this will focus on china passes alleged violations of intellectual property. the former u.s. ambassador to china spoke to bloomberg about the relationship between bloomberg and beijing. >> china's respect strength more than any other people. >> economic talks in washington, unable to produce a joint statement. nominated by president trump to be the best rector of the office of personnel management and has withdrawn his name from consideration. in a letter to the white house, george said his chances of being recented were remote and partisan attacks would further

delay consideration of the nomination. that provides for elections in venezuela, it claimed 8 million people voted but the opposition and private polling company say they turn out. members were manipulated by at least one million votes. two people remain unaccounted prekindergarten through 12th grade. no word on whether those missing were adults or children. the associated press it might've been caused by a ruptured gas line.

global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ julia: live -- joe: you 30 minutes into the close of trading in the u.s. >> apple post earnings boosted index. quite selected you miss? >> president trump signed into law something congress forced on him. is not losingn sleep after his firm posted the worst half of trading. a half-hour left to trade. wide test -- why this could be

elon musk's worst quarter when it comes to losses. >> former fed chair alan greenspan pointing the finger at the bond market. real long-term interest rates are much too low when the bond market collapses and long-term interest rates will rise. moving to stagnation not seen since the 1970's. ,., who joins us now from boston. joe: thank you for joining us. the warnings of the bond bull market, we have heard this for a while. has anything fundamentally changed for the chu gentry of the market? >> thank you for having me on.

people have talked about a bond bubble, a loaded term. it is central banks. hawkisheeing more rhetoric for the central bank. things other than typical growth inflation. >> are real interest rates being suppressed in a world of less central bank activity? point seeing a different than what we're seeing now? >> real rates are low only because of central bank inflation? no. low volatility of growth but it has been the goal of central banks with an extraordinary monitor policy to lower real and a goal to keep them down and back away.

>> so many people are looking for inflation to pick up. are you convinced by it? >> to be honest, i am probably less convinced than six months .go now seems to be coming down. arguments for its high growth inflation trade-off. with had unemployment continue to get lower and lower. at some point, inflation will get turned up. wages will get picked up a little bit and not much. a lot of low inflation is supply driven. the amazon affect or whatever you want to call it. central banks are looking beyond it a little bit. they are still concerned but not so test. >> what we have seen from a number of big banks is an

element of coordination and about when it talks retracement in some sense of the stimulus they added here. i wonder whether things changed that would present opportunities for you guys to monopolize. lookingrtainly, we're around sovereign bonds. part of the analysis certainly, central bankers talk kit -- in portugal a while back. august for central

bankers to discuss how concerned they are with inflation slightly lower than expected. it is something we will very much be paying attention to. >> we know about the optimism getting closer to the dollar 120. what are opportunities out there that you see as attractive? swedish crown.he think about sweden. if it thinks about monetary policy for us, it should also be doing that. another one is the australian dollar. cyclical data is better than we are seeing in new zealand. they actually cut interest rates

today and we are mostly in this discussion raising interest rates. in monetary policy we are seeing globally. it is suggesting we need to look more closely to emerging markets. i saw the headline saying they are turning wary local currency just because of sheer run ups in recent months. mentioned your positive but are you more cautious in areas where you think they are now lofty in terms of pricing? >> when we look at the emerging-market landscape, we look at risk factors. we have been trimming some positions. asset classes, the rate component in the currency component has run up a lot since the beginning of 2016.

look at real inches ,raits, you get good value there is still some more scope asgo but it is not as cheap 18 months ago. >> the bank of england holding a monetary policy meeting tomorrow. there is talk they should not wait to raise rates again. wouldind of ripple effect the rate increase have sooner rather than later? >> the economic theory would shock, making the u.k. more attractive. talk. hawkish

i would keep rates on hold right here. >> thank you for joining us from boston. coming up, what elon musk is selling. the stock is currently up by 1.5%. from new york, this is bloomberg. ♪

>> let's bring in abigail doolittle with a deeper look at

tesla. something that really stands out. his lips us. they did to the downside and a number of them are going the wrong way. kevin today and he said investors were looking for five dollars per share in 2017. of $26.ss investors are giving them that. >> earnings don't matter. what will matter?

twice it is the future and the idea of targets. it is pretty ambiguous, they are talking about a 5k run rate that even if they do it in the last week, it is 700 vehicles this year. a great new function in the bloomberg gives us a chance to look at analyst models. that well-known analyst you had mentioned, scarlet, covering tesla. it is great stuff that shows vehicles in than the average price point and a lot of information. the numbers are pretty small. investors are hoping this leads to something bigger in the can buys into elon musk's his vision.

