nd selloff surging to on multiyear high on earnings and data. the fomc makes a rate decision this week. goldman sachs says it might not be the sleeper meeting many expect. makedent trump poised to his first eight of the union address before congress tomorrow , which trump will show up. david: welcome to "bloomberg daybreak: americass." >> here is what you need to know. bonds selloff taking a bite out of the equity market. the dollar finally getting a boost from jumping yields. , highest levelld since april 2014, 2.71%. let's wait for the bond bears to come out in full force. david: it is time to get an update from outside the does

this world. president trump may have made theresa may's political problems worse. president trump said he would have taken a tougher stance on getting out of the eu than may did, this as may faces a revolt from her own party over the terms of brexit. in kabul, and attack has killed soldiers. the death toll has risen from the weekend suicide bombing. 103 people killed. the attacker was driving an ambulance filled with explosives. , returning home after spending several months in detention, the billionaire reached a settlement with authorities. shares and his company are surging today. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries.

david: we turn to our first take. bond yields rising here it a big week for economic data. number three is the state of the union address tomorrow. which donald trump will we see? alix: maybe both. that would be confusing. joining us are our guests now. thank you for joining us on a monday. is this the moment when we finally will see a bite out of the equity market from rising yields? >> it remains to be seen. david: it is only monday. >> stocks have tried to selloff, only to close higher. there is nothing in the tell yous that would to fade this market yet. you would normally see momentum turnover. we have not seen it.

wait for the signal. everybody is waiting for this moment. when will the bond market accelerates so fast it takes the wind out of equities? you have to air on the side of caution. david: this magic number, a little north of 2.7? alix: i am waiting on the bill gross tweet. david: all eyes on that. what is the number? >> three? 3.1? in the midst of this week, that is the most interesting. there is so much happening this week, one thing after the next. come friday, everyone will take a deep breath. number two story is the week ahead come all that economic data. meetingse, fed

tomorrow and wednesday, janet yellen's last meeting come and the jobs numbers friday. what is the most important set of data you are looking at? >> i will be watching the state of the union. to see what happens. i think it will be the topic of conversation for everyone this week. on the numbers front, i think friday will be the most interesting of all. we have seen 2% so far. 2.3% would beove substantial for breakevens. we have been stuck between 2% and 2.2% on the upside. a point where breakeven accelerates beyond 2.3, that would be a huge signal , and also a signal that inflation forecasts are too light here it there has been no

evidence of inflation pressure. to get there you have to have tremendous wage pressure in the labor data on friday. friday is an important day. if you get that pressure starting to show signs of life, we could be in a new regime. david: what happened? we are waiting for inflation, then all of a sudden there is inflation in the united states and europe as well. was buildingis last year. you did see an excel a ration in the economic data, the isn hitting cycle highs. certainly a better than expected holiday season emerged -- and acceleration it is this building up pressure, and tax reform tipped us over the edge, especially if companies will produce all these wage gains. there is this unknown, how much

they will be sticky, one-time bonuses him about whether it is one or the other, it will emerge in the first quarter. that first quarter wage number is likely to look hard than anyone anticipated. david: state of the union, our third story. which donald trump will we see? one during inauguration, or the one in davos? >> i will always put america first, just like the leaders of other countries should put their country first also. meanmerica first does not america alone. when the united states grows, so does the world. what's good for america is good for gm, and now what is good for america is good for the

world. >> that is teleprompter trump. that is what we will get. teleprompter on a the whole time and davos. >> that is what we will get. the trump i was thinking about elected, after he was totally unscripted. it's the first time we started hearing about infrastructure. i wonder how much of that we will get versus teleprompter. alix: what does that wind up meaning. who is he talking to if he goes with teleprompter trump. his base. it is just it is about sticking to america first. david: what do the equity markets want, teleprompter trump? >> teleprompter trump is a lot more stable than non-teleprompter trump. with the equity market is probably most prone to is any

description of nafta, change in trade policy. weret last year, we pricing in with a high probability some disruption in trade. that was reduced through the last couple of quarters. we are no longer pricing in any trade disruption, so i would highlight that as a major issue for the equity market. otherwise there is not a lot longer term from the president or out of washington that can derail progress right now. david: how many times did he mention 401k? >> that will probably not,. what will come up is the fact the equity market is up and the economic data is up, and i think there will be acting on the back that we have a much stronger economy today than a year ago, a much higher equity market, and why is that? the president will say it is

because of policy. --id: it is not for a one ok 401k. it is bonus checks. thank you very much. thank you both for being here. you want to stay with bloomberg tomorrow. i will be live for complete coverage of the state of the addressed 9:00 p.m. right here on bloomberg tv. the teleprompter and david would not be friends. coming up, we talk about the busy week ahead and the bonds selloff. this is bloomberg. ♪

alix>> this is "bloomberg daybr: americas."

thefi is agreeing to buy ablynx 44 $.8r billion -- 44 $.8 billion. buy rock has agreed to capstone paper and packaging for $3.4 billion. capstone investors can take cash or shares for their holding. the new ceo of easyjet is taking a pay cut. his salary will be cut from $1 million to $996,000. that is what the former ceo was making when she left easyjet. a 52%rline says there is gender gap in pay that has to do with the overwhelming number of men who are pilots. that is your bloomberg business flash. david: president trump delivers

his first eight of the union address tomorrow night in washington and although he one of those been good time reviewing his successes over the past year come investors will likely focus on what comes next. we welcome the director of policy research for compass point from washington. let's talk about what comes next and let me start with trade, because there is a lot of focus on trade, the nafta negotiations going on, but more broadly would we expect to hear from the president tomorrow night on trade question mark >> i don't -- trade? >> i don't think we will hear much be on the broad platitudes we have heard for over a year and america first strategy. i don't think he will offer that much detail on nafta or any of the other side agreements that are ongoing. tomorrow night is more about a victory lap for the past year when it comes to tax reform and the market success than it is a look ahead at the administration's actions over the next 12 months. david: we heard president trump and davos trying to reach out to the international leaders and

talk about america is not alone and if we grow, everyone grows together. do we expect some softening in his stance and that he will move towards the middle? has been a fun conversation as to whether we will see "teleprompter trump" or "twitter trump." if we operate on the framework that the president loves positive press, my bet is we will see teleprompter trump tomorrow evening them a but that does not mean twitter trouble go away. he will be there after the speech in the morning after, so we will have a pretty bland come typical state of the union address that will go through a litany of the administration's accomplishments and hopes for the year ahead without much in the way of substantive policy. david: one help no doubt will be infrastructure come some sort of plan.

