Over in europe, snapping back, all of yesterdays post, up 1. 2 . The dax fell. Eurodollar, 112. That is not much ammunition. They need for the g7. It is a weaker japanese yen. Yields up a little bit. That is a market that is stabilized. Up a basis point. David lets check in with our bloomberg team. Mike mckee in new york on a possible summer rate hike. We will look at Goldman Sachs to annual meeting we will look at goldmans annual meeting. We will begin in paris with egyptair bound to cairo bound for cairo from paris. It seems that debris has been found. Yesterday, there was a report that it had been found from the greek navy. Not from theat was flight. The Egyptian Army has come out with an official statement says saying debris has been found a few hundred miles north of alexandria, which is the area that is the area with the plane was expected to go down. They found passenger items and bits of the plane. I dont know how long it will be before they can get to a laboratory where they can detest. It is pretty obvious from the to pre it is not obvious if it was a bomb are not. That will soon be the next development. Was certainly a tragedy, but it is not lost on people that the plane originated from paris. What is the reaction . Thewofold from governments point of view, they are very cautious. They really dont know what has happened. They say, nothing is ruled out, but there is no hypotheses at this point. On the other hand, there has been a defensive rush on airports in paris. There was footage within the airports showing checked bags went through xray machines. There was a real pr push of airports to show how secure they are. The transport minister was on tv saying that they have been under emergency rule after the last attack. I would point out that the plane was only in paris for one hour. It was a quick turnaround. Cairo, alexandria. If something was put on the know, but we really dont it wasnt necessarily in paris. David thanks, greg. Leaders from seven countries are meeting in japan the next two days. What are the big issues on the table for this many . What are the big issues on the table for this meeting . Went seems like the yen from being the elephant in the room to closer to the spotlight. We heard from japans finance minister briefing reporters and saying that when it came to the recent moves and fx, that was not discussed. He did reiterate that excessive and disorderly moves will hurt the economy. He also mentioned that stable fx is very important as well. That is when you get into that gray area on intervention. Overnight, we heard from the Obama Administration about wrapping up the pressure on currency manipulation. Japan and germany are on this watchlist monitoring the movement and currencies. We did for the u. S. Not exactly out japan. Singling they said it would be hurtful to Global Growth. Trade flows are weaker than they should be. This is not a time when countries should be making major moves to boost competitiveness. They said the g7 should not avoid competitive devaluation and they are working to attain growth as well as that the school growth. There is a lot of disagreement on what currency intervention would look right. Is there any agreement on what constitutes a disorderly fx move . That was actually a question reporters had asked the u. S. Treasury secretary moments ago. He gave a good example. What he constituted as disorderly was what happened back in japan in 2011 when the earthquake and tsunami happened. Sources telling us that the u. S. Feels movements began recently have been orderly. Its things like we have not gone to those extreme measures. Thank you so much. That is even on man thank you. Expectationsift in. Bloomberg radio surveillance says Michael Mckee joining us. Michael we have a saying in this country down south, the fed whacked the market upside the head. My interview yesterday with richmond fed president jeremy lacher. June is definitely a live meeting, but what we do depends on how the economy is going to evolve. Them marketing at expectations, it looks like june is roughly one and three. 60 . Ightening looks like dudley is widely followed because he is part of the core with Stanley Fischer and janet yellen. He sets the tone of what goes on. You can call him the guy goes around the asset store changing the prices. Jon expectations have been reset. Market und the 28 28 percent mark going into june. What do they want to see the number at . Michael there are a lot of traders who do not want the fed to move. They also think the fed has cried wolf too many times. If the data starts moving in the direction dudley is talking about, watch those numbers. We will get close to 50 , 70 . Janet yellen is talking june 6. Fighting back against Politics Around the Federal Reserve. Does that surprise you . He has been an outspoken voice saying the fed should not be dragged into the political sphere. Jon Michael Mckee, great to have you with us. We will turn to Goldman Sachs holding their annual meeting today. I next Team Leader Michael moore is turning us from london live with a preview. What is your reporting telling us . Michael we have a couple of items on the docket addressing longstanding issue, whether it is an independent chairman or investing for people who go into government work. Neither of those are expected to gather a great amount of traction. What you are going to be focused on is the common territory but the banks decision to stick with the trading business after a rough 12 months. And really a rough four or five years. David this is not a good period for those holding goldman stock. How much pressure is lloyd going to come under . Michael he will get a lot of pressure from the Bank Strategy and decisions that stick so strongly in the trading business. He is going to point to the cost cutting, the shrinking they have done of the Balance Sheet. There are real questions. You have analyst coming out and saying the Second Quarter is expected to be down as