>> welcome to "bloomberg markets ." i am sonali basak. the s&p 500 looking to end the week in the green. it is up .1%. nasdaq 100 up about .2%. philadelphia semiconductor index is where the most love is. the vix relatively flat on the day. hanging out on a 12 handle.

some midday movers on the equity side. nike shares plummeting after the company's first quarter sales missed expectations. it was the biggest decline since 2001. the dramatic drop has wiped out $22 billion in market value for nike. the company's stock has already declined. nike now down 20%. synchrony shares down after an analyst said -- the partnerships and experienced management team. the price target set to $56, implying a 27% increase from thursday's close. treasuries extending june gains. projecting almosttwo rate cuts

in 2024. bets on a september cut also have increased. tons of implications for the bond market. you have the two-year flat. a little bit of arise in the 10 year yield. it is time now for the wall street beat from public credit markets to private ones. there are so many questions on how big the private credit market will get relative to the public credit market. bruce richards said the industry could become a $15 trillion industry over the next decade. there are questions on what the private credit industry will include. joining us now is michael, blackstone's cio for credit and insurance.

michael: thank you for having me. we say $25 trillion. i have heard up to $50 trillion. the market size today is only $1.7 trillion. when you think about the growth ahead, i think we are still in batting practice when you think about the opportunities that are ahead. it is three generational mega trends driving that. higher base rates. the secular shifts from banks to private credit providers. the proliferation of strategies we can offer clients to access the private credit opportunity. everything from investment grade, corporate credit, real asset credit. we are covering the waterfront. sonali: $1.7 trillion to $25 trillion is a massive jump. how fast do you get there and

what is the biggest driver of growth? michael: the biggest piece that will unlock that is the opportunity set that is attractive for clients because it offers excess spread with very little credit risk and diversifying exposure and things like infrastructure credit which are really compelling in today's market. sonali: you see so much of the market jumping into finance but if you see what is happening, there is a lot of expectation the acceleration will just get faster. explain that movement. michael: number one, they share market size. $5 trillion to $10 trillion. a huge market. it is much earlier in the transition from banks to private lenders. 90% of the market is still done by banks. you are financing the real economy. you are financing consumers,

data centers, energy transition. huge growth capital expenditures. sonali: how much are those types of transactions becoming more attractive for firms like blackstone relative to the private equity backed financing? michael: they are attractive relative to the risk. we originated billions of dollars of single a rated paper at 200 basis points of excess spread above at what you would buy a corporate investment bond. if you think about areas like energy transition and data centers, they are massive opportunities with trillions of dollars of capital required to fund them and we have incredible expertise broadly across our entire franchise in real estate, private equity and infrastructure. sonali: people look across the credit landscape. people like private credit. at the same time you look in the

public markets and spreads are just at incredible levels and you do both from where you are sitting. what do you prefer? michael: i think you are absolutely right. public market spreads have gotten awfully tight because of strong technical flows into the markets seeking absolute yield. we have a choice to go to markets where we see excess spread. that is why we are highly recommending our clients to enter areas of private credit. sonali: where is the risk? the market is pricing as if there is little risk of default. it cannot be true that you will see nothing go wrong just for the pure fact that people will be re-nine sing -- refinancing to higher rates. michael: we look at the broader market and see strong economic resilience. number 2, if you look at where a lot of the activities are, some are investment-grade.

even on some investment-grade the vast majority of what we are doing is senior secured first lien 40% loan-to-value lending. . that is not a risky activity. we have a broad picture of health. where might you see -- we are seeing that more often in subscale borrowers who have a harder time dealing with this environment and out-of-favor sectors. in the public market that tends to be the cyclicals. sonali: a little bit of a nerdy question. people have been talking about seeing a lot of publicly traded bdc's, a good reflection of the private market. more importantly you have some trading below the net asset value the question i am getting is should they be marked at lower valuations? is this a reflection they are still marked too high? michael: it is a reflection of

buyers differentiating based on quality. you are right, moody's has downgraded some. you look at the thought rates in that market and you see some dispersion. investment products like ours are trading at big premiums because of the quality of the portfolios. sonali: more dispersion and more opportunity. thank you so much. that is michael, blackstone global cio for credit and insurance. d we will hear from our interview and a lot of talk from the fallout from last night's u.s. presidential debate. we will hear from a former candidate and his take on last night's presidential debate. i sat down earlier with mark and asked him which candidate is better for the bond market. >> i will leave that to the bond geniuses. it is hard to say. i think there is a general feeling that trump might be

better. more favorable for the business environment. president biden, things have done well under him. ♪

