he the idea that we have saved five million people's lives, it's overwhelming. it's everything. jon: i'm jon erlichman. matt: and i'm matt miller. bouncing off the 4400 level. the s&p closed session highs. it is down 0.3%. investors lose faith in the big rally built last week. the 10-year yield coming down. the dollar index is rising and nymex crude down but still above $70. it has been down below that at

some point during that session. jon: it has been hard to break that bearish trend. that is reflected in the energy stocks. rivian shares are up 4% as it teams up with tesla through the supercharger network. we saw ford and gm deals before. fedex shares under pressure. in the last couple of quarters, they have had a crowd pleasing results but the stock rallied more than 30% this year coming into earnings day. we will see what happens later today when the company reports. other names we are watching alibaba. big management changes. baba shares down 4%. nike under pressure. morgan stanley concerned about the inventory picture and how that is going to impact their margins.

matt: we will continue to watch those stocks. risk off sentiment, aside from that, katie greifeld is looking at etf flows and why investors are showing fomo. jon: it looks like fomo is winning. katie: you can see the bright yellow bar. equity etf's have taken in more year to date than their counterparts. in march we had a lot of risk off sentiment that sent billions into fixed income etf's. but the current standing is that equity etf's have taken in over $100 billion year to date. it took a while but the stocks are back in charge.

earlier today we heard from john hancock saying this move into risk is a little too late. john: there is not a lot of risk being priced in. the time to fix the roof is when the sun is shining. you have to have a risk on to outperform this year. we would love to trim into this strength and redeployed into higher income after an exceptional run. matt: the question is why is it too late? katie is still with us. the rally is too far, too fast? are we worried about earnings later on in the year? katie: we have already seen the move. you look at the nasdaq 100. it is up 38% this year. if you are coming in right now, you run the risk of not buying

at the top but near the top. you look at what investors are doing in this rally has gotten too big to ignore. you think back to the start of the year when everyone was saying this was the year for fixed income. there is still money coming into fixed income, but money managers cannot ignore the stock market. jon: it is interesting. the other reality last year was 60/40 was not working. i think that sentiment is sticking when it comes to whether people want to make a choice between equities or bonds. or maybe put more money to work in other areas. i wonder if that will skew the etf flows. katie: outside the black-and-white question of stocks or bonds there is also the element of cash. that has been one of the big, conversations.

conversations. it ties in with the traffic we are seeing in the etf market. you have equity funds winning out. that coincides with money starting to come out of those money market mutual funds. record amount of cash but you are seeing a lot of love for equity etf's. matt: we have not seen them in the first five years. let's turn to the paris air show where politicians and executives have gathered. there has been lots of talk about supply chains as well as the state of demand. here's a sample of what some executives have been telling bloomberg in paris. [video clip] steve: there is herd mentality to order to protect future slots. the question is will they

deliver as currently contracted? will they get deferred? stan: we have always tried to be conservative and not overproduced to the market. we know that is better pricing. akbar: i already have substantial orders. the problem is that even if you order today, you are not going to see those airplanes for the next five years. matt: joining us for more insight is sheila from jeffries. we have to talk about the massive order we saw from india's indigo. i think 500 airbus a320's. we have seen india almost order 1000 planes. that market is exploding. sheila: there is no doubt demand

is really good. we are expecting 50% increases. 1500 by 2025. on wide-body planes, 230 by 2025. demand is good and that is only based on 4% growth versus the 6% the last decade. honestly, the air show is not about placing mega orders. as the guitar ceo said -- qatar ceo said, wide-body's have five-year backlogs. it is about can the supply chain meet the current demand? that is why the stock is trading lower as it has been concerned with how the supply chain could meet current demand. what issues are they having? can they be profitable as they do so? matt: before we get to supply chain what is the point of these

gigantic orders? what is the size of the backlog? it seems to me, i don't know, ak bar is jealous somebody could put in a bigger order. they seem to be competing for the biggest order every year. they are competing for planes that not going to be delivered for five, 10, 15 years? sheila: they are competing for slots about five years out and trying to guarantee those slots. these mega orders are to guarantee the slots and often times what we see is not firm. we like to watch firm orders. but when we count firm orders and mou's we are counting about 1100. people want to put that in, but they are putting in the order in hopes of getting an aircraft in

2028. that is why the show was subdued even though it has not happened. since 2019 you cannot get a plane for at least five years. jon: i was talking about general electric. you were talking about their takeaways and they have got plenty of key partners, including boeing and airbus. we call it a transition or a further spotlight of general electric on the aerospace business and the push they have made in trying to convince the market that is the best place to be. sheila: sure. ge is one of our top picks along with boeing and tranzyme. the energy business is in the 70% services asset. that is not only on the oe side but engine supplier as the

number one supplier of wide-body engines around the world. we continue to think the servicing element will outpace as people continue to travel. that is why we like ge. they had an investor this morning in paris and talked about outperforming expectations. but some of those better results are being offset by supply chain issues and delays. jon: do you think investors should think more of it as a repair and maintenance play more so than the jet engines themselves? sheila: i certainly think so. ge is one of the highest leverages to commercial aftermarket at 70%. if you exclude the military, we count it about 50%. followed by pure play which is a tranzyme aftermarket.