chance ofny realistic a significant infrastructure bill coming out of congress this year? see it. i do not i think republicans and democrats while they might agree generally on the concept and the need for infrastructure spending, there is literally no agreement on how to pay for it. simply is not enough urgency on capitol hill to cut thecheck necessary to fund broad-based infrastructure plan that the president will talk about tomorrow night. david: that pesky little deficit. thank you so much for joining us. is our nextg us now guest. good to see you. what are you watching question mark -- watching? >> we have been focused on trade issues. there wasf weeks ago an expectation nafta would be a focus point in february and march, but the tone seems to be

shifting. i'm not just talking about davos. climaxesg of these seem to be postponed perhaps until after the mexican election , so the nafta tension is perhaps less a cute than it was a couple of weeks ago, and the trade tension has to do with china. already have the solar pound those and dishwashers -- solar panels and dishwashers, but the idea that the united states wants to retaliate against of an electoral property is the big win, because the amounts are bigger than the specific product categories. i don't think that it will be in the state of the union, but that is the big talk to -- big topic. david: not aluminum, not steel? >> if you look at what the u.s. imports of these metals, these

billion to $1510 billion in each category. if you talk about retaliation needed to be at a similar size for intellectual property, we are talking hundreds of billions of dollars, so a totally different scale. that is the key thing to watch for investors. announce anything specific in the state of the union, but if there is tough rhetoric on china in that speech, that will set the stage for something later on. alix: the stage is what we are market.at in the equity weaker today, but the bond market finally getting a boost. are you buying bonds or shorting them? hit 1% in then we , everybody said this

is the short of a lifetime. we are now at 66 basis points. we are still incredibly low yields. the european economy is growing the best in the last 10 years come much better than anybody thought. forecasts revising its . we still have a policy setting that is an emergency policy setting, so there is a disconnect there. i think that means the structural fundamentals for bond yields will go higher. maybe people in the market are short now and it will take a well before we get there, but from a structural, fundamental perspective, these bond deals are heading higher. alix: you will be sticking with this. much more coming up on that. also, reports of sexual harassment for stephen wynn hit his stockard. we will talk to one person about why he kept his high rating on

the stock, next. this is bloomberg. ♪

david: reports of sexual harassment by steve wynn on friday hit wynn stocks hard with the parent company down the most in 13 months, then extended into in chinese casino operations macau, where the stock is falling as well. an analyst is with us now who and has notting backed off. explain your thinking on wynn. harassmentxual allegations have created a major overhang, serious allegations for sure, but the main exposure for wynn resorts comes from a cow, where they get 70% of their operating cash flow. as long as it does not spread to a potential inquiry the top

regulator over there, we are confident this could grow over. david: the board is talking about an investigation. if the board replaces steve wynn , what would that do to the stock? >> that would be disastrous. the company has said steve wynn 's the static vision and his integral efforts are to success. the loss of steve wynn could actually impair significantly the company's competitive position. that is the number one risk factor the company has identified. into thehat going stock. that is why a lot of investors are concerned the potential follow could be damaging based on steve's vision and driving force behind all the projects they are pursuing domestically and internationally. alix: something we have not seen in other companies where these allegations have come out is that it is going up to the board.

where was board governance and shaking things up there as well. >> we have taken a close look at the wynn resorts board. it is less than ideal situation where you have a minority shareholder in steve wynn who has undue influence and there are 10 members in a board, four are designated as independent directors. there is only one woman on the board. steve himself has reappointed the lead independent director robert miller, who ironically is charged with leading this investigation the board has just launched, so there is a lot of concern is to whether you will get a really independent review from the board. having said that, i think we are comfortable at this point that the company and the potential consequences of steve leaving the company could ultimately lead to a situation where he

could survive this. on the boardthe members, there is clearly a management fail here. a lot of these were reported up and they went nowhere. that should be a red flag to board members that something is going wrong in the way the company is being run. >> absolutely. this problem appears to have persisted for three decades. i am caught by surprise i have to admit come and especially with all this movement in society. it, themes down to types of scenarios, this is something investors are wary of. it remains to be seen. alix: great to see you. thank you for coming in. still with us is our guest. i know this is totally out of how you look at the market, but how do you look at these allegations as they come in when they relate to the ceo of a major company? >> this shows the stock going

down. they have to take this seriously. banks for aglobal number of years. we had training in avoiding ethical conflicts. spread toentually politics as well. allill have this going on around the world, but it is something investors have to take seriously. alix: you can make the argument that it is still the underlying fundamentals. it reminds me of bp, where you had some investors were still bullish on bp, as long as you saw the oil pumping in the gulf of mexico. david: it will be harder for steve wynn. should these companies traded a

discount? >> it probably depends on who the person is. alix: warren buffett, maybe not. steve wynn, maybe. cofounder and partner will talk trade and immigration and how it will impact the tech industry. this is bloomberg. ♪ we use our phones and computers the same way these days.

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it's a new kind of network designed to save you money. call, visit, or go to xfnitymobile.com. alix:alix: this is where we stand in the markets two hours before the cash we finally see higher bond yields take a bite out of the equity market.

s&p futures are off by .3%. the dow is off by .1% and this is the potential. look at the five-year bund yield trading at zero. in the u.s.yield continues to grind higher. , it's having an effect on the dollar as well. strongerr is modestly against all other g10 currencies. means weakerar commodities. we do have stronger industrial commodities, but crude is on the back foot, down .7%. david: lockheed is out with earnings in a beat on earnings and revenue. the estimate was going to be four dollars per share. beat, we havee not seen the preliminary data yet.

we are anticipating they might have to do the f-35. they are up almost 4% in premarket trading. this round of nafta negotiations will conclude in montreal with some progress reported on some parts of the deal. for thel be looking united states committing it to continuing talks instead of pulling up. michael mckee is up in montreal. he spoke with sandy levan. he is one of the lawmakers of the talks. been a lot of talk about whether the u.s. would walk away from the talks. did you get any impression from the ambassador? i don't think you resolve problems at this point by walking away. it put you in a bad position. i think we need to continue to work. i think the u.s. will continue

to work. david: we welcome mike mckee now coming to us from montreal. tells about what the overall tone is. we are hearing things are getting more encouraging. mike: it's hard to know. officials from canada and mexico are optimistic. it's going to depend what the u.s. representative thanks. critical of the canadian and ma mexican negotiators. he said there would not be much point in continuing to negotiate. they have met several times since then, most recently in davos. his heiser met with negotiators. you heard sandy levan's comments. he was very grim going in and out of the meetings. a few moments ago, he came into breakfast right behind me and wished me a good morning.

