to keep the federal government operating. >> we had a long and detailed meeting and discussed the major outstanding issues. we made some progress. we still have a good number of disagreements. discussions will continue. >> congressional republicans and democrats will spend the day blaming each other for the impasse. federal judges have approved redrawn legislative districts to address concerns about continued racial bias with some boundaries and new constitutional violations. they rolled districts initially approved in 2011 for illegal gerrymandering. new figures show 2017 was a record year for the cuban tourism industry despite a crackdown by the trump administration.

they pumped $3 billion into cuban struggling economy. it led the trump administration stayder most diplomats to away. manual macron said he will boost defense spending in the coming years to guarantee his country's domestic security and maintain french military engagement abroad. after a crisis over cousin the military budget led to the appointment of a new chief of staff of the armed forces, he called the effort unprecedented. global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. this is bloomberg.

julia: live from bloomberg world headquarters in new york, i'm julia chesley. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. the 10 year yield touching a three-year high. what'd you miss? the clock is ticking to cobble together a short-term spending bill, president trump reaching across the aisle, but disagreements remain. democrats are standing firm on their demands. tom perez of the democratic national committee joins us in minutes. a scorecard of the first year in office through the etf. what'd you miss?

possible progress on a last-minute deal to avert a shutdown. chuck spoke with reporters after returning from a meeting at the white house with the president. >> we had a long and detailed meeting. we discussed all the major outstanding issues. we made some progress but we still have disagreements. the discussions will continue. scarlet: on capitol hill with the latest, senator schumer said we made some progress. what does that look like? >> no breakthroughs at this point. the main issues remain, how to fund the government in terms of what number there should be four discretionary spending, an ,ncrease as the pentagon gets and the daca program is the main issue.

a half hours away. democrats are demanding this deadline be used to come up with a a solution to normalize the status of those at risk of deportation. they don't trust republicans are going to be serious about a solution unless they are forced to which is why we are having this debate. >> the democrats are sticking heels in. more conservative republicans are shielded behind those democrats. the suggestion, we can continue this, without doing too much damage, is that what we are looking at? >> that is what a lot have floated. that tends to be the fall back when they are staring at half shutdown, saying let's buy a few more days. the number two senate republican is resistant to that. he doesn't believe the major

disagreements can be resolved in a matter of days. that is another impasse we are at. republicans, just a handful of democrats supporting it. the senate has not decided if it is going to hold a vote yet with a and a half hours to go. they don't have the 60 votes needed to prevent it. scarlet: the key word there is impasse. thank you. we will check back in with you. julia: for more we are joined by dnc.erez, the chair of the thank you for joining us. we are seeing a blame game on both sides. mick mulvaney saying this is the schumer shutdown. if the of government does shutdown because of a filibuster, how can that be the republicans fault? bea shutdown tonight would

unprecedented in the history of this country. never have we had a situation where one party controlled the , and they, the house senate and you had a government shutdown. the republicans control everything and they can't get 50 votes in the senate. so that is the problem. what we need to do is address it now. sufferingout people from opioid addiction who need treatment, this is about helping our veterans and disaster relief in people -- for people in texas and puerto rico. his own defense department has said you can't govern one week at a time. this is on the republicans. if you look at may 2 of last year donald trump tweeted a government shutdown would be a good thing. i think it is terrible.

, the president owns any shutdown that would occur. well, you own it. it got blown up because he blew up the bipartisan deal that existed. this is on them. lamar alexander says congress is close to a deal on major issues that could pave the way for a government funding deal. >> maybe some progress. get the child health insurance program issue off of the table? there is a lot of different things that need to be addressed. opioid funding, defense spending, there is opportunity with this one month punt to take care of chip. why not take that and move on to another fight?

