ritika: let's get the first word. attorney general barr said today that special counsel robert mueller's breccia report will be submitted to congress once it is properly redirected -- redacted. barr also said he is available to testify before the senate judiciary committee on may 1 and house judiciary panel on may 2. thousands of brexit supporters went through the streets of london today as lawmakers rejected prime minister theresa may's eu withdrawal deal for a third time. marchers carried signs with

slogans including "no deal is " andr than a bad deal, "leave means leave." a march took place last week where hundreds of thousands of people demanded a new referendum. bloomberg has learned that someone is planning to step down from leading the small business administration. he helped raise money for president trump's reelection campaign. donated more than $6 million to trump's 2016 campaign. president trump says he and mcmahon will hold a news conference at 4:00 p.m. today. chinese and u.s. negotiators wrapped up trade talks in beijing today. treasury secretary steven mnuchin called the talks constructive and said he looks forward to welcoming china's vice premier to washington last week -- next week to continue discussions. president trump expressed

optimism, saying we are getting close. 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. this is bloomberg. ♪ scarlet: from bloomberg world headquarters in new york, this is "bloomberg markets: the close." caroline: we are 30 minutes from the end of the trading day, week, month, quarter. we are up by 10%. feels like a risk on mood. hopes between the u.s. and china inching to the never quite to be had trade deal. we are at 13.8. despite ongoing headwinds particularly when it comes to brexit. we are never-ending with uncertainty coming from the

u.k.. pound under pressure. the prime minister did not get her withdrawal agreement. scarlet: we do not know the path ahead. caroline: i'm looking at the ruble as well because this is an interesting one because sanctions could be ever closer to russia. the u.s. could be preparing new sanctions in preparation for the 2018 nerve agent attack in the u.k. scarlet: some breaking news over the last 20 seconds or so, maybe longer than that. apple has canceled its airpower product, the charging mat that can charge the iphone, airports, and apple watch at the same time. it is fairly unusual, very unusual for apple to cancel a product. this was announced in 2017 to a lot of fanfare and supposed to be released in 2018. caroline: we had warning signs but nonetheless holding onto gains. scarlet: let's move on here now because things to a nixon era tax law, bank managers are able

to help investors dodge taxes. it is all about short-term trades called heartbeats. if you look at this chart, you can see how the trades spiked fairly recently. joining us now are the two co-authors. let me start with you. very simply, what is this tech support is maneuver? why is it called heartbeat? >> the heartbeat name comes from when you look at a chart of fund flows in the etf, you see this huge inflow. it looks like investors love this fund suddenly on monday. sometimes $3 billion poison. 24 or 48 hours, the same amount comes out. what that is is somebody helping the fund avoid taxes by becoming an investor for a very short period of time and when they leave, they take stocks the etf needed to sell, so instead of selling them and booking a taxable gain, instead the

investor is withdrawing them and there is no tax bill to either party. caroline: ok so i can see the benefit. i like the fact this rather looks like surgery and the heartbeat jumps up, but who is making the most of this at the moment? who is benefiting? >> we are seeing the major fund issuers using this strategy. to his point, this is the way they are able to leverage the day in and day out flows in and out of an etf to get hold of that kind of a tax break. something very common in the industry the last five years or so, something more prevalent as the markets are heading upward and capital gains uncertain and stocks getting more severe. when it comes to who gets the benefit in the end scenario, the etf's passing goes on to the end investor. that means they are deferring their tax so they will not be paying for it on a yearly basis and will pay the tax ultimately if they end up selling the fund. if they use etf's as part of

estate planning and happen to die, their heirs will no tax whatsoever so they avoid the tax altogether. scarlet: there is a path to avoiding taxes completely. caroline: a bit brutal. scarlet: admittedly. is this legal? zachary: that is a quick question. the fund managers and bankers who do these trades tell us it is perfectly legal. they have opinion letters from lawyers telling them it is ok. the irs has never come out and said whether they are ok with this. they told us they know about it, but they would not tell us whether this is something they are looking at or something they want to attack or something they are tolerating. caroline: what about reaction to this very story? have you got any from regulators, market coaches participants,et good or bad? rachel: what is interesting is the etf have grown to be a $3.8 trillion market. caroline: scarlet nose. rachel: etf iq every week.

it has become a market you cannot ignore. initial funds have been diminishing over that timeframe so it has become something that has really helped lift this industry and drive the industry growth. some strong opinions start to come out when you start talking about what would happen if you took away one of the major breaks that helps these funds grow. caroline: look at this chart. it is why it is called heartbeat. those are extreme moves. scarlet: we often look at flows as a way to get read of a demand, sector, theme, strategy. doesn't it distort that read? rachel: definitely. we have made the mistake before on bloomberg news where we have written stories about sentiment really bullish only to see that slow out the next day because it was ad hoc rebalancing or something we missed. it definitely skews the flow. it beholds people to look at it over a longer time as a result of that. you cannot look at them on a weekly basis. monthly tends to be safer. scarlet: what is the difference

between funds using this heartbeat trade versus there was an overall etf loophole built into the product? zachary: it is a special break that essentially only applies to etf's. hedge fund or mutual fund, you cannot get the same break. but the billion a day out of investors wanting to own fewer etf's takes a lot of the taxes away. but the heartbeat are for when that is not quite enough to cut out all the taxes. you call the bank to do this kind of once a year or once a quarter trade that cleans out the cobwebs and gets would've all the taxes. -- gets rid of all the taxes. caroline: is it one of those things where it is happening and it is normal until you have an outsider looking in going this is not particularly what you becoming on? zachary: it has really only gotten attention even in the etf industry in the last couple of years because the moves are just so big now because the industry is so big.

