dani: we are 30 minutes into the u.s. trading day on this wednesday april 17. here the top stories we are following. it's getting taller with rising rates, can stocks -- split screen hearings for bowing as the plane maker safety culture comes under scrutiny. two separate hearings will focus on whistleblower claims and an faa report. mosques pay package will be up to investors after a report voided it. will shareholders approve it a second time?

we will discuss. ♪ katie: welcome to bloomberg markets. markets there is some green on the screen behind it. the s&p 500 up to the tune of about 3/10 of 1% if that holds that will snap a three-day losing streak so do not hold your breath. it's the same thing if you look at the nasdaq 100. a little bit more tenuous their prating we are just about unchanged when comes to the nasdaq 100. big tech under a little bit of pressure. breathing a sigh of relief in the bond market you can see yields are falling right now currently the 10 year yield lower by three basis points compared to recent history that is quite a high-yield yield we are looking at. let's turn and talk about

boeing. their safety record under the microsoft dust microscope today. two congressional hearings with lawmakers set to question safety experts and a whistleblower. the global head of aviation joins us now. set the scene for us. how we got here and what we are expected to hear from lawmakers? >> a very busy afternoon this day for us here covering these two hearings. one of them kicking off as we speak. this is the one that will explore the finer points of the faa report that came out a couple months ago which was a year-long effort that looked at the safety culture at boeing and what they did wrong, what they should be looking at -- doing differently. not very flattering findings. saying there was a disconnect between management and people in terms of what to do, what sort of safety culture the company should have. we got a little bit of testimony

ahead of time that sets the scene a little bit. one of the people who will speak to this said he felt in his own words the pendulum had swung too far sort of giving boeing too much authority. there's a little bit of soul-searching on the faa side as well. the second one is an hour later so they will overlap. that one will probably be spicier. that's one that looks at the whistleblower claims that came out last week. that one is about the dreamliner aircraft and the allegation being boeing was essentially sloppy in the way it assembles its planes. not really surprising boeing refutes these saying they stand behind the safety of this product and of the products generally.

it will be interesting how they respond to this. they will not be on the scene of either panel. this is in absentia. it will be interesting the dynamics that unfold. >> i'm glad you brought up the whistle well -- whistleblower, we've been paying attention to the 737 which was involved in the january incident but the 787 when you think about boeing and their business that's a critical source of cash. benedikt: it's essentially on the civil side a two product company and we've written and talked so much about it and in that january 5 incident and now the 787 has come into the spotlight. it's worth reminding people it's not the first of the 787's safety record or production record has come into under public scrutiny. boeing taking the plane out of

delivery for a couple of years sort of three or four years ago because they did have some issues. they said they fixed them and the plane is safe to fly but the whistleblower claims these issues were not fixed, it boeing rushed these planes out the door and in essence they should be grounded. we will see what else he brings to the table in the hearing. he says he has a lot of documentation, it will be interesting what he can bring that is new and potentially damming for the company. katie: a busy afternoon for bowing. our thanks to beni. i'm thrilled to say we are joined by lauren good men, a new york life investments chief market strategist and economist. great to see you in person. i'm looking through your notes and you write about this wall of worry that investors have been grappling with. when you think about this at the

beginning of the year and where we are now in mid april has it gotten higher? lauren: i think the markets have perceived it have gotten higher because of the rates we've seen in the past couple of days. but investors have taken the wrong message which is why we are seeing a little bit of buoyancy in the markets today mainly rates have been moving higher for the right reasons because u.s. economic growth has surprised to the upside and earnings are expected to be strong for the first quarter. we wouldn't expect to see real weakness in the rally or the end to a rally. the earnings progress was earnings growth moving lower. or until labor market typically unemployment claim certain to rise. there could be moments of consolidation. katie: just to crystallize that point you are saying when we think about the rates it is for the right reasons. lauren: inflation has been moving higher and overheating

