selling to the degree we have seen is one china proxy, weakness in iron or. -- iron ore. scarlet: interesting that comes up for the xi jinping meeting. those are your market minutes. i want to stick with south africa because as you mentioned s&p cutting the countries credit after ao junk status purge of the finance minister and a reshuffling of the cabinet. this is reflected in the credit default swaps which is basically an insurance policy against a sovereign default. the white line is the cbs of south africa, the cost of insuring against a default and byrose by 218 basis points friday. the spread between south africa and brazil which is at the blue line is now the smallest since october. brazil is already rated junk.

brazil's year was for political turmoil and this year seems to be south africa. and let's look at the auto sector, that was the big story of the day. this chart is really stunning. this is a market cap of the g.m., tesla and forth. white line, tesla, blue line is forward -- ford. tesla is now a bigger car company than ford if you go by market cap. comparison between the two companies when it comes to size and sales but it shows how much people are paying up for elon musk's dream and vision. scarlet: for if they are paying for the elon musk. the person. joe: let's continue to analyze auto sales.

kevin is our automotive analyst at bloomberg intelligence and he joins us now from princeton. thank you very much for joining us. a week a number for all the k number for- a wea all the auto sales. isn't this a story about consumer demand, about inventory, what is going on? >> 16.2 on the seasonally adjusted rate. i think we were due for something in that range. on the one hand i think it is a reasonably encouraging sign to say in a bad month we are in a mid-16 kind -- upper-60 million range. been moving up and now it is losing its bite. , ite incentives are working is ok, it is when they stop working they have to worry about the band.

-- about demand. scarlet: tesla's market cap is higher than ford. tesla reported an increase in auto sales, better than points for the month of march. when you look at a company like tesla, you think of it as a carmaker or a tech company? >> as a car guy a look at it as a car company. simply that they are manufacturing vehicles. from the perspective of what costs,st, what capacity what distribution will cost, a lot of the things they do are of thetter in terms automobile industry and in car content. they are certainly progressive in that way but at the end of the day it is a very capital-intensive industry. they did not have distribution or capacity.

as we have seen through the capital raises, while market cap is the only measure you can compare them or call them an automaker, there is virtually no other metric you would be able to compare tesla's 25,000 units globally in a quarter to general annually, fordon 6 million annually. i was looking up adjusted net 2010-2016,ugh general motors and ford both 40 million each -- tesla has lost billions. you cannot compare on the volume side or the capacity side but it is only on that cap number. joe: let's go back to the general state of the automotive sector because it is more than peopleweak sale that has hitting the alarm they'll --

alarm bell. rental car companies resell values down, causing some worries about oversupply. people worrying more and more about the leak with these in the prime autos. delinquency in these subprime autos. the data says this is a rough patch for the industry. >> at the headline it would certainly appear that way and certain groups they would affected differently. when you look at the rates we have been leasing over the past several years, the officer -- aser terms are going to have an impact on google pricing which will impact the manufacturers. vehicle pricing.

i think you will see a lot of good, late model, low mileage vehicles coming into the preowned market and i think that will be an opportunity in terms of closing the affordability gap between new and used vehicles. there will be a lot of good used cars out there. scarlet: march was supposed to be the month where we see you as odd is else rebound. what we do know is there were a lot of incentives on offer. -- march was specifically month where we see u.s. auto sales rebound. as the industry learn from that last about of incentive offers? there is such a dramatic shift on the truck side -- from the car side to the truck side. a lot of the incentives are to unwind our position. -- car positions.

if you look at the car sales of that are 86% truck in any given month. you're getting incentives on the car side to bring those inventories it down because everyone is the backing these truck versus carl nicks to be in the 65% range going forward regardless of gasoline prices. looks like we're going to have a filibuster in washington over neil gorsuch's supreme court nomination. taking a look at the week ahead. this is bloomberg. ♪

mark: it is time for first word

news. the united states stands ready to help russia in the wake of a deadly attack at a st. petersburg subway station that left at least 11 people dead and 40 others wounded. the united states condemns this reprehensible attack and active violence. our thoughts and prayers are with the injured and the russian people as we extend our deepest condolences to the loved ones of those killed and injured. mark: a homemade device filled with shrapnel designated inside a train. a more powerful bomb was diffused at a nearby station. it is being called an act of terrorism. investigators are cautioning that other possible causes cannot be ruled out. the senate judiciary committee since a neil gorsuch's supreme court nomination to the senate

where a confirmation vote is expected on friday. the democrats have secured votes to block the nomination with a filibuster. majority leader's mitch mcconnell says he will likely change senate rules to reduce the threshold for confirmation from 60 votes into a simple majority of 51. president trump is a detonating the first three months of his salary to be national park service. white house secretary sean spicer handed a check for over $78,000 to interior secretary e during today's briefing. the president promised to forgo his salary but by law you must he paid. thrilled by the president's decision to give money to an interior agency. he said he will use of the money to restore the nation's battlefields.

