climbs above goldman sachs for the first time since 2006, shares up nearly two and a half percent and 1% in premarket. apple is repatriating hundreds of billions of dollars in a win for president trump, but a government shutdown still looms. 2017, the 6.9% in first acceleration since 2010. his inflation the next stop? david: i am david westin along with alix steel, and morgan stanley is the big story. when you adjust earnings, it is $.84 as opposed to $.77. they took $1 billion. alix: revenues are coming in at $9.5 billion, but everyone wants to know ficc, coming in lighter than estimates, and that is quite a decline.

equity, stellar, super killer, $1.92 million. i want to highlight their wealth management. that revenue, $4.4 billion, better sequentially. margin dipped a little bit at 26%, but that is their bread-and-butter and looks very solid. david: they put so much investment into wealth management they said it is a big part of their future. the margin down a little bit, but they are still doing well. morgan stanley does more equity trading than others, so there equities are good. alix: goldman sachs, the highlight for them was their investment banking revenue, but morgan stanley showing no signs of letting up. is 1.55 compared to an estimate of 1.3, so they are beating there. alix: joining us are alison williams, and on the phone is can leon. he is a buy rating on morgan

stanley with a price target of 59. you are big takeaway? is an: i would say ficc little bit of a surprise, but no surprise coming in strong. we expected markets to help their execution, and it looks like they are right on plan. that is a key goal for them that is coming in better than expected. asset price helped, but i am sure we will hear on the call, they have been moving accounts more toward the feedback-based model. these are very strong. i think we will hear more about that. i do not see anything on the tax .ate, the go forward tax rate it will be key as well as the indirect benefits. a lot of what we heard from management was as expected, in terms of a boost potential he to m&a and underwriting fees. alix: what we saw in terms of

taxes is we enter 2018 with a strong momentum by rising momentum, tax reform, and revolving -- david: what are you looking at most? kenneth: the core businesses are doing well. wealth management, investment banking, and equity. the fixed income did underperform. morgan stanley has narrowed their presence in that area. i would like this morning, looking at the link between what is the expected tax rate for 2018 and what is the capital plan for returns to shareholders of dividends and buybacks? this quarter, just looking here, they repurchased $1.3 billion of common stock. i think there is a lot of interest across the large banks on not only the tax effect, but how it affects going forward with a return to shareholders. david: talk about the tax

effect, because this far, a lot of the focus has been on taxes. what about this $1 billion right off? kenneth: i have not seen the details, but what is likely is it is mostly related to recognition of a lower tax rate, the deferred tax assets have less value going forward. when you look ahead, the earnings at morgan stanley are in the midst of raising their estimates, not only for morgan stanley but other large banks. doubtthe conversation no will be that morgan stanley's market cap is greater than goldman sachs, but i want to highlight the ficc that number -- ficc number. are we getting too much of that market cap comparison? alison: the fourth quarter is there weakest quarter and they have said a $4 billion annual,

so they are still on target to reach that number. ficc coming in lower than expectations. i think we talked about this last week, head of all the companies' reports we saw estimates coming down for citi, deutsche bank, and goldman. i think that sort of signaled quarter, end to the and sometimes estimates cannot catch up. jpmorgan started out with a disappointing number, and we have seen that at all of the banks. the big picture, their annual target is basically in line with estimates. volatility has hurt trading but helped banking, and strong banking results. we focus on equity trading because they tend to be the most volatile line, but fees are very strong in the quarter. david: as we look into 2018, the tax laws will not just affect morgan stanley as a company but

will affect their customers. how is that likely to affect them as opposed to other banks? kenneth: for morgan stanley for its clients, it is moving toward action and confidence to do transactions. -- as you go into 2000 18, especially looking at repatriation of cash for morgan stanley customers, m&a will be an area where they are a leader. equity underwriting continues to do well. if the animal spirits of the stock market continue, we will see a healthier ipo market this year versus last. alix: what is your number one question on the call? kenneth: really related to return of capital. there is so much calibration going on in terms of whether they are going to be competitive with the other large banks. as an stanley is viewed

total return vehicle, so dividend growth matters. alix: thank you so much, alison williams and kenneth leon. i want to point out where we are trading in the market now, it was a killer day yesterday across the board. nasdaq, and s&p all closing at records. no doubt morgan stanley will be helping the market as well. euro-dollar getting a little bit of a boost, a broadly weaker dollar story, and yields, 2.6% on the 10 year. selling all across the curve, the highest in about 10 months. nymex crude up about 2/10 of 1%. its forecast for u.s. production and conventional production, lowering its forecast for shale. david: time to turn to headlines from outside the business world. the first time since

2010, the rate of economic growth in china sped up. in 2017, an.9% increase in 2010 someone -- 2/10 of 1%. exports were better than expected last year. on capitol hill, republicans are betting that democrats will not force a shutdown over government -- immigration. the house is on track to pass a one-month spending bill today that would for senate democrats to decide whether to block the measure in a bid to gain leverage on shielding young, undocumented immigrants from deportation. a new tax introduce overhaul to bring hundreds of billions of dollars to the u.s.. it will spend billions on jobs in manufacturing centers in the u.s. apple is also giving employees a $2500 bonus. global news 24 hours a day,

powered by more than 2700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. $250 billion, what do you buy with that? we are going to figure out what fun things apple could buy with their cash stash. as we had to break, i want to with out what is happening morgan stanley, slightly higher in premarket, up about 1%. a solid beat on revenue, investment banking good, wealth management up. this is bloomberg. ♪

david: it is time now for our daybreak first take, where we

talk about the top three stories of the morning. first, bank earnings with morgan stanley just out, edging past goldman sachs. china reported strong growth numbers, raising questions of whether it may want to step off the gas. the trump administration taking one step forward with apple repatriating cash but potentially a step backward the government shutdown. alix: joining us is marty schenker, and we are pleased to welcome stephanie flanders. stephanie was the chief u.k. and european market strategist, with a very long resume that goes on a long time. day isrite chart of the morgan stanley versus goldman sachs market cap. ,e will be talking about it morgan stanley finally surpassed goldman for the first time since 2006. what do you make of that? stephanie: certainly in morgan

stanley's case, these latest results there out some of the risks -- bear out some of the risks it took. we have always said the likes of morgan stanley should not be in the wealth business. their general approach on equities, all of these things were in question at times, and it is playing out very well, the wealth management side and the equities. david: one of our colleagues wrote in and said, you talk about lloyd blankfein and jamie dimon. what about james gorman? marty: he does not have rock star qualities, but he is certainly bearing up what stephanie said, he took some risks and they are paying off. in terms of market cap, the fact that goldman had a pretty dismal quarter and their market cap went down as a result. i do not think either one is obsessing over their market cap. alix: that is just the press.

