all of that will mean higher levels of capex. capex remains a top concern.w you view you on -- elon musk and tesla as a positive force in the u.s. economy. are we likely to see this investment coming to a good end? >> i think it certainly helps all of us that anybody is making these investments. colin is immersed in the numbers more than me so far be it from me to say these are brilliant moves for tesla. i would say he is also predicting, his targets would be for the stock to drop by one third, which is a lot. you could counter his argument. with an overvalued stock, at least they have the ability to raise more capital with that currency that can help them pay for these investments. i think they are positive for the country. caroline: colin, respond in terms of the price targets on tesla and the concern you have on the overvaluation on the company. how much support has there been for the share price by the relationship being built between washington and elon musk? >> i think that might explain some of the recent run in the stock. i don't think there was any

that's stage one to open the door to a bit of capex, company borrowing. that's very good news. i was shocked to find we have done the same as the u.s., we have fully reversed that leverage. that's a good sign. >> karen, thank you for your time. >> thank you. >>> again, we will keep you up to date with any comments coming out of this live press conference taking place still in malta where donald tusk is speaking on stage live about these draft guidelines for the brexit talks. we've also had the maltese prime minister speaking as well. >>> coming up on the show. by all means get involved. i have to say that. find us on twitter, @louisabojesen, and on e-mail, streetsignseurope@cnbc.com. loads more to come. vladimir putin telling cnbc that claims of u.s. election meddling are fictional. more on that after the break. wa. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second.

the governor of connecticut has lisa: i am alisa capex "bloomberg technology."nd you are watching "bloomberg technology." "bloomberg technology." during a trump spoke meeting with carmakers in detroit. he is expected to unveil new plans during a trip wednesday to michigan. meantime, the president and --na's she's in pink capex president may meet next week. they will meet at the metalico resort in florida. washington and other states fighting to block the revised travel ban what a hearing tomorrow before a seattle judge. a complaint filed on their behalf says the ban is unconstitutional. other states joined washington in pushing legal action. the ban goes into effect thursday. senate minority leader chuck schumer is warning republicans that a test to pay for the border wall by the funding -- defunding planned parenthood would fail. a partial government shutdown would begin on april 29.

tesla will probably spend 3.5 to $4 billion in capex. that's going to start depreciating, which hits gross margins as well. and so the combination of those two factors is what puts us below expectations. >> when does a capital raise come? and what do you think the impact will be on the stock? >> we're expecting that a capital raise would likely occur between the second and fourth quarter of this year. i don't think it will be significant. they might need to raise $2 billion to $3 billion. but tesla did that last year. they did it with equity. they have credit lines that they could tap into. and they did it without a major impact on the stock. i think it's reasonably well understood that they'll likely have to go back to the capital markets. >> i want to ask you, you know, how do you, as an analyst, sort of quantify what, in many ways, could be unquantifiable? and that's the cult status around this name. how does that factor into the way you view this stock and whether you think that puts any sort of a floor underneath it? >> right, it's

now, the fact that ours generates cash for you and costs no capex, and everyone else's uses more staffthink we're going to start to separate from the pack in a much more material way. just the idea of being able to reach out to yelp and google and amazon and be out on the cloud pulling patients to our clients when the guy's stuck on isolated copies of software can't do it, that's going to start to really help us separate from the pack, we believe, and i think we're going to have a renaissance, another renaissance as a result of the backing off of the government and the opportunity for us to do our own unique product management. >> so, thread the needle for us, jonathan, back to the ahca. we know that there's some concern in the senate about what the house has put forth thus far. how do you get it better so that it's palatable to the senate, maybe has a chance of passing? >> i mean, that's horse trading. i think the net-net is they're trying to figure out how to pull back on the minimum required benefit design so that the sort of inevitability of price increases doesn't sort of go off i

that's the most important thing is they were putting a billion a year in capex in opel, vauxhall andllion for the plan g.m. is keeping but fixes this line of ability for them and you have the ongoing operating losses they'll be able to get rid of as well. this has been a real burn for the company for a very long time and even as it was getting in the black, the returns were very thin and it was watering down the progress g.m. had made in the u.s. and china. david: that liability shifts to p.s.a. and in a practical matter isn't that cutting heads, what g.m. is doing is outsourcing, them, i'm not laying them off, you lay them off. how does that work a french company owning a german company? dan: we'll see. whenever you have these european deals and you have to do restructuring, if one more german gets laid off than, say, a frenchman, you'll have a problem. i think what you'll see is the real cutbacks will be in the u.k. where neither of the governments are involved in the two companies doing the deal will be able to put any pressure. that's always been easier to lay workers in the unit

