they admitted during a court appearance in washington today that he misled investigators about the last time you spoke with rick gates. they wanted the fourth person to plead guilty in the wide-ranging probe so far. a group of students who survived a florida school shooting have begun a 400 mile trip to the state capital. they want to pressure lawmakers to act on a sweeping passage of gun control laws. the students expect to arrive in tallahassee this evening. they plan to hold a rally tomorrow at the state capitol building. tomorrow will mark one week since a gunman killed 17 students and faculty at a parkland area high school. the proposed stimulus pipeline, forcing documents to be turned over because of trump's approval. mr. trump's decision they do

said -- they said was arbitrary and should be overturned by the courts. officials say it should be rejected. ,n ambassador has accused calling him the problem and not the solution. the ambassador address the security council immediately after a boss today but the palestinian leader left us in as he was finished speaking. he told the council he was ready to begin negotiations immediately. --bal news powered by 24 2700 journalists in more than 120 countries. this is bloomberg. ♪ julia: live from bloomberg's

world headquarters in the -- new york. are minutes from the close of equity trading. a pretty choppy session with stocks hovering around the lows. the question is, what did you miss? julia: a deluge of u.s. debt, ensuring $180 billion of debt today and more to come later this week. hitting the highest levels. walmart is falling behind in efforts to keep up with amazon. the retail giant saw slowdown last order bringing shares of the company to the lowest in two years. special counsel robert mueller filing another charge in the pressure probe, this time against an attorney that did ukraine related work with paul manafort and rick gates.

lisa: stocks under pressure, let's get to abigail doolittle. abigail: average is trading near session lows. dow, the s&pt the 500 down. the nasdaq had been up .75%. not a huge decline, but that reversal, a small version of the volatility we have seen over the last few weeks suggesting it is not resolved yet. let's take a look at an intraday chart. the reasons why it is underperforming, down about .5% from much of the day. aofould be the delug debt.

and in turn, what will that mean for stocks? time will tell, of course. we're looking at shares of sincet, down more than 5% october of 2014. growing just 23% relative, 50%, and the outlook for 2018. that is weighing on procter & gamble. billing interesting because it is a high flyer. even though there's nothing fundamentally going on, investors may be eager to sell it and take profit. take a look at g #btv 648. these are the technicals on the s&p 500. we see a beautiful uptrend that

tells us the buyers are in control. it really started to take off in december and january. perhaps investors getting ahead of themselves with those big gains. we saw the big move all of the moving average telling us the buyers absolutely disappeared, touched on to the 200 day moving average but we're back below the 50 day moving average. that is some reason to think that what we are looking at is not a bullish consolidation pattern but waiting before the bears strike again. the 200 day moving average as the sellers step in. before the big rally that helps .tocks take off julia: in action. what did you miss? amazon hitting the bottom line like never before and testing the patience of investors.

shares saw the biggest drop in two years at the walmart e-commerce unit decelerates with online sales growing at less than half the pace last quarter. is sarah in washington. at 23%, is this a bit of an overreaction? >> a think it might be. here's why. calls for 40% e-commerce growth for the full year. that suggests they are seeing what happened is a little bit of a blip on the radar. growthstill stronger been is being seen by many of their peers in the industry and the low teens e-commerce growth is what we saw industrywide. it is still better than many of their peers. joe: walmart is having a bad day

but it has been on an extraordinary run in recent months. really the last year. how much of those gains were investor starting to believe that after all these years, that there e-commerce strategy was starting to click? >> i think we learned today it was a really big part of the gains. we saw these e-commerce gains above 50%. it was something of a cocaine hit for investors. an easy way to make them feel good about the progress walmart is making. i think in a year ahead, the onus will be on them to show that they can perhaps not return to growth that sizzling because some of that was the fact that they bought jet.com, but that they can pick up the pace once again. joe: what happened in this quarter? they are still forecasting robust growth. there are operational issues. but what do we know about what the issue was?

