>> we are 30 minutes into the u.s. trading day on this tuesday, april 16. here are the top stories. big tanks scorecard with results from the big five. how did bank of america and morgan stanley earnings stack up compared to their peers? johnson & johnson shares sliding despite a beat on profit. the chief financial officer joins us to discuss the health giant's path ahead. and a conversation on clean energy with orsted america's ceo david hardy. what is the outlook for the industry? we will discuss in just a bit.

i am katie greifeld in new york. welcome to "bloomberg markets." when it comes to the s&p 500, building slightly on yesterday's losses. s&p 500 currently off about .1%. you did have a selloff yesterday. managed to open a little bit higher this morning. about 30 minutes in, those gains have dissipated. big tech, nasdaq 100 trying to say in the green, currently up about .1%, even though you have that selloff in the bond market continuing. the 10-year treasury yield higher by another seven basis points, rapidly approaching 4.70% on that benchmark 10-year yield. we will see if we get there today. first, let's talk about the last of the big bank earnings rolling out this morning. bank of america and morgan stanley topping estimates, with bank of america with one of their best first quarters on record.

let's get more details. let's start with bank of america. what went right? >> net-net income finally beating expectations. we did not see the same for some large bank spirits are to meet there is not only a bit of a coup, they say they expect net interest income to bottom in the second quarter, which is the current quarter, and rebound into the second half of the year. they say they are stunned by the amount of savings and consumer accounts, cash on sidelines, and they are pointing to a rebound in amend bang and capital markets. similar with morgan stanley. they say we are at the beginning of a multiyear cycle in mergers and acquisitions. morgan stanley beating on trading in investment banking, still missing on advisory estimates. the ceo pointing to a bit of a rebound. for morgan stanley, there is the outstanding matter about probes into their wealth manager. the ceo saying the conversation

with regulators is nothing new about onboarding new clients. this is particularly important because we did see earlier in the year morgan stanley's stock take a significant hit tied to that news. now are rebounding on the day. kailey: we're finally at the end of the big bank earnings. in just about a minute, tell me your biggest takeaways from this season. >> the big boys are coming back. the big institutional businesses are now what is looked at to be the next driver. he had trading businesses hold on very strong and very competitive. you had underwriting jump back. jp morgan bringing $1 billion of debt underwriting fees alone. so as long as that keeps going, you can see interesting movement here in terms of increasing fees. to offset weakness elsewhere if lending to the broader economy

will start to slow. katie: appreciate your reporting. let's be joined by lori calvasina of rbc capital markets, head of u.s. equity strategy. i'm so excited you're here because a selloff in the bond market, when it comes to the equity market, you cannot ignore it anymore. you write that generally you think higher inflation and fears over higher interest rates are good for the mega cap growth stocks. i'm excited about that because that is a little bit un intuitive. we have been told higher rates are bad for big tech. now you see the opposite dynamic at play here. >> what they are also saying is that broader rotation trade that the crosscurrents are very complex. one of the things we have noticed, and this is what that was alluding to, if you look at the post sbb environment, a very short term relationship for about the past year, is that

10-year treasury yield moving up, then we have been seeing any kind of mega cap growth cohort you can come up with. we use the top 10 names in the s&p, and those traits have basically been alive with moves in the 10-year treasury yield. you think about last fall when we saw the 10-year treasury yield spike, that was one of seven sort of periods we saw mega top growth stocks really move up. we did some digging then to see what was going on, and if you looked at the top 10 names in the s&p against the rest of the s&p 500, we found much better balance sheets in the extremely big mega cap growth stocks. obviously, that is not true for every single one. but we saw it on the median basis. we think that sort of balance sheet fears and interest rate fears were one of like 10 different things that pushed people from mega cap growth

