a number of prototypes near san diego. he is having trouble getting congress to pay for the barrier. thesays he was surprised by decision to fire rex tillerson. he knewcorker said there were tensions, but he thought they had learned to work together better. reporters, hee to says he is delegating his responsibilities to the deputy secretary of state john sullivan. scott pruitt says it is too early to decide on suitable temperatures for the next century. he defended the trump administration position on climate change. >> what folks in, it is not whether there is climate change

warming trends, all those things are the case. the issue is, how do we know in 2018 what the ideal global of red -- global average should be in 2100? insist therees to are questions about contributions to climate change. the myanmar government is rejecting reports presented to the u.n. human rights council that found it committed extreme abuses.ghts officials in myanmar say the information is not credible. global news 24 hours a day powered by 2700 journalists and analysts in 120 countries.

i'm mark crumpton. this is bloomberg. scarlet: live from bloomberg world headquarters, i'm scarlet fu. joe: i'm joe weisenthal. >> stocks are selling off. joe: what'd you miss? scarlet: the latest turn in the revolving door of the trump administration. he will make mike pompeo the nation's top diplomat. semiconductor setback. president trump blocked qualcomm's hostile takeover of qualcomm. -- quad calm. and democrats are hoping to score a seat less than two years ther president trump swept

18th district the presidential election. as we have been reporting president trump fired rex tillerson this morning and is planning to replace him with mike pompeo. his tenure was marked by a series of public disagreements with the president. there was a news conference we watched live. it was notable. tillerson did not think the president or mentioned the president at all. he focused on the staff. russia,, he highlighted which is something that his boss has had a different view on. we are seeing a live picture in california where he is reviewing prototypes for the border wall. joe: he had the demeanor of someone who had just been fired.

it is still unusual to see it. it looks like someone who had been defeated. i remember that first speech he gave, talking about how his wife told him year prepared all his life for this. he seemed like someone who did not get to finish the job you wanted. scarlet: arguably he was not able to do anything -- she never established a chemistry with president trump. there was the question of whether he called the president a more on. committed to the administration but did not deny that. after that there was a chasm. julie: joining us with more, bill joining us from washington. was this a matter of time? that this firing was going to happen?

, tillerson look back has had a lot of ups and downs. more downs. your member his remarks that he was willing to talk with the north koreans, which the president responded to by saying stop wasting your time. tillerson was upset with remarks after the racist protest in charlottesville. taskok the president to after that. there were a lot of ups and downs. over the past months we thought .e was on more solid footing no one was really expecting this to happen at this time. he was just having the strip to africa. he was fighting for his job over the weekend. i don't think when he landed this morning he thought he was

going to be fired on twitter. there are a couple of dimensions to this. the relation to the president, and the managerial question, what he was like running the state department. , whethere any idea there is any internal changes we could expect? >> i do think pompeo will bring over a full team of people. going to come in with his own senior staff. tillerson tried to encourage his senior staff to stay on for a transition and help make the process sooner but there is another dimension on the management side. tillerson spent four decades at exxon. very disciplined process and .ery disciplined thinker

he complained the white house and u.s. government was anything but disciplined. if he disagreed in a meeting with senior advisers you would know. he would say it. i am not saying pompeo would not disagree with the president but he is more of someone who has shown himself willing to go along more with the president and his views on things like russia and other foreign-policy hotspots. pompeo did agree with the assessment about russia's interference in the 2016 election, something the , toident has pushed back on say the least. on issues where we know pompeo's positions, are we going to see him come into line with the president? >> i think so. pompeo has had a better chance

to get to know the president. he has talked about he is in the oval office almost every day the president is in washington. has also given a wink to some of the president's views. the intelligence community's assessment did not conclude there was any impact on the actual vote. that is not something that was part of the assessment. that was a step he owned what they were asked to do. mike pompeo did not feel compunctions about taking that extra step. scarlet: many have pointed out reason why the president made this change is he wanted to have a new team before his meeting with kim jong-un. mike pompeo still needs to be confirmed. is there time to get this done

to have a new secretary of state before this? time.re is not a lot of bob corker did schedule a hearing next month. mike pompeo already got three senate confirmation. there will be questions about the policies and priorities but heo think pompeo, because just went through this, he should be in a good position to do it again. but not just the north korea meeting is on the plate but a decision about the iran nuclear deal. pompeo was in line with the president's thoughts on that .eal than tillerson that comes up for a key decision early to mid may. rex tillerson was not the only management shuffle. a promotion at the cia. .ina haskell being nominated

her background is controversial tortureof her ties to of suspected terrorists. how much of an obstacle is that going to be? >> that is going to make what might be an easy confirmation hearing much harder. you're going to have people like john mccain who has spoken out with concerns about her rendition,in cia that is not going to be easy for the white house to get through that process. is a recurring issue for this administration. when people leave they have difficulty bringing in outsiders to fill those jobs. that is one reason you see people shifting around rather than coming from outside. joe: can you give us an update on north korea? we had not heard back in terms of scheduling the meeting.

