1 00:00:03,120 --> 00:00:07,440 Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington, 2 00:00:07,520 --> 00:00:12,520 Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco, 3 00:00:12,640 --> 00:00:17,079 Speaker 1: Bloomberg to the country, US Exam General one ninety and 4 00:00:17,239 --> 00:00:20,920 Speaker 1: around the globe the Bloomberg Radio plus Aben Bloomberg dot Com. 5 00:00:21,280 --> 00:00:26,640 Speaker 1: This is Bloomberg Surveillance. Good morning on Wall Street. This 6 00:00:26,680 --> 00:00:29,840 Speaker 1: is Bloomberg Surveillance, and Michael McKee along with Tom Keane, 7 00:00:29,840 --> 00:00:33,720 Speaker 1: a couple of things making news out there. Moody's has 8 00:00:33,800 --> 00:00:39,520 Speaker 1: cut Brazil's finance rating to junk this morning and downgraded 9 00:00:39,840 --> 00:00:44,800 Speaker 1: Brazil's outlook to negative. Home improvement retailer Lows makes fifty 10 00:00:44,840 --> 00:00:46,920 Speaker 1: nine cents of share, matching estimates on better than a 11 00:00:47,400 --> 00:00:50,280 Speaker 1: forecast revenue of thirteen point two billion dollars. That's on 12 00:00:50,680 --> 00:00:53,600 Speaker 1: better than forecast cump store sales. They were up five 13 00:00:53,600 --> 00:00:55,840 Speaker 1: point two percent. They're boosting their forecast for the year 14 00:00:55,880 --> 00:00:58,200 Speaker 1: as well. As Tom notes that is uh sort of 15 00:00:58,280 --> 00:01:01,680 Speaker 1: in contradiction to the gloomy view of the U S economy. 16 00:01:02,000 --> 00:01:04,360 Speaker 1: Rock Bottom interest rates are sticking around for American states 17 00:01:04,360 --> 00:01:08,240 Speaker 1: and cities. New York City sold yesterday general obligation dead 18 00:01:08,240 --> 00:01:10,520 Speaker 1: for the first time since July. Said to be followed 19 00:01:10,520 --> 00:01:13,920 Speaker 1: this week by deals from Los Angeles and North Carolina 20 00:01:14,000 --> 00:01:16,240 Speaker 1: and Carlisle Group buying a majority stake in the Spanish 21 00:01:16,319 --> 00:01:20,480 Speaker 1: outsourcing company Digitecht. That deal expected to close in the 22 00:01:20,560 --> 00:01:23,840 Speaker 1: second quarter. Now, let's check in with John Tucker and 23 00:01:23,880 --> 00:01:26,720 Speaker 1: get the latest headlines from around the world. John and 24 00:01:27,080 --> 00:01:29,760 Speaker 1: Michael with a big win in the Nevada clocuses, Donald 25 00:01:29,800 --> 00:01:32,600 Speaker 1: Trump has claimed a third straight commanding victory of the 26 00:01:32,640 --> 00:01:36,280 Speaker 1: race for the Republican presidential nomination. Marco Rubio ted Cruz 27 00:01:36,280 --> 00:01:38,720 Speaker 1: in a tight race for a second Trump promised his 28 00:01:38,760 --> 00:01:41,319 Speaker 1: supporters an amazing two months ahead and his bid for 29 00:01:41,360 --> 00:01:44,720 Speaker 1: the White House. Deadly storm system that's fowing tornadoes and 30 00:01:44,760 --> 00:01:47,720 Speaker 1: the Gulf Coast states last night expected to bring severe 31 00:01:47,760 --> 00:01:50,480 Speaker 1: weather to the Carolinas by the SAMT de Nooon. The 32 00:01:50,520 --> 00:01:53,400 Speaker 1: man accused of randomly killing six people in Michigan had 33 00:01:53,400 --> 00:01:56,680 Speaker 1: a personal store of weapons that included handguns and long guns, 34 00:01:57,120 --> 00:01:59,160 Speaker 1: but there was nothing in his past that prevented him 35 00:01:59,160 --> 00:02:02,320 Speaker 1: from owning a many guns as he could afford. Anton 36 00:02:02,400 --> 00:02:07,360 Speaker 1: and Scalia's doctor says the justice suffered from coronary art disease, diabetes, 37 00:02:07,440 --> 00:02:11,680 Speaker 1: chronic obstructive pulmonary disease, sleep apnea, high blood pressure, and 38 00:02:11,720 --> 00:02:15,160 Speaker 1: several other elements that probably contributed to his death February thirteenth. 