stocks last year. i have another chart that looks at longer-term relationships, showing things like when 10-year treasury yield's move up, the s&p 500 consumer discretionary sector underperforms. the s&p 500 communications sector underperforms. some of those big tech-ish type areas of the market have seen inverse impacts from interest rates.consumer discretionary stocks, tech, expect pressure when interest rates are rising. that is a long-term relationship. but in the post sbb world, there has been a quirk on how the mega cap growth stocks have been trading. katie: look at balance sheets a little more, you make the point that a lot of it comes back to the better quality balance sheets, but what do they actually look like for this top 10 names when it comes to things such as duration in this higher interest rate environment? >> we look at duration for the top 10 names, looking at the net debt to ebita levels, and we

found they really do not have balance sheets in this cohort. i think it is a decent reference point for today, we saw 10-year treasury yield move up quickly run 5%. the fear was we have to refinance all this debt, and people were not taking many steps on the arguments but wanted things with lower debt levels and wanted safety traits. that is one of the tailwinds we saw emerge during that period, and i think it manifested in a broader safety trade and then overlay the longer-term secular growth gains on things like ai that obviously make people feel better. katie: look at the 10-year treasury yield right now, approaching 4.70%, which is one step on the path may be returning to 5%. do people need to be worried about heise interest rates in the equity market -- where would

that fall, is that the inverse of the big tech stocks of smaller cap companies? >> we certainly do notice that anytime people really get upset about interest rate moves or start to price in things like no fit -- more fed cuts, more fed hikes, you can look at the cpi days, and you do see the small caps take the brunt of the pain when we get a negative cpi reading, for example. if you think about the broader rotation trade for many to come out of the mega cap growth stock, it has to go somewhere else. small caps are one of those, big destinations, kind of the flipside of the coin. small relative to large, when you have a tightening fed, small caps underperform. easing mode and cuts, that typically triggers small-cap outperformance here at think the destination for the rotation trade, small-cap, that cyclical part of the market really cannot work until you get some cuts. katie: interesting.

small caps are fascinating to me. some people are optimistic about the space. and you look at valuations and forward p/e's, they're really cheap relative to some of the other indexes. but sounds like for it to really work, we need to see fed cuts. >> yeah. look, i have those charts. cftc data, small caps look under owned. nasdaq and s&p cftc data, those big cap growth parts of the market look really crowded, at, in line with, or above. 15 times p/e and the russell 2000. or something much higher in the rest of the market, this top 10 names we talked about before. we agreed, you have all these great things going for small caps, and small caps should benefit if economic tilman's are. if gdp forecasts keep going up,

that is a powerful tailwind for small caps. but those are going smack dab into some headwinds right now with the inflation and interest rate story. i think it is interesting that so far, small caps are not really breaking the low from november 2023 relative to the s&p 500. we will see if i am right about that in couple days. so far, the small caps are fighting back, and i think it is because of some of those good things they have going for them. katie: definitely a space to watch with a lot of crosscurrents but also tailwinds. have about a minute left with you and we have not talked about earnings. this talk about this upcoming earnings season. there was an interesting note from j.p. morgan yesterday saying a lot of the good news on earnings, it is already priced into this market. your take? >> we all get caught up in the consensus estimate, our forecast as a strategist, and so on. but we need to stop fighting

about this i the summer. estimates are too high to start the year, too high at this point in time in the year. they typically get cut and settle out by june or july and end up close to what the consensus forecast was at the middle of the year when we get to the end of the year. cuts are normal, nothing to get overly worried about. i do think some of the bears in the marketer overstating the case a little bit. the street is that 2.42%. we will see what happens. i think there are a lot of cost pressures. management teams are good at defending the bottom line. i do think we have a decent set up. and guidance has been overwhelmingly to the downside, so companies have been trying to keep a lid on expectations. katie: really enjoyed this conversation. thanks to lori calvasina of rbc capital markets. coming up, johnson & johnson

narrows its profit guidance for the year. we will speak to the executive vice president and chief financial officer joseph wolk, next. this is bloomberg. ♪

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katie: one stock we are following is johnson & johnson. their first quarter profit beat wall street's estimates, but it slightly narrowed its adjusted profit guidance for the rest of the year. i am thrilled that we have joe wolk, the johnson & johnson executive vice president and chief financial officer. let's start with that adjusted profit guidance for the year, narrowing to a range of $10.57to $10.72 a share. the earlier forecast was for

