national congress told reporters the developing countries do have problems. >> it's not as if the united states doesn't have difficulties. millions of unemployed people in the u.s., millions who don't have health care services or access to education. we would not dare to make about anys derogatory country that is in, any social economic or other difficulty. mark: el salvador says it sent a diplomatic protest note to the united states, expressing the country's " resounding rejection of president trump remarks." salvador demands respect for its brave and dignified people. u.s. ambassador to panama is stepping down, reportedly saying he can no longer serve the trump administration. that's according to multiple media reports. the state department confirms he

is leaving his post, but says it is for personal reasons. he was confirmed as ambassador to panama in 2015. turkey is warning its citizens about traveling to the united states in retaliation for a new u.s. travel advisory that warned americans about terror threats and arbitrary detentions in turkey. the u.s. travel warning is set to unfairly portray turkey as an unsafe country and did nothing to improve frayed ties between the nato allies. the same russian hackers who penetrated the democratic party have spent the past few months laying the groundwork for an espionage campaign against the u.s. senate. according to trend micro, which suggests the group is trying to gather the emails of america's political elite. the hackers are looking for confidential information to leak. global news 24 hours a day powered by over 2700 journalists

and analysts in over 120 countries. i'm mark crumpton, this is bloomberg. ♪ scarlet: live from bloomberg world headquarters in new york, i'm scarlet fu. joe: i'm joe weisenthal. julia chatterley is off. scarlet: stocks rising after banks kicked off the fourth quarter earnings season. the u.s. two-year yield topping 2% for the first time since the financial crisis. joe: the question is what'd you miss? scarlet: the tax bill fueling the spotlight in banks earnings reports. jpmorgan and wells fargo will meet a bigger windfall. how will they divvy up the bounty? the stakes in reaching an immigration deal got higher. president trump's controversial remarks at a bipartisan meeting is raising the risk of a government shutdown at the end

of next week. mark zuckerberg's about-face is calling facebook. shares falling on the drastic position to ship its newsfeeds back towards friends and family posts. what'd you miss? bank earnings season kicking off with jpmorgan and wells fargo the first up to bat. jamie dimon undressed the impact of tax cuts on the bank during a conference call. >> it's the effect of retained capital and increasing competitive american companies that will drive jobs and wages in the long run. i have no question we will be far better off. scarlet: joining us to discuss is oppenheimer senior analyst and managing director. let's start with jpmorgan. certainly the tax change had a big impact, not just on the bottom line where it hurts, but also some of the businesses like

the corporate bank and investment bank. talk about how you are putting aside those numbers to read the corporations. chris: if you put the tax bill aside for both companies today, the fundamental trends were very close to what we were looking for. wereourth quarter charges not just felt on the tax line. both companies owned some tax advantage assets. tax-equivalent adjustments through the various instruments they own. it impacted any number of lines of the p&l. when you strip through the noise and they give most of the pieces in the press release, everything was close to what we were looking for. pretty close through recent quarters. joe: jpmorgan stock has been doing phenomenally well, some of it is the taxes and the boost they are want to get to earnings. in terms of the underlying business, how much momentum is? there can it sustain the stock

further? chris: i think the banks in general are in a good spot. even though loan growth is slow, year.g 2%-3% on year growth with rising rates, the ultralow rates that we have had the last couple of years have hurt banks. as rates rise, the interest margin normalizes. 2% or 3% loan growth is turning into 5% or 7% net interest income growth on an underlying basis for the industry. if they can keep expenses up 1% or 2%, that will drive 7% to 8% income growth, then they have 3% or 4% from shared buybacks. the fundamentals from what you can see are good enough to sustain roughly double digit earnings momentum. the tax numbers distorts that. basis, think about it

in terms of these companies for the next 18 months or so. scarlet: you mentioned the word expenses, it brings us to wells fargo. it looks like a kitchen sink of a quarter. do we see a light at the end of the tunnel for these various expenses? litigation is a big one for the fourth quarter. there are so many different directions you can look at the expenses. one,: this is the last big i would say. tim sloan's fifth quarter as ceo, next year starts a new year. clean, orbe pretty otherwise there is a real problem. you wouldn't go through 50 --ths of being ceo without through 15 months of being ceo without turning a few rocks. the results are going to be cleaner and more stable next year. you have an organization here

where everybody has a new boss, and everybody has a new scorecard, in terms of compensation evaluation. -- ie been in measurement have been in management, you knew there were two things. ifyou change their boss, and you change the compensation system. at wells fargo, you have a lot of people who have gone both. will single out as we progress through 2018. their trends are lackluster compared to everybody else. scarlet: we are going to be speaking with the cfo of wells fargo, what is the number one question you want to ask him? joe: i like this. a question from the guest. chris: what i want to know is how quickly -- ultimately, the customers are going to end up with most of the windfall from

the tax law. that's because banks target an after-tax return on equity. they are going to target 30% or 40% for tax. if you want to make an auto loan, you know you have to charge the customer 5.5%, give them the losses to expect and the cost to do service the loan. environment, you are going to make that 30% or 14% hurdle by charging only 5%, or four per 5% -- 4.5%. theof the big banks, as loan broker rolls over, they are going to break it towards a new tax environment. in my view, the instant impact for 2018, reform is the earnings go up. that's because the loans that are in the books were but they're in a 35% tax environment. the new ones are going to be put

there in a 21% tax environment. i would love to hear his thoughts on how quickly the benefit is going to roll through sharing ofomers and this windfall between the customers and shareholders. that's where i would dig in. scarlet: oppenheimer senior analyst and managing director, thank you for joining us. the cfo of wells fargo will be joining us after the market closes this afternoon. coming up, rising late in the day. de shaw said to build an active state in the retailer. this is bloomberg. ♪

