Record highs on an intraday basis. They have not been able to maintain those levels. These are all very small moves. I wanted to dig into the dow a little bit. The only of the three major averages that have failed to maintain the record that was set on march 1. Apple is the big winner in that index. Shares up 3 after brian white over at Drexel Hamilton put a price target on apple, sending shares up. Ibm lower on Warren Buffett cutting his stake through berkshire hathaway. Bernsteins saying the shares should not be bought on weakness. Downly, Goldman Sachs 0. 66 . To talk about apple again for a moment and as it relates to the s p 500 more so, right now, thus far, we have seen apple rally in along with the s p 500 rallying along with the s p 500. This has been supportive for the s p. On the bottom, we have the correlation. We are really seeing a lot of the time, a majority of the time, the two moving in tandem. If apple does continue to rally, that would not be bad news for u. S. Stocks. Headlinese to monitor out of the Stone Investment conference. The Howard Hughes corporation up by up after bill ackman reiterated the support for the company. He has held shares for six years and is the largest shareholder for Howard Hughes, a real estate company. This is not a new position for him. We will keep monitoring those headlines to see if there are any other stock or marketmoving news coming out of it. Scarlet good stuff. Thank you so much. Investors news for this merger monday. A tie up betweentwo retail rivals, the making of a tv goliath, and the battle takes another twist. Lets bring in alex sherman. Lets start with your scoop on the sinclair tribune. A tv goliath in the making. Are we done here . Alex we are done initially, but not in the broader world of tv broadcasting deals. It will be interesting to see where we go. Sinclair buying tribune. , with this new station, they will on more than 220 tv stations around the country. Tribune owns 14 fox affiliates, more than any other local affiliate stations. That is why fox and blackstone potentially interested in a counter bid. They did not end up bidding. The end price is a little higher than what they were hoping to pay for tribune. They were hoping to get a deal done around 3830 nine dollars a share. Scarlet where does this leave fox . Alex this was a transactionindependent deal. They did not want sinclair and tribune to come together because that allows this company to own 28 of all of the different fox local affiliate out of there, so when it comes to negotiation time, they would lose leverage. Some of the other companies out there, it is less of a big deal. They look at this deal and say, if we are going to play in this world, this is the one we should do it on. I dont expect them to start bidding on others. This is a fascinating story to me and the price increase in this bidding war here. I watering now. Eye watering now. Alex you should not be embarrassed if youve never heard of Straight Path. If you take a look at the stock chart coming year to date, it is amazing. This company was trading at 34 per share. In january, they listed to sell themselves to review Strategic Options and it went up to 42 per share. Scarlet that is crazy. Alex now, what we have seen is one of two things happening. Even the market either the market greatly understood misunderstood the value of Straight Path, at t came up with a big offer verizon, a company that has not really come forward and said they are verizon, they have seen it as a weakness in at ts strategy. If you want this thing, we are going to make you pay up for it. They keep topping at ts bid and there is no real end in sight. Because at t now has what . Three days to come back . Alex this is the third time verizon has upped its bid. If at t really needs this asset, verizon is going to force them to say, you say you need it, just how much do you need it . We are going to make you go as high as possible. It is a bit of gamesmanship and you can see it play out in the stock. If you are an investor and you want to make money, i hope you bought Straight Path a few weeks ago. This thing has quintupled. Julia i love these bidding war things. This is like two people fighting over and ebay purchase. Alex exactly. Though i will say, one person does not really want it and the other person does. Julia yes. Value in the eye of the beholder. Axo, say no. They have rejected a bid from ppg. Will ppg go hostile . Scarlet i think it is inevitable. Alex they have said they will. Julia the shareholders have said, this is a good deal, this could be an important deal for akzo, and they are saying, we want to go our own way. Alex akzos fiercely independent as a dutch company. They have something that basically allows a foundation of the company to have the voting shares here. , they does go hostile would have to agree ultimately to sell the company. They have said that we are willing to go the way of our public shareholder bid and we will vote with the shareholder base, but now it is up to ppg on whether or not they decide to go hostile, whether or not they want to up the bid one more time. Scarlet alex sherman, thank you so much. Now to another big deal today. After many months of talks, billionnouncing a 2. 