Whats leading the day are commodity related shares. Crude oil rebound, material stocks being led higher by c. F. Industries, which got positive commentary. All that is helping sustain some of the gains were seeing in stocks. But to the point that scarlet was making about the tight trading range today. This is the range today, just over five points, 5. 29, to be exact, the tightest trading range weve seen all year. The average is about 13 points to give you perspective here. Indeed its a quiet day, especially given a very tightrange day especially given the fact we have the jobs report. Its also reflected in the volatility index. You see the runup that we had and the collapse essentially in the vix. We keep getting awfully close to that, 10. 5 is where the vix is today. I mentioned materials, two of the other materials stocks doing well today are dow and dupont because they have yet another step toward their deal being completed. A Brazilian Competition Authority has recommended approval for the deal. Its just a step toward final approval. That makes it more likely. Finally quick check on expedia and priceline after Bloomberg News earlier reported that a hotel lobbying group is getting together and marshaling efforts to allege that these two companies have a monopoly on Hotel Booking practices. Thats according to documents obtained by bloomberg. Both of them quickly dropped, they recovered a little bit but still in the red. Scarlet . Carlet good stuff, thank you. That is twice their revised reading from march. Jobs dropped to the lowest point in the decade. Wages a soft point climbing from earlier. We are joined by the chief executive chief investment officer. Ed, great to see you, thank you for joining us today. The rebound in nonfarm payrolls not enough to jolt equities out of their tight range. Were still in that tight band but at session highs. Why not . Ed i think markets reacting to a lot of data the last couple of weeks. Its been in a tight trading range. There were some positives in the report a benefit of some of the slowdowns we saw in the First Quarter in terms of g. D. P. This is a positive emment. Yet there were some things less positive, somewhat slower than maybe hoped for wage growth. Julie thats the data weve been getting. If we look at whats happening with earnings, were talking about the best earnings season weve had for some eight years. And yet the s p cant get bf 2,400. I get the point about valuations and around record highs but what is it going to take to push it higher here . Ed certainly i think you need to step back and look at the ,erformance of exy thes overall back to the u. S. President ial election. Multiples have moved up. , a lot 1 tiedough to policy, weve seen movements with health care this week but remains a lot to be done in term os driving that faster growth in the economy and some of the beneficial aspects that could be Going Forward. Scarlet julie was talking about earnings per share growing, its been a blockbuster season so far for earnings, you can see that with a blue line there, nice recory even as the s p stayed in that tight bend. Julie i want to ask you about something weve shown, this chart shows the fact that there was a high correlation until the fed started cutting rates between what happened in commodities and what happened in equity markets and since the fed have been cutting rates, it broke down. Can we be resilient in the face of what were seing this week in terms of a pullback in commodities . At what point does it matter for equity markets, if at all . Ed Royal Dutch Shell has performed well, the brder commodity markets, oil in particular, put up a good quarter. Ultimately its Company Fundamentals that drive a will the of die nam exs. Royal dutch has shown good resiliency. Real commitment to blinging down costs. Really, live wng a new environment for the commodities. I think for us it comes down to, you know, understanding the drivers of individual equities and a little bit less the broader mechanic ro elements that might be at play thats been, you know, causing a little bit of weakness in the commodities section. Scarlet would you say the weakness in the commodities sector, especially some metals like copper, is there something investors see in terms of the outlook for demand globally and in the United States that would give people pause to perhaps look at individual stocks . Isnt there a bigger macro story being told by the plunging commodities . Ed i dont know if the story has entirely been written yet, i think marks are reacting to a bit of the slowdown we saw in g. D. P. Growth and clearly the dynamics at play in china are going to be important for metals in particular. I think it is something we need to Pay Attention to and watch Going Forward. But we think some of the signs that maybe Economic Growth, stabilizing, maybe even improving a little bit, particularly in the u. S. , that could be a big driver globally for Economic Growth and ultimately be something that helps stabilize and enable some commodities to recover. Julie how do you make money in these markets, ed . Ed our approach is to be dynamic to what the markets are offering. Ultimately to be able to look across at the classes and the companies that were directly investing in give us a will the of opportunity across their capital structure. Fur us its that dynamic positioning. Markets do tend to move just like this conversation were having around commodities, theres a lot of different influences on different segments of the market. I think that the extent that you can look through that and understand the longer term opportunity that really enables you to take advantage of and ultimately find opportunities to make money. Julie i know youre still optimistic about tax reform this year and the benefit that will have to certain companies. In light of what weve seen from the administration and how difficult it was over the repeal of obamacare here are you worried that perhaps the changing costs of actually getting that health care through might actually restrict what they can do financially on tax cuts Going Forward . Does it change the game at all for you looking at what happened yesterday . Ed i think its early to say. Theres some significant differences to making changes to the health care, to the Affordable Care act and to reforming our overall tax, you know, policies and systems in the u. S. I think there are certainly elements of tax reform, repatriation included, which i think will be easier to get bipartisan support for and ultimately can be very important for many individual companies in the Broader Market valuations. I think these issues are certainly very different