♪vonnie?: welcome to bloomberg markets. the dow is resolved in the last minute and it resumed a few moments ago in the s&p, 500 is trading once again. there was a report that the cme

group was saying that index pricing was not updating and websites were down when it comes to index pricing but as you can see, it has been a risk off day before that. looks like we are trying to see where things will settle out having had those prices not be online for the better part of an hour or so. let's get to some individual movers because it's an idiosyncratic day. salesforce is tumbling, the biggest drop in two decades. it goes back to 2000 form to find such a drop in their renewing concerns that salesforce is moving up behind iboom. we are seeing distress with shares of kohl's making its biggest drop on record. it reported first-quarter results that wildly missed on pre-much every metric. footlocker is on solid footing.

it's reaffirming its sales and profit outlook for this year and the last quarter was almost double the average analyst estimates. some of the other retailers are also seeing wild swings. let's look at retail with john edwards. we are seeing wildly different performances as post earnings and we will see how those talk prices settle out. talk to us about the kohl's drastic performance. why so bad? >> it's a little hard to put a finger on. they been trying to turn around for some time and it really seems like it could be a merchandising issue. they are discounting. they are bringing in traffic with their sephora partnership. it seems people are not stepping out of the sephora locations into the rest of the kohl's store to buy. vonnie: it seems sephora is driving every thing and kohl's did not do deep discounts and still didn't excite people but

we are not seeing the same kind of performance from other retailers. his coal -- is kohl's getting the mx. wrong? >> people are not excited about the offering they have. their apparel is kind of struggling and perhaps a bit dated. just really looks like they are not appealing to that very choosy consumer whose out there. people are pulling back but they are still buying selectively when there is something appealing to them. vonnie: we are seeing phenomenal performances today from footlocker and birkenstock. isn't a question of footwear or is it about the ceo? >> some of it is about execution. footlocker is doing pretty well even though -- on profit even though their same-store sales did continue to decline. they were not off as much as people feared. it looks like they might be

stabilizing their as they've been in their own turnaround effort. vonnie: we are getting a little bit of information on the consumer and it seems to be a mixed consumer at the moment. some people are trading down but is there anything macro we can say about the consumer? >> i think it goes to the choosing is, people are pulling back broadly on discretionary purchases and focusing more on the everyday essentials which is why companies that are more exposed to grocery like walmart are tending to do a little better than target. it looks like people are being more and more selective in terms of their spending and are not going after just discounts. they are looking for products they really want to buy. vonnie: some of the other outperformer's are dollar general and burlington.

it's not just the discounters, best buy also did well. >> that's right and it's a bit of an execution thing and what the market was looking for. comparable sales were down 6% there but they are managing to bring more profitability out of their membership program and their service offering. vonnie: it seems to be a question of getting the better staff as well. is labor a problem for some retailers? >> absolutely and its labor and staffing in its training as well. it makes a big difference. with people being picky, if they are turned off by the retail experience, that's not going to bode well for them. vonnie: john edwards, always a fascinating pleasure to speak with you. we've got plenty of earnings and i want to mention the s&p and dow are now ticking again so we

can read index pricing in real time. they were closed since about 10:41 a.m. some more than an hour for the dow and a little more than the s&p 500. a pretty risk off day but there is some outperformance in many cases including hp. we will get to many of these movers throughout the next hour. we are seeing ticking resume in the s&p 500 is now down 0.3% and the dow jones is down about 0.8%. new york fed president john williams delivered remark -- delivering remarks right now at the economic hub of new york. let's discuss this with michael mckee. we got a lot of data today which suggested different things. what will john williams address in particular? mike: we've got his advanced tech so he's talking about the general economy but he's talking about it very generally in the way he has been doing and saying he doesn't think the slow down in inflation in the first couple

of months of the year is a break in the decline of inflation. he thinks it will pick back up again. we still have solid economic growth any thinks they will get to their 2% target but he is not putting any time frames on these things. one thing people were looking to see is whether he talked about if potential growth and therefore the neutral rate of interest or what economists call our star is higher. that would maybe imply that rates are not high enough. he kind of avoided that but he did mention that you cannot just look at the stars. if you look at it in a broader context, in the behavior of the economy over the past year provides ample evidence monetary policy is restrictive in a way that helps us achieve our goals. we are seeing clear and consistent signs that the imbalances between supply and demand and the economy are receding and we seen a

