We are in rich territory. Unless you do something bold, we are running into real serious problems. David plus Companies Report , earnings and the leaders take us behind the numbers. We have been demonstrating the quality and power of this platform. Not yet firing on all cylinders were comfortable with how we came out. David it is straight ahead on bloomberg best. David hello and welcome, i am david gura. This is bloomberg best. Your weekly review of the most important interviews and analysis from around the world. Lets start with a day by day look at the top headlines. Even before the trading week started, all eyes on the first round of the president ial election in france. Francine now we know it is definitely macron versus le pen. They would be about 22 24 . There were contrasts drawn between the two of them, but certainly the gladness of how each candidate thought they performed is coming across dramatically. Francois fillon said, the defeat is mine, only mine. There is only one choice to make for the runoff is to vote against Marine Le Pen. Even the republican candidate acknowledging his defeat and calling to vote for macron. I think this is a strong result for europe. There is a lot of skepticism still in europe, especially from investors across the u. K. And the u. S. We are learning three things. Democracy is alive in france and first, europe. Second, europe is winning, and macron is propopulism pro europe. Populism is losing. There is little chance that Marine Le Pen can become the president. It is a probability that is in the low Single Digits according to our models. Both establishment parties were eliminated in the first round. Macron and le pen will face each other on may 7. Both offer radically different visions for the future of france. So we have had this relief rally in the eurodollar, higher up 2 , higher up by 3 . The question for markets, two weeks to run. Will the french do as they have been told, to get behind macron . Go to the center. Yes, they will. It would be nice at this point if we can stop saying that we cannot trust the polls. Clearly, we can trust the polls. This is the fourth, if not fifth time in the row in a row where they have called it exactly right. Viewve rather taken the that there i say, the Political Risk has been overstated over this election. It is a banner day for for u. S. Stocks, for all really, after the first round of the French Election is said and done, macron and Marine Le Pen prevailing. Which is kind of what people expected. That is the crazy thing. Huge moves despite the results coming exactly as polls anticipated. Are you surprised at the degree to which risk assets surged around the world on a result that was pretty much in line with what the polls suggested . It was a strong day. My rate of the day is investors took this sort of relief as a over the French Election as a chance to buy opportunities that emerged last week with the earnings season. If you look at the leaders, it is financials and industrials. This is the two sectors that led reporting last week, they are beating expectations and guiding higher. Politics is definitely having shortterm impact on the market, but the longerterm trends are still intact. Alyx trade wars could be back. You have the president putting a tariff on canadian soft lumber. Why go after canada when you have worse offenders in the market . It is their turn. He is moving ahead with things that have been in process for a long time. The softwood lumber debate has been going on since 1981. Basically, canadian lumber producers harvest timber from government land. It is largely private land in the u. S. And the u. S. Has long charged that they charge less than they should for the lumber that is harvested and it is an unfair subsidy. The two sides are at a point now where the u. S. Lumber producers are asking for tariffs. They are getting it. What is the message for those for government officials in capitals like beijing or mexico city . How should they interpret what happened today with canada . We have been saying and proving that this administration is much more enforcement oriented than the prior ones. We have been bringing lots and lots of cases. This is our second billion plus dollar fine just so far this year and i doubt that there has year where there is ever one in a whole year, let alone two, in a couple months. Enforcement is very much on the forefront in this administration. We are going to take it to court and we are confident that as has been the case everything we are going to win. Vonnie [applause] vonnie the Trump Administration wants to put forth the biggest tax cuts in reforms in u. S. History. We will lower the business rate to 15 . We are going to repeal the alternative minimum tax. We will have a onetime tax on overseas profit. With the implementation of the new tax the debt tax would disappear. The white house essentially released what is in many ways a mirror image of what donald trump released as a candidate on taxes. There are tweaks from the campaign. He talks about repealing the estate tax, the amt, and the Corporate Tax rate of 15 , which he proposed in the campaign. A lot of these goals are shared by republicans in congress, the big Sticking Point is how it is paid for. Kevin the key moment is when gary cohen said there would be attacks from the left and from the right. The question becomes, politically speaking whether or , not they will be able to unify the Republican Party in order to advance goals. If you are trading on this tax plan, you have to think if not what is just in the plan, but if it can actually pass it. They can. The way it is outlined right now you cannot increase the , deficit after the 10 year window by cutting tax rates if youre going to use the reconciliation process they plan to use to get it through. This is not even possible is part of the problem. It is the beginning stage of what is expected to be a long and brutal slog. Tax reform is like an airplane that just about hit the runway, it has not taken off, it does not have a destination. The plane has not even been built but we do have design ideas from the white house. Bank of japan is the focus as well. They kept stimulus the same. The inflation forecast is a sign of exit monetary easing remains far off. No change no change in policy no change in the negative , rates. It is 0. 