Franchise. We have a rate increase, maybe two more. Ramy and brexit, the date of decision draws near. It will be a shock if we were to leave. There is consensus on that. There is the freedom to find new markets in the world and take back control. Ramy it is all straight ahead on bloomberg best. Ramy hello and welcome i am it ramy inocencio. This is bloomberg best, the most important review of analysis and interviews from around the world. Lets look at the headlines, we start in the middle east. Bloomberg has been reporting on saudi arabias plan to diverse if i is economy and actually reduce its dependence on oil. Diversify its economy and ask a its dependence on oil. Jonathan all eyes on saudi arabia, the economic shakeup has been led by the deputy crown to go mohammed, trying away from the decade of crude reliance. Take us through this blueprint. What do we know so far . We are talking about the biggest economic shakeup since the kingdom was founded in 1932. They will list the company, take the money, the sovereign wealth away to goould use away from oil, increase subsidies, taxes. Mark looking at the oil revenue are employedd 2 3 by the state sector, is this a little too late . We will find out in the next time. There is round for hope, not all of them great ones. One of them, they all understand it will cost the royal family, but something has to change. It doesnt be extraordinary. It does appear to be extraordinary. They pull that back in, that is another area. This is still a monarchy, and of the king wants something and the sun wants something, they can push through. Apple shares slide as the World Company grapples with slowing demand for the flagship product, the iphone. We knew they were declining for the First Time Since 2003, but they still got some analysts off guard, and there could be another decline this quarter. What are the takeaways . Of revenueit is 2 3 for the company. Emily and is saturating and still growing at 7 . Apple. Have shrinkage at this is increasingly a seasonal product story, secular growth taken away. The real concern, and the reason the stock, the margin number was disappointing. You wanted to stay high, but they are coming down. A serious realignment of the market and apple is suffering from it. The smartphone i have is sufficient, i dont need upgrades that often areas i have a big screen. I will keep it as long as i can. That foretells a very different future for apple. It is good that services group, because that is opportunity. I dont agree with bob. Overlooking how tough the compare was with a year ago and the huge worst off the large burst off the largescreen iphone. Will we see a burst of new innovation that will motivate people to get back on twoyear upgrade cycles and get the more excited, and one other factor, can apple keep drawing, converting people from android, which they are not doing in europe. , no change in Interest Rates scarlet, but the federal open Market Committee drafted a policy statement with a somewhat hawkish tone, and that is a surprise. Gone is the reference to risks closed by global and economic financial developments which the fed used to explain its decision not to change policy back in march. Translation, the fed is not as concerned about the external risks to its outlook and the focus is back on the domestic economy. Was this up hawkish or dovish statement . We thought it was dovish because they may set themselves up for a june hike. They clearly did not do that. And i think there is a sort of more subtle reading of it that the committee seemed quite that they have underpinned the risk Asset Recovery since the last meeting. That is why the june hike, people talked about it, it is so unlikely. To be banished from your mind. To be learned anything about what the fed is going to do . It is much i do about nothing. Ado about nothing. A mentioned june. That is the long bond for the u. S. , but we did not learn much. We will learn more over the next month or two as long as Global Equity markets are stabilized. That is the key for yellen. She has assumed the role of global banker in the last two meetings, indicating global, not just domestic risk markets, are critical. This may stabilize the stock market and bond prices. The commentary about artificiality of yields and financial impression that has gone over for six years now. Through, andmped they kept its Stimulus Program unchanged. There is large downside risks, half of 1 . The thinking is that governor kuroda wants to see what it will do his economy and the bank longerterm. That is right. Governor kuroda in the press conference underscored the fact that there is more that can be done, and he will do more as needed, including with negative rates. But they just took back in january, and he wants to give more time to have an impact in the economy. Clearly a wait and see three he did not prepare the the markets on this when he took action this negative action in january. Francine they dont want to be dictated to. It certainly looks like that. He does not mind surprising the markets. He chooses as a weapon or other things discussions, in the background which we dont know, we simply cant say which way or the other. He does not seem to be gearing very much about preparing markets, preparing the public. He is not using one or the two of central banks. Oil huge story, oil hitting the highest since the timber, exxon mobil with quarterly profits the lowest it has down 3 . Cents 1999, it still ahead of analyst estimates because it cut capex by 33 . Cuts in theeen big First Quarter. Will be the legacy of these for the what will be the legacy of the company with the hiebert Service Replacement ratio . We have the right thing for the longterm. The pullback in investment is going to affect the servant replacement and the production down the road. They will go flat to the end of the decade. Even hitting the target