We have his a take on the economy and tells us where he sees value right now. In two hourslose time. Lets take a check on where stocks are trading with abigail doolittle. Abigail were looking at a bullish day here with the dow, s p 500 and nasdaq all higher. Up. 1 afters now flipping between small gains and losses. , the techbest day heavy nasdaq carving out another record day. Chart withongterm the nasdaq relative to the s p 500. , the nasdaqcases outperforming the dow and s p 500. Up dow and s p 500 only about 6 or 7 on the year. Relative to the tech heavy other big averages are lagging to some degree. One stock helping is apple. Apple is up in a big way. Hitting yet another record high. Apple does report tomorrow after the bell. Investors are looking for earnings of 2. 02 on 53 billion. One of the big things investors will be looking to see is the cash position. Some are expect things to hundred 50 million 250 billion. Here forood stuff apple. Turning back into the bloomberg on apple, this is a great chart using the chameleon indicator. The chameleon indicator is one that combines lots of technical indicators and makes it super simple. The mixed colors show a bit of a change. With the exception of where we of theeen, the rest chameleon indicators have been pretty bullish. I just spoke to that specialist to set this chart suggested we. Ould keep going good stuff here for the nasdaq and apple. To bloombergsrn news breaking interview with President Trump in the oval office. Lets start with the big headline about the banks. We have a little tape from your interview. Lets get what the president had to say about the prospect for perhaps breaking of the big banks. Looking atwe are that. Some people want to go back to the old system. We are looking at it right now is going to be seriously changed so the banks can go back to loaning money. David you were traveling on the campaign with President Trump. How different was what he said today different from what he said on the campaign trail . Guest hes arguing very Different Things now that he is in office. I dont member exactly what he said but as he has gotten familiar with the oval office and different people are devising him and hes taking advice from different positions. He says more than 84 Business Ceos advising him on what to do, hes taking advice from the Business World and that is helping color his thoughts on this. He talked quite a bit about wanting to do what is right. He talked about doing populist things. The gas tax is one of those cases where we were surprised to hear him say he wants to increase the gas tax. Thats definitely a contradiction from where he was on the campaign trail. Something that would hit people in the pocketbook. Thats one of the biggest headlines, i thought, out of this interview. David where is he getting that advice . He has had a conversation with many advisers. Where thosea sense conversations are happening . Not say exactly where. He says he has all of these. Usiness leaders he relies on steve bannon and jerod kushner. We talked a little bit about advisers and the people he leans the advisers he leans on the most. Its just a general feeling about what his instincts are right now. He knew he was making news on several different topics and deliberately putting these positions out there to see how the country reacts. Gas tax andve that the possible breakup of big banks. What did he say on health care . What did trump have to say . Guest we were pressing him about the existing conditions and he was talking about how this is not the final bill. He said i want to take care of people. Thats one of the popular things he has been focused on. We said listen, you want to cover people with preexisting conditions, but if sick people wee to pay more money, as pressed him on that, he said this is not the final bill. I want to take care of people, lets see how it turns out. Is a question over what he said on the weekend as well. Some contradiction there. Lets go back to the Milliken Institute global conference in Beverly Hills am a scarlet fu joins us with the ceo of the Global Investment firm that oversees 275 billion in assets. Scarlet im here with the chairman and ceo of fairings llc. Lots to talk about here. Lets talk about the data this morning and get a sense of where we are. We have personal income and personal spending coming in lighter that expected coming on the heels of the week First Quarter gdp report. Where do you think we are in this Economic Cycle . Guest i dont think you can read too much in it. I dont think we are at the end of an Economic Cycle. I think we are a seventhinning stretch, maybe. Theres a lot coming forth this businesstimulate investment and consumer spending. A lot coming bishop could be fiscal policies. A party where the treasury secretary was speaking. Whats on his timeline. Is going to put a data out there that we want to have there are two priorities form, andare and tax those are two priorities that are going to dictate the process. Thats the important part. Youre just starting. I look at that as any other business negotiation. You start with ideas and then you engage. Remember theres a process to get legislation accomplish. Page,t based on that one is there enough to sustain the rally we have seen in equities . I think we will see the view of it back to europe with the finalizing of the French Election and german election. If its meant to sustain the market rally itself. Right now, its a bump to the market, a little advance low. When it comes to the repatriation of overseas cash, that is something investors have been talking about for a long time. The white house wants companies to put that money into investment and hiring in the u. S. Whats the best use of all that cash . You can say the money comes back