the second round of the presidential vote in france is heating up. forcois fillon says voting macron would be a continuation of socialist policies of president francois hollande -- 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. joe: we are looking at a big week for president trump, in search of an equally big political victory. today's news, senate democrats have enough votes to block neil gorsuch's supreme court nomination. it may come down to president trump's meeting with president xi jinping in florida. wall street is watching that and keeping an eye on two key pieces of economic data.

our correspondence growth -- join us. it looks like the democrats have enough votes to do a filibuster of gorsuch? does that mean the republicans in the senate are going to go nuclear and put him on the bench with 51 votes. >> republicans will deploy the nuclear option which will allow them to size and depth of the filibuster chuck schumer has wrangled democrats to enforce. at capitol hill i spoke with the senior aide to senator chris coons who became the 41st democratic center to join the -- democratic senator to join the filibuster, saying they had not forgotten back in the republican-led senate days when they blocked barack obama's

choice it to be the supreme court justice. of congressional past working its way over. scarlet: how soon can we see him confirmed? >> the timeline is in the next few weeks and there are some other confirmation hearings we are watching as well. the senate banking committee will vote to move the fcc commissioner nominee to head of the sec. -- sec commissioner nominee to head the sec. is so many democrats not supporting gorsuch from pressure -- the result of pressure from left wing democratic activist? >> there has been some rumblings of president trump looking to work with the democrats. there are some rumblings that

they would like to work with the democrats on a has of issues whether it is energy policy or some kind of regulations on the senate banking committee. when you look at what happened with health care and the house freedom caucus, if you look at what happened today with the supreme court, it doesn't look like democrats are willing to work with this administration. president trump will be meeting with his counterpart xi jinping. it will not take part in washington, it will take place at miralago. >> we don't know exactly what the optics are going to be of this meeting which many political and policy watchers are eagerly awaiting. we do know they are going to talk about national security, in particular how do the chinese interact with north korea and south korea. during the transition we heard the president-elect talking

about taiwan in particular. this is all about trade because when you look back on the campaign trail, candidate truck was aggressive in labeling china -- currencynder manipulator. he is backed out from that criticism. do you think they will discuss any flexibility on currency? >> i don't think it will be all about trade. there is nobody home at the trump administration. there is eight of nine empty spots in under secretaries of state, there are zero secretaries of treasury. there is no one to negotiate on the trade front. there is not much they can do. trump may bring up trade and then she keeping -- and then xi

jinping has an interesting answer. look at the trade deficit and we have a look at the u.s.-china trade deficit. it is starting to go the other way. it down in 2016 by almost 6%. the president doesn't have much to do in being able to negotiate anything new with china. joe: it was a week ago that the president tweeted these are going to be tough negotiations. but you are saying you don't think there will be any negotiations? >> i think this is a feeling out process were both sides see where the other is. the problem for the trump administration is a they are not really anywhere because they do not have the in ministration staffed out yet. xi jinping is in control of his country. he is not going to be offering anything seen as weakness back home. he is going to have a very firm hand with the president and he

went of the things kevin was addressing, there was a story out there that the chinese have turned down all the photo ops. they don't want any pictures of xi jinping and donald trump, they don't want that 22nd is poppinghere he their hand or ignore him like he did with angela merkel. what's the number one thing you're looking mess forward to seeing? >> but i want to see out of these reports is if we're going to see some continued strength. the isn a number that came out today did not change, new orders went down a little bit. jobs are a lagging indicator. let's see if we get some data that suggest the economy has consumer momentum going forth. joe: thank you so much to bloomberg international policy correspondent. all week long bloomberg will be

focused on the global ramifications of president trump's summit with president xi. stay tuned to bloomberg tv and bloomberg radio for the latest analysis at what is at stake. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" we are taking a deep look into bloomberg and i am focusing on emerging markets. i want to thank our fundamental team for alerting me. emerging markets sovereign debt history investment than emerging-market corporate debt. you can see that in the negative

