sonali: welcome to bloomberg markets. let's get a check on the markets. look at the s&p 500 into the green but barely. roughly flat on the day. nasdaq 100 up .2%. coinciding with a move lower in yields. two-year and 10-year. two-year has a little bit more of a bid with a two basis point move lower. new york crude at $83.45 on the day. now only up .07%.

we saw levels we have not seen in crude in two months. on the equity side, nova notice and eli lilly shares -- novo nordisk and eli lilly shares down. the president says it companies no lower prices, "we will do everything in our power to end it for them." shares down about 2% now on the day. we are watching paramount shares moving on a report that barry diller, who led paramount decades ago is considering a bid for the entertainment giant. he was chairman of the digital media company iac. according to the report, diller has signed nda's with national amusements. paramount now up almost 2%. the big news of the day, earlier today jay powell spoke at the euro central bank forum in

portugal. inflation is getting back on a downward path but he remains patient. take a listen. chair powell: they want to be confident inflation is moving towards 2% before we start the process of reducing how tight our policy is of loosening policy. because the u.s. economy is strong, the market is strong, we have the ability to take our time and get this right. that is what we are planning to do. sonali: we will discuss the comments with michael mckee because if you have a chair powell also saying he remains patient, the market is less so. you have a little in the bond market. what are the tea leaves? michael: the market was looking at the idea that we had maybe the economy slowing down a little bit. we were going into the jewels report inking it was going to be bad, but it didn't turn out that way. we saw jolts, and higher than

anticipated. revised down last month but back over 8 million for the month of april and may. what we are looking at is status quo. the market is loose -- tight rather. sonali: how do you pair what chair powell said versus what chicago fed president austin goolsby said, that policymakers should prepare for rate cuts. michael: that is one of the debates, the big debate is when they need to cut rates. goolsby a little more dovish than the chairman at this point. we know the economy is slower. the question is how fast is it slowing and is it going to slow so quickly that we have a problem in the economy and we slide into recession? goolsby is more worried about that now. at the moment chairman does not seem to be that concern. sonali: there's a lot of question about what the biden

administration versus trump administration means for the bond market. my question is what is more important for the bond market, the election season for how the fed moves? michael: how the fed moves is more important until the september meeting. , that will make that -- if we get a rate move, that will make the markets happy. if we don't, it becomes the election. the next meeting is not until two days after the election. if we get a view in the markets that one of the other candidate is going to win before the votes are taken, it will switch back to the fed. the markets care about the cost of money. down the road who is president and their economic policies will make a difference to the markets. for right now it's all about the fed. sonali: like every trade, it is when you get in. thank you for your analysis. we turn from the macro to the markets, the world of hedge funds. citadel and millennium extended their here today gains in june,

continuing to deliver a stream of returns. multi-strategy funds rose just shy of 6% last year on average. they are up this year by 5.2% through may according to pivotal path. citadel on its main hedge fund posted an 8.1% return in the first half of the year. millennium management gained 6.9% in the same period according to people familiar with the matter. the bloomberg opinion colonist says there's only so many opportunities in markets for outsized gains that hedge funds are bound to disappoint investors. we are joined by neer. you see such a massive divergence between these. are they delivering on their value proposition? >> i think some of them are and some of them will continue to. as a group the hedge fund are not.

i'm struck by what is not making news this week. i know you follow the space closely. jane global, one of the biggest hedge fund launches ever starts to trade this week reportedly with just over $5 billion. in the heyday of hedge funds in the 1990's and 2000, this would have been tremendous news. you are hardly hearing about it. i think you have to ask why aren't you hearing more about it. i think the answer is that the hedge fund performance has steadily declined over medium-term. since the beginning the industry. the reason is that so much money poured in so fast. there's only so many opportunities that you are going to see average results. that is what you are seeing. it doesn't help you had run away equity markets in the u.s. in the meantime. even on an absolute basis when you look at multi-strat, the credit suisse multi-strat index, it's up 5.2% over the last 10 years.

that is not going to cut it if you're in the business of making money. sonali: an absolutely amazing point. jane global is trading this week for the first time. it was one of the largest hedge fund launches in years. what does this say about the weight of large hedge funds, particularly new ones that are smaller than the bridgewater's, citadel, millenniums of the world? how much power do they have these days question mark nir: they certainly have more power than the smaller players. the question is if they are constrained by the market. i would argue they are. i would say -- i would go further and say what you are looking at is in north america you are looking at four chilean dollars zombie industry -- a $4 trillion zombie industry. the appreciation and assets in the last nine years, 10 years has really come from market appreciation. the inflows on a net basis since 2015 are about $5 billion. a rounding error.

