♪ >> welcome to bloomberg markets. we are looking at stock little changed this monday after rising initially. that would have the s&p 500 on track for its 30 for closing record. traders awaiting some big catalyst this week, jay powell's remarks to congress, cpi data, and earnings season which begins in earnest on friday. the s&p 500 basically unched at the moment. not much movement in yields. nasdaq also little changed. let's look at some individual companies and bringing our stock of the hour, boeing. climbing to a one-month high

after the aircraft maker agreed to plead guilty to criminal conspiracy in connection to two crashes of its 737 max jetliner. the deal avoids a potentially bruising courtroom confrontation. let's bring in senior aerospace analyst george ferguson. seems like this part moved quickly. this decision to plead guilty moved very quickly. george: the government gave them a deadline of a week. it would have been a pretty drawnout, painful contest of this case. it would have had been probably six months or a year from now, a time when bowman is hoping they are healing, not talking about internal processes and procedures that broke down during the front part of this year. they just wanted to get this one behind them.

they have bigger fish to fry coming. they have the union contract, the most important union contract expires in september. they will get focused on that or they could have a work shutdown. that will not help their second-half deliveries, which they need to stop burning cash. scarlet: pretty long and important to do list. who is leading the company? they are on the search for a new ceo. dave calhoun stepping down at the end of the year. what has the progress been like? george: the company hasn't given us any guidance on what to think there. it makes me believe that the search is still ongoing and they are not narrowing it down very well yet. i think that is a big question in a lot of people's minds, a lot of important things to do between now and the end of the year. better to have a new ceo sooner rather than later, especially as it comes to sit down with his most important union to strike a deal to keep the factories going.

scarlet: absolutely. you want consistency when that happens. boeing is scheduled to deliver their quarterly results july 31. i know it is still early but what are we likely to see from this company? the last couple of reports have been a focus on the company and how it explains its problems. now if you look at the fundamentals, what do they tell us? george: second quarter will be all about cash burn. the company had free cashiers of $4 billion in 1q, similar in 2q. we don't see the same number of deliveries, not out for june, but we expect them in the next day or so. we would expect me even more than a $4 billion burn. probably ends the quarter at $13 billion. we would like to see more cash in the balance sheet. more importantly, we need to see

that cash burn go to zero and become a cash build. they are talking about that in the second half as they boost deliveries, start delivering airplanes to customers. i would expect a lot of the commentary to be how they expect deliveries to be rising in 3q, 4q, not having these levels on burn. scarlet: in recent weeks boeing has finally started the process for buying spirit, the parts maker that it used to own before it spun off. are there any surprises that you look forward to that deal to create? george: since it was just announced, i would hope there are no surprises this earnings call. it does not get consummated until next year. i would expect going to already beginning managers into place at spirit to make sure the quality improves. i would expect to get some

commentary on the stability of the quality coming out of spirit air. they cannot wait for the deal to close next year to improve that situation. it has to get better now. scarlet: really appreciate you joining us. boeing shares climbing at 131%. that is out -- one third of 1%. that is our stock of the hour. paramount has made a deal with guardians media. sky dance plans to invest $8 billion in the business while paramount has agreed to sell the business, national amusements, which controls 77% of paramount's voting stock. allison is set to become the new ceo once the deal is complete. let's bring in felix gillette. the soap opera is over? felix: looks like it is over after seven months of back and forth, we finally have a deal. scarlet: sherry winstone is out of the picture completely, does that mean that david allison has

influence over the company? felix: interesting that we got to hear from david allison in the call and he laid out his vision for all of this, talked about paramount having to up its game in technology, the various synergies he feels like sky dance can provide paramount. talked about its animation studio, combining that with nickelodeon, sports, cbs, movie properties. it was interesting to hear. the president of the company, we got to hear from him a little bit, too. scarlet: is the company going to bleed talent? she had three different people from three different divisions sharing the ceo title. are they going to stick around? felix: hard to say at this point. they are still talking about reducing costs by 500 million dollars, more costs cuts coming.