4 deal to acquire kate spade. Investors applauding the news. Shelley has been covering the story from the beginning. Take a look at this. Investors like this for coach. Why is that . Saying, we areh putting our money where our mouth is. They are saying, we are going to become this big conglomerate. They are putting kate spade on their shelves to keep making money, they are buying it as one deal that is going to be one of many to come. That could be one reason why shareholders are bidding the price up. Fora it is also a buy these guys into the millennial era. They have signed with those kind tocelebrities that appealed the millennial generation. Are we going to see kate spain bags under the coach umbrella Going Forward . What does this mean . Shelly actually, we are not. Coach is not going to bring any kate spade merchandise into their stores. They are going to keep the brands completely separate, the same way they have done with stuart weitzman. It is an interesting deal because you are not going to get the kinds of cost synergies that you might have seen from other kinds of deals. Scarlet you have written before about how coachs priority is strategic m a. How much dry powder does a company like coach have right now . Shelly coach is after handbags, shoes, footwear, and then outerwear, things like jackets and things like that. Anything that falls underneath those umbrellas, they are going to keep putting that under the coach umbrella to make it a bigger company. They basically said, our coach core brand is not growing that much. Instead of trying to blanket the world, lets buy up all the other brands. Julia what about a possible bid for jimmy to . Jimmy choo . Shelly i dont think it is off the table. Have the they dont cash right now, but maybe something around the size of stuart weitzman, which was around 600 million. Jimmy choo has been talking about 800 million. It is not too far off, especially if you give it a little bit more time, maybe the price comes down a little bit, depending on how many buyers come in. Julia selena gomez is the name i could not think of earlier. It shows you a great deal about me. 47 million followers on twitter. Scarlet you mentioned stuart weitzman. There is a former jimmy choo official who now works for coach. In terms of personnel, coach is positioning itself for dealmaking. Shelly exactly right. We have been arguing that jimmy choo would make a perfect asset for them. Maybe coach has used the fact that jimmy choo is on the market to say to kate spain, look, we can do this other deal, maybe we will come to an agreement. Maybe that had something to do with it. , columnistelly banjo for bloomberg gadfly. Julia lets check on the bloomberg first word news with mark crumpton. An Obama Administration official who warned the Trump White House about a key advisors ontact with russia will be capitol hill this hour. Former acting attorney general sally eight testifies yates testifies before a Senate Committee. She has not spoken publicly about former National Security adviser Michael Flynn before. Yates is likely to testify her warning was stronger than a heads up. Formers word that two Obama Administration Officials Say that during the transition, president obama warned president elect trump against hiring flynn as his National Security adviser. Pruitt isief scott replacing half of the members of the key scientific review board. A spokesman tells prewitt the agency is making what the spokesman calls a clean break with the Obama Administrations policies. Several Board Members were surprised, saying they were told they would be retained. British Prime Minister theresa may is asking voters for a mandate as large as Emmanuel Macron received in france. Mccrone won Emmanuel Macron won 66 of the vote in the french runoff. Theresa may says she needs that kind of support for brexit talks. Syria is dismissing the idea of Foreign Forces patrolling four safe zones. The official told reporters in damascus on thursday saying that syria would only settle for Russian Military police who are already on the ground in the socalled deescalation zones. Global news 24 hours per day. Im mark crumpton. This is bloomberg. , of all theg up hurdles that stand in the way of tax reform legislation, the congressional calendar may be the hardest to overcome. This is bloomberg. Scarlet this is Bloomberg Markets. Trump not one to shy away from the questioning of acting attorney general sally yates. The president tweeted, ask sally yates how she knows ssified information how to how classified information got into the newspapers. This all has to do with the hiring of Michael Flynn and what and his meetings with russian officials. The scoop that we got is that the president , former president obama warned the president about Michael Flynn. Tell us more. What we know is that president obama on november 10 shortly after the 2016 election, in a meeting with then president elect donald trump had a conversation with him. Trump,ng that obama told we are told and other outlets are also reporting is not to hire Michael Flynn. Trump about him apparently. This was someone on president obamas National Security staff and he was fired because of skepticism about his character. I think that is what is coming back now as sally gates, the acting attorney general, prepares to testify before a , about thel investigation into russia and more specifically about Michael Flynn. Indications, his connections seen usual if not quite inappropriate. Julia i want to ask you about the work youve been doing digging around trying to understand how easily the administration is going to find getting something done on taxes this year. You can see a number of obvious roadblocks. Sahil the biggest roadblock right now is the congressional calendar. Rewriting the tax code is difficult in the best of circumstances and these are not the best of circumstances. The calendar ahead for congress is very rough, it is pretty daunting for any hopes of getting big things done, like not only taxes, but also infrastructure. For the next 39 legislative days before the august recess, the the senate is going to be wrapped up with the health care bill. Likely passill Something Different and it will likely go back to the house. Then there is the august recess. Once lawmakers come back, they will have to do a series of things before deadlines strike. They will have to fund the government by september 30, they will have to extend expiring programs like the Childrens Health insurance program, like flood insurance. In the fall, they will have to raise the debt limit, which has been a politically difficult vote for republicans. These things are likely to eat up a lot of Political Capital and create a difficult environment to do tax reform. No disruptions are going to happen, so these things are likely to be put on the back burner. Congress is not known for doing multiple things at a time, for being able to walk and chew gum on big issues. About thehen you talk counter, tax reform should be taken care of by the end of 2017, but you also have the