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00:00MARK: PRESIDENT TRUMP SAYS CONTRARY TO SOME MEDIA REPORTS, PLANS TO OVERHAUL HEALTH CARE ARE "COMING ALONG GREAT." IN A TWEET THIS AFTERNOON, THE PRESIDENT ALSO SAID, "WE ARE TALKING TO MANY GROUPS, AND IT WILL END IN A BEAUTIFUL PICTURE." THE REPUBLICANS PAYS A PARTY BADLY DIVIDED OVER THE CAMP -- OVER THE OVERALL CAMPAIGN. GROUPS CLAIM IT DOES NOT DO ENOUGH TO REPEAL AND REPLACE THE LAW. THE TIME, TWO CONGRESSIONAL COMMITTEES HAVE CLEARED THE BILL . THE ENERGY AND COMMERCE COMMITTEE APPROVED THE BILL THIS AFTERNOON. THE PRESIDENT'S TRAVEL BAN COULD DERAIL THE 2026 WORLD CUP DREAM. THE U.S. IS CONSIDERED THE FAVORITE TO STAGE THE EVENT LAST YEAR, AFTER HOSTING -- AFTER LOSING HOSTING RIGHTS FOR 2020 22 QATAR. THE U.S. -- 2022 TO QATAR. FEED THE -- FIFA SAYS MR. TRUMP'S UPDATED POLICY WHICH LIMITS ENTRY FOR SIX MUSLIM MAJORITY COUNTRIES IS INCOMPATIBLE FOR REGULATIONS FOR TOURNAMENT HOSTS. THE LAST TIME THE U.S. HOSTED WAS 1994. SCOTLAND MAY HOLD A SECOND REFERENDUM ON WHETHER TO STAY PART OF THE U.K. LATE NEXT YEAR. THE FOREIGN MINISTER TELLS THE BBC SHE MUST -- THERE MUST BE MORE CLARITY ABOUT BRITAIN'S EXIT FROM THE EUROPEAN UNION. SCOTLAND VOTED TO STAY IN THE EU . IT IS SAID INDEPENDENCE IS INEVITABLE UNLESS THE U.K. SOFTENS ITS RIGHTS IT STANDS. -- BREXIT STANCE. A TAX AGENCY SAYS THE NUMBER OF VICTIMS PLUNGED LAST YEAR BY 48%. THE IRS SAYS IT HAS STOPPED NEARLY ONE MILLION FRAUDULENT TAX REFUNDS FROM BEING ISSUED LAST YEAR, TOTALING MORE THAN $6 BILLION. IDENTITY THEFT EXPLODED FROM 2010 TO 2012, AND PEAKED AT THE IRS IN 2014. GLOBAL NEWS 24 HOURS A DAY, POWERED BY MORE THAN 2600 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. THIS IS BLOOMBERG. ♪ SCARLET: I'M SCARLET FU. JOE: WE ARE 30 MINUTES FROM THE CLOSE OF TRADING IN THE U.S.. SCARLET: STOCKS ARE MASKS -- STOCKS -- U.S. BENCHMARK BONDS -- THE 10 YEAR TREASURY NOTE RISING BY THREE BASIS POINTS AT 2.59%. MARIO DRAGHI SAYS THE EURO AREA COVER IS PICKING UP STAYING. WHAT DOES THAT MEAN FOR MARKETS GOING FORWARD? PLUS, JAMIE DIMON SAYS PRESIDENT TRUMP'S AGENDA HAS REAWAKENED ANIMAL SPIRITS IN THE U.S. HE EXPECTS SOME OF THE ADMINISTRATION'S PROPOSALS TO BE ENACTED. WE WILL HAVE MORE FROM THE CEO OF JPMORGAN. JOE: LET'S LOOK AT WHERE THE MAJOR AVERAGES STAND AS WE HEAD TOWARD THE CLOSE. ABIGAIL DOOLITTLE IS STANDING BY. ABIGAIL: JOE, NOT MUCH HAPPENING . WE HAVE THE DOUBT, S&P 500, AND THE NASDAQ EVER SO SLIGHTLY HIGHER, SLIPPING IN THE GREEN MOMENTS AGO, AFTER A BRIEF LEG LOWER WHEN THE 10 YEAR YIELD POPPED ABOVE 2.6%, BUT NOT A LOT OF ACTION HERE. HOWEVER, IF THE DOW AND S&P SHOULD TURN LOWER AGAIN, IT WOULD BE THE FOURTH DOWN DAY FOR BOTH THOSE AVERAGES, THE FIRST TIME THAT HAS HAPPENED SINCE THE END OF JANUARY. THESE ARE THE BIGGEST LOSERS AND BEST WINNERS. STARTING OFF WITH THE LOSERS,'S TRANSOCEAN DOWN MORE THAN 3%. BOILED DOWN FOR A FOURTH DAY WORST LOSING STREAK SINCE NOVEMBER. THIS ON SUPPLY GOT FEELS -- SUPPLY GLUT FEARS. CIGNA PUT UP A BETTER THAN EXPECTED QUARTER. SHARES ARE RALLYING. FINALLY, MARATHON OIL IS ALSO RALLYING. INVESTORS LIKE THAT THEY HAVE SOLD ASSETS AND ARE BUYING ASSETS. WE HAVE HAD A LITTLE BIT OF INTRADAY VOLATILITY. TODAY COULD PROVE TO BE AN INFLECTION POINT. WE HOP INTO THE BLOOMBERG. IN BLUE, WE HAVE THE S&P 500. IN WHITE, WE HAVE THE HIGH YIELD SPREAD, BASICALLY THE DIFFERENCE BETWEEN WHAT HIGH BONDS AVERAGE VERSUS THE TREASURY, AND WE SEE IT IS STARTING TO WIDEN OUT. IT TELLS US THAT HIGH-YIELD IONS ARE SETTLING A BIT. IF THIS HIGH YIELD SPREAD SHOULD GO ABOVE THE 20 DAY MOVING AVERAGE, IT MIGHT SUGGEST THAT WE WILL SEE AN OVERDUE CORRECTION FOR THE S&P 500, AND INDEED, THE LAST TIME THE HIGH YIELD SPREAD DID GO ABOVE THE 21 DAY MOVING AVERAGE, WE DID SEE A PULLBACK IN THE S&P 500, SO IT WILL BE INTERESTING TO SEE WHAT HAPPENS WITH THIS CHART. BUT THE BIG BONDS STORY THIS WEEK, TREASURIES. TREASURIES ARE NOW SLUMPING FOR THE NINTH DAY IN A ROW, THE LONGEST THAT HAS HAPPENED SINCE MARCH 2012. IT IS VERY INTERESTING TO PUT THIS IN THE CONTEXT OF WHETHER OR NOT THE BIG BOND BULL MARKET IS ENDING, OR ARE WE GOING TO SEE A REVERSAL ON TOMORROW'S JOBS REPORT? WE WILL KNOW SOON. SCARLET: WE WANT TO TURN TO TECHNOLOGY. IBM HELD ITS INVESTOR DAY THIS WEEK, AND THE COMPANY ANNOUNCED A NEW PARTNERSHIP OR WATSON, AS THE BUSINESS CONTINUES TO PUSH FORWARD TO SEE HOW CLIENTS ARE UTILIZING THE TECHNOLOGY. ONE IS WITH SALESFORCE.COM AND WILL FOCUS ON ARTIFICIAL INTELLIGENCE. JOINING US IS JOHN KELLY. HOW DOES THIS NEW PARTNERSHIP WITH SALESFORCE ALLOW IBM TO PUSH AHEAD IN HIS CLOUD COMPUTING-FIRST ERA? GUEST: WE HAVE MADE TREMENDOUS PROGRESS AS A COMPANY. WHAT WE DESCRIBED TO OUR INVESTORS THIS WEEK WAS THE TREMENDOUS PROGRESS WE HAVE MADE IN OUR INDUSTRIAL-STRENGTH CLOUD BUILT FOR SECURE DATA, WITH IBM WATSON, THE PREMIER COGNITIVE ENGINE IN THAT CLOUD, AND HOW WE ARE GOING TO MARKET IN DIFFERENT INDUSTRIES SUCH AS HEALTH CARE, FINANCIAL SERVICES, AND THE INTERNET OF THINGS. IT'S -- SO WE ANNOUNCED A NUMBER OF PARTNERSHIPS. WE HAVE MANY CLIENTS COME IN AND TALK TO THEM. ONE OF THE PARTNERSHIPS WAS SALESFORCE. SALESFORCE IS GOING TO BE USING WATSON WITH THEIR DATA AND OUR DATA TO MY NEW INSIGHTS. WE HAVE COMPANIES LIKE PHARMACEUTICAL COMPANIES USING WATSON FOR DRUG DISCOVERY AS WELL AS DRUG SAFETY. WE HAD WEST SIDE FROM AUSTRALIA, BIG OIL AND GAS COMPANY, USING IT FOR WORKER SAFETY, USING WATSON FOR OIL EXPLORATION, FINDING BETTER OIL EASIER. ONE OF THE HIGHEST VOLUME USES OF WATSON WAS AT H&R BLOCK. IT IS AT 10,000 OF H&R BLOCK'S OFFICES, BEING USED TO OPTIMIZE TAX RETURNS. SCARLET: VERY TIMELY. WHAT KINDS OF CUSTOMERS TO THESE PARTNERSHIPS GIVE IBM ACCESS TO? GUEST: H&R BLOCK IS AN ENTERPRISE CUSTOMER, BUT ALSO WATSON IS EXPOSED TO THEIR CUSTOMERS, CLIENTS, AND CONSUMERS. CELGENE, CONSUMERS OF THEIR DRUGS. IN THE CASE OF THE WEBSITE, IT IS THE GENERIC STAFF. WATSON IS BEING USED PERVASIVELY ACROSS A NUMBER OF INDUSTRIES, AND IT IS TOUCHING EVERYONE FROM THROUGH AREAS LIKE HEALTH CARE TO THE HIGHEST END, COLLEGES. SCARLET: WHAT IS THE LEVEL OF INVESTMENT THAT IBM HAS MADE AN WATSON TO MAKE IT MORE THAN THE QUESTION AND ANSWER A SYSTEM THAT PEOPLE REMEMBER FROM JEOPARDY? GUEST: WE HAVE MOVED OUT OF THAT SYSTEM ON JEOPARDY AND STARTED TO BUILD INDUSTRIAL-STRENGTH SOLUTIONS, ALL THE WAY UP TO TAX RETURNS, BUT ALSO IN HEALTH CARE, ONE OF OUR BIG FOCUS AREAS . WE HAVE TRAINED WATSON IN A NUMBER OF CANCERS, WE HAVE TRAINED WATSON IN DRUG DISCOVERY , WE HAVE TRAINED WATSON IN PLACES LIKE MAY GO CLINIC -- IN MAYO CLINIC. WATSON NOW WILL AUTOMATICALLY MATCH OF A CREDIT -- MATCH UP A CLINICAL TRIAL WITH A PATIENT. SCARLET: WITH CONGRESS WORKING ON A REPLACEMENT