to the white house by the president. according to people familiar with the matter, the president had discussions about firing rosenstein, who supervises special counsel robert mueller. the president says china isn't the only nation with unfair trade rules the u.s.. he addressed the matter at the white house while discussing the recent tax overhaul. the europeanmp: union, same thing, it is hard to do business. we lost 151 billion and trade deficits last year. it sounds innocent, but it is not good for us. so we are renegotiating. added tradeesident negotiators are making progress in talks with china. the wto chief says he understands president trump's desire to create u.s. jobs and boost salaries. but he says countries that get

tough on trade should be careful to avoid what he calls a domino effect that could derail such goals in the first place. >> the possibility of further escalation remains hypothetical at this stage, but a reality nonetheless. however, it seems even the escalation mayer already be having an effect. he added that a u.s.-china dispute could have international ramifications, but he added we are not there yet. sites to sources as saying the u.s. has collected light and urine samples from the deadly chemical attack in syria that tested positive for chemical weapons. officials are fairly confident that the samples suggest that chlorine was used in the alleged gas attack. officials say the u.s. has other

intelligence including images that indicate the syrian government was responsible. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. ♪ julia: life from bloomberg headquarters in new york, i am julia chatterley. we are 30 minutes from the close of trading as equities rally and bonds. as the president tones down the rhetoric on china and syria. joe: but the question is, what you miss? scarlet: president trump asks advisors to look to rejoining the transpacific partnership. mixed messages on syria.

president trump says he will weigh options for the four hours after saying to get ready for missile attacks. at the moment of truth in the volatility blame game. the big spikes we have seen this year might not be good for them, and jpmorgan and citigroup and wells fargo report before the bell tomorrow. a slew of headlines out of d.c. today, the major policy change from the president. a few days after his inauguration, president trump abandoned president obama's pacific trade partnership, and promised a better way forward for a u.s. trade deal. he reiterated the point last november. president trump: we will have more trade anybody ever thought of under tpp that i can tell you. idea, andt the right i will be proven to be right.

we will have much bigger trade with the way we are doing it right now. julia: that was the transpacific trade deal. and now the president is telling the senate he is looking to reenter the trade deal. it republican from nebraska told reporters earlier today. >> it is good news the president is the same to advisors, and he said he is going to deputize robertudlow and lighthizer, and is good news for america and the rule of law and the pacific. julia: we are joined by alex wade with the latest. what a difference a few days makes. is this the impact of larry kudlow explaining the benefits, particularly with targeting china and the influence of being involved with the tpp? >> gary cohn was a free trader too.

i do think it is a change of attitude from the national economic adviser. trump is confronting the political reality of tariffs. when he slaps tariffs on other countries, they tariff farmers. farmers but this guy in office, so today he made remarks to farm stateroom publicans and guys who are very anti-tariff were very upset with trump's tariff plans against china and steelmakers. ishink that is why he walking back, his voters are going to be hurt because tariffs. for thet would it take white house to rejoin discussions of tpp? what is involved with their? re? alex: it would probably be easy. i think those countries would be terribly resistant and talking about rejoining. i am sure the trump

administration will look for a concession, but i suspect it might be nothing more than a fig leaf. they might sign the deal obama negotiated. scarlet: they already negotiated all the details, and i can't imagine the white house will enter negotiations as opposed to coming out with their own custom requests. alex: these are a lot of countries, and it has gone into effect with 11 other countries. i think the u.s. would want to get something so that the president can save face. but those 11 other countries would be willing to give much. julia: talk to me about what else is going on. the president is softening his own in terms of talks of action suggestiond

seems there is less of a reaction that initially suggested. what are we thinking on syria and what is the latest there? , and we haveh little reporting to support this, but we are trying to figure out where the russians are. the worst that could happen if we attack syria is if we accidentally kill russians soldiers in a strike. the russian government said this morning that the hotline is open between the u.s. and russian side in syria. i think the two sides, the russia and u.s. are talking about what next optimal attack looks like. reports earlier of proof there were chemical weapons used in the attack. this is that the heart of the current discussions. you are suggesting what some form of attack would look like. you talked about rush of sanctioning some form of military action in syria. , but iever public a

think there could be a week and a nod from russia that they are not going to respond, as like as we restrict our attacks to certain locations. we have no reporting to support that, but the fact that it has taken so long since the president said he is going to retaliate best the fact he backed off that very aggressive language yesterday towards russia -- and this indication from the kremlin the two sides are talking leads me to believe there is some kind of deal being worked out. julia: back channels at work. would beand the person in charge of back channeling is the future secretary of state -- mike pompeo, and he is having his hearing in congress at the moment. what did we learn from hearings today? he was confirmed as cia director, so what is new? acknowledged the state