we think the aftermarket is where it is at as aircraft get out of warranty and hit the first shop visit. it is pretty lucrative for the aftermarket providers. you will start seeing that in 2023, 2024. we think expectations are too low for ge and across the coverage. the best way to play the aerospace is through the services businesses with ge having a large business. matt: we see the stock double the last 12 months. it has been doing very well. what about boeing versus airbus? how does that shake out post paris air show? where does each one stand? sheila: we are very bullish on boeing. we think a story investors miss is the guidance is $10 million in 2025, 2026. we think that could go up to $12

billion or $15 billion by 2026 because of pricing on the 737 and 787. boeing is shipping aircraft from a parking lot from three years ago. those aircraft have half the pre-cash flow versus what they will ship in 2026. that is why you are seeing the airlines put in mega orders. they knew if do not get the slot in 2026, 2027 they will get at least 5% higher per year. boeing is getting tighter. that is the story than investors do not have yet. they view $10 billion as management target and we are above that. matt: thank you so much for your time. sheila: thank you. matt: sheila from jeffries talking to us about boeing, airbus, general electric and the paris air show. coming up, news of an all electric escalate from gm's general meeting as it chases

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jon: this is "bloomberg markets ." one of the things we wanted to talk about today is what is happening in the auto market. americans are taking auto loans that exceed that of the car value. that means car owners' loans are worth 125% of the vehicle value that could foreshadow higher delinquencies ahead. part of that is because we are

trying to figure out where vehicle values go from here after skyrocketing as we came into the pandemic. matt: absolutely. consumers -- we are already having to stretch to buy cars. prices have risen so much. dealers are charging extra money over msrp. now that the rates are higher the loan becomes more expensive. as soon as you drive it off the lot, a new car becomes worth less. you do not get the degradation you had previously. but we already see delinquencies rising when you look at the auto loans. it is a concern that i think wall street is waking up to. jon: certainly watching it from the banking connection. we will be watching that, but it gets us to the stock of the hour which is general motors. shares have been weaker. the company holding the annual meeting in which it announced plans to reveal the electric

escalate iq august 9. let's bring in barclays senior auto analyst dan leavy. busy day for gm and walking us through the roadmap of vehicles. on the escalate, what was your reaction to their big plans? dan: thanks for having me. i think the escalate as part of a broader model lineup. there has been a steady cadence of announcement and model rollouts. this was in the roadmap. they escalate as one of the marquis models and gm has been approaching the ev model rollout from the perspective of franchises of strength. the escalate is one of the marquis vehicles. it is not a surprise this is one

they wanted to electrify as this is a vehicle they have held a lot of brand and pricing power. jon: i think the numbers are that by 2025 they want to be rolling out one million ev's in north america per year? something in that neighborhood. having a little bit of everything would help. dan: yeah. there is going to be a wide lineup. we have already seen that from them. the four ev's they have already announced or that are set to produce this year in terms of hummer, lyric, blazer and equinox, hit on different segments of the market. it is expanding from there. the volume target, this is roughly -- it is a run rate volume target by the end of 2025.

we are somewhat skeptical that they actually hit this target. similar to other automakers. i think the ramp to ev, while this is something they are committed to, like others, we think there are a number of challenges that we have seen along the way on ramp. the ramp has gone steadily. and the other piece is that the ev environment has shifted. in a report we published last week, we were graduating from a period the last few years of ev euphoria in which the market expected demand to be really infinite. now that dan amick has shifted -- dynamic has shifted. gm and others are still committed to the transition but it might not be going quite as quickly. matt: when you have the escalate you also have the yukon, tahoe,

suburban. they own that market. are they all going to go electric? is there anything stopping customers from switching from the gas powered version of the giant truck they like to the electric version? dan: they eventually will all go electric. but what we have also heard from gm and others is a measured tone on this transition. there is a tale of ice. i think you will see that on the truck side. while there are electrified silverados later this year, and you have the sierra, while you are getting those out there is the tale of ice. i think you will get the same on the large suv side where you are correct, they have dominated. they want to play on the ev side

but to the extent there is a tale of ice, they want to maintain exposure knowing that those vehicles are the vehicles responsible for all of their profit. jon: great to get your perspective. thanks for joining us. dan levy covers the auto sector for barclays. we will stay on the theme of ev's, coming up. bloomberg has put a price on the entire electric vehicle market. it is a big one. this is bloomberg. ♪

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at&t business. somebody would ask her something and she would just walk right past them. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i started crying. i could hear everything. call 1-800-miracle and schedule your free hearing evaluation today. jon: this is "bloomberg markets ." i'm jon erlichman with matt miller. time for what it's worth. our number is $57 trillion. that is how big the market for electric vehicles could be by 2050. the new finance team has been crunching the numbers.

to break the data down further, the u.s. would represent 1/5 of that. china would make up one third. while the majority of those ev's are passenger electric vehicles, commercial electric, e-buses, they make up that part as well as 25%. matt: it sounds absolutely huge. i'm pretty sure it goes $9 trillion by 2030 and then $40 trillion by 2040 and then $57 trillion by 2050. you have to add inflation to get to that number. we already have a gigantic internal combustion engine market. you are expecting to replace the entire fleet by then. it does not surprise me hearing that big of a number when i see how prices are rising. electric pickup trucks, you could get $100,000 vehicle or more if you go for the

hummer. inflation is a big part of that. jon: i think dr. evio update hi. [laughter] although dan levy spoke on whether this short-term is as big as everybody thinks. maybe think about the russian to streaming only to think about the market was not as robust short-term. matt: the problem being charging. that seems to be the one major drawback from the demand side. dan mentioned you have got to ramp up battery production as well. if charging does not become easier and faster more quickly, you are not going to see full-scale adoption. you will still see big sales numbers. 20% is the expectation for the ev slice of new car sales this year. jon: we will be watching those numbers closely. you mentioned tesla. for matt miller, i'm jon

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romaine: putting up resistance. from bloomberg world headquarters, romaine bostick here kicking you up to the close. starting the holiday shortened week on the back of the back foot. under pressure after a lovely five-week run. the question is whether the economic conditions and corporate earnings are going to support these newfound valuations. morgan stanley's mike wilson saying that has yet to materiali