caroline: welcome to bloomberg markets. read on the equity screen with the s&p 500 retreating from a record high following the most since april even after a cool inflation report paved the way for the federal reserve to cut interest rates. let's check the market starting with the s&p 500 losing .9% marking the first pullback in almost two weeks. a pretty meaningful decline. we are seeing rotation out of big cap growth names like technology, communication services and consumer discretionary into rei utilities, industrials, and materials. the nasdaqt 100s,, a larger decline of 2%. all magnificent seven names are

falling. in the philadelphia semiconductor index a drop of 3.75 percent with all 30 names in the red. part of the rotation going into the old economy names. dow industrials of the bible .2%. that is the out performer. names like 3m, dow, and home depot and caterpillar advancing. the bond market 10 year yield hitting the lowest since march. you can see big intraday decline right around eight: 30 am when cpi numbers crossed. u.s. treasury options got solid demand so far this. switching up looking at dollar yen intraday similar movement. the inverse with the dollar losing ground. the yen rising in value with the dollar losing ground against most major currencies. slowing inflation data out of the u.s. this morning boosting the odds of a rate cut later. the yen stronger on the offer of

stronger options in the brokers market and a sales, increasing speculation about intervention from japan to support its currency, a theme in the currency market for several weeks now. inflation it cooled broadly in june driven by a long-awaited slowdown in housing costs. what does it mean for fed policy? joining us is a senior u.s. economist at bnp paribas. the headline cpi number fell unexpectedly. there is a whiff of the deflation in the air. how broad was the weakness in pricing? housing was one component. give the overview? elaina: i think it is too early to worry about deflation here of course. but i think there were two things i would like to say about it.

first, there was to normalization in some very abrupt moves we saw in the may report. you mentioned housing. housing was a strange increase in housing costs in may. they normalized in the june report. despite all of the different categories normalizing such as car insurance for example, normalized from a strange decline in the previous month. it was broad-based cooling, particularly in the services sector. that's a very welcome development. we see that finality inflation is a lagging indicator, of course, trying -- finally starting to hedge down developments in the economy and labor market. sonali: we --scarlet: we already

saw a slowdown in goods said to see it in services is encouraging for the fed. j val told congress this week fed officials need to gain more confidence before cutting. confidence is quantitative, not qualitative. to what extent does this morning's data point the june inflation report at provide confidence? yelena: it will definitely boost confidence. the labor market is where it needs to be. probably even slightly weaker than the fed would like to see. look at the unemployment rate. 4.1% in the june jobs report. that's already slightly higher than the fed penciled in into their june summer economic projections. today's data is tracking such that we may actually under shoot two .8% year-over-year growth in

pce inflation that the fed was expected by the end of that year. that obviously increases the chances of an earlier rate cut. scarlet: does the data put a july rate cut on the table? yelena: no. too early. i think between now and the july fomc meeting there is simply not that much major data that could really push this forward. i think the data so far, in terms of the labor market and inflation, is really something that the fed would like to see to kind of, for them to proceed as they have expected and start cutting rates later this year. i would say that going in july would spook the markets. it would just mean that the fed is seeing something we do not see. that's not what the fed wants to do.

scarlet: maybe they used the july 31 meeting to signal things are moving in line for a september cut. when the fed it doesn't start cutting, david rosenberg, an economist, says the first 250 basis points of the cycle will mainly remove excessive restraint as opposed to providing any real economic stimulus. what's your take? yelena: i think jay powell will probably make a big announcement at the jackson home at the end of august. how will the change affect the trajectory of real interest rates? i agree. the fed needs to push nominal is stressed right -- interest rates a bit lower so real interest rates don't make more strain for the economy. that's key here. this cutting cycle -- it's not an easing cycle -- it's a cutting cycle. and the fed will need to do that

in order to not over tighten. it will be different, most likely, from the past cutting cycles that were driven by weakening economy into a recession. that is probably not what we are looking for. scarlet: important distinction. thank you yelena shulyatyeva senior u.s. economist atbnp paribas. coming up, a rap on nato. richard hass joins us to discuss the future of the alliance and geopolitical tensions as everybody watches president biden to see how he fares at the summit. this is bloomberg. waterproof leather. breathable fabrics. spikeless traction. the most comfortable golf shoe in the game.

