and train teachers to carry guns. union officials will be spoken to about the tariffs on united states goods. e.u. has threatened tariffs on european cars. according to the bank for international settlements, borrowing is seen as a danger in china, and canada was flagged because consumers have maxed out credit cards. these countries are in danger of a financial crisis. els haveds and ernie agreed to be captains of a president's cup in australia. this gives outside golfers a chance to compete.

global news 24 hours a day, powered by more than 2,700 journalists and analysts in over 120 countries. this is bloomberg. ♪ >> live from bloomberg's world headquarters in new york, i am julie hyman. scarlet: i am scarlet fu. jim: i am joe white -- >> i am joe weisenthal. the 10-year yield, 2.86%. joe: what'd you miss? the three items to watch in tomorrow's cpi report. meet david solomon, named the soul -- sole president and ceo

of goldman sachs. and we talk about the future of a decentralized blockchain platform. >> what'd you miss? investors are setting their sights on u.s. economic data. jobs report sent stocks rallying. to start withing this chart on pro-cyclical deceleration. i will let you explain. matt: the jobs report on friday. growth,tion and wage the pace of wage growth in the previous month in december, then we have that deceleration last month. there have been concerns about inflation. have been talking about is this difference between procyclical and a cyclical

inflation, things that are likely to respond to a lower unemployment rates are a cyclical. -- acyclical. there are some sectors of the u.s. economy where wage growth response more sharply to the unemployment rate. that is what we are showing in the white line. the blue line total average hourly earnings. in the labor market are more sensitive to the unemployment rate, which have seen a deceleration in wage growth over the last year in -- year and a half. this is an restaurants and manufacturing. done is gone have and looked at the wages was in those sectors that they identified as being affected by the cycle.

att: kind of looking at the wage growth data for each sector and seeing which one has tended to trend up. you can kind of bank on wage and inflation coming up later this year. >> we will focus on whether it backs up the jobs report. there are a couple of items you say are really important. matt: what we saw in the december data cpi was that you but aughly flat core cpi, bottom stuff moving beneath the surface. on the one hand, you have this pro-cyclical inflation basket,

but there were a few things that chipped away at that. television, radio, the blue line up top. and you had a sharp deceleration in hotels, and lodging away from home. events liketed spore to ticketed events like sport events and bvm's. museums.ng events and there was a big drop last month. does this reverse and give us a boost? it will be interesting to see. julie: when you think about how much you spend on these things, how much of the total is it? we were looking at the biggest chunk out of the overall inflation data.

the was also a major decline. when you multiply those you see not additions. -- non-additions. >> they are heavily weighted. versuso-cyclical acyclical -- matt: this is a statistical exercise, acyclical. you can make the argument that cable and satellite television might be a monopoly, but that is in the basket. joe: you have looked at rent by region. why is this helpful? matt: this is the largest

the overalln inflation basket, let alone the pro-cyclical basket. we are looking at the four regions of the country. the west is being driven by san francisco, seattle, los angeles. that has been coming down over the last year and a half. the white line is the northeast, being dominated by new york city. we are seeing the uptick in the new york city one drove an overall bounce in oer across the nation. there are a lot of reasons to be skeptical. we want to see what continues to reverse again this month. you have a real problem trying to lift overall inflation back up to 2%. this was such a big

deal in the previous jobs report -- apparel cost. that was a big driver for why inflation came in hotter than anticipated. been with apparel, it has so volatile lately, even relative to its past data. it is getting increasingly hard to handicap what apparel is g oing to do. there was such a massive decline. it is not something you can look this is soomething -- something you can expect. coming up, tesla shares are on pace for their best deal in more than two months. we dig into tesla, next.

this is bloomberg.