FOR NATIONAL HEALTH INSURANCE, HOW DO YOU SEE WATSON FITTING END TO SOLVE SOME OF OUR CHALLENGES? GUEST: WORLDWIDE, SCARLET, HEALTH CARE IS A HUGE INDUSTRY, $1 TRILLION, GROWING AT HIGH RATES. WITH ALL OF THAT, THERE IS A LOT OF WASTE, AND THE OUTCOMES ARE NOT GOOD ENOUGH. IT IS A HUGE OPPORTUNITY FOR SYSTEMS LIKE WATSON TO GO IN AND REDUCE COSTS WHILE IMPROVING OUTCOMES FOR PATIENTS. SCARLET: IBM HELD ITS INVESTOR THEY. YOU HIGHLIGHTED INITIATIVES SUCH AS SALESFORCE. YET, WHEN YOU LOOK AT THE STOCK, IT IS LOWER TODAY. WHETHER INVESTORS MISSING? -- WHAT ARE INVESTORS MISSING? GUEST: FIRST OF ALL, I THINK INVESTORS WERE THRILLED WITH THE MEETING. THEY SAW WATSON IN HIGHER VOLUMES, DOING REAL WORK. OTHER MACHINE LEARNING COMPANIES ARE DOING EXPERIMENTS, BUT WATSON IS DOING REAL WORK WITH REAL CLIENTS. I THINK OUR INVESTORS AND CLIENTS ARE STARTING TO REALIZE THAT THIS IS REAL. WATSON ISRAEL, AND IT IS CAPABLE OF DOING AMAZING THINGS. -- IS REAL, AND IT IS CAPABLE OF DOING AMAZING THINGS. SCARLET: THANK YOU SO MUCH FOR YOUR TIME. OLIVER: A PROGRAMMING NOTE, GARY COHN JOINS US AT 9:30 A.M. EASTERN TIME ON JOB STAY. YOU DON'T WANT TO MISS THAT INTERVIEW. ♪ JOE: WHAT'D YOU MISS? CHINA PRODUCER PRICES SURGING AT THE FASTEST SPACE SINCE 2008 AS THE WORLD'S LARGEST SECOND ECONOMY TARGETS GDP GROWTH OF 6.5% THIS YEAR. JOINING US FROM CONNECTICUT IS STEPHEN ROACH, SENIOR FELLOW AT YALE UNIVERSITY AND FORMER CHAIRMAN OF MORGAN STANLEY. THANK YOU FOR COMING ON THE SHOW. GREAT TO HAVE YOU. WHAT IS YOUR ASSESSMENT -- SNAPSHOT OF CHINA'S ECONOMY RIGHT NOW? ARE THINGS GOING WELL WITH RISING PRODUCER PRICES? IS THIS THE SIGN OF SPARE CAPACITY BEING USED UP AND GROWTH LOOKING SOLID? GUEST: CHINA IS OBVIOUSLY FACING A LOT OF CHALLENGES. YOU SHOW ME AN ECONOMY IN THE WORLD THAT IS NOT. THAT IS CERTAINLY THE CASE. BUT CHINA IS GROWING AT, I THINK, A FAIRLY ROBUST RATE. 6% TO 7%. THE BIG STORY IN CHINA IS CHANGING THE STRUCTURE, MOVING AWAY FROM THE MODEL THAT FOR 35 YEARS WAS DRIVEN BY PRODUCTION, FOCUSED ON EXPORTS, INVESTMENT, TO ONE THAT IS NOW GOING TO BE DRIVEN MORE BY CONSUMPTION, DRAWING ON SERVICES AND CHINESE PEOPLE. IT IS STILL EARLY STAGES OF THE TRANSITION. THERE'S A LOT OF MINEFIELDS IN THE ROAD, RATHER -- WHETHER IT IS DATA OR PROPERTY BUBBLES WERE SOME OF THE OTHER ISSUES FACING ON THE POLITICAL AND SOCIAL SCENE WITH RESPECT TO CORRUPTION AND LEADERSHIP TRANSITIONS. BUT I AM PRETTY CONFIDENT THAT CHINA IS GOING TO STAY THE COURSE, AND THIS IS NOT A CRISIS WAITING TO HAPPEN, AS MANY ARE WANT TO BELIEVE FROM TIME TO TIME. SCARLET: JOE BROUGHT UP PPI. CPI, HOWEVER, SLOWED. WHAT IS A BETTER INDICATOR OF CHINA'S PRICE TRENDS? GUEST: THE FIRST TWO MONTHS OF THE YEAR ARE DOMINATED BY LUNAR NEW YEAR DISRUPTIONS AND HOLIDAYS. YOU'VE GOT TO LUMP THEM TOGETHER . ULTIMATELY, THE MOST IMPORTANT GAUGE OF PRICES FOR ANY ECONOMY, INCLUDING CHINA, IS THE CPI, WHICH IS STILL, I THINK, ON AN UNDERLYING BASIS HOLDING AT OR SLIGHTLY BELOW THE GOVERNMENT'S TARGET. PPI HAS BOUNCED UP AFTER A PROTRACTED DEFLATION, AND I THINK THAT INDICATES THE WORST OF THE INDUSTRIAL COMPRESSION IS NOW BEHIND CHINA. SCARLET: WHAT DOES THAT MEAN, THEN, FOR THE PEOPLE'S BANK OF CHINA'S DRIVE TO BALANCE THE ECONOMY? THE CPI HAS NOT YET MET THE TARGET. GUEST: I THINK IT WILL KEEP THE CENTRAL BANK FOCUSED ON SUPPORTING THE ECONOMY, BUT THEY ARE ALSO DEALING WITH THE LEVERAGING, SO THEY ARE TRYING TO BALANCE BOTH OF THESE CONSIDERATIONS AGAINST ONE OF THE OTHER, BUT THIS IS NOT AN ECONOMY LIKE JAPAN OR EUROPE THAT IS ON THE BRINK OF DEFLATION. THIS IS NOT A CONCERN OF CHINESE POLICYMAKERS. JOE: YOU MENTIONED THAT UNLIKE MANY PEOPLE, YOU DON'T SEE CHINA AS BEING A TINDERBOX ON THE VERGE OF DISASTER. OF COURSE, PEOPLE ARE ALWAYS CALLING FOR THAT EVERY YEAR AND IT NEVER SEEMS TO HAPPEN. ONE SOURCE OF ANXIETY IS THE CAPITAL OUTFLOWS. THAT HAS BEEN ACCELERATING. THE LATEST NUMBERS SHOWS INFLOWS OR SOME STEMMING OF THAT. HOW BIG OF AN ISSUE IS IT? WHY ARE YOU NOT AS CONCERNED AS SOME PEOPLE ARE? GUEST: I AM CONCERNED. A YEAR-AND-A-HALF AGO, THEY HAD $3 TRILLION IN FOREIGN EXCHANGE RESERVES -- EXCUSE ME, $4 TRILLION, AND NOW THEY ARE DOWN TO $3 TRILLION, AND IF THEY KEEP SLIPPING, THAT WOULD BE WORRISOME. THEY HAVE SPENT A LARGE PORTION OF THEIR RESERVES TO PREVENT THEIR CURRENCY FROM FALLING, WHICH IS SOMETHING THAT SEEMS TO HAVE ESCAPED THE TRUMP ADMINISTRATION WHICH THINKS THAT THEY ARE PUSHING CURRENCY DOWN, IF ANYTHING, THEY ARE TRYING TO PROP IT UP, BUT CHINA IS NOT EXPOSED TO A HUGE OVERHANG OF SHORT-TERM EXTERNAL DEBT. THEY CAN JUMP OUT OF THE COUNTRY HAD CRUSHED THE CURRENCY, THE CASE WITH ASIA IN THE LATE 1990'S. CHINA HAS THE WHEREWITHAL TO SOME OF ITS CURRENCY SIGNIFICANTLY. SCARLET: YOU MENTIONED EARLIER CHINA'S EFFORTS TO TRANSFORM ITS ECONOMY FROM ONE THAT IS EXPORT DRIVEN TO ONE THAT IS DOMESTIC AND DEMAND DRIVEN. SEE JINPING HAS TALKED OF THE NEED FOR ECONOMIC REFORM, BUT SOME SAY HE HAS BEEN SLOW TO ENACT THE CHANGES. WHAT HAVE YOU SEEN HIM DO TO MAKE THE ECONOMY LESS DEPENDENT ON INVESTMENTS? GUEST: SCARLET, STRUCTURAL CHANGES, HERCULEAN CHALLENGE FOR ANY SYSTEM -- STRUCTURAL CHANGE IS A HERCULEAN CHALLENGE FOR ANY SYSTEM. CHINA, THEY ARE TRYING TO BUILD A LOVE OF SUPPORT TO CONSUMER DEMAND, AND THERE ARE THREE LEGS TO THE STOOL, MORE JOB GROWTH, AND THIS IS COMING FROM SIGNIFICANT DEVELOPMENT OF ITS SERVICES SECTOR, HIGH REAL RAGES -- WAGES, COMING FROM MOVING FAMILIES FROM RURAL TO URBAN CHINA, AND THE THIRD IS THE SOCIAL SAFETY NET, WHICH ENCOURAGES CHINESE PEOPLE TO SPEND AND NOT SAVE, AND THERE THEY HAVE LAGGED. THEY HAVE INCREASED THE ENROLLMENT IN NATIONWIDE SOCIAL SECURITY AND HEALTH CARE, BUT THEY DON'T HAVE ASSETS TO PROVIDE CONFIDENCE FOR THE FUTURE. I THINK THEY HAVE MADE SIGNIFICANT PROGRESS. THE SERVICES PIECE OF THE ECONOMY IS NOW THE LARGEST AND MOST RAPIDLY GROWING. AND CHINA IS NOT GETTING CREDIT FOR THE PROGRESS THEY ARE MAKING ON THE ROAD TO REBALANCING. SCARLET: DO XI JINPING'S ORDERS UNDERCUT THE REFORMS HE HAS BEEN PROMISING? GUEST: WELL, I THINK THE MOVE TO CURTAIL CAPITAL OUTFLOWS IS A SETBACK ON THE ROAD TO FINANCIAL REFORM. THAT WITH THE BURSTING OF THE EQUITY BUBBLE A YEAR AGO, THOSE ARE TWO DISRUPTIVE DEVELOPMENTS, AND CHINA CERTAINLY NEEDS A MORE ACTIVE PUSH ON THE ROAD TO FINANCIAL REFORM TO TAKE IT DOWN THIS ROAD OF REBALANCING. THOSE ARE TWO SETBACKS. I WOULD GRANT THAT. ARE THEY FATAL? KNOW, BUT THEY DO RAISE QUESTIONS ABOUT THE FINANCIAL PEACE OF THE TRANSITION. JOE: STEPHEN ROACH, YOU ARE GOING TO BE STAYING WITH US NEXT BECAUSE WE ARE GOING TO TALK ABOUT THE U.S. AND CHINA RELATIONSHIP. IT IS SOMETHING QUITE RELEVANT NOW IN THE TRUMP ADMINISTRATION. ♪ JOE: WE ARE BACK WITH STEPHEN ROACH, SENIOR FELLOW