is really that pimco great term for recovery.d already a great last quarter in q4 and now q1 continues and i think q2 will also continue with the success story of pimco. >> how sustainable do you see that success at pimco? clients flocking two-year pimco income funds. how sustainable are the inflows? what do you see in the crystal ball? mr. wemmer: the crystal ball is that pimco is really doing nicely and is recovering. i think we should also understand that we are in a very volatile world and i think we enjoy the quarters as they come and we hope we can surprise more often in the coming quarters. >> we will take the surprises as they come. tell us about your appetite for m&a. you spoke to my colleague earlier on this year and said is not on the immediate list, but the opportunities would be evaluated. given the strength of the performance right now, do you have more appetite to do m&a? and if so, with that come in the united states? -- would that come in the united states? mr. wemmer: with $2.9 billion in spoiled areofits party

pimco's new ceo says it is important look forward and not backward as the firm grows.an interview with john micklethwait, roman made the case why active manager still have the advantage over passive funds. >> 16 indices that turnover 10 times what the s&p 500 turns over. it is also the fact that you have non-economic agents. just think of the ecb and fed as people who buy funds. you also have the buyers who are accounting driven, think insurance companies or pension funds. the opportunity for outperformance is much larger in fixed income. >> there is one possibility like the government can come in and cause problems there, trying to push things towards passive because they think it is cheaper. mr. roman: of course, there could be legislation which would push for the lowest possible price, but we can add 1.25% alpha, and when you compounded over the lifetime of retirement account, the difference is quite significant. when you consider we are talking about 1.25 percent when rates are at 2.3% in the u.s., the amount of outperformance is quite substantial. john: you have f

pimco is on a great turn for recovery.last quarter in q4, and now q1 continues, and i think q2 will also continue the success story of pimco. anna: how sustainable do you see that success at pimco? clients flocking to your pimco income fund, it seems. how sustainable are the inflows? what do you see in the crystal ball? dieter: the crystal ball is that pimco is really doing nicely, and is well recovering. we are in a very volatile world. we hope that we can surprise more often in the coming quarters. anna: we will take the surprises as they come, dieter. tell me about your appetite for m&a. you spoke to my colleague manus earlier on this year. you said it was not on the immediate list, but opportunities would be evaluated. given the strength of the performance right now, do you have more appetite to do m&a? would that come in the united states? dieter: uh, look. with $2.9 billion operating profit and trust in change in the famous discount rate in the u.k. spoiling our party to reach the upward in costs within the quarter,

human covering emco for years. -- you have been covering pimco for years.y say there is a 70% chance of a recession next five years. talk to us over the big concern in a long-term. --john: assets are overvalued is what they are saying. the way to protect yourself is don't buy a bunch of risky assets and take some of your gains. stocks have been doing great as the market at the bottom in 2009. take some of those off the table. they also say the recovery has gone on so long historically recoveries don't die of old age this one could the older he gets. prepare for that day. julia: take profits as the market continues to increase, build cash, and then bonded these things pullback. what they talking about? john: they didn't specifically say -- they use the word "correction," which is typically 10%. they did not predict armageddon or another 2008, but they said user profits now when assets are overvalued to then reinvest and reinvest in assets that have more of an upside. for example, look at emerging markets outside of china. whatever assets can get there. fedhe

you are feeling slightly more optimistic about europe in pimco?more optimistic, especially after the first round. francine: this is the concern that so many people think -- i do not know if he was cautious or optimistic that macron will win. but many people think if you look at the polls, if the polls are right, that we are looking at a president macron. but we need to remember that people need to turn out and vote. so next monday is also a long bank holiday for the french. they may decide to go on holiday and not vote. tom: alliancebernstein is a huge deal. affects it directly pimco and everyone in asset management today. you really wonder where mr. roman will be with pimco in six months. kraus islowing up, out. i understand it is important for france and all of asset management in london and new york. this alliancebernstein thing is a massive deal. it goes back to the merger of alliance capital in 2000 with bernstein. it ended yesterday afternoon. pimco is front and center in this raging battle. francine: i think he was asked about it later. i w