>> tesla has raised capital a couple of times earlier this year. >> it seems to disappear. up 40% in the last 12 months. all of the issues the bears seem to disappear with time. it is a love for tesla that -- a pass. it in 1998 or 2000, the stock was up 5000% since the future. the and is -- amazon is a giant. who knows in those early years? >> another thing people often they overlook them -- the cash raise, they overlook the losses and shortfalls. some have pointed out executive

turnover being another factor. >> people of him. my follow him on twitter. he retreated right across the universe. is one more path of the company has given. >> details, details. >> over comment and under deliver. deserve. than we anyway, thank you. it is time for a look at some of the biggest is the stories in the news right now. today inffett spoke baltimore and made remarks about the potential for the u.s. economy. >> we have not lost a magic touch. the form is still there. i applaud the people taking advantage of that.

i hope that they sold me their business prematurely. anything you can do to convince them to take me in as a partner. do your part. >> he went on to say that it is ridiculous to have a dim outlook on the united states. partners -- nheim guggenheim has since been building up its bond and still expanding the unit. criticizing its suppliers use of chemicals. analyzes and the project began in 2014 in response to investor demand and these chemicals. johnson & johnson are also participants.

that is your bloomberg business flash. what did you miss? venezuela will face-off against another legislative body. the u.s. has held back from holding broader u.s. sanctions. says oil sanctions are possible and spoke with kevin after making a public speak -- speech on television. >> i thought it was important for the people of venezuela to hear directly from an american policymaker. i spoke not as a u.s. senator but someone born and raised in a community deeply shaped by the tragedies of the western hemisphere. cuba, nicaragua, and now venezuela. i wanted them to know that first and foremost, they were shaped and i also want to understand why the president in the united states is doing what it is doing. we are united left and right, republican and democrat, on the idea we support democracy and

human rights in venezuela and we're with the people of venezuela. the overwhelming majority just want an election. if the leaders of venezuela are so confident they are on the right track, why don't they cement themselves to an election? it is our values and our principles and second, it has engendered incredible unity. think about what the president has been able to do. mexico, panama -- panama, all of the countries are behind what they are doing in venezuela. to's red penrith -- sponsor what they're doing their. they already have the girl aqua and before we know it, we have anti-american left of center states creating migratory pressure on the u.s. starting with the face of operations and

by the way, trafficking and drug pressure on america. for theing all assets dictator, do you think that is enough? have you spoken about the potential? >> i talked to the vice president yesterday and we have been in contact with them. every time he does something outrageous, the white house will respond with additional sanctions. the great news is other countries will join us. countries in the hemisphere including panama have the banks announcing they would be sanction of the same people. >>'s oil and sessions on the table? >> they are. i will not give away the president's but most certainly, everything is on the table. they're are doing it very strategically and targeted and smart. the people of venezuela do not today and if it from venezuela's oil.

>> there is a lot of talk that it is not over. >> in september, we hope to take one more shot at it. on the promise of repealing and replacing obamacare and was reelected on the same promise. i am one vote but i will do everything i personally can to keep the promise. >> that was marco rubio speaking with kevin. >> he spoke before that interview on venice whalley and tv. widths -- with current sanctions, nevermind if , they're arem up trying to hurt the people in this is the reason to rally behind him. i understand that is a big fear of stepping up sanctions. and reflecting the sort of concerns. hise needs to shore up

approval rating stuck at 17% right now. >> credit default swaps, , extraordinary stuff. >> to give you a sense of where the 10 year bond trading is now, just to go to what show is company -- state oil you can track that. in axt, equities have been bull market since early 2016. how much longer can a party last? we will look at the data. this is bloomberg. ♪

>> the path higher has been incremental and devoid of swings. chart.to wilson for this the s&p 500's to does biggest groups, tech in blue and

financials in white. tech is a bigger sector here. they are no longer track each other the way they once did historic week. both higher since 2009 but financials have struggled. shows shows a two-month correlation between these sectors. it has been negative. if you go over here, -- to bank of america merrill lynch, they published a report this week which cited this shift as a reason for the lack of volatility in the s&p 500. >> i want to talk to you about emerging markets. i am showing you the emerging-market index. the white line is the global bond spreads. one goes up and one goes down as bond spreads tighten and emerging -- emerging-market equities rally.

