Is trump having any visible impact on trade policy . We will see with the director general of the world trade organization. Mark we will have a look at european equities and trading right now. 30 minutes until the end of the session. Check it out. Gmm go, stocks are holding on today. Geopolitical concerns, have held back u. S. Stocks more than european stocks. European stocks back today, gains in greece. Today, two days since the stoxx 600 has been unchanged. Yields rising in the periphery. They are falling in the core. That is obviously something we are keeping an eye on. It is a busy corporate day today. First quarter profits almost doubling, rising demand for the mercedesbenz including this new e class. The onetime gain helping the company off to a strong start to the year to reclaim the luxury crowd sales from bmw. It has been reaping the benefits of revamping the product lineup. Of suvsw, and expansion as well, shares up by one third 1 . Moving on, sticking with german matters, cuba raising its 2017 earnings forecast. Chief executive youre in goldens turnaround efforts seem to be pulling in. Sportswear and styles with the help of endorsements like usain bolt and rihanna. It is in contrast to its rival, under armour. Ratings, shares of the highest level in a most a decade. 8 , and the biggest leap september last year and finishing off with tesco. Annual profits beating estimates but the Market Leader vowing to keep prices low, ratcheting up pressure on the industry, shrinking profitability. Sterlings decline pushing up the cost. The grocer says it is passing unless of its costs to its customers and its rivals shares are consequently bound by 1. 9 . 19 minutes into the trading day, julie, how is it looking . Stocks have taken a leg lower. The s p off by one third of percent. The dow and the nasdaq have also accelerated. Weve got materials, industrial and financial pulling them lower at the moment. Is still, the movement small. That has been the case for the past couple of weeks. We are looking at g btv 2487. This is the return of the s p 500 as a clothing as of closing. For the last few sessions we havent gotten to 0. 4 as of the close. Just something to watch. At the same time we have had an uptick in volatility. Here with this very is averages yesterday, it moved about 50 for the first time in a long time and it is remaining above that level today. Even though the movements are small percentage wise for the overall indices volatility is kicking up. Finally. That is something to watch as well. Elsewhere, we are taking a look at the airlines. Delta reporting its earnings saying it is set to gain some pricing power, producing passenger revenue for each see below the mile, expected the climbed one to 3 , helping the airline shares. American suffering from its on pr situationngoing after that passenger was dragged off of a flight and a quick check on oil prices after the inventory numbers. Oil has been bouncing all over the place. Overall, positive for oil but there was a building push in ergya and the Information Administration also predicting that production is set to rise. More between the bulls and the bears in the oil markets. Vonnie thank you for that. Lots of developments on the deal political front. Secretary of state Rex Tillerson meeting with his counterpart in moscow to discuss tensions in syria. Joining us from russia is our National Security reporter nick wadhams who is meeting with the secretary of state. We will get some kind of joint statement at some point, presumably with some idea of what might be in there and whether or not putin will meet with Rex Tillerson today. We have not heard whether there will be a meeting. There will be a press conference and it is believed that if something occurs it will happen freezing happened on his trips to russia. Putin is notoriously famous for people making people wait. They are expected to often run late. Saying, back off your support for a side and join the International Community in helping determine syrias future or keep allying yourself with syria. That is the question that is the message. If it isseems, as pretty stuck in where he stands. It is pushing back against demand. The syrian leader assad where does that lead . He seems to be completely set. This is the question that has bedeviled these sides for years. John kerry ran into the same problem. Russia is too important a strategic player to support this regime as a warm water naval base in syria and military base there as well. This is in the middle east. It is playing for a broader strategic role. So far, the u. S. Has not been able to provide enough carrots with all of the sticks, ostracizing russia and firing the missile strikes at an ally in syria. Vonnie Rex Tillerson has had a long relationship with russia, given that he came from exxon mobil which has feelings there. Dealings there. Can we take whatever we see at face value or will there be back channel talks and negotiations . This is what is so interesting about this is it tests Rex Tillersons brand of diplomacy. In public, he doesnt go too hard on his interlocutors across he table but he says capitalizes on the relationships he has with these guys. ,his morning, lavrov came out throwing jabs at tillerson and the United States and tillerson said we have some differences but we hope to work them out. We will see if it works out. Vonnie thanks to bloombergs nick wadhams. Running is on the phone