♪ scarlet: what'd you miss? some news that crossed bloomberg in the last hour. de shaw holding an activist stake in loads. we don't know the specific plans for the investment, but they plan to use the holdings to agitate for change is according to people familiar. ed's bring in and hammond -- hammond. we have been chasing this story forever. there was this rumor there was an access to lowe's, but we couldn't figure out who. de shaw is not even on the list. it's a fairly new thing. they heard someone from elliott management to run their activist strategy. this is one of their first big positions we have seen them show up with. it is a new entry in the market. firm gettingis a

into activism, is it quant inflected activism? do they bring their quantitative skills to do activism better than previous people? >> they have among the best robots out there. you could see that. the have an activist algorithm. at the moment, this seems to be a. is aist position -- this pure activist position. perhaps layers of activism on top of the stuff where they have a big position. scarlet: do we know the timeline in terms of when they started building this position? >> not exactly. we think they started building it quietly in the market. you haven't seen volume in shares until the last week. we think they were building it. may gone up more recently. we have a nomination coming up soon on lowe's, whether they

come with a public letter, changes to the board, or if it is something that will get a result behind the company -- by the scenes with the company and management. is a second lowe's want to home depot, the stock has done well. does anyone have any theories or anything for what they would like to see about real estate or anything? have done great recently. . . they are one of the companies that benefit well. i think there is this spread between them and home depot. the margins are less good, yet they should trade roughly the same, because they do similar things. in terms of sale of the company, i don't think that is an option.

maybe they could sell off assets, or spin, it is remaining to be seen. scarlet: i'm looking at the top shareholders, vanguard is number one, black rock number two. plan, you are talking about a lot of passive money. >> we have seen this again and again. a lot of these traditionally passive funds will find the scenes work with activists and say the idea isn't so bad. scarlet: de shaw also has a stake in eq t in october. what do we know about that? >> we don't have any update on that. that was pretty much their first activist position. what was different was they were late activist to the scene. others went in before the start and were asking for what they went and asked for. scarlet: made in activist.

ed hammond, thank you so much. let's get you to the bloomberg business flash, is look at some of the biggest business stories in the news. the u.s. supreme court investigates in-house judges on whether their appointment violated the constitution. it stems from a judge must decision to fine and bar and investment advisor after finding he misled clients. the judge did not observe constitutional formalities, including a commission vote. are pushing the troubled u.s. retailer to declare bankruptcy. according to people familiar with the matter, that could happen as early as this month. they have been coping with declining traffic, and management of people, and debt, about $1.2 million. the u.s. trade representative's office has but alibaba on its notorious markets list for selling fake items online. it'steps to clean up

marketplace are "insufficient." the movement considered a bloat to alibaba's global expansion. they called the process "deeply flawed, biased, and politicized." that is your bloomberg business flash. let's move on to our stock of the hour. it is twitter, popping higher. up for a third straight day in a row. facebook drops on a change of strategy. we bring in abigail doolittle. joe: mark zuckerberg says we are not going to have as many ads, maybe not as much news twitter is all news, basically. ,i guess investors are liking it. abigail: they are taking the view that if twitter or facebook is going to drop, social media perhaps point into twitter on a day. zuckerberg is talking about that. friends, family, twitter is much more about ads, political media,

news. what could be happening here is perhaps some investors think people spend less time on facebook, maybe they spend more time on twitter. that could be a part of the phenomenon. joe: today, twitter shares have been doing well. what is a big story that's not just about maybe some reaction? abigail: the big story is 2018 has easy numbers. prices,aising their early stage of a turnaround. analysts are looking for 6% sales growth in 2018. that's really low. it seems pretty achievable. if they can start meeting numbers, beating numbers, it could go much higher. scarlet: talk about the user sets that we do know for twitter? that was a bit concerned, that they were not growing at the pace they should be. abigail: they focus on daily active usersabigail: growing in a big way.

