they did not want a le pen presidency, right? -- this isople important to keep in mind, because in one hand, it proved --t macron vocalized mobilized a lot of voters, but it was not the majority of the people. i think he needs to keep that in he is looking for a majority in parliament. >> tonight in that speech, he talked about globalization and the european project. isthe eiffel tower sparkling. >> it is hard to ignore. it is sparkling. >> antonio, he talked about those things with his speech at the louvre. he is going to keep banging away at this drum, isn't he? he has certainly been given a

mandate for that. that is but i think what the results of the election was. it comprises a lot of different ideas, because one of the main ideas in this project, and now that a lot of people have voted for macron, some of them voted because they like europe, some people wanted some political revival, but what is here for now is that he had the legitimacy given by a presidential vote to try and push forward an agenda, and the issue is he needs the elementary majority. without that, those will be basically useless. >> the front pages will be dedicated to the future of emmanuel macron. one final question -- what is marine le pen's fate in the years ahead? >> i think it will be tough. outsaw that the lights were

, and i do not know if you saw that le pen said she is going to -- she realized the brand was just too touchy. she said we will see about making the next party conference, so you will see a lot of fights, and i think le pen will be in big trouble if they do not do well in the .exical action -- next election >> thank you so much. we will be here tomorrow. john farrell will be here tomorrow from new york with important market reaction as well. john, thank you so much for the good conversation, per securely that particularly earlier tonight. we will be here tomorrow on a andonal holiday in france, then it really picks up between the u.k. election and the parliamentary election, and on to italy.

it is a soup of politics as well. >> it is. those amazing things that happens so rarely and so unexpected we. mr. trump wrong, the president-elect of france. this is bloomberg. , the. macron president-elect of france. this is bloomberg. >> and coming up on bloomberg best, the stories that shaped the week in business around the world. tellssident trump bloomberg what is on his mind about breaking up the big banks. clear.ade it >> two of the world's most powerful money managers talk about their business. >> to see money come out of active management and head towards structures. >> give me a sense of what you learned from valley and? bringsmilken conference of leaderswho's who

and finance. >> that is something we are considering at treasury. it will be exciting places to invest. >> we did not meet expectations this quarter. it was not the first quarter we did. x and we -- >> and we question the timing of trump's tax cuts. plus, a big miss for apple. that headlines a big week of earnings reports. >> facebook had another "great quarter." -- stock wenttop up. >> it is all straight ahead on "bloomberg best." ♪ julie: hello, and welcome. i'm julie hyman. this is "bloomberg best." your weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. on monday, president donald trump shared his thoughts on a number of political and economic

issues with bloomberg news. his comments made headlines and moved markets. >> in an interview with bloomberg news, president trump says he is willing to meet with the leader of north korea and he also saying that he is considering breaking up the big banks. pres. trump: we are looking at breaking it up as we speak and , dodd-frank is going to be very, very, seriously changed so the banks can go back to loaning money. erik: can you talk about the context in which he discussed that? was it something he brought up, you brought up, or how fully fleshed out our his thoughts on that issue? >> i didn't bring it up until late in the interview because we spent so much time talking about taxes, health care, and north korea. but we thought it was important to get the question on the record. he gave us a sense that there is some sort of decision or announcement imminent on wall to break up big banks, and changes to

dodd-frank. i wish i could tell you much more, but he did not show as a whole lot more than that on that question. julie: apple shares falling after hours after reporting q2 earnings that beat expectations. revenues still fell short. the iphone has always been the moneymaker for the company, but sales were basically flat year-over-year. not surprising given the anticipation for the next iphone coming this fall. we're expecting a big design overhaul there. apple also announcing they generated over $7 billion on services. let's talk about the iphone. obviously, this driving two thirds of revenues for the company. are you concerned that sales were flat? >> no. i actually think when you look at the quarter overall, it was fairly mixed. the one negative was those iphone numbers. but you know it is one of those , quarters where you can only put so much emphasis on the iphone. we think the entire miss here can be attributed to the fact that consumers are holding off for the next iphone generation device.

overall, you have seen a bit of a hit on the stock price, but that is something we would look past. >> it is a case, as tim cook pointed out in the conference call, he is thinking that people have been leaking too much information about the iphone, and there is a lot of hope and expectation and they may be holding off on a purchase. at the shares of the two largest companies in taiwan, both trading there there is a , mark hope and belief that this is going to be something in the third quarter. unfortunately, it is hurting in the second quarter. it comes down to is, will this hype be realized, or will they be a disappointment in the third and fourth quarter when the phone finally does come out? surprise, -- >> no surprise, no move today. in a unanimous vote, the fed kept its interest rate unchanged, but they did acknowledge that the economy has slowed in recent months.