>> we don't have a ton of detail that with the holiday season, they were getting and a lot of merchandise like toys and electronics. trying to manage that inventory. ony ended up out of stock key essentials. it was a learning moment that perhaps will be repeated in the holiday season ahead. asa: i was speaking with director earlier today that said what walmart was doing was spending money to try to get its online shopping up to speed so that it could compete more effectively with amazon. he called this the buyer of the century. >> they did have their lowest operating margin and quite a long time because they are bringing money into trying to make e-commerce work. expanded, 10

million skews a year ago. this is what jet.com deployed. bundling their orders together, giving you discounts on items. as opposed to firing off individual orders for single items. julia: we have a chart that shows the holiday season dominant of amazon. that is the orange segment. right?e opportunity, lisa: such a glass half-full guy, i love it. explain how important monetizing is for those that

live for walmart online versus those that go to the stores? and they also need to broaden who they are targeting here. just for me, i don't automatically think to go to walmart. psyche? ey change that >> it will be really challenging . value is one way. there are studies that show amazon is not always the lowest price in digital. if walmart can drive that message home to many shoppers, that can be a really powerful letter for them to pull. joe: in terms of these acquisitions, thinking about a , what do we know about integration? integrated have a broad business? the core

business? >> it is something we have done pretty well. they brought him to oversee the entire commerce business. they didn't just sort of an exit and try to keep jet operating as it was. done, the ceo is trying to harness his expertise. we do see that a lot of retailers make this escape. walmart has done that. julia: the white house press briefing is underway.

sarah huckabee sanders has asked about robert mueller's new indictments unsealed today. the press secretary reiterating believe russia metals but that the trump campaign did not help russia metal. -- meddle. inin the a tweet where he drew a comparison and said i have been tougher on russia than president obama was. what is the plan for the midterms? what is the plan for the midterms? we will be discussing this later on in the show and for the days to come. stanley says it the stock slide was just an appetizer.

julia: the stock market has had a taste of the potential damage for higher bond yields but the biggest test could only yet to come according to morgan stanley. the appetizer and not the main course. we spoke with morgan stanley chief asset strategist to get his thoughts. >> when i look at the economist forecast, we have two overlapping themes the crossover in the second quarter. you have inflation picking up not just in the u.s., but in the eurozone. it will fundamentally be a mean reverting series and we will be moderating. it is not necessarily that it will be a recession or a sharp slowdown.

it is not as strong as it's been. >> unfortunately, you can't be too precise about an exact breaking point. the reason i like this chart quite a bit is, first, i think real rates, like the interest rate over and above inflation is probably the most important rate when it comes to thinking about equity markets and discounting cash flows. for all that has happened over the last five years, market thinking about growth, stagnation.

we have been edited pretty stable range for these long run a real yields in these long-run expectations for where policy will be. it doesn'tt of guarantee anything, but it does suggest something different. it is something the market may assign a higher discount rate. julia: while this selloff is just the appetizer and it is getting stronger for companies looking to capitalize on recent market drops. luke, always great to have you on. as far as buybacks are concerned -- >> you have a big and getting bigger pillow under the market.

been very strong in helping buybacks prop up the market. ,ven blowing out of the water estimates for q4, it will continue into this year. julia: how big are we talking? >> i believe $165 billion in q4. and getting even stronger. "share purchase is going straight vertical in the wake of these earnings announcements. " i don't know how sustainable it will be but it is clear these idiosyncratic market shocks that don't deteriorate the macro backdrop on something that will eat into by back. julia: and the tax reform. joe: wasn't at one point the story that the buybacks were financed by superlow interest rate and, in theory, if we see the interest rates rise, could that biden to buy back volume? luke: i think this part of the

story. a shot over at deutsche bank has done a good job dispelling that myth. it is certainly an avenue through which you could see all this go through the down feathers. sign is this a negative for u.s. corporations in the sense that they have no other better place to put their money other than to buy back their shares? by many measures, they are incredibly high valuations. luke: on one hand you have that him on the other hand, you could finance a startup like uber and see your cash burn up. lisa: you don't have to have one of the other. luke: but if we are going to define the use of cash, i think shareholders will be a lot happier getting some ring versus these longshot plays. reform. do mean it, tax to what extent would buybacks be part of the story here?

we have to assume that there would be a bump. it is part of the story. luke: for some companies yes for some no. the persistent underperformance even in the face of tax reform, their company, a lot of them are to reduce leverage to be able to do some interest deductibility. let's talk about what the volatility landscape looks like in the aftermath of the fireworks we saw the beginning of the month. g #btv 8196 about what the options market is showing today. early february, all kinds of wild stuff around here. a little bit of calm. what are we looking at? cost the way line is the of a put option that, right , it hithere the sp y

the closing bottom of the year on the eighth. and the teal line is the cost of the call. and the cost of it is around the all-time high. they have five call options betting on setting new all-time highs by march, by mid-march. get to his bat as we were a couple weeks ago. joe: we will do that after the show. julia: luke, thank you so much for that. coming up, it was a tough day for walmart. the one company may be getting pleasure from their pain. i will give you one guess. the chart you can't miss, next. stay with us. this is bloomberg. ♪

julia: did you remember when we

were saying the u.s. tech overhaul was the most unpopular policy maneuver out there? check this chart. looking at here is favorable references to u.s. government policies. if you head over to the right hand side, 35% of respondents in the latest survey say that the tax cut legislation signed by issident donald trump circulating. we are off the chart compared to previous government. we have democratic administrations, bush 43, obama, then the u.s. presidency of donald trump. a kind of argues that the tax overhaul clearly resonating. whatever donald trump doing, it's clearly having an impact because people are talking positively about the policies of the u.s. administration.

