address the u.s. trade deficit with china that continued to grow in 2017. the white house denies any friction. sarah huckabee sanders told the president today that he loves him and has full confidence in him. secretary ross is expected to be part of the world delegation at the economic forum. rex tillerson met with his british counterpart boris johnson. tillerson said he sees progress in garnering european support for new penalties against iran that could prevent a u.s. withdrawal from the iran nuclear deal. he highlighted his concern that iran'sk does not cover ballistic missile program. the european union has imposed sanctions on several senior venezuelan officials accused of human rights abuses. said top justice officials

will have their offset -- assets frozen and be banned from traveling in europe. pope francis is apologizing for insisting that victims of pedophile priests show in his words roof saying he realizes it was a slap in the face of victims that he never intended. -- who is accused of covering up for the most notorious pedophile priest. said of the priests, i am convinced that he is innocent. global is 12 four hours a day powered by more than 2700 journalists and in over 120 countries. i am mark crumpton, this is bloomberg. julie: i am julie hyman.

>> i am scarlet fu. we are 30 minutes from the close of trading in the u.s. and stocks are at record high after they advanced a bill to end the government shutdown. >> the question is, what did you miss? >> lawmakers ending a stalemate to advance a stopgap funding measure that would keep the government funded through february 8. investors anticipate a stranger things bump. the program likely boosted subscribers in the fourth quarter. and angela merkel is one step closer to a fourth straight term. what did you miss? more on that main story. the senate moving to end the government shutdown after three days by advancing a temporary spending bill that would fund the government through february 8.

still needs to take a vote on the measure and then it will move to the house this afternoon, and ultimately it will wind up on the president's desk for a signature. there doesn't seem to be any suspense at this point about the shutdown being ended for now. the question is what happens after that? pushing going to keep it back further and further? >> it is true that there is no suspense about what will happen through this bill, it will sail through the senate and it will get to the hout pretty easily as well. the president may be able to find it as early as today. the next step is a crucial question, there are a lot of landmines in the path forward. this gives the government open through february 8 with a vague commitment from mitch mcconnell to democrats and some of his

pro-immigration republicans to move forward with the issue of daca and legalizing those were brought here as children. debate is going to be one of the most explosive political debates in this country. it involves immigration, there are lots of different factions and democrats will be demanding a resolution. as toan open question whether there will be a deal on the lingering issues. tot gives democrats enough be satisfied on the issue of dreamers. >> you talk about that commitment from mcconnell is not being particularly strong or robust. we don't really know what it entails. what anything further than democrats could have got on friday when they first had the vote? >> it is a little bit more than what mcconnell and republicans were willing to offer.

it was a little bit of and all of branch the democrats hung onto. a lot of them are getting antsy and going wobbly and were not happy with the fact that we are into the work week in the government wasn't open. a lot of them didn't expect republicans to cut a deal while the government was shutdown. they do control the house and the senate and the presidency. i think the just concluded that this was probably the best they were going to get even if it was not much. >> let's not forget that the democrats had a six-year commitment as well. you mentioned the promise by mitch mcconnell to address or bring a bill on emigration to the table. kevin mccarthy said there is no commitment. if it gets through the senate, it would have to change a lot of people's mines in the house. ask that is exactly right and

spkr. ryan:'s been telling a number of his members in the house republican conference that the house will not be bound by any assurances or agreement made on immigration whether it is policy or procedural. it remains a big? in the house has been the chamber where immigration legislation goes to die. and 2013.d in 2006 that is going to be the single biggest challenge. there is a mercurial president trump and nobody really knows precisely what he wants. >> we should mention that senator cornyn is speaking on the floor of the senate.

>> that is the majority with speaking in advance of the vote. when you talk about being unsure where the president fits in, that it was interesting during sarah sanders press briefing she said of people want to protest about this issue, they should go to capitol hill, they shouldn't come to the white house to protest. we have seen the president taking different roles during his first year in office. this one.t is he for he is about to go to davos. how pivotal will this be or will this be up to congress? >> it is a bit of a come -- complex back and forth. senator mcconnell and paul ryan don't need a permission slip from the president to move anything through congress. president can offer advice

or offer this or that, but ryan and mcconnell have been very reluctant to move in anything related to immigration without some political cover from president trump. he is the one with the credibility with the anti-immigrant portion of their base. those who don't like there is a liberal immigration policy. the president is in a unique position to unify his party on this and to get his members in line who are generally wobbly on the issue of immigration. that is why he is so critical. but the senator also expressed some frustration in his own subtle way that nobody really onws where the president is the issue are what kind of a deal he will accept. now i think he is inching in the direction of saying even if he doesn't i will make a commitment

to move by february 8. >> how our democratic leaders reacting to the frustration among activists that they caved? >> one senator who is an independent who caucuses with democrats was asked about the reaction from the left and he quoted make jager saying you cannot always get what you want. ist senator schumer said this is a serious commitment by mcconnell. they expect him to honor his word and move to immigration by february 8 at the latest, and if they can proceed to that and get something out of the senate, they can retroactively consider this a victory. that is nothing ironclad democrats got. activists are serious for them. with we will find out if it was for nothing.

