i am very pleased to introduce tonight's guest charles schwab former ceo and chairman of the charles schwab corporation and author of the new book invested changing the way americans invest. charles schwab is one of the most influential financial executives as in 2019 nearly three.$6 trillion worth of assets managed by charles schwab and company. founded 1971 with a 100,000-dollar loan and has since grown into a financial services juggernaut. his memoirme invested lays out his passion to change the way we invest in the hard work and ingenuity and entrepreneurship that propels his vision into one of the leading financial service firms in the world. to guiding company through decades of transformation - - transformations he recounts the defining moments of his life while providing unique insight into the dynamics of entrepreneurial companies and we are pleased to have a conversation today with mister schwab about the how to of financial management and his advice to obtain to career and life please join me to welcome charles schwab. [cheers and applause] >> a lot of my fans are out here.

liz ann sonders, charles schwab chief investment strategist with us. let's get first word news with viviana hurtado. viviana: on capitol hill, pressure is building on senate republicans to agree to call witnesses in the impeachment trial. it is coming from the revelations in john bolton's forthcoming book about president donald trump and ukraine. the president's supporters are bracing for the possibility of more damaging disclosures. according to "the new york times," the former national security visor was concerned the president granted favors to autocratic leaders in china and turkey. the president will unveil his middle east peace plan, joined by israel prime minister benjamin netanyahu. the proposal is excited to be very favorable to israel, and that should be favorable to mr. netanyahu. he faces another election on march 2. palestinians aren't even speaking with the president because they don't feel their side is being equally heard. there are fears today's announcement could spark violence. the u.k. breaking with the u.s. over huawei. the british

colin martin of charles schwab pushing back a little bit.olin: with more than half of the market comprised of bbb's, there is no stigma anymore. they are ok with that. they believe they have the tools to defend that if need be. with yield so low everywhere, they are ok with bbb's. through the years, if you have been an investment-grade corporate bond investor, that is high-grade. over time, it has gotten riskier. still investment-grade. you are taking on more risk today than you were 10, 20, 30 years ago. jonathan: let's get thoughts from the guys. ken, in credit, bbb's at the moment, the story coming in from 2019, the narrative that builds is the c-suite could defend their credit rating. do you think they still can? ken: i do. in 2019, we saw something for the first time in my 30-plus year career. we saw at&t, that people had been concerned about being downgraded to below bbb to high-yield, its board of directors put in something into its management compensation scheme, where management is being judged partly by its ability to keep debt bel

[laughter] it is a nontrivial point, they could so charles schwab, but they could so charles schwab personally. >> i have a name and likeness in the provision that wasn't for sale so it i hadn't used my name and face by that time in advertising so i was getting people who identified the company with me so i know who they are going to sell it to. we came to terms, they were happy they ended up with five or six times what they paid me in compensation in five years time so that was a good return for them. >> here we go. excellent. thank you so much for coming

jeff kleintop of charles schwab will be sticking with me. much more coming up here.s is bloomberg. ♪ viviana: this is "bloomberg daybreak." we begin with car sales in europe. last month, they jumps to a record. upcoming penalties at the end of causing sales to sore= -- two soar up. tsmc posting fourth-quarter earnings that were better than expected. taiwan's largest company is tech tong in make sure it maintains its market lead. hedge fund manager kyle bass convinced hong kong it is headed for financial disaster. bass telling bloomberg this year, citi will suffer -- telling bloomberg this year, the city will suffer a full-fledged banking crisis. still, one measure of the city's financial stock is near an all-time high despite months of antigovernment protests. that is your bloomberg business flash. alix: thanks so much. one more story that caught my eye was president trump thanking some of the biggest u.s. companies after signing the new trade deal with china, bullet came to jp morgan -- with china, but when it came to jp morgan, he wanted a little more recognition f