39 00:02:15,480 --> 00:02:18,240 Speaker 1: The public and reporters who covered the Supreme Court were 40 00:02:18,320 --> 00:02:22,160 Speaker 1: unaware that Scalia had any serious health problems. At Global 41 00:02:22,200 --> 00:02:24,560 Speaker 1: News twenty four hours in eight power via twenty four 42 00:02:24,639 --> 00:02:27,320 Speaker 1: hundred journalists more than one d fifty news bureaus around 43 00:02:27,320 --> 00:02:31,280 Speaker 1: the world. John Tucker, Michael, thank you, John. Time now 44 00:02:31,280 --> 00:02:34,880 Speaker 1: for the Rakotina Auto Group of Bloomberg NBC Sports Update. 45 00:02:34,960 --> 00:02:37,880 Speaker 1: Here's John Stash all right, Mike much They had win 46 00:02:37,960 --> 00:02:39,760 Speaker 1: for the Devils, who had lost three in a row. 47 00:02:39,880 --> 00:02:42,120 Speaker 1: Right now on the outside looking in for making the playoffs. 48 00:02:42,160 --> 00:02:44,720 Speaker 1: But they've had success with the Rangers this season, taking 49 00:02:44,760 --> 00:02:47,000 Speaker 1: three or four. They scored twice in the second period, 50 00:02:47,080 --> 00:02:49,680 Speaker 1: two more late in the third. In Newark, Devils beat 51 00:02:49,720 --> 00:02:53,320 Speaker 1: the Rangers five to two, outshot them thirty six and nineteen. 52 00:02:53,639 --> 00:02:56,000 Speaker 1: They're not one point behind Pittsburgh for the last playoffs spot. 53 00:02:56,040 --> 00:02:59,440 Speaker 1: In Minnesota, Friends Nielsen scored twice. John Tavaris is twenty 54 00:02:59,480 --> 00:03:01,799 Speaker 1: three of the year. The Islanders won four to one 55 00:03:01,840 --> 00:03:04,960 Speaker 1: in Portland. Startup a franchise record nine game road trip 56 00:03:05,000 --> 00:03:07,480 Speaker 1: for the Nets. They battled the Red Hot Trailblazers but 57 00:03:07,600 --> 00:03:10,480 Speaker 1: fell short one twelve one oh. For the Portland backcourt 58 00:03:10,480 --> 00:03:13,400 Speaker 1: of Damian Lillard and c. J. McCollum both scored thirty 59 00:03:13,440 --> 00:03:15,919 Speaker 1: four points. Lillards had five straight games of more than 60 00:03:15,960 --> 00:03:19,240 Speaker 1: thirty brook Lopez had thirty six in the lost Blazers 61 00:03:19,240 --> 00:03:21,240 Speaker 1: of now one six raight eleven of twelve. Next top 62 00:03:21,520 --> 00:03:24,919 Speaker 1: for Brooklyn is tomorrow in Phoenix. Nixs visit Indiana tonight. 63 00:03:25,240 --> 00:03:28,359 Speaker 1: College basketball, the big game nationally was Kansas rallying to 64 00:03:28,400 --> 00:03:31,280 Speaker 1: win at Baylor battle of top twenty teams sixty six 65 00:03:31,320 --> 00:03:35,480 Speaker 1: to sixty. Locally, St. Peter's overwhelmed Manhattan sixty one to forty. 66 00:03:35,640 --> 00:03:38,040 Speaker 1: Rutgers fell the oh and fifteen, and the Big Ten 67 00:03:38,080 --> 00:03:40,839 Speaker 1: out scored fifty one to thirty in the second half 68 00:03:40,840 --> 00:03:43,480 Speaker 1: by the Minnesota team that was one in thirteen in 69 00:03:43,560 --> 00:03:47,200 Speaker 1: league play. The final was eighty three to sixty one. 70 00:03:47,400 --> 00:03:52,640 Speaker 1: The Bloomberg NBC Sports Update, I'm John staff Shawler. Thank you, John. 71 00:03:52,720 --> 00:03:55,760 Speaker 1: We are keeping an eye on financial markets. Fere back 72 00:03:55,760 --> 00:03:59,920 Speaker 1: in the saddle today and writing the financial markets were 73 00:04:00,000 --> 00:04:04,880 Speaker 1: watching US futures deteriorate. SMP futures down by nine tenths 74 00:04:04,960 --> 00:04:07,400 Speaker 1: right now in Europe, and it's a two point one 75 00:04:07,440 --> 00:04:11,720 Speaker 1: percent drop for the stocks six hundred. This is bloomberk Surveillance. 