>> welcome to the bloomberg audiences. this is first word news. >> debt limit at a block. kevin mccarthy's top are roughly left with think closed-door meeting with the white house representatives from this morning. republican representatives say the talks were a pause and accuse the white house of being unreasonable. this comes a day after the deal came together pray the house vote is next week. the u.s. and taiwan have increased their trade relationships. it is the first tangible result from an initiative that faces opposition from china read the initiative is in a free-trade agreement doesn't address any thor money such as terrorists. there is a cloudy outlook next week, and for chinese commerce officials. >> volodymyr zelenskyy attended

an arab summit in saudi arabia. he addressed al-assad -- bashar al-assad and a staunch ally of vladimir putin. he visited the kingdom and route to the g7 meeting in japan. he spoke to the saudi crown prince and made a speech at a gathering in jedi. more -- morgan stanley executive plans to step down. he is been ceo since 2010 and transformed the bank after a global financial crisis pretty will assume the role of executive chairman. there is no word on who will replace him in january. he said there were three finalist for the job in january. global news, 20 boroughs a day, and on bloomberg originals, powered by 20 senator journals and analyst and more than 120 countries. i'm john hyland. this is bloomberg. >> welcome to bloomberg markets. i'm am jon erlichman.

>> i matt miller. let's get a look at the markets right now. after we heard that republicans are walking out of that ceiling negotiations, we've had a marked change in the trade. the s&p 500 is down. not by much. just 1/10 of 1%, and at a relatively high level. we are holding on to the gains we have made in the most recent surge, and really the rally from your today. 4190 two is where we sit on the s&p 500. we have a yield floating up right now at 366 and 367 on the 10 year. we saw a jump in yields at the beginning of the curve. it has since subsided a bit, but we have yields on the rise. the bloomberg dollar index is down after three days on the gain. it is now at 1235. off 4/10 of 1%. then, we see oil, although it is off $.70 a barrel. 7116. sitting in the ranger has lived

over the past couple of weeks. >> we are watching energy stocks as a result of that. we are also watching the retail sector which has been busy with earnings, and will continue into next week read a couple of names in particular catching ri. footlocker is still down or than 25% as softer consumer realities set in, and the company also tries to rekindle that relationship with and we will see how that plays out, but the inflation is playing out in ross stores. that is off about 1% right now. that is a little bit of the snapshot for retail. let's also take a look at what is happening in the technology sector because bloomberg's on sarah frier is reporting that meadows instagram is working on a textbased app to compete with twitter. that has already been working with celebrities on testing that out and we could see it on a summer release. we will check in with sarah, but

an interesting development for meta-which is obviously a hot stock recently on an intraday basis. we are looking at stocks right now off about one third. >> also, a space that seems to be inviting competitors. there hasn't been any big one to twitter yet, but interestingly, we will continue to follow this. the other headline has everyone's attention today is morgan stanley ceo james gorman. he will step down sometime in the next 12 months. his successor will have take shoes to fill. here's how wells fargo has put it. >> he restructured the capital market business, the trading business. this is shortly after morgan stanley would have failed during the global financial crisis within days. we came in to restructure that business. it also expanded the annuity of wealth management. on both fronts, he did really well. >> let's keep the conversation going for read walter todd is joining us. ceo of greenwood capital

covering what is happening in the tree, and i guess starting with you and why now, let us know. >> the one thing about this morgan stanley succession plate is there should be no surprise. if anything, this has been the most orderly process in the way it has been. in 2020 one, when james gorman carried out a leadership overall, it signified where he saw the four main contenders to his role at the time. those were the two co-pros -- presidents. deep management chief and john cruzan who was then the seat 00. but since then, he has left and you are left with three contenders, but back in 2021, they told the board they would like to be in the scene for no longer than three years, and today, he goes on to his annual general meeting, within the next 12 months, they expect to have a successor in place who tells you everything you need to know and

that is going to plan. it has been executing on this, and he has shown himself to be a very strategic thinker and likes to go above -- about things in a meticulous manner, and if there were to be a good indicator of how good a job he has done, you just have to look at the morgan stanley stock which is down 2%. more than 2% on the news that he will be leaving the post. >> mike mayo says this is the best performing bank stock in terms of the ceos tenure. who will replace them? >> the three main contenders have identified andy saperstein, the copresident, and dan simcoe s, the asset management chief, but this will be the copresident sticking out. they could spring a surprise, but as things stand right now, it will either be a tactic, and

the one who really help with the institutional security business, which is the investment bank, the trading and banking business which first held the resuscitation of the equities baseness, and the fixed income business, or the wealth management business with andy saperstein who now runs a $4.5 trillion juggernaut. last year, there was more revenue in the investment bank, and the wealth management and investment combined with a responsibility of over 55% of the revenue. >> walter, to bring you into the conversation to the point there, we have these sizable businesses and possible successors that have strength in one versus another, is there a particular leader you would like to see, someone more geared towards wealth management or a deeper wall street type? >> you have to give the adage to andy saperstein, just given the

