the underlying economy is still positive. we are expecting good jobs numbers. we have not seen wage growth. things are percolating underneath. jonathan: this is a good point. when we have a downdraft on the equity markets, 6%, i was quite surprised the treasury only docs lower of by about three or four basis points on the 10 year yield. it was not dramatic. why do you think that is? >> i think everyone be leaves rates were going to move higher. is areset the levels here persistence of equity volatility. is persisted at a much higher level relative to last year. there has been a slow bleed into the right market. comingn: the money is into the rate market and the 10 year treasury. when does it come into the front end of the two-year space? 50 basis points is a cycle lower for this slide. completely flat, flat, flattening. the rolling over of risk appetite, is taking out rate hikes. -- no one is taking out rate hikes. at what point do we start looking at the front end of the curve, and saying, the fundamentals have rolled over, i want to start taking out rate hikes

rates rise, yields rise, and you have a heart attack to the underlying economy. , on monday if trade is not going to matter that much, the fed may not raise rates. that is good for risky assets because the longer term discounting rates is not going to happen as people fear. david: those choices are quite start. they lead you in very different directions as for how you invest. how do you discern those possibilities? neil: we look at where we are in the economic cycle. despite the optimism we discussed last time i was on this program about what is happening with president trump, u.s. equities have looked fully valued for some time. i think we would advise clients to look elsewhere where valuations are not as full and the economic prospects are still relatively good. u.s. leads is the the world. law year, we had kind of a as everyone got sucked into the tax reform, which not everyone thought would unfold. everyone who has has wanted to in -- who has wanted to get has got in. when new york sneezes, the world catches a cold. julie: when do we government structure to re

the data for the underlying economy is so positive. we are expecting a good job number. we have not seem rage group. things are really percolating underneath. >> this is a good point. i thought the same thing a couple of weeks ago. i was quite surprised that treasuries only dropped lower by 34 basis points on a 10 year yield. it was a dramatic. what you think that is? everyone believes that rates are going to move higher. herehas reset the levels is the persistence of equity involved. you see this big spike in volatility. it persisted at a much higher level, relative to last year. that persistence and higher volatility has had a slow bleed into the rate market. >> the money is coming into the rate market? i think that is what is interesting about this. we are flat, flat, flat. flattening. it is interesting that despite , the rolling over of risk appetite, no one is taking out rate hikes for this year. money is going into the 10 year. you end up with 46 basis points. at one point we start looking at the front end of the curve and say, risk appetite has been damaged to such

if you lookt the strength of the underlying economy as the economy continues to grow you see more economic that's typically followed by more banking activity, mergers and acquisitions or more loans. in general, fundamentals are good for financials of the if sentiment can turn around -- possess him in the market we have seen seeing wereo change because of either positive earnings reports or some of the fears b sw over we cou a turning poinl that's really the catalyst that could turn things round. >> what aboutearnings? as bob highlighted not just for technology but for many parts of the market the expectations are pretty nkhigh. >> i that's true. earnings expectations have been rising. but keep in mind those tax cuts are going to drop a hot to the if you see earnings expectations rising about 6%et but tax cuts if you filter through all the earnings estimates would lead an additional 8%, which is what a lot of analysts believe you may actually have room to advise the up side even wit the heightened expectations. >> let's go back to tech here. as we wrap this up here, do you think it is a pau

the data for the underlying economy is still positive. we are expecting a good jobs number. have not seen wage group. things are really percolating underneath. jonathan: this is a good point. i thought the same thing a couple of weeks ago. when we had a downdraft in equities market 6%, i was quite surprised that treasuries only dropped lower by three or four basis points on a 10-year yield. it was not dramatic. why do you think that is? i think positioning was such that i think everyone believes that rates are going to move higher. what has reset the levels here is the persistence of equity involved. you see this big spike in volatility. it persisted at a much higher level, relative to last year. that persistence in higher volatility in equities has had a slow bleed into the rate market. jonathan: the money is coming into the rate market, into 10 year treasuries, it has not come into the two-year space. i think that is what is interesting about this. this is a cycle low for this spread, we are flat, flat, flat. not completely flat but flattening. it is interesting that despi

in almost and almost four rate hikes a lot of competence in the underlying economy. if you look at the yield on the tenure it's completely nonreactive. we put in there. the message of the financial markets believed the dots. they are more resolute about raising rates than any other time since we went into the great financial mess. he said he does not see an impact to the economic outlook. he did admit there was a concern amongst fed members i've never really seen one of those trade wars. my sense is that we will see a lot of heated rhetoric at times. the political risk may go up. i don't see any damage to the global economy. is not in anyone's interest you look at a lot of the countries that are involved here. more dependent on trade the united states is. it makes up a large part of chinese gdp. an awful large part of gdp in germany. there is an incentive for cooler heads to reveal there. 3.6% unemployment live that down around fort next run for next year in the year after. to me would suggest wage growth. i really wonder at times the same percentage so we of we got 4