heard fromrst we've the u.s. trade negotiator. we will hear what he has to say after meeting them later this morning. they will hold a joint rest statement and we will find out if he thinks the proposals the canadians and mexicans have made our enough to keep the nafta talks going. david: they have actually agreed on a few issues, but some of the big ones are left out there like rules of origin to be decided. what comes next? mike: they will hold around in mexico city in february. one is scheduled for washington in march. they have to decide if they are going to keep going or not. treaty, theyn the close the book on a three of them. there is a lot left to go. to have those big red lines. they have the rules of origin. they have dispute resolution.

there is a lot still to talk about by the first of april. the president has to decide if he wants to request more negotiating authority from congress. they may suspend the talks through the elections and pick up again in the fall. david: it's good to see you. alix: stay warm up there. the cofounder.y impact on trade so far? : most of our companies are internet explores. we are looking for an even playing field. thate looking for support we can export products around the world. do you feel it's a detriment now, the way policy is? are you looking at something specific? to: i don't want anything

impeded. if you go to china and put up a computer, what you see looks just like windows, but it's not windows. alix: we have some breaking news that just came in. buying dr pepper snapple. it's $103 a share. dividend.be a special i'm trying to get the actual price. i don't see that. david: no. alix: it looks like they are going to be buying dr pepper snapple. holder,re a dr pepper you will get $103.75 per share and is tax dividend. get more details, we will update you on that. that's an interesting development in the food and beverage space. for example,ion

how has that been impacting the tech sector, especially you. ian: every company in the venture space be at apple, arebook, google, tesla, we all starting by first and second generation immigrants. we are very cautious and careful. we want to support immigration. it's the fuel for our business. david: you've seen the reports about the plan that president trump will give at the state of the union that will allow 1.8 million of the dreamers to stay in return for $25 billion for a wall. is that encouraging to you? is that a way forward? ian: i think the wall is silly. david: but what if it's the

price to get the 1.8 million? is it worth that? ian: i think the u.s. economy $25 benefit more than billion. david: are you finding it difficult to get here in the country? ian: yes. it's really troubling. if you want to hire a phd who isn't an american, it can take two years. sometimes it's forever. the u.s. economy has a great effect. people want to come here. that's our core strategic advantage. we put a blocker up and they can't make it here. it's terrible. they are defeating ourselves. have a problem. how is it affecting you? >> we have a couple of issues. we do need people with very specialized skills. thesees forever to get

visas approved or the green cards approved. it's worse it used to be. tapelike deliberate red but in the process. the process is slow down. ofs sort of the opposite trump's official agenda to deregulate. there is more implicit regulations in the space. these are highly qualified people. it's bad for the economy. david: that sounds like jens: with theould agree president. you can get these phd's in. having moretion to immigration regardless of whether it's merit-based or not and if it's the economy. alix: how does it affect you? does it actually hurt your growth, does it materially hurt or is it going? aheadit's hard to plan

how to grow fast. it also starts to impact your ability to attracted candidates if they know it's a hard process, they do they won't apply. we already reduce the pool. it's getting more and more of it. being advantage? who are the competitors around the world taking advantage of their expertise? canadians,inese, the eastern europe where a lot of the talent originates from. those of the bigger markets that have the biggest advantage. i think the big impact is our companies are looking not for an average engineer. engineer.op 1% you can't find that every day in new york city.

you have to relocate people. you have to have a global trade for those people. alix: thank you so much for joining us. it's a busy week in the economic front. you have the fed meeting wednesday. you have jobs data coming up on friday. we get the monthly pce. what is it going to take for the dollar to get a more sustainable boost? jens: this is been the big question of the last several weeks. i think actually if we saw something different on inflation, that could change things. one of the reasons why the dollar has treated so poorly is the fed still has this inflation a concern. if it was the case that we could say we've met both our targets, unemployment is low, then we would start to think about a much faster pace of tightening.

get that. on the other hand, there is less inflation in europe and some of the inflation over there is theing hurt versus here in u.s. it could take a long road to recovery. speaking, in the last year or so one of the most important things in trading currencies is not the official inflation targeting different economies but what is really in practice. in the ecb's case, they are fine with core inflation up to 1.3. that is great progress. 2.0 or something close, that makes a big difference. we had a big move. i think positioning is getting stretched in some ways. the euro tends to trend.

if these signals from the ecb continue, it's hard to find this trend. alix: it's great to see you and always great to get your perspective. a follow-up on breaking news. current green mountain is buying dr pepper snapple. existing shareholders will hold 13% of the combined company. gete holders will also $103.75 a share in a special cash dividend. the net debt should be pretty high. david: you can't trust me with math. i think the math is 180 million shares. $18 billion more or less. alix: you did all that in your head? david: i think that's right. we will try to come back and confirm that.

a theft of virtual tokens is rattling digital currency. you can tune into john kanaan jonathan ferro and then pimm fox joins tom keene. bloomberg surveillance can be heard in the united states on sirius xm radio. live from new york, this is bloomberg. ♪

>> coming up in the next hour, the equity and derivatives strategist. and now to your bloomberg business flash.