ones and ultimately, you know, the path theyll take to moving forward will be very different as well. I think we have to watch ultimately, you know, the difficulty of getting things through for either party in washington is certainly not a new dynamic and just because we have seen the transition and republican control across washington, you know, certainly expectations are it still will be a challenge and take, you know, a bit of cooperation. We think tax reform ultimately can, there will be controversial elements of it but theres still possibilities of seeing some favorable action and we think that can be beneficial as we ove forward. Julie thank you so much, ed. This repeal and replacement costs more, it could impact what they can give in terms of tax cuts later. Scarlet its going to be a long slog either way. Julie lets check in with mark crumpton. Mark Health Care Reform moves to the Senate Following yesterdays vote in the house. Dont expect a vote in the Upper Chamber any time soon. Senate republicans say the house bill cannot pass is they will rewrite their own measure. The administration is preparing for a long process with Vice President pence, saying he hopes for a final bill by the end of the year. The president has asked a federal judge in kentucky to dismiss a lawsuit by two supporters. The two men blame mr. Trump for inspiring violence against black protesters during one of his campaign rallies. The president s lawyer said the men are trying to pass blame unfairly and that mr. Trump cannot be, quote, vicariously responsible for merely inspiring others. A deal to set up four safe zones for civilians of war torn syria goes into effect today. The deal between russia, turkey and iran would ban all military action in those areas. Syrian rebel groups, those though, have expressed doubt the zones could work. The zones could be closed to aircraft from the u. S. Led coalition. Emboldened by the environmental rollbacks of President Trump, state legislatures are following suit. Several states are taking aim at items include sogelar incentives, Chemical Spill protections and antipipeline protesters. The moves come as the Environmental Protection agency argues it can curtail federal regulations, leaving it up to statings to decide how to protect against pollution. On this last day of campaigning before frances president ial election, activists with the Environmental Group greenpeace unfurled an antibiotic he pen banner from the eiffel tower. It contained the French National motto, liberty, equality, fraternity, and the word resist. The banner was removed after about 45 minutes. Global news 24 hours a day, powered by more than 2,600 journalists and analysts in over 120 countries. Im mark crumpton, this is bloomberg. Scarlet. Scarlet coming up, the white house reaction to the april jobs report. Well hear from u. S. National Economic Council director gary cohn. From new york, this is bloomberg. Scarlet this is bloomberg markets. Julie time for the Bloomberg Business flash a look at some of the big business stories in the news right now. Supreme sking the u. S. Court to buy rival Health Insurer cigna. The filing comes after a federal Appeals Court last week blocked the companys first effort to overturn a ruling against the deal. Meantime, cigna posted profits and revenue above analyst estimates. Strong performance in its core business also boosted its 2017 orecast. Herbalifes strong First Quarter earnings revitize its shares. This follows last years federal trade Commission Investigation over concerns its a pyramid scheme. It had to refund 200 million to distributors later this month. Jaguar is gaining on porsche in the u. S. Luxury car market with a tide of capital to work with from par their company and a fully overhauled product line, their new suv and sports sedan eerlt outsold or closely trailed the Porsche Cayenne models so far this year. So far, buy verse bought 14,000 jags, more than double the buyers have bought 14,000 jags, more than double the number posted over the same period last year. Scarlet. Lets get back to the u. S. Jobs report which showed employers added more jobs in april. 211,000. The Unemployment Rate fell to a precrisis low. Earlier today, our reporter sat down with gary cohn to discuss the april jobs report and the trump agenda. Its been a big week for us. If you think about where the week started, people questioned whether wed get a budget, we got a budget done over the weekend and got a Budget Approved which funded many of the president s real key agenda items, including 21 billion for testifies. After that we got health care done, which is, we got a Health Care Vote through the house yesterday, moving on to the senate. Were excited to have the senate have that. We got our jobs report today. As you said, had some Interesting Data in it. As you saw the headline rate the Unemployment Rate as well as the u6 rate, are down to prefinancial crisis levels. Down to 2 2007 levels. Thats en down to 2007 levels. Thats encouraging. The less encouraging news is Wage Inflation. Were still not seeing Wage Inflation in the United States. Were seeing wages grow at about 2. 5 year over year with core c. P. I. About 2. 4 . Were not creating purchasing power. We want to crow ate purchasing putter for american citizens. That really play into our agenda and what the president has been talking about and in reg reform and tax reform and bringing better jobs back for hardworking americans. When you present these numbers to the president , what is he dissatisfied with . What doesnt he like about the numbers . The president is pleased that were growing jobs. Hes very pleased. Hes very pleased that our unemployment levels are at 10plus year lows. These are good numbers for him. He does not like wage he does not like where wages are. The wants americans to have more disposable income. He wants to grow the economy. He wants to change standard of living he wants to make america a place where Everyone Wants to live. So his agenda is really around attracting industry, attracting jobs back to america. So he looks at the participation rates and he looks at the wage growth rate. Hes proposed, and you backed him on proposing, fairly widespread reform to create job growth overall. Do we need that big a plan given that jobs are ding ok if not great . Were doing ok, but you see from the data, were doing ok with jobs that dont pay that much. We need to bring great jobs back to america. Scarlet that was u. S. Economic Council Director gary cohn speaking earlier with davids we toin. Julia next up, we take a look at the stock thats got investors buzzing. This is bloomberg. Julia this is bloomberg markets. Scarlet the s. E. C. Turned heads when it approved the first quadruple change to e. T. F. s. There are already threetimed leveraged e. T. F. s, there are double leveraged e. T. F. s from way long ago. Whats so different about fourtimes leveraged . Not much. Just the optics. 