broad-based decline in inflation. basically, they don't need to raise rates is what you would read into that but it doesn't want to go that far. a lot of fed officials have recently said we are not taking rhett -- rate increases off the table and wall street got hot and bothered over that. it doesn't look like they are getting ready to do that. vonnie: we will get pce tomorrow and that will tell us what's happening with inflation. they don't seem ready to give up on the idea that our start might be a little higher. they are not really discussing openly how interest rate sensitive the economy currently is. mike: they started to talk about it. williams had mentioned it about a month ago and we've heard from rafael bostic and neel kashkari suggesting that maybe our star has come up a little bit. the problem with our star is you cannot measure it in real time. they are just kind of making assumptions based on the strength of the economy and the

level of inflation at this point. it does suggest that when they start cutting rates, they will not go down as far as perhaps some people think or hope area we will not be going back to zero rates but they will be flexible as they see how the economy reacts to these things. the question is not just when did they cut rates but they've also added the idea if they need to raise rates. bill dudley today suggested that their version of our star is woefully short in the rates should be significantly higher but the fed doesn't look like it's ready to go where bill would go at this point. vonnie: not going back to zero rates anytime soon for sure. i guess it's good to have somebody putting fire on the other side of the argument. another fomc meeting in about two weeks time. thank you so much for that update. coming up, a company pitching

itself as a solution to un-affordability in the housing market, particularly vacation homes and second homes. we will have the ceo next. this is bloomberg. ♪

vonnie: this is bloomberg markets. u.s. existing home sales tumbled to a four year low in april. pending home sales and contract signings dropped 7.7% since the beginning of the pandemic. the monthly decline was steeper than all estimates in the region. with this data in high mortgage rates, potential homeowners are looking for potential alternatives.

picasso might be an option. it's a platform for buying and selling shares of luxury vacation homes. the ceo joins us now along with abigail doolittle. thank you so much for joining us. how is a picasso shared different from a timeshare? >> thank you so much for having me. i'm sitting in a picasso home today. it's called infinite road and it sits in napa valley and it's available for $1.4 million which is 1/8 of the whole home price. to answer your question, picasso is coownership. imagine if yuan three or four your closest friends bought a home together and shared access to that home throughout the year. that's exactly how picasso works except you don't have to know the other owners. our company manages the entire experience.

it's everything from designing the homes to furnishing the homes and paying the bills and maintaining them throughout the life. abigail: say somebody bought one of the shares and one of your homes two years ago and today wants to sell it, do they sell it the way they would if they were a single homeowner or do they sell it back to you? is there the same risk there? >> is very similar to selling a home except it's a little easier in terms of the actual transaction process. what you are selling is real estate. you're just selling a portion of the home you own and we sold about $200 million of resale transactions over the last three years. the average picasso owner has realized that 10% appreciation on their picasso purchase when they went to resell it. we try to make the process as easy as possible but you pick the price of the seller in the real estate appreciates as the

whole home would in a traditional real estate sale. abigail: so when folks go to your website and see a share for sale, they would be buying it from the person who had owned it . relative to buying, i understand some of your picasso buyers especially in this environment of high rates are able to offer 5% or lower, is that true? >> that's exactly right. the home i'm sitting in today's a great example. it has a 3.5% interest only mortgage with seven years left on the term. it's assumable by the new buyers so we have lots of examples of properties like that on our website at new -- that new homebuyers can benefit from. when you look at picasso.com, you can find two different types of listings. we have tens of thousands of listings across the country in addition to paris, london and cabo. some of those listings are what we call prospect listings which

are whole homes that are available for sale. when we see enough demand for a particular listing, that's when picasso gets involved, performs diligence on behalf of the ownership group and then converts it to a co-owned home. the other types of listings you will see on our website or what we call available now. those are homes that are already converted into a picasso that are available to buy right now. a lot of those available now inventory homes, more than 50% have interest rates of 5% or below that are assumable by the new buyer. vonnie: so it doesn't look like mortgage rates are a big part of this question. does this interest -- does this type of business succeed in the lower type of environment of interest? >> it does, it will thrive in any mortgage rate environment. our history is a great example of that.