what is the latest? >> from the white house point of view this is something they are targeting for late may. there are 1000 things that could go wrong between now and late may that could derail this. it has been noticeably quiet. we know about the invitation from u.s. intelligence and the south koreans but there hasn't been a lot of public commentary by north korea about the fact they offered this invitation. there hasn't been anything about what they think is on the agenda. we have a lot of this secondhand. it would be reassuring to officials if they could hear something from the north korean state media. >> thankit would be reassuring o you recovering a of ground with us today. subject of gina haskell, john mccain has spoken enough. he tweeted about five minutes

the torture detainees during the last decade was one of the darkest chapters american history. the senate must do its job recognizing the involvement in this disgraceful program. mccain quite vocal. joe: a very slim majority for the republicans. coming up, dick's sporting goods has now to limit sales of guns. we will dive into the company's problems, next. this is bloomberg. ♪

scarlet: time for the bloomberg business flash. salesforce doubling down on

little guys after catering to top companies. they are rolling out a new aimed at small businesses. is official recognition smaller companies are eating into its market share. phil murphy wants to raise taxes to help fund the budget and he is taking aim at state millionaires. proposing airbnb taxes. the tax plan lacks support them key democrat. toeral motors is planning airbnb program for cars. the lists -- they will list their cars and share the revenue

with the automaker. we will have more on this story. that is your bloomberg business flash. our stock of the hour is dick's sporting goods. dix posted a deeper than expected sales decline. joining us to discuss, matt townsend. it did get publicity for doing that. isil social media saying i'm going to order something. at the end of the day it didn't seem to make a difference. the quarter they disappointed was before that. it was not baked into their forecast. they said they expect what they changed gunthey regulations to have a negative impact on the company. and maybe some people are just

upset with what they have done. >> at the end of the day it is like another retailer having retail problems. when you look at the business, it is just another one. >> it is a big box specialty chain. toys "r" us heading to liquidating. dix is that for sporting goods. blamed under armour the saying they just did not have great execution during the quarter. priceaced a lot of pressure. there is a company called fanatics that is doing well and growing fast. even though it is the last man standing in this space, it is still struggling and has to prove it can grow going forward. scarlet: there is also a company

called amazon doing well as well. asked by to find a way to exist and even thrive with amazon as their biggest competitor. >> everyone has pointed to best buy because best buy was left for dead and their ceo came up with a plan and now they are on a plan towards growth. the best buy story has customer service. that is a big complaint, that the health is not great. you are not sure who to look to. retailer inx general can look at best buy. help. maybe you need less the stock is up now. it turned around surprisingly.

just around 2:30. was there anything -- are you hearing anything that is more positive? >> that is one thing the company tried to say, they spent a lot of money last year trying to do this on the channel experience. they are spending less on that and they expect gross margin to muchve, to not decline as i believe the wording was. they were confident on the call, we are the leader in the industry. maybe that is what investors are saying. scarlet: and they are still expanding. they plan to open a new stores. best buy was shutting down stores. flex home depot, they have started opening stores. a lot of retailers have stopped.

dick's sporting goods did not market.arge opening stores is counterintuitive at this point. one quick thing, we talked amazon. we did not talk about nike. channeling customers to its own stores. engine isig growth direct to consumer, people oring nike here at nike.com their own stores. that is not good for dick's sporting goods. that is happening all over. consumers todrive their own stores. julie: cut out the middleman.

scarlet: they are going to have to come up with their own private label. >> they are trying that. scarlet: the nasdaq gets its stocks knocked off by these stocks. this is bloomberg. ♪

julie: we have technology rolling over today. tech has been add records and leading. we are looking at that leadership. if we are seeing it rollover what will that mean for the broad market? you have the semiconductor index in white followed by the nasdaq 100 in blue. the percentage of members above the today moving average, we have seen an uptick. the stocks went to a record

followed by the nasdaq 100 going to a record. on the bottom we have a ratio of the 2. you see these stocks versus the nasdaq. we have seen a drop in both stocks. we will see what that means. we talked earlier to mike wilson who said we are going to see changing leadership in the markets in the second half of the year. meantime doubling down on the old leadership. today's data could be read in multiple ways for something for everyone. , not thatne data crazy. 1.8% year-over-year change in core inflation. target, all of that looks subdued. the blue one, the blue line is the three-month annualized pace of inflation.

extrapolated the last three months and said it is going to continue at that pace, 3.1% inflation. the question, which do you look at? are we at the beginning of a turn? or is this the same old same old? the debate continues. are never going to get an answer. scarlet: for those buying the blue line, there is one way to play that industrials, metals, energy and tech, these capital good stocks, when the line goes up here outperforming. the orange line tracks commodity prices which we will use as a proxy for inflation. the line is higher when

commodity prices rose. they underperformed in the line fell. over the past year if you look at the end commodity prices have risen significantly while capital good stocks had that best held steady. they have been market performers. ,f inflation remains a concern perhaps capital good stocks are headed for relative performance catch-up. they will eventually get that lift up. joe: it has been a consistent question. investors i guess don't believe in it. one day the line will be there. >> that is sort of a wildcard element. it should be interesting. the market close is next. we are looking at decline. first decline in eight days. trading from a record high.

from new york, this is bloomberg. ♪ . . .