john: will pimco be as american as it is now in five years or a more global firm? mr.an: there is an urge for globalization across all businesses in america. it is exciting, but -- john: is it difficult for a firm like yours to get in at the moment? mr. roman: it is, but it may change it we think there is growth in emerging markets, saudi arabia and latin america will be exciting places to invest. we have more resource outside the u.s. going forward. erik: up next, treasury secretary steven mnuchin is thinking outside the box when it comes to financing infrastructure. mr. mnuchin: we are studying altra-long bonds. that is something we are considering at treasury. erik: an wilbur ross shares his thoughts on what needs to happen with nafta. >> nafta is an old agreement, and obsolete agreement. it does not reflect the current status of either the mexican economy or the american or the canadian. ♪ ♪ erik: welcome back to a special edition of "bloomberg best." i am erik schatzker. president trump has promised to overhaul financial regulation, health care, and the tax code a

pimco is on a great turn for recovery. we had a great last quarter in q4. now q1 continues.lso continue -- q2 will also continue the success story of pimco. ♪ ♪ vix, often called the fear gauge, not really a measure of implied volatility, at its lowest level at one point today since 1993. that is an extraordinary low by volatility. on the bloomberg which lookatistorical movers. you want to focus on this part of the screen. not surprising. apple set a record. alphabet, microsoft, amazon at a record. facebook, broadcom. >> there are about 30,000 functions on the bloomberg. we always enjoyed showing you our favorites on bloomberg television. maybe they will become your favorite. here's another fun thing you will find useful. to where youyou can get fast insight into timely topics. here is a quick take from this week. >> everyone is listening to you now. you came by the tens of millions to become part of an historic movement the keof which the world has never seen before. >> u.s. president donald trump's victory is part of a new wave of populism sweeping through democracies of t

. >> allianz reported pimco net inflows totaled 21 billion euros in the first quarter.rmer confirmed at minus half a billion. >> the 200 million ahead of our outlook for the year. insurance is always a volatile business. it is too early to address our outlook. pimco is on a great turn for recovery. we had a great last quarter in q4. now q1 continues. i think q2 will also continue the success story of pimco. ♪ ♪ >> the vix, often called the fear gauge, not really a measure of implied volatility, at its lowest level at one point today since 1993. that is an extraordinary low by volatility. >> this is hmov on the bloomberg which looks at historical movers. you want to focus on this part of the screen. not surprising. apple set a record. alphabet, microsoft, amazon at a record. facebook, broadcom. >> there are about 30,000 functions on the bloomberg. we always enjoyed showing you our favorites on bloomberg television. maybe they will become your favorite. here is another function you will find useful. quic . it will take you to where you can get fast insight into timely

what does pimco make of the macron picture? up, we will have a discussion about china.xports and imports come in weaker than expected. is this normalization? is that what is taking hold of the market? we discussed. is bloomberg. discuss. this is bloomberg. ♪ manus: it has just gone 9:12 a.m. if you are tuning in from paris. the morning after the night before. the stocks in europe taking a moment. .33. a nice run. the dax is the only one managing to hold onto a day. to a gain.on cac managed to put on 7.4% between rounds one and two. hitting levels we have not seen since 2008 in the paris market. chinese numbers coming in weaker than expected. march, exports accounted for 14.3%. 6% in these 18 point last month leaving a trade surplus of 222 billion yuan. taking one china is thing in the markets are doing something completely different. was moderately heartening. the fx reserves stabilized. the markets are under pressure in germany. join the dots for me if you can. >> liquidity conditions are being tightened. the monetary policy is getting less easy. as liquidity condition

pimco has been in the game. super active.you are laughing at that but -- is there something to be said for that, when you look at the data? christopher: it's like me going out and saying i'm a big fan of baldheaded people. come on. umm, no, but to get technical the bond market -- the index construction methodology. the bond market index is all of the debt issued. the companies that issue more depth are bigger in the index. that's why, particularly in bonds, corporate credit decisions -- we have a great corporate team, we run almost all of our fixed income in our desk -- they are able to make very smart credit decisions and outperform that index. duration does that make sense. even pimco doesn't want to play too much -- they will take the risk and credit. we call that smart indexing. you will not replicate the bloomberg -- you guys now on us so i can say that. why have to redo disclaimer? scarlet: no, you are good. christopher: you guys on that and you will not replicated. be cap you're trying to -- dedicated. passive manageme