spread between e.m. corporate debt and e.m. sovereign debt. investors feel more comfortable with companies making good on their debt than the government. this has happened for previous time since 2010. in the fourth previous times, emerging-market stocks have fallen as well. around, you are not seeing emerging stocks fall. in fact they have been rising. you would have thought the news out of south africa and venezuela is contributing to the negative yield spread but this trend has been in place since last july and this trend deepest since the last election. this is something that has persisted. how will it resolve itself? stock emerging markets rally has been one of the big surprises this year. i'm looking at one of my favorite functions on the bloomberg. it does supply chain analysis and one of the reasons it is so

relevant is it that imagination technologies, a u.k. based technology company that does chips, he discovered that apple said it will no longer be using their technology or licensing it. you can see here who a company's biggest customers are and apple is accounting for 50% of the company's revenues. happens to a company that hitches its wagon buyer like apple, it is great on the way up and then apple says i don't want you to -- i don't want to license your technology anymore. now it is down 60%. it is a fun function because you can see how these companies are connected. scarlet: this is more than being exposed to apple, this is being apple. of next, republicans have left than one month -- less than one month left before a government

shutdown. this is bloomberg. ♪

[ engine revs ] [ screams ] [ shouting ] brace yourself! this is crazy! [ tires screeching ] whoo! boom baby! rated pg-13. [ screams ] [ [ screams ] ] [ shouting ] brace yourself! this is crazy! [ tires screeching ] whoo!

boom baby! rated pg-13. [ screams ] mark: it is time for first word news. u.s. officials familiar with the matter say that last month white house lawyers learned that the former national security adviser under president obama requested the identities of u.s. persons and raw intelligence reports on dozens of occasions that connect to the donald trump transition and campaign. the request was discovered in a national security review on a of -- normallycy

busy names are redacted from summary of monitored conversations. a subway bombing in st. petersburg russia has killed at least 11 people and injured dozens more. a home a device filled with shrapnel debit dated -- detonated. official sound a more powerful bomb that was later does these -- that was later defused at another station. the white house, president trump had this reaction. happening alling, over the world, absolutely a terrible thing. mark: police are hunting for two suspects they believed plaintiff those devices. any rock, president trump son-in-law jared kushner is getting a firsthand look at the situation. he is also there to show support for the iraqi government. he is visiting the country with the chairman of the joint chiefs

of staff. local news powered by 2600 journalists and analysts in over 160 countries. this is bloomberg. scarlet: a recap of today's market action, u.s. stocks finishing little changed on the day. they came back from earlier losses that were sparked by disappointing march on his sales. -- auto sales. joe: investors already in a whole to start the second quarter. "what'd you miss?" while most of washington is focused on the nomination of neil gorsuch on the supreme court, we're looking at a potential government shutdown at the end of the month. mitch mcconnell says he is confident the government will avoid one. we have had government shutdowns during the obama administration but that is when we had divided government. this timecontrol --

republicans control all the branches of government, so why will it be hard to keep the government open? >> it would be more than half a century -- at least have a century since the last time a government run by one party oversaw a shutdown. the government is set to expire on april 28 and there are significant disagreements in congress about what to do about it. the president has proposed genetic changes like tens of billions of dollars in new military funding. he wants to offset with a heavyic cuts that are so that even republicans don't want to touch. they have to get 200 16 votes in the house, they have to get at least eight senate democrats to clear a filibuster because a government funding bill can be filibustered. you mentioned they need

at least eight senate democrats, are those democrats willing to keep up with them -- team up with them? one is sequestration and the other is a domestic money and military money gets treated equally. they want to know cuts in domestic spending to increase military spending and they want no poison pill riders. they will not support funding for president trump wall. signalingrvatives are that they want to defund planned parenthood in this government funding bill. they have a few things to iron out. joe: everything you said so far paint a kind of gloomy picture. divided, thens are democrats want to go along and less they get everything their

way, what is a scenario where this will work itself out? >> the short answer is something that looks like the status quo. something that extends government funding through the fiscal year that does not make any dramatic changes, does not give trump too much of what he ints data that does not move a direction where democrats cannot reasonably say we are going to block this thing because if they take an unreasonable position, obviously they're going to be blamed for it. republicans are in the difficult position of disagreeing amongst themselves pretty substantially on what to put on this. you mentioned the sequestration which was policy became out of the 2011 debt ceiling fight and the premise was that there would be cut to two things both parties would find untenable. military, domestic spending for the democrats.