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stocks giving up earlier gains and selling off at the close. the nasdaq down about 1%, the 10 year yield rising to 2.84%. julie: i am julie hyman. scarlet: i am scarlet fu. joe: i am joe weisenthal. if you are tuning in live on twitter, welcome to our closing bell coverage every weekday from 4:00 to 5:00 eastern. scarlet: u.s. stocks open higher, and quickly lost ground, closing just off their worst levels of the session, the nasdaq off 1%, just over 1%, first decline in eight days. the s&p and dow falling a second straight day. joe: the nasdaq had been outperforming for several days, and today underperforming, so kind of a mirror image. scarlet: we saw volume pick up today as well, as we saw the selling pressure. volume on the nasdaq, 22% above the 20 day average. let's take a look at some of the

individual stocks on the move. we got that news late monday that president trump was blocking broadcom, based in singapore, from acquiring qualcomm, so it looks like that deal is a no go. qualcomm down 5%. general electric, which has been down quite a bit this year thus far, down once more today after j.p. morgan says things there are worse than you think, that earnings guidance is not a credible number. he said that in a note today. u.s. steel declining after the company raised its earning forecast. initially it was a head scratcher when the stock started going down, but basically inlyst estimates for ebitda particular have been higher than the company talked about, especially the benefit -- given the benefit they were seem to get from the tariff. macy's, the ceo speaking at a bank of america merrill lynch conference today, saying the company has healthy inventory levels and is on a clear path to comparable sales growth in

fiscal 2019. joe: let's take a look at the government bond market, looking at some of the action in the wake of that inflation number, which wasn't exactly mild, but maybe people were worried about an upside surprise. 2.52% --yield down to 2.25%, 10 year yield at 2.84%, so some flattening. think we have a chart -- here we go. itly in 2018, late 2017, started flattening, then earlier this year steepening, and now we are back to this flattening again, still below 16 basis points on the 2-10 spread. scarlet: let's look at currencies. te dollar -- the dollar has ticked higher at the end of u.s. trading. what you can see around 8:00 a.m., an interesting move, the leg lower. around 8:00, two key pieces of news. the cpi report, as expected

pretty much, than the president's firing of rex tillerson. not as expected, although -- maybe the timing not as expected. julie: speculated for months. let's look at the loonie, worst-performing major currency versus the dollar, a huge leg lower after the boc governor said the central bank would remain cautious on rate moves and the economy has room to expand without inflation. kiwi at a two-week high after a bond auction drew more than two times the demand on offer. turkish lira, bonds sold off for weighinhay, outflows on the currency. the euro gaining ground versus the lira. joe: a look at the commodity front. not a ton of action.

in this low 60's range for a long time without showing much direction, down a little over 1%. gold gaining ground modestly. and those are today's markets. scarlet: for more on today's market news let's bring in alan fx at, global cohead of deutsche bank. gave us the lowdown on inflation numbers, pretty much as economists expected. at bitcoin 30 a.m., interesting moves -- 8:30 a.m., interesting moves in currency with the cpi report and the rex tillerson firing. is fx moving on political concerns, trade concerns? or on cpi in line? alan: all of the above. certainly moving on cpi data. the market has consistently seen the dollar fall on cpi days. that relates to the idea, if we can get that number out of the

way, that is the big macro risk, the reflation story. we don't have that. good news for risk, bad news for the dollar. that was number one. then the politics, i would say just gave a nudge to what was happening. quiet on trades. scarlet: for a change. that said, looking across asset classes, particularly between u.s. equities and the dollar, the dollar is the asset that has been more reactive to headlines out of washington over the last year, when most of the time stocks just kind of shrugged it off. do you think we will continue to see that react finance -- reactiveness? alan: stocks are getting a nice lift from the dollar, the weak dollar offsetting the tightening you have seen from the federal reserve so far, and financial conditions have eased. that's a big part of it, but yes, i think the underlying story is risk positive. re maybe in the seventh

inning of a nine inning game in terms of the global growth story, and the u.s. growth story, so i think that's kind of ok. the equity market is ok if you just left it alone, if you did not have the threat of a tit for tat story on the tariff side. the dollar story is much more complicated, and it is clear the administration would like the equity markets to go up and the dollar to go down. joe: if you compare the data we got today and friday's jobs report, on impressive wage nu -- number,sive wage compared to february when we saw a volatility spike. a, were people overreacting about the macro backdrop, and b, what does it tell you about the markets that people were so inclined to freak out? alan: i think, i happened to

