sonali: welcome to "bloomberg markets." stocks are struggling for direction now as the s&p hits session lows amid a wave of earnings. let's get a check on the markets. the s&p 500 breaking the two day winning streak, down 3/10 of 1%. the nasdaq 100 is also moving into the red territory, though barely. flat on the day, even with exuberance around the magnificent seven. we will talk more about that throughout the hour. two-year yield's, they had their big option yesterday waiting for the five-year yield that was up to .467 on the day, four basis points higher while the two-year

yield stays flat. mid-day movers on the equity side, boeing shares are lower even as they burn through less cash than predicted for the first quarter. the plane maker is slowing output to get a handle on manufacturing issues. more on that later in this hour. tesla, really rebounding after elon musk vowed to launch less expensive vehicles as soon as this year, using concerns following a disappointing quarter with its biggest negative cash flow ever, tesla shares up 10% on the day. abigail doolittle is here with more on those results and what to expect. abigail: tesla, rallying in a massive way. up 10%. it has to do with not just of the quarter was really negative, as you mentioned. take a look at the chart. since last july it has been a trip -- downtrend. up 40% on the year.

investors expecting the worst. from earnings they expected sales of 29 billion dollars, with adjusted profits it was down 53% on a year-over-year basis. speaking of, at this point the stock is about flat year-over-year, down 1.5 percent. earlier it had literally been flat as investors, cheered by what elon musk had said around the cheaper ev being likely, even by the end of this year. you mentioned a cash flow problem. take a look at that, down $2.5 billion, they burn through that in that quarter after so many quarters of positive cash flow. so, that is the big concern but that narrative around a cheaper ev being out sooner rather than later is helping out. meta over the last year, up 120 9% relative to earnings.

investors looking at four dollars $.44 per share with 64% growth on the top line. 26% growth. a high bar. how will ai factor in? it is not just meta reporting. tomorrow, microsoft and google, down. alphabet, i should say. down. we will be watching these reports for growth on stimulus and in the economy with the ai factor. sonali: a lot of signals to pay attention to. thank you. we discuss it now with christina uber. a chief market strategist. what are the signals telling you? christina: relatively good. we have seen some anomalies but that speaks to customer basis. we had one customer service company sharing that they saw consumer weakness. for the most part, a good earnings season. enthusiasm about tech.

i think we will continue to see some relatively good earnings reports. sonali: every other day the market is looking for direction. knowing what we know about data and where equities are heading, how do you start to perhaps change the way you are approaching the market? kristina: we have to think of this as a unique and short-term phase. it's a holding period where we are waiting for signs around what fed policy will be like this year. having said that, most investors have a longer time horizon. it is important to be well diversified, vested, not sitting with an excess amount of cash on the sidelines, doing those things, because it makes sense for the long run. tactically speaking this is very

much a waiting period and i'm of the opinion that we will be pleasantly surprised not just with earnings but also with policy this year. sonali: we have to think about the fed policy. more economic data this week, including the pce gauge of inflation. how do you read into that given what we know about cpi and industrial strength in the united states? kristina: i took the most recent cpi with a grain of salt, i will tell you that. we can call out key areas that added and put us over expectations. you know, we could very well see a somewhat disappointing pce. by that i mean it meets expectations, but it suggests stickier inflation. my view is that the fed is likely to understand that and understand, though, that we are seeing a lot of signs that the u.s. economy is softening. we saw it in pmi's this week

with market reaction as a result, because it is far more forward-looking rather than the lagging indicators. from my perspective, the fed will be patient. we will get more hawkish fed speak but i would not be surprised if we got a rate cut in june. sonali: fascinating. if we got that, is it because the economy is slowing, or you believe that the lagged factors are taking hold? kristina: i think it's a combination. a combination of factors. the fed freely admits to we are in very restrictive territory given the progress on disinflation. from my perspective, signs that the economy is cooling a bit will only further support the view that it is time to at least start to cut. it could be a very slow process, but the initial cut will be important, psychologically, for markets. sonali: i'm interested in this

idea that you could see some signs of cooling in the future and then new edge wealth talks about the idea that perhaps if tesla starts to lower its price point on cars, it would feed through into the new car sales data in cpi. then there is that idea of a ripple effect, what it means for car insurance. how much of an effect does that have it the end of the day? kristina: it has to be different industries doing the same thing, but it's a good sign, right? we have seen car prices come down from their peaks in late 2022. probably not as much progress as we would like to see, but it could help to move the needle. of course, that then has a lagged effect on auto insurance. we saw a pretty ugly increase in auto insurance. but if that is the caboose it followed what was higher car prices. all in it starts a cascade

