john: republican house speaker kevin mccarthy is rejecting the possibility of a short-term debt limit extension hours ahead of a meeting with president biden. mccarthy said why continue to kick the can down the road. he added let's solve it now. federal reserve bank of new york president john williams is signaling he's open-minded about the central banks next policy move in june. he said he will be monitoring credit conditions closely empathetically the effect in the outlook for growth, employment and inflation. a jury has begun deliberating in the lawsuit that claims donald

trump rate a woman in a dressing room in new york city. the former president denies any wrongdoing and if the jurors believe the plaintiff, they can seek punitive damages. global news powered by more than 2700 journalists and analysts in over 120 countries, this is bloomberg. ♪ jon: welcome to bloomberg markets. mat let'st get a quick check on the markets. we have seen little movement: one third of 1%. you see the 10 year yield

climbing just less than one basis point, just over one basis point at 35205 as investors let go of some debt. you see the dollar index seeking out a bit of a gain. 1221 is the level on the dollar index as the green bag gains against its peers and you see nymex crude coming back up nine cents per barrel. just about the same as yesterday. jon: after 2.5 percent lift yesterday, let's get into individual movers. within the dow, a stock like boeing is standing out with the $40 billion 737 max deal with ryanair in the second-biggest performer behind salesforce in the dow. paypal is down at this hour and the company is still growing and we saw that during the pandemic but not at the levels we previously saw. the operating margin worries are waiting on the minds of

investors. investors are also worried about the outlook for under armour with that company dealing with some inventory realities. we've seen some weakness in shares of under armour to the tune of 6%. a massive pop for shares of novavax today, up 37%. the headline is that this company is really retooling after the pandemic. it's nice that we are moving on from that but for the company, the road ahead has been challenging and they are cutting about 25% of their workforce. matt: let's get to some more movers, palantier is soaring after giving a strong earnings forecast. they say demand for its new ai tool is unprecedented. joining us to talk about this is katie greifel and sonali basak.

is any of this gain about the earnings or is it all about artificial intelligence? katie: it's predicated mostly on ai. they say it hasn't been released yet but it's due to be released this month and the anticipation is strongest after we heard from the company today. the idea is basically that if this platform that will help them work with governments militaries and corporations to analyze sensitive information. were talking about criminal databases and phone records. what is very dramatic is the ceo said the company is running hard at ai technology and its strategy is to take the whole market. we will see if they can do that. shareholders seem to think they can and the stock is up 24% at the moment. we got some skepticism from morgan stanley.

they seem to be building a tower of ai promise that the foundation is still shaky and digging into the underlying metrics portrayed a much more mixed picture. jon: i would imagine a firm like apollo has to think about what's happening on the ai front but they have been busy in the fundraising category. given the economic uncertainty now and some of the constraints on big investors, there has been a lot of the -- on their plate to consider. sonali: there has been pressure on fundraising in the private equity area but for apollo, even though they scale back the size of the flagship fund they are reason, you see them playing off of that. you have the copresident saying they are one of the few firms playing offense in uncertainty which was clear by the level of deployment activity in the first quarter and the current pipeline is about three times where they were a year ago and growing. they are deploying into more depressed evaluations.

you are actually seeing apollo get a lift today in all of the other private fund managers are not. part of this is because apollo is heavily weighted into what they call the yield strategies. these are fixed income replacements, private capital markets, private investment grade credit. this is private capital markets getting into what is a constrained lending environment. you can see by the stock story, it is selling. matt: we got disappointing earnings from kkr yesterday. how is this earnings season going to shake out for private equity, most of which we don't see in public markets? sonali: if you look at the stocks so far this year, you have blackstone heavily weighted toward real estate and there are worries about private valuations under the surface, particularly at mna markets.

we had a conversation earlier over at goldman sachs and they see green shoots particular this week when you see best and great come back at scale. there is a problem with the debt ceiling debate and some of that activity can be pushed along further into later this year. without exit opportunities, you will see some depressed marks when you look at the private equity universe because that's a huge avenue in which you are not able to exit opportunities and that puts pressure on pricing. jon: let's shift from wall street to columbus, ohio. it's starting to look different. you were talking about palantir's big ai push and when these has its own ai push. katie: it feels like every company has to pay lip service to having an ai strategy which is interesting news for wendy's.