although, they go on to say and their statement, that will change. "the committee views the slowing and growth during the first quarter as likely to be transitory." near-term risks to the economy, the statement says, remain roughly balanced. >> heading into the fed's statement the market was pricing in one additional hike this year as early as june. did you see anything in there that should change anybody's mind about what to expect from the fed? >> not much. it was a milquetoast statement, so to speak. we talked about a resumption of normal economic growth, which i assume is 2% to 3% this quarter. we also talked about gradual rate hikes. that is the rub. when you speak to one in terms of what the market expects, then the fed with their chart looking at 2% or perhaps 3%, i expect the market has it more right than the fed.

the house passing the gop health care bill successfully voting for the repeal and replacement of obamacare. the bill now goes to the senate. pres. trump: as far as i am concerned, your premiums will start to come down and we will get this passed through the senate. i feel so confident. >> the bill passed 217 to 213. two viewer votes -- fewer votes in the house and this would have been speaker ryan had a margin defeated. of about 21 votes he could spare and lost 20. mitch' mcconnell has a margin up -- mitch mcconnell has a margin up two votes he could lose. this will be an uphill slog to get anything through the senate because there are a handful of moderate republican senators that seem less likely to budge. having said all of that this is , something that republicans have promised consistently, constantly in every election for the last seven years. they won the house, the senate, the white house on this promise. there is a will to get to yes. if there is a will, i would not let the prospect, but there is

no clear path. it is going to be difficult. >> what will end up happening in the senate, according to senators i have talked to they , will craft their own entirely new bill. they might take pieces of the house bill, but they do not want to own that house bill. that house bill polls terribly. they want to have something that is their own, so there is a lot of negotiating to go. it won't happen in the next few weeks. -- e: >> the payroll's report from d.c. now. julie: 211,000 jobs in april, beating estimates of 190,000. unemployment down to 4.4%, that is the best since may of 2007, almost a decade. a solid rebound from the earlier reports. >> the job's number is a good number. and the underemployment number came down from 8.9% to 8.6%. that was a pretty substantial change. there is something in there for everybody. it simply suggests that the fed continues on its course of gradual increases, and that of

course, is the primary question -- what is gradual mean to the market? gradual means 40 basis points for the year. in terms of the fed, it means 50-75, and there is the conundrum. >> i think it is consistent with a hike in june and with three heights overall, because job creation remains solid and because the unemployment rate and u6 are down. in terms of the bigger issues, wage growth is still relatively sluggish and the participation rate ticked down. so yes, consistent with the fed hiking, but not consistent with economic takeoff. >> the president is pleased that we are growing jobs. he is very pleased. is very pleased that our unemployment levels are at 10 plus year lows. those are good numbers for him. he does not like where wages are. he wants americans to have more disposable income.

he wants to grow the economy. julie: still ahead as we review the week on bloomberg best, conversations from the milk and institute global conference, including interviews with treasury secretary steven mnuchin and ceo manny rowing. plus, bill ackerman exclusive interview at what went wrong with his investment in valiant. up next, more of the top business headlines. april was another cruel month for u.s. auto sales. >> these of the three biggest players in the u.s. market and they are all down more than analysts had anticipated. julie: this is bloomberg. ♪

you ♪ julie: this is "bloomberg best." i'm julie hyman. let's continue our global tour of the week's business stories

on capitol hill in washington where an agreement on a spending bill averted a u.s. government shutdown. >> let's find out if we have a government functioning in washington. looks like they will not shut down after all. congress has agreed to a plan to fund government operations through september. what happened? >> we have a government. they did not shut down, they kicked the can down the road all the way on friday, and i can tell you that analysts on capitol hill suggest they can really only get by doing these one week extension for about two to three more weeks. at some point, they will have to pass a longer deal. what exactly is in this budget? there is a $15 billion down payment on the military, which president trump has called for. there are $2 billion increases for some health research, something that president trump has said he wanted to get rid of. 1.5 billiono

dollars for border security. that is not an increase along -- order,exico order a.k.a., the wall. this is a bipartisan deal that perhaps several folks had anticipated. >> democrats scored a very big victory here. they sought a limiting financial advice to retirees, no custody sdc for ftc -- no cuts to the sec or ftc funding. basically, it is a big win for chuck schumer and nancy pelosi. this means this thing is all but done and a government shutdown is off the table. >> the democrats have been trying to claim victory on this, which is a strange way to look at a bipartisan discussion. if you are in a bipartisan meeting, it is very unusual for one group to walk out and start spiking the football saying we won and killed the other guys. >> and this is a elliptical meeting with mick mulvaney, speaking at the white house. a lot responding to two tweets the president sent out this morning.