and gives a shortterm stimulus and that is what we really have to recognize is we are in a global economy. Apple is going to be selling all over the world and thats not changing. Base we get to a territory , we are going to continually be behind in bringing corporate profits back home. I think the important thing is that changes longterm. Scarlet if there is a one time tax repatriation holiday, is that sufficient to get angst going . Worst you have the situation now. No one knows what the change is. Some police have not been able to plan to bring the money back because they didnt know what the impact was going to be. Clarified willat bring some back. Just how much, we will see. Get tax reform in the market will see that favorably. It plan out a little more singly as it relates to their foreign operations. Scarlet one thing that did not come up in the conversation at all was the Federal Reserve and Monetary Policy. Were not talking about Monetary Policy dictating everything in the market. The fed meets this wednesday and likely nothing will happen but does the Federal Reserve move more slowly because of all the things in the offspring what in the offing like tax reform . Guest i dont know that they move more slowly. I think they keep in here with the way they are looking at it. You want to hear some discussion about normalizing the Balance Sheet over time, so they are edging in a certain direction of normalization. But barring something happening, and unexpected event from a certain change in the economy, i think they stay on message for a while. Aboutt we were talking the seventhinning stretch, but where do you think we are in the credit like all . Guest we are definitely on the backside in some ways. We are i dont think heading into recession tomorrow but i would look at this its lot int where we do a asia and europe. You need to be doing your homework on companies not just because of cyclicality, but whats happening in the industry. You look at retail in the impact of amazon. Itwill see some stress but can help with your portfolios. Scarlet lets talk about your industry, the Asset Management industry. What is driving the consolidation . Like a lot of industries, we have to be more efficient. The effects of scale, the effect of enhanced use of technology, you need to be more efficient and our sector and the big institution, you have seen they want to work for fewer managers and wider capabilities. That will do a lot to bring the new bearing together. Our relationship, the biggest asset allocators and owners out there is driven by more efficient servicing. You will see certain management come together to build those capabilities. Scarlet how many big players would be left . Guest there are thousands of managers out there and i think theres a place for the boutique but the numbers will shrink and become more efficient. Ago andy it was years it was a big thing when black rock went over a trillion and now they are 5 trillion. So overtime it is scale. Scarlet scale seems to trump everything. Guest scale is one way, but it is also efficient. Scarlet back to you, david. We have more ahead from the Milliken Institute global conference, including a rare and exclusive interview with can griffin, funder of citadel. This is bloomberg. David this is bloomberg markets. Im david gura. Julia im julia chatterley. Lets get a check on the bloomberg first word news with mark crumpton. Mark more now from President TrumpUs Oval Office interview with Bloomberg News. The president did not rule out a face to face meeting with north Korean Leader kim jong in. North korea has in the president s most Urgent NationalSecurity Threat and foreignpolicy challenge in his first 100 days in office. Under the right circumstances, i would absolutely meet with him. People wouldl never say that, but im telling you, under the right circumstances, i would meet with him. Mark the last top u. S. Official to meet with a north korean official was Madeleine Albright who met with cams father in 2000. House and Senate Negotiators reached a budget deal that rejects most of the president s wish list stop the 1. 1 trillion agreement would keep the government in operation through september. Republican leaders bowed to democratic command the mans to limit hundreds of restrictions aimed at curbing regulations. Notmeasure also does include money to Start Building a wall along the border with mexico. British Prime Minister theresa may is not backing off her position on brexit talks. She insists britain should be able to line of the free trade deal with the European Union at the same time it negotiates its exit. Eu leaders suggested the prime thesters ambitions for upcoming talks are unrealistic. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Thea lets dig deeper into Bloomberg News making interview with President Trump. The president got wall street buzzing when he said he was considering breaking up the big banks. Joining us from our d. C. Bureau is our analyst. We have heard trump talk about this before. We have had gary hint about it. How serious a proposal do you think this is . Is a i dont think it serious proposal. I think its similar to the tax basel that came out last week. Its just an idea and it is very high level. Not seen anything actionable on it. They want to say we are going to bring back a tweet for sentry glasssteagall act but they have not explained what this is. Few things to watch out for the treasury secretary is expected to come back with a doddfrank plan in early june and what are the up claimants they are going to make to the Federal Reserve question mark are they going to be populists or more moderate, establishment figures . I think we will get a clearer picture but right now, i dont think it is going to be very much. Know about do we what the white house thinks of this legislation, this financial. Hoice act is the white house and embracing it . Are they planning to do something on their own . Guest and has been pretty quiet. German had selling has said all the way back that he has met with the president and is working with the white house on this plan. Its an act that essentially gives large banks a choice. Bank is around 6. 