Associate Steve Mnuchin from his the biggest tax cut in history. Have a look at where the equities are turning, 30 minutes from the edifice section. Theks gaining as we said at top for the six days, the best run in two months. The highest level in 20 months since the days of august 2015. Besides the following falling against the dollar as we await the unveiling of President Trumps tax plan. Credit default swaps, bond insurance, busy earnings day to day raising the outlook for for asurging profit mercedesbenz luxury car brand, improving commercial operation feces automaker for 50 growth compared with previous or cast of only flight gave this your fears improved outlook showing confidence in being able to milk growth at mercedes, at the same time, finance installment, investment to develop nextgeneration vehicles. Shares up by three quarters of 1 today. Gaining towards the end of the session. Firstquarter revenue of like 4. 9 today. Carsaker of peugeot stomach more auto components. It has been losing market share is in europe after scaling back discounts to shore up profitability. Opel brands tos gain scale in the region as well as to pool resources for developing Battery Powered models. Think offensewith and very, very face of the return of facilities is some of this advises cialis the eal. Ng brazilian r the chairman forecasting improved improvements for the first time. She expected the Economic Growth in all of the banks 10 main markets decisive for his phone ratese negative interest of home sales, of theories 90 minutes and the training trading day in the u. S. What is it looking like there . A look atare getting oil. The drop we saw on crude oil, the reaction on prices has remained consistently bullish. It has been paring some of the gains. Why . Take a look at the bloomberg here. It is about the refined product. There is some concern that the glut is moving downstream. Let me explain what i mean here. Here is crude Oil Inventory and the drop we are now seeing. Own here, gasoline distillates in yellow. A biggerhem saying than estimated increase in inventories. Yes, the crude Oil Inventories are being worked down but it is being pushed through to the refineries. Theyre not necessarily selling that through. We are not made the commensurate drop there. Oil may bes and limited. Something to continue to watch. Take a look at stocks and what we are seeing there. We are seeing there. Were seeing strengthening on the back of like of an oil prices because of the gain in energy stocks. Take a look at it on the imap on the bloomberg. Moved up. Tors have we still have a drag on Consumer StaplesAmtech Systems degree. Energy and health care, the best to performing groups. And health care, edwards website is, earnings beating estimates. In shares are soaring todays session, the bestperforming stock in the index of 10 . Paragon is rising in their results. Forecastedke it is relatively bullish year. Express scripts and anthem here because it looks like they may still have an amicable closing to their conflict over pricing. Anthem had said that they would scripts ress expert him express scripts. Mark . Mark lets stick with markets as investors respond to the round inf the first the French Elections. Philip, thank you very much for joining us. Now that we have the hurdle of the first round of the French Election out of the way for, is path clear for a sustainable rally in the european equities . I think the impulsive nature of the equities in the last few days tells the story that effectively we had a fault of political uncertainty, claudia underlining, as election going on in market after that he reflation trade flows presence of election and we are seeing the same pattern repeat itself now. The impulsive move suggest that markets are getting back to focusing on fundamental factors. I think clearly begot the italian elections to think about the countries that have not been announced yet but maybe in september. At the moment, we are in political remission, provided that micron comes through in the final round. We are shifting to an earnings driven bulls phase. Yes. Mark what is the substance of that . We have sort of forgotten what this phase is like. In this cycle, which i think is the third longest since the 1920s, it is predominantly about Interest Rate production. A defensive lead rally. Now we see the cyclicals come to the floor. Theu saw these impulsive move after the first round of French Elections, what was in the lead was things like financials leading the charge. I think the leadership has changed. We had a bit of a setback. That occurred in the u. S. Market as well. We have seen the same picture in europe. Now youre basically saying that leadership come through. I was thinking this morning, sort of in the i wasrs, if you like, told that europe has been played out now. A money we are seeing moving into u. S. Treasuries and u. S. Stocks is coming out of europe. Would you agree necessarily . I think a couple of things are going on in europe. I think from an equity perspective, i think the bottom of action is looking increasingly important. Be basically spent too much looking top down. The about my picture, you have companies with a lot of headroom in terms of margins. At aave sales growth higher clip than in the u. S. At a different point in the cycle. I think