capex has moved higher as the economy has recovered somewhat.t to make sure you will not have to pay fines. david: i spoke to one business leader who is more confident the cousin of the fuel efficiency being looked at. mary barra, ceo of gm. >> i heard he is reinstating the midterm review, and i think that is so important, to look at the progress made in the last five years in technology and how consumer trends have changed, really looking at the whole environment. he can as we can do things that will improve the environment, not threatening jobs. i think we can do things that will create jobs and strengthen the economy but do the right things for the economy -- the environment. that is about suv and trucks in the united states, which are higher-margin. the direction of travel was maybe in that direction. we are about 26 minutes into the session. were welded going into the cache open. equities with a decent bid. 26 minutes into the session here in the u.s. up about .1% on the dow. flat on the s&p 500. the ftse hit an all-time high in europe earl

capex than spending more foofing in 2017, but companies aren't exuberant yet.c's production cuts are heading to a forth month. geria has joined kuwait in proposing the curbs maintain to stabilize the mark. saudi arabia is key to any decision. >> we have a fair amount of compliance from a lot of opec members, more than people were expecting. but at the end of the day it is a saudi initiative. the saudis are now increasingly needing to focus on growth. they are needing to focus on their budget, which means it is hard to imagine that this deal is going on that much longer. look, ultimately what the saudis need is not an opec agreement. 2020 ey need is the plan. they desperately need to diversify their economy. they need to unlock 50% of their population, which is nowhere in their economy right now. i am talking about women. and we do have a young leader who wants to make a difference. they are starting late, and there is a lot of conservative push-back in their government. it is clearly a risky proposition. >> you mentioned the crown paris. he did fly to washingto

of capex, 80% is on replacement.ared to 27% [speaking simultaneously] yousef: with all of that in mind, ryan, i will jump in. what else are you recommending for your clients in terms of being able to secure some good yield in this part of the world? ryan: we remain positive on the health care sector and some specific retailers in saudi arabia. we obviously look at the high dividend yielding stocks in the u.s. and saudi arabia. we are looking at 5000%, which is interesting for investors. we look at stocks that are generating substantial free cash flow. there are quite a bit of stocks that show this. yousef: all right, ryan from abu dhabi. he is the head of wealth management for 80 a security. -- a ds security. shery: something we want to bring up is the future of interactive tv. you can find it at tv . you can watch it live and see previous interviews and dive into the securities on the bloomberg function we talk about. you can become part of the conversation. this is for bloomberg subscribers. check it out at tv

what exactly companies are going to consider, in terms of spending and capex along 2017, than the ipoen not be as intense as a lot of people are seeing at this moment. considering oil between 50 and 60. this is the scenario we heard from, from specialist of andstments and -- investors bankers. it would be ok, we could see activity. if things do not go as well as expected in the beginning of the year, of course it would not be as exciting as we hoped. tracy: always nice to have you on, always bringing us the latest on gulf markets. let's bring in someone else for some or agreed to in we are joined by the head of research at our friends capital, he is in apple dobby. -- abu dhabi. when it comes to deals in the u.s. markets, are you as excited as other investors seem to be at the moment? .> very good morning we are excited, however there ipoa few concerns of the and the ipo in banks. i would say that the main challenge will be valuations, especially with the upward stroke in yield curves. on the other hand, i believe that the year we could probably see more ipos coming to the wavet, and

meantime, the president and --na's she's in pink capex president may meet next week. they will meet at the metalico resort in florida. washington and other states fighting to block the revised travel ban what a hearing tomorrow before a seattle judge. a complaint filed on their behalf says the ban is unconstitutional. other states joined washington in pushing legal action. the ban goes into effect thursday. senate minority leader chuck schumer is warning republicans that a test to pay for the border wall by the funding -- defunding planned parenthood would fail. a partial government shutdown would begin on april 29. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. "bloomberg technology" is next. ♪ caroline: i am caroline hyde. this is "bloomberg technology." switchits the ignition on his stream for driverless cars with a 15 billion dollars acquisition. details on how the deal went down. billion verizon/yahoo! deal almost never closed. we have the inside track on how it near