the u.s. economy i believe is one of the key risks to investor positioning but we are not seeing signs the economy is overheating out of the fed's control. one of the reactions to inflation moving higher is a tightening in financial conditions and that tightening can help to ease some of the pressures we've been seeing in the real economy and may actually help the fed to cut later on this year. katie: when it comes to this rise in rate it has jump -- injected volatility over the past couple of weeks but when you talk about the backup in yields being for the right reasons does that logic apply to this stock market evenly or are there certain sectors that will be hammered by this rise in rates even if it's for a good reason? lauren: a couple of things we are taking away from market behavior over the past couple of months are the growth equity and specifically tech stocks have not been as sensitive to

interest rates as has been the case. that's been large part due to the economic logic is that those are long durations equity. they are more reliant on future cash flows that don't exist yet. major leaders in the equity rally have been those that do have ample free cash flow. the other thing we've been seeing is while the market performance has broadened, quality has been a key trait of winners regardless of the sector. we are not seeing the small caps or junkie or segments really participating in the rally which suggest the role of worry for markets it hasn't dominated yet. >> talk about free cash flow, to me that sounds like tech. lauren: it is. let's talk about that a little bit.

it is a big part of the quality story although there are quality names in all sectors. but when it comes to broadening the investment theme around technology, artificial intelligence, we think there's opportunity in other sectors that leverage this theme just as an example to make artificial intelligence really terrible you need not just the chipmakers but also the digital infrastructure, the energy infrastructure that will get us to a more durable theme. that's a small and mid-cap growth where we see early acquisitions of interesting ai ideas. we think there's a broader participation in that theme. katie: stick with us we will get into more detail on earnings. maybe some of the small and mid-caps. let's a quick look at what's moving in the markets. we are going to do that with bailey lipschultz.

talk to me about asml. >> asml under pressure today worst drop on interest -- intraday. results missed expectations. the number of ones that operated is how high expectations have gotten. that's why you are seeing shares under pressure, a modest miss compared to where investor analysts had been penciling in. about some of the ongoing issues with sales and demand in china. those are things investors are pointing out as a reason to take some profits on a pretty massive rally the stock has had. katie: you are looking at their worst day since october of 2022. talk to us about united. reporting after the bell yesterday. bailey: up double digits at one point this morning.

keeping an eye on that. i always like to preface the year-to-date performance only up about 10% on a 12 month basis but meeting expectations with the results talking up travel demand despite some of the issues we've been seeing whether it is for bowing or individual airlines in particular they been able to navigate rising oil prices and cost of fuel as well as some of those costs whether they are playing -- paying flight attendants or pilots. how interested and active they are in the ability to drive profits. really setting the stage and a strong tone we continue to see earnings coming in from those consumer facing companies. katie: some nice relief as we focus on what is going on with boeing which has been affecting the airlines. let's talk about what's going on with tapestry. bailey: the ftc preparing to sue tapestry. we did not see a sharp -- sharp

move. you can see three tents of 1% for tapestry. that spread is widening. look at the way capri has been performing grade there are continued concerns and expectations of what regulators will push back on whether this could impact the deal and how we get through. we heard from management saying they still expect it to be completed by year end. as we talked about the ftc scrutiny is more heightened than it has been in recent years. there's uncertainty around every deal and that's one of the things we binged -- we have been seeing. the all-cash offer price. shares continuing to widen since the deal was announced. katie: it got a lot more fun under the ftc dependent on your definition of fun. bailey lipschultz, thank you so much. tesla asking shareholders to vote for a second time on elon

musk's 56 billion dollars pay package after a judge rated the first one this year. this is bloomberg. ♪ hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall.