you will see $1 billion or $3 billion flow just driven by this tax transaction. scarlet: bloomberg businessweek put together an animation that shows you how this heartbeat trade is pulled off. one thing i will say, rachel, is that it involves banks so what is in it for the banks? do they get paid to participate in this? rachel: they do not get directly paid. the economics are subject to debate but a few tax reasons why that might be the case, the bank has to have economic interest for this to be regarded as a legitimate transaction. if they don't, there is an argument the irs can come in and declare these to be a little more devious. they are not getting a theme. they meet -- not getting a fee. relationship building. necessarily anything directly in it for them in each transaction. scarlet: overall goodwill. caroline: almost optimistic.

scarlet: never alter was stick and finance. rachel evans, good story. zach, good story. you can read that in the latest issue of bloomberg businessweek. and as rachel mentioned, don't forget to watch etf iq every wednesday at 1:00 p.m. muchmaking its debut after anticipation. more on the nasdaq's newest member. this is bloomberg. ♪

caroline: more on the breaking news that apple will cancel its airpower project. it is a highly unusual move for the technology giant. here with more is mark from los angeles. put it in perspective. we knew that there were problems with this charging capability. >> right. when apple launched the iphone x in september 2017, one of the highlighted additions was to be wirelessly charged so to put it on one of those inductive

charging mats. the thing is apple did not have an excess we that would allow you to do the wireless charging but what it announced was something called airpower, which they were set to launch in 2018. the airpower is a unique device that ran highly sophisticated software and hardware that would allow you to have one charging pad that can simultaneously charge an iphone, the air pot, and apple watch. 20198 came and went and -- 2018 came and went and it never came out. we had a story around july or august last year that apple was facing struggles with overheating, software malfunction, and the ability to get the multidevice charging to work. now we know they were never able to pull it off and today they canceled it. obviously a friday news dump. a hugely embarrassing move for the company. this is not a significant product in terms of revenue. this was not going to bring in billions of dollars a year. but for apple, canceling a product, no matter how big or small, is embarrassing as it is

a company that stresses perfection. scarlet: the company thing after much effort, we concluded airpower will not achieve our high standards.we canceled the product. how can tim cook, who is a genius with supply chain and management, how does this happen on his watch? mark: the bigger thing here is they announced it almost a year and a half, two years early. if they never previewed this thing, we were not happy discussion so it is more of an issue from the marketing side or whoever made the decision to announce it. scarlet: thank you so much with the breaking news on apple canceling its airpower project. we will stick with tech because lyft cofounders are confident that company will be profitable down the road but will not speak light on how long that might take to happen. one thing that could help the bottom line, the proliferation of driverless vehicles. just before the company first day of public trading -- company's first day of trading, they discussed it with bloomberg. >> quite some time, probably a decade or two, before you have a

car that can do every single ride out there. network applications for deploying self-driving car's will be the majority of the chase for years to come. scarlet: lyft shares opened up at $87.04, above its price of $87. it has come off that level since then but a strong debut. caroline: plenty of strong debuts. romaine had the chart. you have to cast your mind to blue apron, which has been dismal. earningless, a strong an uber has to be peg attention. scarlet: let's take a look at how things are shaping up on the final trading day of the week, month, and quarter. the s&p 500 up by 0.6%, getting a bit of a lift into the close. ready to close the quarter with a gain. it would an inversion

look like. one basis point about it now. scarlet: very narrow. very flat. still flat. caroline: that has been the focus point of much trading. the bound off by 0.2%. will we have a general election in the u.k.? scarlet: who knows? ♪

♪ caroline: this is countdown to the close. scarlet: joining us at this hour as always is joe weisenthal. quite a bit of data to sift through. i know you had uri on -- your eye on inflation and new-home sales. joe: so inflation, no new story. still not very much of it. nothing in the data would make the fed move off of its current stance. the interesting story we would talk about work, maybe even later on the show, the effect of

lower rates on the housing market. housing hit a rough 2018 as rates went up for most of the year and that is viewed as probably the one segment of the entire economy that is rate sensitive. one of the stories that might emerge this year is the degree to which housing rebounds things .o lower rates caroline: the markets driven by hopes, prayers, some mutterings of china and u.s. trade deals. it seems to be getting closer. joe: maybe. some people wanted to buy because it is an amazing quarter and they wanted to have something to show. scarlet: they wanted a narrative. a meeting in washington next week and a meeting in beijing this week. when you look at how the center groups are faring, some of the industries affected by trade discussions are at the top of the trade war. semi conductors, chip makers, health or equipment, services.