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scarlet: paying attention to the markets in the red right now after a cooler than expected inflation report. we will get to that more later on. we want to talk about washington were nato issued a declaration wednesday night calling out china's military support for russia in ukraine describing china as a decisive enabler of russia's war against ukraine as the campaign -- bidens campaign fights an intraparty uprising over his fitness for office. let's bring in bloomberg balance of power cohost kaylee lines with more. k give us more froma nato. iley: the summit is in its third day in washington. additional aid for ukraine was announced by president biden at the beginning of the summit tuesday. error range defense systems ukraine desperately wanted and conversation around an eventual path for ukraine to join nato

though the conflict with russia does need to end for that actually have been considering allies would be inherently drawn into the active conflict if it were to happen near-term. by and large a lot of the conversation at the nato summit has been dominated by questions around the presidency of the united states, not just you will win in november as allies brace for the potential return of donald trump and what it could mean for the u.s. relationship to the alliance and how the nature of dr. change. and the acuity of president biden to be a leader of the free world at this time when questions swirl around his age, why his press conference tonight at 6:30 p.m. eastern will be critical. he won't be reading a teleprompter. he will be thinking off the top of his head ad-libbing answers to questions from the press. it's hard to overstate how critical a moment it is. scarlet: no safety net for president biden with the world watching. we have more prominent democrats coming out speaking out urging

president biden to step aside from the presidential race including the senator from vermont. kailey: yes. it's critical. it's the first time we have seen a democratic member of the senate called for biden to step out. senator peter welch has done that in a washington post op-ed overnight. it is noteworthy biden campaign aides, some of the most senior officials this hour are set to meet senate democrats to try to stem the bleeding. we have only seen one senator at this point call for biden to drop out publicly. we have seen a number of members of the house, now up to 10, publicly called for him to step out. today a democrat from michigan, hillary shelton joined the chorus. blumenauer called for him to drop out overnight as well. at this point they haven't proven they stopped the bleeding. there is a question. once nato is over what will happen then? house speaker emeritus nancy pelosi went on nbc yesterday and not only declined to full

throated lee endorse his reelection efforts, but encouraged everyone to essentially pipe down until nato is over. there is a question whether or not that was a signal to her democratic caucus they just need to bide their time until all the pomp and circumstance is over. scarlet: bloomberg balance of power cohost kailey leinz. now let's discuss this with richard haass center counselor at centerview partners. kailey gave us the rundown on what was accomplished at nato so far. the alliance said ukraine's future is in the alliance and we will continue to support it on its irreversible path to membership. can you translate that into plain english for us? what does that mean? what is the actual support entail? richard: the support is modest.

$40 billion, $50 billion in aid, some useful weapons, particularly in the area of air defense. putting ukraine on an " irreversible path" to membership does not mean a lot. not only is there no timetable, it's not clear what the conditions would be. you and kailey were discussing cease fire. what would be the territorial reach of the ukraine that would enjoy nato protections? how would that work? what limits my to be acceptable in terms of nato weaponry or forces on ukrainian territory? i think the conversation about whether, when, and how ukraine might one day be a member of nato has barely begun. scarlet: who would have that conversation? president biden and emmanuel macron of france both face uncertain futures is now.