5 , so the eighth largest u. S. Banks would have to put up 420 billion in capital. It is a high price to pay, so its going to be interesting to see how the white house embraces the act once it has its markup hearing. We will see by june whether the white house will fully embraces plan or plan to pursue other efforts. Julia this is an interplay between two potential options. If we go to bringing back some sort of glasssteagall, who was in the inner circle here that would fight it . One who said this is essentially an option. When he was pressed by Bloomberg News, he said i think its going to be more tiered regulation, less regulation for smaller banks. Its going to be the populist wing of the white house versus the establishment wing. The key players to watch our treasury secretary Steve Mnuchin and gary cohn i would look at Vice President pence. One of his advisers is wellversed in doddfrank and we will see what plan comes out of that office to roll back doddfrank. Julia great to chat with you. If we are having a tiered system with the likes of jpmorgan. David we will see how all of this evolves. Still ahead, a rare and exclusive interview with the Millionaire Hedge Fund manager of sit. This is bloomberg. Since dell. Marketshis is Bloomberg David , im julie chatterley. Time for the Bloomberg Business flash and a look at the biggest stories in the news right now. Ups, the Package Delivery service would ask retailers to pay for part of the cost for surplus workers when retailers failed to ship the planned number of packages. Its part of a broader negotiation overpricing during the busiest time of year. The money manager that oversees almost half 1 trillion, peter prowse has been fired. As ceo. Will take over they just said it was time to put new leadership in place at the company. Space expiration technology, plans to make space travel more affordable is evolving. Arocket blast off during classified payload for the u. S. Military and landed on earth. They first accomplish the feat relanding rockets is key to the companys longterm vision. That is your Bloomberg Business update. Ahead, much more from the milliken conference, including a rare interview with ken griffin. That is coming up next. This is bloomberg. David this is bloomberg markets. Im david gura. Chatterley. Ulia but get back to the Milliken Institute. Erik schatzker is set is standing by right now with a special guest. Welcomem delighted to ken griffin of sit it out to our set here at the milliken global conference in Beverly Hills. Great to see you. This is where i would like to begin our conversation. Your industry is under pressure. Hedge funds are closing at the fastest pace since the financial crisis. Are inunds that survive many cases retrenching. Or returninging in money to investors. How do you see it . Ken ive been in the space for almost 30 years now. Its almost an explosion the size of the industry. The number of funds 3 trillion of capital, its an unbelievable growth story. Dynamics, theres more competition, theres a lot of people in the marketplace and this is causing secondtier players to fall by the wayside. You can see secondtier firms that do not have a competitive advantages. You have to call it a day and move on. Erik why is it so hard to generate excess returns . Ken excess returns come from market inefficiency. Use news, data and information means markets are mutts more efficient in the short run. Is there less output to be had . Ken because the markets are efficient, theres less output to be had. Today, earnings will be analyzed and companies will analyze we are going to do this. Literally within seconds of the earnings announcement, you see tock prices move and just reflect all the news we have. Quarter timeed when you are looking at data that comes from credit cards giving you insights. All of these dynamics are making the money move making the markets more efficient and more it reduces the amount of alpha available as a community. Would you describe your position as offenses were defense of . Ken offenses in the quest for talent. There are a number of talented individuals. Firms are shutting down. There are a lot of good people we want to bring into pseudo. Theres a chance to bring good people into said it all. Sue dell is built on one simple equation, the belief that super talented individuals working together as create extraordinary results. Strategiesinvestment or approaches do you believe would be most successful in this environment, the one you just described, and the way you see markets evolving . Ken what i find works well overtime is having a deep expertise in the areas in which you are participating. I think about investors that want a big u. S. Look and they are driveby or tourist investors. That investor is almost andainly not going to work they dont understand the company, the country, the pricing dynamics and what is relevant. For us, the core belief we have ,s deep expertise is rewarded so we organize our affairs where people specialized, they are a Health Care Expert or expert in industrial size. It is that deep specialization we think drives differentiated and superior returns. Erik of the stuff you are doing, what is working well and what will continue to do well . Ken we have been successful across the bat across the vast majority of our strategies. It comes down to individuals with a deep agree in specialization