transportation also gaining 1.2%. this is on the day. there are only three groups in the red. caroline: interestingly on the back of the data. on a day where sales are rising. scarlet: real estate investment trust down a quarter of 1%. they open higher. no dispute on that compared to previous sessions. we have been kind of making our way higher through the trading day. caroline: not happening. scarlet: certainly a melt up first quarter. we are moments away from the close. about 7.5 minutes to go so let's take a look at what is driving the action. abigail: i want to take a look at apple. the news that just came out about apple canceling the airpower wireless charger. i want to take a look at apple on the quarter, up 20%. mini bull market within a bear market. other usuale of the suspects like microsoft and

google. this despite the fact that the revenue picture is not so great. this is last year. we see revenues were moving in the right direction. that was the september quarter into the big december quarter. despite the fact that there are a lot of revenues there, $84 billion or so to be precise, that represents a 5% decline year-over-year. take a look at the march quarter, june quarter, and september quarter moving in the wrong direction. investors bidding up apple despite revenues not going in the right direction. very interesting to see what the march quarter brings when they reap port and probably a month -- they report in a month or so. romaine: i want to look at yeti. it went public last year and one of the worst performers in the russell today among small caps. remember, this stock debuted in october. that was right in the midst of the big decline in the s&p when it was down about 10% so the suffered, but then back in

february, it gave a pretty good earnings report and the shares have rallied 60% in the past 6.5 weeks alone and have more than doubled tuesday december low. morgan stanley downgraded the stock to equal weight, cited the rally basically saying a lot the upside right now is priced in. today'sven with decline, still one of the best-performing ipos we have had in the past few months. scarlet: thank you very much. now for more market analysis, let's bring in sarah ponczek. we were joking about how it has been a multiple first quarter but it has been. every industry group is about to finish in the green. sarah: everything is higher. every industry group. if you look across the board, the world index having its best first quarter since 1998. caroline: 1998? sarah: 1998, yes. it is not just stocks. oil, best quarter since 1999. investing, great credit, high-yield credit. best score since 2003, so it is

unbelievable when you lay out the records and these years. it has been a very long time. joe: so i joked that may be part of this rally was people at the end of the quarter feeling like they need to put into something, but if everything was up, how was exposure to it? people were under positioned everywhere you looked? sarah: it is interesting because all quarter long we have been hearing that people are not in this market, people are under positioned. it is the unloved rally like the unloved bull market. i was discussing this this morning. i think it is interesting because someone is clearly doing the buying but there is no data that shows who would it because mutual fund buyers, hedge fund buyers, even data that just came out showing foreign ownership is down. there are people who are evidently on the sidelines of this rally. that is why a lot of people out there are still saying there could be more legs to it because people are not in this rally. clearly, there would be more room to run if they get back in. caroline: let's get a

perspective of who is in the market as we had to the market close with four minutes to go. have you been calling to buy every sickle asset group because it is amazing, isn't it? >> it is amazing but the fact ,hat the fed on the sidelines market saying the fed is not coming back this year, has actually -- you can see from january 4. but where the business has been going? they have been going into bonds. the ones coming out of the equity market, especially on the retail side primarily have been putting money into the bond market across the board. it has been fairly dramatic. also, we know that many of the portfolio managers do have cash for a number of reasons. one is the ipo pipeline. otherwise, you will have to sell something else to participate in the deal. yeah. that is something that if you don't have cash and don't want

to pursue supercommittee batteries it. got -- want to pursue it, so you better raise it. if the market comes in and the earnings season is worse, by the way the bar is low, but if it is worse than that, you will see the markets struggle because the question is, is there enough pivot to underpin the market as it has this quarter? joe: what does it tell you about the state of market sentiment right now, the enthusiasm we saw for lyft? quincy: it is healthy, very healthy. granted the investment banks made sure it is healthy. they will not bring a deal to the market that will fail. caroline: hardly any shares available, right? quincy: exactly. to a certain point, they are going to keep that $80. they don't want to go below $80. that would not be good. is 100kup period something days. and then you have uber is filing probably. there will be an awful lot

coming to the market, but nonetheless, they want to take advantage of the market while it is receptive to deals. scarlet: when you talk to people this week, and i know it was a struggle to get people to open up about what it was investors were waiting for, how much was lyft on their minds? where they positioning for it in any way? sarah: interestingly enough, nobody brought it up unless i brought it up to them because when you think of lyft, for example, yes, people will do it as a tech company. maybe people want to be positioned in lyft, they will have to sell out of some other tech companies to make room, but at the same time, lyft is really the first of its kind to the public market. it beats uber. this is the first reich shipping company on the market so it is hard to find a stock or an area that is actually a direct comparative of it. not many people brought it up. joe: it is also off 11% of its high so some unlucky traders are already under water.

caroline: holding the $80 level. earnings is where perhaps they will be focusing next. this time next week, we will be starting to look to earnings season. the big after that, we will get wells fargo, some of the banks. but what are you waiting for? quincy: what we are looking for really is the revenue story. revenue has been marked down, down, down. the point is revenue is marked down below to where the market has already discounted that. you are going to see investors wonder whether or not the global economy, the domestic economy is slowing more than initially expected. revenue growth is a very clear picture of demand. i will make my bottom line, but revenue tells us demands for a company or sector will be filling the data together. that will be important. next week is major for this tug-of-war in the market as to whether or not the economy is

slowing. it is a broad cross-section of data, probably some of the most important. jobs but also the pmi, purchasing manager index, the ism. those are some of the leading indicators for how the economy is going to fair. caroline: joe doesn't need to be told twice. joe: i will be watching all of that. >> and retail sales. scarlet: that comes out on tuesday. and people are starved for some timely data after the government shutdown earlier this year. we've closed the day near our highs. the nasdaq, not quite getting to where it was earlier, but this is a gain of 0.8% for the nasdaq and the dow jones. for the quarter, they finished with gains of at least 13%, 11% for the dow, 15% for the nasdaq. the best we got