AT YALE UNIVERSITY. HE WROTE A PIECE IN THE FT AND DIAGNOSED PRESIDENT TRUMP WITH TRADE DEFICIT DISORDER. WHAT IS THIS DIAGNOSIS, AND HOW DOES IT RELATE TO THE U.S. RELATIONSHIP WITH CHINA? STEPHEN: JOE, MY QUESTION -- MY CONCERN IS THE TRUMP ADMINISTRATION THINKS THEY CAN MAKE AMERICA GREAT AGAIN BY BEATING UP ON CHINA OR MEXICO. IT IS A COUNTRY'S VISIT -- THAT IT IS A COUNTRY SPECIFIC ISSUE, AND IF THESE GUYS CAN PLAY BY OUR RULES, AMERICA WILL BE FINE. THE POINT OF THIS ARTICLE IS TO UNDERSCORE THE FACT THAT THE U.S. HAS DEFICITS WITH 101 COUNTRIES. WE HAVE A MACRO PROBLEM. YOU CAN'T FIX A PROBLEM LIKE THAT JUST BY GANGING UP ON ONE COUNTRY. IF YOU HIT CHINA, THE CHINESE PIECE WILL SPREAD TO OTHER TRADING PARTNERS. THE PROBLEM IS WE DON'T SAVE, AND UNLESS WE BOOST OUR SAVINGS, WE WILL HAVE A PROFUSION OF DEFICITS WITH HALF THE COUNTRIES IN THE WORLD. THERE IS NO CHINESE SOLUTION TO AMERICA'S MACRO IMBALANCES. SCARLET: SO IF THE U.S. KEEPS PUSHING THIS ANGLE OF BEING PUNISHED UNFAIRLY IN ITS TRADE RELATIONSHIP WITH CHINA, HOW DO YOU SEE THIS PLAYING OUT IN THE COMING YEARS? STEVEN: I THINK THE TRUMP ADMINISTRATIONWANTS TO IMPOSE SOME TYPE OF PENALTY ON CHINA, WHETHER IT IS TERRORISTS, PULLING THEM CURRENCY MANIPULATORS, OR SQUEEZING THEM IN OTHER WAYS, I THINK THEY HAVE CERTAINLY COMMITTED TO THE RHETORIC THE PRESIDENT CONSTANTLY SPEWED FORTH DURING THE CAMPAIGN THAT CHINA IS -- I THINK HE USED THE WORD RAPED, RESPONSIBLE FOR THE LOSS OF AMERICAN JOBS IN FACTORIES. THE ANSWER ON THAT IS HIGHLY DUBIOUS, BUT THE DIAGNOSIS OF TRADE DEFICIT DISORDER IS AIMED AT SAYING THAT, AGAIN, IF HE GOES DOWN THIS ROAD, THERE WILL BE SIGNIFICANT REPERCUSSIONS OF THAT THAT WILL COMPOUND OUR PROBLEMS, NOT SOLVE OUR PROBLEMS. JOE: STEPHEN, INTERESTINGLY, SINCE HE HAS TAKEN OFFICE, HE IS NOT FOCUSED MUCH ON CHINA. IS THERE AN OPPORTUNITY FOR SOME CHANGE TO THE U.S.-CHINA RELATIONSHIP THAT TRUMP CAN COUNT AND SAY HE'S GOT A DEAL OR SOMETHING, BUT COULD YOU MUTUALLY -- COULD BE MUTUALLY BENEFICIAL? STEPHEN: THERE IS HUGE OPPORTUNITY, THE QUESTION IS WILL HE DO IT. I AND OTHERS HAVE STRONGLY ADVOCATED, ESPECIALLY NOW THAT WE HAVE A DEAL MAKER IN THE WHITE HOUSE, FOR THE TRUMP ADMINISTRATION TO DO A DEAL ON A BILATERAL INVESTMENT TREATY BETWEEN THE UNITED STATES AND CHINA. WE HAVE BEEN NEGOTIATING THIS TYPE OF DEAL AND GETTING NOWHERE OVER THE LAST FIVE YEARS, BUT IF WE WERE TO CUT A DEAL ON THE SO-CALLED BE I.T., THAT WOULD GIVE US MORE ACCESS TO OWNERSHIP STAKES IN CHINA, AND THAT WOULD GIVE THEM RECIPROCAL ACCESS IN OUR COUNTRY. CHINA IS GROWING ITS DOMESTIC ECONOMY, AND THAT'S EXACTLY WHERE I WANT TO -- WHERE WE WANT TO BE WITH OUR MULTINATIONALS AND TAKING ADVANTAGE. IF HE DID THAT DEAL, YOU CAN CERTAINLY CLAIM THAT HE HAS MADE PROGRESS IN OPENING UP A GREATEST DOMESTIC DEMAND STORY THAT THE WORLD WILL SEE IN THE FIRST HALF OF THE CENTURY, AND ALLOW OUR COMPANIES TO PLAY AN ACTIVE ROLE IN GRABBING A SHARE OF THAT. SCARLET: STEPHEN ROACH, FORMER CHAIRMAN OF MORGAN STANLEY ASIA, THANK YOU FOR JOINING US. THE MARKET CLOSES NEXT. TAKE A LOOK AT HOW THINGS ARE TRADING NOW WITH FOUR MINUTES TO GO. NO CHANGE FOR THE DOW. ACTUALLY, NO CHANGE ACROSS THE BOARD FOR THE MAJOR INDICES. OIL IS WHAT WE ARE KEEPING AN EYE ON, BELOW $50 A BARREL. ♪ ♪ SCARLET: WE ARE MOMENTS AWAY FROM THE CLOSING BELL. "WHAT'D YOU MISS?" MARKING THE EIGHTH ANNIVERSARY OF THE BULL MARKET, BUT THE BIG STORY THE REVEAL OF THE 10 YEAR TREASURIES TOPPING 2.59%. [BELL] SCARLET: I'M SCARLET FU. JOE: I'M JOE WEISENTHAL. IF YOU ARE TUNING IN ON TWITTER, WELCOME TO THE CLOSING BELL COVERAGE. ♪ SCARLET: WE BEGIN WITH THE MARKET MINUTES, IT IS T MINUS ONE DAY FOR THE JOBS REPORT. IN THE MEANTIME, NOT A LOT OF ACTION. JOE: BUT IT IS MISLEADING, BECAUSE THERE IS NOT MUCH ACTION HERE, BUT WE HAVE INTERESTING STUFF TO TALK ABOUT. SCARLET: THE EIGHTH YEAR ANNIVERSARY OF THE BULL MARKET. SINCE THEN, MARCH 9, THE S&P 500 CLIMBING 250%, A 97 MONTH OLD BULL MARKET. AND ON A PERCENTAGE GAIN BASIS, THE THIRD BIGGEST RALLY TRAILING THE RALLY FROM 1990-2000 AND 1949-1956. AN INCREDIBLE RUN SINCE 2000 AND FED IN TERMS OF THE INTERESTING MOVERS, I WANT TO LOOK AT RETAILERS. STAPLES WITH THE BIGGEST DROP IN MONTHS. THEY WILL SHUT 70 STORES ACROSS NORTH AMERICA. AND -- RALLYING, POSTING A SMALLER LOSS THAN EXPECTED. AND THE BEST PERFORMER IN THE S&P 500, SIGNET JEWELERS. YOU KNOW AS THE OWNER OF KAY'S. UP AS MUCH AS 9.6%. IT GAINED ON AN ANNOUNCEMENT THAT IT WILL RELOCATE STORES AWAY FROM MALLS. THE PROBLEM IS, THE BENEFITS WILL NOT BE FELT IMMEDIATELY. YOU CAN SEE THE SALES HAVE BEEN DOWN THE PAST THREE QUARTERS. AND ANALYST C COMPARABLE SALES FALLING FOR ANOTHER TWO QUARTERS BEFORE EVENTUALLY RECOVERING. JOE: I HAVE NEVER HEARD OF A COMPANY RALLYING BECAUSE THEY ARE MOVING AWAY FROM MALLS. LET'S LOOK AT THE BOND MARKET, THIS IS WHERE A LOT OF THE ACTION IS. THE TWO-YEAR YIELD AT 1.37%. THIS IS BEFORE MARCH. 10 YEAR YIELD, 2.59 PERCENT. AT ONE POINT IT WAS OVER 2.6% FOR THE FIRST TIME. IN A LONG TIME. TAKE A LOOK AT THE CHART, PUTTING THE MOVE IN PERSPECTIVE. THE HIGHEST LEVEL AROUND SINCE 2014, SO THIS IS STARTING TO GET PRETTY REAL. AND I WANT TO GO TO GERMANY AND A LOOK AT THE INTRADAY CHART. THERE YIELDS -- THEIR YIELDS ARE LOWER. SCARLET: THEY ARE MOVING HIGHER. JOE: MARIO DRAGHI THREADING THE NEEDLE TODAY AND EXPLAINING THAT THE ECONOMY IS GETTING BETTER, BUT NO, NO IMMEDIATE NEED TO PULL BACK ON THE EXTRAORDINARY EASING. AT SOME POINT IT WILL HAPPEN AND WE SEE LONG-TERM RATES GOING UP. SCARLET: IT WAS A LITTLE MORE HAWKISH THAN SOME ANTICIPATED. IF YOU LOOK AT GERMAN BONDS REACTING AND HOW THE EURO REACTED. LOOKING AT THE MAJOR CURRENCIES, HE NOTED THE IMPROVEMENT IN THE BALANCE OF RISKS AND IT SAYS THERE IS LESS URGENCY FOR FURTHER MONETARY ACTION. WE WILL BE SPEAKING WITH -- LATE R ON WHY THE ECB SHOULD DO THAT SOON. AND WHEN YOU LOOK AT COMMODITIES, WE SEE RED. KNOCKING DOWN THE CURRENCIES. HERE IS A HANDFUL OF THE EXPORTERS. JOE: LET'S TALK ABOUT THOSE COMMODITIES. IT IS NOT PRETTY. CRUDE OIL, WTI FALLEN BELOW $50 A BARREL. WE USED TO JOKE EVERY DAY THAT IT WAS AROUND $53. IT TUMBLED YESTERDAY, AND TODAY, BUT ONE POINT BELOW $49. SCARLET: STILL IN LINE WITH A 12 MONTH AVERAGE. JOE: IT SEEMS TO BE WEAKENING. SILVER IS TUMBLING 1.8%. HERE IS THE ONE YOUR CHART. WE ARE ONE YEAR ON FROM THE BOTTOM. AN EXTRAORDINARY RUN, BUT YOU CAN SEE HOW WE ARE BASICALLY DOING NOTHING FOR MOST OF THE BEGINNING OF THE YEAR AND NOW WE ARE SORT OF BREAKING TO THE DOWNSIDE ON THE RANGE. THAT IS ON EVERYBODY'S MIND. THE BREAK BELOW $50 IS THE STORY OF THE DAY. SCARLET: ABSOLUTELY. THOSE ARE THE MARKET MINUTES. DEEP DIVE INTO THE BLOOMBERG, YOU CAN SEE THE CHARTS USING THE FUNCTION AT