that work as part of a team. Teams are really important to gather the mosaic of information you need to have insights different from your competition. That teamwork dynamic is really important and they are supported by great Quantitative Analytics and support systems. Long is it going to take before this shakeout in the Hedge Fund Industry is over and when it is over, what will have happened . Ken its not just a shakeout for the Hedge Fund Industry, is for active management. We see money come out of active management. Money in apens, the passive structures is not pursuing alpha in the same way. That should make markets little less efficient which would create a larger profit pool for those who remain. The firms that are best able to analyze and incorporate information are going to continue to earn outsized returns. Erik how much of an opportunity is there for citadel . Ken i dont fixate on that problem. Erik im not saying that you do, im just curious. Ken can we manage 25 billion . We do. 35 is probably outside our reach. If i look at what drives our an analytical element that comes. Make 3 million were make 4 million, if i say im going to give you three times as much money, your worst days are three times worse. Lostthat number, if youve 15 million or 20 million in a day, psychologically, a lot of people have a hard time with that. Its about growing our capabilities and deal with the psychological impact. When you are wrong, be wrong in a meaningful way. Is notable for the and thatnviction it has responded. Intold a huge business equities execution and have filled the void in banks left by Market Making. What about the approach the new administration is taking . Perhaps this concerns you . Ken it is way too early to tell. To reduce regulation and the United States, i applaud. Level i cangreatest pull to get the economy to go faster. I started my business when i was in the dorm room at harvard. Inould launch a hedge fund 1987. You cant launch a hedge fund less than several hundred million dollars. Thats discouraged new business formation and active management. Space, the transportation space, it is everywhere in america. Thats a tragedy. To reduce the Regulatory Burden on the american that has a dream, i applaud that. The last administration was interested in reduce at and introducing more transparency to the bond market. What about this administration . Ken i hope they follow through on that. Transparency creates confidence that you have been treated fairly and confidence you understand what is taking place in the market lace. Transparency is the underpinning of a healthy capital market. In a market that is opaque, the markets enjoy and information advantage of that capacity, but that doesnt make for a good market. If this administration continues to carry that baton forward and shine light on how treasuries are priced and created, that would be good for the entire market. ,f they dont, i think it is whether its the reform for obamacare, the infrastructure bill, we are taking our deficit higher. It is important to take steps to continue to drive the u. S. Asked income market to be perceived as the most liquid, fairest market in the world. That will drive down the cost to borrowing which will benefit and save money for every american taxpayer. Erik just today, President Trump told my colleagues hes taking a serious look at steps to break up the big banks. Would you be in favor of that . Ken i would. I believe in market becomes overly concentrated, you reduce competition and competition is the life led of what makes the free economy work. Many firmsve vigorously competing to get ahead, that is when creativity happens. Thats when consumers win. Of 2000inancial crisis eight, number of decisions were made quickly that resulted in a massive consolidation of the u. S. Banking system. I dont think that serves the interest of our country well. When i argue to break these banks into many small banks . No. Should we think about separating from the commercial banks . I would besteagall, excited to see that. I think it would be great for the economy. Rigoroushave much more competitors, but i think thats good for america. When American Investment banks are at the forefront of innovation not all innovation is good, but over time, the majority of innovation creates value for our company. Erik what is next for citadel as a firm, beyond what you do now . Its two entirely different businesses, both started by you. Know what else you might do. Do the focus is on what we and what we might do better. Whos the fifth largest provider of downloaded music . Erik i couldnt tell you. You dont care. More and more, the Market Leaders in our economy enjoy a very strong position. We want to be that Market Leader both in the hedge fund space and the Market Making space. The jack welch approach to being number one or number two and if not ken then why are you there. We are able to make things happen from that position of strength. Not thinkingare about expanding into any other businesses . Ken the business line, within those business lines, strengthen, strengthen, straighten. The quantitative strategist Quantitative Strategies have been successful for a couple of hedge funds. Will that become a bigger part of your business . Part ofhas been a big our business for a long time. Those firms are extremely good at what you do. The ability to synthesize vast amounts of data to create a forecast of securities prices. Some people believe that Artificial Intelligence and Machine Learning are going to displace human beings in investing and Asset Management. What conclusions have you drawn about ai and Machine Learning . I think those observations come from principally those who dont use Machine Learning or ai. Those of us who are practitioners in the