Fed. You will be in washington for the fed. Big day, though not much is expected to happen. Negotiators still have to vote on a deal. Trump gets none of his priorities. It will be interesting to see if he would veto it. An ordinary president , you would say no. Mike pence said yesterday they might not pass obamacare, the repeal, until the end of 2017. Francine we will have marty sheckler with us. By now, lets get our first word news. Reporter more on the spending bill in washington. House and Senate Negotiations have reached a budget deal that rejects most of President Trumps ideas. Republican leaders bowed to democratic commenced to limit hundreds of policy restrictions. The measure does not include money to Start Building a wall along the border with mexico. The u. S. Is considering a range of options regarding north koreas military operations. Over the weekend, kim jong uns regime tested another ballistic missile. That was in open defiance of the International Community and lucky to already. But the u. S. And the allies are considering expanded sanctions. In the u. K. , Prime Minister theresa may is not backing away from her position on brexit talks, insisting that britain should be able to line up a free trade deal with the European Union as it negotiates its exit. Over the weekend, leader suggested that the upcoming talks were realistic. Hope francis has called a negotiated frances for the crisis in venezuela. Progress francis has called for a negotiation in the crisis in venezuela. Is National Assembly controlled by nicholas mikula. Global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. This is bloomberg. Francine thank you. Equities, bonds, lets get right to it. Theres up 3 , turning of euro, and a flattening of the yield curve. Oil cannot find a bid. Next screen, please. We will go right through this. The dow, just below 21,000. The eurocanada, still weaker. I cannot find any markets to talk about today. Asia, japan stocks rose, weakening on the u. S. Budget deal, emerging market shares were higher as the dollar is gaining a little bit. British markets are a little bit low. 3, down 3 . Y is this a sign of the economy slowing down, or is it just the trump reflation trade losing some air . Tom last week i looked quickly at the copper charge. Up the bloomberg right now. His is Michael Mckee he survived the white house Correspondents Dinner. It was a very different dinner. Here is the inflation. The and,re pce, 2008, the crisis. This is topline pce with the oil distortion. Goods are down here, mike. Service sector, up here. Why do we all feel this, but we do not feel this where chair yellen is, and we dont feel the advantage of inflation down here. Michael at this point, people tend to overstate inflation. It is a psychological target for the fed as well as an actual target. Inflation at citations have been going down. Tom very good. What do you have for us . Michael this one really took me by surprise. If i did not put a name on this chart, which they told me i had to do, you would not know the white line is greece. The bottom line is the msci. It is outperforming compared to world stocks. When would you think we would ever see that . The optimism and the markets above the idea of getting a deal. Tom it is the ultimate winner chart to see greece better than good in the equity markets. It is made day and we tried to look back at somebody with anglosaxon pagan history. Dealo, may day is a big worldwide. It started in 1890 with different. Expense, expense, expense, control and, labor does not have a chance foward . Now, the wage gains are starting to come through. We end up with labor doing better. And we do have the possibility that the economy will get better globally and there will be more jobs. But people who were in jobs right now are Getting Better deals. Tom they all matter. It is in porton, but i think the fed meeting it is important, but i think the fed meeting is not all that important. Michael that is an interesting question. The fed has a press conference every other meeting. Themarkets skipping o nonpress covers meetings. Is that good for you . Yes, there is a lot of babel speakers. Of the fed overall, it has been negative for the last couple years, this transparency by the fed. Michael what the markets seem to be looking for is clarity on the idea of shrinking the ballot sheet. I have had people tell me the day they make that announcement about how they will do it, is a trade people will to be moving on that. Is that the case, or will it be a small and of change in the Balance Sheet at the beginning that you do not have to move . The way you just described it, that would be Janet Yellens nondisruptive to the market. I think she can probably accomplish that. Back to your earlier point, i think the markets held its breath on everywhere the fed speakers say, to give some kind of indication where they might take rates. It turned out to be a lot of nothingness and confusingness. At the end of the process , it was a ba it was a bad idea. Tom i want to go to the Michael Holland view on equities. Is psychologically a singledigit equity they are not really a great world. 15 the last 12 months. Can we sustain this double digit surprise wherever because the Corporate Management actions . Forever, sure. [laughter] the answer is no. 15 is not tenable. Tom what about 9 or 10 or 11 . The upside, the sober professionals would tell you 5 to 8 would be a good range. Michael we have heard a lot about whether stocks are overvalued, and the one phrase they keep coming up is, well they are high, but nothing like they wear when we had the last couple of collapses. How far are we from a correction as far as you are concerned . To the latter, i dont know how far. Nobody knows. I learned that nobody can predict when the next correction will be. On the other hand, the premise you described is true. We are nowhere near where we were during the dotcom time, when we had a huge correction. We had 51 of the marketplace now, only 51 . We dont have people saying this could go down 15 . People would laugh if we got something approaching that. It might happen. Because we have more growth in the world. 