then scully for pulling these figures out. the negative references have an pretty much stable at about 19%. this is ahead of the midterms. lisa: another interesting chart that caught my eye was basically a relative value trade between stocks and bonds that a lot of people have been talking about. when you are seeing here, this line is the extra yield you earn from the field in the s&p 500 relative to 10 year treasuries. you can see that gap has narrowed to the lowest since 2010. what does that mean? investors are earning the extra over to own s&p 500 stocks benchmark treasury yields. this is fascinating to me. at what point to investors going to stocks will say, we went to stocks for the yield. treasuries are starting to look good again and we will cycle back into that. and for years, even an

elevated valuations, it is compared for that. amazon crushing everyone else. here is the chart i stole from the market live blog. it shows the ratio of amazon shares to the bloomberg retail index. and not surprisingly for years, amazon went up relative to everything else. a trendlinece along but in very few sustainable downgrades. shooting straight up lately. amazon continues to crush it. as amazon overvalued? but the big picture perspective, amazon is clobbering it. >> i love the tease. who could be benefiting from walmarts losses? julia: president trump has

signed a memo to ban bump stocks. it automatically signed a memo to ban them. here is the market close. this is bloomberg. ♪ ♪

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julia: posting a six-day rally, the dow down more than 600 points. after a heavy slate in u.s. debt issuance. i'm julia chatterley. joe: and if you are tuning in live, we want to welcome you to the coverage. julia: and julia: we begin julia: with market to give you a sense of the individual -- julia: and we begin with markets to give you a sense of the individual changes. it was at the lowest point of the session. coming back from the lows of the session, the last 30 minutes or so, it is one of the bigger weights. just to give you a sense and only one sex or in the grain here.

quarter of a percent, and some of the big draw, utilities, industrials, the industry heavy sectors. walmart down more than 10%, post in the worst daily performance since 2015. it also reported a disappointing annual profit forecast. gap shares down nearly 5%. the debt rose more than the stock did for right aid and noble energy had the best day since 2018 after releasing a flood of positive announcements with an updated three year outlook that forecast higher sales volume and cash flow. look at the

government bond market. it tons of options and anxiety about the rising rate. we see the rates higher across the board here. up to 2.2%. auction today at the short end. see a little bit of verizon yield here amid the backdrop. and if we take a longer-term yield, ite two-year is looking kind of normal-ish. julia: normal ish. moving on to what going on in currency land, they are very much taking the cue as far as the rate market is concerned. and as joey .6%, mentioned, 250 billion plus dollars worth of issuance. for a much tied to what we see in the rates market as well.

it is getting a bit cautious. .6%.g the european parliament is a 60 paragraph resolution. and i want toder, show you what is going on as far as dollar india is concerned. the primary reason being cited for the weakness seems to be some of the selling we are seeing. the stoploss is being triggered, it will reach the 6460 level.

further hedging, and what to watch in the space as well. joe: sometimes goal does the same thing. julia: it could be equities. just talk through it and it is like everything is connected to everything else at this moment. >> we had a big selloff.

and how much of a bounce before we go back to the highs. stopped just above the maximum retracement. yet, if we get above that level, it would boost my confidence. that level in the currency is 126 in the euro. it also corresponds to a monthly trend line drawn off the record high back in 2008 because 160.est rates last we have the fibonacci retracement, and a third number i point out and a lot of people are saying that the 35 year and we go back to

double digits. joe: the mark teixeira the short end of the curve, it's took a brief dip in early february, back to all-time highs. >> many people are looking at the march meeting. , people come out of that view. i don't even see the three hikes priced in yet. the greater supply we have, it will be something like that. lisa: there is a lot of

disagreement in some people say stocks can continue to gain. what is the tipping point? >> we saw the rise and hourly earnings and healed got to 296 to 2906295 or something. people said that was the and of the stock market. even though yields held their own, the stock market came back. lisa: let me frame it another way. if tenure treasury yields go to 3.5% as jpmorgan and many others expect, will the s&p 500, dow jones industrial, will they be able to hold on to gains and continue to march higher? i don't think the stock market is driven by low yields right now. since 2010 to 2017, earnings have gone up roughly 9% a year.