>> the time for kicking the can down the road is over. it is unconscionable the children's health insurance program is part of the hostagetaking. we have to deal with everything. this president has been so untrustworthy. we have a meeting at the white house, there is a deal and then it breaks down a day later. it is hard to sit here and say we will trust you to do something when there is no track record of delivering on those promises and every day that passes more people are suffering and wondering if that funding is going to dry up, more dreamers that are in danger. we need to deal with this now. they dealt with a massive tax bill to help large corporations and wealthy people, they did that in short order.

you can address this in short order as well. scarlet: i want to ask about the urgency. why are they linking this to the government staying open when daca is in effect through a judicial injunction and accepting applications. why make that connection? we have that, we don't know what the court system will end up doing. every day we have dreamers who are living their lives in fear. ,hese are first responders these are soldiers in the military, school teachers, health care professionals. you is no way to say thank to people having to our communities. we need a clean dream act. there is a bipartisan bill, the overwhelming number of people who support this. this has been held up because the far right will not allow an up-and-down vote. .

if you had a straight up-and-down vote it would pass. paul ryan is so petrified of his far right base, mitch mcconnell the same. they will allow that to happen. that is not leadership. >> can i say, the point of things none of these need a graying now to prevent a shutdown. we could stop playing politics. these things could still be negotiated but it is easier to play with the leverage, push for a shutdown. pushing for a shutdown because you think it hurts him more. the difference between tim and credits and republicans in so many examples is we believe government can do good things for people. we don't think government is the enemy. catalyst. can be the

donald trump said in may a government shutdown would be a good rain. i could not disagree more with that. but we have now is the situation were republicans control the house, the senate, the white house and they can't come together. there are not 50 votes in the united states senate for the bill that passed the united states house. we can't continue to kick the can down the road. that is chronic incompetence. that is why this is so remarkable to me that you control the presidency and both houses of congress and can't pass a budget. maybe you like having a shutdown. that is unfortunate for the people living a life of uncertainty right now. julia: do you think there will be a shutdown tonight? >> i hope not. that is up to the republican leadership.

tom perez from the washington headquarters. thank you for joining us. president trump will meet with theresa may at davos next week according to sarah sanders. this comes after the president cancel plans for a visit to the u.k. and there was tension between the two after theresa may was disappointed by him. said he didn'tt want to go because of that embassy location. >> he didn't want to go. >> i think that was the real reason. >> coming up, amazon's short list for its next headquarters. which cities are on the list? takeo the tax changes

apart the rankings? or change the rankings? this is bloomberg. ♪

scarlet: amazon released it's not so short short list. 20 cities in contention now including the you are, austen and atlanta. toronto is the lone canadian hopeful. changed, including a big tax overhaul. the senior economist joins us now from westchester. joe: before i ask you if austen is still your number one choice, does the fact that northern virginia, d.c., maryland got

three of the top 20 picks suggest to you that perhaps may be that region has what amazon is looking for? to before we had suggest putting more weight on not just the d.c. area but the northeast corridor overall. you can see the list is highly concentrated in the northeast. no clears there is message from this but it sends a little bit of a signal they may be leaning that way. biased because i have family in austin. austen was your number one pick before that was revealed. is our number one but

it is close with atlanta. they are almost a statistical tie. in third place is philadelphia. those are the top three in terms of our data. i do still think austen has a chance. they did send a signal they want the northeast they did include them on the list. in addition to the dynamic economy there, they have whole foods headquarters there, which amazon acquired. that gives them some points. julia: talk about how you have changed your criteria in terms of the waiting in terms of this short list and what we have seen, tax reform, the tax overhaul. extent is that changing your calculations? think the ones they picked confirmed our ranking was good.

10.ot seven of our top the ones that did not make it makes sense. rochester was saying rochester had a chance but at the end of the day, we knew that was an extreme outlier. the ones we have seen support the ranking that we don't need to change that much, if you were going to tweak the ranking based on what we have learned you would take geography into consideration. we have five main categories. geography. that rewards metros further away from seattle and gives metros points if they have one of his homes nearby and other geographical factors. scarlet: that why -- that would explain three in the d.c. area. toronto is the loan non-u.s.

