>> welcome. i am mark crumpton first world news. the pentagon is seeing delivery of air defenses for ukraine. instead of building weapons from scratch, break down will accelerate assembly by using exists in parts. one of the weapons is a natural -- national advanced air system used to protect the area around washington dc and will be levered -- delivered to ukraine in a few weeks. in uvalde, the school superintendent plans to retire after months of outrage of the handling of one of the deadliest

school shootings in a decade. fishing left 19 fourth-graders and two teachers dead. texas lawmakers blasted decision-making by both police and school officials. new york city mayor eric adams signed two bills prohibiting guns in prime square -- in times square. state law and abled the district -- restriction was ruled unconstitutional last week by district judge. "this is the heart of our city, we are not going to live in fear". in the u.s., small business optimism has lessened for the first -- the national federation of independent business overall optimism came higher than

expected according to a tuesday reports. global news 24 hours a day on air and on bloomberg quick take, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton, this is bloomberg. >> welcome to bloomberg markets. >> what started as a risk of data in the equity market has completely turned around. the s&p 500 now up zero point not a ton of action in the bond market. we are seeing yields only at 3.88. mastec the mass -- nasdaq down

10.7%. >> the general mood we want to get into here. first, the dow has stock today after morgan stanley was feeling bullish about a company that has had some challenges with investors recently. beatrice has continued to push stock higher on the belief the fed has a possibility of consumer health business in york -- europe that could be on the block. there are seeing reports that there are light away and on the global growth concerns of the imf outlined today. as we begin to get ready for tech earnings, netflix is still weak from these numbers but pivotal with a very cautious, to on how much extra bank for the buck the company can get from there as supportive business. we will continue to watch what is happening throughout the tech business. >> the question remains of where do you put your money earlier

today? jim seltzer spoke at the economic forum sing better terms and pricing are more emerging in both the public and private markets. >> when you have the dislocation we have had so far, there are opportunities within the public markets and the investment markets and low dollar price and interesting opportunities. in the private market, you new capital is coming with better terms and better pricing. you are in this unique period where there is actually opportunities and the higher end of both of the markets is interesting. higher yield on a yield basis is somewhat attractive but on a spread basis it is historical levels. the spreads this morning are bid 500s, approaching 600. this is typically a time when you get interested in yield. right now it is approaching 10% which is a very attractive number. it is my view that's, having

done this for a few decades, things are happening faster and faster. >> faster and faster and faster. private credit is no exception. the ns that this week there is more than 12 billion dollars from investors for strategy providing senior loans with the middle market company. joining us for more insight is the firm's president and ceo can can follow. thank you. as more people get more bullish on private credits, can they be -- should they be more wary of lag bolts into private credit markets? >> great to see you again. absolutely. i think the more conservative strategist today certainly are the ones that are going to hold the day. the reality is that as we head towards potentially a rough year and we move into potentially a recessionary dynamic, the more

conservative managers are going to be the ones in favorites i think that is the case with our capital rates. our investors are looking for us to focus on defensive industries and companies that are reasonably levers with traditional covenants and that is where we focus historically. that is the main reason why investors are attracted to our strategy. >> you reference to capital raise and it was a big one. in a year where you are not seeing a lot of ipo's on wall street, talk to us about what the mood has been like in your neck of the woods. >> it is surprising the level of investment activity we have seen the last quarter in the last year because it has remained extremely active. in the middle markets, you are still seeing higher quality companies transact and businesses that may be impacted by inflationary pressures and inability to pass on price increases and other dynamics with these chain. i think those are being pulled

off the market to kind of wait out a better environment but the higher quality companies and companies that have significant strong capital and in many cases that companies have that have benefited through covid like health care and distribution businesses have accelerated and those are still trading. the multiples we are seeing for the higher quality companies remain robust. 15, 20 times cash flows for very strong companies in defensive industries. that is where we are focusing. today, given the rise in underlying base rates and improving spreads, the same loan we did a year ago at 6%-7%, we are now getting 9%-10% for a traditional secure loan. we think it is a great time that as long as you are more conservative and selective in the nature and businesses you are looking at a. >> one of the other major

