mark: i'm mark crumpton with bloomberg's first word news. judge said she is concerned a gag order in the special counsel's case against president trump's confidant roger stone. the case already received substantial publicity, including from statements stone made himself. stone has pleaded not guilty to charges including obstruction and witness tampering. he is the 34th person charged in the special counsel's investigation into potential coordination between russia and the trump presidential campaign. goodrump says there is a chance he will declare a national emergency on the southern border, but he told

reporters today to wait until the state of the union address next week. president again called the congressional conference committee, debating border security, "a waste of time." the committee is trying to agree on legislation to avoid another government shutdown. mr. trump is pulling the u.s. out of a landmark nuclear missile treaty with russia that was signed more than 30 years ago. the deal covers missiles with a range of up to 3400 miles. american officials say moscow has been violating the treaty for years. russia denies that. earlier, secretary of state mike pompeo said "the onus is on russia." >> russia has jeopardized the united states security interests, and we can no longer be restricted by the treaty while russia shamelessly violates it. inrussia does not return verifiable compliance within the treaty within the six-month period, verifiably destroying its missiles, launchers, and associate agreement, the treaty will terminate. mark: u.s. officials also have

expressed concern that china, which is not part of the treaty, is deploying large numbers of missiles in asia that the u.s. counter because it is bounded by the treaty. vice president pence is in miami in a meeting with people who fled venezuela as washington heightens its efforts to remove nicolas maduro from the presidency. he is meeting with community leaders, former elected officials, in florida senator marco rubio and rick scott to discuss the south american nation's political crisis. the trump administration has backed opposition leader juan guaido as he has declared himself the interim president. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪

scarlet: from bloomberg world headquarters in new york, this is "bloomberg markets: the close." caroline: we are 30 minutes now from the end of the trading day. remember, the s&p 500 still higher by more than a percentage point on the week. basically flat today. what leads us higher is the likes of energy, lower the likes of technology. amazon off by more than 5%. earnings dismal. concern about india. the chinese many factory numbers the worst we have seen since 2016. did i say it right? scarlet: pretty much, yes. caroline: we seeing the dollar higher again. course, amazon is something we are keeping an eye on after a disappointing forecast for this quarter.

dow is the outperform or of the three major indexes because of earnings from chevron and i can't lifting energy stocks -- exxon lifting energy stocks. software makers doing the best in the s&p 500. of course, the great british pound. caroline: not so great today. scarlet: not so great today. not so great for the week. but a lot of work to be done. caroline: and when it comes to many fracturing data in the u k as well, that's a pretty. let's take a look at what was pretty in the u.s.. hot jobs numbers. employers added 340,000 jobs. bloomberg spoke with none other than larry kudlow about his take on what those numbers mean to economic growth overall. larry: more people are working and prospering. and by the way, it is not inflationary, ok? in productivity is rising. and policies of lower tax rates and deregulation and energy and trade reform are working. we are sticking with our 3% economic growth rate.

caroline: let's get more analysis from elena. should they be sticking to the 3%? >> well, i think economic growth will slow down this year from still a pace that we observed in 2018. it is just a natural way of coming from the sugar high from the tax reform, but it does not mean that it is going to do really bad. it will still continue to be about potential growth, trend growth. so that means that the economy will continue to create jobs and continue -- we will continue to see on of limit rates going lower from where we are -- unemployment rates going lower from where we are. scarlet: just how much do they lag by? yelena: it is more of a coincidence. if you look at the statistics between gdp and payrolls, sometimes it is a little

misleading. but most of the time, it is a coincidence indicator. so i think it will slow down a little bit with growth this year, but again, it will continue to be about metro will continue to push the unemployment rate lower. caroline: should we be worried about the reversions we saw for december? yelena: the revisions? it is the past data. everything was revised. if it is revised from 300 to something like 200, it is not such a big deal in terms of signal. right? it is still very positive. it is a lot of job creation. what is also positive in this report and what is not to like about this payroll report, a rate is rising. wages are growing strongly. you saw three handles for six months in a row in terms of year-over-year growth. this is telling us that we would see that inflation that larry

was -- we will see that by the end of the year. scarlet: of course jobs is just one of the pieces of data we got today.there is a whole slew of data because we are now catching up on some of the data that was held back during the government shutdown. wholesale inventories, construction spending, michigan consumer confidence, which is not linked to the shutdown as well. what were you impressed by in today's offering of data? yelena: i think i was actually quite interested in the housing data that we received yesterday. it was new home sales, and it was really telling me that despite the surprise in the data, we are still going to get some week numbers on residential investments. residential investments will be a drag on growth in 2018 for the first time since 2010. that is the result of higher mortgage rates and things like that. it is not going to be a big drag, but still, quite

impressive that it is the first time since 2010. caroline: is the fed vindicated right now? yelena: well, that is an interesting question. we were talking on the desk about it. what is jay powell going to say now when he speaks next week? is he going to flip-flop again? i think for now the fed will just continue to talk about the economic data, the economic fundamentals are still strong, and today's report obviously supports that. but they will wait and see for the data to tell the story. they are not going to send any signals now because, i mean, the signals are very different right now and conflicting. economic data is still strong, but will financial -- what will financial markets be saying in the next few months? so they will wait and see. we still think they will continue to hike rates by the end of the year. scarlet: all right. thank you so much for joining us. now we do have some headlines on

