sonali: welcome to bloomberg markets. i'm sonali basak. there are more than 5 billion's of option set to expire today threatening to trigger sudden price swings in the market. let's check the markets and how they are reacting. if we had the s&p 500 earlier this week touching $5,500. now we are well below that. at the market is looking to hang onto gains. really flat on the day. the nasdaq 100 seeing a similar story. flat on the day. the s&p 500 struggling in some

red territory as well. the philadelphia semiconductor index down more than .4%. the dow jones industrial average also roughly flat on the day. mid-day movers on the equity side, autonation, some 15,000 auto dealers reeling from a cyberattack of cdk that is used to complete transactions. at some dealers are handling tasks on paper until the service is restored. cdk has warned a second attack thursday is likely to keep systems down for several days. it down more than four point 4%. amex today announced it will buy a restaurant reservation company known for catering to high-end and exclusive venues. it will complement an mx percent acquired in 2019. after reaching a record high of almost $74,000 in march but going now hitting the lowest level since may.

the drop comes as uncertainty about what to expect for cuts in u.s. interest rates has lessened demand for riskier assets. but going down more than 2%. coinbase down almost 4%. microstrategy down .25% rate today, the wall street triple witching event where some of the $5.5 billion worth of options is set to expire coincided with index rebalancing were some etf's must adjust holdings including the $71 billion technology sector spider fund. bloomberg's isabel lee joins to discuss. isabel: it is one of the biggest etf's worth of $71 billion. for a long time the biggest holdings work microsoft, apple, and nvidia with nvidia in third place. because of a weird quirky rule the third place is a. nvidia's holding added this etf has been 4.5% for months. last friday nvidia surpassed

apple and now it's second place. now you get the full weight, 22%. a lot of volatility. nvidia rising to its full weight and apple is being clipped down creating volatility on a day were triple witching is happening. sonali let's talk performance. how well has this fund been doing prior to reshuffling and what is reshuffling mean for it? isabelle: the widest dispersion since 2001 is because of this quirky methodology. it has not reflected the full weight of nvidia. if you were an investor you invested in the etf expecting it would attract the benchmark, but it has not been. it dates back to how big the market has been and how narrow. the device occasion -- diversification roll dates back to 80 years ago when nobody expected big companies to be this big. sonali: thank you for your time

and analysis. now switching gears. four of the biggest banks on wall street must improve their blueprints for a hypothetical wind down after top u.s. regulators found weaknesses in their plans. at the fed and fdic reviewed the most recent resolution plans, also called living wills, mandated following the 2008 financial crisis for the regulators did not identify specific weaknesses in the plans. bloomberg's todd gillespie joins us now. you cover all the banks. at citigroup in particular, very closely. what is the difference between the likes of jp morgan, bank of america, goldman sachs and how they are being treated relative to citigroup right now? >> citigroup today the ftse said citigroup had a deficiency in its plans, essentially one rank lower than what they identified in the other slightly problematic banks. on the other hand the fed said they only identify a shortcoming with citigroup because the two regulators do not really agree

citigroup is deficient. they kind of escaped the lowest penalty. the worst penalty for these banks right now. as you say, citigroup is a bank that has had a lot of regulatory overhang. it has consent orders and issues with technology and data it has been trying to improve for years. it has been a very costly weight on the bank. earlier this week when the wall street journal first started reporting inklings of the ruling coming it overshadowed one of citigroup's biggest initiatives this week. it is a reminder to investors that just as a citigroup is trying to really push its transformation plan, there are is still a lot of whites hanging over the bank. sonali: this might be a fairly basic question, though i find it hard to answer for myself. why is it more than a decade after the financial crisis you have banks still deficient in living wills? todd: great question.

the regulators do not break out exactly what the shortcomings are. obviously, as we move on from the financial crisis, as banks are evolving, they constantly have to adapt their plans to the current environment, managing different new of exposures people are worried about whether it is crv risk, different models of how they are exposed internationally. the banks constantly have to change. every year. every year they have to think about new issues that keep cropping up. really it is a sign some of the banks need to be better at adapting to new environments as well and to be fresher and faster on their toes. sonali: thank you for keeping and i on the story for us, bloomberg's todd gillespie all over the banking system. now turning to the world of institutional investors. earlier this week hamilton lane had raised a firm record of $5.6 billion for an investment vehicle to private asset management funds, a fast booming secondaries market. the fund itself was about 600 more than the initial target,

rare for today's fundraising environment. joining us for an exclusive interview is eric hirsch, co-ceo of hamilton lane. before we get to the fund itself and the need for secondary fear, can you explain a little bit about the investor conundrum now in investing in private markets. we are hearing so much about the complicated picture they are facing with, kind of, finding the liquidity they need right now to recycle money back into the funds. eric: you exactly head-on at sonali. everybody knows the asset class over any long time frame you want to look at has been a huge outperformer against the public equity markets. from an equities standpoint you would rather have more assets on the higher performing side, the private side. right now we are in terms of liquidity. so, investing continues. but distributions are keeping pace with that. investors are finding themselves a little bit tight on funding. sonali: what does it mean for