effect that could be relatively slow, especially at first. but i think we will see another leg of significant disinflation this year. sonali: what is dragging the bond market more? are the auctions having a sick for effect on people's view for buying new bap -- new bonds? kristina: they can have a psychological effect when you have a big auction, and there are these concerns about who will continue to urges u.s. treasury bonds. in my career, pretty long one, given my age, i have never seen the level of concern about u.s. debt, the fiscal situation and how sustainable it is, and again , who will buy u.s. debt. we came close before sequestration and i think we are probably going to follow a somewhat similar path, where we get to a point where we realize we will have to tighten our belt

fiscally. of course that won't impact all the debt outstanding, but it will impact future auctions and a lot of this is very psychological. sonali: in addition to the fed next week, we are expecting refunding announcements. what do you think are dollar is? kristina: that wasn't my bingo card for this year. i expected we would start to see signs that the fed would cut and see a weaker dollar. i think it is just delayed and we could see a weaker dollar in, you know, if you. i don't think that it changes much. we just have to recognize that it can be problematic for summer earnings, but it is probably more problematic for other countries in currencies. especially the yen. sonali: thank you so much for keeping an eye on the board. that was kristina hooper.

coming up, the yen weakening, maybe prompting japan to step into action. that's next. this is bloomberg. ♪

sonali: this is "bloomberg markets." we are talking about the yen, it got weaker beyond where it had been for the first time in more than three decades, fueling the risk that it may prompt the yen to step into the market. our correspondent joins us now. why is this mark so important? >> we have heard a lot from

japanese policymakers that the pace is what they care about, not the actual level, but being here at 1.55 when a few weeks ago we were at 1.52, it's just the kind of signal of a ratcheting up of the that there might be some sort of intervention. sonali: what does it mean ahead of the bank of japan meeting on friday? ours is meeting next week, it's reaching these levels? carter: yeah, we have all of this coming up in for the bank of japan on friday, most bloomberg economists don't expect the bank of japan to hike rates. they are one of the few central banks in a tightening phase right now, not cutting rates. so, this is a big question. is the bank of japan going to address the sliding currency? does it complicate in any way their mission and, ultimately,

what is that going to mean for the fed that also meets next week. sonali: talk about what intervention would mean, how would it happen and what would it mean for the markets? carter: we last saw that in fall of 2022. it was a bit of a different environment then. the u.s. was at the beginning of the monetary cycle, not where we are now, which is very much on hold, and a lot of folks out there are saying that intervention would be less successful from the japanese side then it was in 2022. sonali: carter, we have to leave it there. we will keep a close eye on that. still ahead, high expectations for meta-platform earnings and bill signed by biden including a potential tiktok and. it would significantly impact meta's business. the bill also includes eight for ukraine and taiwan. here's what he said earlier today about it.

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sonali: this is "bloomberg markets." president biden signed a bill this morning that will start a 270 day countdown for tiktok to divest or face a band in the united states and in response, tiktok says that this unconstitutional law is a tiktok man and we will -- ban and we will challenge it in court. kailey leinz is an d.c. with the details and the tit for tat is very hard not to watch. it's interesting to see how this is being fought. ultimately, is there anything that tiktok can really do? kailey: they can try to fight this and he you intend to do so. what could be facing us is a protracted legal battle that they come down to whether or not the law that was signed today is

constitutional or if it violates free speech rights of content creators. that is going to be a kind of clock running simultaneously with the wider clock, giving tiktok nine months to divest itself from ike dance. or if the sale is in progress they can have three more months to continue the process. all told, that would be about a year. lawmakers will tell you, especially ones who are highly concerned with data security and the data of the americans in the u.s. who use the platform could be shared with the american chinese communist party or if they could be subject to propaganda, they will tell you that this is not a ban on tiktok . it's an effort at divestiture to make sure that this is a company held in non-chinese affiliated hands. however, shou chew definitely disagreed, saying that this is a ban and that politician say otherwise, but don't be