midterm Elections Come 2018. What specific complications with trying to address tax reform present in 2018 . Sahil it is always difficult to get big things done in an election year. T is a truism in politics it is not just the november 2018 elections, but in the spring, republicans will be facing off in primaries and it is an uncertain political environment, sensitivities are heightened, people are less likely to want to take risky, tough votes in an election year, whatever month it is. Which is why you have republican leaders, including speaker ryan and kevin brady of the ways and Means Committee saying the road looks steeper and steeper by the day. Scarlet good stuff. Im National Political reporter. Thank you. Julia it is complicated. Still ahead, bloomberg takes a look behind the scenes at the hightech studio with the boston pops orchestra is performing the biggest hits. This is bloomberg. This is Bloomberg Markets. Scarlet all this week, Bloomberg Technology is in boston speaking to fortune 500 companies and uncovering its burgeoning tech scene and that includes a closer look at the boston pops orchestra. The orchestra is paying tribute this year to the music of former conductor and hollywood superstar john williams, who was known for his work on star wars, raiders of the lost ark , and other big onscreen hits. Here is a look at the recording of his work in a hightech studio. Start with a little of this. At some of this. Hours of keitho lockhart leading the boston pops , you will have a recording of the selected works of maestro john williams. The manned the managing director says the soundtrack of our time. John can write a melody better than anybody else. Star wars comes right into your head. You say et you hear it in your head. The recording is overseen and , onevised by nick squier of the few fulltime sound engineers employed by any u. S. Orchestra. It is visually appealing, it sounds great, it really allows us to record and listen to the orchestra and make sure that we are making the right decisions when we move microphones or are mixing in the space. The Recording Studio recently underwent a quarter Million Dollar upgrade and is arguably the most advanced in the country. Split wood paneling makes for a theer sound, as do theaters. The improvements were carried firm that also count jayz and alicia keys as their clients. We are the most recorded orchestra in the world. The profit from such recordings once represented as much as 15 of the boston pops orchestras income. 40 years later, of the 46 million taken in, media represented just over 1 . It used to be you would tour to sell recordings. Now, if you record, you are trying to drive people to concerts. That visibility comes in other ways. Like the deal the bso made in 2015 with Google Play Music to make some of its performance is available in streaming or download. After the concert, conductor lockhart will come down for a listen to see how things went, but for now he is in full performance mode, so that every note captured for posterity is just right. Full disclosure, bloomberg is a sponsor of the boston pops. Catch a conversation with the former boston pops conductor Keith Lockhart and boston mayor. Ody marty walsh it is all part of bloombergs tech week in boston. I will definitely be listening in. That sounded amazing. We are still keeping our eyes on oil. The commodity close, fluctuating after saudi arabia and russia signaled they could extend Production Cuts. How much good will that do . The latest next. This is bloomberg. From bloomberg World Headquarters in midtown manhattan, this is Bloomberg Markets. We have Commodity Markets closing in new york. Crude is bouncing around after saudi arabia and russia signaled they could extend Production Cuts into next year, doubling down on an effort to eliminate a supply surplus. Bloomberg is also reporting that some opec members are set to have discussed deepening those cuts in addition to extending them. Lets move on to natural gas. Accuweather is seeing temperatures below normal on the east coast and average in most of the central u. S. , which means no need for air conditioning. Inventories are another factor. They were 16 above the fiveyear average for the period. It is warming up, but not by enough to where we need to turn on airconditioning. Julia not yet. Lets get more insight on the commodity sector and haven assets like gold. Gold little changed after thenuel macrons victory in french president ial election. Joining us with a deeper dive into metals and oil, the commodity strategist for bloomberg intelligence. Mike, great to have you on the show. Let me take you straight to the first chart im showing you here. This is plotting goal versus the dollar, what do you think here . Mike gold is just waiting for that next move. The dollar has been the narrow with strange since just before that big break. Basically around june 2014. We used to call that the spring scenario. It is ready to move. If it continues higher, gold is going to be having a problem. Gold might be looking ahead to a weaker dollar. Increasellar will not in the fed tightening cycle, what is it going to take . Scarlet they might be entering a new cycle, and other words. Mike could be. The bloomberg dollar index is up for years in a row. Gold could be bottoming. Scarlet lets talk a little bit about oil. We were talking about how oil has been bouncing around. Have the issue with how people are positioned for gold. I have a chart here. It shows the futures curve. It looks a little bit better. It is one of those unknown knowns by our viewers. We all fully expect russia to cut and opec to cut. Basically, prices are bringing that down. I think a lot of people dont know that that can tango. Further out prices were much higher last year. There was a pretty substantial amount of supply versus demand. That has shifted to a much more flat can tango. Oil is probing for a low. Be going tosia may help, but this is probably not the battle days continuing. Scarlet which levels would you be looking at for wti versus brent with a top or bottom . Mike 45 is the key level. That seems to have held last week. Of the bottom