.ond yields continue to tighten maybe the emerging markets to equities can continue to rally. out that theoint largest publicly traded hedge fund on its emerging-market bond rally called and said it is outpaced develop market equities and perhaps we need to be thingss given how tight are spread. has been a couple quiet days in politics. that has not stopped president trump us his approval rating from sliding. the average for all polls and he is now at -18.7, the cap between approval and disapproval, the approval rating going down in the disapproval rating going up. to the extent any of his matters -- they seem to be having trouble and it is probably not

good for senators on his side. >> a low bar. >> the market closes next. the down just rules of 22,000 by six points and the s&p and nasdaq little changed. ♪ ♪

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julia: "what'd you miss?" the dow has 22,000, but will tesla hit the brakes and 10 minutes time? if you are tuning in live on twitter, we want to welcome you to our closing bell coverage. scarlet: let's begin with market 22,000, the dow above set to close above that level. the s&p 500 and nasdaq essentially unchanged. the data today, was there anything to give investors a sense the rally will push ahead? joe: no, we got an adp number. it is all about friday's jobs report. scarlet: looking at the dow industrials, apple is the biggest point contributor. without the gain and apple, the

dow would be barely higher. outlook for decent the quarter, even as investors worried that the latest iphone will be delayed. earnings don't matter for investors for tesla, it is all about what elon musk says come production, ramp-up of the model three. time warner little changed after wonder woman delivered big profits. awaitingany is approval to be acquired by at&t. joe: let's look at government on markets, yields up a little in the u.s., not much action there. , catching up with the rally in treasuries yesterday.

, foreign inflows into china higher than estimated. , fed: the dollar mover speak today, cautious on future rate hikes, sending the dollar lower. higher, a 30 month high. some perspective there. mover ine strongest the g-10, mentioned by morgan stanley for policy tightening, lifting norway only canada, mexico in there. dollar-ruble, donald trump signing that statement over further sanctions. you can see the weakness in recent weeks. joe: a quick look at commodities, starting with crude picking up. below $50.f action,

gold down .5%. aluminum up 1%. those are today's market minutes. on the: for more insight dow and what it means, let's bring in oliver renick. how significant is this when it comes to the internals? oliver: significant in terms of what it changes fundamentally, not a lot, however a nice, big number. it is the optics and whenever you get to high index prices, people think about what got you there and whether you belong there. to what extent are stocks overvalued? which pockets are the most overvalued? which companies deserve to be traded at higher prices, and which ones even after doing well and earnings don't justify their valuations? that is the story today. joe: the markets are doing

pretty good, but there are ,ockets of frailty, transports semiconductors, some of those thoughts that despite doing well aren't living up to investor expectations. oliver: it feels like there is tension where strategists are bullish on the rest of the year, but not complemented by some of the data. industrials breaking down. is a chart looking at industrial stocks in the s&p 500 and dow jones transportation average. a little downturn. , but thesefred about are parts of the market, transport specifically, a read through on the economy, the healthiness of american companies.

trains, rental services, stocks that had not been doing well when you consider those expectations for those stocks doing well in such an environment. julia: what about the small caps? oliver: that is another frailty of the market. you have record highs on the dow come s&p flat come of it near all-time highs, and the russell 2000 rolling over, that has been going on for a week or so, some weakness in the small caps phase. you can use that as a risk off under current to an overall risk on environment. it is perhaps specific to some of the earnings, but industrywide, health care and tack have been driving the russell 2000 down. oliver renick, thank you as always. .carlet: square reporting

we indicated analysts said the company needed to wow. it did get that. square up 6% after adjusted ebitda at $36.5 million. revenue higher than anticipated, 240 million versus expected 229.5 million. the outlook not so shabby, full-year adjusted ebitda of 128 million. now that is the bottom mayor of -- bottom area of the range. speaking of square, we have an exclusive interview with jack dorsey on bloomberg daybreak: asia tonight. from new york, this is bloomberg. ♪

scarlet: breaking news, square with earnings and revenue that beat estimates and full-year million ebitda of $120 to $128 million, so the stock climbing, up by better than 3% on the back of those gains. julia: a significant rally for 8.5%, reporting a lower loss than expected, adjusted loss per share at eight cents. the estimate was $.15. , so a beat on the revenue line. they raise their full-year to $1.7, $1.5 billion