bloomberg spoke to pimco's ceo on the suspect at the global conference in l.a.. looks like mr.ll win the election, which will be good for france and democracy. will need to form a government who can an act -- trade andarliament find the prime minister who can get that done. guy: let's cross to parrot. -- to paris. how important is this story around the euro in terms of marine le pen's prospects? it has been the one thing she has not convinced people on. it is popular with part of her base, at the idea of leaving the euro and the uncertainty that would cause, particularly the loss of value us -- of people's savings, that has been an impediment of winning over voters of francois fillon. they share too many things on immigration and things like that, but voters tend to be -- have savings and just don't want to risk any adventures with a new currency. it is a major impediment for her she has soften her views, but doesn't want to give it up completely soaked is in a rather confused thing right now. two currencies, a frankfurt daily spending, a common euro used for big transactions.

here are some highlights, starting with the exclusive conversation with pimco ceo.gers retain an edge in the market. turnxed income indices over 10 times what the s&p 500 turns over. it is also the fact that you have noneconomic engines, and think of the fed. who are have the buyers accounting driven. or they have liability to match. so, the opportunity for our performance -- four out performance is greater. >> there is the possibility that the government could cause problems and push for regulators -- trying to push things because it is cheaper. >> of course, it would be legislation which would push for the lowest price. but we think the business totor, we can add 1.12% 1.25%. when you consider that we are 1.50%, about 1.25% to the amount of outperformance is substantial. >> ideas as to where pimco will be, will it be a more global firm? >> i think there is a nerd for globalization across all businesses in america. the big unknown is how that can be. it is exciting, but hard to size. it is difficult for firms like but things may change. we think there is growth in

here are some of the highlights, starting with john micklethwait's conversation with pimco ceo manny explains why they retain an edge in the market. >> fixed income turns over 10 times more than the s&p 500 turns over. it's also the fact you have noneconomic agents. think of ecb and the fed is people who buy bonds for other reasons than active investment. and you have the buyers who are accounting driven. think insurance companies or veterans funds. the opportunity for performance we think is much larger in fixed income. >> there was one possibility that someone could come in and cause problems. trying to push things towards passive because they think it's cheaper. >> of course there can be legislation that 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%, the amount is quite substantial. >> will pimco be as american as it is now or a much more global firm? >> i

john: flash forward five years, will pimco be as american as it is now or a much more global firm?e 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 in exciting place to invest. we think we will have more resources going forward. ♪ >> we did not meet expectations this quarter. it is not the first quarter we did. >> 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 for our clients. >> equities wasn't the star performer either. five years ago, goldman's equities was five times bigger than morgan stanley. what happened? >> the businesses are weighted in different ways. we have an equity franchise, strong position

it is true, pimco is really on a great turn towards recovery.ast quarter in q4 and now q1 continues. i think q2 will also continue the success story. ♪ ♪ vix, often called the fear gauge, at its lowest level by one point today. lowest level since an 1993. extraordinarily low implied volatility. looks at historical movers buy index rating and basically want to focus on this part of the screen. not surprising, we have apple, alphabet on here. microsoft and facebook are at a record. 30,000e are about functions on the bloomberg and we always enjoy showing you our favorites on bloomberg television. maybe they will become your favorite. here is another function. q you i see go. here's a quick take from this week. >> everyone is listening to you now. you came by the tens of millions to be part of a historic movement the likes of which the world has never seen before. >> u.s. president donald trump's victory is part of a new wave of populism sweeping through the democracies of the world. what differentiates this from mainstream politia is that they aner

joining us now is rich clarida from pimco. good morning to you.d, this two-day meeting, we're not expecting anything, are we? >> we're really not. we had a rate hike at the march meeting. the fed minutes made some news. we'll have an important june meeting, but this may meeting will not be eventful. >> as for the bond market, we saw a tick up in yields yesterday. are we range-bound in and around the 2.3% level on the ten-year? >> we have been range bound. a lot of folks coming into the year we thought we could see a lot of upper pressure on rates. we have not seen this for two reasons. one,i anxiety about the frenk c elections. markets are scaling back. we are pushing back the timing into 2018 as well. those two factors are important. >> what are you opening will be achieved in the next 100 days under president trump? >> my goodness. it's like the markets and i would like to see some clarity about basic parameters about what the tax and fiscal package will look like. that's first and foremost quite important. the budget situation, that can has bee