the reason for the plan negotiated between republicans and democrats is that we need 60 votes in the senate that were not there. the headline -- our country needs a good shutdown in september to fix the mess. >> we have seen director mulvaney three times in the last 24 hours talking about the budget deal. he has used almost a different tone in each appearance, first saying that this was a great deal, a sign of bipartisanship between democrats and republicans and talking about how the white house got a lot of priorities into this bill. the most recent briefing was his most incendiary and most active in which he raised his voice and , took on the democrats saying, the democrats had tried to take credit for a win and that he would not stand for that. >> brexit talks get tougher as brexit secretary davis says he is willing to walk away without a deal if provoked. he also made clear that the u.k. will not pay a bill from the european union.

that bill is for $110 billion. the clock is ticking and time is short to reach that deal with britain. exactly how do we get from 16 to 100? and how is this playing out politically? >> that is the question people are asking, jonathan. they are scratching their heads over these numbers that are flying around. certainly, none of this has gone down very well. the mood was already pretty grumpy after that leak. that was over that dinner, and the mood coming out of damages here is one of not wanting to compromise. and as we saw david davis coming , out saying the u.k. will , threaten to walk away from negotiations if they feel like they are being pushed into a corner. the mood in london is pretty grumpy right now. >> sticking with the economic

impact of brexit, j.p. morgan chase is planning to move hundreds of london-based banks to dublin, frankfurt, and luxembourg. the move would help preserve easy access to the eu's market after j.p. morgan did warn us. jamie dimon warned us this would happen, 4000 banks to be relocated. this is possibly the beginning, isn't it, jonathan? jonathan: absolutely. that was a number that was mentioned more or less potentially there, and now they are giving us more details. frankfurt, dublin, luxembourg. the chasm between europe and the u.k. and how the negotiations started, i think it is very clear. we have places in dublin, luxembourg, you name it that are trying to win business. top of that, we have a year denominated clearing debate. france is being very vocal. >> a slump in the u.s. auto industry shows no sign of letting up with sales at all six of the biggest carmakers falling again in april.

ford and honda posted the steepest year of declines. that was around 7% each. gm sales fell almost 6%. chrysler fell 6.6%. >> it is not looking good for the whole industry. yes, these are the three biggest players in the u.s. market are -- and they are all down. they are all down more than analysts anticipated. definitely some softness playing out. there were a few bright spots. you know gm's retail sales were , up a little but there's not a , lot to hang your hat on. been falling, and suv sales have been making up for it, and what we ian the -- what we see in the early numbers today is that there is not enough growth in s to make up for the plunging auto sales -- suvs to make up for the plunging auto sales. we have to see how may and june play out, but it looks like we are past the peak in an industry that is on the downside of a plateau, and maybe starting to contract. now fox might be trying to

acquire tribune media. 21st century fox is teaming up with blackstone to outbid sinclair for tribune, which had a market cap of $3.2 billion. >> this is all about getting scale in the television business and the real catalyst is now there is a republican-controlled fcc in washington, the expectations that all the shackles will be taken off in that this is an industry ripe for consolidation. everyone is talking to everybody and looking to get bigger. sinclair had been the most dominant player in the television business in terms of m&a, consolidation, and they were considered to be the top buyer for tribune. >> but tv broadcasting is so 20th century. why would someone to own more of a dying business? >> advertising growth is still growing, but the big change for the television industry has been retransmission revenue. those are revenues that flow to the tv station owners in the -- from the cable operators for the right to carry those tv

stations. revenuethe second stream for television stations that they have never had over seven years with instance, and it has made a good is this even better. -- business even better. >> metals extending their biggest daily plunge. the china data are softening. what is behind this metals move? should i be worried? >> we are looking at iron and fundamental 1 -- copper and iron, the two fundamental ones, and they are moving for good fundamental reasons. we had data from australia coming in, showing fresh supplies coming into record stockpiles. on cover, stockpiles were building in london and that is a bad sign, but let's not get carried away. ton, this iser still a very, very profitable business.

