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tv   Bloomberg Markets Americas  Bloomberg  July 11, 2017 12:00pm-1:00pm EDT

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ties to russia. we are looking at major market reaction. they have recovered for the most part the dow jones is only down 13 points. tenure treasury of buyinge bit treasuries on that. donald trump junior was told in he would receive damaging information about hillary clinton at a meeting with a kremlin connected lawyer from russia. the email says the russian government was trying to help the trump election bid. latest us now with the is the chief washington correspondent kevin cirilli. marty, let me come to you first
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read is it obvious it any crime has been committed? .arty: not yet everybody is trying to figure out what the legal definition of collusion is. you're not allowed to take anything of value from a foreign government. we are trying to parse this email and figure out what the legal liability is. mr. trump'sod for son. i wanted to read one portion of the email. they said there was going to be help from russia. this is high level information. marty, that's more than we were expecting. that's pretty blatant. support may not be interference, it's more than just good wishes.
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email,later in that there is an even more damning quote where he says if you have what you say, love it. only he wass not anticipating some useful information, he was already strategizing how to use it. vonnie: let me ask you about the involvement of jerod kushner and paul manafort. they were at the meeting with this lawyer. it was set up. then: this came during summer of 2016. paul manafort was the campaign manager. he was working with jerod kushner and donald trump junior. to someone who said they wanted to get this information out as quickly as possible. nothingl they did legally wrong.
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question that this is bad. anything ont cloud policy issues republicans want to move ahead on in congress. i spoke with a senior republican strategist who works with the trump administration. this looks badbt politically. the presence son was not seeking a clearance from national security. legal not have a obligation to report the meeting. we are going to be looking into that. has a clearance during the campaign. o'brien is also with us. there is a pattern he established.
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the net is even wider. tim: the first question is why donald trump junior released these? it's another moment. they are prioritizing a media campaign. i don't think they are thinking about the legal circumstances. that question gets raised. the second thing is they are certainly in legal consequence now. these emails establish a point in time where they are openly colluding with russian operatives. did the president know about it? did other people know about it? tonie: whose job is it now steer the dialogue? happens, there are going to be years of investigations.
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of public perception of what's going on, who should step in here and make sure the message is heard? marty: it's us in the fake news business. we have to keep on the story. various congressional investigations. we have the trump administration constantly criticizing the media for covering those revelations. ultimately, the dialogue is going to have to be from the facts as we know them. we are going to have to continue to report this story. we will take it where it leads. impact trump'sis supporters? they probably don't like russian meddling. time, they are very
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supportive of the candidate and his family. tim: i doubt anything about russia matters to trumps core supporters. i think they are looking for jobs. republicans who voted for him are looking for tax cuts. if this ends up with legal charges, it will matter to everyone. vonnie: we have had some responses from the democrats. nancy pelosi has been very vocal. there has been nothing from the hillary side. what will they say? will they try to open old wounds? kevin: this is going to continue. the criticism is coming on capitol hill. tomorrow, the fbi nominee is set
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to testify. he will have that testimony. he will have to talk about how he will continue the investigations that are ongoing, looking into the campaign connections. they will continue. there is a deep frustration among staffers. administrations inability to move beyond this. that is from a policy standpoint why this is only going to continue frustration. it remains to be seen how the president treats this. his son does not work with the restoration. it's possible he won't take any part in any of this. is there a defense here that rob goldstone is just a former british tabloid marketing
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person? marty: the one thing donald trump has avoided is tweeting about these meetings. cannot fire his son. he is still going to be his son no matter what happens. that is going to be very problematic. if there are any legal consequences, this story is now out there. it's going to be with him through the administration. it's going to linger. the cloud over this administration got darker. vonnie: it's almost not so much to do with trump junior, but jerod kushner who has a very active role in the administration. tim: they blurred the line. -- thosebeen very
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blurred boundaries are going to haunt them. aboutaven't been smart that worried people move in and out of these offices. from the trump organization into the white house, there are not clear boundaries. vonnie: fantastic roundtable. thanks to everybody. we are halfway into the trading day. it just got interesting. julie hyman is joining us. julie: there was a market reaction to the release of these emails. whether it's logical or not and sometimes the markets are not logical, we did see a clear reaction. one of our producers was emailing and he said this called into credibility the credibility
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of the administration. we've been bouncing around a little bit worried the s&p has shown the wrist and most lasting reaction. if you look at the chart, you see that rob. it has recovered to some degree. the other interesting evidence of reaction can be seen in trading volume. take a look at the bloomberg area -- bloomberg. these are the average volumes of the past 20 days. 11:20 a.m., the spike today, you saw that in volume versus the average. things calm down a little bit quickly. he called it very quiet. if you follow the white bars and you come to where we are, you've got volume at 15% low the 20 day