they plan to test an ai checkbox next month and it will talk to customers and has a female voice and it will use google cloud ai software and it should have the ability to understand speech and should be able to answer frequently asked questions. we will see how that goes in there hoping to start opening it up at test locations were restaurant employees will monitor the drive-thru and make sure the ai can address all the requests there are so pretty early stages here but when these has an ai strategy. matt: i imagine it will be fantastic because the ai will never get bored of up selling. that's a problem when you have a high school kid getting $15 per hour and he doesn't care if a kid did have sells more fries but the ai will push it hard. in terms of columbus, i used to go to the first wendy's store, the original store on broad street which is now gone. sonali: all the things you need

to know about matt. jon: and apparently, if you save milkshake instead of frosty, the ai gets it right. i hope you have that experience in columbus. matt: there was only chocolate frosty's, no other flavors. thank you very much. tune into sonali's interview with james milstein at the top of the hour. that's one you don't want to miss. in terms of interviews, we will talk to the ceo of nichola about their challenges in the ev truck space as well as energy production and storage. this is bloomberg. ♪

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jon: this is bloomberg markets. it's time for our stock of the hour. shares of nikola trading lower. it put a priority on what it knows best, building fuel-cell trucks in america. it is selling out of its electric truck partnership and europe which will conserve cash at a key moment for this company in the industry. matt: it's important in the sale brings in over $50 million total which is about 1/10 of their market cap so it will read your -- reprioritize and refocus on north america and i will try to find out what kind of guidance we can get in terms of full your deliveries.

let's talk to the ceo of nikola. he joins us along with a journalist who's been covering this company hard and strong for a long time, ed ludlow. michael, let me ask about deliveries for this year. last year was difficult and you only were able to achieve half the deliveries originally forecast. you are in other businesses but we think of nikola as an ev truck maker. what kind of production and sales can you achieve this year? >> thank's for having me today. last year, we started with their better electric truck and this year, we launched the fuel-cell truck so we had two trucks in the market so while we see momentum on the better electric truck, the real essence is the fuel surge truck and we think we will produce well over 500 trucks this year. we set up the infrastructure,

the hydrogen infrastructure so we feel this focused approach is well underway. ed: 375-500 trucks for this year that you will sell. how many of those will be battery electric and how many will be fuel-cell electric and how many will you actually build? >> those numbers will be production numbers which we then delivered to dealers. in terms of the mix between battery electric and fuel cell, the fuel-cell truck has many advantages compared to the battery electric truck. the ranges up to 500 miles and the mileage is less and we started production in july of last year so in a couple of weeks. we think we can produce between 150-200 so it depends on which fuel-cell we would -- we get out but there is strong demands it was a mix of things but overall, we think we can get to 375-500 trucks. jon: this is a north american

focus and it's no secret you believe there is a big opportunity in a market like canada as well for vehicles and the network, can you expand on that? >> first of all, it's important to highlight we sold our european business to iveco because it makes sense and it gives us financial relief and we think the north american market is so big. there are 4 million diesel trucks on the road but canada is interesting for us because you have incentives and it's a nice entry. our focus going forward is clearly north america. it's a big relief for us because we did a lot of work in europe it's much better in the capable hands of iveco but we see canada as an interesting market as well. matt: what kind of future do you see for this company? many people could have written it off after the fraud charges and the founder is in prison.

you switched out the management team completely in the market cap is under $1 billion. you've got such an impressive resume. after you worked at daimler, you are the cfo of the volkswagen group and you read adam opel in europe. you must see something really promising 5-10 years out for this company, tell us what it is. >> absolutely, it's the product. we just came back from the biggest truck show in north america and who else is there who has a fuel-cell truck with a range of 500 miles? it's available now so the reason why i'm excited is because i'm a big believer in the product and we really have a competitive advantage. also the first uber advantage on the fuel-cell truck. a lot of people don't see is that we set up the infrastructure. you always need to bring the truck and the infrastructure together. that's why i am so excited and i believe nikola will be really

successful going forward. ed: the cfo set on the call that a capital raises a high priority as well as limiting cash burn. what does a capital raise look like in the first instance and how much of that will go toward the hydrogen infrastructure buildout? >> a great point. first of all, the cash burn is coming down. ed: answer the question first and then we will put it into perspective. >> the liquidity demand is less and we want to issue new shares and that's why the stockholder approval is important in june. we have a few other ideas but in terms of the energy infrastructure, we have announced that we are teaming up with oatera and this partner strategy is helpful. the raise is very important for us. jon: in terms of your own ownership in the company, what would be your message to investors?