the stock market has gone up 10% a year. a combination of tax cuts will boost corporate earnings. not 25 or.s. economy, 50 basis points. --ia: even if the psychology we keep talking about this 3% and then 3.25% and than 3.5%. even if we see volatility around his levels, perhaps a little bit , the fundamentals are justified. whether it is earnings. even at this stage. marc: if you look at the model, it is adjusted ratios. how much of this is fueled beyond low interest rates? more fueled by low interest

rates. joe: is there a point where we got a series of hot readings, may be a wage growth number from a few weeks ago. you think that could really spook risk assets? the thing about inflation is that it is auto correlated. be fightingnds to to get inflation at 2%. and it could be one of the things, it is kind of keynesian. numbers, capacity

utilization. we are well below where we have been another cyclical peaks. might have a shortage of workers. not sure we are seeing wholesale inflation. it's sort of the opposite of saying that it is the skill and. -- skill end. julia: you change positions in the foreign exchange market to make money? marc: very carefully. it doesn't seem to be a complying underlying trend. many people are bearish, they talk about the twin deficits. it couldn't emerge before you got the tax cut at the end of december and spent all of 2017 falling. the sentiment seems to be stretched.

i am playing from the short side. i like the dollar-yen going higher. it is slow earnings growth. we get to the data. look at walmart with the batter earnings. we're about to get into the next earnings season.

i like the charts and guilty pleas in the mueller investigation and what these developments could mean for the white house and for the midterms. we'll go to the washington for the latest. this is bloomberg. ♪

jessica: let's get the first word news this afternoon. senators are scrabbling for

fallback options to prevent the deportation of young people that arrived in the u.s. illegally as children. the clock is ticking toward expiration of a program and at legislation failed last week in congress and none of the plans have gained traction. will miss a deadline to send a prisoner from guantanamo home to saudi arabia, but an official says the transfer may occur soon. he pretty guilty in 2014 to charges that included conspiracy . you was supposed be transferred for a rehabilitation program. he will be the first transfer under president trump. david davis moore and business leaders to expect changes in the way deals are negotiated after the united kingdom accepts the block. >> brexit will inevitably mean a change in the way that companies do business.

it has to if we are to make good on the referendum result. have its own trade deals, policy, and make our courts sovereign. jessica: they said it will not change britain's identity as an open and dynamic country. a spy group has emerged as a global threat. reaper is now conducting espionage well beyond the korean peninsula. and traderd hackers range of industries from electronics to aerospace to health care. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. julia: moore guilty pleas in the robert mueller investigation and d.c. -- in d.c. entered a person

guilty plea in the special counsel's probe after lying to federal officials. as alex wayne, great to have you with us. we also have sarah huckabee sanders saying that these indictments indicate there was no collusion. we're still talking about vacuuming -- tackling issues like this. >> sarah huckabee sanders was pressed about what the president is doing to prevent russian hacking and russian election meddling. the russians have not been deterred after their meddling in 2016 and they will try again in 2018. she sort of stumbled on answers. she claimed the president has done more than obama ever did to put pressure on russia including by creasing the defense budget but she sort of danced around

these sanctions that congress has asked to punish russia for the meddling. lisa: what can we be looking for going forward to make sure the white house is taking that's to make sure there is not involvement or meddling by russian actors in the midterm elections? sarah huckabee sanders said the white house is talking with state and local officials about how to strengthen election systems against meddling by russian actors. lisa: but that wasn't the issue in this case, was that? that wasn't what happened. it was not necessarily the local elections. all elections are run by state governments. to strengthen the systems against russian meddling, you have to work with state.

