president trump fulfills two of his campaign promises as he signs orders to build a wall on the mexican border to stem illegal immigration. made in the usa, the u.k. prime minister addressed the .epublican party she's there to put u.k. interest first. china curves continue. banksoc is set to order to control the first quarter.

the premier says china will continue to champion economic openness. it's "bloomberg daybreak: europe." city ofre in the london, i'm manus. a day of breaking news. one of the biggest nordic lenders, the critical thing on their mind was what would they do with the dividend? committeds if they've 65, it's just a snap below the estimatet -- consensus . this after the ceo this time lester shifted gears in terms of having promised to pay out 75% of its former dividend, shifted

gears and said it's going to a progressive level. you,ple of key numbers for the loan loss estimate is for 148.8, quite a significant fourth-quarter net loan losses. it will be eventful and we will be prepared, according to one banker. 1.20 one billion euros. net fee income, 876. the key message here is that the and the is in line buffers of capital are there. six-month earnings-per-share 34% and 44%. those other breaking news headlines.

i thought we would start with a moment in time, have a look at this. this is the dow jones industrial average, breaking -- it took nine weeks to travel 1000 points. that is the second fastest rally on record. the last time we shifted gears like this was back in 1999. that was this time here. in 35veled 1000 points days, so it's taken nine weeks to do 1000 points. the last time we so that kind of momentum was in 1999. livered, over 370 points of this momentum. their stock is up 30%. regulation, the drumbeats of

the trump administration. what will the reality be in the studio? what can he actually affect and change? the pace of which you've not seen since prince wrote the song about 1999. the equity story is absolutely driving higher. are humminges along. the msci asia 1.2% overnight, the highest since 2015. the topics, it's the financial stocks having the biggest rally. mitsubishi financial up by 4%. the hang seng at a three-month high. is there momentum to come? the briefing i meant to -- i went to describe donald trump is dr. jekyll and mr. hyde. flip it over and let's look at the rest of the market. for all this if you sickness,

what happened to the dollar? they don't believe it. it's over position, overcrowded, and over traded. the dollar dips by .8%. those are not my views on the dollar, that is the view of citigroup. the dollar tips ever so slightly. up because the market --ieves that ultimately opec inventory climbing by 2.80 4 million barrels. the pieces will have global slowing demand. we will all be a lot older and wiser. shery ahn is here with the bloomberg update. president trump has acted on two of his most controversial campaign promises. he signed an order to set in motion the construction of a physical wall across the nearly 2000 miles southern border.

he also signed an order on the so-called sanctuary cities that refuse to enforce immigration law. writing in bloomberg china is described as consistent on free trade. china has in portraying itself as a champion of globalism as donald trump says he will renegotiate nafta. china central bank is said to have ordered the nations lenders to strictly control move toew year, another curb excess leverage in the financial sector, according to people familiar with the matter. the government has been targeting home loans since the fourth quarter to contain runaway property prices. harvard university says it plans to outsource most of the investment management of the

university, more than $35 million endowment and cut about half of its 230 staff. the sweeping overhaul of the world's biggest university find arcs a turnaround of in investment strategy dating to the 1990's. the funds ceo was starts with improving performance. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the .loomberg at top manus: markets are on the move. are arebullish story going to question these markets? good morning. that 20,000ow hit point level, as everyone has been expecting, there was not really much choice for investors

but to take it and run with it today. , hong kong leading the charge, where the strongest markets in the region today, up 1.4%, holding near the three-month high. and japanese equities, a lot of the movement here coming through in banking stocks which have been rising quite steadily. mitsubishi 5% and ufj also a front runner. australia and india close, the other big movement we've seen is coming back into emerging markets. thailand is up for a fifth consecutive session and jakarta had a really strong week. the dollar has started to lose a little bit of ground, pushing up some of the emerging-market currencies and giving conviction to those markets. there was a report today that china is considering ordering banks to curb new loans in the first quarter. still we've seen solid moves coming through in the shanghai

market in late trade, up by about .25%. that's ahead of the lunar new year break which will see a lot of those markets closed over the course of next week. the offshore renminbi, fairly steady there. the momentum has been more in equities. we know the u.s. treasury yield is fairly steady at 2.5% level and we've seen the yield on the australian 10-year note just a little bit higher. so money coming out of bonds a little bit in the region but certainly back into the equity space today. manus: thank you very much. let's see how long it lasts. there's one man many say is responsible for a lot of the market movement, donald trump. he's making good on one of his fundamental campaign pledges, signing an executive order to build a wall on the mexican border.