nearly two-thirds of americans are living paycheck to paycheck according to a recent survey by charles schwab and company. half of those surveys said they struggle to keep up with their monthly bills. scott cohen of cnbc reports on better ways to stay afloat financially. >> reporter: things went from bad to worse for angela who fell behind on her bills, then became the victim of an assault and had to take a leave of absence from work. >> a car payment needed to be made, so i needed something right now. >> reporter: she turned to an online payday loan store operation owned by scott tucker. in a story told, tucker fleeced 4.5 million people out of $1 billion. >> it just attacked my account. >> reporter: most experts agree a payday loan store is the last place to turn. creature out to your creditors as soon as you are in trouble. chances are, they will work for you. in that doesn't work, be careful about additional debt. >> reporter: the difference could be as basic as knowing your rights before you borrow. payday loan stores are illegal in many states. >> take a look at apr, look at the annual

plans and charles schwab accounts about one percent of that money is in gold believe it last i checked is that currently the situation and all we have to see is that to move to $2.00 or 3 percent crag and gold would very quickly get to $2500.00 an ounce and u.s. dollars greg that's just it max i mean is it you've any good you know oranges you know you name it if you get a vast amount of increasing amount of money chasing a finite amount of goods the price goes up i mean that's econ $1.00 of the one so i just you know again yes a trillion dollars you go from one percent to 2 percent that's a trillion dollars coming into the sector in half of that $500000000000.00 would basically have the entire sector or the whole g x o x. l d i mean all that stuff so that's what i expect i think we get a point this year once it becomes clear that the shares are breaking out that they're just a big rush of cash into the sector people just looking for precious metal in all their forms as a hedge as whatever they get makes for a big year so i don't i just i think people need to recognize what happened las

about the growing coronavirus square i'm joined by chief global and investment strategist from charles schwab, the coronavirus, how big a deal is this? >> the human toll is immeasurable we can never tell if this is going to be the pandemic that breaks out but we have more than a dozen of these break outs to take a look at the market impact that is even true when the global economy was vulnerable. in 2003, it was sars and then it was the swine flu. sars was a total global cost of $33 billion. the seasonal flu in the u.s. costs $7 billion it seems prudent to take precautions if you are a traveler, probably not if you are an investor. >> i say it because of markets around the world how important is it to this economy. manufacturing is still soft. we have not seen the fiscal spending around the world, that could be the weak link that takes out the leg under this stool it is important to watch let's talk about the earnings impact in the united states. any themes that point to a stronger open in 2020? not hearing the uptick in costs and on the employment side the upward guidance. many business lead

now ask fidelity or charles schwab they put in writing 100% of unauthorized loss they will protect butord 123. i same that okay. knowing that hacks with passwords do occur, does it make sense for people to break up their investment accounts to smaller accounts. having two or three small holding. >> you know, no, they will fine those anyway. you and i get an e-mail, it looks real like from some authorized source a friend or this financial institution. we reply, now we're hooked, they needed was our e-mail address, now they can buy all sorts of pieces of our life off dark web for penny osdol ar --s on the dollar, they find out where our accounts are by looking at our credit and looking through e-mails they find from our e-mail box. for me, i do a don't do any of my financial retirement type of investment activity on-line. zero. i am the cyber guy, i've done enough stories i have said put in my account do not allow on-line access. that is extreme but it is the most broad e prudent thing. >> i am scared of doing anything oon-line. i have a question, someone who served in state government f

whole ameritrade deal is about assets under management and synergies big, big asset gatherer, charles schwab up 24% year over year last year. of course on the ameritrade deal, they said they are aiming to close in the second half of the 2020 obviously this is under review right now. there may be some small age antitrust issues remember, this is not about trades, this is about synergies and it's about gathering assets. the new combined entity would have more than $5 trillion in assets combined and it's also about synergies. you're going to close a lot of sectors there that are going to be redundant and they are talking about very significant cost synergies overall what else is going on here look, this is all about the banks. 60% of their revenues are from the bank net interest income. so when the yield curve changes, it really matters a lot to a company like schwab. they also have a very big asset management division. of course they have a very big etf division they have funds that are out there and make money on that, 30%. there you've got 94% in that here's trading this is what zero commiss