billion, the bottom raised by $500 million, but investors liking what they are seeing. the smart watches on track for delivery ahead of the holiday season. let's talk about tesla. we are waiting for those earnings to break. and aalyst joining us contributor from portland, oregon. give us a sense of what we are expecting. they did release deliveries earlier this month, the back end of last month, 22,000, less than analysts expected, but what could they hit us with today that could surprise us? >> from that perspective, the s

known quantities, no measurable deliveries of the model three, the solar roof not a big contribution, so the cash burn will be the big story. it looks like none of the result specifically for this quarter matter that much because it is all about the model three, the future, story, and all that, but what could we learned today in the report or call that would inform that outlook? interested to find out more about the amount of tesla business made up by leases. the entire auto industry depends on leases. leasesrest the cycle, are one of the big drags. we are getting a lot of vehicles coming back off leases as used

cars, presenting a cheaper alternative that could hurt and the ability to finance future leases. given it looks like tesla has been cutting prices on certified preowned vehicles come they might be subject to that and i would like to know how much. scarlet: that is an interesting point. we had not heard tesla was probable to the cyclical swings. kevin, jump in here. far hases declining so not been a factor for tesla. is that likely to change going forward? as a boutique automaker, 76,000 deliveries last year globally, yeah, there is still a large addressable market. the question is are they just selling to the pent up demand of , toys for those kinds of

drivers, or are they moving into that realm of where they are talking about 500000 and one million units per year. companyvery different to be a small boutique manufacturer as opposed to a volume manufacturer. julia: i want to ask about guidance for the second half. there are concerns about how much -- scarlet: tesla just came out with its numbers. second quarter adjusted loss per $1.33, analysts looking for $1.88. also come tesla sees positive model three gross margin in the fourth quarter. 2.79 billion dollars,

analysts were looking for $2.51 billion, and never or loss than expected, revenue beating estimates come and tesla sees x deliveries up. julia: we were questioning whether demand was softening, inventories building, and moscow said it was affecting sales, the fact -- musk said it was affecting sales. what do you think when they say those delivers will be up in the second half? >> the issue is they talked about the initial deliveries being the long-range 300 vehicle. forthey prices near $60,000 the model three comes of the room between three and model as

is not as wide as if was said to have dan. i would be surprised to see $35,000 model threes on the road. since the handover event, they are averaging 1800 reservations per day. with the announcement, those continue to pile in. one of the big questions with tesla is do they have the manufacturing capacity to meet all this demand, 1800 reservations per day? where does it look like from your perspective in terms of their ability to ramp up now? the $64 billion question, right? it is hard to say. a certain amount of this is wait and see. don't have a lot of pictures or first-hand accounts of what the model three assembly line is

like. that is what worries me the most. there was all this talk and build up that there would be but manufacturing system, they have eased back, said it would roll out and ramp up this production system, its sophistication, after the launch of the model three, and now they are saying that will happen more with the model. they were in such a rush to get the model three to market that they were not able to get a major breakthrough on manufacturing. currentlyike they are trying to take their current production system and simplify the design of the model three and push that as far as it will go. it looks like a solid two years before a new manufacturing system comes, and that will be the change they have been talking about. joe: they say we are confident

q3, 5000oduce 1500 in by the end of 2017, and ramp up in 2018, so some guidance on capacity. scarlet: as far as the model s x, tesla sees them up in the second half versus the first half, and it delivered 22,000 vehicles in the quarter that ended. julia: kevin, you were talking about that cash burn. cash on hand of more than $3 billion at the end of q2. more than $4 billion in cash at the end of q1 comes a $1 billion in cash burn. ubs saying they need to spend more than $2 billion by the time it starts model three production and believe that tesla will have to raise cash based on the fact that we have dropped i $1

billion quarter to quarter, so how concerned are you by the cash burn and the need to raise cash this year? >> even though we are talking about billions of dollars come a digit numbers are easy to calculate. look at the burn for the quarter plus the investment the needs to come to get the model three to where it needs to be in terms of production run, it you could figure out how long some sort ofgo, so capital raise is imminent. julia: you have been saying they are not getting it. they need crossover and need to use the resources of one product or a second. what do you think about the cash burn here? massive improvement and production capabilities has come in with the model why, and as

result, it will be a new platform. getting economies of scale by sharing the model three. that will mean they will burn anotherh because it is knows what and who this new production system will cost to develop and apply. julia: the proof will be in the pudding, bottom line. kevin, is it up to elon musk to keep reiterating we are ambitious, but will do this and analysts and investors continue to buy the story? the biggest misconception is that tesla, whether it is product or technology or production capabilities, can do other things other automakers cannot.