from moscow. Of course, we will bring you the News Conference with russian northern Russian Foreign minister Sergey Lavrov as soon as it begins. ,ark back to the market surged joining us is helen driver of Global Equities on the geopolitical question. Why are european stock investors looking through the syria, north korea, French Election . The stoxx 600 are at a 16 month high. Why are european stocks proven so durable question mark thanks for inviting me along. I think the reason for that is the movement in 2017. Th corporate earnings environment and outlook thate have seen in the european stocks is that much more robust. We see doubledigit Earnings Growth from European Companies and they stay competitive in contrast from 20162017 where expectations were high. We saw those expectations ratchet back. The European Market just failed to deliver. I think it is an expectation that at this time it is for real. Question, it has been a mirage for many years. Lots of false stories. Mark why is it different this time . I think the actual underlying survey data we are seeing coming out and importantly in manufacturing, which is very important in europe, we have seen that coming out very strong. The expectation is the hard data which is coming up to me it, you talked about some of the companys earlier. The pumas of this world. We have seen these earnings come through and if anything, these expectations are upgraded and not downgraded. Vonnie but what kind of quality are these earnings . We saw margins getting thinner. Iseeing . These earningson are beating because these expectations are lower . There is an element of that. There is also an element of topline growth returning. In part, we have seen the reflationary trade in the back edge of last year and some of the companies that were reporting, some of this is topline growth exceeding. I will give you one example. Lb mh, yesterday, really strong numbers. Doubledigit growth in revenues across all product areas. A costcuttingt phenomenon. We are seeing that growth returning. Vonnie where are you looking for little portions of value in the business . Despite the fact that the valuation gap has started to narrow, when we look at factors such as price to book, the gap between the u. S. And u. K. Markets is actually as wide as it has been since the 70s. We still think there is value there across the board. This is also being reflected in some of the m a activity. We dont think this is just a consequence of currency with the strong dollar enticing the u. S. Companies across a look at european targets. We are seeing activity within europe both as strategic, some of it costcutting, opportunistic maybe. Debthat is reflective reflected in some of this m a activity. It inseeing industrials. We have seen it in parts of the financial sector. It is a very broad base valuation. Mark lets look at our whichful function grr shows you all the Industry Groups on the stoxx 600. This is a 12 month chart. Basic resources on this reflation rate. Technology, oil and gas. T is real estate media, etc. How different would you expect that to look and maybe 12 months . I think perhaps not that different in terms that if the reflationary trade continues the Economic Data goes does come through and we see that reflected in Interest Rates, moving up again. Which will probably put some downward pressure on some of those property sectors but of companiesp the mining , the oil and gas companies. Mark you are looking at anglo american, for instance. They are all in the triple digits in last january. They always have at the same time started to compare the balance sheet. It is a big problem in that sector. Some of that moves and is a reflection of Balance Sheets and perhaps in time some of that , whether that be the right or the wrong thing to do, they might start to see some of that cash coming back to us as shareholders. Mark bhp and elliott, of course. The pressure is on. Thanks for joining us. Helen driver, head of Global Equities. Vonnie mark, lets check in on the bloomberg first word news. Courtney donohoe is here with more. President trump wants to repeal obamacare before taking on tax reform. Thatresident told business a Republican Health care bill will get done. The president also talks about the socalled border tax. Our country is taken advantage of, to euthanize a nice term, by every other country in the world. Adjustment means we lose. We lose. I dont like to term the term border adjustment. We have an import tax, lets call it a reciprocal path. They have promised an overhaul that would lower corporate taxes and make it easier for companies to bring back money from overseas. Iseurope, john mccain congratulating montenegro for its upcoming nato membership. And blasting russia for its attempt to interfere in the balkans. Speaking of much of montenegro, they said it was not accessible. In the middle east, a surprising entry in neurons president ial election. Former president Mahmoud Almaden a job. Moderate president has been considering an overwhelming statement. Globalews, 24 hours a day, powered by more than 2600 journalists and analysts in re than 120 countries. I am courtney donohoe. This is bloomberg. Mark . Onimf managing director protectionism. The future of the eu and global trade. Highlights from our interview with bloombergs Francine Lacqua in brussels. That is next. This is bloomberg. Vonnie live from bloomberg World Headquarters in new york i am