richard: it's a political military alliance and it is hard for the military to operate. as you were discussing, there is the specter of donald trump hovering above all this. we can begin the conversations now. but until there is clarity, whether it is the government of france or more important, the government of the u.s., not just the presidency, but the congress, i don't think the conversations amount to a lot. scarlet: is it possible for nato to trump proof aid to ukraine? richard: nato can't really trump proof anything in terms of aid to ukraine. i guess u.s. force levels in europe, policies vis-à-vis russia. under our system, as you know, the president of the united states, the executive branch enjoys tremendous discretion and latitude when it comes to

designing and implementing american foreign policy. all of the talk about trump proofing is pretty empty. scarlet: of course, president biden isn't the only wild card. meaning if he does not stick around through next year. i think about, and greece -- hungary's viktor orban. nato name checked china. how alliance is --united is the alliance against china at the moment? richard: i thought that was the most interesting part of the summit, that tough language about china. it's like the era of romanticism about china that a lot of europeans and americans for a while were part of. that has passed. i think the interesting question is what actually comes from the language? china is violating the spirit, if not the letter of all of its commitments not to arm russia by giving technology and components. now what are nato countries prepared to do?

what will be the diplomatic, economic, and military consequences of the surprisingly tough language? that does not seem to have been decided. but i would keep focusing on that in coming months. scarlet: in terms of follow-up action we are more likely to see follow-up action on china then ukraine? richard: i think that is realistic but a lot of it depends on if there is a will to match the words. the first time i have seen nato, the u.s., and europe come together with such tough language. it will be interesting to see how the chinese react and whether they try to defuse the situation. and if they don't, what are the united states and europe actually prepared to do in terms of technology restrictions, market access restrictions and the like? scarlet: we know foreign policy is president biden's area of expertise. he was chair of the senate foreign relations committee for years. this event should be his moment to shine. it has turned into a fitness test for him. what have you seen and heard

from president biden so far at the event? richard: this speech has been fine. we will see how the press conference later today goes. the communiqué was pretty much a standard nato communiqué. i don't think it will matter a whole lot. first of all, americans aren't focused closely, intensely on nato communiqués or nato summits. it won't affect a lot of voting. and i think the press conference will matter more. but, because of the debate, every time president biden goes out now people are sitting there wondering less about what he says then how he walked and how he talks. i am not sure if he can turn the corner on that. it is a larger conversation about whether he will step aside or remain the candidate. that's the issue of the moment. scarlet: absolutely. after the debate about two weeks ago you wrote that the debate and growing perception that donald trump will win in november will turn the potus into something of a lame duck with more than a half a year left in his term.

it will work to diminish u.s. influence with friends and foes alike. what's your perspective on how nato allies are likely reviewing all of the turmoil and questions about his age and fitness? richard: it's incredibly disorienting for them. it's not only joe biden. take a step back. in the good old days nato could look at the united states and it did not matter who won one of our elections. whether it was a democrat or republican 97% of the policies towards europe or nato would be the same. the departure is what donald trump represents domestically and more important with foreign policy, so qualitatively different than the last 75 years of american foreign policy. so different from joe biden. it's truly disorienting for europe. alliances depend on reliability and predictability. because of donald trump of the u.s. is no longer in the business of being reliable or predictable.

scarlet: do you believe president biden should stay running for the president in november? richard: as i have said publicly, i do not. i think he is a good president and really good man. i don't think he can defeat donald trump in part because he's an incumbent. it's a bad moment to be an incumbent as we have seen in other elections. in part his age issue makes him the issue, not donald trump. i think as long as he is the issue and donald trump and his policies are not the issue, then, joe biden loses. i think that for that reason as well as the fact of how demanding the job is, the idea that this joe biden can do the job in four plus years when he is 86, it's a stretch, to be generous. i think that if you want to see donald trump not return to the oval office for a second term, it's incumbent upon the democrats to find somebody else. i think joe biden should step aside for the sake of his legacy and for the sake of the country.