i am curious but there is so much heat coming down on goldman sachs for their commodities business and it is a cyclical issue, not a structural issue. lloyd blankfein is sticking with that. fast forward a few years -- stephanie: we should say overall, the banks are looking pretty good relative to where we might've thought a year or two ago. the way the recovery is playing out, stronger than we would have expected. it is looking good for the banks , so none are looking terrible, but goldman managed to underperform that other strong pack. money has been lost making big bets on commodities, but if we are looking at china is not going to have the slowdown, and in particular some of the reforms they are bringing in maine's a slowdown in china

-- means a slowdown in china will not have the same impact on global commodities that we thought, might not be a bad place to be. overnight, china reported some key economic data that showed gdp grew at 6.9%, the fastest since 2010. this is a chart that shows the white line is gdp growth. the blue line is credit and credit growth. can they afford to cut back on the credit? stephanie: this has been throughout the whole lot's of years we have wanted china to reform, that they constantly worry abouthey growth and the broader public consequences of that. what we have seen and one of the upside surprises over the last year or so is they have managed to have a process combining fiscal support with the supply side reforms that china tackled

a little bit of deleveraging and overhang in some of the steel industry and elsewhere. it is sort of paying off. i do not expect -- think we should not expect the slowdown. i do not think it will have the consequences we think. alix: does this make donald trump angry? marty: i do not think so, but another number we should look at is their holdings in u.s. treasuries. advisers to the chinese government had suggested perhaps that they scale back their purchases of u.s. treasuries. the november numbers suggest that maybe happening. is, they are still buying u.s. treasuries, and where else are you going to go? it does raise somewhat of an alarm, and could potentially pose an issue for the u.s. government who is looking to actually raise a lot of money. alix: next one. apple.

this is a story that caught my buy yesterday, what can i for $250 billion? supply.s. m1 money every nfl franchise three times over. a quarter of their outstanding shares, and they could probably or at&t, or fund the government infrastructure for the next five years. why bring that money back? stephanie: it is interesting and clearly playing fantastically to the trump agenda. one of the things economists have said is you are taking this quite big gamble with this tax plan, which gives an enormous ticket value of the money they are handing over to the big multinationals and the changes on the global taxation, and betting they will bring at least a little bit of it back to the u.s. and do something, which in any normal environment would take a lot of time to pan out.

i think that is still the case, that if you get these nice headlines donald trump will be happy. what will they spend the money on? are they going to get the foreign companies currently making for them around the world to come to the u.s.? alix: how many plants can they build. seven? david: that is a lot of manufacturing plants for $2 billion. they have a little thing coming up at midnight tomorrow call the government, whether they will keep it going, and it looks like that are getting farther apart. marty: the optics are not great. the house will have a vote today and paul ryan is pretty sure. the ryan plan, which will keep us going until february 16 and give the democrats the child health insurance. marty: there was a democratic caucus yesterday. not one democratic u.s. senator said they would vote for this plan, and they need 60 votes and

democratics -- democratic support. david: they are saying they will not fund it without daca and two point billion dollars for border security, so they are digging their heels in. marty: at the last minute, there is some sort of compromise worked out. no one wants a government shutdown, but the key thing is miscalculation in foreign and domestic policy. you can miscalculate and then the blame game starts. donald trump wants the democrats to take the hit and it is questionable. stephanie: it is harder to do that when you true all that attention to the bipartisan meeting that went so dangerously wrong. now they are in a much greater chance. marty: mia -- alix: and i working until midnight on friday? that is what i want to know. stephanie flanders, a pleasure to have you with us, and marty schenker, you as well. we are watching morgan stanley

earnings, that stock still up in premarket. wealth management revenue up 10% . we will keep you updated on those headlines. this is bloomberg. ♪

the new taxused overhaul to bring hundreds of billions of dollars back to the u.s.. tax will pay a $38 billion and will spend billions on jobs and manufacturing centers. you can see just how much was held overseas. the cash held overseas is the cash bar and the blue is and marketable securities. here to break it down as michael mckee. the headline broke. the market was positive dollar, negative treasuries. is that the right reaction? .ichael: it may be treasuries were negative because apple will pay $38 billion in taxes and may have to liquidate some of their treasury holdings to pay that, but we do not know

what maturities they are holding . we know the breakdown but we do not know the maturity. david: and have eight years to pay it. michael: they have to pay 8% a year in the first five years, so it is not a big upfront cost. they are not is bringing back 250 $2 billion by choice and paying taxes on it. have to pay taxes on it. every company has to pay taxes on their foreign retained earnings, so apple won't pay the $38 billion anyway. they have been setting aside this money. that was from their 10k for their september earnings report. capital going to add expense money, but compared to what? that is what they did not tell us. david: the critical point is not that there is incentive to bring it back, but eliminating disincentive. they can make a decision to

invest but will only make a decision to invest in the united states if it makes sense. michael: the $2.5 billion is already here because 95 percent of it is invested in dollar denominated assets, so it is not like the money will come pouring back in. alix: how much for they thinking about spending in the u.s. in 2018, and how much more will it increase? the $38 billion over five years is like $6 billion. michael: in their latest filing they said they would spend 16.5 billion dollars in capital expenditures and now they are talking a $30 billion additional investment. does that include the $16.5 billion or is it on top of it? five, youide it by are talking about $6 billion per year in incremental investment, which is a lot. there are only 23 companies in the world that spend as much as

$6 billion. apple is an outlier because of the size. david: they are giving bonuses to their employees and will employ more people. they say it will have enormous effects on the u.s. economy. michael: compared to what? the have been adding about 11,000 to 20,000 employees worldwide and they will add 20,000 workers over the next five years. is that 20,000 above and beyond what they were going to do? the bonuses, we don't know the details so we don't know -- we know they are restricted stock units -- but is there a vesting pay $1500does apple and it grows into the $2500? what would matter is that they give every person a $2500 raise which would -- but we have not seen that. alix: cash held overseas by the big guys, a huge amount of

money, over $500 billion. michael: they will all pay the tax on it, so that is already baked into the calculations of what the government will be receiving. there is not really a lot of news. each company, you can figure it out for what their cash holdings are. what do they do with the money? if you use apple as an example, they will spend $30 billion. have some tax liabilities including a liability to ireland. billion. $171 is that going to shareholders? alix: we will see. michael mckee, thank you so much. china, stellar growth last year. ♪

