ife, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> welcome to bloomberg markets. the s&p 500 hitting a session low but bonds rebounding. let's get a quick check on the markets right now. the s&p down for a fourth straight day. the nasdaq 100 falling even more with big tech among the leading decliners. the two year yield which did hit 5% yesterday, coming back down, 4.92% at the moment. the 10 year yield, 4.59%.

it got within one basis point of 4.7%. let's take a look at aluminum futures. a big pop in the month of april but we have seen a steady advance all of 2024 in tandem with commodities. bloomberg reporting president biden will propose higher tariffs on chinese steel and aluminum during a visit to pittsburgh today. some movers on the equities size to tell you about. chinese steel tariffs sending metal makers higher, although steel coming down at the moment. president biden expected to call for 25% tariffs on chinese steel and aluminum. there totaled $1.7 billion in 2023. the ftc is preparing a lawsuit to block a fashion company's $8.5 billion takeover of capri

potentially killing a luxury conglomerate. capri controls high-end labels like versace and jimmy choo. in private markets, david hunt says the credit market is heading for a shakeout as investors set higher standards. here are some of his comments from this morning. >> all kinds of people set themselves up and immediately are able to raise money. i think that period is now over. investors want to see you have multiple track records and you have done this over a period of cycles and to have the credit skills. and ability to set up shop and raise money is a lot less than three years ago. there will be a bit of a shakeup. scarlet: let's bring in ivelina green to join us now. thank you so much for coming in today. ivelina: thank you for having me.

scarlet:scarlet: david hunt talks about a shakeout. it feels like we are at a cycle turn. what do you make of the volatility we are seeing now and if it signals a regime change? ivelina: i think the volatility we are seeing is to a certain extent somewhat predictable. we have the fed, the ecb coming out with guidance and rhetoric around wanting to see inflation go down further and make sure that is a sustainable trend prior to actually lowering rates. it never really sunk into the consciousness of the market. i think that finally we are starting to come to that realization and that will have some very profound consequences. some of them are going to be technical. money is all the sudden -- potentially leaving other riskier asset classes. from a fundamental perspective it all of a sudden seems even

more stretched. scarlet: they have been stretched for a while and perhaps a little more now. now you can add geopolitical concerns to the mix and what we talked about, the idea that inflation is stickier than anticipated and maybe excel the running so any interest rate cut gets pushed further out. how do you think about the prospect of severe dislocation among asset prices? ivelina: we are at a crossroads and i would not be surprised to see the market come down especially as it pertains to credit. yields stay flat even though rates have continued to come up. it is a function of being compressed. we will see other bit of a catch up and that will lead to a correction in terms of credit markets. not only the more levered structures but investment grade companies, when everyone chased when rates started coming down from a spread point of view.

scarlet: given all that what kind of opportunities do you see with us on the brink of some changes versus when you first launched? do you have to be more selective? are you getting the opportunity to buy into some stuff that it first you were not looking at? ivelina: it depends on your strategy and the investor. if you are investing from a strategy that tends to lower volatility, you need to be cautious. we are starting to see a lot of this portion in equity and credit in terms of a company's performance. on the back of that there will be a lot of landmines. the flipside is for someone in us who tend to invest in a higher-yielding product that presents an opportunity on the back end. in my view, one thing for certain is it has picked up significantly. even though for the first three months the waters seemed placid

in equities and credit, we continued to see an increase of companies coming under pressure on the back of structural issues and cyclical issues and two years of elevated rates. scarlet: we go back to the david hunt comment about how much shakeup is coming. you are based in london so i am curious to get your take about what risks you see in europe versus what we see in the u.s. given that the european economy as a whole is not doing as well as the u.s. and rate are coming sooner. ivelina: absolutely. i always tell people we have the same problem in europe that you have over here. i would say some of those problems are significantly more elevated. again, even if we talk about inflation and redcoats are coming sooner -- rate cuts are coming sooner, you need to put it in the context of which