>> what'd you miss? president donald trump has a's traditional security tour in agreeing to meet with north korea. comments.gary locke locke: the united states has imposed sanctions on north korea that china has gone along with. sometimes, china does not fully comply. reduced their aid

and assistance to north korea. clearly, china will be a key player and have a key role in what ever the negotiations produce. one of the key concerns that north korea has, is the united states going to invade, along with south and north korea, if they give up their nuclear weapons? they want guarantees, perhaps from china, and possibly russia, in protecting and defending north korea if they were ever to disarm their nuclear weapons. kim jong-un has insisted on some sort guarantee from the international community. can china guarantee north korea and we guarantee south korea? professor locke: this is why it is so important -- as your

previous guest and indicated, so many issues have to be resolved. this will require the participation of japan, south china, north, korea, and the united states. china used to be a leader when it came to north korea. is fact that president trump expected to meet with kim jong-un, what does that message say to the cinese -- chinese? locke: the chinese have long wanted the united states to sit down with north korea. previous administrations have sent the message that they would not sit down with north korea until they got rid of their nuclear weapons. in the meantime, north korea has developed their weaponry. diplomacy is always the best avenue.

do have the leaders meet toectly could perhaps -- have the leaders meet directly could get there respective diplomats to start this round of negotiation. it is not going to be solved in a one-time meeting between the two leaders. shery: you mentioned japan. that they have never been too happy with korea relations between the united states and north korea, could we see resistance coming from the japanese? locke: the japanese have much to fear and be concerned about if north korea were to develop a nuclear capability, and the ability to launch those nuclear warheads. they want to continue the conversation with north korea. with the been working

united states to try and put pressure on north korea to stop its nuclear capabilities. wants stability on the korean peninsula. what china does not want is a collapse of the north korean regime, where suddenly you have the south and democratic forces algiend. -- aligned with the united states. japan is seen as a buffer between the united states, and china, and north and south k orea. scarlet: sprint is issuing its second round of spectrum backed bonds.

america's fourth-largest mobilephone carrier is is selling nearly $4 billion in bonds. shares of two of the biggest surged afterenders both announced plans to boost foreign ownership limits. wants to raise noncitizen ownership to 49%. irates also wants to diversify its investor bates -- rates mostly due to reduction in the price of oil. the ceo of broadcom met with treasury officials in his quest to acquire qualcomm, after the concerns about national security threats linked to the chipmakers. broadcom is expected to complete its low -- relocation to the united states by april 3. we have about 15 minutes to

go before the closing bell. we turn to our stock of the hour. fora is halting production five days in february. the stock has been pushed up by as much as 6%. bring in our reporter that covers tesla for us in san francisco. explain why this would be good news. >> there has been a lot of uncertainty swirling around this potential production shutdown. the fact that tesla has confirmed there was a planned in february,a week moves some of the uncertainty. it means production is now higher than it was before. i think the stock is reacting today. like, the shutdown is behind them.

joe: are there skeptics out there that are like weight, this shutdown will -- like, wait, this shutdown will speed up the pace of production? or does it seem plausible they will do something in this time that will make manufacturing better? like,a lot of people are how can there be a shutdown this late in the quarter? sla promised they would make 2500 field goals a week in this quarter. this00 vehicles a week in quarter. no one knows how many cars they are making right now. we are trying to figure that out based on vin numbers. it is a big question on the mind on cust -- of customers and investors.

what matters is being able to exit the quarter at 2500 per week or not. >> people are trying to figure out all different ways to get to the bottom of this. what the reasons they are having to do this detective work is of the reasonsne they are having to do this detective work is that tesla only gives quarterly updates. any chance they will change? dana: tesla has always done things its own way. it does not release monthly numbers. it does not participate in the big auto shows. it does not release a sales breakdown. you don't get teh gra -- the granular data you do with other oems. that's why there's always this big drama every quarter as to what is going on. dana: -- joe: what did elon say that got

the fanboys hyped up? dana: there should be a fully autonomous car by the end of next year. scarlet: did he ever say anything that wasn't as optimistic, anywhere? quite candid. he talked about being depressed, sleeping on the factory floor. when things are rough, he is pretty transparent. but he is always bullish in the end, even if it kills him to get there. is always the believers that will help shore up that stock price. up, investors are reacting to higher interest rates in a sudden -- for cash we haven't seen in almost two d

ecades. from new york, this is bloomberg. ♪

scarlet: what'd you miss? to like the yield they get on ultra short-term debt. this shows the total assets in money market funds. at $2.9nt now stands trillion. that is the highest in almost eight years. yeild on the three months -- yield on the three-month treasury bill has risen. itial tariffuse's int

threats sparked fears of retaliatory action. a risk-offbuted to move. money market funds are seen as more safe havens. you are seeing a little bit of that move. julie: but this chart seems to indicate more risk-on. while tech stocks overall, as 500, havey the s&p not been able to retain their record, the information technology index has surpassed its former record it reached back at the end of january. analysts are more optimistic when it comes to tech earnings. ofhave seen an increase