he said construction would start within months. >> as soon as we can physically do it, we are within months. certainly planning is starting immediately. announced plans to tighten restrictions on who can enter the united states with a suspension and refugees and a cut in the number of admissions expected today. let's bring in our guest, a chief economist, thank you so much for being with us. the walls are going up, the policy is taking form but it will take time and probably $20 billion. cpt being ripped up. my question to you is, all this protectionist movement, he's going to need copper, iron ore and aluminum. i don't want to rock anybody's boat, but the u.s. does not have enough of those goods and

chattels to do this huge infrastructure span. you can rock boats but i'm going to rain on the parade. the dow might be up at 20,000 but reflation trade lives on, but i'm worried about the other stuff that donald trump has been very clear about. it's an increasing stance toward protectionism and the impact on the world, not so much directly on the u.s. because we know it's economy is large, but it's relatively closed already in terms of world trade. a barroom brawl with other countries and matching tariff increases or even just pushing their currencies down lower, i think market currency is another thing. to be so gung ho about the positive growth impact, but the second bit is the quid pro quo. just because -- it doesn't mean the fed hits the brakes hard.

if i'm right about this protectionist impact later on in the year, then it seems the fed will have to turn a blind eye to that. we could have a real sort of loggerhead between what donald trump wants to do and what the fed wants. how much more aggressive with the fed need to be? could there be a policy mistake? one guest was saying it would be a policy -- a folly and a mistake. >> if there is a mistake, it's the fed hitting the brakes too hard, but why would they do that? 's looks as though trump advisers are talking about a complete paradigm shift. this is potentially a decade or more ahead, assuming that he does to terms. in which case, in the meantime,

if the fed suspects that growth is going to slow down indirectly because of slow growth elsewhere or protectionism, it probably also means a drift back toward the dollar, in which case the higher dollar will do a lot of typing for the fed. i see the fed hiking just one more time in the middle of the year when they know the size of those tax cuts, rather than at least the three hot after christmas and the three that the fed has an mind. manus: you said the protectionism rising, he will make that the number one priority. one thing that comes through is that he wants to do good trade deals rather than isolation deals. but we don't know yet. stimulus, over fiscal do you get 4% growth? be aax breaks, etc., will domestic united states of america story. is this a u.s. growth story and

not a world growth story? ,> he cannot have been clearer its pro-business, but it is pro-american business, and in , thease, even before trump international impact for the u.s. being relatively small. helps themain drift rest of the world is through financial markets. turning it on its head and we get increasing concerns about u.s. growth, that will take a lot of the cream off the top of those stock markets that you mentioned earlier. in 1999?ere were you desk,as in london at my and i remember the great hope to 10,000, and now we are twice that. manus: do you think everything we just discussed -- let's say

he gets half the fiscal and half the tax, a half trillion and 22% tax rate. have we underpriced? that is my question. are we irrationally exuberant, or could there be more cream on top? >> there could be more cream on top. i would put that down to the interference of central banks. of qe313 trillion worth -- between the four big central bank since the end of the u.s. recession, that helped stock markets. stay with me, we have a lot more to get through. later in the morning will get news from the form -- former federal reserve governor at the university of chicago. time. at 9:30 u.k. coming up, the dividend was in

line. swedish -- a swedish ceo will join us with his views on the day, plus connecting with china. tol hear about the decision move stock price since the financial crisis. and a host of companies are publishing their earnings. unilever, that's where anna edwards is off to as we speak. we will get the full-year figures at 7:00 a.m. and hear from the ceo. ata is sitting down with him 7:50 u.k. time. stay with us. this is bloomberg. ♪

manus: breaking news coming across the bloomberg terminal. johnson & johnson will a four

billion deal.0 johnson & johnson are to ion, it will drive their revenue higher. the deal was unanimously approved by both boards. the deal will close by the second quarter of this year. 280.8 swissg, francs. be a substantial minority that is spun off. the r&d unitn off did itnson & johnson outside thede -- united states. repatriate your dollars back to the united states of america.