4x, just why . Why do we need 4x . Thats what people are wondering. Others are wondering its a product thats launched as everything is very frothy. The opportunity here is that its tracking the s p. If you look at the leveraged e. T. F. s, the ones with the most assets are the double leveraged and short s p. Around the s p is where the most asset goes. Theyre probably thinking we could pick up 100 million or 200 million. This is tough to come up with a product people want. But it turn heads because the s. E. C. Up to this point has been building up to being more conservative and banning derivatives in e. T. F. s. Now it seems to be an about face. It happened on the same day the new commissioner was sworn in. Im not sure if theres a connection. Julia you said optics, theres outrage on twitter which i mind amusing. People are concerned because of what you said i think, because its been you see there. This will end well, i think thats sarcasm. You you can lose four times faster. Thats what i want to pick up on here. There are way faster ways to lose on e. T. F. s. Thats the irony of it. Thats why i say optics. The top 100f. Isnt volatile e. T. F. s. Lets put this in perspective. I think some of the products in that 150 are pretty wild and i think people are think, e. T. F. s are for everybody. Does everybody understand what gos in here . In a book i wrote on e. T. F. s, i proposed a Rating System that way you can have innovation but then rate them and give advanced information like, this is rated r. That way people know, this has something going on, i call it the nasty surprise Rating System. Something in there that could hurt me. That way everything would be serving its right audience. Julia 2 of the market are tiny. They are small but get a lot of press. Scarlet i can think of one person who would love a ratings guide to e. T. F. s, chris aleman, i caught up with him last week. Heres what he had to say about the battle between active versus passive. Act i have managers beat the market in any time period and those repeat consistently. Active management has not been a valuable place to be and its gotten worse because i think information flows faster. Theres more information, more priced into the market. The u. S. Market in particular is more efficient than it was in the 1980s. So passive made sense in the 1980s, it makes sense now. Scarlet hes a fan of passive. I spoke with manny roeman of pimco, he said active neutral funds and active e. T. F. s beat passive because theres noneconomic players like Central Banks with sovereign wealth funds how much mature is a passive fixed income versus the active or versus passive equity. Its a mass rejection of active. In fixed income, not so much. If you look at the mutual funds active, eight are fixed income. So fixed income is treading water. But i do think that low cost is the mother of all trends and its affecting everything, no matter where you are. This chart shows these are flows. Take all the funds and e. T. F. s in the u. S. , divide it by ratio buckets, thats what you have. I call it the lowcost demarcation line. Theres a cup of funds taking in money that are more expensive. Largely speaking, no matter what youre doing, people really want your product cheap, whether its active or passive. Were going to leave it there. Thank you for giving us your isdom. Julia still ahead, the commodities close, oil on the rise today after slumping to a fivemonth low. The latest, next. This is bloomberg. Tually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Scarlet from bloomberg World Headquarters, this is bloomberg markets. Weve got commodity marketses closing in new york. Lets get you started with gold. For the week, the biggest weekly loss since trump was elected president. Better than expected u. S. Jobs data eroding demand for safe havens, including gold. Iron ore is gaining today after plunging this week. We had concerns about chinas Manufacturing Sector but today its up by 3 . Copper another mehmetal seeing recovery, recovering from a fourmonth low. And oil, crude is recovering today after tumbling this week to the lowest since november. Still trading in the mid 40 range but above the 45 level this comes of course as u. S. Shale production continues to counter opecs attempts to prop up prices. The bloomberg day break , ericas team spoke with ed about this weeks selloff in metals. Part of it was the metals, the numbers were not negative but not as positive as they had been. Iron ore and copper is a china story. Gold is another different story. Its actually the expectation that gold was going to sell off after the french election. We had gold popping up for no good reason. Its going back down to reality. On the oil side, youve got to look to see who is producing what, who is capable of producing what. We had a real cut. The cut is over 1. 5 Million Barrels a day. Eventually inventories have to respond to that. What opec did undermined its own objective. Ill give you three examples. One is, between last september 28 when they agreed to a mild cut, and november 30, when they had an agreement they increased production by 1. 5 Million Barrels a day that oil came into the western markets and to china in the First Quarter. They caused a little bit of exuberance in the market, price went up, the curve flattened, no longer was viable commercially to store oil in tankers. That also came out of the market. There was a good 60 million barrel drop from inventory in the sea held in tankers, floating inventory, moving on land. Also in the First Quarter. Hen we we had longs going into the market, record length. 