department is demoralized and employees are not really happy working there, which is an interesting observation to me. those vacancies are the fault of his predecessor, rex tillerson, and the white house, refused to fill positions. especially after career diplomats left the agency. that was welcome news to people at the state department. other huge story certainly the white house come in questions if anyone can that justice department is going to be fired eminently. planss about your weekend and how watching the story unfold is affecting how you are thinking about friday and saturday and sunday. alex: i wish i had weekend plans. [laughter] between syria and the justice department, i am pretty well but. it is a wait and see on both.

it looks like -- if i had to guess right now, i don't think the president is going to fire anybody this week or this weekend. his allies and surrogates going on tv in the past 24 hours and saying he should fire rod rosenstein or bob mueller or jeff sessions -- i think people in the white house and members of congress especially are advising him that would be really bad politically. bloomberg white house editor alex went from washington, rest up before your visit weekend. coming up, joseph stiglitz discusses negotiations with the u.s. and china over trade could play out. is it a trade war, could skirmish, or negotiation? this is bloomberg. ♪

scarlet: trade tensions between the u.s. and china are to be investors on the edge. tariffs and tough talk have spooked markets, but china has answered with a measured approach. joseph stiglitz earlier today and began by getting his thoughts on a response. joseph: i think they have a good understanding of the united states. they studied the united states, and they studied very carefully. there is an old saying in china in any conflict, no your enemy, and study them carefully. they are thinking exactly about that. that is one of the reasons they have taken a measured response. not escalating -- very measured.

at the same time, they realized that trump is a schoolyard bully. with a bully, appeasement doesn't work. what they are doing are things they believe are in their own economic development interests. they believe opening up their financial markets at this stage is in their interests. it was not in their interests years ago, they have a dynamic view of development. at what is not good at one stage becomes good at another stage. theseome to the view that opening up this precisely what they need in the next stage. scarlet: is the u.s. doing the right thing in approaching china to understand where they are coming from and understand the landscape? joseph: i don't think the united states government has any deep understanding of china.

that is quite sad. i don't think they have anybody weston engaged with china -- engaged with china. is going to engage over the 30o china or 40 years of its development process -- and seeing how they have been evolving both economically and politically. scarlet: talking about globalization come as changed quite a bit. of u.s.he off shoring factory jobs, and you can argue it has gone on and i thought and one come back. has it taken a new form that doesn't show up in traditional data? complex products and ideas, and we haven't figured out the road to there? joseph: we began to discussion

on intellectual property -- which led to the wto. recognition for what is called flexibility, that certain conditions you would allow compulsory licenses. but we didn't have is people who understood the actual property. our trade negotiators are basically lawyers who are engaged in fighting -- not people per instance who are at the center of science and technology. and they have said, what is the best intellectual property structure for advancing the well-being for people all over the world, and recognizing the appropriate structure property regime and united states is not going to be the same as for china. they are in different stages of development.

days to be a more sophisticated discussion of intellectual property that we are not getting out of this administration. scarlet: how do we get there? you and the private sector in figuring that out? joseph: you need both scientists and the private sector. one of the problems in the past is the pharmaceutical industry and entertainment industry have really dictated america's perspectives on intellectual property. and what is good for the pharmaceutical and entertainment industry is not good for the advancement of science learning in general. scarlet: that was my conversation with nobel prize-winning columnist joseph stiglitz. julia: it is time for the business flash in the news right now. volkswagen has announced a new chief officer. he will oversee i.t. for the

groups vehicles to help its lyric technology change at the automator. beenhe ceo has also appointed to the management board. scare ands a mcdonald's. affected customers on march 23, and individuals with eight at the location should look for symptoms between april 7 through may 12. china is paving the way for smart technology and the government is testing an expressway embedded with mapping centers and electrical battery chargers. cars can't charge wirelessly and provide individual data to drivers. according to estimates, china will have 13 million autonomous vehicles by 2025. and that is your bloomberg business flash. houret: our stock of the

is soaring on a potential deal. here with the details. gopro has had a tough go. and it has gotten cheaper, and is reportedly ompany is to cut th concerned about. gopro hasn't been doing very well. we know the stock has tumbled over the past several years, retired j.p. morgan chase to advise it on a sale. the test been floating around, and there is questions of who would come in and buy it. there is a interesting potential buyer for it. joe: this is a small company now worth less than a billion dollars. julie: it is worth over $700