$10.55 to $10.75 a share. why the narrow range? >> good morning. rate to be here with you. thanks for your interest in johnson & johnson paired we had a really strong first quarter, encouraged we will be able to meet the guidance we outlined in january. with the passage of one quarter, we see less risks. from an operational perspective, we took out and raised the floor on our earnings-per-share, as well as ourselves guidance. there is a little bit of an fx headwind. we end up at the same midpoint, but the part we can control with respect to our business is very much in hand and we're very comfortable with where we're at for the full year. we saw 7.6% growth, really bolstered by pharmaceuticals growing at 8.3%, med tech growing at 6.3%. as well as that has progressed for the near term, we are really emboldened by the number of

clinical milestones we hit throughout the quarter, specifically in pharmaceuticals. we had five approvals, three more filings for approval, and a number of data readouts. and very important areas like multiple myeloma, lung cancer, and psoriasis. on the meditech side, we deceived approval in our market-leading electrophysiology category. we are very active deploying capital. we did announce a plan to acquire shockwave medical. that complements another acquisition we closed earlier this quarter. we increased our dividend for the 62nd and second of year. we maintained our commitment to the level of rmb investment. katie: a lot to get into it with guidance, if you resell for but also lower the ceiling, you end up in the same place. when it comes to the guidance, i

believe last year at this time you called out the guidance as being characteristically conservative. how would you describe the current guidance that you delivered today? >> i would say it is comfortable right now. if you think about what we delivered in the first quarter relative to consensus on the street, we beat by six or seven cents. we are supplying about three cents with the rays in the operational performance. the reason we are hedging our bets a little bit is because of the clinical advancements i mentioned in the first quarter, being so early in the year, i would give our scientists every opportunity to advance the pipeline even further, find new molecules, new therapies that could impact patients and improve the long-term performance profile of johnson & johnson. that is how we are thinking about it. if last year was responsively cautious, i would say we are comfortable with where we are at right now. katie: let's talk about the

pipeline and portfolio. i want to talk about solaris, your best-selling psoriasis drug, which revenue came in below estimates. it is expected to decline as similar competition enters the mix. what of the portfolio or pipeline has the best chance of replacing that revenue? >> the good news is it has already been replaced with the director multiple myeloma. it became the largest johnson & johnson product. about 75% of ourselves actually are for patients who experience inflammatory bowel disease. only about 25% are related to psoriasis. we have another drug that grew at 28%, and then one for prostate cancer that grew in the 20% plus category. so we're very comfortable that the assets that will really carry us through in this decade are already in place to make up for the loss of the specific one

you referenced with respect to stelara. the pipeline is emerging. we have an antibody for multiple myeloma that blew away expectations in the quarter and a number of assets in the stable, if you will, that are already on track and improved in our market to replace that. i will remind folks, the loss of exclusivity on still are is not a drop off a cliff event. if you look at the competitors out there who had similar biologics and when generic, they did not experience a dramatic drop in revenue. we expect putting much the same in still are -- stelara. these are critical diseases. patients and physicians are

reluctant to jump off those therapies when they are working so well. katie: talking about cardiology, you mentioned the acquisition of shockwave. that was earlier this month. how do you see that fitting into the cardiology portfolio? and i want to talk about the dilution, a 10 cent in 2024, 17 cents in 2025. what made you comfortable with that? >> in terms of shockwave, we are excited about that. it is complementary to the presence and leadership we have in electrophysiology with our webster unit. acquisition we made and completed at the end of 20 for heart failure, the world's smallest pump. shockwave is a different space within interventional cardiology, but it really complements the portfolio. it is a high-growth margin -- market, good margins. it is and asset johnson &