google has to defend changes to it shopping service that have rivals demanded more antitrust. they have to release their first report today. another blow to the reputation of german automakers. in industry sponsored tests diesel exhaust. they condemned the experiments in the strongest terms. done by a group founded by tom or. ikea is calling their kinder one the greatest entrepreneurs of 20th century. his idea for ikea was to make furniture that was affordable and easy to transport. his $59 billion fortunes made him the eighth richest person in the world. alix: now we're going to cover the wall street beat. a quick -- crypto crown affair. someone stole 500 million

digital coins. the government is scrambling with how to deal with. some democrats are calling for steve when to give back all the money he raised as rnc chair. there is sentiment among the brexit bankers. ceos and davos are feeling good. they are all positive. they are great. joining us now is jason at kelly. let's talk about this deal. this was not a deal around the rumor mill much. personal.is is i grew up a soda brat with coca-cola. andng this coffee company green mountain has a lot of those pods running around, to buy dr pepper, it's legendary. alix: it's a position of

weakness or strength? david: they have been on an acquisition. they've been acquiring big companies. alix: why the diversifier? i guess you have snapple. david: they are going into sugar drinks, which is interesting. coca-cola is going away from them. jason: bankers are getting active. i know will be talking about this. david: moore m&a. million that of gone missing from a bit going exchange. i thought this was supposed to be more secure? this is not the first in. where seems like a moment every crypto, this is what we were worried about. back smugs sitting and saying this is not as awesome as you said it was. one of the big themes here is

this goes back. this is what really moved people a few years ago about the notion of going and crypto currencies. alix: it was kept in a hop wallop. it's connected to external networks versus a cold wallet. you have a lot of protection around where the coins are checked and traded. why would you do that? jason: that doesn't seem very smart. david: here's a list of all the different thefts. it's a lot. alix: government is always so far behind these technological advances. crypto,n the case of they say the government doesn't need to be involved. then one the government involved until they get robbed and now they need help. david: let's turn to steve when.

n. wyn he has been a big money raiser for the republicans. now he had to step down from that. some democrats are coming backrd, he should give donald what he contribute but all the money he raised, which would be a lot of money. jason: republicans over the weekend were saying it's fair to say he needs to give back the money. the money that he donated. david: which was not all that much. raise the money he did does feel like a step too far. you can see the argument. people were not donating it to steve wynn.

it's hard to see how that goes. david: when it was harvey weinstein donating to democrats, republicans said this all has to go back. the democrats are saying ok fine. fear. that's the real alix: that's how you do it. our last story is the banker story from london. a confederation of industry polls surveyed financial services firms and found people are bummed out at the biggest level since 2008. it contrasts from the happy-go-lucky feel of davos. jason: it changed pretty dramatically over three months, over the last quarter. it dropped from 13% saying they and 35re optimistic

percent less optimistic. it's amazing how quickly it shifted. people are starting to get used to the idea. david: this all goes back to last wednesday at davos. >> we are continuing to be the matter what happens with brexit we will continue to prosecute our business across europe as we do today. alix: that reminds me when i talked to people from goldman. they say frankfurt is so good. we are looking forward to it. about he was talking across europe. that is starting to head home for people in london. the bank heads whether it's whoever,nkfein or they've not been specific and haven't really committed to these other places as much as they have over the last few weeks. hearing that optimism from davos does make things ok.

it may be ok for us and everyone has moved on. david: next, we will talk about what i'm looking at and that is bob mueller's investigation. ken president trump really fire him? what would it really mean? tv .ck out you can look at our charts and graphs and interact with us. this is bloomberg. ♪

david: the future of bob mueller is what i'm watching right now. president trump thought seriously about firing him and back down with his white house counsel said he couldn't. lindsey graham the republican senator went on abc and this is what he had to say. >> i'm sure that there will be an investigation around whether or not he did try to fire mr.

mueller. we know he didn't. we know if he tried to it would be the end of his presidency. david: those are strong words. alix: would he do it now after he backed off the first time? david: richard nixon did do it. he thought about it. to tunet want to forget in to our coverage of the state of union at 9:00 tomorrow morning. -- tomorrow night. next, his call on the bond selloff. this is bloomberg. ♪

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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. alix: leaping yields, the bond

selloff has yields surging to multiyear highs and -- admit a week of dizzying earnings. the fomc will make a rate decision, the last under chair yellen. -- sayssachs met access it may not be the sweeper meeting everyone is expecting. president trump will make his state of the union address. which trump will show up? david: we will find out. welcome to "bloomberg daybreak." i am david westin with alix steel. here is what's happening to the market an hour to half before the cash open in the u.s . a final rising yields helping support the dollar on the margin and taking a little bit of a bite out of equities. s&p futures down by seven points after the best start of the year since 1987. euro-dollar a little bit weaker down 3/10 of 1%. the story of what's happening in the bond market and the treasury market, a five basis point rise in yields. 2.71. i am waiting for the tweet from

bill gross. it's the deal of the morning, curate greenmount will buy dr pepper snapple -- k buy drreenmount will pepper. the question is, why? why did they want this? david: they have made good acquisitions before. it's a good deal and a january that has had a lot of good deals. brieftime now for morning . at 8:30, we will get the latest pcu numbers, the numbers the fed pays attention to. at 11:20, a nafta news conference will be held in montreal. at 11:30, president trump will be holding a swearing-in ceremony for his new apartment of health and human services secretary alex a czar. alix: it was -- it's all about bonds.

bridgewater associates chairman and founder told us last week in davos we were already in a bear market. >> assets are more sensitive. a 1% rise in bond yields will produce the largest bear market in bonds we have seen since 1980, 1981. >> has that bear market started? are we in it? >> i think we are in it. david: stewart warther is joining us. what about this bond? selloff. ? we are seeing it around the world it feels like. stewart: i think we are and i think we are in a think comments from the ecb are not helpful. what we are looking for is after relentless flattening in 2017, potentially a steepening, particular the 10 year sector. are is what rate strategist looking at. on the equity side, i think the question is when does that spillover especially when you think about the cost of equity, it's essentially the 10 year

yield plus equity risk premium. i think we are starting to see signs of that this morning. 270 we all the way up to did not have sensitivity and now we saw weakness in the utility sector. finally i think we're starting to see a broad market decline at least on the back of higher yields. be a how can you want to seller of equities in an earnings season that has been strong? stewart: i think part of that has to do with the fact the market priced in so much of this season. if you look at the s&p come up about 5% relative to earnings expectations. forou think about earnings 2018, the market is pricing in a stronger year. what is that mean for 2019 and 2020 and when is the next recession going to be? the fed continues to hike, earnings can only grow for so many quarters until we get that next recession. on that basis, how much can the market rally from here? alix: what if it is based on real fundamentals?

