Macron Says 'France is Back' as Trump Debut Nears: Davos Update

(Bloomberg) -- Billionaires, world leaders and investors are gathered in Davos, Switzerland, for the World Economic Forum’s annual meeting to hobnob and discuss topics ranging from the global economy and sexual harassment, to the risks and opportunities of artificial intelligence. Not to mention hear a speech by President Donald Trump.

Here are the latest developments, updated throughout the day. (Time-stamps are local time in Davos.)

Macron Backs France (6:00 p.m.)

French President Emmanuel Macron declared "France is back" as he used the main stage at Davos to argue the global elite needs to invest, share and protect in a bid to narrow inequalities that have resulted from excess global capitalism

Trump’s Infrastructure Plan Built for Speed (5:22 p.m.)

President Trump’s proposal would not only make available $1 trillion for infrastructure projects but it will also speed permitting processes, Transportation Secretary Elaine Chao said on Bloomberg Television.

Trump Likely to Showcase His ‘Duality’ (4:49 p.m.)

Donald Trump’s speech this week will likely underscore the “duality” of the U.S. president’s personality, former White House aide Anthony Scaramucci tells Bloomberg Television. Trump wants the U.S. to be part of the global system, “but he doesn’t see that as going against being an ‘America First’ leader.”

Israel Lobbied Germany for Iran Deal Fixes (4:45 p.m.)

Israeli Prime Minister Benjamin Netanyahu told German Chancellor Angela Merkel at Davos that the only option for saving the Iran nuclear deal “is to insert real, not cosmetic, fixes that will prevent Iran’s nuclearization,” Netanyahu’s office said in statement.

U.S. Delegation Dodging Russians (4:18 p.m.)

Davos “is a small village, but they don’t want to talk,” Russian Deputy Prime Minister Arkady Dvorkovich said, adding he was ready for contacts with members of U.S. delegation. “It is not Russia who is hiding from dialog.”

Google Happy to Pay More to the Tax Man (4:14 p.m.)

Google is willing to pay more tax globally, said Sundar Pichai, the head of Alphabet Inc.’s largest business unit. “We are happy to pay more tax, whatever the world agrees to, but the question is where Google should pay it, Pichai said.

Chinese Companies Finding It Harder to Enter U.S. (3:51 p.m.)

The head of China’s second-largest e-commerce operator said mainland companies are finding it harder to enter the U.S. market. “I can feel the protectionism is quite serious there,” JD.com Inc. Chief Executive Officer Richard Liu said via a translator. “It’s not a good thing. It will hurt the US economy too.”

‘America First’ Endangers U.S. Influence in Africa (3:48 p.m.)

Bill Gates, co-founder of Microsoft Corp. and the second-richest person in the world, said there’s a danger that U.S. President Donald Trump’s “America First” approach could damage the U.S.’s influence in Africa in the long term. Other countries like China are continuing to push into the African continent, and the U.S. should not pull back, Gates said in an interview with Bloomberg News Editor-in-Chief John Micklethwait.

Merkel Pleas for Cooperation Over Isolation (3:28 p.m.)

German Chancellor Angela Merkel warned against the “poison” of populism that leads states to become increasingly inward-looking, as she made the case for a common European approach to more areas of policy making. “We have to advocate for our multilateral approach,” Merkel said in a speech. “You need to have the patience to find multilateral solutions and not slip into the apparently easier solution of acting in national interests.”

Wall Street Cozies Up to Trump (3:20 p.m.)

Jamie Dimon and Lloyd Blankfein gave credit to the U.S. president for policies that they said will help boost economic growth and drive markets higher. “What I’m bulled up about is that policy makers are making good policy decisions in the U.S. about taxes, about proper regulatory reform,” Dimon, who runs JPMorgan Chase & Co., said in a Bloomberg Television interview. “I like a lot more stuff than I don’t like,” Blankfein, chief executive officer ofGoldman Sachs Group Inc., said in an interview on CNBC.

Bonds Face Historic Bear Market (3:09 p.m.)