everybody talks about buybacks instead of capex. they are down is because of energy. i love the narrative. tobias.orry about that is what my family calls me. announcement by ford today. a major investment in three michigan plants. jobs toe enough real keep his base happy? tobias: i cannot speak for the president or his days. -- base. i'm canadian. i can say he is actually not my president. the notion that we will fix all of our issues on jobs through .he investments that is unlikely. i think there will be job growth continuing. will they all the manufacturing jobs in michigan? probably not. tom: help me with the top line, which links to nominal gdp. this is the animal spirit of america. average60% nominal gdp through the beginning of the crisis. it is not come back. 3.5%is roughly a statistic. the president wants to get back to hear. do you have an indication that we get a combination of real growth and inflation on top of that to get to the animals. everybody desires? >> i think we stake closer to the growth rate. we are looking at

capex forecast is the white line. next to it is small business optimism.s a pop in that because they are thinking about the trump trade and how that will spending. the purple line is up and up, showing investors buying companies that spend on capex. this could be a big part of it unwinding. mark: i love with a chart postulated. given that ollie probably answered and asked the question of the day, if health care dies, what next, i will give it to you. julie: it will be unanimous. sorry. a very good perspective from both of you, i have to say. mark? mark: that is it from us. we will continue to focus on the willh care votes, which take place hopefully sooner rather than later. this is bloomberg. ♪ ♪ >> it is 1:00 in washington, 5:00 in london and what :00 a.m. and hong kong. on pimm fox. >> welcome to bloomberg markets with a focus on politics and policies during president trump's first 100 days in office. david gura is off today. are on the top stories we're watching. house republican leaders are not confident they have enough votes. a live shot of the hous

obviously other smaller companies in some cases doubling capex in 2017. service providers, whether they're drillers, pressu. oil is still not 100 bucks or even 70, which is where we think it will be later this year. with oil in the mid 50s, the industry is off to the races. exxon is kind of jumping on that band wagon. really in a half hearted way. >> got it. pavel, thank you for joining us. >> thank you. >> the new ceo of exxonmobil darren woods will be on "squawk box" tomorrow for an exclusive interview. tune in tomorrow 6:00 am eastern time. >> exxon helping to fuel the dow to 21,000 for the first time today. mcdonald's also giving a boost. fast food giant out with big news. we'll break it all down on this record-setting day. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. >>> welcome b

relative to stock prices, but if you want to build the economy, build plans in the u.s., use it on capexe dimon two days ago and this write up from late yet. >>> still to come, rich clarida will join us. we will get his thoughts on the fed, the economy and what washington is up to. you can't predict the market. but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. futures building on the celebration that followed the fed meeting -- >> what's happening around the rest of the world. >> it's catching on, like contagion but in a good way. >> s&p is up 6 points. nasdaq is up 18. this after the nasdaq 100 closed at a fresh all-time high and the dow surged more than 100 points. with us now is rich clarida from pimco. do you understand the market reaction? we got a hike from the fed as expected. i guess it was interpreted to not be so aggressive or hawkish when it came to what comes next. what's your take? >> that's a good point. obviously the hike itself was telegra

we've seen decline in capex from some british companies. concern now that the uk economy is slowing down. we've seen the bank of england be reticent to raising rates again, even though inflation has moved above 2%. because they're concerned about a slowdown and weakness of the pound. you mentioned a risk of shocks. i'm wondering what type of shocks. >> i think people have not woken up to the fact here at least about how much hard ball the europeans will play on this. if this happened in the eurozone crisis where the markets and sort of rational people look at the economic benefits that could come from a peaceful transition, peaceful separation, a peaceful negotiation of bailouts. but the problem is politics trump s economics when it comes to the eu. the eu, brussels and paris cannot allow this to go easy for the brits. all indications now is that the brits want to talk about a trade deal first thing. europeans do not want to truck about trade deals. they want to talk about the exit bill, the 60 billion euros the uk owes. the rights of eu ci

there's a lot of talk about what will happen with capex.eys out there about business sentiment and expectation. when you talk to small businesses in areas like missouri, kansas, are they feeling the good spirits? and are they going to put some of that money to work? yes, they feel good about the business environment and future of business conditions. the real issue is, what will they do with capital expenditures? it's a real wait and see game. right now it's this promise of lower taxes, lower regulation. when they ask -- can you to find that definitively? no one can. until business owners understand what those things will do to their business and their bottom line, sit on their hands, you don't see capital -- oliver: don't expect a big ramp up at the first quarter of this year. kc: they need to know. they need to know how it will affect their bottom line and then he will see spending. scarlet: nothing just yet. kc, thank you so much. mark crumpton question mark mark: judge neil gorsuch says that he will not weigh in with his personal views