>> crude is coming off its worst day since opec announced cuts in november. wti crude slipped to $45 a barrel. that is the lowest level this year. u.s. supply continues to offset the opec cuts. this week alone, we are down 7%. >> this is all technical, nothing fundamental. nothing has changed in the market. it is expectations in part, technicals in part, and then all of a sudden the market got bearish and we had a record amount of trading for a couple of minutes. a record amount of open-ended and then it was all shorts coming into the market. fundamentals turned bearish as well as he and how self-fulfilling is this and how hard is it go? >> it is never possible to call a bottom, but this is a good buying opportunity. the market is really fundamentally tightening up. we will be seeing even more robust inventory draws. when that happens, i think there'll be a shift of financial

sentiment boosting the price going forward. we are expecting a big jump in price by the end of the year. ♪

♪ julie: welcome back to "bloomberg best." i'm julie hyman. this week, two of the world's most prominent fund managers spoke exclusively with bloomberg television, citadels ken griffin and pershing's bill ackman. let's begin with tim griffin, who sat down with erik schatzker who discussed recent entrenchment and hedge fund industry. ken: i have been in the space for almost 30 years now, and over the 30 years, it has been an explosion in the size of the industry. the number of bonds -- funds, $3 trillion of capital, now deployed in hedge funds. unbelievablen growth story, and like many growth stories, we are going through a moment of reach

richmond as the dynamics of the playing field are changing. there is more competition. this is causing the second tier players to fall by the wayside. we saw this from the dot com bust. you see second-tier firms that do not have a competitive advantage and eventually have to call it a day and move on. >> your position, would you describe it as often serve -- offensive or defensive right now? tim: it is offense. erik: in what way? ken: in the quest for talent. there are a number of really talented individuals we can hire bring onto our team in this , environment. with firms shutting down, there are a lot of good people that we want to bring into citadel. with firms struggling, there is a good chance to bring firms into citadel. erik: how much longer do you think this shakeout in the hedge and industry will be over, i the time it is, what will have happened? ken: it is not a shakeup for the hedge fund industry, but for

active management. right? we see the rise of passive money and etf and index products. we're seeing money come out of active management heading towards passive structures. now as that happens, the money that is in passive structure is not pursuing alpha in the same way. that should make the markets less efficient, graduating to a larger profit pool for those who remain. we will find a new nuclear realm over the years to come. passes going to be bigger. the firms that are best able to assemble, analyze and incorporate information into their decision-making processes will continue to make outsized returns. >> we have a company that launched almost 14 years ago. call it first 12 years, generated 21% on equity. we made a really bad acquisition

and brought that down to 15%. this was a private entity that went public. took over in they traded fairly 2014. close. as a result of that bad acquisition, we dropped a significant discount. >> how much did it cost you? it cost us probably about 30% of anything or more. we have recovered about 20% from the bottom. but the market is still not recognizing it. so it has impaired us, if you will with a discount. , so you look at the ftse 250, the average return on equity ism one of those companies about 13% over a similar period. but the average ftse company trades at multiples of that. we trade today at .58%. we are liquid. we operate like an investment holding company. we do not pay corporate level tax. francine: this is clearly what you think is a great idea. give me a sense of what you learned from valeant. bill: what i learned is that it

can be very expensive. this is a strategy where historically, we bought a large stake in the company and joined the board of directors. presented ourselves as a significant influence had a yay nay over ther decisions the company made. in the case of valiant, in 2014, had a very successful transaction. he made a mistake with the path investment in the company. not being on the board, we could not see what was going on. that was a big mistake in our history. francine: does it mean that you will stay away from pharmaceutical companies? bill: probably stay away from pharmaceutical companies. julie: coming up, more conversations from the milken institute conference. ons includes david selman goldman's underwhelming quarter, and u.s. commerce secretary wilbur ross on nafta. plus, an interview with ben bernanke, who put in a few good

words for his successor, janet yellen. >> she is highly competent, has done a good job with a confidence of the markets. julie: this is bloomberg. ♪