will be difficult given the pullback in investment. Jonathan Cost Management has been terrific, bp a great example. , 18 month low. How does that set you up if you want crude. We will go higher into the year and, and we will still see 16 on a barrel at the end. But the price, saudi arabia is no longer trying to price this out in the various quarters. Ramy we will have more earnings highlights later in the program, including mixed results from European Banks and bold words from tmobiles ceo. More news on the summary. This is bloomberg best. I am ramy inocencio. So many headlines, lets keep moving on the world tour of top stories, starting with statistics from asias locket secondlargest economy, japan. Japan is increasingly working for shareholders unlike any other. We are talking about the nations dental bank. Central bank. It is a top 10 shareholder in about 90 of the nikkei 225. Bloomberg colleagues dug through messages, and wow. That is the reaction. The policymakers in japan dont disclose how them buying etf translates into individual stakes in individual companies. The fact is we can estimate, and that is that we have done for their own record, regulatory findings by companies and also etf managers. It is state capitalism from a new direction. In the old days, governments now to own companies, and we have other things where they have privatized on the one hand, others talked about a strategic direction. This is not strategic. This is buying them and ending up with it. It is a very weird new version of the bank of japan capitalism in its own way. Scarlet drugmaker valeant is getting a new chairman and ceo as the other one leaves to help execute a turnaround after a series of scandals last year. Is this about leaving, or is he really up to the task . Pair ago, when you seeking go, he had a perri pretty spectacular run up until april last year. Shares gained. That is pretty good for any ceo tenure. But i got embroiled with really nasty takeover fight with myelin , made promises to investors, then they said they would cut their forecast. Theyg a charge on a deal finished up last year. And the stock is down by half since reading that august peak. So with a momentum he gained in the first part of his tenure has not been maintained over the last 12 months or so. Had on,your fantasy ceo whatyou think hat on, you think his first task will be as ceo of valeant . Drew restoring credibility. You need to say, i got this, Financial Reporting on time, it will be transparent. You will know what is in this business. D. C. And has 18 37 billion contract to build 12 submarines for the australian navy. Has won a 37 billion contract. Biggest ine australian history and the biggest upgrade of the navy since world war ii. 2800 jobs and also the heavy use of australian steel. The contract is also big the contract is also big for talon. I think the french government and the Australian Government created the Proper Development for this. , andve created of Bridge Industrial bridge between australia and france to begin confidence to both parties. Mitsubishi motors has itted falsifying emergency emissions tests back to 1991. They are now investigating up to three months. Thepresident apologize for scandal, which has wiped out half of the market value since last week. Can the Company Survive this scandal . Speculative has turned to a couple of scenarios. One is a buyout and the other is a bailout. Thethe buyout, there is possibility a chinese company, maybe an indian carmaker, a domestic japanese business. The forecast is not good at all. Of the smallest carmakers in japan, so it is unlikely that part of the business would survive. Yahoo shares are slightly lower after announcing star board getting new directors. Is this a surprise . No, this was the option we all thought would happen. Star board was running a proxy contest and they wanted to replace all or most of the board of yahoo . That would have been miserable for everyone. Happened, thee field process would have run, and then they would have picked a winner. Star board would have started this again and they would have to begin again. Sense. Makes it is for Board Members out of 11 who will be on the board, they seem to be supportive of what is going on and the sales process can continue. Scarlet and there was a statement after this announcement that said, this revolution will allow us to keep our focus on the issue important objective. We look forward to working with the entire board, including new directors to maximize shareholder value. Jeff if verizon wins, they will probably get rid of marissa. Tim armstrong would run the whole thing. They may be the one party willing to pay the most to do it. There are some big health and pharmacy deals that came out. Abbott laboratories has agreed to buy st. Jude medical at 25 million. And at the will buy stem centrex. Carol what do you think happened . It begin with the thing up and down. It really got slow. Today is a pretty busy day, health care is leading the way. That is not a surprise. With the obamacare and the push for consolidation, you will see more companies whether we are talking about arma companies or Device Companies or insurance and hospitals. Something will keep happening. Carol that is like top of mind in the health care. Nopi and astrazeneca will get aggressive. This will be in play for a while. Comcast plans to buy dreamworks animation. It is a 3. 