they don't focus as much on the monthly active users. that is stagnant, around 330 million. thatctive users on twitter are engaging more, they go on a daily basis, you are probably a good example. joe: i go on every once in a while. i remember when trump won the election, he tweeted and people thought it would be good. maybe some of that is going on. abigail: in a way, i believe you are right. the daily active users have started to get better since the election. whether or not they are able to monetize. they didn't come across last which suggested profitability and margins are going in the right direction. i have a chart suggesting twitter could go higher. we see that twitter is almost at

its ipo price of $26. it has taken out its high from a technical standpoint, if above 25 on a continual basis, you will see twitter go toward 40. the price target rate today seems reasonable. there are investors thinking it will be an easier. they will need it, beat it, perhaps it goes higher. scarlet: abigail, thank you so much. we have breaking news crossing the bloomberg. according to the wall street journal, a lawyer for president trump arranged a 130,000 or payment to a former adult film star one month before the november 2016 election. that is according to the wall street journal. i believe we have alex on the phone? no, we will be speaking with alex later on. joe: a typical day. scarlet: coming up next, u.s. inflation, and the three charts

you can't miss. this is bloomberg. ♪

♪ joe: what'd you miss? it was a big day for economic and business data. our economist report is here. let's get started. you brought three charts. the first one you have has to do with retail sales. >> by all accounts, it was pretty good christmas. you can see that in this chart. it shows the so-called control group in the retail sales data, which strips out a few categories. it's what feeds into the gdp calculations. you can see at surged in november and december, this rate of expansion. we are definitely getting

reports that consumers are feeling strong based on their christmas purchases. there are starting to be questions about how overextended they are getting, is it sustainable? it is definitely a sign that confidence is high. remember hard data for soft data? the hard data seems to be matching the soft data, at least on the consumer side. >> you can see how it has been low for the last year or two. we are finally getting the pop we have been waiting for. joe: we have another chart that you brought us. it has to do with procyclical inflation. if we can go back to the chart. we have been talking about the inflation data and that subset of inflation data that the fed can hope to control. -- sansomething that can francisco fed has going

procyclical inflation. the blue line shows the cpi version, the data we have today. in the data we had today, there was an uptick in this process global inflation that is supposed to respond to tighter labor markets. you can see it is still lower than it was one year ago. it is not really showing signs of life. it is also important to note that the reason it went up was because of this big, outsized move in owners equivalent rent. scarlet: let's talk about the owners rent. the red line is one that i pay attention to, because it is california. it is about everyone else. >> this is really the key question for the inflation outlook in 2018. this is going to be the driver that gets inflation back up to the fed's 2% target, if they can make it. in the west, that's the red

line. that shows rental inflation, mainly in san francisco, l.a., and seattle, rolling over pretty hard. that is what has been driving inflation through the expansion. also of note is the amber line, the northeast. that includes new york city, that is coming down hard. it has picked up a little bit in december. that's why we saw the uptick in procyclical inflation. joe: that first look at aflation numbers, i thought little inflation. when you look into it, there is not a lot to get excited for the fed. >> it goes to what do you think is going to happen in the housing market over the next year. there is a question about overbuilding in multifamily construction. that is starting to contract. this is going to be an interesting thing to watch. scarlet: and the effect of the tax law on places like

california and new york. u.s. economy reporter, thank you so much. the market closes next. we are looking at record highs. ♪

scarlet: what'd you miss? u.s. stocks set to close at record highs. a record for the s&p 500 in 2018. i am scarlet fu. i am joe weisenthal. julia chatterly is off today. if you are tuning and live on twitter, we want to welcome you to our closing bell coverage every weekday from 4:00 to 5:30. scarlet: u.s. stocks closing at record highs. joe: it is like everyday is the same but this is getting astounding. is not boring at all. scarlet: 226 points on the dow after a 200-point gain yesterday, as well. earnings from jpmorgan, wells fargo. we also had retail sales and inflation numbers come out today, all of this combining to push people into equities. the optimism is what is truly astounding. joe: incredible. scarlet: let us look at

individual names. foras much optimism names like facebook after zuckerberg signaled he will make changes to the way facebook calculates what kind of news stories and presents to you and their newsfeed. less of the sponsored post from media outlets. that could result in less engagement for facebook users in the short-term. investors not liking that news. jpmorgan coming out with results. it was a disappointing number if you look at the headline number, but that is because of the tax change. what is important is the outlook in jamie dimon's signal. the tax cut will be good news overall for jpmorgan and banks. has reached the $100 mark after a report by bloomberg that ge shot is building an activist stake in the retailer. joe: is also much we yesterday if you are not at double digits this year you are behind. looking at some of these, it

kind of feels like it. scarlet: blackrock crossing the $6 trillion asset mark. it hit $6.3 trillion in the fourth quarter. a big boostot because of the tax legislation and flows into etf. a quick addition breaking news and the last 10 minutes or so maybe even less. cbscan see in terms of after the rap reported by, and cbs vice chairwoman is looking into a merger of the two media companies that split more than a decade ago. i feel it we talk about this every couple of months. i'm a on-again? off-again? the talk is that they are on again. joe: broken record. let us look at the bonds market. higher across the board. two-year yield ending the day at 2%. this is the first time since the financial crisis that the twoyear had a to handle --

handle their. the inflation was firmer than expected. the retail report was enough to push us over this big round number indicator. not doingeld that much. i want to show the 30-year yield in italy. there had been a big rally in sovereign debt. so much optimism in europe right now. everything rallying, strong data, the climbing political risks. you see that yields, 3.11%. lots of bidding out in the long ends in europe -- long ends in europe. let us go back to the two-year yield to put it into perspective. it is kind of getting normal, you know? after years, it was totally nothing and getting a little bit higher, 2% out for the week. scarlet: it is remarkable at the end how much of a straight line up it is. you mentioned the euro rallying, driving the u.s. dollar weaker. this is the dollar over a six-month period.