1 . No change in yield control. Keeping the 10year yield anchored to zero. No change in the amount of bonds it will buy. What did it change . Fiscal year two dozen 17, they had been forecasting 1. 5 and they reduced it to 1. 4 . Mark it was decision day at the ecb. The central bank kept their Stimulus Program and rates unchanged. We are talking about degrees of dovishness. Was this slightly less dovish . Slightly less than last month. They said the risk had diminished further. The other dovish elements in my mind said, if financial conditions prove inconsistent with the view or balance the risk for inflation, we are ready act again with increasing buying, what does that mean . You are rising too much or bonds yield rising too much, so they are immediately putting out this element of dovishness down the road. Jonathan it comes across the bloomberg terminal, gdp analyzed coming in annualized with a significant downside surprise, 0. 7 is the read. 1 was the estimate. 2. 1 would be the previous number. Quarter on quarter comes in at 2 . In line with economists estimates. The employment cost index comes in at 0. 8 . The survey, the medium estimate was 0. 6 . The headline number softer than anticipated. 0. 7 . The median estimate was a full percentage point. It is weaker than thought, but not the worst case scenario. If we just look back over the past five years, First Quarter of the gdp averaged 0. 9 . There is 2. 4 for the remaining three quarters. There is something wrong with the First Quarter gdp. Quote stan fischer, he said there is something going on with the data we do not quite understand and i think that is true. It is a negative surprise, i am not worried. Here is the good news. Going into the Second Quarter, the headwinds of consumption and also inventory is supposed to reverse. You are supposed to have business investing, particularly in gas and oil, and you put it with a backdrop of decent global growth, you could get a Second Quarter gdp at 3. 8 and that is what Morgan Stanley is forecasting. David still ahead as we review the week on bloomberg best investment insight from howard marks, and exclusive conversations with two leading entrepreneurs in china. Earnings from amazon and alphabet and europes biggest banks. Up next more of the top , headlines, wells fargo shareholders make themselves heard at a raucous annual meeting. Standing up and saying, i am not going to sit down and i want would like to hear from these Board Members. David this is bloomberg. David this is bloomberg best. I am david gura. Lets continue our global tour of the top business stories. Wells fargo executives dealing with repercussions of an account scandal at the account at the annuals meeting the board of , directors felt the pressure. After a Shareholders Meeting in florida, all Board Members narrowly survived a vote to remain in position. Support ranged anywhere from 53 to 99 in the wake of the phony account scandal. Give us a sense of just how raucous it was. This is not your typical shareholder meeting. Not at all. A some point it was quite contentious. It was a must three hours long in the first almost three hours long. The first interruption we have was by a man named bruce marks who works for an organization that works with homeowners. He is standing up and saying i am not going to sit down and i would like to hear from these Board Members on what they knew about the scandal and when. From there we had four different individuals who again interrupted the meeting along those same lines. Are the questions you had going into the event answered . Not really. We are still wondering, what can the board do. Some of these Board Members got such low votes of confidence. Four of them didnt even make it out of the 60 threshold and for the remaining of them, only three got above 90 . That is really low. Vonnie submitting a revised takeover bid for a dutch maker now at 29 billion. How much of an improvement is the offer . Is a decent bump over there previous offer. This is the third time they have come back. This is about 8 above the last offer. As you say, almost 29 million, so it is a big deal. Mark give us a sense of a kind of pressure the chief executive is under to negotiate with ppg. I think a huge amount is the easiest way to describe that. They have been extremely resistant, dare i say entrenched in terms of the way they have responded to this. That is to say, we are not interested, go away leave us , alone. The argument to the shareholders is, if you hold on and let us to the separation of the business, we will create more value for you. Overall do not take the ppg offer. It looks good up front, but over time, we will give you something better. Vonnie the big deal in the luxury space. A french billionaire moving to consolidate control over Christian Dior for about 3. 