million are now because the seals have been coming down, and i have a chart at the bloomberg looking at the company's gross margin. we saw a drop in the fourth quarter, the most rheumatic drop we have seen in recent years. drop,a pretty negative the company took charges, and tries to cut down on expenses and headcount, but that has not managed to catch up with declining sales and choppy earnings. scarlet: at the and of the day, it is a hardware company, no matter how it tries to spin itself as a media company. julia: why are they find it, is it about the brand or the hardware? they are a technology company themselves, they could do equally if not better. julie: that is what men himself who at times is an effective ambassador for the company. bloomberg intelligence also points out that gopro has plans

to try to improve things. it is going to spend 50% more on marketing this year, although one could argue you are a good brand already. doesn't have a licensing deal and we may see some layoffs, and some measures are designed to get a buyer to come in and make the asset more attractive. scarlet: we know you cannot cut your way to growth, no matter how hard you try it. coming up, if you have a luxury home on the market, have a chart you miss to see what cities are faring better. this is bloomberg. ♪

han the dollar rand. negotiations, we see the russian ruble with a step up and sanctions, and the turkish lira, whether it is economic or political tension, also spiked. you could see south african rand for now, a harbinger. joe: it will be back.

it is a matter of time. you might think with the recent volatility, consumers are anxious about the economy and their own finances -- but not the case with the latest update from the bloomberg consumer comfort story. people are feeling good, and the white light is the index that hit a new post crisis high -- the highest levels since over a decade. the blue line is specifically about how people feel about their personal finances. you think that is where anxiety shows up, but no, it is not having an effect. if you're looking for the transmission mechanism between stock market volatility and economic slowdown, this is one data point that doesn't show it. scarlet: but there is anxiety people in certain neighborhoods, and the tax overhaul is h

urting certain markets, westchester county, north of new york city. biggest annual drop in four years, and you can see it marks the third quarterly decline. decline thisr quarter, giving contracts to buy homes are down 14%, the most in five years. and average property tax westchester is the highest in the country -- $17,000. another way of looking at the slump is the number of days hike and properties are staying on the market and not sold. this is sobering as well. westchester -- 798 based in average height and homes on the market. market.end home on the san francisco, interestingly enough, also faces a chemical taxes -- faces state and local

taxes. joe: they should show up with facebook and google cache. julia: we should have a ratio of millionaires and billionaires in that region. scarlet: the market closes next. take a look at major indexes before the close. we are looking at gains with the nasdaq up 1.1%, and the doubt 1.4%. this is bloomberg. ♪ welcome to the xfinity store.

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♪ julia: geopolitical tensions cooled down, and stocks go up. president trump the because toes back into tpp, at least for now. i am julia chatterley. scarlet: m scarlet fu. and ifn joe weisenthal, you tune in on twitter, we welcome you to closing coverage. begin with market minutes and an update on u.s. stocks, a turnaround from yesterday's trade. we see stocks gaining with the nasdaq up at better than 1% and the s&p the laggards here. the dow adding 300 points, and the president stopping his

and tensionschina in syria, and he is also saying he is reconsidering joining the tpp. julia: according to reports from the new york times, will continue to watch headlines. scarlet: nonetheless, who was an update for stocks. joe: that is well put. scarlet: last year it did not matter, but this year it is an irritant. and abigail doolittle highlighted this, bed bath & beyond on the worst day on record going back to 1992. heavy discounting promotions way on the forecast for the coming year, pushing it below what analysts are targeting. and abigail told us it is not giving 20% coupons anymore. down more than 4%, saying the earlier easter this

year the total company sales. also saying total company margins were down as well, below expectations. victoria's secret is in particular were the damage was seen. thanlackrock is up at more 1%. when you look at the earnings overall, it beat analyst estimates. joe: let's look at the government bond market starting with the u.s. action. pop ina substantial yields. some of the breakdown of traditional of relationships with risk assets and treasuries, but not today, people buying risk asset stocks, and selling treasuries at a substantial amount in the short and long end. is 10 year yield up, and it in a range that it has been come

up it is getting towards the high-end. julia: and the same story in currency land. and tensions coming down between the united states and russia -- also pointing out what is going on in the dollar cad. we see the canadian dollar losing ground in the session, best theng estimates monthly change showing prices dropping for the first time since 2010. watch the 200 day moving average. we saw the euro under pressure, continuing to watch the softening of european. industrial output numbers unexpectedly falling for a third consecutive month. joe: and on commodities, some interesting moves. oil continuing to advance. not a huge move today by any stretch, but nonetheless about texas0 mark from west intermediaries. and gold selling off.

