The three year came in a little weaker yesterday. We have seen a lot of former buyers foreign buyers come into the tenure market. More fed speak. Minnesotaq a at the business partnership. David westin is with us remotely from d. C. David President Trump is meeting with his Business Council, a group put together by Steve Schwarzman. They come together every so often to talk about things like the tax plan. They also speak about immigration and trade. We will go over to the white house and speak with Steve Schwarzman and some other ceos to find out exactly what they spoke with the president about, and can they get this thing back on track. Alix what is one thing they will be pushing for . David i think taxes is clearly the answer. They really want tax reform. If you go around the table with all those ceos, every single one has a part of taxes that they want or do not want. You put it all together that is the big question on the agenda today. As we just mentioned, secretary of state Rex Tillerson is on the way to moscow. The stakes could not be higher missiles atlaunched a Syrian Air Force base last week. Summit in italy, Rex Tillerson spoke out against russia. Next they have allied themselves with they have allied themselves with a poor ally in bashar alassad. Assad has made the russians look not so good. David joining us now on the telephone from the site of the g7 summit meeting is nick wadhams. Nick, you have been there reporting. To what extent did the other members of the g7 summit give support to the United States in this action against syria . I think that really was the point of the g7 summit meeting today. Originally, this meeting was set to discuss ukraine, north korea, and a little bit of syria thrown in. After the missile strikes, this meeting was really about empowering Rex Tillerson and giving him a unified message to bring to russia this afternoon and evening. With not confirmed to meet resident vladimir putin, but it is expected now that that meeting will occur. Toarly, it is an effort present a unified response from the g7 leaders when he goes to moscow. David apparently, g7 may have strengthened Rex Tillersons hand some. What would be constructed to come out of moscow for both sides . When he spoke with reporters, he said that russia has a choice. They can stick with this unreliable regime, or you can join the fold of western nations and play in the future of syria. The obvious implication there is that if you stick with the syrians, you do not get to play a role in determining their future when there is a political transition process that happens later on. David finally, is this something you believe that the administration is trying to put back into the bottle . That they will move back to things domestically, or is this going to escalate . Nick i think this will depend on the response he gets from moscow. Clearly, this is the most important foreignpolicy priority for the government right now. North korea i would say is increasingly becoming a distant second. This is a big thing. When you look at what Rex Tillerson is doing, there is a pattern of escalation here where they say the u. S. Position has not changed, but they are getting much tougher in the language. David nick, they do so much. Alix a pattern for escalation. By jurriened now timmer. Jurrien, how are you factoring in geoPolitical Risk right now . It is something that is usually there. It is by definition low probability and high impact. Iserally, what i ask myself that is the systemic to the fundamental story that my investments are affected by . A couplehen i remember of years ago when russia invaded ukraine and crimea. In europe, that was a systemic thing, but not so much in the u. S. If it is not systemic, then you stick with your more general plan. However, it is important to have a Dynamic Portfolio come a so if there is a shock you have portfolio, so if you have a shock, you have some balance. The markets are really fully valued here, and it could probably sustain a shock less well if was trading at a 15 multiple. Really is not anything new here that investments have not had to deal with for decades and decades. Alix does that sort of match up with what you are seeing in the fx market . The dollar is lower. Where is the jewel Political Risk being factored in for those assets . The geoPolitical Risk has caused quite some damage to the bearish trade. The had been a little too much consensual. Winning fromly is the rising uncertainty. The dollar is doing fairly well compared to the euro. All in all, you have mixed u. S. Economy data come a rising Political Risk in north korea and also in france. Aboutso have questions President Trump. The domestic agenda is quite busy. I think he has lost a lot of it ability with the health care vote. Next, we will be watching the spending bill. The deadline is the 28th of april. There is a lot of risk around. Jonathan in terms of risk, can you spell it out for me . What kind of risk are we talking about . What kind of risk do you see escalating from here . With the situation in syria, it is obviously quite difficult. It is not going to be easy to convince russia to change their stance. Therefore, it is hard to see how that cloud will list very quickly. Lift very quickly. In i believe that will stay focus along with north korea and france. That is a lot to go through. Jonathan does this strengthen the president s hand at home to get things done or does it weaken things . It probably creates a little bit of momentum as was the confirmation a few days ago. For the markets, it really is about the fiscal stuff now. For me, it is a question of whether we get what do we get , when did we get it, and how much of it will be offset by the