they want the public they say what they are talking about doing it explain to the public what they are going to do. they haven't done that yet and there's no indication they will. >> there is a new york times article over the weekend talking about the florida shootings and spreading discourse to how this should be tackled. president today signed a memo directly with justice department to propose regulations to ban all devices like bump stocks. does this take it to the point to some kind of legislation? >> this seems to be a reaction to congress failing to pass legislation. it is a surprise move by the president. i think it looks good for him to do this. congress talked after the vegas shooting last fall about passing legislation that would ban bump

stocks that allows semi-automatic rifle to be filed much more rapidly. the biggest shooter used such a device to kill i think 58 people and wounded about 800. congress, for reasons known only to itself failed to pass the legislation last year and so the president has stepped in. almost obama style and signed an order directing the right to ban these things. joe: is it clear the executive has the authority to do this? definitely not clear but what would have do happen is makers of bump stocks will have to sue the government once the regulations are out to challenge them, which will be resolved by the court system. joe: obviously, a ban on bump stocks would be tip of the iceberg in terms of what they want. does it feel like the politics are any different. it's become a cliche, people say nothing is ever going to change. is there any reason in your view

to think that in the wake of hearing, in the wake of from the students that perhaps the climate has changed? >> it does feel different to me after this one. the students at this high school, the survivors, they have rapidly become very politically active as i am sure you have observed. think, going to be heard in washington. the have organized a march for next month. i expect a lot of people will show up for that. the president's meeting with students and teachers tomorrow. something else notable that happened today, sarah huckabee sanders would not rule out some that would beres opposed by the nra such as renewing a ban on assault weapons. she said they are not closing the door when she was asked specifically about doing that. julia: you have to tap and a public sentiment.

alex wayne joining us from washington. thank you for that. ceo vp discusses the challenges facing his industry. from new york, this is bloomberg. ♪

lisa: what did you miss? the oil industry is challenged by surging uso output. bob dudley, chief executive of bp spoke with bloomberg's manus cranny in london. have are $50 and we obligations to the gulf of mexico still in there. by 2021, we will be in the $35 to $40 range i can say confidently in terms of the breakeven point. it wasuple of weeks ago, bullish. you are in the studio just a couple of weeks ago and your

word changes constantly. where's the bandwidth. it you can give me a price if you want to, but where is the is at 40 to 50? where do you see the longer-term trajectory given the challenges from the u.s. as an exporter? bob: the key is the responsiveness of the shale. they are a shock absorber on the upside in the low side of the oil production. it is such a response of market in north america. in terms of 50 to 65, it is probably the van that we will drift within till the end of the decade. flex even have a hedge together. and you have a very specialist knowledge. the unitedy between states of america and russia, in my humble opinion, is hitting new lows. you have a substantial knowledge of this. square this away for me. are the risks rising if you are holding? how do you look at the geopolitical landscape right now? bob: we work within the

boundaries of the sanctions all the time. just a given. we have a role there. we have a successful business. i think business builds bridges. and i think the bridges that can be built between countries, the u.s., russia, communication channels, that is healthy. you have got to be careful but we have very good partners and it is a very commercial enterprise. trump is in davos and takes you to lunch and says bob, i'm trying to wrestle with the geopolitics of russia. it from the businessman angle, what is the advice he would give to trump? like it has been taken over in the media and politics, it's probably hard for him to deal with. anything that can be done to create some discussion somewhere between governments is always healthy. and i probably don't have the advice for him because, as you say, almost any discussion of it

raises all kinds of responses. said thatople have this is going to be multi-billions of investments. but put the geopolitics aside for just a moment and deal with the pure nuts and bolts of business. is the russian arctic where you want to push for and be present for? bob: it is the higher cost of definition, so that is where we are not focusing. julia: coming up, feasting on debt. a bond traders digesting $250 billion worth of treasury auctions, issuance over the last three days. we will dissect the numbers coming up. this is bloomberg. ♪ ♪

>> on jessica summers. let's get to first word news this afternoon. president trump has directed the justice department on regulations banning bump stocks that allow semi automatic rifles to fire more rapidly. ,fter today's press briefing , sarah a ban sanders said "we have not closed the door on any front." the gunman who killed 17 people at a florida high school last week used in ar15 rifle. associate,mer

admitted during a court appearance today that he misled investigators about the last time he spoke with rick gates, a former associate of paul manafort. person to plead guilty. the head of the european union border agency is warning the number of migrants trying to reach europe through the mediterranean will remain high this year as more are expected to arrive through spain. the director told reporters today overall numbers have decreased in 2015, but 1.8 million people entered europe. yet migrants are finding new ways to cross borders and forged documents, a major challenge. help in restoring electricity five months after hurricane maria on much of the island. a $300 million loan for the bankrupt power authority. without the loan, the utility will need to impose rolling

blackouts. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. julia: thank you very much. let's get a recap now of today's market action if we start with the u.s. equity markets. the dow closing down just over 1%, though it did trade off the session lows we saw within 30 minutes of the end of the trading session. sadly lost ground from around midday. a host of factors. walmart having a total shocker. scarlet: we said earlier it was down the most since late 15, but actually, since 1988. the share price declining further. julia: questions about walmart's outlook here, the online section in particular. the broader market here, the rates market having an impact. worth of $250 billion issuance across the front end of