city. in would toronto still be contention? you have a higher corporate tax rate there. think tax reform probably makes it lean more in the direction of the u.s. but that is only one of a thousand things they are considering. city ands a high cost growing fast. like the reasons we rolled san francisco out, extremely high cost. you have to worry about the high cost hurting toronto as well. >> and how much one pays in corporate tax. job: good point. i want to ask about new york. that did make the list and would affect a lot of people here. what do you think the prospects

are for new york city? >> we have new york in our top 10. it doesn't surprise us to see new york on the list. the biggest knock against new york is the cost. one of the most expensive cities on our list. it is going to be expensive to acquire that land and hire workers. that is the thing holding it back. it is hard to compete with the human capital level in new york in terms of the number of workers with the right skills, right education. that is strong in new york and obviously underlying job growth is good. it is a dynamic and healthy economy with a lot of skilled workers but extremely expensive. the cost kept it out of being our top three but it is our top 10. joe: i hope there is another round. you back toll get

discuss this. thank you for joining us. our stock of the hour just started trading today. 10%, just under 12 and a half percent. julie is here with the details. >> a home security company owned by apollo. apollo sold a stake in it. there were signs of trouble with the pricing. it is not as though it is just falling and the renault indications of weak demand. for $14 to05 shares raise one and a half billion dollars but they offered 111 million shares for 17 to 19. they sold though shares below the lower end of that predicted range. if you look at the financials versus the other companies in the industry, there has been an

acceleration in revenue growth as well. we have a look at their historical trends but it is not necessarily capped up with peers. there is more work for apollo. this used to be part of tyco. it was spun off. apollo took it over. it is a quick ipo between that time. apollo might stay there for a couple of years. sell if itollo could wanted to. >> it could. the private equity firms are holding onto things for longer. this could be an example. scarlet: thank you. coming up, bitcoins recent given more questions.

the charts you cannot miss, coming up. this is bloomberg. ♪

joe: what'd you miss? talkingy is going to be about what is going on in d.c.. what are they saying today? this chart was put together by mike mcdonough. the green line is people who and prompted wanted to say something about how good the government was doing. that is surging. the red line is negative comments. we had that massive surge when it was a government shutdown. downe government shuts watch for that green line to fall. that is incredible.

risky assets are going up and so is gold. what you're looking at here, a global holdings in gold etf. sincere not the highest 2013. money managers like it. it is a good short-term play. what is driving the rally? signs of global inflation picking up and bitcoin has struggled. lead inhat is a perfect for me. the bitcoin rally in the past few years, how extraordinary was that? it was monumentally extraordinary. the bitcoin rally in white. the.com whichand looks like a straight line. the.com bubble burst is a .traight line based on bitcoin

i put all sorts of facts and figures and. the chart here says it all. scarlet: green arrows. 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. [applause] julia: what'd you miss?

stocks hit the week at record highs. we are on shutdown watch. i am julia chatterley. scarlet: i am scarlet fu. joe: i am joe weisenthal. we want to welcome you to our closing bell coverage. scarlet: let's begin with our market minutes. we are on shutdown watch. we have anyook like agreement in place. but levity -- ormaybe the dow is up 100 200? julia: curb your enthusiasm. the dow is up 53 points. doesn't seem like investors are too worried about political tensions.

investor targeting lows. is d.e. shaw. it took an active stake in lowe's, which said it will add three new directors to its board. generated revenue growth for the first time in almost six years. gross margins missed analyst estimates. g.e., down for a fifth straight day. volume has been higher than average. this is back to this whole idea of when turnaround will take root. let's take a look at the government bond market. of shutdowns -- related anxiety.

2.65 on the ten-year. two-year.he 10-year, the highest since 2014. julia: look at the chart. the blue line, ten-year yield pushing higher. the dollar index in white. the highest level in 10-year yield since 2014. that fresh year low, on track weakest losing streak in almost a year. want to point out the dollar cap.

euro dollar, dollar cad, trading above 125. nafta concerns, talks going on nine days. mexicans are thinking negotiations improving. canadians are very concerned. leverage is lying with the canadians. remains in focus with that ecb meeting next week, and the gathering of the socialist party delegates in germany. want to flip over and look at emerging-market currencies. the seven-year high for the currency index. weakness --uch of

strongest. a touch of weakness in the mexican dollar. may launch and operation into northern syria over the weekend. watch the headlines. joe: we have crude falling another forecast -- we have crude falling. talks aboutcast exploding u.s. supply, harkening back to the days of the shale bo m. -- boom. oil is down and gold is catching a little bit of a bid. values.re today's market scarlet: what'd you miss? how are markets reacting to the government shutdown? not really at all. the s&p 500 index has been

declining since wednesday, but closed at a record high today. in david, from jp's morgan -- jpmorgan's acid management to discuss. discuss.management to the economy is at multiyear highs. that is the reminder. line has spiked, which reflects the economy in a negative way. avid: historically, when we have seen shutdowns, 30-40 days later, stocks were up slightly and yields were unchanged. haseems like the market been willing to shrug this off, given the historical record. you may see sentiment begin to shift.