the biggest thing is capex x energy on a year over year quarter live growth basis year over year it'shadn't had that for a lorch ti -- long time. you could argue about and mill spirits but the base, you still need a business and the base is capex confidence claims and that's feeding into productivity, which we haven't seen in a long time. >> do you have any similar? is there a maximum amount of exposure that you'll have at voya? >> all clients aren't alike but the base unite we're at full allocation, at 60%. we're in large cap, small cap, emerging markets. emerging markets are at almost triple return, you have to be more risky. i see the growth in reflation trade is still in tact and we're seeing signs corporate profits, q1 is about to start. something like 9%. you need to be in the market right now. manufacturing, broadening manufacturing, not just the u.s. but all around the world. the consumer, i call them the game changer, everything is the tail wind for the consumer, you add tax cuts to that and game on. emerging markets. i just saw an article that said india just passed legislat

and the capex in hong kong, jumping the most in one year. after the price target was raised more than 6% on the stock. the vice chair was jailed one month ago. but if you look at this chart, pricen see the target is still very much above water, all the way going back to march of last year. not once has it been in the red. this is still very much viewed as a valid and a strong stock. much,thank you very juliette saly. let's talk about the banking sector in europe. a big story for european markets. the deutsche bank share price could be down 10% at the start of trade. deutsche bank has announced an 8 billion euro share sale. directors at the german lender also gave the green light yesterday to selling a piece of the asset management business. two deputy ceo's are scrapping the sale. matt miller has more from berlin. matt, what is the most significant change here then? there have been a host of measures announced by deutsche bank. matt: there is a lot, but the capital raise has to be the first thing shareholders look at this morning. as a resul

in terms of paying or giving us a benefit and expensing capex that benefit doesn't benefit us.nature, giving short term benefits doesn't change our decision-making at all. and so tax reform to us i think is something that we want to preserve, we're all for tax reform, only give up certain things by that trade doesn't make sense for us. >> more than anything we have seen capital expenditure as a nation be well below what had been anticipated, my guess is a lot of that is tied back to washington and not knowing the rules of the road. >> becky we were chatting off camera for years now, for heaven's sakes, when you look at the data coming out of the business roundtable i'm a part of, when i look at my passion as chair of the atlanta fed and the data coming across, people are not investing long-term capital right now. we've got to get some level of certainty so that people have confidence in the future and now can start making and growing jobs. >> one question we've been talking off ka,camera and on caa about climate change. i'll ask you the same question he asked scott pruitt, do y

stro stronger signs of capex, fiscal policy question. and fiscal quarter gdp is looking like a 1% number. >> with jobs data? >> even with the jobs data. it may be the old gdp bias that seems to pull down q1s every year. then there's some inconsistencies within the data. getting strong imports but no consumption at all. that's a real question. yellen was asked about that yesterday and said we don't pay too much attention to quarter to quarter gdp. has to be a bit of a worry. got their attention last year at this time. >> all right. i don't know. i done know what happens with the fed. yesterday i loved the -- it was the second hike in how many months? three months? two months? >>> yeah. >> since december. >> yeah. all the news, it's the second hike in three months. the third hike in 11 years. you know, it helps that second phrase is an important part -- >> that's part of the market. >> all central banks are hoping that they're finally done with qe. >> the reflation trade is coming back. >> that helped in the netherlands and in france, too.

vonnie: one of the reasons you are looking at a recession is capex.restrained, to me. where do you anticipate that goes, even if we get plenty of animal spirits out of the trump administration? >> let's talk about why those numbers have been week the last seven years. part of the reason investment is driven by the pace of technical advances, something -- sometimes called total productivity growth. ,n addition, the last 20 years the relative price of capital goods have been declining, interest rates have been the climbing and congress is passed a variety of taxes and does that have pushed investment up. all of that came to a stop with the great recession. prices stopped declining and technical advance slowed dramatically. eventually there will have to be some recovery in investment if firms want to be evil to meet the increases in demand for output that are going to naturally occur even with growth as not -- as modest as 2%. will companies spend if the border adjustment taxes factored in? aren't they part of the same thing? >> they are. let's start wit