951 Million Barrels of net length. Basically 100 from where it had been in the fall that eventually sold off but it created a pop in the price and the u. S. Shale industry, not only the u. S. Shale industry but almost record hedging levels in the Fourth Quarter that prompted a surge in recounts. We havent seen the surge in production yet. Its an expectation of a surge, we dont know what that surge is going to be. That was ed morse, the global head of Commodities Research speaking earlier on bloomberg. Julia while opec gets ready to meet late they are month, how low might oil go . Joining us to look at that is michael gloin, and were joined by suzanne who covers commodities for Bloomberg News. Thank you so much for joining us. Interesting question. Whole load of element heres whether its opec supply and demand. Lets start with positions on what the futures curve is telling us. I know youve got some chart there, mike, tuck us through this. One thing we can expect to hear after the end of today and into next week, managed positions, hedge funds will have collapsed this week. The problem is the data were going to get now is going to be from tuesday. Itll be a little bit late. We have to see that next week. So one of the things we can look forward to, the markets found a good support, back to where it started with opec. Remember how bullish they were bearish now. The curve has flattened. What was a steep angle a year ago, meaning supply was exceeding demand, has tightened up. A flattening curve, means the market improve. Probably a range trade in the bot tom sometime soon. Julia are you saying around these levels now where were trade, were at the bottom of that range . Were certainly closer than we were at 55. This is just well have to see. Thats key thing. 45 is the key level to watch. Weve done some research, 40 is a level that would bring out risks in the market. I dont know if well get there but thats a level to watch. Scarlet julie has another chart for us as well, something that, mike, you brought. In what can you tell us about the levels were looking for. Weve moved way beyond the 50 and moving averages. Now that theyre well below we might get some positions short. I think thats what you need to put in the bottom. That was the problem at 55. We made clear to our viewers. Market was over supplied. Opec got a cut, positions were really long. Now theyre heading lower, watch the lower end. Thats why were focusing on, im looking at 45 kind they have key level. Watching management positions. Seing what the curve does. The curve remains steadfastly angled if we can get it up, the level im watching is 40. Because 40 is the level when the market broke down in 2016. Initially bounced to 50, then dropped to 40. 40 seems to seems to be a level if we get below that youll see issues with credit spread in the stock market for now. The market seems to be saying hey, were in a range, were not worried just near the lower end of the range. Scarlet heres a chart we do have available, certainly credit, energy credit, high yield credit was the story last year. Its dissipated this year. Where do things stand right now . So far theyre saying were ok. Energy equities equities have been leading the market down. Crude oil has just caught up. You can see the chart the credit spreads having widened a little bit. Nowhere near what they did in 2016. I think markets looking forward to, more likely a range and were getting the lower end of the range. Things have changed from the plunging scenario we saw before in 0142016. Julia were also seeing some strongness in the metals as well. Ive seen the word capitulation being thrown around as well. Let me bring you in here, ive seen people, actually, joe earlier was talk about the coppergold ratio in particular as something to watch here. What do you think is going on in metals than what do we need to watch for . Whats been going on, it started earlier this week when we got data out of china saying manufacturing was growing. After that, we got data from the l. M. E. Showing that we have an excess in stockpiles, especially in copper. Then after that, we got the fed on wednesday saying basically hey, we still got some rate hikes on the table. And then you get a little bit sort of, the dollar moved up a little bit. You get all these elements coming together. Thats sort of created the perfect storm for base metal this is week. Thats why weve seen such a heavy plunge. All these different factors coming together. When you talk about base metals and data out of china. I think about chinese investors and how many of them look at trading copper and iron ore as individual securities the way they might trade stocks as opposed to as barometers for whats going on in the global economy. How much does that weigh into the movements of metal prices . When people do look at er, they think about, its sort of where the economy is headed. When you look at that and you get a slow down because people say if china, which is the biggest producer and consumer of commodities, theyre slowing down, we need to take a look at prices, are they overvalued. You get selling, begets more selling. Youve got a lot of sell, gets down to a certain technical level, then people say we need to get out of it because the outlook for demand looks like it might be slowing a bit. Copper is the bellwether of Global Growth if nothing else. What dewpoint to say here mike . What do you think is in the cards, on the cords here . I like that, what do you want to say. The coo thing, copper and gold are both down but the trends are disconcerting. Copper has gone down, gold is up 7 . Thats not a stable trend for global Economic Growth and inflation. Thats what you see in the chart. Oftentimes when gold when copper, you know, copper is underperforming gold on the way down, yields are going down, so is global mack are economic activity. Another thing i show is what happened in crude oil. Ocopper positions and crude oil positions are way long. Now theyre coming back which maybe be a may be a sign this overcorrection is over. Scarlet the blue line in that chart is coppertogold ratio. When it goes down, copper is underperforming goal, when it goes back up, theyre performing relatively. Its an indication of what might happen with bond yields. Julia on the bottom of the chart here, you look at the managed money, were at some kind of low, but nowhere near what we saw in 2016. Great chatting to you. Ke and susan, covering commodities for blmberg news. Lets check in with mark crumpton. Mark french president ial candidate marine he pen Marine Le Pen booed and pelted with objects today. She was hustled out of the cathedral by a back door but was spotted and booed again. Stick with bloomberg, well bring you special coverage of the french president ial election runoff results on sunday. The European Unions chief negotiator said Citizens Rights take precedence in separation talks. Chelle barnier said before trade gokeses begin, he wants to ensure the rights of people hiing and working in the u. K. And e. U. More than three million citizens live in the u. K. While more than a million brits live in e. U. Countries. Service members were killed in somalia in an operation against the Extremist Group al shabat. The Service Member was in somalia as part of an advise and assist mission alongside member os they have so malli national army. He was alongside the Somali National army. The pentagon said the operation also wounded two other Service Members. A new stud by study by the World Food Program examines the impact of Food Insecurity and conflict on cross Border Migration showing the direct correlation between food scarcity and people fleeing for more secure destinations. According to that study which was released today, for every 1 increase in Food Insecurity, it compels 1. 