what you are looking at is an industry not attracting a lot of interest, not attracting new capital, and lives and dies by what it can pull out of the markets. that's fine obviously. there are huge fees on the money. no one is crying for the hedge fund. if investors continue to put new money and fresh capital elsewhere the market share will decline. the only way to do that is to improve performance. i don't see how they do it without slimming down and taking advantage of whatever few opportunities they can find in the market. citadel -- bloomberg news reported citadel gave back about $25 billion to investors since 2017. that might give you some idea of what they are up against in terms of capacity. sonali: i'm curious about what it means for the hedge funds. you think about bob and jane diversifying. it is not just about equities. they are using bank risk transfer trades.

what is this say about investing rid large? -- writ large? how much alpha is found of the stock market versus other markets? nir: there's always less than the portfolio managers would like you to believe. i think there is generally less in the most liquid markets because they are the easiest to trade. i used to go down to lying to more esoteric places in you will find more alpha. in the 1990's there was a lot of esoteric stuff to do. in those days there were a lot of things you could do that were not particularly popular and most people had not heard of them. there was room to maneuver and manage tens of billions, maybe the few hundreds of billions of the time. a lot of the strategies are available in low-cost etf wrappers. there are more players trying to mind the alphas. the natural result is going to be the office are going to decline. some are even going to

disappear. it is not surprising that hedge funds are trying to maneuver that by going to a multi-strat approach. let's try different things and see what hits. it is too risky to try anyone think that's a crowded space with sonali: i want you're not hedge fund pure view on the market here and how you think the second half plays out. where are you most concerned about hiccups and where you see the most opportunities? nir: fundamentals are important. i think they are more important than they usually are. most people are tracking the broad market, the s&p 500. the concentration of the top names is going on a 30 or maybe more. that makes their fortunes in particular super important to where the market is going. i don't think it is lost on anyone the reason they have gotten so big and dominant is because their financial performance in the last 10 years has been extraordinary. i mentioned before when we

talked previously they have grown earnings by more than 40% a year over the last 10 years, which is huge when you consider the historical earnings growth for the s&p has been about 4% a year for the last 150 years. all eyes have to be in this small cadre of companies and what happens to the growth. if it starts to diminish, even if it's 20% a year, but it diminishes, it will be a hard slog for the market. i would watch the fundamentals of the biggest companies very carefully. sonali: earnings season just around the corner. nir, thank you for your latest column and insights on the markets. coming up, tesla delivering more cars and analysts expected but sales are still down from a year ago. details on that next. stick with us. this is bloomberg. ♪ the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future

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sonali: this is "bloomberg markets." time for the stock of the hour. tesla reported its second consecutive drop in quarter deliveries but better than the average analyst estimate by about 4000 cars. while sales were down from year ago, tesla improved under liberties -- deliveries from the first quarter. tesla shares just flying past 5% on the day. volatility is not unusual. explain how these deliveries are put into context for the story we have seen this year. ed: the figures did not continue to get worse. the first quarters numbers were very difficult and at the time tesla gave a number of factors

behind what was happening step the tension and problem in the red sea affecting supply chains, the arson incident at the berlin facility. elon musk talked about the impact hybrid sales of had on the sales. there are different ways of looking at it. it's a drop of 4.8% year-over-year, less than feared, exceeding estimates for deliveries. there is a range. some deliveries as low as 420,000. some saw them higher. we did not get a lot more information than that. for many it's been interpreted as a good sign for ev demand things have not continue to get worse. sonali: the first quarter of this year you saw a nearly 30% drop in tesla stock. the second quarter you saw 12% rise. we did not really gain back all the losses yet but the momentum in the second quarter has been better. what is the next catalyst for tesla for investors to be on the look for?