the scope for earnings is coming through in europe, more significant than the u. S. So therefore, that side of things i think has changed. Also, Balance Sheet, the balance she probably the strong as they have been in 10 years. I think that is significant. I think it is too early to give up on europe on a relative basis. Vonnie what would be next for europe . Here in the u. S. We are looking at infrastructure spending, a tax reduction, typing, the cycle continuing paste. What are you looking at im afraid i cannot offer you that level of trump excitement from a european perspective. However, a big the underlying picture is robust. I think fiscal headwinds which significant are becoming physical tailwinds for the first time in years. Companies have had to basically , hence thee cost strong Balance Sheet at the moment. I think we are now beginning to see the benefits of that coming through. Bizhe sort of stepbystep basis, we are seeing a lot of stocks come into companies. We have a tight about oil prices. I think repsol is an interesting company. It has been out of favor. Other companies, banks, clearly leading the charge. Mark does it have further to run, the bank rebound from the multiyear lows last july . They have had a good run, havent they . They are up 25 , having performed this movie. I think their lows by international investors. I did have a lot of headroom. If you look at the performance of european banks relative to u. S. Banks, u. S. Things are strongly favored at the moment. I would bite the cinderella option. I think this and relevant european banks look to be showing signs of outperformance. Mark the euro is cheap. Euro is cheap ignore them your is booming at the moment. If you go to germany, the netherlands, there is a boom. Clearly Monetary Policy settings are wrong. Able have to change. That will be supportive of the euro. Mark thank you. Good to see you. Come back soon. Of investec, asset management. Vonnie lets check in on the bloomberg first word news. Courtney President Trump is proposing the biggest tax cut ever. White house officials are excited to outline the tax overhaul today that would divide massive tax cuts to business as big and small. Steve mnuchin spoke in washington this morning. Im hopeful that democrats will work with us on this. This is about tax cuts that are good for the American People. I hope they will not stand in the way of creating tax cuts for for makingess, business competitors for simple find personal taxes. We are hopeful that it is bipartisan. Courtney mr. Trump plan is to reduce the top Corporate Tax rate from 35 to 15 . Bloomberg will bring you live coverage of the tax report briefing at 1 30 p. M. Eastern time. Congress has until friday to pass the 1. 1 trillion spending bill or face partial government shutdown. So far, lawmakers have not seen any of the details which could complicate the passage. Republicans a democratic negotiators are hashing out all of the details in private. Still past of see the extension to provide a larger bill. Saudi arabia and russia will meet in the next two weeks to discuss oil cuts. The current cutbacks from opec and russia and in june. So far theyve not reached the target. In china, the military has launched the first amended built aircraft carrier. The Carrier Program is at the heart of the countrys efforts to build a socalled blue water navy, one that is capable of projecting power well be on the coast of china. The Company Country has another carrier that was bought from the ukraine. Global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. I am courtney donohoe. This is bloomberg markets. Mark thank you very much pick coming up, we will hear from the Credit Suisse executive. He says that he favors a straight capital increase. More on the strategy next. This is bloomberg. Vonnie live from bloomberg World Headquarters in your, i am funny quinn. In london. Rk barton we are counting you down to the european close. Mark Credit Suisse has announced plans. Francine lacqua sat down with the chief executive in zurich earlier today. She asked him why he decided to forto the markets before 4 billion rather than the ipo in switzerland. Action quick please. We think that is something we got right. We always had two to four, as you have heard me talk about. And 2014. 4 million in 2017, refuse, repeal, and the ipo as an option to do that. Why . It was something entirely under control. We have not yet proven the value of the work. We feel now that we have accomplished for five quarters. We have been demonstrating the power of the platform and the social wealth management. Simplys a proposition of raising rates to back this. Doj. S the when we were thinking in october to a 15, we had two big things. A writedown that we took in the the boj as we discussed, a broad range of outcomes. Some of it, really bad for the company. Removing that in decemberjanuary, completely reset the dials. We can now look at the capital planning. We have huge uncertainty overheads. We knew it was diluted. It was something we were willing to consider. Francine has it been more complicated . More complicated but look, if you need capital, unique capital. Improvement. Huge profits of 50 in two years. Bydid not lose anything preparing for the top option. The having looked at both, straight Capital Raise is