johnson & johnson closes the deal. let's get the business flash. >> ebay predicted annual revenue that may rise as much a 6% to $9.5 billion, topping analyst estimates. it's the best outlook in years for the company. investors gave their vote of approval with ebay shares soaring in after-hours trading. credit suisse is exploring options for expanding in dublin according to people familiar with the matter. it's emerging as the favored location but it's also -- considering cities like frankford as it considers moving jobs to adapt to brexit. second-quarter revenues could be as low as $5.5 billion. missing the average analyst prediction of 5.9 billion.

that is your bloomberg business flash. thank you very much, i'm just running a couple of numbers . the bid is 280.08. beforelittle bit more the deal actually closes. actelion will spin out of its drug discovery operations. more on that deal as we get through the day. let's circle back to the other great driver of the world. curb takes more moves to leverage. stephen engle has the deal -- details from hong kong. stephen: the pboc is said to have ordered the nation's to strictly control

in the first quarter of this year. people familiar say this includes a request to keep the mortgage increases low the rise we saw in the fourth quarter last year. the central bank wants to avoid excess credit fueling bubbles while keeping enough running in the financial system heading into the link the lunar new year holiday. the pboc is said to have indicated it may punish banks that don't comply. the idea that china is the world's driving economic power is unusual. in exclusive interview, weighing in on the world's second-largest economy. they built a system that's going to need to restructure. it happens to be metastasizing right when trump gets elected. what is happening in china is going to happen on its own, on

top of the fact that trump will get a better deal for the united states. those things are going to cause profound change in china. manus: metastasizing reckless behavior? .ascinating use of language is all going to come crashing together. >> it is a bit of a dark cloud potentially if handled wrongly. but let's take a step back, even before mr. trump, china has a big dilemma. guess what the magic number is, close to 7%. it has an overheating housing sector in particular. when that happens through the shadow banks, problems occur. the interesting flip side of protectionism is potentially china addressing its slower growth through pushing down the renminbi.

the irony is that if they do that, and when they do that, the u.s. potentially could call it a currency manipulator. to do otherwise and let the reserve's it would question china's commitment to buying u.s. treasuries. manus: the offshore renminbi has had the biggest rally on record. the offshore heads for a record monthly gain yuan. offshore stop theoing a lot to currency from slipping away on a banana skin, i thought. >> in the short-term, they are. first their technical currency basket means that as the dollar goes up, that's one reason for the renminbi pushing up against the dollar. later they will need to take all

setting action. the other thing in the newt-term, ahead of the year holiday and the start of the new calendar year, they have to limit capital outflow in china because there is a personal allowance that allows people to take out up to 50 pounds in terms of local currency per year. these are short-term reactions, but the longer picture is that china needs to preserve growth. it has less in its toolbox because of other methods it has used. leaving the currency the main weapon in his hand. they could push the currency down further. manus: up next, the first interview of the day after reporting fourth-quarter profit, johnson & johnson closes the for 280.08 actelion

percent. that's the breaking news bloomberg. this is bloomberg. ♪

it's 3:30 in the afternoon in tokyo, a beautiful day. shift by .25%. a let's talk about daybreak, it's available on your terminal. and on your mobile. there you go. the city of london, beautiful buildings. will we have the business to fill them?

that's the question some people want to ask. gdp figures will be released for the fourth quarter. bump inittle bit of a paperternoon with a white on the details of our new relationship with the eu will invoke perhaps a less hard brexit? who knows. the next-door looks at prime minister theresa may. foris striking out in a bit a trip to the united states. she will address the republican party and will have that meeting with donald trump. a special relationship? how special will it be? finally we turn our attention to consumer earnings, expecting unilever to post a subdued

quarter. are the leads on daybreak. let's get into the asian stock market, the highest level in four-month. >> we're seeing the global equity rally gathering steam. the dow at 20,000, the s&p 500 at a record in the msci sinceacific its highest july 2015, climbing for a second day, tracking those u.s. stocks. i haven't broken down by region's. leading theer japan gains and still it's like it's doing that. japan leading but hong kong gaining, at its highest in three

months. you have financial stocks leading the rally. alive when you look at the dollar. the bloomberg dollar index poised for a fifth straight weekly decline, the longest stretch since may 2015. there's a little bit of a disconnect happening between dollar-yen and the 10 year treasury yield. staying a little on the back foot, even after the 10 year yield went above 2.5% and holding it that today. of about 1.5 basis points. at 6:30often show this but you can see gains in equity , japan is interesting. three basiselds up points. yesterday we saw the 40 year bond yield hit almost 1%. that global reflation trade certainly showing up in japan.