THE BOTTOM OF THE SCREEN. WE ARE LOOKING AT CRUDE OIL, THE RAPID SELLOFF BUMPING UP AGAINST KEY LEVELS. $50 B IN THE LINE IN THE SAND. -- BEING THE LINE IN THE SAND. THE THING DAY IS THE 50 DAY MOVING AVERAGE GREATEST THE YELLOW IS THE TWO DAY MOVING AVERAGE. CRASHING THROUGH THE 50 DAY MOVING AVERAGE YESTERDAY AND NOW CONFRONTING THE 200 DAY MOVING AVERAGE. YOU CAN SEE IT MORE. THERE IS THE MOVE THERE YESTERDAY. IT HAPPENED EARLY AND NOW IT SEEMS LIKE NO BOTTOM. REMEMBER THE CONTEXT, MONEY MANAGERS HAVE HUGE POSITIONS IN CRUDE AND WE HAVE SEEN REDUCTION IN THE POSITIONS FOR THE PAST FEW DAYS AND MANY PEOPLE BETTING ON IT MOVING HIGHER, SO THEY WERE CAUGHT OFF SIDES AND EASY MORE TURBULENCE AS A RESULT. JOE: COULD BE SOME REAL PAIN. AND SPEAKING OF THINGS SELLING OFF. I HAVE THIS ON MY LAUNCHPAD. GM. WE ALWAYS PANNED BY IT. A WAY TO LOOK AT EQUITIES, BONDS, COMMODITIES ALL IN ONE THING. WHAT I HAVE DONE IS I HAVE SET THE ENTIRE UNIVERSE TO SUNDAY AT 6:00 P.M., THAT IS WHEN THE TRADING STARTS IN NEW ZEALAND. BEGINNING OF THE WEEK. ALL YOU NEED TO DO IS LOOK AT THE COLOR, EVERYTHING IS RED. EXCEPT SERBIAN STOCKS. AND IRISH CDF. ALL THE BIG MOVERS THIS WEEK IN RED. WHOLE MILK GETTING CLOBBERED. BOND YIELDS SHOOTING HIGHER AS PEOPLE SELLOFF. CURRENCIES ALL LOWER AGAINST THE DOLLAR. RUSSIA IS DOWN 4% ON THE OIL. IT IS INTERESTING AND I THINK MY KEY POINT I WANT TO MAKE IS, IT DOES NOT FEEL LIKE A DEEP SELLOFF, IT IS VERY BROAD EVERYWHERE YOU LOOK. EVERYWHERE YOU LOOK, THERE ARE SELLOFFS. SCARLET: IF YOU WILL NOTICE, IT IS COLOR-CODED IN THAT THE DEEPER THE RED, THE STEEPER THE DECLINE. A LOT OF DEEPER RED. JOE: ESPECIALLY GOVERNMENT BONDS. SCARLET: AND CURRENCIES. SOMETHING WE WILL CONSIDER FOR THE NEXT HOUR. JOE: "WHAT'D YOU MISS?" JAMIE DIMON TOLD BLOOMBERG THAT PRESIDENT TRUMP'S ECONOMIC AGENDA HAS IGNITED U.S. BUSINESS AND CONSUMER CONFIDENCE AND HE EXPECTS SOME OF THE ADMINISTRATION'S PROPOSALS TO BE ENACTED. >> IT SEEMS LIKE HE WILL CUT THE ANIMAL SPIRITS. . WE HAVE NEVER HAD SUCH A PRO BUSINESS PRESIDENT SINCE THE FOUNDING FATHERS, I'M NOT SURE THAT IS TRUE, BUT SMALL BUSINESS CONFIDENCE IS SKYROCKETING BECAUSE IT IS A GROWTH AGENDA. JOE: SO HOW DID INVESTORS ENTER THAT AND REPOSITION. BENJAMIN SEGAL, PORTFOLIO MANAGER FOR NEWBERGER INTERNATIONAL EQUITY FUNDS, GREAT TO HAVE YOU. JAMIE DIMON SAYING ANIMAL SPIRITS HAVE BEEN UNLEASHED IN THE ECONOMY, SO WHAT DOES THAT MEAN, IS IT IS TRUE, FROM A MARKET STANDPOINT? WILL IT BE FURTHER GAINS OR THAT IS WHAT WE HAVE JUST SEEN SINCE NOVEMBER? BENJAMIN: WE HAVE SEEN THE ANIMAL SPIRITS IN THE MARKET. THEY TEND TO LEAD THE MARKET. HOW MUCH MORE CAN WE SEE IN TERMS OF PROACTIVE POLICY, HOW MUCH MORE INVESTMENT CAN WE SEE, I THINK THERE IS A FAIR AMOUNT OF UNCERTAINTY. I THINK IF YOU LOOK AT CERTAIN PARTS OF THE WORLD OR COUNTRY, CERTAINLY IN OIL AND ONGOING INVESTMENTS AND EXCITEMENT, BUT AS YOU POINTED OUT WITH STAPLES AND HEALTH CARE THERE ARE ALSO SOME CONCERNS. SO I TEND TO VIEW, YOU SHOWED EARLIER THE GAINS SINCE THE 2009 LOW, THAT IS THE SECOND BIGGEST OR LONGEST EXPANSION AND THE THIRD-HIGHEST. AS A GLOBAL PORTFOLIO MANAGER I TEND TO LOOK AT SOME OF THE MORE INTERESTING OPPORTUNITIES OVERSEAS. SCARLET: TALK ABOUT THE DISCONNECT BETWEEN EQUITIES AND OTHER ASSET CLASSES SHOW. WE ARE KEEPING THIS UP. IT REALLY HIGHLIGHTS HOW WE SEE LOSSES ACROSS THE ASSET CLASS ES, WE ARE STILL HOLDING NEAR THE RECORD HIGHS. THIS IS COMING AS INDIVIDUALS OUR BEARISH ON THE STOCKS, STARTING TO COME UP A LITTLE BIT. YOU DO NOT SEE THAT KIND OF CATHARTIC SELLOFF IN EQUITIES YOU MIGHT EXPECT GIVING THE MOVEMENT IN THE OTHER ASSET CLASSES. THE HUMAN: -- BENJAMIN: BANKING IS A HUGE SECTOR AND WITH THE RATES AS LOW AS THEY HAVE BEEN, IT IS A STRUGGLE TO MAKE MONEY. AND NOW WITH HIGH RIGHTS -- RATES, JAMIE DIMON IS SHOWING MORE OPTIMISM. SOME OF THE TONE OUT OF EUROPE TODAY, MARIO DRAGHI GIVING HOPE TO THE IDEA THAT EUROPEAN BANKS MIGHT FOLLOW THE U.S. BANKS, WITH SOME OF THAT RECOVERY. AND YOU HAVE THE OIL PRICE AND A LOT OF EXCITEMENT IN THE OIL SECTOR, THE U.S. NOW THE LOW COST PRODUCER GLOBALLY. AND I THINK THAT IS ONE OF THE REASONS WHY YOU SEE SOME EXCITEMENT. SCARLET: EVEN AS INDIVIDUALS ARE TURNING A LITTLE MORE BEARISH ON EQUITIES. JOE: YOU MENTIONED YOU LIKE THE OPPORTUNITY OVERSEAS MORE THEM THE U.S., WHAT DO YOU LIKE? BENJAMIN: I AM GOING TO EUROPE, I HAVE BEEN IN JAPAN. THE STORY WITH JAPAN IS ACTUALLY VERY DIFFERENT. THE STORY IS I CANNOT SAY EXCITEMENT IN THE ECONOMY, BUT THERE ARE REAL CHANGES WITH COMPANIES, COMPANIES INCREASING THEIR SHAREHOLDER ORIENTATION AND INCREASINGLY CONDUCTING BOARD MINIS -- MEETINGS IN ENGLISH I'M A THEY ARE TALKING ABOUT WHAT THEY WILL DO WITH CASH FLOW -- ENGLISH. AND THEY ARE TALKING ABOUT WHAT THEY WILL DO WITH CASH FLOW. IT IS A RARE AND EXCITING NEW THING TO HEAR FROM JAPANESE BUSINESSES. IN EUROPE, I THINK IT IS LESS -- YOU KNOW, THE COMPANIES ARE BETTER KNOWN AND AS I THINK WE EMERGE FROM THIS QE ENVIRONMENT WITH RATES LOW AS YOU POINTED OUT, MARIO DRAGHI IS NOT SAYING IT IS PARTY TIME AGAIN, HE IS TALKING ABOUT 2% GDP GROWTH. BUT IT IS A GRADUAL NORMALIZATION OF RATES AND OF THE ECONOMY AND YOU DO THESE TWO ELECTIONS OUT OF THE WAY FOR FRANCE AND GERMANY AND I THINK THE QUALITY AND FUNDAMENTAL UNDER EVALUATION OF EUROPEAN BUSINESSES BECOMES MORE -- AND YOU SAW THAT WITH THE APPROACH FROM PPG, THAT IS THE SORT OF CORPORATE ON CORPORATE EXCITEMENT THAT YOU WILL NOT GET IF MARKETS DO NOT GET US THERE FIRST. SCARLET: WE HAVE THE ELECTIONS, YOU MENTIONED, BUT WHATEVER POLICY THE VICTORIOUS PARTY COMES OUT WITH, IT WILL TAKE SOME TIME TO IMPLEMENT. CHANGE WILL BE SLOW. YOU SEE MORE COMPANIES TRYING TO CONSOLIDATE OR BY EACH OTHER OUT IN THE MEANTIME AS WE WAIT FOR THE EFFECTS OF THE POLICIES? BENJAMIN: ABSOLUTELY. THAT IS A WAY TO REDUCE CAPACITY AND BOOST RETURNS AND GROW PROFITS. AND DEPLOY CAPITAL IN A WAY THAT THE CAPITAL MARKETS WILL APPRECIATE. I THINK YOU WILL SEE THAT. JOE: QUICKLY, WITH INTEREST RATES KICKING HIGHER AND COMMODITIES SELLING OFF, AND UGLY FEW DAYS FOR THE EMERGING MARKETS. AS THEY HAVE BEEN RALLYING SHARPLY SINCE THE END OF DECEMBER, HOW DO YOU SEE THAT RIGHT NOW? BENJAMIN: I THINK ONE MUST BE IN CREDIBLY SELECTIVE IN GENERAL. THE FUNDAMENTALS ARE NOT FAVORABLE FOR THE STRONG DOLLAR, AND THE WEAKER COMMODITIES NOT HELPFUL. HIGHER INTERESTS RATES ARE NOT HELPFUL. ALL OF THAT IS THE CASE. BUT COMPANIES DOWN THE MARKET KEEPING PERSPECTIVE ON THOSE WHO ARE LESS DRIVEN BY COMMODITIES AND MORE GEARED INTO THE UNDERLYING GROWTH IN CONSUMPTION. AND THERE IS STILL OPPORTUNITIES LEFT. SCARLET: OK. THANK YOU SO MUCH. WE WANT TO LOOK AT A STOCK FALLING IN LATE TRADING, ULTA BEATING ESTIMATES FOR THE FOURTH QUARTER. BUT