4% in those earnings estimates. tech is continuing to power the gains we are seeing overall and outpace the rest of the market. joe: 2018 tech is going to the next level. there are ways you can gauge sentiment for the market. suggesting the volatility in early february is starting to calm down. the volume of options activity is being looked at. the put to call ratio has tumbled. we are basically at pre-volatility spike levels. there is much less put activity than theere was a month ago. we have a little bit lower to go

inn those crazy days january, but this is one way of sentiment. we are starting to get back to normal. >> whether you are looking at that put-call ratio, complacency is coming back. people are too optimistic. it is interesting people are willing to put their money in cash. scarlet: order they are waiting for the next down before money for -- or they are waiting the next down before money goes back and -- back in. let's look at how the market is shaping up. points.is off by 122 by haveaq is out -- off

1%. from new york, this is bloomberg. ♪

♪ stocks areyou miss?"

missed but the nasdaq has reached record highs. i am julie hyman in for julia chatterley. joe: if you are streaming us live on twitter, we want to welcome you to our closing bell coverage. we begin with our market minutes. the nasdaq finishing at a record high but across the board when you look at u.s. equity levels, they came off their best session. trade.ower at the end of the nasdaq paring its advances closing up by one third of 1%. joe: this tech rally is remarkable. >> there was no economic data as well. in a holding pattern. apple is trading at a record and amazon once again in the session. we has -- we have a lot of tech

stocks that continue to climb. speaking of which, when you look at individual stocks on the move during the session, semis continuing on their care. macron. itsas trading earlier at highest since 2000. let me see if it surpassed its previous record high. sinceat its highest september of 2000. it had a couple of price target upgrades. the analyst they are from the institute letting a $100 price on the macron share. was in the early stages of another major breakout. it has had a number of those. broadcom shares. talking a lot about that story today. the ceo meeting with the treasury department, officials try to address government concerns over a national security -- over itsonal security related to

bid on qualcomm. questions over whether that deal will succeed. netflix on the way down. a short seller left of citroen citron saying it will go down to $300 per share. said not to expect a netflix buyout anytime soon know how much people are buying netflix shares, who knows. brandsally, newell bouncing back from last week's decline based on news that toys "r" us was liquidating because of all of the great co--- graeco products it made. we also had news that a director for the board of newell brands -- i am seeing now confirmation

on that director is supporting the star board. joe: let us look at the government bond market. not a ton of action of ahead of the cpi report tomorrow. that will be the big show of the week on the eco-front. 10 year yield, some buying in the treasury market today. there was an auction that seemed to go pretty well. nothing too scary there. the tenure yield is down to 2.86%. >> let us look at currencies. the trade concerns getting hyped up last week as the trump administration watered them down. they are still lingering. the euro holding study. gainingie and the kiwi after australia was excluded from the tariffs. and the yen is firmer.

there has been some political controversy hanging over japan's finance ministry. questions about a land sale from the finance minister who refused to resign his post after the land scale -- land sale scandal. if you look at the british pound -- it has given up some of its advance but it is now back to $1.39. the u.n. and the u.k. began four days of talks today and they say advance but it is now backthey e implementation of the process. the implementation period. but the gains here for the pound will be fleeting. joe: and on commodities, let us take a look at oil and gold. quiet overall. oiled them below $62 a barrel. .own 1%

gold is doing nothing. and those are today's market minutes. >> for more on today's market action, let us bring in our guest. to speak with you. as we have been mentioning, the nasdaq closing at a record high and tech stocks continue to power on. names like amazon and apple. joe mentioned that in the absence of any news, it seems that the focus is just on tech stocks. is that an indication of risk on or is that just the path of least resistance? eddie: i think that is exactly right. stick with what is working. it has been an amazing rally. seven straight days for the nasdaq. look at the s&p 500 today. new highs beat new lows 60 nothing. apple, amazon, microsoft, all of

these names. the semi's working well. and who joined in this rally? goldman sachs. morgan stanley. bank of america. financials joining in as well. with the cpi coming out tomorrow, i think so many people think -- let us stick with what is working. we will stick with the trend. report wethe last cpi saw was some of the highest numbers that we had seen in many years. we saw report we little pullback from the broader market late in the afternoon so that could just be a sign -- stick with tech, stick with what is working and we will ride it through the cpi report. joe: is it still frustrating for active portfolio managers? if you want to outperform this intot, you have to pile this same super popular stuff