other automakers have platforms that can fund a new development where tesla has to go back to the equity or debt markets to do so. the fact that it is losing money and burning cash, other automakers don't want to do that. julia: i'm then ask you that same question. >> one of the risky things about the need to raise more cash is the fact that it seems like some of the major and is to show holders are reducing their positions, and that was a .ulwark of their stock value there were some major institutional funds that held significant positions in it. they go down cut you can expect more volatility and the stock price. i said earlier i was surprised they were not raising more cash. regretting them not

waiting to raise more money. scarlet: thank you so much. more on tesla, coming up. tesla shows up better than 3%, the most actively traded company in after hours trading, 162 million in shares trading hands. this is bloomberg. ♪

breaking news, metlife second-quarter earnings $1.30, higher than one $.20 expected.

aig with second-quarter operating earnings beat estimates come up by better than 1.25%, but commercial underwriting worsened. the decline is higher property losses and second half 2016 increase in loss estimates. julia: let's pick up with tesla. we are still with our two guests. nathan come you said this would be a nonevent. the guidance was all-important. they areave heard his expecting to produce more in the second half in the first half, but very little about the model three. they did say it will be temporarily impacted by labor and costs.

how worried are you when you hear that? >> not worried. they reiterated that he will produce 1500 model trees in q3. that is all the market -- model s in q3. we look at $120 million for a new assembly line, so a high cost per vehicle. been on atock has tear over the last year. it stalled out in the last several weeks. to see at we need this point to take us to the next level and make it a compelling stock? the deliveriese are priced in at this point. there is little talk of profitability, but the worst thing could be to produce and deliver their promised the numbers and people see the

resulting financials, which we think will show a net loss. joe: we talked about some of the teslaive turnover there a that the bears like to cite that all is not well internally. is that a red flag from your perspective? >> it is. in particular turnover on the autopilot team has been especially bad. i have been looking into that recently. positionr senior turnover in the last two years has been shocking. it also has happened in clumps. it seems to me it is tied to the have reallyey ambitious goals for the hardware they deployed.

there is a lot of skepticism about whether or not that hard capable of lovell four or level five autonomous driving. if the help but wonder most recent the parsers is highlighting the fact that this team has been set up to fail. scarlet: we have to leave it there. thank you so much. check of tesla shares, higher in after-hours trading, , andue beating estimates eps loss mourn arab than expected, but this is about the that elon musk tells the investors when it comes to the model three. congress tightening its grip on russia, president trump signing a sanctions will come of a

raising concerns over this is bloomberg. ♪ the limits placed on him by lawmakers. this is bloomberg. ♪

mark: it is time for first word news. president trump endorse legislation that would reduce legal immigration and evaluate these applications based on merit with the preference for people with higher education or job skills. the bill was cosponsored by two republican senators. wille green card reforms give american workers a pay raise by reducing unskilled immigration. this legislation will restore our competitive edge in the 21st century and restore the sacred

bonds of trust between america and its citizens. mark: the legislation would represent a dramatic overhaul of the current u.s. immigration system by changing the 1965 law. voting underway in brazil on whether the president should in corruption trials. debates that started around 9:00 a.m. local time, lawmakers now cast their votes in the session expected to in the late today. saidsts at eurasia group brazil's lower house of congress is expected to reject the request to put the president on trial. more than 7000 syrian refugees were driven from lebanon to siri today it was part of an agreement. the prisoner swap which included

a top al qaeda operative was the last phase of the deal. hezbollah has been fighting 2013,syrian forces since and the iran-backed group is still deeply involved in the civil war. say a buss in germany drivers inattentiveness led to a fatal collision. the bus caring german seniors on vacation to italy slammed into a truck that had slowed for a traffic jam in bavaria on july 3. the crash killed 18 people. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's get a recap of today's market action, starting with majors. story was the outperformance of the doubt relative to the other indices, apple surging after hours on

those after than expected iphone forecasts. ght,use apple has a big wei but everything else not doing much. breaking news after hours from wyndham, spinning off hotel operations into two separate public companies. we will be watching that story has it develops. julia: a host of earnings out after the bell today. square, adjusted eps at seven cents, the estimate five cents, adjusted revenue $240 million, million,ate to $29.5 beats, in proved on two but what everyone was excited about, they raised their