more than a couple of days. congress dr. act together in got their act together in 2013. a prolonged shutdown would be damaging to the market. are clients talking about the shutdown? david: it is on the radars of clients. the historical record suggests getting it done before midnight tonight. it can give congress some time to sort out the issues they know they are debating on. we think something will get done to carry us over in the short-term, even though we still have long-term issues in washington. mind the red line. talk about the green line. reform, theted tax

longer-term impacts of tax reform going forward, companies like apple are suggesting they amountying a significant of repacked creation abroad. -- repatriation abroad. are we changing our minds about the longer-term impacts and is that feeding into markets? david: the tax bill be very end of last year. -- got done at the very end of last year. as we learn more about what companies intend to do, fourth-quarter earnings will continue in terms of what funds inl be used for increases wages, and what will happen to the corporate bottom line. you may see that optimism continue to build. updating their

models? everyone knew it would make a difference. david: i am not sure everyone did. one of the biggest surprises of the fourth-quarter earnings has liabilities. some companies are cheap -- taking charge in the fourth quarter. the hand of profits in the fourth quarter that people were expecting next quarter -- hint of profits in the fourth quarter people were expecting next quarter is now out of the way. scarlet: you have revenue surprises above the long-term average. what does that suggest about the one jeopardy of discerning cycle? vity of this earning cycle?

david: we are finally seeing an acceleration in nominal growth. continue to accelerate over the course of 2018. as long as wages remain in check, that will be good for markets. have seen an extraordinary outperformance of equities relative to fixed income assets since the election. income assets may be kind of attractive with yields at this rate. is this an opportunity to rotate away from equities? david: i think we are trending in that direction. runties still have room to before they come under the pressure of rising rates. 5%, whereold is about you see that correlation between rates and equities turned negative.

the way we think about it is if inflation, you will get 3.5 on the 10-year. this is versus a real earnings ,ield on equities, 2.5 to 3 with a volatility of 15 plus. we are moving in the direction investors in long equities rotate act into a more balanced approach -- back into a more balanced approach. scarlet: pimco was saying the lack of fear in the markets of worrisome. that shows we are at the peak and it is downhill from here. we think the economy will grow in 2015 -- 2018. article aboutan

the return of equity inflows, for passive and active funds. this is just beginning. retailseeing signs investors are we engaging with the equity market. some of those bad 10-year numbers are going to look a lot better this year. i am not sure we are at the peak yet. equities still have time to run, and the fundamentals look solid. earnings look set to be robust this year. nvestors can walk away with a relatively healthy return over 12 months. julia: where should investors be looking? draw a line between commodity producers in latin manufacturing economies in southeast asia. forlatter were reinforced

us over the past week by the solid #of china. -- nmumbers out of china. you can't ignore the cinhina story. as long as china look solid, emerging markets will do ok. great to have you with us. strategist atket jpmorgan asset management. up, losing patience over the progress of nafta talks. the common ground of negotiations, next. this is bloomberg. ♪

mark: lamar alexander says members of congress are close to resolving five major issues that could pave the way for a government funding deal. his comments came after president trump and chuck schumer held an 11th hour meeting at the white house, with schumer telling reporters "we still have a good number of disagreements. discussions will continue." would be a first since 2013 when president obama was forced into delaying implementation of the affordable care law. president trump's travel ban would restrict travel into the

country from the six predominantly muslim nations. a high court will hear arguments in april and produce a ruling by late june. washington,ay in secretary mattis said the military must strengthen its competition with world powers, such as china and russia. threats fromowing revisionist powers, as different as china and russia are from each other. these nations are consistent with producing authoritarian the security decisions of other nations. ark: other departments echoed

the remark from secretary mattis. a chinese official said the oilly sinking of an iranian tanker in the east china sea created an enormous difficulties for the rescue and recovery effort. it was one of the worst maritime disasters in recent years, with all 32 on board believed to have been killed. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. julia: i want to bring you some breaking news. has been raised from an -- bbb+ to an a-.