from november before that. We find that the key line in the spreads risk of credit would be below 40. That hold down has whole zone has pretty good support. Julia this is an interesting chart. The one im showing you now. It is wti futures and gold. Which one is expensive and which one is cheap or in reverse . Mike we love the cheats charts. That is a key indication of the paradigm shift happening in the market. That is the price of gold relative to crude oil. It takes about 2627 barrels of crude oil for one ounce of gold and that is around the peak of 2008. It continues to march higher. Gold is getting more expensive, crude is getting cheaper. One reason is advancing technology. Advancing technology, bringing on supply, fighting central banks. Central banks are helping to support the price of gold. That is a potential paradigm shift that if it continues, it is a new world where crude oil is a significant commodity, but it is not as significant as it was. Julia it is your bottom line here. Mike exactly. If it continues, that is the reason why the Federal Reserve has to keep an eye on it. Scarlet wouldnt natural gas be a proxy for that technology . Mike it is and natural gas is basically five years ahead. That technology really kicked in five years ahead of crude oil. It is shifting with this massive demand for electricity, as you mentioned earlier. Just catching up. We dont have the demand to catch up to lower prices and that is why prices are still bottoming, but it looks like natural gas has met with bottom and is creeping higher. Scarlet i like how you said it could be used as a proxy. Do Oil Producers look at it in the same way . Mike i think u. S. Producers do. We keep hearing how they are reducing cost and increasing production. It is pressuring prices. The nonus producers are not as happy with that scenario. Julia theres nothing they can do to react. You continue with your supply cut or . Mike they are dependent on the supply cuts in crude oil. That is not a good situation to be in for people who want to have higher prices. Scarlet mike, thank you so much for your pretty charts. [laughter] we appreciated. [laughter] get you caught up on headlines on bloomberg first word news with mark crumpton. You socarlet, thank much. Former acting u. S. Attorney general sally eight is scheduled to tell a Senate Committee about concerns she raised to the Trump Administration about contacts between fired National Security adviser Michael Flynn and the Russian Ambassador. You are looking at a live picture from capitol hill. There is the committee chairman, republican senator Lindsey Graham of south carolina. It is to be sally yates first appearance on the hill since her firing. The senate panel is investigating russian interference into the president ial election. Earlier today came word from three former Obama Administration officials that president obama warned president elect trump against hiring Michael Flynn is National Security adviser during an Oval Office Meeting after the 2016 election. The former National Intelligence director James Clyburn is also scheduled to get James Clapper is also scheduled to testify today. A federal Appeals Court is hearing arguments in virginia over president elect president trumps revised travel ban. Ban were of the blocked by federal courts in march. Far right Leader Marine Le Pen lost her bid to become frances first female head of state, but she is looking ahead to the next challenge, junes parliamentary elections. She says she has set a new challenge for herself, a major makeover of her National Front party. Parliamentary elections will be held june 11 and june 18. In germany, chancellor Angela Merkel says she is very happy that Emmanuel Macron won frances president ial election. Speaking in berlin today, she said Emmanuel Macron bears the hopes of many europeans and pledged to continue germanys close cooperation with france. Facebook wants to make sure fake news does not play a role in next months u. K. Elections. It paid for a series of ads in british newspapers today instructing people on how to spot phony stories. The New York Times also reports that facebook removed tens of thousands of possibly fake accounts in britain. Global news 24 hours per day powered by more than 2600 journalists and analysts. Im mark crumpton. This is bloomberg. Julia coming up, Hedge Fund Manager David Einhorn has two of the most frustrating trades in the markets. He has a long position in gm and a short against tesla. Will he get the catalyst he is looking for to turn this trade around . That is next. This is bloomberg. Julia this is Bloomberg Markets. Scarlet when you look at u. S. Stocks this morning, this afternoon, little change while the vix has reached its lowest level. Julie the risk levels across the board, across assets are usually low right now. The volatility index that tracks the s p 500, we have the lowest level in a closing basis since 1993. The vix touched its lowest intraday level since 2007. Other risk proxies showing similar lack of concern. The yen falling. We have the 10 year seeing some selling today as we see the yield go up by about two basis points. How important is the vix as a predictive mechanism . Bloomberg view column today to debunk that notion. Lets take a look at some of the various ways to look at the issue. You can look at this chart looking at the inverse vix and the s p 500 and you can see that rather than the vix leading the s p, they are almost mirror images of each other. Another way to measure it is to look at the correlation or lack thereof two. That tends to be a steady, Strong Negative correlation between them. The inverse correlation has weakened as of late. Now it is about 0. 6. The closer to zero, the more independently the measures move of each other. Something else we can look at is the 10 level on the vix. Not been that frequent that we see the vix move below this level. Lower level the indicator. On the bottom, you have the vix low. To put it another way, lets take a look at another screen. Those little red dots appear 14 times going back to the early 1990s. The average of 20 sessions falling below, 0. 