this is the safe haven today. .6%.down while and speculation of china releasing stockpiles that will diminish the price -- and soybean futures, somewhat of a proxy over anxiety of trade, gaining 1.2%. i want to go into my terminal -- aluminum is on a tear. it had been rallying, and tariffs,ullishness and but diminishing supplies -- it is at its highest level in five years. and those are today's market minutes. scarlet: we have breaking news on.com, reporting a 12 billion dollar share buyback authorization. a program in place to do so and it is effective until

november 3 of 2019. this comes after the company failed to buy all, because the government invented it from doing so. itsdcom completed redomiciling. julia: this is one option. scarlet: the stock getting a little bit of it left in after hours trading. jt's begin jim paulsen who oins from minneapolis. all,oticed, as we have that news barely drop the markets last year even with all the noise from the trump administration. but this year, it is taking hold, why do think that is? jim: the market is more honorable this year. the valuations are a lot higher. the edge of liquidity is contracting in the last nine

months. we came into the year with the most excessive optimism we have had on things for a while. bullish -- and now this year a rise on the curve, including the 10 year. inflation concerns are escalating, and that makes a vulnerable stock market. a year ago we had the same news that the president with tweed every morning, we had fed meeting news, and it didn't do anything. but this year with vulnerability, the news takes much bigger impact for daily volatility, and we continue to see that in the last couple of weeks. julia: looking at the price action in the snp, we are pulling up the chart knows looking at the failure to break above the unchanged level of the year. 2672 is where we seem to keep coming to an failing to break above. in terms of the sentiment in the

market here, do we need a strong earnings season to allow us to break above? points you mentioned, the sensitivity of investors, even the technicals seem to matter. jim: i think the technicals are the biggest thing in the room. ever since the february bottom, the technicals have been very dominant they in and day out. we haven't been able to establish that we are necessarily going to break below this february lows, nor have we established we have retested in the water is safe and we're headed to new highs. we are stuck there between the february lows in the year to date unchanged marker. at some point, we are either going to have a serious challenge on blows or we will break about 2800 and the s&p. brighton out those technical boundaries continue to dominate things. i do not if you will be earnings.

pressure on wall street that earnings is what it will save us, and it will return mojo to the market. i'm less convinced. i very much agree that earnings will be spectacular. it is just that i think there is reasons to believe the earnings eight up on the stock market -- the earnings data will be quite muted. paid ourselves last year for the earnings this year, and have already been paid for the earnings that are going to come out. joe: one of the big questions for investors is what happened to tech. fangbooked on the thanks stocks. the companies that are more in the attention of regulators. you can see the blue line on the chart, the unregulated once, if can tell us what some of those significantly

outperforming the regulated once. nes. jim: how i broke that down is stocks of theang 10 most popular companies. you can break them into for stocks that get most of the revenues from the reselling of collected user data, like facebook, for example. and those who get their revenue models in the more traditional selling of products and services like amazon. if you break those down, i called us to indexes the regulated index in the nonregulated index. not that they are currently regulated, there is nothing like that going on. but what is so interesting since the inception of all 10 of those of 2014, the is as nonregulated index has been so much better consistently, relative to the regulated fang

stocks i. it is almost as if there is relation on these two types of companies, even though there hasn't been, but the market is treating them that way in terms of performance. scarlet: we started earlier by saying the stock market's name more tolerable place right now and there's an adjustment to a new level for the economy, one that is more sustainable and upcoming changes its character in little bit. are we in the early stages or have we gone through a chunk of it? jim: i think we have taken some of it -- we have dented some of the optimism we had in the third week of january. we are more defensive a little bit. we see the defensive sectors to a little better, showing people are nervous about things. that is helpful. we have been a little bit on valuation.

and earnings were down 21 times. we certainly have reset yields to some extent coming in the low twos and heading towards 3% on the tenure is a receptive rates. some issues are away, the i look recoverywe look at the to closer to 3% or 3.5% wage inflation ultimately, i think we are going to see a more sustainable level of 2.5% in the tenure treasury and something earnings trailing. we continue the struggle of valuing the stock and bond market this year. we can do it quickly in a panic mode or stocks go down and take out the february lows and go lower and people panic. maybe get to reasonable levels and that might present a great buying opportunity at some point this year. or we could do what we have been

doing of late, and going frustratingly nowhere, fast. are a lotearnings higher, we suddenly start 2019 at a much more respectable level. a good buying opportunity. julia: jim paulsen, thank you for your insight. expecting big banks powerful profits. we explore why thin might want to curb their enthusiasm. this is bloomberg. ♪

mark: as he entered his confirmation hearing today, secretary of state dominique mike pompeo was greeted by anti-protesters.