2 one of the biggest billion. Transactions ever. Buy Christian Dior, it is a big paycheck. They make the Fashion Accessories and handbags and clothing under the dior brand, it has actually been separated from the perfume and beauty business since the 1960s. With this deal, they are bringing those together under the umbrella of one company. By doing this, he is hoping they can find synergy and have a greater impact and seek financing more easily. Marine le pen stepping down as head of the front party. She says she wants to campaign for president as an free candidate to represent all to represent all the french people. What do you make of the fact she is stepping down . She is trying to broaden her appeal, but will it work . I would not be reading too much into it. As you say it is an attempt to , broaden appeal. She wants to present herself as a unity candidate for all french people. Obviously, given the history of the National Front that is going to be difficult for her, but this is a symbolic effort by her to recognize the fact that there is baggage that goes with the party. China saying it will maintain what it calls prudent policies after the economy saw a unexpected pick up in the First Quarter. This is according to the agencies reporting on the president xi jinping. What do you make of it . It is a strong signal that they will not be stepping back. There is a view that the growth was so good in the First Quarter that it may have peaked. When you look at the congress at the end of the year, authorities are saying they are going to ensure fiscal and monetary to keep growth on track. We heard similar amounts lately that the economy is on track to to meet the 6. 5 target. The message is they are letting economy softened from here. There is a major showdown brewing in washington. Cracking open the Net Neutrality debate. Federal Communications Commission chairman unveiled his game plan for rolling back the neutrality rules in the nations capital. This is going to be a political debate that will engage millions of people. We are going to stay focused on the facts in the law. The facts are that americans by and large believe in a free and open internet but they also , want to have nextgeneration networks to be built out. I think what the fcc does not need is heavyhanded regulations that saddle businesses with a lot of rules that this incentivize them disi ncentivize them from Building Networks and that will be the course we are charting. It is a dramatic reversal from a few years ago when there was this fight over Net Neutrality, the Tech Companies won that time. There were strong supporters of Net Neutrality and you had come Companies Like comcast at t and so on , who lost. This time we have a new administration and they are getting their way. Mark the e. U. Warning the u. K. That the remaining 27 countries are its chief concern as it seeks to limit the negative consequences of britains departure. European ministers signing off on the guidelines that will form the basis of talks. Is this the e. U. Toughening their stance toward the u. K. . That is a way that some people are interpreting it, because the negotiating guidelines that European Affairs ministers signed off on today here in luxembourg do make some explicit demands in relation to financial services, in relation to the rights of e. U. Citizens in the u. K. And british citizens living in the e. U. , and also with regards to the bill that the u. K. What have to pay on leaving the e. U. The , brexit bill. What the leaders are going to sign off on on saturday, are general principles for the e. U. Going forward. Detailedl then be more negotiating mandates and the real negotiation will not begin until after the u. K. Election on june 8. Alix president set to sign a memo ordering wilbur ross to determine the impact of rising aluminum imports, which could lead to curbs on imports. It is the second such investigation the president has initiated this month. Why is this happening . Why is the investigation happening . It is a lightning rod point for the former Trump Campaign and now trump they made it clear administration. That steel was in their sites during the campaign and then they talked started talking about aluminum and wilbur ross made it clear last night that they were looking at trade issues that seemed to have a lot of focus or maybe a bit of uncertainty and aluminum is very much one of those topics. Speaking to analysts and traders in the market, they are uncertain there might be much to come out of this. People are quick to point out that these 32 investigations, nothing really happens on the other end. David welcome back to bloomberg best. I am david gura. Markets around the world enjoyed a rally after the first a relief rally after the first round of French Elections, but what is the outlook for the longterm . Erik schatzker sat down with Henry Mcveigh to get some and howard marks to get some expert insight. Lets talk about european growth. Based on what you have seen, why is it surprisingly positive . The biggest single factor we , do a lot of quantitative models and on the Ground Research is just the Monetary Policy. When you look at the ecb with zero interest rates, that has a huge stimulus effect on the economy. We saw a similar picture in the u. S. A couple of years ago where Monetary Policy was moving forward but there is no cyclical , ignition to drive the growth until housing picked up. That happened in the u. S. And in europe right now, we are seeing house prices go up, not a lot of Consumer Lending activity. The transition investors should look for is for Monetary Policy to the cyclical parts of the economy including housing. , right now, Monetary Policy is dominating, our base view is if the cyclical components will pick up. What about fiscal policy and structural change . We lived through gridlock in america at a time of monetary stimulus. Are the europeans doing a better job of governing . I am glad you asked. Another thing i think is missed by most people is that in 2012, the fiscal austerity was 150 basis points drag on european growth. European growth is not ever going t