. >> fast forward five years, will emco be as american as it is -- will pimco be as american as it is now? will it be more global? >> the big unknown is how big that china can be. we think there is growth in emerging markets. we think that southeast asia and latin america will be exciting places to invest and that we will have more resources going forward. >> the treasury secretary steve mnuchin is thinking outside the box when it comes to financing infrastructure. >> we are studying ultralong bonds. >> end of the commerce secretary shares his thoughts on what needs to happen with nafta. >> nafta is an old agreement, it is an obsolete agreement. it does not reflect the current status of the mexican economy, for the american, or the canadian. >> welcome back to a special edition of bloomberg best from the melkin institute global conference. president trump has from us to overhaul financial regulation, health care, and of the tax code as part of his vision. john micklethwait spoke with the treasury secretary steven mnuchin about the administration's plan to spur economic growth an an ac

and the future of pimco.rn over six time what the s&p turns over. the the fact that you have ecb and the fed as people buying bonds. buyers whove other are accounting driven. think insurance companies, think pension funds. the opportunity we think is much larger in fixed income and equities. >> there is a possibility the government could cause problem's there? they are trying to push things through because they think it's cheaper? manny: there could be legislation which would push for the lowest possible price. we think over the business cycle we can add a quarter percent. when you add this over the last time of retirement account, the difference is significant. when you consider we are talking 2.3% 1.5% when rates are in the u.s., the performance is substantial. >> you focused on the fixed income. you haven't gone to these other things. explain that. is that purely because it's the area you can excel? manny: i think it's the reason we wanted to do something. we want to have a very focused strategy. we want t

jonathan: running us now, tony from pimco. -- joining us now, tony from pimco. .it matter they will be distracted by the politics? >> issues like that matter for economies and risk. it is something that can't be measured so when faced with uncertainty, there's dish engagement. capitalists to simply stop doing what capitalists do. they are simply wheeling and dealing and trying to make a buck. >> is the risk asymmetric in the hand the u.k. and the continental u.k. investing in assets. the global story matters and essential to it is china to a great extent. $11 million. plus, a hundred billion dollars of new gdp. globaltters is the because the big destination for ist they tell us it important to see strength of their. we would bet on stability for the rest of the year. haseems that the president propelled to maintain stability there. look for stability there. matters as far as the concerns, the key question is who pick up the dinner tab? maybe they went dutch come as they say. coming up, some things you really don't want to miss. we will be live from the milk .nd gl

joining us is mike amey, managing director and portfolio manager at pimco. good to see you.among investors that oil producing companies did the bare minimum of what was expected and no more? exactly, coming into the meeting there was an expectation we would cease production cuts, guided that way by the saudis and the russians, and really what they did was exactly what they said they would do. i think there was a little bit of hope and expectation that maybe you would get more than just the saudis and the russians, so a few more oil—producing would join the production cuts, that not happen, they did what they said they would do but the markets got ahead of themselves and we saw on the day a big move, 5% down is a big day limu. i have this picture in my mind of the saudis, the russians, opec, trying to cut production is the price goes up, and the americans on the other hand throwing oil in as fast as they can from the shale oil producers, trying to make as much money as possible and push the price down. there is an element of truth to that. saudi and russia, government revenue

tom: jerome snyder of pimco with us.ir force helicopter in jerusalem. it appears to be a motorcade in jerusalem as they begin a day of, not pageantry and sightseeing, that the means it, it, but thedemeans journey to the western wall. francine: it is something we need to keep an eye on. when you look at these pictures, and we have covered geopolitics closely from the start of the hour, is there anything the president should not say or could say that would move the markets? jerome: he is going to try not to offend anybody or alienate anybody. anything that leads to that will create additional volatility. it is unlikely. given the rhetoric we have seen of him being not necessarily surrounded by the press for, it will probably continue for this trip. this is a volatility will probably be limited at this point. tom: jerome snyder will continue with us on bloomberg radio. the president continues with his trip. this is his second visit after riyadh. i thought foreign-exchange would be boring. it is not. 1.10, 1.11,nds out 1.12.