new investments? it was interesting to see you raise, particularly, the secondaries funded to this effect. is this a function of the head and crunch? or is it a function of investors try to find a new investments in private markets? trying to make private markets look a little more like public markets? erik: i think it is a series of ands. the secondary space and us particularly have been very strong and investors supported that with this fund raise and our team did a terrific job. and, you need more liquidity mechanisms and a secondary funds have been a way of providing that to investors. the secondary market has probably been the most involved in our asset class. that has been relatively traditional for a long time. the secondary market has provided liquidity at different fashions, sizes, strategies, and spaces. that is all a good thing. investors see this as a way to shorten duration in what is increasingly becoming a longer

duration asset class. sonali: how do you think about opportunity moving forward? i spoke to one of your colleagues earlier this week. the interesting thing about your fund as you are looking at places that are not for the faint of heart. things like growth equity. how much opportunity is there now after what has largely been considered a valuation reset? erik: the opportunity set is massive. as the industry has gotten bigger, even if the percentage of trading volume has stayed relatively static you have a lot more assets trading around the secondary market. for us, one of our huge advantages is the database. we have better insights, better data into the market than others. we can use the data very effectively defined in price assets and we are doing it. we aren't just looking where everyone else is looking. right now the venture and growth space has real challenges. there are also real gems setting day that are attractively priced and it is those investors that

went a little heavy in that space at the wrong time and now find themselves a too full and need to get rid of assets. sonali: one thing weighing on people here is the exit opportunity and lack thereof. you have alluded to paint across the industry. how much is there an exit opportunity now? is part of the funds occurring because the exit opportunity may not be there for some time? e i think --erik: i think an issue here is buyers and sellers not seeing the world the same. if today you are the owner of an asset contemplating selling, you are thinking to yourself, geopolitical risks, a big election looming, the economy has been a little volatile, not sure what is happening with rates. as the owner of an asset, you are thinking today is the day to sell to achieve maximum value. as a buyer of assets, you are also looking at the same thing thinking, well, things might get cheaper tomorrow.

both sides are staring at each other waiting for the other to blink first. the seller at some point we'll need or want liquidity and people will start to accept this is our new normal. people will adjust. we are seeing that happening now. trophy assets are trading today at very high prices. it is not that there are not deals being done. there are. people are buying plenty of assets. they are still selling and getting liquidity. we just aren't seeing it in an equilibrium volume where dollars out and dollars back are you quitting each other and that is causing a bitmapped -- causing a mismatch for the lp. sonali: another story, a company you are invested in, case, sent a letter to thousands of investors saying they were going to lower fees tied to do funds that make it into alternative assets. -- tied into feeder funds that make it into alternative assets. i am curious about what you think of this move. can there be a significant fee reductions in retail funds tied

to alternatives? erik: i do. you are seated it every other asset class and ours will be no difference. as institutional demand continues to rise and you match that with retail demand also rising, there will be fee pressure as there has been in all other parts of the asset class. over time, investors will focus on, what is a commodity? what is a high value into proposition? i think you will see, right now, a lot of the infrastructure around our asset class has been relatively expensive and there will be moves made to try to reduce the cost of the infrastructure and bring down some friction cost for investors across the asset class. i think it's a great way to further democratize what is happening in getting the access more broad and out -- broadened out and making sure the investor experience is as positive as possible. sonali: that's erik hirsch co-ceo of hamilton lane. breaking news. we were just talking about

apple. now headlines are crossing the terminal. if the company is withholding a raft of new technologies from hundreds of millions of customers in the european union citing concerns by the blocks regulatory attempts to rein in big tech, mainly, apple said it would block the release of apple intelligence from users in the eu this year. it said the digital markets act allegedly forces it to downgrade the security of its products and services. we will bring you more details as we know them. those are their shares of apple as we go to break. stick with us. this is bloomberg.

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>> we fulfilled 100% of redemption requests over the last four months and today we have apple liquidity $7 billion plus. this differentiates us from other players in the space. sonali: blackstone speaking earlier to of this month now bringing us to the stock of the hour. the firms 339 billion dollar property arm undergoing a change in strategy. the world's biggest investor in real estate moving into riskier terrain in the hunt for high returns. patrick clark joins me to talk about what is going on inside of blackstone's crown jewel. you and your team has been all over the rate in particular -- r ei in particulart, the liquid vehicles. what pressure does it put on blackstone? patrick: they promised investors a dividend. investors can now very often get better returns more easily and

