Time. Abigail, what are session highs . The dow, s pave 500, nasdaq all sharply higher. Up 1 on pace for their best day since march 1. The s p 500 on pace for its best weekly gain. The first weekly gain in three weeks. The best weekly gain in 2 months. The nasdaq on pace for yet another record closing high. Certainly a bullish day. We havehis, strengthened financial straight American Express up more than 5 , on pace for its day its best day since october 20 of last year. Investors clearly like that, plus there was nice acceleration in growth around the companys credit card, commercial credit card business, volume three by 6 rate we have the regional banks, see corporate citizens trading higher. These companies also put up solid firstquarter, top and bottom line estimates spread lets turn to a stock that is spiking higher after comments of treasury secretary steve mnuchin, spiking down just a little bit more great initially of 2 after Steven Mnuchin did say that fannie mae and freddie mac need to be fixed. A little bit of reversal there. Interesting to look at that great sticking with the theme of governmentbacked bonds, lets look at sallie mae. Sallie mae is the student Loan Servicing company of governmentbacked and other private education loans, up 10 . Huge pop on the day, they put up a big quarter. They beat earnings by 39 . They put up . 21 per share in adjusted earnings great lets hop to the bloomberg and take a look at the chart straight it may help explain why sallie mae was able to put up such a big. Uarter it shows three different types of debt. Inwhite we have credit card, blue we have autos, and then in yellow we have student loan straight theres been lots of talk about the idea that there could be some subprime auto crisis, the we see that auto below the student debt at 1. 3 trillion. Huge numbers here climbing. Is it it it is a positive for sallie may. Interesting to take a look at that. Scarlet they do so much, abigail. Virtue agreed to by its rival for 1. 4 billion. The stock traded less than 14 before the bid was announced in march. Today it is surging 11 to about 19 a news of the deal. For two also jumping. Joining us to discuss the deal is the ceo of virtue. Thank you for joining us on the big day. Lets talk about why this deal makes sense right now. What makes this the right time to do this . You are seeing more efficiency in the market combined with less volatility, putting pressure on margin for every participant. Casey g has this wonderful customer franchise theyve had for a long time and we have an efficient market structure, combining the two we think we will get best in class of both. Scarlet you mentioned volatility has come way down. Is this an admission that decline in volatility is a structural issue . I dont think its a structural issue. Weve been in a couple quarters. Ow with realized volatilities that was a catalyst for us to say, this is a time for a from like ours that has asked in class operations. Maybe look at some of the landscape and say, are there firms we think we can add efficiency to provide a better product, ultimately, to the buy side and Institutional Investors . Oliver systematically low volatility, even though despite theres a lot going on, the vix remained low. Look at the landscape for competition in the industry and pushing margins very close, very small in terms of trying to beat out the competition. Does this signal with this type of m a that it is a winner take all industry . Inwhen we started virtue 2008, my partner and i, we have to be global. We have to have scale. You have to provide prices across asset lasses and geographies classes and geographies. Wonderful customer franchise on it institutional Market Making side and agency side, really concentrated in u. S. Equities where there has been an increase in cost, decrease in volatility, really put pressure on their margin. We think we can take that model and stable gasquet lit more globally. Scarlet what level of m a are you bracing yourself or in the highspeed trading industry . To what extent is that connected or inspired by the more probusiness agenda of the white house . Thats a great question. You will see firms like ours that are able to scale the business and have efficient ability to provide a good offer spread. The question is, do we acquire or let these firms kind of flounder . I will be an interesting question we will face that will be an interesting question we will face over the next couple years. Firms trying to change their strategies. When theres not a lot of volatility in the market, not enough opportunity in the market for everybody to be successful, so you will see larger players, like virtue, it are consolidate or continue to grow. And the smaller guys that are maybe more nichey, maybe in a single asset class, they will struggle to continue to private provide the margins to their owners. Scarlet you are still looking than. Absolutely. Were still in the market. People said two years ago, michael lewis, you have a book. Why would you guys put yourself out there to be public . Today you see why. Oliver we talk about overlap. Lets see where some of the comes from. This could be a 200 million in terms of net savings. There will also be comparisons here that overlap. Will beasiest cuts around technology and infrastructure. We dont have to pay market data twice through exchanges. We can reduce our footprint because we consolidate strategies and data centers. Those are the things we will be looking at day one. We run a leaner firm in terms of people. We have a lot more people than we do. We will look at that. It will be, what is the best in class . How can we provide the right service . We bought a customer facing franchise. Were not going to screw that up customerver with that base, is Infrastructure Ready to handle all the client flow . How long will it take until you have the technology that can handle all of kcgs clients . Technology, ont the