next week's state of the union. the president will be delivering the state of the union on tuesday. and according to a white house official in our reporting, he will call on congress to pass a new nafta. he will also ask congress to cut well.rice efforts as immigration expected to be a part of his speech as well. describe his- vision. my guess, spending on the wall. caroline: maybe we can get some bipartisan approach. scarlet: we will see how that all shakes out.coming up , a small cannabis company wins cannabis pot symbol lottery. caroline: why they are so high. see what we did there? this is bloomberg. ♪

now a small cannabis company has hit the jackpot, literally. surging today after winning their first ever -- the first ever pot stocks symbol lottery in canada. here is christine, bloomberg cannabis reporter in toronto. a sucker for a good name and a good ticker, but do they get as much bang for their buck in terms of promoting the business in any way? >> well, today, it certainly seems to be. the stock i checked before i came on air is up 117%. this is a penny stock we are talking about. the surge that it got from this new ticker symbol is unprecedented. they have only been public since october. they have never seen a trading day like this in terms of a volume and share gain. that is because of the publicity they are getting around having

won the lottery for the ticker symbol. the canadian exchange has had about 40 different companies apply.very competitive . this is the first time they ever held a lottery, which gives you a sense of how much demand there was for this ticker. and i guess we are seeing why today in the trading in weekend unlimited stock. scarlet: the states are particularly high you are a penny stock. -- thedid these toxic stock exchanges determined it? kristine: it really interesting process because this has never been done before in canada. i guess there has ever been this kind of demand for a ticker symbol, which is surprising because how often do you have 40 different companies fighting for one ticker symbol? presumably never. what they decided they were going to do is hold a lottery. they set a deadline. only companies that are currently listed or have already planned and submitted their perspective to go public could apply. no etf's or other funds could do that. and basically did a random draw

out of a hat. about 39 other cannabis companies out there that are feeling pretty disappointed today and probably watching the move in weekend unlimited stock and wishing that was them. >> just amazing. what happens to yolo? kristine: it is now up programs for grabs. maybe we will see a lottery for that one as well. in the u.s., a new etf that will track pot stocks has applied separately to list under the ticker yolo on the new york stock exchange so there will still be a yolo pot themed listing out there, assuming it gets approval. scarlet: good to hear that. thank you so much. npeaking of clever tickers, a industry hasn't for everyone, including a fund for your four-legged friend. a fantastic ticker to boot.

♪ >> the etf is a bet on the bloomington care industry and trade under the ticker paws. in the u.s., more households have pets than children. spending on those pets has grown an average of 7.6% since 2005, reaching more than $70 billion in sales last year. to let the cat out of the back, they kept pace of the s&p 500 since the fund launched in november. they generate a portion of the revenues from pet related business. the fund includes subindustries to veterinary pharmaceuticals and services to internet retail. the fund has amassed around $25 million in assets. 23 holdings are rebalanced monthly in a shared market cap structure. you will find mostly ok and you -- u.s. list the names -- u.s. listed names. 50 basis points and a green light from bloomberg.

scarlet: shout out to our talented graphics team for building the animation. catch the etf iq every wednesday at 1:00 p.m. new york time. caroline: this is bloomberg. ♪

♪ caroline: this is countdown to the close. scarlet: joining us at this hour as always is joe weisenthal, who is so excited about these slew of data we got today. prettys, all looking good. the jobs report was weird because there was a bunch of surprising numbers, but better than expected. the pace of hiring has not decelerated. another also good. picking up better-than-expected that's better than expected --

better than expected. michigan consumer sentiment beating expectations. if you are that bad and you just cause, you have to like this -- sed, you have to like this data. you did not get what would force you into a backtrack. it might explain why january was so good. caroline: and it really makes me feel the divergence trade may stockpile again. when you look at the divergence in chinese manufacturing, when you look at the data out of europe. joe: the u.s. is kind of a closed economy. there is only so much degree to which we are intertwined with the rest of the world's cycle. i feel like the data right now and last year kind of indicates that you. -- view. scarlet: we will see if there is divergence 2.0. energy leads the way, up 1.7%. oil seems to have broken out of its range. chip stocks also doing particularly well.

caroline: seems to be on the back of the geopolitical risk there, russia, u.s., concerns about the u.s. pulling out of the angel agreement in terms of nuclear relationships. but also, some stellar numbers in terms of chevron at x wrong -- and exxon. scarlet: food and staples come with a lot of consumer related names on the downside. there is also auto companies. we just heard about the mixed numbers for ford and gm for january, although they do not officially release any of those numbers. we are rising interest rates have not helped the automakers. you add it all together and you have a mixed day really. a little change in the dow and nasdaq. caroline: over the week, we were up more than a percentage point. scarlet: with about eight minutes to go, seven minutes to go before the close, let's take a deeper dive into the action today, and we start with abigail. abigail: let's take a look at amazon because you were talking about the mixed markets.

amazon a big drag on the s&p 500 and nasdaq. using the graphic dashboard, a great function in the uber terminal, shares down 5.6%. an above average volume. we have 48 buys on this name but relative to the corner they just put up, they beat fourth-quarter estimates. the first quarter guide is disappointing on the retail business despite that. look at this valuation at a premium, trading at an 84% premium. when we link this back up with the stoxx 50 two-week high and 52 week- the stock's high and low, suggesting we may see more weakness ahead for amazon. taylor: i'm going to take a look at weakness here in pizza, papa john's and specifically. we know the shares were off 70% today.