is it possible that they can say both of our parties hate these cuts, let's get rid of them? >> sequestration is the one thing that has united both parties. it is a bad way to make policy according to every budget expert as you are cutting the programs that everyone likes and your cutting the programs everyone agrees should be cut. there are bipartisan deals led by speaker paul ryan before he was speaker in 2013 and again in 2013 to avoid sequestration. offsets going to come from and where are they going to find the money to compensate for that because of the low hanging fruit is gone. there have been millions of dollars of cuts in the obama era for domestic spending and no one has the gall to touch medicare and social security. there is no easy place to find this money but there is agreement on doing it.

bloomberg's national political reporter, thank you so much. america, weatin take a look at all the political pressure mounting in venezuela, ecuador and brazil. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" it is been a small to us few days in latin america him antigovernment red test is in thezuela to an attack on anti-opposition candidate in ecuador to brazil where the president's popularity is tumbling. the anti-opposition candidate in let's bring in a senior fellow for national -- latin american studies. -- thank with us is

you so much for joining us. let's start with you. you look at what is happening in venezuela and ecuador, to what extent does unrest need unrest -- feed unrest? both of these are countries that are hitting the end of populist governments. they benefited from the surge in oil prices, they spent that money and more and with lower oil prices they're facing their maker and having difficult times. both countries are having to repay their external debt and increases their imports. in venezuela people are losing 10-20 pounds because they cannot find enough to eat. ecuador has seen a recession and we are seeing a lot of economic a. at aet: when you look country like venezuela, is it comparable to north korea? seen basic production

fall, in fact, makers of clorox pulled out because they cannot make basic products like that. we have seen a turn. the government stepped in and he used the resources they have to buy all these things. looking at the benchmark venezuelan government bonds, already trading around $.51 on the dollar. following further over the last few days. what is your estimate on how this plays out? obviously much more concern about potential defaults? >> it is pretty tricky. you have some sort of net three profiling priced into market. profiling priced into market. it started when the supreme court tried to seize legislative powers of parliament. you have a bond maturing on april 12 that on friday was

trading at $.95 on the dollar. joe: we have a chart that we can pull up of this schedule of bonds payout venezuela paces -- faces. what are the key dates you are watching? 12,his year it is able about $3 billion coming up and then october and november we have a little bit of a bomb as p as well.bum our internal house view is there going to make these payments. there is a lot of stuff that doesn't show up in the balance sheet of the country and the chavez government knows they have to service the debt. humanitariane is a crisis in the country, some warned that there could be a refugee crisis comparable to syria. what is the u.s. prescription for this? how should the u.s. play a role are not in this? >> it is hard for the united states to play a unilateral role

in venezuela and we have before it has often black fired -- it is often backfired. there is a role for other leaders in the region. for brazil, peru, argentina and -- and chiledemn to step forward and condemn what is happening there. what we did see this weekend, when the supreme court overstepped its bounds is that some of these countries were called their ambassadors, which is a huge insult for venezuela. i want to turn gears to ecuador where there is dispute and debate over the election. yellowian yields and really surging -- in yellow really surging. i think a lot of of people are aware of the situation in

venezuela, not so much ecuador. benefit ecuador has had with spending petroleum money that came in, they did rebuild their infrastructure. the venezuela is coming -- the venezuelans are not coming out well. they have infrastructure but they did overspend. oreano andon between m corvaia, -- there's probably a lot more corruption then there was 5-10 years ago in ecuador but in terms of servicing the debt, ecuador stands out as being a child -- a high yield whennd people forget that he defaulted on the debt, he

defaulted on the bonds he was not involved in. eno does not have a lot of latitude to default on the bonds because of the guy who test them to take over issued them. ecuador is dependent on foreign initiatives. if you are creditor it is going to be ok but the dispute is the legitimacy of the election. scarlet: he says he does not accept the federal board resolved. is a former lasso banker turned politician, as he have any interesting ideas about how he would pursue policy? >> most of the things he talked about was how the president of peru, heap was a previous banker -- it isn't trying to improve the business environment to help jumpstart the economy. joe: if you look at recent

decades, one of the stories is latin america is far more stable than it was in the 1970's and 1980's. but then we have the headlines of venezuela, ecuador, paraguay and brazil. is there a danger of the region backsliding overall? i think what we are seeing in many of these countries is at the end of the cycle. more countries have moved towards more pragmatic, market finley government. -- market friendly government. chile,look at peru, mexico, a lot of these countries are open to the world and to moving away from populism even as the rest of the world may be flirting with it. scarlet: you have been involved in argentina, venezuela and ecuador, with so many investors keen on the emerging markets, are they taking a look at

venezuela or ecuador as part of the e.m. renaissance? >> i think investors are much more attuned to the fact that if you trade emerging markets in reaction to headlines, you are not going to do so well. if you look at venezuela, the last two years, research suggested they were on the brink of default. ecuador to some extent and venezuela have been one of our core conditions. we've had good returns off of it. terms of appreciating the diverse investment opportunities available in emerging markets, maybe you don't go for an etf, much morestors are sophisticated and there is a bigger appetite. central --n o'neill, thank you for being with us. we will be talking about south africa's former president.