that everyone else is piling into. eddy: that is always a frustration. group ofhave a small names lifting the entire market. when you have just four or five stocks draining nearly everything. since the beginning of 2007, about 15% of the entire market due for the s&p 500 is solely to apple and amazon. 15% of the entire game. julie: will that keep going? twoyou a buyer of these stocks? or are you looking elsewhere? eddy: i am looking elsewhere. you have to look at the growth in value trend. that cycle has been going on for well over 10 years. i am a classic stock picker. i looked -- i like to look elsewhere for value.

i do not see that trend being able to last indefinitely. i wanted to also point out -- we had the federal reserve meeting next week as well. later this month. this is where jay powell will make his month. this is the first meeting he will preside overthis is where . he will likely raise interest rates. the expectation for hikes has been growing. the futures market currently believes that there will be four interest rate hikes by the end of 2019. a number of additional rate -- approaching 2.4. talk to us about how you are folding this into your picks. eddy: this is interesting to look at. we are going to get the fed meeting next week and this will presse powell's

conference. his first one. plus, we will get the update of the economic projections, the so-called blue dot. what is interesting is that the fed has told us there will be three rate hikes this year. and wall street gets that. edges, are seeing at the growing in the futures market is the possibility of four rate hikes this year and i think that is interesting to see. the futures market is up to about 33%. i would think it would be at about 2% or 3%. we can read several things into that. could there be an inflation surprise for this year? that is a way to protect yourself from this. or is it a growing economy? another reason is that we can see a test of the president's tax cuts. remember, the budget deficit is very wide or this point in the cycle. i think we will see it test

every -- many things. point, the more rate hikes than expected i think it definitely hurts the stock market. it will be a growing trend where growth beats value and interest rates are higher than expected. that is where that divergence is where people stick with names -- with tech names and banks. scarlet: so far so good. eddy, portfolio and editing --ager of the blog space "crossing wall street." to a ceo is planning decentralize the future. also, the cofounder of the theory him -- etherium. this is bloomberg from new york. ♪

♪ >> let us get the first word news this afternoon. secretary of state rex tillerson shortened his first trip to africa in office to help the silicate the u.s.-north korea meeting. he will return after spending just a few hours in nigeria today instead of spending the night as originally planned. he spoke in chad before heading to nigeria. chad asd states values a strategic partner in this region. we know chad faces many security threats on each of its borders. we appreciate chad important role in providing security for its own citizens and its contribution to the security of its neighbors as well. >> chad, a u.s. ally had expressed its disappointment in its inclusion in the travel restriction list.

they suggested that restriction could be removed. british prime minister theresa may says the russian former y's poisoning was from russia. she said it was "highly likely that russia was responsible for sovietng the former officer." european foreign-policy chief willthe eu will respond -- extend funding to ukraine. he was visiting the capital of key have today and -- kiev today. improveine is trying to its economy after years of inefficiency and corruption. it has been hit hard by the separatist conflict in the east. a jury has been chosen in the a man whohe widow of

went on a shooting rampage at a nightclub in florida. herwidow is scheduled -- trial is scheduled to begin on thursday. aiding andsed of abetting the suspect. global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. this is bloomberg. the techd you miss?" world is defending on austin, texas. the annual event starts as a showcase for some of the hottest startup companies. one in attendance is consensus else on the ethereum block change. to enable a decentralized future. with us is the founder and ceo of ethereum, joseph lubin. good to talk to you, joe. let us talk about sxsw. i am curious about the

programming geared in that direction since it has been such a hot topic in society at large. of: there is quite a bit programming focused on block change. we had an event with about 4000 people in attendance. we are running the ethereum lounge. and we have right now a women in block change event going on as we speak. we have had events with steven with steven and a slate of other activities. being ining around and all of the different events isund the area, everyone talking about block change in the event or peripherally. are they what extent not really highlighting bitcoin. the bitcoin bubble has seemingly burst even though there is a lot going on when you check out the price action when you look at the other platforms and look

into the demand for black change and cryptocurrencies at large. joe: it may be hard to tell because we are so focused on building decentralized applications on the ethereum platform. we are so much less focused on cryptocurrencies like bitcoin. argue that we have seen a correction in our space but calling the bubble to have been popped is a little shortsighted. i think there is tremendous foundational, fundamental work being built in our ecosystem and it is very early days for the ecosystem. joe: throughout the for several quarters in 2017, we saw an explosion in the space.