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average. now, it has come back down. we will keep looking at that and see if other headlines come out as well. one of the groups doing the worst is the financials. they are all under pressure at the moment. at the same time we saw a selloff in stocks, we saw some buying come in. the 10 year yield was pushing lower. that seem to have a ripple effect. showing as is not dramatic a reaction as we saw with the s&p 500. we charted the 10-year is well. we did see something of reaction. you see that drop in yield. that is enough to push down financials and drag down the s&p 500. mark: if you took an early
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lunch, you could've missed whole thing. vonnie: coming up, how they are hedging their investments. andook at how health care taxes matter. this is bloomberg. ♪
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vonnie: this is bloomberg markets. let's get a check of the first mark: donald trump responding to the possibility of receiving damaging information from hillary clinton. the newports the emails
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york times obtained. these emails percent before he met with a kremlin connected lawyer. the information was coming from the russian government. qatar torson is in mediate that dispute. premier, met with the signing and anti-terror agreement. both ensures that countries are responsible for their commitments. we will do more to track down funding sources and collaborate with. we will keep our homeland safe and mark: at least 16 people are dead in the crash of a military aircraft in mississippi. the plane went down in a soybean field.
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it's not clear what caused that crash. it originated in north carolina. northern ireland's democratic unionist party will push to exit the single market. on bloomberg radio. up party is key to propping theresa may's agenda after she failed to lock down a majority in parliament. she needs the 10 lawmakers to pass laws. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. vonnie: thank you. president dollar trump's plan to overhaul the tax code could be in place by august. either way, how are investors planning? director atmanaging blackrock.
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they oversee $30 billion in assets. we are pleased to have him. let me start with the theme of the day. this about pushing through the republican ideas. relief --ence of tax there is a problem with that. brian: everybody is thinking about washington. where we going to get to? when you step back and look at the equity markets, it comes back to certainty in the market.
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this is one of the things we can talk about today. what do we have in our portfolios to make sure there is risk dampening and volatility dampening? washington is part of that. funds, things were you can be market neutral and agnostic to the direction of the markets. that is important. they look at washington and what happening there. vonnie: they are more exposed to alternatives. >> you see this massive rise. it's a bad move? brian: was really happening is a re-examination and looking back. how does active and passive the together?
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how do our portfolios mix? they are looking at reevaluating hedge funds and how those components work together and use the tools have been blessed with. it helps them think through that equation. what hedge funds do we have western mark -- have? sometimes, some of the data that might be in those bonds. that is an important point that's the big shift that is happening. we see this huge line in passive. about active and passive. it's both of them and how they work together. >> are you seen them do more on their own? that is something that surprised me.
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rise ine are seeing a general. it's trillions of dollars in the hands of people in the united states. that is significant uplift from where it was 10 years ago. the types of professionals they have involved and the investments they are looking to do are some of the most interesting happening in the marketplace. this is where they get real growth. we have been helping them think about origination of coinvestment and interesting private equity opportunities. >> on know you talked a little while ago about the biggest concern. mentioned,things you why is that? is it more wealthy families than the average person?
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group we got together a in new york. we get some informal things in the room. this is a slowdown in china as the number one fear. how everything is interconnected. i think they see their own privacy issue. -- fact that the markets are i think to a degree depends and how large it is. a double-edged sword. technology is redeveloping. that is a great thing. it's really interesting. side, it's other
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connect now. people are very focused on that. it's an interesting point. technology,king of our families thinking about locating a little bit western -- bit? brian: how do we incorporate those funds? through private i really and private capital and think about growing the company? it's with us to stay. technology is reshaping everything. it's an incredible opportunity. i think back to your original reshape, it's time to how to mitigate any potential
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volatility that might be coming down the road. vonnie: great conversation. thanks for that. i want to mention breaking news. we have been following this story for the last hour or so. he will testify before the intelligence -- intelligence committee. this is bloomberg. ♪
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vonnie: i want to reiterate. that donaldadline trump junior will testify before intelligence committee. he will testify before the
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intelligence committee. this after he released those emails that showed back in june that he did correspond with a british tabloid journalist trying to set up a meeting between him and the russian lawyer who had connections to the kremlin. russia was going to provide information that would be helpful to his father's candidacy. we saw the markets take a dip. we are back to where we were for most of the session. we are back to her we were. the 10 your -- the russian ruble is weakening. this is bloomberg. ♪
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vonnie: live from bloomberg world headquarters in new york, i am vonnie quinn. we had a dip and then we rallied
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acca. indices are still in the red. someil: we have seen volatility today. this is a chart of the s&p 500. it opened slightly lower. right around 11:10 a.m., this big nosedive down on the headlines that donald trump thatr received email russia won a help the campaign. outill see how this plays and if it becomes a new market fixation. , theorst sector on the day banking sector and financials. many of these banks are set to report on friday. leslie we are in a wait-and-see mode ahead of that period.