8 billion price tag, if you percent premium over dreamworks last close. Could this be a rich valuation . Comcastestion, it is who is doing it. Beenworks animation has for tailed it for years, and what bankers and advisers in the industry have told me for years, Jeffrey Katzenberg to not want to give up the business. He wanted to run any company post sale. He is giving up control of this business by selling it to comcast. This is a huge multiple for this company. Less multiple however you look at it. One thing that makes it appealing to comcast is the theme park connection. Scarlet yes, kung fu panda and shrek will be at universal studios. X they also make how to train your dragon. Tie into kidsar movies, this was appealing to comcast. Ramy you are watching. Oomberg best i am ramy inocencio. Investors wrote the roller coaster this week as Companies Release the quarterly reports. There is the big beefs and major misses. Afterebook shares surging hours. Start jumping as much as 9 in extended trading, better than expected revenue. And positive engagement metrics and steady growth in daily active users. The Biggest Surprise was the proposal for a new class of stock. Mark zuckerberg wants to issue a new class of nonvoting shares to the continued so he can continue to make big bets on Virtual Reality and find his initiative without diluting his inner ship ownership stake. What do you think of this, what does it mean . It means he wants more control in the terms of direction of the company. He is wise to do that. Thatood news, given runaway success, investors will be fine with him taking the reins. This is making it very clear he is in charge of this company and he wants to see some longerterm bet. He does not quit he does not want pressure quarter to quarter. Emily what do you think of this . Are goingn things well, it is a good thing. When they are not, it is bad. I am not sure this is the right thing, but he has earned the right to steer the ship because he is doing it in a great way. Smashing First Quarter estimates rishaad smashing First Quarter estimates. What samsung has done is taking advantage of a lull with the iphone release cycle, releasing its premium smartphone a month early. So far, it seems to be tracking well globally. We will see. The iphone 7 is coming in a few months. How long he can most maintain momentum. Rishaad is this a turnaround . Edwin seeing what apple has shown us, with the pc downturn, we will see things turn a dime in this market. Shares are following three straight years, so investors need some convincing. Twitter shares getting whiffed in the forecast for the second forecast. Dropping 77 million to summer between 690 million. But user increased to 10 million, slightly more than 308 million. Was aboveer number expectations. There was call back from thirdparty vendors it was , so that was positive. They solved one problem i gave us another one. That is large brand advertisers. The how much they spend on the platform. As well as the Current Quarter we are in right now, the they guided a low. Results, shares are surging despite the profit dropping 64 and the route short of estimates. I was looking at the headline numbers and thought why is this dropping so much . To make up the story on the loan. There is a big drop in revenue, 24 on last year. A huge amount of for a company to be down by. The big beat this morning was on the loan impairments. Investors have been very scared this company was growing bad loans as the slowing Economic Growth in asia takes its toll on the banking, which is focused predominantly in that region. It wasnt as bad as expected. Beach onere was also a the Tier One Capital ratio. How important was that . Hard Tier One Capital is of the investors and banks around the world are excited on at the moment. It rose to 13 , and that is a glowed level good level. And they need to support regulatory purposes. The capital dictates how strong the Balance Sheet is and how much dividends the institution can pay when it has finished the Turnaround Program and a couple of years time. We got new First QuarterEuropean Bank earnings, creating a mixed picture for the industry. The chart shows yesterday a beat while bloomberg loan impairments improve. Profits are 25 to 793 million pounds. Analysts were thinking of 346, so something they like. There was a drop but beat thiss, net pound number heavily affected by foreign exchange. Our clays going through this but you have profit down 24 . It is not as bad as it could have been. Investment banks need to hold up better than some of the u. S. Tears. They had a Weekly Earnings quarter, somewhat easier of a comparison. Trading held out, better than expected. There is some negative good news, and a lot of the bad news came from businesses that are exiting. Investors can say, if i believe they are going to get out in a timely manner, i can look past that. Deutsche bank profit declining in the First Quarter, still beat estimates. Profit hit by a slump in trading revenue and the ceo speaking to the bank. How important is this . Of the estimates were ranging very widely, the company is going through a deep restructuring. It is very difficult trading environment for analysts to have much visibility. That is because you have an Investment Bank doing better, but you also have improvement on the numbers are in primarily by local lower legal charges in what is difficult for the bank for many cases, as we saw this year. Also the illusion of capital, inch has investors worried the Fourth Quarter in particular. If you are not generating enough earnings, you will struggle to boost capital buffers. Shery bp has reported earnings. Analysts had expected a loss of 244 9 million. Takeaways fromig bp is they are repositioning business to be Free Cash Flow positive at a price range between 50 and 55 dollars a barrel for oil. That is on the back of the Company Preparing for or six dollars oil. Profitable, to be they were anticipating 60 a arrel next year. To be able to pay the dividend without having any money. What they are doing in this Earnings Statement is saying, we are recalibrating the company so we can make sure we can ensure the dividend for you, even if the oil prices is as low as 50 a barrel. Tmobile earnings out, beating estimates for earnings and revenue. You summed up verizons call and a wrap. How would you sum up tmobile