♪ >> these are our top stories. macron has won a victory over far right nationalist marine le pen. [speaking french] the long democratic confirmation process, you have put your trust in me, and i

would like to express my profound gratitude. it is a great honor, because nothing was set in stone, and i would like to say thank you. thank you from the bottom of my heart. let's look at the market reaction. syria do -- the euro has been positive against the u.s. dollar, and it has come back from some of the earlier highs, trading now just above the one in 10 mark. about .20%.eakening will also have european stock markets coming online in about 9.5 hours. we will be watching those openings very, very closely. in other news, angela merkel's that we needvinced

to speak to the democratic social incumbent in germany. the challenger provides further evidence that the chancellor is regaining momentum ahead of the federal election in september. u.k., theresa may's governance has accused some european union counties of wanting britain to fail in the most outspoken comment so far. that hostiled briefings were held against the prime minister. the conservative party pushed for votes in next month's general election. hasthe trump administration added 95% to the budget of national drug control policy. -- cut 95% of the budget from national drug control policy. this comes a time when the president has pledged to

aggressively combat opioid addiction. this is "bloomberg." now we are back with bloomberg best. >> you added 9 million users last quarter. where is that growth coming from? did it come from donald trump? >> we can't say focus on politics and these events is really driving the growth because we do not have a way to measure that. twitter benefits when influential people use our platform to tell what is happening. we encourage that, we love the discussion, we love the conversation that is happening. the more it happens, the better we will be at showing you with happening in the world and what is being talked about. we would love it if every world leader would use twitter as a mechanism to talk to their constituencies. julie: that was twitter cfo and coo anthony noto with emily

chang. many of the world's top investors, executives and financial policymakers spoke with bloomberg television at the milken institute global conference in beverly hills this week, including leaders of the trump administration's economic team. let's begin with treasury secretary steve mnuchin. in an interview he confirmed the , u.s. is thinking seriously about issuing ultra long-term bonds to fund infrastructure programs. steve mnuchin: we are studying ultralong bonds, yes. that is something we are considering at treasury. we have a working group looking at it. we think it is something that could absolutely make sense for us at treasury. but on the infrastructure side, the president is determined that -- has determined that we make a major investment. >> there is are a huge part of the infrastructure that needs to be rebuilt, and we will do that in a lot of different ways, through public-private

partnerships and financing so we don't balloon the budget by $1 trillion. >> do you think fundamentally , in many ways governments look at infrastructure in the wrong way? at the moment every thing gets , chucked into general accounts. if you are running a company, which you have done several times, in terms of long-term investments, they will be counted differently than the short-term cash flow? is that one of the restrictions you face? mr. mnuchin: absolutely. as you know when you're running , a business you have an income statement and a balance sheet. if you're making an investment that has a 20 year or 30 year payback, you don't expense it in day one or look at it as a complete expense. the government budget treats everything as cash, so it makes it more difficult. >> there are more investors watching this network than anywhere around the world. if you had to bring them into finance that infrastructure, what is the main ploy you would make? does that have to do with pricing, long-term, what does that have to do? mr. mnuchin: we've seen a lot of interest from our counterparts

in investing in the united states, whether it's in infrastructure or other opportunities. i think this is something we are going to be able to get done. ♪ mr. ross: nafta is an old agreement. it is an obsolete agreement that does not reflect the current status of either the mexican economy or the american or the canadian. at a minimum, it needs updating. second, it has the problem with the rules of origin. mainly how much of raw material can be brought in from outside nafta and get the tariff benefits of nafta. in automotive, for example, they do it part by part. some of those parts are not even used in cars anymore because technology has changed. there are a lot of changes like that that are needed. a lot of things that weren't even thought about. digital economy not really dealt with.

services economy not really dealt with very much. some of the liberalization mexico has made to its natural resources, not dealt with at all. so there is a whole lot of stuff to do. at the end of the day the objective will be twofold. increase total trade and reduce our trade deficit with both mexico and to a lesser degree canada. >> there was a lot of talk last week about pulling out of nafta altogether. ditching it versus renegotiating. what is your sense about the possibility of really just getting rid of the whole thing right now? wilbur: what's unfortunate is it got leaked, and that blue what had begun as a sensible discussion of alternatives into something beyond what it really was. it's very bad, all the leaks that have been occurring. they seem to be a fact in washington. people told me there is no such thing as an off the record conversation.

but the fact remains the president has made the decision to try to negotiate nafta all over again. he's also made clear if we can't do that, his inclination will be to withdraw. ♪ julie: executives from some of the world's leading financial firms also joined bloomberg for interviews at the milken conference. here are some of the highlights, starting with john micklethwait's conversation with pimco ceo manny roman. he explains why they retain an edge in the market. manny: fixed income indices turn over 10 times more than the s&p 500 turns over. it's also the fact you have non-economic agents. just think of ecb and the fed as people who buy bonds for other reasons than active investment. and you also have have the buyers who are accounting