springy some breaking the nordiccsson, gear maker. the market was looking for 59.2. is ambition on the dividend to increase it over time to a progressive dividend. the focus -- the ambition will drive that dividend over time. they are reviewing their priorities on future direction. negative energy trends remained in the fourth order and the margins pretty much in line with the market estimate. dividends, staying

with the nordic region, earnings topped out in the past hour, fourth-quarter net interest income was in line with earnings estimates. let's get to its ceo who joins me now. thank you so much for joining us. it will be a relief to the market, according to the numbers of got in front of me, that takes us down to 70%. that weident are you are putting a base level on the dividend and that you can sustain these levels of dividends? >> of course we have 12 months to go, but what we have done is show that we have delivered our dividend policy and there's no reason to change that. we have a progressive dividend policy. the thing to note is that we

have actually increased our to 18.4 -- 18.4% which is above requirements. to aim was to increase that 75-100. we have a very solid capital base and robust business. manus: so no reason to change the dividend policy. the classic understatement, you're talking about getting ready for a volatile year. init going to be the change interest rates, the movement in swedish interest rates? what is the biggest risk for you on the horizon? we see growthy coming in the markets. the economic events, and we've already been operating in a negative rate environment for the last two years, so that is not the thing that concerns me.

the concern for all of us is more geopolitical and the spill over to the economy. environment, i'm pretty comfortable way we operate. manus: obviously everyone is looking at policy at the moment, shifting gears in the u.s. and it is expected in europe and sweden. how long do you think the shift from the end of monetary policy will take in your own swedish market? into 18.k we will go 2017't see a tightening in and my comment that i think we need to be a operate in a profitable and efficient way in the environment we see today. one of the things i'm looking at is the negative interest, that is well done, but where are we in terms of net interest income?

in have potentially a change interest rates going into 2018. how does this change the outlook , and what will we be talking about at this time next year if it goes according to your plan? said that we saw turn in the interest margin during the second and third quarter. given the yield curve and pricing, our aim is to regularly increase it. manus: the shift in the yield curve, does that change what you will do on the fee side of the business? can we expect a shift in the fee structures that we've seen from you? >> i don't think so. i don't see a dramatic move,

certainly not in 2017 and maybe not in 2018. in the end of don't see a structural change in our income structure. you mention politics at the start of the conversation in terms of the primary risk you see for 2017. how does a business like yours begin to mitigate against that? how do you begin to prepare for those kinds of shocks that we saw in 2016 but that may be on the roadmap for 2017? >> of course there is not that much you can do for unexpected events. but when we have events like brexit, we had the trump election, around those type of events, we carefully look at our risk exposures, look at what

bigger transactions are happening around those events and make sure that we don't make stakes. will affect the broader macro in, and there's just normal prudence and i think we've shown not only in 2016 but throughout the 10 years after the financial crisis that we've been able to navigate in a pretty volatile and challenging waters. one of the arguments over brexit that's never far from any , will the banks have passporting rights, etc.. i want to get your feel for this, you have a huge liberally minded participants in europe which is pro-finance and generally pro-free market. do you think the u.k. not being part of the eu is going to

dynamically shift what happens to banks and banking around europe in the medium-term? is it a risk to your industry, the u.k. no longer being a strong voice at the heart of europe? >> i would hope not. what you said about the u.k. i think is right. we have subscribe to the same type of belief and policy. brexit,hope that however it happens, is a wake-up call for europe to follow similar policies. i think we need a liberal market economy and we need a constructive restructuring in europe. and means we need a dynamic viable and profitable banking sector. issue,just one final your bank and the shift in dividend policy, is that

something which is inextricably linked to the levels of capital being put on you by regulators? , the one thing we came -- that came through is that building or capital is one thing we do not need in banking. what do you want to see from regulators that takes your industry forward? >> i would agree with that. -- it'sd have seen the not anymore about capital. revolutioncovery and doime, what we now need to is calibrate and anything we do should be evidence-based. we need to really improve the confidence not only around the banking sector but the broader economy. that is responsibility that we

all have as bankers and regulators. much forank you very joining us there from stockholm. a little bit of breaking news, this time coming from the dutch revealed, mistakenly george soros short position. mistakenly publishing details of the hedge fund going back to 2012 on its website on tuesday evening. they were quickly removed, they included a number of unreported .ositions it was taken down very quickly on tuesday evening. .hose are the headlines hopefully we have reached peak capital requirements coming

