Only the macron will be victorious, but also that she is the best outcome for markets, lowers the risk for Brexit Associated with the Marine Le Pen victory. All major averages up yvonne man 1 , the best single day since march 1 when first one all major averages were at record. The nasdaq is at a record today. The other two have not quite gotten there. We are seeing this cyclically red led rebound. The banks, financials certainly helping lead some games we are saying. Bank of america, jp morgan, Morgan Stanley all higher. Financials are bestperforming. This despite the fact that the 10 year yield which scarlet just is now up to intro basis points. Its interesting that even as we have seen the sign in the treasury market, and yields not up as much financials and stocks overall still going strong. We also have a new development in a developing merger story. Will consider people the industries new pg new unsolicited bid. 28. 8 billion. Management the firm has also directionally, the same kind of reaction higher are shares chemical tents and painting here. Pharaoh and comers both higher. Its interesting going into the French Election, there were a lot of people betting on increase and volatility. Not many some betting against a decrease in volatility. Some were doing that through an inverse volatility etf. This goes the opposite direction of the vix. For the past several weeks we have not seen outflows from this. And flows very small but not outflows. That hasnt happened since 2013. Some folks were looking for this potential outcome and drop in volatility is that we are seeing today. Scarlet thank you so much. Oliver for more what is shaping the markets we are joined by mike regan, Senior Market editor and we water. So heres lisa abramovitz. Lets talk about brock box, what everyone was watching sunday night. What struck you as how markets were interpreting this outcome of the French Election . The first round, a big sigh of relief. He saw the gap between peripheral and fields, yields on french bonds, spanish bonds compressed with german yields. You saw people expecting that the European Union to remain together there were not the u. S. Treasury government frisk on, they are selling the treasury yields going up. Interestingly you saw the biggest move been fed funds futures for december since last december. People brought forward their expectations expectation of a june rate hike 60 percent from today. 50 on friday to get a sense of how big that differential was. People are saying, french risk is off the table for now but the fed still matters. Of course the fed still matters. This removes the obstacle for rate hikes this year. Its ant think big week for u. S. Politics. A shutdown looming. Todaying that struck me was, every market kept open higher. The s p well opened well above its close on friday. 10 year yields open the way above where they closed on friday. Lets bring in the vix, this is something you mentioned. The gpo just looking at the bar chart for the vix, what he is pointing out is a cap between where the fix closed on friday, where it opens today. Hats a 20 gap this is rare. There is some sort of cap like that and any chart that you can see. Does the balance of supply and demand, maybe over reaction to the news. It doesnt mean anything significant necessarily for the longterm direction of the market. Timber press on our team did something on this looking at 60 of the opening gaps in the s p 500 index and stocks in europe get close that very day. Obviously not happening tonight, but if they do last, the medium one gets close tothree40s later. People are thinking maybe a 20 fivee it was or something. He got a wonderful and that is a technical affect which we did see for example there short covering. They will be the worst case scenario. Maybe an overreaction in the shortterm. In actual testicll reaction as. Scarlet we have the chart here that goes back to february of 2016. About a 10 month chart. There is todays action, that yield spread coming in. We are not back to the level that we were saying back in november. We only go back to january. It is not like it is coming back that much. Right, theres the question of, are people overestimating the chance of macron winning . Have a chance that any idea of le pen actually becoming the head of france . Scarlet theyre following the wisdom of her father losing. It hasnt gone away just because this vote was according to the best case scenario. Oliver scores toone. Mike regan, think you so much, Lisa Abramowicz you can check lets check on the bloomberg first word news with mark crumpton. Mark the United States has issued 271 sanctions and it response to steering president bashar alassads alleged use of chemical weapons. Its one of the largest sanctions in american history. Earlier today come the United States department of treasurys office of foreign assets control imposed sanctions and respond in response to the upper, 2017 sarin attack on innocent civilians by the regime of syrian dictator assad. Sanctions are the latest u. S. Response to president assad is alleged use of chemical weapons in an attack that killed more than 80 civilians including children. President trump said the time to settle the issue of potentially Nuclear Armed north korea is now. Membersday during of the United Nations security council. World itsbig a problem we have finally solved. People put blindfolds on. Its time to solve the problem. Mark secretary of state Rex Tillerson is set to chair a you and on friday which is expected to tell the world body to sanctions. Th korea the french president is urging voters to choose Emmanuel Macron in the may 7 president ial runoff to keep up far like far right leader Marine Le Pen. President hollande said le pens platform of pulling out of the euro would devastate the countrys