less diluted. Weve went twice. We keep 100 of the very good cash flow and good business. Mark Bloomberg Francine Lacqua top Credit Suisses executive. Joining us for some more inside insight, a bloomberg gadfly editor. Explain. Has already been markets on thanks, but i think that is macrons victory victory keeps it going for investor and 2000 and banks. All bc there is a second round to go but i think had there been a different result on sunday, im not sure we would have seen this kind of announcement or reaction from Credit Suisse today. Vonnie is there a big major plant on the part of the various countries to make sure that the banks survive all of this retreat from globalization, anger and their separate countries, all of the ntls still on the books. Im not just talking france but also italy. So many things happening this year in terms of elections, and now, brexit to deal with. That is a very good question. I think you need to schools of thought. Either the european situation is so bad that there needs to be a europewide solution, for the entire Banking Sector or this is still individual countries and laggards that need their own country specific solutions or Even National solutions to get fixed. I think we are still in the latter category. I think the kind of reaction you are seeing is capital increases from banks is pretty positive. I think even if we are hearing of a kind of solution to help anks offloadgs b the loans, i do not think this is a crisis moment. Mark Credit Suisse in particular, how much wiggle room it. This 4 billion give doesnt it put capital concern to bed or not . Im not sure. I think it depends on how confident you are about the next 12 months. I think we are hearing a lot of. Onfident noises obviously the market is upbeat. Increases is a good reaction. On the other hand, save himself are quiet cautious about the fixed income rally. Iny have had headwinds wealth management. I think for Credit Suisse we dont have any other reliable track record of earnings. Two years of losses and some having heavy restructuring to go. Mark is the jury out . On bloomberg you can look at the total return. Has a negative number. Some record lows. His sister jurys still out. As much facilities as possible on the surface. Everything is the sum of providing the market for the way they wanted. Providing a capital kind helps invest in a bit in growth. Everything is there to deliver on the plan. You just have to be convinced, confident mark that he can deliver. Good stuff. Loomberg gadflies leonel read his piece. Who thinks of these great titles . Vonnie leonel, mostly. Thank you to both of you. Expected to sign an order on National Monuments any moment now. This is the department of the interior. You can see they are all waiting. It is possible that he opens borders to more oil and natural gas drilling. It is certain the going to set with environment to this. This is lubricate vonnie live from bloomberg world headwinds in your, i am vonnie quinn. Mark live from london, im mark barton. The european close. Minutes away. Time for the Bloomberg Business flash, a look at the biggest business stories in the news right now. Appears to be solving one of its biggest problems, attracting new users. The company showed signs of new life in the First Quarter. Reporting monthly activity that rose 6 in the last year to 328 million. Revenue has not kept pace. For the First Time Since going public, twitter posted lower revenue. Still, the stock is surging. China Southern Airlines has body jets. Uy wide the list price of the deal is about 6 billion although airlines usually get discounts on big orders pay chinese southern is a stateowned carrier that recently agreed to sell a stake to american airlines. They plan to expand the fleet 2020. 00 planes to 1000 in that is the latest business flash. Take a look at where european equities are trading as we had to close. Stocks are higher. Yes, six consecutive days of gains. This is bloomberg. Mark live from london and your, this is the european close. Im mark barton with vonnie quinn. Live event, up one half of 1 . Services city for a sixday. August 2015. Investors continue they cheered by the results of the first round of the french presence in presence of alexa series of as much as 11 is this at some of the most since 2008. Ever since for the revenue part cbs a series of consistency france surveys and if the beautiful supplies benefits. With aard performance 48 gain, the strongest quarterly growth in two decades, rebounding demand in china some of revival of european was a has boosted brands. Clearlyt quarters surpassing that of competition. Yesterday, of course, spending 12 lean euros on christian dior. Shares up 3 today. The chief executive of Credit Suisse moving to and concerns about the banks capital concerns has not totally dispelled those concerns. A bloomberg gadfly reporter said they did beat estimates. Capital inaise total, 21 billion euros. Low lastg from the summer, making sales more attractive. Also in the news today, belief in yourself, First Quarter profits beating estimates, revenue missing, returning to its roots as a trade think. That is how is looking. How is looking over their . Vonnie once again, really calm levels, which we have been think is maybe not the best indicator of market volatility look at the