>> tesla shareholders are set to vote on a $56 billion pay package for elon musk again. his compensation was avoided by a delaware court earlier this year and shareholders will also vote on whether to move tesla state of the corporation from delaware to texas. ed ludlow has the details. let's start with the pay package. you look at tesla shares they are down 40% year-to-date. i know the meeting is not until june or so. but if i, tesla shareholder will

i vote yes to this pay package? >> i do think the stock reaction is interesting. we were higher in premarket we are down 2% so you've had significant declines over three days parade you are down for a fourth straight day, longest streak of declines since the beginning of the year. the reason i point that out is if you're confronted with this information from the proxy and the only thing that's come out of the proxy is to vote on the original pay package that the delaware chancery shot down, it's not approving a catalyst to the upside and what tesla's chair rights in the proxy is that the courts second-guessed investors decision to authorize the pay package in the first place so there's a legality question here which is how mechanically can tesla put the same package before the shareholder base if the courts have shot it down. it's an interesting dynamic. >> fascinating to see how this

shapes out and what the stock does between now and june. let's talk about the other thing shareholders will vote on. that's moving the incorporation from delaware to texas. when it comes to the reason why musk would like to do that i believe he would have a little bit more wiggle room when it comes to texas. >> musk is upset with delaware because of what happened in the court case. texas is becoming the center of tesla's universe not just because of its technical headquarters the nexgen data center buildout is happening in austin for jojo also happening in buffalo, new york. and it all stems back from the court case so investors again i don't know whether they would see any favorable outcome in either direction. one interesting note from the proxy. tesla was at pains to point out they ran the process of deciding to reincorporate texas or move

to texas in parallel to the pay issue because they did not want to be accused of using incorporation as a leverage in that pay situation. that's codified in the proxy so if you're a tesla shareholder: read the proxy in the language that relates to it. >> i know you have a busy day ahead of you. i think you will be talking at elon musk it bloomberg technology which comes right after the show. i think the bloomberg's ed ludlow. let's get back to these markets. still with us we have lauren goodwin who is the chief market strategist and economist. it -- let's talk about a little bit about what we are seeing going on because it feels like you can make the case that this market has really been driven by the macroeconomic factors, that that is what's fueling these big benchmarks but then you have these idiosyncratic stories such as we seen with tesla. when you look at these markets do you think it's those stocks

specific catalysts that are moving the markets or is it still the macro. >> i think it is still the macro. the earnings environment is so very important but when we think about the health of the market rally at the fact earnings on aggregate are expected to post 2% growth quarter over quarter 3% revenue growth in a backdrop that's been relatively healthy. key questions for investors ahead like when and how much will the fed be cutting interest rates, what is that mean for the path of the economy in the near term. katie: for a while it's been ok, high valuations seeing on the fundamentals it justifies what we are seeing in the price action. some people have said when it comes to the earnings news it's already priced in to the benchmarks. lauren: one thing i am concerned about for cutting corners is earnings growth aggregate is

expected to be about 11%. down from expectations of 13% at the beginning of the year but still healthy earnings growth. we are seeing that this quarter that when i think about last year -- last quarter in a year that had hypothetically higher economic growth than this year it's difficult for me to see how on aggregate we will meet those targets. as the impact of higher interest rates impact the more cyclical and small-cap sectors of the economy i think it will be difficult to meet that target. what we are gaining here from an equity perspective we may see payback in the second half of the year. katie: i am curious when you add it together, how are you approaching markets at this juncture? are you on defense or playing offense? lauren: it is difficult to play total defense where we don't expect a meaningful pullback until the employment environment

earnings environment deteriorate. we are not seeing any signs of that. there's been a lot of health in the equity market but in credit markets since the fed pivot. i would say we are taking a balanced approach but more creative on the portfolio construction fund. we are taking some equity risk and deploying it in high yield where there is a similar price action risk but more of a kerry benefit for investors. in terms of credit balancing what is a short-term position with a long-duration position in infrastructure bond. it helps us to keep a neutral duration profile which when we are seeing so much interest rate volatility is an interesting way to help balance some of that portfolio risk. katie: taking some of your equity risk and putting it into high yield bonds, that is interesting. walk me through the logic a little bit. you take a look at high yield yields right now you're earning something for that risk. >> that's a big part of it.