♪ alix: this is bloomberg daybreak , i am alix steel. the equity rally that led to a record close yesterday is continuing, with dow jones futures up 26 point.

thanks helping propel the futures over 2800. the dax, up 4/10 of 1%. the story to me is what is happening in the u.s. bond market, 10 year yield, 2.6%, the highest since march of last year. the curve steepened just a little bit, 55 basis points between the twos and tens. watch what investors do and how they price for inflation. the dollar broadly weaker across little bitnd crude a firmer as you wind up having opec upgrading their u.s. supply production for this year, but downgrading the shale production. david: let's get an update on what is making headlines from outside the business world. kailey: president trump is firing back at his own chief of staff. john kelly told democratic lawmakers the u.s. will never

construct a wall along its entire southern border and mexico will never pay for it. in a tweet, the president wrote that the wall has never changed as he conceived it and said mexico will pay for it directly or indirectly. to repairy had hoped strained relations with president trump next week in davos, but a meeting may not happen. their time in the swiss resort will overlap by only a few hours during the world economic forum. imf managing director christine lagarde wants germany to increase government spending to boost growth and says they should take advantage of their budget surplus to invest more in infrastructure. the bundesbank president hit back, saying increasing public spending is the wrong way to go. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. david: overnight, china announced strong economic numbers for 2017, with gdp

growing at 6.9%. that is the first time it sped up its growth since 2010. the blue line is the growth of credit. as we go through these numbers, enda curran from hong kong. let me start with you. welcome, dawn. i thought that china was keeping the thing going until the 19th party of congress and maybe it would drop off but it is not. donald: that was the expectation. it feels as if they have the economy on cruise control and are not willing to step back. glad -- china is a global story. europe is driving the band for exports out of china, a miss contributor to china's growth, giving them the opportunity to slow down the credit pace. inflation has really been subdued, currency stable.

david: it is a sweet spot fueled in large part like credit. it is growing credit faster than the gdp. donald: i think the interesting thing on the graphic you are using is just how flat, how in variant the real gdp is for the past six years. this is in plausible, given all of the things that are happening in the world and all of the things happening in china. their data is what we use. the credit rise is not as worrisome to me as to some people. i think they are focusing on derisking rather than deleveraging. alix: what is the distinction? donald: the credit that they allocate, they want to make sure goes to projects that really left the china economy as opposed to those kinds of projects that may not really give growth that beijing wants. enda: they are targeting risk in

the financial system and particularly the banking system, but do not want to stop credit through the economy. david: can they do that without running up against the state owned enterprises? enda: they remain the elephant in the room, totally hooked on death. just debt. supply has come from the medium and smaller size business rather than soa's. how? --old: the soa he's s --soe's are the ones that have the muscle so they protect themselves, and the little guys are more at risk from pressure. david: when xi jinping first came in, he talked a lot about reform and we just had the 19th party of congress, not much talk about reform. will he take it on? donald: i don't think so.

his favorite three word soundbite -- improved state management. that is his phrase. reformard phrase for soe in china with the call exxon and chevron. petrochinahem in in and sinopec, and they will quickly understand what real economic reform is. if you do that in every industry, china will be a different place in three years. david: does that mean our president has a really good point? part of the way they are sustaining their economy is by excluding western companies such as exxon. donald: i think we are going to see more exclusion, not less. president xi is a political strongman. donald trump is only america first. the two biggest leaders in the world are going in directions which i think market fans don't

like. enda: i think donald is entirely right, it is not just the u.s. plenty of other governments have criticism about china not opening its market and allowing reciprocal change -- trade. president macron of france made the same point. alix: aren't investors now allowed to come in more? u.s. investors in equity coming into the space. donald: they are allowed, but the question is will they as the strongman mentality becomes predominant, will they want to? david: how much does president xi -- is he feeling his oats? there were many years when you would talk to chinese officials and they would say, we are not that strong, and now he is saying, we are taking a leadership position. donald: i think he is feeling his oats. alix: is it feeling or sowing?

david: feeling his oats is feeling really good for yourself. donald: i think he feels like he is strong, and the irony is washington has said bilateral, we don't want to be the global leader and a more after being the global leader for 70 years. i don't think china is capable of it, because you cannot be a leader and mushy have followers. i do not think they will have many -- and you must have followers. i do not think they will have many followers. they are not necessarily ready to do that and they are not in a position to figure it out either. alix: yesterday what we learned from the tech data, how much treasuries china is buying or not. the white line is u.s. treasury securities held by china, now at a four-month low. how do you view this? when they broke the news they would slow or stop buying, a big selloff in the bond market. what is your take?

donald: this is a complete nonstory. china does not buy treasuries because they think it is a good idea. china accumulates treasuries as a consequence of the economic activity, trade flows, services, goods, capital flows in and out. if they want us to sell treasuries, the question is what would they want to buy? i don't think there is anything better, nor will there be. alix: the political posturing that we talked about and the threat to president trump and trade? donald: it is all hogwash. doing asat are they far as the yuan becoming a currency? donald: they are a lot of talk. not that they are not making any progress, but the idea that this currency will become important in the extension that they are

going to go to a freely floating currency, no chance. that exposes them to the lehman brothers moment even more than they are now. that is importing risk. they will not let go of the capital or currency anytime soon. david: a better -- not a better day to have you together. a million-dollar wine highest, how a wall street assistant went -- made off with million dollars of wine? tom in to our colleagues keene and jonathan ferro from 7:00 to 9:00, and pimm fox from 9:00 to 10:00. area,n hear it in the bay boston, washington, d.c., on sirius xm. ♪

kailey: this is bloomberg daybreak, i am kailey leinz, and you are looking at the hewlett-packard enterprises great room. in the next hour, tom barrick, colony north star executive chairman. now to your bloomberg business flash. saudi aramco is ready for its ipo in the second half of this year according to the ceo. he says the state owned oil giant is looking at the possibility of listing shares locally first and then having an international ipo. aramco has not decided where to list shares overseas in what could be the biggest equity offering ever. tencent is widening its lead over facebook as the most valuable social network company. , with facebook

falling more than 5% since mark zuckerberg said the site will highlight commentary from friends and family. blackrock is taking a page from the silicon valley playbook. the world's largest asset manager is offering unlimited time off, a benefit considered appealing to young workers. that is your bloomberg business flash. alix: we turn to wall street beat, where recover three things wall street is buzzing about. first up, good call. getting even leaner, barclays firing up to 100 people from its investment banking staff. ever, silicon valley perks. safed, aull body former assistant stole more than $1 million worth of wine from goldman sachs president solomon.