76 00:04:11,800 --> 00:04:20,160 Speaker 1: You're listening to Bloomberg Radio worldwide. Welcome back to Bloomberg 77 00:04:20,200 --> 00:04:23,719 Speaker 1: Surveillance and Michael McKey along with Tom Keane. It's a 78 00:04:23,960 --> 00:04:28,000 Speaker 1: risk off day, most definitely. Oil is lower this morning. 79 00:04:28,000 --> 00:04:32,599 Speaker 1: West Texas thirty eight three down three, Brent down two 80 00:04:32,640 --> 00:04:36,560 Speaker 1: point one, thirty two dollars and fifty six cents. The 81 00:04:36,560 --> 00:04:40,200 Speaker 1: real action today in the currency markets, the yen one 82 00:04:40,680 --> 00:04:43,720 Speaker 1: eighty two, the euro one sixty three, the pound on 83 00:04:44,440 --> 00:04:46,920 Speaker 1: eighty six. We've got some haven trades and we've certainly 84 00:04:46,960 --> 00:04:50,800 Speaker 1: got some Brexit trades out there. A lot of people 85 00:04:50,839 --> 00:04:55,200 Speaker 1: wondering whether the G seven finance ministers and even more 86 00:04:55,279 --> 00:04:58,719 Speaker 1: so the central bankers going to actually do anything this 87 00:04:58,800 --> 00:05:01,600 Speaker 1: weekend when they meet in chant High to prop up 88 00:05:02,000 --> 00:05:06,440 Speaker 1: global markets and reintroduce some additional confidence out there. And 89 00:05:06,600 --> 00:05:09,960 Speaker 1: hla is the chief economist had of research for Lombard 90 00:05:10,040 --> 00:05:13,120 Speaker 1: Street and she's, uh, never mind the pound. She's made 91 00:05:13,120 --> 00:05:14,520 Speaker 1: her way over here. I don't want to see your 92 00:05:14,520 --> 00:05:18,080 Speaker 1: expense report when you go back, given given it's causing 93 00:05:18,160 --> 00:05:19,760 Speaker 1: you so much more to come over here now, but 94 00:05:19,839 --> 00:05:22,480 Speaker 1: thank you for coming. Uh. You and I were talking 95 00:05:22,480 --> 00:05:26,280 Speaker 1: off there that a lot of what is going on 96 00:05:26,560 --> 00:05:29,919 Speaker 1: concerns about what is happening in Asia, particularly with Japan. 97 00:05:30,560 --> 00:05:34,279 Speaker 1: There is talk that with the yen falling as it has, 98 00:05:34,960 --> 00:05:38,720 Speaker 1: strengthening as it has uh, we're going to see more 99 00:05:39,080 --> 00:05:41,440 Speaker 1: from the Bank of Japan next week, We're going to 100 00:05:41,560 --> 00:05:46,240 Speaker 1: see additional Uh, they're gonna go farther in the negative rates. 101 00:05:47,040 --> 00:05:51,160 Speaker 1: If this happens, the world economy and financial markets are 102 00:05:51,279 --> 00:05:57,000 Speaker 1: on the route to a real crisis. Abnomics has largely 103 00:05:57,040 --> 00:06:02,839 Speaker 1: amounted to competitive evaluation, which, given Japan's primary structural problem 104 00:06:02,920 --> 00:06:06,120 Speaker 1: of too much income in the business sector and too 105 00:06:06,200 --> 00:06:09,960 Speaker 1: little in the household sector, has actually made the real 106 00:06:10,040 --> 00:06:15,880 Speaker 1: economy situation was there, but the real damage has been 107 00:06:15,920 --> 00:06:21,160 Speaker 1: done to the rest of the world because we are 108 00:06:21,160 --> 00:06:24,880 Speaker 1: operating in a global economy which is deficient, lacking consumer 109 00:06:24,960 --> 00:06:30,280 Speaker 1: demand and competitive evaluation. If everyone goes for it from 110 00:06:30,320 --> 00:06:34,200 Speaker 1: the major economy is not going to benefit anyone. Japan 111 