front end, with the customer interfaces, how they see it in you not only look at m a but now that you bring onto a business you didnt have before we dont necessarily worry about competition, we try to be excellent in what we do. There. T firms out our wholesalers are providing marketmaking services to retail institutional customers that our competitors of ours. We dont fear competition, we try to be as competitive as we can be. Is aet you mentioned kcg customer facing side of the business. What do you expect to be the biggest challenge in absorbing this business . We are a small organization. We have 150 people. They have been around for longer, they are much more embedded in the Financial Services. We have to be really humble and modest. You cant have a culture where its us against them. Thyeve won a major transaction a few years ago. We made it clear on day one, its one firm. In any m a transaction it will be an issue. I have experience in doing that and we will be humble and try to learn from the great people at kcg. They have a great and unique franchise. Thats what we wanted to buy for that. Ofver what is the prospect a type to regulation in the United States mean to you now that you have this other side of the business, and perhaps there will be a push towards people having to allocate specifically . Is a great question. That is one of the catalysts. A fabulous institutional practice, Institutional Agency business where they have literally hundreds of customers. We got less than 10 customers. We have a great product, in an execution only environment we think we can be exceedingly competitive. We have regulatory tailwinds behind it, we think marrying the algorithmic business we have, posttrade analytics we have with their Extensive Client base, we can build a winning product, particularly in it post world where transaction analysis is going to win. Oliver what if it doesnt come through . Is inst of all ,kcg europe and we are in europe and we want to be there. When you talk to the institutional Money Managers, they save we are going to do it in europe, we are going to do it and the United States. The big institutional Money Managers are saying, you have to provide quality. We think we are going to win in that proposition. Oliver it sounds like he will be back to talk about m a in the future. And ceo of virtue joining us spread lets get a check on bloomberg first word news with mark crumpton. Trump saysdent administration will restore u. S. Prominence to the Steel Industry and level the Playing Field for its workers. He spoke today at a white house meeting with American Steel executives. Pres. Trump we going to fight for American Workers and americanmade steel, and thats beginning immediately. For decades, america has lost our jobs and our factories to unfair foreign trade. One steel mill after another has been shut down, abandoned, and closed, and we are going to reverse that. Mark the president also signed a memorandum to speed up a study on whether steel imports are hurting u. S. National security. Utah republican congressman Jason Chaffetz may leave congress before his term expires. Radio insult lake city today that he is weighing his options, might depart early. Yesterday the chairman of the House OversightCommittee Said he would not run for reelection or for any office in 2018. Decision was not based on either health or political concerns. Arenuel macrons rivals trading their fire on the newcomer. Nationalist Marine Le Pen and republican Francois Fillon both attack at the 39yearold former economy minister, saying his ideas are weak and vague. A new french poll finds support to macron goes one point 25 . Fillon scored one point, 19 . Tune in to bloomberg this sunday for our special friends decides, one less cover of the election. Millions of millennials are living at home, their parents home. Half are white and the majority are male. The census bureaus recent findings contrast with the 1970s, the more young adults lived with a spouse. About 1 4 of today possible annuals are not millenials are not in school and dont have a job, but the majority tend to be in college or graduate school. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Scarlet the imf sees results growth rebound in 2018 but challenges remain for latin americas biggest economy. The finance minister of brazil will join us in washington. The countrys road to recovery hinges on facing political uncertainty, easing monetary policy, and progress on the governments economic reform agenda. Lets head had things over to erik schatzker, whos in washington with a central player in brazils future. Erik few men could be more central to brazils future than the finance minister, who is here with me in washington. Thank you very much. Good to see you here in d. C. Welcome back to the United States trade lets begin with pension reform, and issue critical to result was future. You and the president are working hard to catch this pass this pension reform bill. Event to make concessions to win support youve had to make concessions to win support. Savings are now lower than they would have been when it was in its original form. If the room to make further concessions it necessary . When we present the reasonable proposal, we already dutchans to have some what you are mentioning as concession. Actually it is changes proposed by congress. That, market was already priced in Something Like fiscal benefits of the outcome in proposal of about 70 of the reasonable proposal. As it is today, according to us being proposed today to the commission. 