david: $1 million of wine for somebody to steal. .oining us is ed hammond i want to come back to this short sell, and i love the story. a fellow named fraser paring who was a social worker in england and decided to become a short seller. they started looking at certain stocks and they were focused on carillion before this all went south, and a focused specifically because they bought the company for twice its traded value. they were already to go. ed: the steinhoff story is the gift that keeps giving, like this company has just gone from bad to worse. the banks particularly in the u.s. have huge exposure, $22 billion worth of exposure, $1 billion written down on loans. this british guy came out as the short seller. he panicked because what he saw was steinhoff.

they bought mattress firm and paid $64 a share, double the trading price. he said it are the market is valuing this at nothing and they have got it right, or they are valuing it at 100% of what it is worth. he said, this cannot be right, so he started to go short. we have seen this company just collapse. alix: big banks are like, it is cool, we will learn new money. ed: they are all reporting losses, and none of them are saying it is specifically because of steinhoff. david: i think it is over $1 billion. alix: for the u.s. banks. my other story for that was hsbc, which used credit derivatives to reduce its lending exposure as early as 2015. they packaged those derivatives and sold them off the pension funds and hedge funds, and now

the hedge funds could be taking some big losses. david: this is when credit derivatives work as they have exposure rather than hedging. ed: the people they sell them on to are not in the best place. having exposure to carillion, another troubled company, a traditional outsourcing company in the u.k. does everything from cleaning up the stock graffiti, etc. alix: these are the two we will be talking about, the bank carillion exposure the way we have been talking about steinhoff. ed: it is not just banks. it is also the public sector has huge exposure to carillion. there is a lot of really messy issues that need to be unpicked and this will be as much of a political story as a public story. alix: barclays wants to get market share back but they are

letting people off. ed: letting people go. david: laying them off. ed: it is such an interesting company, because they have been doing this will week, won't we for a long time. no one knows what they want to do with respect to the u.s. investment bank. they inherited lehman and they are very strong in some sectors, particularly in energy and consumer resources. they are never sure it is something they want to do or if they want to retreat to being more of a risk off lending institution. , less serious than their last round where they cut 1200 jobs, so this is a bit more of a trim. the message is unclear. is barclays here for the long-term or retrenching back to what they once were? blackrock is saying, you did not have to come to work but

we will keep paying you. you can take as much vacation time as you want. saying apparently, we are competing with silicon valley. trend ofis an ongoing wall street trying to become better at parcel care. these days, you want to get young millennials, particularly for people long in tech skills. they like the softer incentives, and blackrock comes out and says, you can take unlimited time off. alix: i cannot get david westin to take his entire vacation time he is due. i had to force him last year. david: "fortune" had a piece last year about this phenomenon. a survey of a human resources group said when you give people unlimited vacation, they do not take more time off. ed: it is psychology. it makes us look like slackers. alix: you tend to see more

companies do this. our wage gains in the unemployment data really the metrics to look at in regard to the health of the economy and wages? that will be a bigger benefit and is a good thing for growth, but not measured correctly. david: now they are doing sabbaticals in part of the bank. alix: my favorite story, the full body theft. $1 million in wine stolen for mr. solomon at goldman sachs. ed: that wine tasting with david solomon, we could do that. this is unbelievable. david solomon has this guy who worked for him over 80 period of time. -- a period of time. alix: eight years. ed: he was sneaking wind out of the enormous collection, taking it from the department in new york to the hamptons, and he

would ferret a body -- bottle away for himself. the burgundy he was taking, the cells for tens of thousand dollars, and he was selling it , and an alias mark miller he was caught and is facing a federal charge. david: a very sophisticated assistant. i am not sure i would know which bottles to take. alix: if that is your job, i would hope you would know. david: was that his job? ed: here is a fascinating conspiracy theory. goldman had a bad day yesterday, and the story hit yesterday, and this is what everyone is talking about. eclipse the bad result -- it clips the bad result. alix: kind of like david solomon and the tax. david: a renewed push for a cbs-viacom merger, that is what

i am watching. alix: i am looking at morgan stanley, up in premarket. wealth management up by 10%. the margin slipped a little bit, a solid beat. investment banking also, and light on ficc. if you have a bloomberg terminal, check out tv . watch us online and interact with us directly. this is bloomberg. ♪

david: this is what i am looking at. this is media, some of my old buds. cbs viacom were originally

together and they split up. cbs did really well under les moonves. viacom not so much. well,onves, whom i known -- no well, is resisting. this is a big deal within the industry. alix: how much power does les moonves have versus her? david: he is thought to have a lot of power. when they split everyone thought viacom would do well and cbs went not but it happened opposite. sherry is saying, what is your succession plan? she is getting impatient. you also have the disney-fox deal breathing down their neck, because these people are getting bigger and you are not going there. alix: the cbs have the same kind of issues that disney had or fox had, or could they go it alone?

david: bob eiger apparently concludes you cannot go it alone. less would say, we have been very successful and we have gone into over-the-top, a director scriber did -- business -- direct subscriber business. willie get to scale? sherry redstone may be changing her view. alix: what about the stock? viacom versus cbs. david: we have a graphic that shows that. under their 10 year, the sock -- stop for cbs has really gone up and the viacom stock has gone down. you can see cbs has gone way up. alix: it is hard for them to find a leg sheri redstone can stand on. david: she is the new sheriff in town, and you have to worry about staying too late at the party. is it fully valued?

having said that, les moonves has done a superb job. alix: i love when we get the nitty-gritty from david westin. he gets so excited when i talk about oil. morgan stanley as well as the broader equity market, morgan stanley up 1.6% in premarket. equity trading coming in at $1.92 billion. the biggest gap was goldman sachs. the wealth management business up 10%, margins a bit lower, but not a lot of drama. tomng up in the next hour, , friend of president trump, will join us. ♪

alix: knocked off its pedestal.