confused. this will certainly be an ongoing fight and it doesn't end with the signature of the president today. sonali: similarly, i'm wondering what to make of the future of tiktok ownership. if there is divestiture or a ban, how do you think about who owns it? a lot of the silence is coming from the steve mnuchin team, where there had been a possible idea of a big sale. even in congress it looks like there could be pushback with the likes of senator ron wyden. kailey: the first thing to consider is that it would take a lot of money to purchase the platform. we estimate that the u.s. arm of tiktok could be worth around $40 billion. the former treasury secretary steven mnuchin had indicated interest but that he would have to get together with a wider investment to make it happen. you are right, senator ron wyden suggested that he would actively try to stop steve mnuchin from ever taking ownership of the platform. it just raises these other

questions as to who would be allowed to buy it without raising antitrust concerns because of another big tech company trying to absorb something this large, they would run into questions around competition. the other thing to consider is that ultimately it won't just be up to the u.s. to sign on. it will be up to china, who at this point have suggested they will not agree to a forced divestiture. there is of course the algorithm in question as well and china has given no indication that they will let go of the special sauce that makes tiktok tiktok. sonali: even if this had come alongside the ukraine israel bill, what does this say to you about the future of how congress handles national security issues, particularly national security financing, in the future. kailey: this was difficult to get done. it took literally months and the only way it was able to get across the finish line was to have them connected to different pieces in the house and repackaged in the senate.

making it so the set of it -- 79 senators who voted for the package had to vote yes on all things. not just ukraine aid or israel or tiktok divestiture, it had to be all at once and that was the only way it moved forward. that was difficult work to do and acquired a great deal of bipartisanship as we heard president biden speaking about this morning and frankly wired not outright sacrifice from mike johnson, a willingness to be able to give up his job in order to get this across the finish line because while the house is on recess right now and the senate is as well after voting late last night, when we return there's a chance that mike johnson could be forced with a motion to vacate brought by marjorie taylor greene and it will be a question of whether democrats in a spirit of bipartisanship step in to save him. sonali: we are looking forward to your coverage later today on "balance of power." one company that could benefit from the situation with tiktok is meta,

reporting after the bell with wall street expecting $36 billion in revenue order. the results are expected to move the stock upwards 9% in either direction. jon erlichman joints me now to discuss the expectations. you have meta up almost 30 per stash 37% on the year so far. how are they really set up for this -- 37% on the year so far. how are they really set up? jon: last time around, when they reported in february, they got a lot of checkmarks. the business was back on track. mark zuckerberg found wall street religion. then use all the strong performing business committing to a dividend with stock buybacks. after those quarterly results, shares were up and that provided a lot of momentum. you set the stage on expectations, you could make the argument out of -- out of all

the big technology companies outside nvidia, meta expectations are high because the stock has come so far. it's interesting, if you think about the year that mark zuckerberg wants to forget, 2022 when the stock collapsed, since the end of that year the shares are up 300%. if you look at digital ad companies this year, meta is easily getting way more attention than the likes of snap or pinterest. a lot of it has to do with the ai initiative. you mentioned expectations on the order. wall street always wants to look at what happens in the first quarter, but then look at the second order as well. right now, the predictions suggest that this will be the strongest performance since 2021. we have heard a lot, bloomberg intelligence has been talking about this as well, integrating generative ai into facebook platforms.

chatbots that make more at inventory. that is what wall street would like to know the most about and i would imagine that outside of putting up numbers that please the street, any guidance they give on the ai story going forward is important as well. sonali: how do you think about the ai story for meta moving forward? what does it ultimately give them when it comes down to the bottom line? jon: i think that if microsoft is quickly implementing ai into their suite of products, meta has arguably had the same success in the early days of integration. think about search. if we were to compare meta to alphabet, who has been in the ai game for a while, one of the biggest concerns is whether they are seating search shares to people being able to do more searching, whether it is on a platform like the one that meta has, tiktok, or even a platform

like amazon. arguably, alphabet has quarterly results coming up as well. if they can prove that their search business remains strong, that could cool some of the street concerns, opening up the opportunity that seems like the biggest one. but also being able to show that wall street discipline that got investors confused about this story is an important part. sonali: thank you for keeping an eye on that for us. there's a lot to watch with those magnificent seven names. but when you think about amazon and google in the coming days, coming up we will go into the private credit role. craig packer is going to join us on the growth of private credit and address if he is seeing potential stresses ahead. higher for longer it is. stick with us, that conversation is next. "bloomberg markets -- this is bloomberg. ♪

her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

sonali: this is "bloomberg markets." let's get you quick check on the markets. looking to find direction, the s&p 500 is still on the red for the day. nasdaq, also slipping into the ready, really flat on the day. the five year yield, interesting, the option is over at 1 p.m., three basis points higher, the 10 year hanging out under 465. shares had their best in the year, executives ending at double-digit operating margins for toys with a guidance boost for digital products. teledyne shares are among the worst performers in the s&p, cutting outlook, down more than