vonnie quinn. Mark i am mark barton. Counting down to the european close, 12 minutes away. The imf managing director Christine Lagarde addressing the funds and policy priorities today in brussels ahead of the imf spring meeting. Hassaid that Global Growth a spring in its step. The topic of protectionism protectionism is clearly a threat. One that if it was to be realized would really be a break on growth. It would be a break on productivity. It would be a break on investment. We are seeing that both innovation and trade are conducive to productivity. Productivity is the engine for growth. Risks that wethe see, clearly protectionism is one. The Political Uncertainty we see around the world, typically in the european region is also high on our agenda of risks. Flowstential for capital moving from emerging markets to advanced economies as a result of the reinforcement of the dollar and the rise of Interest Rates is a third one. Risks that apply to a situation which is quite positive at the moment. Do you believe that the Trump Administration could be less protectionist than we feared just at the beginning of january . Always i dont believe any prescribeuld actually limited growth, limited productivity, limited investment. Limited innovation. If policy makers including the u. S. Policymakers want better growth, more investment, more innovation and productivity, trade is part of the solution. Then you going to the question of what kind of trade. Is it trade with restrictions . Distortede with matter measures . I think everyone would agree we do not want distortion. We want trade that is open and fair and inclusive in order to facilitate opportunities. The u. S. Appens if decides to label china a currency regulator . Thatwould first observe what has been decided on day one has not been decided. Believe is an assessment of the currencies currency values on a broad basis. On a global basis. You cannot just identify one particular country because the whole system works together. When your currency goes up somewhere it goes down somewhere else. I think that the assessment of currencies should be conducted in a very cohesive manner. We have tried to help with that and we will be releasing a report in july. What are your concerns apart from these bigger zeitgeis concerns . Do you worry about that policies . Outcome ofabout the the elections thursday. What the economies do not like and what the investors do not like is uncertainty. The track record in the last two months has been the realization of unpredictable results. That leads to a. Eriod of uncertainty now. What will be the new politician in germany . What will be the consequences of brexit . And the sooner those results are known, the better people can plan their lives, their investments, their location of business and so forth. Could we see the end of the eurozone . Or far leftht candidate would be president of france . I certainly hope not because the eurozone benefits and costs with its pitfalls and Unfinished Business is just an amazing construction that have brought together countries that were at each others throats for many years for. It is not perfect, clearly. It needs to be improved, clearly. It needs to benefit all countries. It needs to be differential and respectful of the culture, of the attributes of societies. It is a construction, intruding to a lot of additional welfare in those societies. Mark russian president Vladimir Putin is meeting with u. S. Secretary of state Rex Tillerson and the Russian Foreign ministers at the kremlin. This is according to the kremlin spokesman. There were doubts that putin would meet with him because of displeasure over the stance of the u. S. In the attack on the Syrian Air Base by the u. S. In recent days. This is bloomberg. Vonnie russian president putin is meeting with u. S. Secretary of state Rex Tillerson right now at the kremlin. This is the kremlin spokesperson. We will bring you the News Conference as soon as it begins. This is bloomberg. Attention homeowners age sixtytwo and older. One reverse mortgage has a great way for you to live a better retirement. Its called a reverse mortgage. Call rfree information kityour with no obligation. It answers questions like. How a reverse mortgage works, how much you qualify for, the ways to receive your money and more. Plus, when you call now, youll get this magnifier with led light absolutely free when you call the experts at one reverse mortgage today youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree cash from the equity in your home. And heres the best part. You still own yohome. Call now take control of your retirement today live from london and new york, this is the european close. I am mark barton. Vonnie quinn is with me. Lets look at where stocks are finishing. One of the geopolitical concerns . We have had two days where we have been completely f up by one quarter of 1 . Utilities were up to a high. Agencies todayc in u. K. Were wages, job data. Adjusted for inflation, regular the threeust. 1 in months through february. That is the weakest figure since the First Quarter of 2014 which brings me to this chart. Annual wage growth excluding bonuses at 2. 2 . The blue line is inflation. 2. 