through on the banking side. coming up, we will talk china. a ceo who seized the opportunity for growth in china continuing. a.m.,arnings, and 7:00 including unilever. and brexit tops the call as theresa may heads to washington. --ding tips for the pros post-brexit world. this is bloomberg. ♪

manus: breaking news coming in from unilever. whatever you use in your home or your bathroom, it's probably one of their products. the market was looking for growth of 2.6%. so that's the fourth quarter, it

was tough conditions that will likely continue. that's what they are telling us, tough conditions, likely to continue the first half of 2017. the market was looking for 2.6%. when it comes to the growth factor for the year, it's been a slow start with growth improving as the year progresses. as we speak, and edwards is on her way to sit down with the ceo. they dealt with the monetization issue in india, commodity costs are a big dynamic for them. they are having a conversation at 7:50 a.m. this morning. let's get out to juliette who has the business flash. agreed to & johnson buy actelion for $30 billion, becoming a leader in medicine, creating a rare type of high blood pressure.

they will pay 23% above yesterday's closing bid. the transaction was unanimously approved by both boards. johnson & johnson sees the deal closing by the second quarter. ebay predicted annual revenue that may rises much is 6%, topping analyst estimates. it's the best outlook in years for the company. investors gave approval with ebay shares soaring in after-hours trading. toshiba set to be selling a stake in its chip unit as part of his recovery program. it's planning to sell 20%-30% to multiple investors, according to a person familiar with the matter. toshiba's board is said to be discussing the sale on friday with the goal of deciding on buyers next month and completing it in march. manus: u.k. prime minister theresa may touches down today

in the usa, becoming the first international leader to meet donald trump since his inauguration. to decide on post-brexit trade deals between the two countries. our guest is still with us. theresa may goes to the united states. , thepeople have said to me trade in services relationship with europe, yes, the u.s. is important, but it's not going to trump anything that you get from europe, but it is important nonetheless. >> it is important. ,e know that in terms of brexit the best that is yet to be decided and will take longer than many think is the link that the journey. in the meantime, theresa may will need to speak to the other

big economies and start to talk about trade deals with them. but eu trade law is that the u.k. cannot commit trade bigamy. we cannot sign up to a trade until we anybody else are fully outside the eu, and for a number of reasons, i think it will take about five years, not the two years that we are all looking for. ,anus: to carry on the analogy you can have a lustful affair on the side. >> well, you can hold hands. we will stop the analogy there. change -- what changes the direction of travel? conversatione the they have to have with europe, or do europeans just need to say were not profitable right now? >> these are politicians and i'm

sure it will have an effect depending on what countries you are negotiating with. it has become clear that the u.k. prime minister wants what she calls a bold trade agreement with europe and others. we want to be sort of a member of the golf club, we can use the golf -- the clubhouse, but we don't pay the fees, which is a little bit rich. that's taking it probably a step too far. we expect everybody else to remain playing the way we would like to. there's going to be a lot of trade-offs and compromise here. any trade agreements with come to will not be without strings. it sounds a little bit in fact like eu membership. manus: we are waiting for gdp numbers to come through today. newwe at the beginning of a reconciliation in terms of what growth might be in the united kingdom?

>> will find out today that the u.k. group 2% last year. many will say so what about brexit. let's not forget we have not even started to talk about leaving. so the risk of that growth rate comes down a little bit. manus: thank you so much for being with me, neil williams. qantas is working to expand its international business. the airline has restarted flights between sydney and beijing. it plans to introduce a direct service from paris to london next year. takesay it will not traffic away from its partners ever. >> we think it's very complementary. they're very supportive of it. and we have 40 different destinations in europe.