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downanks have been guiding numbers since may. have a great graphic that shows and a big piece of this comes from creating revenue. we have goldman, jpmorgan, bank of america, citigroup and morgan stanley. trading revenue could decline by 11%.ch as i spoke to one longtime wall street or a compass point financial. he says at this point this is priced in but investors are waiting to see the actual result. 11%. so long as the revenue trading guidance is in line, you probably see according to this wall street are some buying action. is weak around trading revenue, you can see more solid news. let's turn to the best sector, the only sector higher on the day, energy, oil of 1.7%. it had been down 1% earlier on concerns around saudi arabia's action. i did reach out to one trader and i spoke to michael bloomberg
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bloomberg prayed bloomberg trade michael is saying he thinks it is a continuation of what happened yesterday. we do have some of the energy related mainstream higher and sympathy, as for what is next for oil, this comes to us from mike mcclung, bloomberg commodity strategist, g #btv 2647. in white we have the price of oil and here we see between these 2 orange lines that trading range everyone is talking about between 40 and 50 and 50 and 55. we have the futures curve. tangoays it shows up can is narrowing. demand versus supply starting to improve. that could support oil over the long-term. it makes the point that never long positions on petroleum based products are near the lows we saw back during the crash. he seems to suggest if oil approaches $40, it could be an attractive buying opportunity.
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time will tell, but a very interesting chart there on oil, the futures curve, and some of those net longs. vonnie: donald trump acknowledging he was told before a meeting last year with a russian lawyer that he had potentially damaging information on hillary clinton that came from officials in moscow. the emails says the russian government was trying to help solve the election bid, at least supported, in the words of the email. for more, let's bring in shannon pettypiece. how damaging is this to the administration right now? to waitnk we will have and let this investigation play out. now, though, we do know this is going to put donald trump junior and jared kushner and paul manafort in increased legal jeopardy. it doesn't mean anything will come of it, but we now know that
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don junior will be going before congress to testify. will almost certainly attract the attention of special prosecutor bob mueller. there's multiple complaints now it violationand about of election and campaign laws. still ate are may be the beginning of all of this stuff and there's more that will come out, and this is sort of a snapshot in time of a campaign, not a full picture. but, increasingly, more snapshots are coming out. exactly, a pattern. from your knowledge of the beltway and how fast things move, could you imagine what the administration is doing right deciding howof close to stay to this story or how much to distance themselves from the story, and what is jared kushner doing right now? >> as far as the administration,
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it's the second day where the president has had no publicly scheduled event. yesterday there was a press briefing off-camera where huckabee saunders came out and really denied any collusion. there's another press briefing today off-camera this afternoon. we will have another round of these questions with information to see if she sits by that story. jennifer jacobs has been hearing from people within the administration saying there are some who are getting increasingly worried about this, who feel this meeting should not have taken place, and that it's not good, it's certainly not good for them. there are certainly other people who are still in the mentality of, this is fake news, there's nothing there, and feeling confident this is just some part of a grand conspiracy to get state or the deep
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media but others in the administration acknowledged this is a problem and this is trouble and that we may just the at the beginning, certainly not the end of what this investigation is going to unveil. vonnie: that's our white house correspondent shannon pettypiece in washington. donald trump junior will testify before the senate intelligence committee. we have this on senator john cornyn's word, he's the majority whip from texas. trump jr. will testify before the sell it -- senate intelligence community. this is according to our reporting, it would replace kisliyak, at the center of allegations between the kremlin and the trump campaign. the plot thickens. markets have been reenacting to all this news. themselves.reversed pretty back to where they were.