the curve, the two-year, five-year, seven-year throughout the course of this week. a bit of digestive issues perhaps to be expected. down into theit individual sectors the performance we are seeing, only one sector of the s&p 500 in the green. information-technology, 2/10 of 1%. losses of more than 2% for the consumer staples. gainsng five sessions of more broadly for the equity markets here. perhaps a bit of a pause given the ca choppiness the last two sessions. >> "what'd you miss?" maybe you did not miss this. the treasury sold nearly $180 billion of bonds as it wants to rebuild its cash balance yield on a three-month and six-month note the ones to watch. joining us with more is bloomberg's: u.s. rates

strategist ira. what is the big take away from the massive auctions today? what can we expect with the other government debt auctions that we can expect in the coming days? >> thanks. i think one of the big things is the demand kept up maybe a little more than some of us expected with the amount of supply particularly in the three and six months bills. you saw a demand for the six-month bill. given the fact that you might and two fed hikes in there the fact that it is a longer maturity than the three-month, i think that is where there is a little bit of angst. the three-month bill we have to cheapen a bit at the auction in order to find a clearing level, but when you look at the 2-year note, that one is fine. that one is actually the best it could have done. joe: we are talking a lot about this huge wall of supply coming to the market both this week,

but also big picture as we talk about the national debt and all that. you talk about flooding the market with nearly $200 billion worth of debt. when you look at what is going on in the market, how do you decompose the raw supply and demand picture versus the economic fundamentals such as interest rates and the fed and inflation and all that? ira: that is an interesting point because this is an unusual situation. normally, we see a lot of treasury supply and a lot of that supply, so that is higher deficits and those have to be funded through treasury issuance. the usually occur when the economy is slowing and inflation is coming down so usually yields are going down when you see this kind of supply. now we are seeing supply while the economy is actually doing ok so the question is, and is is giving people a lot of -- what happens when we see all this and we have higher inflation and a growing economy?

does that mean higher yields? the answer is probably does. the question becomes, what part of the curve should be affected the most? in my view, it is the front end of the curve that has to be affected the most because you are talking about an environment where the federal reserve is hiking and also where the treasury is issuing most of the debt. joe: is there a historical period that seems similar? or is this sort of new territory? ira: interestingly, it is like the middle 1980's. that is a time when you had good growth, increasing deficits that were relatively big. you had inflation coming off of basically unprecedented levels of double digits in the developed world so you did not have bond yields rising. you have bough bond yields falling. hard to find a historic parallel between today and anytime basically in the postwar period.

>> there is a big question of will the foreign buyers come back in? idea about how well they did with foreign investors but have basically pulled away as hedging instruments get more expensive for them and the increasing deficits? ira: unfortunately, we don't get that data for a couple weeks when we have the treasury allotment data that tells us how much foreigners and investment funds and banks. you demand from investors, those are folks who could go through someone else in order to buy bonds. those were actually ok. when you look at the 2-year note, it was basically the same as it was in october, november, and december. lower than in january, but basically the same as it was last year. i would have to take away from that that things have not

changed as much in terms of dynamics, but we have $2 billion more into your notes. what happens when we get another two next month and the month after that? now we are talking about a lot more supply over time. julia: the fact that traditional safe haven so are not working that well, whether it is gold, treasuries given the repricing we have seen, can we tie that to what we are seeing in a rude pointing of nominal rates versus what clearly remains pretty range bound as far as real rates are concerned? ira: actually a lot of what has gone on particularly in 10 year you rates is in real rates. ship rates have gone up 30 basis points or so. that is where all of this comes from. it is not inflation expectation. it only with applicable basis points the last six weeks. it is the risk premium basically been built back into the market.