-- and heons came told the senate committee that they can see propositions of the state department are demoralizing. expertiseject matter needed to deliver diplomacy around the world to conduct its mission and development missions. each of the missions you are interested to the state department hard count the people -- require counted people. mark: pompeii a has said he has been interviewed by robert miller but here refused to provide specifics of those discussions. defense secretary james mattis has officially confirmed the united states will not engage in yria's civil war. >> there is a technical concern that we don't act to any civilian deaths, and do everything humanly possible to

avoid that. we are trying to stop the murder of innocent people. i'm a strategic level, it is how we keep this from escalating out of control. mark: secretary mattis added the role of america in syria is to defeat the islamic state. the u.k. will not pay the bill to exit the european union until there is a blueprint for a trade deal according to british secretary david davis. requireit bill could the u.k. to pay $55 billion to the european union. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. bank earnings season kicks off tomorrow with reports from jpmorgan, citigroup, and wells fargo, but for the about. things like tax cuts and rollbacks bode well for banks, but challenges are lurking,

ncluding trade war fears. fears should war but well for some of the trading for these banks, surely? >> that trading is a little different. -- ifg between countries that leads to economic slowdown. whichrldwide become a, has been going well for a while now. it is on four cylinders, and if one of the cylinders pop off because of a trade war, and economies will slow down and that hurts all kinds of activity, including trading and other things such as bending and profits. scarlet: does far there has been a lot of rhetoric. we haven't entered the throws of a trade war yet. and increased volatility should the good for trading revenue.

last year when trading was muted and there was like a volatility, everyone was saying you can't make money in trading. yalman: volatility is good until there is too much. going to see it in the first quarter earnings that trickle out tomorrow, because some volatility of the banks. there is more trading going on -- and when volatility goes too much, it is a down market they start hurting as well. joe: i was find it interesting that this i get that volatility is good for them, and when volatility spikes, their stocks go down. but the current environment that we see now where the fix is in the 20 range stocks are going up and peopleet spot are feeling good, but we are not at the 10 level in the vix area. to an: we pay attention

lot of stock market volatility. stocks is not where a lot of the money is made for banks. fixed income is where the big money is made. because it iscky a principle business. they are taking risk. they have inventory of all kinds of bonds. get the right all caps of derivatives. reaches alatility stage where they are not able to offload their inventory at prices that are ok and they make profits -- and end up losing money on those. then volatility starts hurting them. stock market volatility is probably good when there is more trading, and you will make money if it goes up or down, but mine markets -- the derivatives and different areas of interest rate swaps, that is when it hurts them and they could lose money. and then we start distinguishing between banks. julia: let's do that quickly,

give us the headlines of what we expect and what to watch for. jpmorgan and citigroup, we are looking at trading. it is a big deal and it is important, and what hawks will see is volatility helping their figures in the first quarter. with wells fargo, it is more about loans and lending, because they are not an investment bank. with wells fargo, although there is bad numbers suggest there charge of rates going up, and bones aren't growing as fast and efficiency isn't doing well -- the taxes are going to be good for them. the taxes will be good for everybody. they are getting good money from the tax cuts, and that is going to be bringing -- that is going to help their bottom line. scarlet: thank you so much. this is bloomberg. ♪

scarlet: u.s. has put goods ingest still and soybeans disputes with china, but the two nations should be more focused on emerging industries. ice up with an exclusively at a summit in new york. war, thatf all, trade is a image -- and it sounds very specific. some of the rhetoric on the u.s. side has made it sound as if the complaints are quite specific. eel, aluminum, etc.. it sounds to me the underlying dispute or issues are over much broader things, especially technology transfer.

the future of trade that is going to move away as it has been already -- away from manufacturers and towards services, data, artificial intelligence -- all the areas we see the great growth. trying to establish the rules of the game strikes me as way more important. i find this trade war rhetoric unsettling, and also to a certain extent, besides the point. it is tried to give political motion so there will be in outcome, rather than to specifically. scarlet: while the truck demonstration fusses over mental imports onmetal chinese goods. to set up a new rules of the road, they need to see eye to eye and have common definitions. are we there yet?