Billionaire hedge-fund manager Ray Dalio said that the bond market has slipped into a bear phase and warned that a rise in yields could spark the biggest crisis for fixed-income investors in almost 40 years. “A 1 percent rise in bond yields will produce the largest bear market in bonds that we have seen since 1980 to 1981,” the founder of Bridgewater Associates said in a Bloomberg TV interview.

France’s Macron Calls on Elite to Share (2:52 p.m.)

French President Emmanuel Macron arrives in Davos with a new message for the global elite: invest, share and protect. He will tell business leaders it’s up to them to narrow the inequalities that have resulted from the excesses of global capitalism, an aide from the president’s office said. Macron is due to speak at 5.30 p.m. local time.

Morgan Stanley Wary of Market Exuberance (2:51 p.m.)

It’s not the Federal Reserve that keeps James Gorman up at night. The chief executive officer of Morgan Stanley said he’s more worried that the stock market has reached record highs in recent months with technology stocks lat very high multiples. “You’ve got markets at record highs, and as we know, these things don’t go in a straight line,” Gorman said in an interview on Bloomberg Television. “Markets are expensive, but they’re not ridiculous.”

Aramco’s Tax Burden Depends on Oil Prices (2:39 p.m.)

Saudi Arabia plans to link the most important tax paid by state-owned energy giant Aramco to the price of oil, a significant move ahead of the company’s initial public offering this year, Amin Nasser, chief executive officer of Saudi Arabian Oil Co., said in a Bloomberg Television interview. Adjusting the 20 percent royalty on oil revenue Aramco currently pays would help the kingdom to raise extra money if prices climb. While not unusual in commodities industries, the move may not prove popular with potential investors. It would protect them from downturns, but also reduce their gains at times of rising prices.

Italy Lobbies for Financial Services in Brexit Deal (1:45 p.m.)

Italian Prime Minister Paolo Gentiloni said that any accord reached between the U.K. and the European Union must include financial services, because excluding them “is totally unrealistic,” he said in an interview. Among the remaining EU states there was a “strongly prevailing position supporting the necessity of having a good deal with the U.K.”

Faster Fed Tightening Could Create Trump Tension (1:37 p.m.)

Stronger inflation that sparks more aggressive Federal Reserve tightening and rattles markets could be a source of tension between the U.S. central bank and President Donald Trump, Harvard University professor Kenneth Rogoff said in an interview with Bloomberg Television’s Tom Keene. “There could be lot of tension between Donald Trump and the Fed if the stock market falls for some reason and they need to raise interest rates. We could suddenly see tweets about Jay Powell in the middle of the night.”

Bond Market in Bear Phase, Dalio Says (1:34 p.m.)

Billionaire hedge-fund manager Ray Dalio said the bond market has slipped into a bear phase and warned that a rise in yields could spark the biggest crisis for fixed-income investors in almost 40 years. “A 1 percent rise in bond yields will produce the largest bear market in bonds that we have seen since 1980 to 1981,” Bridgewater Associates founder Dalio said in an interview with Bloomberg Television.

China Vows Further Opening (1:32 p.m.)

China will introduce more reform measures to open up its economy this year, according to Liu He, the top financial and economic adviser to President Xi Jinping. “Some measures will exceed the expectations of the international community,” Liu said. “Opening up is not only important for China, but also for the whole world,” adding that a fresh reform push was also a celebration of the 40th anniversary of the nation’s shift away from a closed Communist system.

‘Play Own Game’ on Trade, Gentiloni Urges (1:28 p.m.)

Italian Prime Minister Paolo Gentiloni said U.S. President Donald Trump’s protectionist push threatens global growth, urging Europe to “play its own game” to fill any gap left by American businesses. Gentiloni said in an interview with Bloomberg Editor-in-Chief John Micklethwait that all leaders were allowed to protect their own workers. “But there is a limit and the limit is defending our free trade, defending the model which has brought us to this kind of growth,” he said.

Alibaba Scared of Weaponized Trade (12:46 p.m.)