it looks like corporate profits will gain doubled the jets which would be a good thing for capex and important is most the epicenter of the global china, whichility, we should expect stability from. the unitedrse, states and tax reform and whether or not it morphs into tax cut legislation. the markets want something. it is much easier than health care. health reform takes a benefit away from people, which is very difficult for politicians to do. tax cuts is giving a benefit back to the people which is easier in terms of legislative challenge. markets of faith in rests upon the idea that politicians will be able to get something done to stimulate growth, particularly with stimulus and some form of the regulation. -- some form of deregulation. francine: thank you so much, tony crescenzi. these are live pictures from the competition commissioner of eu. dowis talking about this dupont deal. she gave it her blessing, but with conditions attached. this includes the sale of large parts of dupont's pesticide business. this is bloomberg. ♪ this is: -- taylor: bloomberg surveillance. 'sber rud

most of this was news that analysts were looking for an mcdonald's seeing $1.7 billion in capex thisr. news, the latest shakeup at the world's largest hedge fund, bridgewater associates is now out in detail. ray dalio, the billionaire founder stepping down as co-chief executive officer. he will remain code chief investment officer. john rubenstein is leaving the firm. he is staying on as an advisor but there are cultural differences, according to a letter on linked in by ray dalio. i want to bring in a professor at the columbia graduate school of business. how big an announcement is this? ray dalio is in his 60's and making changes at this point, that would be surprising. fabio: the corporate culture is amazingly complex and unique. the question about david maccormack being the head, there are two differentiating things that need to be maintained at ridge water. -- bridgewater. one is the corporate culture, it is absolutely unique. you have a system of total transparency and it has driven out a whole lot of talented people, not only john rubenstein but a co-ceo in 2004, brett mccormi

he talked about his capex plans and said we're bracing for volatility and we'll watch the fluctuationsn commodity prices. >> i am shocked that they said they thought it would be $69 by the end of the year? >> yes. >> that's not something i think darren woods is factors into this. i would think we would hit 40 by 70, but -- >> me, too i think you're right. i think big oil is more conservative now because they felt the pain when we went back to $26 a barrel. >> i think it's more than living off of the last drop for oil prices. i think there may be a bit of a new paradigm. you pointed it out when you talked about how much shale production there is for exxonmobil they have 5,500 wells in the permian basin that make a 10% return on investment if crude is at $40. if you see oil prices pick up, you'll see more production come on board and that will put pressure on prices. >> that's the caveat here. you have all these producers having to coordinate and work together. >> and technology is different. technology is allowing you to really make a profit on much lower oil prices. >> that's what i'm

haas year oil companies cut capex deeply, by 40%, and now big companies like exxonmobil announce increasesxpansions. where do you see the price of oil by the end of the year? >> as you mentioned, we're down at cera conference in houston, the energy capital 069d worlof . we have all the energy leaders from around the world gathered here. i would describe it as thoughtful optimism. as you know, exxon made a big announcement talking about the creation of 45,000 additional jobs along the gulf coast. iny most people believe we're at a point of stability. the cost cutting is taking place. they're managing in such a way that we can be competitive globally even at lower prices. i think a lot of people believe that things are beginning to stabilize. hopefully move forward with more upside opportunity as demand comes back globally. >> have oil companies learned their lessons? the rap against the oil industry, it's a boom or bust thing. when you hear about companies expanding capacity, you worry that companies have forgotten that discipline and go the other way once again and we'll be oversupplied in

a large part of that growth in our capex is taking advantage of this short cycle investment in permian i think it's 550 wells you have in permian -- >> 5,500 wells. >> that make a 10% return. >> we have a great portfolio and many make more than 10%. it was a minimum threshold we use. but it was a prolific play, excited about the opportunity in the permian. it fits in our wheelhouse as a company to bring the discipline, technology, rigger to drive value, increase production, increase resource recovery of that. >> based on those numbers, is it safe to assume anything over $0 you will continue to pump on those wells or is there a point, you would shut down on some of them? >> a lot of the pacing is based on the ability to efficiently rom out the technology, ramp that technology up, so price will play a role, but also we want to be sustainable long-term. we want to be thoughtful about how we grow that invest mtd and volume. >> people talk about this renaissance of american drilling, wondered if that means opec is irrelevant at this point. what do you think? >> opec has made a difference in