the president's policies on regulations and taxes continue to boost our economy. >> jon: so as you at home were listening to the legislative affairs director of the white house, you were nodding in agreement. >> the underlyingconomy is so strong right now. investors are looking for any reason possible to focus on that story and not the trade story. so that -- again, markets are coming back because unemployment is good, economic growth is good. wages are growing. the federal reserve is happy about that. a lot of good news here if tariffs don't get in the way. i don't think the president wants them to ultimately. that's the republicans best chance for re-election in 2018. >> jon: one of the things that concerns company in the u.s. that range from the biggest defense contractors to the smallest independent film maker is intellectual property theft in china. they steal a bunch of stuff. >> this is a very big issue. the one thing the president is doing, and it's not without risk, he's being serious about this. he's actually going after china on this issue in a way no president has. there's a lot of americans, even americans that don't like tariffs, like the fact that he's showing some seriousness here. that at t

the tune of 2.9%. this is growing economy. markets react sporadically. i think underlying economy is strong. president trump is going to deliver on campaign promises. david: i think the underlying economy is strong as well but could hurt it. a lot of people are saying this. koch brothers are coming out with statements. senator sasse let's be clear, president is proposing massive tax increase on american families. protection system weak, not strong. you would expect a policy this bad from leftist administration but not supposedly republican one. and only people lining up for this tariff among the parties, among the politicians are democrats? >> right, well you know i would go back, i think again, senator sasse, that is rather dramatic statement from someone who was not right about a lot of this election. we go back to your second guest said, i thought quite powerful number when he was talking about how much it would increase the price of automobiles by one-half of one percentage. so there is that. but second of all, as sarah sanders said today, there might be carveouts with this. might only ap

the canadian economy look like? washe fourth quarter it 170.4 percent. we are still around record highs . nafta has all the headlines, but the bif underliesto the canadian economy. >> that is certainly true. the bank of canada governor cautioned the other day that along with nafta being one of them near-term risks, more persistent as the canadians are highly indebted. interest rates are rising on account of the fed raising interest rates as well as the bank of canada raising rates. alix: when you look at the underlying strain, there was consumers. does that hold up? dana: no, and fact the bank of canada infects -- expects consumption to fall off. what they need is a reorientation of the economy. however certainly concerned about nafta and whether or not there will be a renegotiation of the treaty, the agreement, meaning there are downside risks to trade. alix: so if you strip out the nafta conversation you have had with trudeau, what does he think about the underlying strains. mike: he does see the strains from borrowing. it is going to be difficult for them to increase trade if consumer spending falls. if that happens we look towards mor

in the wake of that when he became president, he pledged to sort out the country's economy. the underlying issues going forward are likely to remain similar. he has been quite low-profile during his campaign. when he has spoken out it has been to place emphasis on setting up the fight against militants in the sinai peninsula in the wake of a series of attacks. the economy will always be looking -- lurking in the background. anhave seen egypt taking on imf loan. inflation here shut up. -- shot up. those are the kinds of things that will be affecting people's daily lives regardless of the politics over the next four years. >> thanks so much for that. chris will be hosting our election special live tonight from egypt. that starts at 6:30 p.m. french time. is moussaallenger mustafa moussa who publicly supports the president. is theear-old moussa sole candidate running against el sissi in the upcoming vote. >> i believe i have equal chances. i believe that my program will get me a high enough percentage to get me to win. that is my goal. >> his actions do not always reflect his words. the frenc

you're going to have these ebbs and flows, and the underlying economy is solid, corporate earnings isshould be using as buying opportunities if you have a long-term time horizon. ashley: charlie gasparino, we're very close to correction territory. 10%, 9.99%. so the recent high, we're down almost 10% which puts us in correction territory. very interesting. wasn't expecting this kind of reaction to the news that we already knew was going to happen. >> one of your last guests talking about global capital flows nailed it on the head. i forget the gentleman's name. look at it this way, donald trump is a blunt-force instrument, right? we know that in terms of how he campaigns, how he governs, how he tweets and how he deals with trade. what that guest pointed out is that trade -- ashley: we're in correction territory. >> you need to have a deft hand and protectionsism too blunt. if we do something to themselves, they do something back, if they stop buying our treasury debt, guess what? rates will go up, if rates go up, that depresses business investment. that hurts business investment here