economy and threatened front desk french liberty. Macron was an advisor on Economic Issues from 20122014. In hisan minister socialist government for two years. Former president barack obama is using his first public appearance to talk with students about his experience as a community organizer. How that laid the foundation for his political career. Obama led a Student Panel and the university of chicago for his president ial librarys plant. The keyyoung people are to solving the nations biggest problems and he is looking forward to working with them. Global news 24 is a day powered by more than 2600 journalists and analysts in one 120 countries. Im mark crumpton, this is bloomberg. Scarlet we have breaking news from narcotic, a spinoff from alcoa, which makes aluminum parts for autos and aircraft, saying it is postponing its annual meeting and is willing to nominate to directors the activist fund after a bruising proxy fight. You can see the shares now resting too much in intraday trading, up half of 1 . Coming up, shares of Goldman Sachs have been under pressure since last weeks disappointing earnings. We get details on some of cap has some of their fixings got burned. This is bloomberg. Scarlet this is bloomberg markets. Oliver turning now to the trading meds at wall street, lest we Goldman Sachs reported its fixed income trading generated 1. 60 9 billion in revenue, a 1 gain from last inr compared with a 17 gain the business at jpmorgan and a 29 increase in bank of americas business. What was behind this bloomberg has discovered answers. Joining us now are folks lets talk about this loss. This was the highlight. What happened . They burned under distressed engine games. Peabody, the worlds biggest coal company, they also made bets on bertoni one. More aggressive in market making. Their interpretation of market making. Scarlet during the conference call, there was some kind of vague comments about how there were volatility issues, theyre working at volatility. It seems strange given the other things did just fine. Credit has been good in most places. Put words ins Goldman Sachs mouth, lets hear he had salmon conference call. We underperformed this quarter. The underperformance was driven by commodities and currencies. We know that some of our competitors have bigger financing businesses and mark significant corporate footprints as a result of larger lending books. It is one quarter. Scarlet he compared goldmans clients customers versus the other banks. So that explain what happened . Yes. The very next day Morgan Stanley , a company with a similar client profile reported a 96 jump in income. Was notanation verified. Essentially, that let us to start to dig in figure out what went wrong. Oliver this is curious, because the credit that you talk about, some of the retailers, these are parts of the market benefit on the worst. Even some names that have and recover quite as quickly with the price of oil. Can you give us some details on theyhese got on the books, had underwritten the appeals or maybe they made the market they took a run side of the trade . Lets lets talk about peabody. Thisinjured million is just from sec filings, 10 times more than the next dealer broker. That tells you that they loaded up on this to make markets for sure. Theyre not breaking broker rules. However, they made a bet. Market making is still risktaking. While they had these on the books, whether they would be shortterm or longer, they had to mark them down. In scarlet the quarter was they plummeted. What happens going forward, what kind of insider you getting from investors on how the outlook is . In the of this stuff start of the Second Quarter is still going down. I do think overall Goldman Sachs will not change biota. This is part of their dna, how they make markets. They could closer to the edge than other firms. In other quarters they will have gangbusters results. You can cut over a budget, texas, and health care resume this week as President Trumps 100 and mile some quickly approaches. What can washington get done is the question. We are live on capitol hill next. This is bloomberg. Oliver this is bloomberg markets. Scarlet we had to washington our President Trump is approaching his 100th day in office, Congress Returns from a twoweek recess. Lawmakers will avoid it ever been shut down hopefully. President trump or release a tax plan on foot wednesday. House republicans might restart their work on an Obamacare Repeal and replace bill. Joining us now is kevin cirilli. And a report from bloomberg news. Kevin lets start with you. Give us a roadmap of what we need to be aware of as we look first at the prospect of a Government Shutdown. Kevin the white house is saying they are hopeful there were not be a shutdown should lawmakers fail to pass a partial government funding belt by 28, 1 day before President Trump concludes his 100th day in office. Lets listen to what Steve Mnuchin had to say moments ago about the prospects of a Government Shutdown. I was in a meeting this morning with Mick Mulvaney and other senior people. The president is working hard to keep the government open. Addressing various issues. Kevin the administration saying there will be a shutdown. This is the dutchman up to them for a policy standpoint, considering that they are looking to tight funding for the , a lot of politics moving on this. Oliver you have more details but we look at tax reform and talk about spending and all these things that have to come get himce, it starts to through the entire idea of a shutdown. What do we expect to see what taxes, one of weekend clearing from over the weekend . Kevin no one knows exactly what the specifics will be. When you play back the last couple of dates, President Trump catching his own administration by saying that the tax plan will be coming