they're not charles schwab. you have 14 employees? >> right. yes, that's right. >> and you did it? >> yeah. >> no one told you. >> that's true. >> but now you want -- you made a business decision, your business model is you're going to offer this benefit because you're going to attract the kind of employees you like. you said in your opening statement, your customers like that. they like a-plus maid -- what was it called again? what was the name of your business? >> sorry? >> what's the name of your business? >> well-paid maids. >> they like well-paid maids and they like that concept so they're willing to pay, i assume, a little more to have the quality of service you offer your customers. you made all that decision on your own as part of a business model. now you're saying, i want my company to mandate and i want my competition to do the same thing now. >> i think it was 20% of businesses extending this benefit. and i think the overarching framework around having a stronger economy means more employers are going to offer this. perhaps that true but the economy goes up and down. ev

highs, dow up about 180 points and morgan stanley the big gainer in the s&p up 7.5% you have charles schwab also doing well we'll see you tomorrow "power lunch" begins right now >>> brian, thank you very much welcome. i'm tyler mathison and here is what is new at 2:00 on a very busy thursday. stocks surging to fresh record highs today. and even some of the most hated names on wall street are feeling the love and we'll tell you what this could mean for the rally plus it is the great retail divide, the split between the winners and losers has never been deeper. and it is not the usual names. we have those details for you. and later, the delivery wars are heating up, grubhub surging 25% in the past month, but one analyst says this company won't even exist in two years. we'll explain that as "power lunch" begins right now. >>> and welcome. i'm courtney reagan. another day, another rally stocks are surging, the dow up nearly 200 points near the highs of the day all three of the major indices hitting record highs in what has been an unstoppable rally and tech leading the way again, the sector now

highs, dow up about 180 points and morgan stanley the big gainer in the s&p up 7.5% you have charles schwabo doing well we'll see you tomorrow "power lunch" begins right now >>> brian, thank you very much welcome. i'm tyler mathison and here is what is new at 2:00 on a very busy thursday. stocks surging to fresh record highs today. and even some of the most hated names on wall street are feeling the love and we'll tell you what this could mean for the rally plus it is the great retail divide, the split between the winners and losers has never been deeper. and it is not the usual names. we have those details for you. and later, the delivery wars are heating up, grubhub surging 25% in the past month, but one analyst says this company won't even exist in two years. we'll explain that as

i worked with charles schwab, the co-founder this is one of several major environmental issues that they'ret it's very exciting to see 1 trillion trees, and we're going to do this over the next ten years >> we're also here at davos talking about tech and disruption and whether it's a force for good what's your relationship like these days with fellow tech ceos you've had twitter fights. you've called facebook the new cigarettes >> they get nervous when i come in the room because i ask them one question what is your highest priority? what is your highest value what is truly important to you and i think that maybe they're board members, they're investors, and i think it's kind of the shift again from pure shareholderism to a new stakeholder capitalism that, you know, you have to ask yourself, what is your highest value what is truly important to you and if trust is not your highest value, then your company is going to be in a crisis of trust. >> facebook is coming off a year it rallied 60% despite this crisis of trust and controversy after controversy, earnings continue to grow. consumers, yo

liz ann sonders, charles schwab chief investment strategist. nice to see you today. >> hi, guys. thanks. >> when it's comfortable, it's time to be uncomfortable. >> sentiment has clearly gotten stretched here you've spent a lot of time talking about valuation. first it's a description of what metrec you use if you look at equity versus premiums, relative to corporates, or the fed model, the market still looks pretty cheap. on more traditional metrics, it looks much more expensive. the reality or more important factor is that we think of valuation as this fundamental factor because the component parts of most metrics are quantifiable the reality is that valuation is as much as sentiment indicator as anything else i think that's what we're seeing a melding of right now you also talked a lot about the so-called trimming to early. the reality is if your only measure of success is to get out of the top and get in at the bottom, neither get in or get out is an investment strategy. that's gambling on two moments in time and none of us will be consistent doing that. the whole notion arou

