Meeting with king abdullah. Ae expected to announce boost of cooperation by sending more military trainers to jordan to help the air force in the fight against islamic state. Prime minister may is also scheduled to stop in saudi arabia. The white house is agreed to a request from the National Archives and Records Administration to document each tweet posted by President Trump. That is according to the Associated Press which reports the request includes even deleted or corrupted posts. The president ial records act requires such correspondence to be preserved for history. The Previous Administration used an Automated System to keep copies of president obamas tweets. Global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Scarlet live from new york, i am scarlet fu. Joe and i am joe weisenthal. We are 30 minutes from the close of trading in the u. S. Scarlet u. S. Stocks kicking off the Second Quarter with modest losses. Joe question is, whatd you miss . Scarlet auto sales falling short of expectations. They are reporting some of the biggest declines, so much so that tesla has surged in market value. The country loses its Investment GradeCredit Rating for the first time in 17 years with a negative outlook. How the leadership put the economy at risk. Latin american distress. The venezuelan Opposition Leader calls for the removal of the Supreme Court judges who stripped our from congress. We will look at the crisis in latin america. Lets look at where the major averages stand as we head toward the close. Abigail doolittle is standing by. Abigail heading into the close, we are looking at small declines for the major averages. The dow, s p, and nasdaq are all down modestly. These declines do not tell the complete picture. We have had a little of everything today. Lows, the s p 500 was down nearly. 7 . The dow had been down. 7 . Now down less than. 1 . Anything can happen in the next 30 minutes. It will be interesting to see whether a turnaround can happen. One reason the averages are off the lows, we had recovery for the banks. The banking index have been down more than 1 earlier. A continuation of something we saw in march. March was the worst month for the financials since brexit. In march down fractionally. 500ink, we have the s p financial index having the worst month since june of last year. Bank of america at one point down 14 . A true correction. Some analysts say there could be more to go. This does include charles peabody. He did tell me earlier he thinks we are going to see a bear market for financials. There are a few reasons. One of the nearterm reasons, he thinks q1 will mark peek profitability. He expects to see trading revenue around fixed income decline. This is the fixed income trading for Morgan Stanley over the last eight quarters. It had declined and so had the stock. Around march of last year, the Fourth Quarter of 2015, we saw a big recovery. Also for the stock. Charles peabody expects to see a decline. He thinks some of these banks could start to offer guidance ahead of their reports were on the reports given his recent conversations with management. He thinks this revenue will decline and could take the stocks with it. He thinks we could see a bear market for Financial Sector. Also for longterm reasons, thinking in 2018 estimates will have to come down. The reason this matters, one must chart one last chart. Your to date, the s p 500 is up about 5 . The Financial Sector is up more than 1. 5 . The Financial Sector has been a big tailwind out of the election. This year, not so much. If we see continued declines for the banking sector, it could be a drive for the s p 500. Perhaps it will not just be a correction for financial but maybe for the s p 500, the other major averages overall, after the worst month since brexit. Joe thanks. Lets talk more banks. Whatd you miss . A wave of the regulation crashing onto u. S. Shores and touching everything from relay for life to environment of policies from regulatory policies to environmental policies. Sean tuffy joins us from london. Great to have you back. Lots of issues relating to banks. Lets start in the u. S. Goldman was out with a chart over the weekend pointing out some of the exuberance over Bank Regulation appears to be coming out of bankshares. Where do you see the regulatory landscape in the u. S. . Our thing still moving along in terms of changing the picture . I think unfortunately not. There has been a lot of sound and fury about a deregulatory agenda. The fact is there has been no momentum more movement or movement on that. The only thing trump has done his request a study to look at the impact of the deregulatory environment. I think we are a long ways off from major deregulation. Scarlet that chart highlights how investors have pushed take shares up. Goldman said the deregulation would not lift prices as much as share prices reflect. How confident are you the white house and congress will tackle financial deregulation in an effective way . Unlike how they dealt with the health care situation. It will be interesting to see what lessons they have learned. I think with financial regulation, it is different in that the house has a few plans they would like to move forward with. I think there is more of a definite framework. I think we need to remember in order for substantive changes to happen, you need to get 60 votes in the senate. Im not sure they can get all 52 republicans on board, let alone six democrats to the fact defect. Joe is there anything that can be done by the administration or does this have to go down the legislative route . There are some other avenues. I think that is probably where we will see action. There are a couple of avenues. The big one is the