>> the song that was paid at the end of the pittsburgh rally -- every trump rally. >> doesn't he played at the end of every one that you cannot get what you want question mark >> that is his signature song. >> something of irony there. >> the rolling stones have not spoken up about that. >> interesting we have breaking news on a deal crossing bloomberg. mccarty has agreed to acquire 100% of petrone international. it is known for its tequila. size ofbillion is the it. we are talking about two privately held companies in this case who are making this deal. it's a big private deal, involving a delicious spirit. theasn't petrone on entourage -- patron on the

entourage tv show? >> that was avion. >> oh, i'm osrry. >> enterprise that you knew that. -- i'm surprised that you knew that. >> this is bloomberg. ♪

>> while many sectors such a growth last year, sectors and voted republican so the biggest gain. those are part of the findings of this study. jed joins us from san francisco. differ joining us. your latest research shows that while in many aspects, american life was very divided, at least right now, economic growth is

eating fairly evenly distributed around the country. >> it's one of the rare areas where both red and blue america have something to cheer. there were both places and industries in red and blue america that grew strongly in the past year. that's exactly a change we saw. >> is there a fundamental reason for that? is it random and not sustainable ? >> there are a couple of reasons that don't have anything to do with politics. first of all the mining sector which includes oil and gas has been bouncing up and down with oil prices this year. industryconstruction continues to rebound from its struggles after the housing crash.

it's one that has the longest after what wee saw in the last decade. >> those are the red industries, talk of at the blue industries, education, health services. what did we see there? industries, all service industries, professional services, as well as education and health services, leisure and hospitality. we expect to see growth longer term. where there are some jobs that are more at risk, some of the service industries are the ones that still need to be delivered in person. for now, they are less at risk of disappearing from technology or global shifts. those are technology -- those are sectors where workers are more likely to vote blue.

sawe blue factors also strong growth. >> what happens now? and will the next phase of growth by sector be determined more by the economic cycle or economic policies from this administration? >> at this point the trend we have seen has not been primarily because of policy. trendingntinuation of things we have seen since 2016. a lot of the policy things from the tax bill -- we hadn't seen them yet. that maybe sometime before we do see them. remer that president trump did focus on manufacturing. the end of favoring either red states or read sectors. >> their local tax deductions at

least in theory they should be great for the robust blue states. who will have the ultimate impact? would you expect to see more growth? >> we might see somewhat of a slowdown. it is possible that there will be some people on the margins who might move to lower tax states. housing costs and other factors and up affecting whether people move more than taxes due. we could see a small hit to consumer spending in some of the places more affected by the adoptions,ocal tax but that is likely to be small compared to the other ways in which policy could affect the labor market. curious how you think specifically of the labor market. that is something we talked a lot about last year with the worker shortage and the fact

that homebuilders were potentially being impeded by the fact that it was hard to find labor. do you see that is a big challenge for the industry? there have been labor shortages for a while now and demand also matters. even though the single-family did leg for many years, apartment construction boomed. storyk the labor shortage needs to be weighed against where the strong demand is. we are coming to the point now where more millennials are reaching the age moving out of andr parents homes eventually thinking about homeownership. when that happens we will see stronger demand for single-family homes and that will add to demand for construction. >> in your report you also

noticed that the states with the fastest-growing jobs are texas and florida and among the blue states are maryland and washington. combine that with what we know about housing. presumably if those states will continue to see fast job growth will be more demand for housing in the states as well. >> because housing can -- does tend to be more constrained, one of the patterns we have seen over time is often faster population growth in red states bute it is easier to grow stronger wage and income growth in the places that are more constrained. places that poor people cannot afford to live. at the same time, red states include not only fast growing places like texas and florida, but rural america and rural america continues to lag behind in terms of population growth and job growth. is the chief

economist for indeed. it is time for our stock of the hour, trading lower today. downgrain to neutral. abigail doolittle joins us with the details. palo alto is a cybersecurity company. what is goldman sachs? >> they are saying there is a balanced risk reward profile. they're also saying that the street estimate might be a bit high based on the idea that they are looking for them to gain more market share than they will but when i hear balanced risk reward for me that is a valuation call. we are going to see that valuation is very high. iss a great overview of what happening, shares are lower with above average volume. here is the valuation trading and 61% premium to the group. these chairs look a little bit rich.