morgan stanley climbs above goldman sachs for the first time since 2006. the wealth management fees hit a record. one step forward, two steps back. apple is repatriating millions of dollars in a win for president trump, but a government shutdown still looms. 2.6% forields above the first time since march. david: welcome to "bloomberg daybreak." i'm david westin mumbling alongside alix steel. alix: we had the nasdaq and the s&p closing at record levels yesterday and now futures are flat. euro-dollar in little bit stronger. the dollar weaker against most currencies. i'm watching the 10-year yield. 2.16 is how we print -- 2.61 is

how we print. more on one of our top stories. morgan stanley's solid beat. the stock almost up 2%. allison williams is here to break it down. the highlight for morgan stanley. allison: all good. the one area they missed was fixed income trading. if investors were going to pick an area for them to mix -- miss, that would be the one. morgan stanley is executing on plan and they are going to talk they are fact that basically reaching all of their targets, they are coming in within the range. i think investors are really going to focus on how much help are we getting from the markets and where do we go from here.

we will want to hear about the indirect benefits. the other big question for investors is we have these benefits, but how much of that are you going to spend how much is going to get competed away? looking at the headlines today, they are talking about reinvesting money. you see the stock trading off a little bit. we saw that with bank of america yesterday. thattalk about the fact the tax rate is mathematically going to take them to their targets. they talked about the fact that they might be spending some of those savings. david: the taxes are what the taxes are. where is comparative growth going to come? correct. the key expectations are there should be some help to loan growth on the commercial and industrial side. they should be some help to fees from m&a and from banking. one of the differentiators is

going to be, are you going to let that go to the bottom line? bank of america said they are still weighing that. talking about different business investment, cost has been a big focus. they are in line with targets, but will we start to see some pickup in the reported cost ratios as companies are spending more? david: thanks so much. that is alison williams. apple made a big announcement yesterday about what they are going to do in response to the tax overhaul package. they will invest $30 billion over the next five years. ,oining us now is tom barrack executive.northstar you know the president pretty well. talk to us about the effect of the tax cuts. i'm going to put up a chart to show how much money apple has offshore. it is like $250 billion.

what is that going to me to the u.s. economy? tom: we are yet to know exactly what it means. as we see today, some of it invests and has another effect. it is a bit like an orchestra or a symphony. it is the first tune of what is going to take an iterative a new direction of infusion in the economy, which can only be positive. it,ompanies surround especially as we look at who has the largest market caps in the world, we look at these digital providers, in front of that is also a brick-and-mortar game behind the investment in new products. we know that the supply of products in the digital outweighs the supply of digital infrastructure. i think it is going to be massive. i think of you just take the top

four or five players in the world that have been amassing offshore capital appropriately and are now looking at a reinvestment fund in their own products and in the underlying infrastructure, we talk about infrastructure and we will talk about it later, of the legacy infrastructure, which gary cohn and others are working madly at trying to bolster, i think it is massive. to catch up just with the supply of infrastructure for these suppliers and the product that we use every day, it is huge. david: right now, let's talk about the trump administration. they came off this tax overhaul with a big win, no question about it. then they had a little bit of some stumbles or distractions in the media, everything from a book to some tweets, now we have the possibility of the government getting shut down. can they keep the momentum going into the new year? tom: no, i don't think they are losing momentum at all. environmentfficult

for any politician because what we are doing is freeze framing tiny little vignettes in real-time. it never happened before in a political environment. you would look at results and you would look at a section of productivity and not confuse efforts with results. important tois calm the nerves, the emotional nerves of everybody around the world as to what is happening is to understand that this administration does not do anything whimsical. what appears to be whimsical is actually well thought. when you talk about the short-term vagaries of a book, michael wolff wrote a great novel, it is going to be the best-selling book in the world, people can judge whether it is fiction are fact. [laughter] david: let me push you on that just a little bit if i may, tom,

about whether things are -- even overnight, we had this report from "the washington post" and "the new york times," that the chief of staff said the mean ant did not really wall and now i'm teaching him and in the president came out this morning and said, i meant a wall. is that intentional? is that part of the plan? tom: it is part of the president's plan. general kelly, there is nobody better. command and control and this president has particular reference to general's and the one he has around him are great. , kelly.mcmasters the president has a very distinct method of controlled chaos and within controlled chaos he curates for points of view. it is not abrupt. it is how he has managed for 30 years. i tell my friends, when you think that this man has lost it, i wish you had the opportunity to go see him. he has not lost it.

this has been the way he was successful in business, finance, media, and he is our president. this is not a campaign anymore. it is management by controlled orchestration of very points of view, including general kelly, general kelly can have his own ornions about what might be might not be, but the president invariably is going to say ultimately i will be the decider. alix: my question to that, is president trump racist? i asked that offer a cnn headline, i ask it because it is in the middle of a government shutdown conversation when it comes to daca, his tweets do matter, what he says does matter , so is he racist? tom: let me give you the absolute answer as a friend who has known him for 40 years. no. alix: despite all the headlines? tom: zero. alix: despite the blank hole? tom: zero.

let's imagine at your morning meetings if someone was to take snapshots of your discussion, the president is trying to get an immigration bill done. , one ofthat 55 minutes the best displays of what this president does best, having everybody in there, it is almost like "shark tank," saying, "let's get it done." take a segment of a discussion in a negotiation and isolate that is just unfair. if you look at his record and his history and what he is bying to do, he is trying extreme positions to drawback to a comprehensive immigration bill that we have never had. that is a negotiating style. we had an islamic ban. saudi arabia was the enemy. 9/11. we saw this piece of legislation that is directed to say you consider the government of saudi

arabia. to, inrom an islamic ban april, the first american-arab-islamic congress, the president of the united states stepping up an airplane in riyadh and within five minutes, we are moving -- months, we are moving the embassy from tel aviv to jerusalem into is our ally? saudi arabia, the uae, hopefully and you have this massive moves from what seemed like an absurd islamic position. zero racism. sensing on mexico. the issues on mexico and nafta, our largest trading partner to read you look at making the americas great. david: you have a graph that shows their experts to latin america. how they dwarf china. it is extraordinary. tom: absolutely. certainly thes most powerful factor in the world we need to worry about, but the answer is in the americas.