30% in the last year after the german step down after he used a racial slur. the news today is they failed to get a bid they like from a private equity company, looking to sell off a stake or part of themselves as a private investment. we know that this would shore up their balance sheet and finances. we know growth has been flowing from 11% in 2014 to 4% this year. looking at 10% next year. profit expected to turn negative as well.when you look at the balance sheet, cash is high. cash flow has been steady. we will have to wait and see who comes in and makes investments for all or some of this company. lisa: thank you so much for real-time taking a look at what caroline was mentioning earlier, chevron and exxon. let's take a look at the impact of the earnings on these shares. they are up, which is really remarkable given the fact that oil plunged nearly 40% in the fourth quarter. still both chevron and exxon managed to beat.

chevron surprised with a $25 billion stock buyback announcement. there was not a set time frame for this, but that is about 10% of the outstanding market capitalization of this company. meanwhile, exxon surpassed analyst forecasts. the biggest refining bonanza in six years.the permian basin really was the outstanding element here. almost doubled. really good read for the big oil companies even though it was a pretty rocky fourth quarter for oil. caroline: lisa and the entire markets team, great breakdown. for more on the strength in energy and how the industry is performing, let's get to sarah. go, and really energy for once diverging from the rest of the stock market. we have always seen oil lead the market. today, real divergence in that trade. >> it is amazing because you think about oil prices having their best january on record, and they are just continuing to climb higher today. same with energy stocks.

obviously you have multiple components here. you have earnings, which lisa just mentioned, from chevron and exxon. they are not the only stocks that have done well. we heard earlier in the week from shell. if you look at ea on your terminal, if you look at this, it is more than 22%, compared to 2.5% for the s&p 500 at-large. that shows you how much the companies are beating. at the same time, oil prices rising. opec showing they are cutting. scarlet: looking also at tech because tech is another big performer today but they are up 0.5%. .5 -- up by only earnings have really been kind of mixed. sarah: it absolutely has been a mixed bag. you can extrapolate that from tech to the entire market at large. a lot of people will look at the earnings season and the returns we have had and say, wow, earnings season has been great.

but the back of the matter is it has been ok. has not been bad but a mixed bag. really the expectations were so low going that we should see a nice set of.of course, we will get some more tech names next week. scarlet: sarah sticking with us because right now with 2.5 minutes to go before the close, let's bring in our guest. we are up on the week even as we are mixed on the day. is it appropriate to be risk on right now in this environment? >> you can be risk on because two things have been going for you. one is the fact that the fed has essentially indicated it has the markets back, so at least it is good for a few weeks if not for longer. second, there seems to be at least some talk of progress in the u.s.-china talks, which have been bothering the equity market, especially in december. it does not mean that you are out in the clear. it just means you have a few

weeks of break. joe: let's talk about the fed. obviously pivotal. how much of the seeming turnaround can be explained to the fact that stocks tanked a ton in december and that forced the fed's hand? komal: that seems to be divisible reason why the fed switched between december 19 and january 12. in the powell, speech on wednesday. but if you go further than that, joe, you have trump repeatedly attacking the fed, who he called local on one occasion. and the question now is, how much of that due to the president's job warning? and the fed chairman leaves his open -- himself opened to the criticism because he did nothing to indicate he was not listening to the president either, so i would put both of them is likely factors. caroline: give us a sense of the set up for next week. trending higher now.

the fed has come back to support the market. or are we worried about a china and u.s.? sara: many people are looking -- sarah: many people are looking at it and calling for consolidation. a day like today where we are seeing a bit of a cell the rally -- sell the rally, if that is what we will be seeing going forward. it was interesting about the start of this year was that it was so completely by the dip in everyone's mantra. if we were down 1% one day, we ended higher. many times. it's interesting to see a day like today where we see in opposite of that and i am curious to see if it goes forward. scarlet: and we will get more earnings next week. what are the earnings telling us about the state of the u.s. economy? komai: i think the earnings picture is no longer all the way up like we used to have for several quarters. you have mixed earnings coming through, so that is partly contributing to the volatility you see in the market.

if it is true the economy slows significantly from the second and third quarters, you are going to see more of a picture and 2019 on the earning side. caroline: with evidence today, the nasdaq is down 300% in the volatility is amazon. also concerns about operations in india, which are hitting regulations. the dow jones is trading higher. it was a mixed picture and a lot of it starts to become specific on what companies are saying what. komai: amazon was down as well. it was in the negative column for a few days. even in the dow, you have had fluctuation during the day. the market is unclear on which way to go. that is going to become more pervasive as we go into the new year. scarlet: unclear for the way to go reflects today's trading as well. the nasdaq was down, but for the

week we are up. joe: from a markets perspective, the quietest day of the week. toept waiting for a big move emerge, but nothing much to send prices. caroline: let's dive deeper into the action with our market reporters. abigail: i'm looking at something called jaws, also known as the s&p 500 over the last year. fitting to the conversation you were having. this is what we have been dealing with over the last year. up and down, investors uncertain about what is next, and a lot of that was driven by the feds tightening cycle. in december, we had the worst month for the s&p 500. you have to think with these with saws, back above the 50 day moving average, that is a bullish point. overall, tons of uncertainty and volatility is likely to persist. i taylor: want to take a quick look and recap amazon.