scarlet: thank you for answering, richard. last september you moved over to join the investment banks interview. i wanted to get your advice to ceos perhaps looking to make big acquisitions now. what's the single biggest geopolitical risk they might be underestimating now and it should consider before going forward with a big acquisition? richard: the biggest short-term risk is uncertainty about the role of the u.s. in the world. we have been such a linchpin of order in the world for the last three quarters of the century from our entry into world war ii and you can't take that for granted anymore. i think that for people in the business world, they have to assume a greater degree of uncertainty. you have these emerging powers and greater turbulence in the world. on top of that the world has to come together to deal with global challenges beginning with climate. all things being equal, it's a fasten your seatbelt time.

going ahead it will be a more difficult environment. it literally and figuratively, for businesspeople to navigate on what they are used to. scarlet: thank you for sharing your views richard haas former president emeritus of the council of foreign relations. coming up, we hear from the ceo of general mills on their strategy tonight to keep shoppers coming back. this is bloomberg.

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scarlet: consumers are fed up with inflation at the grocery store. it's been a challenge for the ceo of general mills. we began with a focus on one of the leading packaged food companies. w >> we have had a time when we

went through once in 50 year inflation that has impacted our cost structure. we are up almost 30% in cost of goods sold in the past two years. back to the beginning of the pandemic almost a one third increase in our cost base. almost $3.6 billion give or take. >> consumers are feeling inflation. even as inflation comes down it does not mean it's deflationary. we are in a dichotomy where in some ways we are settling into a new normal and in other ways it felt -- feels very abnormal and stressful for consumers. romaine: food prices soared well above the 20% rise for consumer prices overall. food inflation concerns have dominated headlines. every time ohioans go to the grocery store. romaine: the senate held hearings on translation calling out industry private -- players for reducing the size of their product without reducing price. >> there has been talk about

shrinkflation. how do you go about this in a way that's more transparent? kofi: first we have to do things that dampen impact and don't harm the consumer. the other job is to make sure that if we have consumers looking for value, that we hit them with the right promotions and incentives. and we have pack sizes to meet their price point expectations. that is a big part of the job. scarlet: coming up, talking real estate with savannah earls. this is bloomberg. all-day energy

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scarlet: welcome to bloomberg markets. i'm scarlet fu. let's get a quick check on the markets. the s&p 500 and nasdaq are following the most since april. declines of 1.9% for the nasdaq 100. down .8% for the s&p 500. this after a fairly cool inflation report. this was an instance on buy on the rumors, sell on the news. you are also looking at yields going down for both the two-year and 10-year. a couple of auction this week which have seen favorable demand but the big story here is slowing inflation does give the federal reserve move to -- room to move forward with interest cuts later this year. let's turn to real estate.

higher for longer rates for the past two and a half years has made commercial real estate a source of real concern, including for fed chair jay powell. abigail doolittle is here with samantha rudin earls. let me start with abigail who has an overview for us on where the real estate market stands right now. abigail: one of the big stories is the pain that commercial real estate is in but not all sectors within commercial real estate. higher vacancies. this is weighing on some of the publicly traded office reits. big declines over the last five years as though publicly traded companies, investors have had to be pretty disciplined in taking losses. that is not true with other

office buildings out there. we are all waiting for a move down for office properties but not a lot of activity in terms of trading. take a look at the delinquency we are seeing. a big piece of this is the wave of cmbs, 1.5 trillion by the end of next year. we had delinquencies on cmbs going up to 10% in 2011, 2012, and that we are creeping back up to 6%. it is not all painful. other sectors are good but the office part of it is bad enough that this week, jay powell addressed concerns around commercial real estate. >> this is a risk that has been with us and will be with us for some time probably for years. banks need to be honestly assessing what their risk is, need to be assured that they have the capital and liquidity and the systems in place to manage this risk.

scarlet: let's bring in the rudin co-ceo samantha rudin earls. that was a great overview. curious to hear from you on the 17 residential buildings and 15 office buildings that you own, what does it look like for you? samantha: thank you so much for having me. obviously, on the office side, it has been a lot of distress, but we are also hearing the chairman powell talk this week, knowing that as inflation starts to cool, the labor market is softening, potential of rates coming down in the fall will be very helpful on the office side. it's also really important to focus on, where there are areas where office is struggling, there are other areas where it is doing really well. park avenue, the vacancy is sub 8%.