if the president just extends now and says let's make the americas great, our largest trading partner, three times china, so this nafta discussion, which also seems abrupt and severe -- david: exactly, how do you square what you said, which makes perfect sense, with how -- we are going to pull out of nafta? tom: it is startling diplomacy. a way to look at it is you have some of the smartest individuals in the government in the foreign service office, right? in the state department. the state department has a cadence of diplomacy they have always used. you have a president who says mike cadence of diplomacy -- mike cadence of diplomacy is going to be different. think goodness you have a state department who has a normal diplomatic communication. with nafta, you have wilbur ross , you have an ambassadorial

group who are focusing on the details. what is the president doing? he's going to an extreme and saying, you want to negotiate? here's what's going to happen if you don't. serious about saying we don't get it right, we will pull out of nafta. about saying we don't get it right, we will pull out of nafta. it is like the paris treaty. people say, how could he not believe in global warming? i think no matter what he says, of course he believes in global warming and sustainability and the viability of those things. he did not think the judicious miss of that particular agreement benefited america. instead of saying what am going is say i'm going to take leonardo dicaprio i'm going to take vice president pence, i'm going to do 14 months and evaluated, he startles the whole system. the only country that pulls out and says, i will do something better at a less cost to america that has more viability for sustainability, just like unwrapping regulations.

he has unwrapped 22 regulations for every regulation he has imposed. david: it is fair to say it is a n approach we have not seen. tom barrack is staying with us. ♪

alix: the future of real estate, bubble or not? sam zell pulled us earlier that when you talk about commercial real estate, it becomes less attractive when supplies increase. we are building 387,000 multifamily units in this country, meaning a lot of people are employed. let's talk to a real estate owner. tom barrack, colony northstar

owner. what is your view? tom: whatever sam says, i go with. [laughter] alix: i'm sure he loves to hear that. tom: he's hardly wrong. there areou feel like bubbles approaching or there is still value to be made? tom: it is a bubble in capital. it is not a bubble as we have experienced to them in the past. sam is obvious right -- obviously right. renters ship is increased to 69% as homeownership has decreased. we had a single-family rental that has proved to be very viable. on the commercial side come on the retail side, on the industrial side, supply has not been as exorbitant as it has in the past, but supply of money, central banks intervening, the liquidity flood, the attractiveness of safety or

capital preservation has been the private markets, as well as the public markets for real estate. it feels bubblicious. if you look at them against the 10-year, we are where we have always been. i think the answer is that real estate entrepreneurs and providers or public companies such as ourselves finding these silos of value added increase in this changing economy, so you have physical obsolescence in the system, financial obsolescence of stuff. was type of office building earth breaking, there was never anything built like this before, but if you look now at how tech companies are housing themselves or how we work, which doesn't own a brick to have the same market cap or greater is kind of

where we are going. it is going to the next -- david: where is that silo opportunity? do you find those opportunities? where are things underpriced? tom: underpricing is very difficult. there is hardly anything that is underpriced. it is value added utilization. if youtook industrial, took infrastructure, if you took the digital divide and what that is going forward, if you took hospitality, retail is being hammered. my garage looks like an amazon.com logistical center. the recycling of what happens in the retail world is obviously a big issue, but it is not really underpriced either. housing, the same thing. i don't think there is anything cheap.

i think real estate entrepreneurs have to do it they did 50 years ago. understand your tenant. the tenant being xerox or ibm in a 50-year lease. you get out and front of them. alix: a stock market for realtors. david: it is a version of the gig economy. tom barrack is going to be staying with us. we will get his take on a range of topics from bitcoin to electric vehicles. this is bloomberg. ♪ ♪

david: we are back with tom barrack, the colony northstar executive chairman. bitcoin. what does tom barrack think about bitcoin? tom: out of my pay grade. i don't understand it, i don't have an opinion. david: tempted to buy any? tom: no. alix: electric vehicles? tom: i think elon musk is a genius and an entrepreneur in an arena in which very few of us understand and it is the beginning -- when you look at

power of batteries and what can be done, i think it is the beginning of a new age. david: china, friend or foe? china is the challenge. whether it is a friend or foe, i think you have to say for china's growth and benefit, president xi as the same view as president trump, that it is china first and they are a power and they are good and they move on a dime and with super court powers that president xi has, he can outweigh any presidential four year term or congressional enactment that there is and we have to not be naïve and since and has one belt, one road, we should take the americas and have one belt, one road and compete with them. treasuries, 2.6%. tom: buy. jonathan alix: you would be

buying -- alix: you would be buying the long end? tom: yes. when you look at the economy is all over the world and what is likely to happen and do we have inflation or deflation and the fear of in racing going toward is hard for me to understand. alix: you would be buying the .ong end what about the short end? tom: the short end is of little concern to me. we are trying to manage long-term liabilities and long-term assets. david: the middle east. it seems like everywhere you look, there is a problem. , saudi it is jerusalem arabia, iran, what is the future? is difficult as it has been there for thousands of years, but i think the amazing thing is that the new leadership, not just the new leadership with president trump and jared kushner and rex

tillerson, who have been phenomenal with what they have done in engineering repackaging of our allies, i think saudi ,rabia and the emirates hopefully soon, they will re-include qatar, forming the gulf block with israel as a negotiating stand with iran is a tremendous move forward and the young leadership in saudi arabia are our dobby -- abu dhabi moving in that direction with netanyahu. this has never been done. iran, turkey, russia, china are a challenge. so, i think you need the good graces of a cadence of diplomacy of the state department to keep those communication lines open and the boldness of the moves of all these young leaders is dangerous, but necessary. are archaic structures

that were based on on supporting dynasties for an oil curse. so that the waistcoat harvest the resources from the middle east and now we have left them with what they started within the parks -- first place, sand and tens of millions of populations of young people without economic hope you guys inc. you see these young leaders trying to bridge that. alix: banks. ,om: i think the deregulation especially the senate bill, will thatce a wave of lending we have not seen. focus on lending instead of complying with regulatory confines. alix: fed chair? tom: good choice. alix: who good choice? pfister, sorry. tom: i don't know. alix: who do you want to see as

vice chair? tom: whoever will do the best job. alix: a businessperson, an economist, somewhere in between? more hot, more dove? what would be better for you? it is important to a consistency, predictability, and transparency, so i don't view it hawkish or dovish. alix: dollar, up or down? tom: the dollar has gone down mistakenly i think because the hope of europe and asia as an alternative. i'm strong on dollar. alix: tom barrack, that was a rapid fire, we got there. he will be sticking with us. housing data out in a few minutes. 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. alix: this is "bloomberg daybreak." economic data coming across in a few seconds. s&p futures unchanged on the day. switch up the asset classes.