well for trading revenue across the industry. So this is a business that has been in decline over the last several years. David michael moore, thank you very much from london. Jon coming up, overbearing, too Much Negative sentiment. Find out what to buy when everyone else is selling. Lisa this is bloomberg. Google stock may be rebounding. Over the last few days, 900 billion was white off the value of global shares. Is this the bottom . Peter joins us now. Reached asign we have Tipping Point and people are going to go back into stocks . Peter it has been encouraging that the fed has gone out of their way to put the hike on the table and stocks have done reasonably well. We are down 2100, but we have not broke the 20, 40 level and we will start to see the rebound. People have just been bearish. Lisa i am struck by this. There is a great amount of pessimism. The fed is about to move and will destabilize its entire age that the economy is its entire mirage that the economy is in. Peter it will not take as much to push to higher levels. It is hard to push down when so many people are underweight. There are so many ways to look at it. Look at if you start digging into it, you have seen this egg trade were people are bowling out of tech if you start digging into it, you see this where people are pulling out of tech. Something i want to understand is all of that negative sentiment, what is the signing off . Peter as normal people have been selling, some of that has been bought by the companies themselves. You are seeing the s p. It does have those utilities. It does have those low volatility names and you are seeing consumer stocks. You have seen shifts and that has absorb some of it. The sovereign wealth funds have been buying it. Has absorb this domestic selling. David we hear conflicting reports. Udp is coming down and they are concerned the jobs number make it softer gdp is coming down and they are concerned the jobs number is making it softer. The bearuch more case is easy to make. I can come up with the exact same analysis. That is the problem. Everyone is looking at the potential for the fed that is what people are underweight. It is a positioning. When so many people are underweight, it is hard for the market to go down. You have pressure from all these short positions. Tore has been a huge influx these volatility funds. They have been bleeding money. Some point, people cut those hedges that propel stocks higher. Is on why they are confident the fed can raise rates in june or july . They have it by bloomberg estimates. Stocks havent fallen off. That backs up my view that people are underweight. Some uncertainty into usmv. Becoming less fearful of the market. That propels us for the next high beta trade. David thanks peter. We are going to go over to julies. Julie a Company Called enter oil that trades in the u. S. Their assets are in new guinea. Assetsge which also has is going to be acquiring it for 2. 2 billion. Then it will sell the majority of the acquired gas in expiration assets to paris for 1. 2 billion. Tal ge and toa at thee are looking maker of cartier jewelry. Sales plunged 18 in april. The company is coming out with a negative forecasts saying challenging comparatives will persist through september. It is trading lower. Swatch is trading lower as well. We are looking at yahoo . Wall street journal is reporting that the bids they have received may fall short of the expected range of four. Billion. Ed range of 4 4 billion to two 8 billion. To 8 billion. Deere is down a third of 1 . Forecast,h it cut its indicate Equipment Sales will be down 9 . The prior forecast had been for a drop of 10 . We will continue to watch that want to see if there is more commentary. Jon thanks, julie. Coming up, the oil rally rages on after hitting a 12 year low in february. Crude has jumped more than 18 . Production down. Where is the sweet spot for producers . That is next. Jon this is bloomberg. Im jonathan ferro. Futures are up. S p is positive. In europe, snapped back from yesterdays losses. Dax up. At 112. Lar treasury yields are 1. 8 . Crude is in focus with oil set for it second straight weekly gain after production cuts continued. Firefighters where is the sweet spot for producers itching to ramp backup reduction . Joining us is james west. Where is the sweet spot for u. S. Shale . Mid 50s is the sweet spot. Service companies have no pricing power. They are working at cash flow even prices. Task going to be a hard given the devastation over the last two years. 65 is probably a breakeven cost for u. S. Shale. Jon the narrative is we have gone through a story of Storage Capacity to a story of a market deficit. Where is the reality is, somewhere in between . On a we are oversupplied global basis. That oversupply has quickly followed. We should see inventory strong the second half of this year. Cuts over the last two years will lead to very limited supply as we get into 17, 18, and 19. In february and march, we were hearing possible restructuring. Has that run its course, and how big a factor may that be in supply . James we are going to see more default as we go through this year. More restructuring as well. Of this. Lay into all what that will do will maybes producers will take up their interest expenses. They will have a better cost of capital and better access to Capital Markets so they can spend again. They want be they wont be the companies they are today. They stayed on script this quarter. Up, he mayake see a tick up, but not a whole lot. Lisa even if oil prices increase, that means the companies with 120 billion dollars of debt that have defaulted, there is more to come in they can come back online even with Higher Oil Prices . James not slowly not. Absolutely not. The bankers are mostly controlled by regulators. They are slow to change. Lisa there is a story that banks have been hiring law firms to build in tighter credit protections with energy companies. James absolutely. David talk about