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joining me now is the managing director at citi, to talk today's move and lots more. today's move was big, it wasn't massive. it does show you that people's fingers are a little light to the touch these days. anything will set them off. >> if you look at the conditions in the market after the fourth of july holiday, volumes are very low. we have been running daily treasury trading volumes around 60% to 70% of the 20 day average of the last two days. you can news like the donald trump junior news, and that's enough to get people who are nervous and looking for something to do. even so, we've got some big events coming up with yellen testifying tomorrow, cpi data on friday, and as we are speaking, we have the fed governor giving a speech in new york that i think will be closely watched as well. vonnie: yes, the speech.
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tell us why this is such a major speech, and why janet yellen's testimony is so big this time around. the markets are at a juncture with 10-year yield, let's say where it's all, coming down to the inflation data. speech, fed governor brainard and away exuded some questions about whether the inflation dip of the last 3 to 4 months is as transitory as the fed states it minutesexample in the with the fed statement back in june. therefore, i would say between now and the september fomc meeting, what the markets really want to see is traction on the upside of inflation. otherwise, they would take some bets off. it's been a long time and a lot
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of people are increasingly worried or thinking that we are becoming more like japan, which has the type of labor markets i think in japanese history, you know inflation over there. this whole question about the level and slope of the curve for wages, i think by september if up, i't see, cpi pick think people are going to be concerned this is maybe more secular and less transient. vonnie: you recently turned bearish treasuries. finally. waiting for the moment. you got off an airplane and found there has been a 20 or 30 baisis point move. it was a relatively benign event. maybe the wrong word -- it was in this massive event that triggered this. give me your reasoning for being bearish. >> we look at the market and regimes. we had a five-month move on the july 6 lows, after brexit last
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year, up to the december 15. it was a 1.3% move. in the next six months up until basically the june fomc meeting, mid-month. we had a 50 basis point correction, 130 basis point mov e. during that bold flattening correction up until the middle of june, we had evidence that people were getting less and less short and increasingly long and flattening traits in the yield curve. we just thought there was such a crowd in those trades that the skew of risk was becoming increasingly asymmetric and increasingly bearish. vonnie: what is your target for the 10-year? >> we have 2 targets. two hit one, you have to leave the other. there's very good local support that we saw from i believe the price action in may, right around 242.
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we get very close to it in recent days but haven't left above that. similarly, above that you have to go back to the eyes of the year right around 263 and 10-yea r yield. i think that's achievable but we will need inflation to drive it there. i think it's also an interesting point that we've already seen canadian 10-year yields, and very recently german 10-year yields breakup of their 2017 range highs. and, so we are starting to see some global synchronization in this move to higher rates. but we've got to get above 242 first and see inflation data. vonnie: you are echoing what lael brainard has been saying. he said with inflation process for the next rate hike, the inflation process. that's a different word than typically is used. she considers normalization of rates as quote, unquote, well
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underway. we're hearing the global economy is experiencing synchronous growth and the -- how the central bank site may affect. but there's another thing to consider here, and that's potential for a new fed chair. what the former fed bank president had to say about this. >> i think randy is a terrific choice. i know him, i've worked with him on a few occasions. i think his approach is going to than somefferent regulators are. regulators in washington since the crisis have adopted a command and control strategy about the more things they can restrain or oversee and a bank or financial institution, the better off things are. that's not always the case. it's usually not the case. i think randy will be a voice of
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reason, a voice of questioning. of reason, and his job is to simply will be regulation and overseeing banks and so forth. he's also going to have a voice of monetary policy. what will that mean for monetary policy? >> it will make for very interesting fomc meeting straight you can be sitting among a lot of academics and appeared to hold some believe on the phillips curve idea. he was a rules-based approach. the way i think about -- i certainly don't know him personally, it seems to come with good experience from both treasury as well as asset management, is the mandate when the white house announced him, they want it to release the heavy hand of regulation on the financial system. and that therefore seems to be his mandate going forward. i think that should be good for the financial system, and just sort of backing away, even with
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the former acting vice chairman of supervision, the fed governor said yeah, maybe we did -- we need some. -- some -- vonnie: we have doves and hawks and people who believe more, this type of economics and little bit more in this brand think this is something different from the current members of the federal reserve. >> in the past we've had people who have come in and he came from wall street. i remember meeting with former fed officials. they seem to like a different perspective. the fed governor has a lot of experience in international economics and development. these kinds of voices make for potentially better division. vonnie: the board of governors doesn't decide everything either. >> right. vonnie: our thanks to the