3 . This shows you the problem the in future be having months. A squeeze on real pay, falling pound, rising inflation and average pay at best flatlining and in reality coming down from the highs we saw at the end of last year. Something to watch. Gold has been a haven in recent days because of physical concerns. It has broken through its moving average, highest level since november. It has fallen to 11 month low in december. We had a sound off between the u. S. And russia. We got the french president ial elections as well. Thrown into the mix, another slumping intold the Fourth Quarter after trump promised tax cuts and more infrastructure spending. This is the fed also pushing gold lower. All of that has changed. Something gradual hasnt spooked gold investors. Re up to that is gold futures. The big thing in china was inflation data. Close to the quickest pace since 2008 last month. , putting back slightly from february, putting back the inflationary boom. Profits to corporate and industrial profits, ppi, from 7. 2 to seven point 8 in february. Versus. 8 . The rebound is helping company profits. The forecast moderates incoming courses. As below yearearlier figures fall away. That was the big piece of data out of china today. Vonnie the Canadian Dollar giving up most of its games now. It is stronger by just about one governor is seeking a rate cut but it is not on the table at this time so it is too early to say if canada is sustainable. Met earliercanada and kept Interest Rates unchanged at one half of 1 for the benchmark rate. They took down the forecast for 2018 although they listed several forecasts for this year. Once again at 1. 3273. Abigail doolittle has a look at market volatility. One of the biggest stories in recent days has been the spiking rise in volatility. It is up on her days in a row. Seen lastlevel last november right around the time of the election where there was lots of uncertainty. They were coming out of this complacency period we have been in. That is the vix, the fear gauge over the last two years. In blue we have the 200 Day Moving Average and in yellow the 50 Day Moving Average. The vix rely has popped right above those. Spike mondayuge with the china selloff. We also see it in the macros around brexit and also around the election. We are seeing Katie Stockton, head of technical analysis, she just put out a note saying she believed that with the vix above the 200 Day Moving Average it means we will have to continue volatility in the days ahead. She thinks that we could actually see some continued bearish action. Btv 6961. Erg, we see this is the s p 500 in relation to moving averages. Averages, we see that it is rounding down. That is somewhat bearish. But the point of stockton is that we see the s p 500 below that 50 Day Moving Average. Something that Katie Stockton says could move down to 22. 80. Happened times this the other that 200 Day Moving Average in orange. There could be a pullback ahead if the s p 500 is unable to hold that moving average on the close mark. Mark that is it for the Global Economy. The wto says it would expand by 2. 4 in 2017. The nearterm economic and policy to element. For us now from geneva, roberto azevedo. Director general of the wto. Thank you very much for joining us. First off, what is the driving force behind this potential pickup in global trade in 2017 . I think gdp growth is expected to do better. We are protecting a 2. 7 expansion of the Global Economy this year, 2. 8 next year. Those numbers are better than they were before. They will help us pick up the trade numbers. But also, a little bit more harmony in Global Expansion of trade. I think right now all regions are looking better. We had moments when the economies were doing well. Then, the opposite. Now, everybody seems to be in synchrony a little bit more. Also a number of indicators like a container port, through port, freight, orders, air freight orders, purchasing orders, all of those numbers are up. There are no more things that can bring us to a reasonably alternate moment at this point. Mark there should be a little star next to your forecast because there are caveats. In order of importance, what is the greatest risk to the forecast. Anything that makes investors think twice. It is a big risk. That includes uncertainties in terms of fiscal policy, monetary policy, trade policy as well. That can be a good risk or bad risk. Anything that makes the investor hold on and see what happens before he actually puts his resources on the table. All of those things have an effect, including geopolitical nations which we see around the world. It is a very large number of things including elections. There will be elections coming up in europe. There were the elections in the u. S. And the new administration is still sorting out the Economic Policy and trade policy. All of those things play a role. Mark the new u. S. President , donald trump, has expressed protectionism sentiment. Firstly, have you spoken to donald trump. Secondly, are you concerned he could withdraw from the wto . I have not spoken to presidt trump. In fact i am still waiting for the confirmation of the new United States trade representative. That is my main interlocutor. I would like to have that conversation but we are waiting for that. I dont have any indication that the u. S. Is even thinking about withdrawing from the wto. Mark are you pleased, though . The rhetoric during the campaign was protectionist. Since then he softened his on nafta, he has pulled out of the tpp. Pleased that there still seems to be a big disparity between the tone during the election and the reality so far . Been saying for quite