THE NET FORECAST FOR THIS QUARTER IS A SHOT OF ESTIMATES. ANALYSTS WERE LOOKING FOR $1.28 BILLION. AND DOWN 5.4%. IN NEW YORK, THIS IS BLOOMBERG. ♪ ♪ MARK: IT IS TIME FOR FIRST WORD NEWS. WASHINGTON STATE IS ASKING A FEDERAL JUDGE TO BLOCK THE REVISED TRAVEL BAN. BOB FERGUSON SAYS THE STATE WOULD ASK THE JUDGE TO EXTEND THE TEMPORARY RESTRAINING ORDER AGAINST THE FIRST BAN. THE ATTORNEY GENERAL FOR NEW YORK SAYS HIS ESTATE WILL JOIN IN WASHINGTON LAWSUIT. YESTERDAY, HAWAII FILED SUIT AGAINST THE REVISED TRAVEL BAN, SAYING THE ORDER WILL HARM THE MUSLIM POPULATION, TOURISM, AND FOREIGN STUDENTS. THE TREASURY SECRETARY SENT A LETTER TO HOUSE SPEAKER PAUL RYAN AND OTHER LAWMAKERS TO INFORM THEM THAT THE TREASURY WILL NEED TO START TAKING " EXTRAORDINARY MEASURES" WHEN THE -- ON U.S. THAT IS REINSTATED. IN THE LETTER DATED MARCH 8, THE SECRETARY ALSO SAID THAT HONORING THE FULL FAITH AND CREDIT OF THE U.S. OUTSTANDING DEBT IS A CRITICAL COMMITMENT. AND FRESH OFF HIS REELECTION AS THE EU PRESIDENT TODAY, THAT CONCEDED HE RECOGNIZED WHAT HE CALLS A PARADOX IN THE PROCESS. HE WON THE SEAT DESPITE FEARS OPPOSITION -- FIERCE OPPOSITION. IN MOSCOW, THE RUSSIAN PRESIDENT VLADIMIR PUTIN AND BENJAMIN NETANYAHU TALK ABOUT THE SITUATION IN SYRIA AND ISRAEL CONCERNED ABOUT THE ROLE OF IRAN. PRESIDENT PUTIN EMPHASIZED A HIGH LEVEL OF TRUST BETWEEN THEM. PRIME MINISTER NETANYAHU PRAISED RUSSIA IN -- AND OTHER MILITANTS IN SYRIA. THE SAME TIME, HE RAISED CONCERNED ABOUT THE HEZBOLLAH FORCES IN SYRIA. HIS VISIT TO MOSCOW POLICY TALKS AT THE WHITE HOUSE LAST MONTH WITH PRESIDENT TRUMP. ♪ MARK: GLOBAL NEWS, 24 HOURS A DAY POWERED BY MORE THAN 2600 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. I'M MARK CRUMPTON. THIS IS BLOOMBERG. SCARLET: THANK YOU. "WHAT'D YOU MISS?" CRUDE OIL PRICES FALLING BELOW $50 FOR THE FIRST TIME THIS YEAR AS INVESTORS REALIZE THE GLOBAL GLUT IS PERSISTING, DESPITE THE PRODUCTION CUTS. MIKE MCCONE IS A COMMODITY ANALYST AND JOINS US WITH PERSPECTIVE. WE CAN TALK ABOUT TECHNICALS, WHICH WE WILL. AND ABOUT POSITIONING. THE ONE THING YOU POINT OUT IS THERE IS AN OIL CONFERENCE IN HOUSTON THIS WEEK WHERE THERE IS TALK ABOUT PRODUCTION AND IT MIGHT UPSET THE TONE FOR OIL. >> THE CONFERENCE PUT A BOTTOM IN THE MARKET AND MAYBE IT IS PUTTING A TOP IN IT THIS YEAR, BUT WHAT I HEAR IS WE HAVE MORE SUPPLY COMING ON. PRICES ARE HIGH AND WE HAVE A NEW ADMINISTRATION THAT IS DRILL AT WILL. THAT IS THE SPARK. THE MARKET WAS WAITING FOR A SPARK. IT WAS WAITING TO MOVE. POSITIONS ARE WAY TOO LONG AND THIS IS KICKING INTO THE LIQUIDATION. JOE: GO INTO THE BLOOMBERG AND WE HAVE A GREAT CHART SHOWING U.S. TOTAL OIL INVENTORY, THE YELLOW LINE, WHICH IS GOING UP. AND OIL RIGS ALSO GOING UP LATELY. THE UNDERLYING DATA IS THAT U.S. IS SWIMMING IN OIL AGAIN. AND SORT OF THE PUT IT TOGETHER WITH WHAT YOU SAY, MAYBE PEOPLE WENT DOWN TO HOUSTON AND THE DATA WAS ALREADY THERE AND THEN THEY HEARD THE PRESENTATIONS AND NOW THEY ARE SAYING THIS IS THE REAL DEAL. MIKE: THERE IS A BULL MARKET OF SUPPLY AND SUPPLIES ARE EXCESSIVE. IT IS FINALLY KICKING AND AND HAPPENING THIS WEEK. I WAIT FOR A CERTAIN TIME? I DO NOT KNOW. SCARLET: IT IS A SPARK AND FOR THOSE LOOKING FOR A TECHNICAL REASON TO GO SHORT ON OIL, THEY COULD FIND THEM AS THEY LOOK AT THE BELOW THE 50 DAY. YOU CAME WITH A SOPHISTICATED CHART. TALK THIS THROUGH IT. MIKE: YOU CAN LOOK AT MY HAIR, I HAVE LESS LOOKING AT THE DAILIES. I LIKE TO LOOK AT THE WEEKLIES. WE ARE LOOKING AT THE NARROWEST RANGE FOR A 10 DAY BASIS, THE LOWEST IN 20 YEARS, NOW THIS BREAKING DOWN. ONE THING THAT IS SIGNIFICANT, LAST TIME WE HAD A SIGNIFICANT PATTERN WAS 2015 WHEN IT WAS AROUND 16. THE OPEN INTEREST ARE AT RECORDS. IT IS RIPE FOR A MOVEMENT AND OF THE RISK IS DOWN AND LIQUIDATION AND RISK IS HIGH. AND THAT IS WHAT IS HAPPENING. THE QUESTION IS, HOW FAR ARE WE CORRECTING? JOE: LET'S TALK ABOUT THE FUNDAMENTALS. AND ON THE DEMAND SIDE. WE HAVE A PICTURE, THE U.S. HAS TONS OF OIL IN PRODUCING MORE AND INVENTORY IS BUILDING AND PEOPLE IN HOUSTON ARE SAYING EVERYTHING IS GREAT AND THEY WILL DRILL MORE. AND YOU HAVE A CHART LOOKING AT THE TOTAL AMOUNT OF VEHICLES TRAVELED. WHAT IS HAPPENING ON THE DEMAND SIDE? MIKE: THE AMOUNT OF VEHICLE MILES ARE UP. THE BAD NEWS IS THE MONTH OF CONSUMPTION, ACTUALLY VEHICLES ARE FLAT. THAT IS A KEY FACTOR. A GOOD INDICATION OF THE ADVANCING TECHNOLOGY AND INCREASED TECHNOLOGY WHERE YOU SEE WE ARE DOING MORE WITH LESS. A GOOD INDICATION OF THE BIGGER PICTURE, WE ARE NOT USING AS MUCH ENERGY, YET WE ARE DOING MORE WITH IT. JOE: THIS IS A COOL CHART. YOU SEE THE TWO LINES IN THE SAME TRAJECTORY ON THE MONITOR. UP TO 2007, THEN YOU SEE THE DIVERSION STARTING WITH THE CRISIS. PEOPLE ARE DRIVING MORE, BUT THEY DO NOT NEED OIL AT THE SAME RATE PER MILE LIKE THEY DID A DECADE AGO. MIKE: TRUE. I WAS AT A CONFERENCE ON TUESDAY AND WHAT STRUCK ME AS I GOT A CAR THAT HAD AN AVERAGE OF 30 MILES PER GALLON AND MAYBE 10 YEARS AGO IT WOULD HAVE GONE 20. AND I WENT TO THE CONFERENCE AND I SEE THESE WIND TURBINES IN THE CORNFIELD AND IT IS THE TECHNOLOGY MET THE MARKET IS NOT PICKING UP ON CREDIT WE ARE INCREASING PRODUCTION AND REDUCING -- PICK UP ON. WE ARE INCREASING PRODUCTION AND REDUCING CONSUMPTIVE. SCARLET: WHEN YOU SPEAK WITH TRADERS, ARE THEY GETTING WORRIED THIS MIGHT BE A LITTLE BIT LIKE THE START OF 2016? OR DO THEY THINK WE WERE DUE FOR A BREAKOUT WHETHER IT WAS UPSIDE OR DOWNSIDE? MIKE: THE MONEY NET LONG ARE AT THE HIGHEST EVER. MAYBE THEY ARE HIDING THINGS I CANNOT SEE IN THE FUTURES. YOU WOULD THINK SO. BUT POSITIONS ARE SO HIGH. SCARLET: I HAVE THE CHART. JUST A HIGHLIGHT THE POSITIONING, HOW OUT OF WHACK IT IS. YOU CAN SEE THAT THERE IS MANAGED MONEY IN THAT LONG POSITIONS, THE WHITE LINE. JOE: HOW QUICKLY COULD IT FLIP? WILL IT TURN ON A DIME IF WE GO LOWER? MIKE: THAT DATA IS A WEEK LAG. WHEN WE GET THE DATA TOMORROW, FRIDAY, IT WILL BE HAMMERED. BUT THE OPEN INTEREST ON THEIR, THAT IS EVERY DAY AND WE SHOULD SEE IT TOMORROW. IF YOU SEE THE LIQUIDATION DECLINE, THE LONGS IS GETTING OUT. I SUSPECT WE WILL SEE THAT. JOE: AWESOME STUFF. OUR COMMODITY STRATEGIST FOR BLOOMBERG INTELLIGENCE, WE APPRECIATE IT. THE U.S. MONTHLY TRADE DEFICIT FOR JANUARY WAS AT ITS WORST IN NEARLY FIVE YEARS, SO WHY ARE THE U.S. EXPORTS LACKING -- LAGGING? WE LOOK AT ONE REASON WHY. THIS IS BLOOMBERG. ♪ ♪ SCARLET: I'M SCARLET FU. "WHAT'D YOU MISS?" YOU CAN FIND OUR CHARTS USING THE FUNCTION AT THE BOTTOM OF THE SCREEN. WE WILL LOOK AT ONE CHART THAT SHOWS HOW TRADE AND INFLATION ARE INTERSECTING CREDIT THE COST OF EXPORTS IS HIGHER -- INTERSECTING. THE COST OF EXPORTS IS HIGHER. WE ARE LOOKING AT AGRICULTURAL COMMODITIES. CLIMBING 3.1%. IT HAS BEEN PART OF AN UPTREND