scarlet: welcome to bloomberg markets. investors have been punishing big tech in favor of small caps this week as we await the fed's decision and critical earnings next week, while the sec targets short solar andrew left. and paris moves along with the olympic games even after an attack on the rail system. let's give you the set up for you in terms of where we stand with equity markets. the s&p 500 and the nasdaq 100,

in recovery mode after three days of losses. barroso gains for a fourth time this week up 1.3%. and treasuries also gaining with its annual -- with the 10-year-old moving lower today, 0.20%. bristol will join other drugmakers and raising their 2024 profit forecast after the sales of their biggest products beat estimates, also helping their $20 billion purchases of three other drugmakers last year. meanwhile 3m rallying the most since 1987, the company which is under new management also boosted its full year project forecast. they are increasing the pace of new product development. let's also look at the nasdaq 100. the index swung wildly based

on data and election developments. we want to talk about the big swings with bloomberg's isabel lee. when we talk about the nasdaq, great to see you, thank you so much for making time for us, is that either a warning sign of things to come that we have seen the peak in big tech or is it a buying opportunity? >> there is no consensus, we have such a wild violent rotation this week. going back to 2022, it was the worst day in the nasdaq. it started because of lukewarm earnings from alphabet and tesla. the main question i've been asking people is, is this the end of the ai rally and those the rotation have legs? you never really got a consensus . that is interesting thing. investors are not thinking, when are we going to get the roi or the payout for these millions we have been pouring into artificial intelligence? yes it is revolutionary, kkr saying it is going to be bigger than the cloud, but it's not

going to happen overnight. add to that the fed meeting next week. romaine: we are going to get more earnings from the rest of the -- scarlet: we are going to get warnings from the rest of the 7 next week which will bring more answers. the catalyst for all the fed talk was june 11th when the june cpi came in cooler than anticipated. it really cemented the idea of the fed will move sooner rather than later. it gave those of a big shot in the arm. >> because as we know, lower interest rates would be beneficial for small caps because they are economically sensitive and balance sheets are weaker, so it will be a boost for them. for the longest time without big tech would see a bad year this year but the ai rally happened, chatgpt, that's a different story altogether. the consensus is they are going to cut in september although we have the likes of former new york president dudley saying it might be in june because we are seeing the effects already, of the fed interest rate hikes. it still remains to be seen. some of the portfolio manager i

stopped to say it doesn't really matter, it is 25 basis points. what's important is direction. they are going to cut already. now it's just really which month rather than will they cut. scarlet: it's not anymore, it's just when. i wonder how much political headlines are contribute into the rotation. we have had enormous amounts of headline in the political world, the presidential debate at the end of june, the assassination attempt on former president trump in mid july and now biden stepping down and kamala harris, the vice president taking over as a presumptive nominee, how much as the trump trade part of this greater rotation? isabel: i would not even say it's a big impact. it depends on who you ask. it is different for everyone. trump 2016 is different from trump 2024. he was not even crypto friendly back then but now he is slated to speak in the bitcoin conference. i guess we can only write about it when he appears. but the main thing investors are

really watching is earnings. the continuation of five out of seven next week, microsoft, apple, amazon, that is the big thing. politics, it is too early to tell, still three months down the line. even the fed, it is not a huge game changer in the sense that investors have already priced in september. scarlet: thank you so much, as a bill lee, who covers markets for us here at bloomberg -- isabel lee, who covers markets for us here at bloomberg. andrew left is accused of committing fraud through stock trades and social media posts and research reports, marking the agency's biggest move yet and a multiyear crackdown against traders who taught their bearish bets, bloomberg's bailey lipschultz joins us now with more. what is the sec accusing andrew left of doing specifically? bailey: they both have their own charges against andrew left, what stands out in the sec complaint is that he would use social media to promote investments and layout price

targets but then quickly profit from it. if you came out with a short position or a short call on a certain company, saying the dr. drop 50%, he would actually according to the allegation, he would load up on options or an opposition and then quickly exit the position when the stock immediately reacted. not sticking to those investments. one of the examples it alleges is that left would say he would say he would say on a stock when it hit -- until it hit $65, but they would begin to sell the stock at $20. profiting off of the immediate reaction as opposed to laying out a long-term thesis and sticking to it. scarlet: he just needed investors to jump on whatever he said and he would quietly make his trades. there was also part of the complaint that said he was teaming up with hedge funds. bailey: when you go back three years ago, when both the sec and justice department were investigating the network of short sellers, they were turned to figure out of these

were research units and groups that operate individually or if they partner. that's one of the things that was uncovered in the sec complaint. in fact they say the defendants had entered into compensation agreements with hedge funds so whether they were letting them know of trades before they actually came out with research or outright publishing other firms' research as their own to help. scarlet: the sec also uncovered statements that really sound pretty damming when it comes to andrew left, that he knew exactly what he was doing, too. bailey: when you look through all the filings in the sec complaint, it is not really becoming of andrew left. it is going to be interesting to see if there is another shoe to drop and when that would happen because again this is going on three years of investigation, there's a large network of investors active at short-sellers who promote investments on social media and user following to move stocks and there is a potential follow. scarlet: there is a playbook. have we reached out to andrew left? he's been dealing with this for a number of years now. what is he saying? bailey: no immediate comment.