It’s easy to launch a trade war but difficult to prevent the disastrous fallout, Alibaba’s Executive Chairman Jack Ma said during a panel discussion. “I am scared. I am concerned. Don’t use trade as a weapon.”

Trump Team Sharpens Trade War Talk (12:35 p.m.)

President Donald Trump’s top economic advisers set the stage for the rollout of his “America First” manifesto on the world stage. A day before Trump’s scheduled arrival, Treasury Secretary Steven Mnuchin endorsed the dollar’s decline as a benefit to the American economy and Commerce Secretary Wilbur Ross said the U.S. would fight harder to protect its exporters.

Spain Pushes for EU Reforms (12:10 p.m.)

The EU must “reinvent itself,” Spain’s King Felipe said. The bloc’s leaders need to embark on an ambitious and far-reaching round of integration, highlighting monetary union and defense policy as priority areas.

Currency War Would Be ‘Devastating’ (11:35 a.m.)

Jacob Frenkel, chairman of JPMorgan Chase International, said a currency war must be prevented at all costs, as the consequences would be “devastating” for the global economy. “A currency war in the monetary sphere is the mirror image of protectionism in the real sphere,” he said in an interview with Bloomberg Television, adding that “we should prevent it at all costs.”

Italy Defends Free Trade (11:23 a.m.)

National governments have a duty to protect their citizens and markets, but the principles of free trade must not be called into question, Italian Prime Minister Paolo Gentiloni said. Italian policy makers must continue with economic reforms after the March 4 election, he added.

U.S. Readies Its Troops for a Trade War (10:48 a.m.)

Ahead of President Donald Trump’s speech later this week, U.S. administration official laid the ground work by signaling a toughening stance on trade. “A trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the rampart,” Commerce Secretary Wilbur Ross said. Breaking with traditional U.S. policy of support for a strong currency, Treasury Secretary Steven Mnuchin endorsed the dollar’s decline as a benefit to the U.S. economy.

EU Doesn’t Want a Trade War With the U.S. (10:24 a.m.)

A more robust European single market rather than a trade war will be the “right answer” to challenges presented by protectionist policies such as the tariffs imposed by U.S. President Donald Trump, according to Portuguese Finance Minister Mario Centeno. “We are always worried about protectionist policies, which I really don’t think is the way to lead our economies,” said Centeno, who on Monday had his debut presiding over the gatherings of euro-area finance ministers. “But we have to be ready and prepared to respond to that with the highest levels of competitiveness from our side.”

Kostin Decries ‘Economic War’ Against Russia (10:11 a.m.)

The U.S. Treasury Department’s compilation of its first official list of “oligarchs” close to President Vladimir Putin constitutes “economic war,” VTB Group CEO Andrey Kostin said. “I’m not so much concerned about personal sanctions, which would be the least evil, but of course any further sanctions on Russian financial institutions would substantially undermine our relationship with America,” Kostin said in an interview with Bloomberg Television.

Europe Faces Lost Generation (10:00 a.m.)

Europe’s youth risk being left behind unless the European Union takes steps to address the growing income divide across generations, IMF Managing Director Christine Lagarde said. “Working-age people, and especially the young, are falling behind,” she said. “Without action, a generation may never be able to recover.”

U.S. Cheers Weak Dollar (9:48 a.m.)

U.S. Treasury Secretary Steven Mnuchin said the dollar’s decline provides a boost to the U.S. economy through trade, breaking with the usual practice of the U.S. government advocating for a strong greenback. “A weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters on Wednesday.

The Trump administration is not concerned about the U.S. Treasury market, with Mnuchin saying the market is “one of the largest and most liquid in the world. He added that the U.S. government “couldn’t be happier” about the reactions to Trump’s tax reforms.

U.S. Warns of More Trade Measures Ahead (9:47 a.m.)

There will be more measures coming, U.S. Commerce Secretary Wilbur Ross said when asked about President Donald Trump’s decision to impose tariffs on solar panels and washing machines. “What has provoked a lot of the trade actions is inappropriate behavior on the part of our counterparties,” Ross said.

