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tv   Whatd You Miss  Bloomberg  March 1, 2018 3:30pm-5:00pm EST

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litigation against the companies." he made his comments on combating opioid abuse at a summit. he said over the next three weeks, the administration will roll out a policy that will be "very strong." the u.s. ambassador to mexico is resigning this spring amid strained relations between the countries. in a note sent to staff, she wrote after more than 31 years in government service, she has submitted her resignation and it takes effect may 5, two years after she was sworn in as a masseter. insisted aor syria government-led assault must not the siege ofcat on aleppo. he says the u.n. cannot afford to give up on trying to enforce resolution 2401, calling for a nationwide cease-fire in syria. askingould continue
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until we are red in the face, blue in the face, for both sides, because they have both been shelling, not comparable in terms of proportion, to stop shelling each other's areas. today the priority needs to be stopping the suffering and the tragedy of the civilians. orderedadimir putin had daily pauses in military action to allow civilians to exit the region. is unable to it provide much-needed humanitarian relief. for third day, buses were parked at the crossing for eve accuray to civilians leaving the eastern part of the city. officials said the five-hour pauses and fighting in the eastern suburbs of damascus layout a unilateral plan by russia to take in aid
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and evacuate civilians. the eastern suburbs have faced an onslaught for weeks by syrian government troops backed by russia. global news 24 hours a day powered by more than 2700 overalists and analysts in 120 countries. i am mark crumpton. this is bloomberg. ♪ live from bloomberg in new york. i am julia chatterley. we are 30 minutes from the end of trading in the u.s., stocks tumbling with the dow at one point falling many points. investors nervous over a trade war as president trump says the u.s. will tax imports.
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he here signs of a policy shift taking place at the central bank. and gun stocks bucking the decline. companies taking matters into their own hands when it comes to the national gun debate. julie hyman with details on this selloff. looks like we are heading south. julie: there has been bouncing around around the 100 day moving average. go slightly below it and then bounce up again. down,eless still trading in a downward trajectory, with volume 10% higher today than the 20 day average on the major averages and of course as we have been talking about, the catalyst was the talk of arrif on aluminumc
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and steel. i want to focus on the industrials because this is one of the groups that is at the center of this, what effect will it have on their manufacturing capabilities and cost as a result of this? if there are retaliatory tarri fs, what effect will that have? following arols maker of heating and cooling equipment. it is spread across different industrials. although it is a broad-based selloff in the market. looking at aluminum, a five-year chart, just to get perspective on what we have seen, it is trading at near highs. the question is, what if we have this back-and-forth, what kind of an effect will it have and what kind of gap will you have between pricing and the u.s.? if you look at the industrials and how they have performed, it has been a good five years for
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the industrials. they have outpaced of the gains we have seen overall in the s&p 500, if you look at the industrial sector. this illustrates the difficulty in figuring out what affect this will have. i want to take a look at the bloomberg, showing be supplying change for boeing. on the left you have a supplier sorted by cost of goods sold. you have general electric, united technology, our conic, the question is for these companies, how much of their are aluminum and steel? where are they manufactured? complexity of trying to figure out what effect this will have. you have to ask that of boeing itsell in terms of where manufacturing facilities are located and in terms of boeing, will it have to raise its prices at some point? -- customercompany
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is the united states of america. does it try to renegotiate? you have the airlines. this is a thorny issue, figuring out what effect this will have. this is just one company. ,"lia: "what'd you miss? president trump will place a tariff on skill and aluminum. and aluminum. foreu is calling countermeasures. executives met with the president today. joined balanceor of power earlier and he said the actions will invigorate the beleaguered sector. encouraged that the president will take action
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that is decisive and meaningful and that will help restore the steel industry to his former position. julia: not so sure about that users. here with the latest is joe, great to have you with us. talk us through the details we got today and what is going to become reality when the president makes an announcement next week. and 10%ariff on steel on aluminum. after that is what everybody in the industry is scrambling to figure out. they have hard data. they have three options that came down from the commerce department. there was a lot to work with. there were quotas and there were some tariffs. julia: are we assuming the worst in terms of a blanket ban if you look at the reaction? in terms of worse, i don't know. this is what the market is going to figure out.