quite an incredible increase in optimism about euro nations, spain in particular. from a b-.ed to a b what'd you miss? the most important round of nafta talks will begin next week. losing officials are patience over the negotiations to rework the trade accord. light has been shed on talks. mexico's in bassett are to the united states -- ambassador to tehe u.s. said the differences are narrowing. we are going into top negotiations for the three sides. i think we are making more ground. i think we could get to a deal

for the three countries within a reasonable time. we heard the canadians are getting increasingly concerned about the prospects of this falling apart. 2010 canadians take to the table next week to bring more fight -- take to theadians table next week to bring more fight to the table? the canadians are going to come up with ways to game the the big fivend to "poison pill" proposals. these things normally take years. we are really early on in this. the fact that they are not making obvious signs of progress is not unusual.

i think all eyes are on this montreal round because they think donald trump will trigger a withdrawal notice. but he said earlier this month -- they said earlier this month they are making progress. it depends on which day you were listening to trump. justin trudeau and his -- what willn canada want to be seen as standing firm on when it comes to the issues? look, we would rather have no deal than what the u.s. is offering. says.s. saysm take - take it or leave it. canadians say, they will show them they were fibbing when they

said u.s. proposals are worse nafta, or theyo will say, fine. most key leaders will be in davos. from will ramp up a week monday, when the ministers will meet in montreal, on the 29th of january. joe: does anti-nafta sentiment continue? josh: the three parties want to see an improvement of nafta. canadians are under no illusion that nafta is perfect. you do not have these anti-nafta discourses at the same level,

even though canada has been losing auto plants at the same rate as the united states. been on firm footing, saying, these are the proposals. it is what it is. julia: will president trump be blamed if the deal blows up? gain, but a good didn't save the deal in the end? josh:a canada has mounted what strategy,"donut" to mount pressure on people around the president, including senators. alysts are saying that is the

starting to take hold and the strategies are paying dividends. moreresident has been prone after recently -- pro-nafty recently -- pro-nafta recently. scarlet: thank you. julia: the president tweeted yesterday that nafta was a bad joke. scarlet: wait for tomorrow. coming up, james quincey discusses how he encourages innovation at coca-cola. this is bloomberg. ♪ ♪ julia: what'd you miss?

changing the culture at a well-established institution is difficult.

that is the challenge that faces the president and ceo of coca-cola. james: it is hard. any institution that has been around a long time is going to be -- it is going to be hard. i am the chief agitator for innovation, is not the chief innovator. -- if not the chief innovator. that means driving the culture to do a few things. stay curious. how will we innovate? curiosity is passive. need to drive empowerment so people feel like they can go and do something. i think the next thing is, be inclusive. connect the pieces. we have tremendous global knowledge.

sometimes your idea has already been tried a somewhere else. somewhere else. to learn from software 1,panies and have versions 2, 3. james quinceys judge whether people are really changing their behavior? the only way forward is to look for multiple signals. surveys, wheree we ask people. we can look at the sales numbers and measure the success rate. we can look at our research,

what it is generating. and to new patterns for progress.

mark: i am mark crumpton with first world news spread president trump and chuck schumer held one-on-one talks at the white house. the meeting came as the administration and lawmakers try to get the federal government operating. long and detailed meeting and discussed all of the major, outstanding issues. progress, but we have a good number of disagreements. discussions will continue. congressional republicans and democrats spent much of the day blaming each other for the impasse. retryl prosecutors will

robert menendez on bribery .harges and it on a hung jury after a week of jury deliberations that fail to this a verdict against senator menendez or his codefendant, and i dr. accused of buying his influence with luxury vacations and campaign contributions. a court tired an expert to address concerns about continued racial bias with some boundaries, as well as constitutional violations. this in district approved in 2011 work illegal jury matters. it will be used in this fall's elections. sofiaeswoman says that mayor is doing fine after being treated at her washington home today for low blood sugar.