43 . In other words, not really much Predictive Power for future stock returns from the vix falling to that very low level. Even if you look at the positive , about half the time, we saw stocks rise after the vix fell so much. About half the time, we saw it fall. It is interesting as we talk a lot about volatility to try to unpack the relationship or lack the stocktween return. Scarlet thank you so much, julie hyman. Fund manager David Einhorn has two of the most intriguing trades in the market. He has a long position in gm and a short against tesla. Tesla is up more than 40 year to date. Joining us now is david welsh. David einhorn in a lot of pain on this trade and now he is fixating on gms management and is saying, do something to raise the share price. How successful do you think he will be here . I think he got out once during the initial and scandal ignition scandal. General motors management is frustrated because they have record earnings. They keep hitting targets and the stock stays 33, 34. They do not feel they are getting the return they deserve. He wants to issue two different stocks. They pay is very nice dividend. They want to trade on the earnings power of thethey want e earnings power of the company. Onwill increase the yield one stock. If you have a dipping down on a smaller issue, you will have a better yield, the two stocks would combine to sell for more than what you have today. Einhorn is going to have a tough time with this because none of the analysts have recommended this either. Websiteas dedicated a and he is putting more pressure on the company. G. M. Says they do not want to do this because it is Financial Engineering and it will risk the Credit Rating. David einhorn is saying, you have not made it clear to the rating agencies that the dividend shares wont be preferential. What is your take on gm not being preferential to the rating agencies . Gm did put his proposal forward to the Credit Rating agencies and they did make subtle presentation changes. You get a he said she said. Thatde it pretty clear this is not a preferred stock issue. Gm likened it to a preferred stock issue. This isnterpoint to that rating agencies have perfect data. He is still saying this could possibly lead to a downgrade in credit. There is not a precedent for the dual shares rating. It could reduce liquidity and therefore reduce value of the combined shares. Nobody really knows. One thing i want to pull out is how much green one capital and David Einhorn own in gm. Is greenlighthere capital owning a 3. 6 stake. 41. 5 million shares. It is the sixth biggest shareholder. David welch, you said that none of the analysts have come on board. Have any of the other investors given their support . There has not been a big outcry against it. The analysts are confused as to how this would generate value because there is nothing to go on. Others have not weighed in very heavily on it. Orhave not heard from iss advocacy groups that may come out between now and the annual meeting, which is june 6. You may still see these groups come out and way in one way or another on the proposal. Quick i want to ask you a question because we have not talked about tesla at all. David einhorn says shareholders are hypnotized. Packing g. M. As a shareholder. With tesla, he has a shorter position. He wants management to do something. When she knows said it, he was talking about the teslasolarcity merger. Is a bubble, iis dont know when it is going to burst, but he thinks it is going to burst in a bushel of tech stocks that will burst at some point. You will see them in bigger numbers next year. That will be a litmus test. If that car sells well and makes bigy, it could justify a valuation. If it does not sell well, but it sells well on the margins are not there, you may see investors dialing back. You are looking at into 2018 before something might happen. You are looking at into 2018 before something mightscarlet . Tellinge seems to be people on the call. Scarlet people buy it. Lets get you some Bloomberg Business headlines. A look at the biggest business stories right now. The knob from Elliott Management , which owns a 15 Million Dollars stake in the company. They say the company is significantly undervalued and plan on encouraging selling the company or parts of its business. Gigamon designs networking products and solutions. Pharmaceuticals alexi manufacturesicals drugs for autoimmune diseases and was rated by brazilian police. That is your business flash update. Julia up next, a developing story. Harvard universitys endowment is selling 2. 5 billion of assets. We will have the latest on what is behind that move. From new york, this is bloomberg. Scarlet this is Bloomberg Markets. Story,a developing Harvard Universitys endowment is trying to sell around 2. 5 billion of assets according to someone familiar with the matter. Joining us now from a boston bureaus Michael Mcdonald. Thank you for joining us. Just tell us what assets they are selling to begin. Michael sure, it is a collection of their private equity funds, Venture Capital funds, as well as some Real Estate Investments that they have. The understanding is that these are Legacy Assets and this is a sale that they have kicked , but with thepast fiscal year for harvard rapidly approaching attend, june 30, a new ceo in place, these secondary funds are flush with cash, they have taken a step forward and have hired cogent partners to go out and try to find some buyers and try to unload some of these assets. Scarlet i just want to point out to everyone that michael covers endowments and one of the functions he uses regularly is endo go. I have it up here on my bloomberg. Harvard is number one on assets under management. If you look at it over three or five year return, it has done better, it is positive, but when you rank them, yale is doing better. On the fiveyear return, the bulldogs are kicking the crimsons bitutt when it comes o returns. You mentioned the new ceo at harvard. Has he done . What has been his distinction so far . Michael sure, he goes by nar. What we have been documenting are the institutional changes that have been going on at harvard. The