quarter for the s&p 500 since 2009. scarlet: let's take a closer look at what our reporters were monitoring. abigail? >> i'm taking a look at what you were talking about, the s&p 500 on the quarter. let's give it some context. this is the bull market on a quarterly basis. green bars represent and a quarter. many more green waters than not. take a look at this great quarter for the s&p 500 following the brutal fourth-quarter. we also have a breach of the uptrend. , will it is wondering go to the upside or the downside? it is unclear. that may suggest the sellers are taking over. tore is also a reminiscence what was happening in 2007, 2008. volatility does breed

volatility. >> thanks, abigail. ipo out of the way, venture capital firms are sitting on $500 billion worth of invested assets looking to leave the corral and enter the public sphere. that includes airbnb, post makes, and uber. you are talking about a scenario where we could end up with $100 billion worth of ipo's this year. most analysts expect that we will hit a new record. even though we are going to have a potential record issuance in terms of dollar terms, it is not going to be a record in terms of market size. projected new issuance is going to be less than we had in 1999. it is going to be less than what we had in 2012, 2013, 2014. that should give some assurances

to the pessimists out there. and even with this stampede, all the unicorns coming to market, we have that stampede of corporate buybacks. scarlet: thank you so much. unicorns of salad do make when they are in a stampede? we have the toronto benchmark index gaining 12.4%. that is the best first-quarter performance in almost two decades. go long cannabis. the third-best performer in the last three months is grown is, then aurora. they had a helping hand, it would seem. fantastic perspective there as we look at these blockbuster gains. su with us now. quincy crosby and sarah ponczek, sarah, you had a great story about how investors look at what is going on with the inverted

yield curve. stock investors are not freaked out about it at all. there's this wall street hierarchy where investors are kind of seen as not as erudite as the bond investors. >> typically the stock market follows the bond market. the idea is that the bond market is the smaller asset class. this time around, some people have brought up the fact that stocks had their freak out about recession concerns. know the bond market is worrying about global growth and flashing warning signs. you talk to investors or look at the stock market and clearly the s&p was up more than 1% this week after the inversion on friday. we do have to note that the three-month 10 year curve is no longer in negative territory. still, many seem unfazed. i don't see recession on the

horizon, so why am i going to change my worldview? joe: earlier, i was talking about real estate and new home sales and this question of whether lower rates will start to turn the housing market higher. do you think that will happen could we even have a recession if the housing market is picking up steam again? >> it is a very important component. zero interest rate policy, the fed holding 25% of the market. securities because they want to help the housing market, that is how important it is. up,ong as employment holds the mortgage rates are down significantly. mortgage applications are up. you've got people getting jobs, a little bit higher wages, and even more important, consumer confidence was just revised up, telling us that consumers in

america are happier. that bodes well for the housing market, especially because prices are coming down and supply is coming up. mortgage rates are very attractive. caroline: i'm going to compare and contrast that to what is happening in the u.k., the london property market having its biggest drop in a decade. how much do you factor in what is happening globally? you've got the chaos from brexit, the ongoing concern about trade deals. when you look at the returns over the first quarter, it doesn't seem so. >> there are times that the market just gets tired of the same story over and over. it just gets bored with it. it says, let's focus on what we can focus on. let's look at that and deal with that. that is what happens with the market. is the market board

with the yield curve story? >> apparently so today. but if it happens again and again, with the 10 and the three-month, the market is going to notice it. data, perhaps weaker than expected, pushing those yields down. joe: the three-month 10 year is positive again, so story over. scarlet: no longer on the horizon. >> look at the credit spreads. so nice and tight. not signaling any worries whatsoever. the bears will say, just wait until the earnings disappoint. that is when it could invert more deeply. joe: what is the bigger story next week, trade or the jobs market? >> jobs. caroline: you are preaching to the choir. >> i knew that was the answer to

was looking for. it seems like the market is pretty desensitized to train. until we get a hard outline of what is going on here, i don't think it is going -- caroline: on the back of trade? >>esterday we had a headline saying it could go for weeks or months more. we are getting different messages every day. right now, whenever you ask investors what matters most, it is earnings and economic data. the fact that we aren't seeing these completely fall off a cliff. scarlet: sarah ponczek, really putting the spin on the jobs report. we have a new stat, u.s. stocks capping the best quarter since 2009. the s&p up 13%. pretty remarkable statistics. caroline: we've been saying that all day. scarlet: i know, but the bell

has run and we are moving ahead. quincy, how do you balance your portfolio? >> i think you hedge. there's so much coming up in the next quarter that is really important that will really affect the market. over in thebe staples. utilities. took a little bit off of that. tech, are going to be in tech isn't going away. however, if it sells off during the earnings season, you hav in. i think it is prudent right now to be defensive. scarlet: quincy, great to have your perspective. and sarah ponczek, thanks so much. that does it for the closing bell.