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sonali: this is "bloomberg markets." i am sonali basak. you are looking at a live shot of a biden campaign event in north carolina. we are waiting for president biden to join us with comments. he will be speaking. it is time now for the stock of the hour. the consensus seems to be that biden lost last night's presidential debate and the

boost to donald trump in public opinion. the trump media company stock rose early in the day but has given back those gains. republican presidential candidate vivek ramaswamy joined bloomberg technology. . vivek: this was sad for the united states of america to see the current president joe biden in the mental state he is in. there was joking about drug testing. it looked more like he had a lobotomy. it is a sad thing speaking as an american regardless of partisanship. when you think about the country that has produced the greatest of innovation and the leaders in the private sector, to see the person leading the federal government be as absent as he was yesterday is a damming indictment of the modern democratic party. >> may i just jump in? it is interesting you ran as a

presidential candidate for the republican party. you are representing former president trump but you started by speaking about president biden's performance. many are frustrated we did not hear any answers to the questions posed to former president trump about what he would do if reelected. what did you learn about what former president trump might do if he were to be reelected to the white house? vivek: you asked me about my impressions. the number one thing about the debate was the surprise of biden's performance which is why i commented on it. i agree it is more constructive to talk about the policy vision of the mad likely to be the next president, donald trump. talking about the revival of american success and focusing on the economy. president trump demonstrated despite being a number of the different economic class than most americans, he is still someone who understand prices

have gone up but wages remain flat. that part really landed. i wish the debate went into greater depth on policy. if biden had shown up with greater mental acuity we might have had an opportunity but things he said were incoherent. what we learned last night and the combination of recent speeches president trump has given, economic growth is a core view for donald trump. economic growth is a worthy objective. bringing down the tax burden and the regulatory burden to drilling for oil and natural gas and increasing the supply of energy to bring down costs, those are core issues that matter not only to business owners what a factor that matters to all voters and that was one of the more powerful things that came out of last night, the discussion about the economy. >> may i just point out what you said on prices and wage inflation, you said prices have

gone up but wages remain flat. that is no longer true. we saw inflation in may down fractionally -- vivek: may i comment on that? >> wages were up .7%. i wanted to get the latest data out there. vivek: let me comment on that. you are a numbers guy, i like that. inflation is a cumulative. that is the inflation rate. inflation over the course of the last several years, many consumer goods and products are up over 50% by the time biden took office. sonali: bloomberg technology cohost ed ludlow joints me. you heard it there, this idea of inflation and how the republican party is using it in pushing to the future. what do you have to say about how they are reading the numbers versus the feeling of people, for example, who might see prices rising but struggling

with the level of inflation? ed: you could see from the interview i was braced that some comments that vivek ramaswamy made. in part because i invited him onto bloomberg technology because of our reporting at bloomberg that mr. vivek ramaswamy is engaged with trump directly on parts of policy. his answer that he goes on to give where he thinks were trump's message will be strongest is on the economy. we had to do some fact checking in real time as you can see from the clip that you played and one issue on both sides of the political spectrum is there was no fact checking at all during the process of the presidential debate last night that played out on cnn. inflation was one point we discussed. for me it was this idea that i

have been told by sources across the country that mr. ramaswamy has former president trump's ear, everything from his relationship to elon musk to crypto, that is why we had him on the show. sonali: how people are reacting the day after, you have a lot of people on the phones with their friends, fundraisers, colleagues , politicians and trying to reposition after last night's debate. what do you know? ed: social media has been interesting. the number of clips that have been shared of one participants, but of course on joe biden -- the headline on the bloomberg terminal this morning about the lead of the debate is biden's disastrous debate accelerates doubts over candidacy. on social media that is being discussed. you will see that on platforms like x and on reels on instagram, clips shared of gavin

newsom. he gave some interviews, as well. i live in marin county north of san francisco. it is a blue state but there are pockets of republican support in the bay area. i watched it at a local abr and saw people's reaction, interesting. sonali: ed ludlow, we thank you for your time and bring us that interview after the presidential debate. coming up we are joined by a -- stick with us for that conversation next. this is bloomberg. ♪ ♪ ♪