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this was pretty steep in terms of the tariffs. i'm not sure everybody expected a hard tariff. that is key. joe: the steelmakers went out, we know some of the obvious losers, carmakers not having a good day. who else might get hit in the fallout? >> listen, we ran a story in june where the guy who buys actual aluminum for miller scores said if we get hit with a tariff, this will go down to buyers of the beer. how much will that actually be? than mey people smarter will have to dive into the numbers and figure it out. it is anybody buying something as simple as an iphone all the way up to big construction products. everybody has been worried about for the past year during these discussions and now
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it is at her doorstep. they have to figure out what is next. these discussions have been going on for a while. no surprise after the president said he will do something next week, canada said it will respond to any kind of tariff, is ready to retaliate. do we have any sense of what they are likely to do? 25%, 10% on aluminum, do we know what canada or the eu are thinking? now. is unclear right it seems like everybody is serious about retaliating. they have made that clear for months and months, especially the fact candidate was not exempted. europe and australia, japan, all of these allies were not exempted. they are in the same book as china. china gets 25% and sodas canada. toia: it doesn't matter china. they are not the top 10 exporters as far as steel.
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we were talking with mike mckee and he said that does not mean china is not dumping on the rest , suppressing prices. as far as the united states, china is no big deal. >> there are cheaters in the world. they will dump. primary have any aluminum from china. we buy a small percentage of steel from china. for a second,p maybe this is ignorant, have you pose tariffs against another country? i thought these existed so we did not have trade wars. , so it is under the 232 has nothing to do with the wto. it is the interesting part of his trade group. they found this little used law that allow the president to becauseariffs something was a threat to national security. julia: that is why the eu is
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outraged. well.t: canada as larry summers told us about the piloted -- possibility of these tariffs. >> because there are more americans who work using steel and aluminum then work producing steel and aluminum, it's an thert that will protect american market and raising the prices of aluminum, that is going to be a net job stealer. scarlet: is the goal of the administration to punish china or create and save u.s. jobs? >> they want to create and save u.s. jobs. they mean it when they say it. how you actually implement policy versus what actually are different things. there are tens of thousands of jobs in the upstream market that
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to make and produce aluminum and steel. you're talking about millions of jobs in the downstream of that market. julia: how do you enact specific tariffs when they come in and out before the end product is finally produced? >> there is a worry about shipping. been a discussion. that is why they went across the board. only certain countries, they would send their aluminum through candidate to get into the united states and that would leave pressure on the domestic industry. that is the argument here. scarlet: there's always a way around it. thank you so much. up, is the federal reserve shifting its focus? some analysis with an outlier point of view. this is bloomberg. ♪
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," jayt: "what'd you miss? powell says he sees no evidence of overheating in the u.s. economy. our next guest says the fed is shifting its focus. he is a professor at the university of oregon on he is a professor at the university of oregon. people were saying the debate is be threet is going to hikes versus four hikes. you are saying it is a bigger shift. the fed views the economy in a danger zone for inflationary pressure. what did you hear from him or see from the federal reserve that convinces you up this? >> the big shift was in the testimony when the testimony shifted from concerns about
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achieving full employment, sustaining full employment and now when this latest version, a avoiding between overheating and maintaining that 2% inflation target. it was that shift that became something i.t. didn't to -- i a change in focus for the fed. instead of equilibrium, they are thinking about if we don't move more aggressively, we are going to be allowing an overheated economy. janet yellen never talked about overheating. the fed wants to keep inflation expectations anchored. that language that was a concern wasn't part of her rhetoric? >> i have not seen it before. i haven't noticed a transition from achieving full employment to sustaining full employment.