impact the bigto full from dubai and other destinations. this route will generate a lot of interest from people in europe wanting a faster way to get to australia. it's three hours faster getting from london to perth on this route and faster getting from sydney to melbourne going this way. it's a particularly designed terminal which will be a great ground experience for customers as well is an amazing in air experience. this is a game changer for all of us. and new technology coming in the may allow us to even do a sydni to london draft. bignology is becoming a

brand of qantas in allowing us to fly to great markets that we could have only imagined in the past. plans comes innd june of this year. are you looking at any other and does the prospect of a turnaround in ties you -- entice? you? >> we have a lot we need to do. series ofwhole exciting things to happen over the next few years, so i'm not going anywhere as long as the shareholders still want me to do the job i will continue to do the job. how does the decision to cut capacity change your hedging strategy? same profilee we've always done and it's worked very successfully for us

in the past. we never try to predict what's happening with the oil price. we try to give ourselves protection against the price marks. it gives the business time to cope with it. profile is well hedged out there for the next 18 months. participation, very high levels of participation. it gives you protection if it peaks and participation if it does collapse. that's the way we've always done it and the way we will continue to do it. manus: a conversation with the qantas ceo there in beijing. is amiss, 2.2%. a tough year, tough positions. the market was looking for 2.6%. johnson & johnson closed on a deal to get actelion in the back.

nordea dividend was in line. this is bloomberg. ♪

manus: asian equities extend tops gains as the dow 20,000 for the first time. border control. orders totrump signs build a wall on the mexican illegaland stem immigration. for a trade.s. meeting with president trump. she is there with a promise, putting the u.k.'s interest first. the pboc is said to order banks to control in the first quarter. -- control new loans in the first quarter. china will continue to champion

economic openness. you are welcome to "bloomberg daybreak: europe," our flagship morning ship in the city of london. more results coming through across the bloomberg terminal. we have the first half net sales, coming in at $6.42 billion, the first top line coming through. they actually say, a couple lines coming through. let me take this back for you. we have a top line from diageo. these are the six month results coming through. $2.70 billion, and the estimate was for $2.01 billion. they have many, many challenges. let me take you straight to rbs.

forhas provided a provision their exposure to retail mortgage backed security. they continue to cooperate. that provision will be 3.1 billion pounds. rbs continues to cooperate with the department of justice. this will take the total aggregate provisions for this particular issue to 6.7 billion pounds. rbs reaches the final hurdle with the department of justice. cooperateontinuing to , but they are taking a provision of 3.1 billion pounds. the total provision so far is 6.1 7 billion pounds. there are further substantial additional provisions that might be recognized. this is not the end of the journey. i can tell you it is one of the last and final global lenders, if and when, they manage to

feel this deal. penalties has been levied so far with regards to precrisis fails of mortgage related bonds. we understand that senior rbs executives favored a fourth-quarter charge because the bank is on track for a 2016 lost, making such a provision before a settlement is reached, that would reduce the impact on the financial performance this year. that is according to our sources. thisillion pounds, and additional provision does not directly impact the distributable reserves. i will get there. it is just a little bit of a mouth full between the numbers and where we are with the headlines. this.et's talk about did you sign up for a package, did you get a telephone, did you

get broadband? the first-half operating profit comes in 451 million pounds. sky says they are on track for the full year and are on a deal with exclusive england matches with the nation's league. those are the top lines coming through from sky mobile. let's go back and look at diageo because they moved on to the rbs provision, which was flagged up. let me just review and recap the diageo numbers. organic sales came in at 4.4% with an estimate of 3.1%. they say they are delivering stronger full year unchanged. they are confident of the organic operating margin. those are the top lines coming through from diageo. i will have a conversation with ivan menezes in a couple of

minutes time. actually, not a couple minutes time. in one hour and one minute. what have we got for you? let's look at the equity market futures. we have the dow making records. it transferred itself through into the intra-asian trading session. look at the bottom of your screen, up over to present. 2%. up over this is the second fastest rally in the u.s. on record. u.s. futures on the top of your screen. up .25%. paris, and frankfurt all showing the same enthusiasm for the trump trade. the asian equity markets carry higher through the morning.

the asian-pacific, rocking it this morning. topix, driven by financials. the hang seng, just off a three month high. this all transfers itself into the risk radar. you have got gold on the move. again, the dollar is that little bit shaky this morning. let's look at the risk radar, in terms of the other complexes we have. we have the dollar, gold, and oil on the move. should we have a look at that? no. i just got ahead of myself. let's get to juliette saly with the first word news. juliette: president trump has acted on two of his most controversial campaign promises. he signed in order to set in motion the construction of a physical wall across the nearly 2000 mile southern border. he signed a second order