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sonali: this is "bloomberg markets." i am sonali basak. you are looking at a live shot of a biden campaign event in north carolina.

we are awaiting comments from the president from raleigh. until then we will switch gears. major institutions have benefited from preferred access to private market investments. we will speak to a start up trying to give everyday people access to equity for as little as $10. fund rise built itself as a market manager. i am joined by ben miller and abigail doolittle. when you think about the difficulties in giving access to these markets and the demand for these markets at this point in time, what are some challenges you are working through? ben: the biggest challenge has been education. institutions no wide to invest in real estate, private markets but most people have never heard of them. i remember when we first invented it. we launched and no one cared. they did not realize this was a

place that big institutions that diversify into. most have 20% of their portfolio and alternatives and most individuals have almost nothing. abigail: you were the first firm to offer the ability to invest in alternative investments to the everyday person. before blackstone and kkr. real estate, private credit and vc. so many different views on commercial real estate. what are your thoughts? has the bottom occurred? ben: i think the bottom occurred around december of last year. we have seen that strongly across our portfolio. we have 20,000 departments. around february of this year, we saw demand come back. way stronger than anyone expected. the surprise was because rates were so high, it drove demand

into renting. there was a fear last year there would be a huge oversupply of apartments. it turned out to be misplaced because the demand was more than enough to meet supply. abigail: that is a confident view given that some investors -- join bloomberg television to talk about office values potentially going lower than $.10 on the dollar in new york city. would that spread out? if that goes under what that tie up funding, allocations for institutional investors? what are the repercussions of that? ben: that is totally right. we are talking about a $3 trillion asset class. i think you will see a $1 trillion-$2 trillion loss. in a way it is great for my business because if institutions are underfunded and suffering from losses, individuals can

fill the gap. that is what we see a little bit today. the office losses, the government and the lenders and investors have decided to draw out the losses over three to four years. i think it will take a while before you really see it in the valuation is that reflect reality. sonali: it is funny to think about the way you invest in real estate versus the way you invest in your own home or your own ability to rent into an apartment. if you are a renter and you are blowing thousands of dollars a month into new york real estate, how can you benefit from the rising price of those apartments? ben: we own 20,000 residential units and one of our big strategies, building single-family homes for rent. if you cannot afford to buy today, you can invest some money

into a portfolio. it is basically a huge appreciation, it balances the cost of the house that might end up being more expensive than you expected three or four years from now. abigail: what is the role of ai in real estate? ben: the real estate industry has a terrible track record of understanding the impact of technology. work from home destroyed office. ai will have this huge impact on real estate. real estate is ignoring it. you will see it hit office again. it will start to hit the white collar worker. 100 million knowledge workers in america and unfortunately it will have an effect on jobs. that will end up affecting office. sonali: we thank you so much for joining us. that is fundrise ceo ben miller. i am sonali basak. that does it for "bloomberg markets" today.

we are still waiting for remarks from president biden from an event in north carolina. bloomberg will bring you those comments as they happen. stick with us through the close. this is bloomberg. ♪ starti is never easy, but starting it eight months pregnant, that's a different story. with the chase ink card, we got up and running in no time. earn unlimited 1.5% cash back on every purchase with the chase ink business unlimited card from chase for business.

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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: the president is about to speak. welcome to the fact that certain politics. as joe biden returned to the campaign trail the day after a challenged performance in his first debate with donald trump in atlanta. i am joe mathieu mi5 kailey leinz in washington. kailey, the president's hearing intense criticism and, in some cases, calls to drop out of the race, calls coming from inside the house. kailey: members of both the democrat and republican party who, in the aftermath of the debate, are questioning joe biden's ability to carry on at the democratic nominee. keep in mind, this debate so early in june, before donald trump or joe biden nadia: in