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managing director for u.s. rate strategy and citi. venture janet yellen -- fed chair janet yellen makes a report this week. thursday, catch the q&a session. but these on bloomberg, 10:00 a.m. eastern. let's get a check of the first word news traders mark crumpton. mark: president trump and the french president will hold a joint news conference in paris on thursday. both world leaders met in brussels in may. president trump due to arrive at the official residence of the french president at 10:30 a.m. new york time. the news conference is scheduled for just afternoon new york time. an official dinner with first lady melania trump and macron will follow. airstrikes continued to pound parts of most old despite iraq must prime minister declaring total victory over islamic state. there are still pockets of resistance on the western edge
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of the old city neighborhood train iraqi troops and the u.s. were able toion drive the militants out of most will after three years of occupation. thousands packed a bronx, new york church today in honor of the slain new york city police officer. the mother of three was shot to death last week while sitting in a police vehicle. and new york police department commissioner were among those paying their respects. o'neill promoted familia posthumously to detective. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. vonnie? getie: coming up, investors social. stock falling below its ipo price for the first time yesterday. we will to you why, next. this is bloomberg. ♪
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vonnie: today we're focusing on snap, the stock falling below its ipo price for the first time. joining me now is an ipo reporter. is this the death knell for snap or something it can overcome? >> morgan stanley with the lead underwriter for the ipo as well. this was the analyst saying, we no longer have a buy conviction. we think you should hold the stock. the share price target cut by 43%, down to $16 a share in mostly pointing to snap not
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impressing them enough in terms of how it is rolled out. the analysts came out and said we were wrong about how quickly we thought snap would improve scale and proved to its advertisers the return on investment. they are comparing this to the likes of instagram, which of course is owned by facebook. when you look at snap and what they are trying to do and getting users in, posting videos and photos to the story, they have 166 million daily active users. instagram stories alone, which is the rolling video feed -- 250 million daily active users. already behind. now the stock is down below the ipo price for the second day. not a good look here for snap. vonnie: beautiful synopsis. at $15wn 7.5% today .70.
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thank you. leaving workrkers early. discussed the job in trading revenue, next. this is bloomberg. ♪
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when you look at
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vonnie: this is "bloomberg markets." four straight quarters of rising income from trading, the u.s. biggest investment bank spent the past few months in a slump. shareholders will soon see how dull it's been when banks begin reporting earnings later this week. joining us is our banks reporter. >> i've been talking with different sources across wall street, asset managers and also banks. some of them have been doing things like going home to plague
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her new nintendo. vonnie: their new classic nintendo. >> the reissued miniature version. there's not a lot to do. others have been on tinder. one person i talked to as well, going home early to watch his kids. vonnie: i do wonder, is this the way it used to be before everything seems to take on significance, so basically from the financial crisis onwards? is that the old normal? periods wherely things are slower. going into the summer, especially this month, there's a lot of people on vacation. that is always happen to a certain degree. i'm not sure you see a lot of periods where it is as slow as what we found. i have to ask if any of them expressed concerns. move, for about an hour there.
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all of a sudden it was like nothing had happened. liquidity is down. volumes are down. wonder if it's wise for somebody to be away from their desk. something could trigger a move. >> one thing to keep in mind with that kind of threat or concern is that traders can trade on their phone. there's always someone on the desk. wonder if it's wise for somebody to be away from their desk. if your sales coverage is out, there's always that ability. we don't want to say -- it definitely is the story focusing on earnings. low volume is bad for banks. in terms of trading, what we found from the analysts we talked to is about 11% down across the board from the bank side we look at. starting with jpmorgan, citi on friday. that's a pretty big drop.
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sachs were looking more in the 20 handle for fixed income traits. vonnie: we will have to revisit those traders and see what they are doing after those results, right? >> exactly. if something happens tomorrow with trump too. vonnie: they may not be going home to pay their classic nintendos. still ahead, donald trump junior's latest n.l. revelations. -- email revelations. more on those emails and ramifications in washington, d.c. coming right up. this is bloomberg. ♪
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>> it's 1:00 in washington, 6:00. from bloomberg's world headquarters in new york, i'm david lifton in for david gura
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today. welcome to "bloomberg markets, the trump economy." email bombshell. the russian government was --ing to help donald trump a gmail sent to the president's son in the middle of the campaign. the markets immediately reacted to the news. tough questions, president trump 's nominee to head the fbi will face lawmakers tomorrow with the russian disclosures now front and center. you will speak with a former fbi assistant director about what the fbi needs right now. meanwhile, back at the ranch, what will the latest russian disclosures mean for congress's plans for dealing with health care and tax reform? ♪ our top story at this hour, donald trump junior and the questions surrounding a meeting he had with a russian lawyer during the presidential

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