again, the underlying economy, we can't emphasize enough is terrific. we have not yet seen nicole all the effects of the tax cuts, all that capital that's going to be moving back. once that gets turning in the economy, katy bar the door, right? quickly. reporter: that's true, the economy is great, one of the traders was noting 2.8%, if we get below that, that could weigh on stocks. >> nicole petallides, thank you very much. we appreciate you so much watching, busy day, "risk & reward" starts right now. don't go away. >> we've lost over a fairly short period of time, 60,000 factories in our country. closed, shuttered, gone. 6 million jobs at least, gone. we have a trade deficit of $504 billion. it's really $375 billion. many different ways of looking at it. any way you look at it, it is the largest deficit of any country in the history of our world. with china. we're going to be doing a section 301 trade action. it could be about $60 billion. i'll be signing it right here, right

the japanese economy with the stronger yen. when we look at trade data that came out today, still positive versus expectations. we still think the underlyingoes not say much for the market in the short-term. we know that we have a federal reserve meeting coming up this week. so that is keeping market participants at bay until we see what will happen on that front. in terms of japanese politics, the medium-term -- towards the medium-term is more variable. , just i'm curious about staying on japan watch in the currency, we had the export numbers out of japan a little under an hour ago that showed the stronger currency is hurting exports there. a lot of people are looking at the dollar-yen and saying when will we hit through 100? do you see that particularly as a political risk here? in the united states, do you see that happening anytime soon? if this political risk continues in japan, then the bank of japan will have to come out and take some action and make sure that the currency doesn't strengthen too much. it will be slightly off their hands if the u.s. economy or the u.s. political system is much more bearable and more risky. it might b

people said that this was technical and not fundamental and wouldn't touch the underlying economy. estions about expectations for this growth we have binge joining. but if you look at the actual data, the fundamental backdrop remains sound, though there have been signs that it is a bit wobbly. is there reason to be skeptical right now? lori: at a the issues that we have seen you can attribute to noise. but we do survey analysts and we asked them to evaluate the health of fundamentals and valuations on 52 different industries. 75% told us that fundamentals look good. the view was unchanged from the beginning of the year. they are not really seeing this enough yet to change their view. i would not call it a ticking point but we are dancing on the razor's edge. scarlet: so, what's the canary? ? whichn the coal mine companies are we talking about. guidance because of these fears? ceore watching measures of confidence and those seem to be holding up, which is a good sign, but you are seeing comments here and there with this roundtable data that came out recently. there are a few whispers

and when you look at the underlying economy, that's the first thing you want to look at. d the trends are good. leading indicators, and housing starts are slowly rising jobless claims, historical lows. so the underlying trends are good the yield curve which is the focus of a lot of people over the last, you know, several weeks as it flattens has become a concern. and i think when you look at the powell press conference last week there was a question regarding the yield curve and would the fed halt rate hikes if the curve started to invert. i think a lot of investors have been of the view if the long end of the curve doesn't pond as the fed hike rates they would step back but he dismissed that and said the effectiveness of the yield curve isn't as reliable as it used to be i think that's a worry for investors. you don't want to fight the fed. if they're willing to invert rates into a yield curve by their own research is the best predictor of the economic cycle then that's of concern a reason to be weary >> the fed was a bit more hawkish. more than we anticipated if you look

the u.s. -- underlying strength in the u.s. economy is good.ut, a just want to play couple of weeks ago, daniel morgan told us that the possibility of a 40% correction over the next 2-3 years is likely. we have heard from cross asset jpm and theout of senior economist that the chances of a recession in three years is 73%. they are saying that we are pretty close to the top. if it is that risky, why would you bother staying in? why not get out now before you have to start warming about it? gerard: the risks are rising. our view is that next year the odds of a u.s. recession are rising. in terms of keeping overall risk, overall goes for so many investors is to stay invested, to see some positive return. being invested in a multi-asset portfolio across a range of reals, infrastructure, estate, they can provide different sources of earning. the european economy. is doing so well. -- wehink that we will think that we will ultimately stay invested, but start to de-risk from u.s. equities in particular, and overall risk profile, start to reduce that,