anxietys been a lot of lately about a regulatory crackdown and the status of many of this, how much does this threaten the interest in ethereum if one of its main applications is under such regulatory scrutiny? we are extremely happy about how things are going globally with regulators. there are many jurisdictions excited about tokens and that is true in this country as well in the u.s. are many great applications being built worldwide on ethereum and with other blockchain technologies but there are many bad and fraudulent projects. it is perfectly reasonable for a bit of a pause in our ecosystem. many important i think for projects to do their legal homework and issue tokens properly. joe: you talk about all of the

projects that have been launched describe asthat you promising. the underlying platform though is still not predicted -- particularly robust in terms of spacing. what is the timeline of a roadmap where someone can launch something and it can be expected to run without slowing down the network? joe: it is remarkably robust and respect to security trust history, software developers has been pushing the bounds of scalability on every platform they have built on. we have a trust infrastructure that enables better collaboration. we are seeing technology like state channels and plasma that will ratify this year, in the next few months, for different kinds of applications. excellent testan showing us where some of our

clients were week and where some of those issues -- were weak where some of those issues are. short term, there will be some excellent fixes in 2018 and in the next two years, we will see dramatic scalability increases. >> there are new derivatives coming to ether. calleds an exchange "true digital." what affect his is going to have? we already have some derivatives from cryptocurrencies. what does this bring to the table and how will it change the pricing, for example? joe: bitcoin is a cryptocurrency and there are cash settled issued those. that was an interesting early step in the development of and adjacent financial industry --

infrastructure. ether is a crypto fuel. there are other fuels. we need real financial infrastructure around these things so in addition to having some caps settled forward for bitcoin and ether, very soon we will see the liver moving forward. co-founder, joseph lubin. he is also cofounder of consensus -- i should say ceo and founder of consensus. named as the president and the chief operating officer of goldman sachs putting him in line to eventually replace lloyd blankfein as ceo. this is bloomberg. ♪

♪ the irish you miss?" border is a sticking point in brexit talks. theresa may has given her words that there will be no hard border between northern ireland and the rest of the u.k. britain's exit from the customs union threatens to derail the negotiations. ireland's deputy prime minister talked about the difficulty of solving the irish border earlier today. to move from one customs union into another. there has to be some border checks. we have to prevent that from happening. and we are happy to talk to the british government about ways in which they think they can achieve that but in the absence of that agreement we are very clear about the default and the eu is clear about the commitment

given by the british government in december which is in the absence of a political agreement that the default position is that northern ireland would essentially ensure that there is not a border with the republican -- with the republic of ireland by maintaining alignment with the rules of the customs union and the single market. that creates problems for the united kingdom's single market and so we want a more comprehensive solution that can solve all of these problems. at the moment, it is difficult to see how that could work unless the british government changes its approach towards a future relationship with the single market and the customs union. so far, they have not been willing to do that. >> deputy prime minister, how are negotiations otherwise going? we couldany likelihood see a semblance of a finalization of a transition deal by the march summit? >> i think both sides are very

anxious, as is ireland, to try to get a clarity around transition. there is a lot of pressure coming from businesses in the u.k. on the british government to try to get clarity to the transition arrangement. what is likely to happen is that the rules that are currently in place within the european union would apply in britain for that period of time. so that people and businesses are not going to have to change twice. once for a transitional arrangement and one -- and once for a more permanent relationship. that is the first thing that i hope the negotiating teams will be able to get agreement on in the coming weeks and months. so we can then move on to what is called a withdrawal treaty which we have a draft of now from the eu side but more importantly we can start to negotiate with the future relationship can look like. and hopefully, from an irish

perspective and the eu perspective, we want the future relationship to be as close as possible to the status quo to weaken mint -- maintain the strong trade relationship we have with the united kingdom and that that you has with the united kingdom as well. but letthat makes sense us see how the negotiations developed because they are complex. >> looking at the findings of the latest kpmg report, for businessesus see how the negotis developed because they are complex. >> to look for certainty , it is contradictory. how much of the contentious issues can be left beyond the deadline? including the border? >> i think in truth there is no way we are going to have a agreementree trade negotiated before britain leaves the european union. coming up, we will talk a --

