Only the macron will be victorious, but also that she is the best outcome for markets, lowers the risk for Brexit Associated with the Marine Le Pen victory. All major averages up yvonne man 1 , the best single day since march 1 when first one all major averages were at record. The nasdaq is at a record today. The other two have not quite gotten there. We are seeing this cyclically red led rebound. The banks, financials certainly helping lead some games we are saying. Bank of america, jp morgan, Morgan Stanley all higher. Financials are bestperforming. This despite the fact that the 10 year yield which scarlet just is now up to intro basis points. Its interesting that even as we have seen the sign in the treasury market, and yields not up as much financials and stocks overall still going strong. We also have a new development in a developing merger story. Will consider people the industries new pg new unsolicited bid. 28. 8 billion. Management the firm has also directionally, the same kind of reaction higher are shares chemical tents and painting here. Pharaoh and comers both higher. Its interesting going into the French Election, there were a lot of people betting on increase and volatility. Not many some betting against a decrease in volatility. Some were doing that through an inverse volatility etf. This goes the opposite direction of the vix. For the past several weeks we have not seen outflows from this. And flows very small but not outflows. That hasnt happened since 2013. Some folks were looking for this potential outcome and drop in volatility is that we are seeing today. Scarlet thank you so much. Oliver for more what is shaping the markets we are joined by mike regan, Senior Market editor and we water. So heres lisa abramovitz. Lets talk about brock box, what everyone was watching sunday night. What struck you as how markets were interpreting this outcome of the French Election . The first round, a big sigh of relief. He saw the gap between peripheral and fields, yields on french bonds, spanish bonds compressed with german yields. You saw people expecting that the European Union to remain together there were not the u. S. Treasury government frisk on, they are selling the treasury yields going up. Interestingly you saw the biggest move been fed funds futures for december since last december. People brought forward their expectations expectation of a june rate hike 60 percent from today. 50 on friday to get a sense of how big that differential was. People are saying, french risk is off the table for now but the fed still matters. Of course the fed still matters. This removes the obstacle for rate hikes this year. Its ant think big week for u. S. Politics. A shutdown looming. Todaying that struck me was, every market kept open higher. The s p well opened well above its close on friday. 10 year yields open the way above where they closed on friday. Lets bring in the vix, this is something you mentioned. The gpo just looking at the bar chart for the vix, what he is pointing out is a cap between where the fix closed on friday, where it opens today. Hats a 20 gap this is rare. There is some sort of cap like that and any chart that you can see. Does the balance of supply and demand, maybe over reaction to the news. It doesnt mean anything significant necessarily for the longterm direction of the market. Timber press on our team did something on this looking at 60 of the opening gaps in the s p 500 index and stocks in europe get close that very day. Obviously not happening tonight, but if they do last, the medium one gets close tothree40s later. People are thinking maybe a 20 fivee it was or something. He got a wonderful and that is a technical affect which we did see for example there short covering. They will be the worst case scenario. Maybe an overreaction in the shortterm. In actual testicll reaction as. Scarlet we have the chart here that goes back to february of 2016. About a 10 month chart. There is todays action, that yield spread coming in. We are not back to the level that we were saying back in november. We only go back to january. It is not like it is coming back that much. Right, theres the question of, are people overestimating the chance of macron winning . Have a chance that any idea of le pen actually becoming the head of france . Scarlet theyre following the wisdom of her father losing. It hasnt gone away just because this vote was according to the best case scenario. Oliver scores toone. Mike regan, think you so much, Lisa Abramowicz you can check lets check on the bloomberg first word news with mark crumpton. Mark the United States has issued 271 sanctions and it response to steering president bashar alassads alleged use of chemical weapons. Its one of the largest sanctions in american history. Earlier today come the United States department of treasurys office of foreign assets control imposed sanctions and respond in response to the upper, 2017 sarin attack on innocent civilians by the regime of syrian dictator assad. Sanctions are the latest u. S. Response to president assad is alleged use of chemical weapons in an attack that killed more than 80 civilians including children. President trump said the time to settle the issue of potentially Nuclear Armed north korea is now. Membersday during of the United Nations security council. World itsbig a problem we have finally solved. People put blindfolds on. Its time to solve the problem. Mark secretary of state Rex Tillerson is set to chair a you and on friday which is expected to tell the world body to sanctions. Th korea the french president is urging voters to choose Emmanuel Macron in the may 7 president ial runoff to keep