that targets sanctuary cities. averagejones industrial closed about 20,000 points for the first time ever, up 9.5% since trump's election. u.s.hree major benchmark stock indexes closed at record highs during wednesday's session. this country will continue to champion economic openness, despite economic uncertainty. he described china as "an anchor of stability with its consistent message of support for reform, openness, and free trade." china has been portraying itself as a champion of globalism, as donald trump scrapped the tpp and says he will renegotiate nafta. china's central bank ordered the nation's lenders to control new loans in the first quarter of

the year to curb excess leverage. that is according to people familiar with the matter. the government has been targeting home loans since the fourth quarter two contain runaway property crisis. french prosecutors have opened a probe into presidential front-runner fillande, regarding the use of his wife as the parliamentary aide. collected alon public salary, totaling 500,000 euros without actually doing any work. in a statement, fillon says the investigation will allow him to put an end to the unfounded accusations. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. you can find more stories on the bloomberg at top . we are just closing out most of the asian session here today. shanghai just closing higher by 1/3 of 1%.

there has been strong buying coming through, even though chinese authorities are ordering banks to curb new loans. also, a strong rally from the hang seng index at a three-month high. of course, the dow getting 20,000 points, giving conviction to asian markets. we were talking on bloomberg radio earlier today to a couple of analysts that said the asian equity rally has led regardless of what is happening in the states. the nikkei is up by 1.8%. australia and india were closed for public holidays. we are looking at the thai indexed, because it has been higher for a fifth consecutive session. the asian indexes have been climbing to the highest level since july of 2015. we have seen yields on the 10 year in australia rise. the other focus we have been watching is the offshore

renminbi. 6.8265 on the offshore renminbi. we will be watching this closely tomorrow, the final day before the lunar new year. manus: a grout reeat roundup. donald trump as acted on one of his fundamental campaign pledges, signing an another executive order, this time to build the wall on the border with mexico. president trump interviewed with abc news and said construction would start within months. president trump: as soon as we can physically do it -- >> within months? president trump: i would say so. manus: trump also has plans to tighten restrictions on who can enter the united states, a suspension of refugees, and a cut in the number of admissions expected to date. theing us now, the head of

medic strategy at ubs. the dow makes it to 20,000. i love what you said to me. it is the velocity i am interested in. we did it in nine weeks. the last time we saw a paste like this was 1999. -- we saw a pace like this was 1999. should i care about the dow? what do you make about the momentum? >> it is a good enthusiastic indicator, but it is trite quite meaningless the way it is structured. moves like this all over the place. if you look at the march 2009 rally, that was up by about 29%. we are about 75% to 80% there. i think some of the moves we have seen have gotten a little

ahead of themselves. auseere suggesting you pu to see evidence. manus: if it is evidence that you want -- >> walls are evidence. manus: that will cost $10 billion to $20 billion. that is a representation, isn't it? $20need $10 billion to billion to build that wall. we are talking about a fiscal latitude to about $1 trillion. to close that gap in america, you do need an excess of half of $1 trillion and extensive tax cuts. is that the driver for the next leg of the american equity story? >> i am not an american

strategist. but i think they will say, there is upside to the u.s. market. there is potentially more earnings. ,here was quite the tech rally but it kept going a little further. i think the big news is that potentially, and ironically, the things going on in the u.s. my propel the closure between profit growth in europe and the u.s. 20% of our sales go to the u.s. our makeup is much more cyclical. we are much more in tune with higher rates and higher inflation. energy is a bigger part of our markets. what fiscal spending will support. we were not able to piggyback on the u.s. growth between 2007 and 2013-2014.

maybe europe can finally piggyback onto it. manus: we have touched on this a couple times and one of the themes last year was -- there was less momentum to own europe perhaps than there should have been. do you think that will shift gears a little bit? office a note from the the other day saying, we have overpriced political risk in europe. i ham potentially overpricing negative risk in europe. that is a double whopper. >> we used to say there was a double discount on europe. you still have got the earnings pick up to go for in your. i think political risk is potentially overpriced. underperforming the u.s. by 56% since 2007, and

the profit gap is about 56%. i think it is time for that to close. also, european profits have disappointed for six years in a row. as they move through the year, a little profit growth and momentum turning up, you get through elections like france, and you will see u.s. investors feeding back on european equities. manus: there is a hint in that message. karen olney, stay with us. let's set you up for the day ahead. we get the growth figures, the gdp numbers, published at 9:30. .lso, questions in parliament theresa may, seeking parliamentary approval to introduce article 50. at 2:00 p.m., the euro finance