hear your analysis earlier in terms of cpi numbers, and i agreed entirely. a little bit of flattery there . [laughter] the three-month numbers are edging up. the wage number, 2.95. the three-month core cpi, 3.1, edging up. on the other hand, not as bad as january and december data suggested. i has provided -- it has provided a little perspective. inflation has enormous inertia, on the downside and upside, so it will move very slowly on the upside. scarlet: i want to go back to what he said about how the administration would love to see the dollar weaken and stocks go up. how do they make that happen? [laughter] tweets have kind of given a message. this is what the u.s. wants. areink some policies

edging in that direction, the tariffs an obvious one. we for getting a fiscal stimulus at the wrong time in the cycle, that's going to lead to large external deficits, current accounts going to deteriorate sharply. starting to deteriorate already, so that's one of the elements knocking the dollar at this point. julie: what do you think will happen as the fed raises rates more this year? is that already priced into the u.s. dollar, or are we going to see, start to see it kind of bottom and come back up as increases happen? alan: what you see so far, looking at futures, roughly three rate hikes are priced in. we think there will be four rate hikes, and if we edge in any direction, more rather than less. i think if the fed moves from four rate hikes to five rate hikes, back-to-back fomc

rate hikes, that would be a big deal. that's what will be needed to really give the dollar a push. joe: i have a chart on the theinal, 5251, comparing vix and fed back to 1991. "normalized"to a rates regime, what does that mean for volatility? alan: if you slide the fed futures forward, you'll find the feundould lack the fed -- funds rate by roughly two years. we are at the point where the fed tightens, nothing much happens, and eventually gets traction, and that's when you get volatility picking up. scarlet: what is the tipping point? what causes that moment? alan: it is not always obvious. i look at the back end of the

curve. the fact the 10 year yield is starting to look up, about 3%, the big level, i think people will say, that's another nudge, another regime kind of thing. that would get us a volatility spike again. right now we have a lot of politics in the air, something that will keep is a little on edge, so other factors, but that's the big one. watch the bond market. scarlet: alan ruskin, global cohead of fx research at deutsche bank. thanks so much for joining us. julie: president trump shuts the door on broadcom's takeover bid for qualcomm, citing national security concerns. we bring you the latest on where broadcom goes from here. from new york, this is bloomberg. ♪

mark: crumpton with first word news. president trump is in california, inspecting prototypes on display for his planned border wall. the president was briefed on eight prototypes today. he asked which of the models are the hardest to climb. the president also said certain parts of california are desperate for a wall to break the flow is illegal immigration. secretary of state rex tillerson is calling for an orderly pompeo, theo mike cia director who president trump designated as tillerson's successor pending confirmation by the senate. tillerson spoke to reporters hours after being fired by president trump in a tweet. >> effective at the end of the day, i am delegate in all responsibilities available to the secretary to deputy

secretary of state sullivan. my commission as secretary of state will terminate at midnight, march 31. mark: president trump has chosen gina haspel, mike pompeo's deputy, to lead the cia. if confirmed, she would be the first woman to hold the position. florida prosecutors will seek the death penalty against school shooting suspect nikolas cruz in the massacre of 17 people at marjory stoneman douglas high school. the 19-year-old will be arranged tomorrow. cruz's attorneys have said he would plead guilty if the death penalty was not pursued. ereusands of pairs of shoes w lined up in front of the capitol building in washington, representing children killed by gun violence in the united states since the sandy hook school shooting in 2012. the shoes were donated from across the country, and arranged earlier this morning. activists also demanded that congress act on gun reform. 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. scarlet: "what'd you miss journalists and" -- president donald trump sent shockwaves after issuing an executive order blocking broadcom from acquiring qualcomm. the president ruling it "threatens to impair the national security of the united states." julie: that move almost certainly scuttles the $117 billion deal qualcomm has been staunchly fighting since november. was not even a done deal yet. joining us to discuss, bloomberg technology's ian king. and joining us by phone. this is a big blow to broadcom's quest. what does it do now? ian: we have not heard them give knowrmally, so we do not what they will do next, but the

conjecture is there is no way forward for them. seems pretty clear at this point. when you put this in the broader context of what broadcom has been doing, rolling up other companies to build itself up, nos this mean that plan is longer executable, that they cannot buy anymore u.s. chip companies? scarlet: talk us through exactly why and how the administration made the argument this deal would threaten national security? this is a singapore-based company, broadcom, which is in the unitedng states, looking to become a u.s. company. china is not even the buyer, so how does that link up with national security concerns? >> you are right. china is not the buyer here, that china still looms pretty large over the u.s. government's fears about qualcomm, because qualcomm is actually locked in a overwith china's huawei

which company will dominate the development of the next generation wireless technology, and there has been a lot of bipartisan pressure from the hill that this administration theorts, that we need, u.s. needs to protect its national security related assets. semiconductor industries, anything close to military operations or applications related to the military, and that's where this movement came from. a a lot of pressure from the hill, and secretary steven mnuchin took it across the finish line. joe: can you describe the state of play right now, where the cutting edge is of chinese semiconductor technology? how far behind they are from the u.s. leaders, and how quickly they want to close the gap? ian: we have reported on this for a while. clearly the chinese have been aggressive in trying to take over at the small to medium chip companies in the u.s.