>> is there anything fundamental to the business that goldman is not excited about? >> they are saying there is a muted outlook for the cybersecurity industry in 2018. the overview, what the macro seems to come down to in this industry now is an integrated solution and palo alto networks is leading that. from a product standpoint i would think they are very well positioned behind that checkpoint. apparently symantec is very well behind. 390,f we look at g #btv this is a three-year chart. it is a mid-cap company, a higher growth valuations. they have a more reasonably priced product that goes to small and medium-sized businesses and a trying to go to the businesses with integrated products. >> thank you so much. coming up, the homebuilder e-cig

etf sets a record while new home sales are slower to recover. the chart that you cannot miss, next. this is bloomberg. ♪

julie: what it you miss? -- what did you miss? a rally in chinese shares. chinese companies have had quite a winning streak. cameron christ of bloomberg pointing out on the market's live blog today. he also pointing out that if you think the u.s. stock market is overbought, you haven't seen anything yet. there is also an overbought level and this is a record streak for this index of eight shares, the last time we got to this level of overbought was back in march of 2015 and what

followed was quite a tumble for these shares. that's not to say it's going to happen again but it is certainly something to keep an eye on as we talk about momentum and overbought levels here in the u.s.. >> all around the world, markets are overbought, but this seems to be the most extraordinary example of that. -- short of 2017 volatility, people made so much money against the vick. that sort of peaked, if you look at short mixed trades, it peaked in early october. we are back to where we were last spring. speculators are still shorting the big picture substantially but it has come off of it. toittle bit less appetite straight up bet that volatility will go down. boom has recovered

faster than actual sales of new homes. the blue line tracks new home sales and has yet to call back even half of its record plunge from 2005. the white is the homebuilders etf. it has made a complete round-trip and is back to the same price it was from april 2006. have a prettyhey generous definition of what constitutes homebuilding. it also includes home furnishing companies and retailers like world perl -- whirlpool and home depot. when it comes to these etf you need to look under the hood and when it comes to home sales, we might have seen a big boost at the end of the year as people were looking to lock in some contracts before the tax changes coming to affect in early 2018. >> it is also interesting that home prices are at record levels. they have recovered even if

sales of single-family homes haven't. >> the market closes next, and we are looking at record highs for the major indexes. this is bloomberg. ♪

scarlet: what'd you miss?

all three major averages are at record highs as the senate inches closer to ending the government shutdown. i am julie hyman and for julia chatterly. scarlet: i am scarlet fu. joe: i am joe weisenthal. if you're joining us live on twitter, we want to welcome you to our closing bell coverage. scarlet: u.s. stocks rally to record highs. guess what. when the government was about to shut down, they also rallied to record highs. i do not know if you can draw a link. joe: there is no link. nothing matters. stocks just go up. i don't know about tomorrow. julie: i love the absolutism of that statement but it feels so right. if you take a look at some of the individual contributors to the gains, the fangs are on the list. amazon and facebook trading at records.

netflix as well as we await earnings in a few moments. amazon opening up its amazon go convenience store model in seattle that may spreads elsewhere. we were talking about that today. of the shares trading higher. and then we have -- also that shares trading higher. alphabet trends trading higher. they are looking at a restructuring working group that will seek to minimize the time needed to exit the unregulated power business. in the case of xerox, we have it teaming up with a fellow investor. they're urging the company to explore strategic alternatives. they collectively own 50% of xerox. teva as built a new position announcing pharmaceuticals, saying they were spurred by chemists cost-cutting plans. shares of 1.5%. joe: lessig a at that government

bond market. unchanged. this is the interesting thing. no movement in the end. lower on the day. pretty remarkable but even with move -- bigon risk on move, number selling and treasuries for now. scarlet: currencies, the dollar weaker except for the young. -- yen, in europe, we are waiting for resolution to the arman -- the formation of german government there. that is something we will discuss later on on what'd you miss? onre is also a meeting thursday. it is unlikely the ecb will make a firm commitment to withdraw the stimulus or slow down the stimulus too much. in terms of the pound, it is at a 19-month high versus the u.s. dollar. if we flip it around, it is green. if you do pound-dollar. the yen is weaker ahead of the boj meeting.

they agreed to end the shutdown as we know what you are looking at a weaker yen. we should mention the nafta talks begin in montreal. it is a mixed impact when it turns -- comes to the canadian dollar and mexican peso. no real trend there yet. joe: let's look at those commodities. oil and gold and not much going on here today. just a little bit and oil up a little bit. those are today's market minutes. scarlet: we are awaiting netflix earnings for the fourth quarter. while we wait for the numbers across the bloomberg, let us bring in paul sweeney for more on what we might expect. the stock is near a record high and everyone is bullish. over the weekend, barons talked about apple buying netflix. i feel if we talk about this every once in a while. netflix has gotten so expensive. doesn't want to be bought out? paul: i do not think so. there is no reason it should. everything they do seems to be turning to gold. the stock is up 60% over the next 12 months. near an all-time high. driving success