i'm trying to bring up a chart of breakevens because you can see -- higher inflation expectations, we see a lot of companies use tax reform to raise wages. those are fundamentals that with the just higher bond yields and potentially more hikes. ,tewart: on that basis especially around the topic of tax reform, our economists are predicting a .5% gdp increase in 2018 and a lot of that dissipates as growth slows and at the same time, you have higher inflation, which is relatively negative for the economy. i think the reason why we are on growth overall is the fact that you have this tax plan happening at exactly the wrong time in the cycle. you might get this late cycle investment splurge and we haven't even seen it at least in structures, from oil investment. we might get more details as far as shale plans, but i think it

i think it'sbut hard to make this bullish case with equities at this point. futures,ok at dividend dividend019 or 2020 future and relative to the current level of the s&p price, it's essentially pricing more and more multiple expansion. on that basis, what kind of market are we in? can we get more multiple expansion? i think that's a tough call. david: why did your economists tell you the growth slowdown will incur pressure cooker? -- will occur? stewart: we could see increased productivity, but after years and years of relatively low productivity, it's hard to imagine a shift to a higher regime. we have had some flattening and a small uptick in productivity growth, but it's hard to imagine going into some boon scenario

especially when the labor market is so tight. i think that is one of the key factors that gives us pause is the fact the labor market is tight and if you look at q4 domestic final sales, we are already operating above full capacity so how much further can we go? alix: fair point. the question is do we wind up seeing a broad selloff or sector rotation? i want to get your take on what happens to value versus growth. the blue line russell ones out the growth and the white line, value. everyone keeps saying value will outperform and it continues to be growth. 2.72% 10 year change this conversation? stewart: this is one of our key calls for 2018 on the equity side, nasdaq volatility will continue to be high relative to s&p. this is a function of rates -- grades. biotech is a great sector. he look at multiple years out, what drugs are in the pipeline and discount them by the

probability of happening and the 10 year yield or whatever respective yield. when rates go higher, all the sudden companies mechanically -- share prices should be lower. on that basis, we think nasdaq should continue to be volatile and there should be sector rotation or style rotation from growth to value. we are in a momentum driven market and that's the problem. just like the fact that bond yields work relentlessly going to -- going lower for 35 years, it's difficult to break out in a higher regime. for years and years people called for europe over the u.s., value overgrowth, and we haven't seen that. i think finally the key differentiating factor will be the increase in net supply and g4 government bonds. simple supply demand and who's going to buy that roughly $600 billion increase in that issuance? either yields argan have to rise and it will be reverse portfolio rebalance affect -- either

yields are going to have to rise and it will be reversed portfolio rebalance effect or a broad market level rebalance. david: interesting. stewart warther will stay with us. coming up, nafta progress. we bring you the latest from montreal. this is bloomberg. ♪

♪ >> this is "bloomberg daybreak." i am haley lines. curate greenmount -- keurig greenmount and is adding soft drinks to go along with coffee. they agreed to buy dr pepper snapple. the combined company will be run by ja be holdings, the vienna-based investment holdings. beaten outn out --

of it off -- potential blockbuster drug for blood clotting disease. they will not make a revised bid. west rock has agreed to buy capstone paper and packaging for $3.4 billion. capstone investors can take cash or shares for holdings and that's your bloomberg business flash. david: this round of nafta negotiations will conclude today in montreal with a progress report on some parts of the deal, but there's a long way to go. what many will be looking for is a signal from the united states to continue talks instead of pulling out for it michael mckee spoke earlier in montreal with sandy lebanon, one of the lawmakers in the talks. >> there's been a lot of talk about the u.s. -- whether the u.s. can walk away from the

talks, whether the president wants to stay in. did you get any impression from the ambassador? think it would solve problems at this point while -- by walking away. if he gets to a bad position, i think there needs to be continued work. >> you think the u.s. will stay and work? >> i think the u.s. will continue to work. david: mike is with us from montreal. what do we here at of the u.s. delegation these days? alix: the real -- mike: the real question is what does robert lighthizer think of negotiations that have gone on all week. the m b suter -- the ambassador -- walking out and would not comment. and we will see later this running after he meets with counterparts from mexico in bilateral talks and addresses the media at 11:20.

a lot of progress made according to the canadians and mexicans on minor issues, but still some of the biggest, toughest issues remain and the question is if the u.s. wants to continue working on those at the meeting next month or has the trump administration had enough? david: the administration has them tous up for walk away. wouldn't this be a shock if light heiser said that is it, we are gone? ake: it would certainly be shock to investors who have priced in the idea that talks will continue and very likely the end suspended from of march through november after the mexican and u.s. elections this year pick up again. on onenald trump saying end we will cancel it on the other end things look good, it's hard to tell where they are going with this. remember in washington, couple months ago, lighthizer said he was disappointed from what he heard from canadians and

mexicans. the question is have they improved their offer enough to keep going and has the president seen and heard enough from american is this and agricultural interest that nafta is in their best interest, in the best interest of the u.s., that he will back off of his talk of pulling out of the treaty? david: we will come back in three hours time to find out the answer at 11:20 eastern time. alix: still joining us is stewart warther of b.n.p. paribas. trump will get his first state of the union address tomorrow night. is there an asymmetric risk in the speech tomorrow? stewart: there isn't and if you look at price action around the trade topic over the last week, emerging market equities and dollars was the best performing global index last week, up 3.5%. part of that was if you look at it like a relief rally around nafta. i think as that sets up this week and the potential for some hawkish trade rhetoric potentially at the state of the

union, that is negative. particularly we are looking at that and if you look at nafta and the dollar-peso, that has improved somewhat. we are down trading below 19 and on that basis, you are skewed one direction. we know the infrastructure bill that trump proposed is likely to come up in the address and he's likely to discuss at least recent stock market gains. that is behind us. it's -- the question is is it credible and what kind of trade policy talk will he discuss? alix: what do you think is built in for an infrastructure bill? stewart: honestly, not much. alix: there could be a smidge of upside risk of there? stewart: the question is what kind of bill would be credible. there's the discussion of having the federal government fund 20% and that leaves states funding the rest of it and potentially public-private partner interest. i think the rest of that is very

difficult to pass, especially given the deficit expansion we had from the tax bill itself. david: what are the markets pricing in in terms of immigration and the wall? we have another deadline, february 8, they might shut down the government. what are the markets anticipating at this point? alix: gosh, again? stewart: we have already seen small reaction because we have the government shutdown potentially getting closer to the next debt ceiling debate and on that basis, it's incrementally a more important event. if you look at government shutdowns over history, it's not necessarily a market moving event on average. however, there has been considerable dispersion to the upside and the downside. the more important event is potentially the debt ceiling potentially as it relates to the u.s. in the credit rating, etc.. stuart werther, thank you very much for being with us. coming up, keurig greenmount

agrees to buy dr pepper snapple, combining coffee and soda in a giant beverage merger. more on that next. ♪