it is their biggest import, even bigger than oil, and some say if you look at the top 10 chipmakers worldwide, not even close, there is not a chinese one even close to being there, still dominated by the u.s., taiwanese, south korean companies. so they are nowhere there. the key is, well, what does that mean, can they build these capabilities? domestically doing that is going to take a long time. attention has focused on huawei, a networking company with its own chip division, and the industry is starting to take that chip division capability seriously and starting to worry this is going to be one day a rival of u.s. companies. saleha, is there a broader takeaway away from this decision by the u.s. government that will perhaps discourage foreign companies from making acquisition offers to u.s. companies?

saleha: broadly, i think what it looks like is a lot of companies did not realize we have a new regime in washington, and that helpbe used as a tool to the administration apply pressure to countries like china. analysts say we should not be surprised to see trump use this address to get china to trade imbalances and help with north korea as needed. looking further from that, it looks like they want to protect the technology, intellectual property here in the u.s., so we deals,expect technology licensing deals will be tougher in a regulatory manner. the bid has that been denied, will it have

difficulty getting another acquisition approved? it is on treasury and the government's watchlist anyway. could it make a smaller acquisition and escape scrutiny, or because it was blocked this time, it's going to cause concern regardless? saleha: really hard to say. all eyes are on broadcom. i heard from one analyst earlier today, either there is a really big national security risk related to this that the administration is not willing to divulge, or just a policy step, bold step. if there is a national security concern, you better believe broadcom will be watched closely. scarlet: ian king and saleha moh sin, thank you so much for perspective on this non-deal, as it turns out. voters in pennsylvania's 18th district vote on their next punishment, with democrats -- next commerce meant, with voters

hoping -- next congressman, with democrats hoping to pick up a seat. this is bloomberg. ♪

scarlet: pittsburgh goes to the polls. voters in pennsylvania are voting on their next congressman. republicans want to avoid an embarrassing loss in trump country, while democrats are hoping for a narrative setting victory, all in a special election in a district that will not even exist in a few months. chiefg us, kevin, our washington correspondent joining us from canonsburg, pennsylvania. you are with the group supporting conor lamb, the democrat nominee here. talk to us about the mood, and how folks in lamb camp are

feeling. kevin: they just opened the doors at conor lamb headquarters, the democrat challenger looking to turn pa congressional district 18 blue. this is a district that candidate donald carried by more than 20% during his 2016 cycle. there has been a flood of outside money from republicans, more than $10 million. hisr lamb himself and campaign outraised rick saccone, but outsiders from both sides have been visiting, including union leaders and former vice president joe biden. side, republican president donald trump here over the weekend, donald trump, jr. visiting yesterday. what we have to note, conor lamb is running as a centrist, side, president donald trump here over the actively criticizing the leadership of the current democratic party, including house minority leader nancy pelosi, so he is trying to cast himself as a young, charismatic leader, someone to be at the

forefront of what progressives are hoping will be a complete shift in congress come the midterms in just a few months. julie: to your point, kevin, he's not running on the party line, so to speak, so when we look at this individual contest and these individual candidates, how much can we really extrapolate? we are also looking at a younger man versus an older man, for example. they have run different types of campaigns, in terms of the messaging they have been doing. so, is this just kind of specific to this race, or are there bigger takeaways? kevin: i think the political watchers in washington are definitely telling me there are larger undertones we should be paying attention to. first and foremost, a source at the dnc told me, should democrats be able to get out the vote in this portion of the state with this type of electorate, that would be a sign corrected perhaps some

of the mistakes they made during the 2016 cycle. pennsylvania had not gone for a republican presidential candidate since 1988, and president trump was able to carry this state, as well as michigan and wisconsin. this is a state that somebody bee joe biden would like to able to make the pitch to these voters in the midterms, as well as in the next presidential cycle. election, docial not want to get too far ahead of myself. everyone will say, local elections are unique. that said, it is worth noting candidate trump carried this district by over 20%, and now these two candidates according to the polls are neck and neck. joe: if conor lamb pulls it off, with it be because of trump voters who switched back to democrats, or hillary voters were more motivated to vote? kevin: the latter. every, thet really

union leaders and speak with, the democratic strategist sources, all point to this effort of really mobilizing the vote, getting people motivated, getting people to the polls. yesterday i was at an event for rick saccone, the republican with deep ties to the local community here, and donald trump, jr. was there aignas very much a camp strategy of preaching to donald trump, president trump's agenda, and talking with voters at that event, they talked about things like health care, like the tariffs last week, which the union workers actually like, but despite the union endorsing the democrats. all politics is local. this will be dissected every which way. i i'm sure we will be talking about this tomorrow as well. on a busy day in washington, this is where political fodder focus on. julie: thanks so much.