some time that there are there is a lot of speculation. The United States and the president expressed a number of concerns. They expressed concerns about unfair trade, concerns about agreements which were negotiated before. Apparently they felt they were not fair. The expressed concerns with distortions introduced by other governments in the global markets. That, i always said, is ok. They are not the only ones having concerns. The question is what kind of policies will be put in place to deal with those . That will be the major task. Wto, a we have, in the number of tools that members used to address what they have. I think in trade the devil is in the details. We have to see a little bit more of that kind of policy to determine what kind of impact it will have on world relations. Mark i must ask you about brexit. Process is the underway, one of the key questions is, how soon before the u. K. And the eu move on from the exit deal and talk about the trade deal . When do you think that portion of the discussion will begin . How fruitful do you think the conclusion of those discussions will be . It is difficult to tell. How the process is going to evolve, it is clearly a bilateral conversation between the eu and the u. K. The wto has no role whatsoever. We come into play once the conversations between the two sides have been concluded and the two will present the wto members what they believe their commitment should be, these are the the other members. Role. Then we have no my hope is whatever the outcome we are going to have, it will allow for a transition that is smooth and will not cause turbulence in the Global Economy. The turbulence is something we do not need at this point in time. Mark thank you so much for joining us today. Roberto, general director of the wto. Vonnie lets check in now on the bloomberg first word news with courtney donohoe. In russia u. S. Secretary of state Rex Tillerson got a chilly reception today. Russian foreign minister Sergey Lavrov accused the u. S. Of carrying out an unlawful attack against syrian forces. He is referring to the u. S. Attack on the base last week. In retaliation for chemical weapons being used on syrian civilians. Tillerson says the two sides have large differences what that the talks could narrow the gap. In the u. S. White house, press Secretary Sean Spicer has apologized for claiming that adolf hitler didnt use chemical weapons. I would ask for. Give us, to understand that i should not have tried to make a comparison. There is no comparing atrocities. For folkslid time enjoying part of that. You know that a lot of people who dont know you wonder why you would do that. Spicer was ridiculed for drawing a comparison between the nazi leader in syrias Bashar Alassad. He failed to look knowledge the germans killing of jews with poison gas. In the middle east, saudi arabia will probably support extending opec production cuts into the second half of the year according to a person familiar with the discussion who says a final decision has not been made yet. Opec and russia are hoping the cuts could lead to higher oil prices. 50 and 50 atween barrel since late last year. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am courtney donohoe. This is bloomberg. Vonnie courtney, thank you. Coming up, time to drain the swamp . The latest on President Trumps move to reshape the structure of the federal government . That is up next. This is bloomberg. Mark live from london and new york i am mark barton. Vonnie i am vonnie quinn. This is the european close. President trump ahead of his lead meeting with the nato chief, moments ago the white house released actions designed to streamline the structure of the federal government. It starts the president s pledge to drain the swamp. Joining us now, one of our white house reporters. Shannon, explain to us what exactly is in this action . It is intended to be the start of a Campaign Promise to drain the swamp. But like repealing obamacare it might not be an easy as easy as the president is anticipating. The first step they are taking is an executive order which is sort of an open call for suggestions about how the government could be reorganized. The head of omb says he wants to start with a fresh, clean slate. A blank piece of paper and really think, if we were to rebuild the federal government how would we rebuild it . Are there agencies that could be broken up . Are there things that could be moved around within the federal government . Things that can be made bigger . Really, just an openended invitation for people to start thinking within agencies and the public about this. Our issues getting conflated here . We talk about training the swamp. Mick mulvaney is looking for cuts across all agencies and when you actually look at the percentage of people involved and working for the fel government, it is miniscule in coarison with the population, Something Like two poin Something Like 2 . The latest numbers i saw were around 3 million. But that is across the entire federal government. There are some of these agencies that people might not realize have tens of thousands of workers who work for them. Treasury or epa or department of education. They do realize that the government does have a place and there are some functions but they definitely believe that there are inefficiencies and there always they can make it more efficient. They wouldnt give any numbers as to how many people they could