let's be clear, the underlying american economy is still strong. what's happening outside of the world of d.c. still looks good. corporate earnings looks pretty good. you also had a tempering down of all the trade war rhetoric over the weekend. i think there was a lot of fear built in we were going to have some kind of an epic trade war with china or europe or all the above. those fears have receded a bit. you add all that together. you had yesterday's massive relief rally. we're up about 50 points today. so not as much as the futures would have implied. we're still down for the month of march by the wait. the last two days haven't been awful. >> also, yesterday, when i said to you besides trade what else should we look for, you were, and it pains me to say this, 110 percent right. you said keep your eye on facebook. that was all over the place yesterday. >> well, listen, even a blind squirrel finds a nut once in a while i suppose. facebook is a story. this is a march to forget for facebook. there's more news today. the ftc has opened an investigati

we have a combination of confidence expressed in the underlying economy rates moving up. perfect storm for financials. >> steve, they were positive on the economy. >> very. they rallied the market right off those statements popped the market higher you would expect lower market. you would expect them to sell this it was almost robotic the way they interpreted it. it was what we would expect to have seen and they are selling the market off the highs we rallied around five or six handles in the s&p now they sell off. >> it's early in the post fed decision >> often changes, yes. >> joe, from what you heard do you think this was hawkish, dovish i feel like there is a little bit for everybody. >> a little bit for everyone it's clearly more confidence their forecast is what we had ativanguard for some time. three hikes, close to four in 2018 three more next year that symbolizes more confidence in terms of their outlook, the fiscal stimulus adding to that most importantly the unemployment rate. it's likely that the burden of proof for the fed not to gradually raise rates over the

. >> and if you take a look at the underlying confidence in the economy, by so many more people coming back to the labor force, that nobody had anticipated. nobody is focused on that. the fact they feel good enough to leave their homes and go look for jobs, that will also keep wages down because you are increasing it is a commodity. >> let's take it down from 30,000 feet for a moment and talk about where people should be thinking about putting money to work and we've seen these cyclical stocks an the technology stocks that led on the way back up. a small caps have gotten a boost in large part over the last couple of days because of the trade tariff fears is that the place to say >> i added health care today. >> the answer is yes i i think you could look at some -- i think you can look at ex peadia, working nicely. that is on the bottom of a quality company. still down about 70% >> if a company has to pay more for labor. they need productivity so this is the productity, long financials and those that finance and industrials that implement productivity and the technology that brands behi

but i also know that it doesn't really sort of recognize the underlying -- understanding of the global economy he actually has. >> so what do you make of that? he's being disingenuous. he's being untrue to facts as he knows them. >> he's spinning. but i think we all do understand, we're not naive that if you're going to be working in this administration, whether you're mattis or tillerson who many consider to be quite patriotic in their -- in the service that jobs they clearly don't need, or wilbur ross, there are challenges, particular challenges in working with this president. and it led a lot of people to say one thing on television and others when talking to allies or antagonists behind the scenes. i know there is an awful lot of pushback inside the white house right now, trying to talk president trump off the ledge when it comes to these tariffs. >> there sure is a lot of talk in the white house. ian bremer, thank you so much for that. the white house is in a state of flux, the chaos isn't keeping the president from cracking a few jokes at his own expense, though. but who will have the la

taxes and more regulation and that's what has markets just a little bit edgy even though the underlying economy is indeed strong. kevin: biggest issue i have policies are predicated on national security concerns, i don't know how strong that argument is and we are starting to see that they said there's going to be blanket tariffs and all of a sudden they are doing exemptions and quotas with south korea, i don't know what actually is going to be established because our economy is -- services economy 70% services. detriment on that side if you focus on manufacturing. these jobs are gone away and not necessarily because of dumping, there's automation and other things happening. dagen: how much is the economy going to be on first quarter, final reading on fourth quarter, 2.9%, it's not going to grow 3%. part of the problem is when president trump throws out 3, 4, 5% that's where the economy is going to grow, if it doesn't get to that kind of heady level then people are going to go where is my 4% growth. >> do i think it gets above 3% in subsequent quarters -- dagen: i think it was like 2.4% yesterd

the world economy. it has to be considered the biggest underlying risk.banks will go too far. >> is it possible comes out bet jer i mentioned this volkswagen executive admits i don't know why there's a tariff on cars. maybe the u.s. should look into that what if it turns out it levels the playing field? >> a lot of things china is reducing its still output already it is likely to make some trade concessions on industries it protects these things are fine. i don't know if you win if you say, this is all a negotiating tactic and say there's no risk around that. so this has to be considered a risk but don't forget that the underlying improvement in the economy is stronger breadth of earnings around the world. we'll have a world economy that's $6 trillion larger this year than last year. that matter, too. >> it did. and on the air saying earlier the q1, weakness in gdp. >> everybody year since 2010 here again. >> today also marks ten years since the bear stearns bailout. >> announcer: this is a special edition of "squawk on the street." live from a clearly ra