we will talk to you tomorrow when the results are in. this is bloomberg. ♪

mark: crumpton with first word news. senate foreign relations committee chairman bob corker says president trump's decision to fire his chief diplomat caught him by surprise. corker, who has been secretary of state rex tillerson's most vocal supporter, acknowledged there has been tensions between tillerson and trump. the president spoke to reporters before leaving for california. >> we disagreed on things. when you look at the iran deal, i think it is terrible, i guess he thinks it is ok. i wanted to break it or do something, and he felt a little differently. mark: the president has chosen cia director mike pompeo to place tillerson.

the current deputy cia director gina haspel has been taken to take pompeo's place. russia's top defense officials the they will respond if u.s. launches a missile strike on the syrian capital of damascus. moscow has been one of the key allies of syrian president bashar al-assad. russia said it would consider a missile strike on damascus a threat to the russian lives of the military deployed there. jean-claude uecker is demanding -- juncker is demanding more clarity on brexit from theresa may. he addressed the european parliament today. >> with one year to go, it is now time to translate speeches into treaties, to turn commitments into agreements, turn wishes on the relationship

to specific solutions. in a eu leaders will meet summit this month. earlier this month, prime minister may outlined her vision for life after u.k. leaves the eu. republican congressional candidate rick saccone says he's not surprised he's in a tight race against democrat conor lamb, both competing for the house seat vacated by former conquers and tim murphy. a lamb upset would boost them across ahead of midterms in november. succumb -- saccone has tried to appeal to voters bite appealing -- by appealing to president trump, who won the district by in 2016. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action. u.s. stocks open higher, but quickly lost ground, even coming after a cpi report that did not

contain major surprises. u.s. stocks closing around session lows, nasdaq down for the first time in eight days. joe: not to medical moves, but considering -- not dramatic moves, but considering the performance of the nasdaq, interesting to see that down. julie: the group leading gains, financials, also sharply lower on the day. tech and financials rolling over. tomorrow is another day. what did you miss? america has a new top diplomat, at least pending approval by congress. president trump fired secretary of state rex tillerson this morning, planning to replace him with cia director mike pompeo. this is as the administration prepares for historic talks between president trump and kim jong-un. tillerson spoke to reporters earlier this afternoon. >> i will now return to private life, as a private citizen, as a proud american, proud of the opportunity i had to serve my country. julie: joining us now is horizon

investment's chief global strategist. thanks for joining us. as we have been talking about, what struck us during rex tillerson's comments before his state department colleagues was that he did not talk about the president, did not mention the president, and highlighted the issue of russia, which besides another onsue, is which he seems to have had disagreement with president trump. greg: two things. number one, he probably is still a little steamed that initially got fired by a tweet. kind of a harsh way to treat a secretary of state. more importantly, there are real differences, with the iranian nuclear deal, tariffs, russia. no lost loved -- love lost between the two. joe: where do you expect to see the most immediate impact of the change? greg: number one, the iranian

deal. chances have increased significantly we may try to pull out. the other thing i think will be the next big crisis for markets, for the world, is a really nasty trade war with china. i think we are close. i think the u.s. will announce in the next few weeks major sanctions, claiming china steals our intellectual property, and i do think the chinese will retaliate. there's a report in this evening's politico indicating the president wants dramatic new tariffs on china. that's going to be a crisis. scarlet: what role do you think a secretary of state mike pompeo would have when it comes to tariffs? would he be at the negotiating table, or just have to deal with the collateral damage that creates? greg: i think both. first and foremost, i think he will go along with trump. you don't want to wind up under the bus. that's one of the lessons from today. i think you would agree with trump, and trump is talking about aggressive new tariffs, so

i think they will probably be on the same page. the really crucial issue is how we respond once china retaliates. does this become one retaliation after another, does this snowball. with: what role would her replaces gary cohn have, particularly if as reported it ends up being larry kudlow, who is a free trader, but one who has moderated his stance recently? greg: i talked to a lot of people today. forget about the ncaa basketball pool, they want a pool, how long can larry last? larry is a very outspoken guy. he likes the camera. we already have someone at the white house who is very outspoken and likes the camera. i not sure larry would last too long. scarlet: i am glad you brought up gary cohn, because it was not so long ago that he departed the white house, and now rex tillerson fired, and the

undersecretary for public diplomacy, steve goldstein, fired following his statement on rex tillerson's firing. there is a sense out there, a couple of tweets, that there is going to be more turnover in the days and weeks to come. what do you think is causing the shift? things were quiet for a while. seemed like john kelly had things under control, and now we have this movement. greg: it is a chaotic atmosphere. some people like the chaos theory of running a company. i am not sure it works for a government. i think mcmaster goes by the end of march. you even have to worry about general kelly. so do think there will be more departures, more chaos. the market so far can handle this, but i think our allies, maybe our adversaries as well, are going to look at the u.s. as a country losing some stability. joe: this morning we probably thought that the biggest political story of the day would