of course equity does have some yield. when you're looking at high yield structures eight to 10% is a meaningful carry for investors. there's a little more to it than that. the high yield asset classes changed a lot over the last 10 to 15 years with quality borrowers for the most part staying in the asset class. lower quality buyers moving to the credit environment. we see a clear bifurcation in quality and high yield so investing in that segment of the high-yield structure is one we think is attractive for investors. something that is really important about the credit markets is public issuers and high and investment-grade credit have had enormous support from the government over the past couple of years in pandemic era programs. floating-rate borrowers, consumers and businesses are the ones seeing the impact of higher rates. the fact we have not seen spreads widen in high yield

despite the wall of worry is a function of that. spreads are likely to widen as we see economics risk rise. you get that extra compensation from the yield in that portfolio. >> it certainly helps cushion the blow. really enjoyed this conversation. our thanks to lauren good men -- lauren goodwin. we will look at the companies making the most social buzz in our social climbers segment. this is bloomberg. ♪ do you want to close out? should i? normally i'd hold. but... taking the gains is smart here, right? feel more confident with stock ratings from j.p. morgan analysts in the chase app. when you've got a decision to make... the answer is j.p. morgan wealth management. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it!

who wants to come see the future?! get your business online in minutes with godaddy airo

>> it's time now for social climbers. a look at the stocks making waves on social media. losing weight and gaining sleep. new study suggest eli lilly's weight loss drug also helps

improve breathing for patients with sleep apnea. if it were to be approved for the condition it would open the door for more patients to access the drug through insurance. next up we have urban outfitters getting a downgrade to and underperform. the analyst excites a challenging year ahead thanks to steep discounts and weakening traffic trends. we have alcoa making the social rounds after news president biden would propose higher tariffs on chinese steel and aluminum during a visit to pittsburgh pennsylvania later this afternoon. you can follow the latest company buzz on your bloomberg terminal. let's take a quick look at the market because it is moving. the s&p 500 we were talking about those gains earlier still in the green. you can see they've come down quite a bit. the s&p 500 up 2/10 of a percent. can't say the same for big tech. the nasdaq down about 2/10 of a percent. constructing zero energy buildings.

we will talk to marshall cox about his company's mission of decarbonizing housing. that conversation coming up next, this is bloomberg. ♪

katie: buildings are sent to be responsible for 40% of the greenhouse gases. our next guest is helping to solve that problem. calvin aims to shrink carbon footprints.

it was named the company to watch and joining me now is marshall cox. the ceo of calvin. tell me about cozy, radiator covers you put in residential apartments. >> is an insulated radiator cover. the fans turns on when the room is cold and turns off when it is hot. we are able to stop radiators from overheating by virtue of thermodynamics. in pushing colder air into warmer rooms. and we save on heating cost. katie: you could go to thermodynamics but i would know what you were talking about. you have sold over 30,000 cozy's how does that work?

marshall: building owners pay for the fuel so it's a sense of the building owners that we do direct sales to them and reach out in various ways that we work with partners. and they can sell on our behalf. katie: if i wanted as an individual by my own cozy? marshall: you could not but you can urge your landlord to do so. katie: how much does it cost for an apartment building to put these into apartments? how much does the consumer potentially save? marshall: the main way we sold the technology is through a flow cost.

our focus is low to moderate income buildings. we charge between $15 per apartment per month on the long-term plan and finance the use of technology for the building. katie: does this make a meaningful impact on energy bills? marshall: it saves between 20-40% on fuel costs. it's a substantial savings. katie: when it comes to these partnerships how long does it take to negotiate and get your cozy's installed? marshall: that's a question we get from investors. some portfolios take up to six months. sometimes a year or more. katie: you are based in brooklyn

but are you in other cities? marshall: we are 95% in new york . we have been building a platform to deploy at scale to third parties in finalizing the platform and start releasing two other partners in austin, berlin. katie: you talked about investors. where are you right now when it comes to expanding your business? you have 40 employees or so are you trying to raise more money? marshall: we are. we are releasing a newer product that bridges the gap between oil and fuel-based heating to electrified heating in a manner that works how the building operates and transitions. katie: we spend a lot of time on codices but what other products do you have currently? marshall: one of the things -- i