up far like far right leader Marine Le Pen. President hollande said le pens platform of pulling out of the euro would devastate the countrys economy and threatened front desk french liberty. Macron was an advisor on Economic Issues from 20122014. In hisan minister socialist government for two years. Former president barack obama is using his first public appearance to talk with students about his experience as a community organizer. How that laid the foundation for his political career. Obama led a Student Panel and the university of chicago for his president ial librarys plant. The keyyoung people are to solving the nations biggest problems and he is looking forward to working with them. Global news 24 is a day powered by more than 2600 journalists and analysts in one 120 countries. Im mark crumpton, this is bloomberg. Scarlet we have breaking news from narcotic, a spinoff from alcoa, which makes aluminum parts for autos and aircraft, saying it is postponing its annual meeting and is willing to nominate to directors the activist fund after a bruising proxy fight. You can see the shares now resting too much in intraday trading, up half of 1 . Coming up, shares of Goldman Sachs have been under pressure since last weeks disappointing earnings. We get details on some of cap has some of their fixings got burned. This is bloomberg. Scarlet this is bloomberg markets. Oliver turning now to the trading meds at wall street, lest we Goldman Sachs reported its fixed income trading generated 1. 60 9 billion in revenue, a 1 gain from last inr compared with a 17 gain the business at jpmorgan and a 29 increase in bank of americas business. What was behind this bloomberg has discovered answers. Joining us now are folks lets talk about this loss. This was the highlight. What happened . They burned under distressed engine games. Peabody, the worlds biggest coal company, they also made bets on bertoni one. More aggressive in market making. Their interpretation of market making. Scarlet during the conference call, there was some kind of vague comments about how there were volatility issues, theyre working at volatility. It seems strange given the other things did just fine. Credit has been good in most places. Put words ins Goldman Sachs mouth, lets hear he had salmon conference call. We underperformed this quarter. The underperformance was driven by commodities and currencies. We know that some of our competitors have bigger financing businesses and mark significant corporate footprints as a result of larger lending books. It is one quarter. Scarlet he compared goldmans clients customers versus the other banks. So that explain what happened . Yes. The very next day Morgan Stanley , a company with a similar client profile reported a 96 jump in income. Was notanation verified. Essentially, that let us to start to dig in figure out what went wrong. Oliver this is curious, because the credit that you talk about, some of the retailers, these are parts of the market benefit on the worst. Even some names that have and recover quite as quickly with the price of oil. Can you give us some details on theyhese got on the books, had underwritten the appeals or maybe they made the market they took a run side of the trade . Lets lets talk about peabody. Thisinjured million is just from sec filings, 10 times more than the next dealer broker. That tells you that they loaded up on this to make markets for sure. Theyre not breaking broker rules. However, they made a bet. Market making is still risktaking. While they had these on the books, whether they would be shortterm or longer, they had to mark them down. In scarlet the quarter was they plummeted. What happens going forward, what kind of insider you getting from investors on how the outlook is . In the of this stuff start of the Second Quarter is still going down. I do think overall Goldman Sachs will not change biota. This is part of their dna, how they make markets. They could closer to the edge than other firms. In other quarters they will have gangbusters results. You can cut over a budget, texas, and health care resume this week as President Trumps 100 and mile some quickly approaches. What can washington get done is the question. We are live on capitol hill next. This is bloomberg. Oliver this is bloomberg markets. Scarlet we had to washington our President Trump is approaching his 100th day in office, Congress Returns from a twoweek recess. Lawmakers will avoid it ever been shut down hopefully. President trump or release a tax plan on foot wednesday. House republicans might restart their work on an Obamacare Repeal and replace bill. Joining us now is kevin cirilli. And a report from bloomberg news. Kevin lets start with you. Give us a roadmap of what we need to be aware of as we look first at the prospect of a Government Shutdown. Kevin the white house is saying they are hopeful there were not be a shutdown should lawmakers fail to pass a partial government funding belt by 28, 1 day before President Trump concludes his 100th day in office. Lets listen to what Steve Mnuchin had to say moments ago about the prospects of a Government Shutdown. I was in a meeting this morning with Mick Mulvaney and other senior people. The president is working hard to keep the government open. Addressing various issues. Kevin the administration saying there will be a shutdown. This is the dutchman up to them for a policy standpoint, considering that they are looking to tight funding for the , a lot of politics moving on this. Oliver you have more details but we look at tax reform and talk about spending and all these things that have to come get himce, it starts to through the entire idea of