inflation can be more persistent because of how unionized european markets are. you're talking about unions in the high 20% and no 30% of the population whereas in the u.s. that number is less than 10%. the core inflation number is likely to be stickier. europe, it is an interesting time to navigate. also europe is not one economy. the german economy and the u.k. are struggling but spain is doing well. how do you strike that balance? for someone like spain and -- greece well witnessing a soft landing for germany. scarlet:. . it is delicate thank you for joining us. ivelina green, alternative founder and cio. scarlet: wild earnings season gets underway we know that markets are keeping an eye on

geopolitical risks in ukraine in the middle east. the u.s. working to de-escalate tensions with israel and iran. we spoke with jamie dimon about the need for strong american leadership. here is some of that conversation. jamie: we need good american leadership. we need to explain to people why this is so important for the world. america first. no american president will say america second. but we need to explain why ukraine is important to us and why america relies on global security and why our allies rely on that. if they cannot rely on america they will have to rely on someone else. ♪

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scarlet: senator richard blumenthal this morning during the first of two capitol hill hearings detailed concerns. we know senators have been critical of boeing which has been under pressure from whistleblowers' claims of shortcomings all revealed in a study commissioned by congress. united airlines reported better results than expected and regulatory pressure will put its expansion plans at risk. let's discuss all of this with nicolas owens. it is good to speak with you. i want to start with boeing and zero in on what the company is doing because senator tammy duckworth this morning said boeing needs to be judged by

what it does and not what it says it is doing. the onus is on boeing to do more and we have seen the ceo david calhoun will be leaving at the end of the year and stan, who headed the commercial airplanes unit, will be retiring. is that sufficient? nicolas: those are words to live by. we should all be judged by our actions. i think those two leaders stepping down clears the way for change. i do not think there stepping down is sufficient. customers and airlines express frustration that these production defects kept coming to light and they did not see the light at the end of the tunnel what would be the behavior change. this opens the door to getting in front of what has been plaguing the boeing assembly lines. scarlet: people talk about this broken safety culture and culture is set by personnel so

you need to change or personnel. we have stan retiring and there is a new head of the business, stephanie pope. she has been lauded for her performance. talk about what she needs to expand as she takes on this troubled unit. nicolas: i will say i think running the services business put her in touch with a lot of the logistics of maintaining and servicing planes. there is certainly room for the right tone which is listen to what is going on on the floor and how to these processes -- i think it is important to bear in mind that at boeing, they have a double whammy of both of their biggest assembly lines being stilled essentially before covid and then covid hitting. i would not want to have to run those assembly lines, personally, but you really have to dig deep to change behavior.

i think there has been a lot of discussion about culture. i think of culture as how we do things around here. it seems like the stresses on the assembly process, the abnormal process, the defective parts coming from spirit, have thrown a wrench into their work that is less predictable than it ever should have become. setting that right will include more of what they are doing, which is stopping and restarting and reevaluating -- how do we get this to a predictable process so we can deliver the plans one hundred percent certified and on-time? scarlet: one thing boeing will be doing is buying out one of its biggest suppliers which it used to own. that creates a bit of a complication. the systems is a supplier to airbus, boeing's main competitor. how do you see this shaking out? nicolas: my guess is they are in

those conversations with airbus and others. after boeing spun off spirit, spirit acquired these operations buildings and large parts of their plants. i think they are unwinding that and sorting through who should own what. i doubt that airbus would want boeing to own part of their assembly line and that is understandable. it is a matter of putting the income paper through. scarlet: i want to get your take on united which surprised investors with better-than-expected results. there is concern the boeing aircraft delays and regulatory pressures would be a drag on the company. how surprised were you with what united had to say about the boeing delays not being that big of an issue? nicolas: i had not put pencil to paper on what the damage would be, they quantified it at $200 million. it seemed quite limited.

a handful of planes that were grounded for a few weeks. i'm sure they shuffle things around to try to deliver flights. for me that shows the impact to the airlines from the bowman difficulties and general backups in the assemblies, i would think of them as slow-moving. a slow-motion problem. united talked about shuffling their order book over the next several years, they will make more of older plans if they have to -- older planes if they have to. scarlet: it is interesting to note it will be something taking place over the course of several years. thank you so much for joining us. nicolas owens of morningstar research. coming up we will talk loans with martin nussbaum as we look at stocks at session lows and the two year and 10 year at