75 over 10out originaliod of the one, and 30 years, 72 . I guess what im trying to get a sense of is, do you feel, to negotiatequire, more, that there is room for negotiation, or do you have to set a limit . The New York Times henrique i think we are close to the limit or at the limit. Erik so the savings of 630 billion, that is 600 . Whats the limit . Henrique the limit a little over 600. There is not much room. That the moment the report is approved by the special commission, its much harder to change it in the house. Rik numbers are one thing but there are other considerations in this bill. It was supposed to eliminate but youvelities, had to negotiate away some of that as well. You had to make some concessions to teachers and police officers. Is there a limit to how much you can sacrifice in the way of principle, or is any pension reform bill that saves money worth passing . Thatque the idea here is the most important point in terms of inequality is the fact of those whohe 20 make less income, the bottom, which is 20 of the total workers in the country, those are already retiring by age, because they dont complete their contribution requirement. That means that the ones who you lose, basically the higher paid one. That is the most important equalization, and that is prevailing. Erik this week the imf raised its growth forecast for brazil to 1. 7 in 2018. An important vote of confidence trick the whole world is still waiting for your country to emerge from recession. Do you estimate of the economy grew in the First Quarter, or is it possible that growth was still negative . Henrique our projection is quarter over quarter,. 5 to. 7 growth, First Quarter over Fourth Quarter of last year. Idea is that rate to be kept, and we expect to have less quarter of 2017 over last quarter of 2016, with 2. 7 growth. Erik on an annualized basis . Henrique no, last quarter over last quarter. Erik i see. Private Sector Economists are expecting growth of 0. 4 . What about you . Henrique true. Thats because of the statistical statistical carryover. Thenave a steep decline, you start going from a very low basis. Even if we grow very fast, average against average, for what you are talking about but if you take to beginning of the year against the end of the year erik but you are on record as predicting 1 growth of 2017. Does that still apply . Henrique no, our projection is in for 2017, 1 2 . 5. Erik is that a new forecast . Henrique no, it was published a few weeks ago. The idea here was there was a becauseon the average, higher than expected decline in the gdp in the last quarter of last year. Erik this is what confuses people. Forecastingu were 1. 6 growth. Then you took that forecast down to 1 . Why is it that you and your ministry consistently overestimate the prospects for the economy . Whats wrong . Whole market, most of the economies have the same kind of projection. Thateason is, the fact brazil had a much worse than expected recession last year, and then gdp declined further. As a result of that, we had a lower basis we started. And then comparing average against average, it is smaller growth. The good news is, we are starting on a very strong weight. Month, we are ready to see very strong growth. The reason for that is because the companies were deleveraging themselves last year. And that made the resurgence worse in the shortterm. Henrique we thank you oliver we thank you for your time. This is the finance minister of brazil here with us in washington. Up tomorrow, we will be hearing from finance ministers from countries including sweden, columbia, and saudi arabia. This is bloomberg. Scarlet time for a look at some of the biggest business stories in the news right now. Is partase of dividend of a corporate makeover trading him to be profit and sales expectations and the new ceo has pledged to quote, achieve a new level of financial performance. Born buffett prospered sure how the way is voting all its wells fargo shares to support the reelection of the banks board. An assistant to buffett says berkshire, wells fargos largest investor with a stake of about 10 already voted most of the holdings, and the billionaire is a voting his personal shares great wells fargos board is also under pressure after proxy advisors urged investors to oppose the reelection of 12 to 15 directors. That is your business flash update. From new york, this is bloomberg. Scarlet from bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. We are going to start this time with cocoa falling to a nineyear low as momentum sellers pile on. Cut the price has by 42 this first year. Cocoa producers are planning an emergency meeting on prices next week. Oil bouncing around today after yesterday pledging as much as almost two dollars. The fluctuations come as major producers reach an initial deal to extend output cuts, according to the oil minister of saudi arabia, who did not identify the countries involved in the deal. Oil is currently down 1 3 of 1 . For a longerterm view on oil, lets show you a chart thats available on the bloomberg. The blue line shows the price of back toing all the way the early 1980s. The white line tracks u. S. Oil production as a percentage of opec production. 1986,s. Share peaked in then it was down. It bottoms at about 2008 and since then it has been on a steady rise on u. S. Shale production, about 29 of opecs production overall, making it harder for cartels to counsel the global oil gut. Glut. They asked for his views on the key factors driving prices. One of the key things that has been happening in global Commodity Markets is weve had a pretty strong dollar. The strong dollar has been a big headwind for oil. Part of the strong dollars come from the weakness in the eurozone. Some of that seems to be reverting. British pound had a big move up because of the election call, which was viewed positively. Importantly, on france, if we get the right result, theres a market spike, we will see recovering the euro, and thats very important because it will probably mean we get softer u. S. Dollar backdrop, and that is a positive environment for Commodity Markets. Everything else if you look at emergingmarket data, survey that pmis, we do need French Election confirmation to push both the euro higher and together with it, Commodity Prices on oil. What is the correlatio