we will be talking about the state of manufacturing in the u.s. ♪

♪ let us get a recap on today's market action. the nasdaq climbed to a record up by 0.75%. the indexes did come off of their gains from earlier. the s&p 500 ended up closing in the red. -- it gives you a sense of the excitement surrounding these tech names that carried over into 2018. or clarity when it comes to the line of succession at goldman sachs. david solomon is they sold president and ceo at the firm. -- and coo at the firm.

no word on a timeline for blankfein's eventual retirement. he brushed off reports that he was when to step down as ceo. finnid i feel like huck listening to his own eulogy. let us bring in devon ryan. for investorsk that this structure would last and create confusion? >> i am not sure it was a big risk but anytime you have certainty, that will be received well by the market. as of friday, there was a lot of uncertainty about the future of the firm. i think investors even then had comfort that the ball was already moving forward in succession planning. he has had a long run by any standard. just that level of clarity that

we got today about who was going was comforting to the market. harvey schwartz is well-regarded i the market. situation thatal happens when you have leadership changes. it creates a chain reaction. it is all getting accelerated. we are a little surprised at how fast this has developed but the market is comfortable. they are hand forced by the friday story. if you look at what the two men are in charge of the schwarzman is a trading guy and solomon is the investment bigger. looking at the quarterly basis, you have investment banking in orange and institutional client services in white. how much of this is a function of the health of their respective businesses and how much of it was a factor of their personalities and their positions in the firm? joseph: that is a great question

-- guest: they have very different backgrounds. and one is in trade more in investment banking. in terms of where the firm is going, if you are looking to bring in a later of the firm from where the next generation of the company is going to be, i think that is what the decision is about. i think they are both well suited. looking at the next 10 years, the future is more towards digitizing and pushing harder as thending with markets first iteration of that on the market side. -- both more individuals have been involved in that. david knows the clients very well. he is well-suited. expect towould you see these new digital initiatives move the dial at goldman? >> another good question.

you have have -- that is already moving the needle. they are doing a lot of things on the retail come up well to management site. one point that gets missed is almost a third of the company is either programmers or engineers. evolvingly is a firm towards technology and digital. i think they are on the front facing part of the industry. and i think that is underappreciated. joe: are they further along -- i , they talkedan about their massive tech investments. is goldman ahead of the race? they are as far along as anyone. everyone takes a different approach and has a different business model but jp morgan is at the front of the pack that goldman sachs absolutely is.

if you think about where the firm will be in five or 10 years, you think about how employees have expanded into those units and all of the initiatives -- it may be a little below the surface. the will move the needle in next five years and that is what i am thinking about. some investors are ahead of that but some are looking at goldman as the old investment firm. the future, it could be quite a bit different. , according to our calculations, is trading at 12.5% or 13%. you are neutral on the stock. what needs to happen at goldman to keep fueling -- it has hit a record, that is pretty impressive. what will fuel the next leg up? >> it has been a great story and a great stock and that is part relationew on its call. -- on its valuation call.

we need to see things that a curse here that are going to make us think that the return on equity is going to go to the mid-teens or higher. it was 20%., because of capital restraints in regulation, it has been more muted. i think the things they are doing, pushing more towards technology and retail lending and retail wealth management, that will boost them. we want to see more traction but absence regulatory shifts, that will push equity. >> final question. lloyd blankfein has been at the firm for 36 years. he is only 63 years old so he had -- so he still has time for a second act. will he moved to washington? washington?ove to >> in this administration?