a shutdown. What do we expect to see what taxes, one of weekend clearing from over the weekend . Kevin no one knows exactly what the specifics will be. When you play back the last couple of dates, President Trump catching his own administration by saying that the tax plan will be coming out on wednesday. But only is the administration and folks your capitol hill secretary mnuchin meeting with talk Republican Leadership tomorrow and what an aide tells me is a regularly scheduled meeting in order to discuss tax reform. Heres what he had say as he laid of the priorities for what exactly this land will include. We have been clear about what the president s objectives are for tax reform trade middle ofome tax cut, a priority the president. Supplication, the average american should be able to do their taxes on a large postcard. Business tax reform. We needed to make business taxes competitive and we expect with doing that we will bring back trillions of dollars from offshore. So no specifics on whether they will get into the weeds about controversial things that are split republicans such as the border adjustment tax. When it comes to health care, we know the white house, President Trump is promising to restart something on that. Who is leading the effort, is that figure arrived, does he have a plan in mind . That push particularly has come from the white house. White house officials like Mick Mulvaney talking about it. When we hear from the house and leadership, that is not exactly the way it is. They see this going there being a vote this week at least. They are focused on the spending measure and of urging the Government Shutdown. They are doing negotiations on health care behind the scenes. Are unclear still if those going to bring them enough votes and if they will be able to do its this week to have autumn house floor. Those negotiations right now are around benefits that obamacare requires Insurance Companies to cover. They want to John Scherzer can cover fewer benefits to bring down the cost of insurance premiums. The leadership has not started taking the pulse of their membership. Its unclear effect compromise will be enough to bring moderates and conservatives on board. Oliver class time, there was opposition from the Democratic Party of course. Then within the republican party. Does whoever will lead this bill but they will be specifying in terms of what they will target . The possible amendments we are talking about is the negotiation between conservatives congressman mark meadows of the freedom ,aucus, and the moderates congressman macarthur. It could basically give congress ehe ability to absolv themselves over spots ability and not have to deal with choosing what benefits Insurance Companies might cover, and leave that states. Could be something that helps bring enough from both groups on board. Speaker ryan leading that efforts to bring those two together. Scarlet kevin, we have headlines from the wall street journal. President trump has said to ask to cut the Corporate Tax rate to 15 . Give us a little background here in terms of what kind of numbers he was throwing out during the campaign, what he had been framing the text from discussion around. This is the benchmark for the administration, that 50 number. Clifford something a size 25 . This is something that will be a political marker we are also seeing headlines which are saying that secretary mnuchin they want to have comprehensive tax reform, they want to include any text discussion which will include a middle income tax reduction as well. That of course stirred coldwater. That they would go for just Corporate Tax referred first. Now it looks like they will take a much more comprehensive approach. The bottom line, with such a big to dousy legislative list, its unclear whether they will try to one off and do tax reform separate from health care, or whether they will just have two policy adams together. Scarlet what is the president s highest priority here . This avoiding a shutdown, health care, or tax reform for this week . Kevin kevin shutdown shutdown shutdown. It comes down to whether or not will they be able to run the government efficient. If there is a Government Shutdown its not only not good for President Trump, its bad for republicans. Scarlet thank you both. We have the commodities we will look at white gold has been following falling. This is bloomberg. From bloomberg World Headquarters, this is bloomberg markets. Commodity markets are closing. We begin with gold falling to the lowest level in almost two weeks. Mining stocks also sank as investors favored a riskier asset on expectations Emmanuel Macron will be the next president. Oil fell for a sixth day as a ramp of u. S. Drilling signaled production gains may keep supply plentiful even as opec considers extending production cuts driving the prices in commodity. Lets get more on set to get more insight on oil, you can look at this chart. The white line is the price of wti crude. The green is the rising line of u. S. Oil. Five to the cap, the longest stretch since 2011. , 49. 23w 50 barrel currently. Oliver we are looking at atrlet we are looking copper prices. Here is ben davis, the commodity panelist who covers metals at berkeley. Do copper fundamentals even matter in a week like this when we have followed from the french from the fallout French Elections and trying to avoid a Government Shutdown . I dont think so. Copper is interesting to watch, because it is all about demand. In another week, the fundamentals dont matter. In april and may, we are not getting a lot of data out of china. Not getting a lot of news on the supply side, so it is times like this when the