budget reconciliation technique which is the funding defunding items republicans have in their crosshairs. There are two big ones. One empowers the fda to wind down too big to fail entities that run into trouble or the Financial Protection Bureau in the republican process. Scarlet lets transition to the u. K. Theresa may triggered article 50 which begins a twoyear negotiation for separation from the European Union. When negotiating the relationship, do the sides tackle the challenge of Financial Services first or wait until they find Common Ground on other issues . How high is it on the must address list they have . It is a great question. It sometimes depends on the day when you are looking at daily news reports. The Financial Sector is a big part of the u. K. Economy. It does feature prominently. There are larger issues structurally around the framework of the relationship between the e. U. And u. K. I do not think they will address specifics of the financial relationship right away. I think it is clear at this point we are looking, you talked earlier this year about a soft to hard brexit spectrum. I think the u. K. Has admitted they will end up outside the single market. I think the Financial Sector has braced itself for a hard brexit. Joe how much of the u. K. Financial sector is really at risk . We have seen reports about major with staff in other countries. From your perspective looking at the total size of the sector, how much could get hit in a hard brexit . It is a hard question to answer. See the threell major pillars of the Financial Sector, insurance, assetmanagement, and banks, all moving operations to remaining e. U. Countries. I think it will be significant. The other thing to remember is theres going to be movement in the jobs we do not see. I mean typically people would by default it is set up in european set up european financial Head Quarters in london or put jobs there. I think you will see new jobs created outside of london. Joe they will not be counted as job losses because they were never there in the first place. But in some alternate scenario, they probably would have gone into london. Exactly. It is the losses you cannot see. Scarlet how patient global banks will be during the negotiation depends on they have a standstill arrangement until the rules take effect or they thate a phase in period theresa may referred to in her letter. Do we have a sense of the timeline banks are working with when it comes to planning out how they proceed . Think most banks i think most banks, the bigger question now is orderly versus disorderly brexit. I think most Financial Institutions are looking to have the decisions made before the end of this year and any movement necessary in 18. They will have to move ahead of the deadline because they cannot wait to find out if there will be a transition or not. Scarlet a lot of details will depend on who is negotiating them. Cohen has said personnel is policy. Can you tell us more about david davis who is responsible for negotiating the u. K. s exit from the European Union . Brexiteer. N ardent he was clearly on the side of the u. K. Leaving. Against the former european commissioner who is very experienced with the type of negotiations. It will be interesting to watch how it pans out. Joe theresa may explicitly mentioned Financial Services in her letter and the importance of maintaining that relationship. What does the dream scenario look like froor may . She came out with the negotiation exactly what she wanted. What is a plausible upside for the future of Financial Services in the u. K. . I think theresa mays dream scenario of the plausible upside are different things. The likely outcome is the u. K. Will not be outside physical market and certain Financial Sectors may have negotiated equivalent regimes but not be fullfledged access they enjoy today. Scarlet you noted in your research if negotiations are not extended, wto rules kick in. We know how they treat Financial Services . Are more for goods. I think that part of the equation is more for the real economy than the Financial Sector. , thank youan tuffy so much. Coming up, he has litigated some of the biggest court cases of his generation. David boies takes us through the nomination of neil gorsuch. From new york, this is bloomberg. Scarlet whatd you miss . Senate democrats appear to have enough votes to block neil gorsuch. Signaling they could change rules for confirmation. Earlier, we spoke with attorney david boies who argued many landmark cases in front of the Supreme Court. Asked why wall street should care if gorsuch is on the Supreme Court or not. More and more cases are going to the Supreme Court. Not just on constitutional issues but on statutory interpretation issues. One of the things you are looking for is what the court is going to be doing on issues that involve the regulation of business. One of the things that happened starting in the depression with president roosevelt is more power to regulate the economy was given to administrative agencies. That has been cut back a little bit over time. The real question is how much that is going to be cut back in the future. I think you are looking at judges like judge gorsuch and others on the court to see how much leeway they are prepared to continue to give administrative agencies in terms of controlling the economy. There was a day when we had Supreme Court justices who had worked with the companies and knew the ins and outs. We dont really have much of that on the court now. Should we be concerned about that . Do these judges understandably business works . I am concerned about that. I think we have gotten away from having people on the court who practiced law and represented businesses