♪ alix: a busy monday for mergers and acquisitions and one we are highlighting is keurig greenmount to create -- agreed to combine with dr pepper snapple. it is a -- $103.75 a share. you nailed it, use it $18 billion. 38%.pper shares -- up walk us through the why of the deal. need aink we see -- we few more details and we will have the call it about 10 minutes and we will see more into keurig's strategy. if your member, coke had a stake in keurig before it was acquired in 2016 and they had this venture to distribute soda like keurig distributes coffee in

these singleserve doses and that was a threat to soda stream, but it didn't work out and they scrapped that venture. it's interesting to see if they try to do that again or are they reviving the singleserve soda market and trying to be competitor to sodastream? david: in general, globally, they are moving away from carbonated beverages, away from sugary beverages. actuallyr pepper acquired a brand last year that moved into the healthier side of the drink market and that has growth source for them and i think that's part of the appeal as we see the beverage market shifting to get into these soda alternatives. and pepsiepsi -- coke as well, but dr pepper has been making inroads. i think it's about expanding into different areas of the beverage market. sort of highlights high up in

their press release the distribution opportunities and how they are basically going to cover all points of sale of the beverage market. i think it's about expanding. what i am interested to see is how does this factor into jeb's overall food and beverage strategy because they bought panera, krispy kreme doughnuts. now your throwing in dr pepper. how does that work together? david: and they are not publicly traded. it makes it hard to make -- get your arms around how big are they? brooke: they are massive. keurig was a big deal, this is $18 billion. they are a behemoth in the food and beverage industry and it will be interesting to see how their strategy plays out and you have to wonder, did coke did get flat-footed here because they executed the strategy and they didn't and you have some becoming in behind them to do it. alix: that's a good point. does this me any -- mean anything for m&a in that sector? brooke: there has been some

deals. they are not huge, but i think the food and beverage sector are trying to find these pockets where there is growth and a lot of times that means healthier upstart brands. there are not necessarily going to be megadeals. campbell did a couple of deals recently and i think there trying to find -- they are trying to find healthier growth. thed: -- strategy to take smaller brands. the thing i find fascinating is we hear so much about how -- might do further acquisitions -- and you don't hear so much about jeb. brooke: i think they have gotten more in the spotlight given the deals they have done. there's a lot of speculation for a while they could buy a soda maker and that hasn't played out. could they now start thinking about that now that you start seeing more m&a in this space? alix: thank you so much, we really appreciate it.

other stuff we are watching is wynn. the reports of sexual harassment hit the stock hard. the company was down the most in 14 months and then shares of his chinese casino operation falling as well. joining us is trip miller of ilaneing partner -- gua partner. >> thank you for having me on. as a father of two girls, i take these accusations seriously. we have watched stock go from 60 to 80, so we are pleased on the business front. there's a corporate governance story versus business in transit value story. i think while these allegations are very unsettling, we are going to be very interested to see how this plays out. the company already announced a special committee led by the only female member of the board. we would love to see them take a little bit more direct action in

dealing with this issue. in the past, they appointed the former director of the fbi to investigate a board member. we think something of that level to be included in this investigation would send a message to the market and shareholders that they take this seriously. david: from the report, it's clear that got a governance problem of some sort. can they fixed that problem with steve wynn at the top? make a great you point. obviously he is chairman and ceo . in a company like this, it could lead to problems. we have seen other companies, federal express, berkshire hathaway, where you have a ceo and chairman in the same role and it worked well. i don't make a blanket statement it's something that should never happen. here there is clearly a culture, his name is the brand led by him and so we wonder if these allegations have merit, then it certainly permeated the board and on down.

i think they have definitely got to look at this seriously. potentially bring in someone from the outside that has a high integrity caliber that the world will look at an go, ok, they are getting to the bottom of this and they want to pivot. whatever happens with steve wynn, the brand is still intact as far as the irreplaceable retail assets they have in a cash flow off the business. i think there is an investment story versus a culture story and i think the two things need to be viewed somewhat separately although i would argue that with the allegations going on, i am sure this will not help their convention business in the u.s. anytime soon. alix: give us the 411. will you be buying on weakness? will that be your strategy is a shareholder? trip: i think we will take a wait and see approach. this is a serious situation we will watch closely and we want to see how the corporate governance plays itself out in the short run.

alix: really good to get your perspective. trip miller, founding manager of guilane partners. -- in aget the latest few minutes and the market reacting to higher bond yields. s&p futures down by seven points. bondhy could be in the market. you can see treasury yields moving up 2.71% and the german five-year blend year to -- bund yield over zero, positive territory for the first time since 2015. all of this supporting the dollar on the margin. what will happen with the eco-data? this is bloomberg. ♪

♪ alix: this is "bloomberg daybreak." we are just moments away from economic data dropping and the story today, higher bond yields, stronger dollar, weaker equity market. that kind of sums it up as

rising yields in the u.s. and europe finally take a point -- bite at equity markets. you can see what we are talking about in terms of the rise of treasury yields and the german bund yield positive for the first time since 2015 as the dollar finally gained a little bit of steam to read the data is out. a couple of things we're looking at. personal income coming in stronger than estimated at .4% for december. personal spending in line with estimates, .4%. november was revised higher as people ended up spending more. data, core pce month on month up .2%. year on year, that level means 1.5% in line with estimates. a stronger personal spending rates sort of what we can assume from the gdp rating that also had final sales to end producers moving up as well. as income is steady, what is that mean for the savings rate? and inflation still not lighting

up. david: exactly. despite what we hear -- alix: that the trajectory seems to be moving higher. david: not quite showing up, but the survey was good across the board. the markete on reaction, 10 year yield off the highs of the session, but still at 2.7% s&p off the lows and the dollar index, not a big mover either. not a material shift in the market's thinking yet. david: let's find out what this means. we will go to princeton, new jersey, bloomberg's interest rates strategist, ira. ra: these personal income and spending numbers are usually close to estimates when they come in the last quarter -- the last month of a quarter because we already got the gdp number friday. you can back up things and kind of know what these are. i think importantly, it's the inflation data and the fact that that remains kind of at this

