sonali: welcome to bloomberg markets. stocks begin the week with renewed volatility as the market really takes a breather. let's get a check on these markets. the s&p 500 looking for some direction, still up on the day about 3/10 of 1%. cannot say the same thing for the nasdaq 100. tech heavy stocks down 3/10 of 1%. bonds are looking for direction. no bid at all. you have a gentle move in the

two-year by a basis point but basically flat on the day at 474. the 10 year standing flat generally at 426 on the day. mid-day movers on the equity side. nvidia falling for the third day. it has lost roughly $400 billion in market cap since thursday when it was valued above $3.3 trillion. bitcoin is down after the crypto market's second worst week of 2024. man has cooled over uncertainty over monetary policy and simply this is a precursor for a broader stock market downturn. the bifurcation between the s&p 500 performance and breath has worked -- has a rich one of the worst levels in decades. bringing you alex semenova who wrote the story about the lack of breath. what is going on?

>> the u.s. stock market is on pace for one of its best rallies of the year. if you look under the hood, there is reason for concern at least in the near term. as we are getting these new highs on the essence 500, the number of stocks dissipating is decreasing. it is not so much breath has become bad but the gap between s&p for work -- s&p performance and breath starting to deteriorate has reached a level we have only seen two other times in the last 30 years and both those times in september 2021 and may 2020 read they proceeded a period of weakness and that suggests we could get near-term consolidation should sonali: what does this mean for overall market sentiment? we were showing you how far nvidia has fallen the last couple days and bitcoin which's also much love. you are not seen the interest rate move downward impact these fast high-tech stocks anymore. alex: even though we might get somewhat of a pullback

near-term, there is no sign it is going to turn into something more in of various because we are getting the same economic data rate outs. the next move is likely going to be a cut whatever that might be. we are in this period where we are waiting for the earnings season should we are getting this uncertainty. there is not much of a catalyst to get things going in the market should it is why we have seen the strength in big tech and the rest of the market lacking. that creates a concentration risk where something happens with tech stocks that is going to weigh heavily on the market. sonali: earnings season is just around the corner, especially anchor earnings. what are you preparing for when you look at earnings season ahead particularly when there is such a lack of catalyst in the stock market today? alex: the thing everyone is waiting for his the rest of the 493 companies in the s&p 500 to grow their earnings. in the first quarter magnificent seven lead the way while the

rest of the earnings growth was flat. much of wall street is expecting the gap to close by the end of the year so that is going to be one thing to keep an eye on sonali: thank you for your time and your reporting. a close eye on these markets. we spoke to was you hose head of investment and corporate banking. saying 2024 is the year of execution. i spoke with him for an exclusive ahead of the conference tomorrow. >> as you reported in to may of 2023 reported the acquisition of greenhill which was closed around december. that was a great opportunity for us to acquire a premier m&a restructuring firm to expand our talent and capabilities in the u.s. in our pursuit of building a full-service platform. m&a constitutes somewhere around 40% of banking people hit we -- banking people. we had done a great job building

out the under lending capabilities, build a formidable capital markets platform in investment grade and added onto our leveraged finance. in m&a when the activity was down the last two years since 2021, we saw an opportunity to lean in and acquire greenhill from our perspective. it was opportunistic. it was more unique for us that it was incredibly aligned with our culture as well as strategy greenhill historically had focused on public companies, complex transactions. it had some hidden gems in terms of having a restructuring practice at a private capital advisory in the secondary side which complemented our primary fundraising is nice -- fundraising business which we acquired in july of 2022 through the acquisition of capstone. greenhill was a global business. mizuho is a global bank.

our home market is in japan but we have offices worldwide. greenhill has 50 offices worldwide. there was an opportunity for us to add onto talent, add onto capabilities on a global isis. -- a global basis. mizuho had power alleys in the energy and infrastructure space and had great capabilities in health care in industrials and consumer. putting it together has been incredibly interesting and six months in as we are working together, we are beginning to see the fruits of those assumptions and expectations. more than sonali: six months in, how do you think about the expansion opportunity ahead? are you looking to add more talent in the investment banking ranks? >> i would say this is the year of execution for us. executing on the strategy we have laid out and our ambitions has been to squarely positioned as a top 10 investment in

corporate rank in the u.s. market. -- corporate bank in the u.s. market. we have been strategically adding on for the mizuho form such as leveraged finance where we have added on anchors from other bracket platforms particularly as there is pent-up demand in private equity and maybe we will talk about that. we have hired in leveraged finance. we are hiring in industry verticals we honor the financial institutions, health care, as well as infrastructure is a big area of focus for us as a combined platform should sonali: sonali: i'm glad you brought up the private equity world. there has been every surgeons in deck capital markets in 2024. what does that mean for the finance business? you were disturbing to see the excitement cut -- you were turning to see the excitement come back. >> we were starting to see rebound across mna as well as some dribbling into the ipo markets. activity in 2024 as not and out