way the business has been transitioned over the past 10 plus years under his leadership. if you look at the last few major acquisitions that the company is made, it advanced e*trade under the wealth management business, and i would probably give a nod to him. you can't argue with this success as you mention. also, when you look at the steadier or consistent earnings stream versus goldman sachs, traded at that look, so i favor sticking with wealth management. >> walter, what do you expect from the transition here. how deas as head does the last one go. as well as mac. >> i think, we should look to what happened at goldman sachs. that is to highlight the risk of the transitions. there is some loss talent because someone will not get

picked to 60 gorman, that will likely leave us to go elsewhere and look for opportunities, so that is a challenge, but if you look at what has happened at cullman saks with the trouble they've had in the leadership transition over the past 45 years, i think that is a risk story to pay attention to as we see what happens. and with the telegraph transition, the stock transition would indicate that maybe it wasn't messaged quite as well as it could have been, but it is something that has to be watched, and they will be getting this question over and over until it actually happens. this may be distracting will bit, as well. >> given just the economic uncertainty and all of the financial ceos watching very closely, it is worth a reminder that with james gorman's first step into this role, there was a lot of cleaning up after the crisis that had to be the early focus of the 10 year. >> no doubt.

james gorman is leaving morgan stanley in a better place then the person who will end up taking over with a much less to do to straighten things up. they are in pretty good shape as we speak. i think that is a good point to make, but over the next 12 months, a lot could happen, given the backdrop that we find ourselves in from an economic perspective, so things like not being as rosy 12 months from now when this happens is they are today, that is not as rosy today. anyways. >> thank you very much. walter todd is the president as well as not arise on talking to us about the big news in this c-suite at morgan stanley. meanwhile, the debt ceiling standoff is intensifying with a group of republican negotiators walking out of a meeting with right house -- white house officials. the white house says that it will be difficult read we are joined in washington. what is the latest wrench in the works here?

>> as you said, we saw the republican negotiators walking out of this meeting earlier today. the house speaker really put blame on the white house, saying he has to see movement, we don't see any movement. yes, we have to pause. that is after a congressman in the chief negotiator on the issue said that he was being unreasonable and he didn't know if the negotiations would continue later today or over the weekend. this could throw a wrench and the timeline, and speaker mccarthy previously said he thought we could see a deal in principle done by the end of the weekend on the floor of the house next week, and president biden is early in japan about 2:40 a.m. in the morning. this is happening to return on sunday, and to speak on sunday night. it could be a very different remark than he thought he would give had negotiations continued in the positive direction, but as for what the potential hold up to be in these talks, we know there are some sticking point issues, including stricter work

requirements or entitlements. that is something many of the democratic party, this pacific back caucus have issue with. something with speaker mccarthy priestley described as a redline, so that could be a point of contention as well as the size and the scope duration of the spending cap in question. but for all of the optimism, we had really seen buildings over the last few years. it feels like a step back, and the clock is ticking. we have two weeks out until june 1, and even when the deal is reached between these two parties, it still has to get through congress and get to the president's desk area >> all right. thank break kailey leinz is talking to us about the debt ceiling negotiations print up next, that story teased at the top. meta is coming for twitter. that is a stock of the hour, next. this is bloomberg.

do you ever worry we'll live forever? no, it's literally never crossed my mind. what if we live to like 100? that's 35 years of being retired. i don't want to outlive our money. and i have been eating all these stupid chia seeds! i could totally live to be 100! why do i keep taking such good care of my- since we started working with empower, we're able to get all our financial questions answered, so we don't have to worry. so you never- no. never. join 17 million people and take control of your financial future to empower what's next. start today at empower.com

oh booking.com,

♪ i'm going to somewhere, anywhere. ♪ ♪ a beach house, a treehouse, ♪ ♪ honestly i don't care ♪ find the perfect vacation rental for you booking.com, booking. yeah. [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

>> i'm jon erlichman with matt miller. med's instagram is planning to release an nap to compete with twitter. sarah frier is breaking this news, we are joined by phone. a great scoop, and this is something they've been working on behind the scenes for some time. >> this is true. they have been testing it with some select celebrities and influencers. they have agreed to keep things under wraps. we are able to confirm a couple of sources this morning. they are hoping to release this app this summer. so, i'm sure you've seen a lot of social media competitors for twitter. we have mastodon. we have blue sky, posters. the list goes on and on. but this is the one that's

coming me giant. meda has instagram networks that we will be able to tap into. verifications have rolled over from instagram. these details are still early, things could change, but they are also talking about integrating with mastodon which is one of the big open source efforts to compete with twitter. >> i was going to ask wealth is out there to compete with twitter, and i'm not sure if i am gauging it correctly, but there is a massive appetite for an alternative. is that all right? >> i think that is true. the chaos of twitters takeover has led to a lot of people looking somewhere else to be. not just because the number of employees have been laid off for the chaos of controversy that mosque tweets create, but also because twitter has become a little bit less predictable. a little bit more unstable in

terms of what it offers people, and so, that we want to go to a place that feels friendly and normal and i don't know if any of the other twitter competitors so far have a big enough audience to have staying power, but certainly, with meda, it is a social network company. >> they definitely have amassed a little bit of a gravitas in the social media spectrum. thank you for joining us. sarah frier. she broke the story, you can bet we will continue to follow very closely. coming up, look at the ipo market with equities, and big retail investors giving a chance to buy equity in pre-ipo companies. this is a hot market. 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.