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this is an evolution of that language. julia: what are they saying that the art that would precipitate -- that we are not that would precipitate watching for an overheating economy? everyone said they did not really see any difference in this testimony. you are seeing something fundamental. >> right. been long time i have concerned that the forecast the fed was making was vulnerable to in economic outcome. why is thes been, fed forecasting growth of 2.5%? that is well above potential growth and has very little movement in the unemployment rate. and if the inflation factors,
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the reason inflation was low, we had temporary factors holding inflation down, once we had this much growth and those factors went away, we should see higher inflation. when i look at the forecast, this doesn't really make sense. we should have much more of a risk that the economy is going to overheat in the overall forecasts. add to that fiscal stimulus and the unemployment rate that is already very low, you can see where you have a rapid shift in concern among policymakers. julia: you are saying they are making a forecast a noble -- enable to back out an appropriate path that involved three hikes in 2018? >> i have said that. i think there is truth to that. they really want to maintain a
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gradual pace of rate hikes. that had become three rate hikes for 2018. it was hard to shifted that view as long as inflation was below 2%. now that inflation looks like it's coming back up to 2% and we have seen that in today's numbers, then i think you have to rethink, how does this make sense? think they make sense. it does not take much imagination to see the unemployment rate dropping quickly to the lower bound of estimates of full employment. joe: you have written on your blog, which people should check out, marinating in the testimony. at the end of your second one, you talk about this idea of getting used to gradualism and assuming the gradual path is all we will see for the time being. how much of a shift it would be
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if that is not the approach? and you look at the market various measures, the bond market, other measures of what the fed is expected to do, how prepared or unprepared are market participants for a new regime? >> i do nothing we are prepared at all. i think we are adrift as we did this leadership change. it was not clear whether the fed was moving in a new direction. they added the further rate hikes in the last statement. that might have been a hint, that may be not strong enough. change is not necessarily suggesting that the fed is about to change to a faster pace of rate hikes. i think if you were thinking
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three with a risk of four, you should be thinking more four now and definitely next year, if you are thinking two, you should be thinking three. that seems to be where we should go on the basis of this. we have to be cautious that the tone that the fed might have going forward if unemployment drops downward the next couple of months, if inflation is coming up a little bit faster than anticipated. scarlet: how prepared are market participants? how prepared is the white house with the new regime? the you see any political tension? >> it is hard not to see the potential here. it is one reason that the administration has maintained the strength of numbers they have seen today.
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the strong economy. if that were to turn into a weak economy, that would create a for this administration. pushing back on the fed would not surprise me. y from theim du university of oregon, fantastic conversation. an outlier point of view. thanks. coming up, whitney tilson picking five stocks for his kids' college savings portfolio. this is bloomberg. ♪
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joe: i am joe weisenthal. "what'd you miss?" day in the market. it has a different vibe then early in february. spy, theoking at the
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white line, and tlt. what you can see is the lines are moving in almost mirror image with each other. one goes up, the other down. the correlation is broken down a little bit. this is important because in early february we had the selloff. the story was stocks are selling off and bonds. the treasury component of portfolios was not acting as the that was causing a lot of thing. days like this are put in full. no one wants to see stocks go down 1.5%. diversified portfolios are working more like they typically when a day like today treasuries are rallying on risk off. it is not the same flavor we got in february. scarlet: everything has gone haywire. challenges to save
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money for their kids' college education. whitney tilson has figured out his strategy and he is sharing it, including five stocks. berkshire hathaway, howard line,, that is the blue and amazon, facebook, and alphabet. he recommends 50%. half of the money should go in berkshire hathaway because the stock is trading 10% its value and he expects warren buffett to man the ship for five more years. off the bat, he was skeptical in the past. that was his -- alfa bank, he was skeptical in the past. he said that was an error. amazon, 25 percent across all three. howard hughes is 25% as well. i don't know, don't try it at home. market close is
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next. we are less than four minutes before the close looking at a selloff. the dow coming back off its lows. this is bloomberg. ♪ mom, dad, can we talk?
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julia: the dow down almost 400 586ts, it hit as low as this afternoon. we are off the lows. i am julia chatterley. scarlet: i am scarlet fu. in onf you are tuning twitter, we want to welcome you to our closing bell coverage. with ourwe begin market minutes. a third straight day of losses for stocks. the dow was off by quite a bit. it came off the lows and all of this triggered by political headlines. the president announced he will impose tariffs on steel and aluminum imports. and we had substantial down days going into today. building anxiety about multiple things into which today's news fed in. and the technical
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factors. we fell below the 100 day moving average. that could have added to the downward momentum. i mentioned steel and aluminum tariffs, if you look at the stoxx, they bucked the decline. you get the idea. the s&p, almost all the members increased in that subject index. some of the users here would be hurt by import tariffs. their costs would increase. motors and ford reported monthly sales numbers. troubling sign for trucks. the s series had a small increase. total sales missed estimates. ,nd best buy reporting results up 4% after delivering a rosy outlook for the coming year.