julia: interesting. ira, thank you for joining us. and a reminder that on friday, you can get a recap of all the options from this week and their impact on bloomberg real yield. jonathan ferro talks you through the issues in fixed income everything friday at 12:30 p.m. new york time, 5:30 p.m. in london. don't miss it. joe: must see tv. hedge funds dealt another blow, this time by the u.s. supreme court. lawsuits filed by fannie and freddie investors sending shares down by as much as 5% today. we will go back to washington next to find out what that is about. and if you want to get involved in the throw or the conversation or whatever, send me a tweet on twitter. what do you want to know? what do you want to hear? what do you think about? what did you see in the markets? let me know. this is bloomberg. ♪

julia: "what'd you miss?"hedge funds dealt another blow by the u.s. supreme court today. the court rejecting an appeal filed by terry capital and other fannie mae and freddie mac shareholders challenging the federal government documents huge are in profits generated by fannie and freddie in a network sweep. joe, great to have you with us. help us understand why this appeal was rejected. what do we know? >> well, the supreme court did not say why they rejected it. most appeals at the supreme court is not granted a hearing, and that is what happened at in this case. what that means is a decision by an appellate court last year claims that the government had illegally stolen for any and freddie's profits, so it is

another window shut on the shareholders, they will have to look to other avenues. joe: that is exactly what i was going to ask. they have these shares. become a lot is not give them access to any profits, but if somehow the law was reversed, theoretically they would make a fortune. what is their next best hope now for becoming the beneficiaries of all this? >> right. this was not the last legal case out there. that appellate decision i referenced that happen in for every 2017, it did leave outstanding some of the contract-based claims, kind of an opportunity to get some profits there. they have lots of other cases around the country. but the problem so far is not a single judge or not a single court anyway has said that the evidence even matters in these cases. basically they have been saying as a matter of law, putting aside the government's motives what the government did was ,egal, so for the shareholders

what they are really hoping for is the trump administration a path thatake would leave them with profits, but we have so far not heard from the trump administration what they want to do with frannie and freddie. joe: who are the big holders of them right now? various hedge funders have gotten in on the street at various times. who are the biggest agitators for change now? >> the biggest agitators for change are very capital, even though the fund is widening down and the fair home funds, which is probably the last at this point. bill ackman's firm, they are big holders in the common stock, and we also know that paulson and company, they had a big stake here and have been doing a lot of the behind-the-scenes work, a lot of the pr efforts to try to change policy makers's mines. >> can resume out a little bit and talk about the big issue

here? after mae and freddie mac basically being taken over completely by the government during a financial crisis had to give out any excess profits that they made to the u.s. federal government, correct? so basically, what these hedge funds are alleging is that they should be taken out of the public domain at this point, lead to be more public companies , and allow some of the profits to go to work current holders of fannie and freddie shares. is that accurate? >> yes. basically the government to go over these companies in 2008, and at first, the government was granted some preferred shares. in 2012, the agency that controls fannie and freddie along with the treasury department changed at the terms of that agreement to go from a 10% dividend to sweep all profits for any and freddie made. they would not oh dividend in a time of losses. that change in 2012, the hedge funds have been mostly focus on.

so far as i said, the courts have decided that decision was legal. what the shareholders are hoping for if they would get a court reversal here is that the reversal would send more than $100 billion back to fannie and freddie. that money can be used to pay down the government's's stake in the companies and eventually start paying them money as well. julia: so $190 billion were spent saving a default of fannie and freddie and that is taxpayers money so we are talking more than $100 billion outside of the money that has already been recouped in taxpayer money to stave off this. is that right? >> right. sent 190rnment has se billion dollars to fannie and freddie and taxpayers we cook more than that since 2008. i cannot remember the off the top of my head. from the shareholders perspective, the government has been more than paid back. this is what they call a loan

should be eliminated. julia: yes. you wonder why they continue to fight. we see about a loss of money. thank you so much for your perspective on that. , cybersecurity as we approach midterm election. ceo'sghts from fireeye interview earlier today coming up next. this is bloomberg. ♪

>> "what'd you miss?" they recent reporting has shown us how extensive restaurant russian influencing is in the u.s. the ceo of fire i discussed this with our own david westin early on today.

kevin: there is a lot of different ways to answer that question. first, there is technical vulnerabilities. can russia hack? that is a tool in the tilted they can use but also something obvious that we can trace back and say the russians stole the documents and we can leave them. when it comes to sharing ideology, we have to sort out as a nation where are the boundaries between how people where you even have one person in this world be represented by 500 to 1000 people and that amplifies the influence. operations like that are here to stay. i think every government will use them. we have to figure out how we find them and how we counter them appropriately. >> you are the eye of the cybersecurity storm per se. you actually released a report on chinese cyber spies. kevin: five years ago. >> five years ago. how does this compare, what russia has done, to something you have seen in the past? kevin: you know, there is a

general continuum. offensive operations, it used to be there are rules in the playground. security,tional military against military, government against government, and i think that started to change around 2015. their operational security slipped a little bit, meaning they were not doing the counter forensics. they're targeting broad and a little bit and the rules of engagement seemed to spiral into other areas like releasing documents. these are things they did not do for two decades in my career, but now they are doing it. we have not settled on what are the appropriate rules of engagement between nations. >> how much is it because we do not take the time and effort to defend ourselves? a lot of emails still in, people say they could have taken basic steps to protect their emails. playinghe thing about the lead against wayne gretzky, sooner or later, the point is getting in the net. same thing with russian hackers.