profitability and sit the u.s. business. as they grow internationally, some of their markets are starting to turn profitable as well. the real challenge for them from a financial perspective is to fund the programming obligations, close to $20 off-balance-sheet. they are free cash flow negative. they have a lot of growing to do in terms of growing into their liabilities. joe: if you're a columnist, you kind of have to write a apple or amazon by netflix article every two years. there has never been any indication from netflix or one of the big internet giants of the have this. joe: that is a mistake on the part -- paul: that is a mistake on the part of the new media companies. they should have bought the company years ago. it is not the bigger risk to the big media companies, and the whole media industry in general has been proven wrong. to been -- to be a big disruptor

in the media industry for generations. they are really doing well. there is no reason to sell. they have strong management teams. there and i struck position. scarlet: the reason i started asking whether apple should buy netflix or whether netflix wants to be bought out is because there are deals going on in the media state street disney and fox. julie: here are the numbers. $8.33 million.-- coming in line with estimates. it looks like netflix is continuing its a performance. what else is -- it's outperformance. what else is standing on the numbers? ways the it is als next earning editions. it has been at salsa discussion forecast in 13 out of the past 16 quarters. does it always lowball with estimates? paul: a little bit.

the fact is it is hard to predict some of these international markets and how the growth will come in. it is not an earnings momentum stock. it is a subscriber momentum stock. you talked about international, streaming. we talked to lucas shaw earlier he said that was a question. 6.3 million people. big gains in international subscribers. even in the u.s., an additional 1.9 8 million. the estimate was -- 1.9 8 million. million.- 1.98 scarlet: it seems the price hike did not have much of an impact. paul: there was probably a little bit. we will see it in the first quarter. history has shown the fast couple of hikes have not really impacted the numbers or gross

adds. tothink they will be able continually raise prices because the message for them as we are investing in content. joe: we see that after hours move of 5%. the stock was also up in today's trading. it is up 9% from today's trading in after hours. this is just a monster move. this is a stock at 220 last week and now it is up to 40. i want of that into perspective. incredible performance. scarlet: despite the fact that it is meeting the consensus. julie: that is what paul just said. company -- the management over the last couple of quarters has tried to get it to read orient its focus -- reorient its focus away from subscribers. there is an improving profit picture as the international market start to mature.

we can tell by the start -- the stock that it continues to focus on the numbers. julie: you mentioned the content costs. this has been sort of the thinking. at some point, it will be an issue for them. is there any sign of discipline? the joke is they will greenlight anything because they just want that you can kind of try anything on netflix and are a lot of opportunities but that comes with costs. paul: it is contributing. netflix, wh hulu, amazon. their oxygen leading to conduction -- production inflation in hollywood. -- again,rting to see it is the greatest time to be in hollywood, television and the production. there are some of them are buyers out there than just the traditional big six hollywood studios and distributors. we're seeing it across the board. netflix in particular is able to raise prices, drive subscriber

growth. that will drive profitability which will hopefully in the and funds of these obligations. julie: but there is no sign of them pulling back on at all? paul: no. again, we will see the streets looking for negative free cash dollarsa couple billion this year and next year. they fund at a deficit and funder programming investments in the debt markets. scarlet: it doesn't seem to market -- matter for investors. the move after hours brings cap close to,et if not above $100 billion. joe: cool number there. what is going to be the big question here?illustrate there is nothing going on . what do you want to know? paul: competition. right now we are seeing the media companies coming to the realization that they need to pull their content back. theire pulling some of content back. that is putting more pressure on netflix's original programming. te moreed to crea original programming and rely hollywood.

investors want to get a sense of how netflix is doing there. the subscriber numbers will tell you they are managing the process pretty well. >> indeed. paul sweeney, thank you so much. as netflix skyrockets ever higher. scarlet: we also have breaking news. let us turn to washington. the senate has begun voting on the government funding bill t the government funded through february 8. once it passes, it is expected to pass. it will go to the house, where it is also expected to pass. a minimal make its way to president trump's desk where he will sign in the government will reopen. we will reopen. we'll keep you posted on further developments. this is bloomberg. ♪

mark: the senate is voting down the three-day government shutdown. they're trying to reach an agreement that gives congress time to resolve the dispute that led to the shutdown. >> since our meeting in the oval office friday, the president and i have not spoken. the white house refused to engage in negotiations over the weekend. eat deal-making president sat on the sidelines. >> so long as the government remains open, it would be my intention to take up legislation here in the senate that would address daca, border security, and related issues, as well as disaster relief, defense funding, health care, and other important matters. when the funding bill receives final passage in the senate and we'll head to the house where it is also expected to pass.

