>> welcome to "bloomberg markets ." let's get a check on these markets. looking at the s&p 500 today, in the green but only less than 1/10 of 1%. so, the nasdaq 100 is up a little more than that. the two-year yield today was hanging out around 274. 10-year yield around 430, back higher on the day. the yen fell to the weakest levels against the euro on

record, the weakest against the dollar since the 80's. authorities might soon be forced to support the currency again in a stem to put off the worst selloff in the developing world. a lot of ramifications across asset classes. we have some mid-day movers on the equity side. fedex is surging after a forecast profit topping wall street estimates with fedex up more than 14% on the day. investors hope the metric is assigned that the sweeping plan to reorganize and cut costs is taking hold. whirlpool, moving on a reuters report that the german industrial giant, bausch, is considering an offer for the appliance mark -- maker. whirlpool sock was down nearly 30% this year at the close, yesterday, with takeover talks spurring an 8% rise in shares. a look at rivian after volkswagen and rivian announced a 5 billion dollar partnership

to develop electric cars and software. the deal is a financial lifeline for rivian as they grapple with the slowing electric vehicle market. vw will make an initial $1 billion investment with $4 billion more over time. amazon just crossed $2 trillion in the last few minutes in market value. taking a look at the big tech stocks of the day, you are seeing love in the broader market for that industry. turning to today's big take, our reporters have constructed the three days that led to the downfall of rko's. -- archegos. the cowriter of this story joins me now. you have been all over it, not just through the trial but through the scandal itself. what can you say about the timeframe? >> ever since this happened, everyone on wall street have

been wondering how it happened. how did someone build a fortune so secretively and then so publicly lose it in a matter of days. in a downtown new york court room there has been a trial where the justice department was going off on what they believe was market manipulation and lying to lenders. but in the process we had such vivid glimpses of what actually happened in those chaotic last three days when the firm collapsed and it doesn't look pretty for wall street. you have descriptions of senior executives in a tsa security line in texas dialing in with anxious banks on a thursday night wondering if they will lose money. there is a description where a credit suisse trader talked about how he was walking into the office on the friday of that, for the first time hearing about archegos being a distress after going into the office to try to begin the unloading process of the portfolio and of course in the middle of it all, goldman got near $500 million in

gifts because of a staff screwup . it's not really the image of calculated risk taking that wall street tries to project. everything we have seen shows that there was a lot of falls and a lot of cringe worthy incidents of -- across different wall street camps. sonali: let's talk more about that. there are so many remaining questions. in the terminal headline he revealed the chapter revealed ineptitude. who was most that? >> you had a handful of banks losing more than $10 billion, they clearly don't come out looking good. credit suisse doesn't exist today. look at some of these communications. this was a firm that was giving these banks vague, evasive answers. essentially pinky promises about the portfolio but banks were loading them up with firepower. sonali: shocked about it, still,

back looking at that time, why did the bankers try to work this out on their own? why didn't they call a banking regulator and it all was going wrong? >> it was all happening live. they had multiple conversations about agreeing not to sell down. some banks said no, i'm ready to shoot first and ask questions later. those were the banks that escaped reasonably unhurt. one of them was goldman sachs. the others that chose to play cautiously and carefully did not end up looking good. sonali: how does that look? goldman saved money but on the other hand they got out first to the expense of others? what is the reputational fallout after? are they better off or worse off? >> do you think that if you go to a senior goldman executive, are they worried about the reputation of being hard-edged and hard-nosed about the process? or are they bragging about the fact that they didn't lose any

money? and does credit suisse get any credit for saying let's do this slowly and in a calculated manner without spooking the markets? they are not around to tell you the tale. that tells you how goldman will do it again. sonali: why wasn't a regulator called at the beginning? >> the fact that it was happening on the spot live -- sonali: 72 hours, shouldn't they regulator have been called? x they were going to the biggest banks saying that they were trying to meet market -- margin calls elsewhere, give us cash, officers have a tomorrow, are you sure you are good or it tomorrow? fine, have $300 million? did they get it back the next day? no. people saying that there wasn't much to worry about with a great performance that they were giving money back to? there was no recognition until the final day of the week that this was a real catastrophe. sonali: just incredible.