people need to keep in mind is the reason they are raising interest rates because the economy is getting stronger. the economy getting stronger as good for the underlyingfar too long in the past in organizations where the rates get somewhere and gdp is stimulative. the sabres are going to make a little bit more money whether it be the checking account, savings account or short-term bonds. also, the interest margin banks will start going through the roof. this allows them to lend more money and make more money on loans, allowing them to increase the flow of capital to our economy. the next four to five to six races from the feathers emulated for the economy. i think it is going to introduce a lot more volatility in addition to open party scene. >> good for investors of what you're saying and two more rate hikes this year, three more next year projecting out into 2020 more rate hikes. are there any other benefits you want to mention? >> we are so far away from slowing down the economy in terms of the interest rates. we need to be about gdp on the short end. maybe eight or nine to ever actually in that restrict it stands. i think any weakness is a nice bu

the arithmetic now of the underlying u.s. economy is good. my is like a supertanker, large with good momentum. it might not be moving as rapidly as we both like, but it is hard to knock off balance and off course. when investors are saying at is the economy is still on course as we look at gdpbean counting approach looks ok and industrial production looks ok. there has been a boost this year on corporate profits from the tax cut. that is what investors are looking at. one thing that tom opened with is what are the bigger uncertainties out there? i think investors should be looking at them. when i speak with investors, what they are saying is they have time to worry about that and time to reflect it in their portfolios. we are concerned that no one rings that bell. knowing the timing of the concerns and everyone is awaiting the policy out of washington and elsewhere. they look for example at europe. many assumed that political aability in europe would be foregone conclusion. there are concerns about that in terms of the italian election. with y

the transport and commerce. it always gives us an underlying idea of the economy, and tencent, one of the key online retailers, theinst alibaba, very much in focus as well. in terms of the eco-data, it is continued to be the expectation is that we will continue to get positive results. we have housing data which is expected to be up in february, jobless claims will be a big focus as you know. we continue near a 48 year low for joblessness which is showing the underlying strength in the sector and durable goods rebounding. haidi: lots on the docket this week. thank you so much for that, su keenan with a look ahead. let's look at the markets that are trading. new zealand of course, we are ahead of the asean freight decision we are watching policy rba andce between the the fed. the kiwi dollar looking at these lows, 72.20, approaching that .oving day moving average the aussie dollar hitting a three-month low. we have not seen these since christmas time last year. the general risk off sentiment and concerns over how metals and commodities prices are going to fair under potential trade protectionism. japanese yen was o

anna: away from the tariff story, the markets seemed excited on friday by the underlying strength of the u.s. economy the potential of reduced to political risk on the korean peninsula. what is the latest on this because we heard a little bit about the potential talks between camkim jong un and trum. kathleen: it seems the logistics are still coming together. those will be interesting to watch, in terms of where it happens, when it happens, what the terms are. the main question is really, what trump is able to achieve when the meeting does occur. i think there is a little bit of skepticism, even among his staff that the meeting will come together. and then some concern that -- because just having the meeting provides kim with a degree of legitimacy he has not had before. but for trump, trump's in the room negotiating style seems to be pretty freewheeling and a lot of north korea experts say it will take patience, persistence, outlining clear goals and sticking to those goals and having the ability and discipline to walk away if he does not get what he wants. and so, we have not seen those characteris

the american economy what it should be to build for the future. in the millennial's of which you are one. >> the caller gets to the underlying point of the substantial overcapacity coming out of china. originally they built this at tene or 12% per year with such demand but what has happened is there economy has slowed down so now that is part of th' concern. so now it is just the question how presidential deals with that with major repercussions of trading partners. >> caller: good morning. two quick points. first everyone says this will hurt us or make things cost more but if we take the tariffs and import that that makes more manufacturers in this a country by more steel and aluminum. the way to offset that price andri they tariffs and then to be more competitive. if they are smart it would help with the price overall. and to sell more steel and aluminum. >> and then to raise prices so there isn't much question even those reports they mention that is what it will take for the industry to become competitive a again to raise prices so who will bear the cost of that? >> democratic line. >> caller: nobody talks about the fact mr. trump uses this deal

the economy is looking really good. it has been many years that we have seen these numbers. the underlying strength of