the pennsylvania supreme court today struck down the boundaries of the state's, 18 congressional districts thing they violate the constitution. the ruling is a major picture -- victory for a group of democratic voters who argue this is for -- the districts were unconstitutionally gerrymandered to benefit republicans. the republican-controlled legislator in harrisburg has until february 9 to pass a replacement. the u.n. agency for palestinian refugees has lost what it is calling an unprecedented appeal, seeking hundreds of millions of dollars for funding after the funding cuts by the trump administration. last week, the state department notified the u.n. relief and works agency that the u.s. is withholding $65 million, a decision the agency called "abr upt and harmful." they aim to raise $500 million so the agency's core services to refugees are unaffected. $1.5 arabia has announced

billion in new humanitarian aid for yemen. the kingdom is also vowing to expand the capacity of yemen's courts to receive feet -- ports to receive fuel, food, and medicine. it is half what is demanded by the u.n. in its last humanitarian appeal. the u.n. calls the situation in yemen "the worst humanitarian crisis in the world." global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton, this is bloomberg. what'd you miss? major averages closed at a .of course they were rising even before the shutdown was ending. here to talk more about how investors are reacting to the dysfunction in the sea is been labeler, globally equity strategist. i keep edging myself. a storm pointed out earlier --

as joe pointed out earlier, it seems like a stock got no matter what. effort to send? -- is that fair to say? paul: what if we just wrote that in a note -- joe: what if we just wrote that in a note? >> they usually go up when the government shuts down so dry your conclusions from there. newave had a little bit of your positioning, fear of missing out thrown in there. the one thing that sort of surprised me is last year, institutional investors saw very little coming into u.s. equities. sort of holding back. this year, they're still holding back. we saw huge move in retail investors. they're the most polished they have been in 10 years. that is a key to us. at the levels, they are pretty high. it is pretty good. we're in uncharted territory.

scarlet: because of the tax growth, you have a defensive overweight on u.s. stocks. ben: yes. i think earnings are great. $.15 earnings. the u.s. has the best earnings in the world at this stage in the earnings cycle. my problem is we may end up paying for that. 25% above long-term level. it is gradually turning the corner. that is my caution here. joe: you mentioned retail investors the most bullish in 10 years. what are you looking at specifically? ben: the american association -- that number. joe: in general, you mentioned what sort of characterizes 2018, you mentioned the phone the trades. when did it start? we have been rallying forever but when did it start to feel that people are really chasing our people are feeling that markets have been rallying for a

long time and then underway and missing and i need to get an? ben: i think that change on the retail side is just coming off. signs are there not overly bullish. maybe 20 or 30 went to the u.s. and the mast -- vast majority went into it europe, japan, emerging markets in that order. julie: that implies also that that is not necessarily going to happen. forecast isds, your for growth in u.s. stock prices to moderate this year, which suggests the folks who did not put their money in u.s. stocks, we will not see a tipping point likely are for retail investors, that will convince them to get in. ben: i think there may be a little bit of disappointment. the robby strong headwinds from -- there will be strong headwinds from the euro. i think that is a little bit of disappointment in some parts of the world. at this point in the earnings

cycle, to have 50% earnings grow and a little bit more than that is a little -- 15% earnings grow and a little bit more than that is a little remarkable. i think they are well supported. they do come down a little bit but i think it was a little -- pretty low as were levels, which are well above average. scarlet: let us talk about the place where money will continue to move to, emerging markets. 13%. where within em would you want to avoid? everyone we talked to is bullish on em. at some point, this will be a crowded trade. ben: i would take issue with that. numbers, emerging markets is the biggest in 10 years. scarlet: less underweight now? ben: not really because they performed so well last year that actually the underway has been getting bigger. you have an asset class with people that are hugely underweight for the best earnings are growing in the macros with bond yields

reasonably subdued with the weaker dollar. it takes all of the boxes for emerging markets. scarlet: thank you so much. coming up next, the moment of truth on the horizon for brazil's lula. whether the court's decision on his -- why the court's decision on his jail sentence good shape the economic future. this is bloomberg. ♪

the senate floor full of people. they have begun voting on the government funding bill to reopen the government. voting is now underway. patient a 20, 30 minutes. usually that is how long it takes. we will wait to see how this

progresses. we should mention president trump's meeting with democrats on immigration. theourse, that was one of concessions mitch mcconnell had to make the democrats to bring up immigration later on. julie: we do learn earlier -- we did learn earlier from sarah sanders that the president still plans to go to davos. unlikely will be resolved today. julie: exactly. what'd you miss? lula, when brazil's of the most intriguing questions for emerging-market investors. wednesday a three-judge panel of an appellate court will decide whether to up hold the former president's 9.5 year sentence for money laundering. that ruling will be instrumental in determining if lula can run for president in october. joining us from bloomberg is a lane of the peanut who covers -- elena, who covers emerging

markets. what is the perception of lula in brazil at this point? only a jail term is separating him from running for president again. elaina: he is still the most popular person in brazil. the current president, his popularity is at around zero. can you imagine? there is quite a lot at stake. there's a big chance that he can become the president again and all of those charges can be not important. joe: let us say he is allowed to run and the expectation is that he would win, power investors thinking about that prospect? elena: that is make it or break it for them. last year was a huge year of clinical unrest in the country. upzil -- brazil's stocks are so far year to date and they think they will continue to rally if he becomes the president.