johnson can glue -- use a global footprint and our expertise in other areas of cardiology to expand that platform even further. with respect to the dilution, it comes down to financing. with your prior guest, you were talking about higher for longer with respect to rates. we have significant cash balances, and there is an opportunity cost to using cash that we thought maybe going the debt route would be more advantageous from that perspective given our aaa credit rating and the cash flow we generate year in, year out. we are evaluating that and have to hear from the regulators first on the shockwave acquisition, then we will determine the best way to finance that. katie: let's talk about the future. in the notes you sent to my producers, you write ever strong balance sheet will continue to enable flexible investment of capital into a combination of organic and inorganic growth. are there more m&a type deals in

your future? >> possibly. we are always looking at someone asked if we were done this morning, and you really cannot commit to being done or not. what we can commit to his we are always looking. if you look at johnson & johnson's history of the last 25 years, about 40% of our growth comes from inorganic means. we look through the lens of having that strategic fit, so scientific capability, commercial expertise. perhaps it is the global footprint. and then layering on the financial returns. are we earning enough to compensate for the risks we are bearing on their behalf? if -- we do not say we are done or just getting started, we are always constantly looking. katie: i really enjoyed this conversation and hope to speak to you again. joe wolf is the cfo of johnson & johnson. we want to bring you some headlines just crossing from the u.s. treasury secretary, janet

yellen, speaking right now. she does not see widespread spillovers from the iran attacked. she also expects additional sanctions against iran in the coming days. you can follow her remarks right now on livego on your terminal. that is secretary janet yellen speaking right now. still ahead, we will look at the companies making it the most -- making the most social buzz today. this is bloomberg. ♪

katie: time for social climbers, a look at the stocks making waves on social media this morning. the doj repairing to file an antitrust complaint against live nation that would force it to spin off the ticketmaster business. live nation and ticketmaster

have been under fire for ticket fees and faulty customer service. , u.k. boot maker doc martens lowering its outlook for 2020 five and naming a new ceo. this comes as doc martens contends with sliding cells and the u.s. and shares that have fallen over 80% since its ipo three years ago. finally, we have united health beating profit estimates and deferring its outlook for the year. they show strong results despite a costly cyberattack on one of its subsidiaries that roiled the health-care industry earlier this year. you can follow all the latest company buzz on trengo on your bloomberg terminal. coming up, escalating oil prices emphasizing the need for alternative solutions. we will speak to david harvey of the orsted group about the outlook for renewable energy. that conversation coming up next. this is bloomberg. ♪

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♪ katie: escalating tensions in the middle east pushing oil prices higher. can the solution to escalating costs be found in wind energy? we're joined to help answer that question by david hardy, the e.v.p. and c.e.o. his company operates wind farms and is here for the b-net summit in new york and thrilled you can make some time for us. dave: thrilled to be here. katie: let's talk about costs. critics of offshore wind say it's pretty extensive. you look the a the new contracts you recently renegotiated with new york. they're more expensive than your older contracts. how should people be thinking about those higher costs?

dave: well, first, offshore wind is one of many renewable energy products we're working on. he also build onshore wind and solar and those industries are more mature. offshore wind, while orsted built the first offshore wind farm in 1991 and the very first ones are being built as we speak. we celebrated the completion of the south fork wind project a few weeks ago with governor hochul and secretary holland and a big achievement to build the first offshore wind farm in america. we're standing up a new industry here that's 30 years behind europe. so of course our costs are going to start higher. and while the fuel of offshore wind and renewables in general are free, solar, wind, the cost of capital is our main driver of some of our costs. and as you know, interest rates have risen significantly over the last few years and is one of the main drivers why offshore wind is more expensive today than two or three years ago.

katie: it feels like every conversation i have on this show is couched in the fact we are in this higher interest rate environment and we look at the economy and inflation is very high. when it comes to consumers, even consumers that would like to be part of the energy transition, does it make it more difficult for consumers to really embrace and adopt some of these new innovations such as offshore winds when they're worried about their pocketbook right now? david: one of the challenge is one thing i spend time on and talk to my team about. affordability is a critical factor long term but we need to put it in perspective, though. there's a lot of costs for a conventional power system and it's not as transparent sometimes to where those costs are hidden with the consumers but they are in health and environmental cost and taxes and other things. likewise, even though our costs are higher now, we believe in the medium term and longer term the cost will come down and we need to get the cycle started.