the spokeswoman added that the 63-year-old, who asked type 1 diabetes, was able to go to work. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market. there could be a government shutdown, and no one is worried. joe: another thing not to worry about. scarlet: the odds of the government should not hit another record high, secured 7% today.- 67% cofounder john phillips joins us now. a just gave the odds of government shutdown hitting a record high, how has that changed over the last couple of days? it has been bouncing around,

and what is interesting is that the odds of a government shutdown -- if you ask these 10 to 20%,were only and the only spiked after president trump comments, which were so controversial. they were up to over 65%, now they are hovering at 47%. at the very least it is a jump of 17% in the odds that there will be a government shutdown. got caught off guard by this, and we have seemed particularly today from republicans and democrats -- a blame game going on. to what extent can you give us who people are blaming? >> i think they are blaming washington in general, and congressional seats are going to be lost depending on who does the blame game better. i think who is to blame depends

on where you sit on the political spectrum. remember, these traders are not partisans, they have skin in the game. julia: such an important part. joe: have you seen any changes on this? 2018 and the odds that the democrats take the house. what is the current status on that and what does the trends show? >> certainly, the odds have shifted due to other factors, the tax cut for instance. , thatrket is convinced democrats are going to take control of the house of representatives in 2018. 64% odds that republicans are going to control the senate -- so it is a complete flip. the market thinks democrats are going to take the house, and publicans will keep the senate.

just like alabama, lots of trading in the market. the market is convinced that republicans will be able to retain that republican seat. joe: tell us about the volatility of these bats. -- bets. whatever it is from now until november, it must be decades i that standard. >> it is a lifetime. joe: in terms of volatility, how predictive is it? >> the odds do change. 75% odds of has happening, then 25% of the time the other thing is happening. the markets don't have 2020 vision into the future, but they are quite accurate predictors of future events, and that is what

predictive measures will allow buters with small money, real money on the line will be able to put their money where their mouth is. better than pundits, i think markets are more accurate. of size, there is this humongous back -- it shifts the skew of the results you see. to what extent are these results react if to the probabilities of outcomes? do they change? a very good point, in some markets, there is no limit of how much you can invest the bet on an outcome. there is an $850 limit for a traitor, so you can't have a whale come in and influence what the odds are basically putting a million dollars on a particular outcome. quickly todoes react

information leaking into the market. if senator schumer and president thep reach an agreement, announcement they make may not be the first information that leads into the market. ofy are very efficient getting information that might not be public yet, and the price reflects that. it is also an anecdote for fake news. if you make your purchase decision based upon fake news, you are going to lose your money. the market is discounting information that is not credible. it's not that people make mistakes and get fooled, but the fact of the matter is, if you are a sucker for fake news, should stay out of predicting. julia: yes, you are a sucker. let me ask you about

something else you are launching. your launching and amazon headquarter as well, is this in response to demand, work customers asking for? wewe are looking at it and have to weigh whether there is a binary outcome if something is going to happen or not going to happen. would love to create a market around it, but i am not sure that it lends itself to such a market, but you will be the first to know if we do it. our partner is victoria university, and there are more than 80 academic institutions, which takes this predicted data and uses it and studies it to see how wire markets are so predictive. ap are into the future just a little bit. smart money, we will see. john philip, thank you for that.

up, the cio of a firm on etf's which tracks people betting on policies versus democratic policies. this is bloomberg. ♪

scarlet: the passage of the gop tax bill had markets rally last year. boost is a zynga first actively managed policy exchange funds. companies benefiting from tax reform as well as gop, which focuses on companies that benefit from republican policies. thatfocus on companies

benefit from democratic policies. -- phillips, we should start companies that benefit from tax reform. of the form, not that it is over, how do you move forward and push this etf ahead? >> i think that is what people are investing in. you saw a rally with trump investing in -- and i think when it went through, we saw more of a rally, so we have seen that fun performing very well. is whenrtant thing earnings rolled through and wall street starts embracing these companies that had one time step up. ,hat is going to roll through and you can put a multiple on that and see vstoxx get another leg up. c stocks get another leg up.

are goingink people to stop talking about tax reform. it is going to be a renewed focus and people will talk about the corporate tax site as well. i think it is going to play on, and we will look at that next order of the facts -- of effects. we're looking at some of the banks and other opportunities as well. it is an ongoing thing, and you look at obamacare. had applications for almost a decade. are you goingften in there and rebalancing the names? >> we are trying to stick to the etf industry. that is how we are thinking about right now.