Corruption Will Soon Be History in South Africa (9:44 a.m.)

South Africa is in a much better place now than when previous credit-rating actions took place, according to Reserve Bank Governor Lesetja Kganyago. “We have got a good case to make” to ratings companies and “corruption and misrule will soon be history,” Kganyago said in an interview with Bloomberg Television.

Euro Strength Not a Problem, Centeno Says (9:33 a.m.)

Exporters are doing well, and the relative strength of the euro is no reason for nations in the single currency area to be concerned, said Mario Centeno, the president of the Eurogroup of finance ministers. “Things are looking good, and I think they will continue like that,” Centeno said in an interview with Bloomberg Television. “We have been able to show a lot of resilience to external shocks.”

Bitcoin Risks ‘Massive’ Drop (8:56 a.m.)

UBS Group AG Chairman Axel Weber said the Swiss bank won’t trade bitcoin or offer it to retail clients as increased regulation could lead to a “massive” drop in value. “This is something where the price is really unclear,” Weber said in an interview Wednesday with Bloomberg TV. “We fear that in the future if these investments implode and the market corrects, then investors will be looking at who sold us this.”

‘The Brain’ Behind China’s Overhaul (7:46 a.m.)

When Liu He takes to the lectern in Davos later, the Harvard-educated technocrat will move further into the spotlight that’s been aimed at him since his elevation to China’s top political body last year. “Liu will be like a Chinese version combining both Larry Summers and Ben Bernanke, plus the chairman of the president’s economic council,” according to Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong.

Davos Crowd Warms to Trumponomics (7:00 a.m.)

Have criticisms of Donald Trump’s economic policy gone too far? Whisper it quietly, but 12 months after the beginning of the Trump presidency, several economists and business leaders appear willing to give Trump and his tax reform a chance, Bloomberg View’s Ferdinando Giugliano writes.

Another Day, Another Davos (7:00 a.m.)

The second full day of talks will get underway shortly. Among those attending are German Chancellor Angela Merkel, French President Emmanuel Macron and U.S. Treasury Secretary Steven Mnuchin.

A takeaway from Tuesday was that many of the executives are admitting Trump hasn’t been bad for business. The question they have is whether the good times can last and some of the bankers already see signs of complacency in financial markets. For the politicians attending, most are doubling down on globalization as Trump imposes tariffs and prepares to join them in the Alps.

Here’s What Happened Tuesday:

• Global finance executives warned of parallels between today’s soaring stock markets and the pre-crisis years as complacent investors risk being wrong-footed by central banks raising interest rates.
• From the U.S. to the U.K., an unusual number of Western leaders are arriving in the Swiss Alps with their influence on the wane, with countries like China and India keen to fill the void.
• Indian Prime Minister Narendra Modi said Asia’s third largest economy is “removing the red tape and laying out the red carpet” as he attempts to attract foreign investment and kick start sclerotic growth.
• Canadian Prime Minister Justin Trudeau confirmed a Pacific trade pact without the U.S.
• Europe’s revival drew widespread praise, putting the region in position to be a counterpoint to Trump’s protectionist policies.
• Trump’s tax cuts got mixed reviews with some lauding the boon to corporate budgets, while others questioning the long-term impact. U.S. officials said he will meet with executives at a reception during his time in Davos.
• Mexico’s Economy Minister Ildefonso Guajardo signaled that the country is willing to negotiate a reworking of Nafta all through the run-up to July’s presidential election.
• Uber CEO Dara Khosrowshahi is setting his sights on making the embattled company profitable within three years, he said in an interview with Bloomberg Editor-in-Chief John Micklethwait.

To contact Bloomberg News staff for this story: Chad Thomas in Davos at cthomas16@bloomberg.net, Andrew J. Barden in Davos at barden@bloomberg.net.

To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Chris Reiter, Iain Rogers

©2018 Bloomberg L.P.

With assistance from Chad Thomas, Andrew J. Barden