>> treasury secretary janet yellen is morning time is running out to raise the debt ceiling in order to avert an economic catastrophe. yellen made the comments ahead of a scheduled meeting today between president biden and congressional leaders. the president has said he is optimistic about a deal while house speaker kevin mccarthy earlier today said there has been no progress in negotiations. today is a primary election day in three states. republicans in kentucky are picking a nominee to take on democratic governor andy beshear in november. in pennsylvania, democrats are picking a nominee for the philadelphia mayoral race and

there are two special elections that could determine control of the pennsylvania house. there is also a mayors race in jacksonville, florida. south africa's president says he and the leaders of five other african nations plan to present their peace initiative for the war in ukraine to moscow and kyiv. zambia, senegal and the republic of congo, and egypt are involved in the effort. the u.s. has accused south africa of supplying weapons to russia. it denies any knowledge of that. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. jon: welcome to bloomberg

markets. matt: i'm matt miller. i want to get a quick check on the markets after i tell you but a headline i saw across the screen -- pfizer has a book of $85 billion for it on sale. that is massive and that is something we are going to get to, be covering throughout the program. just an incredible bond offering. this comes after the last big when we talked about, was apple. i think that was $5 billion, 11 billion dollar book in comparison to this. so gigantic pick building -- i can take book building for pfizer. the s&p down about .3%. off a little bit with a gain in yield. a little competition for the yield you get on stocks. you can see the bloomberg dollar index rising rising .2%, not a huge gain.

investors have been selling on the rallies for the greenback will stop you can see oil down $.21 a barrel. it has found a home at this level. $71 a barrel, that is where we are seeing wti shakeout. but amazing book building therefore pfizer. jon: it really is. looking forward to a deeper conversation on that. most sectors with cautious trading, but we are getting reaction to a lot of those regulatory filings overnight. we are looking at amd's shares. part of that is comments from bernstein that dan loeb with a notable stake in a&e. i was curious about what would be in warren buffett's wallet and n shares are up after berkshire hathaway, with an update on those shares in its portfolio. we continue to get a lot of earnings stories and we see softness in home depot shares

after the quarterly numbers, raising questions certainly about what's happening in the housing market and that uncertainty rubbing off on one of its rivals. lows shares off about 1.2%. matt: let's get to those retailers. laura tramping is director of research at luke capital markets and she joins us here. thank you so much for your time. this has been a hot sector you are following closely. what do you make of home depot's numbers? >> the interesting measurement for us as ticket, lines up almost exactly with when home prices were last flat. a 12 year run is pretty great, but without ticket to support it, meaning remodeling's are getting smaller, consumers are doing smaller jobs, that is going to be a major hit to group -- two growth. jon: what are some of the train

-- some of the trade-offs? have you seen any when you look at those ticket sizes right now? what's the more likely thing for the consumer thing to do and the less likely thing for them to do right now? laura: they are pretty much wrapping up what's left of their covid improvements. that is the tough thing for home improvement. you had this big boom during covid and it takes normally about 10 years for a customer to go back over and remodel something or do something major. an easy way to think of it is during covid, we bought couches and now we are buying pillows. it's a tough spot from a topline perspective. matt: what do we make of the competition from lows? when we get numbers from home depot, does that mean more people are going to lows or to consumers not switch that easily? laura: i think lows is a little better position. more rural, less focused on the coast, gaining share from the pros on the coast but this is a falling tide drops all boats

situation where if the macro turns, there is not much they can do to fight it. matt: it is it -- jon: it is interesting as we roll through the season, home builders themselves were surprised by some of the outlook those companies shared. obviously as longer-term process. my question being yes, home depot set us up for some cautiousness this year but should we read into this as being something that will continue into 2024 or is their argument this softness will bottom out at some point? laura: it is our view we want to get constructive on this sector soon. we lowered our rating in october of 2020 one and entered this year thinking we would have buys on the stocks by no. i think you still want to have the last negative revision. it is an early cycle story and will turn faster than customer demand will. matt: in terms of retail in general, you are the director of research at loop. you oversee not only these

big-box stores but a wide selection of stocks. how does this earnings recession look to you? we had back-to-back orders of contraction -- back-to-back quarters of contracting earnings. laura: across our teams, consumer, tnt and industrials, it is tough to get positive. our buildings material analyst is certain to recommend a few stocks but we think we are in for a recession. we think it will be shallow, we hope it will be short and 2024 will be better it is tough to get constructive right now. jon: what would be the kinds of signals that would tell you maybe we are starting to see signs of a bottom. laura: you don't fight the fed. the good news is inflation is easing and it is easing across the board, but especially in those key consumer categories like groceries, which we follow. if you do see the fed ease off, it's almost as if everyone talks