9 more people to migrate. Because of the crisis, the conflict, people have to move. They have to find food. And when they cant find food, theyre going to go wherever they can get it. And thats why you have migration. Thats why you have people moving in the millions. Mark beasley said in syria alone over five Million People have moved from their primary homes during that countrys savage sixyear civil war. Global news 24 hours a day, powered by more than 2,600 journalists and analysts in over 120 countries. Im mark crumpton, this is bloomberg. Scarlet . Scarlet coming up, we take a look at Biotech Research as that industry faces an uncertain future under the poll sthoifs Trump Administration. This is bloomberg. Julia this is bloomberg markets. Scarlet we just heard about the selloff in commodities. How has that been playing out in equities . Lets head over to julie for the latest. Julie these are the Industry Groups in the s p year to date. Energy is in the bottom spot thus far this year. Its down by about 11 . So thats really been the biggest limiter of gains that we might otherwise have seen on the s p 500. Even with Energy Stocks down by that amount weve got the s p up by about 7 on the year. Other way to express this is 8351, that looks at the corligs between oil and stock. The s p 500 up here is in white, oil is in blue. We have seen particularly this year a divergence as stocks continued to rally even with the latest selloff in oil. On the bottom here is the correlation which is now turned slightly negative after being very strongly positive at the beginning of april. More than 0. 5 corligs. And we sort of tend to think of oil and stocks moving together and yet this year, and particularly over the past month that has not been the case. As for today, however, it is somewhat the case. Because energy is the biggest contributor to gains in the s p 500 today. Here are some of the stocks that we are seeing outperform many of them sharply yesterday. Oil is one of them, plummeted. Chesapeake fell yesterday, back up today. Newfield and murphy, a couple of others that are bouncing in todays session, scarlet. Scarlet all right, jewels. Julia those guys she was just talking about, transocean and chesapeake and murphy, those are some of the most shorted stocks out there just to give you a sense. 16. 7 at the outset. Scarlet a bit of a bounce. Julia lets move on. Next week the Trump Administration meets with biotech leaders talking future funding for reserge as the industry faces uncertain i under the uncertainty in the new president. Bloomberg will be in boston for a special week of programming, shining a light on biotech industries. Caroline is here with a look ahead. Youve been speaking to one of the communities, the president of harvard, i believe. This is what make this is job so awesome, when you get such a guided tour of a city city like boston and get into such famed and academic institutions like harvard to speak to none other han of course the president of the schoolhorse, hes intn leading leading Harvard University for a decade now. We were talking about how theyll be meeting with the Trump Administration on monday. Theyre talking about cuts likely to come in funding particularly around biotech. This is something she spoke to, her concerns and what hes intn doing to speak to some members of congress. I spent a lot of time working with individuals in congress this spring, trying to make the case for how research operates and how universitys are dependent on a Longstanding Partnership with the federal government and on federal support. Weve also been concerned about immigration issues and the free flow of talent. I think our greatest advantage as a country in this has been the attraction that we can pull people with to the United States. We benefit enormously from that. Academia and business singing from the same hymn sheet here, saying also immigration is a key concern under this administration. She spoke particularly of the incubator they have in harvard ibab ilab, the new company being built often by foreign students they have attracted to harvard. This is something of course we hear echoed not only by the students going to harr vart, the concerns on immigration, but think of some of the more famed alumni. Mark zuckerberg, bill gates, they have spoken passionately about their concern about immigration. Scarlet caroline , in california you have Silicon Valley in new york, we have silicon alley. I dont know what they call it in boston but theres a growing tech scene there. Give us a sense of where it is in terms of tech and innovation. Caroline biotech is the life blood of boston here. 31 of the state of massachusetts overall state product, the money it makes a third of it comes from tech and biotech. Almost half of the payroll of boston comes, and from massachusetts as a state, comes from biotech and tech. No wonder when youve got 20plus universities and academic institutions just in the state of massachusetts alone. 12 growth in technology in terms of 2010 to 2015, according to p. W. C. And more than 900 Technology Investments in the window of four years. We have some phenomenal guests coming for you over the next course of this week. I want to see you stay tuned. Monday well be bringing you throughout the book more sound from president faust, of course, from harvard but weve also got the governor of boston, charlie baker. Weve got the mayor of boston, walsh and none other than g. E. s c. F. O. Geoff bornstein, why . Because theyre breaking ground on monday to make boston their headquarters. Julia thank you for joining us. Catch bloombergs Technology Special coverage all next week starting at 5 00 p. M. Eastern. From new york, this is bloomberg. Julia amazon isnt just business its personal for jet. Com founder mike law. Hes been visiting walmart regularly since the retailing giant bought jet. Com last year. His goal is to help topple amazons dominance. He spoke with emily chang who did a deep dive on the companys ecommerce aspirations for the latest edition of business week. She asked how the acquisition of jet. Com was faring. Take a listen. Its still early. Its been less than a year. But the last quarter in february when we got a walmart earnings announcement, ecommerce growth was about 28 or 29 . Thats not only far above the industry average its