there's bearish sentiment given the full-year sales but missed estimates about slowing growth in india, but this is not letting up. there is no pressure yet. are staying in both margins. you have rising in the last quarter, but as a percent of overall sales, it's falling. analysts say don't let this letter to panic and that the is relatively manageable. ask iss -- that the cap relatively manageable -- capx is relatively manageable. 1.3 billioneen inflows. lester was 1.5 billion dollars in outflows. a positive sign heading into next week's earnings. thoserks to cards, all of are reporting earnings and have exposure to china. the chip sector as well.

a volatile week but a positive sign into next week's earnings. going from tech to junk bonds, let's take a recap of this past january. it was the best monthly january performance for high-yield bonds in the united states in a decade, since 2009, when this market was rebounding from the .inancial crisis i have to say, this is raising questions. is this the beginning of a rally or is this the end of it? theou take a look at what derivatives market is saying, the implied cost to assure against the defaults, has come way down by more than a percentage point since its peak at the end of the year. this means companies are coming back to the primary market and are raising money at relatively inexpensive costs. then again, we go back to a due investors,

who compensated for the risks given the fact that we are later in the credit cycle regardless of the federal reserve. scarlet: thank you very much. we will stick with that idea, because still with us is komai sri-kumar. there are a lot of people out there who worry about the overleveraged companies and how that could lead to the next recession. fromhinking scott guggenheim in particular. you think there is too much debt to keep the economy growing at 2%? komai: i think there's a lot of debt on all the three counts you mentioned, consumers, government, and corporate. this was08, when because of markets debt, it is now spread out. second, you have the corporate debt dominating in terms of how much it has grown from 2008 to 2018. especially at the lowest investment grade levels, which is i think, just as you had a

when a aaa crashed and could not pay up, you have a situation with companies considered investment-grade which are going to go down in terms of what is happening in the next downturn. there are a lot of dangerous signals, and as lisa said, you have had a rally in high-yield is, ifbut the question the economy is weak, all of the fed backstopping can only postpone what can happen. joe: so maybe there is some big moment where this catches up to us, but as you pointed out, the fed told risk investors they have your back because they are so attuned to volatility in the stock markets. what do you do in the medium-term if you don't know -- if you can't ever know when that debt low up would be? medium-term, you mold your portfolio more and

more in terms of looking to be defensive and where you go. what i think the fed told you, joe, and toldmore in terms of ie fact that anything like an imminent start to a recession, they will postpone it. that does not change the fact that many of the progress assets should probably be part of your portfolio if you have a two-year or three-year time verizon. caroline: i want to get your take on what the fed has done and whether it should be done. we have great jobs numbers, and it is yes not too hot and too cold, they have room to be patient, but should the market push the fed in the way that it did? did the market push? what did it capitulate? komai: you have a number of good questions. yes, the market pushed the fed. is it correct to push the fed? yes. investors can do whatever they

like, and it is up to the fed to respond. as for the jobs market eating very good, i would question that. i've repeatedly said the jobs market is not as strong as it seems to be. the participation rate is lower than the peak we had before the 2008, beginning of the great recession. second, wage growth has been meager. you have had higher income people investing in the liquidity market who have done well, the people depending on wages are not doing well. multiplee people hold jobs, meaning one job is not enough to provide enough of an of those jobs holders are staying close to 8 million on 5% of the workforce almost throughout the last 10 year history. me that the fed's benefits of the quantitative easing has not paid

off for the economy, and the labor market has a lot of slack. scarlet: joe made that point on twitter earlier as well. nice job, joe. joe: thank you. always good when the guests are aligned. scarlet: how convenient. i want to go back to the markets. cavedntioned how powell into what the president wanted. he left himself open to criticism. now, you have the fed's third objective. as a replaced international concern. komai: stock market management should not be manipulation of and not be,nagement and manipulation of prices, should not be part of the market. indirectly, we are justified in doing that. there is no way they can do that. i've always suggested you need rule to have aa

firm part in terms of how the money increased should take, and then all of you can rule to hava firm go home. the computer can do the work rather than the federal reserve board. that's not going to happen in a bureaucracy. that's why we have the problem today. today, caroline talked about the fact that wages have not been increasing much, but the fed increased rates nine times since the end of 2015, four times in 2018 alone, and suddenly, the chairman got religion on january 4. seeing it was all a bit too much. the fed does not have a basis for doing that. tohink it is too late provide a backstop, which is why i think there will be a much bigger issue to face sometime in the next 12 to 18 months. dear question joe, of being defensive, you are protected in the short-term, but not in the longer term. joe: what would have been a better policy approach, or what might still be a better policy

approach to get labor market strength back to where it was precrisis? labor komai: market strength does not depend on monetary expansion -- komai: labor market strength does not depend on monetary expansion. that is what we learned from the german experiment from 2003 onward. was a sick man of europe, and the changes were structural, not monetary.