be that house race in pennsylvania, but we are kind of treating it as an asterisk given everything else. how much will you read into that as a bellwether for what's going to happen in november, and something investors should be paying attention to? greg: first of all, i tend to th ink we over analyze one special house race. you cannot extrapolate that into a national trend. however, it looks at the margin will be a heck of a lot more narrow than the 20 point margin trump enjoyed just a year-and-a-half ago, so it will send a signal that trump's popularity i think especially with women has begun to drop. it has to be a wake-up call for a lot of republicans. as for the markets, almost regardless of what happens in november, trump will still have his veto power. it will be hard for him to get defeated in the veto fight. scarlet: of all the political stuff we talked about, i want to

highlight something you mentioned that i think is really important. the prospect of increased tariffs with china and a trade were heating up. as he said, the markets kind of shrugged off all this other stuff, right? that seems like something that would be trickier to shrug off, right? greg: yes. i would use a cliche. markets hate uncertainty. it is a true cliche. i think we're getting close to an uncertain climate with the chinese, with a lot of germany,on, maybe with maybe with brazil and other countries. that kind of uncertainty to me is not a positive story. joe: do you think a strong market reaction to an germany, maybe with brazil and other escalating trade war would have a feedback effect on the white house and cause a softening of rhetoric or action? greg: that could be. the harsh reaction we got a couple weeks ago prompted the president to carve out an

exemption for canada and mexico, so i suppose this could as well. i should add, the fundamentals still look great. great inflation number today. the labor market is on fire. gdp growing, corporate earnings growing, so the fundamentals are still good. i just think the next geopolitical crisis, a big trade war with china is not positive. scarlet: a lot of people were saying that another area of confrontation for the white house and others in the government is if the federal reserve continues on its path of raising interest rates, given that the economy is doing well and inflation is growing as expected. the fed will be meeting next week. do you see in the coming month a confrontation that will not be friendly between the new fed chair and the white house, which is looking for easier conditions and a rising stock market to bolster what is going on? greg: obviously we will get a rate hike next week. that's a pretty safe bet.

but what if we get two, for even three more in addition to next week? donald trump, who loves to tweet, might start tweeting about jay powell, the fed chairman, saying enough is enough. that is a risk as we get toward the end of the year. scarlet: greg valliere, joining us from charlotte, north carolina. thank you so much. discussesmark mobius where he sees opportunities in latin america. from new york, this is bloomberg. ♪

julie: mexico and brazil both hold elections this year. mark mobius, former chairman of franklin templeton, spoke about

the outlook for those nations today, starting with opportunities in brazil. mark: tremendous opportunities in those areas. low-cost production of these commodities at the same time we have to look at the consumer space. now in brazil, you are beginning to see recovery in the economy as a result of the changes taking place with these investigations, scandals, and i believe there will be a great opportunity in that area. and education, as with medical. very similar to china. there's going to be big changes and opportunities in those areas. these are things about brazil -- julie: go ahead. mark: interesting thing about brazil, they really have not fully adopted the technology that is being adopted in china. i think it will come. that is where they will be great

opportunities. julie: i just wanted to drill down into the commodity part. are playing the producers, exporters, what is the best value? mark: i would go to producers. many of them are exporters as well. that's where you want to be. >> let's stay in latin america for a moment. where are you on investing in mexico, given the political and geopolitical uncertainty there? mark: as you know, things are not as bad as they seem. everyone was very much down on mexico last year. we figured that was a time to begin to look at mexico, despite all the negative news. let's face it, mexico and the u.s. are joined at the hip. there's no way they are going to separate, and i think things will look up for mexico going forward. as you see bilateral agreements coming out with the u.s., i think it will be fine. >> in terms of sectors, is that also commodities, manufacturing? what are you looking at? mark: i would look at

manufacturing, because those are wereoeople who fundamentally hurt by the talk of some trade sanctions by the u.s. some of these companies will be pressed, and probably now is a good opportunity. mexico has a very big consumer sector, so we would look at that, retail for example. >> you mentioned the consumer sector a few times, mentioned retail in mexico. what about in brazil? broad consumer base, as these economy switch over? mark: very similar to mexico in that sense. a big consumer society. you know, the savings rate is relatively low, and lots of consumption. they are used to that, because they have gone through all this inflation over the years, so they are used to going out to buy something as soon as they get money, so that would be a very interesting space for brazil as well. >> you make a very interesting point. what is the situation with household leverage in brazil, compared with mexico, for

example? mark: leverage now in brazil is lower because of this problem they have had with the economy. the economy actually shrank last year. so now they are in the recovery phase, so i believe that in that sense, mexico is in a better space in terms of the consumer that. but brazil is a big, big market, so we would look at that very carefully. scarlet: that was mark mobius, former chairman of franklin templeton, speaking to bloomberg earlier today. up next, share your wheels. gm is aiming to do with cars what airbnb has done with real estate. we have more details on the automaker's ambitions. from new york, this is bloomberg. ♪