12% with wall street turning to increasingly unconventional debt packages, bonds as credit investors seek safer bets for asset-backed securities. eric hirsch discussed of the states of credit markets earlier this week. >> on the credit side there was a tremendous amount of capital coming in. still finding good homes, yields continue to be high. we don't expect uniform success right now. sonali: we are not going to -- we are now going to dig into the credit market with craig packer, copresident of blue owl. you have been operating for the last few years in what has been the arguably hottest quarter of wall street, credit private credit. there is concern that market is starting to see some >>. what is and what isn't? first of all, thanks for having me, -- what is and what isn't? craig: thanks for having me.

there's a natural concern. we are one year into a higher rate environment with folios containing extremely good performance. loss rates are low. investors are benefiting from higher rates. they are generally consistent and attractive dividend yields. it's been a great environment for private credit. sonali: there's a question about competition between the private banking market and the opinion market -- articles in the times with ideas about the banking market taking back tens of billions worth of flow into those leveraged finance deals. how much are you feeling like you are competing right now? craig: the secular shift has been decidedly towards draft lending with bigger and bigger solutions to private companies and they are picking them more and more for those financial solutions.

the markets exist alongside each other in there will be a natural ebb and flow based on market conditions between the direct market that we lead in the syndicated market, how the banks participated last year. most of the activity was in the direct space. this year the public markets opened up and the banks have been active in that area as well. that is the natural state of affairs, so it is really a return to the normal market environment. for some perspective, the shift of $10 billion to $20 million in activity, these are markets measured in trillions. leverage finance is a 3.4 trillion dollar market. these are on margin. the trend is continuing with borrowers for large-scale direct lending solutions. sonali: are these companies looking to refinance or do deals in m&a? craig: it is some of all of that. existing private equity companies that we finance are

doing it on acquisitions, financing the balance sheet and entering into new markets. there is some m&a activity. i hope to see it pickup. i had hoped to see the year started out stronger. i think that with this environment, we will see that as the year wears on. these are big markets. private equity firms are active managers of their companies enter using financing as a tool to grow businesses in the economy continues to be good, so there is a lot of demand for capital. sonali: what is interesting to me is that as the fed is really waiting to cut interest rates as quickly as investors came into the year expecting, one question that i have, and this is almost handing it over to you, the leveraged finance markets have reopened a little bit this year. are they at risk of closing again at the end of the year? given that rates are so high and jitters are starting to form? craig: one of the central

propositions for a firm like ours is that we can stay open and offer capital in a long market. we have a good liability structure. the public markets are volatile. they really are a function of whether the end investor has an appetite for risk or not. the leveraged finance market, i have been in it for 30 years. there are times when it's open, times when it's closed, times when it's volatile. study the markets, that will tell you that it will eventually go in both directions. it wouldn't surprise me -- i'm not predicting it, but it wouldn't surprise me if there is some sort of volatility between now and the end of the year. i can feel confident, when that happens, this will be an environment where we are open and able to make loans. sonali: what is the impact of higher rates, from where you are sitting? craig: it's a great environment for our investors. we make floating rate loans and if rates stay high, we are earning more on the loans and the economy continues to be a

good one. our companies are doing well and earning more, higher for longer is generally healthy for us. certainly, higher rates put more pressure on the companies. refinance mostly private equity backed deals and they have done a nice job of managing their company's operations to be able to support the higher debt load. sonali: how many companies are waiting for the cuts? craig: companies that are well-run don't wait. they take the strategic steps they need to manage their businesses and they finance, you know, when it's appropriate. i don't think the companies -- again, it's a floating rate product. you don't need to wait. if you benefit when rates come down, you don't need to wait to take advantage of that. on the bond market, you have to time it just right. companies have strategic needs after financing that's more expensive today, but if you are making a decision over 10 years at some point the rates come

down. sonali: another thing we talked about is the idea of signs of stress. we talked about moody's downgrading or reducing ratings when it comes to certain weaknesses tied to big names like blackrock, oaktree, kkr. how do you see that playing out, ultimately? why are those stresses coming into those structures? craig: they are performing extremely well. last year, this year. while those actions took place, the vast majority of the ratings have been solid and there have been just as many upgrades as the downgrades. the credit performance has been exceptional. i would like to think that ours is at the top of the list but the space over all is performing very well. equities performing well. there has been a reissuance of bdcs in the investment-grade bond market.