we started about 3.5 years ago and we've sold more than $1 billion of real estate during that time. our owners have booked more than 100,000 state nights across 40 plus markets around the world. we started in a low interest rate environment so it certainly does well in that environment. the reason why it does well in a high interest rate environment is because coownership is an alternative to owning a whole home. as you were just talking about on the prior segment, we have a house in affordability problem. at housing affordability problems not getting better, it's only getting worse. we are seeing coownership grow in popularity as a solution to the housing affordability problem. it's not limited to just second homes. we are seeing it in primary homes or coownership is grown by about 20% year over year while the rest of the market is flat or down. zillow just reported that 26% of homebuyers in 2023 bought with a

friend or family member. i think it's safe to assume that coownership is not just here to stay but it will grow in popularity as a solution to the housing affordability problem. abigail: it sounds interesting and your homes are gorgeous and if someone has $1 million to invest in a home, people would go for this option. you been around for three years or what are your exit strategies? when i first talked to you, i thought ipo. is that on the horizon? >> when the time is right, yeah. we definitely aspire to be public. that's driven by our mission and our aspiration to fulfill on the mission to the greatest extent possible. our mission is about making homeownership possible for more people. we want to enable people to live better lives by finding their happy place and it's a huge opportunity. there are tens of millions of second-home sitting around the world that are empty and tens of millions of families who aspire to own those second homes.

we hope to connect to aspiring homeowners with empty second homes in the same way airbnb connected aspiring travelers with empty bedrooms. vonnie: is it the american dream to co-own and wouldn't you want to co-owned with somebody you know? it seems there's a tinderbox of legal liabilities and once you sell the home, you are protected from that? >> it is an american dream, and international dream for people to own real estate. based on our survey data come about 75% of people with discretionary income aspire to own a second home. this is absolutely american dream. the reason why is because the second-home enables people to live a better life. when you are in your second home, you are in a different state of mind. you are able to pursue hobbies you don't have time for in your primary home and much more. in terms of the coownership

complexity, you are right if you co-own a home on your own, it can be complex and there is risk associated with owning a home with people you know. a big part of what makes the picasso model unique and special is that picasso sets on top of the ownership group and manages all the details. the owners are not debating or arguing over what kind of artwork they will put on the wall or when we will replace the furnace. picasso is managing the entire experience so the owner just guess to show up at their home, enjoy it as if they own the whole thing and move their stuff out of the owners closet and spend time with friends and family and when they leave, they don't have to worry about their. -- their home. picasso manages the details. vonnie: we will be watching with great interest. the picasso ceo, thank you and abigail doolittle as well. still ahead, the consumer is holding back on buying electronics but best buy still has earnings results.

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vonnie: this is bloomberg markets. best buy is reporting better than expected profitability in the first quarter even as people hold back on electronics purchases. anthony from loop capital covers a company and joins me now. investors have been pretty strict on companies. if you beat them, you get it nice bump to your stock price but then you get -- but then you can get punished. consumers and investors seem to be happy with these best buy results. >> i'm not sure they were necessarily happy as much is relieved. what the stock had been pricing in with the weakness over the last several weeks and a lot of consumer stocks have been weak over the last several weeks is that the company was going to miss for the first quarter and

-- and/or lower their guidance for the full year. the fact that you didn't see them miss and lower and you saw them beat at least on earnings and then reiterate guidance, i think investors breathed a sigh of relief and are there is probably some short covering going on as well. vonnie: the stock is now up more than 12% and we will see what it does for the rest of the week area what does best buy need to do to keep this kind of performance going? >> i think there is limited things they can do. at the end of the day, the macro is such a headwind for them. they sell high ticket, discretionary merchandise some of which is very tied to existing home sales like appliance sales and television sales. what they have been doing is doing what i call a great job of controlling what they can control. the fact that you had an operating margin up 40 points year-over-year despite a 6% comp

store decline is quite impressive. the fact that they continue to generate cash flow and return it to their shareholders is impressive. the not too much they can do from a topline perspective but they can tightly manage the things that are within their control. vonnie: you did a nice side-by-side comparison with amazon prices and found best by is reeling doing its level best to beat amazon which doesn't have any retail space. what can best buy do to keep up with amazon if it's already doing this much? >> i think it's just a lot of continuing to do what they are doing. we have been doing best buy and amazon pricing studies for quite some time and best buy's at virtual price parity with amazon so they are not allowing amazon to undercut them on price but they also have been doing a great job of investing in their omni-channel capabilities.