continues.s the longest weekly losing streak since february. talking about almost a year. it is not just the euro that is strengthening, also the pound, getting the highest since june 2016. spanish and dutch officials agreed to push for a softer brexit here. mentioned the euro strengthening. it is not a three-year peak. angela merkel reaching a preliminary agreement for polish governments. finally some movement for germany and the eu's most important member. joe: let us look at commodities. lots of interesting action today. crudeec intermediate getting nicely. one point today, games all around. continuing up nearly 1%. gold gaining over 1%. people are just buying everything that is not dollars right now. palladium futures up nearly 4%.

another chart on that in a second. platinum futures up nearly 1%. of course, palladium gets a lot of attention because it is usually a lot of high-tech purposes. look at this. a record high in history for the price of stock palladium. i bet a lot of people did not know that if you went out and bought palladium right now, it is at its all-time high. of course, it is the laissez-faire precious metal. scarlet: you have been going on about that. joe: and finally, corn and wheat. we have a report from the usda. that is the sort of update on supply and demand for green census like that. ends stuff like that. we see that selloff in corn and wheat. those are today's market minutes. scarlet: what'd you miss? wells fargo earnings taking a hit due to litigation costs. the spring and was fargo's chief financial officer who joins us from san francisco. thank you for joining us today. good to speak with you.

i guess the question here is, starting with the litigation expenses, was this a kitchen sink quarter? $1 billion in litigation expenses. do you see the end of the tunnel leading gets past the consumer banking legal disk units you have been waiting for -- legal disputes you have been waiting for? >> at the quarter, it was $6.2 billion of net income, about as high as it has ever been at wells fargo. drivers.few big litigation is one of them. also, tax reform because we are a big taxpayer and have been through the cycle. we have deferred tax liability is so we put up about $3.3 billion a benefits from that. on the litigation front, the number is bigger than you mentioned. $3.2 billion in the quarter. it reflects sales practices. it reflects legacy, pre-financial crisis, mortgage- related issues that are coming to fruition. there are some other matters, as well.

i would not call it a kitchen sink quarter. on the expense side, it is a result of real circumstances on how the quarter ended. the net number, $6.2 billion, produces an 11.3% return on equity. and the next of the quarter was actually a really good outcome. the drivers of the business for the quarter, loans being up, depositing up, the income being relatively strong overall contributed to the great outcome. i think we are positioned pretty well going forward. i'm sure we will talk more about taxes. if we will pay a lower tax rate going forward. we make most of our money in the u.s., so we have been a very high taxpayer and now we will be a lower taxpayer. i think we're feeling good about that position. joe: earlier in the show, we were talking to oppenheimer analyst, and we said, which we john, and he ask wanted to know about the impact tax or form would have on the lending you will do to the extent that the loan yield, i

guess, or the interest rate -- will borrowers see a decline in interest rates they pay? i heard that because i watch her show all the time. scarlet: thank you for that. joe: it worked out very well. john: yeah. [laughter] it is certainly a possibility and it is on people's lines. i heard some of the other big banks talk about what -- how long the tax credits will last. depending on what happens to competition,. not everyone we can be within the markets we are in is a u.s. taxpayer like a bank that already produces a reasonable return on equity. so competitors are going to behave differently. we will beght,

generating in our own calculations a higher return on certain activities and there will be attention our competitive advantage to be able to use the to win business by giving pricing concessions to customers. i do not think it will be as uniform as he was intimating.our average alone is on the books for three or four years, probably. so it is not like last year's role often this year's role on. that will happen probably over the course of the next few years and we will see what impact that has had. as i said, we are fortunate to roe.oducing 11% or 12% the others will be thinking about that as a way to try to hang onto something that allows them to get back up to a competitive return. they will not be the first movers, and we will see how competition unfolds. it was a good point by chris. scarlet: thank you for listening. thank you for watching. i want to expand on this idea of

the tax loving something that changes the playing field for banks, wells fargo and particular. re: more willing to expand certain business lines or businesses that anywhere before the tax cut was made? time. as to how it impacts wells fargo's corporate behavior and how it pursues new opportunities. sure. the first thing we did is to take care of our -- the people who are ready work at wells fargo. we gave a race to our lowest to ourployees -- raise lowest paid employees to get them up to $15 per hour. if they were at $50 for our, we got them up further, which was helpful. the second and we did was increase our corporate philanthropy, which has commercial benefit and makes the communities we operate in jogger and more resilient. -- strongerys been and more resilient. we have taken our numbers from $290 million in 2017 to $400 million in 2018, to 2% of net