one of the things we don't spend at lunchtime looking at here are some of the underlying fundamentals of the u.k. economyngs like with capital investment, productivity? where is growth in terms of productivity? david: as i said before, most ,conomists in the u.k. agree broadly now with the bank of england's revised assessment that trend growth is lower at 1.5% than pre-financial crisis. business investment has picked up, less than expected given the improvement we saw in profits following sterling's shot forward in 2016. that was associated with a lot of brexit uncertainty. will change changes again the bank of england's reaction. broadly moving in the other direction. march 2019rough to and the u.k. leaves the eu, some of these brexit issues will start coming much more to the four. expectation is slow growth. but we are comparing and also with a european economy which has not been fantastic in terms of growth rates. at the moment, eu is growing faster. david: david owen, thank you. nick bennenbroek will be staying with us. coming up, president trump is expected to announce $50 billion in new tariffs on

it will not change the underlying trajectory of the u.s. economy.rm growth not boosting inflation. this is a gradual approach to this. greenspan was tightening 25 basis points every meeting. market -- the one innovation we can count is maybe ad in june press conference after every meeting to give them more degrees of freedom. there are eight meetings this year and the press conference only follows four of them. increases the likelihood of maximizing the degrees of freedom that the fed has. i think they need to have these meetings more often. he seemed comfortable in front of the press. this is not a man that is shy. how do you think he did? do you think he said -- sent a clear message as the new fed chair? governor, at his first meeting announced qqq eu. the other president cut interest rates. powell was rebel -- was able to cut rates at his first meeting. this tells us the federal reserve is committed to the path that has been laid out in yemen. the gradual rate increases will reduce the balance sheet. it is a very cautious approach. yvonne: there'

the country's economy and a tweet today. the president wrote "the economy is looking really good. it has been many years that we have seen these kinds of numbers. the underlying strength of companies has perhaps never been better." european commission resident donald tossed says more saysties -- donald tusk more penalties could be on the way for russia. russian diplomats expelled in the wake of a foreign russian -- former russian double agent and his daughter on british soil. -- poisoned on british soil. >> additional measures including further expulsions within the common eu framework are not to be excluded in the coming days and weeks. mark: the former spymark: and his daughter remain hospitalized. president trump ordered 60 russian diplomat's the u.s. believes are linked to espionage to leave the country. in russia the death toll from sunday's fire at a mall in siberia stands at 64. more than a dozen others were injured. an undetermined number of people remain missing. witnesses say fire alarms did not go off in the facility. several victims were children. the facility housed a movie theater and a children's play area. authorities say a criminal investigat

. >> when we consider the tariffs, what's the underlying impact on the economy?l it lead to significant price rises in many sectors or provided it stays just to a steel and aluminum tariff, is it relatively muted, the impact >> i guess it really depends on whether it stops right with that i mean, you know, the real question is whether this is going to turn into smooth/hawley 2018 what we've been seeing over the course of these last couple of sessions is more of a warning signal than anything else. it is telling you what, in fact, could happen if we pull out of of nafta if gary cohn loses completely in the white house and actually leaves we're going back to the beggar thy neighbor policy. for all you millenials, google it the problem is that right now, we are at a sensitive juncture think about it we have exported american-style, you know, free enterprise all over the world, lifted billions of people out of poverty this president has done everything right until now protectionism is a prosperity killer, plain and simple the answer to your question is, if it stays j

the economy getting better. president trump tweeting out the economy is looking really good. it has been many years since we've seen these kind of numbers, underlying strength of companies has perhaps never been better this is business economists are projecting the economy to expand 2.9% in 2018, up 2.5% in december, according to a new national association for business survey and liz, we have next week, we have new earnings reports coming out. i think, and frankly i talked to people in the administration, they think, that the economy could surpass that 3% mark. maybe even nearing the 4% mark that president trump is shooting for. what do you think? >> i think leading indicators trend, not only are we going to surpass 3 1/2, 4% growth, but it will last a long time. when the leading indicators hit a new peek, it is usually -- peak, three or four years before you have a recession. it is so much good data, it would take a lot to turn this economy around. david: david, we have to mention how suppressed this economy was last eight years. never growing over three fores for entire eight year term for president obama it is like a pressure cooker and the pres

praising the country's economy in a tweet this morning, the president said quote the economy is looking really good, it's been many years that we've seen these kinds of numbers. the underlyingtrength of companies has perhaps never been better. the european union's law enforcement agency says police in spain have captured the alleged mastermind of the cybercrime gang that stole more than $1.2 billion from financial institutions. your pulse says the group used malware to target more than 100 financial institutions over a five-year span. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney donohoe, this is bloomberg. courtney, thanks a lot. prime minister theresa may is speaking right now in parliament and she said she welcomes the expulsion of raven -- russian diplomat by europe and the united states as jeremy corbyn, the labour party leader. key questions remain on rights, including ireland's border and she is working to resolve those issues with the eu and the irish government. the key questions remain on brexit, she says, including the ireland border. this is bloomberg. ♪ vonnie: live from new york, i'm vo