. a lot of people are concerne this investigation has been on and off for years and years and years. there is a lot at stake. we're talking about potentially billions of dollars in investors money. scarlet: the reason why he is so popular is because he is still seen as a champion of the poor. kind of policies busy -- what kind of policies is he championing these days when it comes to cleaning up corruption? that is one reason people do not like the law or do not latecomer. -- like temmer. elena: right. nll of this is for him to be o the sidelines. scarlet: basically saying fake news. elena: fake news. he has something the lula didn't have. that is something that attracts all the lower-class people who have nothing to do with the millions of dollars in money

connected joe: to the investigation. when specifically -- connected to the investigation. joe: when is the ruling and what are the odds? two people put gases? -- guesses. elena: they are saying the other about zero. it will be upheld. joe: it is expected that conviction will be upheld. elena: ultimately, it is still -- ultimately, it is still very unlikely he is allowed to run. elena: it is unlikely. the popularity has been brightened this year. he has operated with the government. he has been making a lot of political gestures that the lower-class people and people who did not have enough money found appealing. they will make the decision wednesday. scarlet: let's talk about other calendar events. and a south korea, the releasings will be

data. what are you focusing on an hearing from from readers and investors that you have talked to? there will be the longest level of discussions ever. at stake is $1 trillion. the trade between the united states, canada, and mexico. a lot of people are looking at the increased chances that trump can pull out and say i am done this, i am done with all the negotiations. canada and mexico are respected to come out with some kind of agreement and decision that could propel the talks further. said weon i talked to fro are near a deadlock in a very important point. that is pretty important right now. propina, thank you for joining us. coming up, pending the punt.ment shutdown with a a compromise to reopen the government and why it has mitch

mcconnell smiling. we had to washington next. this is bloomberg. ♪

mark: i am mark crumpton with first word news. the senate has enough votes to pass legislation to reopen the federal government after nearly three days shutdown. you are looking at the vote underway now. for the shutdown to end, the house must also approve the bill and president trump must sign it. kevin mccarthy of california told colleagues yesterday the chamber will take up whatever the senate passes. that is according to a republican house member. lawmakers say the measure will likely clear the house. the house is expected to vote on the bill later tonight. secular missing after an explosion in an eastern oklahoma drilling rig this morning. the site was being regulated by

red mountain energy. a spokesperson for the oklahoma medical examiner's office said she would not be able to confirm any fatalities until the fire is extinguished and investigators can get to the scene of the blast. the iraqi parliament met today and set may 12 as the date for national elections despite calls from the country's sunni community delayed the vote -- to delay the vote until the return of the displaced people. community delayedthe divided pas failed many times to set a date, prompting iraq's supreme court to issue a ruling on sunday against any delay in the elections. south africa's ruling party said today it is considering whether to order president jacob zuma to step down as head of state after a meeting of the african national congress. the secretary-general told reporters no decision has been made and denied media reports that the departure was imminent.

he is under increasing pressure to step down. global news 24 hours a day. powered by more than 2,700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: let us get a recap of today's market action. u.s. stocks rose to record highs. pretty straightforward. [laughter] joe: but that on repeat. outlet: in terms of news after the bell, netflix reporting results. is all about subscriber addition. a .3 million customers added in the fourth quarter. analysts were looking for 6.3 4 million. as a result, it your looking at a 9% jump in after-hours trade. joe: incredible. scarlet: what'd you miss? the three-day shutdown fight ending with a punt. reaching a compromise, gaining little other than vague assurances of majority leader mitch mcconnell to open debate on immigration. the vote currently underway in the senate. we're joined by tim o'brien. joe: thank you very much for

joining us. you wrote in a column today about how this whole budget battle is very much like how trump ran his businesses. what did you mean by that? the i think it is part of problem. one of the promises he kept his he would come to washington and when the government just like he ran his businesses, which he has. it has been focus more on owneting himself and his position at center stage at the expense of a legislative solution. joe: a few weeks ago, everyo ne called it an extraordinary meeting, they kept the cameras rolling, one of the best meetings of all time, and it to meanut in practice absolutely nothing in terms of getting closer to an agreement. tim: it was reality tv. enemy graduated from that int -- and then we graduated from that into almost everyone involved in this process not looking good. republicans didn't look good, the democrats didn't look good,

trump didn't look good. all they did was kicked the problems down the road. there will still be funding problem in three weeks, they still have to deal with daca and the immigration issue. it split the parties in different ways. i think we will see a repeat of today three weeks from now. julie: when of the interesting things also that characterizedtrump's business career -- characterized trump's business career was as corporate bankruptcy. what would be the equivalent of that in his public life? he does not have the escape hatch. he does not have that way to get away from some of the obligations. are a fiscal conservative, you want the budget to be managed in a sound way. you want tax policy that would promote a sound revenue base to the federal government. he is not focused on any of the minutia. isardless of where anyone