it's a difficult time when everyone is tightening their belts. in general, the hollywood community is a bit relieved to have david ellison in control. he is a known quality, loves movies, has been investing in the industry for years. it is not just a group coming into to cut costs across the board. it feels like it could be a plus in terms of investment into the company. scarlet: there is a lot of talk about how there might be litigation from shareholders who don't like how everything has been structured, how redstone controls all the voting shares, and now someone else will. felix: david allison did sweeten the deal for the other investors, that was part of it. also increased some of the litigation protections for sherry whetstone at the end. that is part of what got this over the finish line in the end. we will see what happens. scarlet: when there are new headlines, we will bring you into update on david thank you

so much, felix gillette, covering the entertainment and media world. another deal we are watching, eli lilly buying morphic for $3.2 billion. morphic develops gut-related pills. abigail: eli lilly is up .4%. typically don't have the acquirer higher, but more if it is up 75%, close to the price they offered. $3.2 billion in cash, about $57 per share. the fact that the stock is there, folks think the deal will be done. interesting that eli lilly investors are putting a stamp of approval on it. it broadens them out. the company has got-related science. eli lilly has been doing great but they are in immunology, every percent of their revenue.

this will broaden them out to some degree in that area with some early-stage trials which their ceo says wants to start making those kinds of deals. scarlet: interesting that eli lilly makes the deal not long after the ceo talking about how he didn't need to make a splashy purpose -- purchase. abigail: i would argue it is not so splashy. it is for those that own morphic but it is a $2 billion market cap company. early-stage developmental, one selective molecule inhibitor for ibd. it is being used in three clinical trials, two in ulcerative colitis, one in crohn's disease. for morphic, it's a big deal, but for lilly, another token to put in the copper. -- coffer. scarlet: great stuff on eli lilly and morphic, which is soaring on the news.

coming up, we will be talking about oaktree's howard marks. he sees opportunity in distressed debt after the fed's long hiking cycle. more from his interview next. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh sweat isn't sweet. it's salty. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty.

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scarlet: the increase in interest rates over the past year has created more opportunity in private markets, this according to oaktree capital markets to chairman howard marks. here is what he told bloomberg television earlier. >> right now and going into the future, leveraged companies will not be able to renew their leverage as easily, and the cost

of doing so will be higher. so that gives us better opportunities than we've been seeing. scarlet: he was on bloomberg open interest, our new show. sonali basak is one of the hosts of the show and she joins us now. >> so interesting because you have a show focusing on stocks also at a time when the bond market is very interesting. howard marks speaking to, looking at at the implied rate is for this year. two cuts only brings you down to about 4.82 as he implied a rate. you are looking at these companies refinancing at still a significantly higher rate than they bought the debt at. the point he is making is there is still stress in the system. banks are reporting at the end of this weekend into next week. another area is private equity backed companies, nonpublic

companies, where the stress under the surface is hard to calculate. scarlet: hard to see because it is not visible to most of us. you mentioned banks reporting earnings. this is a big week for that. a big call from mike wilson from morgan stanley who sees a 10% correction as highly likely. >> interesting move here because you have the s&p 500 hovering around where he had been targeting the end of the year but he, like other investors, believe there is volatility heading into the election season. the temper cap -- 10% call is an interesting call when you have seen the market check out all of the geopolitical risk, expectations have changed so drastically. that said, this concern about a 10% correction, even people who are bullish on the market -- we spoke to an investor at state street. they said even with that potential drawdown risk, there

is optimism through the other side. another person we spoke to about this uncertainty around the elections, greg jensen from bridgewater. one of the things he said to us was that he sees a lot of fiscal risk as well. he wouldn't go so far as to say whether he would put the petal on shorting the long end of the curve, but another part of the market that he was sunny about, ai. let's listen to what he had to say. >> i expect over the next five years, so much of what you may investors and analysts can do, can be better with machine intelligence. that has been a journey for me. i've been looking at this bridgewater system based on human intuition being translated into algorithms. sonali: greg jensen was one of the early investors in openai and anthropic.

bridgewater is also heading a lot of ai risk as well, the impact it may have on stocks. it will be interesting to see how that plays out. scarlet: howard marks, greg jensen, who else do you have coming up? sonali: we have torsten's lack of apollo tomorrow right before we hear from fed chair powell testify. steve eisman neuberger berman. if you are worried about the markets, he is someone to listen into. sallie krawcheck as well. and the ceo of abercrombie & fitch, whose stock have been rising faster than nvidia, if you can believe it. i know that you and i both wear it. scarlet: you are one of the few people in the office i have talked to actively wearing it because it used to be only teenage jeans and t-shirts and now it is so much more. sonali: i have borne it to the

opera, if you can believe that. scarlet: you can catch her bloomberg open interest every day from 9:00 until 11:00 eastern on bloomberg television. coming up, closing arguments over bill hwang's trial is today. we discussed the implications next. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. 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.