industry no Machine Learning is really powerful when you have a very large data set. Aree the patterns consistent or persistent over in a more you end up bespoke situation, whats going to happen in france with the forthcoming election are the primary that just happened . Machine learning is worthless. You dont have any Historical Data to train the machine with. Whenne learning is good you have a lot of history you can train the computer with. Its not a good when you are dealing with bespoke or oneoff situations. When you ask the computer how apple is going to do, it does not have enough data to understand that question. Do those big a role approaches have considered all . Have in citadel . Ken they have a role but we use a broad toolkit to support investment managers. One of the other voids left by the bank has been lending. That has been filled by a building private credit businesses. It is something we have looked at over the years and if i think of the next five to 10 years, perhaps. It is interesting. Whats great about the United States is about 80 of the money Corporate America borrows comes from our capital markets. It does not come from our Banking System. Capital. S the cost to look at europe. 80 of their money comes from a Banking System that is struggling. Anemic. Rowth is the ability for banks to write off poorly performing loans is not there. Has a very negative impact on their entire economic landscape. To move fromwere that, it would represent a departure from liquid markets. 2008, the focus has been liquid markets. Like some of our competitors did and we learned some very important lessons. For us, one of the key lessons was to stay focused and liquid markets. And thats the way it is going to stay for the time being . Ken that is the way we are. Reputationel has a im not sure what word to use, tough, ruthless, perhaps for chewing through people and spitting them out. You are the guy who runs the business. Tell me what its like from your perspective. Perspective, it has been 27 great years. Ive worked with some of the brightest people in finance and i have seen their careers awesome. Ive seen them make a huge impact on the capital markets. We bought the portfolio and reshape the u. S. Options market. It takes a special team to make that happen. Like a sense, it is professionals ports team and if you are no longer on your game, we dont have room for you on the team, but theres a lot of people who love to play at the most Upper Echelon of the industry. Erik you have been recruiting talent for 27 years. Who fits into citadel and why . Is people whos are passionate about finance. You are just trying to get rich, it doesnt work. He have to care about what you are doing because you live this job 24 7. Youhe middle of the night, wake up and think i did not think about that and should have. For people who this is a passion, they like to try to figure out puzzles. It matter if they are old or young . Ken it changes the way they view the world. My young colleagues love complicated and complexity. My older colleagues love with me. That is just us growing up. Need insane creativity that i get from my tray fouryearolds and the wisdom and experience of my 45 and 50yearolds. , peopletside of citadel know you as a philanthropist and someone who knows about public policy. Some know you as a republican. When you consider the challenges this country faces, what are you concerned about most . Ken im concerned about education. Mathematics, science and engineering, i worry most about the amount of talent we are putting on the Playing Field as we compete in the growing economy. One of the downsides of Machine Learning is we are going to reshape some very large part of our economy in the next 10 years and we need to have both new and we need tod train a substantial amount of people who are going to use youre going to lose their jobs. I learnt i worry about the robustness of our k12 education. I worry about our colleges that are not producing enough raju thewith hard skills in maths and sciences and i worry about our lack of commitment to postcollege retraining of individuals who are going to have lost opportunities as we are able to automate certain parts of the economy away. Confidenceu have that this new government recognizes the problem and has a realistic plan to address it . , theresrtunately nothing i said you havent heard a thousand times before. This is something we have talked about for 40 years and this is where we need the will of our political leaders to match the reality of what we do with our educational system and we need to fight that fight hard. Thank you very much. That is can griffin of pseudo. The secret to everlasting youth and complexity. Much more coming from milliken. Back to you in new york city. Schatzkert was erik at the Milliken Institute global conference. We will have more later this afternoon, including an interview with the state street global advisors. This is bloomberg. David this is bloomberg markets. Im david gura. Julia and im julia chatterley. Time for the Bloomberg Business lash. Canadian Mortgage Lender pony Capital Group continued its massive decline after reporting more with draws. It extended the drop to nearly 80 on concerns redeeming Investment Certificates were worth it. Huge interest deposits declined over the past month, raising concerns that it could spread across the industry. But u. S. Supreme court issued a mixed decision on the reach of the main federal housing discoloration laws. Courtstices told a lower to reconsider whether miami can sue banks were lending practices the city believes contributed to urban blight. Partial victory for bank of america and wells fargo which appealed a Lower Court Ruling that said miami could press the suit under the fair housing act. Miami is suing citigroup, but the bank was not part of the Supreme Court case. Haveal prosecutors subpoenaed bnp for possibly manipulating the u. S. Treasury market. According to people familiar with the matter, the Justice Department issued the subpoenas last month and has been examining the treasury market for approximately two years. That is your business flash update. David lets take a quick look at the majors right now. The s p down about. 