actually above amazons growth rate. Walmart is starting from a much smaller base but it was a promising sign. Walmarts investors reacted quite well. There are reasons for optimism. What mark laurie, the founder of yet. Com has done at walmart. Com, hes kind of administered some of the medicine walmart needed he has broadened that marketplace selection which walmart resisted for a long time. He has done what is sort of necessary online in terms of matching the lowest possible price, you know, walmart historically was a little unwilling to do that because the store is supposed to have the lowest price, then hes gone on an acquisition spree. Modcloth, shoebuy. Why is he buying these Smaller Companies . A couple of reasons. One, to bring Product Selection onto walmart. Com. Some brands wont sell to amazon or walmart. These seb sites have that selection. Some of the selection he can bring over to walmart. Com or jet. Com and then the third reason is hes getting some, you know, very skilled founder entrepreneurs who hell then put in charge of all of outdoor, all of shoes across all these walmart. Com properties. So in a way its a strategy to hire some great ecommerce operators. What did he learn at amazon that hes bringing to this moment . Its almost more interesting to talk about what hes not bringing, what he almost learned not to do. Hes very sort of gentle, i guess, or maybe reserved is the better word, when talking about his amazon experience but one thing that clearly he left amazon with a bad taste in his mouth around the willingness of the company to kind of empower the startups that they were acquiring and so he continued the business, lets say the diapers. Com business at amazon but of course is competing internally with other people that sold diapers. At walmart, doug mcmillan, the c. E. O. Of walmart, put him in charge of ecommerce across the board. Hes following that model. He went out and acquired the tdoor retailer moosejaw, the founder c. E. O. Of moosejaw is in charge of outdoor across all walmart. He is empowering them in a way perhaps he didnt feel empowered at amazon. Julia that was brad stone, you can learn more about the feud between amazon and walmart in the new issue of Bloomberg Business week available now. Scarlet coming up, we speak with the man behind the taylor rules, economist john taylor, said to be on the short list to replace january janet yellen. This is bloomberg. Julia its 2 p. M. In new york, 12 00 p. M. In san francisco. Scarlet welcome to bloomberg markets. We are live in bloomberg World Headquarters in new york. Over the next hour, stories out of washington, paris, and beijing. Here are the top stories we are the top stories were covering on the bloomberg and around the world. Oil finally seeing relief after with solving the past five days. After with sawing whipsawing the last five days. In washington, a busy week for the administration, with health care passing the house. Senators are pushing to write their own bill with no fixed timetable to act. And the man behind the taylor rule, Stanford University professor and economist, john taylor. That conversation on the fed and the u. S. Economy later in the hour. We are just one hour from the close of trading. Lets check in for the latest with julie hyman. We are in green. Julie yes, we are off the highs of the session. Interestingly because this is morningstion to this jobs report that was fairly lackluster, the reaction that is. I do want to point out what is happening with apple shares. Apple got a lot of headlines. The company came out with earnings and the day after the stock initially gapped at the open, still finished the day what looku know at the week. Apple once again at a record, has reclaimed that status. And that apple strength that we are seeing has helped the overall markets. Commodities split between energy been talking have about ocean and chesapeake, and also Materials Companies are higher. There are getting a boost from lyondelle at ubs, and basil also higher, really with oil prices, a chemical producer. I want to go back to jobs. This is one that was highlighted with the Bloomberg News stocks team. Really interesting pointing out, it points out the s p the s p 500 top that we have seen coincides with unemployment and wage growth. You have the white line. You have the Unemployment Rate in blue. You have the convergences were they both came to 4 , the dotted line. Once again, they are sort of level. Toward that once again, the s p 500 is rates. G to tighten this time around, its not necessarily going to happen when you have these wages that have always to run, and of course, you have the fed that is going to be very gradual and cautious this time around. Julia . Julia thank you very much, julie. A bill topassed repeal and replace obamacare and there was a positive jobs report. Chiefs gary cohen, advisor to President Trump, speaking earlier today. It has been a pretty big week for us. People were questioning whether we would have a budget. We got a budget done over the weekend and got a Budget Approved which funded many of the president s real key agenda items. After that, we got health care done, which is we got health care house. Moving on to the senate, we are excited to have that and then we got the jobs report. Big a when was this for the Trump Administration and what comes next . For more on the week that was, lets go to megan murphy, the editor of Bloomberg Businessweek. You were laughing. Going to sayeally they got health care done this week . That is pretty stunning. Yeah, they got the bill through the house. That is 43 days after a spectacular collapse of the signature legislative push of the company ministry can, and, yeah, they got this will through. Sort of a nailbiter. They left a lot of republican congressman at risk potentially. This is an incredibly unpopular piece of legislation, far more unpopular than obamacare was at this stage. We move onto the senate, but there is a lot of work to get this over the line. We look at this beyond health care now. What did the Administration Learn about washington, about pulling votes together, about things given that they are by and large nonlawmakers in their previous lives what did they learn about handling this better . Megan weve got a great piece on bloomberg dealing into this. They learned their lessons from the first collapse in terms of the outreach they need to do with special interest group, members, with getting their plan out there, knowing what the ultimate red lines were, particularly moderates who may face challenges in districts int Hillary Clinton carried 2016, as well as the far right members, the House Freedom caucus, their