are you buying stock? >> obviously, we all have stock. the products speak the right language. we are not in an easy phase but the products speak at clear language and we are just launching the only fuel-cell truck in the market and i think that's why we are excited and we believe in the company. att: thanks very much for joining us. the ceo of nikola. thank you ed ludlow as well. coming up, president biden and congressional leaders are preparing for a high-stakes meeting on the debt ceiling deadlock. we will get insight from courtney rosenberger at strategic next. this is bloomberg. ♪

i will not negotiate whether or not we pay our debt >> come to the table and stop playing partisan political games. >> they said we will default unless we agree to these wacko notions they have. i'm happy to meet with mccarthy but not on whether or not the debt limit gets extended. >> mr. president, why don't we sit down and work through it? jon: this is bloomberg markets. of course, we will be watching the latest in the debt ceiling drama unfolding in d.c. president biden is said to meet with congressional leaders at 4:00 p.m. new york time in the oval office. let's get insight on what to watch for area the managing director of policy research at strategas joins us, what are your expectations? >> thank you for having me. it's important to keep expectations low for what comes out of today's meeting and the fact that they are meeting is good which means they will probably be confrontational and

the hard work is just starting and we expect to see worse headlines before we see better headlines. we do not expect any news about a deal anytime soon. matt: president biden said he would not entertain republican wacko notions. what are the most wacko notions they got? what is he concerned about? >> it's both sides digging in and wanting to save face and make sure whatever agreement is made, they come out looking like they one and they gave concessions to the other side. for president biden come he wants and not negotiate with republicans because he learned when he was vice president in 2011 that if you negotiate on the debt ceiling, the democrats will probably end up losing because there will be things like spending cuts. for the republicans, we just had april budget data get released yesterday and that will harden their position and they feel they have the support that the fiscal situation in the u.s. is deteriorating and we need

spending cuts going or what the country. matt: don't we need spending cuts regardless of whether you are republican or democrat? don't we all agree the u.s. government spends far too much money? we have a $1 trillion debts. >> the big issue we are concerned about his net interest costs as a percentage of tax revenues are at their highest level since 1999 this past april. we are now at 12.7% of tax revenues which is close to routine .3% that the cbo forecasted for the end of this fiscal year. once you get above 14% in the coming months, that typically has been a signal for austerity coming from the market. the free lunch is over in washington and policymakers have not had to deal with rising interest costs in decades and now they had to deal with it for the first time and crowding out other spending and it will be a problem if they don't deal with it. jon: markets have to make an

assessment of what they see in front of them and where they sing -- see things potentially going and you mentioned 2011. you've been looking at the comparisons between then and now so what have you found? >> we are starting to see a lot of similarities. under the surface of the s&p 500, if you look at the names that relatively outperformed in 2011, what we call the havens, they are starting to outperform again to those areas that got hit in 2011 so there is a huge flight to safety and staples and utilities where the big outperformer is. materials and industrials in financials and real estate, those names got hit and you are seeing that happen again. defense is a name that has a triple headwind going on right now. there is concerned with the defense companies about a breach leading to reimbursement risk for those companies and the concern about discretionary spending in the defense budget and a third issue about ukraine

and the potential end of hostilities there. matt: what are the chances the 14th amendment is actually used? it says we have to pay our debts no matter what. >> we view that as an extremely nuclear option. we don't see that as a likely probability, that would hurt the u.s. ability to issue further debt. our base case is a two-step process and develop a spending framework into a debt ceiling increase with defense spending to include maybe energy permitting and then they go back to it into a longer-term deal. matt: thanks very much. jon: we are also watching what's happening with the bank stocks. a turnaround for pac west today, at a session high, up as much as 8% as we watch the markets

continue to navigate what's happening in the banking sector and we will await the debt ceiling update later today. for matt miller, this is bloomberg. ♪ go. go scientist. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson.

♪ >> the read across the tape, not much at all, deterioration in market sentiment on this tuesday, export growth slowing in china. optimism in the u.s. dropping to the lowest in a decade. romaine bostick here on this tuesday afternoon kicking you off to the close. interesting read across the markets as volume remains tepid and trading value remains low. let's take a look at where we stand in equity markets. nine of the 11