income after tax starting in 2019. that is a way to use the benefit to improve how we are operating in foster closer relationships with community groups, nonprofits, and others who matter to our team members, who are our customers and will make our business better overall. in how wee first step would respond to what we might do differently corporately. we are benefiting from the fat that we make almost all of her money in the u.s.. it used to be a comparative disadvantage. now it is an advantage. we are probably less likely at the margin to be looking for bigger opportunities outside the u.s. looke margin, they will for business at home. we are interested in doing more of the things we're already doing. deposit taking, mortgages, autos, commercial real estate, lending. is chris described and we just talked about, it all comes out to a higher return in this new

environment. we think it is great for business. most important way, if our customers want to do more because they have more money in their pocket, for confidence from the consumer side, we moret more spending, transactions, maybe more borrowing or risk-taking because more people have jobs and more money in their pocket. for the business side, i expect more, dealmaking. that is good for our business, as well. without changing much, i think there is a huge opportunity in our business performs as a result of what the government has done. scarlet: a win-win for wells fargo. thank you so much and think you for watching what'd you miss? next, will they or won't they? is talkingstone about a merger. viacom says not to be an active sister company but what happens next? this is bloomberg.

♪

mark: i am mark comes in with first word news. hillary clinton is blasting president trump for his comments about immigrants from haiti and africa. on twitter, she noted that it is the eighth anniversary of a haiti.ting earthquake in she says instead of remembering the tragedy in honoring the resilient people of haiti, we are subjected to "trump's ignorance, racist views of anyone who does not look like him." the president decided today to continue to wait economic sanctions related to the 2015 nuclear accord with iran,

leaving the deal in tact for now. the president did issue tensions against 14 people and entities involved with iran's ballistic missile programs and a crackdown on government protesters. the president has repeatedly denounced the nuclear agreement negotiated by president obama. mr. trump declined to certify it was in the interest of the u.s.. he so far stopped short -- u.s. he so far stopped short of scrapping the deal altogether. welcoming a deal in germany. they called the european part of significant contribution to that european policy." the agreement includes more government involvement in education and exchanges to health insurance but no tax increases. in montecito, california, rescue crews continue to search for more survivors for tuesday's deadly mudslide. 17 people have been confirmed dead. at least five others remain

missing. about 100 homes were completely destroyed and another 300 were badly damaged. global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton, this is bloomberg. ♪ let us return to that news on cbs and viacom. shari redstone of both companies is pursuing a merger of the two media names that split up more than a decade ago. joining us from princeton is paul sweeney. i feel it we talk about this every couple of months. it has been in the water. people question if they will merge in some thing happens in a separate and go their own ways. what is different this time? why would they want to combine once again? paul: what is different is we have the walt disney company announced it was acquiring the majority of 21st century fox couple of weeks ago and that was a seismic shift within the media space and general -- in general.

it underscored with the big media companies are thinking today. they need to get bigger and scale. it is not just scale to compete against other media companies. tos is about having scale compete against -- getting scale to compete against the amazons and googles and apples of the world as text companies continue to encroach on traditional media businesses. joe: if they were to tie up, what would -- how would it be a stronger company? i guess that is what i am trying to get at here. in syria if they were to come together, what are the parts of cbs and viacom that would be worth more than them separately? paul: it is a good question. whenes against the logic the companies split apart to highlight the faster value as of the viacom and the slower growing assets of cbs.

since the separation, cbs has grown and the stock has outperformed viacom significantly. that is because the core business of the broadcasting business with three transmission revenues and other growth drivers has been a good business while viacom has been under managed. i think if you were to bring these two companies together, the first thing would not be a cost energy story, it would be a management tory. do? could leslie moonves a what was arguably under managed?i think that is what they're looking for. leslie moonves will be a key assets. joe: so much of this has to do with the leverage that he media companies have. big distributors, big web portals, web giants. everyone is looking for leverage. yoa combined entity would be an eight better position -- would be a better position? paul: i think so.

if you bring the film studio together with cbs television, presuming a lot of the programming being produced by paramount aired on cbs and showtime, you have a little bit of energy there. of course, the negotiations go on constantly with the cable networks and their distributors. viacom would be in a stronger position because it would also have the cbs network there to comcasteverage against and at&t is. -- at&t. scarlet: we're still waiting how regulators responsible. the disney and fox merger, or purchase, i should say, changes the media landscape. , paul sweeney bloomberg intelligence thank you so much for joining us. coming up, incendiary remarks leaking out from oval office meetings. reports of hush money and

another looming government shutdown. just another day in washington. we had to defeat next. this is bloomberg. ♪ this is bloomberg. ♪

scarlet: what'd you miss? a new report from the wall street journal saying president trump's lawyer arranged a payment to a former results on star one month before the 2016 election. joining us to discuss is alex lane. joe: alex, did you ever think you would be on air talking about a subject like this? i figured it was inevitable in this job. at the white house, someday, some president is going to pay a ?istress to go away right joe: that is will put in a

reasonable answer. are there any implications? assuming the reporting is correct, it does not look good. today in 2018, doesn't have any political ramifications or is it another thing where like a week from now we will be like, remember that story that seems so old but it was only a week ago? would be only another thing that goes on? alex: what a throw in the caveat. it is based on anonymous sources and the white house denies it. did not deny it. he said they denied having an affair but he did not deny making the payments. scarlet: that is a critical distinction. we will wait to see how that plays out. of course, whether the base cares about this at all. alex: i would not expect so. scarlet: let's talk about what is going on here with whether the president will talk with bob mueller, the special counsel, because there were questions posed to the president and