12 earnings gains in his quarter, just finishing up. This is the first time in five years. So, the direction is going the vector is going the right direction. Tom we have seen ceos building of the margins down the income statement. Lets come back to Michael Holland and we will do apple in a bit. We will get your monday started strong. Later today, this afternoon from the Milken Institute global conference in los angeles, a timely discussion at the 2 00 hour here on Bloomberg Television. With Michael Mckee, im tom keene. Stay with us. This is bloomberg. This is bloomberg surveillance. 24 century fox and blackstone are teaming up to make an offer to tribune media. Blackstone would fund the all cash bid and fox would contribute the tv stations to be joint venture. Japan, shares of sony jumped to the highest and 22 months. A bullish Earnings Report led to analyst productions that sony could have record earnings this year. And the last couple years, the company has put more emphasis on gaming and finance. The stock has doubled since 2013. Casinos are on a hot streak, with revenue increasing in april for the ninth month in a row. The Gaming Industries are recovering from a two year slump that kept high stake players away. Now they are trying to attract families and casual gamblers. That is the Bloomberg Business flash. It is time for our morning mustread. It is may day and people are taking off all over europe, except for macron and le pen. As the election continues and friends, we look at the question as to whether there is a case for le pen. Times is theork overarching critique of the euro is correct. The french will presumably vote against her, nonetheless, and choose macron, with the partysity that the repor standard might be right. Tom it will come back to charlotte here. This is the reaction from the white house. This is what happens. To talkingtening about france and i am reading the wrong one. This is Charlotte Mcdonald gibson. Raisedgest winners who liberal proeuropean values with the same passion and emotion of the populace. Meanwhile, the mainstream parties that have responded by shifting their own rhetoric to the right have fared less well. So, it is still possible for the populist to win. It is still possible. Continue,e populism continue, continue and guys like you just ignore it. You ignore it at your peril, tom. That populismubt is with us and it is not going to go away until we get much better Economic Growth. You yeah, but, mike do jump in here. We are going to get back to a. 3 . Europe is actually doing pretty well. Do you buy this idea of the volatility of gdp, and we jump back to a better number . Probably not and if you listen to the corporate leaders, the answer is no, but that is the direction we are going. But not without volatility. Tom do you like this line of gdp number, with all of your experience . Closer to the in final number than the other predictors out there. Remember, these numbers are as of the day. Snapshot,ike polls, a as opposed to taking everything into account because the Commerce Department does estimate things. In france, a trade at this point, or is there so much belief that macron is going to win, and even if it is not the political parties, as Charlotte Mcdonald gibson talks about, it is still the center that holds. I think in those elections, you want to step back. You could have a surprise in either direction. Much more from macron i think it is not a trade. I think it is a gamble. It is a crapshoot, in terms of the surprise element there. Smart betting the will become a we will not get is a prize and marcron will take in that is what the markets are saying as well. Tom david has a lot of enthusiasm for global stocks. Is this an opportunity to buy . Ig in europe question rick they are still attractive. If you look at the numbers from the s p, 51 coming from the u. S. , those earnings grew 19 . Things are better in europe. They have been better yearoveryear and that is imported because lester was not very good. The valuations in europe are still attractive. Tom we will continue with Michael Holland, and look at the French Election here on this may day. Coming up on Bloomberg Television radio, this is wednesday. The conversation with the former Federal Reserve assistant chairman, denve ben. Inhael mckee and myself, washington. This is bloomberg. Tom it is the perfect image for the discussion on the use of cash. In your city, that is what you do out there, is surely if you have especially if you have children out there. Good morning, everyone. In new york and also in new york, Michael Mckee with me. With us, Michael Holland at this early hour. I want to talk about easy cash. We do a lot of joking here, but bring up the chart, if you would. This is apple. You need courage back here, in 2003, back in the middle of the chart. Michael holland has had the courage and it comes in use with use of cash. What do we mean when we say use of cash . Companies like apple, and there are too many, despite the fact it does not have a premium valuation, are gushers of cash. How they use it is how they survive and prosper. In the case of apple, they are actually fairly frugal with the cash. Moree is a little profitable with the catch. Apple invests in things like the new iphone