00:06:34,600 --> 00:06:40,680 Speaker 1: is playing very dangerously also with the likelihood of this 112 00:06:40,880 --> 00:06:43,880 Speaker 1: ending up in a public that default and also an 113 00:06:43,920 --> 00:06:48,440 Speaker 1: inflationary explosion, probably not through the course of this year. 114 00:06:48,680 --> 00:06:51,159 Speaker 1: But when we look to seen it's been the Kyle 115 00:06:51,240 --> 00:06:53,839 Speaker 1: Bass argument for quite some time. How do they get 116 00:06:53,839 --> 00:06:59,360 Speaker 1: to an inflationary explosion? Well, look, they didn't have a 117 00:06:59,520 --> 00:07:03,520 Speaker 1: private sector excessive debt and a huge need for de 118 00:07:03,680 --> 00:07:08,400 Speaker 1: leverage in which quantitative is n would offset. What they 119 00:07:08,400 --> 00:07:12,760 Speaker 1: have done is QUEI on the front foot. And the 120 00:07:12,840 --> 00:07:16,800 Speaker 1: only reason this injection of money has not spilled into 121 00:07:16,800 --> 00:07:19,640 Speaker 1: the real economy is that the majority of the bonds 122 00:07:19,680 --> 00:07:23,520 Speaker 1: they're buying are from banks which are not correspondingly lending. 123 00:07:24,200 --> 00:07:26,880 Speaker 1: Now banks are running out of j g B s 124 00:07:27,040 --> 00:07:29,800 Speaker 1: by the end of the year. If they step up 125 00:07:30,160 --> 00:07:36,680 Speaker 1: quantitatives in as well as um lower negative rates, then 126 00:07:37,000 --> 00:07:41,680 Speaker 1: the likelihood is that this will go in the real economy. 127 00:07:41,840 --> 00:07:45,680 Speaker 1: But because they're not changing or improving the real trend 128 00:07:45,680 --> 00:07:51,200 Speaker 1: growth rate, it's going to spill over in prices quickly. 129 00:07:51,240 --> 00:07:53,720 Speaker 1: Before we let you go, I have to ask about China. 130 00:07:54,480 --> 00:07:59,560 Speaker 1: The market seem to want the Chinese to devalue. Yes, 131 00:08:00,000 --> 00:08:03,240 Speaker 1: if the Chinese were to open up the capital account fully, 132 00:08:03,520 --> 00:08:07,160 Speaker 1: the U one will depreciate, And I keep stressing depreciate 133 00:08:07,360 --> 00:08:11,400 Speaker 1: versus de values because the Bank of the People's Bank 134 00:08:11,440 --> 00:08:15,120 Speaker 1: of China is not intervening to devalue the une. In fact, 135 00:08:15,200 --> 00:08:19,240 Speaker 1: they're intervening to stop it from depreciating further given the 136 00:08:19,320 --> 00:08:24,880 Speaker 1: market forces. But where internationally, policymakers and central bank maker 137 00:08:24,920 --> 00:08:28,920 Speaker 1: mistake is to bundle China with Japan and the EU area. 138 00:08:29,160 --> 00:08:33,679 Speaker 1: And that's wrong because the U one is overvalued. China 139 00:08:33,760 --> 00:08:38,960 Speaker 1: has massive excessive capital that he has to unwind. If 140 00:08:39,000 --> 00:08:42,120 Speaker 1: it tries to do that with an overvalued currency, sapping 141 00:08:42,679 --> 00:08:46,000 Speaker 1: export income as well, Beijing has to be some sort 142 00:08:46,000 --> 00:08:49,640 Speaker 1: of magician at reform in order to produce a rebalancing 143 00:08:49,679 --> 00:08:53,520 Speaker 1: towards consumer spending. In other words, China needs a weaker 144 00:08:53,559 --> 00:08:58,440 Speaker 1: currency to help its rebalancing towards consumer spending. And when 145 00:08:58,480 --> 00:09:03,520 Speaker 1: Secretary Lou was stopping about competitive evaluation, he put China 146 00:09:03,679 --> 00:09:07,720 Speaker 1: in the same pot as Japan and the ural area. 147 00:09:07,800 --> 00:09:11,640 Speaker 1: And that's a serious mistake because China, actually from the 148 