as expected ted most of the activity has been highly concentrated we think about the mna side of the world trip 40% of m&a activity has in with mega transactions whether it be in the energy space, tm t, financial institutions. on the lbo's, we have seen some of that. when he take a look at some of the broader volumes, private equity on the sidelines constituted 25% of overall activity compared to the 35, 40% we have seen in recent years. certainly a rebound that there is a lot more pent-up demand. there was a study that came out and said there are 28,000 portfolio companies sitting in private equity firms. 40% of which are four years or older. there is demand to monetize some of those. private equity had raised massive funds which they have yet to deploy. we are beginning to see early days of activity but hopefully

there will be more to come as we get through the elections and beyond. sonali: 28,000 companies that are ripe for exiting, is that how you look at the potential base for future clients? michel: part of the base of future clients. we do focus on publicly traded companies which have been active participants in elect to which he. there is a opportunity for them to achieve synergies in percent of growth as well as validation. second is the private equity world. with not forget there are 1400 unicorns in addition to other cohorts of companies funded by the venture capital community which are looking for an exit in what has been a muted ipo market. it does spend companies all the way from the venture side or i

would say growth venture to the private equity as well as publicly traded companies, mid-cap as well as large-cap. sonali: where are the opportunities most rate for mna? you're talking about the potential for large-cap deals. do think we can see more in the next 12 month and what industries? michel: i would put in a couple different categories. certainly there are opportunities for large-cap companies to continue to utilize the strong balance sheet and access to the capital markets to expand, grow, consolidate. there are companies that need to transact that may not have access to capital markets who may be looking for a home. broadly speaking, i would say -- you asked which sectors we are excited about. there are those supported by strong secular trends which are going to be multiyear, multi-decade whether you are thinking about ai. we had at our tech conference last week the ceo and chairman of ibm talked about ai being the

first of a nine inning game. those are multiyear trends we look at. secondly, infrastructure should there is an enormous amount of demand to build out infrastructure both in court whether it be toll roads, air ports, ports as well as core plus being digital data centers and just driving digital transformation, whether it be in automation, electrification and what have you should you have talked a lot about ai and the buildout in data centers and electricity that would be required to power those. there are several different trends that would support a multiyear multi-decade investment. potentially could be more tactical and i put the last school which is companies looking to focus on their core businesses. spends, splits and then those divestitures could be our part

of m and a committee. -- m and a activity. sonali: don't miss our bloomberg invest event with leaders in asset management, banking, wealth and private markets. this week will be airing the best moments from our station on bloomberg tv and radio including conversations with todd boley, katie koch, gary gensler and many more. this is bloomberg. ♪

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sonali: this is bloomberg markets and i'm sonali basak. it is time for the stock of the hour. watching shares of target and shopify after the companies announced a partnership to

further expand target online marketplace. spencer reported on the news. he joins me from seattle. one of the bigger questions is what does this do for target in terms of competing at a greater scale the likes of walmart and amazon online? spencer: target needs to catch up. they have been flat-footed when it comes to selling things online. initially they said have an online marketplace but it is going to be more curated. they did not have much inventory. when you think about sites like walmart and amazon that have hundreds of millions of products, they cannot compete with that. by linking up with shopify, they can latch onto millions of merchants and offer more diversity in their online marketplace. sonali: what does this mean for the people that have options to shop online and they are curious about how to pay for the goods they are getting?

when you think about shopify, you think about their relationship with a firm and by now and playlist -- and pay later. amazon has been trying to widen payment plans. is there an opportunity to tap into more flexible forms of payment? spencer: i think everyone is trying to do that especially with consumers tightening their belts a little bit. if you can do anything to make the purchase price seem more palatable either by spreading the payments out and not just putting on a credit card even though it is pretty much the same thing, you're committing to payments down the line. they are all trying to dial up the conversion rate. you will see those options retailers are going to be offering more and more as consumers pinch their pennies. sonali: thank you so much for following the story for us. an interesting one under the world of stocks in the world of e-commerce. coming up, we are going to talk to santander out with a survey

on the financial state of italy income americans. we are going to get the id to -- the exclusive details with the ceo of santander u.s.. this is bloomberg. ♪ the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.

sonali: this is bloomberg markets. it is time for our wall street. santander is out with a survey how inflations and housing costs are impacting middle income banking customers. . that is defined as households making between $50,000 and $148,000 a year. joining us with the details as the ceo of santander u.s. a lot of people are thinking about how higher interest rates are impacting the consumer. where is the consumer starting to break? what? does the data show you? tim: first i would say consumers remain optimistic and resilient.