we make some changes enter quarter, we actually made some changes this week, so it is evolving. julia: going beyond tax reform -- energy independence, something the president has talked about. you wrapped up some of those , explain what is going on there. there are some obvious things we can pull out from both. the gop is funded in the fence and deregulation, infrastructure and tax reform are the key things in their. re. the idea being we look at the initiatives of both parties and try to select a concentrated portfolio that is specifically aligned with those things. portfolioemes in the -- the third biggest components of that -- you can see that at

and flow in the long term with policy trends. if there is a concern that republican policies are not going to go through, then you will see the downs in the rally, and that is something we will expect and happen if republicans control both chambers. want to see people trying to predictive markets and the etf striven where their opportunities and saying different things. scarlet: that is why we had you guys back to back today. a government should then that we are staring into, could that be something q fold into the etf or is that too short-term? >> we look at the impact of large policy initiatives -- in specific sectors and stocks. that is how we are looking at it. we havernment shutdown, studied them, and they haven't had a major impact on markets.

the concern is if it is a prolonged shutdown. etf's -- it isic not like vanguard of the world. now, performance is a way out of obscurity to get your name out there. right now, trailing the s&p 500 a little bit, it is and i that latches on and gets people easily. have copycat efforts from someone else? >> we have seen one similar fonts to gop, but i think we are doing something different. i know you're familiar with the reese --, so maga rebounds quite frequently. managed, andly where putting forth our best ideas, 38 names in the portfolio. it fits into the

conversation we are having -- sentiments as we head towards the midterms later this year. >> that is a big we are excited about that is launching next week. alertn sign up and get an -- launching next tuesday, it will include a policy meter and the sum that is very cold that will tell you whether you are in a republican or democratic market. it is going to be something that is focused in midterms, and another thing you can look at is the week today and the one-year performance of the individual some things, these policy baskets. .ulia: looking forward to that ben phillips, thank you for joining. the 10 year yield is at its highest level since 2014. we did and to what one calls no one's land for treasury. this is bloomberg. ♪

julia: the 10 year treasury yield hit its highest level today. earlier today, was said that the yields could keep rising if it traits passed this level. panel about hitting the ski mark. -- hitting this key mark. if youas been the shape, look at the bonds, it hasn't hit new highs this year. the performance has been solid from the front and -- end. market, and you have a fed that is likely to keep moving. of thevery front end

curve, wise that you see the value there? it is where a lot of money has been made, where d.c. the value now in the front end of the curve? >> i think in the short term is a lot of uncertainty, and it is not been paid for the duration risk going outside of the curve. it is not only in terms of treasuries, but also other assets including securitized assets. that whatt the moment you're getting is much better reward been taking that duration risk down the road. mashup --s also this massive short position. is that resonate with you? i do philly agree with that, at the value in the back end of the curve is difficult to judge.

a global context of 83 basis points. 90 plus percentile of relative value relative to europe and the back end of our curve. the capital markets are global. a lot of investment flows are a pricing mechanism that are coming from abroad, and that is why the back end of the curve is actually running out of steam and resisting a selloff from the front end. [no audio]

julia: trustworthy is as fake news source? must watch this weekend. joe: coming up, what you need to know for next week. this is bloomberg. ♪

julia: "what'd you miss?"? stocks and record highs. scarlet: coming up, don't miss this. nafta talks get underway in montreal on tuesday. reiterated top pull out of the agreement. joe: the gdp coming out on friday. julia: and president trump giving a speech in

are watching bloomberg technology. a check of first world news area president trump and chuck schumer held a one-on-one talk at the white house.

the meeting came to the run-up of the midnight deadline to keep the federal government operating. we'll bring you the latest from capitol hill with a live report. a panel of federal judges approved a redrawn or carolina districts -- north carolina districts. to two dozen senate districts will be used in this fall's elections. reviewreme court will the legality of president trump's travel ban that restricts people from six predominantly muslim countries. the high courts will hear arguments in april. president trump meet with british prime minister theresa may and next week's world economic forum in switzerland. the president said last week he canceled a planned visit to the u.k. because he was unhapp