plans to cut half the staff this year. They sent out pink slips to about 60 people. They have a plan to get a rid get rid of another 50 people by the end of the year. This is a sign of some of the portfolio changes we are expecting to see. Cutting losers, trying to get the portfolio turned around, and improve the performance again. As you point out, other Ivy League Schools and other institutions. There starting to see beginning signs of these things. Only just the beginning of lots to come. Julia it is interesting michael, in some of your reporting that ive seen, you are providing seed capital for the Portfolio Managers to run cash outside of the endowment fund. Is anybody questioning that. It is the endowment model to depend on outsiders. Harvard stood out by having its own fully staffed trading desk with more than 200 people, including all the support staff that goes with that. What they are doing is not meeting with a lot of heads scratching. In fact, a lot of people saw this as inevitable, as harvard really struggled to deliver the kinds of returns that its peers were delivering year after year, where they were using this exact kind of model. Depending on outsiders trying to pick the best managers for their money. Scarlet all right, our thanks to Michael Mcdonald in our boston bureau. We will continue to cover this story and get you more details when we find out what they will be selling exactly. Julia interesting. Scarlet more Bloomberg Markets is next. From new york, this is bloomberg. Julia it is 3 00 p. M. In new york and 8 00 p. M. In london. Scarlet welcome to Bloomberg Markets. In markets, one hour to go and the trading day starts are slumping with alltime highs but the vix is on pace to close at its lowest level since 1993. In global politics, the French Election maybe over, but there are other key votes to watch in the coming months. Is ittake a look at what stake for investors in germany. In corporate news, Goldman Sachs filling holes left by gary cohens move to the Trump Administration. This hour would bring you a closer look at its new chief of Investment Banking. Were just one hour from the close of trading. Lets get our usual check on markets with julie hyman. Seeing much not change. Early in the session, the s p and nasdaq touched records on an intraday basis and could not maintain those records. The dow has failed to retain the record intraday in closing from march 1. Majors all three averages, the nasdaq and white, the dow in pink and the s p and purple, going back a year. All the blue lines the times when all three have made records on the same day. A cluster in february and in a drought thats been going on since then. Not managed to get there. We will continue to watch and leg upwe see that next for the dow in particular. Back to todays session, a lot of movers to talk about. As we talk about the push and 500, it useful to look at the best and worst performer. The ceo in a phone interview with Bloomberg News saying its classthe best in its among Consumer Group companies. Tyson foods coming out with the fullyear earnings forecast that trailed estimates. Basically sing whitney weakness in the chicken business. Hurting tysond is foods numbers. Also wanting to look at a couple of the pharmaceutical companies. Horizon is plunging today, the biggest oneday drop on record. Cutting its 2017 forecast because of pressure according to analyst in its primary care segment. Piper jaffray sing the companies pivoting to become more of a Rare Disease Company more exclusively and may have to spin off the primary care business at a low price. Alexi and pharmaceuticals althoughere raided theyve said its not been accused of any misconduct by brazil or has not at this point. Those shares are down by nearly 4 . And there is all the m a activity going on today both presumed and completed. Tribune media selling itself to sinclair for 3. 9 billion. Selling itself to coach for 2. 4 billion dollars. That deal has been talked about for some months now. A bidding war between at t and verizon, according to Bloomberg News reporting, verizon is trying to outbid at t, and dig him on posting a new steak a new stake in being pushed to consider a sale. Though shares up 19 . Not had an m a monday like this in quite some time. Lets move to markets and continue the conversation. The backstopping below 10, marking its lowest level on an intraday basis since february 2007. A chairman in france told bloomberg tv the election result is a positive for the country and for the region. A very strong sentiment of optimism in france this morning. , the after the election outcome was obviously good news for the country, good news for the economy and very good news for europe as well. Scarlet thats dig further into how investors are digesting the macron victory. Oliver, great to see you again. When not really selling, were just sitting here. Oliver just kind of sitting on the news. The market your today, theres been a drastic difference between whats happening around the world and whats happening in the u. S. Index,look at the german french stocks, about 15 your today. A lot of this was baked into the markets already. The one thing in the realm of doubt is, everyone had said this would happen. Economist saying heres what would happen to gdp and stock markets if donald trump wins, but quite the opposite happened. Given the runup to this point, i think its safe to say this is what a lot of investors want to see happening. Thats why were kind of flat here. Amazed at the difference between the United States and europe right now. Francis playing catchup to a large extent. Its narrowing, but it still exists. Oliver when you look at violation for european versus u. S. Stock, its hard to dig into it because earnings were decimated, its like looking at the inergy index in the u. S. Versus the broader market. Arnings have deteriorated to great extent. On the flipsides claims investors talk about new been over into those stocks because theres more room for growth from where they came from. Idea that the geopolitical risk is removed but then you have the earnings rebound. Scarlet when you look at markets, everyone