don't miss they take. it's quite the tale. now, apollo's john zito says his firm is looking to simplify the credit strategy of pricing in longer for higher rates. we will bring you more information from the bloomberg invest conference. this is from yesterday. >> the higher rates for longer has catalyzed a lot of things in fixed income. it has actually created this whole new asset class, whole new area we can innovate to change the area you access. that is where i'm spending most of my time. clearly, private credit has gotten really popular. we were used to that. i was at apollo over 10 years. we didn't take meetings with the credit guy, really. now it's -- ok, rates may be up for longer than people expected. what does it mean for asset allocation? what does it mean for investment

businesses? are we set up the right way to take advantage of what i think is going to be a completely different, completely different investment environment? looking at things historically, in 1995 94%, cal and associates, 94% allocated to fixed income. 2000 22, the weapon of allocation for the retiree is 3% for fixed income. now they are going back to 51%. for us it's all about educating on what private credit is, how do you access the megatrends that are happening in a safe way? how do you reverse what's gone on for the last 15 years? take the asset category and to get 8%, 9%, 10%, what did you have to do? go into complex strategies and use leverage to get that return. now you can do it with a pretty

simple loan. so, getting back to the basics of trying to solve what we have is a big retirement crisis and getting back to the basis -- basics of doing it in the simplest way possible is pretty exciting. usually fixed income and excitement is not in the same sentence. sonali: coming up, bank stocks as they face their annual stress test week. more on the state of the banking system, next. this is bloomberg. ♪

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sonali: this is "bloomberg markets." time for the stock of the hour. we are watching the big u.s. banks. the big four are lower in the session. later today we expect results from the federal reserve stress tests and we have a preview here with todd gillespie. when you look at we expect around after the market closes, how do we expect the federal reserve to treat the banks and these stress tests? >> today at 4:30 we will expect the fed to release their stress test results. most people are generally, they've got to the point now where these big banks, they know what to expect and ho to play the game. they all seem pretty optimistic and have signal to the market so far throughout the early stages of the year with increased buybacks. they are probably expecting to pass the test. but it plays into the broader debate that we have now about capital requirements in the u.s.

sonali: we have this data that we heard from regulators around living wills. when you take it all together, how do you assess the strength of the banking system? >> there is a lot going on with big weights hanging over these banks. key uncertainties. the big thing that everyone was looking towards is how much more of a buffer will banks leave acquired to hold under these parcel three and game rules? our colleagues reported that the fed looks to be significantly reducing the expected extra buffer that they will be imposing on the banks, giving a bit more leeway and optimism to the system. at the same time on friday when the banks are allowed to release the kinds of dividends and buyback increases they will give to investors, they probably don't to take the mickey just yet. they want to be cautious. we still have a lot of regulatory uncertainty around what they are sick -- signaling

to the market at how liberal they will be. sonali: thank you so much, todd. we will keep an i on that. breaking news, bloomberg reporting that the supreme is poised to allow emergency abortions in idaho. the supreme court abortion decision appeared briefly on the website as well. kailey leinz joins us from d.c. to discuss. what do we know? kailey: important to note that this is not necessarily a final opinion from the court. bloomberg law colleagues saw this got posted on the website when the issue two other separate opinions earlier this morning. in what was seen, which appears to be a draft, the court is poised to allow emergency abortions in idaho. for backgrounds on this case, it was one of the states where after the dobbs decision where roe v. wade was overturned, they had a trigger law with a near total abortion band go into effect with you exceptions.

the federal government sued idaho over that and over hospitals that receive medicare funding to offer necessary stabilizing treatment to pregnant women in emergencies, which of course could be inclusion -- inclusive of abortion. but we have seen on the website suggests that the court has ruled in favor of the federal government question, poised to allow emergency abortions in the state of idaho. this could be very consequential if we get a firm court opinion on this. we have not gotten the final opinion yet, but it could significantly impact the events of tomorrow, the first presidential debate between joe biden and donald trump where we understand joe biden is expected talk about abortion rights extensively and push donald trump on the issue as he enabled the overturning of roe v. wade if this is the final opinion from the court. this would be a win in the first

time the court has weighed in on a abortion band since the dobbs decision, two years ago this past monday. sonali: kailey, thank you for all of your reporting today. now coming up, switching years to get insight on the sate of mergers and acquisitions. a lot of questions before the election with antitrust. we will speak to daniel wolf, specializing in kirkland and ellis. that is up next. this is bloomberg. ♪

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>> if we get past this regulatory cloud, if we get the direction of interest rates with greater clarity, you will see a reasonably stuck m&a marketplace become unstuck. sonali: that was paul taubman,

founder and chairman of tbt partners, a preeminent investment bank in this country, speaking with me at the bloomberg invest conference. we will continue to have a conversation in the wall street eats segment. joining now is daniel wolf, specializing at kirkman and ellis. also joining us is r-star deals for order, michelle davis. you heard what paul had to say. do you agree there could be a cloud over the m&a market the uncertain you? daniel: the famous thing that dealmakers say is they are cautious mood optimistic but i would say i'm cautiously pessimistic about what the rest of the year will bring. the things that have been dampening down m&a activity look like they will continue for the rest of the year. higher interest rates, uncertainty about the election, the regulatory environment continuing to be a cloud over dealmaking. i think that looking ahead for