♪

caroline: live from bloomberg's world headquarters in new york, i'm caroline hyde. u.s.s a a snapshot of markets. joe: the question is "what'd you miss?" . caroline: strengthen hiring,

u.s. payrolls jumping despite the government shutdown. session,the debt of president obama's former chief economist makes the case for ending the fear of budget deficit. the sponsor of super bowl in atlanta sets up they clash of the brand. hot jobs numbers for a cold month. employers adding 300-4000 jobs in january, topping economist expectations. we talked with some of our all-star guests for their latest take on the numbers. >> this is a blockbuster jobs report. >> it's impressive. >> the virtuous cycle continues. >> we are the hottest economy in the world, and we are proud of it. >> this is number great for the fed. for now, i think they can write this out and i don't think they will make another move until the second half of the year. >> are the really data

dependent? his inflation ultimately going to become the only thing that pushes them off of this? >> i think people continue to underestimate the strength of the economy, it's not inflationary. >> we are not at full employment. price stability is fine. there's no rush. >> the market is completely pricing out any hikes for this year and that's a position revised -- that will be revised. joe: for more, let's bring in matt boesler who always brings charts that we don't see anywhere else. we have three charts, and the first one is the ratio between black male prime age participation. tell us about this chart and why it is significant. matt: the big question is how are we creating so many jobs with such an unemployment rate?

in the past, we have discussed this. a lot is from people coming in from outside of the labor force. one of the aspects is captured here in this chart. said,hart shows, as you black male primate participation to white male participation. that is gaining back of a lot of ground, but it is still much lower than it was in the 1970's and 1980's. the take away from this chart is that there is still a lot more room to bring in some of these disadvantaged demographics that have not been doing as well in the labor market, over the past continueecades, to that participation, continue bringing people into the labor force, even though the unemployment rate is so low. ,aroline: that is why we've got potentially, slack left and why we are not seeing much inflationary pressure. matt: right. it's interesting because, for a

long time, wage growth had been so quiet. now, we are finally starting to see it take off over the last several months. we haven't seen that filter through to inflation. we are starting to see that wage growth take off. thathite line here shows average hourly earnings figure on a year-over-year basis. -- percent it hit 3 for the first time since 2009 -- hit 3% for the first time since 2009. thecan see, basically in entire postwar history of the u.s. economy, the fed has never allowed wage growth to rise above interest rates for very long. it's just never happened. where at this juncture fed is saying they will pause or maybe stop a neutral, around 3.25 percent. wait growth is already at 3.5 percent, so it's an open question on whether the fed will allow wage growth to continue

accelerating without raising interest rates concurrently. romaine: what interesting phenomenon of this run up that going back to, obama and bush administrations, we see this coming into the leisure, hospitality, and services, but we did not see wage growth go along with it until recent years. matt: absolutely right. one of the reasons wage growth has been sluggish throughout the expansion is because a lot of these lower paying sectors like leisure and hospitality, like retail, you have not seen much growth there. we are starting to see it now. this chart shows you the ratio of wages in the low-paying leisure, and hospitality sector which includes restaurants and hotels, to overall average hourly earnings. this is cyclical in the latter part of the expansion. restaurant wages tend to regain ground against overall wages. lastan see that, over the several years, this has exploded higher. restaurant wages are climbing

compared to national average wages. scarcity and this labor markets but some of these low-paying businesses have to deal with now. they are finding more workers. joe: how did the data fit with the fed? does it show they were wrong to slow down because things are still pretty good on the hiring front, or write to slow down because it shows there is plenty of slack in wage growth and other types of inflation are mediocre? stuff tore's a lot of take from the latter case you laid out, which is that there isn't any inflation. it's really comes down to this distribution of income. if you allow wage growth to rise above interest rates for an extended period of time, you will redistribute toward labor as you allow them to catch up to capital. best the opposite of what we got in the 80's, 90's, and to thousands. going forward, the question is whether the fed will allow it or not. they usually say there is some

scope to allow it, but we will have to see how it plays out. caroline: matt, thank you. coming up, the government shutdown. when it constrain the labor market -- when he could constrain the labor market strength, but all about public offerings. that's next. this is bloomberg. ♪ this is bloomberg. ♪

caroline: time for look at what the stories are trending across the bloomberg universe. a newal users are reading jersey booker is the latest to throw his hat in for the 2020 election. meanwhile, papa john's has shares falling nearly 9%.

top bloomberg story said [indiscernible] the chain will look for investors to purchase the stake instead. tictoc on twitter is reporting subsidies could see springlike weather next week after the polar vortex. u.s. midwest is expected to fall quickly and temperatures could climb as much as 80 degrees in the region. a rapid thaw may create more problems like busting pipes and crumbling roads. you can follow all of these on your terminal, on bloomberg.com, and on tictoc on twitter. was one of many agencies impacted by the partial federal shutdown. during those days, u.s. companies could not file for initial public offerings. how are they faring now? of tritonhe ceo research. when a company wants to go ,ublic, they file a statement

wait a certain period of time, file more documents, and at some point, they end up pricing this and selling shares to the public and it starts trading. how long does that take and how did the government shutdown effect that? draftmally from the first to launching the roadshow is about 90 days. some people can spend a year and the record time was 45 days. it's generally about 90 days. whereaunch the roadshow, it becomes public, and 30 days from then until the deal prices and you have a party and you ring a bell. then that is it. joe: which is a bigger impediment to perspective ipo's? government shutdown remote go that shutdown or market volatility? >> neither. when i come here we talk about individual ipos, but the macro story is that the