full-year adjusted earnings per share guidance. also, their full-year revenue guidance as well, so some optimism from square. the loss for the ,uarter new york than expected third-quarter revenue estimates looking stronger than expected, epshe full your revenue and guidance upgrades look good there. linea bead on the revenue and the smart watch on track for delivery ahead of the holiday season. don't miss our exclusive interview with jack dorsey on bloomberg daybreak: asia tonight. reporting,tlife also

second-quarter earnings per share beating estimates by , r.o.e. increase. stocks now unchanged. aig up by him was 1%, operating earnings per share higher than the most bullish estimate out there. "what'd you miss?" thedow hit 22,000 and record high, but transports are 6% below that. let's turn to abigail doolittle on what that might mean. technical me is the .esearch analyst let's answer that question about the diversions with another question from the terminal, will we get a correction before the end of the year? one of our users saw your coming on and typed in that question.

>> this is the dow. this has been an incredible bull fromt, up almost 250% 2009. it is still going up. place, ands are in moving averages are rising, so long-term aspect remains positive if we look at their weekly . a you look at march, we have mac d momentum that suggest consolidation, but that takes place against the backdrop of a positive, ongoing bull market. >> let's look at the dow transports.

could you talk to us about what you are saying? >> this is a problem for dow industrialsecause and transports are supposed move in tandem. the question is that the one moving higher may have to come back and have a correction. barely above the prior highs, and once again, tried to get up and did not. weekly momentum not only a negative divergence from march, but a sell signal, so it is conceivable that here that itend is may be forming a double top. it takes time. when you have negative 2015, it took time to know you absolutely have the breakdown from what might have

been called a double top there. the viewers question, we might expect something in the next few months. it could just be a consolidation or pullback of up to 10%. more time will tell there. we also saw something interesting with the nasdaq. let's look at a chart you have 391. btv june you had something known as an outside day where the high and low of the outside theis higher and lower than prior days. >> what is that tell us about buyers and sellers?

what is that mean about what is behind it? , what are and sellers they doing, and that they camp -- >> you had further lows as time rally and a test of the lows. that took about one month. it is conceivable what happened is we had another outside day, and once you have had something like that, the character of the rally they are after is very important. higher goldr went but gave us another sell signal right there. the momentum, you have the diversions we talked about with conceivable weis have something that continues to .orrect

investorsace where got giddy and overwhelmed the sellers? >> that gap, possibly. degree thew to what high frequency trading is giving us more gaps than we have seen. this one is another one, and another one, but it is very conceivable the market is ready to finish the correction, let's put it that way. >> to answer the question from the terminal, there could be a correction. go across asset classes, is there another market that comes to mind that would confirm this for you. ? >> >> the nasdaq has been unique in the sense that it has been up 400,000% in since 2009.

in aoved itself to be structural market after the 2000 collapse. the bigger the drop, the longer the need for repair and relative strength moved out through a 10 year base and prices have been going up, so it remains a structural leader, but do for rest. >> great stuff. possible corrections ahead for the equities markets. scarlet: thank you so much. from new york, this is bloomberg. ♪

julia: "what'd you miss?" there was no cameras in the room when donald trump signed off on a new sanctions bill targeting russia, china, and north korea.

there was a sharply worded statement saying "by limiting the executive flexibility, the bill makes it harder for the united states to strike good deals for the american people and will drive china, russia, and north korea closer together." our senior white house correspondent joins us now. have a strong point, but unfortunately he felt like he was backed into a corner and forced to sign this thing. >> that's correct. gottensident would have their backs up at the idea of any kind of legislation on foreign policy or national security. the president can't undo the sanctions by himself, only if congress says it is ok. trumpoblem for president

is the whole surrounding russia investigation complicates things for him. hiser two, it was felt administration does not have a consistent stance across all .evels the president had no choice but to sign it. strong,rity was so , so after vetoproof several days of consultation and those inside his administration that we got that statement. any white house would probably not be inclined to sign this. questions are even raised about the constitutionality of a law like this. have the courts world on stuff

like that? think thatople constitutional debate would theoretically in? >> the easiest recourse is if you don't think congress acted within its rights, you sign a willment and as a result i buy my time. with the president is saying is i will raise the concern about constitutionality and but right now not broadcast any challenge t. interact or congress would like to be of a to replace this, at least the republican majority. it does give them some bexibility, and they might willing to do so if the trump ministration took some steps.