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best buy had its best holiday sales performance in more than a decade, managing to fend off amazon and do well in the end of the year. joe: looking at the government myd market, i showed it in chart earlier. today was a classic day for portfolios, unlike in early february. today stocks sold off but people bought safe haven assets. we are sort of pulling back a little bit from that share. this is a one-month chart of the 10 year yield. about the lowest level in two weeks. to fixate on the countries impacted by the potential tariffs. mentionedaluminum today. we are not talking about china. not even in the top 10 suppliers to the united states. canada, brazil, mexico, russia,
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just to give you a sense of who is trading where. we did get the canadian dollar falling to its lowest level against the u.s. dollar sense last year. we had push block -- pushback from the canadian government saying it would be unacceptable. the canadian dollars coming back byewhat right now, stronger 1/10 of 1% versus the u.s. dollar. a similar story with mexico. a lot of questions about what some announcement over tariffs would mean for the broader nafta negotiations. is this a shift in stance? the russian ruble in the spotlight. broader sentiment, we should mention emerging markets, the dollar ruble is higher. also we want to mention the south african rand heading for
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its worst week since october. lawmakers shaking investor with leadership change with a proposal to take land without compensation at a time when the tilt we have been discussing by the federal onerve was causing an impact broader risk sentiment and emerging markets. , theusly we had jay powell fed chair did say there is no evidence the economy is overheating. bitcoin is up today. just wanted to show you. [laughter] just thought, i want to bring that to you and i did. .oe: they get around the tariff [laughter] on commodities, gold and oil not doing much. the biggest losers, palladium and platinum, both of them
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high-tech cars related. we had ugly car sales in the morning. that had them. maybe to the extent the tariff s, slow them down. those are today's market minutes. we are joined by our senior editor mike reagan. there wereus that people worried about what kind of trade war might transpire this year given we've gone through six rounds of nafta talks. julia: the seventh round now. [laughter] scarlet: we had not actually gotten many details. being moreings are concrete and people are nervous, this seems like an opportunity to move. mike: i think most of wall street forgot about the platform of trump. we are getting reminded about
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it. a, a country is that runs a chronic trade deficit is not in the best position to start a trade war. joe, you are a boxer. it is like me fighting mike tyson. if you look where the biggest imports of steel were coming from, brazil, south korea, germany, china. there's a lot of potential backlash from this. we have seen some of the announcements from canada. joe: i am not a boxer. i hit bags in the gym. [laughter] ascribeays difficult to news to selloffs. do see is the russell 2000, the smaller cap they were only down
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.3%. steeper losses for the s&p 500. it is a signal that to some extent the trade story was driving today -- sides, american producers are going to have the products and we are exporting. it is asymmetrical. steel is not that big of an important. bloomberg intelligence said it is 3%-4% of the cost of a car. raise the cost of the car a little bit. it is the asymmetry of it. china wants to respond. , semiok at the experts conductors, pharmaceuticals, that sort of thing. china is looking at sorghum and soybeans. -- eu looking at whiskey julia: an harley davidson. mitch mcconnell and paul ryan
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are in the hot seat. mike: right. julia: what are we talking about in terms of size of imports, talking about steel and aluminum ? we have a chart on that. it is typically a couple billion a month in imports. there you see, it has gone up over the years as the economy has recovered from the recession and the manufacturing has stabilized. again, it speaks to that asymmetry. to make enough imports up the deficit because of a 25% tax. what is the benefit of this? it's not enough to make a mark on the deficit. joe: it is not the first time a president has introduced tariff s. did the sameh
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thing in 2002. we have a chart showing what stocks did after that. they went down. is this current environment similar enough that this provides a useful template? ine: you can see the line the middle showing you when they were imposed. it was a different climate. we were in the middle of the dot com bust. the stock market, everything stabilized and then got worse. we also had the 9/11 attacks and the afghanistan war. it is a different picture. interesting, the intraday chart looks like that, weaker stocks, weaker dollar, and higher treasuries. i don't know if that muscle memory kicks in or not. volatilityr the spike, we said there would be a
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period of adjustment for sentiment to re-stabilize. are we in that period where a headline like this, $1.5 billion, it is not a big of a deal. it still hit sentiment. mike: right. we were starting to come out of it. this is obviously refreshing that risk off feeling. the vix had not really quite come back down to the normal situation where the futures are higher than the spot and now we have exacerbated that where the near futures are higher than the further out futures. it is a worrying sign to a lot of traders. you're going to have to cover the shorts. as it wasas acute then. it hasn't completely dissipated. right, mike reagan,
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thank you so much. we have breaking news crossing the bloomberg. results from a couple of retailers, nordstrom for now. revenue beating estimates, earnings-per-share also, actually that missed estimates tax charge. 25% a couple of one-time items. gross margin missed estimates even as total sales beat the consensus. that ms. is having some impact on the after-hours price. shares are down by 4.5% in extended trading. american outdoor brands reporting results. it had been rallying today into the results which came out after the market closed and aobc reporting $157 million. a small company when you look at the top line.