be reduced from the government. I say there are areas that could be bolstered like National Security but in general they envision a government with fewer assumptionuse of the about a lot of inefficiency are in the government right now and the way they do things. K what is the first pack pushed that going to be in congress . Excellent point. They control the purse strings. They will set the budget. Thet of these functions in government and employees and jobs have been created because of legislation that requires the government to do certain things. To the extent that they want to do Something Like move an agency out of Energy Department and put it into commerce, that may apply to legislation because the reason it is in legislation best in energy in the first place is because of legislation. Meetingll us about the between the u. S. And nato partners coming. I suppose it comes at a very sensitive time given syria and relations between the u. S. And russia. Not to mention north korea which is not part of nato but it is another tension on the global front. Two weeks ago, when we look at the tension globally it was a different story. Desire from strong members of nato and our allies to know what is this president s position on russia and syria . President said i dont want to telegraph these things publicly, put my cards on the table for people to know. But among his allies he needs to bringingng some some clear policies so they can craft their policies. That is one of the most important things. Everybody can get on the same page and understand what the trump doctrine is starting to shape up to be. Obviously it could change but where are we at right now and where a things taking shape . Vonnie shannon, one of our white house reporters. They do today President Trump and the secretarygeneral of nato will hold a joint News Conference. Atwill be live on schedule 4 30 eastern, 9 30 london time. Also, Rex Tillerson, u. S. Secretary of state meeting with russian president Vladimir Putin right now. Tillerson and Russian Foreign minister Sergey Lavrov. Chartsattle of the coming up following bloombergs interview with the imf managing director Christine Lagarde. We take a look at growth around fed timing. Rsus what a battle in store. This is bloomberg. Mark time for our global battle of the charts with a look at some of the most compelling charts of the day. We will related to you the investor. Access the chart by running the function at the bottom of your screen. Ati am looking today financial conditions. Chart,u can see in this we are coming down a bit so conditions are tightening over the last year. Financial conditions in the u. S. Have basically eased to the equivalent of 125 basis points at rate cut. The blue line shows the actual fed fund raising. Over the last year they have raised that by 50 basis points. Right nowoints a day in between what the fed has been trying to do and what it has actually gotten so this is one of the reasons why if we see another pickup in the stock market you may see a faster fed tightening. They dont want to repeat this experience when they were tightening the fed funds and yet financial conditions were not tightening at all. That is something they are watching. Mark where can we find that chart . Btv 738. G vonnie i saw matt basel are walking in and i got deflated, but actually i was excited to see his chart. You just interviewed the wto secretary, he talked about synchrony. But here we go. Three lines. The purple line is the emerging economies around the time in the United States and we are looking at economies moving much better than developed economies. They were advancing at pace with while emerging economies were much better than that. Now we are getting what he called synchrony, at least in terms of forecast where emerging economies are not doing as well as Global Growth overall. Backopment Companies Take what you call it when you are racing the baton . Anyway, the point is it looks like some synchrony but at the same time subdued Global Growth. Bloomberg. On the always drops the baton in the relay. I love the chart and i love what he was telling about the fed. Its mistakes the back in history but do you know what . Played to my eagle ego. It toust going to give her because of my wto interview and also the fantastic interview with Christine Lagarde. Do come back. That is a very important chart but vonnie is the winner today. Look at where European Markets and it today. Arey of gains, investors shrugging off their geopolitical concerns. Stocks rising to its highest level in 16 months. More decline in london, gain in frankfurt. Vonnie it is noon in new york, 5 00 p. M. In london and 12 00 a. M. In hong kong. I am vonnie quinn and welcome to bloomberg markets. From bloomberg World Headquarters in new york we are going to take you from new york to washington and moscow in this hour. Here are the top stories we are following. Russian president Vladimir Putin meeting right now with u. S. Secretary of state Rex Tillerson. He is also met with Russian Foreign minister Sergey Lavrov in the kremlin. This is according to a government spokesman. Russia pushing back against demands that it abandon syrian leader Bashar Alassad over a chemical weapons attack. In markets, u. S. Stocks are edging lower for a second day. Over a backup of mounting political tension. Treasury secretary Larry Summers says he sees more room for downsizing for downside and upsides