that is coming up. Every time they get a new launch, and they have done their work, they use it smartly. Tom megan of the London School of economics has a lifetime study of the word profitability. Are we profitable now, versus 10 years ago, 30 years ago . I believe we are more profitable. Those are numbers. It is backed up by facts. Yeah, we have people who do dumb things, but overall, it is as good as it has been. You mentioned google and apple. Google has a lot of cash and they buy all these Different Companies and are involved in all these different from self driving cars, etc. Apple has all this cash and they spend it on their current products. They tried to develop things, but they are in a vertical silo. Which corporate model is better for investor . Michael, i would say i own because i own both there is no single way to havess and both of them been successful, continue to be successful. I like apples way better, but i think google i like the fact that google will say, we made a mistake, we will not do it anymore, or whatever. I like both of them, but i like apple better. Michael why do you like apple better because one year ago, the idea and the market was, apple is dead. They cannot get enough incremental improvement that people will go out and rush out and buy one million iphones a year again. Why do you like apple if they have this cap on what they can do . Because they dont have the cap. They are a multiphoenix. They have been declared dead many times over and they keep doing great things and sometimes it takes years before they did them. Tom lets look at the antiapple right now. Jason, get your camera over. This is really hard to read. It is impossible. Here is 10 billion in revenue and Michael Holland, there is no profitability. There is no profitability at the ebit line. There is a loss at the net income line. Maybe there are some hopes and dreams out here as well. How do you avoid the nonprofitable companies . What is the skill set to do t hat . Is not particularly skillful. You just look at it, and i dont want to own the company. As an owner of a private business, the answer is no, i dont want to on this. Michael holland is staying with us here, the coming up later today, live from the Milken Institute conference, a conversation with steve mnuchin, the treasury secretary. Will companies be able to keep more cash . We will ask him. This is bloomberg. Economics, finance, investment, politics, international relations, a little bit of hockey. Michael mckee with me this morning and for francine lacqua. May day around much of the world. We are working, working america. Michael holland with us. Right now on your monday, first world news briefing. Emma Republican Congressional leaders who want to focus on healthcare and tax overhauls have given into democrats on a spending bill. House and Senate Negotiations have agreed on a 1. 1 trillion budget magic measure. It rejects most of President Trumps priorities, including money to Start Building a wall along the border with mexico. In asia, the u. S. Will pay for a new generation missiledefense system deploying and south korea. President trump and said he wanted the South Koreans to pay for the defense system. National security adviser h. R. Mcmaster told south korea the president s remarks were made in a general context. In china, the official measure of factory activity has fallen from an almost fiveyear high. The Service Industry index fell to a sixmonth low signaling chinese growth is likely to slow down in the second quarter. The economy unexpectedly rose with an and all rate of 6. 9 in the first three months. In france, the two president ial candidates have kicked off the final week of the campaign. Polls show independent macron is a doubledigit lead over arena le pen. Marine le pen. Haveays the french should two currencies, one for daily use and another for international trade. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Thank you. Over the weekend, significant out for in the sunday over the conversation the president of the United States had with the leader of the philippines. He is usually controversial. The uproar about whether mr. Deterred they should visit the white house. I heard one pundit say simply if he wasnt the leader of the philippines, this guy could not get a visa into america. Im not saying that is right or wrong, but that is the level of heat. We have a headline that mr. , torte said to mr. Trump withhold his firepower against north korea. We need perspective. We get that now from manila and bloomberg tv, one of our partners in the philippines. Robbie, wonderful to have you with us. That mr. He likelihood will visit america. Invitation came as sort of a surprise. I think people in the administration were expecting a pro forma poll after the summit. This certainly was welcome news for them. They do not need to say too much. They know how people will read into this. This change of the headlines for the president , president duterte that is, in the days prior to this human rights record and reputation was front and center once again. First, when the university considered giving him an Honorary Degree in law. Huge outcry that forced duterte to decline the invitation. Afterwards, just last week, a complaint filed before the International Criminal court accusing president duterte of crimes against humanity, particularly of his war on drugs. This invitation from President Trump changes the headlines for him. Tom roby, the constant theme is the outrage of the western media and western officials. The brutal fact is, every signal filipino i speak with strongly supports mr. Dutertes action to diminish crime in the philippines. Does that support has that support waiver at al