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and earnings-per-share was nine cents. that was a penny higher than anticipated. the outlook is interesting because anywhere from nine cents to $.11. analysts were more bullish. julia: the share price has been halted. interesting to have that happen as earnings are released. just wait and see if there are further headlines. for now, that stock halted in after-hours trades. coming up, we will speak with an economist and strategist and get his thoughts on jay powell's testimony on capitol hill. from new york, this is bloomberg. ♪
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scarlet: some breaking news, the gap is going to be reporting earnings after the close soon. for now we can tell you it is boosting its dividend to 24.20 five cents and the numbers just crossed, $.61 for last quarter, higher than anticipated. that was on an adjusted basis. basis, they are beating estimates. comparable sales a 5% increase. that means net sales also coming in higher than anticipated. app is up almost 5% in trading. jerome you miss?," powell testifying before congress today, offering a rosy picture of the u.s. economy and insisting the fed is on an appropriate path. with us to discuss the takeaways is vincent reinhart.
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learnvestors, what did we or what did investors learned from the testimony by jay powell? >> that chairman powell is upbeat about the economy and he thinks he will be able to raise interest rates this year for a good reason, he is catching up with excess demand. joe: earlier in the show we were talking to tim duy who said he picked up a tonal change with powell and more concern about avoidance of overheating. perhaps less of a willingness to have an asymmetrical 2% target. it is mostly continuation. jay powell is delivering the notcy of janet yellen, 2.0, 1.0. janet yellen agreed in principle
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to re-normalize and tried to delay as often as she could. 2017, jay powell will do the same thing. it was tightening and then a balance sheet action. there was a style difference, though. that is jay powell was willing to express his own view more distinctly. a couple of times he said this makes me more confident. the way i read the data, this is what is going to happen. he is distancing himself from the official communication. scarlet: why is that significant? doesn't mean he's trying to convince other members of the committee? >> i think it's the other way. he wants to clarify and simplify the committee communication. is tootement
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complicated. it is confusing. you need a postgraduate education to understand it. when i was drafting, you only needed a high school diploma. i am proud of that. the goal is to simplify the message and then make sure every participant makes it clear if they are not on that page, they are saying this is my view. the federaler it is reserve for investors, we've been fixated on inflation. i know you have written a report the fed needing to be careful for what it wishes. they have a fixation on inflation because they have a guilty conscience for falling short of targets. they were tone deaf at the january meeting regarding international factors. what will this result in as far as policy? >> what is interesting, since they started the multi-your
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forecasting -- multi-your forecasting and articulated their goal, in 11 out of 12 .orecasts they were under they over forecast of the actual outcome. they are wrong about inflation. looking back over the last couple of years, you have to say it was the international sector mattered. global competition put downward pressure on inflation. it means the exchange rate and commodity prices are especially important for domestic inflation nowadays. and so if the dollar starts to depreciate, that could pass through into domestic inflation. a decisiont, we have later this month. everyone expects a rate hike. there will be focus on the medium dodd moving up and could we see a risk of four plus? tough given the
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behavior modeled by janet yellen last year. you need a meeting morning before you do anything. i think they are going to have a conversation about the equilibrium or longer run funds rate later in the air. they don't have to rush it. participants are noting the tightening. if they get a pickup in inflation, even more than in the last projection, we will reprice into four tightening's. they are in no hurry. you might see a few dots shifting into 2018, but that doesn't matter much for anything except for the short rate. what will matter is later in the
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and they have that conversation about the terminal funds rate. that is priced into everything. reinhart, thanks for joining us. let's recap some breaking news. american outdoor company, better known as the smith and weston company, very much in the headlines the past several sessions. they reported earnings missing estimates, for adjusted earnings per share for the full year. cents --tation, 30 7.5 37.5 cents. no surprise trading has been halted after hours. very topical. we will discuss more next. from new york, this is bloomberg. ♪
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," we: "what'd you miss? are seeing the financial impact of the gun debate since the shooting in parkland, florida. american outdoor brands, formally known as smith & wesson, said lower levels of demands for guns may continue for some time. trading has been halted in after-hours. covers the gun industry joins us now. the fallout continues. >> that is true. keep in mind these are earnings based on what happened. it is important here. this means the gun debate is part of a larger conversation about how the firearms industry is doing. joe: in the old days, there was a pattern where after a mass shooting, there would be a surge in gun sales. people feared reprisals. it seems there has been a flip.