not hearing anything right now. which i don't believe should be a complete surprise. he has spoken to bloomberg in the past and has been a target after that gamestop snafu back in 2021, he ended up falling under some pressure for that, too. scarlet: thanks for giving us the lowdown on the sec lawsuit against andrew left, the famed short seller. we do have breaking news here, it was expected that warner bros. is suing the nba after tv rights were awarded to its rivals in particular amazon. we will keep you posted on further developments. amazon did have a bid that was approved by the nba, and warner bros. discovery tried to match it but the nba made clear that it was going to move forward with amazon's bid instead. now we have legal action as a result. meanwhile in paris, let's go to the other side of the world here, the city is sticking to its olympic games opening ceremony in just under an hour while authorities address a "massive attack" paralyzing the

network of france's superfast trains. fires were set off at three critical rail line nodes impacting hundreds of thousands of passengers. traffic on a small number of the impacted drain lines have since resumed. their have been no official statements over who is responsible for the attacks. bloomberg's caroline connan has more from paris. caroline: the paris 2024 fall olympics kick off for the first time. just a few hours before the opening ceremony, the french train network warned about some acts of sabotage on three parts of the tgv fast train line north of france and east of france that could actually disrupt as many as 800,000 passengers going in and out of paris. of course that is a big impact

possibly on the opening ceremony. i was talking to the ceo of the big olympic sponsors who said it is very sad some people are trying to take the olympics host edge -- the olympics hostage but hopefully it will not ruin the party. as many as 15,000 athletes from more than 200 countries have arrived in france and paris including from iran, north korea, israel, athletes from israel have been placed under very high security. the russian athletes will be able to compete but individually, not representing their country. president macron has called for an olympic truce after one month of political uncertainty, after the snap elections and no new prime minister insight yet. friday night, for the first

time, the opening ceremony will take place not in the stadium but in the city along the river seine with as many as 6000 athletes sailing down on boats with a big finale at the ase of the eiffel tower -- at the base of the eiffel tower. scarlet: coming up, a private equity giant liens into gambling with a deal to buy game companies igt and everi. this is bloomberg. ♪ all-day energy starts with clean hydration. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty.

thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh scarlet: it is time for the stock of the hour which is

actually a twofer. we've got igt and everi. shares are jumping after apollo agreed to buy a part of igt and all of everi. a gambling's machine company. joining us now is chris palmeri in los angeles. what is the strategy from apollo in buying the two companies? chris: igt was a pioneer in the slot business in the u.s., they own that ubiquitous "wheel of fortune" game and casinos everywhere. it was really not doing great. it had been bought by this italian lottery company a few years ago and the new industry darling was this australian company called aristocrat, it was really making all the exciting machines. they came up with this idea to separate igt business and they cut this deal with everi. a much smaller slot machine manufacturer.

apollo was interested in igt. now they just came and decided we are going to school them up -- scoop them up. they think they can do a better job than the current situation. scarlet: igt may be selling its gaming division but will still remain a publicly traded company, right? chris: yeah. . they are not going to use the igt name anymore but it will be the lottery business that existed before. scarlet: got it. thank you so much for clarifying all of that. i want to get your thoughts on the breaking news we just told you about moments ago which is warner bros. discovery suing the national basketball association after the tv rights were awarded to rivals. this is a multistep thing but let's take you through it. there was this period where everyone could bid an amazon bid for one portion of the games and the nba accepted it and warner bros. discovery was able to match it, and it did have the nba decided to move forward with amazon. so, now warner bros. discovery is suing over what, the decision not to go with it?

chris: warner bros. is arguing that in the current contract which expires next year, they pay a premium for the right to match a competing offer, not a common situation in these types of deals. what we are hearing with the nba -- what the nba is likely arguing is this is not the same package that warner bros. had before. why the nba picked amazon, it's got a larger footprint of subscribers globally, it's got a lot more money, and they just want to sort of go with this streaming partner in the future. whether the contract is enforceable is something the court is going to ultimately decide it looks like. scarlet: we should bench on warner bros. discovery chairs are higher at the moment by $.26 at $82.55. thanks for clarifying that for us, with the latest on the nba.

we will turn to clelia warburg peters who helped coin the term "quintet." and this is bloomberg. ♪