building the first projects like south fork and like revolution and sun rise, which are two other really large projects we're in construction now on in our offshore portfolio will drive those costs down, i'm really confident about that. and you can see the cost for offshore is significantly less in the u.s. and we're not dreaming it but can see the path. katie: you're looking at europe and you say there's a blue there for costs coming down overtime? david: for sure. katie: you brought up solar and it's an interesting point, you think of solar and feels like the american public is used to seeing panels on roofs and fields, etc., when you're driving. what lessons can you take from solar which is a more mature industry, and bring to offshore wind or is it too ideosin creatic? david: similar but different. we're building 1,400 mega watts of solar as we speak, one of the largest battery systems as well coupled with one of our solar projects. we know a lot about soldier and getting communities to support

solar. offshore wind has some benefits that are much better than solar. you can build really big projects pretty far offshore, less visual impact, much higher capacity factor is a term we use but basically more similar to -- from a base load standpoint, less intermittent, i guess you'd say. solar is twice as intermittent as offshore wind, for example. we spend a lot of time in our company working with stakeholders to try to make sure we rebuff, you know, misinformation and just educate people because it is new and people don't know very much about it. katie: you mentioned a little bit, of course your interactions you had with the government of new york. but let's talk about the biden administration because recently they issued a policy that would make it easier for offshore wind developers to claim a special bonus tax incentive for energy communities. i'm just curious for your thoughts on that. does that go far enough for your projects? david: i think the i.r.a. is a

tremendous piece of legislature, the largest green energy legislature in america and actually having an impact on the world because other societies are having to follow the u.s. and our ambition here. it's definitely helps our business, the i.r.a. at large. this new topic you brought up, this energy community's bonus. we've recently received some guidance from the treasury department that is favorable for offshore wind and will allow our projects to qualify for this extra bonus. again, depends what side of the table you look at, from, you know, it's more tax dollars being used to help incentivize the industry to get out of the chutes here but it's bringing it to the affordability question you asked earlier, this incremental tax incentive will actually make the cost of offshore wind lower as a result. katie: we're having this conversation in an election year, clearly clean energy, renewable energy has the support of the biden administration. what would a trump victory mean

for your current projects and future plans? david: well, i think if you take red and blue, you get purple. i wore my bipartisan purple tie today. i believe renewables and offshore winds are a bipartisan topic. the world needs clean energy and we need affordable clean energy. the u.s. needs jobs and the growth that will come as these industries mature, especially offshore wind. we're building whole new ecosystem here of infrastructure, supply chain, etc. equally important, we need energy security and so these are homegrown energy solutions, onshore winds, solar, offshore wind and green fuels and green hydrogen and are all homegrown energy solutions good for all americans. katie: david, i think that's a good place to leave it. really appreciate your time today. that is david hardy of the orsted group. let's check these markets. about an hour into the u.s.

trading day. we're going to do that with bloomberg's simone foxman. simone: looking at s&p and trying to find direction and it's down as equity markets await, a speech from jay powell coming at 1:15 p.m. eastern time. the dollar, however, having its best run in a year today on prospect of higher rates as well as ongoing middle east tensions. with respect to the middle east tensions, we're not seeing brent continue that rally. in fact, it's a second down day here trading at $89.64. finally, we're keeping an eye on the treasury market with yields rising just slightly today. flirting with that potential 5% level that we last reached in december. and to that end, we look at bond and market implied volatility, and sebastian boyd has a great writeup about this, our m-live reporter and it's nearly as

highest it's been since december. actually, i think it was january 3 is where we are in the same level. and he says part of this reason may be some comments we got from the fed vice chair phillip jefferson who talked about data dependence and said, quote, if incoming data suggests inflation is more persistent, that may mean hold is appropriate. so sebastian writes, if you see more data dependence, then bond markets will be more volatile because nobody knows which way the data will come in. turn to the equity markets, our big mover of the day has been united health. we're seeing a surge in shares there. after the company reporting very positive earnings. not just the muted impact from a cyberattack but also medical costs that were in line with expectations. that's a big one. the banks have been in focus. bank of america started out the day-trading higher but now we're on pace for the biggest drop since march 2023.