SINCE 2016 BEGAN. AMERICAN FARMERS AND FACTORIES HAVE THE MOST PRICING POWER SINCE THE END OF 2011, MORE THAN FIVE YEARS. IT GOES BEYOND STABILIZING OIL PRICES WHICH COULD HAVE CHANGED TODAY, BUT IT IS PART OF THE STRONGER DOLLAR STORY. JOE: THIS IS WHAT YOU WANT TO SEE, PRICING POWER. THEY CAN JUMP AROUND FOR ALL KINDS OF REASONS, BUT YOU WANT COMPANIES TO HAVE THE ABILITY TO RAISE PRICES, IT IS THE SIGN OF A GOOD ECONOMY. THAT IS A VERY COOL CHART. I HAVE NOT SEEN U.S. EXPORTS MEASURE THAT WAY. SCARLET: IS GLOBAL DEMAND RECOVERING AND RESILIENT? WE WOULD HAVE TO CONTINUE TO SEE EXPORTS PICKUP AND THE DEMAND FROM ABROAD TO BE WITH THE SAY IT WITH CERTAINTY. JOE: OK, I AM LOOKING AT THE WAY CONSUMER SENTIMENT IS OFTEN IMPACTED BY THINGS LIKE POLITICAL IDEOLOGY AND AGE AND DEMOGRAPHICS. IT IS A SPREAD, THE REPUBLICAN CONSUMER COMFORT, HOW THEY FEEL ABOUT THE ECONOMY MINUS HOW THE DEMOCRATS FEEL ABOUT THE ECONOMY. WHEN IT IS GOING UP, REPUBLICANS FEEL BETTER AND WHEN IT IS GOING DOWN, DEMOCRAT FEEL BETTER. AND I SHADED THE BACK. YOU CAN SEE THE RED BARK IN THE MIDDLE -- BAR IN THE MIDDLE OF THE BUSH ERA. THE BLUE BAR AFTER IS OBAMA. IT IS HOW YOU WOULD EXPECT IT. REPUBLICANS FEELING BETTER -- ZOOM IN AND AT THE END OF IT YOU SEE THE READ AND BILL -- BOOM, SURGING TO THE HIGHEST IN A LONG TIME AS REPUBLICAN OPTIMISM GOES AHEAD OF DEMOCRATIC OPTIMISM. IT IS RIGHT WHEN THE TRANSFER HAPPENED FROM OBAMA TO DONALD TRUMP IT IS AMAZING THE DEGREE TO WHICH PARTISANSHIP SHAPES THE COUNTRY. SCARLET: WE ARE A DIVIDED COUNTRY. JAMIE DIMON SAYS DONALD TRUMP HAS AWAKENED ANIMAL SPIRITS AND IS BRINGING BUSINESS CONFIDENCE. WE WILL HEAR FROM THE CEO NEXT AND IT - IN AN EXPOSE OF INTERVIEW. THIS IS BLOOMBERG. ♪ MARK: IT'S TIME NOW FOR FIRST WORD NEWS. GERMAN POLICE SAY SEVERAL PEOPLE HAVE BEEN INJURED IN AN TAX ATTACK AT DUESSELDORF'S MAIN TRAIN STATION -- AX ATTACK AT DUESSELDORF'S MAIN TRAIN STATION. TWO SUSPECTS HAVE BEEN ARRESTED. MORE ATTACKERS ARE EXPECTED TO BE AT LARGE. PRESIDENT TRUMP HAS SCHEDULED ANOTHER CAMPAIGN STYLE RALLY, THIS TIME IN NASHVILLE, TENNESSEE. THE PRESIDENT'S CAMPAIGN WEBSITE -- WHICH IS STILL IN OPERATION -- IS ADVERTISING THE EVENT NEXT WEDNESDAY AT THE NASHVILLE MUNICIPAL AUDITORIUM. IT WILL BE THE PRESIDENT'S SECOND CAMPAIGN STYLE RALLY SINCE HIS INAUGURATION. U.K. PRIME MINISTER THERESA MAY SAYS "IT IS TIME TO GET ON WITH LEAVING THE EUROPEAN UNION." IN BRUSSELS, BLOOMBERG'S CAROLINE ASKED THE PRIME MINISTER WHY SHE BELIEVES SHE CAN WRAP UP A TRADE DEAL WITH THE EU IN TWO YEARS WHEN THE DANISH PRIME MINISTER HAD SAID IT COULD TAKE AS MANY AS 15. >> THAT IS THE TIMETABLE WE ARE WORKING TO, AND THAT IS THE TIMETABLE THE EUROPEAN UNION IS WORKING TO. IF I AM OPTIMISTIC THAT WE CAN ACHIEVE A GOOD AND COMPREHENSIVE FREE TRADE TO A WITH THE EUROPEAN TRADE UNION -- WHY AM I OPTIMISTIC ABOUT THAT? IT IS NOT JUST IN THE UK'S INTEREST. IT IS IN THE INTEREST OF THE EUROPEAN UNION. MARK: PRIME MINISTER MAY SAID SHE WILL TRIGGER ARTICLE 50 OF THE LISBON TREATY TO BEGIN THE OFFICIAL EXIT PROCEEDINGS BY THE END OF THE MONTH. DOCTORS IN JAPAN SAY THE 185 CASES OF THYROID CANCER FOUND IN CHILDREN WHO LIVED NEAR THAT 2011 FUKUSHIMA NUCLEAR DISASTER CANNOT BE LINKED TO RADIATION. THE DOCTORS AT SIX -- AT FUKUSHIMA MEDICAL UNIVERSITY SAY THE CASES WERE FOUND TO DO TO BLANKET SCREENING AND NOT DUE TO RADIATION THAT LEAKED FROM THE PLANT. THEY ALSO SAID THAT THE EVACUATION'-- IF ACCURAY'S -- EVACUEES'STRESS AND LIFESTYLES HAVE CONTRIBUTED TO THE PROBLEMS. GLOBAL NEWS 24 HOURS A DAY POWERED BY OVER WHEN HE 600 ANALYSTS IN 120 COUNTRIES. SCARLET: LET'S GET A REACTION TO TODAY'S MARKETS. WHEN YOU LOOK AT EQUITIES, HO-HUM. WHEN YOU LOOK AT OIL, A DIFFERENT STORY. JOE: THE 10 YEAR YIELD HITTING 2.6 TODAY AS EVERYONE GEARS UP OR TOMORROW'S JOBS REPORT. SCARLET: OIL DIPPING BELOW $50 A BARREL, FINALLY BREAKING OUT OF THAT RANGE. JOE: FIFA WHAT'D YOU MISS? JPMORGAN CEO JAMIE DIMON BELIEVES PRESIDENT TRUMP WILL GET AT LEAST PART OF HIS AGENDA DONE. THIS WAS PART OF THE GLOBAL MARKETS CONFERENCE IN PARIS. DIMON WAS ASKED IF HE WAS CONFUSED ABOUT WHAT THE TRUMP ADMINISTRATION IS GOING TO DO FOR THE ECONOMY. >> LOOK AT THE POLICY. LOOK AT THE TWEETS. LOOK AT THE PEOPLE ON THE GROUND. THEY ARE SECRETARIES OF STATE, SECRETARY OF TREASURY. SERIOUS PEOPLE WITH DEEP KNOWLEDGE AND DEEP EXPERIENCE, AND THEIR MISSION IS TO HAVE A GROWTH AGENDA, AND THAT AGENDA IS REDUCING CORPORATE TAXES, STARTING TO BUILD BETTER INFRASTRUCTURE, WHICH WE DEFINITELY NEED, REDUCING THE REGULATORY REGIME. GROWTH IS GOOD FOR ALL AMERICANS. MIDDLE-CLASS, GROSS PAY, JOB CREATION. IT'S A PROGROWTH AGENDA. >> DO YOU HAVE ANY DOUBT THAT HE WILL BE ABLE TO FOLLOW THROUGH? >> THE REPUBLICANS HAVE THE HOUSE, THEY HAVE THE SENATE, THEY HAVE 30 PLUS GOVERNORSHIPS. THEY HAVE A BETTER CHANCE OF GETTING THOSE THINGS DONE. I DON'T KNOW THE EXACT TIMETABLE. THEY HAVE TO DO THIS STUFF. THE DEMOCRATS DENIED THAT TAXES ARE TOO HIGH. EVERYBODY WANTS GOOD INFRASTRUCTURE. MOST PEOPLE ACKNOWLEDGE THAT IT'S TIME TO LOOK AT THE REGULATORY REGIME AND RECALIBRATE AND MAKE SURE THAT IT IS CONDUCIVE TO GROWTH AND DOESN'T HURT SMALL BUSINESS FORMATION AND THINGS LIKE THAT. >> TO JAMIE DIMON, WHAT IS THE ONE QUESTION YOU GET ASKED THE MOST BY YOUR CLIENTS WESTERN MARK IS IT ON -- CLIENTS? IS IT ON TRUMP OR IS IT ON CHINA? >> THESE ARE INVESTING CLIENTS. WE TRY A LOT OF RESOURCE EXECUTION. MOSTLY, IT'S AROUND THE NEW ADMINISTRATION. PEOPLE ARE GOING TO BE BOTH CONCERNED, INTERESTED, ETC., AND AROUND THE WORLD, IT'S TRUMP, I MEAN, MOSTLY ABOUT TRUMP. TODAY AT LUNCH, I ASKED AROUND THE TABLE, WHAT DO YOU WANT TO TALK ABOUT? WE DID NOT GET TO TRUMP UNTIL THE SEVENTH QUESTION. >> WHAT WAS THE FIRST? >> A LOT ABOUT REGULATORY, INCLUSIVE CAPITALISM, AND THINGS LIKE THAT. >> INVESTORS ARE CONCERNED IT WILL AFFECT THEIR INVESTMENTS, OR MORE INTELLECTUAL STRENGTH AND HOW THEY NEED TO INVEST? >> THEY ARE THINKING LONG TERM. I THINK CAPITALISM COULD DO A BETTER JOB OF CREATING JOBS, MORE WAGES, BETTER SKILLS. ONE OF THE REASONS WE DID A BUSINESS ROUNDTABLE IS BECAUSE I BELIEVE IN PROMOTING WAS GOOD FOR ALL AMERICANS, INCLUDING EXPANDING THE EARNED INCOME TAX CREDIT. THEY ARE SOCIALLY ADVANCED, THEY GIVE MEDICAL BENEFITS, THEY TRAIN PEOPLE. WE COULD DO A BETTER JOB IN TERMS OF POLICIES THAT ARE BETTER FOR THE COMMUNITIES. THAT'S TRUE IN EUROPE, THE UNITED STATES, AND WE CAN ONLY SKEWED BY GOING IN BUSINESS. EDUCATION IS IMPORT AND TO BUSINESSES WHO HIRE PEOPLE -- WE CAN ALWAYS KEEP THAT GOING IN BUSINESS. EDUCATION IS IMPORT TO BUSINESSES WHO HIRE PEOPLE. >> DO YOU THINK PRESIDENT TRUMP HAS WOKEN UP THE ANIMAL SPIRIT? >> IT SEEMS LIKE HE HAS WOKEN UP THE ANIMAL SPIRIT. WE HAVE NEVER