, thec company counts number of companies is down from its peak in the 90's. you have heard about the availability of capital and private markets, but when we look at fundraising and private ipoets, going public in an the way people have traditionally done, it is tens of times more money in the private market than in public markets. is just more and more of a rare event. this seems to be one more reason why people might want to think about alternative sources of capital, because the government might not be open for you if you want to go public. caroline: and this is any type of company whether you are uber or in the private market. we go over to market cycles and

that has changed a great deal. he see the shutdown might be one more nail in the coffin of the entry point into the public market. romaine: do you think the market appetite is there to absorb these ipos? not just because of their size, but the market has changed a lot from the.com boom. -- the dot com boom. rett: the ipo is one of the last bastions of active market. it's active managers that price these deals. absorbed 40 tech ipos last year and only 20 the year before. how many teams can goldman sachs put on the road to sell these deals? as many as they need to. there's not a challenge of ability to absorb the deals, the problem is, there's so much access to capital in the private market that do you want to go public? joe: i've heard from people that it is bad you don't have as many ipos as they used to be like buying into amazon when it had $60 million. we remember amazon because it

became amazon, but there are probably hundreds of other ipos that year that we never heard from again and people lost 100% of their money on. does it really hurt investors that companies are not going public earlier in their life? rett: if you look for examples, this still happens. you could have bought blue apron in the public markets last year and now it sells for $1.40 now. snap is another example of why the stories don't work out the way they are supposed to. joe: most of those ipos were blue apron like. we don't know what the outcome will be, but people forget about all of the risk investors took to have five or six substantial companies that emerge from that entire area. caroline: we love having you on and love your charts. coming up, the u.s.'s annual deficit is sweeping toward trillions of dollars. to analyst on why

they are saying just that. -- analysts on why they are saying just that. this is bloomberg. ♪

mark: i'm mark crumpton with bloomberg's first word news. president trump today -- on the need for a well, and possibly declaring a national emergency during a huge trafficking event at the white house today. the president told reporters that democrats am the including nancy pelosi, are doing what he called a tremendous disservice i refusing to give him money for the wall, which he argues is exacerbating the trafficking issue. >> honestly, i don't think she has a clue. i really don't. i don't think nancy has a clue. i see that went to said walls are immoral. she doesn't know. i wish she did because she is

hurting this country so badly. it is all rhetorical, not delivered well, but it is all rhetorical. mightmr. trump hinted he make an announcement in his state of the union address and urged reporters to listen closely to his speech. the president is pulling the u.s. out of a landmark nuclear missile treaty with russia signed more than 30 years ago by reagan and gorbachev. the deal covers missiles with a range of up to 3400 miles. u.s. officials say moscow has been violating the treaty for years. russia denies that. vice president pence told venezuelans in miami that washington was working toward what he called a peaceful transition so opposition leader guaidote know -- juan does not going to power. clear.united states made

the safety and security of president guaido and his family are of great importance to the american people. [applause] ,ark: the vice president added this is no time for dialogue, it is time to end the maduro regime. isederal judge said she considering a gag order in the special counsel's case against donald trump confidant roger stone. the judge said the case already received substantial publicity, including from statements stone made himself. stone has pleaded not guilty to charges including up structure and and witness tampering. he's the 34th person charged in the investigation into potential coordination with russia and the 2016 presidential campaign. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i am mark crumpton. this is bloomberg. joe: howard schultz called it the greatest threat domestically to the country. the national debt has been a focused of the former starbucks ceo who is exploring a white house bid. two economists are not as convinced. they took issue with the argument in a new piece for foreign affairs writing "many cuttingixated on programs like social security and medicaid. that's a mistake. policymakers should focus on urgent social problems." another "policy approach that neither prioritizes cutting deficits nor them -- dismisses them." there is a major shift happening, at least among the center and centerleft about this deficit and a growing movement

of people who call them modern --etary who say they sho we should stop worrying about the deficit altogether. how much of that influence having on this debate and for you and larry summers, who had talked about the debt, to come out and say this perhaps what is a rethink of the consensus in washington. jason: there's been a major economy, and that has changed the way a lot of people and organizations think about the debt. a place like the international monetary fund, which for decades pushed fiscal consolidation, pushed austerity, is now pretty much off of that. they are talking about how that could hurt economies. a lot of this depends on where you are economically. on thes changed views deficit and it should change with it. will underpin an actual change in that view in particular -- change, and in

particularly, the current interest rate cycle we have been on over the past couple of decades my's not being the same cycle we are on in the next couple of decades going forward. jason: when the first president bush and president clinton were cutting the deficit, the real interest rate was about 4%. businesses were not investing a lot. it was really important to get the deficit down, get interest, rates down and make it so businesses could afford to invest more. aree's no businesses that not investing because they can't afford the cost of capital because borrowing costs are too high. we don't need to deficit reduction program to reduce interest rates that already adjusted for inflation are a tiny bit above zero. were in a very different position -- we are in a very different position. caroline: you talked about in your piece about large deficits arising -- deriving more from falling revenues than rising

in spending. how can we more officially bring in revenues? are any of the new speech is coming out from the presidential hopefuls and the tax people bringing good chimes in your ears or not? jason: you made an important point or quoted a point i may, i don't know if you endorsed it. if we hadn't had the tax cuts of the last couple decades, you would have a budget surplus, not a budget deficit. i think we will need more revenue over time. we can certainly afford to have higher rates. i would love to focus on improving the tax base. on the corporate side, we could have expense and businesses, which is a good thing for them hire with those rates on the individual side -- rates. on the individual side, we could close the tax benefits high salaried households get. all of this is the right direction to be talking about.

