sonali: welcome to bloomberg markets. i'm sonali basak. let's get a check on markets because it is still a down day. s&p 500 near session highs. the problem is with the down 3/10 of 1%, you are five weeks of the clients. the 10-year yield has been interesting to watch on morning. there has been a bid in it, although it has slightly waned.

roughly flat on the day. 4.24. earlier this week closer to 4.3%. bitcoin also on the decline. down 7/10 of 1% but still above 80,000. pretty much under 84,000. highlighting a couple of movers right now in the equity markets. >> let's start with boeing. up about 5% today, off the news fresh out of the white house about boeing winning the u.s. fighter jet deal. this competition has been in the making for two years. we are talking about a deal of $20 billion until 2029, so boeing has just flipped from losses to wins year to date. on the other side of the break, lockheed martin, who actually won a similar competition in

2021, now is the loser of this outcome. down about 7% today. earlier in the day it was 2% higher. you can imagine this is really weighing on the price of the company. we can see clearly the positive and negative reaction between the two companies. fedex is an interesting example of weakening consumers and tariffs weighing on one company. the company is down about 8%. earlier today it was down about 12%, so it pared back some of those losses, but year to date we are looking at losses of 20%. very rough start to the year. the company lowered their full year guidance for the third consecutive quarter. all the words that people are worried about, inflation, consumer, tariff, and all of that is weighing in on the price. british airways, just got some good news, but the stock has

closed 2% lower today. this comes after a strong year that the stock doubled its price thanks to paying out debt and improving services. of course, the drop is coming today after heathrow airport was closed all day. they were worried that this would continue for a few days. now we are here in positive developments that many flights will operate as of saturday, which is faster than people expected, so we look to see if there is more relief coming for the stock tomorrow. sonali: thank you for keeping and i at. we will bring your bike to the situation at heathrow. some flights will resume today and to bring normal operations back in line on saturday. alex morgan joins us live from heathrow. tell us the latest. this has been extraordinarily disruptive, flights move, canceled. now that we have a better timeline, how do things move forward from here?

alex: we are yet to see an aircraft come in but heathrow are expecting to resume some flights this evening after this unprecedented disruption caused by fire at a local power substation. they will focus on repatriation flights, bringing people back to the u.k.. global aviation is like dominoes. you get the next one and the next one. despite this promise to return to full service tomorrow, we will see days of disruption. around 200 thousand passengers come through heathrow airport every day. in this day of unprecedented closure, about 1300 flights were affected. literally in the last few minutes, saying they will hope to restart some flights focused on repatriation, hoping for full service tomorrow. but big questions about resilience. behind me is europe's busiest airport. you wouldn't believe it, the

skies are completely clear still. this is an embarrassing moment for the u.k., at a time when heathrow is pushing for a third runway. questions know about the u.k.'s ability to have resilience when a major part of the infrastructure taken off-line today. sonali: when you think about the disruption that's been caused, guy johnson made a great point earlier today, there is significant economic disruption that could come out of this. how does that ripple across? alex: there is a whole load of points. let's start first of all with the passengers affected. number 10 over here, the government reminding airlines of their responsibility to deliver speedy refunds to people. looking at the hotel lobbies, seeing people stressed, tired, confused. even with the proposal to get back to normal service, heathrow is still telling people do not

come to the airport unless your airline specifically tells you. the first question is compensation. this broader picture of taking off-line the busiest airport in europe, the fourth of the world, for a full day will affect not only passenger travel but cargo coming in and out of the u.k. it will take a while for people to do the sums of this, but at the passenger level, broader level, this is a huge amount of disruption. sonali: thank you so much for all of your reporting. that is alex morgan live from heathrow airport in london. of course, a day of disruptions. breaking news now. apollo is set to explore a $4 billion sale of cox media group. that includes the local broadcast television and radio stations. valuation could be as much as $4 billion. they prefer to sell the whole thing to a single buyer rather than break it up. this is interesting because we

have, despite all the doom and gloom, some m&a coming back. interesting when you see it from sales from private equity firms, particularly as the ipo market has been muted. earlier this week, we caught up with hamilton lane co-ceo eric hirsch, and he still sees a strong market for credit in particular. >> we see signs of continued health, not concern. not seeing leverage levels increasing, seeing a really good use of recaps as a way to get money back to limited partners. that is a good thing. sonali: in the middle of all of this private credit competition, bloomberg news reporting that funds are grinding down margins and cracking up leverage in order to win business, especially as trade wars and geopolitical uncertainty suppressed deals. private capital stocks since the election, munro capital has seen better performance than some of