ideologically, you want government that is well-run, where people are managing your , where there are a doll decisions being made. scarlet: in terms of the policy understanding, there is not a lot of granular understanding and -- on the part of the executive office. because they keep changing their stance on immigration and the other sticking points. i don't think he has a governing philosophy. i think he has a marketing philosophy. athink he wants to be seen as person who wins and is on top of the process. you cannot get to either of those places. you need to be deeply informed of the issue at hand. both sides in the debate need to trust that there will be an honest outcome. that has been absent here. joe: i think it was chuck schumer last week who said negotiating with trump was like negotiating with jell-o. he may have been mixing metaphors but we understand.

what do people the private sector negotiating with trump say about that experience? tim: new yorkers and money-center bankers that have known donald trump and how he is been since the 1990's. he is someone who has not kept his promises. often times, he ended up losing banks on the hook for more than $3 billion -- $3 million in debt. he is not someone who was seen as a shrewd negotiator. in a lot of cases, you can look back at the plaza hotel. he overpaid. he blew the westside yard deal, one of the most pivotal deals of his career. the only big bureaucracy he ever ran -- or big organization -- was this publicly-traded casino company. herein into the ground will times. julie: what about his relationships with his lieutenants in the public sector and business life? now as we talk about the immigration debate, we get reports that season miller and john kelly are pushing him

further rightward, one can say, on that debate. is there someone in his business dealings that were subject to pushing him one way? tim: only the family members. the circle of family members. he trusts his family members to an extent and literally no one else. i think stephan miller and john kelly have now entered the danger zone, becays even if he it - because even if he is philosophically consistent of where they are, he never wants to be seen in public that someone will tell him what to do. those the death curse for bannon. ross is on the plank. certainly, i would wager -- though i could be wrong -- that will cause a rift with trump. although they do not seem

trying to be out front, which is interesting. tim: they publicly said trump will leave a wall behind. scarlet: and his position -- tim: right. pretty much in the same place were both kelly and miller are. that is not the most important thing yet. the most important thing is that he seems to be the man in charge. scarlet: tim o'brien. we appreciate your time. coming up, difficult coalitions outside of the u.s. angela merkel has a familiar ally after the democrats voted super zoom -- resume talks with the german chancellor faces a tough path ahead. from new york, this is bloomberg. ♪

scarlet:w good news for europe -- what'd you miss? good news for europe. they voted to end things talks with chancellor angela merkel and her party, paving the way to a possibly majority government for the first time since the elections were held last september. joe: jake up, thank you for jacob, thank you for joining us. there's a headline saying they got a deal but then a few more steps. what is it now? it seems like they're close to a deal to form a government in germany. wetzel needs to happen -- what still needs to happen? jacob: we have an agreement by the social democratic delegates, so to speak, to get into the nitty-gritty of forming what is called a coalition agreement,

which, given that the coalition would have a clear majority and the bundestag, basically it is the government program for the four years. there still needs to be details negotiated. this year, the final agreement will need to be put to a referendum against the members of the social democratic party before you can actually have a german new governments form. ge're looking at somethin around easter or the end of march, and the best scenario. scarlet: things are moving but moving at a slow pace. i know the details are still being worked out, but what are we likely to see when it comes to power-sharing when it comes to european reform versus domestic german politics? think the reality is

the german economy is an economy by almost any metric does very, very well. which means i do not think we should expect huge changes to domestic german policies. unfortunately, i do not believe we will see a huge increase in public investments and other things, for instance. at the same time, i do believe that we will see a german government that is far more committed to striking a big deal or grand bargain with the french president overcoming euro area reforms. in my opinion, there is a really good chance that you will have meaningful reforms. months and 12 to 18 to be implemented over the next five or seven years. julie: does this mean that germany, because of what is happening with angela merkel, does not have the leadership position it once did and perhaps france will step into that role?

is there still potential for germany to reclaim the position? mean the reality is a lot of the german leadership for europe send directly-- stemmed as a last resort during the financial crisis. now, the economic situation in europe is very, very good. that mneeans the leverage germay used to have, saying no to a bailout package, is gone because you no longer need that. the dominance that germany has had politically and economically in europe over the -- since 2010 is always going to disappear. october that, we're at a situation where we are clearly -- on top of that, we are at the tail end of angela merkel's chancellorship. where as you have a young and

new lehigh for the elected president of france, who really has no domestic opposition to really speak of inference. so, yes, france and germany will, going forward, be more equal partners. in the long run, i think that is a positive for europe, not a negative. joe: going back to the. domestic politics for one moment, what is the spd's reluctance in terms of joining this coalition? is it more about ideological oreagreements or is it m about the political fallout? jacob: i think it is absolutely mostly the latter. they feel, and i think correctly, everything the grand coalition has done that is good in their term, in terms of introducing a minimum wage in germany, which was a long-standing social democratic political demand, angela merkel as the leader gets to take