yen come a weaker again today, but right up there around the 111 mark rate similarly for the Canadian Dollar, a lot of movement in the Canadian Dollar today. Also i want to take a look at the turkish lira. A big surprise, 50 basis points increase from the central bank had the fear of from the kcra for if you suffer if on the u. S. Dollar. That is what happened this morning. But to our board and it is tm. And to rally as the s p 500 they. With you more about efficacy on a weaker again as well. The rest weaker as well, down one point orbit. You see fonts moving around as well. This is africa little Abigail Doolittle for a look at the nasdaq the rate at the gulf was a big story. We have the nasdaq closing above 6000 yesterday for the first time ever. The first reason, the last time that the nasdaq close of of of the ground number, up take new ground number was in march 2000. Action taking more than 17 years for the nasdaq to claim a second big number. I will toss it back to you. You. E thank great market checks. I would to forget to the department of the interior because we are going to hear from the president of the United States who is just about to take the podium. He is looking at signing an executive order looking at. Ntiquities we know that more executive orders are to come today and this week which could set up some clashes with some and find that the groups feared once again, the president at the department of the interior, anding hands with ryan you he we go, the president of the night states. President trump thank you, mike, a great Vice President , great help. Everyone loves mike pence. I want to thank you for your service, incredible. It is a real pleasure to be at the department of the interior, where you help preserve the splinter and beauty of americas natural resources. Can tell you, the groups in here right now are really doing the job. Right, are they doing a good job . We will take care of alaska also. Dont worry about it. They protect the ability of the people to access and utilize the land which truly belongs to them. And, belongs to all of us. Secretary brian seatgeek is ryang an incredible job is doing an incredible job. Soon after he was conference, we had a snowstorm. A big one. He was on the steps of the Lincoln Memorial shoveling the snow all by himself. Guy. A strong he did a good job. We are proud of him. The first 100 days we have taken historic action to eliminate wasteful relations. They are being a limited like no one has ever seen before. There has never been anything like it. Sometimes i look at some of the things im signing and say, maybe people will like it, but im doing the right thing. , iregular politician will do dont know what you will do. I can tell you, literally, some politicians have told me, you are doing the right thing, i dont know if i would have the some of these things. We are doing it because it is the good of the nation. We are returning power back to the people. We have eliminated job destroying regulations on farmers, ranchers, and coal miners. On autoworkers and so many other American Workers and businesses. Today, im signing a new executive order to end another egregious abuse of federal power. To give the power back to the states and the people. Where it belongs. The previous semesters and used of 100 year old law known as the to unilaterally put millions of acres of land and water under strict federal control. Have you heard about that . A limiting the ability of the people who actually live in those states to decide how best to use that man. Today, we are putting the states back in charge. Big thing. Im pleased to be joined by so many members of congress and governors who have been waiting for this moment including governor herbert of utah. Thank you, governor. Governor lepage of maine. Who, by the way, has lost a lot of weight. I knew him when he was heavy and now i know him when he is thin. I like them both ways. Great job. Governor calvo of juan. Governor torres. Recognize senator orrin hatch. Believe me. He is tough. He was calm and calmly and say, you have to do this. Isnt that right . You did not stop your he does not give up. I really have to point you out. You did not stop. And, mike, the same thing. So may people feel so strongly about this. I appreciate your support. And youre never ending prodding because we are now getting something done that many people thought would never ever get done. Im proud to do it in honor of you guys. Thank you. [applause] President Trump altogether, the previous demonstration bypassed the states to place over 265 million acres, a lot of land, think of it. 265 million acres of land and water under federal control through the abuse of the monument designation. That is larger than the entire state of texas. Last year alone, the federal government has asserted this power over one point three 5 million acres of land in utah. Known as there is years. I have heard of lot about it. I hear it is beautiful. Objections ofund the citizens of utah. Act does notes give the federal government Unlimited Power to lock up millions of acres of land. This time that we ended abusive practice. I have spoken with many state and local leaders. A number of them here today who care very much about preserving our land. And, who are gravely concerned about this massive federal land