about a recession, let's go into one and let it be light so we can recover. those are the kinds of things we are looking for -- the easing of inflation and a shift in fed policy. matt: who do you see as the beneficiaries? typically in a recession, investors will step down to may that dollar stores. is costco a beneficiary? instead of going to your expensive local supermarket, you make a trip there and get more stuff? laura: we really like costco's and bj's wholesale club. we also like ross stores and burlington. tjx has a slightly higher end customer but off-price, warehouse clubs are a great -- are a great place to duck and cover right now. matt: great to get you in the studio. hopefully we can get you back. she covers the retailers for that shop. coming up, more details on pfizer's massive bond offering. it's raking in over 85 billion

dollars in orders. an incredible book building. the sale lining up to be one of the biggest ever in the ig debt market. details next. this is bloomberg. ♪

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matt: this is bloomberg markets. i'm matt miller. pfizer today is in the u.s. high-grade bond market with huge deal putting it among the biggest ever. bloomberg news is reporting the pharmaceutical giant is tapping the market for about 30 billion dollars to finance the acquisition of the biotech company, see jen. we just learned a few minutes ago the order book topped $85

million. joining us is bloomberg -- the bloomberg credit reporter. tell us how this ranks in terms of book building. have you ever heard of someone building and $85 billion book? x i think order brothers discovery got a little over 85 billion but it is really big considering a lot of people were worried that challenge on amgen steeled would have put a damper on investment demand, so it is and -- it is encouraging to see people want to snap these up and the orders are really coming in. jon: we will talk about the amgen deal in a little bit, but when you were working the phones, when did you get a sense the appetite out there was pretty robust? josyana: everybody has been waiting for a victim and a deal like this. even before i started working the phones, everyone is talking about how they wanted this rich m and a deal.

we only got amgen is one of the biggest ones and one of the only ones. everybody is really positive on their ability to absorb some of the debt they are putting out, so everyone is looking forward to snapping up a bond like this. matt: what is special mandatory redemption language? they have taken that out. josyana: is basically language some of these companies put in when they put out a bond before they close an acquisition. it's to make sure if they put out this bond, unfortunately, an acquisition doesn't close, there is an ability to redeem these and people get their money back. pfizer wanted to switch their language a little bit just to make sure investors are really solid on it and were sure they would be getting their money back if anything happened. jon: providing a little

flexibility for some of those potential bondholders but just reading what you have been putting out today, it echoes what you have been saying -- it seems like the appetite is strong enough. just plenty of players happy to get into the mix with this offering. josyana: 85 billion dollars is huge. it means a lot of people were looking to buy it and with a deal like this, i believe the longest kirsch -- longest portion of the deal, investors are looking forward to get into that on the longer end of the curve. there is some uncertainty and people just want to have some stability in rates going forward. jon: thank you so much. staying with the pharmaceutical sector, we were referencing the amgen deal. verizon -- horizon therapeutics

taking a hit. jennifer re-is a senior analyst for bloomberg intelligence and joins us with some more details. you have done some analysis on this deal. did you get a sense there was a lot of overlap that might lead to this kind of action? >> i would say this one is a surprise. but when i have been waiting for, because the ftc has been foreshadowing it, is a new approach to a pharmaceutical or biotech deal where it is were novel and the ftc looks at it differently than they have in the past, not focusing on horizontal overlaps. now we see it with amgen horizon and what the ftc is looking at is not any kind of overlap, not even a vertical relationship but what amgen might do in the

future with respect to anti-competitively bundling products once it has horizons products its matt: polio. matt:let me read the amgen response -- we've been working cooperative -- cooperatively to address the questions raised by the ftc's investigative staff and believe we have overwhelmingly demonstrated this combination poses no legitimate competitive issues. obviously, the ftc disagrees and in general, the mood seems to be very much antitrust in this country. in the western world, is that the case? are regulators coming down on proposed combinations with a pessimistic view? jennifer: absolutely. particularly in industries they view as consolidated like

pharmaceuticals. i think they are waiting for a big pharmaceutical deal to go after it and focus much more broadly on it and not the way they have traditionally. what amgen says, they are correct in that the theory of harm is any theory of harm the ftc has had is rarely settled. i think it's going to be a tough uphill climb for the ftc. jon: that is what i wanted to ask you about. paint a picture timewise on how these legal stories can unfold in terms of how long and i'm curious in terms of anybody else looking to step up and do some kind of m&a deal, does this have a chilling effect? jennifer: absolutely. on timeline, the ftc has sued in the northern district of illinois looking for april a merry injunction to stop the companies from closing while it can pursue an ongoing process.