you can order from best buy and is not quite as good as amazon but it's close enough for government work. in addition, you can do by a line pickup in the store. 40% of wars were picked up in the store. if you bring an item home or you have it delivered to you and there's a problem, you can return it in the store and you can't to that with amazon. it's just a matter of trying to continue to invest in their omni-channel and kind of stay as close as they can to amazon's capabilities. i think that's the key thing from that perspective. vonnie: thank you so much for joining us today. let's take a look at the markets. about four hours into the trading session and the s&p 500 is down 0.3% so the risk of sentiment is bleeding into today after yesterday's down day. the s&p 500 is lower and so is the nasdaq and the nasdaq 100 is

down 0.6% or close to it. we are seeing yields also reverse course a little bit today with the two year yield 4.94. even though oil stockpile showed a big increase, we are not seeing much strength on oil prices today. oil is trading well below $79 per barrel. coming up, we will discuss the latest string of energy deals. this is bloomberg. ♪ n. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management. when you automate sales tax with avalara, you don't have to worry about things like changing tax rates

or filing returns. avalarahhh ahhh 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.

v vonnie: this is bloomberg markets. let's get a check on the markets this midday hour. the s&p 500 is down about 0.3 percent and pricing stopped for more than hour because of a technical glitch. we are back now to tick by tick pricing for the major indices.

the s&p 500 down more than 0.3% with tech shares leading the declines for the most part. it's down for a second day in the nasdaq 100 is down 0.6 percent and yields are dropping slightly. look at the weakness of the oil market, below $78 per barrel even though we got data that suggest stockpiles continue to increase. some midday movers on the equity side -- salesforce is sliding by the most in almost two decades. salesforce projected the slowest quarterly sales growth in history. management is telling the potential for artificial intelligence oriented software and features to boost revenue. it's not convincing investors. let's look at shares of energy companies after a flurry of news regarding deals we got the deal that conocophillips will acquire marathon for $17 billion and on the other cited things, miner

bhp decided to pull its $49 billion deal for anglo american. it would be a difficult deal to pull off anyway. let's discuss deal activity with the rbc capital energy analyst. this deal seems to come with a little bit of a surprise, why? >> i think there's been a lot of discussion about marathon being an acquisition target. i would tell you that conoco's name never came up in that. it was a little bit of a surprise. when you step back and look at it, it makes industrial sense. they do quite a bit of business in the u.s. and the other thing is that marathon hasn't east session asset in eg and conoco's got one of the better footprints there. they have commercial efforts that could expand and enhance that. when we look at m&a in the

energy space, things have changed. marathon had one of the highest freak cash flow yields. vonnie: it does seem to be a win-win. will it sail past regulators? >> that's the question at this point. these oil transactions are looked at by the ftc but so far there hasn't been -- there's been some secondary requests but there hasn't been any stoppage to getting transactions done. oil is a global market. it's not measured by city, state, colony or basin. it's a global market and clearly it's a very fragmented industry still. even within the respective basins, i don't think you see ownership position at a point

that would draw any kind of resistance. vonnie: you have to imagine there will be more deals in this space. there has to be for companies to reward their shareholders. what's next? >> that's a good question. i've been doing this for 25 years. there have been many public company acquisitions. last year there was six. those six were among the biggest dollars ever. 135 billion dollars of enterprise and this year we've got more with $40 billion. when you think about where we go from here, you have to think three, four or five years out. think of these large-cap companies that want to provide shareholders a durable return. those companies will look to continue to require -- to acquire. conoco is not done forever.

there is another one that could look at opportunities. when you think about all of these companies, the goal is to provide the sustainability and durability and part of it is consolidating things. vonnie: when you look at the price and valuation, it's a premium. is that fair and is this a good valuation? >> marathon had one of the highest freak cash yields. -- free cash yields. . when you look at the deals that have been done over the last two years, it's been about a 10 or 15% premium that has been faith. i think the price they pay for marathon made a lot of sense. by our numbers, roughly 10% of

free cash flow per share. i think it's a reasonable premium. vonnie: i want to ask about the opec-plus meeting in oil prices. it seems that we are not going anywhere on the barrel of crude. will the price of oil go up and will opec continue to hammer out more gains out of this market? >> $85 oil are good prices. i think there will be some desire to see stability in that range. opec has taken out for little bit of surprise by holding a virtual meeting. i think expectations are to hold the line on those curtailment at this point. i think there's still a lot of questions about the economy. you pointed out earlier that the crude builds that we have.