3 . Pretty much flat. 6093. Financials leading the way when you look at the s p 500. The shineing some of off the rally we were seeing early on. In our interview with President Donald Trump he suggested hes actively looking at raking up the big banks. We pointed out earlier on in the show that we have heard this before from him. What do we think is the likelihood of this . The backandforth we heard on the so far compared him to campaign trail, i got the sense from talking to Jennifer Jacobs that it is something he is thinking about. It was interesting to hear Erik Schatzker ask ken griffin what he thought about this and he said he is in favor of breaking up. Julia he said my fantasy is we break up the big banks. Is a going tos remain a fantasy or are we going to do something about this . On doddfrank or something more specific. Julia we will go back live to the milliken global conference. This is bloomberg. David it is 3 p. M. In new york, 12 00 p. M. In san francisco. Julia welcome to bloomberg markets. David we are live and bloombergs headquarters in new york. In the next hour, were covering stories out of Beverly Hills, washington, paris and tokyo. President trump sits down with number again tells us he wants to bring back the graph the glasssteagall law that separates Consumer Lending and Investment Banking. Is he serious about raking up the big banks . Will have more later this hour. One hour left in the trading day. The nasdaq is set to close at a new record high as optimism from earnings and the budget deal eases demand for safe havens. Plus President Trumps first 100 days and his impact on the markets. That fly from the milliken global conference in hell for you. Abigail doolittle has a closer look at the markets. Abigail it is a bit of a risk on day with the dow, s p, 500 all trading higher. Look at the nasdaq, natalie making those records but up more than. 75 . Lets look at the s p 500 group returns. Explain why the nasdaq is outperforming. It, lets take a look at an intraday chart of bank of america. We are going to see some decent volatility with shares higher and right around 1 00, took a nosedive. This has President Trump told Bloomberg News in an exclusive interview hes considering raking up the big tanks between the Consumer Lending side and big banks. That caused many shares to take a nosedive but now recovering. We do have yields higher with the 10 year yield up four or five basis points. Taking a closer look at tech apple trading higher. Investors seem to be optimistic about the prospect around the iphone. Amazon still having a tailwind from its strong quarter. Disappointing dish subscriber numbers suggesting many are leaving for online streaming services. Tesla trading higher. Another Bloomberg Intelligence analysts saying this reflects the fact that elon musk was bullish on the companies prospect of giga factories. Quickly by on tesla hopping back into the bloomberg. This is a longterm chart of tesla. The stock had been stuck in this big range for a few years but on the recent bullish and the mental activity, the stock raking up out of the range. I did speak to a Technical AnalysisTechnical Analyst who said we will see tesla move up to 429, suggesting the stock could move higher from current levels. A tribute, you could say to elon musks visionary positioning. Out to thes get milliken conference in Beverly Hills california where scarlett who is standing by with the chairman and ceo of state street. You mentioned, i am here with the chairman and ceo of State Street Corporation and before we get to your business and company, i want to get your made by on the comment the president to Bloomberg News that he is actively considering a breakup of wall street tanks, putting in place a wife First Century version of glasssteagall. What might that look like . The way people traditionally think about that is they think about breaking up credit intermediation from trading. My own view would be thats not necessary. We have some of the strongest global banks in the world in the u. S. And you have to go back to look at what we have done post crisis. Doddfrank, which Everyone Wants to bash them i think the foundational elements were completely appropriate. Liquidity, a more Resolution Authority that is effective. Most of those things have input in place. I dont think we want to take us back. I think we have significantly limited the ability that you would have a large bank failure that would impair taxpayers. My own view is we are in a pretty good place regarding Bank Regulation with one exception. We put so much on the Banking Industry that it is time to recalibrate. Not change the capital liquidity, but get the calibration right. The second thing we need to do is we have made so many changes, some of which have created unintended consequences. We fundamentally changed liquidity. Im not sure for the better. We need to pause and figure out how to make it better, not change it from a standpoint of a modern day glasssteagall. Why do you think this idea keeps coming up that we should oppose a wall between commercial banking and Investment Banking . Is lyricallyk popular to lean into the financial sector. Its also not broadly understood. I think it is a phrase that gets peoples attention. I personally dont think it is a good idea. The u. S. Banks are some of the