the rest of the year, we might be facing a lot of the same with the same limited activity that we saw in the first half. >> coming into the year there was a lot of optimism around mega deals but most of them were in the first quarter. why? what happened between then and now? the rate cuts didn't come? daniel: not as quickly as people expected and that affected the market. there is no scientific formula for saying hey, this is what will drive activity, but looking at the current market, right now the biggest obstacle is valuation disconnect. it takes all the input. interest rates, regulatory environments, geopolitical risk. going back to 11th grade economics, willing buyer, willing seller, that drives economic activity and after a time of low interest rates, it distorted asset valuation. sitting in the market, buyers

want the market to take account of the higher for longer interest rates continuing and sellers are looking back and saying i like to the valuations from two years ago and until we can bridge the gap because interest rates come down or sellers get more realistic about valuation, we will continue to se a chpy market. >> another topic that comes up when people talk about m&a is the election. how big of a deal is the election to mna? it's an obvious talking point but are your clients sitting there saying that we are putting this down because we don't know what's going to happen? daniel: we had those kinds of conversations. i don't ever remember going into an election wondering who was going to win. the last 25 years has real casually change that in there is real uncertainty over the outcome of the election and uncertainty is not a good thing for m&a. think about being a cfo trying to pencil out a deal.

is a 35% corporate tax rates or 21%? without that knowledge, a lot of people step back and say they want to wait and see what the outcome is and they don't even have a preference as to what it is, they just want the certainty of knowing what it is so that they can pencil that in. that will tinea as long as the election outcome seems close. sonali: it's interesting, how long does the uncertainty last, even after the election? think about the uncertainty around how the current or different president might approach certain deals. how long does that take to shake out? daniel: realistically, people get ahead of the actual changes being made. it's knowing the outcome so that people can act on it. they would probably act on it before the effect is felt in policy and regulatory environments. but just knowing which way the wind is blowing helps people. sonali: there is this idea that the republican party is lighter on deals and regulation.

is that the truth, given the issues we are facing today? daniel: historically, that has been the case in people heading into a second trump administration think that it would go back to a traditional republican approach of matters, a lighter touch than we are currently seeing, which is heavier than it has ever been. one thing we have been paying attention to is the move on the populist right to make common cause with the progressive left on antitrust questions. josh hawley and j.d. vance are saying the same thing on deals that elizabeth warren has said. saying that trump will win and antitrust will be just fine. i think it will be lighter, but we don't know how much lighter. >> so, another area that you have looked at a lot, pharma, it's always attention grabbing deals, but we haven't seen

anything bigger than $5 billion. what's going on and what's going to happen for the rest of the year? >> it's a combination of factors. the ipo market has been shut for the last couple of years and we always count on it to replenish the supply of companies acquired. that hasn't happened. same thing with private capital markets that are not available. we have seen less growth, less investment, creating a scarcity of assets. pharmas are looking at the available targets and not necessarily being able to pencil it out and work from a valuation standpoint. there are quite a few that have up coming patent cliffs and are going to be looking to replenish their pipelines. it is going to take time for valuations to set up so that the deals work. just because you need to replenish doesn't mean you will pay any price to acquire the assets. sonali: we have less than one

minute left, but your point on whether your administration, is 10 the new 20? will it be done at all? daniel: with the overlay, if you look at the activity level across different deal sizes, the middle of that deal, 2 billion to 20 billion, that's been normalized. what is missing is the megadeal on the lower end of the market the engine of the market, the 500 and below is well below historical levels of activity. there are different drivers of each, but until we get recovery on both we won't be able to say that m&a is back with exuberance. sonali: certainly has been an interesting year. thank you to daniel wolfe and our own michelle davis. that does it for "bloomberg markets" today.

we are watching a market that has been trying to stick into the green but has flipped a bit into the red. stick with us for the close. much more markets ahead, as well as "balance of power" ahead of the big presidential debate tomorrow. "bloomberg markets -- this is bloomberg. ♪ want to save on some of the biggest names in streaming on the network made for streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month. all your favorites. all in one place. only from xfinity. for more watching and less spending... x marks the spot. do it all on the network made for streaming, and bring on the good stuff.

>> from the world politics, to the world of is this, this is "balance of power."

♪ live from washington, d.c. >> it's the opinion we were not supposed to see today. welcome to the fastest show in politics as bloomberg news learns the supreme court is poised to allow abortions in medical emergencies in idaho. this was briefly posted on the court's own website. i'm joe mathieu alongside kailey leinz. we thought the court was done for the day. kailey: inadvertently posting what appears to be a copy of the opinion. the first time the court has ruled on a state abortion ban since the overturning of roe v. wade two years ago. what bloomberg and bloomberg la