away we are a long way from that, and these are complex issues. it is hard to discern what the u.s. red lines are. what are the real goals? ally steel?s steel is a small part of the picture. the intellectual property transfer issues are going to be much more important. hopefully that is the real focus. it is hard to discern our priorities. scarlet: there's so much noise. john: it is a negotiating tactic. it is a little scary, but if it gets to yesterday positive way, will all take a breath and xl e, buty ok -- and exhal has added a lot of tension. scarlet: what is china's strategy?

when you look at their priorities at the conference, what did you learn about china's roadmap and where it sees it going in the next 10 to 15 years? is a good question, but let's take a step back and put it into context. the plant that lays out a number of banks -- a much more market by ated economy driven much more modernized market-driven financial system. a much more open capital markets, but also china 2025 -- which is to say will focus on this sector and that sector. many of the favorable aspects of 12, plan also in the five-year, and 10 year plan. plan?this really a so when you see this is what we

are going to do, is that what you are going to do? that is what president gee's speech is important, it suggested that the movement is towards the more market-driven economy. one that would call a more reformed and liberalized, and certainly more favorable to china's trading partners. the reorientation towards consumption spending, domestic development that will draw in more imports -- it will become more liberalized investment regime. all of that is promised. scarlet: and the unlimited term limits should in theory allow him to follow on that. john: i thought maybe to solve the problem that in his second term, he doesn't become a lame duck. because they are important political forces against reform -- the worry would be that even if he set the stage in term one

and moved forward, if there was a heart term limit, the risk would be that i will hold my breath until you are gone. scarlet: thousand i exclusive interview with john lipsky. this is bloomberg. ♪

mark: on the mark crumpton with first word news. house speaker paul ryan says the united states has a lead the replyto

to the attack on syria. >> bashar al-assad and his enablers down on the u.s. response, saying an attack could come soon or not soon it all. ryan says he is being delivered and not dithering -- deliberate and not dithering on his response. the president said to expect more cuts in the environmental protection agency. president trump: i will sign a presidential memorandum directing the epa to cut even more red tape on our manufacturers. >> [applause] president trump: so that they can expand and continue to hire and grow. added added tradet

negotiators are making progress in talks with china. angela merkel says germany will not join any military action against syria following that alleged chemical attack. germany will not participate in the military operations, but we will support any effort that will put down a marker that says any use of chemical weapons is simply not acceptable. mark: merkel added germany supports action from the un security council on syria. she calls it regrettable russia blocked international chemical weapons watchdogs from investigating. hundreds of thousands across puerto rico are in the dark. the electric power authority a main linefell o n supporting power to san juan and surrounding areas.

many have been without power since hurricane maria struck months ago. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. green across the screen for u.s. stocks, with the dow leading the way up 293. points the president walking back his rhetoric when it comes to syria, russia missile strikes, and trade war with china. he is considering rejoining the transpacific partnership, according to a report. >> "what'd you miss?" investors remain undeterred in the face of trade wars and missile strikes in russia. the fundamentals are intact. i want to bring in geoff dennis, securities securities.

as important as the fundamentals are, we cannot escape the politics. depicts thert that stock market shift we have seen of recent sanctions, and of course tensions with syria over the weekend. you say this could be an opportunity. we have liked russia all year. what we think we know is reasonably good. the market is cheap. the economy is improving. our economists for russia certainly thinks this situation with sanctions won't necessarily damage the economic outlook. we cannot predict the politics. unfortunately that is so hard to predict. >> what is going on with russia? up ine significant ste up terms of sanctions? how do they relieve the

pressures of global international finance? geoffrey: i think if you have a series of rounds of sanctions, they have not impacted the market that greatly. now this particular series targeting are like arcs -- tar geting oligarchs and others, and that is why it is getting attention now. if the international community extends sanctions further to other companies -- the bellwethers of this market have not been impacted by sanctions, but if, they are this is where are,roblems -- but if they lie.is where the problems

scarlet: over the weekend we have seen the ramp up in rhetoric. you make the point that the federal budget will be in balance, or even a small surplus this year. if you look at the fundamentals on its own, it looks pretty good. geoffrey: the price of oil is at a record high lie. scarlet: over the weekend we have seen the in ruble terms. if i did these numbers for a client of ours yesterday -- if you go down the list and look at ratio, it isdp 12.5%, nearly lower than any other country in the world. pressure generates $119 billion billiona generates $190 dollars per annum on exports. what we need to see from russia is to get this economy growing properly, but the balance so to speak, those fundamentals are