points to earnings, saying this is why the gains are justified. What you dont hear a lot is any commentary on what the fed is doing or how it will proceed. Want to bring in a comment from loretta of the cleveland fed earlier today. Important to remain vigilant against falling behind as we continue to make progress on her goals. Especially given the low level Interest Rates and the large size of our balance sheet. We know that Monetary Policy affects the economy with long and variable lags. Policy actions have to be taken before policy goals are met. Seems like thet fed is looking to stay out of the markets way. Oliver theres also the conversation is been overlooked a little bit when you talk about geopolitical risk. Whats interesting is that in a prior couple of years we talk about central bankers being on her back, it was pop that up the economy. Now theyre on the same page as investors. You can see thats where investors are betting. Right on board with what the fed wants to do. There were some ambiguity from the fed members on friday. There are differing viewpoints but right now the markets have a good idea where the fed is going to go. 90 onto the hike in june and 92 in july if you dont get it in june. Julia youll always have some fed member saying this is where were going but we dont want to be behind the curve. Theres a disconnect between equity markets and bond markets. Beenrket investors have burned a couple of times, predicting bond rates will go higher. But they going to get in line with what were seeing in equity markets . Oliver given the focus on rates, and the shifting rate story of the past six months, it has an effect on to parts of the market that are very important, financials and low rate plays it had been intact for a long time that are sort of rolling over. Difficult, the disparity between bonds rallying on a risk equities. O or versus its hard to suss it out because a lot has to be figured out. Want to get your thoughts on what happened over the weekend. Berkshire hathaway had it Shareholder Meeting and Warren Buffett is talking about how hes ready to make new investments but is not finding anything because things are kind of expensive. Oliver he had some interesting backandforth whether or not he views the market and active versus passive investment. It doesnt surprise me that he finds it hard to find value. The soundbite coming from a lot of wellknown just the 200 million Portfolio Managers but the big guys in the room. Its Pretty Simple math that everything is operating at high valuation. A guy like buffett likes that traditional buying a company letting it develop. Those options are fewer and far between. Not looking that apple as a tech company but as a company that can sell lots of products. Get you a check of the headlines on first word news with mark crumpton. Mark former acting u. S. Attorney general sally yates, who is fired in the early days of the Trump Administration, is on capitol hill giving testimony to a Senate Committee about russian interference and masters president ial election and Trump Associates context. She is expected to recount her january 6 conversation with president comes white House Counsel in which she warned about Michael Flynns contacts with Russian Ambassador Sergei Kissel yet. Meantime the white house confirms former president obama trumpt in president elect about hiring Michael Flynn as National Security adviser. , its true that the president president obama made it known he was not exactly a fan of general flynn, which frankly should not come as a surprise to anyone, given that general flynn had worked for president obama and of in outspoken critic president obamas shortcomings as it related to his lack of strategy confronting isis and other threats around that were facing america. Mark flynn resigned after misleading Vice President pence about his contacts with russell. Rex tillerson will meet with his russian counterpart wednesday in washington. They will discuss the conflicts in ukraine and syria. Sponsoredat russian peace talks, syria agreed to the establishment of socalled deescalation zones but there was still fighting over the weekend. Police raids into spanish cities have resulted in the rest of two suspected members of Islamic State. A third alleged member was captured in morocco. Spains interior Ministry Says the men worked to recruit Islamic State fighters and spread jihadist propaganda on the internet. Despite uncertainties about whether the u. S. Would remain committed to the Paris Climate Accord under president trump, envoys have convened talks in germany on implementing the details of the deal combat Global Warming during 10 days of talks. Officials were try to agree on how to implement the 2015 Paris Agreement to cut carbon emissions, a treaty the Obama Administration laid a key role played a key role in pushing through. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Julia coming up, change at the top at Goldman Sachs. Athave the latest promotions the firm, next. This is bloomberg. Scarlet this is Bloomberg Markets. They promotions at Goldman Sachs. Cohead of the Investment Banking division joining john walters at the top of the firms number two business. Our reporter covers goldman for us. To be clear, talking about three coheads of Investment Banking. Thats correct. Today in the john waldron has been there for about a year and a half. Scarlet this is normal that they have three coheads of Investment Banking at Goldman Sachs. Thats right. The current president was one of the heads of cohead the Investment Banking along with the others. In november, if you want to go back in time, there were three. , then onet a new job got a reassignment today and that left one, then you had the two name today. Scarlet it makes you wonder what these guys are being set up for. Julia what can we glean about future succession plans . Its tough to tell, but this is an elevation of two highly thought of executive that Goldman Sachs you that had been put on the Management Committee more than he year ago, so we knew they were important to the direction of the firm. Now they are tapped to run a Huge Division at