steady-state and the high 1.7% a bigf range that isn't worry for the federal reserve and whether or not they are going to hike rates. today's market move i think was in anticipation of higher inflation and certainly we broke some technical levels and there's kind of a void of where those technical levels reside. david: talk about that. we hear increasingly, including goldman out with a note this morning saying at the fed meeting, we don't expect a change, but maybe some more hawkish talk when we hear what they have to say on wednesday. why is that? is that because of technical? ira: not so much the technicals, but i think the hawkishness comes from the higher inflation breakevens. one of the moves for the 10 year treasury's you have a move from 1.7% inflation expectation over twonext 10 years, almost point 1%. that's a 40 basis point increase

in inflation expectation by the market. they can say the market is expecting higher inflation expectation and the data has been reasonably good so we can of it -- be a bit more hawkish. the market is pricing for them to meet the dobbs again. thatnk that is something market participants are taking notice of. alix: i want to get more granular on the detail. the savings rate in december dropped to four point -- 2.4%, the lowest since december of 2005. it does that boat not well for consumer spending? boder they -- does that not well for consumer spending? ira: that is one of the worries from a policy maker perspective, will the savings rate get too low and will people be spending more than they are making? one of the things we look at is consumer credit. when you look at consumer credit

growth, you can see why people are spending more than their income and that's basically because they are willing to borrow for the first time since the credit crunch. i think that is really one of the reasons why the savings rate can be low even with weight growth being muted. alix: great to catch up with you, thank you so much. for more on what all this means for the credit cycle, we are joined by a man who knows a runs kkr'so -- he global credit business. his team disclosed the second $2.24 billion focus on private corporate debt and mezzanine lending. good to see you. general. start are you positioning for higher inflation? nat: inflation is not really our concern. we are positioning for higher rates and as we heard from the economic data, the increase we

reallying in rates is not driven by core inflation, which is generally the driver. i think what we are seeing is the rollback of qe and some sterilization of the money supply resulting in higher expectations around rates. we are preparing for that, but not really seeing significant evidence of inflation in the real economy. alix: if we wind up having a surge in rates, we take a look at the corporate credit market inside the bloomberg, triple c rated junk bonds are at the tightest since 2014. that is the white line. single b ratede -- nat: the real catalyst for change would be a couple fold. first of all, a negative trajectory in the real economy. if we start to see the fall cycle again, that would be the biggest potential concern. we don't see that. economic data, you saw it this morning and the data that came out is really positive. we would be surprised in the

near-term to see that manifest itself although we do see scope for potential price volatility. this unwind of qe we see a little bit of impact in the treasury market, the bond market. we think there are potential knock on effects as you see the central banks pulling back from the treasury market and certain areas of corporate credit they played in in europe. you can see that travel to different parts of the corporate credit market as you see that government bid erode and then you see that travel to different asset prices -- classes. it can move prices. alix: how does this create opportunity for you guys? nat: we generally are cautious. you see the charts where you got spreads of the all-time tights and you want to be circumspect. there are pockets of opportunity, so we are focused on a couple of things. first of all, complexity versus

simplicity. that plain vanilla bond in a high-performing company is priced for perfection. there are sectors like health care and retail where things are more complex and investors are confused about the direction and we are fouled -- we are finding value in those locations. -backed market is interesting to us. we have this theme going where the banks have pulled back and i continues to yield opportunity for us. basically you put money in a startup firm that ends up investing in other businesses? nat: that's right. we have seen a series of regulations and you've seen the banks reduce leverage the smaller balance sheets and that creates opportunities for lenders like us in many places where we are addressing that by creating platform companies to go out and make loans in the mortgage space and the aircraft leasing space. we are finding really good returns. alix: doesn't rollback of

regulation here in the u.s. and banks take on more risk change the scenario? nat: yes. thinking about that quite a bit. a lot of the opportunity is european and you are not seeing that discussion of regulatory rollback in europe. a second is a lot of the change of function of regulation, but of the d capitalization of the banks. arecrisis, -- today they nine or 10 times levered. finally, whether there has been discussion about regulatory change, the fundamental post crisis architecture remains in place. it creates opportunity for us. david: at what point you become concerned with leverage? public sector, private sector, corporate, household? the level of saving in the u.s. is not at a high level. at what point does that become potential credit risk? nat: i think one of the things

people are wrestling with in terms of where we are in the cycle right now is the duration of the recovery for so long. ofare now 104 months income the second longest recovery in history, but all the data telling us things look good. a lot of the things you are referencing our historical catalysts for taking us back into a recession or slowdown and they are not apparent right now. the flashing warning signs of high household leverage, and not really -- the absolute level doesn't look outside of historical norms. i would say we are not troubled by what we see today, but we are watching it closely. alix: would you take on duration risk or credit risk? nat: i would try to take on neither. [laughter] ist we are telling our teams we should not be increasing our credit risk to get yield. i would rather accept lower yield in the environment and make sure the credit quality is good. we are in a very late part of

the cycle by historical norms and this is a top duration. i think we need to be preparing ourselves for the prospect of a downturn. david: not just in terms of the credit cycle, but respect to the fed back off. to what extent is that really summing that poses a risk for you to have to take into account? -- something that poses a risk for you to take into account? nat: we do best during times of volatility and times of dispersion and when correlations breakdown. in a credit analogy, we are old-fashioned stock pickers. we are not making big macro bets. we do best when this way of of capital that has come in has moved all asset prices of almost upwards. when companies start moving directionally based on fundamentals, that's good for us. alix: let's end on your fund.

you said you were active in europe. take me through the regions you are active in and what sectors. nat: there are two different forms of lenders in europe. one is more primary lending, the extension of new capital to new companies and assets. on coreery much focused developed europe in the u.k.. the u.k. we are approaching with a little bit of caution, more recent economic data has been positive, but brexit is looming and creates risk. the other thing we are focusing on is nonperforming loans. that is more southern europe, so active in spain, italy, portugal, greece and a great opportunity. david: you are active in italy or greece, that must mean you think it will come out ok? nat: for we see evidence it's coming out ok. there has been some fundamental reforms. in greece, i would say it's a little bit more balanced where a

lot of what we have been trying to purchase in nonperforming loans are assets levered to performing businesses and you are not making a pure greece gdp bet. ford: it was -- thank you being here, it was really interesting. we talk with the general counsel of bain capital on a breakthrough in juvenile diabetes. if you cannot watch tv, you can listen to the radio. tune into tom keene and jon ferro from 7:00 to 9:00 and at 10:00 we have pimm fox joining tom. live rum new york, this is bloomberg. ♪