romaine bostick is stepping index, where the team will be looking at housing with housing experts. this is bloomberg. ♪

caroline: live from bloomberg's world headquarters in new york, i'm caroline hyde. romaine: and i'm romaine bostick. joe: and i'm joe weisenthal. caroline: and here's what happened on the last day of trade of the week, the month, the quarter. bulls on the run. the s&p 500, best quarter in a

decade. will april showers rein on that parade? portfolios get a lift. the ride-hailing company sends encouraging signals to the stampeding unicorns. but is it fomo or real growth potential? and, u.k. lawmakers vote down theresa may's brexit plan again. leaving the country deeper in crisis. goes public after all the fanfare and the roadshow. the second largest ride-hailing company in the u.s. raising $2.3 billion in the ipo that priced at the top of an elevated range. josh green gave bloomberg his forecast for the company. year, the economics or the business improved. we are confident that the business will be profitable. caroline: let's bring in brett wallace. withre not so much in love

the way the business has been progressing. >> love is an emotion. we try to the mathematical about it. question ofally a what was going to happen, but when. i didn't even get uptown in time to say it is going to start coming off before it fell below 80. there is excitement about this deal, but there's a lot of problems with the fundamentals of the company. just looking at today, you would say there's a fairly mediocre -- >> know, they raised $2.3 billion. joe: people this morning are already looking at some losses. >> but if you are a hedge fund, you are wondering, when do i need to get out of this thing? romaine: a lot of the analysts who came out ahead of this with their own stock ratings, they

saying, don't worry about the fundamentals right now, there's a broader growth theme here. why shouldn't we buy into that? they are doing something that could be considered. >> you can be bullish about ride-hailing and still have questions about the value here. these guys spend two dollars a ride just in marketing and incentives. they spend another two dollars in insurance and $.50 in operation. so they need to spend to grow. they spent $1 billion last year. is it going to be growth or is it going to be profitability? caroline: and what would be the right choice? >> other than giving all the money back? caroline: in terms of growth versus profitability. they still have ultimate control over the company as founders. very little of the actual

company is traded right now. >> so the short side is going to be going crazy about this. what should they do? they don't exist in isolation. we are going to see uber filing in less than a month and then uber is going to raise $20 million to compete with them in the market. they are going to have their hands full because uber is the big dog in the market. romaine: when you look at the score, you rated this below snap. >> you don't see that everyday. but there was still an appetite at least in those first few months. that faded for a variety of reasons. you've got this whole host of companies lining up here. my guess is that some of your scores of those companies probably aren't terribly better. >> the new low is we work. this company goes public, it had a $15 billion valuation -- the

one number you can believe about lyft is the billion dollars negative, and we work has twice that, but three times the valuation. that sets it up for a problematic valuation. joe: you don't see that very much, do you? >> you have to take your hat off to these guys. almost no one can raise enough money to lose so much money. caroline: this story from our reporters showing that european banks are not wanting to finance we work because they are worried about getting so exposed to one particular company. >> the bankers that won't finance to let we work sign the lease assume that you will get all the way through the equity before they are exposed on the fixed income side. to say we are not comfortable even though they've raised tens of billions of dollars tells you a lot about the equity oriented world.

this,e were talking about what it says that we work is worth $45 billion and lyft was able to raise over $2 billion. is there any sort of cyclical element? ipo's. at past is there any broader macro lesson from this? you can sayhat about these companies is whether or not they make money, they grow. investors like to invest in growth companies. that is something people used to the able to do. if you are going to invest in early stage, you want to do that privately. you told us your worst one. what is the best one? >> it is difficult to say. we said that lyft reminded us of snap.

we said that until we saw pinterest, which reminds us a lot of step, they just don't have the same loss profile. again, we look at them when they come is my d on this question. i will let you know if we see anything we really like. on average, scores from the trailing year have been just over six. in general, we are seeing quality degrade. >> joe: great stuff. thanks to rent wallace. coming up, theresa may's brexit deal failing for the third time in parliament. the u.k. faces two choices and more uncertainty. that is next. ♪

caroline: we're going to go live now to the president in mar-a-lago. >> i've known for a long time.

i knew she was good, but i didn't know she was that good. she has been one of our all-time favorites. she's helped so many people in the world of small business. she will be leaving. she's going to go and help us with a very important year-and-a-half that we have coming up. the reelection as they call it. we look forward to that. she's going to be doing a fantastic job. making the newbe nomination and appointment in a very short distance and that will be in consultation with linda. just have to say this is an outstanding woman who has done an outstanding job and i want to thank you very much. >> thank you very much. highlights been your and what are some of the great things you've done, just so they all know? >> the highlight has certainly

been the fact that you asked me to take on this position. it has been an honor to serve the country in your cabinet. states,le of the united 30 million small businesses, 99% of businesses in this country are small businesses, so we've been able to help them, we've reimagined fda, and it has been awesome. we've had great outreach. i have traveled all over the country. i've been to all 50 states. i've met with over 800 feel -- we talk about that optimism. it is there. businesses are happy. they are expanding. they are hiring more people. it is incredibly powerful when you are out feeling it and

talking to the businesses. we've had great outreach to women entrepreneurs through a project i've been working on. a learning platform. we talk your salary that you donated and developed a pilot program for our vets, and we've been working closely with sonny perdue and usda. i can tell you one thing that not many people know is how we move in when there is a natural disaster. i want to thank you for letting me go with you to houston and puerto rico and my hometown in north carolina and i got to see firsthand what it is like when the commander-in-chief is on the ground and the folks know that you are attending to them. i want to thank you again for serving. i think my great team because

they are awesome. >> i do have to say that i witnessed firsthand during the hurricanes, because we had numerous hurricanes, and they were big, and tornadoes, we had some vicious ones, and we just left alabama, and i've watched linda and her people helping people that really needed help, and they needed it quickly, and you have been outstanding, so we are very thrilled at the great job you've done. we are staying together. announcing the next administrator in the very near future. we pretty much know who that is going to be. we will be putting it out there pretty soon, ok? [inaudible] >> somebody that is really good. somebody that will fit in beautifully. somebody you are going to be very happy with.