grab. It has gotten worse and worse. Now, we are going to free it up, which is what should have happened in the first place. They should have never happened. That is why today i decided this order and directing the secretary to end these abuses and return control to the people. The people of utah, the people of all of the states, of the United States. Every day we are going to continue pushing ahead with our reform agenda to put the American People back in charge of the government. Their lives. Again, i want to congratulate the secretary, congratulate orrin hatch and all that the people who worked so hard on bringing it to this point. And, to medicinally positive things are going to happen. On that incredible land. The likes of which, there is nothing more beautiful anywhere in the world. Now, to mentally positive things will happen. I want to thank you. I would to thank everybody for being here, god bless you all, and god bless america. Thank you. [laughter] [applause] vonnie you have been listening to the president of the United States. He has been in the interior department at the podium that talking about directing the interior secretary to end what the present calls abuses and return control of over 260 million acres of land back to the states rather than having it under federal control p he said underminedcades we the people of that land and to date the states will be put back in charge. At tvn follow this along. Lets get back to something the president will be doing in just a couple of hours now. Broad revealing the broad outline of his tax plan. Looking at concerns that the plan could increase the deficit. We have tom giles who has been looking at how technology companys will be impacted. We begin with tom in california. Talk to us about the repatriation efforts here. We are looking at a 10 repeat tuition tax. Would that be implementable. What will Tech Companies do. Is that comes about that will be a big boom for the technology industry. 2. 6 trillions hold dollars overseas. Apple, cisco, and alphabet. Give them a big incentive to bring the money back overseas. The question is what do they do when it comes back . The trump and his jewish and has talked about bringing back jobs. Trump administration has talked about bringing back jobs. They say they will lose it for i use it dividends, and for buybacks, dividends, and m a. The question is what does it do for the economy. Let me ask you, does any of for he is saying offset any of the cuts. You can outline what the cuts will be as well. That is the milliondollar question. Gary cohn and Steve Mnuchin are expected this afternoon to unveil what President Trump will unveil as his opening bid on a words, tax cut, in his perhaps the greatest in history. That is his hope. Congress will hold the keys on to whether or not this happens. Democrats are likely to be opposed to any plan that the white house proposes if it breaks for upper earners, which it seems it will. Republicans are divided. This is a big source of contention. Among house republicans, there has been discussion of the border adjustment tax. Huge division on that. Ability, a limiting that. Also a huge source of contention if the tax cut does not offset, it will automatically expire within one decade. That will be problematic to do any sort of tax cut on a temporary basis. Right now, tax reform is like an airplane that has not hit the runway. It has not taken off. In fact, the plane has not been built. We will just get some design ideas from the white house. I love the vonnie metaphors. The companies excited . What mean for thet corporate universe . Sure, they are excited. Companies like tax cuts. The question is how this changes longterm tax activity. Maybe it is only for a decade. Will you completely reorder the way you think about your plan when you know they will expire. Im not convinced. Companies will say, i will build this factory here, make these changes. There is a question if it is a holiday, or if we moved to another system. That is an outstanding question. If they are not incentivized to bring it back, they would just keep letting it builds up and we will have the same problems down the road. I think there is still a lot of uncertainty here. Mark picking up on the point there, shifting production from overseas to the u. S. , might we see some of that in the Technology Sector on the back of these measures . The fact of keeping jobs overseas, it is still cheaper to keep jobs overseas. It is still cheaper to employ factory workers overseas than it is here in the u. S. I think historical precedent is important. Important holiday. Later, Academic Studies showed that more than 90 of money brought back at that time was used on what . Buybacks, dividends, and executive compensation. If you are sitting there hoping that they will plow that money back in bringing manufacture back into the u. S. , i think historically, we do not have reason to expect that that will happen. Is, you guysling are saying, essentially it will help investment more than jobseekers, this perpetuation. What about the tax cut . What industries, if the tax rate ends at 50 will benefit the it sounds like a quarter bordert sounds like the tax is off the table. With that off the table, you are going to have companies impacting to varying degrees depending on how much they