naturally, ratings injured -- radio things agencies look at individual performance but if you study it, it has been quite strong. one year ago i was here and everyone was wondering how we would hold up publicly. sonali: how do you avoid those stresses, given the interest rate environment you are in? craig: this is what we do, we are selective -- sonali: but what are you avoiding in the market? craig: what we have been avoiding for eight years. we lend to recession resistant companies, software, food and beverage. backed by really high-quality private equity firms. we lend 40% loan to value and we like to lend to businesses. we made decisions a few years ago so that when you get to the environment where the economy is weaker, you can make it through. sonali: you worry that this economy could be more drastic than most investors are currently preparing work. sonali: rates are high, we are

in the lending business and are worried all the time. until we get lower rates there is a risk of economic weakness and we spend a lot of time worrying about that. having said that, asset classes have formed better-than-expected and i think that the vast majority of the companies are going to do just fine, even in a modestly weaker environment. sonali: taking you out of that worry seat. thank you so much for your time, blue owl copresident craig packer. coming up, boeing is trying to impress investors with its latest revamp plan as they struggle with manufacturing issues and regulatory screenings . those details are up next. [speaking another language] this is bloomberg. ♪

sonali: this is "bloomberg markets." stock of the hour, boeing shares are lower as the stock market gets weaker and the company reported earnings this morning saying that it through less cap joanna ferguson joins us now -- george ferguson joins us now. when you look at boeing is saying, what are you thinking is the path forward for them? george: seems to me that on the earnings call they continue to talk about cash burn and as they talk about a second-half turnaround, they have really been planning on getting to the bottom of their stability program with both internally

they started to get a handle on that and externally having an agreement with the faa and what's going to make the project process more stable and higher holiday. and then they are really looking to come back out in the second half of the year and build i think, you know, not quite 3730 sevenths a month, that's a big cash generator, but something below that pretty quickly, maybe in the 30's by the time they get to three q, be back up to 38 by the end of the year. they are still talking about a cash positive year. it's an old hockey stick recovery and it is all predicated on 2q. sonali: how do you feel about the unanswered questions? what do they still need to put a -- put on the tan -- on the table for having a better handle on these issues? george: the biggest challenge is

talking to david calvin, the interim ceo will be gone at the end of the year. he is making decisions there that could be overturned by the successor. so, i think that is one of the big questions will have is -- is this the follow-on ceo's plan? that is probably the first thing. i guess the second thing is, will the faa agree with the plan they have in place to stabilize production and let them get out there and go at it hard for building aircraft? the other concern is always -- what happens if there is another hick up in the second half and they can generate cash? what will they do then? sonali: talk us through the cash positioning more and if there are any risks to it. sonali: right now they have -- george: right now they have about $7 billion in cash equivalency, burning 4.5 million on used free cash flow, repaying

$4.4 billion in debt. that tells me they don't want to go back to the debt markets. they said they expect an additional burn, not as large, but significant in two q. look, they've got a $10 million revolver they can go out and tap. maybe they burn another couple billion in two q. feels like they are starting to get dangerously low on cash. at the same time they are trying to purchase spirit aerosystems. they have said they want to do that with cash, although spirit has a market cap between 3 billion and 4 billion depending on the day that you look at it, so it seems they already have a number of commit its to cash that will take them dangerously low. that is a big challenge in the mind of investors. sonali: we will keep a close eye on it. thank you for keeping such a close eye on it as well.