there are questions the president raises about concerns from germany and the eu. down the line, they could be hit with the consequences of sanctions on russia. the presidents best recourse his advisers thought was to flagged the issues, raise concern about the impact on u.s. allies and the ability to work with allies, and to leave it at that. it is a pretty strong win for the republicans in congress who are fighting republicans of the white house. scarlet: another thing the president mention was that while he favors tough measures to deter behavior by not just russia, but iran north korea. does this legislation limit what the u.s. is able to do when

it comes to dealing with north korea. to be part of the conversation. >> that's true. this does ratchet up sanctions these of thework the nominations, but because of therussian part, legislation does deal directly and north korean iran sanctions, but the rush of peace is what the president fears could affect his bargaining power. see thisrt of why you strong threat on trade, more drastic trade measures was that he iso his base carrying out campaign promises combat signaling to china and singapore are going to work gather on north korea.

i'm going to reverse to the harsher propulsive my campaign. it is fascinating when president trump says it will korea and, north russia together. as ongoing debate over steel well and china, and the timing very critical. it is a tension point in these countries, the balance tough to find. coming up, our interview with lloyd blankfein to what he says about president trump and banking regulations. from new york, this is bloomberg. ♪

julia: "what'd you miss?" for clarity on regulation, something goldman sachs and lloyd blankfein addressed at an event today in baltimore. alix steel was there and asked lloyd blankfein about sentiment and the proposed changes to the volcker rule. people talkhing about, there are some things getting done. there is a change in sentiment and attitude. the way rules are implemented, the attitude of the new class of regulators coming in, and again can we operate in financial services, but are a corporate

.dvisor in m&a industries aree more highly regulated than they have been. instantaneous and in some cases does not need congressional approval, but certainly doesn't need legislation. it is just the way regulations are implemented and the attitude towards it. i think we are witnessing a change in sentiment. of theeard the office comptroller of the currency is starting the official process companies on what they want rolled back. say what your profits would be if the volcker rule were not in place? throughthey were going financial regulation, you could ,egulate the amount of capital

regulate leverage, and you can regulate activities. you can do this transaction, not that kind of transaction. was the volcker rule did you could take positions, but they wanted to camp down speculation. speculationween back off of, and taking the other side of what isr client wants to do, that risk taking principal activity, and the line between the two is blurry and indistinct, but with the volcker rule, it said if you are taking positions and points of view in anticipation of connection with the specific clients operations, that is good. if you are doing it away from good,pecific, it is not

but if you are a market maker at a desk, it is hard to know where that distinction is. what makes a market is one million people all at the same time because someone thinks it will go down in some of the .ivil go up in practice, it has been cumbersome and hard to do. desks are on trading very nervous, and it has had a dampening effect on liquidity in the market place, and i think regulatorsors -- the did not cause that -- they were filling in the statutes, but now that it has been in place and they see how it operates, there is a consensus that it has to be re-examined. julia: lloyd blankfein earlier on bloomberg. scarlet: time for the bloomberg business flash, companies reporting earnings after the

bell. losing money, but was a smaller loss than anticipated. models s and x will rise, and expects to produce 1500 model threes. aig beat estimates, although commercial underwriting worsen. the new ceo said the company remains "vocus "focused." this is bloomberg. ♪

i willn't miss this boot be watching the boe tomorrow announcing its rate decision at 7:00 am eastern tomorrow with a press briefing to follow. is it super thursday tomorrow? julia: don't miss this. u.s. and german factory goods. joe:

>> you are watching "bloomberg technology." president trump endorsed new legislation today that would

reduce illegal immigration to the u.s. it would also evaluating fisa applications based on merit with a preference for people of higher education and job skills. would represent a dramatic overhaul of the u.s. immigration system. president trump has signed a russian sanctions bill that congress forwarded to him, but he added a statement saying he has reservations about its impact, and whether parts are even constitutional. the measure gives congress power to block the president from lifting the sanctions. and the trump administration is considering rick perry as a possible replacement to john kelly to head the department of homeland security. representative michael mccaul, a texas republican, is also said to be favored by some administration officials. authorities say one person is dead and another missing after a natural gas explosion at a college prep school in minneapolis. the school served students from pre-k t