, driven. think insurance companies or have liability to match veterans funds. think pension fund. and so the opportunity for performance we think is much larger in fixed income than it is in equity income. john: there is one possibility that someone could come in and cause problems. the push from regulators sometimes to talk about trying to push things towards passive because they think it's cheaper. manny: of course there can be legislation, which would push for the lowest possible price. we think over the business cycle we can add 1.25% to 1.5% alpha. when you compound this over the lifetime of the retirement account, the difference is quite significant. when you consider we are talking about 1.25% to 1.5%, to 2.3%, that is the rate in the u.s. -- the amount is quite substantial. john: flash forward five years, will pimco be as american as it

is now you are do think it will -- asuch more global firm it is now? or do you think it will be much more global firm? manny: i think there is an urge for globalization across all businesses in america. the big unknown is how big it can be. it is a quite exciting but it's hard to size. john: it's very difficult for firms like yours to get in at a moment. manny: it's difficult for firms like us to get in at the moment but things may change. there is growth in emerging markets. we think latin america will be an exciting place to invest. we think we will have more places outside of the u.s. going forward. ♪ >> we did not meet expectations this quarter. it is not the first quarter we did not. >> it doesn't happen very often. >> but it happened this quarter. we have a terrific franchise. we feel very good about our franchise. there is no risk management issue. we feel good about the work we are doing here for our clients and how we are positioned. >> equities wasn't the star performer it has been in the past either. five years ago, goldman's equities business was five times

bigger than morgan stanley. and now morgan stanley's is bigger. what happened? >> the businesses are weighted in different ways. we have a leading institutional equity franchise strong position , across institutional work, and high touch, low touch, also prime brokerage. one of the places we are not invested in morgan stanley is in quants. there is a variety of reasons. it is a business that has grown very significantly. morgan stanley has a bigger position in the business. erik: what can you do about it? >> it is the business we are investing in and, candidly, it is not a straightforward business. there is a lot of operational risk in that business, and while we are investing in it we want , to be in the business. we have been a little bit more cautious in terms of our investment in that business but , we are building capability. morgan stanley has a platform on quant that's a little larger. but if you look at the institutional business away from that, we have a very, very institute -- significant institutional leading equity franchise. erik: can you take some of that

market share and quant away from morgan stanley? >> i think there was an opportunity with a set of clients that we don't do as much business with to increase market share with those clients. >> how? >> we are focused on that. by continuing to invest in technology and make sure it's developed meaningfully over the course of the last year to continue to develop and is competitive. we started to grow our market share with those clients and it is something we will focus on. ♪ julie: in another exquisite interview this week, bloomberg's tom keene went one-on-one with former federal reserve chairman ben bernanke in washington dc. among the minute topics they talked about that many topics they talked about was tax policy. ♪ tom: are we victims of our cultural economics? almost our cultural religion where we can't spend money when we need to? ben: it's ironic because now we are talking about big tax cut. -- tax cuts. at least from the perspective of putting people back to work, it would make more sense to have more tax cuts and spending in 2013 or 2012, which was when i was asking for that. from that perspective, with

unemployment at 4.5%, the case today is a little weaker. although there is always a case for improving the quality of the tax code, making it more efficient, fair, simple and so on. but in terms of adding demand to economy, that would've been better a few years ago. tom: let's make some news here. are these tax cuts tax cuts you can support as proposed, and a particular point, are they all something within the gilded age where all the benefits go too narrowly to the affluent? ben: if i talk about the income tax proposal for personal income, i guess i have a couple of concerns. one is that it is more demand -side oriented than supply-side. it will generate more consumer spending. it is not obvious it will increase the potential of the economy very much. as we were saying four or five years ago, we could've used more demand-side stimulus. today is not as obvious we need that. the other aspect of it is that we don't know the details and it

appears like it would create a much bigger deficit. i'm not opposed to increasing deficits under certain circumstances by any means but why not think about , improving the efficiency of the corporate tax code or doing infrastructure? tom: do we have a risk of a leaderless fed with president trump? ben: i think that is presumptuous to us to say that. we do not know who he is going to point. he could presumably reappoint janet yellen. i think, from his perspective, a reasonable, sensible thing to do. she is obviously is highly -- obviously highly competent, she has done a good job, she has the confidence of the markets. but whoever is appointed, i'm sure will certainly work carefully with the rest of the fomc. there is a reason why there are so many people on the federal market committee making those decisions, including seven members of the board. then there is a high quality staff that provides a lot of guidance and help. we are not quite in a 1928 situation. but i am of course very hopeful they will appoint if not janet