ed: robotaxi day on august 8. we have an earnings report in between that on july 23 aftermarket. musk posted in the last couple of hours in response to a user the business of delivering electric vehicles to customers is only going to be a small part long-term of the business relative to what he sees as the potential for optimus. that has always been the debate in the last two years. there are those that price it as a company whose business model is energy, the selling of electric vehicles and installation of energy storage, which is excellent in the quarter just gone. others say it's a software company based on autonomous driving. that has not changed and we have not learned more to guide us in either direction. sonali: how do you take stock of what you expect out of earnings season? you see how mixed the analyst

reaction has been. what can tesla be saying during earnings echo turn the momentum around? -- that can turn the momentum around? ed: elon musk gave detail about the factors impacting the global market for electric vehicles. whether or not that is the mainstay of tesla's business going forward, higher interest rates, more hybrid models online, the domestic competition in the chinese marketplace. many chinese ev players. what actually happened in the quarter gone and how quickly they are moving towards this robotaxi future. if are going to have a robotaxi dan august 8, it is unlikely we will hear about it on july 23. we will have a great time playing bingo. you think the similar themes will come up this quarter as they have for the last two. sonali: cad ludlow, thank you for your time and your. a busy month ahead for you.

coming up, we will talk about a released video that shows more of what happened in the incident following former molson banker jonathan kay escalated on a brooklyn street. this is bloomberg. ♪ how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun!

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sonali: this is bloomberg markets and i'm sonali basak. a lengthy video former moelis & company senior banker jonathan kaye's fight with the crowd in brooklyn has been released, obtained by bloomberg from the alleged victim's lawyer. it shows how the incident escalated to a punch that went viral on social media. we have to warn you the video shows graphic images. >> what does that mean?

oh! [beep] >> you just pushed me. stop. hey! serves you right. why would you do that? oh! stop. stop. [beep] >> go [beep] yourself. go die. sonali: joining us for more perspective on the incident was todd gillespie who has been reporting on what was happening on both sides. explain the series of events from early june until now and what we know. todd: on june 8, the evening of

brooklyn pride, jonathan kaye lives himself. there were revelers on the streets. a lot of people around. jonathan was walking along the street and has this altercation which has been widely shared on social media. very quickly after it went viral on twitter for the first time he was put on leave after a flood of protests on social media and in person as well. shortly after that, about a week or two we reported he had resigned from the company. rick pulley miss -- polimas has largely taken over his duties as head of business services banking. now we know that was a criminal police report filed by one of the alleged victims. now just yesterday jonathan kaye

was arraigned at a brooklyn criminal court on six charges of varying degrees for two incidents, two different women that evening which has shown more clearly in the video that we have now a 51-second video as opposed to the 10 seconds that was originally released on social media. this is provoking renewed debate, shall we say. sonali: how has kaye and his legal team responded? todd: they say clearly they believe he was acting in self-defense. he was surrounded by a mob who were chanting anti-semitic slurs. you can see quite clearly in the video they threw water on him, another red liquid that we were told his gatorade. he was provoked and then surrounded and he was purely acting in self-defense and wanted to get back to his family nearby where he lived. sonali: the dispute is not over.

there's a lot we don't know. both sides run different sides of the story. what do we know about the circumstances around his departure from mullis? todd: that's an area we are not clear on. that is something it was a sensitive topic for mullis, a very prestigious investment bank where one of its senior bankers was really -- the firm is blindsided by this incident. we know they investigated the incident. he was put on leave and he resigned. we don't know the circumstances around the resignation, whether he was essentially pushed out, whether he resigned himself, but there are sensitivities around that now. sonali: partially also because of who he was. a lot of headlines say he was a millionaire banker who punched a woman. this is quite racially charged on both sides, wasn't it? todd: jonathan kaye is a jewish

man who lives in brooklyn. this group of -- the group on the other side, some were wearing clearly palestinian supporting symbolism and clothing that evening. we are told this was a verbal altercation with regards to the israel-gaza conflict. that there -- it was part of the spark that led to the event. sonali: todd, thank you so much for following the story throughout and keeping an eye on what has happened throughout the past month. that is todd gillespie who does reports on the investment banks for us at bloomberg news. i am sonali basak. that does it for "bloomberg markets." it is a short holiday week in the united states. you are watching markets roughly flat as we head into the middle of the week. s&p 500 reacting moderately to chair powell's remarks on the bond market, also with the small

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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 first democratic member of congress calls for joe biden to drop out of the presidential race. welcome to the fastest show in politics. a representative from texas pulls the record. i'm joe mathieu alongside kailey leinz in washington. this comes today as joe biden reports raising tens of millions of dollars after the debate that was said to be such a disaster. kailey: the days since the debate, $38 million raised. they had a record month of june with $127 million according to the campaign get there are calls within the party providing to consider not being -- biden to consider not being the -- lloyd doggett represents the district once are presented by lyndon johnson. he says in this