strongest, best capitalized in the world. The rest of the world doesnt have a glasssteagall and their banks seem to perform well. We ought to stay the course and make better what we have already put in place and get away from the glasssteagall motion. Talk about state street it is your 225th anniversary. You are pioneers. There are growing rumblings that piles of money flowing into passive investment could block things into a downturn. Is there any truth to that . Etfs have garnered tremendous attention. New technology and trillions of when youowing in, that look at the percentage of assets still in active versus passive, it is balanced. Its not out of whack. Scarlet so for all of the talk every thing is going to passive . Guest i dont think thats the right answer, nor do i think its going to happen. Seen, if you think about last 10 years you have seen diversification through alternatives, places, whether it is real estate or infrastructure, a little higher yield and the other thing you have seen as more assets move to passive and inch marking. It is a completely reasonable rebalancing. You can see those extreme Asset Classes get more creative and you will continue to see alternatives move into more liquid spaces and you will see the etf space introduce more interesting investment strategies. I dont think the world is going to passive. I think it is an appropriate rebalancing. Scarlet you talk about alternative investments. One thing i did not realize is state street is one of the biggest donors to the private equity world. Tell us more about that one. Guest let me back up half a step. A big part of state street is in the Asset Servicing business. When things move to alternatives, we quickly assemble some capability. It dawned on us over the last couple of years that private equity has become more and more popular as an investment theme but did not have great edge marks. If you are a private equity manager, you want to compare yourself against something. Went out to our client base and said would you be willing to give us your performance data in exchange for us creating an index. Remarkably, everyone said we are all in. Scarlet how will people use the index . Guest i think they would use it to compare their performance. This will provide a private equity index which will want to compare performance results. The other thing that we did was areaid as part of this, we going to take the aggregated private equity index and this aggregate where some of the beta returns come from and create a product that would simulate they returned of a private equity fund. I view it as a temporary holding place. There are some of thes in the world, multibillion dollar or trillion dollar asset owners. It takes a long time to build up an asset allocation. So this is a beta way of getting private equity exposure. Scarlet thank you so much. That was scarlet fu and the chairman and ceo of state street. Lets get to headlines on the bloomberg first word news with mark crumpton. Mark President Trump says he is actively considering breaking up giant wall street banks. Giving a push to efforts to revive last eagle, the depression era law separating Consumer Lending and Investment Banking. The president spoke with Bloomberg News from the oval office today. Mr. Trump we are looking at that. Some people want to go back to the old system. We are looking at it as we speak be doddfrank is going to seriously changed so the banks can go back to loaning. Mark President Trump says he is over into increasing the gas tank the gas tax to Fund Infrastructure development. The two president ial candidates have kicked off their final week of the campaign. That macron has a double over marine le pen. Marine le pen has been pushing the idea that france should leave the euro and at france should have to currencies, one for daily we use and one for international trade. Thousands of cubans marched through cubas revolution square in what is considered one of the largest celebrations of International Workers day or may day. It is the end of an era. President castro says he will step down in february, making last made aay as head of state. One protester with an American Flag was led away. At the Kennedy Space center in florida, elon musks spacex launched a sensitive mission for the u. S. Military today. The falcon nine rocket carried a satellite into orbit for the National Reconnaissance office. Nine minutes after launch, the rockets first stage returned to earth, landing and reusing rockets is key to space xs vision of making space travel increasingly afford will. This was the companys fifth Successful Mission over the years. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. David coming up, President Trump tells bloomberg to actively considering breaking up the big banks. Get more from our reporter who spoke with the president , next. This is bloomberg. Julia this is bloomberg markets. Im julia chatterley. David lets get to our newsmaking interview with President Trump. He spoke with Jennifer Jacobs in the oval office and had this to say about the future of u. S. Banks. Looking atwe are that. Some people want to go back to the old system, so we are looking at it right now as we going to doddfrank is be very seriously changed so the banks can go back to loaning money. Great interview. What further context can you give us about where the conversation goes from here . Do you have a sense there is some action in place as well . Meeting with clearly bankers, he wants to dial back doddfrank. This was about a half an hour interview and this question came very late in the interview. I dont have a lot of extra to add other than when we asked are you inclined to break up the banks, he said this is something i am inking about right now. Did he talk about glasssteagall