geopolitics. The canadian wildfire is a shortterm event, but nigeria, how important is that . Is that a longterm issue on supply . James geopolitics are getting much worse whether it is the middle east, west africa, the they are blowing up pipelines. These are serious outages causing longterm problems. We could see the spread to other places. Strikes going on in kuwait. , morell see more outages geopolitical tensions. Dont forget about latin america. Jon this is an important conversation. The geopolitics will prevent people from investing in most locations. Means thatsituation the cash flow will go towards the debt repayment. When does it become critical for the oil market . James we are in that stage where the major Auto Companies needs to figure out what they want to be when they grow up. Are they dividend payers, or will replace reserves . They have to start spending capital the next 6229 months six to nine months. West, thank you very much for this very important conversation. Coming up, currency concerns taking center stage at the g7. Stick with us on bloomberg. Show me top new artist. Ah, ha ha. Show me top male artist. My whole belieber fan group. Its not a competition, but if it was i won. Xfinity x1 lets you access the greatest library of Billboard Music awards moments, simply by using your voice. The Billboard Music awards, live sunday may 22nd, 8 5 pacific, only on abc. Jon good day to the city of london. Equity market globally remarkably resilient. The me give you the Global Market snapshot. Let me give you the Global Market snapshot. I want to begin with what is been happening with equity markets. What you see is the s p 500 down about 4 10, negative on the year. What is positive is we have not had a big equity market route off of the new federal rate hike expectations. You can see in green, this is the performance of todays session. Of 76 points and up one full percentage point on the session. Points and up one full percentage point on the session. Copper session bouncing back of 1 10 of 1 . Is reason the ftse performing the move away from the conversation about the fed to the g7 in the coming days. The fx market and what you see in the red is a weaker japanese yen trading down 1 10 of 1 . Dollar yen going and little higher. The one to watch. Japan worried about a currency getting too strong. The problem is a going to the g7, which is dominated by politics, and 1 10 is stable. David thanks, john. We are two hours from the opening bell on wall street. The g7 meeting begins in japan, the worlds most industrialized to adopte expect practical measures to improve the International Fight against terrorism. Equipmentt farm producer has reduced sales of tractors and combines as farmers have a decline in income. The wall street journal is reporting bids for the core business of yahoo may fall that had originally been projected. We will go to vonnie quinn. Investigators now have their first clues in the case of the missing egypt jetliner. Some of the wreckage has been found. The Egyptian Army says they discovered debris from the plane 180passengers belongings miles of the coast of alexandria. Investigators say they will look at the degree. Debrief. Salam say they hope they will give him information about islamic states. Today, he has nothing to say. He was arrested in belgium after four month on the run. He was excited to france. In his study says more than half a British University students dont have a date of the referendum on the european union. Many run the risk of not being able to vote. They are on the electoral register, but just in the wrong location. Global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. John . Jon to the g7 with a summit meetings are underway as finance ministers from and central bankers gather in sendai, japan. This morning, printing 00 spoke to Pierre Moscovici this morning, Francine Lacqua spoke to Pierre Moscovici. There it is up to americans to decide. Optimistic and willing to find a Global Solution by the 24th of may. That would be a great, great thisl that we are solving issue and we are maintaining the integrity of the eurozone. For brexit, i hope that the british voters will choose to remain because that is the only win win solution for the u. K. And the eu. Francine you always comes up as a problem child in the world. We have seen a little bit of growth, but because of the referendums and lack of debt relief, we are pointed to, we can do more. Change . L it pierre i am not agreeing on that. The that the economy eu is in solid recovery. It could be even stronger. It could be faster. It could be even superior. But we are at a level nearby 2 growth a year as well as for this share and for next year. It is solid. We need to pursue reforms, social reforms, and keep a strong pace of fiscal consolidation, but not damaging recovery. We are leading the investment euros. 300 billion rightrozone is on the track, but of course, i understand there is a need for more political leadership, and some choices such as a refugee and some issues such as the refugee crisis needs to be addressed. Francine, what would a g7 be without a conversation with greece . Agenda, what did you make of what he had to say . Francine i cant believe we are 12 months after the brexit concern. Greece would have to leave the eu because of debt problems. Again, we are talking about greece and worried about a summer of turmoil, a summer of discontent. It is crazy that we have not had a solution. The imf is still trying to talk to the counterparts. The germans still seem to be the blocking point in terms of debt relief. We did speak to Pierre Moscovici, the commissioner of economic stability. They both told us that they were confident that a program would be reached as soon as next week. We talked about brexit and talk a lot about the other concerns. Guess what . They have not talked or addressed currency wars get. Jon i wonder if that is a conversation for behind closed doors . The president o