i don't think opec-plus want to rock the boat right now. i would expect them to maintain their production levels at this point until there is a reason to change that. once you start seeing stronger economic demand, that's going to spur them to make a change. vonnie: does the fact that we are heading into an el niño season change anything? >> it's hard enough being an analyst in predicting oil prices in predicting weather is even harder. you have to be aware and cognizant of that. fundamentally, you got to get back to more of an economic capacity versus weather which is transitory. vonnie: thank you so much for joining us and talking the whole

gamut of issues in energy. sticking with energy, senate majority leader chuck schumer and other democrats are calling on the justice department to investigate possible collusion on price-fixing and oil and gas companies. kailey leinz joins me from d.c. with the details. what more could you tell us about how this letter will be received? kailey: how it will be received we have yet to ciber this is an everton number of democrats are backing. 22 others other than chuck schumer and this is following ftc alleging scott sheffield, the former ceo pioneer colluded with opec officials in order to fix prices. this came out in the ftc approval of the exxon $15 billion purchase of pioneer. sheffield is not allowed to be on exxon's board as a result. the senders that want the

justice department is to launch a criminal probe into this and look more widely at the oil and gas industry do see if there was other collusion when it came to prices and to hold any liable actors accountable for that. this would be something that would be punished as a crime would be. the individual has a fine of $1 million but for a company it could be a fine of $100 billion. it's worth noting that is not the only way in which congress is pushing this question around price-fixing. last week, number of congressional democrats launched a congressional inquiry into questions over collusion in the oil and gas industry. this is part of a narrative that democrats have been pushing when it comes to casting blame for inflation on corporations and the idea because they are prioritizing prices is what democrats say is one of the driving forces of the inflation americans are facing.

if it's more widely to that thing but targeting oil and gas prices. vonnie: there are two senate committees as well investigating whether donald trump made quid pro quo promises on regulations to oil executives. will there be any suggestion the two are related? >> kailey: it fits into the same theme in terms of the industry and its influence. there have been reporting a few weeks ago that donald trump met with a number of oil executives down in florida, essentially saying if you give me $1 million to fund my campaign, i will commit to rolling back to all of the regulatory agenda items related to oil and gas extraction under the biden administration. he will roll that back and make it easier. there is a lot of action from the democrats in congress want to look at what that promise was and the way it was made and it would require donald trump being elected into office for him to see that through. a lot of the strategist i talked to have noted it's highly likely

that donald trump will be rolling back some the biden regulatory agenda regardless of whether oil executives fund his campaign to that's caught the attention of many in washington. vonnie: we have the jury resuming deliberations today in the hush money trial and then hatton and the jury came back and asked several new questions? kailey: last night, they sent multiple note to the judge saying they wanted to rehear from david packer. they wanted to hear more information specifically what packer about the catching kill scheme related to the story of the 2015 meeting. they heard some of that testimony today and they reheard about half of the jury instructions from the judgment they have requested.

they wanted headphones to be able to hear evidence on the laptop as well and all those matters are dealt with this morning in around 11:15 a.m. is when the jury began deliberations. we are now just over one hour and change into the second day of liberation. we have no idea how long this ultimately could go and it's hard to read into the notes the jury sent and what they mean about the jury's thinking. we are on a waiting game in that includes former president trump whose there were presumptive republican dominic -- nominate. not only will in acquittal impact him personally but how it implied him electorally as in -- as he's the middle of a presidential campaign. vonnie: we will follow along and balance of power and listening for all of the deliberations and what the jury might come out with.

coming up, elon musk runs six companies with the latest thing is he's putting his entire empire at risk. it's today's big take next, this is bloomberg. ♪

♪ vonnie: this is bloomberg markets. let's have a look at tesla shares because the stock is down almost 30% year to date. we are obviously seeing a stock that's under pressure as electric vehicle demand and competition heats up. the latest bloomberg big take looks into the people keeping elon musk's's umbrella companies

running. he runs six companies, 130,000 employees worldwide. we reported on this big taken joins me. it seems to not matter how many companies elon musk makes. it just got 6 billion dollars from sequoia in private equity. >> he continues to fund raise for his latest startup, x ai and has a long and loyal relationship with a lot of investors and they are long time investors in his other companies. our big take today is an effort to help people understand how to think about elon musk. it's not just tesla or a space. -- or spacex. it's a combination of or a solar system of companies. vonnie: he can do no wrong. is there anything that might actually hurt his chances were make it more difficult for him to run any single one of these companies?

