Bloomberg. Governors central bank who may toe the line with the government. The question of Central Bank Independence here. This the first policy decision of the new central bank governor. The government wanted to cut. Thats exactly what they got. The rate to 10 from 10. 5 previously. Lira a stronger turkish because many did expect this move. Other board for you. I arrived in the city of london hours ago. , thanksto the u. S. Open now positive on futures. Dow jones futures up about one point. Here in london, still lower, down by about. 25 . Out, the japanese government 10 year yield, 13 basis points. When i arrived in london this morning, it was remarkable. Yields below 0. 4 on the way out to 40 year that. 40 year debt. David a big story for the markets. We are looking forward to the japanese and centralbank later this month taking more action or not. The European Union earlier today took another shot at u. S. Tech giant google, this time over the companys android software. There has been an ongoing tussle here between the eu competition authorities and google. What is different about this . He just got a lot more serious. The antitrust chief at the eu has outlined what they call a statement of objection, outlined what their problem with google is peered they have three main issues. This is the android operating system that basically runs your phone. That is a very dominant operating system in europe with morehing like 70 mo or market share. Thats where her concerns lie. In three particular areas. Tools want to use google on your phone, you have to accept other google tools. Theou want google play, store that gives you access to all their apps, you have to accept other google you have to bundle them together. You have to put search, you have to put chrome. Agreementslike the that google sets with other smartphone manufacturers, paying them lots of money to make Google Search the predominant Search Engine on your phone. The other Search Engines are not as prominent. Isit comes preloaded, it right there on our phone, we are less inclined to go to a competitor. David this is google, search, mobile. The trifecta. Tom thats how we are communicating now. It is all on mobile. The android operating system really is the gateway to a whole host of apps. David thank you for joining us, tom. A slew of earnings coming in over the last 24 hours. Matt coke just out with a beat. First off i want to start in japan come overnight, Mitsubishi Motors tanked after the company described nissan manipulating emissions test data. It we will see fallout from that in the coming days and weeks. Last night come intel announced its biggest job cuts in a decade. Cutting 12,000 jobs, decimating its workforce, cutting it by 11 . After missing estimates for secondquarter sales forecasts revenue rose by 1 billion. Net income rose by 2. 7 . Speaking of computers, printer maker Lexmark International is is beingbought bought by a group of investors. Lexmark. Share for we are seeing it rise in the premarket. More earnings news. The corporate software, and he can still grow through vmware announcing a share buyback. Or toy, cocacola firstquarter earnings came in one penny better than expected. Revenue could only match consensus estimates of 10. 3 billion. As theslipping a bit gross margin fell one full point. Sugary carbonated beverages in the entire world, in the whole world, 49 of those are cocacola made. Jon that is quite a stat. Its about growth at this point. Joining us now is Jonathan Golub. You talk about how companies that are more globally focused will remain under pressure because of the Global Growth slowdown. That is not been reflected in a boost to the new k nikkei. Are we had a point where we say centralbank stimulus is not working . Jon there are a couple stories here. This is the First Recovery cycle that weve ever seen where global trade actually is declining. Some of this is related to the china story, some of it is really related to the strength in a market like the u. S. Compared to the global market. Is not a Current Quarter issue. This has been going on for three years. For those investors looking to find faster Global Growth to invest in, they would be much better served to stay at home and focus locally. Jon is that really a reflection of whats happening with economic fundamentals or a structural shift in relationship between trade and income . The point. S exactly right now, we are running u. S. Gdp Something Like 2 . That is about half of what it would normally be. In those kinds of environments, it is not conducive for those Companies Industrial that normally do well in a robust economic environment. That is the story. R tends to favor domestic. The mystic companies in germany or japan. U. S. , butt the Domestic Companies in germany or japan. The front runners in both parties and scored big victories in the New York Primary yesterday. Jump beating john kasich and ted cruz. We dont have much of a race anymore based on what im seeing on television. Senator cruz is just about mathematically eliminated. We have won millions more votes than senator cruz. Millions and millions more votes than governor kasich. Vonnie trump won all but a handful of delegates in new york. Z cannot possibly collect the delegates he needs before the convention. Broke Bernie Sanderss winning streak. She won with 58 of the vote. Again,y, you proved once there is no place like home. [applause] victory makes it almost impossible for sanders to win the nomination. Sanders will determine his path forward after the primaries next tuesday. For more, we are joined by megan murphy. Waswhiteness of the margins surprising. Ideness of the margins wereas surprising. It makes trumps pathway a bit clearer. Side, on , it shows she is the candidate to beat and Bernie Sanders will think about what he wants to do