am an enormous nerd and environmentalist and i care about decarbonizing everything but especially buildings. there are significant barriers to electrification's. in europe. if i have a furnace or boiler and i won't do anything with it until it dies. it usually dies in the winter and people almost always replace it with the same system. how do you do that in new york city where they have a hundred families that they have to keep heated? we employ a low-cost heat pump without waiting for the motor to die in the technology and installation is paid for with demand response. we have a thermal battery and,

it will pay us money to do that and enough to pay for that technology to low or no cost to the building. it lowers the mass draw of the electric. low or no upfront cost and lower operating costs is a crucial step in making sure the market transition to make it better for the environment. katie: before i let you go i'm curious, you mentioned you would like to decarbonizing everything but your focused on buildings and residential buildings. do you see expanding into commercial buildings? marshall: there are a lot of commercial buildings that often do have hvac i will never stand

in the way of a building electrifying but commercial buildings are not our focus. katie: in terms of it becoming a focus wrapping into your central mission, work could the timeline look like for that? marshall: it could be immediate. they are pressuring all of these buildings to lower the emissions and commercial buildings may feel the pressure more consistently. katie: it was great to see you onset. that is marshall cox the ceo of calvin. we are an hour into the u.s. trading day. abigail: we are jumping around here the s&p was up slightly but the nasdaq is down on the day. stocks start higher and trade lower.

you can see it's hard to make it out here exactly. a nice move higher on monday and then down on the day and something similar to yesterday it will be interesting to see how this day falls out. we are looking at a down month the s&p down 3% with the worst month since september of last year. the nasdaq also is worst month since last year but the russell 2000 and most sensitive to the backup and yields down 5.2%. representative of what we are seeing in april. the worst month going all the way back to the summer of 2022. we've been talking about this for a while because of the

parish divergences we've been tracking for a while. we had the s&p 500 going higher for many months up until this month. rsi indicator going lower saying that as we go hired the buyers are becoming less enthusiastic which has caused us to go below the moving average saying there could be more consolidation to the downside. to the upside apple is up .3%. alcoa up 3% having to do with the possibility president biden may issue additional tariffs to steel and aluminum. katie: applicant too, thank you so much. we will take the pulse of

commercial real estate with brian williams contrary holdings founder and ceo. -- cadre holdings. ♪ ♪ great job astro-persons. over. boring is the jumping off point for all the un-boring things we do. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank. taking chances is for skateboarding... and gas station sushi. not banking. that's why pnc bank strives to be boring with your money. the pragmatic, calculated kind of boring. moving to boca? boooring. that was a dolphin, right?

it's simple really, for nearly 160 years, pnc bank has had one goal: to be brilliantly boring with your money so you can be happily fulfilled with your life... which is pretty un-boring if you think about it. thank you, boring. - super excited to open up my diploma from southern new hampshire university. ♪ ♪ - i'm nervous, i'm excited. ♪ ♪ - [man] okay, let's see it. let's see it. - oh my gosh. - jesus suarez, i did it and it's here. (group cheers) ♪ ♪ - [narrator] next term starts soon. visit snhu.edu. visit snhu.edu. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk,

our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly.

abigail: you are the of the principal room. next up, kristina hooper joins us. this is bloomberg. katie: it is time now for our wall street week conversation and we are looking at the commercial real estate market. we speak with ryan williams along with david westin. david: let me ask you the most basic question did you see transactions go down and have

you seen them go back up as far as number and size come back up. ryan: it's in the capital markets freeze right now. lenders, mortgage providers are staying on the sidelines. they are looking their wounds as they focus their attention on the most distressed assets on their portfolio. with the comments from the fed and the outlook is one where we will continue to see a slow trickle of stress and distress. at the of the end of this there will be buying opportunities in the middle-market and the mid-caps space. katie: that's what i'm curious about. when you talk about this freeze i'm wondering if it relates to commercial real estate is there any one sector that's been particularly frozen to others and where will those buying