its larger peers like apollo and has even been outperforming the s&p 500. they made headlines last week. ted koning is the ceo and founder of munro capital. what do you think you are doing to avoid some of the pain that others are seeing? ted: everything revolves around good old-fashioned underwriting. we have 500 companies in our portfolio. each one of those agencies, we dig in, underwrite, we look at margins, customers, we look at the business, and we make sure we are doing the right deals for the right private equity firms, in the right industries. at the end of the day, that is the key to our business, not losing money and making sure we look at the right deals. sonali: particularly interested with this dynamic that we are seeing with privately backed companies. it feels like there have been so

many deals that have been not just amend and extend but all of these ways of returning money back to investors that don't include a pure play exit of the company but requires putting more debt loads on the company's own private equity. how much of an issue is being created given this has been going on for so long? ted: great observation. what has happened, mid to thousands, the private equity business was a three to five-your holding business. we saw a lot of m&a, deal spending from pe firms to pe firms to ipo. last several years we have seen an unprecedented amount of an extension of a holding period. lots of institutional investors clamoring for their money back right now from private equity funds. gp's are doing what they can to return money to lp's. the enemy of a private equity

firm is holding periods and time. time reduces irr's, reduces returns for everyone. the key now is to try to return as much as you can to the lp's, so you are seeing refinances, dividend recaps. we will see more in 2025 in order to get money back into institutional shareholder hands. sonali: what do you think is happening under the surface given that rates have remained so high for so long? a lot of people were banking on the idea of refinancing into falling rates. that also has not happened at scale. ted: the challenge is there has been a basic dislocation between buyers and sellers. buyers believe we are in 2024, 2025, paying multiples based on current levels. sellers are thinking we are back in two 19, 2020 and there is a valuation gap.

we are finally seeing a narrowing of that valuation gap. 2025, we will see much more m&a this year. there is lots of dry powder on the horizon. 1.6 trillion dollars of private equity dry powder sitting on the sidelines right now. there is about $600 billion of private credit dry powder. we will see a lot more transacting i think in 2025 as the year goes on. sonali: the other reality to the point you are making, valuations have been correcting. s&p 500 looking at five straight weeks of declines. you and many are saying that private equity firms have to accept the valuation they wanted, they are not going to get. does that mean the returns to investors will be much more muted such that it will be hard to get more capital to cycle into the industry, especially when public portfolios are down? ted: no secret that private

equity business has become more difficult. purchase price multiples are down, we are not seeing ebitda growth, not the financial engineering we saw the last 10 years in order to drive returns for lp's. that is why if you look at the alternative asset class right now, private credit is probably the fastest growing, has been the fastest growing, and will be the fastest growing asset class. we are generating 12 to 20% returns for our space. in equity, the top investors are generating those types of returns. between multiple compression, between more challenges, higher interest rates, and just the fact that it is harder to do deals and buy at reasonable prices, i think private equity is a much tougher business. the better firms will have to distinguish themselves. sonali: one question i have about the private credit business, there seems to be a

lot of debate about how much disclosure there should be, how liquid these credit products should be? where do you stand? do you believe it should be more easily treatable, marks should be shown more frequently? ted: the challenge is private credit is a private business. companies go there because they don't want to do public transactions, syndicated deals. we are of the. we can be customized, domany ofe industry, including monroe, we do quarterly marks, so they are all done by third parties on a quarterly basis. there is no standard in the industry. some of my competitors don't do that. but at the end of the day, we are a buy and hold investor. what happens quarter to quarter, what happens in europe, asia,

what happens around the world doesn't affect our business because we are looking at underlying companies, underlying performance and the health of underlying companies. our average hold is about 50% loan to value. my goal is to generate returns but get our money back for our investors. sonali: thank you so much for your time today. that is ted caning, chairman and ceo of monroe capital. fcc chairman brandon carr says any company seeking a merger or approval from his office must first drop its dei programs. in an interview, he specifically mentioned paramedic global's merger with guidance media and verizon communications acquisition of frontier communications. we will get more from that interview, next. stick with us. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride?