pay are the question is how much they do with it. To say that go on growth needs to be part of this. If that is not on the cards soon, what happens . How does Congress Passed something that is not realitybased . This is where tax reform could collapse very quickly or turn into another 10 year tax cut, like we saw in the bush years, which ultimately sunset at some time. As our guest mentioned, we cannot realistically duke Corporate Tax cuts a temporary basis. One important thing to note is that we saw a letter yesterday from the joint committee on taxation, which is officials or keeper. Scorekeeper. Its on the even a threeyear temporary tax cut of 20 , which is more than President Trump is asking for would indepth adding to the deficit in a way that would kill it in the Senate Unless you get 60 votes, which will not happen. Doing Corporate Taxes on the tempered basis is extremely unlikely and you have this problem of offsets. Republicans have about 20 votes to spare in the house, not a huge number when you consider how many members they have. It is a very narrow margin. Getting the entire party united on offsets, which will have winners and losers and would alienate and anger a lot of people, you will see this at the capital, swarming with lobbyist anyrawl back revenue from industry. That is where the rubber will hit the road and republicans have a Monumental Task of finding a way to pay for these things if they want to make them permanent and stand the test of time. Companies notould expand in other places . On a shortterm basis, they would absolutely have an incentive. On the longterm, you are right. We will see the companys take the money parked overseas, make investments there, make m a, accident acquisitions over there. They can still invest in u. S. Treasury. There is a lot you can do with overseas cash. The other thing to bear in mind here is when the money does come back from overseas, whether it goes into factories, automation, there is so much pressure from to use forlders base buybacks and dividends. Apple is a fairly innovative company, still building things, their stock is near records. They have faced pressure from activist investor to use cash for dividends and buybacks, not go invest in new product. Onres so much expectation the part of shareholders those around this series if you see a holiday from of whether whether shortterm a long term you should expect shareholders are not happy if it goes into r d, factories, etc. Vonnie thank you to our panelists. Thank you for that. Coming up later, bloomberg will have an interview with david cap, the former chairman of the house we think the committee fears have come forth, bloomberg will review you live coverage of the tax reform briefing set 1 30 eastern. Speakers include the diminution and gary cohn. Another quick look at markets. It turns out they have dropped substantially. The nasdaq erase all of its games, now unchanged on the session. Be 500,t, of your event emily of it. This isrative bloomberg. Vonnie it is time for a global battle of the charts where we look at the most telling chart of the day and what they mean for investors. You can look at them on the bloomberg by running the future on the bottom of your screen. Kicking things off to day, we have not seen him for a while, kevin kelly. Looking at im today, with everything going on with the tax policy, looking at small cap stocks. They have been one of the taxest beneficiaries of the rhetoric. We have here, in purple, the russell 2000 index, normalized against the russell 1000. When the people line jumps up, that means that small caps are outperforming. In white, and interesting prospect, the 210 year spread. We saw small caps jump up on the idea that potentially be could get some tax reform. We have seen them come down recently. These are good stocks to look forward to seeing how this stocks digest the policy. Vonnie bravo, kevin kelly. Mark artan, take it away. Mark a 16 month high. Worth 1. 89. Peter troff, 83 . Now, down 66 . 100 3 . In july, the green bubble there, the 5year note low five year low. Peter troff, by the way, in euros, 1. 5 4 trillion euros wiped away from european banks. They are still 66 below the peak. They go, nice and easy. Vonnie 1. 54 trillion. That beats what we will hear about in the tax plan today. Mark barton, you are the winner today. I want to see some reaction. Mark i have a dodgy back, i cannot bow tonight. Vonnie that will do. Mark have a quick look at european equities. These are the closing figures. The six day of gains. This is bloomberg. Vonnie it is noon in new york, 5 00 in london, midnight in hong kong. Welcome to bloomberg markets. From bloomberg World Headquarters in new york, we will take you from washington, d. C. To paris and moscow in the next hour. Here are the top stories on the bloomberg and around the world that we are following. Cut in u. S. Tax history. That is what secretary Steven Mnuchin says the president will propose as a way to spark Economic Growth. And a half, the secretary and gary cohn will speak at the white house about the plans to reform taxes. We will bring you those remarks live on Bloomberg Television and radio. Plus, twitter surprises. The social Media Company showing plans of life signs of life. Does it translate to a revenue turnaround . Nasdaq past the 6000ar