joe: the exploding deficits we see in recent years has not pushed interest rates higher, therefore, what is the evidence that diminished deficits under the first george w. bush and president clinton can take credit for the lower interest rates they saw? after all, interest rates have been declining since the early 1980's. it looks like a continuation of the trend. if the link is broken now, how do we know that relationship held in the past? jason: it may not have held in the past maybe. this point was true 25 years ago . they have been careful and find if 1% of gdp deficit raises interest rates by about 25 basis points, it's reasonable to see something like that. ask yourself, would we be better off now if interest rates 1.5 points lower?

in some ways, that would be a scary prospect if you think about what monetary policy would be like in a world with much lower interest rates. romaine: is there any concern that if we were to embark down this path, it could put in jeopardy the status of the dollar, and particularly the strength of the dollar, should the treasury increase its net sales? jason: larry and i are arguing. this isn't anything goes. you can do it everyone's, free lunch type of situation. you should pay for things. it would constrain the ambition of some of the democratic plans that would be hard to pay for. the existing deficit and debt, they will keep gradually, we are just not going to add a lot to it increase even faster. joe: what is the limiting principle? jason: paygo.

i don't know if that would work forever. we would have to check back five years ago. at least for now, knocked actively digging the hole any deeper, that would be more than fine. it would in some ways be an improvement in what we have seen lately, and would let us focus on other issues like employment, climate change, health care, education, training, and the like. caroline: minor details like that. jason furman, great to get you here. the current professor at harvard kennedy school's. a washington democratic senator. he joins us with his take on the -- an insider's take on venezuela. this is bloomberg. ♪

caroline: the trump administration is rising pressure on the battle with the venezuelan president by targeting the nation's oil. will bel and customers blocked from using u.s. financial systems by the spring. kevin cirilli is standing by with a special guest who has another side of -- point of view. >> we're joined by democrat from maryland who joins us via baltimore. i want to start with venezuela and the decision to withdraw support from the maduro regime. is that something you support? ,en. cardin: i do support that under the venezuelan constitution, president maduro has lost all legitimacy and it falls on the national council for the acting president until reelections can be held. >> there are so many different moving parts to the situation in venezuela.

one is the maduro regime's relationship with russia, iran, and with certain chinese telecommunications firms like zte. the president was meeting with the chinese delegation on the issue of trade. what would you like to see the president accomplish between the u.s. and china on these talks? sen. cardin: first, i think the president set of the trade agenda in a way where it has been pretty detrimental. it is an imposition of tariffs, first against our closest allies, canada and other countries, and the way he said -- the way he handled setting up the relations with china, we lost the help of our trading partners. we have legitimate concerns about china, that they should have been raised in conjunction with our other partners rather than how the president did it. as a result, these tariffs have had a detrimental impact on our economy. see significant trade

talks and see whether we can work out a way to get a level playing field with our negotiations with china. >> senator, you are one of the most senior democrats on the committee. i was struck by your statement president'sthe decision to withdraw from the russia-u.s. nuclear arms treaty. explain why you believe that is the wrong decision. sen. cardin: i was extremely disappointed by what the president did. make no mistake, russia is in violation of the treaty, but the treaty is an important part of our arms control and leadership globally on reducing the threat of nuclear confrontation. we need to challenge russia within the context of the imf, not withdraw from the imf. there's a process of six months , theich, we hope negotiations between russia and the united states will resolve this with the treaty remaining in effect.

the president negotiates raises the temperature much more than it should be. >> all of this comes a few days before the president's state of the union address. you deliver the weekly address for this week -- delivered the weekly address for this week. in terms of the message and the tone you will the president strikes, what will you be looking for? sen. cardin: i moisten what the president does 30's tweets, etc. we would like to see the president have a conciliatory tone, first with border security and the 35 day record shutdown of the federal government. it would be nice if the president would encourage bipartisan agreement the between democrats and republicans on board a security. our committee is heading that direction, rather than blow up the discussions. it would be nice if the president reached out to us rather than having these confrontations from these white houses -- from this white house.