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(♪♪) sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals. >> this is the biggest single hosting event in the history of airbnb. we have the number of people of airbnb of people staying here in paris filling the stadium five times over and they are spending over a billion dollars here in paris. scarlet: that was mr. chess game discussing the height around the -- chesky discussing the height around the paris olympic games, the ceo of airbnb. we have our own bloomberg's abigail doolittle. you have called --

you have coined the term "prop tech." with does airbnb look like now? clelia: i think it was pretty nice and around the time that airbnb was being founded. there were companies like zillow, truly are, but the broader disruption of the real estate industry driving the most gdp across every economy in the world was really and it's very early days at that time. -- in its very early days at that time. this spring we had the co-ceo of picasso who i know that you know and there are other co-ceo's, the founder of zillow, he said that home sharing, the cochairing of homes is the american dream. do you agree? i love how you are nodding your head. it is hard to know if we agree with that also. do you think picasso could potentially be the next airbnb or zillow?

scarlet: i think picasso -- clelia: i think picasso is allowing people in particular to share second homes. i do think we have an affordability crisis across this country and that different innovations that allow people to access homeownership are really valuable. whether or not home sharing is realization of the broader american dream, i think that is a legitimate question mark. but picasso started out to allow people to share vacation homes. for many people, picasso could allow them to access something that would not otherwise be available to them, which would be home in another place outside of their primary residence. abigail: sticking with homes, there was that massive nar lawsuit, the settlement, $418 million, and some of the measures go into effect this august.

even ahead of that, how we already seen the death of the 6% commission, the perception of that it just does not exist anymore? clelia: i think this is going to be a real interesting question that we are going to live the answer to over the course of the next six to 12 months. i personally think that the settlement was less of a big deal down it's been made out to be. really the settlement was very kind of nuts and bolts. here's the regulation about what can and cannot be displayed on mls's and the types of agreements that buyers, agents and sellers can make between themselves, the settlement did not in any way require the commission's come down. it just required bits and pieces of the transaction be tied up better. but i believe that the way that the media has covered news around the settlement and the perception now on the part of consumers, that the commissions

are going to come down and they are going to set up this standoff between the real estate industry and consumers that i do think is going to result ultimately in lower commissions, but i think they may be less low than the media is currently suggesting, because i think there's really no requirement that real estate agents bring these commissions down, and what you are going to see is that there will be a push on the part of many sellers to say, i don't want to pay this. i am going to list my home with the understanding that we will not pay buyer's agent and there will be fewer people who will come and see the home and then they are going to moderate over time. scarlet: there's a lot of things that kind of have to happen and there's obviously a lot of confusion as you put it. what does this mean for the housing portals like zillow and redfin which you can consider prop tech companies? because people will be going on the sites looking for more

information. clelia: those i think are some of the leading prop tech companies. what you have to think about what the different mrs. models -- the different business models actually are. zillow and redfin are in distinctly different positions. zillow is an advertising agency for buyers agents. we think of zillow as being a portal just to look at listings. but zillow's business model is they are selling that lead traffic to buyers agents. if buyers agents are suddenly in a worse position on the market, if they have less money, if you make less money as a buyers agent, a portal like zillow could actually be in a poorly compromised position and that is where you have seen zillow over the course of the past few years really push to diversify their offering to try to create offerings that are more focused on sellers and sellers agents. abigail: i should have mentioned before the reason that we skipped a residential as you are the former president of warburg realty. in terms of the settlement and

the changes that are going to come, knowing that there's nothing official relative to commissions, what real changes will be affected? if everything else remained equal, do you think that just that perception that commissions have already dropped -- may be as much as the media is portraying more people think -- do you think that's going to have an actual effect on residential values? clelia: i think we are going to have to see and i think it will vary somewhat by market. i think this will probably impact luxury markets less. because i think people in luxury markets are more used to working with professionals in different parts of their financial life and people will continue to be committed to working with really strong buyers and sellers agents in luxury markets. in the middle market, the average american home, force generally around $300,000 right now -- worth generally around $300,000 right now, a seller or buyer in the market, 6% is often equivalent to their entire life savings. so for them, that is a really

meaningful difference. and i think you will see people really push more and that middle market segment to have commissions come down. scarlet: abigail doolittle and clelia warburg peters, thank you so much. that does it for bloomberg markets. ♪ xi-chun, xi-chun, xi-chun! you've got more options than you know. book now. with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place? show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity.

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

live from washington, d.c. joe: the obama endorsement is in the bag. now time for a running mate. welcome to the fastest show in politics. as vice president harris lands the obama endorsement, we are going to bring a new polling from the swing states ahead from spencer kimball at emerson college polling center. michael much he -- michael mckee will join us with a tame rating on inflation. what it means for the economy and politics. we will have analysis from our signature panel. rick davis and jeanne sheehan zaino are along for the ride. let's see how the numbers are playing in the markets with an update from charlie pellett. charlie: a substantial rally underway. every major group in the s&p 500 higher on bets the start of the fed easing cycle will keep fueling the outlook for co