credit for that. the junior partner, even though it was originally their policy, gets squeezed. theseore, they blame grand coalition and overshadowing by angela merkel of the social democratic party for the historically bad election results the party got last september. julie: we have to leave it there. thank you so much. senior fellow at the peterson institute for international economics. breaking news.e president trump has imposed a 30% tariff on solar imports to the u.s.. we know the commission asommended tariffs as high 35% from imported solar panels. it is 30% for the first year and declining to 50% in the fourth year. joe: we see shares of first solar up surging 7% after hours. markets liking the idea that perhaps some players will have pricing power.

julie: for some players. it is an interesting split because cheap imports have allowed the insulation industry to boom in the united states. folks that put panels on your roof. for is not a clear win them. thatcally, the two firms push for this are u.s. subsidiaries of foreign companies. one of the chinese company, one of solar world, a german solar maker tussle or panel maker. i think this is the only u.s.-based one left in the industry if i'm not mistaken. there a lot of vision over whether this will be a big -- a good thing. scarlet: a lot to unpack. not as clear of a signal as they thought. coming up, we will talk more highlights from bloomberg's interview with larry summers on geopolitical risks and when his nes -- and what is next for treasury yields. ♪

>> what'd you miss? three summers is not sure about the direction of treasury yields. anders joined david westin lisa earlier to discuss. it is hard to say because if markets become more alarms, treasuries are where they go. i am not as confident as many observers that yields are going to rise sharply from here. two scenarios.re there is a scenario where the economy continues to grow and where markets stay,

and there is no geopolitical disturbance. i think in that scenario, you will see the fed tightening more than what is now priced into the market. i think you will see some meaningful upward move. a scenario areso some of the a scenario are some of the uncertainties come into focus. i think if that were to materialize, you could see equity markets sell off. and that scenario, i think 10-year yields would meaningful move downwards from here. lisa: what is the potential low for 10-year yields in that scenario? look, i think if we have -- i guess the way i would sayocach that is to sessions come every so often,

the odds moving into recession or somewhere in the range of 20%, perhaps slightly lower. i would be very surprised if we saw a recession where 10-year yields did not fall by over 100 basis points. i suspect that sometime in the next -- some in the next half-dozen years, we will see low of rates make a new 1.5. david: it could easily go the other way for some intervals before hand. finally, come back to your piece. one of the things you urged about the president is to show he is a reliable and predictable partner. you just talked a minute ago about the team around him and whether there is real confidence economicd handle an

downturn. wilbur ross may be on the outs, a controversial, powerful commerce secretary. i do not know if that is true and you do not. of the people around him contributing to some of the apparent instability and uncertainty that is being communicated? lawrence: yes. yes i think in some ways they are. learned,hing i have orther it is in business government or universities, leaders tend to get the subordinates they deserve, and the subordinates they want. responsibility for the contours of economic policy and any issues of credibility that

may arise really rests with the president. find, iink he would suspect, his team better able to desires if he were steady and predictable in those desires. -- it ise the piece easy to go on and on and a lot of different ways, being critical of the president -- but i think that the president was elected because he tapped into feelings thate the united states needed to look inwards as well as supportically out to a great global system. there were areas of economic

diplomacy in which the united states needed to be more assertive than it had been at some points in the past. and there were many americans aving in the middle ofa c country who had been forgotten to a great extent and there needed to be more focused on co ncern. i think people are prepared to respond to that message as those concerns if they are led in a steady, predictable, reasonable way. that is the hope that i have for the president's second year. julie: that was very summers today on bloomberg daybreak: americas. we have breaking news. puerto rico will begin advertising prep assets, it's troubled powered company coming from the governor.

he is speaking in an address on puerto rican television. the sale of assets could take 18 months. he says it will transform the energy system. he says puerto rico will define the legal structure for the asse sts sale, which comes as a surprise. this comes as nearly 30% of power customers remain in the dark and puerto rico, nearly four months after hurricane maria. distresscial is why it has taken so long. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: the boj will set monetary policy and give outlooks for gdp. joe: davos. were action coming at you tomorrow. julie:

>> just minutes ago, the senate passed legislation that would reopen the government and funded

until that. the measure is expected to clear the house. five people are missing after an explosion at an oklahoma drilling rig. the cause is still unknown in the oklahoma medical examiner's office wasn't able to confirm any fatalities. courtnnsylvania supreme said they violated the constitution. the ruling is a major victory to benefittic voters republicans. secretary of state rex tillerson met with his british counterparts. tillerson says he sees progress in garnering european support in new penalties for rock -- for a rock -- for iraq.