00:09:11,679 --> 00:09:15,120 Speaker 1: major economies, is the only one which in terms of 149 00:09:15,160 --> 00:09:19,679 Speaker 1: its structural policies, is on the right route. And thank 150 00:09:19,679 --> 00:09:21,640 Speaker 1: you very much, never enough time. Thank you for coming 151 00:09:21,640 --> 00:09:23,679 Speaker 1: in and hopefully you'll be able to afford to come 152 00:09:23,679 --> 00:09:28,240 Speaker 1: back soon. The pound at the moment one thirty eight ninety, 153 00:09:28,320 --> 00:09:32,439 Speaker 1: down almost a full unit on the day. The offshore 154 00:09:32,679 --> 00:09:36,360 Speaker 1: u N is down by ten of eight percent at 155 00:09:36,360 --> 00:09:40,200 Speaker 1: six fifty four oh eight, the official fixing six eight 156 00:09:40,640 --> 00:09:44,000 Speaker 1: almost down two tenths of a percent. Time now for 157 00:09:44,120 --> 00:09:46,400 Speaker 1: the Bloomberg n j I T STEM Report brought you 158 00:09:46,440 --> 00:09:49,040 Speaker 1: by New Jersey Institute of Technology, partnering with government and 159 00:09:49,080 --> 00:09:52,200 Speaker 1: industry to apply the university's world class research assets to 160 00:09:52,280 --> 00:09:54,880 Speaker 1: innovate and spur economic growth. Learn more at n j 161 00:09:55,120 --> 00:09:58,120 Speaker 1: I T dot edu. Here's problem my, thank you, and 162 00:09:58,160 --> 00:10:00,679 Speaker 1: Here's what's making news in science technology. The Engineering and 163 00:10:00,760 --> 00:10:04,800 Speaker 1: math uper Technologies is starting its very first motorcycle taxi 164 00:10:04,880 --> 00:10:08,360 Speaker 1: service in Bangkok, where perennial congestion leads to rush hour 165 00:10:08,400 --> 00:10:11,560 Speaker 1: traffic speeds in the Thailand capital around seven miles an hour. 166 00:10:11,679 --> 00:10:14,280 Speaker 1: The startup that began life as a limousine service in 167 00:10:14,320 --> 00:10:17,280 Speaker 1: the affluent San Francisco Bay area now wants to tackle 168 00:10:17,320 --> 00:10:20,440 Speaker 1: the workman like vehicles that hoards of Bangkok residents rely 169 00:10:20,520 --> 00:10:23,440 Speaker 1: on to navigate jam pack streets. It says it can 170 00:10:23,440 --> 00:10:26,400 Speaker 1: help untangle the traffic snarls that result in two hour 171 00:10:26,520 --> 00:10:29,480 Speaker 1: daily commutes and western Digital's plan to sell a fifteen 172 00:10:29,480 --> 00:10:32,280 Speaker 1: percent stake to a Chinese investor fell apart after the 173 00:10:32,280 --> 00:10:36,199 Speaker 1: deal came under a U S National security review, highlighting 174 00:10:36,320 --> 00:10:39,240 Speaker 1: the government's ability to chill agreements that could give Chinese 175 00:10:39,240 --> 00:10:43,960 Speaker 1: companies access to US technology. And that's this morning's Bloomberg 176 00:10:43,960 --> 00:10:46,320 Speaker 1: and j I T Stem reports. Thank you very much, 177 00:10:46,440 --> 00:10:49,040 Speaker 1: fab Moon. The other story we are following in the 178 00:10:49,120 --> 00:10:54,440 Speaker 1: currency markets and markets overall is Brazil downgraded and the 179 00:10:54,480 --> 00:10:59,240 Speaker 1: resilient real falls below four to three point nine nine 180 00:10:58,440 --> 00:11:04,680 Speaker 1: one Bluemerk surveillance brought to you by T two Computing, 181 00:11:04,679 --> 00:11:06,600 Speaker 1: a new kind of I T solutions company for workflow, 182 00:11:06,640 --> 00:11:09,320 Speaker 1: mobility and infrastructure, led them explain how their expertise can 183 00:11:09,360 --> 00:11:11,839 Speaker 1: help you gain greater business value. Visit TTO computing dot 184 00:11:11,880 --> 00:11:13,400 Speaker 1: com for more information.