. >> charles schwab. finally starting to perform.rates higher could be good for them. >> united airlines sold off. should recover that and more planes are full. consumers full pockets of cash. >> throw grubhub shares up once again. highlight it for you dow jones reporting yet again that grubhub is in talks considering its strategic alternatives will anybody buy them? right? they have a struggling business. the stock has gotten hammered throughout the better part of the year jim chanos publicly short on the name is it a recognition that their business is that bad they need to put themselves up for sale? who if anybody will actually buy them >> yes that's a big spike on rumor. >> for sure. "the exchange" with becky begins now. >> thank you, scotty hi, everybody. i'm becky quick. here's what's ahead. the president tries to ease tensions saying iran appears to be standing down we are following the developments. >>> plus, stocks moving higher despitd uncertainty out there. nasdaq an s&p at all-time highs today. can anything hold back the

charles schwab leaving. will the economy remain strong? is there going to be a place here for my kids to work? as far as this story about moving, the bay area is in a unique space compared to other places. >> you say we're kind of the outlier within the state of california. >> there is job growth in california but not like we're seeing in the bay area, broth on high tech jobs, high income jobs. the bay area is providing a significant disproportionate amount of the state's tax revenue in part because the revenues are so high. companies are successful and people are being paid way more. >> interesting. i have a lot of friends who have lived in the bay area for years. i haer the same sentiment, too crowded, getting too expensive. it feels like we're at a tipping point, like maybe this is not the place to be anymore. do you hear? >> we do. it's an evergreen story. that story was current in 1970, 1980. people are looking for a sense of what it was like. what is the same is this continued economic growth that we've had in the bay area since real

shares of charles schwab up nearly 13 fundraise in the last three months options traders are bettingn more upside. pete is at the telestrator to tell us what he sees in the options market. >> let's look at the start of the year even. the stock was trading around $49 here as you look at the high areas. somewhere very close to that number today what we are seeing is very large call activity going out to march. the march 47 calls initially they bought about 11,000 of these. looks like they are pushing towards 14,000 of these. they are trading for 1.35. there is some premium there. what they are tell us, what i am reading through is this stock is going to move towards 47, maybe even get through there it is trading right where it is 46.50, it gets up to 47.50, 48, those calls ought to really react. especially if it happens sooner rather than later. i am in those. i am going to be in those approximately a month. next, i have a great one for you. we talked about microsoft earlier today. microsoft, the stock was trading a little bit higher than this when this happened but again the 165 calls

she's at charles schwab.you what's your take on whether this will park whatever the cause of it, spark a more brought and pronounced, prolonged pullback, having had such a great run for markets? >> the honest answer is i don't know what i wrote about in my note was heading into this on pretty much, attitudinal measures which in and of itself doesn't suggest you're ripe for a pullback, but does suggest mods more vulnerability. whether it's long-lasting i think it's too soon to tell. but for now anywhere, i think it represented a park, in an, for instance, energy and technology today getting battered a lot harder than most of the rest of the market we've seen airline stocks, semiconductors, what advice would you give to investors as to which sectors to buy and which ones to avoid right now? >> we wouldn't make any tact dalles shifts in trading recommendations around a one-day event. we're not making any trading recommendations specific to the coronavirus, but clearly when you start to see a pullback, it hits th