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people don't worry about that. maybe because trump's president. definitely true. about the last five quarters we have not seen that. some people have called this the trump slump another say people are maxed out. if you have three or four ar-15's, do you need another one? that definitely impacts this. the other thing we should be looking at is oversaturation of inventory. some retailers might have had a lot of inventory and they are now moving through it. it does take time. scarlet: certainly as we seen from other retailers. we are waiting for american outdoor brands to be trading once again. it is halted for the moment. another gun maker is declining, plunging, i should say, more than 8% right now. you could see that is a proxy
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for what they might do when they resume trading. julia: people pricing in the brand.t cut for outdoor we are seeing more and more companies respond in their own way. we were talking about this earlier. if you can't get a policy response from the government, the private sector is pushing it themselves. polly: that is right. we have seen walmart and dick's react. joe: what percentage of guns are sold at big chains? polly: because we lack federal data looking at where gold -- guns are sold, it is hard to say. then show culture is real. mom-and-pop stores are popular. julia: you wrote an incredible article for bloomberg businessweek, my favorite story, talking about how in any other faultyy, you get a
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toaster, a toy, it could be recalled. not the case for guns. what is going on? polly: that is right. this dates back to the 1970's. johnrms were left out and dingell, who headed a plus rating with the nra, was a opponent for that. he worried it was a backdoor to gun control that could be politically motivated. now there -- if there is a defect with a firearm, there is no way to get it out. you really have to sue or the company has to decide we are going to remove this product. that brings us back to the private sector argument with gun control. the private sector has to be responsible. julia: you've got to read that story, eight months in the making. olly, thank you very much.
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how different inflation measures have fared in 2018. this is bloomberg. ♪ retail.
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♪ >>runiformecho. -- president limit putin said he had a number of missiles that rendered nato defense is useless. he said you have failed to contain russia. if president spokesperson said the defense department is not surprised by those comments. theyr stance has been -- know it has not ob been about them. we are confident, and we are
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prepared -- we are prepared to defend this nation no matter what. has: the united states argued that missile defense services are not aimed at moscow, but they are into the night threats from iran, north korea, and rogue states. senate democrats have outlined a outlined gunlan to ownership a democrats want to extend background checks for gun ofchases to include the sale gun shows and the internet. democrats also went to allow family members or law enforcement to apply for protective orders to take guns away from individuals who show credible signs of harming themselves or others. has held know the nra the republican party and in a vice lock.
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the republicans are also tried to wiggle through this. that is what this is about. as small as it may be. mark: what he referred to is a bill sponsored by a senator and fixed the background check system. venezuela has pushed back their presidential election by one month. the administration signed an accord with several opposition parties to hold general elections in the second half of may. the opposition said they would boycott the election unless the government take steps to ensure a fair vote. a blackout hits and one, puerto rico after two of the island's main power plants shut down. you one million people live in the areas hit by the blackout. said byciated press this afternoon, power have been restored to puerto rico's main
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international airport and several hospitals. officials are struggling to restore main operations. global news 24 hours a day powered by more than 2700 journalists and analysts, in more than 120 countries. i am mark crumpton, this is bloomberg. julia: the action. threetocks falling for a -- for a third straight day. we should mention of course, this catalyst for the decline was the president announcing he is going to put tariffs on imported steel. julia: we saw an acceleration to the downside. we did see this ounce at the end of the session. to 2.81%.ack thise natural response to environment. scarlet: we also have some breaking news crossing the bloomberg.