out on wednesday. But only is the administration and folks your capitol hill secretary mnuchin meeting with talk Republican Leadership tomorrow and what an aide tells me is a regularly scheduled meeting in order to discuss tax reform. Heres what he had say as he laid of the priorities for what exactly this land will include. We have been clear about what the president s objectives are for tax reform trade middle ofome tax cut, a priority the president. Supplication, the average american should be able to do their taxes on a large postcard. Business tax reform. We needed to make business taxes competitive and we expect with doing that we will bring back trillions of dollars from offshore. So no specifics on whether they will get into the weeds about controversial things that are split republicans such as the border adjustment tax. When it comes to health care, we know the white house, President Trump is promising to restart something on that. Who is leading the effort, is that figure arrived, does he have a plan in mind . That push particularly has come from the white house. White house officials like Mick Mulvaney talking about it. When we hear from the house and leadership, that is not exactly the way it is. They see this going there being a vote this week at least. They are focused on the spending measure and of urging the Government Shutdown. They are doing negotiations on health care behind the scenes. Are unclear still if those going to bring them enough votes and if they will be able to do its this week to have autumn house floor. Those negotiations right now are around benefits that obamacare requires Insurance Companies to cover. They want to John Scherzer can cover fewer benefits to bring down the cost of insurance premiums. The leadership has not started taking the pulse of their membership. Its unclear effect compromise will be enough to bring moderates and conservatives on board. Oliver class time, there was opposition from the Democratic Party of course. Then within the republican party. Does whoever will lead this bill but they will be specifying in terms of what they will target . The possible amendments we are talking about is the negotiation between conservatives congressman mark meadows of the freedom ,aucus, and the moderates congressman macarthur. It could basically give congress ehe ability to absolv themselves over spots ability and not have to deal with choosing what benefits Insurance Companies might cover, and leave that states. Could be something that helps bring enough from both groups on board. Speaker ryan leading that efforts to bring those two together. Scarlet kevin, we have headlines from the wall street journal. President trump has said to ask to cut the Corporate Tax rate to 15 . Give us a little background here in terms of what kind of numbers he was throwing out during the campaign, what he had been framing the text from discussion around. This is the benchmark for the administration, that 50 number. Clifford something a size 25 . This is something that will be a political marker we are also seeing headlines which are saying that secretary mnuchin they want to have comprehensive tax reform, they want to include any text discussion which will include a middle income tax reduction as well. That of course stirred coldwater. That they would go for just Corporate Tax referred first. Now it looks like they will take a much more comprehensive approach. The bottom line, with such a big to dousy legislative list, its unclear whether they will try to one off and do tax reform separate from health care, or whether they will just have two policy adams together. Scarlet what is the president s highest priority here . This avoiding a shutdown, health care, or tax reform for this week . Kevin kevin shutdown shutdown shutdown. It comes down to whether or not will they be able to run the government efficient. If there is a Government Shutdown its not only not good for President Trump, its bad for republicans. Scarlet thank you both. We have the commodities we will look at white gold has been following falling. This is bloomberg. From bloomberg World Headquarters, this is bloomberg markets. Commodity markets are closing. We begin with gold falling to the lowest level in almost two weeks. Mining stocks also sank as investors favored a riskier asset on expectations Emmanuel Macron will be the next president. Oil fell for a sixth day as a ramp of u. S. Drilling signaled production gains may keep supply plentiful even as opec considers extending production cuts driving the prices in commodity. Lets get more on set to get more insight on oil, you can look at this chart. The white line is the price of wti crude. The green is the rising line of u. S. Oil. Five to the cap, the longest stretch since 2011. , 49. 23w 50 barrel currently. Oliver we are looking at atrlet we are looking copper prices. Here is ben davis, the commodity panelist who covers metals at berkeley. Do copper fundamentals even matter in a week like this when we have followed from the french from the fallout French Elections and trying to avoid a Government Shutdown . I dont think so. Copper is interesting to watch, because it is all about demand. In another week, the fundamentals dont matter. In april and may, we are not getting a lot of data out of china. Not getting a lot of news on the supply side, so it is times like this when the market likes to refocus its emphasis on to macro results whether tax cuts from trump or the French Election. So if copper is a leading indicator and trades with macro trends, what does it tell you about what we are seeing . The price has sold off a little bit in the last couple of months. We had a rally in november and this weekend. This is a metal that is replacing a Global Economy that is growing, stable but not yet going to be