ministers me to discuss greece. they will also be assessing the state of play in ireland, portugal, and spain. next, theresa may heads to washington. ubs has trading tips for a post-brexit world. this is bloomberg. ♪

manus: 7:19 in london. another shot there from the brandenburg gate. 1.0796.-dollar, >> johnson and johnson has agreed to purchase the swiss drugmaker actelion for $30 million. j&j will pay $280 per share in yesterday's above

closing price. the transaction was unanimously approved. johnson & johnson sees the deal closing by the second quarter. the royal bank of scotland says it will take a 3.1 billion pound charge in its fourth-quarter results as it moves closer to resolving a u.s. probe into sales of mortgage securities. the bank says it is cooperating with the u.s. department of justice. pounds into the litigation. according to two people familiar with the matter. one of those people says the irish capital is emerging as the favorite location for the bank's back office job. they're also considering frankfurt as a considers moving jobs to adapt with brexit. that is your bloomberg business flash. manus: theresa may touches down today in the u.s., becoming the

first international leader to meet with donald trump since his inauguration. she is looking to lay the groundwork for post-brexit trade deals between the countries. may could get a warm reception as trump exits the transpacific partnership and aims to renegotiate nafta. karen olney is with us. the marketide, is assessed with every tweet and move trump makes today. johnson and johnson, doing a deal in the pharma space. that is one of the torch lights trump has shown a light on. johnson & johnson is doing a deal, picking up actelion, and doing it with dollars held overseas. there are a couple themes to pull up here. we just talked about the value and growth proposition. >> if you look at the second

half of last year, value outperformed quality by 31%, an enormous number. that means certain stocks like actelion, heineken, even chemical companies of high-quality. that means some of these quality players in europe are on sale at the moment. it makes sense to buy. the pharmaceutical sector is as cheap as cyclicals in europe. manus: hence, why they are beating one another up to get in there. let's pivot to the u.k. i am looking at cable this morning, 1.2645. we have been rising for two days. we do not see that there is often. but we are rising. we are hitting levels we have not seen since december. let's look at the ftse. the ftse has had record after record. the dow makes a record.

where the u.k. sits relative to the u.s. and the european story in your mind. >> the big thing was the currency, obviously. we get all the good news up front. currency is the only thing that gives you a model of certainty. but if you look at the u.s. investor, the return has lagged by about 10%. u.s. investor, it is only up 7%. that currency weakness will hurt the returns of an international investor. it is the currency playing out within the u.k. market. growth has been strong so far, but we have not had brexit. it is a surreal environment. we have not seen the pain of brexit. manus: as an investor, it has

not started, you are right. people say to, me, you have to be a lot more nimble and dynamic and it shift your portfolio from 60% equities and 40% bonds, because the backlash of all these policy ms. oves is inflation is the trade. to what end do you reflate your positions? to what end do you take that into consideration? >> clearly, it is different. if you look at the euro area, you have got the greatest opportunity at the moment throughout the developed world in the great divide between bunds and equities. we saw german inflation at a three and a half year high. that is a no-brainer trade in europe. in qe, we think the tapering starts at january 20 18th.

-- january of 2018. popping? asre you well? >> they could push equities relative to bonds. manus: you are always a great litmus test for the etf flows, in terms of the american investor into europe. america might be ringing the dow bell, but you are bringing the european bell. >> there is risk everywhere, but it is a good deal. manus: is there flow to be had? >> last year there was a great divide between etf flows into europe and the euros. the prior year, they were almost equal. in 2016, u.s. investors were

selling european etf 10 months in a row. in the last month, u.s. investors start to purchase european etf. it looks to me the are ready to come back in. there is still political risk. we have to get through france and we have a dutch election. we are starting to see profit growth. they are starting to nibble. manus: thank you very much for coming in this morning and putting this in context, kar en olney. there are some big stories to be had. there is a big conversation we are about to have. edwards has left me here on my own. man is talking to paul pol about the rights and wrongs of unilever. there are other breaking headlines. pound a 3.1 million

provision. johnson & johnson spent $30 billion out of their back pocket to purchase actelion. this is bloomberg. ♪

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download the xfinity tv app today. manus: welcome to "bloomberg markets." it is the european open. i'm manus cranny, alongside matt miller. guy johnson is on assignment. making history, the dow closes up by 20,000 for the first time ever. how much longer can that bullrun last? theresa may heads stateside, where she addresses the republican party ahead of