spotlights is liquidity. our parts of the credit markets are seeing more -- far more liquidity and yields. i am curious if that makes private credit less attractive by comparison, especially at a time when a lot of companies are looking to right side their balance sheets. >> and think what also has happened in the private credit markets is because of the broadly syndicated liquid markets that are essentially closed to new issue, there is obviously a secondary player in their markets but in terms of new deals in opportunities, surprise -- the private market is aware of where it is. as a result, we are seeing larger companies with or scale and larger business models go into the private markets. as a result, that is a real advantage. we are getting federal pricing, larger companies, traditional structure.

in many respects, the private markets are benefiting from the essentially closed public markets. i have heard prior commentary about the secondary opportunities which i agree with but if you look at the primary markets, it is private credit that is providing the financing. obviously we offer certainty and a stable financial solution for businesses looking to grow in rates capital. there are very busy and we hit a record quarter in the third quarter. during the day, we have invested nearly $2 billion. we are very busy. >> helpful context. much appreciated. ken can sell -- kencel, turtle asset management president and ceo. chips makers, earnings estimates falling into the fastest paste since 2008. this is bloomberg. ♪

>> this is bloomberg markets. i am kriti gupta alongside jon erlichman. we consider that continue to see a lot of pain coming from the biden administration to limit the sale of chip conductors and equipment to chinese customers. joining us now is bloomberg

intelligence senior analyst from hardware and networking. walk us through the investment story here. on the one hand when you see this kind of pain, if they pull out of, you do not invest in the stock market but there is still underlined demand globally for chip so why is that not bolstering sector? >> let's talk about the city connector cycle in general. the city connector cycle is typically a leading indicator of the -- the semiconductor cycle is typically a leading indicator of the economy. we see the uptake pre-covid, they were the first ones to recover. now it seems as if they will be the first ones to rollover ahead of a recessionary fear. >> the bloomberg markets live blog is looking at past instances where we have seen the kind of challenges that we are

seeing right now. investors are going to kill at some -- feel at some point like evaluation has been tested by companies by that logic you are laying out for us. with this be the segment to watch, whether sentiment or conviction begins to change at some point? >> sure. if we look at the chart from the p perspective, at forward earnings, or if you look at it historically, it is still 20% above 2018. this still could be more to go given the uncertainty in the near term. then also with the near to medium term with the other restrictions being put in place. >> helpful context. thank you. woo jin ho. over and lift shares tumbling

after biden administration -- uber and lyft shares tumbling after the biden administration mandate. this development, is it the kind of thing that can up into the business model these companies have relied on? >> absolutely. this could be detrimental in the sense that when you look at their fixed costs, it is about 20% of the overall cost structure. if they have to add the workers of employees, you cannot even take off the scale. a company like uber has 2 million drivers globally. it is huge. even if they have to pay minimum wages and lower health benefits, the cost structure balloons. here, we have all the talks about his companies generating tax flow. this is still a proposal. i do not think this is going to

be the department of labor's way to influence the core. >> what kind of pain are you going to see in terms of things like free cash flow? >> think about fedex and ups. fedex has 200,000 employees. their cost structure is 30% of employee costs. in the case of uber, the variable cost proponent is much higher. for drivers bring their own -- but suddenly then you have the workers as employees and you have to add on the the cost. at best you are going to have a high signal visit. there is right now margins that are at 12 -- 20%. >> how are you going to be trying to analyze this business

going forward for these companies to your earlier point? coming out of the pandemic, this was the group challenged during 2020 that many were optimistic about coming into this year. >> scale is still the driving factor when it comes to be -- to these. for a company like uber, as long as they can spread the cost throughout multiple drivers and consumers on the platform, they still have a network expect and will be able to survive. for a smaller company like lift out -- lyft, it remains to see what happens because uber is global. at the least this is not a problem outside the u.s. right now. >> thank you very much. always helpful breakdown. investments -- investors keeping a look at the uber and lyft