good. julia's char to t,if you look at the y axis, it is always cheap. not to be denigrating, but is into this the sort of picking up a cigarette butt type of investment? is it cheap for a reason? geoffrey: i think the reason it is cheap because it has a dominant role in the index, especially energy. typically investors don't pay a high multiple for those sort of stocks. compare it with mexico or south africa with expensive consumer stocks. there is a reason for it. of course there is no question that the risk of sanctions, the

uncertainty of the politics is a constraint, even before this particular episode. it is still interesting relative to that average. >> another country where we see weakness lately is turkey. the currency is at record lows against the dollar. we have a look at turkish credit swaps higher than brazil. geoffrey: turkish credit default swaps should be higher than brazil and russia. are not encouraging people to get involved. it is almost a hedge against our positive view. the fundamentals in turkey are

poor. interest rates which are generally high and responsible in emerging markets -- they are low. they don't have an explicit interest rate policy of sorts, but they are low. the country's current account deficit is financed by short-term capital flows. in the famous expression, if the tide goes out, turkey will be the first one to look as if it is under pressure. we don't think that is an opportunity at all. julia: if we look at the big themes going on globally, trade an issue for emerging markets, technology a weakness in developing markets, critically in asia too. yourus how that is shaping overweight and underweight in particular. geoffrey: trade is one of the hardest things to analyze in my career. number one, there are no precedents.

the 1930's is the precedent. that is a longtime, even for me. we don't know how the politics will play out. re: economists are -- our economist are leading this. today's news will be consistent with that. where we will see it coming through is if we get a slowdown in exports growth. war when export growth subsides. up until war when export then, if you look at the countries in the firing line -- china, korea, taiwan -- in technology, look how well they have done this year. they have outperformed, with the exception of korea. the market is saying, we are probably going to be ok here. it is a giant risk, but it is hard to analyze.

i'm sorry to say it is capricious politics. julia: keeps your job fun, though. scarlet: coming up, we will tell you -- is bloomberg. ♪

scarlet: facebook ceo mark zuckerberg's testimony on capitol hill may be over, but questions still swirl about the path forward for the social media giant. could the answer to on instagram? i want to bring in bloomberg's sarah frier. she wrote about it in this edition of bloomberg's businessweek. thank you for making the trip. fascinating story.

interesting in the last few days how little instagram was talked about in these congressional hearings. sarah: instagram is a footnote in the discussion of facebook's faults, although they have their own problems. we have seen problems with andia misinformation, bots fake accounts, but compared to the impact that facebook has on the world, people don't care so much about instagram, and further they don't understand instagram as part of facebook. joe: initially instagram was rocket, to the facebook which helped it blowup into the behemoth it is now, but with facebook's core product under such stress, it makes instagram look like a serene island. sarah: part of that is because instagram's functionality is so different than facebook. there is no real mechanism for things to go viral. you can follow people who don't

have to mutually friend you back, so it is not a pure social network. scarlet: nevertheless, there have to be ties between instagram and facebook. how much data is shared between instagram and facebook? sarah: anything you share on instagram can be used to target you for ads on facebook or instagram. employees tell me they consider instagram part of the facebook advertising engine. with advertisers, instagram is another way to reach your audience. on instagram, people follow content that they identify with most closely, that inspires them, it is more cultural. scarlet: more intimate. julia: you talk about in the how instagram adopted the social model of facebook to garner more advertisers. we had a discussion about how

well instagram, even compared to facebook, manages to target people specifically with advertising and monetizes it. sarah: because of the facebook data they are able to use to target you on instagram. also because instagram is exactly what advertisers want -- it is like this place where people are trying to figure out how they want to travel and eat and shop, and it is all there. julia: in the story again, facebook bought instagram in 2012. we talked about this facebook movement, people were shifting to instagram. sarah: the consumers don't get it. they are deleting their only doingi am only doing instagram. instagram is the number one alternative in consumers' minds. joe: could we see facebook's soe app or service evolve