getting busters growth some people were anticipating. It is kind of saying to the world, to the market, things are ok, not great, not bad. Oliver how do you assess where the expectations were . Copper had a big jump around the election. Sentiment had turned ready bullish. How do you weigh the sentiment against what he is doing . Dane we had the rally. It was three dollars. Analysts cap saying this is the new era of three dollars copper. After the rally, a kind of stagnated and retreated. Sentiment has improved, but it is more than sentiment to drive the price higher and keep it there. Scarlet and with supply, you mentioned strikes and planned disruptions. There is a planned strike at onesia is in new these indonesias mind in may. Dane this is a fascinating paradox for the market, because we have had a lot of disruptions , indonesia, escondido, and peru. The price did not go up as much as we expected. They comes down to the nuances of the Copper Market without getting too technical. We have seen tightness in the market, the orange not the brown, but there is a wave of scrap in the market, so that is the final product from becoming tight. That is why we see prices stabilize. They have not rallied despite record disruptions. Oliver you covered metals, lets talk about iron ore. It has been interesting to a lot of investors. Dane i would agree with that. We have gone from 90 a ton to around 68, 66. This is a great iron ore story. The price is at 90, people were saying it was a new normal for iron ore, that china is using higherquality ores. Yes, they are growing to a higher economy, but does not happen overnight. We have seen an immediate reversal, it has finally caught up with the euphoria. Scarlet what is the difference between chinese import rates and consumption rates of iron ore . China is a bullish place for copper and iron ore. Dane we have seen month and a month china is record breaking. Time, you start to dive into the data, the stocks for iron ore at the highest level ever in china. If you go to countries like australia, brazil, india, major iron ore miners, higher stocks. It takes the simple story of high import, bullish for the market, that was not the truth. Oliver all right, helping us break down the what is happening and the sentiment. Thank you for joining us. Lets get a check on the headlines. Nikki haley, the u. S. Ambassador to the United Nations, is not ruling out a u. S. Strike against north korea if pyongyang tests another nuclear device. Several interviews today, Ambassador Haley praises chinas involvement try to pressure north korea to cease ethyl testing and criticized the leader kim yung moon kim jongun. President trump hopes to hold a White House Briefing to discuss north korea. The secretarygeneral of the United Nations says there is no end in site for the conflict in syria sight for the conflict in syria. Is of vital interest of thethe actors to end conflict, because they are all losing, putting the lives of their citizens in danger. Mark secretarygeneral gutierrez said the syria infighting creates instability and increases the risk of terrorism. The u. S. Supreme court has turned away an appeal seeking to force the cia to release before and the full 2014 read Senate Report about the use of abuse tactics. Pagesaid nearly 7000 repaired by the Senate Intelligence committee was not subject to freedom of information laws. The committee had released a lengthy summary of the report, but the American Civil Liberties union had sued to obtain the full version. Swedish police have arrested a second person in the april 7 truck attack that injured 15 in stockholm and killed some. The government has not been identified, but a 29yearold is back man has been ident uzbek man has been identified after plowing a truck into the swedish capital. The white house is pressing the house to vote on a replacement for obamacare. House Republican Leaders have not announced a date for a vote. The conservatives and moderates are working on a compromise. Their first attempt to repeal obamacare was withdrawn without a vote when it became clear it would not pass. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Scarlet here with the Deputy Governor of the peoples bank of china, his countrys economic growth. This is bloomberg. Oliver i am oliver renick. Scarlet i am scarlet fu. We are checking the markets with nasdaq and how it is outperforming. All of the major averages are at the highest of the session, but the nasdaq is doing better than the other three major averages. Let me fix something on the terminal before we walk over to it. Lets take a look at the nasdaq, because it is not only outperforming today, it has outperformed this year thus far. The nasdaq is in the aqua color, in a record even as the s p and dow are higher but not up as much as the nasdaq. This is what we saw post election when the dow was the outperform her and tech stocks were lagging. What isrm her outperforming today in the nasdaq, we have hasbro on its earnings reports, Company Sales beating estimates. 