fed. Fiscal stimulus with a low fiscal multiplier that is offset by the fed that would get tighter, we will not have a lot to show for it. If it is more supply slide supplyside driven, then the fed can sort of state back and we can get on a tract of more sustainable, higher growth. So, we have no details. That is why the market is sitting around. The russell 2000 on the screen here has been going nowhere since middecember. The markets are just waiting. They met the president halfway from november to middecember. The russell rallied 20 in three weeks. Now, they want to see something actually happen. Alix the difficulty i have is that we talk a lot about the geoclerical part of it, but gold is only at about two dollars. It seems to me that what we are seeing in the market is not a commentary on in fiscal stimulus or reflation, but on the fed onher than a commentary north korea. How do you derive the two . I see the you Political Risk as a valuation issue. From the market perspective, it is less able to withstand a shock. But ultimately, economic growth, Interest Rates, the dollar, they are going to be driven by economic fundamentals. Those have been pretty good. We have been on a secret night little upturn for about four months when china reflate it and the fed back off of its hawkish forward guidance. We had been in a pretty good, cyclical upswing ever since. Earnings are being reported now, and it looks like we could see a doubledigit yearoveryear gain over q1 earnings. There. Ind of a low bar vincent, jurrien and both are sticking with us. Coming up, we will speak with citigroups global head of Commodities Research. Coming up a little bit later is david westin interviewing Steve Schwarzman from the white house. The fed chair sort of backs up on supporting the economy, and President Trump will lean on the executives over in d. C. To get them into fifth gear. You are watching bloomberg. Alix this is bloomberg daybreak. I am emma chandra with your Bloomberg Business flash. Toshiba finally reported thirdquarter earnings after missing two deadlines. A 5 twoosted shiva posted a 5. 2 billion loss. The company has lost billions of dollars with its westinghouse u. S. Power business. Lvmh rose shares of to records in paris. Were boostedndbags by its fashion unit. Sales increased 15 . It is the biggest sign yet of a for the luxury industry. Police dragged a passenger off a United Airlines flight that was over both. Authorities say that will be an investigation. Meanwhile, an internal investigation will be for united. United claims the passenger was being belligerent after being asked to leave the plane. Jonathan we are less than two weeks away from the first round of the fred the front election. The twoyear the French Election. The twoyear spread is the highest in quite some time. That spread run across the curve. We are here with jurrien and vincent. Vince, lets start with you. Is this a big enough Insurance Premium head of the French Elections . Probably not. We will see a narrowing in the spread up to the general election in june. If there is an accident, that could blowout. An accident is a second round between mademoiselle the pen and a showdown between the extreme left and the extreme right. We have gone into a fourway race after a remarkable comeback. Within that group of four, the pen within the group of four, you can find six pairs. To tell which pair will make its way into the second round. Jonathan where should the spreads actually be then . I see four basis points on the 10 year. Ofi would say the risk mademoiselle the pen le pens second round in the election is about maybe 10 or fifth 10 or 15 . The market should price it around that. Of course, if that happens, the spread would love, because the policies of those two candidates would strangle fiscal stability and european stability. So, it could blowout. Right now, the markets see it only at a 10 risk. It could get fatter each day. Jurrien, what do you think . Well, a lot of things need to happen as the gentleman said. Between thef is mainstream candidate in a thestream candidate if runoff is between a nonmainstream and a mainstream candidate, it is early predictable that the mainstream candidate will win. Wins, mye pen understanding is that parliament has to call a referendum. Have enoughnot seats in parliament to and it from t to call an exit from the euro, then she has to start there. I do not think it is the end of the euro as we know it. Is kind of the sleeper hit of 2017. Like you ands everyone else. What gives you the confidence win if we do not see le pen that we will see a huge pop in equities and that euro . The s p is up to hundred 82 . It has lied about 150 percentage point behind the u. S. For a number of good reasons. Had one11, we have speedbump after another to put it mildly. Europe is about three years behind us in the business cycle. We are kind of approaching late cycle in the u. S. , the fed is tightening, we are seeing inflationary pressures. Europe is still in the goldilocks sweet spot. You just need a catalyst. If the French Election comes and goes, we had the dutch election which was nothing. The german election will probably not be anything. Once this is out of the way, i will not say that we are going to the moon, but you take away the catalyst in europe. The Earnings Growth is just as fast as the u. S. , but the market has lied in about 10 to 12 percentage points. Jonathan there is voice it seems to be worried about. They are waiting for the French Election to get out of the way. If you want to worry about Political Risk, once france is done, you start worrying about italy. Theres always something out there in italy to worry about. Shortterm and squeeze you could get after