the attorney general said he intends to release the mueller report in full to congress. do you agree with that decision? >> we have great confidence in the attorney general. if that is what he would like to do, i have nothing to hide. this was a hoax. this was a witch hunt. i have absolutely nothing to hide and i think a lot of things are coming out with respect to the other side, but i have a lot of confidence in the attorney general. [inaudible] we will probably be talking at some point. we're looking at venezuela. venezuela right now is a big fat mass. the electricity is gone. power is gone. fuel is gone. gasoline for cars is gone. they have a lot of electric cars. that is all gone. they have nothing.

socialism,k about take a look at venezuela. i'll be talking to a lot of people, perhaps president putin, perhaps president xi of china. we are negotiating the trade deal. we will see what happens. i think it is going very well. we will see what happens. they are in china right now, meeting with their people. they will be coming back here for another round. , tos a very comprehensive use a word some people like, some people don't like, i think it is ok, but it is a very detailed and listing of problems we've had with china over the years and it is going to have to be a great deal. if it is not a great deal, we can't do it. [inaudible] >> i'm very happy with pat shanahan. i think he's done a really great job.

we knocked out the caliphate. if you look at syria, what happened in a very short time, on theworking to get wall and the border. i'm very upset with mexico. i think mexico is doing a lot of talking. they have the strongest immigration laws anywhere in the world probably and we have the worst, the weakest, the most pathetic, the most laughed at immigration laws anywhere in the world, and i got stuck with them and i hope congress is going to change them rapidly. they have a lot of opposition from democrats, not because the democrats don't think they would be right in changing them, just because they don't want to make anybody look good. they don't care if the country suffers. they don't want any victories. we have new caravans coming up. they are coming up.

mexico could stop them very easily. mexico has a trade surplus with the united states for many years of $100 billion a year at least and this is for many years. mexico has taken a big portion of our car business. mexico is doing very well because of the united states and they have to stop the illegal immigration. we've run out of room. we have this ridiculous catch and release program where you catch them and you are supposed to release them and you release them into our country and we've been very tough and the border patrol has made incredible. the people in the border patrol, the job they do is unbelievable. ice, the same thing. and law enforcement. but mexico is going to have to do something, otherwise -- the deficit like we have with mexico --

get with it. mexico doesn't stop it. they come in from guatemala. they come in from el salvador. they come in from all over. and they come in from mexico. and we are working very hard to stop it. ,ut until the wall is completed and it is really moving along well -- in fact we are going to have a news conference very s it is at the wall a being completed in going up, it is moving along rapidly, but still we have a current crisis. you can go back 30 years and 40 years, but i can't imagine it being any worse than it is right now. children died in december in

u.s. custody, migrant children. do you believe your administration is equipped to handle that in a way that ensures that children are not dying? >> i think it has been very well stated that we've done a fantastic job. one of the children, the father gave the child no water for a long time. the other one was being brought to the hospital on an emergency basis. it is a very tough situation. it is a long, hard track. you see what is happening to women. you see what is happening to children. it is a horrible situation and mexico could stop it at their southern border. they have a southern border. they have a border that could be very well structured. it is very easy to stop people from coming up and they don't choose to do it. we are not going to give them hundreds of billions of dollars

and tell them they are not going to use their strong immigration laws to help the united states. so there's a very good likelihood that i will be closing the border next week and will be just fine with me. [inaudible] i have a very good relationship with kim jong-un. he's somebody that i get along with very well. we understand each other. they are suffering greatly in north korea. they are having a hard time in north korea. i just didn't think additional sanctions were necessary. doesn't mean i don't put them on later, but i don't think additional sanctions at this time were necessary. they are having a very hard time in north korea. i think because of the relationship, i think it is very important that you maintain that relationship at least as long as you can. but we get along very well. we have a very good

understanding. so i didn't think those sanctions were necessary at this time. [inaudible] >> not at all. they were intended to go -- people thought they would go at that time. they had the right to do that. i just decided i would not let it happen. like the special olympics, for many years it hasn't been approved, and then at some point it gets negotiated out in congress. i went out and said, we're going to have funding for the special olympics. that is why i am proved that. little bit of a similar situation with different parties , to put it mildly. i want to thank the job you've done. i tell you what, linda has been so great and when somebody does that good a job, i would rather do it this way then just say bye-bye, so i'm doing it this way. linda mcmahon is a very special

person and now she's going to be working with me very hard so that we keep this miracle that we built -- you saw what happened last night in michigan. if they would really reported, many thousands of people outside of the arena. the arena was packed. it was tremendous love in that arena. you look at what is happening with michigan and ohio and pennsylvania and florida, north carolina, south carolina, iowa, wait until you see what is going on in iowa, so many different , i havenew hampshire tremendous reports of something we did up in new hampshire -- our country is doing really well. we are the hottest country in the world economically and it is going to stay that way for a long time to come. thank you very much. [inaudible] caroline: that was president trump speaking at his mar-a-lago estate in florida. thanking linda mcmahon, who is