scarlet: this is bloomberg markets. a bird was doing be reached in bill hwang's criminal trial over the 2021 collapse of archegos. closing remarks are underway after a weeklong break. hwang faces 20 years in prison for fraud and racketeering conspiracy. josh naftalis from pallas partners joins us now. a lot of key questions here. one thing the jury will grapple with, and i wonder to what

extent the defense or prosecution answers this, why did hwang do all this, what was the motivation? did we get an answer? josh: the government tried to answer the question, the key question the government want to know. greed and hubris. he wanted to enhance his reputation, make a lot of money. the defense's comeback will be that he didn't make any money. it all collapsed and he made no money. the motive will be the key question for the jury to answer. they don't have to answer that not everyone wants to figure out why did they do it? scarlet: trying to understand why he did do it, perhaps they will come up with a rationale to find him guilty or not. in terms of closing arguments underway right now, what are the key themes that you'll be listening to from the government versus the defense? josh: i read some of the snippets about how the government is closing, and they are trying to distill a very

complicated set of facts into a coherent narrative, explain the chronology. basically, this was not rational trading, it was manipulative trading, and that there were lies to the prime brokers. the defense, for example, will try to make it more complicated. this was rational trading, he really believed in these stocks including cbs viacom, and sometimes the market moves against you, and that is the risk the brokers took. scarlet: the defense is he is not a very good investor. he believed in it to the point where when it backfired on him he had no recourse. josh: exactly. just got out over his skis. scarlet: one thing mentioning, he and patrick never took the stand in the trial. is that a good or bad thing? josh: hard question for a defendant to answer when at trial. you can only answer in retrospect. in this case, hwang couldn't

testify because he had a prior sec resolution for his phone. that would have come in on cross-examination. the general advice is you don't need to take the stand unless you really have something to say. i don't think there is anything to say, known is denying the trade happened. the question is why they did do it. scarlet: the only witnesses called were two professors testifying as experts. did they clarify anything for the jury or made it more complicated? josh: more complicated, but that is what the defense wants. they want these total return swaps, complicated treating, this is wall street. the government wants to make it simple. they treated to inflate the demand, push prices up, that's illegal. scarlet: do you think it worked in this case, to have the professors go up and make the defense's point?

josh: i don't think in the end it will work. the evidence is pretty overwhelming. that is not to say this is a novel theory, you push the stock up and don't make any money. there are some pretty devastating testimony from the cooperating witnesses about not being able to get up to go to the bathroom. they had to keep the pressure on the market. it was on the kinds of things that may resonate with a jury. these are tough cases to win. i have tried cases against the defense, and prosecutor, and both are great, but at the end, it is a hard case to win. scarlet: how long do you think the jury will delivered a verdict? can this be done in an afternoon or will this take a couple of weeks? josh: i think it will be done this week. the trial has been going almost two months. i am sure they are almost exhausted. that said, there is a lot to wade through.

they may want a day or two to think about it, but i cannot imagine, after the july 4 week, coming back for another week. scarlet: if you were sitting in the jury, is there any part that you would want more information? josh: they will want to see some of the key documents and testimony. usually for a couple of jurors who don't have perfect recollection. went to the chief risk officer say about that one issue, conversation on the day that things started to fall apart? it is not unusual. the defense lawyers and prosecution will try to read tea leaves based on what they ask. scarlet: you mentioned bill hwang has a prior run in with the sec. if he faces jail time, what does that look like? josh: sentencing guidelines for him are through the roof. probably life given the billions lost allegedly. that said, he will not go to jail for life for this. there could be a significant jail sentence here.

i think the judge will take into account that he had a prior run-in. the resolution was with the company, not within, but that will be an argument to make. this wasn't a mistake. he knows how to avoid breaking securities laws and he did it again. scarlet: a lot of wall street has been riveted by the inner workings of this trial. what part fascinated you the most? josh: two pieces of it. one is you have the tiger cub. a guy with a great pedigree, made a ton of money. then there are the losses the banks took, cs went under in part of this. you have these two dramas that have captured wall street. scarlet: josh naftalis, appreciate you being here, being our ears and eyes on the ground. quick headline, president biden

saying we cannot waste any more time. i will be the democratic party nominee. this is bloomberg markets. ♪ tions. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

>> from the world of politics to the world of business, this is balance of power. live from washington, d.c. >> joe biden says he is going

nowhere. welcome to the fastest show in politics. as the president delivers that message in a series of interviews and a letter to democrats. we get the latest from laura david and send, insights from eli oakley on the latest bloomberg news swing state poll and joe biden's best showing yet even after the debate. we will have an -- analysis from our panel. let's start with charlie pellett in new york. >> any advance today will be another record for the s&p. up by 0.5 points. the dow in the red, nasdaq building on friday's record. 10 year,