6 . Marin rising and xilinx benefiting from a price target rate over credit suisse. Other stocks in the nasdaq that are on the move, one of them is whole foods. The Financial Times is reporting cerberus, which is with albertsons, they might be in talks to acquire whole foods. It has been reported on as a takeover target in recent days. And this place has been reported on in the past as potential target for albertsons is now down with the new report. Are interesting on the nasdaq. In china, the Deputy Governor of the peoples bank spoken bloomberg headquarters world earlier today. Here is what he had to say about stabilization of chinas economic growth. There are several reasons, first the domestic demand is stronger by now. Also the external economy has thevered, reflecting International Trade market. And the energy and commodity price is part of it. We have bloombergs executive editor of global events who was at the event. Give us your take on how his sentiment and the out be data . Matches with the it is entirely consistent. The Deputy Governor [please stand by] data . He emphasized two things. One, the overall world environment is smaller stronger than a year ago, which is helping china as us. He also emphasized this is not your grandfathers chinas economy. They now account for more than half of gdp. A very different landscape from five or 10 years ago. They began opening chinas economy in the late 1970s, we had peter manufacturing operations and caricatured. People with talk about sweatshops. That is not happening anymore. That is one of the things the governor emphasized. It is a maturing chinese economy and the transition everyone said they wanted is now happening. Scarlet but they will point to the excessive debt buildup. How will that look when they finally come home . Did he address it at all . It is a constant theme of china. The Deputy Governor did not try to run away from that, did not dwell on it. Aware of the problem, watching it. If you look at figures from last week, it looks sustainable, looks like it is in check, i did not get the sense the governor was complacent about it. Oliver also when they were talking about equities, the economic picture from china is connected to what was said about what will happen in the equity market. Rodriguez from blackrock was theng chinas shares are largest Investment Opportunity on a world scale. That is a big claim, and he interviews that to chinas government which has established the activity with local unsure markets with the rest of the world. Onshore markets with the rest of the world. What else did you get . How is the economy for people that will invest in china . I was not there for the session with equities, but i was with the bond market. This is the Third Largest bond market. Easily, yet Foreign Investors know that. They are working to wait ways to open that up. Scarlet that is what gary mentioned last week when he was speaking about fair trade and getting exports to china. It involves Financial Services as much as anything else. I wanted to get a sense about the mood in washington, because again before the French Election , before people knew we would have micron and the pen. Macron and lepen. Were they most part bullish . I would not say bullish, i would say more upbeat than they have been for a while. There was road clearing, concerned about populism and protectionism, but for the first time people are talking about the three main economic regions starting to move ahead together. The other thing that was noticeable was less of a sense of unease about the direction the u. S. Is going in. It went back to the annual meeting last october. If he went back last october, we were still dealing with the aftermath of brexit, then november 8 here. We are still coming up fast. This seems to be a sense if not expectation, less discomfort with the direction policy, policies are going in the major economies. Oliver and more relief after the first round of French Elections. Thank you for bringing us down on china and even here at bloomberg. Scarlet it is time for the business flash, looking at the biggest stories in the news now. We begin with jb putting up there business for sale to focus on food and coffee. They recently bought 50 cream and will buy in arab red krispy kreme and will buy in arab red. Panera bread. This guy gave 20 million to duke university. The David M RubensteinScholars Program will go to 240 low income students whose parents did not attend college. That is in addition to economic experiences. Host of bloomberg tell television. Appear conversations. Flashs your business update. Turners ceo john martin explains why Advertising Money is going back to television. This is bloomberg. Oliver this is bloomberg markets. I am oliver renick. Scarlet i have scarlet fu. The Chinese Television industry is reinventing itself. We have john martin. Revive channels like the cartoon network. I sat down with him for the super series in which he spoke about returning Advertising Money to tv from digital. Digital is growing quickly. Our digital business, whether cnn or beach report, has some of the strongest growth rates in appetizing around the country. Advertising around the country. In the Digital World it is almost an oligopoly. Facebook and google are taking 85 of the growth in digital. People have talked about the efficacy of the metrics they had been advertising against. But there is an arms race going on, almost a race to the middle. If you are a company like ours, we are trying to develop the digital capabilities that we can go to advertisers and guarantee them audiences and return on investment and really be able to report out in a specific way to make sure they are comfortable their marketing messages are reaching the consumers they thought they were going to. That gets back to Technology Investments we were making and revolutionizing the way we can monetize audiences. The companies are doing the exact opposite, trying to get into premium content, whether it is youtube or facebook. We are calling it internally, time warner, it is a top race to the center. Google get there faster . Who will get there faster . Who can make tv a really terrific buy versus can the digital players get their hands on premium content they can convince advertisers to go in their direction . There is plenty of money everywhere, but i like the chances of tv with the reach that we have, the environment, and the immersive, emotional connection of storytelling. Scarlet and the scale is what advertisers like. One thing that can be frustrating is watching tv, the commercials are