♪ kailey: this is "bloomberg daybreak." you are looking at the hewlett-packard enterprise green room. later today, conversation with will hurts of texas. willpublican congressman of texas. now to your bloomberg business flash. lockheed martin expects earnings to more than double this year. the largest defense contractor will benefit from tax cuts and -35her deliveries of the s fighter jet. lockheed took a one point $9 billion charge related to reduction in the deferred tax assets. hong kong's commodity trader reached a deal to restructure $3.5 billion in debt. half of the debt would be converted into new equity,

giving control of the company to equities. the deal would wipe out most of the equity of current noble shareholders. the new ceo of british discount airline easyjet is taking a pay cut over the gender gap. his salary will be cut from $144,000 to -- that is what the former ceo -- was making which he left easyjet. easyjet says that has to do with the overwhelming number of men who are pilots. that is your bloomberg business flash. david: thank you so much. there's a lot of money going into fighting diabetes. most of it goes to fight type 2. type 1 fx over a million americans -- effects over a million americans. a group of savvy investors have a new way of fighting type one diabetes, combining charitable nations with an investment fund. here to explain it is the chairman of the fund, sean doherty. the --spare time, he is

of bain capital. let's make sure everyone understands type 1 we used to call juvenile diabetes. it's autoimmune where basically your own system destroys the cells that create natural insulin. sean: that is right. about 40,000 people year really their system turns on itself. our son was diagnosed are it he was a healthy infant and then out of the blue his body -- we have to supply 20 47 all the insulin needs he has to regulate his blood sugar. david: my daughter was diagnosed when she was five years old and she is 36 now. it's a very difficult disease. why are we curing it? sean: it's a very complicated disease. like all autoimmune diseases. we haven't really figured out the scientific cause of why some people's immune systems turn on

themselves so there has been a lot of work done on it. there's been a lot of progress in terms of treating the disease and the science is really terrific. i really was the inception of this fund. jdrf and it isas the world's leader in type one diabetes research. the gains have been extraordinary. since my son was diagnosed and your daughter was diagnosed, really it is night and day. when my son was diagnosed, there were only three human clinical trials. now there are only 70. there's virtually no investment in the disease. david: you have a new approach. it's kind of a combination between charitable organization and an investment fund? sean: think of it as providing a bridge between research and investment. we understand this is a problem that only gets solved if private

capital decides to take a role. our thought was there's all this great research and tremendous gains, yet no money is coming to it. how do we solve this problem? we figured it was up to us to take the lead and if we are not going to define how people can make money funding type one diabetes research and finding something that is either going to cure this disease or do some thing that is referred to as the therapy comeying if we are not going to do it, no one is going to do it. isid: you've got quite a few this people interested and participating at this point. sean: we do. the idea is we have to make the case and we have teamed up with a group that goldman sachs, their social impact advisory group because who better to help us define how one can make money in this disease state than someone like goldman? investing are

specific companies at this point could how much of you raised and invested and in what? sean: we now have about $65 million of committed capital donated money. the reason we went with a donation model rather than a for profit model is because quite literally we want to put all of in one basket. there has been virtually no private investment to date, we want to be a catalyst for that. we have a group of people that will pool their capital together and we will not worry about concentration risk the way a for profit would because our goal is to put everything in one place. the goal on each and every deal we do is to attract a source of private capital that maybe wasn't there before. our first measure of success is who are we attracting into this space? we have done 8 deals so far and we are on pace to invest and reserve around $20 million per year and eight deals span from devices to what we call replacement and restoration of beta cell function, the cells

that make insulin as well as one company looking at a vaccine to prevent this disease once and for all. alix: what has been the success rate based on if you are attracting larger private capital coming in? have you noticed a lot of that? sean: i will be honest, it is anecdotal. we have 20 institutional partners that have invested. we are starting to see a lot of traction on things like the jpmorgan health care conference where different pharmaceutical companies and life sciences firms are noticing what we are doing because there really is a great market opportunity. there are over 80 autoimmune diseases that we know of and we are finding that the science -- there's a lot of commonality against these diseases. in many cases, much more than there is a commonality between type 1 and type two diabetes. autoimmunity's share a lot in common, which is why the heck are people's immune systems

turning on themselves? another interesting thing we notice in the science is the fascinating field of immunology fighting cancer. there are all sorts of companies and billions of dollars of investment in oncology and him you know oncology -- immu no-oncology. there is science out there maybe we can turn down the immune system in order not to attack the insulin cells. that is one thing i think this t1d fund will be terrific. we are not just building on the research, we are finding where the money is going and attracting more money. alix: really interesting. thank you so much and good luck. sean doherty. thank you for joining us. coming up, earnings season hits the first of a two-week peak today. more than a quarter of the companies on s&p will be reporting.

thursday will be the next big day with tech earnings. if you have a bloomberg terminal, check out tv . you can interact with us directly. you can send it to -- and ask a question or reach us on twitter. this is bloomberg. ♪

♪ here is what i am watching today, that is earnings. really it's a whole week kind of thing. what we are seeing in terms of earnings upgrades. we make a lot about how earnings had been upgraded into the corridor, which is very surprising, but a lot of that had been large caps. the s&p is the blue line and takes a look at earnings revisions. the white line is small caps and that has lagged. the reason i think that is cool or puzzling is because we are crediting this rally to tax reform. wouldn't the small caps stock have seen a bigger boost? david: when donald trump was

elected we cap tracking small caps. -- kept tracking small caps. alix: -- it's actually the weaker dollar helped boost expectations for large caps. it's going to be an interesting phenomenon to look out for. this week is huge. we've got mcdonald's, exxon, alphabet, google -- they are the same thing. apple, amazon. what will those sales revisions wind up being? they have lagged. alix: big week. david: big week. alix: coming up, conversation with chad. this is bloomberg. ♪

>> from new york city i'm alix , steel. 30 minutes until the start of trading. this is the countdown to "the open."

alix: coming up, yield with caution, the bond selloff sending them two-year highs. a slew of earnings and economic data puts the markets of the test. decisioneep -- a rate under chair yellen. goldman sachs says it may not be the sleeper meeting many are expecting. facebook reporting results on wednesday, amazon, google, apple shine the spotlight on thursday. good morning. half an hour until the open. here is where we stack up, finally higher bond yields taking a little bit of a bite out of the equity market. s&p futures off by nine points, the dollar getting a lift, euro-dollar down half a percent, and yields off of their highs of the morning, but still grinding higher, 270 is where we are on the tenure. -- 10 yea