sonings, geopolitics, pimco's mark joining us.his is bloomberg. ♪ yvonne: "bloomberg daybreak: asia this is." i am yvonne man in hong kong. -- this is "bloomberg daybreak: asia." i am yvonne man in hong kong. betty: three rate increases this year even remains a possibility. they to look at this chart. bloombergs chameleon trend indicator. that is what it is. for treasury note yield, turning green as you can see in the circle for the first time in almost six weeks. an uptrendnning of that should be there to bond. bebearsates -- should perp on.hould be bears joining us, pimco chief overseeingofficer, $300 billion in assets. good to talk with you again. are you a believer in the fed and what they see? we are not going anywhere in our rate forecast. hi, they, ity -- think it was week due to temporary factors. an inventorylly brought down, and a delayed tax refund. the second quarter will be much better. 60.saw bonds 10-year hit 2 basically, we reduced expectations for fiscal stimulus, but the fed is set to go. the economy is doing rea

pimco forecasts the rise of a 10 year field -- yield.n interview, mark people mark expects the economy to do " much better. ." burger king is looking to get its food out faster. burger king has been testing global payments since december, and a national rollout could happen within months. a mobile ordering app would help them compete with mcdonald's, which plans on launching a payment app in the fourth quarter. that is your bloomberg business flash update. coming up, there's a spring sale next week and a test of the market last year. the auction house is projecting $670 million in sales and sweet. that is more than have to come from the contemporary evening sail alone. we would hear from the head next. this is bloomberg. ♪ vonnie: this is bloomberg markets, i am vonnie quinn. auctions kickoff in new york next week. the semiannual sale will be a test of the art market after a contraction in 2016 when global auction sales fell 26%. christie's is helping to make major sales come back in the postwar and contemporary evening sale. they vigoro

joining us right now is richard -- pimco's strategic adviser. >> it's great to be here. >> it's hardt the market implications of this are. president trump's first trip, some of the splits we're seeing. with germany and then potentially pulling out of the paris climate dealey axios will come out from the trump administration. how do you see it? >> well, you have the fed raising rates, lowering the balance sheet. you've got trump administration, what are they doing, trade policy. fiscal policy, exchange rates. you see what china is doing with the currency and geopolitics and even though the markets are solid, the macro data is pretty solid, longer term, three to five years, some caution is warranted. >> you mentioned the fed is raising rates. yesterday, the ten year yield hit 2.20. continues to make new lows, banks are getting slammed. how does that make sense into the fed rate hike? >> well, that is a good point. because obviously, at the beginning of the year, rates were a lot higher. many thought were headed north. people have scaled back a little bit of a view of what the trump sti

pimco's let's bring an global strategic advisor, here with us as well, the chief investment officer and fixed income at oppenheimer funds. welcome, thank you so much for joining us today. richard, let me start with you. we know there is not going to be a rate increase today. the next meeting in june is. what would cause the fed to reframe guidance for the next rate hike? richard: i think your point a moment ago is relevant. we are in a world now -- the minutes are where the fed makes news. that's where you get a sense of the discussion. the minutes can tell us a lot potentially about the balance sheet plans. today we will probably not get too much. through tom just ran the different action we are seeing across asset classes. maybe it's a good thing we don't have markets positioning ahead of a fed decision the way we might have a couple years ago. richard: to some extent, that tells you the fed has been extraordinarily successful and conditioning the markets to react appropriately. they are being helped by the fact that the pace of economic growth on a global basis really has been very s