we're watching live nation as the department of justice we report looks set to file an anti-trust lawsuit against its ticket master platform. finally, says la is always in the news especially after those layoffs and departure news coming yesterday, web bush writing one of those senior departures with leno was a gut punch. katie: the rough ride for tesla continuing to build. thanks, simone. what's next for paramount as rumors fly about possible merger partners? we'll be joined by jon klein, former president of cnn. this is bloomberg.

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♪ katie: it's time for our daily wall street week conversation and today we're focusing on a possible paramount deal. media mobile david ellisson is in talks to take over paramount and merge it with his own company, sky dance media. john klein is hang media co-founder and wall street week david westin. a lot of people would like to know how this shakes out. david: jon klein can talk to us and it's a different world since you ran cnn and i was at cbs news. give us a sense or a vision if you can fix paramount, whether it's david elson and sky dance, what's the formula for success for paramount, it's fallen on hard times. jon: i hear prayer works, maybe they can try that. you think of the universe, we

all know how the world is going to end, right? the sun is going to grow and grow and become a red giant and swallow up all the planets including ours. that's exactly what is happening in media right now. the tech giants, the apples and microsofts and google and meta and amazon, they're tech/media companies now and are just dwarfing all the traditional media companies. think about paramount in terms of market cap. paramount's market cap is 350 times smaller than apple's, and so it's desperation time. however, think about this. what all of those tech giants have the traditional media companies don't have is technology, specifically a.i. well, you think about david ellison, what access to technology does he have?

oh, yeah, later by ellison who will be an investor under this plan if it goes through. larry ellison and oracle can deliver the a.i. and tech capability to at least get mare mount in the game and perhaps place it in a different category. as i think about the logic behind this sort of a deal, that's one of the things that jumps out i don't think has gotten a lot of attention yet because that's about the only thing that they could do to really change their fortunes in a significant way. obviously, sell off linear assets, cable networks and the traditional broadcast network, sure. focus on streaming, yes. their streaming service like all the others is growing but it's still losing money. they project it to be positivitiable in 2025, paramount plus, that is, that's streaming service. it loses money right now and streaming services are expensive for programming and marketing, etc. you add some a.i. into the

equation and suddenly they become much more efficient and that's been netflix's secret all the time. katie: jon, as you laid out with the media industry undergoing its own heat death of the universe, it sounds like what you're saying is the david ellison bid with the the potential of larry ellison stepping up and providing some a.i. capabilities maybe through oracle that that would be a better partnership for paramount than, say, an apollo, for example. jon: we know the apollo playbook and that of all p.e. firms and they've identified a certain enterprise value they think is higher than the $27 billion they've offered for the enterprise and they will put it on the market and sell off the pieces and turn a tidy profit and it could end up that way because, you know, there's that revlon requirement that if this is a pure cash deal and not a stock swap or anything, you've got to go with the highest

bidder. right now apollo is the highest bidder and could go that direction and those pieces could be sold off and that could be one path. but as you try to think about why would jerry redstone be into considering this david ellison path? one, maybe it's just the personal premium she's getting from this deal but might be some strategic sensibility. part of the ellison team is jeff shell who was the guy running nbc universal and he's a really sharp, smart, proven capable operator who is always looking several steps down the road. and i can see a jeff shell understanding how to navigate these waters in such a way that paramount plus oracle money plus k.k.r. money equals something

bigger and better. think about this, i think it's time to talk about netflix as a traditional media company. why is that? because netflix is not like those tech giants. it's got some sophisticated a.i. but you wouldn't put it in the same category as microsoft or an apple, let's say. so netflix is an undiversified media play. they're solely reliant on subscriptions and how they introduce an ad service, so that's helping them a little bit. but ultimately, they're in the same pool in terms of market cap and revenues -- not market cap but revenues as the warner bros. discoveries and the paramounts and all of that, whereas if you think about a company like disney which is diversified, the disney cruise division alone has revenues equal to netflix. so netflix could be in play for