opportunities appear? ryan: office of the large is the sector most affected and impacted. with a lot of return to work policies there is still tons of volatility in terms of how long tenant stay in the place. there is a fundamental shift in the paradigm with what working even in tales of being together and engaging in the like. there is a lot of stress in the office space but where the opportunity? there is a tremendous opportunity and conversion which means he will have to better zoning, more public/private partnership but that's the silver lining of the stress we are seeing. there will be more housing in we need more housing and for those landlords and owners who were able to negotiate to buy more

time and have an on-ramp or offramp does where there will be the most opportunity in that space. every other sector has been impacted from hotels to apartment buildings but no one is seeing the effect of the capital markets dislocation a macroenvironment. david: one of the questions we have is the increased interest rates help with multifamily interest rates. >> there is a lot of growth in the population cohort that tends to rent single-family dwellings. single dwellings are less and less obtainable because of a lot of trends we talked about.

the higher for longer environment, there is not a lot of supply of new homes. this leads to less and less people able to afford a single-family home. katie: is that what you see from your point of view? ryan: everyone is talking about capital markets in the interest rate environment being the largest catalyst to the current divide between those who are buying and those who are renting and we absolutely see the spread between cost of rent and costs to own. there are some drivers of demand that we think will play out in the investor should be focused on. we will see a massive wealth transfer among millennials over the next 5, 6 years.

cash on people's personal balance sheets will increase and we believe there will be enough demand as a result of this increase in personal liquidity and net worth. the biggest wealth transfer in our lifetimes. what also gives us hope is that there will be more activity in the real estate market. providing incentives for first-time homebuyer credit is for those looking to jump into the space and we are seeing more zoning, conversions and more intent and will from local politicians that is paramount if we want to see increased activity. i agreed the cost of the spread is significant is important to recognize there are a lot of

people who want the empowerment in american dream to be fulfilled and recognized real estate is the most important asset class to build intergenerational wealth. katie: when it comes to state and local governments they are introducing incentives and focused on their housing markets. when it comes to regions of the u.s., where do you find the most opportunity? ryan: we invest in mid industrial and mid-cap properties between 50 one million in equity. we just launched an opportunistic value fund that will build portfolio assets especially in the sun belt. there are local owners and operators that have loans with regional banks and a lot of

those regional banks. they are incredibly worried about this macroenvironment and what's happened as a result is that they are paralyzed. you don't see new credit being issued and as result some of these more affordable high-growth properties are looking for exit valves. we focus on atlanta, phoenix. high-growth markets around the country. investors who are looking to stabilize their holders it's a pretty large macro environment with micro opportunities. we like top-tier local operators

that may have some stress i capital market dislocation and as a result we start to see opportunities trickle in that will be attractive based off pricing. katie: really enjoyed this conversation but will have to leave it there. our thanks to brian williams. what else do we have on wall street week? david: we will have richard ha ass on with ukraine and israel and around the world and what investors can learn from that. katie: a locked a locked will forward to there. i things to david westin the host of wall street week. this is bloomberg. ♪ or filing returns. avalarahhh

ahhh

katie: jamie dimon speaks in the world listens. this circuit is back for season two and in its premier episode she sits down with jp morgan's ceo and why he is all in on a i. >> for any business when you think about risk think about

things that go terribly wrong, can you survive them? technology, government regulations, literally the weather if you're a restaurant. you should think all of that through. katie: bill gates said banking is necessary banks are not. how can fintech replace banks? >> i remember him saying banks or dinosaurs and i spoke to him. he was dead wrong but he was not wrong when he said technology changes everything. if you think you have a big position today you will have one tomorrow. with banking someone's got to hold the money, raise the money, research the money. those resources will still be around. i have always thought it's very

possible that some tech will take a piece of that. we have fintech and big tech and they will invent payment systems kind of what apple did. i'm not against that. apple is going into to deeper financial services are you worried about that. they are a form of competitor. >> existential threat? >> if we were complacent about it, yes.

jb hitting a two week low after posting disappointing shares. shares down .8%. that doesn't for us, bloomberg technology is coming up next. ♪

from the heart of where innovation, money and power collide. this is bloomberg technology with caroline hyde and ed ludlow.