and individuals through most of their career. Some of the people on the court have done some practice. Predominantly, they have been in academic and government life on the bench. Those are important qualifications. But i would like to see people like powell and white who i think brought to the court a perspective on the way businesses actually operate. Gorsuch is up for a vote today. Is there any question in your mind he is qualified . You know something of him. Is there any question in your mind he is qualified . There is no question this is an extremely qualified person. He is very intelligent, works hard, person of enormous integrity. Great judicial temperament. The problem is if that was enough to get on the Supreme Court, there would not be a vacancy. Garland would already be on the Supreme Court. One of the issues the senate has to face is what the criteria are for putting somebody on the court who has been nominated by the president. I think we got off track with garland. Ifhink one of the issues is the republicans are going to play one way and the democrats will play a different way, youll get it unbalanced. You have a very qualified candidate here. On the other hand, you have a that emphasized with garland it is not just how qualified somebody is in terms of advise and consent. Is there a larger issue if they cannot get the 60 votes to support judge gorsuch and go nuclear . Does that likely lead to a more partisan Supreme Court . You have 5149 judges. They do not have the broad support we have expected from Supreme Court justices. I think that is right. I am not a big fan of the 60vote requirement. I think when you are dealing with the Supreme Court, somebody who will be on for life, maybe 30 or 40 years, you want to have somebody that represents a broad consensus. I think the 60vote requirement plays a role in making sure you do not get people on the court that are 5149 in terms of approval or that you had that kind of divisiveness. The last you judges have had 60 votes. I think that is important to the court. On the other hand, i think if they do go nuclear, that is a rule that in a lot of respects has held back progress. I think if you eliminate the 60vote requirement, in the long run that is not a bad thing. Scarlet that was david boies speaking with david westin earlier today. Joe time for a look at some of the biggest business stories in the news right now. Panera bread exploring a range of Strategic Options after receiving interest about a potential takeover according to people of knowledge of the matter who say one option is a potential sale. The bakery chain is said to be working with advisors. It is not guaranteed any deal will close. Shares climbed 20 the last 12 months closing friday at an alltime high. Another setback for j. Crew. The president and executive creative director will step down when her contract expires in december. Provided the Creative Vision behind the brand for years. It is dealing with heavy debt and a shift from mallbased retail. Same the samestore sales fell. Imagine plunged as much as 70 after apple notified the company it will phase out using its Graphics Technology within two years. It is the latest example of the tech giants affect on smaller providers with apple providing over half of its revenue. From finding fresh support hedge funds. Leveraging investors turned forish on the mexican peso the First Time Since donald trump became the republican nominee. 11 aftereso surged 11 consecutive quarters of losses. That is your Bloomberg Business flash. Scarlet next, volatility at near record lows. We will look at one indicator that closely hugs the vix. From new york, this is bloomberg. Scarlet i am scarlet fu whatd you miss . With the vix moving higher, i want to put it into perspective. Longterm, the vix is fairly low. You are looking at the vix since 2000. That is the blue line. The white line is the highyield index. The highyield spread. Cameron argues it is not out of whack when you compare it to credit spreads. As you can see, both are below the longterm historical averages. Those are the dotted lines. They both measure the current market risk appetite. Many people say we are near an inflection point. You should look for these metrics to perhaps signal a turn. I love this because this is a great way of putting into perspective the vixs move. It is not really an outlier. Joe it corroborates with what the market did. I am looking at unemployment in the eurozone which fell to its lowest level in several years. It is still up at 9. 5 . Although it is at its lowest level in several years, it is still high. People say there is room to improve. I looked at the spread between the u. S. And eurozone unemployment rate. There is a 4. 8 gap. It is not that out of whack with history. Structurally, the eurozone unemployment does tend to be higher than u. S. Unemployment. One more interesting thing. Two. When the two converged both had to do with recessions in 2001 and 2008 which suggested u. S. Unemployment is more volatile. Probably has something to do with our weaker safety net. Europe is stable but higher and hours swings more wildly. Interesting perspective. Scarlet within europe, the unemployment rate, in germany and greece on the other extreme. Joe there are a lot of economies in the number. Scarlet the market closes. We will look at the major indexes. This is bloomberg. Scarlet were moments away from the closing bell. U. S. Stocks falling just barely. Carmakers reporting worse than expected market sales, making them one of the biggest drag on the s p 500 today. Im scarlet fu. Joe i am joe weisenthal. We are doing your cozumel coverage closing bell coverage. Scarlet we begin with our market minutes. In