long and boring, even when watching it on demand. How do you address that . Ofwe reduce the number commercials per hour. This is the challenge. It is a challenge and opportunity. Why has netflix risen so much in terms of popularity, and hulu . There is too much advertising clutter on traditional television. So we announced on one of our networks, we have taken the commercial ads down in half. We started in the Fourth Quarter of last year. We have been revenue neutral to up so far. Ou ask how that is possible we have reduced commercial lows on a number of regional programs. Scarlet are you doing more programming . We are making programming larger. The longer. The way we make up if we make the advertising better, more contextually relevant. We believe ratings are actually higher as a result of how we would have resumed reduced ad loads. If you look at traditional cable, commercial stocks, ratings go down, then when the commercial pilot is done, you hope ratings come back. You have fewer commercials. You have higher engagement, higher average audience levels, and ratings go up. We have done research that seems to indicate that if you make your advertisements more relevant and contextual i will come back to that in a second you reduce the number of them, we call it 10 . Higher ratings, higher recall, that if anybody watched like basketball and march madness, anybody . A few people. You need to tune into sports more. We were putting on advertisements during the match basketball tournament that have samuel jackson, slightly. These were engaging, funny advertisements. Scarlet premium content. So now we have studios internally at turner are we are producing our own advertising. Scarlet what does that take . It costs a little dough, but we are a big company. [laughter] scarlet you are describing a Super Bowl Ad where people stick around to watch. Like 12 months basically. Scarlet 12 months of Super Bowl Ads. But is what it will have to be. Ad supported television cannot sustain if you interrupt the Television Shows with very quick spots and dots commercials. There is so much innovation and distribution in programming, and there has not been a lot of innovation in advertising. Over the next five years, there will be more than any of the other areas of business. Scarlet i like that idea of having fewer ads but better quality. It becomes part of the programming, better integrated. Oliver sometimes they get you targeted and start to get freaky. Scarlet a little comfortable uncomfortable. , so theytech crowd raise their hands for lots of other things are not ncaa basketball. Oliver we can say that scarlet that was part of my interview with the turner ceo here in new york. Oliver an exclusive conversation, duke energy ceo on some of the trump administrations new policies aired why she told us the giant supports a tax reform. This is bloomberg. Oliver it is 3 00 in new york, 8 00 in london. Scarlet welcome the bloomberg markets. Oliver we are live from bloomberg World Headquarters in new york for the next hour, talking about stories from paris and pyongyang. Ago, stocks were rallying, following the French Election outcome. Major averages on track for the best day since march. Bute is raises in sectors, utilities on the downside. Italys finance minister said this would help european immigration. We will have more to come. Us howergy ceo tells they will shift to renewable energy. We will have more about that exclusive conversation. And lets get a check on the markets. It is interesting we are seeing the big reaction positively to the French Election. We were not seeing much pessimism priced into the u. S. Markets in the election. There was increase in volatility, but not huge. It was more acute in europe. We are seeing a relief rally because of the results of round one with the nasdaq leading the gains and that a record today. We are seeing the 1 milestone being reached for the three major averages. If you look at the bloomberg, the daily price percentage changes in the s p 500, the 1 threshold is up and down. It has not been since march 1 that we have had a 1 move in the s p 500. That was the day when all three major averages were at record. You can see generally this year you have not had really big percentage swings like we had last year for example. It has become rare. There was more 1 gains, then today was the only time we have s p 500. Gain in the in terms of what is on the move, risk on rally with cyclicals leading gains. Industrials, materials, tech leading the pack, then you have rotation out of the defensive group or interest sensitive groups with a bump up in rates. Utilities are the lagging group sales. Utilities are still higher. Among financials, we have big banks doing well [please stand by] among financials, we have big [please stand by] we were only about 3. 3 below the alltime highs, so it is hard to see it is anything more than noise. A real bump ony the French Election, or will there be a hangover with what we should care about . Most of todays move is the election. We have moved a lot less than they did in europe, which makes a lot of sense, but there was global beta, global goodwill as a result of the result. The s p and you is equities thatally are anticipating for european equivalents, which is what you would expect given the locus of the risk was in europe. Scarlet lets talk about u. S. Stocks versus european stocks, because conditioning has a lot to do with this. We have heard about how u. S. Stocks dont look as attractive as european stocks. Now we have round one out of the way, we will get a faceoff between Emmanuel Macron and read le pen. You would think there would be switching over, but that might be overdone. If you look at the bank of America Survey that suggested that move has already taken place, that you know, perhaps