we just renewed a lease with blackstone for over one million square feet. you see in the office market a flight to quality, flight to amenitization, buildings in good location next to mass transit. the story is not all bad in office. hopefully as rates start to come down, things will improve. we are looking forward to that. abigail: encouraging to hear that it is not all bad. we have heard that class a, other primaries are doing well, but something we keep hearing about is that there is this glut of office that can be converted to residential. i know you recently sold 55 broad, and that is being converted to residential. you are the first person being excited about this. talk about that. samantha: with a surplus of

office space that is in buildings that could be repurposed, because they are no longer serving as an office building. in the financial district, conversions have been happening for over 30 years. since the 1990's, 10,000 people living in lower manhattan to now 70,000. we recently sold our building at 55 broad st to silverstein and metro loft, and they are converting this building, built in the 1960's to a 571-unit residential state-of-the-art apartment building, full suite of amenities, wellness, there will be a pool on the roof deck. they really found a way to effectively repurpose this older building and make it into beautiful market rate housing. abigail: nathan berman is helping out there, considered to

be the maestro. let's stick with residential, which is your area. thank you for joining scarlet and i. we are so happy about this. you talked about the idea that your occupancy now is at an all-time high for residential but we keep hearing about inflation. at what point are new yorkers going to push back where they will not keep being record high rents and keep occupancy at record high rates as well? samantha: the problem is there is a real shortage of supply. vacancy throughout the city is 1.4%. the fact that there is just not a supply of housing makes it that. we are a longtime owner here, we have 17 residential buildings, 15 office. we really pride ourselves on investing in our properties. we have use this period of time where the demand is so strong to

reinvest in our properties, continue to amenitize them. we are hoping to see the long-term value of new york, multifamily. scarlet: you mentioned investing in your properties about certain things out of your control like a brick transit. mta now has some money issues, has to defer some capital upgrades because the city and estate are not moving forward with congestion pricing. how do you work around that given this is something that residents and buyers have to consider, access to public transit? samantha: it is a huge issue. hopefully congestion pricing can somehow be reworked because it would be -- it's really important that our transportation system functions right. it is essential. abigail: i have to also imagine your family. the rudin family is a story new

york family, your grandfather started the company 100 years ago. i know that you do so much to really help the city, preserve the city, we came out of the pandemic stronger than ever. what are you focus on right now? samantha: our company is about to celebrate its 100th anniversary in 2025, huge milestone for us. all of these shifts in the market, cycles, downturns, we have been able to ride through them for the last 100 years. we take a long-term outlook on the city and we also see the importance and value of constantly giving back. my family has believed that if the city doesn't do well, if the city doesn't do well, it will have an impact on our business. we give back to, whether it is hospitals, schools, parks, the arts, all different

organizations, to help infuse the fabric of the city. we see that as what is important for the long-term success of new york city. scarlet: samantha rudin earls, co-chief executive, abigail doolittle, thank you. tesla was on a share in recent weeks but a new report is sending the stock plummeting. we are seeing selling pressure on the s&p and nasdaq today. the nasdaq off by 1.5%, and pays for its biggest decline since april. this is bloomberg. ♪ we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises).