that in the future is more like instagram? sarah: they would have to change major functionalities on facebook in order to get there. i think they are used for different things. the biggest issue for facebook -- when zuckerberg was on the hill being interrogated by senator lindsey graham about if they are a monopoly, is there any alternative to facebook? says, well there are eight apps people use to communicate says family -- he did not say how many of those eight are owned by facebook. family -- he did not say how many ofpeople are ls for smaller audiences, for more intimate conversations, and they are still doing it for facebook. scarlet: facebook does not break out numbers on instagram, but we

do have a sense of how important it is to facebook. how much does it contribute to revenue? market estimates instagram will contribute 17% to facebook this year. instagram takes hold of this market which is crucial to facebook, which are these young people developing their brand preferences and becoming part of the facebook ecosystem, and they don't have to be on facebook in order to give facebook data about what they like. julia: that is what we have been talking about the past few days. great piece. the marijuana industry gets a new and unlikely ally, former speaker of the house john boehner. why he is changing his mind about pot, and is scolding other members of his party for

their opposition. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" well, while one speaker of the house announced his exit from the arena, another found a cause for which to advocate. john boehner is now joining former massachusetts governor and libertarian candidate bill wells on the advisory board of anchorage holdings, which processes as and --processes and u.s.nses canada's in the -- dispenses cannabis in the u.s. you spoke to former speaker john boehner. what changed his mind? >> i talked to the former speaker, and he really said his opinions have changed as the american public's opinions have

changed. the public opinion is strongly in favor of marijuana legalization. cannabisericans think should be legal, according to a gallup poll in november. that includes the majority of republicans and democrats. that is why he said, i used to be staunchly against this, and it is time for politicians to listen to what their andtituents are saying, slowly things will evolve in that direction. joe: john boehner is known for looking cigarettes, liking wine, but said he has never tried marijuana? jenny: both of them said they have not tried it, they say the do not plan to do so. they support the industry for other reasons. they were particularly drawn to

the medical benefits, they mentioned veterans. medical marijuana has been talked about as one of the use cases for veterans with ptsd and anxiety, but neither has plans to try it. joe: what specifically is boehner going to be doing in his new capacity? the medical benefits,jenny: he y board of a company called acreage holdings, which has 35 grow,es to either manufacture, or sell cannabis products in 11 other u.s. states. andlet: will he be lobbying talking to people in government, for instance, the attorney general, who we know has taken a different stance on marijuana? jenny: he doesn't have an official responsibility to do any of this, but he said one of the benefits of having himself and governor weld on the theyory board is that

understand how politics work. he really knows how the sausage is made in congress. he said he will be able to advise on who to talk to, which might be more open to marijuana legislation. he will be involved on the political side of this, for sure. julia: the president has flip-flopped. we know jeff sessions has taken a bold stance. what does he think about jeff sessions' stance and what he is trying to achieve? jenny: i asked john boehner about sessions rescinding the obama era policies that allowed marijuana dispensaries to flourish. ardn she heard it -- he he it, he almost chuckled. he didn't understand why sessions would do that.

for cannabis to become federally legal, it has to be done by congress. it is not the attorney general. it is not the justice department that will push this in the long run. he seemed to think jeff sessions would come around. i think others would have a more negative perspective, but we will see. joe: quickly, how are people in the industry feeling about boehner's boehner's name and status, particularly a republican, on their side? jenny: everything you said about him makes this a big watershed moment for the industry. peoplere other names -- long associated with cannabis -- snoop dogg, willie nelson, cheech and chong -- this is a much different game. boehner is a long-standing establishment political guy, and

for him to do this is a big deal. julia: boehner thinks jeff sessions is playing politics. who would have thought it. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" turnaround thursday, because stocks recovered from yesterday's decline. date rose after the president -- presidentafter the softened his rhetoric on trade deals. jp morgan earnings before the bell tomorrow. joe: i will look at data consumer sentiment tomorrow. julia: vice president pence will be attending a summit of the americas in lima, peru tomorrow. scarlet: the president is no longer attending. he has to deal with syria. julia: that is all for "what'd you miss?" have a great evening. joe: this is bloomberg. ♪

mark: you are watching bloomberg technology. white house press secretary sarah huckabee sanders says no final decision has been made on how to respond to that alleged gas attack in syria. sanders says officials are assessing the intelligence and are engaging in talks with u.s. allies. president trump spoke to british prime minister theresa may and french president emmanuel macron to discuss the situation. meantime, the rush to move biological samples out of syria during the attack may have yielded results. od fromorts urine and blo bodies collected in douma have tested positive for chemical weapons. we spoke to reporters today after an emergency meeting of the security council.

the aggressive policies of some governments, council members, are hav