marginal trade might be allocated to make a bit of profit in european equities and bring the money back to the u. S. There is also risk in the u. S. Know, thef, you government might not be running by the end of the week. The whole north korea thing can be i have been skeptical about it. Certainly a talking point. If there is any reason you are inclined to be worried, it is something you can anchor two. Oliver it is like fear begets fear. This kind of ludicrous we are talking about fear when we are a percent away from the alltime high. Scarlet one chart we wanted to bring up was the euro correction. This is on bloomberg. The euro spot is the blue line, average outcome probability, not know probability, goes back to the risk premium in the market just in case. This is a model i developed a couple of weeks ago. It is the u. S. And germany, then there is a term for a bad candidate for the market perspective at least, a brand bad candidate winning. Time,ory is that in the if the market from the candidate ,ins, the euro should go 109 109. 5. We open in early trading yesterday that are there, and if you priced all the good news, the marginal risk has got to be to swing the other way. We think of macron of something the vote60 share of in early polls. Think of it this way. If he gets another 5 , how is the market narrative . It is still the favorite. If he goes from 61 to 56 , the other way, that may be starting to get closer. That is the reason you cant fully discount things because of frisk, and the bookies are giving le pen relatively high to where she should be, given the polling, but there is asymmetry. You see it and Options Markets and betting markets as well. Scarlet thank you so much. Lets get you checked in with the first word headlines. Mark a senior u. S. Military official told reporters in kabul today that russia was providing weapons to the taliban for use against american backed forces in afghanistan. Russia has denied it provides weapons to the taliban. U. S. Defense secretary jim mattis was in kabul today to address the claims. We will engage with russia diplomatically. We will do so where we can, but we are going to have to confront russia where what they are doing is contrary to international law. With secretary mattis met the afghan president and other senior government officials hours after the Nations Defense minister and army chief resigned following the massacre of more than 140 afghan troops at a military base last friday. President trump says the United Nations has tremendous potential which it has not lived up to. He spoke during a meeting with ambassadors and members of the uns security council. So on syria the council failed to respond to syrias use of comical weapons chemical weapons. I was very disappointed by that. Mark the president said he has considered the world body and underperformer. His at the time was now to meet with north koreas weapons program. Far right french hopeful Marine Le Pen said she is temporarily stepping down as head of the National Front already. For her toto be away embrace a wide range of potential voters ahead of the may 7 runoff between herself and Emmanuel Macron, the independent centrist who came in first. Weeks of political unrest in venezuela have claimed another victim as protests have continued. The people are flooding highways across the country for a day long sit in. A woman died sunday after being struck in the head with a frozen water bottle thrown from a highrise during a progovernment rally last week. At least 21 people have been killed since the unrest began almost a month ago. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Oliver duke energy will stick to plans for a coalfired power plant. We will hear from the ceo. Exclusive interview with what they will focus on. This is bloomberg. Oliver this is bloomberg markets, i am oliver renick. Scarlet despite trumps efforts to support cold, duke energy will cut coal plants through the year 2020. We spoke with the ceo. She spoke about the companyss scenario for tax reform. Duke is supportive of apprehensive tax reform. I understand why congress and the administration are trying to accomplish this with Global Competitiveness for the u. S. , but for duke, it is important we are a regulated company with , consistent with regulatory oversight. Reporter so you take on all the infrastructure, that is the deal. Do you think it will be better if we see Interest Rates repealed . We are making the case. , a huged pricing capital sender. Those are than unique characteristics we consider in comprehensive tax reform. Reporter is there something that can offset you from rolling back Interest Rates . We want to maintain it. We believe foregoing immediate capital would be a trade that makes sense for our industry. We are focused on those two positions. Reporter you quantify the 5 , 10 by 2021 with the republican tax plan. What was your model . We look at a variety of areas, the 20 tax rate, the grandfathering of this so it is reasonable of how it would impact us. Given the regulation, we have been maintaining what we think makes sense. Reporter would it go away . Adaptability is existing higher than that. It is kind of 7 to 8 . Reporter and what about passing it along to the consumers . Interest is a part of the cost of. It will become a part of setting our prices going forward, and that is advocating for what makes sense. Financing costs can be significant. Reporter angie when you have to cut your dividend . That is part of the investors, lowcost capital. So that is always our objective. Earnings, then dividend, is that how you would rank . You have to look at the whole landscape of tax reform. Heard and and skechers interesting discussion on the timeframe, transition. We were considering the elements to get the lowest cost to customers, maintaining