sooner or later, they will score a goal on you. >> what is to be done? why should they agreed to rules of engagement? kevin: that is a good point that asymmetrical nme not be a reason. we have to impose some kind of a response. if all we do is play defense, it will be a long slog and the public will get in the net. >> just one hour after news broke about the school shooting in florida, we have these twitter accounts have a suspicions of links with russia sending out things on the gun debate. why can they not be reined in? kevin: we have anonymity on the internet. this is a culture issue. every country will set the bar for what privacy means to them. it is hard to impose one privacy u.s.,e, but here in the we allow anonymity on the internet or at least conditional anonymity, but we allow the free especially ideas. chineseyou exposed

cyber spies, you are expect in retaliation from china. the fact that we have 13 russians being indicted, what sort of action can we expect from russia? because a lot say of times people ask me before the election what you expect out of russia? there are times when there is heightened diligence and that is one of those times. i did not find it very surprising. i would imagine there is many nations that want to influence elections in other countries, and one of the tools you have at your disposal is influence operations where you can just magnify chaos. >> i am not going to make you responsible foreign policy, but given your technical expertise, a bloody nose approach to korea, this is the equivalent to that in the cyber area. doing at some point have to really attacked them in a limited way to brush them back from the plate to use a different sports analogy? kevin: there will be varying opinions on that, but here is what i think. if we launch attacks in cyberspace against russia and they are successful and they

launch attacks back at us and they are successful, we will lose. there is an asymmetry there. we were dependent on open communications. our economy has an online bases to it that is more powerful than any other economy. cyber domain is probably not the best domain for us to retaliate. we are in a class house -- glasshouse. sometimes you are throwing rocks at a much had. -- mud hut. >> that was the ceo of fire i. lisa: time for the bloomberg --julia: time for the bloomberg business flash. dominoes falling in fourth quarter earnings today. spoke -- patrick doyle spoke exquisitely to bloomberg today talking about the 2017 performance. >> our long-term guidance for our performance is comps domestically and internationally will be a 3% to 6% so we were in the middle of that range.

this is where we expect them to be in the medium-term. julia: cashing in on americans pouring money into their homes. same-store sales at the world's largest home improvement chain grows more than expected in the fourth quarter. it was also helped by hurricane recovery spending in the south and puerto rico. a three-year high the world's hp rejected demands for a corporate overhaul. is really chairman pushing his duty at the company in the wake of sexual harassment allegations by model kate upton and other women. the board and he agreed he should step away from the business without withdrawing salary until the investigation is completed. a special board committee with two independent directors is overseeing the matter. that is your business flash update. joe: coming up, what you need to know for tomorrow's trading day.

this is bloomberg. ♪

julia: "what'd you miss?" a down day for markets overall. bouncing off of session lows at the back end of the session. mark carney is recommending the treasury committee on the u.k.

inflation states tomorrow. joe: i'm looking at the u.s. economic data. existing home sales are out at 10 eastern. >> i'm watching the fed releasing fomc minutes to :00 p.m. eastern time. -- 2:00 p.m. eastern time. julia: that is all for "what'd you miss?" "bloomberg technology" his next. -- is next. joe: this is bloomberg. ♪

alissa: alisa parenti in washington, and you are watching "bloomberg technology." let's start with a check of your first word news. president trump hosted a white house ceremony today for the public safety medal of valor award.

that is the highest national honor for a public safety officer. the awards are given each year to officers who have exhibited exceptional courage regardless of personal safety in the attempt to save or protect a human life. the president has directed the justice department to write regulations banning the use of accessories known as bump stocks. they allow semi-automatic rifle's to be fired more rapidly. police say the gunman who killed 17 people at a florida high school last week used an ar-15 style rifle. meantime, a group of students who survived the florida school shooting are on a 400 mile trip to the state capital to pressure lawmakers to act on a sweeping package of gun-control laws. they plan to hold a rally tomorrow at the state capitol building. tomorrow will mark one week since the mass shooting in parkland, florida. hasndon-based lawyer admitted he misled investigators about the last time he spoke with rick gates. gates is a former