my research shows the preliminary junction hearings average time is about five months. we should get some sort of decision in the october or november time. if the ftc loses, the company will be free to close the deal. if it wins, they will face an internal proceeding that will take even longer, well into 2024. with respect to the chilling effect, absolutely. that is some of what the ftc is trying to do. they view that as a win and they have been quite successful in the last two years of getting the number of abandonments, particularly in hospital deal. they can outlast the timing these deals can otherwise sustain for these reasons and sometimes that's what they are going for even if they know they might have a tough time winning in court. matt: you've been looking deeply into the microsoft activision combination as well, which, as we all know, the u.k. had said

no to. they did get approval from the eu. is that going to make it easier to push the u.k.? jennifer: i really don't think so. the eu decision is its own in the u.k. decision is its own. sometime these key leaders different how they view that market and how they view the remedies. what is so interesting is u.s. and u.k. have come out in the past with a strong statement about rejecting behavioral remedies. they don't think they work and are not willing to accept them anymore. the european commission prefers a structural remedy but did not draw that hard line in the sand the u.k. and ftc did and look what happened. the eu accepted the behavioral remedy and the other two regulators to not and that is what this is all about. the problem is microsoft still faces an extremely high standard in the u.k. to try to overturn that decision and a long path to doing that. i think it's chances of getting the deal closed are low despite the eu approval. jon: we will see what happens.

great to get to -- great to get your context. coming up, with the clock ticking on the u.s. debt ceiling deadline, we will talk about what the next steps in d.c. look like as congressional leaders prepared to meet with president biden. this is bloomberg. ♪

>> if the u.s. does default, risk premium on everything is going to wipe out dramatic -- going to widen out dramatically. i probably want to play into that selloff but you will have risk premium in duration, and corporate credit and the equity market where the p multiple is going to take a very big hit. you have to have hedges in place, whether that is gold, whether that is the vix, whether that is just being in cash, that

is what i would be recommending. jon: this is bloomberg markets. time for today's for what it's worth. you just heard those comments from economist david rosenberg. our number today is $143 billion. that's according to the bloomberg rates intelligence team. the amount of cash on hand the government had as of friday, which bloomberg intelligence estimates could be enough to get us to june 5. however, we've heard from the treasury secretary, janet yellen, who has talked about the x data being the first of june. so we will be watching this story play out, especially today. bloomberg's kailey leinz helping us with what to watch for as we rolled through the latest set of data. what will we be watching for? kaylee: we should be watching for any sign of progress.

there's another meeting taking place today between president biden and the big four congressional leaders, most importantly kevin mccarthy, who have sounded different tones in recent days on the state of these talks. kevin mccarthy has had not much progress has been made while the president has been trying to sound more optimistic. it's a question of what these negotiators can do in the oval office today. republicans are really digging in their heels like work requirements for entitlements which president biden has signaled he may accept it except for medicaid specifically. but i was speaking with senator elizabeth warren who said she will not support any deal that's about hurting people. when i asked whether she would vote for a deal if entitlement work requirements were included. it is a question of it is part one for the negotiators to reach a deal. it is part two for congress to vote yes on it. we don't have much time left. there is just 16 days to go. matt: and a few of those are

weekend days and they may not be in session for all of those days. are we going to get a spending cut agreement and a separate debt ceiling raise or are they going to be in one? kailey: that is what we are looking for answer to. the president has insisted he wants a clean debt ceiling raise but is willing to negotiate on the budget. kevin mccarthy once these to go hand in hand. it comes to what they can agree on in terms of spending cuts or spending caps, clawing back covid funds and the like and again, the clock is ticking. matt: the meeting starts at three and i thing it's going to be a long day for you and joe mathieu but i will tune into your show to see what happens. kailey leinz covering washington for us. it's going it to be interesting and it is really coming down to the wire but we have 70 different's -- 70 different debt

ceiling negotiations and they've all gone through so far. jon: a lot of people are hoping for the best but the market is trying to figure out where to go from here. on that front, we see a bit of a cautious tone for the s&p. this is bloomberg. ♪ he snores like an angry rhino you've never heard an angry rhino baby i hear one every night... every night. okay. i'll work on that. save 50% on the sleep number limited edition smart bed. plus, special financing. only at sleep number.

romaine: staying on the sidelines and flocking to havens. romaine bostick at bloomberg world headquarters in new york, kicking off to the close on this tuesday afternoon. let's get a quick check of the markets. the s&p opening lower on the day as did the dow, as did the russell, as did the nasdaq 100. the nasdaq the only one to climb out of the red. only about a quarter of the stocks in the nasdaq 100 are out of of the red. in that flight too big tech cap -- big