redline spirit basically, they knew they have the votes. They pushed the boat through when they knew they had them, and they did not want people to go back to the district for more contentious town hall saying you did not repeal, you did not replace, you left obamacare intact. Scarlet right and that was the urgency about getting this done before the weekend. Now that the Trump Administration is coming victory, even though there is white of it left to do, what does that mean with the sequencing of their next priority . Blazingt mean all guns for tax reform . You can check up health care and say we will now talk about tax cuts . Megan it was a big week. They got health care done. They will take a lot of the same strategies they learned on taxes. In many ways, it is as complex as health care was. Getting tax none is a decades long dream of tax overall. That is where the intention is going to be focused, that is where they will employ these doctors, but its hugely divisive in terms of priorities across the party, in terms with fiscal strength and the stimulus the Trump Administration was to bring in. Julia was it a win overall with every thing that happened or was it just a whole lot of spin from gary cohen . Megan that is a great question. One thing that will hot them are the pictures in the rose garden with the beer 124 million americans may be losing health care, and americans who are sick or are incredibly disadvantaged. I said at the outset this is very unpopular. They will have to get over those hurdles. The senators who perceive a risk will not take this on board. They will walk away from it. Julia such a punchy response. That was our executive producer, so i will not take credit for that one. Now scarlet now lets get a check on your headlines with mark crumpton. Mark . Mark scarlet, thank you. President trump has avoided a government shutdown, signing a spending bill to fund the government through september. The president s first major feasible to an was signed behind closed doors at his new Jersey Senate republicans are learning the Gop Health Care bill that was passed by the house yesterday will not necessarily survive a senate vote intact. Finance Committee Chairman orrin hatch says republicans will have to manage expectations and focus on what he calls as doable. Energy projects worth 50 billion are in limbo as companies wait for President Trump to fill key vacancies. Several energy regulators, including nexis, have been unable to secure permits as they wait for the Trump Administration to fill regulator seats. The projects include pipelines, new liquid natural gas terminals, and contested utility mergers. A team has begun investigating last months edley sarin gas attack. Deadly sarin gas attack. Thee are allegations that syrian president s regime is responsible for the deaths of men, women, and children. Global news 24 hours a day from our more than 2400 journalists in more than 150 news bureaus around the world. I am mark crumpton. This is bloomberg. Julia . Julia thank you, mark. Oil attempting to recover from the sudden drop. Options insights is next. From new york, this is bloomberg. Scarlet this is bloomberg markets. In scarlet fu. Ulia im julia chatterley now its time for options insights with julie hyman. Julie thank you. Joining me, our guest or macro risk advisors. A perfect day for you to come in. Weve been talking about the Oil Price Bounce after the big downside we have had. Im curious, over this week as we have seen the reaction in oil, the slide, which was quite sudden yesterday, and the bounce today, what positioning changes have you been seeing in the market . The big trade we have seen is people roll out of xlp puts and baiting onally further downside in the uso product, so we think it could be a potential hedge against a risk that should opec not support the conditions will reinforce themselves and that cost embedded in product would increase. Julie what do you think . Is opec going to come out with a strong statement about an extension of production cuts, and even if it does, is that going to be enough . Think the consensus trade is opec will roll cuts. We think they will extend cuts. We frankly do not think that is enough to support prices. We have been very cautious on prices going into april. Julie how cautious are you . What levels are you looking for out of this . We believe oil prices will be subject to dollars to the balance of 2017 and even owing out as far as 2019. We think that we are entering an new trading regime where the slow growth out of china, low inflation rates, low growth , specifically in the u. S. Will put a damper on the demand side of the equation and i dont think it has been given enough attention. Its interesting because the discussion has really been all about supply. You mentioned except the, which there are the men p companies and your trade have to do with in theich is Broader Energy industry. Why did you choose that one in particular . We think the nexus of the current macro environment falls on the top constituents. Exxon and chevron are top waited in the etf. They pay outside evidence to investors. Backdrop, theion rollover in commodities, we think, all intersect at the top we thinke etf, and that there is a risk to these payouts, basically if you look at exxon, for example, the street is forecasting earnings through 2017 basically right into the right oil environment. This pause and rollover in oil prices, we think that those earnings could be at risk and see further downside to the xle. Quickly then, what are the parameters of the trade youre looking at . We like to sell the december shortl its like being through options. Julie to be clear, excellent he is trading at 65 or so . 