stepping down to work on his reelection campaign. it seems as though he also made comments about the impact they are having with north korea. he was not upset with the treasury sanctions on north korea, not necessary at the time, he says, and he says talks with china have been going very well, but not pleased about what is happening at the mexico border, and he says he is looking to shut the border with mexico over the immigration issue. joe: time now for instant replay. some of the smartest voices on bloomberg television wrapping up that strong quarter for the markets. >> massive rally. >> huge rally. >> equities going up, bonds going up. >> dovish tilt by central banks. >> very dovish commentary from the fed.

>> boj, ecb, all of them signaling they are willing to stay on hold for much longer. >> after three years of raising rates, the fed has called a truce on bond investors. >> we are in a low inflation world. >> as long as that is the case, , every central bank in the world can remain on the sidelines. the economic growth continues and the market rally continues. peter,ining us now, chief strategist. everything went up. everyone is happy. everyone made a lot of money. is it going to continue? >> life is great. i can leave right now. i've got my tie on. the mets are undefeated. let's face it. aheads are always looking to a certain extent. great first quarter.

you should be rewarded for that. just as the fourth quarter was so bad and the first quarter was so great, we have to figure out the second quarter. as i've been saying, there's underlying deflationary pressures. it looks like banks have seen that. what about the steepening between the 10 year and the 30 year? what does that have to do with confidence? we have to be mindful of that. let's look at the underlying financial stocks, which are much closer to their december lows now. sort of makes sense why people would chase this rally, but the bond rally, there was at least some degree of perceived safety. how much confidence do you think the market has now to keep this rally going? assuming there's no fundamental change. >> it is a real tug-of-war.

is there an opportunity cost of not being in equities or is the bond market and the continued strength of the dollar telling us that there is going to be economic weakness? we said that the economy is going to slow rapidly. first quarter gdp looks like it is going to be 1%. is that going to fall negative? ifyou think about it, economic growth were really strong, revenues should have been much higher than they are. the budget deficit is much greater than projection. future projections are based on much higher economic growth levels. what is going to happen to the supply curve of treasuries? spreadking at that between the 10 and 30. caroline: seemingly the stock market doesn't care. it has shaken off this inversion of the yield curve. previous guests saying people

have been sat on the sidelines. can you continue to stick to the fact that fundamentals are looking week, but you have to get in? >> my definition of a quandary is, do you stay out of a market and watch everyone else make money, or get in and cause it to immediately crash? view,n investor point of i've been hearing that same market every day since the 2009 low. thisnvest if you think dynamic for the economy justifies further economic growth, which will be reflected in equity prices. caroline: should you pull out? >> this has been a tremendous rally. if you've made some money, it doesn't hurt to take something off the table. your mental aspect when you approach a market is so much more objective when you don't

have a position on it. if you stayed through the fourth quarter, there aren't that many stocks that have made new all-time highs. it is a good time to lighten up. joe: one stock that is basically at all-time highs, mastercard. you've said before that you look at it as one of your favorite indicators as a u.s. consumer. phenomenal start to the year. basically at all-time highs. when you look at that, where is your signal? mastercard, visa, american express, and i say that it is too premature now. components to gdp. there's consumption, government spending, investment, and net exports. the problems with the government spending.

we know the debt ceiling, they are starting extraordinary measures, and that is going to take placegiven the amount of it that one would have relative to the tax cuts, that has been far under those levels. three out of the four components are saying we are slowing. the consumer has not died yet. gdpave some marginal growth. what happens as we move to the second quarter? romaine: all right, peter. thank you so much. up, lower mortgage rates are giving buyers and builders the loop. we will break down the latest numbers with the ceo, next. this is bloomberg. ♪

joe: new home sales getting a big rebound. sales for february beat estimates, advancing to an 11 month high. with more on the housing market, ,e are joined by ivy zelman ceo of zelman and associates. ivy joins us by phone. thank you for joining us. there's so much debate about the overall economy and whether we are going to dip into recession. will lower rates start to fuel a rebound in the housing market after sort of a mediocre 2018? >> first, thanks for having me. there's a lot going on in housing. there's lots of controversy over the direction of housing and the economy.

you look at today's published mortgage rate, which is a little shocking. we are back to 4.06, i think is the quote, which is down year-over-year almost 40 basis points. where you think about the stocks, any time we've seen rates drop, the housing stocks will outperform, it is usually a 50 basis point move. now, people are suspect that this could be the economy slowing. given the importance of housing to gdp growth, we think housing had a pretty tough 2018 with respect to acceleration, the debacle going on, the stock market plunging, confidence being pressured, a lot of political uncertainty. i think we just ended with a real thud. but 2019 is off to a good start and we are seeing incremental

improvement, better than seasonal. we have a substantial deficit for the need for single-family housing in this country. inventories are close to 30 year lows. we got strong employment for millennials. we have weight growth accelerating. we have young people getting married again and having babies. i can go on and on. but i believe that affordability is still reasonable. we can talk more about that. the government did tighten a bit on riskier loans. i think the complexity really gives consumers and investors an opportunity with the drop in , approximately a 5% reduction in equivalent home prices. caroline: sounds like you are relatively optimistic towards the future maybe picking up, but hard,anks getting hit so