basically his answer was, we will see. it depends. what are we learning now about what the president's lawyers are doing with a meeting with bob mueller? alex: they've spoken to the office counsel's about parameters. he has not requested an interview with the president yet. the president said the other day, he was noncommittal the other day about whether he would talk with moeller. bob mueller. if it is requested, the president might refuse. scarletjoe: if the special couns interview the president, with that signify a late stage in the investigation? with the idea the that he is one of the last people he needs to interview? alex: depends on what the president says in the interview. you will recall that back in the 1990's, president clinton did a videotape grand jury testimony in the whitewater investigation, and based on some of the things

he said, which the special investigator in that case ken starr did not think was true, the investigation went in new directions. that could happen if trump talks about robert mueller -- talks to robert mueller. scarlet: we on the comments the president made regarding immigrants into the united states. there have not been that many denunciations from republicans. we noticed democrats, very vigorously, separating themselves in denouncing the president. among republicans, it seems to be kind of talking away from it and pivoting to something else. what does this mean for any kind of immigration deal? him, asr supporting steve king from iowa did this morning, yeah. i think it has seriously setback the prospects for an immigration deal. that meeting was a disaster.

senators came to the white house picking they had a deal in hand and were surprised to find out anti-immigration lawmakers were at the white house to join their meeting and negotiations went nowhere. the holding was exacerbated by ing a bullng -- utter garrity about african countries and disparaging haitians. it was just a disaster. i do not know how they go from here or productively recover in a week before the government shuts down next weekend. joe: great stuff. number white house editor, alex wayne from washington. appreciate your perspective on 24 hours worth of news there. next, shares of facebook fell as the social network announced major changes to its newsfeed. we dive into long-term impacts from the move. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. first word news. richard durbin says an immigration meeting in the oval office yesterday was "combative at times." he said lindsey graham pushed back after president trump used able garrity about african vulgarity -- bul about african countries. lindsey graham said "following comments by the president, i said my piece to him yesterday. those attending the meeting know what i said and how i feel. i always believed america was an idea not defined by its people

but by its ideals." senator durbin took exception to the president, tweeting he did not use vulgar language to describe haitian and african immigrants. >> you have seen the comments in the press. i have not read one of them that is accurate. th-- that is in accurate. he started tweeting that he did not say those words. that is not true. he said them. mark: paul ryan said the floor was "very unfortunate." he added that his ancestors were irish and looked down upon. he said haitians in his hometown are incredible citizens. the president canceled a trip to london to open the new embassy,

avoiding protest promise by a phil -- political opponents. some lawmakers say president trump was not welcome there after retreatin -- read tweeting videos from a far right london group. he said it is due to concerns for the embassy's move to a less fashionable area of london. president trump was at the military hospital in his first medical checkup since taking office. the white house says the president's position is expected to release -- physician is expected to release a brief statement and providing a detailed readout on tuesday and answer questions from reporters. and venezuela, -- he and leftuela, looting has three people dead and 16 more injured/ venezuelan. -- injured. they say two moms were attacked. -- mobs were attacked.

a dozenwed on twitter men attacking and cow as one says, "we are hungry." global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. record highs for u.s. stocks. for the s&p 500, it declined only one day in 2018. there has been earnings, data to back it up. i think we're in the optimism stage of this cycle. joe: we're in the optimism stage. scarlet: what'd you miss? facebook is making major changes to its lack should social network. mark zuckerberg announced the company will shift users' new sfeeds back to friends and family posts and away from businesses. this would mean users may spend less time on the site. joining us to discuss their are bloomberg

columnist. the goal is to get users to find content that leads to more meaningful social interactions. what do you think that means? does facebook have a way of measuring the? >> those are great questions. what facebook clearly wants more people to go back-and-forth with friends, whether they are talking about funny television shows they saw last night or a news story that writingg headlines, or long posts back-and-forth in response to friends or family members' posts. what they want less of is the kind of aimless scrolling through feeds without interacting very much. that is the kind of activity that facebook's own researchers have found make people feel bad.

joe: the stock fell very significantly today. would you get that this will slow down the business, or will this be the type of thing that maybe not as many ads coming through but now people -- but the brands that do come through fair much more? shira: it is so hard to know right now. ifinitial feeling is that people are going to spend less time on facebook, it has fewer opportunities to serve advertisements. obviously, it can offset that if there are fewer at the advertisers pay more for those ads. i am not even sure that facebook really has a good handle on what the revenue impact will be. noticeably, they did not say anything about that today. ads, fewer media