Going Forward. Vonnie are both candidates thinking about how to shape policy message now . Enjoying the clip weve moved away from policy of the last couple of weeks. Him to outline a few more programs come a few more proposals as we head into populous states. Not been an election long on substance on the republican side so far. David to say he is mathematically eliminated it doesnt mean trouble go into the convention with a number. That is true. His pathway to getting the number is still a bit tortured. Even if he comes into the doubt into the convention 80 , he will be able to use some wheeling and dealing to secure those last delegates. I think the chance of a contested convention have dwindled a bit after last night. Vonnie what is the strategy now for trump . He needs to get his act together on organizing and getting these delegates and not bleeding delegates support. The processtake seriously and take his message is seriously and focus on best withis he going to target Hillary Clinton and a population where he still has huge unfavorable numbers . Vonnie later on, we will be speaking with Mark Halperin from with all due respect. T, looking at the value jon the value of active management despite recent manager underperformance. Vonnie you are watching bloomberg. Itted continental has made official. Shaking up its board as part of an agreement with activist investors. Robert milton will be the new chairman. He will replace the current chairman united will give to board seats to two board seats. Mitsubishi motors has admitted to manipulating emissions test data. Shares of mitsubishi fell 15 in tokyo, the most in more than a decade. Have oilrkers futures lower in new york. Kers returning jon futures firming up as we edge towards the open. You can see s p 500 futures up just over one point. Dow futures up about two points. The story really, the s p Jonathan Golub is still with us. You put out this chart showing managers performance against the s p 500. Many of them week performers despite the rally. What is the story behind the market move and the manager underperformance . Couple stories here. If we look at manager underperformance recently, managers do well in certain environments more than others. Active most important is managers do a great job of protecting on the downside. When you are invested in a traditional mutual fund, you tend to outperform you do that with a willingness to underperform when the market is strong. What weve seen recently is a very strong market. That tends to be more difficult for activist managers. Jon do you think there is active management as the way to go Going Forward . You will see less money going into the likes of etfs . Jon it is very cyclical. In the late 1990s when the market was on a terror driven by speculative stock, that was a hard environment for managers. They protected you when the market got sloppy in 20002002, 20082009. It is the ride you get when you go with active managers that may be more important than sibley whether they deliver you better performance. David the message i took away was sometimes active managers over perform, sometimes they underperform. Perhaps the best approach is to have all your money in neither. Im not sure it really matters as much in terms of making a decision. ,f they are underperforming now realize this is not an environment that is conducive to what they do. They do better in environments that are more broad. Environments like weve been in where the biotechs are leading the market by a big margin, 10 tend not to be the most Speculative Companies they tend not to be the most Speculative Companies. ,hen they are underperforming you are not disappointed with what you are getting because you realize there are other environments than actually they do quite well. David i want to turn now to earnings and how these countries are actually doing. You said the expectations were down 9 . They are doing a bit better than expectations at this point. Away toy are shifting the market more broadly. In january and february when things were falling apart, wall analysts slashed their estimates by a massive number and as a result, companies are beating by a big number. Of closee average beat to 5 , way above average. Thats why the market is hitting alltime highs. Things arent great, but not as bad as we thought in january and ferrari. You will see the market continued to rise higher. Not as bad as we thought in january and february. The s p and dow does not include dividends. We are above peak. Right now, the big surprise is earnings are coming in better than expected. Investors are expecting corporate profits to be stronger than they were last year. We lose the headwind from oil. Theres a shift in investors thinking this has become much more positive than we were in jail or a. Things a lot more positive in this session in the futures market. David there has big a big turnaround been a big turnaround. Chinas stock market suffers its worst day in seven weeks despite what we just said about the markets overall. The question is whether people should be taking money off the table. Jon this is bloomberg. Lets get you up to speed on Global Financial markets across the board. The city 100 after printing a fresh 2016 high yesterday, now down just a little bit. Above 2100 on the s p 500 for the First Time Since december. Futures market just edging higher. Two points on the s p 500. Dow futures up about eight. The crude market and retreat through most of the session. Wti downow down by by 1. 8 . Oil producers set to end their strike. We are down by 1. 