i spoke with manny roeman of pimco, he said active neutral funds and active e.t.f.'at passive because there's noneconomic players like central banks with sovereign wealth funds how much mature is a passive fixed income versus the active or versus passive equity. >> it's a mass rejection of active. in fixed income, not so much. if you look at the mutual funds active, eight are fixed income. so fixed income is treading water. but i do think that low cost is the mother of all trends and it's affecting everything, no matter where you are. this chart shows these are flows. take all the funds and e.t.f.'s in the u.s., divide it by ratio buckets, that's what you have. i call it the low-cost demarcation line. there's a cup of funds taking in money that are more expensive. largely speaking, no matter what you're doing, people really want your product cheap, whether it's active or passive. >> we're going to leave it there. thank you for giving us your isdom. julia: still ahead, the commodities close, oil on the rise today after slumping to a five-month low. the latest, next. t

there's fidelity, blackrock, pimco, and are you telling -- is the message that no u.s. investor should own any of this debt? >> well, i think any investor should be free to invest in whatever they want to invest in, and they should face the consequences both financial and in terms of their reputation capital that are associated with those trades. that's it. and in this case, goldman is suffering. they did not manage their reputation risk in a prudent way. they did not think it through. it was the stupid trade from that point of view. >> yeah. one second, let's get the facts about this out there according to the story. the government was under duress to raise cash because reserves were dwindling, so whoever the investors are were able to pick up the bonds fcents on the dollar, and some improves, and what they are going for, and so that's been played in a number of political outcomes from a change of regimes, so it's not ruling out. why is it taking the time they are supporting this little regime? >> well, it's not exactly clear the details of the transaction. i mean, the

. >> announcer: "the bond report" is sponsored by -- pimco. can see in your blind spot. [ dinosaur roarsoard cameras and radar can detect danger all around you. driver assist systems can pull you back into your lane, if drifting. bye chief. bye bobby. and will even help you brake, if necessary. it makes driving less of a production. lease the gle 350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. prone jar shatterst livthe competition.pe? olay regenerist hydrates skin better than creams costing over $100, $200, and even $400. fact check this ad in good housekeeping. olay. ageless. >>> welcome back to "power lunch," everybody. the s&p 500 is on pace for its sixth-straight day of gains and hitting a record intraday high today. best buy is the top performer in that index today. courtney reagan joins us now with more on that. courtney? w. hi, good to see you. not only is best buy the best performing stock on the s&p, shares are hitting all-time highs today. the charts are pretty impressive. logging the best day since august 2016. actually gained more

he is that pimco and is at allianz. we take for granted the publishing.much copy? thatis the pixie dust allows you to get so much opinion and editing out the door? mohamed: it is simple, tom. there is so much going on. ride from starbucks to airplanes, there is so much going on. it is a fascinating time. cambridge to the library, nobody in there was talking about the vix or volatility and yet there are times in our history where you get this quiet. greenspan would call it the quiet since -- quiessence. mohamed: i think the market is comfortable with three things. the central banks' ability to repress volatility. that growth is going to stay relatively stable. that there is a lot of liquidity on the sideline. when you put the three things together, the markets are willing to put aside everything else that is going on in the world and there is a lot going on in the world. tom: let's bring up the chart. the battle of midway is over on the left. i'm kidding. it is truly unprecedented, isn't it? mohamed: it is encouraging people to take a lot more risk than th

schneider at pimco yesterday, quite adamant about a bearish flatten her in -- bearish flattener in ouruy: not much of a sense of direction coming from europe this morning, the same in the u.s. a little bit of a selloff in euro sterling, but not a big one. we see solid data coming out of the eurozone. ist i am interested in, tom, that we have not seen much of a reaction from the china downgrade. is affected because of the commodities link. the shanghai composite is barely budging. tom: let's look at a picture of that. let me first look at the bigger picture, the chinese five-year yield. this function is my favorite for fixed income. here is the five year yield, back to the financial crisis, lower yields off the crisis. notice these peaks here. this is a higher five-year yield. and as you get up to 4%, that might be a point of tangent. i want to show what guy has talked about twice. mr. johnson is always right, right, right. that is the chinese five-year yield. on the moody's news, there has not been that much of a move up today. guy, what do you have this morning? guy: i want to talk ab