stories might make people feel better. in terms of teens getting less depressed, i would think that posts by friends and family, where they are bragging about how great everything is in their lives and their filtered pictures that is what makes people feel bad. while this tool -- this change might make the news feeds different, doesn't really change the way people feel about the information they are getting? aira: this is a little bit of trust me moment for facebook because they say this is the kind of change they believe will make facebook a healthier place for people to be. point, you raise a good which if there is less outside public content and more personal posts, it does not necessarily mean the quality of interaction will improve. you can engage in hateful interactions with your friends and acquaintances just as you do with news stories. joe: as soon as the news broke,

a lot of people started talking about all the startups and media companies. they put a private to video in the last six months. spending time on short videos on facebook or tv shows for facebook, basically anything to put facebook videos for the facebook users. can they be a lot of -- in a lot of trouble in the new regime? shira: yes. the kind of viral video we got used to on facebook is clearly going to be the biggest loser in the changes that facebook is making. it is the 45th reminder from facebook that they make all of the rules on the social network. only they have the rulebook, and they can change it whenever they want, and they do not really care what the impact is on publishers, use organizations, businesses, and others who rely on those rules. scarlet: it could change soon enough. as you noted, facebook often

makes changes and tweaks to the way that the algorithms prioritize what the facebook user sees on a newsfeed. this is the latest one and it is more public than others but things are constantly changing. shira: that is right. facebook is back-and-forth all the time about what it prioritizes. sometimes those are public changes and sometimes they are not. it does seem like this change is particularly momentous and it comes after a year plus of heavy criticism of facebook for becoming a place where misinformation, desperate cracking down on their critics, hate speech, that kind of activity ran rampant on facebook. it feels like the criticism is harsher than ever and so the changes they are making are more dramatic than ever. joe: think you for joining us. great piece of analysis on it. everyone should go check it out. adf go on the

bloomberg. we'll talk about why sexual-harassment on wall street remains hidden for now. joe: get involved in the conversation. send me a tweet. this is bloomberg. ♪

scarlet: powerful men have been pushed out of jobs because women spoke up to alleged egregious behavior. it is different on wall street. why has the me too movement hit a roadblock when it comes to the big tank?

bank? we put that question to max abelson. he joins us now. you went around and tried to find instances of sexual harassment and there have not been a whole lot. max: that is right. people who follow wall street things.o things -- know there was an office in smith barney outside new york city called the boom boom room. said, those women are the old days and things have been cleaned up. in my interviews with more than 20 women, they talked about how that is not the case and they experienced or observed sexual harassment on wall street. i mean the big banks. that leads to the question about why we are not saying the harvey weinstein phenomenon. the movement of powerful men being pushed out of their positions because women feel

courageous enough to speak up. with the pieces about his financial and legal -- what a piece is about is financial and legal forces that keep it out. joe: let us talk about some of those forces. is it just that there is so much money potentially involved for the people who stick it out that people theoretically feel it is not worth the risk? what is the financial angle? max: it is not just how much money, it is the way they are paid. the reality is if you are working a job and you make $40,000 a year and you are harassed in the workplace, i think you're also pressured to stay silent buyer financial ss city -- by your financial necessity. when women make $1 million in these roles, there is more money at stake than not necessarily proportionally more then someone making $40,000. there's something about the way the money is delivered.

they thought they were afraid that they would alienate the men who had discretionary power to give them huge sums of money. some of that money comes from annual salaries. but some of it comes at the end of the year from a man's decision about what to give that woman. scarlet: the big chunk is there. as soon as you change those men and replace them with women, that is how it will be. talk about the legal angle. --ere are a lo there is a lot of arbitration done. max: i want to give a shout to my editor. we talked for a long time about what is specific to wall street. their industries were women still do not feel comfortable -- there are other industries were women do not feel comfortable speaking at. -- up. they rely on the arbitration system more than other firms. you see companies, like citigroup, using the arbitration

system more than other firms, which means that it is really hard to know what goes on inside an arbitration hearing. public court hearings are public, but not so with arbitration. scarlet: talk about the one person that has been fired, a former congressman. morgan stanley fired him. this is after they were not able to prove from the allegations. max:well, we -- we included the ford anecdote because it was unfair to say nothing has changed. it is bad to say that the harvey weinstein phenomenon has not touched all street at all. there's something about wall street, the forces that leave the company's almost as if they are rim. -- a mutant. herald -- immune. harold ford is one of them. morgana job at

stanley a few years ago and was pushed out of it recently, the last couple of months i think. he denies wrongdoing, the morgan stanley says they investigated the claims from a person not inside morgan stanley. it was from a person outside. even there, it is a little bit different. we're still not saying women inside of wall street banks being comfortable enough to speak up publicly and name powerful bankers and have them lose their jobs. you know what, we are still married couple of months -- it was only in october that weinstein was pushed up. maybe will see changes in 2018. scarlet: thank you so much. you can read max's entire story in bloomberg businessweek. uncertain futures as the dreamers weight in limbo. john kasich of ohio has offered solutions of his own. we will hear from him next. this is bloomberg. ♪

scarlet: what'd you miss? john kasich joins forces with bush, saying if we believe america is made stronger by families, let us strength and families who choose to call america home. the federal government should not become the instrument for attacking them. john kasich spoke with david westin and sherry ahn on balance the power and asked about the approach he would take. >> these young people are right on the razor's edge and they are freaking out about, are they going to be divided. think about this for a second. i was telling a friend of mine imagine your son marries a dreamer. they have a six-year-old son and the dreamer, his wife, gets told