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received $700 million last her, that is his biggest takeover ever according to calculations from an annual report filed today. dividends fueled most of that payout. the rest came on his cut of steel profits and other compensation. this according to the filing. $700 million in 2015. let's turn it over to joe with that. a u.s.am here with economy reporter. thank you for joining us. one of the big questions is inflation. is it for real, it's a really gathering steam? we want to take a look at the latest data. you brought some charts as usual. one we are looking at is the measure you have been talking about for a wild. when we sin here?
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matt: this is a measure that takes all of the goods and services, the price at which seem to respond to the unemployment rate in group since -- and group since together. great sign for the fed. is really just not happening at the moment. the yellow line is the biggest component of that. that is housing, that turned up a little bit. at the bottom, every other category in the procyclical inflation cycle took a downturn in january. we are seeing a broad based deceleration in fiscal inflation. everything from restaurants to recreation type services to nonprofit spending and prescription drugs. abouthat is interesting this nature, it seems more
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classically like what you would ly tot inflation like respond after inflation. matt: the whole point of this exercise is to isolate the you do not have all of these -- it is a measure of this. it is the most important one. cyclicalave a inflation which is the other half of this. i brought you the chart as well. the secondgo to chart. it has to do with health care prices. people think health care prices are always searching. it of inflation have been lately/g downward weekl rate leaving the unchanged. with the a cyclical inflation. the bottom one, that is the
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other services category, that include cell phones. this has been the biggest excuse that the fence like to use. there has been a drop in cell phones dragging down inflation. that is worth about six points of inflation. once that is down to the numbers, inflation may go from 1.5 21.55, it is not that big of a factor. is the blue light in january, that is health care. that is finally coming up to levels that are more consistent with earlier in the expansion after a big debt. the problem is you cannot bank on that to continue after the story of the labor market. these are cyclical prices that do not respond. joe: there are so many factors and health care, that the idea of modulating it with rates is silly. mat you cannot havet confidence in the forecast because of that. then you have multi-housing
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-- multifamily housing, why is that important? see construction on multifamily housing is declining. this is important because we talk about housing in the business cycle. residential housing crisis in the last cycle, that has been slow to come back. the thing that has been driving this in terms of investment and credit creation has been multifamily residential. that is slowing down now, that also plays into the procyclical inflation question, we are starting to see a rest with this as well. chart,t related to a what are economy saying about how the fed is likely to react to the tariffs? matt: i think there has been a little bit of confusion with this. the margin is probably going to could bes up, this
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something they respond to. i do not think there is a clear consensus, or what kind of impact that is going to have. we will have to wait and see. a reminder, you will want to subscribe to our weekly podcast. you can find our best content each friday to enjoy over the weekend. from new york, this is bloomberg. ♪
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♪ news, gunmakers plunging and after-hours trading after giving a disappointing outlook did that would be one way of putting of it when you look at the numbers here, they
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are expecting earnings per share two points. is 31.l-year outlook a huge miss for the outlook. a lot of these gunmakers have a lot of inventory on their hands. says it all.ice it has been a major wake-up developments for brexit. jeremy corbyn declared his party support for a custom union with the eu, they put forth their debate for northern ireland aligning with eu rules which theresa may probably rejected. address, she gives an explaining her government's plan for a future relationship with the eu. let's bring in a professor of economics, he joins us from
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naples, florida. professor, great to have you with us. i feel sorry for prime minister theresa, i have no idea what she could come up with to make sense of this. you think she is trying to have her cake and eat it, explain? that is certainly how i would describe her policy that the government has been trying to undertake through this. it makes absolutely no sense. like saying i belong to a golf course, i do to pay to use the sources -- services, now i stop in and expect to still golf there. she is not going to come up with a lot of plans, the problem has been brexit has had no credible plan. especially for ireland. if you are going to leave the is goingikelihood it to have a hard border between the north and the south.
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i have driven there is a lot of times. there is nothing there for the people in the south don't want a border, the people in the north don't. the eu commission can up with a plan that would unify ireland, make the regulations apply to all parts of ireland and if you like the outside, where the politicians inhe britain, they said that is the eu annexing ireland. they don't like it. i guarantee tomorrow, she is not going to come up with a plan. have agoing to government that is going to be in trouble. julia: have a she has a huge credibility issue. this is heresy which is prompting -- propping up her government. how long did she have? david: i don't know where she goes. it is an interesting situation.