66. Julie thank you for walking us through the oil market. Ap Energy Strategist at strategist at macro energy advisors. Speaking towill be Professor John taylor, yes, all of the taylor rule. From new york, this is bloomberg. Julia this is bloomberg markets. I am julia chatterley. Scarlet and i am scarlet fu. Olid jobs report lackluster wage growth should get a spark in coming months. Standing by ins stanford with a special guest. Mike . Michael thank you very much. We are with john taylor, perhaps nation from rest known best known economist. He came up with the taylor rule, and he also put together this conference. Thank you for joining us. We should mention that youre on everybodys short list for the chairman of the Federal Reserve if President Trump to make a change. Let me ask, what do you think of the economy right now and what you think the fed is doing . Think theor i economy was weekend the First Quarter, but it is picking up and i think a lot of people expected that. The First Quarter was unusual. I would like to see higher growth. In thisthis 2 growth recovery has been not so good, so i think the main task is to increase growth down the road, and that is tax reform, regulatory reform, thanks not that you try that. We have had relatively low Interest Rates. The president is looking for monetary policy, he may not want a change. But if hes looking at at a change in the way the fed operates, that was the underlying theme here at the conference. How the Federal Reserve does about his policies. Let me ask you a couple things about that. The Balance Sheets, qe are you in the camp that thinks, a, it works and the fed should continue with the relatively large Balance Sheet with interest in excess reserves and repost for the floor, or should they go back to a small Balance Sheet and target the federal funds rate . Prof. Taylor i have been skeptical about the quantitative easings impact. They are normalizing, which i think is good. Hopefully the normalization will continue in a predictable, strategic way. So, the smooth in the markets, but i think for the most part, the idea of howling that vance insight that Balance Sheet insight, it is appropriate to determine the Interest Rate. Generated the market determine Interest Rate. I think that was healthy in the past and we ought to try to go back to that again. That requires some reduction in the size of the Balance Sheet. Obviouslyou are known for the taylor rule and you advocate the central bank using rules, but how do you use them . You are at Stanley Fischer say, we look at five different taylor rules every time we meet. Theyd they be can or get required to as legislation on capitol hill would suggest, stick to a rule, or do they use it under a discretionary basis, take guidance from it . Prof. Taylor the latest legislation looks at the strategy for monetary policy, and i think that is quite reasonable. I also asked them to compare whatever the strategy is and they get to choose, if they get to describe it with some rule which they get to choose as well. I think its not too far away from whats happening recently. I think chair yellen and vice fischer has been in talks. It is a huge discussion of the rulesbased policy. As you know, it came up constantly during the discussion, and i think the vice chairs description of how policy rules combined with decisionmaking by a group by committee is very useful and very important. I think it reflects some things that we are thinking about right now. Michael would you, if you are running the fed, do the same thing . Set the parameters of the discussion with the role, but still use discretion prof. Taylor i have argued for many years that rulesbased policy works. That is so it worked in the 1980s and 1990s. It was instituted by volcker. He change the policy, made it much more productive will, much more rule like. People have seen that. For most of greenspans term it was the same way. For should get an assist developing these ideas. I think we would like to see these strategies before. It is quite feasible. When they go to bat, it is clear what policy is. We will bring about a Better International system. You mentioned the 1980s and 1990s. One of the discussions here was how potential growth that load, forh moved down the rate policy in that may not be captured in a rule . Prof. Taylor its interesting. When you mention policy rules, theres the socalled taylor rule michael named after someone we know. In theaylor developed late 1980s and 1990s. As was 2 . The average Interest Rate in real terms was about 2 , so its not much different from now. There are other reasons that i think people think it is lower than two. And you know the conference focused a lot on what this level was. And the fomc members on average think it has gone down from two to one in real terms and you should see that. I think theres also a tremendous amount of uncertainty. It could move back up and its important for the central bank to be aware of that. This a lot of talk about models of the conference. One thing that everyone seemed to agree on, where the failures of the models is they do not take financial conditions into account very well. But can you do that . Prof. Taylor just the banking sector, the way that feds the way that spreads affect loans, they have very low rates in europe and japan and that affects lending and we have seen some adverse effect on lending because of that. The models do not incorporate that enough. Theyre beginning to change that. One of the innovations in recent years is the ability to compare models. Yourou can evaluate question in a much more systematic way and, i think, in a better way. I hope the fed does more of that. Michael youve talked about the importance of regulation holding down productivity and growth. The fed is a regulator. What should the fed be doing . Should be fed be dialing back on its supervision, a lot of the rules put in place and start frank . I think dialing back is the wrong way to think about it. If the bank has sufficient capital, you should not have to micromanage and you should not have to micromanage so much these decisions, so much emphasis on compliance. There is a real tradeoff and i think it would be healthier if the bank has more capital to have some kind of offramp for some of this extra control, which i think is hard, especially for Smaller Banks to deal with. A think it will be beneficial. I think thats one of your prose one of the proposals coming out of the conference at this point. Michael i have to ask that question. Would you be interested in the fed job . Prof. Taylor all of this talk is just talk. My main concern, as has been for many years, is good monetary policy, good central bank, good u. S. Interest. Michael if nominated, would you serve . Prof. Taylor im not talking about this anymore, as you know. But thanks for the good questions, mike. Michael very good. You sound like a fed chair testifying to congress. Conversation, Michael Mckee, Michael Mckee with Professor John taylor of the taylor rule. There will be a special election frenchn round two of the president ial elections. This is bloomberg. Crumpton. Mark its time for first word news. John klug yunker and held his todayof the eu speech with a direct slam to the british. Decide to day whether to speak in enclosure french. I made my choice. It is in french because [applause] slowly, but surely, english is losing importance in europe. Juncker says the eu well negotiate with the u. K. In full transparency. Go full transparency. Theeets with president on 25th. Raisie issues that exist, says that the Iranian Nuclear deal should be considered legitimate