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scarlet: this is bloomberg markets. i'm scarlet fu. the biden administration is giving out 1.7 billion dollars to retool u.s. auto plans for electrification. this affects facilities across eight states and is part of the signature climate law, the inflation reduction act. president biden has set a goal of having 50% of vehicle sales being electric by 2030 as well as bringing back domestic production from foreign countries. that brings us to our stock of the hour, tesla. bloomberg reports tesla plans to delay its robotaxi unveiling until october. we sell shares turned sharply on the news. prior to that, it was on its longest winning streak in years before the report came along. let's bring along ed ludlow from san francisco. this robotaxi which has been talked about for so long has really become the focal point for tesla investors, this idea

that tesla stock can recover from its stumble over the past year. ed: that speaks to the severity of the decline after we publish that report. what we are hearing from sources at tesla is that they are basically not ready, they wanted more prototypes of this purpose built robotaxi to show at the event, loosely scheduled for august 8, because elon musk had posted that it would be on august 8. it is delayed by three months, which doesn't seem like such a big deal necessarily, but we are hearing that is the impetus. they want more to show for it. the stock is down 6%, seems like a lot, but at the heart of the thesis is that autonomy, almost an uber-like service is a good proportion of tesla's future revenue. scarlet: this is something that elon musk has chosen to focus on

rather than the production numbers, the fact that sales are cooling off. this has been driving the stock's rally. ed: he responded to a user on x, responding to second-quarter deliveries. musk said that deliveries are a small part of what our future is going to be. unlike their reaction to the shares in this delay, elon musk's own attitude toward autonomous driving has evolved. the idea originally was that you would lease a consumer car with all the hardware and software that you need to drive autonomously, and then when the lease ends, you give it back to tesla. or something like airbnb, you have your consumer car, and when you not using it, it becomes a robotaxi. the latest iteration was a purpose built robotaxi. the street was saying, show it to us. no delay is a question of how

long it will take to materialize. scarlet: tesla shares, the worst performer among the magnificent seven, losing 6% right now. in contrast to tesla, rivian is seeing its fifth straight day of gains. you recently cowrote a story about rivian or bloomberg businessweek, starting with this idea that they have a new plan with volkswagen that is helping its stock recover a lot of ground. ed: i have covered them for many years. long story short, they just hit the reset button. they rethought how they would go from being basically a niche player to a mass-market player. volkswagen has agreed to invest $500 billion through them and they desperately need that money. they have had problems getting access to loans made available by the ira, and they have a new plan. instead of a shiny new factory in georgia, they will launch a mass-market car from a plant

they already have in illinois. it is all about the pressure to scale quickly. weget really inside the ceo's head. i will post a link on x. get out there and read it. 4000 words. what better way to spend an evening, morning? scarlet: tesla is a big part of that story, too, because a lot of the rivian fan base are former tesla fan boys, girls who decide that rivian fits them better. tesla is no longer about the ev's, but elon musk in the cult around him. ed: with its first-generation consumer cars, loads of those first buyers were former tesla buyers. but it may have been people who were disillusioned with elon musk. not everyone. people just look to rivian and say i don't want a small model 3 or model y, i want an suv or

pickup. they bought the electric version that they have all of the giving for years. now the question for rivian is, that market has been taken. you are battling with tesla for the enthusiasts. the mass-market, you have battling with toyota, the honda, and that is why they need this r2. at the same time, tesla trying to extend its lead as the incumbent. scarlet: thank you so much, ed ludlow. check out his article in bloomberg businessweek. you can do that at bloomberg.com . taking a look at big bank earnings which begins tomorrow with a pickup in commercial loans, sparking questions about second-half performance for 2024. this, on a day where the stock market is in retreat, certainly if you look at the s&p 500 and nasdaq. but the russell 2000 is up 3% now, a bit of rotation as investors come out of the big

cap names and move into the smaller, more ignored names. within the russell 2000, all 11 sectors are higher, led by health care. this is bloomberg. ♪

scarlet: this is bloomberg markets. i'm scarlet fu. we are going to look ahead to tomorrow. jpmorgan chase, citigroup, wells fargo will be taking off results for big banks. fees to power momentum in the second half of the year will be a focal point. i want to bring in sonali basak and katherine doherty for more. let's start with the bank earnings and when you are looking for in terms of the capital markets business, investment banking, fees, trading, commodities. >> a lot of people were

expecting for investment banking to seriously jump back, underwriting in particular. debt underwriting has been superhot. mna has been a massive question mark. what does that mean for the banks? their businesses sustain themselves into the end of the year. we have an election cycle coming up. there is a lot of question around the numbers you see this current quarter, third quarter, second-quarter, meeting up to what you mean by the end of the year. what they say in their calls about that growth will be important. scarlet: let's bring in cap into the conversation. i bring up capital markets and trading because we look at that to get a sense of capital markets. you have been covering citadel securities and its new strategy to shakeup banks and trading desks. what is going on? katherine: this is not the biggest banks, the ones we are following tomorrow when they start reporting earnings.