the story is the 10-year yield. 2.61%. basis points.wo the spread gets modestly steeper , but it does a broader, weaker dollar story. the economic data crossing just now. month, starts, month on we are down by 8.2%. building permits were down by about 1/10 of 1%. that is for december. jobless claims moving lower. individuals filed for jobless claims, lower than estimates and lower sequentially. i want to point out that housing starts were revised a bit lower, as well. it little bit softer on the margin. in the market, taking a look at the change. market.ear treasury

the curve still a little bit steeper. taking a look at the dollar index, that is flat pretty much on the day. joining us now is michelle girard, chief u.s. economist from stamford, connecticut. always a pleasure to talk to you. your reaction? >> i tell you, these numbers are weak. when you get big swings in the month to be the culprit, stepping back, the data on housing in the fourth quarter were quite strong. some of it was the rebound from the hurricanes. haves the board, you sales, homebuilder optimism, everything surprising to the upside.

as i said, i feel that coming into 2018, the housing sector, construction activity seems poised to take another leg up. few: what about the next months? how does that impact housing? when do we start getting a good clean read? the winter,ways in the weather can be a factor. alix: this is a cold, cold couple months. michelle: it is very cold. it goes from very cold, it gets back up in the northeast to 50 degrees. we have had a lot of volatility. that can always wreck kalanick with the data -- half-baked with havoc on the data. given the momentum that we have had, if that momentum misses stained in the first quarter, int would be the first time

years that the first quarter numbers have not shown weather-related weakness in that could take the markets by surprise. 2.6% on the 10-year. thoughts? michelle: a couple things. there is no question fundamentals are strong and the fed is going to be raising interest rates and continuing to normalize policy. i've been of the view that the fed would raise rates four times in 2018 and most people have they no longer think that is such a crazy outlook. i think the long and has been held down by the fact or it has not moved up because we have not been worried about inflation and i think that is right. i think one of the things becoming more apparent is on the supply side and this is a concern. it is not just a tax land. we have disaster relief spending. more fiscal spending that will be part of this budget. people are recognizing we are going to get more treasury issuance and it is going to occur on the long end. alix: michelle, thank you very

much. david? david: still with us is tom barrack. a quick reaction to the numbers and supply versus demand in housing markets. it seems like prices are going up, but they are not building houses as fast as we think they might. tom: i think a number of things are involved. the regulatory environment for housing lots is very complicated. it is very complicated for public builders. holding that on the balance sheets is quite complicated. you see the multifamily value-added business picking up that stock. i think what you are going to see when people say this it is theaxes, deductibility of interest in the market, but at the high-end, it won't matter. endg from 39.6% at the high of the income tax bracket down almost three points is about 40% of what property taxes would have been. the expensive houses are not

going to move. you are not going to move to new florida because of property taxes. think it is a recalibration of average americans saying, and my going to make more money on flipping my house and owning my house and borrowing at the levels i can? or not. if not, then renting is a valid option. until they see that trade happening in normal markets, i think you have flat home-building on lots. economyet's go to the of the united states more generally. given the continued strength in u.s. growth, what could they still be thinking might be going wrong? are increasingly focusing on attracting and retaining top talent and on dealing with disruptive technology.

they are less concerned about a recession coming up. u.s. ceos are much more concerned about a loss of trust in their government. what surprised you about this? >> i think how quickly things can change in a year. a year ago, the fear for global recession, particularly in emerging markets was number one of the concerns. the 20's nowre in on the list of concerns. in a year, you see a massive shift in confidence that ceos and see executives have in the economy. even though global recession is are on the list, cfos little bit more concerned. they think, there are things we were talking about in earlier segments that can turn them. david: they're very concerned about retaining and attracting top talent. is that reflecting a tightening job market or a broader issue? are more that ceo's

concerned about the uncontrollable factor. there are risks you can control as a ceo. talent and disruptive technology are the things that you can get your arms around. some of that has to do with labor market tightening. the type of people you need has dramatically changed. alix: what is your biggest concern as a ceo, tom? tom: i think the biggest concern gauge the user of these real estate products, since we are primarily in real of termwith a continuum . the vagaries in the market of the users, if you look at real it used toeneral, work on reasonably leveraged,

long-term income commitments from quality tenants. now, the vagaries of the market are changing. we talked about the digital world. the users of data centers, fiber, radio towers, micro cells, the changing fabric of technology is what is in front of-- the intermediation bricks and clicks. >> what is interesting is the market has dramatically changed, but ceo's get so much more focused on the customer and the changing nature of the customer. with them questions about what is your most important issue with relationship to the customer? the ceo said i personally need to have a better understanding of my customers. david: we just heard that ceo's are concerned about disruptive technology. how is it disrupting your

sector? tom: huge. if you look at amazon, amazon is a 10,000 pound gorilla. you need to understand amazon. it is not an office building soaring over park avenue, like we used to view it. infusion of what is happening and driving the economy and the stock market, if market cape top four companies, they are all technology companies. we have to get out of the dinosauric place that we are. to take this build building takes seven years. >> and the survey, you have to do this with all the people in the company. they find that the nature of the people they need is completely changing.

they are relying much more on contingent workforce, people who come in on projects, surface companies. you have to do that innovation process across your workforce. alix: that is a good question for you, tom. on taxget a benefit reform, what do you do with it? do you invest it in the workforce? what do you do? tom: both. the shareholders want you to return it to them. sayou do, the shareholders you have a problem. with us, you reinvested in the business. we will reinvested in the silos of digital infrastructure and infrastructure and industrial and the things that we know are in front of us. the difficulty for a public wants a continuum way out in front, but you have to be opportunistic. to change that mentality inside a company while you are dealing with shareholders is also an art form.

it is difficult. what you are going to find is the more opportunistic will be better. busy change quicker will do better. those don't adapt will die. alix: that is the statement. [laughter] david: says it all. thanks so much for being here. great to have you here, tom. alix: oil holding near a three-year high ahead of inventory data at 11:00 a.m. will we see a ninth week of crude stockpile declines? i'm watching the morgan's dimly call. highlights here. morgan stanley is clearing bitcoin future contracts for big institutional clients. $1 trillion of sea-based morents are delivering crewing revenue. a staggering number. morgan stanley delivering on the equity banking business. you come in today, you

can tune into tom keene and jonathan ferro 7:00 and 11:00 and then pimm fox joins tom on "bloomberg surveillance" on the radio. this is bloomberg. ♪ ♪