>> america will do another celebration before the state of the union, the super bowl. you were deeply involved with the baltimore ravens and working with them as the president politicized the league, tweeted against his support of players kneeling. talk to me about the relationship you have with the baltimore ravens and how that came about. an. cardin: kevin, this is wonderful opportunity. i met with a lot of the players. i was surprised, i thought i was meeting with a couple, but there must have been 10 or 12 of the players wanting to meet with me. they wanted to get involved with our political system and were upset by our criminal justice system. they have personal examples and their families where they thought people were not treated fairly. they want to know how they could get involved to make a difference. we had a great conversation about how our football players have a great deal of identification in the public and can use that to bring change to

our system. i can encourage -- i encouraged with other involved players, with the communication of members of congress, and as you know, we changed the sentencing guidelines. the nfl players from baltimore had an impact. i was pleased to see them get involved. i think it made a difference. >> what can businesses learn? essentially, nfl teams are regional organizations. of a players are employees massive, massive business. can businesses, wall street companies learn by how the ravens responded to the politicization of football and the hot button issue? what can businesses learn from that? frankly, thequite owners, the management, encouraged the players to meet with me. ansee how they could have impact and try to change things

are getting involved in our political system. i encourage all of them to vote. the management made arrangements to help everyone register to vote. --ncourage them to get encouraged them to get involved with candidates if they believe in the candidates. an nfl player could have an incredible impact on the community by getting involved in the traditional political way. i think that was the message, rather than looking at the type of confrontational messaging we have seen. get involved in the mainstream politics and see if you cannot bring about change. cardin, weben appreciate your time, sir. thank you for coming on bloomberg. caroline: kevin cirilli, thank you. a quick check on the latest business flash headlines. in china, the largest electronics retailer has cut the prices of apple's iphone's again. they are selling the 128 other $30.ple xr 48

that's 20% cheaper than apple's own website. meanwhile, a resolution to a political impact, nicolas maduro's regime is looking to ship 20 tons of gold not sent out to caracas. toldrump administration the investing community not to dealing gold or other commodities that they thought was told by quit -- stole by maduro. that is your business flash update. the slump is getting worse. revenue bank reporting shrinking for an eighth straight quarter. matt miller spoke with the company's cfo earlier. see signs of recession. we see signs of bottlenecks in certain instances, in terms of

hiring staff. we don't see a drop in the order books. in terms of stats, business confidence and economic growth have slowed in the second half of the year, but we still see fundamental strength in the a lower admittedly at level of economic growth in terms of the outlook than we had in 2018. >> how much pressure do you feel from the german government to show them targets or go into merger talks? >> we feel we are in control of our destiny. we are executing against our plans. we are proud to achieve the milestones we did in 2018, whether it was actions around businesses or achieving financial milestones that we promised the market. do the thinking in 2019, leverage the work we have done with businesses, serving clients, executing on strategy. i think all of the stakeholders around us should see us, execute

on that, and that puts us in control of our destiny. >> is there some strategic help that merging with another bank would offer you in terms of raising revenue? >> i'm not going to comment on specific items. we have talked, if you like, and there is a lot of talk in the sector overall, that overtime, and consolidation in the european banking sector would be sensible for a variety of reasons. caroline: that was the deutsche bank cfo speaking with matt miller in frankford -- frank for -- frankfurt. a clash between pepsi and coke. who will win? we will discuss. this is bloomberg. ♪

romaine: the super bowl is this weekend in atlanta. there's going to be another big

-- going on not just between the rams and patriots, but between coke and pepsi. they are battling for advertising hype and sales. here to talk more about what is ourg on, let's bring in bloomberg reporter from atlanta. pepsi is the official sponsor of the super bowl, which is being held in atlanta, which is the headquarters of coca-cola. how did this happen and how is coke handling this? >> that's true. process, andding ,epsi has been the sponsor including in houston, so it's not unheard of, the fact that it is in atlanta. we don't know what happened in this particular bid, and the presumption is pepsi off big isa-cola, and what you see the whole city or at least the downtown, midtown, is awash in pepsi blue instead of coca-cola

red. the awkward about situations this is creating, pushing pepsi products in a town where people don't drink pepsi and all of the infrastructure is coke oriented. athael: what you will see mercedes-benz a stadium, which is the atlanta falcons a stadium where the super bowl will be played, coca-cola had the to put all games adversity spends a stadium. that brings a problem, and what willill have is coca-cola still be poured but it won't be in coca-cola cups. they will be generically branded tops and pepsi will be allowed to sell pepsi inside of kiosks, and whatnot. that's probably the most awkward -- and there is the fact that the world of coca-cola, the big attraction downtown atlanta, is a stone's throw from the stadium, so there will probably be some efforts do not include

the world of coca-cola in any photographs as they take aerial shots. that could be a competition as well. caroline: is there a chance they did this on purpose? pepsi is certainly having fun pepsi inp signs saying atlanta, how refreshing. there's another rivalry going on. home depot said this is an opportunistic way to ruffle feathers. michael: you are seeing them having fun. downtown, there are billboards all over, including a billboard a block down from the world of coca-cola . you see these on garbage cans, which i find amusing as pepsi has their banner all over the place. caroline: great analysis coming from atlanta. enjoy your weekend. michael sasso, we thank you.

that's all for "what'd you miss?" . romaine: "bloomberg technology" is up next in the u.s. joe: have a great weekend. this is bloomberg. ♪ this isn't just any moving day.

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♪ >> i'm brad stone in san francisco in for emily chang. this is bloomberg technology. amazon's plans and india have had a major roadblock, thanks to strict e-commerce rules. can the company get its global game plan back on track? plus, apple cracks down on internal apps for facebook and google. we discovered -- we discussed that standoff.