dividend for investors and making decisions with capital. Reporter so moving on to the you havendustry been retiring a lot of coal plants. Do you change the rate at which you are much hiring them . Retiring them . It is something we have been focused on for a number of years. The retirements are already driveined, and we will carbon out of the ball business consistent with natural gas, renewable. We have reduced carbon by 30 , 2030. Piration is 40 by so we want to modernize and change. That is the right answer for our customers. Reporter and it is a fiveyear, 37 billion growth plan. What are you most excited about . Investment and the grid. If you look at changes in the industry, the electric grid is a part of our system that has a lot of demands on it, newly renewable, cybersecurity, meeting the needs of customers and customer expectations, so we will invest over the next 10 years 25 billion to modernize the grid for the future needs of the community. Reporter you also talked about piedmont, natural gas, a pipeline. Do you hope you will see expedited federal approval for the pipeline . You are building the Atlantic Coast pipeline. What is your prognosis . The infrastructure, whether it is pipelines it is timeconsuming and difficult. The vetting process, and we believe a more coordinated approach of the federal and state overview could see great outcome through the environment and also more accelerated infrastructure bills. We are an advocate for that and believe it might be possible. Scarlet that was the duke energy ceo speaking with alix steel. Oliver i want to make a correction. Earlier we had a story on Goldman Sachs first income quarter performance. We said that they got 250 million in compensation. It was 250 million in revenue for the firm over 2016. We apologize for that mistake. Scarlet volatility plunges as investors become risk prone. This is bloomberg. Oliver this is bloomberg markets. Scarlet it is time for options insight with the julie hyman. Julie joining me is bloomberg options and derivative reporter greg called the road. It is calderon. It is an interesting time. One of the things he pointed out to me which was illustrated by a chart you sent me is unusual which is that we have seen an uptick and now a plunge in volatility that is divorced from the underlying s p 500. You can explain to me what it is about. Greg historically the vix has been called the fear gauge if you well. We have seen a decoupling, if you will, between the volatility indices and the index. Just go back to weeks, you saw from april 7 to basically fridays close, i believe the wasrally 14 , and the s p pretty much flat. We were up 50 basis points or half a percent. Afterthe vix is down 25 the elections in france. People have reduced their protection. Ist we have seen here today this discount of any serious ,vent in france in the actual potentially leaving the e. U. Putting it back to the actual vix options, we have seen people really unwind how they bought calls, sold puts, the whole unwind has really come to fruition today. Over that frame, if you look at the move in the vix and s p, the vix is down 18 since april 7, and the vix s p up 1 . If you look at the actions prior to today when you have the sidewise little change motion, at the same time the vix was climbing, what does that tell us about the vix . It does not tell us what volatility is doing. Greg no not at all. Investors are using the vix and the vix options have a hedging mechanism. The vix is as the highest beta you can put on the mortgage event. People were buying the cheap rejection while the market protection while the market was going sideways. We got the event, people took that protection off. We have a chart of it as well. Julie the interest. Greg last week julie there it is. The putu see the vix, and call open interest declined pretty significantly i think by 37 just wednesday with expiration. We saw a little bit of additional protection being put on into friday. Most of this weekends protection was something people had put on in the previous two weeks leading up to the election. Julie i want to talk about one specific stock, and that is right aid. It has been longterm now to buy. Again, if you take a look at the call to put volume, which is what we are looking at in blue . Greg open interest. Julie the stock price is in white, what is it tell you . Greg right aid has been in a deal with walgreens for a couple of years now. On january 30 2017 they reduced the actual price or takeover price. It is trading at 87 discount to the actual price. Tomorrow, youngs are seeing the blow today. They have, we have seen over the past two weeks since april 10, the open interest, the actual calls is up 10 . What is down 20 . Is down 20 . There is a bit of bullish while this is in earnings play. People on the put side, people could be monetizing the long puts at closing out. Julie got to leave it there. Back to you. Scarlet coming up this is bloomberg. , italys finance minister. This is bloomberg. Mark it is time for first word news. Issued 271states has sanctions in response to bashar alassads allegedly use of chemical attacks. It is one of the largest in history. Steven mnuchin made the announcement today. Earlier today the United States department of treasurys office of of foreign asset control imposed sanctions in response to the april 4, 2017 sarin attack on innocent civilians of the syrian dictator bashar alassad. That was the latest response to his alleged use of that killed 80 civilians. White house officials will gather on capitol hill to layout details for the potential for an plan to republicans. This comes one day after he announces his plans for changes to the u. S. Tax code. You managed gary cohn and treasury secretary Steve Mnuchin,s paul ryan, mitch mcconnell, the leaders of