like this that is so oil dependent, the entire economy grew up -- pre-1979 saudi was a diversified economy, but it really wasn't compared to neighbors. the underlying here that is tricky is you look at how they have positioned themselves now. this is a very political pivot. the allies they have chosen here is basically the united states and israel. i am not sure how stable of an ally the u.s. is. there is a lot of back and forth with the russians and turks, and yet the iranians in the backdrop. while the iranian economy a smaller than the saudi's it is much more diversified so this is a tricky pivot on a number of fronts. a coulter change trying to diversified economy that was an export economy. -- so it ispulation doable, but given the pressures and the region and the political juggling that has to happen -- it is not going to be easy. i think for direct investment opportunities some people could make a lot of money to succeed. julie: i want to switch gears to talk about something else he talked about in the past. --ther oil dependent nation venezuela. we got confirmation that the trump administration was banning purchases of cryptocurrency sold b

the first word news. praisingresident trump the economy, saying "the economy is looking really good. has been many years since we have seen these kinds of numbers. the underlying strength of companies has never been better." russian troops say they expect to reach an agreement with a syrian rebels group to arrange their exit. it is a key victory for the syrian president, assad, as they push to gain control of the region on the edge of damascus. this is the only town on the eastern outskirts still held by rebels. president says participation in the european union is the legal for his country. he said before leaving today for a black sea resort, that he would urge the eu to remove "hurdles against a membership and revive stalled negotiations." global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. thank you. let's check the markets, rebounding today. the s&p 500, the nasdaq and dow. the dow is up for 20. it was -- 420. on friday.ped 425 it has gained that back. we are 45 minutes into trading. the nasdaq is up. stoxx stock europe -- down almost 1%. this is bloomberg. ♪ mark:

the bouquet. up can't get -- have held ok. and you havekdown taken away another component of underlying strength in the economy, then what wouldto be more concerned. joe: cameron, what are you watching? railroads, which have done pretty well over the past month or so. it is interesting, whereas facebook has fallen off and pick has fallen off, the old school well.hoo has done quite we have broken out in transports, and i am assuming it failed miserably -- but it would be another argument. the economy is generally doing ok. credit cards, companies is doing ok and railroads are a indicator of industrial activity. if this was 1975 would say that is all there is -- and obviously technology is another issue. argument thatthe the end of the quarter and month is coming and earning season is coming up as well. we know the macro data has been a little mixed so far this quarter. it is hard to know if that is indicative of a underlying deceleration or if there is a lingering seasonal issue with consumer spending. it is another argument giving a sweep sometility to chips off the table. julia: i want to pick up on the point you are saying a

of volatility should be viewed as buying opportunities in light of the underlying growth that we're experiencing and not just the economy but also corporate profits. >> jim, what about geographically we've been telling investors you guys have been telling investors i should say, be sure you're diversified ever since we had the shocks in the markets. now trade wars potentially or at least tariffs have impacts on other countries. does it change the way you look at asia? does it change the way you look at latin america i know you're talking about not trying to trade around domestically, but what about internationally? >> look, internationally we like global growth. if you look at global trade right now, it's very, very strong i think there's a powerful disincentive for trade wars to grow from here i don't think it's going to happen using that as my template, i like global growth and arab yach -- seich asia there are still problems in the countries. but when you look at the data out of europe, it's pretty strong the valuations are pretty good the growth rates are pretty good so we like global growth we particularly like the

the statistics are running in a very good way. that is a reflection of america's great underlying economic strength. our capacity to manage and innovate economiesnamism of the american private sector. that is a positive thing. i can't honestly say there is in the approach manifesting tax policy in the budget. one of the few things that economists of all kinds agree on is the importance of being countercyclical. so i can't really understand why we would be stepping hard on the accelerator at a moment when we are in the ninth year of recovery and the economy has an unemployment rate below 4%. i don't think the overall budget approach is a prudent one. i think the right budget approach is one that tries to lower the deficit in good times so there's room to borrow and spend in bad times. in good times. so i don't quite understand what the logic would be of a big increase in the government deficit. and i suspected that it will manifest itself over time in interest rates that are higher than they otherwise would be. than theyes are lower otherwise would be. and increased uncertainty and risks, larger trade deficit among other things. not in au sure w