three in four americans feel they are on the right path to prosperity. about 20% feel insecure about their financial future. 90% of consumers are cutting back on expenditures to handle unexpected things and higher prices driven by inflation. sonali: what was staggering about the survey is even if you have optimism baked in, you have more americans looking for the second job to be able to pay their bills. there are a lot of people saying inflation is abating but your survey still shows strains should tim: three in four of the consumers we surveyed this quarter say they saw prices continuing to increase particularly focused in key areas. groceries at the gas pump and utilities and 90% are cutting back on expenditures. that is still substantive. . we sell the majority saying they are planning to take, spend less on vacations and travel and leisure this summer.

sonali: what does this say to you as somebody who runs a massive u.s. bank on how the consumer may look to the credit markets in the future? tim: i do think of the consumer, they are making adjustments to higher inflation. the thing that was most surprising to me is over 40% of middle american income surveyed saying they took a second job in the last 12 months to help pay their bills. it tells us with high prices, we should continue to see the economy slow. we had 28% of those surveyed say they have put off purchasing a new home in the last 12 months because of affordability issues and 55% have put off purchasing a new car. there is pent-up demand. people are struggling with respect to acquire the things they need or want for their financial prosperity. sonali: how do you think about that last part of the equation? you are a major auto lender. people are putting off the ability to buy cars. howdy think about how their

behavior may look moving forward? tim: people are working hard to stay in their cars. while we have seen and are lies in in terms of delinquency rates, we are at pre-pandemic levels in our auto business. we are seeing lower loss rates as people may fall 30 days behind but they are juggling payments. they're finding a way to make the payment because they need the car to preserve the job to get to work on a daily basis. i also think we are going to see used-car prices be relatively resilient. with half the people saying they have put off purchasing a car, 45% say they intend to purchase a car in the next 12 months. how do sonali: you see the housing part? of the equation working out? if you have so many customers telling you they cannot afford a home, at what point do they figure out how to make that part of their equation? to they start to let go of the american dream? tim: one of the other surprising factors for me in the survey this quarter was more than 40 -- more than 50% say they did not

believe homeownership was required for their financial. that is a big change from conventional wisdom in the last 5, 10, 15 years. sonali: it is a massive change and if that is the truth, where else are they spending their money instead? have seen rents rise. we have seen a healthy savings rate. there's been a lot of discussion about people spending down the pandemic savings. our survey said people are continuing to add incrementally to their savings and are feeling relatively stable about that. my only other comment is we still had a survey that 20% of consumers were not aware of the rate they were earning on their interest rate. one of the benefits of higher inflation is higher interest rates and higher interest you can earn on your savings. more people could be taking advantage of that. we are seeing 60% of people not taking advantage of moving there money to a higher savings account.

sonali: do think many americans may miss that opportunity? tim: this would say that 60% are appeared those who do know there rate, 50% were earning less than 3%. if they looked around, they could find a certificate of deposit or high-yield savings account that could yield more. sonali:sonali: how do you think about this -- you're getting this information about where people are moving money, we are in the precipice of a potential interest rate cut later this year. . how do you take the information you're getting in and positioning so you are meeting the needs of these consumers? tim: us trying to make sure we are making our consumers aware of the higher rates of interest that can earn on the savings they have worked so hard for. i terms or certificates of deposit or high-yield savings. being really thoughtful in terms of the lending side and making sure we have options for as many consumers as possible. sonali: where do you worry the most? you think one potential rate cut could ease a lot of the strains consumers are feeling on the credit side?

tim: i worry on the geopolitical side there could be some other surprise that impacts the economy in some way that is unexpected today. sonali: the u.s. ceo of santander on a highly watched corner of the market. that does it for bloomberg markets. you have a mixed day in the markets. as we let you go, taking a check on the markets. the bonds roughly flat on the day. the snp still up but only 2/10 of 1%. the nasdaq 100 widening losses on the day about one half of 1% lower. keep on the markets through the close. balance of power of next. the debate just around the corner. volatility inching under the surface of these markets. this is bloomberg. ♪

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>> from the world of politics to the world of business, this is "balance of power."

live from washington, d.c. joe: israel says that intense fighting in gaza will soon end even as benjamin netanyahu rejects the idea of a cease-fire with hamas. i'm joe mathieu alongside kailey leinz today. we are one month away from the netanyahu visit to washington. kailey: the tenor of that visit and his remarks to congress will probably be colored by what happens in the next four weeks and if that includes an opening of a new front in the war, potentially fighting more directly with hezbollah more directly on the northern border of lebanon. 9 it has been more of a war zone and the question we have been asking is will israel