with interest rates no longer on is acceleration, how much mortgage going to be a big part of their business going forward? are people going to find it easy to get mortgages? >> if you're talking about the government, fha, fannie and freddie, you are talking more than 75%, 80% of the market. that is a very liquid product. banks, whether they choose to own mortgages, whether the concerns might reduce their appetite, is yet to be determined. right now i would say it is pretty easy to get a mortgage, pretty attractive, and there's strong consumer demand for it. we surveyed and their activity is picking up. romaine: can you talk a little about that? when we look at the data, it is

not really the overall market showing strength, but you are seeing certain pockets of it on the lower end of the scale that seems to be doing well or outperforming other areas. as we move forward over the next year or two and get these demographic shifts, do you see couldtential where we have some imbalance in the housing market with regards to what people are buying? >> i think we have a tale of two markets already. inhave a substantial deficit that entry-level affordable price point, which is one of the reasons the new development has to be pushed out and builders until 2015, even 2016, were concerned about going out to the outer rings as they have been pioneers in the past. they were not sure the consumer was willing to drive that far out. mortgage availability was still tight.

you had a lot of perceptions that people want to walk to work and live urban. it wasn't until two or three years ago that the builders started building on the outer rings. today we are well below where we would call normal, building out in those excerpts markets. if that continues, i think we will get to the point where we close the gap on this deficit. the mid to higher priced product, there's some markets where there a lot more competition and pricing is maybe not as favorable. the high-end in certain cities like new york city has way too much inventory. you are seeing changes at the very high luxury price point. i think that is at risk for seeing real pricing pressure. i think you will see moderating home prices. home prices have been going up. we think they are going to slow. caroline: ivy zelman, thank you

for your time. ceo of zelman and associates. we thank you. quick check on the latest business flash headlines. london leading the u.k.'s weakening property market. prices falling the most since the financial crisis. nationwide building society said values in the capital dropped 3.8% year on year, a seventh straight decline and the worst-performing region in britain. also in london, a former banker is suing mizuho. he was fired for stealing a bicycle part. it was worth less than seven dollars. the bank thinks the episode was just a convenient way to get rid of him. he says he previously complained at mizuho. think mizuho has said, you have to have a decent moral compass if you are a banker. romaine: when i first moved to new york, i wrote my bike,

parked it in chelsea, and when i came back, someone stole the bike pump. i'm still upset about it. i don't feel for this guy at all. joe: no sympathy? romaine: i want my pump back. caroline: how many pieces of equipment did you need to buy for your bike every year? this guy bought 83 bike parts in 2018 alone. joe: i don't think they should have fired the guy. i get if you want to have a culture, but i don't know. i'm on his side. romaine: you are? i'm going to not leave my wallet around. [laughter] romaine: coming up, corporate debt. buts fashionable again, with a dovish fed, that story is next. this is bloomberg. ♪

buying the dip, investigators are scooping them up in what is a supply turnaround for the securities just above junk status. joining us with her story is bloomberg molly smith. she's in d.c. for some reason. when i saw the performance, something like 5.8% in the first debt, i thought back to october or november, saying it was this canary in the coal mine. what changed between october and november and today that somehow made people more optimistic about this? >> there's been a lot less fear around the fallen angel. back in october, when anything and everything with a touch of risk was selling off, the sentiment was horrible in all of

fixed income. the fed was saying they are so far from neutral, everyone is thinking there are more rate hikes to come, fixed income is the last place you want to be. really got beaten down. when the fed tilted, now we are in this environment, a lot of those fallen angels started to subside, as well as companies taking some balance sheet. we've seen large capital structures that are doing all these different ways to focus on debt reduction. joe: a lot of this tightening contradicts what people say is the signal from the yield curve. people look at the yield curve and they see recession risk. is not saying the same thing at all right now. >> right now, credit looks

excellent. that is a rally that is hard to ignore. they have been along for the ride and doing incredibly well by a return standpoint. in some ways, they are looking a little cheap still. that spread is still very tight. even drawing in some high-yield money managers. you thats telling there aren't any rate hikes coming in the foreseeable future, so a lot of money managers are taking that to think i'm more comfortable taking duration risk rather than credit risk. caroline: talk to us about where people are buying. it is half the market was aboute market in 1993. where are they buying? >> we've seen a lot of really

great action in -- really across the curve, but definitely the longer dated ones have a lot of natural buyers and those foreign buyers as well that are looking to get into the longer part of the curve, and even longer dated bonds have rallied hard. there's one bond that was sold recently that has had a remarkable tightening story even with all the headwinds in tobacco. caroline: molly smith, thank you very much. great analysis coming from washington. the numbers from u.s. retail sales come out on monday. joe: and trade talks resuming in the u.s. and china on wednesday. romaine: and the u.s. jobs report comes out on friday. caroline: that is all for "what'd you miss." joe: have a great weekend. this is bloomberg. ♪

i am emily chang in los angeles and this is "bloomberg technology." we have liftoff. lyft soaring in its debut after raising over $2 billion in an ipo. i sit down with the cofounders to talk about how they get costs down. plus, we hear from ben horowitz. he compares the rise to that of rocky balbo