change that because the underlying problem that causes this big deficit of the united states is the fact that the americans are consuming more than they produce and consumer based economy it's the consumer based economy and the big huge privilege that the americans have is that they can afford this type of behavior if another country take this role you know emerging markets summer ages that runs for forty years in trade deficit like the americans did you know they will probably face very stiff you consequences on financial markets the americans don't and in that sense they have the power and all of that privilege to a choice the fact that they consume that they can cause you more than the produce now but if we're seeing heated rhetoric on both sides now china saying they're ready for retaliate is there a way out of this well the way out of it would be negotiations because at the end we know very well from historical episodes that there will be losers on both sides america cannot really win this conflict and in that sense there is no substitute to trade talks and both sides that fate barriers and both sides would win if they would sit down and try to tackle those variou

the u.s. economy underlying has slipped enough to justify this equity market pullback? >> i don't think so. i think what's happening is extrapolation of the equity market and it will continue in perpetuity, but i don't think that's the case. the first quarter has shown a weakness relative to the other quarters of the year secondly, with the tax reform package and the fiscal boost and budget act that have yet to gain much traction, i think you're going to see an acceleration of economic activity over the balance of 2018. therefore, investors will -- they will have wanted to take advantage of the pro growth, pro cyclical trade. >> thank you appreciate you joining us to talk about the selloff today dow is down 425 points let's get back to bertha coombs at the nasdaq where it looks even worse. >> yeah. talk about getting in too early, as arthur was mentioning if you take a look at a three-month chart of the nasdaq 100, that's where all the pain is today right now the large cap index is just close to correction territory. when you think about the fact that we hit an all-time high at the end of ja

the supply side as well. if it doesn't we can boost the economy's underlying growth rate, we can saw -- solve the problem.me lagarde. what a different tone from peter navarro. you know him from ross navarro. i will quiz him on the game theory of american trade. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. tom: good morning. "bloomberg surveillance." francine lacqua in berlin and i am tom keene in new york. let's look at something going right through to weakness. turkish lira, you can look at with dollar. here we have it versus e.u. and it has gone to record weakness versus e.u. this is euro turkish lira and that's a log chart, so it's got acceleration out as well. this is maybe a canary and a coal mine on the trade wars, but

and that serves as distraction from the underlying state of the economy, which is robust an vigorousht now? >> it's a very tight labor market. very difficult to hire qualified people for your organization. if you have got them, you keep them. steve: stuart, yesterday the president at the end of a meeting announced, hey, by the way 25% tariff on steel, 10% on aluminum. he in last couple minutes tweeted this. we must protect our country and our workers. our steel industry is this bad shape. if you don't have steel you don't have a country. nobody should be surprised he did it. he said he was going to do it when he was running. >> it was a campaign pledge. he fulfilled the campaign pledge. brian: he officially next week. >> there are two dangers here. they will be imposed next week. there are two dangers here. retaliation from the our trading partners in the agricultural area. we're very vulnerable to that. if some of our trading partners we don't like you slapping tariffs on our steel going to mechanic, we'll slap tariffs on your beef or corn or soybeans coming here. there is a real da

. >> it did reaffirm the underlying strength of this economy and also diminished inflationy concerns an the potential there could be more than three rate hikes this year. so for a portfolio manager, i look at fundms and growing earns and that stand to benefit from the tax cuts like financials like consumer directionary and focused on e-commerce and biotech. >> and can i give you a math as to how the fed looks at numbers. and lindsay, correct me if i'm wrong. take our your pencils. here is noninflationary wage gains and half a point of productive and the inflation, at that rate 2.5%, the fed would see that and if inflation expectations are unchanged as noninflationary wage growth. 3% wage growth would not be inflationary so the fed is really going to be concerned -- it should be concerned when it gets to 4 or 5. and i'm trying to plow this theme which is an amazing theme, the market is more concerned about wage-driven inflation at this point in the cycle than the fed is which is the opposite ishl. >> because even the economic view is the 3% or 4% number, the marks are worried about the

the 80's that we went to 1.15. as that fared value changed japan's economy has come back in the last three years and that underlies > we are seeing positive signs in the japanese economy. corporate earnings are picking up. rishaad: they have been coming back for a while. haidi: they are now realizing that fact and we are seeing equity inflows into japan. that is one of the reasons we are seeing the japanese yen appreciate. there are other risk aversion factors playing out in the market right now. rishaad: how much of this will to the central bank and boj continuing its bond buying program? >> that is the big issue. rishaad: if it stopped, would it through your forecast out the window? totraders have a propensity get in front of a shifting policy narrative, and i think this will play out more aggressively to 2018. i believe the japanese central jumpingtraders will be into the long yen position. that will carry for. you will see exporters ,eevaluate their yen positions along with funds that have international hedges that assets in the u.s. they will reevaluate their hedges for a downside move on the dollar. i'm looki