goldman. Julia this is the rainmaking division in their very successful at what they do. What does this mean for the direction of that business Going Forward and doesnt change anything . We may see some changes on the margins. The m and a business is tops in the world. Great link greg lim cow will be asked to keep that Engine Running smoothly. One place goldman is trying to get bigger is in debt underwriting, specifically in underwriting buyouts. To the extent that buyers of companies in m a transactions look for financing, goldman wants them to look to them more often than they have in the past. Hitlet have there been any cups at the firm since gary cohn left as president and coo . In trading, certainly. The First Quarter, they had a big pickup in trading business. A big pickup. There is some question about what gary left behind and the direction of the firm Going Forward. Says garyi talked to was important, well thought of, but the First Quarter trading loss was not because of gary cohn. As you see these new people elevated into more important positions, that will be a question. How do they do in the role, and what new insight do they bring to the top . Julia its going to be a show me trade in this case. These ofyou can see the heads of the company that you really want to Pay Attention to. Lloyd blankfein at the top, ceo, and chairman Harvey Schwartz plays the role of cfo as well. You have the ticker for everything, you are such a wizard. Scarlet thank you for joining us. Julia time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. Tyson being questioned by floridas attorney general about anticompetitive conduct. Tyson is already under investigation by the sec for allegedly colluding with other producers to drive chicken prices higher. Separately, tyson posted lower Quarterly Sales and earnings. Opec could be considering deeper output cuts to produce reduce a worldwide glut of oil. Delegate say the possibility is being discussed as a way to boost flagging oil prices. Wasmilar Production Cut agreed to last year. The price of Oil Initially rose but has since given that most of its gains. Coach has agreed to buy kate 2. 4 billion dollars. Coach has been trying to build a multibrand company through acquisitions. Kate spade sales turned negative in the First Quarter. Ahead, how to trade the russell 2000 in our options in sight. From new york, this is bloomberg. Julia this is Bloomberg Markets. Scarlet time for options insight would julie hyman. Julie join me is the cheapest market data sheet Market Strategist at bullseye option. We been talking a lot about the vix today. Been talking about the debate about its predictive ability. Im curious where you come out on that. What does this tell us, if anything . The trends are very much intact. Dont fight the power. The trend for the vix has been lower and every time weve seen an explosion of bounce up, its gotten be that down with lower lows. The projection is still nine dollars after a sideways trade for many weeks. Thats a two dollar measurable target to the downside. We still have more downside before we hit our targeted support level but im not trading because the vix is higher low, this using it as a secondary indicator to give me guidance kind of strategy might be appropriate. Julie what were seen at the moment, are we still seeing that sizable buyer that still been coming in and buying downside projection, or has some of that activity dissipated . To happen almost every single day that theres a large size order for some expected inexpensive mix protection and typically 70 of the business call site per day is higher in the option markets. What i found interesting was that we pushed above 2400 in the s p, that gives us a target taking the distance of the last selloff on top of the march 1 highs, so we still have more will put the broad market at plus 10 for the year. In looking at the big picture, the fact that we made new highs, obviously we want to see it followthrough, but thats been a pretty consistent measuring stick over the last seven or eight years. Julie thats turned to the trade of the day which has to do with small caps. Postelection they have strong outperformance and then have waned since then. What are you looking to happen next . Thats what im looking at, some rotation here. The russell 2000 only of about 2 your today. Compared to the s p which is working on 10 based on the techniques we talked about a moment ago. In iwn trading sideways dm since november. We had a false breakout a couple of weeks ago and it moved up announce come back to the 138. ,m looking at a july option and if we get a leg higher in the russell 2000, the option could double on an 8 move in the underlying stock or the etf in this example. Julie we will see if that rotation happens. Back to you guys. Later today and all week you want to catch Bloomberg Technology live from boston. Will feature everything from fortune 500 companies to robotics and biotech startups. That begins at 5 00 p. M. Eastern on television and radio. From new york, this is bloomberg. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Did you know slow internet can actually 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. Mark i am mark crumpton. News time for first word could former assistant attorney general cell you has told a Senate Committee she sally a triple the Senate Committee shielded at the white house that Michael Flynn could essentially be blackmailed by the russians. Yates and former director of National Intelligence James Clyburn testifying about russian interference and last years election. Defense secretary James Madison says they are looking at a safe zone plan for syria. Speaking to reporters on the way to denmark, secretary mattis said there are several issues, including who will keep them safe and who specifically will be kept out of the zones. Five people are dead and 10 others injured in a car bombing in mogadishu, somalia. Police say the car was parked outside a cafe near people sitting outside when it exploded. No one has claimed responsibility, but the Extremist Group alshabaab often carries out such attacks in somalia. Dueling protests