the French Election as just that, shortterm . I think so. The italian risk is not until spring of next year. We have some time until we worry about that. If we have a win in the French Election, you will see the relief rally. As i have said, if you wins, it is not quite clear what Parliament Majority he will get in jim. For the next two weeks, i think the markets are going to stay nervous. What keeps me nervous is that 55 you look at the polls, of the people who say they will vote for him say they are not sure about their choice. Effectively, this is the most uncertain election in quite some time. Vincent have and been speaking with us. So, this could be a game changer. Up, a conversation with Christine Lagarde live from brussels. Atch out for that the French Election may come up there. This is bloomberg. David this is bloomberg. Im david westin. In washington, President Trump will hold a meeting with his Business Council ceos. The leaders of walmart, gm, and pepsi are among those expected to talk strategy with the president and his key advisers with taxes likely high on the agenda. Shannon, it is good to be with you in washington. Tell us what is likely to be on the agenda aside from taxes. I thinkeverything the top thing on every ceos mind is taxes, taxes, taxes. We have heard the promises of a lower tax rate and tax reform that will help them. I think all of them desperately want to know what is going to happen with tax reform. Where is the administration lead leaning. I think it will definitely be number one on the agenda. Alix david what does the president want from the ceos . What could be accomplished by this meeting . Early on, the ceo meetings were about listening. The administration said it was very helpful, because a lot of them were uncertain about Certain Industries. So, getting feedback about what people think about a gas tax versus a carbon tax. All of these various strategies you would take as a part of tax reform. I think we may still be in the listening state, but at some point it is going to flip to where the administration really needs these businesses to listen to them. The administration is going to be coming as salesman. We may start seeing that now where the administration will test out ideas on the corporate sector to see how ideas will go over. How hard will Certain Industries push back against certain ideas. David that sales job might be a difficult one. People at the table represent different industries. Those tax reforms could affect them in very different ways. People in the Tax Department say it is so hard to get tax reform done. That 1986 tax reform through took almost a decade of work to lay the groundwork. You have all of these interests. Every industry is going to go back to the senator or congressman in their state and city, you cannot do this. You have to vote against this. All you need is to senators to drop off on Something Like a border adjustment tax which would hurt walmart, and all of a sudden you lose your majority. We expect to hear back from the white house . We have heard by the end of the year. David end of the year. Shannon, they do so much. Jonathan we will bes we will be speaking with citigroups head of Commodities Research. From new york city, the markets are getting set up on this tuesday morning. Onnting down to that holiday friday. Futures a little bit negative. We have been pretty much dead flat on friday and monday through tuesday. The auction cycle continues today with about 20 billion in 10year note. This morning, the treasury lower by two basis points. Tenure. The jonathan from new york city, this is bloomberg daybreak. Heres a look at the markets. The doubt only down 10th of 1 . Kind of echoing the price action on friday and monday. If you switch of the board very quickly, treasuries seeing a decent did this morning. Yields up to basis points. The cable rate, you know the playbook. You blame brexit. You do not this morning. You blame easter. It has changed year on year, so inflation came in around estimates. The stock creeping a little bit higher. The base case is that it will continue to climb. The euro up a little bit this morning. We are at one spot 06 and 10. Lets get over to emma chandra now for a look at news outside the business world. U. S. Secretary of state Rex Tillerson is on his way to moscow with a message to with a message to russian president vladimir putin. Yet a clear message to give up their alliance with the sharp alassad. In italy, g7 leaders discussed support for action against syria following that deadly chemical weapons attack last week. They have aligned themselves in a Bad Partnership with alassad. The russian government had signed the accord on chemical weapons. Now, assad has made the russians look not so good. Emma meanwhile, italys foreign minister says that there was no consensus at the g7 meeting for new sanctions against russia. In stockholm, the suspect in the bus crash that killed four people has admitted he committed the crime. The suspect has been identified as a native to the back is down uzbekistan. But the result tried to determine if he had any caucuses. In south korea, weve heard that they are open to direct talk with north korean dictator kim jongun. He is one of the top two candidates in the south korean election. He says that south korea must speak with north korea to resolve the controversy with their Nuclear Weapons program. Global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. Janet yellen spoke yesterday at the university of michigan saying that the fed is no longer putting the pedal to the middle, but shifted to Holding Gains made in growth. With the economy operating close to our objectives, we want to make sure we sustain the progress