>> this is "bloomberg daybreak." coming up in the next hour -- alix: opec's monthly report is out this morning and they raised their supply outlook as prices wonder climbing. , soing us now is javier

good to see you. what stood out to me is that they upgraded their u.s. production, but it was conventional. they downgraded shale production slightly. what a relearning about shale's response? >> shale is responding very strongly to high oil prices. a lot of the hedging was done at lower levels. shale companies are going to be couched in starting to please investors. opec was increasing the outlook for things that they are long shale. canada, u.s. gulf of mexico. that is telling you that a $70 oil brand, everything makes sense in the oil industry. you could increase production probably everywhere. most things really work at $70. alix: wouldn't we want to see

opec start talking down the oil price? javier: you will expect that, but there are many other things. you have saudi arabia doing an ipo of their state owned company, so they don't have any interest to pull down the price. we don't see any impact so far on oil demand. oil demand remains very strong. if opec production was flying off the charts and demand was weakening, there would be concerned, but demand is very strong. alix: fair point. that was really the nut of citi 's call yesterday. if you strip out other liquids , theirtural gas estimated inventories versus the five-year average and they say we are well below average and a big part of that is demand. javier: i'm hearing exactly the same thing. i've been talking to a number of big oil investors and everyone is very excited about global oil demand. oilre talking about peak

demand, but we are not seeing any signs of a slowdown in demand. i remember talking many years ago to the saudi oil minister and he told me that shale is not a problem as long as global oil demand is strong. a slowdown,ou get that is when shale gets a problem. alix: you were going to stick with me. us, good to see you. >> good to see you too. isx: what i was struck by the recent calls we have had from every investment bank. i feel that we are having short-term capitulation. togan stanley short-term $70. is that a counterintuitive sign for the markets? yes, look, as i have said in the past, i follow the royalty trust. that is a 30%, the share prices. what it is calling for is a

price of brent around $80. the reason is the global economy recovery. if you follow what has happened over the last three or four weeks, everybody suddenly turned much more bullish on global economic wrote. not just the united states. china's growth has picked up. that is going to push a petroleum consumption. that is going to hold prices up for a wild. i don't buy this idea that people are going to slow on shale to please investors. there is a story going around that you want to hold back to make returns for investors and nobody told amazon to focus on returns when they were growing. nobody told facebook to slow .own growth please investors we are going to see a big jump in shale, but that is about 20 months down the road.

ofyou look at the commitment the swamp dealers, the people that write the hedges, that has gone off the mat. there is a lot of oil coming, but given the growth, it does not matter. right now, we are in a boom cycle and the oil exporting countries are going to do it they have always done and that is going slow on increasing production to keep the money. alix: ticket look at the bloomberg. this is function ccrv. the orange line is where we are right now and then the green line is where we were just a month ago. what i'm struck by is the re-rating at the front of the car. -- curve. don't see aays we lot of hedges in the market, we don't see a lot weighing on the backend. what do you make of that? phil: where i am, i can't see the curve but i have focused on

that. is on the short position reported by the deep. somebody is spending a lot of money hedging oil someplace because the short position is going up. this is money being spent. i'm done here in houston, you see all these new constructions of pipelines coming out of the permian. at 2.5 million barrels a day. as those get completed, we are going to see the uncompleted wells completed and we are going to see a title wave of oil coming. that is not so bad for growth. that, howd on all of much more oil does that translate into in the next 10-12 months? phil: i forget probably translates into one million or 1.2 5 million barrels of the next two months. roughly, 50% higher than the growth eia has.

by the end of 2020, we could see something close to 15 million barrels today, much higher than what people are talking about? javier: i think the market is prepared to see an increase of in excess of one million barrels per day. but again, as phil was saying, if you have varies in oil demand, it can be absorbed. at theus will be looking global economy and at which point we have a recession in the u.s. historically, we will have a recession. alix: great to see you. javier.see you, david: the president is very busy on twitter. there is another tweet. this one is about chips. "it should be part of a long-term solution." this is important because we have a deadline going down at midnight tomorrow and this is part of the compromise that speaker ryan point out, saying

let's extend chip for six years. this appears to be the president saying, no, i do want to do that. president'sr the chief of staff saying we don't really want the wall. alix: but if you follow the tom barrack line of thinking, it is part of the negotiations. david: rattling the cage. alix: we have a treasury auction coming up. also taking a look at morgan stanley as well, that call underway, some positive headlines crossing on that, in particular, $1 trillion of all is a huge amanaged congressman for morgan stanley. if you have a bloomberg terminal, check out tv . interact with us directly. ♪

alix: what i'm watching today is

the u.s. treasury auction and $13 billion in 10-year chips. if you take a look at the bloomberg chart, we have seen a pretty strong cover ratio. 2.4% was the last option. we have 10-year yield hitting 2.6%. what does that wind up meeting about how market participants are looking at inflation and do they need to buy inflation securities? i will be interested in the market read through on that. david: how is that related to the long end of the yield curve? alix: you will probably sell the long end if you think you think you're going to see higher inflation. the yields will go up. if you are worried about inflation, you want to buy inflation protection. if you have a strong auction that says the market is starting to look at higher inflation, based on tom barrack, he is buying the long end because he does not see real inflation pressures. david: it is hard to figure why if the tax reform thing is going to be that effective, why we won't have inflation coming through.

if we are really going to grow the economy numeral three percent, we are going to have inflation sooner or later. alix: some of the market estimates are showing that. we are starting to see that, maybe not in the hard data, but at least in love the soft data and the measures of inflation expectations. check it out and then the options coming up. david: does the fed see it? alix: exactly. watching morgan stanley. investment banking pipelines remain healthy. it was a solid quarter across the board for morgan stanley. asset management chairman will be joining jonathan ferro. market open is up next. this is bloomberg. ♪ erg. ♪ 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. jonathan: from new york city, i'm jonathan ferro. this is the countdown to the open.

coming up, bank earnings wrapup on wall street, president tax cuts, a rough quarter of trading. apple plan to bring back hundreds of billions of overseas dollars. underpinning global growth, as its firstmy full year of acceleration since 2010. let's go through some of the scores for you. -- .1% softer, down 1% on the s&p 500. euro stronger, dollar weaker. the dollar weaker against most of g10 through the morning. higher through 2.64 the first time since march of last year. that is your cross asset picture. the banks dominating things over the last couple of days. morgan stanley