>> i think you will have to ask him. .e probably will not sit idle we are not shocked about the news of from friday but we will give him a little time to take a vacation and he can figure it out. >> he and gary cohn can have a vacation. blankfein has not left yet. so that is the caveat of all of this. devon ryan, thank you so much. joe: coming up, measuring manufacturing in the u.s. -- why the current method for understanding this share of the economy may be misleading. you can get involved in the conversation right here on "what'd you miss?" send me a tweet. here is my account. here is some video of what we are watching right now. >> and that is just today. and send any of us a tweet

maybe we will incorporate that somehow into our programming. this is bloomberg. ♪

♪ and you'd you miss?" factoring. how is it holding up in the u.s.? it depends on how you measure the economy. fox has ajustin complicated measurement that could lead to mislead -- misunderstanding. joining us now to discuss is the aforementioned justin fox. an interesting piece. and you factoring is a hot topic right now particularly with the talk about tariffs and the president's emphasis on reviving manufacturing. what is the problem? >> everyone knows that employment in manufacturing has

gone down in the last decade. toething from 30's -- 30% 8%. manufacturing output, if you measure it in inflation-adjusted terms, has gone up over the decades. there are some issues with the way you measure that because computers, because they are much higher quality, that counts in the gdp as higher output. the same amount as computers because they are better. that is something you have to get your head around that is weird. another good way to think about manufacturing and its role in the economy is its share of the gdp. this started last week. there was a fight on twitter between the american enterprise institute and a former obama economic adviser and some trump supporter. and the trump supporter was saying that manufacturing share of gdp had fallen. and they were saying -- no, the

manufacturing percent of real gdp has remained constant. that got me looking. it turned out that the trump supporter was correct. is that the key thing the claim that manufacturing has maintained itself is based on the idea of historical, a share of real gdp which attempts to it -- inflation-adjusted all of these things. but as you point out, the best anyto do it is look at individual moment of gdp. that is what the bureau of economic analysis says is what you're supposed to do. the big issue is prices of manufactured goods have not risen as fast as other prices like health care. and so, there is a tendency to think that the share of nominal gdp is under representing this

relative improvement in manufacturing productivity. the problem is and i could barely explain this in print and so i won't be able to do it in -- on tv fully. that realm is the way gdp as calculated dividing something by real gdp over a period of time turns out to be complete nonsense. the different parts of real gdp do not actually add up. joe: real gdp is made up. nominal gdp is it real and real plus someinal gdp statistical math. >> the reason we want to know what real gdp is overtime is that as opposed to cancel out inflation so you get a sense of what the real growth of the economy is. thing about how real gdp is calculated since 1996

that means that the parts do not add up. if you divide one part by a another, you're not really getting a percentage. accustomedts we are to seeing may be misleading. you contacted different agencies to say -- this may not tell the whole story. how did they respond? >> initially, i contacted carl whelen. nows a professor in ireland and he looked at a couple of the chart that had been referred to in the debate i referred to. i emailed the authors of those the st.nd the guy at louis fed never got back to me but the guys at brookings did and the acknowledged that we know this is a flawed measure but we thought it was better than dividing by nominal gdp. after talking to others, it is

not. >> why is manufacturing so important? >> one thing is that manufacturing jobs have a multiplying affect, they create other jobs around them in the way that service jobs do not. the other thing is there was a lot of talk, and apple is a classic case, designed in california and made in china, the idea that the high-value stuff will be back in the u.s. but the manufacturing will be somewhere else. it turns out that a lot of the technological knowledge that you gain from manufacturing actually pushes you forward in the ability to make innovations and do all sorts of other interesting stuff. you cannot totally separate it. it is important to have high-value manufacturing. that does not necessarily mean that you need to save every last steel plant but the idea that it

matters to have high-value manufacturing in the u.s. has gotten short shrift. >> and they are good jobs. and they formed the backbone of the middle class. >> it is now a .5% of jobs. joe: as for the tariffs themselves, do you have a verdict? is or anything read deeming? redeeming? anything >> i think there has been a knee-jerk reaction of free trade is always good. i do not think that is right. i get the feeling that these particular tariffs are a knee-jerk reaction that are not well thought out and may cause they help theen steel companies. but i think the general idea that it kind of matters to keep some kind of manufacturing in the u.s. and we should have

policies and strategies to obamaage that -- and the administration solve that also but i still think it gets short shrift in the general discussion. >> free trade is not all it is cracked up to be. >> right. >> coming up, robert mueller's special investigation may be coming to a close. he may be pressing a pause button on certain parts of the probe. we will discuss. this is bloomberg. ♪

♪ special'd you miss?" counsel robert mueller's investigation into whether president trump obstructed justice is said to be close to completion but he seems to be setting it aside for now.