. >> taking a look at the turn-of-the-century, fees like at charles schwab, what does that mean?ve retail investor because of that? it is part of a larger theme that investors are demanding efficiency of scale. zero commissions is just one of those. statement asnice to how efficient the u.s. equity markets become. buy upo money, you can to 10,000 shares and give price improvement with absolute immediacy. no other country offers a retail investor that kind of value. that enablehers that type of efficiency and that type of execution capability. >> there are fewer publicly traded securities. the directu doing -- model is the trend to look at these days. do you think there can be more companies that get off the ground with this model? i think the new york stock exchange has been at the forefront of this and the nasdaq will follow. is part of the theme that with the advent of technology and the demand for efficiency, people don't want to pay a 7% plus discount. we started the capital markets business in order to enable companies to do secondary offerings. enable them to use all the to

companies that had that wide moat and continue to build it, one of them is charles schwab. company that has a wide moat built around it. they took an action recently in acquiring one of their competitors, td ameritrade. they are continuing to build business around their model and doing a good job at it. that is one example held in that etf. at.bol mo paul: thanks so much for joining us. you can get a roundup of stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to dayb on their terminal. also available on mobile and the bloomberg anywhere app. you can customize your settings so you're only getting news on the industries and assets that you care about. this is bloomberg. ♪ "daybreak asia." i'm shery ahn in new york. paul: and i'm paul allen in sydney. apple shares are having a sweet start to the new year, rising above $300 for the first time in stark contrast to the dismal start apple had to 2019 when it cut its sales forecast for the first time in almost 20 years. despite that, they are back. apple went on to outperf

joining us now to discuss what to do with all this information, jpmorgan asset management and charles schwaborning to you both gentlemen what are you telling your clients to do amid the headlines on coronavirus >> good morning. it is good to be here. what a pristine type of run we had into the new year and then earlier in the new year, iran and now the coronavirus. at the onset 70% of china is basically going to be shut down until february 10th. in the near term impacts, they're in the emerging equity world. i think that is where we're telling clients to maybe pull back a little bit. we have to wait and see what is going on here. china's economy is about 14 trillion the u.s. economy is about 21 trillion u.s. consumer, we were an economy, we would be bigger than china. that means the u.s. stock market for us led by this three-headed monster of growth and earnings stabilizing, the fed on the sideline, and trade deescalation still looks like a good bet for us here. >> so again, it's on the u.s. consumer's back. income and spending numbers weren't that hot this morning. >> but rates are low so d

disappointment with payroll and wage growth missing expectations let's check in this morning for charles schwab omar aguilar and diane swak happy friday, good to talk to you. >> good to be here >> happy friday. >> the wage growth is getting a lot of attention how concerning is it >> it is certainly worrisome although it is important to note wages were excelling at this point last year. because of that acceleration we saw late in 2018 and early 2019. that's something that the fed will take with a bit of a grain of salt, but it is something that they're going to be watching that closes because the economy that delivers jobs but doesn't deliver wage gains is not what they want. they want some heat in wage gains. and we're still seeing wage gains not pick up. >> dianna, as you're talking, dow 29,000 for the very first time coming after dow 28,000 back in november very quick turn of another thousand-point milestone and we'll just use this as another flag post in the in the ongoing market rally >> yeah. it's pretty unbelievable the run we've had here and really technology continues to lead the way wi

became the fourth company to pass one trillion-dollar mark in market value, joining us right now charles schwabckdrop obviously, what drives stocks how o would you characterize the earnings season so far what kind of a backdrop are you expecting in 2020? >> well any season still essential obviously, but beat rate near 80% running above long term average, you do tend to bias toward beginning of reporting season, those companies that are out performing consensus estimates i would expect that to come down, i know. the question is less about fourth quarter earnings rightfully so sort of writing off 2019 as flat orientation year given tough kofrpdz against 2018, 2020 looks a little bit better own consensus numbers are edging down for 2020, i think it is too soon to tell he will whether the double-digit growth will come to fruition the market is largely being driven by momentum tried we've got very loose financial conditions fed on sidelines good macrobookdrop, professional o money managers somewhat bearishly positioned agency we owneded the year so i think a lot of performance chasing as well as sho