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>> there are loans at lower valuations. the problem is if someone is refinancing a loan where a rate is 3% and now they are 6%, there is almost no way to get that refinanced without putting in a big injection of capital. there are loans available but it new world valuations. scarlet: talking about how the commercial backed security market has opened up at lower valuations. let's see if our next guest

agrees. martin nussbaum is cofounder of slate property group and scale lending. we are also joined by bloomberg's abigail doolittle. do you see evidence that the commercial mortgage-backed security market is opening up? martin: i agree it is opening up and it is based off a new valuation and pricing metrics. it will take another 12-18 months to sort through all of that and see how all the existing loans are able to be refinanced. abigail: thank you so much for joining us. you founded your business more than a decade ago. it was 90% equity, 5% debt but now it is 50-50. you have seen a boom from the private lending. talk to us about that side of your business and does not reflect the market not being what it used to be? martin: i think the crux of our

business is related to the lack of liquidity in the commercial banking world. the construction of residential multifamily housing. we are seeing the volume of transactions we are seeing is probably 10x of what it was a year ago. we have been able to deploy $1 billion through private lending. it will remain that way while the banks continue to tighten up their underwriting expectations. based off of that i think there will be a big opportunity for private credit in the market for the next 12-24 months. abigail: turning to the real estate side, the equity side, a lot of your businesses and the properties you own in new york city, the development side is tough because of the rise in costs. how important is all passing

some tax abatement law back into place? martin: i think it is imperative. there is no way to underwrite an equity transaction of building multifamily housing without a tax abatement program. apropos to our timing there is something coming down now that would help to have our people underwriting correctly, having the real estate taxes be a percentage of gross income that is digestible to develop real estate. the cost of developing has gone up and the financing of transactions. without an abatement, to be able to underwrite a rental property is almost impossible. scarlet: costs have been going up. that is the bottom line. a lot of people have been anticipating a surge in distress deal sitting the market. do you see evidence of that starting to happen? if so, are we in the first inning of that? the third inning echo martin: i am definitely starting to see

that. we are starting to get npls for the first time. the wave we are expecting in terms of the volume and dollar amount we are not seeing yet but the opportunity is coming. i think we are in inning one or two. if interest rate they were they are over the next two years, we will be in a challenged position for a lot of loans coming off. if we are in a position where rates start to drop that will save a tremendous amount of real estate. i want to differentiate. i think the residential housing market in general is a stronger asset class as opposed to some office conversations and retail we have spoken about before. abigail: office and retail is problematic. another portion of your business which is important in new york city is the affordable housing and transitional housing.

i know that is becoming a larger part of your business. it is a real collaboration between private and public. martin: there is an endless amount of demand for affordable housing. when i say affordable i mean deep affordable, not workhorse -- workforce housing. we need the budget for new york to be able to facilitate the development for larger multifamily housing that helps support the affordable space. transitional falls within the same range. there is a need for transitional housing in new york and across the usa. it is really important to be able to work together with government agencies and the private sector to solve that problem. abigail: very quickly, your business is also in texas, florida and north carolina. is not just a result of the pandemic or were you already there and you planned to expand? martin: we have been focusing on those markets for the last three

or four years and studying them. certain markets have oversupply and certain ones don't. we are micro-focused on what markets make sense. it is a plan that has been in the works for five or six years. scarlet: martin nussbaum, really appreciate you joining us. he is cofounder of slate property group and scale lending. bloomberg's abigail doolittle as well, thank you. we are at session lows. we have come off the worst levels of the session but you still see seven of the 11 sectors in the red, led by technology. the sectors that are bucking the decline or your traditional safe havens like utilities. utilities as a group up more than 1%. we are seeing treasury yields come down as investors buy the dip. the 10 year yield now below

4.6%. the dollar is also losing some ground, losing .2%. i am scarlet fu. this is bloomberg. ♪

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