either one of the giants or maybe a post acquisition oracle plus paramount plus k.k.r. is interested in joining force with netflix. david: glad you raised disney, my old shop. one thing they have is a very large library after the acquisition of fox, even on its own had a large library. and you talk about a.i. and needs action to a large content. by the way, the big tech giants don't have access to that kind of content either. jon: not anymore. a. i. platform that apple acquired and now is one of the main drivers of a.i. at apple. and you do require vast amounts of content to train these self-learning brains on. but what disney has the content that they don't have the

brainback -- brainiac engineers and there is competition for these people and they're having seven-figure salaries waived in front of these people and were probably only makes $20,000 a year a few years ago. it is a tough environment and there are few players who have the cash and stock to wave in front of the top performers. so that's going to be a challenge for disney. disney did a smart thing in this epic games deal where you talk about diversification. that now gets them into fortnight and they'll integrate disney characters there as well. that's diversification within media and they'll still have to do more and more. katie: jon, unfortunately we have to leave it there. fascinating conversation. really appreciate the time. that of course is jon klein, hang media co-found per. who else is coming up? david: we'll have ryan williams on who heads cadre, a platform

for investing in real estate and we'll have kathy mark in charge of investing in real estate coming up friday eastern time at 6:00 p.m. is cathy marcus. katie: big conversations to look forward to. our thanks to david westin. this is bloomberg. ♪

katie: sales numbers are set to be reported with lvmh and expect a muted start with a slowdown in luxury demands and concerns over chinese consumption. we're joined by andrea felsted from bloomberg opinions. let's start broad. what are you expecting to hear?

andrea: it will be muted and they're up against tough comparisons from a year ago. when you take the first quarter of 2023, that's just when china had reopened and the u.s. was still doing ok. we had a bit of a slowdown but it hadn't come off too much. just for context, first quarter of 2023, both fashion and leather goods, the engine of the company and overall organic sales were in the high teens. that was about half, about twice what analysts expected. this time around both of those are going to be around 3%. katie: is this an lvmh story or the industry at large? because you think back to gucci, for example, we had carrying as well and i think it's safe to call some of those metrics as muted as well. andrea: definitely. this is an industry issue. you know, we have china pretty sluggish, there were hopes for a

big revival last year that didn't quite live up to expectations. the u.s. which had also been another engine of growth has slowed but i would say when we come to look at the whole of the reporting season, lvmh might not be at the top but will be one of the better performers because they own lee yvetteon, dee other, and huge -- luis viton and dior, and they have consumers thinking i want a new bag, i'll go to one of these brands. katie: this is an industry wide conversation, who is best positioned among lvmh and its peers to really weather the storm? andrea: over the last year, there's been a really big difference depending on who you're selling to that's dictated your performance. what we found is the superwealthy have carried on spending and the sort of brands

that carry to them, hermes with their expensive handbags and bernel and gucci with cashmere sweaters have been doing well. where we've seen the weakness is among those what they call the aspirational luxury consumer. they're comfortably off but not superwealthy. and they spend during the pandemic, they spend stimulus checks and they weren't going out on a holiday or outo restaurants and they've really been hurt by the increase in inflation and higher borrowing costs and they've retrenched. the more exposed the company is to those shoppers, the weaker their performance. katie: i really appreciate your time. as we count down to the lvmh earnings expected in the next hour or so, our thanks to andrea felsted at bloomberg opinions. it's a down day for the s&p 500,

currently off by .3%. coming up next, v-tech. that does it for bloomberg markets. is smart here, right?ns ♪

>> from the heart of innovation in the southern valley and beyond, this is bloomberg technology with caroline hyde and ed ludlow. ♪ caroline: i'm caroline hyde in new york. ed: i'm ed ludlow in san francisco. this is bloomberg technology. caroline: microsoft to invest $1 billion in a u.a.e. top firm weather g-42 where the u.s. pushes abu