she has to leave the country. the sun calls you up and says, what do we do? where should our son go? shyly the country -- should i leave the country? they're working very hard in contributing. if they break the law, that is one thing. if there are a lot of law-abiding and integrated, no reason to ship them out. secondly, on the business of salvatori and, you had george w. bush -- salvadorans, you had george w. bush and barack obama giving them a waiver. . the case again where there is not any reason to ship them back. do we need changes in immigration and border protection? of course we do. i bolded for ronald reagan -- i voted for ronald reagan's plan in 1986. we did not see the security we wanted to have. i think that is important. let us not look in the rearview mirror to make up things were mistakes were made before. let us look through the windshield. i think in this case, ripping

families apart and going out to support people does not make sense. in terms of the 11 million, i was on the stage and i think i was the only one that said they should not have a path to citizenship but they should be legalized and they ought to pay back taxes and things like that. there is not a practical way, nor is it right, to start driving around with school buses, loading them up, and driving them to the border. it is absurd. they have to forget the politics, make the changes that need to be made but get people relief today who are really so fearful of their families. shery: this seems to be politics. is it just the president right now taking a hard-line stance in order to gain bargaining power? kasich: i have no clue. one minute they're saying we can get a deal the next minute no deal. you had a group in the senate

show up yesterday and they got shot down. i do not have all the knowledge of their plan, but it was basically things that both sides gave a little bit. what i do not like, and i hope our viewers don't like, is using dreamers, kids that were brought here by their parents years ago who are a pawn in all these negotiations. these are people we are talking about. party have a republican that has always been profamily. ok, well keep that in mind. the other thing i think is important, i was talking to a senator the other day saying, tell me about the faith-oriented people we have, oh, yeah, we have a lot of them. i said, faith requires action. you do not want to disrupt these families and scare these kids. that is not what we learned from our faith. -- let us justt

get something done here and we can deal with the more complicated issues right around the corner. the democrats ought to say we will do it but there is nothing getting done. maybe it will, i don't know. try to tell me what is happening tomorrow. it onould never make television because this is a reality show that no one could have ever imagined. vid: there are politicians, starting with the president and the number of fellow republicans, who think it is in their interest to take a hard position on this. what could you do to reassure them? >> i think they ought to pass a bill in five minutes that says the dreamers can stay here. period. end of story. david: you would be in favor of border protection? >> if they wanted to put that in there, that is fine. to me, take care of the dreamers and then you can do the more

comprehensive reform. we need copperheads of immigration reform. you have to make sure we know who is coming in and protecting our borders. why are we using the dreamers as a pawn in the negotiations? these are people. number.atistic or y: do you have to protect the dreamers before the funding runs out? gov. kasich: i think they should've done this month ago. i do not know what they're going to do. these folks get protected and they can get this thing done. and congress, we balanced the federal budget. we did this -- bill clinton was the president. we paid the largest result of publicly held debt in history. we worked together. same thing was true on welfare reform. it is just a place that has become dysfunctional. david: if you are back in

congress today, would you be willing to shut down the government to take care of the dreamers? gov. kasich: no, the answer is go to work and get this fixed. there is an inclination on both sides to avoid a shutdown. nobody wants to do a shutdown. the eyewall also tell you there are times when you just said, i am not going along. we will see how it goes. scarlet: that was ohio governor john kasich. it is now time for the bloomberg business a look at some, of the biggest stories right now. walmart is said to be restructuring to meet the transforming needs of customers. according to people familiar, 3500 store comanager jobs will be cut while 1700 assistant store managers will be added. the new lower paying roles will oversee fast-growing areas, like online grocery shopping and in-store pickup's. one of the biggest crypto currency exchanges has been down for more than 36 hours. it went off-line thursday at 12:00 a.m. eastern time for a

two-hour maintenance and is still down. they assured clients their funds are still secured while they work on unexpected and delicate issues. n is used to price bitcoin futures. a fund is set to invest in acorns grow. it allows them with an average of less than $500 average to invest. ashton kutcher and kevin durant also backed the company. that is your business flash update. joe: what you need to know to gear up for next week. this is bloomberg. ♪ erg. ♪

♪ >> citigroup, bank of america and goldman sachs. >> don't miss this next deadline, the government shutdown is ♪

>> i am alisa parenti in washington. is blastington president trump about his commas about immigrants from eddie and

africa. she noted that today is the anniversary of a devastating earthquake in haiti. she said is that of remembering the tragedy, we are subjected to trounce ignorant, racist views of anyone who doesn't like him. the u.s. ambassador to panama is stepping down, reportedly saying he can no longer follow the trump and nutrition. he says that it is for personal reasons. --rches in chile were talked attach with firebug after pope francis made his first visit to the nation, no one was hurt, unknown attackers threw cap with others in the containing message, the next one will be your cousin, the pope will arrive in chile on monday. in montecito, california, crews are searching for -- through rock and rubble finding more