8 . In the bond market, yields in japan grinding to i alltime lows on 2030 think may be the headline this morning is that we had a very soft session in china. A lot of concerns there and it did not carry through to europe in the way it may be would have done a number of months ago. I want to kick up analyst calls. In china finished with their worst loss in seven weeks. A late day rally perhaps fueled by the usual government intervention. A number of analysts calling for taking money off the table in china saying to sell into any first half rallies. We are nearing the point where things are as good as they are going to get. That is the call from number of on china nomura on china. Tourists spend less money, taking fewer trips globally. Goldman sachs has lowered its rating on burberry. Highend consumers in the u. S. May be cutting back. Two other luxury names were cut in france. My was lowered to a hold and set to underperform. Finally, very quickly, turning away from consumer goods to industrials, one of americas leading exporters, boeing was downgraded today. Ron epstein lowered his rating to an underperform. Equivalent from a neutral. Jon thank you very much. Jonathan golub, the headline this morning, concern over china did not carry through. Concerned that maybe the market ignoring china in a bigger way or are they right to ignore Chinese Markets . Jon we have to put china in a broader perspective. I think they will be an economic disappointment on an ongoing basis. The expectations for them to be a driver of Global Growth are too optimistic. Thats one of the reasons we like more domestically oriented companies. Nearterm, it is may be different. Vonnie thank you so much. Will be looking at saudi arabia and its dependence on oil, next. Vonnie you are watching bloomberg. Donald trump and Hillary Clinton ended their losing streaks in a big way. Postingnt runners doubledigit big reason the New York Primary. John kasich was second, ted cruz was third. Trump told supporters it is not much of a race now, saying crews cannot possibly collect the delegates he needs. Road to the nomination almost unstoppable. President obama in saudi arabia. King expected to push the to provide more cooperation and military support for the fight against Islamic State. The president may also try to mend relations after criticizing the saudis as free riders last month. The ap says to state regulators and a flint employee will be charged. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. Jon thank you. It is a big deal. The japanese Government Bond market falling to a record low this morning. Bringing down all japanese sovereign bonds below 0. 3 . Joining me to discuss what this means. Not just for japan, but for the whole world. Is the only discussion that was taking place on Bloomberg Radio this morning. The rewriting of the textbooks. Have you ever seen anything like this . Tom definitely never in the textbooks. This is absolutely the cliche words uncharted territory for mario draghi. Uncharted territory for janet yellen. Axis, everything is moving out in time. Within that distortion, Corporate Leaders have to go faster and faster to readjust to all these new dynamics. Investors chasing that curve all the way to 30s, 40s to get some kind of yield. Has a decisionan to make. They own a third of the Government Bond market, half the etf market. They caniveness do more, but will it be effective . Tom im unsure about that. With the visits to japan over the years, absolute certitude is japan is a closed system. Culturally closed, economically closed, even with all their trade, dynamics and so, the fiscal and financial flows that or for yourars paper is not the same as in the u. S. The cultural economics of these two systems is so different from what we see in japan. Morning on january 29 when the bank of japan win into negative territory for the first time. It has come down, a stronger japanese yen. We are told that rate differentials matter. You would think the yen would weaken. How big of aroldis janet yellen having in all this . Role is janeta yellen having in all this . A bigt big role yellen for japan, janet really matters on a rate differential basis. The untold story is on a slow basis, something mervyn king would look at. Importantare just as around for an exchange. Foreign exchange. Jon fascinating discussion. Much more on Bloomberg Television and bloomberg surveillance. David from japan to oil. Saudi arabia said to have picked jpmorgan and citigroup to handle ipo. This fund would control more than 2 trillion. We are joined by colin fenton. Welcome. If you look at the long run youve written a note of the rocky balance. Telldoes this move us about where oil is headed . Colin the rocky road to balance is the supply and demand curve slowing at the same time. Imagine a mountain climber is going up the hill and it is rocky and they slipped down. And saudiat doha arabia try to do this weekend. They tried to find the supply that would balance demand. The central bankers think the answer to a rocky road is rocky road ice cream. You were getting massive doses of sugar, stimulants, red bull runs. That is the only sort of soution in the shortterm that the Global Economy does not go completely haywire. Colin would you rather take a dose of medicine in the short run or are you willing to risks some kind of financial crisis . The bellyache that comes from having all of this stimulation given to these markets as if its a good thing. Vonnie why would it be in the interest of any of the companies that are Oil Producers to have supply and demand come into balance immediately . Colin weve been playing this game for two years. Oha,e were 17 countries at d 15 of them already producing below their peak. This is more of a Public Relations kind of attempt to get sentiment moving in a direction prices happen moving for entirely different reasons. David take apart those supply and demand demand for Oil Continues to grow. Its not like it is going down. Colin exactly. It is the slower rate of growth. Iea it was the supposed to be closer to 1. 6. You have