these are smaller banks that are struggling to compete with those big players. why are they struggling? costs continue to rise, commissions are compressing. how can you compete when you cannot invest in your technology and keep up? that is my citadel securities has seen an opportunity to partner with some of these banks and brokers, essentially provide the services that they have built, using in-house. they find some strategies here that they are still developing, in order to give those banks and brokers a boost, so that they can stay in the game. not only state in the game but compete and grow market share for themselves and continue to serve their clients. sonali: what is interesting as well is this idea of, this is coming out at a time when the basel iii end game rules could apply and the could have significant results on trading

desks. from what i understand, this was born out of the idea that capital requirements or making it tough for banks to trade at length. katherine: citadel is seeing the opportunity, as you are dealing with these constraints, we can alleviate some of those pains elsewhere and make sure that you have further capital to have flexibility, and again, stay and compete and continue to gain market share. scarlet: that raises an interesting point. i am glad that you brought up basel three. we know they are still coming up with a revised proposal. how quickly can visit -- the citadel plan come together? katherine: this is something that will take a lot of time, lots of deliberations. they need to develop the trust with their partners, partners need to develop trust with citadel. citadel really needs to be able to demonstrate its own risk management, and what that means for them in managing their own

balance sheet. those are all things that will need to be developed over time. it is not an easy feat. not something, if they are going to turn the switch on, will not happen over the next quarter or so. this will be a developing story that we are following over time. sonali: there is this weird thing going on, let's point out the elephant in the room. citadel securities, anyone at goldman or morgan stanley will tell you that they have noticed a getting bigger. now they are going to the banking industry saying, let's provide you a white glove service. you mentioned this was more for small and midsize banks. it is worth pointing out how big citadel securities has gotten in the world of trading, the ambition they have to expand. katherine: it is going beyond retail trading which is where they came into prominence, the meme stock raise. before you could mention citadel

securities and not many would pick up on the name but now it is very much in vogue. they are continuing to deepen their relationships with institutional clients, with these banks and brokers, and the buy side, asset managers, pension funds, those investors looking to citadel for their services. scarlet: this is the most read story on the bloomberg terminal. thank you both so much. let's get to where the markets stand. we are looking at a decline across the board for the big caps, certainly when you look at the s&p 500, nasdaq. rotation into some of the longer ignore sections of the market. russell 2003% on the day as investors switched to some of the small caps that have been long ignored. that does it for bloomberg markets. i'm scarlet fu. ♪

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announcer: from the world of politics to the world of business. this is "balance of power." ♪ live from washington, d.c. ♪ joe: of the chorus calling hunter biden to drop out of the race gets louder.

welcome to the fastest show in politics. as more democrats make the call now even as joe biden prepares for his biggest test yet. i am joe mathieu alongside kailey leinz and washington. we are five hours away from the news conference i referred to here of the conclusion of nato. the world will be watching for more calls from democrats for joe biden to drop out. kailey: 6:30 p.m. is what he will take the podium. hard to overstate how crucial the momentum will be as he has proven to have great difficulty to stop the bleeding within his own party in terms of calls for him to stop. we have peter welch asking for him to drop out. two members from the house. 10 house democrats have called for him to step out. and who knows what will happen after the press conference is over. speaker pelosi encourage members on television history to at least hold off. joe: in our first hour here, two

salvos from the new york times