coming up, looking at the ftc and the impact of the decision in pushback from the u.s. chamber of commerce. stay with us, that's next. this is bloomberg. ♪

sonali: this is "bloomberg markets," time now for the wall street beat. today we're looking at the federal trade commission decision to ban noncompete provisions and er of businesses are suing the blocker ruling. joining us now is douglas braley. he's following this closely. looking at the good, the bad, the ugly, prominent intra-capitalists have come out to talk about supporting the decision, but the u.s. chamber of commerce is pushing back. how do you given -- how do you axley both sides of the argument

given that even businesses see this differently? doug: first you have to start from the place where people can make the contract they want to make. if it should not be enforced, i hear the point, there are not -- downsides to noncompete. limiting employment mobility, making it hard for a new entrant into the market. there are also good reasons they should be in first -- in force in certain circumstances, they are a valuable tool for protecting trade secrets, incentivizing them, training employees, and protecting them from unfair poaching and rating by competitors. it's a real both sides issue and one of the interesting things about this is that it comes in at the top of the federal level when there is already active debate in 50 states about whether and under what circumstances non-competes should be allowed. sonali: another interesting thing is the suit being led by

business groups to sue to block the van. the statement in and of itself said that the commitment to the categorical commission ban amounts to a vast overhaul of the national economy reflecting an unlawful unprecedented exercise of bureaucratic power. how do you think that suit might proceed at this point and how long could it take to get sorted out? doug: it could take a while. they filed in the eastern district of texas and i think they will seek an injunction while the lawsuit is pending. in other words, for the court to say that you can't put this rule into place, of course considering it. i have to assume that whatever happens in the district court, there will be an appeal to the fifth circuit and likely an appeal to the supreme court. it's an important nationwide issue. it seems likely to me, not guaranteed but likely that the supreme court would take it up. we are talking months or years

before the lawsuit is resolved. sonali: it's interesting, unions are in favor of this but this decision is being made in the u.s. presidential election as well. we don't know how things will go . if there is a change in administration, is some of this symbolic? doug: it may be. you have seen executive orders talking about non-competes as a focus and it shows that commitment to worker's rights. so, there is a lot of politics here and i think that is one of the points the challengers are making, this is a 100-year-old law being interpreted but it's the first time being done so in the context of a noncompete. sonali: with all of this on sort -- and certainty, do you think that lawyers should be making changes to how they view contracts for non-competes? doug: specifically with non-competes they should wait and see.

in the meantime what they can do is look at what they having place. make sure they have a good inventory of non-competes and think about whether there are other restrictive covenants they can put in place in the meantime to make sure they are protected if the noncompete gets invalidated. do you have good customer or employee non-solicits? are you protecting your trade secrets the way that you should be? there are things that you can do short of those that would give you some protection and now would be a good time to make sure those are in place. sonali: for the states that already have the rule, how does it play out for them and what changes have employers seen? doug: so, no state has a rule quite like the ftc rule. the ftc will is broad and almost without exception. even california, which hasn't allowed non-competes for a long time, generally has carveouts for the sale of a business, for partners, for members in the llc

and some do not clearly appear in this ruling and it is at best unpredictable what will happen in those scenarios. other states with limited noncompete's have other carveouts. massachusetts, for example, limits the use, but doesn't ban them. this rule is broad and unprecedented. sonali: what do you think it means for the entire workforce given that there is a kind of threshold for these rules in particular? doug: i think it is something everyone should be paying attention to. it will be especially important to the financial services and private equity industry, where they are dealing with complicated business arrangements, highly paid executives with access to trade secrets. that's where they want to be buttoned up. for the workers who are paid less and don't have the same access to trade secrets, there are arguments they should not have been subject to non-competes in the first place.

sonali: what does it mean that the ftc has gone above and beyond the states to begin with? and they get something good or is it just more water down? doug: it's a really good question how that will -- that rule will relate. contract law is a state-level question. the ftc has come over the top to say we think it is a violation of the ftc act, but that is not the same thing as saying that we are overruling state law and you cannot enforce a contract. i think it is a pretty tricky constitutional question about the supremacy clause about how they interrelate. sonali: it's interesting, you mentioned private equity is one of the places heavily impacted. are there other places you see is impacting this most clearly and should they be considering at least thinking through future policies, given that it would change a lot for them? doug: yeah, it's really any

industry with highly compensated workers who have access to trade secrets or goodwill and to have formal or informal employment agreements in place. we are not talking about line manufacturing employers, we are talking about the services industry, biotech, places with highly compensated formalized employment. that is who should be paying a lot of attention to this. sonali: a bit at odds with to businesses. does, thank you so much for eating some sense of this rule and seeing how it will move forward with the pushback it has been getting. that doesn't work "bloomberg markets" today. markets are online for another set of atac earnings. the s&p is still down more than .3%, the nasdaq is still flipping into red territory. of course, the five-year option is that the one e.m. hour -- 1 p.m. hour.

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>> from the world of politics of the world of business, this is "balance of power." live washington, d.c. joe: so much for the state of