this as a country's credit rating is cut to junk for the first time since 2000. this is bloomberg. ♪

joe: "what'd you miss?" s&p global cut south africa to junk today. the first such downgrade since 2000. after theumbled warning of further reduction. the former president of south africa told bloomberg why the current president jacob zuma should step down. >> the highest court in the land has adjudged him to have a

breached the oath of office and i think that in itself makes it difficult for him to command the kind of respect which will be able to rally and unite sections of the south african population. that was the former president of south africa beating earlier today on bloomberg "daybreak america's". -- it's markets had been doing well up until a week ago when people are getting word that the finance minister was going to lose his job. what is your read on what zuma is playing at here? >> i have a lot of friends in south africa and i think this is nothing less than a fight for the soul of the country. , by firing a finance minister and putting in another finance minister who is clearly

within his sphere of influence, it is clearly destabilizing the country. timely's move is very because of the one check on these decisions could be the market reaction. severe reaction could make the inner circle understand what they are playing with. the fabric, the institutional fabric of the country is at. movest: what kind of could jacob zuma make because of the downgrade by s&p? and we know beauties is going to be publishing its rating. >> there are a couple of things in play. there have been calls from the opposition party for a no-confidence vote. and people who don't agree with what zuma is doing are feeling a little concerned. you need a swing 51 votes to get the nonconfidence but that mean

for the entire government falls said there are some people who are not on board with zuma and there is clearly a split. you are seeing the divergence of who is backing zuma and who is not. at some level we would prefer this to go to the party congress in december 2 make him removed in december to remove him as party leader. and goal,is zuma's how would he like to recheck the country and how do these moves get him closer to that? -- reshape the country and how do these moves get him closer to that? >> how much on some level does he want the country to be a big bank.

south africa has it stresses but you haven't seen anything to make you believe it is on the road to becoming a zimbabwe. now some of the announcements that we are going to look at the landholdings of the white starts to resonate and if you have a country that will not integrate and behave like a responsible member of the international community, you are putting a lot of what people fall for at stake. stake.ht for at someone in charge of the reserves of the country should be independent politically and if you put someone who is at the beck and call of zuma, that raises concerns. scarlet: we have on our screen the 10 year yield of south africa's bond. it is still quite far away from where it was after the u.s. election where it was at 5.361%. as an investor, have you view south africa?

ou view south africa? >> well you have the s&p announcement and fitch and moody coming out with their -- a sense of how the larger holders are going to react. it came out too late for anybody to react. some of the holders might not appreciate the risk south africa's facing at this point. my assumption is you're going to have to start testing. joe: you have seen a lot of these situations before looking at distressed emerging markets, the market reactions like this cause leaders to do better or do they use this as a pretext to further attack the financial system or is there no set pattern? >> there is not so much of a set

pattern but in this case zuma does not have control. the meetings of the party elite, maybe six people and these people are going to be looking at things and put pressure on him. without focus, consolidated control, it is difficult to blame the markets for your problems. joe: from new york. this is bloomberg. ♪

scarlet: coming up tomorrow, don't miss at the trade balance and then factory orders coming out at 10 a.m.. joe: joe: j.p. morgan chase releasing it's a jamie dimon annual letter to shareholders. and an important read on commodities. the most viable cut diamond ring ever auctioned.

alisa: i am alisa parenti and you are watching "bloomberg technology." the u.s. condemned the attack and stands ready to assist russia after a bombing at a st.

petersburg station today killed at least 11 people. officials say a homemade device detonated inside a train. a judiciary committee partyline vote sent will -- judge neil gorsuch's vote for confirmation. democrats have 41 votes to block the nomination. mitch mcconnell may change senate rules to a simple majority threshold of 51 votes for the confirmation. the white house has agreed to document each tweet posted by president trump according to the a.p. which says the request from the national archives and records administration include deleted and corrected posts. the president met with egypt's president today. the goal is to rebuild relations strained during the obama years. former national security advisor susan rice requested identities of u.s. citizens and reports connected to the trump transition and campaign according to officials who say