scarlet: general motors planning an airbnb tech program for cars. according to people familiar with the matter, the pilot program will allow owners to rent out their vehicles when they are not using them through gm's maven car sharing unit. joining us with details, david welch. how far along, how well developed is this maven unit? i ask because it feels like last year people were taken by surprise with gm's progress in self driving and autonomous vehicles, and i wonder whether the same thing's happening here? david: it has been around for a couple years now. what it does at the moment, it rents cars to people the ways a car does. if you want to rent a vehicle for a couple hours. or they will rent cars to uber and lyft drivers, or people who want to drive for delivery services. this will be something different,

peer-to-peer car sharing service. so if you have a gm car, you can put it on through maven, rent it to somebody while you are not using it. scarlet: this seems counterintuitive. doesn't this mean less demand for people to buy gm vehicles if they are renting out vehicles that they own? david: so far we have not seen that. car sales have been pretty strong the last few years, even as ridesharing companies have grown. so what we are seeing, places like new york, san francisco, densely packed cities where parking is expensive, people using different mobility services to get around instead of public transit, that has been the big loser in this in a lot of cities. and car ownership itself is doing just fine. this is a way for people who own with people who need a car. in airbnb, a lot of people are renting the home or apartment of

somebody who already has it that is not using it that week. joe: i did something like this once. my family rented a car from someone else for the summer. these services exist. are any of them taking off? is this something people feel comfortable with, you will park your car and somebody else will have a key to it? do people feel this is something they want to do with their cars? david: the two services out there are grown pretty well. turo has five times the number of users they did a couple years ago, and many more people their vehicles on the platform. still a niche thing, uber and lyft are much bigger.peer-to-peer car sharing is growing, but still fairly small. gm wants to experiment with everything, so that of the world

of transportation really does change in the next decade and beyond, they will be prepared for it. the other thing, as they are building out maven, using the car sharing service, they can get free cars, basically. instead of having to on the car and do depreciation, maintenance, all the things that come with owning a car, having the assets on their books, they will just connect current gm vehicle owners, who they are already talking to all the time anyway, with somebody who needs a car that day. julie: as you say, they want to position themselves if transportation goes in a different direction. gm is not exactly operating in a position of extreme strength right now, right? recent numbers have not been as increased has that willingness to try these different experimental things that might at some point turn into something bigger and more profitable? the core profits in business have been fine.

it's in other markets they pulled out of, like europe, where they were not doing well. the for business itself is very strong, and they have done that so they would have more money to invest in things like the self-driving car program in san francisco, and in some ridesharing, car sharing, ride-hailing services they thing could be big down the line. the bad units of the passenger car business, they are cutting those away, keeping the profitable ones, and using cash flow to develop some of these future mobility businesses that may or may not take off. scarlet: maybe next time joe and his family go on vacation, they will get a maven car instead. detroit bureau chief david welch, thank you so much. time for the bloomberg business flash, a look at the biggest business stories in the news. julie: a federal judge held yahoo! can be liable for punitive damages as a result of the data breach that compromise information of 3 billion

customers, in addition to any ordinary compensation paid out for consumer harm. yahoo! already reached an $80 million settlement with investors after claims executives concealed the data breach to artificially increase the price of company shares. volkswagen has secured $25 billion in that are supplies for its aggressive push into electric cars. vw fans to build 3 million electric cars a year by 2025. bloomberg spoke to vw's ceo. >> commodities have always been part of our outsourcing and procurement. we are not just buying from tier one manufacturers. we try to secure raw materials at reasonable prices. julie: with business booming across southeast asia, ride-hailing startup grab is pushing into a new challenge, providing loans to people struggling to get traditional

banks. with more than 86 million downloads, grab has a solid base of customers for grab financial services asia. that is your business flash update. ? joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg.

julie: president trump in california, making remarks at a marine corps base, this after he looked at prototypes for the border wall that he had proposed. we sought earlier pictures of him looking at that. now he looks to be making comments to the folks at that base. later on, he will be attending a fundraiser in beverly hills before he returns to the east coast. in the meantime, "what'd you acceleratinglloff at the close of trading. angela merkel will be reappointed to her fourth term as german ch

alisa: you are watching bloomberg technology and here here's a check of first wrote news. is in california inspecting part that's for his proposed order while and president asked which party was the hardest to climb.

also set parts of california could use a while to break the flow of illegal immigration. secretary rex tillerson's delegate in his responsibilities deputy --workday to tillerson was fired earlier by president trump. , i ama proud american proud of the opportunity to serve my country. president trump is assigning mike pompeo to replace tillerson and deputy cia director will succeed pompeo. she will be the first woman to lead the agency. florida prosecutors 806 the death penalty for nikolas cruz for the mass shooting at stoneman high school. republican candidate rick saccone is in a tight race against