he seems to be doing well with x that used to be twitter. >> there is risk, tesla is the key to the empire. it's the largest company in terms of employees and terms of market value and is the only publicly traded company. elon musk has pledged his shares . there is risk. never tesla is in a hard spot are having a difficult time, there's always a risk to the rest of the galaxy. that's what you see a little bit of this year. tesla shares are down 30% and there is a key shareholder vote coming up june 13. at the same time elon musk is going on and working on his other companies and that's a big risk for tesla shareholders as well. he can always do other things and he has always had other projects and companies on his list of things he's doing. vonnie: you go through some of the key figures in his empire and they have jumped from -- they don't jump from company to

company but they remain loyal. what would it take to change their loyalties? is there any risk of that for elon musk? >> sometimes executives leave. there is a long list of former tesla executives who are no longer at the company. we saw some key executives leave in mid april and tesla announced massive layoffs. not everyone stays forever but what you will see throughout history is that elon musk has loyal people working for him in terms of helping to manage his personal wealth and legal strategy and in terms of the fixers and family members and investors who have been with him for several years now. those people tend to pop up over and over again at all of his companies. i don't think there is a particular risk to any of them leaving. they know him really well and they've been with him through thick and thin are are likely to stay with them going forward. vonnie: it seems to be unbridled

ambition is a charismatic thing. people take a lot of downside that goes along with that. what happens of tesla shares continue to decline an investor dissatisfaction gets worse? >> i think elon musk is taken a long-term view of the market. he's not a big fan of being a publicly traded company. long-term investors are still seeing past the short term downfall in shares and are waiting for the next catalyst which could be the unveiling of his robotaxi in august. there are questions about ev vehicle demand and how the second quarter looks. the risk for elon musk is his margin call in the amount of pledged shares he has. that's always a risk so whenever the shares start to tank, there is always a knee-jerk reaction of what will he do now to keep that share price up high? those are disclosures that tesla

discloses in its proxy but the margin call risk is a big one. vonnie: thank you so much. your reporting is always must read. coming up, large banks may be more exposed to commercial properties. we will look at today's wall street beat, this is bloomberg. ♪

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study out today from a very well-known professor at nyu who is the former deputy governor of the revert -- of the reserve bank of india when he was a superstar running military policy there. -- running monetary policy there. he is sounding the alarm from him and his colleagues, talking about the off-balance-sheet exposure of some of the largest banks in the u.s. who've largely been left out of the conversation we talk about bank exposure to commercial real estate. he's looking at this area of shadow banking where essentially they are lending through credit lines and term loans to real estate investment trusts which haven't had as much scrutiny when it comes to the on balance sheet exposure that banks face in the u.s. part of their argument is that credit lines that reits have tend to be drawn down in times of stress and when you take this into account, the risk of these banks in times like covid and

during the financial crisis could be more accentuated than people at the moment appreciate. vonnie:these reits have to make large dividend payments but they don't have to pay these out of term loans and that's where the problem begins. it becomes like a >> >> bank loan. precisely and part of the danger is these tend to coincide with moments of distress for the wider economy as a whole. it's precisely when banks need greater capital to lend out to other clients who could be borrowing at higher rates or they need capital to shore up their balance sheet for other reasons. that's exactly when these reits are most stressed. these banks are also under pricing the rates they are offering to these reits. they could be earning more on those late -- those loans.

they limited redemption on a big phone would -- in big fund which made headlines. it showed they increase their credit line access but the rate blackstone was able to achieve despite a clear increase in credit risk was basically the same as they had earlier that year. vonnie: didn't jamie dimon say he was shocked at the ratings these banks are getting. >> some of that as a whole as to the broader debate partly from private credit firms and partly from reits as well. there are lots of entities were banks are exposed on an off-balance-sheet basis with tend to not get as much kearney from regulators partly because that's an information gap which people don't have as much access to. in many ways, the banks are still touching the feet of those systems as a whole.

vonnie: we get the alarm from people like janet yellen so we will keep an eye on this. 340 $5 billion of exposure to commercial real estate since 2022. thank you for bringing this to our attention. that does it for bloomberg markets. continue to stay tuned and we will follow the markets through the day with a risk off dave very idiosyncratic. many companies are doing well in this market. this is bloomberg. ♪ 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.

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>> from the world of politics to the world of business, this is balance of power. ♪ >> live from washington, d.c. joe: day two of deliberations in new york, welcome to the fastest show in politics. donald trump is waiting to learn his fate in the criminal hush money trial that has lasted over six weeks. we are standing by for a verdict. it could be another long day for the former president who is reportedly nodding off and who kailey: kailey: could blame him? it's a waiting game for all of us in the jury re-began deliberations at 11:15 a.m. after rehearing some testimony from david becker and michael cohen and rehearing a great deal of the jury instruction from the judge.