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sonali: this is bloomberg markets. i'm sonali basak. i want to bring in the news of the hour which is that fcc chairman brandon carr says that any company seeking merger approval from his office must first drop dei programs. that comes after this morning jp morgan announcing it would change the name of its own diversity, equity, and inclusion program to doi, calling it the diversity opportunity and inclusion program. for more, we are joined by simone foxman. i want to start with this fcc news. the shocking part is that he was very specific, the fcc chair specifically mentioned in an interview that paramount's merger with sky dance, verizon's

acquisition of frontier on the specific murders that could be impacted by this. simone: i was looking through the kinds of programs these companies have. verizon has a page where it talks about its commitments to diversity, and inclusion, the various programs it pursues. paramount, a couple weeks ago, pulled back some pieces of its dei programs, specifically some aspirational demographic targets it had within its business, as well as collecting demographic information on job applicants. it already tried to down to the trump administration. both of those were seen as more risky when the trump administration came in but the message we are getting from carr today is maybe that wasn't enough. how far do companies have to go to peel back the dei infrastructure in order to satisfy the trump administration? that is very much an open question. sonali: there are billions on the line with these mergers.

i want to ask about the jp morgan change in particular. you saw many companies roll back their policies, citigroup addressed it a few weeks ago. for jp morgan, why does the change of one word make a difference? simone: i don't know if it does, to be honest with you. over the last year, people have talked about the equity piece being a little bit confusing. we saw major hr organization shrm d prioritize the e in equity from that broader dei specifically because people were confused about whether this means equality of outcome or equity of opportunity. it appears jp morgan is leaning into that. but does that and its dei programs enough so that the trump administration doesn't target jp morgan? that has been the question that we have had since these orders came out, talking about illegal dei. frankly, companies don't believe

that their policies run afoul of the law, otherwise, they wouldn't have them to begin with. sonali: one thing that banks say, we have a lot of international companies that do care about this. they are afraid to keep it as it is because of losing work with the u.s. government in particular. how much is an issue particularly for the finance and tech companies losing government contracts due to the classification of dei? simone: the executive order specifically called out federal contractors. they not only say they are going to discourage federal contractors from having what they call a legal dei programs, but they won't all federal contractors to sign a statement affirming that they have eliminated all illegal dei. some of this is still in process. where are you in the process? striking that deal with the government. but there are legal implications to telling the government something and then having them come back and saying actually be

don't agree, we think you lied in the statement. the challenge is, they have not defined dei specifically. a little bit more insight from the eeoc and department of justice recently. we will see how companies respond. sonali: if you were in the middle of the process, you have to be giving simone foxman a call. it has been a big week in terms of changes in corporate policies. coming up, nike shares are falling in the session, they have been all morning. the company is under pressure amid the tariff war and a significant set of changes with a new ceo. details next. this is bloomberg. ♪

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sonali: this is bloomberg markets. i'm sonali basak. time for the stock of the hour. nike shares tumbling after its earnings report signaled revenue and profitability will remain under pressure. joining us to break it down is

poonam goyal. how much time does elliot he'll have? early on in his 10 year and you will have a little bit of a hiccup at the beginning. is this what investors still expect of him? poonam: i think you need to give him some time, definitely three to nine months. we expect the fourth fiscal quarter to be the worst and then things should gradually start to improve. it is really in the back half of fiscal 2026 that you'll start to see him executing and showing proof's plan is working. sonali: when you think about proof in the stock, what will be the next catalyst. when it comes to nike, a lot of people are watching his ability to work with retail partners and celebrities, athletes, to bring this back to being the brand associated with sports. would a celebrity bring the stock higher? poonam: absolutely. two things we are watching for. one is inventory.

we need to see inventory come down. it was down 2% at the end of three q. a needs to get realigned, so still more progress to be made there. the other is getting back in the game, using influencers, celebrities, really being where the people are in the social channels and the physical channels as well. making sure that the product is there, the storytelling is there. that is key to the nike brand story. sonali: thank you for your time and analysis. please follow her for all things big retail. a lot of changes for these brands. want to get a check of the market before we go. it's been another down day in the markets. .2% lower on the s&p 500. the nasdaq 100 is trying to get flat on the day which is good news. both of these indexes still seeing five straight weeks of declines. 10-year yield ending the day

closer to 4.25 but meaningfully lower from where we started the week. that does it for bloomberg markets. i'm sonali basak. balance of power is next. stick with us through the close. 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: boeing will build america's next-generation fighter jet. or come to the faster show in politics, as president trump announces the contract straight from the oval office following the year of challenges for the defense contractor here and in space. i'm joe mathieu. alongside julie find in washington, working to the friday edition of "balance of power." great to have you on board. we will explore the decisions that went into this contract on a day that elon musk shows up at the pentagon, sending people in a tizzy at the white house. julie: in the white house is saying nothing to see here come all about doge. joe: and fake news. julie: fake news from "the new york times," that is what they said about the article.