>> this is bloomberg markets. i am matt miller with jon erlichman. let's talk about the ipo and private investing landscape. really, the pre-ipo landscape because in terms of an actual ipo, it's pretty dry over the past year and a half area let's bring in the equity head of market insight, breanna lynch. it allows investors to access pre-ipo companies, and rihanna, what does this look like right now? we haven't seen a lot of ipo's read can this is a big one, but they have been few and far between. >> yes. thank you for having me. the ipo market has been very quiet over the past few quarters. you sell the proceeds at 61% over year as a q1, and while there have been some promising signs of the successful ipo, the nasdaq rally of 20% and the vix trading over 17 are all good indicators that they are a mixed bag. you have a lot of uncertainty

around the debt ceiling and where rates are going to go, and where inflation is, so private companies have a lot to contend with as that make a decision. >> how does that compato the sense of the appetite of getting invest in the area? >> there is a lot of demand because there have not been a lot of ipo's recently. so, when it comes to the private markets, really, the only investors who can access this market are typically institutional investors. equities allow retail investors to invest, but that is a smaller population than the broader u.s. investing market, so i would say there is a lot of pent-up demand for investors to participate in these growth stories. really, betting on innovation that is happening in these private companies that are growing quite rapidly. >> we had a big story from the bloomberg.

we wrote about the tiger global management selling hundreds of millions of dollars worth of private companies in the secondary market, and others are doing the same thing right now. what is driving that. is it just a lack of ipos, or is it something else that is a catalyst here. one thing that is really driving the secondary act cavity is the need for liquidity from early shareholders. you have both early employees and early investors who have been invested in these companies for 10 to 15 years. at some point in the past year and a half, that hasn't happened. they are really driving a need for look at, but to the point of larger institutions selling in the absence of ipo's, they need to return capital to investors and they have come to the secondary market to do that. >> we were talking earlier this half-hour about what is happening in the banking sector. given the lingering turmoil,

unless that gets resolved, even if there is demand out there, even if there are early-stage investors who are looking or a way to exit, does that complicate the story going forward? >> it is certainly one that complicates things because the ipo isn't just providing capital to the company. it is providing a large scale with wooded event, and shareholders can achieve diddy through secondaries on platforms, but, you don't have to have a mass liquidity until a company does go public rate that is another consideration that these companies have to think about when they are thinking about employees who are inspiring options, and other pieces that complicate the puzzle, when it comes to capital raising, the easy money in the private market just isn't there anymore. it is harder to raise primary funding, and, in the absence of svb, debt capital is also harder to raise. >> in that light, it is a great time to get in on some of these opportunities. it could be priced at a better

valuation for the buyer. what are some of the individual companies that you guys are excited about? what are the companies that investors are clamoring to get a hold of? wax i would say a few of the names that have confidentially filed as far are pretty exciting. claudio is one that confidentially filed for an ipo. they raised nine and half billion dollars of valuation in 2021. i would think they would be a little bit of a haircut to that, given where the public markets are and the average discount in the private market is around 41%. but this is a company that generated 575 million in revenue. it is profitable, so checking some of those boxes of what investors are looking or. >> real quickly, in the tech sector, we have seen a lot of layoffs. some of those people are going to companies and getting equities in those businesses. is that something to watch on the staffing level? wax that is one of the big cost

drivers for a lot of companies. this is something to consider. but, equity is always a key part of equity compensation packages broadly. that remains the case, and that is something that will be a driver and motivator at these companies. thank you so much for coming in. hoping get more time with you because this really is a sector i want to keep close tabs on. rihanna lynch is head of market insight at equities and red we are seeing markets down, and they are opening positively after a pretty decent rally over the past few trading sessions. we are up at relatively high levels on the s&p 500, and about 4189, but these debt negotiations walk out reports have caused us to drop. >> highlighting that for us, and also continuing to watch the sentiment around the regional banks.

janet yellen today also one of the considerations, so the s&p is trying to stay at the 42 hundred level. we will state at that. jon erlichman. this is bloomberg.

♪ >> the relief rally morphs into a bit of a grief. u.s. debt limit negotiators hitting a roadblock. romaine bostick kicking you off to the close. a lot of the optimism we had over the past couple of days getting a reality check on this friday afternoon, equities cracking by lunchtime and now mired in the red. dollar strength flipping to weakness and regional bank stocks, which looked to lock in their best week and 16 months, now surging towards their worst daily loss