HAD SUCH A PRO-BUSINESS PRESIDENT ENDS THE FOUNDING FATHERS. I'M NOT SURE THAT'S TRUE, BUT CONSUMER TEST SINCE THE FOUNDING FATHERS. I'M NOT SURE THAT'S TRUE, -- SINCE THE FOUNDING FATHERS. >> IF YOU LOOK AT A LOT OF THE INDICES, A LOT OF THE MARKETS, THEY HAVE RECORD HIGHS. HOW MUCH OF WHAT IS EXPECTED IS PRICED IN? EVEN IF HE DOESN'T DELIVER A TINY BIT, ARE WE GOING TO SEE A CORRECTION? >> I DON'T TO WORRY ABOUT THAT TOO MUCH. NOW, WE HAVE TO DO IT. IT'S GOING TO TAKE TIME. WITH A TAX SCHEME, INFRASTRUCTURE SCHEME, HOW IS IT GOING TO WORK, IS IT AS GOOD AS HE PROMISED QUESTION RIGHT IF YOU GET IT DONE, EVEN PART OF IT, IT WILL BE GOOD FOR JOBS, GOOD FOR AMERICA. >> WILL HE GET IT RIGHT? THE REGULATION FOR WALL STREET BANKS CUSTOMER >> -- BANKS? >> I THINK SO. WE WANT TO BE A REASON VOICE TO LOOK AT THOSE THINGS INSIDE NOT JUST DODD-FRANK THAT REGULATIONS THAT NEED TO BE RECALIBRATED, COORDINATED. THERE ARE TOO MANY PEOPLE INVOLVED IN THE MORTGAGES. WE DON'T HAVE MORTGAGE RULES YET. FIRST TIME BUYERS, SMALL BUSINESS OWNERS, WE NEED TO DO IT FOR THE SAKE OF ALL PEOPLE. NO ONE, WHEN IT IS DONE, CAN SAY IT WAS PROPER, FAIR, COORDINATED, CONSISTENT. JUST OPEN IT UP, HAVE AN INTELLIGENT CONVERSATION ABOUT WHAT THE SIDE EFFECTS ARE AND CAN WE GET THE ECONOMY GROWING FASTER? IF YOU DON'T HAVE A HEALTHY FINANCIAL SYSTEM, YOU ARE NOT GOING TO HAVE A HEALTHY ECONOMY. KEEP THAT IN MIND. IT'S GOOD FOR THE CITIZENS OF THE COUNTRY. IT'S NOT GOOD FOR THE FINANCIAL PLAYERS, IT'S GOOD FOR THE CITIZENS OF THE COUNTRY. DAMAGING THE FINANCIAL SYSTEM IS A BAD IDEA IF YOU WANT JOBS AND GROWTH. >> YOU FEEL IN TERMS OF DIALOGUE, THE ADMINISTRATION IS HEALTHY AND CONSTRUCTIVE. ARE YOU SPEAKING TO GARY: OR HIM DIRECTLY? >> TERRY COLLINS, STEVE MNUCHIN, PEOPLE INVOLVED IN DODD. I AM A FIRM BELIEVER THAT COLLABORATION WILL WIN. FINGER-POINTING WON'T. THERE ARE SOLUTIONS TO PROBLEMS -- YOU KNOW, I ONLY SAY, WHAT DO YOU WANT THE OUTCOME TO BE AND HOW ARE WE GOING TO GET THERE? SOCIETY AND BUSINESS COLLABORATE TOGETHER. I APPLAUD HIS OUTREACH. I APPLAUD HIS PRO-BUSINESS. WE ARE JOINED TO TAKE CARE OF OUR PEOPLE AND OUR CLIENTS. DURING THE CRISIS, WE DO NEED GOVERNMENT HELP. WE WERE TRYING TO HELP PEOPLE. I WANT TO MAKE SURE WE DO OUR JOB HELPING GROW. JOE: THAT WAS PART OF OUR EXCLUSIVE INTERVIEW WITH JP MORGAN CHASE CHAIRMAN AND CEO JAMIE DIMON. AND A PROGRAMMING NOTE, GARY COHN, DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL JOINS BLOOMBERG TELEVISION TOMORROW AT 9:30 A.M. EASE TURN ON JOBS DAY. -- EASTERN TIME ON JOB STAY. YOU WON'T WANT TO MISS THAT. SCARLET: COMING UP, THE YIELD CROSSING 2.6%. IT JUST WENT TO A SESSION HIGH AND HAS COME BACK A LITTLE BIT. THAT'S THE LEVEL BROKER SAID WOULD MARK THE BEGINNING OF A BEAR MARKET ON A WEEKLY BASIS. WE WILL DISCUSS WITH THAT SIGNALS NEXT WITH OUR GUEST. THIS IS BLOOMBERG. ♪ JOE: WHAT'D YOU MISS? BACK IN JANUARY, BILL GROSS MADE A CALL ON THE 10 YEAR YIELD WHEN HE'S AHEAD -- HE SAID IF YIELDS WERE HIGHER THAN 2.6%, A SECOND THERE -- BEAR BOND MARKET HAS BEGUN. TODAY, WE ACTUALLY PASSED THAT MARK. TAKE A LOOK AT THE BLOOMBERG CHART. FOR MORE, LET'S BRING IN BNP PARIBAS CHIEF ECONOMIST PAUL LEE. IS THIS THE START OF SOMETHING BIG? WHAT IS THIS TELLING US AND WHERE COULD IT GO? >> WE ARE IN A GLOBAL TIGHTENING, PARTICULARLY IN THE U.S. WE ARE A FULL EMPLOYMENT. THE BUDGET DEFICIT IS GOING TO GO UP. HOPEFULLY, BY THE END OF THIS YEAR, THE FED IS GOING TO ADJUST THE BALANCE SHEET'S. ON YIELDS ARE TOO LOW AT THE MOMENT. WE ARE GOING TO GO CONSIDERABLY HIGHER. THE TARGET IS 350 BY THE END OF THE YEAR. IT'S GOING TO BE PRETTY MESSY. SCARLET: 350. COME INSIDE THE BLOOMBERG FOR A MOMENT. RIGHT NOW, THE CONSENSUS AMONG ECONOMISTS IS 2.8% BY THE END OF 2018. 3.50% IS A HUGE LEAP FROM THERE. >> WE THINK TOGETHER WITH THE FACT THAT WE SEE GLOBAL RATES GOING HIGHER, WE SAW TODAY, BOND YIELDS IN EUROPE PICKED UP BECAUSE THE ECB IS SIGNALING -- NOT IMMEDIATELY, BUT IT'S GOING TO BE TIGHTENING, PROBABLY NEXT YEAR. IT COULD BE RAISING RATES AS SOON AS SEPTEMBER ACCORDING TO US. SO THE GLOBAL FACTORS ARE PUSHING US TOWARD HIGHER BOND YIELDS. JOE: I, FOR ONE, APPRECIATE THAT YOU DON'T HAVE A FORECAST THAT'S JUST RIGHT THERE IN THE METAL. SINCE YOU BROUGHT UP THE ECB, LET'S GO TO THAT. LOTS OF PEOPLE GOING INTO THIS MEETING WONDERING HOW DRAGHI WAS GOING TO THREAD THE NEEDLE, NOT WANTING TO SPOOK MARKETS TOO MUCH. WHAT WAS THE KEY THING YOU LEARNED TODAY? >> THEY ARE MUCH MORE CONFIDENT IN THE GROWTH OUTLOOK. THEY EDGED UP THEIR INFLATION FORECAST, CORE INFLATION. THEY'RE STILL NOT WHERE THEY WANT TO BE, BUT WE ARE GOING TOWARD THE EXITS. I THINK WE HAVE TO WAIT UNTIL THERE ARE SOME MORE SIGNIFICANT DEVELOPMENT'S, UNTIL AFTER THE FRENCH ELECTIONS, TO BE HONEST. THE JUNE MEETING, I THINK WE WILL SEE CHANGING LANGUAGE. THE KEY THING IS, CURRENTLY THEY SAY RATES WILL BE AT CURRENT OR LOWER LEVELS TO WELL AFTER QE. HE WAS ASKED, COULD YOU RAISE RATES BEFORE YOU AND QE, AND HE DIDN'T ANSWER. THE FACT THAT HE DIDN'T ANSWER TELLS YOU THEY HAVE THAT OPTION VERY MUCH IN MIND. SCARLET: FOR THE PEOPLE WHO SAY THE ECB SHOULD NOT GO AHEAD WITH LOOKING TO REMOVE ACCOMMODATION, THEY POINT TO INFLATION. COME INSIDE THE BLOOMBERG. THAT IS THAT BLUE LINE. CORE INFLATION AT 0.9 PERCENT. THERE IS NO INDICATION ACCORDING TO DRAGHI AND LOTS OF PEOPLE THAT IT'S GOING TO BE ABLE TO STAY AT THOSE LEVELS. YOU SAY, HOWEVER, THAT THE DIFFERENCE IS THAT EU INFLATION WAS JUSTIFICATION FOR QA THE FIRST TIME AROUND. >> THE REASON THEY INTRODUCED QE WAS THE DOWNSIDE RISK TO INFLATION. THEY THOUGHT -.6% INFLATION THAT WE HAD IN JANUARY 2015 COULD SPILL OVER INTO DEFLATION. THOSE RISKS ARE NOW GONE. IT'S LIKE WHEN YOU HAVE AN UMBRELLA. DO YOU TAKE IT DOWN WHEN IT STOPS RAINING? OF COURSE YOU DO. THE ECB SHOULD TAKE DOWN ITS UMBRELLA. JOE: I LIKE THAT. I HAVE A CHART HERE ON THE BLOOMBERG COMPARING THE GERMAN CURVE, TWO SNAPSHOTS IN TIME. THE WHITE LINE IS THE LATEST. THE BLUE LINE TWO YEARS AGO. MUCH LOWER AT THE SHORT END. STARTING TO GET A LITTLE BIT HIGHER AT THE LONG END. YOU MENTIONED THE FRENCH ELECTIONS AS BEING ONE POSSIBLE IMPEDIMENT. IN GENERAL, VARIOUS POLITICAL THINGS KEEP DOUBLING UP IN EUROPE. IT'S PROBABLY NOT GOING TO BE THE LAST -- BUBBLING UP IN EUROPE. IT'S PROBABLY NOT GOING TO BE THE LAST HURDLE. THERE IS ITALY. THERE IS GREECE. GERMANS ARE IRRITATED BY THE FACT THAT THINGS HAVE BEEN HELD SO LOW, SO LONG. IS THERE ANYTHING THAT STARTS TO RESOLVE SOME OF THESE DEEP STRUCTURAL ISSUES? >> WE HAVE A NUMBER OF ELECTIONS THIS YEAR. SO THEY WILL BE OUT OF THE WAY. THE DIALS WILL DIMINISH. GROWTH IS NOT PARTICULARLY FAST, BUT IT WAS FASTER THAN THE U.S. IN 2015, MARGINALLY, AND UNEMPLOYMENT IS GOING DOWN. SO, AS