to help us answer that question, why that is happening is the white house reporter. shannon, when we talk about robert mueller's investigation, it is a pretty big one. he is looking to see if there was collusion between donald trump's campaign and restaurant interference.ian the portion of the investigation that may be coming to a close is the president's obstruction of justice. there are a lot of different baskets to this investigation from russian to paul-- troll firms manafort's finances. and this piece with president trump. including asking director comey to go. on the obstruction peace, most

of the work there seems to have been done. the interviews have been conducted. overhite house has turned thousands of pages of emails and --uments related to them related to the firing of flynn and comey. and now, they are in the negotiations about an interview with the president. however, just because buehler may have all -- robert mueller may have all of this information in a pile and could reach a conclusion, it does not mean he will make that public. because, putting out there any sort of charges related to obstruction whether it is as large as the president or other players, smaller players involved or false statements that people have made along the way, could interfere with the broader investigation. just because he is nearing the end does not mean that the public will get any resolution on that piece of the investigation. joe: to be clear, we do not have

any idea whether robert mueller will bring charges or not but the basic idea is regardless of what he plans to do tactically, the move is to wait. we have no knowledge of the charges he is going to bring. even if there were no charges, putting out there that there is couldtruction of justice interfere with the other investigations because it could cause the president and the white house to put pressure on theto wrap up investigation. ok, you found nothing here. what are you doing? let us wrap this up. even if there are no charges to be found, he may keep it under wraps and continue to do his work. in that case, what do you make of the fact that we know there are indications he is wrapping up this phase? someone had to tell you and the other reporters that this is happening. i am wondering if this advantages robert mueller to get

this information out there. when you look at the gamesmanship, how does this fit in? when you talk to experienced prosecutors, here is where we get into the element of robert mueller playing 3-d chess . looking at the big picture. we just have a tiny piece of the puzzle. he has many more of them. and is accumulating more. looking at the big picture and how when you make one move, it could trigger a lot of others that could interfere in other pieces that we may not even know are out there. sometimes, when we look narrowly at obstruction, there is the expectation that he would rapid up since he has the pieces but it is a reminder that there is a lot more going on here and one move of a piece on the chessboard could impact the entire strategy. >> that brings me to my next

question. do we know or have any sense of when the president will be interviewed by robert mueller? it has been something they have been negotiating. the terms of the interview. pastter: all of the predictions we have been given on timing have been wrong so far. we had reported in january and february that it could be a matter of weeks. i can say that they are continuing and active and ongoing. involvedlk to lawyers in previous high-profile negotiations like this, they said this is lawyering and it can take a while. there are no indications of the likelihood or the terms and how favorable they will be to one party or another. thank you, shannon. >> making sense of a pretty complex story. it is now time for the bloomberg business flash. johnal electric's ceo

flannery will not get a bonus for last year according to a regulatory filing. --cites the performance of the company. deutsche bank -- an ipo and its asset unit. wants to cut 6000 jobs in its retail unit by the end of 2020. the bank is counting on voluntary departures as well as natural attrition. shares onans to list the new york stock exchange the week of april 2. the online music company will deviate from decades of common practice by not issuing any new shares in the ipo. will use a direct listing. apple is buying online magazine

texture. this is part of its subscription push. users apply to many magazines for $9.99 a month. and that is your bloomberg business flash update. you need toup, what know for tomorrow's trading day. this is bloomberg. ♪

♪ "what'd you miss?" u.s. stocks coming off of their highest with the nasdaq still closing at a record. pennsylvania is holding a special congressional election andeen rick saccone conor lamb. joe: and the cpi numbers will be out at 8:30 a.m. eastern time. >> and the u.k. chancellor of the exchequer releasing a statement with new economic forecasts. >> mom you called? oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie?

it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. alisa: you are watching bloomberg technology and here is a check of first world news. for the first time since taking office, president trump is headed to the state that is the anchor of the u.s. economy and

heart of the anti-trap sediment -- travels to california, he lost the state in a two to one margin and has since but the nation and challenging his policies. president trump says he is waiting for court cases to be decided before acting on raising the age limit to buy certain guns. the president tweeted he will be backing tougher background and willr gun fires allow trained teachers to carry guns. nasa's acting administrator plans to retire at the end of april after a 30 year career with the agency. they are without a leader without president trump's nominee and his recognition comes after the agency is looking to pivot back into human spaceflight after the program ended in 2011. a pilot whose helicopter crashed in new york's east river