story. we have also been tracking american airlines. american airlines saying they expect to post third-quarter scales -- third quarter sales above private guidance -- prior guidance. a good news after we saw the post labor day travel particularly for business trips. let's bring in u.s. airlines bloomberg reporter. from the carriers, maybe a little taste of what could be coming from the other players? >> i think that is right. america is the most recent and comment on what the rest of the environment looks like but they are the first to comment after the actual close of the quarter. basically what everyone has said at this point is asia demand usually ends after labor day. schools go back in session and people start traveling -- stop traveling. but they have seen is an

extension of the leisure demand that has caught them by surprise. this will continue to be strong and airlines are reporting that result. >> it was not too long that the airlines actually went -- positive post-covid. what's the of another barrier and the lack of business travel and some airlines then go back in the other direction? >> domestic business travel has more than fully recovered in terms of the revenue. they are doing really well on a domestic front from small and midsize businesses. often larger corporations have not combated it completely but that is largely because of international travel. there are still some restrictions by various companies by international travel and some big corporations are not fully back in their office but the expectation is pretty broadly that all of them will come back strongly. >> that is what i was going to ask you about because obviously

i am here in canada and we have begun to see more and more easing on travel related rules and regulations. and for the businesses that send their people historically around the world for business opportunities, i would imagine the airlines are going to be really trying to key in on that potential over the next months. >> faster rights. the international long-haul routes are their most lucrative when it comes to business travel. it will have it reopened so that is a concern. i think travel across the atlantic is pretty strong. the have to remember that revenue is away of its fares are way up. even though they may not have the full volume, the fares are carrying them through. >> mary, i want to ask you about the cargo here. airlines have been transporting cargo to make up for the passenger walk. as that completely disappeared post-covid? >> no it hasn't. the airlines that were stronger

in that area before covid are still strong in that area and carrying cargo. i do not think anybody's adding a lot of cargo capacity but they have not pulled it down or pulled back on it. >> thank you very much. bloomberg's very sling and stein -- mary schlangenstein. coming up, mohamed el-erian says the set path is coming up through the windshield. this is bloomberg. ♪

>> this is bloomberg markets. 8.1% is the estimate from the bloomberg survey for this week's u.s. cpi year-over-year number that would be down from august.

still extremely elevated and not sling that would stop the fed on hiking. earlier today, mohamed el-erian said "the economy is beginning to go through the windshield as the central bank likes to fight soaring prices". have a listen. >> that sequence we did not want to see happen is topped with interest rates and all central banks changing. the liquidity regime and that this migrates to credit risk and we worry about inflation. if we are not careful, it may raise liquidity risk. we have been saying be careful of that sequence because when we get to liquidity risk, all three are playing at the same time. we have to appreciate that navigating through this will be incredibly bumpy. >> mohamed el-erian talking about a liquidity story. he also talks about the moment when world leaders were gathering in washington saying the moment we have to worry. i'm curious to what extent we

have to do something like intervention for example or helping the markets or adding more stimulus. the possibilities are endless in theory. >> he challenged two that inflation might not be the story we are talking about in connection with your prayer we spoke to david rosenberg earlier today and the work he has is we are staring at an inflationary environment into next year and whether or not we are going to much further on rate hikes and that will get us into a more complicated picture. to the inflation story we talked about before the mohamed el-erian clip, you get a number this week that is above the expectations and we will see what is happening. vicky morgan already making their review note on possible equity risks. >> of course we are talking about the deceleration and the margin on the move. as anyone talked about how quickly the economy plays as well? is this a repeat of the 80's,

close to 70's. the markets will have a really tough time pricing in. the s&p 500 still green up zero point the nasdaq 100 10 year yields at 2.88. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. -- this is bloomberg. ♪

>> keeping you up-to-date with news from around the world. nato secretary-general stoltenberg said the 30 nation military alliance will hold actual sizes next week to test the state of readiness of its nuclear capability. >> president putin's veiled nuclear threats are dangerous and irresponsible. russia knows the nuclear war cannot be fought and must never be fought.