GROWTH PICKS UP, ON EMPLOYMENT GOES DOWN, SOME OF THE POLITICAL WORRIES SHOULD FATE, PARTICULARLY WHEN WE GET PAST THE THREE ELECTIONS WE HAVE THIS YEAR, POSSIBLY FOUR. SCARLET: HOW MUCH DOES THE ECB MISTAKE IN 2011 LIVE OVER IT, WHEN THE CENTRAL BANK RAISED RATES AND CHOKED OFF RECOVERY? HOW MUCH DOES THAT PLAY IN THEIR MINDS AND INFLUENCE DECISION-MAKING, AND REALLY GIVE THEM REASON TO PAUSE EVERY TIME THEY ARE ABOUT TO DO SOMETHING QUESTION MARK >> I CAN GET DOES GIVE THEM REASON TO PAUSE. THE OVER -- SOMETHING? WAKE'S I THINK IT DOES GIVE THEM REASON TO PAUSE. SOME OF THE PERIPHERAL COUNTRIES, FOR EXAMPLE, ITALY, WHOSE RECOVERY IS YEARS BEHIND GERMANY'S, OBVIOUSLY WANTS TO DRAG THEIR FEET. THEREFORE, ECB POLICY HAS TO BE SOMETHING OF A COMPROMISE. SCARLET: THANK YOU. OUR NEW SHOW, "BLOOMBERG REAL YIELD," WILL DEFINITELY BE TALKING ABOUT THE 10 YEAR AND THE ECB. IT AIRS FRIDAY AT NEW AND. JONATHAN WILL BE ALL OVER THE 10 YEAR YIELD. -- FRIDAY AT NOON. JONATHAN WILL BE ALL OVER THE 10 YEAR YIELD. THIS IS BLOOMBERG. ♪ SCARLET: WHAT'D YOU MISS? ONE OF DONALD TRUMP'S MOST BOLD CAMPAIGN PROMISES WAS TO GET RID OF THE NATIONAL DEBT. NOW THAT HE IS IN THE WHITE HOUSE, CAN HE MAKE GOOD ON HIS COMMITMENT TO WIPE THE SLATE CLEAN? FOR MORE, LET'S BRING IN OUR ECONOMICS EDITOR. >> IT'S NOT GOING TO HAPPEN. THE LAST TIME THE U.S. HAD NO NATIONAL DEBT WAS 1835. IT WAS OVER $19 TRILLION WHEN TRUMP SAID THIS LAST APRIL, AND NOW IT'S CLOSING IN ON $20 TRILLION. THE PROJECTION IS FOR IT TO GO UP AND UP, CERTAINLY NOT DOWN, NOT WITH TRUMP'S FANTASTIC ENDING PLAN. JOE: -- SPENDING PLAN. JOE: I LIKE THAT YOU TOOK THE TIME TO CONFIRM IT'S NOT GOING TO HAPPEN. I THINK EVERYONE KNOWS THAT. IT'S CLEARLY NOT GOING TO DISAPPEAR. THE BIGGER QUESTION IS THE ATTITUDES AROUND GOVERNMENT AND SPENDING AND DEBT. THEY SEEM TO BE POLITICAL. HAS THERE EVER BEEN AN ADMINISTRATION IN POWER THAT TRIED TO EXERCISE FISCAL RESTRAINT? >> WELL, WHAT WE SAW AFTER WORLD WAR II WAS THAT THE FEDERAL DEBT , AS A SHARE OF GDP -- WHICH IS THE NUMBER THAT MATTERS -- WAS DETERMINED BY THE SIZE OF THE ECONOMY. IT FELT VERY -- IT FELL VERY NICELY FOR DECADES BECAUSE THE ECONOMY WAS GROWING STRONGLY. THEN IT WAS GROWING, BUT AT A SLOWER RATE. IT GOT WELL UNDER CONTROL. YOU CAN SEE THAT ON THE CHART. SO YES, IT CAN HAPPEN. THE LESSON THERE IS, IF YOU ARE CONCERNED ABOUT THIS AND YOU THINK WE NEED TO GET THE NUMBER LOWER, YOU SHOULD BE PURSUING POLICIES THAT PROMOTE GROWTH, NOT NECESSARILY THAT TARGET SPENDING DIRECTLY. JOE: THAT IS WHAT TRUMP IS ARGUING FOR. IT MAKES A CERTAIN AMOUNT OF SENSE. >> GROWTH IS GOOD. NOBODY IS GOING TO COMPLAIN ABOUT GROWTH. THE QUESTION IS HOW MUCH WE CAN EXPECT. CAN YOU JUST LET SPENDING GO AND CUT TAXES TO THE BONE AND COUNT ON GROWTH TO BAIL YOU OUT? THE HISTORY SAYS NO. I SPOKE TO A HARVARD UNIVERSITY ECONOMIST WHO HAS WRITTEN A LOT ABOUT DEBT, ESPECIALLY IN DEVELOPING COUNTRIES. HE SAID THAT IS THE CLASSIC LINE WHENEVER A HEAD OF STATE WANTS TO GET OUT OF A STICKY PROBLEM. HE OR SHE WILL ASSERT THAT GROWTH WILL TAKE CARE OF IT. SCARLET: USE GROWTH AND THAT WILL SOLVE EVERYTHING. HERE IS WHAT CRITICAL. WHEN YOU WANT TO ADDRESS THESE ISSUES, WE HAVE A SITUATION NOW WHERE WE NO LONGER HAVE A LOGJAM IN CONGRESS. YOU HAVE ONE PARTY CONTROLLING CONGRESS AND THE WHITE HOUSE. >> EXACTLY. BILL GALE, BROOKINGS, SAID WHEN THAT HAPPENS, THAT IS WHEN YOU REALLY SEE THE BIG DEFICITS BECAUSE YOU HAVE SOMEBODY'S HAND IN THE COOKIE JAR AND NOBODY SLAPPING IT AWAY. JOE: GOING BACK TO LAST SEVERAL YEARS, THERE WERE PROBABLY A LOT OF SPENDING INITIATIVES OBAMA WOULD HAVE LIKED TO HAVE DONE, INFRASTRUCTURE, BUT REPUBLICANS BLOCKED IT. SUDDENLY, A THEORETICAL IDENTICAL FOR BASEL HAS A MUCH BETTER CHANCE OF PASSING. >> YOUR -- IDENTICAL PROPOSAL HAS A MUCH BETTER CHANCE OF PASSING. >> YOUR LAST GUEST TALKED ABOUT THE 10 YEAR YIELD. YIELDS WOULD GO UPWARD WHEN EVER PEOPLE FEEL THE GOVERNMENT WAS LOSING CONTROL OF FINANCES. THE YIELD DID BUMP UP AFTER THE ELECTION, BUT SETTLED AROUND 2.5%. THE LAST FEW DAYS IT HAS BEEN 2.6%. THAT IS SOMETHING TO PAY ATTENTION TO. IT MAY BE THAT THE MARKETS WILL CHANGE THEIR MINDS AND SAY ACTUALLY, WE ARE GETTING A LITTLE WORRIED HERE. JOE: OUR BLOOMBERG ECONOMICS EDITOR. THANK YOU VERY MUCH. SCARLET: TIME FOR THE BLOOMBERG BUSINESS FLASH. SAUDI ARABIA OIL COMPANY HAS ADDED EVER CORE -- EVERCORE PARTNERS TO ITS PLANNED IPO. ACCORDING TO PEOPLE FAMILIAR WITH THE MATTER, THE COMPANY WE ARE TALKING ABOUT IS ARAMCO. IT IS ALSO IN TALKS TO UNDERWRITE THE IPO. COCA-COLA CEO IS IN TALKS TO STEP DOWN. ACCORDING TO REGULATORY FILINGS, HE RECEIVED A SALARY OF $1.6 MILLION, STOCKS AND OPTIONS WORTH $9.5 MILLION AND INCENTIVE PAY WORTH -- THE COMPENSATION IS AN INCREASE FROM THE $14.6 MILLION HE RECEIVED IN 2016. -- IN 2015. AIRBNB CLOSED A FUNDING ROUND OF $1 BILLION. THE HOME SHARING STARTUP IS NOW VALUED AT 31 BILLION DOLLARS. BLOOMBERG REPORTED THE COMPANIES PAY -- PLAN TO INCREASE FUNDING. SINCE ITS START IN 2008, AIRBNB HAS RAISED MORE THAN $3 BILLION. HOUSEHOLD WEALTH IN THE U.S. CONTINUED TO INCREASE IN THE FOURTH QUARTER AS FINANCIAL ASSETS AND REAL ESTATE VALUES APPRECIATED. THAT'S ACCORDING TO NEWLY RELEASED FIGURES FROM THE FEDERAL RESERVE. NET WORTH GREW BY TWO TRILLION DOLLARS TO A RECORD $92.18 TRILLION FROM THE PRIOR FEW MONTHS. THAT IS YOUR BUSINESS FLASH UPDATE. COMING UP, WHAT YOU NEED TO KNOW TO PREPARE FOR TOMORROW'S TRADING DAY. THIS IS BLOOMBERG. ♪ SCARLET: BOND YIELDS SOARED AND CRUDE OIL DIPPED BELOW $50. DON'T MISS THIS. WE HAVE A BIG JOBS REPORT TOMORROW AND IT COMES OUT AT 8:30 A.M. EASTERN. WE HAVE NONFARM PAYROLLS, ECONOMISTS LOOKING FOR 200,000 ADDED. JOE: THE UNEMPLOYMENT RATE IS EXPECTED TO TAKE LOWER TO 4.7% FROM 4.8%. SCARLET: ELUSIVE EARNINGS GROWTH, WAGE GROWTH, THAT IS WHAT EVERYONE IS LOOKING FOR. IN JANUARY, WE HAD A READ OF 24 -- 2.5%. JOE: THAT'S ALL FOR WHAT'D YOU MISS? HAVE A GOOD EVENING. SCARLET: THIS IS BLOOMBERG. ♪ >> LET'S START WITH A CHECK OF YOUR FIRST WORD NEWS. THE U.S. HAS ASKED NATIONS FIGHTING ISLAMIC STATE TO MEET IN WASHINGTON. OFFICIALS SAY THE PLAN IS TO PLAN THE NEXT MOVE AS THE MILITARY LOSES GROUND IN IRAQ AND SYRIA. IT WILL BE LED BY SECRETARY OF STATE REX TILLERSON. WASHINGTON STATE IS ASKING TO

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Full Show: What'd You Miss? (03/09)

Full episode of "What'd You Miss?" Guests include: Stephen Roach, senior fellow at Yale University and former chairman of Morgan Stanley Asia, John Kelly, IBM senior vice president, Benjamin Segal, Neuberger Berman portfolio manager, and Paul Mortimer-Lee, BNP Paribas North America chief economist. (Source: Bloomberg)

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