during the campaign . B things really know, sure. Thisresident emphasizing is something that is on his mind at this exact moment, something he and his aides are talking about and we could see something soon on this front. In the context of something larger or a larger announcement that may have to do with doddfrank. Did he give any indication of how likely support would be across the Republican Party . Clearly there are a lot of different proposals at this time. Margaret a terrific question and we are looking at this in terms of some other things the white house has. Someh care, theres still consternation inside some factions of the Republican Party. Beyond that, the whole tax reform initiative. All of this comes against the backdrop of gdp indicators that ambitions than the the president has stated publicly. Things that need to happen. We now have financing for this administration. Weve heard mike pence say he couldnt be more pleased with the agreement, but a made an awful lot of concessions to get this done. What does that say about the likelihood of what comes out of the concern or the Health Care Bill when we get it . Margaret it may say in a very basic sense that they cannot afford to have a Government Shutdown and they wanted to move on as quickly as possible. The president articulated the idea that when we post the question what about your giveaway on planned parenthoods or the border wall, he says these are fiscal year 17 issues that should not have that on my plate. Im worried about bigger fish to fry and we will worry about this in the fall. I think they decided the clinical risk of not getting a spending bill across the finish line greatly outweighed shortterm concessions. David we had the treasury secretary in the white house talking about the prospects of growth, saying we need to get 3 growth or 4 growth. He had toten to what say about growth in the u. S. Aboutump everyone talks 3 . I think we can do more than 4 eventually. A good time to get there. We have in a country that has , we have beenules artificially stifled for so long. I think we can go higher than or percent eventually. David circling back to a julia was asking about, this figure was so important. The administration wants to see it. We asked the president for a timeline and he said he did not want to put one on there. Come is going to be part of this argument about the gdp. Great to chat with you. Bloombergs senior White House Correspondent speaking there. Up ahead, qualcomm has been trading lower since a rocky earnings report. This is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Time for options insights with abigail doolittle. Is the joining me today oldf Market Strategist at action. Thank you for taking the time. It seems like one of the big stories is once again, we have technology performing over technology in the dow is performing flat. We have a chart that shows that outperformance on the year. The s p 500 relative to the nasdaq. We see that the nasdaq is leading both of those indexes. A charting specialist here says that is the most 1999 and 2000. That big tech bubble. Is that worrying for you or healthy . Guest i think it is healthy and a leader. If you look further back, it is up 40 from those lows. Lets look at it in facebook, apple and google. Theyve done very well and they are making new highs once again today. Abigail using tech can lead us this year. Im looking for the s p to play a little catch up here. Even though we have seen new vix lows, that is important. Low double digits is a big deal since we were up eckstein just a couple of weeks ago. A typical whackamole of explosion, getting smacked down. Weve seen this time and time again. For the s p when it gets above that 2400 high. Abigail you have been bullish and i love that you are pulling back that singledigit. What is the one thing that worries you . Guest i have a lot of worries but i look at price action to dissipate some of those concerns. The fact that the market is hanging up and crude oil with all the Energy Stocks have had this decline. That will be another cabalistic upside. The most encouraging sign are the earnings. The doubledigit earnings, that is what drives the market. Abigail could you talk to us about qualcomm . 15 . qualcomm is down has been trading between 52 and 58. Friday, we saw a new low and higher flows and we did not make new highs in volatilities. Im looking at the october 50 call for about five dollars in the breakeven is about a dollar higher. If it gets to the halfway point, that option would double. Abigail great stuff as always. Back to you. Julia still ahead, we will go back to the milken global conference for an interview with the cme chairman. This is bloomberg. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. 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. Mark im mark crumpton. There are reports of multiple people at the austin campus of the university of texas. Reports thatn medics are near the Gregory Gymnasium on campus. Youre looking at a live picture from our abc affiliate there. People were taken to the hospital with potentially serious injuries. Reports of multiple people being stabbed at the university of texas at austin. We will continue to follow this story and bring you the latest developments as soon as we get them. Chief economics adviser says he thinks republicans have enough votes in the house for the obamacare replacement bill. Gary cohn told cbs news there could be a vote this week. The provisions of the Health Care Bill still are not clear. Letu. S. Supreme court has stand a California Law that bans licensed therapist from working with children to change their Sexual Orientation from gay to straight. The justice rejected an appeal that said the measure violates religious rights. Todays decision