-- a point -- if not janet yellen -- somebody strong and confident. ♪

♪ welcome back -- julie: welcome back. i'm julie hyman. it has been another big week for corporate earnings reports around the world. we begin with silicon valley and results from facebook. ♪ >> facebook shares are down after reporting earnings that missed expectations but revenue that topped estimates. the social network now has 1.94 billion monthly active users, up from 1.8 billion last quarter. another big contributer to overall revenue is mobile advertising. mobile advertising accounted for 85% of ad revenue thanks to instagram's rapid growth. >> instagram, as you know, is a

very important mobile platform, along with facebook. and we are seeing strong growth across those. >> those are incredible numbers. every quarter it seems like facebook has another "great quarter." it's hard to see where there might be problems. the revenue number looks great. the user number looks great. there is a lot of momentum at facebook. our forecast is this year instagram will have $4 billion , in ad revenue. that will be over 1/10 of facebook's total revenue of the best if the number comes true. i think that instagram is a really interesting platform for marketers. they are still really intrigued by it and want to figure out how to reach the youth audience that is so prominent on instagram. ♪ >> let's talk about the banking sector in earnings. france's biggest bank recorded earnings that beat estimates. >> it is solid results for the first quarter.

the bottom line is up 4.4%. to be exceptional it's even up , 13%. this is a tribute to the business performance, whose revenues are up 7%. if you look at ratios, which are always interesting it continues , to improve to 11.6%. basically that's good. to top it off, last but not least, we just decided the bank will be carbon neutral by year-end. >> hsbc first quarter profits were adjusted to exceed $5.94 billion, beating expectations. >> i have to say, not being facetious, i be happy met if i could close up 2017 right now. we guided at the end of the year to see 3%-4% revenue growth of the course of 2017. and notwithstanding a very good start for the first quarter. that's the guidance we are holding for the market as we move into discussions over the next few days with investors.

>> we know you have been nz earningse a over the past few months the , first of the big banks reports this week. how does the numbers stack up? >> they stack up reasonably well. i will give you some numbers in australian dollars. net profit of 6%. that goes to $2.9 billion. cash profit is the one that's often watched with the banks. that is up three point four $1 billion -- $3.41 billion. 23% is still considered a slight miss. these numbers are built on the success of anz domestic units, and over the past few months gently letting go some of the asian assets. some of the other numbers paint a bit more of a mixed picture. particularly net interest margins falling from 2.07% to , 2%. but on the other hand, debt charges also down to $720 million. >> we are watching the banks of singapore after southeast asia's biggest blunder, dbs, -- biggest lender, dbs, reported profits

beating the estimates. you beat reports last week as well. we have seen some better-than-expected earnings fronts. are you seeing a common thread on the improvement? >> there was a turnaround for dbs. they had a weaker fourth-quarter. first quarter came in at a 1% gain at net profit, so that was a nice performance. dbs is seeing a bigger fiction -- friction from wealth management. they are doing well. i think the common thread is that those oil and gas debt problems which the singapore banks have had, they seem to be under control. ♪ >> aberdeen asset management has reported a slowing of how close in the most recent period, and the markets are recovering. assets under management climbed to about 5%, $108 billion pounds. >> the first quarter we've had for about four years we have seen really good positive flows and emerging-market and emerging-market debt. it's been a positive quarter for us, probably the best for three or four years. francine: do you think the trend

will continue? martin: i think so. people are beginning to see value in emerging markets , compared to developed markets. people are looking into places rateindia with the growth it has got, and investing their -- investing there in equities and bonds and more generally in emerging markets globally, looking for value. >> let's talk about bp. we just got the numbers. adjusted net income, $1.51 billion. that came in above the estimate. it beat forecast by $2.7 billion. they are producing cash, but not enough to cover three big issues. those are cap x, dividends, and the gulf of mexico. >> if you were to look at bp against other big oil companies like chevron, the results would be very good. they have increased net income , they beat their wall street estimates and city of london estimates. and the cash flow has gone up. the main problem is bp cannot generate enough money to cover

s -- cap x, packet dividends, and they are unique in that they need to continue paying the gulf of mexico for culpability. it's approaching the limit of bp is comfortable with. the ratio that they aim for between 20% and 30%. previous quarter, 28%. -- close to 27%, 26.8%. >> touching a five-month low for producers like shell. they are reporting first-quarter earnings today. let's start with shell. is it becoming a cash generating machine? >> more so than it was previously. i wouldn't say we are back to the boom times. it is clear the balance sheet is getting stronger and they are doing the right things. investors like it, but we are not back to that. >> validating the chief executive's decision in the massive acquisition of bg group? >> i think it does.