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we talked about jeremy corbyn saying the labor party supports her in keeping our in the customs issue. the last we heard, the labor party was talking about business support in the labor party. they support the customs union, the federation of british organizations. they want to see that union maintained. have a situation where businesses are talking against the government. the government has a clear credibility problem. she is being propped up by the dup members but there are people in the tory party who support -- they are remainders. a clear understanding that she does not have a plaque, she does not have credibility at all anymore. tomorrow, there will be very few details, if any. he knows where this is going to go. my suspicion is, after this weekend that we saw the
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intervention of john major, the previous prime minister who said he thinks there should be a second referendum vote, because the government's position is not credible. when of the odds of that happening? > we don't actually know what would be in the words of that. we are not exactly sure. when you look at where the polling has been sense that photo. leaf or remaina at about 3%. i think was support, it is dashing, we should be mindful of what is happening with the economy. that is part of this story. wages have fallen for the ninth month in a row. growth is much slower than it is in all other parts of europe. feeling this
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uncertainty and their pay package. i think we are going to see growing resentment, especially when the government does not have a plan that they can show is credible. my suspicion is, there will be support in parliament, supported the house of lords for something much softer. as each day goes by, we are moving to a position where brexit will be very soft. we will see norway, switzerland, or something. it will be a very weak brexit. julia: ken jeremy corbyn capitalize on this in the interim? he said we will stay in the be able to will also negotiate trade deals with and that, if not be allowed. he is saying he is the guy backed by businesses, that feels quite ludicrous given the things he has said. where do we go? david: absolutely. i was on an advisory panel,
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because what they were saying was not credible. a week is a longtime time and economics. we are seeing -- the best strategy that he can have is we are against you prime minister may, you do not have a strategy. he is gradually moving towards a softer brexit. ais was a person who was what heforever, i think has seen is the political opportunity. if he is opposed to brexit, that may end up making have the next prime minister great he is ahead by two points in the polls. the unthinkable may actually happened. when you're ago, theresa may was 20 points ahead in the polls. the roller coaster for prime minister continues. it is a big opportunity for the opposition. thank you so much for
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joining us. david: we will see what happens next week, nothing will be resolved. tomorrow,don't know never mind next week. scarlet: we will cover theresa may speech. coming up next, we are going to speak to founder and presidential candidate andrew yet a. he is talking about the automation of robots and the solution. this is bloomberg. ♪
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♪ immigration, trade, and climate change will be all themes of the presidential
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election as many democrats again to mount their campaign. takingfocusing on robots our jobs. has floated universal income as a consequence to this automation. he joins us now. the founder of venture for a america as well presidential candidate. your primary concern, technology is displacing jobs. currently the government has a responsibility to respond, including bold steps. why is this the right step? tomany would say we need reeducate workers. when you look at the information, government-sponsored retraining is almost valued as useless. there is one report out of michigan that showed the success rate was about 37%. you is a program where spend thousands of dollars trying to retrain manufacturing workers. we have to start owning the
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reality that millions of workers are going to be displaced in the coming automation wave. universal income is the best and most efficient way to ease the transition. joe: before we get to that, what explains the current environment in which people have been warning about technological change for a long time, the unemployment level confounds the federal reserve and the productivity levels do not exactly scream people using technology. unemployment measures the people in the workforce, the labor participation rate is a multi-decade low. are 95million -- there million americans who are out of the workforce and when you look at the numbers, there is a lot of weakness. any people who have left the workforce, they lost their manufacturing jobs went on his ability, they went to work in retail which is going to shrink a lot. even conservatives now see the unemployment rate is a
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misleading statistic. julia: we have talked about this before. that is the role of truck driving. you say it is the most common job in 29 states. at the top five
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york and you are watching bloomberg technology. here is the first word news. president trump plans to sign a 25%al order imposing
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imports with steel and 10% for aluminum. he says this will provide goods to american producers. >> bad trade deals by other countries, they have been horribly treated by other countries, and they have not been properly represented. more importantly, because of that, workers in our country have not been properly represented. trump is discussing suing opioid manufacturers along with jeff sessions. he is rolling out a policy on fighting narcotics. national security adviser h.r. mcmaster advisor h.r. mcmaster could be replaced by as early as next month. this is being orchestrated by chief of staff john kelly and secretary james mattis. he could be replaced by executive stephen begin -- and the u.s. ambassador too

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