more liquid asset trade just by treasuries. they will do better. many investors have asked for their money back. demand is in the wrong word because in many cases they cannot get it or they can't get all of it at once. that story is not over yet, right? we will continue to see that i think as long as interest rates remain high. it will go up and down. blackstone at some point did finally start making the redemptions requested. in terms of deploying new capital, i think they have a slightly different challenge. that is, that for a very long time commercial real estate was benefiting from zero interest rates, drawing more and more capital into the space, increasing value. blackstone with the $339 billion of retail -- real estate assets under management, blackstone and its investors were tremendous beneficiaries of the low rate environment. now, all of they have to be more

tactical. -- all of a sudden, they have to be more tactical and figure out real estate or real estate business as they can buy that can succeed without the tailwind of low interest rates. sonali: it is interesting. 10% annualized reception to date for be reached but only 2.3% year-to-date return. that's patrick clark. bloomberg news is all over the real estate industry. but in the management planning to raise -- millennium management planning to raise cash equivalent to 10% of its assets as the multi-strategy hedge fund looks to bolster its ability to access capital when needed. the firm plans to raise the cash by the end of this year or in early 2025. millennium previously raised $14 million in a similar vehicle. the firm has returned about $38 billion since 2020 and is one of the largest multi-strategy hedge funds in the world. stick with us through the break. this is bloomberg.

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>> this is bloomberg markets. i'm sonali basak. the sales of existing homes in the u.s. fill for a third straight month in may while prices set another record. it underscores persistent un-affordability across the nation, particularly in the south. for more we are joined by brett o'connor, chief economist of the florida realtors association and bloomberg's abigail doolittle. brad, you see prices in florida. a really good indication of what is going on, probably to some extremes in florida relative to other parts of the country. how would you describe that dynamic? brad: florida has been a hot market really sends early on in the pandemic. by june or july of 2020 we were seeing some of our highest sales

numbers already. that was a combination of florida being a little more open than other parts of the country. we looked at data, where people were coming from. for instance come out of the new york metro, a lot of folks came from the more densely populated places that are less locked down like manhattan, brooklyn. it really has not stopped. it has dampened a lot. we have gotten a lot of migration into florida that has pushed prices up and kept demand higher than may be elsewhere in the country. the higher interest rates since 2022 is what we are seeing in florida just like the rest of the country where we have seen a dampening of demand overall and our current level of sales is 5%-10% below pre-pandemic levels. abigail: besides rates, what else is dampening demand in florida? brad: we have had insurance

rates problems incurring throughout the country wherever there has been wild or flooding or anything else. florida has of course been affected by those. florida in particular also has been in a situation where, over the last few years, maybe about 10% of home insurance claims each year are in florida and yet about 80% of litigation related to the claims have been in florida. we had a problem with how our laws were structured. the legislature does -- just recently in florida addressed that and we hope it will bring more competition to florida from the insurance side of things, so we will see more even prices. we have already started to see early signs of this happening, but it will take a little while. but that has been a surprise for lots of buyers and existing owners. seeing property insurance rates going up.

but, the bigger deal in terms of the overall effect, but they are both important. abigail: those are some of the factors affecting demand in florida. what about inventories? have rates have any silver lining pushing those back to normal? we keep hearing about tight inventories. nobody is moving to and therefore that is an upward push on pricing. >> right. nationally looking at inventory statistics they are still down from a pre-pandemic level. among the darling real estate markets of the pandemic going from boise to boston, then looking at florida, florida is the only one still seeing prices rising and it still seeing a lot of movement in, but we have slowed down a lot. and inventories here -- here, as a result, have been rising faster than you would see elsewhere in the nation. if you look at most markets in florida the inventory level is

actually a little above where it was prior to the pandemic. and at that point we were complaining we did not have enough inventory. from an affordability standpoint it's a good thing. if you have been trying to get into the market and have not been able to because of low inventory, there are now more options available to you and i florida. but it does vary based on the state. in south florida their inventory is still quite low relative to pre-pandemic. sonali: brad, we have to leave it there. brad o'connor of the florida realtors association. and of course bloomberg zone abigail doolittle. before we let you go, let's check the markets. we have been teetering on the edge and we are teetering a little into red territory when you look at what is happening with the s&p 500. yields roughly flat on the two-year going into the end of the week as well as the 10 year. hanging out at 425. nice and low. of course, pc data next week. a lot is going on into the toes. of course, we have a lot of

volatility plan when it comes to rebalancing and such. stick with us. that does it for bloomberg markets. i'm sonali basak. this is bloomberg. sweat isn't sweet. it's salty. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty. 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

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live from washington, d.c. kailey: part of the balance of power on bloomberg tv and radio. we are following two stories at this hour. the supreme court and the presidential race. with less than one week to go before the first presidential debate we have new fundraising figures that show donald trump outraised joe biden by $50 million and make. more with gregory korte and rick davis and jeanne zaino. the supreme court upholds a federal ban on those with domestic violence from owning a firearm. charlie: thank you very much. looking at a mixed market now. stocks struggling for direction. the s&p swinging between gains and losses. down five. dow