for now, because this is a long-term investment and we will have this conversation again in five years. things may be different. >> things are looking better for statoil, three consecutive quarters of adjusted losses before today. first quarter profit climbing. has it turned a corner? >> it's a long-term process. the cutting costs rationalizing , the assets and looking at what will make the most money. that will not happen in two or three months. that is going to be over over sev. ♪ >> tesla confirmed its highly anticipated model 3 remains on schedule for output to begin in july. this comes as company reported a first-quarter loss. do earnings actually matter or , in this case losses matter , when it comes to tesla? >> obviously not. a company like ford misses earnings estimates by a penny or nickel and the stock gets clobbered. tesla missed by 50% and the ir stock went up. you know, but they do not run out of money and the model 3 is on track. we have been saying it all week. this just really proves it, this

stock is all about the bet on the model 3, the bulls who believe this is the game changer. this is the mainstream major vehicle that will help tesla change the world. ♪

♪ >> we have the automakers talking about u.s. sales. they weren't that impressive. this is a chart going back to 2011 of u.s. auto sales. you can see it rising, rising, rising, and then we get to this year and there has been a drop off, coming in well short of expectations on the big names today -- ford gm, toyota, all a , little behind estimates. >> there are about 30,000 functions on the bloomberg. and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorites.

here is another function you will find useful. quic. it will give you fast -- insight on timely topics. here's a quick take from this week. >> the palestinians must recognize the jewish state. >> the election of donald trump is embolden israeli prime -- has emboldened israeli prime minister benjamin netanyahu. just weeks after trump's inauguration, netanyahu's government announced it would build the first new settlements in a quarter-century on the west bank. breaking the decades of u.s. policy, the trump administration says it does not view existing settlements as an obstacle to peace in the region. but responding to israel's announcement, u.s. officials have said expanding settlements may not be helpful in achieving peace. pres. trump: i would like to see you hold back on settlements for a little bit. we will work something out. >> here is the situation. the west bank is populated mostly by palestinians, who hope to make it part of an

independent state -- palestine. since israel conquered the territory half a century ago, israeli numbers have increased. since 1995, the population of settlers has grown four times faster than in israel itself. and whether hawkish or dovish, the government's support the best the government has always supported the expansion of settlements. why do israelis choose to settle in the west bank? there are three main reasons. one, religion. many religious jews are linked to the bible, which says the land was entitled to them by god. two, security. something the settlement act is protection against the dutch defense against attacks that occurred in 1948. -- defense against attacks that occurred in 1948. three, affordability. others like the relatively high standards of living made possible by government subsidies. according to the international court of justice, israeli settlements are in breach of international law. here is the argument. barriers, buffer zones, and the presence of israeli soldiers to secure settlers make life

difficult for palestinians. both palestinians and some israelis argue settlement play s into a bigger problem. ce by eating upa and dividing the land left for the establishment of a libel palestinian state. any peace agreement will likely hinge in israel undertaking the tough task of removing tens of thousands of settlers in the west bank. israel has removed settlers in the past as it withdrew from occupied territory but they were , smaller numbers. >> even if every single settlement were to be dismantled tomorrow, peace still would not be obtainable without both sides technology uncomfortable truths -- acknowledging uncomfortable truths and making difficult choices. >> choices as to where to draw borders, how to share jerusalem, and how to ensure each side's security. ♪ julie: that was just one of many quick takes you can find of the bloomberg. you can find them at bloomberg.com along with all the latest business news and analysis 24 hours a day. that will be all for "bloomberg best" this week.

thanks are watching. -- thanks for watching i'm julie , hyman. this is "bloomberg." ♪ ♪

♪ haidi: emmanuel macron is the new president of france. his victory is seen as a boost for europe and a blow to populism. betty: marine le pen accepts defeat bethesda has been a huge step forward for the french far right. we are live in paris are you haidi: another boost for $2rastructure, getting billion for road and real improvement. betty: warren buffett looks to the future, say they will be fine after he is gone. haidi: