European equities rise, selloff in the bond market, but equities are up. There are some interesting themes in the market today. Polish assets, insurance companies, polish stocks all doing well on the donald tusk victory, getting close to a victory. Polish assets responding strongly to that. By 13 points. Shell is up by 1. 3 , record high. We had been seeing a number of factors driving this. The most interesting one is that this is a company that pivoted away from renewables. It decided it was not getting the rate of return it wants, not getting the rating it wanted from the market. It wanted to be valued more like u. S. Majors. Maybe some evidence that that is really working. Alix shell sold its shale assets in the u. S. Will they have to go back in . Yields up, stocks up. Go figure. 10year yield up by eight basis points. Stocks dont care. The s p is up by 8. 2 . Tech outperforming, up by 1. 2 . Charles schwab up 6 . However, net interest revenue, 24 . We know why. Clients moving cash into higheryielding products. The upside is they think that trend may have stabilized for now. Crude rolling over, not impacting some of the crude stocks. Washington post had a report out that said may be the u. S. Will ease sanctions on Venezuelan Oil for freer elections. This is all about how we lower prices when the spr in the u. S. May not have the same kind of juice as some in the market expect. All of that on the backdrop of oil prices. Guy also we need to see this in the context of what is happening with iran. I want to talk about apple, what is happening with its stock price today, concern that we are not seeing this Strong Demand for the latest iphone out of china. Comparison charts have many uses, im not sure this is one of them, but i am tracking lvmh versus apple. They both sell very High End Products to the Upper Echelon of society. In some ways, therefore, they should be buffeted by the same factors. The comparison is not perfect but you can see a similar trend in terms of the way these two stocks have moved. What is interesting is, the blue line, lvmh, has rolled over. Apple has stabilized in some ways. Ultimately, will that be cut with the same have additional effect that we see with lvmh . Lvmh being dragged down by a number of factors, but china has been one of those factors. Barclays making that point clearly in terms of its rating on the stock. Is this latest concern, that the iphone is not selling well in china, evidence that we are ultimately seeing apple catching maybe one lvmh has caught . Alix the question is interesting because you can get a highend phones locally made in china. You cannot get a locally made handbag. There are different spheres. I wonder what kind of nationalism can come into play with lvmh when you have that potentially around apple and how that winds up playing out. Does apple trade on china . These are questions that we are kicking around, bringing us to the question of the day. Has apple card lvmhs china cold . Is there a remedy for that . We want to bring in sofia from our markets team, and andrea. Has apple card lvmhs china cold . It is really interesting because clearly china has not rebounded in luxury as we all expected in april. What is interesting, lvmh said last week, in the second quarter, for most of their fashion and Leather Goods brands, sales to chinese nationals globally were up about 40 on a twoyear basis. They said it was exactly the same in the third quarter. It has not gotten any worse but has not gotten any better either. What we need to see for the luxury stocks to motor again is for china to stabilize and recover, but crucially for the chinese to travel again. When they come to europe particularly, they spend more, they use the taxes they save to buy more luxury goods. Until that happens, we are going to be in this sort of pattern. Guy you live in china. Is an lvmh handbag comparable to an iphone in china . There is an alternative to the iphone now, and that was unexpected, the kind of nationalist buying that you see in china that is backing huawei. You are not seeing that in the luxury space. You have some sportswear companies in china that can compete with nike, adidas. Some companies were boycotted in china for bad taste advertising. The thing with lvmh, it is really a macro slowdown story. With apple, it is a market share loss story, a little more complicated. You are also seeing chinese officials, state owned companies being banned from using iphones because of the sensitivity of the issue. I think apples china cold may be worse than lvmhs. Alix if there was something that meaningful that came in terms of stimulus to the public, do i go buy lvmh, or mi scarred by what happened earlier in the year . Will it get the same boost . Good question. It has to do with what that stimulus is focused on. If it is focused on the prophet market, that takes a long time to feedthrough to consumption. The idea that chinese consumers, when they buy luxury, they purchase a broad, there is a currency story there. Their purchasing power abroad has weakened a lot. I lived in hong kong. That is a really good place to gauge the health of the chinese consumer. Spending there has been really weak. Anecdotally speaking to people in hong kong, chinese tours are taking more pictures and cafes, not filling up the stores that really line the streets of hong kong. That suggests spending on luxuries is not a priority right now. Guy if it is a macro story, when the economy returns, luxury spending returns, as well. There is no stigma to buying an lvmh handbag in china. Absolutely not. These are huge brands, great image. Lvmh in particular, over the past three years, the strong have gotten stronger. Lvmh can shout loudest, it can have the most spectacular shows, celebrity designers. Its brand will be at the forefront of consumers minds, so that when they do spend again, they will go for Louis Vuitton or dior. Alix do you feel like lvmh has gotten the right medicine for what ails it from china or is this overhang still there . I think when china comes back, lvmh will be one of the winners. Hermes as well. These strong brands with the strong names who can invest. Citing that, you have burberry, always strong in china. They have a new designer. That will be an interesting play. Gucci coming back. I think lvmh is wellpositioned. Alix we appreciate it as we work our way through it. Thank you so much. I guess the question for you, guy, will you buy an iphone before you buy a new pair of jeans . Guy probably more likely that i buy a pair of jeans. Very different kind of decisions. Buying a pair of jeans, that is a reasonably ubiquitous item. Iphone is a huge decision. I do think, to your point about not comparing apples to apples in china, an lvmh handbag is likely to remain. What happened with apple in china, a much more interesting geopolitical question. That has yet to fully ripple into the stock. Our understanding of that has yet to fully materialize. Alix also buying jeans is like utility. Guy basically just another opportunity to give me grief. Alix duh. Coming up, we will give him more grief. Our question of the day, has apple card lvmhs china cold . Wei li from black Rock International will be joining us next. This is bloomberg. I do think just the extent to which we had complacency on china to start the year, and frankly, as recently as the april, may timeframe was remarkable. Its not surprising that it will take some time to see that complacency unwind. I think there is still room for this whole love of the china recovery story to unwind even though it seems like weve been talking about it for a while. Guy Lori Calvasina of Rbc Capital Markets speaking to us in the last hour, takes us to our question of the day. Cannot believe i am bringing this up again. Just another opportunity to give me grief about my phone choice. Has apple card lvmhs china cold . We are seeing some data indicating the latest iphone not selling as strongly as the previous iterations in china. The question is, is that for geopolitical reasons, as a result of the chinese economy being more lackluster, and the comparison with lvmh comes in. Wei li, global chief investment strategist to blackrock joins us now. We are trying to understand the chinese consumer. As we have seen a downdraft in luxury spending, is apple the next part of that puzzle . What is your sense of what big Global Companies will be telling us about the chinese demand story this earnings season . Wei if you look at the chinese restart this year, its been somewhat disappointing versus expectations, if you apply a developed economy template. The consumer piece is a large part of that. You look at the high savings rate, the very high youth unemployment rate, before they stopped publishing that, all of that contributed to consumers feeling more prudent in spending. On top of that you have the real estate situation still unfolding. It is no wonder that sentiment toward china has been very negative. Some of that could come through in the earnings season that is just getting started. Alix do you think that we fully understand the downside that china could have on other certain sectors or stocks . No doubt lvmh has paid a price, as have other luxury retailers. Have we priced in a week china, how much more worse couldnt get in earnings season . Wei hard to say that we fully understand anything really. What i would say is a lot of the chinasensitive sectors, chinese equities are already paying the price for the disappointing restart momentum that we have seen so far this year. In terms of the bar to surprise on the upside, it is really low. We are currently neutral on china equities more broadly. Also underweight european equities, also in part because of that connection with, in terms of trade, linkages to china. I have to say, a lot is also in the price. You look at flows, valuation, sentiment has been very negative so far this year. Guy what do you think will move markets over the next few weeks . Earnings season is coming up. The situation in israel is something we are paying a great deal of attention to. Fed speak this week as we build up to the quiet period. You have the earnings story. The list goes on and on. Trying to define a clear narrative for this market seems very difficult right now. Are you as confused as the rest of us, how are you thinking about tying these elements together . Wei defining a narrative, we should take a step back from the daily noises. What has been impacting market is the rate repricing story. Thinking about how long Central Banks will stay at this elevated peak rate levels. Probably more to go, maybe not, but definitely nearing peak rate. The focus will shift from r to g as the earnings season restarts. This is where that delta exists, as markets are hoping, certainly pricing for earnings to have already troughed, rebounding from here. If we look at a likely stagnating growth backdrop, earnings could rebound but not as meaningfully as markets are hoping for. 2024 eps growth expectations for u. S. Equity markets, we are looking at 10 which is quite rosy versus our expectations of mid single digits. In terms of the r piece, markets have come into price and higher for longer, to the extent that we think a lot of the adjustments have taken place, which is why we recently closed our longstanding underweight call on u. S. Duration. A lot of the rate repricing has already taken place, even though there is more room for term premium to come back. Alix it feels like you are seeing the rereading will be happening in the equity market not the bond market on a relative basis, is that true . Wei i think there is more for equities to reflect the new regime than there is room for the bond market to reflect the new regime. A couple statistics to contextualize what we have seen. Since the beginning of the rate cycle, 10year yield have moved by almost 250 basis points. That is very meaningful repricing versus equity multiple levels not having moved as much, especially as you think about what happened to the mega tech. In this new regime of higher r, likely lower g, thinking about structural supply constraint, there is more room for equities to price that in. But there are lots of opportunities as markets adjust to this new regime, presenting themselves, closing our longstanding call in u. S. Duration, is us recognizing those opportunities coming back. Alix we appreciate it. Wei li, global chief investment strategist at blackrock. Guy was mentioning polish markets rising as proeuropean parties are set to unseat the nationalist government. We will get those details to you next. This is bloomberg. Alix the market moving event in europe is poland. Donald tusk is set to return as prime minister. His priorities are normalizing relations with the rest of the european union. Joining us now is our Warsaw Bureau chief. What is the significance of this, how close is donald tusk to actually taking the reins of polish government . It is extremely important in the sense that, what we have seen over the last eight years, poland has moved farther away from the european mainstream. The fact that tusk is on top as the leader of one of the three parties that will form the coalition, that he will take power after the selection, is going to be significant. What is important is the turnout of the election. Record numbers. 72. 3 of voters turned out. Clearly he has a mandate, the three parties have a mandate to take over. The important thing is poland has been on the outside. About 35 billion euros of aid was withheld to poland by brussels. Now investors, people looking at poland im betting that this money will finally be unlocked at some point. Guy why have pols voted in the way they have voted . What were the Critical Issues here . You have to say, even though we are saying they are going to win, this is still a very divided society. On the one hand, you still have supporters who believe they have really gained a lot. Law and justice has really ramped up social spending. The economy has been growing fast. Inflation has also picked up. Over all, people, especially in the countryside, deal better about their lives. On the other hand, when you talk about the People Living in bigger cities, the concern is more about this liberal shift illiberal shift we have seen under law and justice. Being less tolerant about lgbtq people, migrants. There is a shift in society in this. What you are seeing in the data is it was overwhelmingly young people who turned out more at the polling stations, deciding to vote for a different poland. Alix does that also mean the support for ukraine will make a bounce back here . I would say we will see. You have to admit, obviously, there has been a turn for the worse over the last few weeks, especially in the runup to this election. Tusk will work more closely with the eu, probably will seek a less confrontational stance toward ukraine. Probably we will see an improvement, bigger support. How this will pan out, we will see. Guy thank you very much indeed. Our Warsaw Bureau chief. We will get the exact results tomorrow, see whether the Market Reaction today is justified. Lets take a quick look at some of the preclose action we watch out for. Rbc out with a significant upgrade of ubs. The signal coming from rbc, it has greater visibility, greater understanding of the potential Value Creation we will see from the combination of ubs and credit suisse. We have seen that stock go out with a 30 price target. 22. 47 is where we are trading today. Quick look at some of the 52week highs. We have talked about some of these names. Shell. Polish assets in the insurance and Banking Sectors. The close is coming up next. More details to follow. This is bloomberg. Guy european equities are higher and green out there but you see the steno story is the polish market. Certainly the market is pricing in a rosier outlook into financial stocks, into the insurance sector, more broadly the market, so an area of significant bright green in eastern europe. Elsewhere, a more muted story. We are seeing all stocks having a good day and retail having a good day as well, but there is a lot of different forces coming into work this week. We still dont understand what impact they will have to get the earnings season kicks into gear and we are watching what is happening in israel carefully. The right story is not going away the rate story is not going away. It is the government and the broader picture. We are watching and waiting but the polar story is an exception to that. You can see that in the market clearly. We pop up first thing and go sideways think about waiting, looking for a catalyst. I dont think a clear sense of direction, a clear sort of conviction in the market today. Single stocks as ever are different. The market continues to bounce around on the single stocks story. Much more action at that level. Shell, that is a record. This is a country desperately turn to push itself to u. S. Multiples and some evidence that is now succeeding. Look at what is happening in the polish Banking Sector today. Really strong moves to the upside. Kkr making the binding bid for the domestic landline network, making a separate bid for the cables business. It is not a done deal here. Everybody is scratching their heads at the outcome. Lets talk about the day ahead. This week will progressively ratchet higher and higher. We have the ecb imf conference taking place, and janet yellen has been at a meeting today of european leaders. You have details of earnings. Interesting with the ongoing story, the tightening of the story surrounding semi conductors and what happened in china. What is happening in the u. K. Housing market will be fascinating as well. It will give us a good clue as to the state of demand at the moment, but more broadly, we will get into the u. K. Employment story tomorrow. Cpi coming later in the week. All of the data will not be released, some data will be postponed. A piece on the terminal earlier today stated that it could provide more volatility because the wage data has been quite punchy recently but the unemployment data has not. They balance each other out but we will only get the more punchy end of the data tomorrow and wait for the rest of it further down the road. You wonder if potentially you could see the outside response to tomorrow from the market to this data. We will wait and watch. Alix punchy number and Market Reaction, question mark. Someone spoke earlier today about a higher rates for longer and also referenced it in his speech. Because we are exposed to these risks, there will be new things happening that you will have to respond to, recalibrate, and so forth. We just dont have that that allows us to experience inflation. Alix lets get more insight with our guest. What do you think we will get tomorrow in terms of the wage data, and what is that we through to the market if we dont get the unemployment number . The wage data is actually the most important because the u. K. Like many countries has been on this big inflation fight. It is about the core inflation. Relieved to see the core inflation print but it is all about which inflation because that is keeping inflation hot, keeping the Service Sector very strong, and inflation strong, so if which inflation cools down, it is a bit of light at the end of the tunnel. Guy the bank of england has been signaling that it probably is getting near to the end. What would a hot wage number signal to the bank of england . Anneka the bank that is signaling it is close to the end indeed but do not forget the bond market is doing a lot of the work on behalf of the bank of england. Even when the bank of england paused the meeting before last of my bond yields went up. Over the last few weeks, the 10 year yield there is the same as it was last year when liz truss was forced out of the building during the crisis. Even if the bank of england stopped hiking, the bond markets are continuing to hike, which reflects strong inflation and wage inflation. Alix we saw that we only play out in the u. S. We you have a huge run in yields and central bankers and governors talk about the bond market is doing the work for us and all of a sudden buying into the bond market. Is the u. K. And the uv going to be in the same kind of spot . Anneka the biggest difference between the u. K. And u. S. Is the u. S. , one of the reasons why bond yields are going up is the massive amount of bond supply coming into the markets. It was pot because of the debts of the discussions and is being resumed now. Lots of financial expenditure. In the u. K. It is different because the government is careful about expenditure, looking at the debt crisis that took place with the government last year forget it is less of a bond supply story, still google bond markets, but it is in little more fundamental of the fact that like the imf says, the inflation problem of the u. K. Is the worst of all the g7 countries, and Capital Markets are not satisfied yet. Guy if we get strong wage data and strong cpi, do you think the message will have to change for the bank . Do you think there will have to be a recognition that maybe there is more work to do . It seems as if the bank of england has been pulled around a little bit by the cpi data and therefore i wonder whether a strong print will take us back to the territory of talking about more hikes. Anneka definitely. We actually leave the markets have been too naive to expect the Central Banks to suddenly turn their calls from being very hawkish to suddenly being accommodative. The bank of england feels under a lot of pressure because unlike other countries, the u. K. Economy is extremely sensitive to shortterm Interest Rates. Look at the amounts of floating rate mortgages. So it is very keen to keep rates down and start lowering rates but it is impossible to do so if inflation is not coming down alongside it if inflation keeps at this stubborn level, the bank of england might have no choice but to at least stay put and certainly not cut. Alix so would we be in a scenario where the fed would cut faster and earlier than the ecb and boe . What would the knock on effect be of that . Anneka it would not be atypical because it is quite usual for the u. S. To be ahead of the curve. The u. S. Was the first want to call inflation transitory no longer transitory to change their mind. The u. S. Was the first to start on the right hiking path, the first to experiment with a pause. The bank of england followed suit later so it would not be a surprise if the fed starts cutting eventually next year, also thanks to a very Strong Economy in the u. S. The bank of england and ecb is not ready yet. What does that mean . A different rate environment. That might mean something for the fx because i strong dollar could be affected by it. It also makes the investable climate for u. K. And european equities that much harder. Guy do you what i am really wondering about at the moment is that we do seem to be in a situation where we are being pulled around by various different factors. Huw talked about the fact that the top of the mountain is now covered in cloud forget what do you think we will emerge from this cloud . Given what is happening in israel, with the Energy Markets right now, how long do you think the mountain will be covered in clouds and we really wont have a good idea of how the market is going to evolve . Anneka i dont mean to sound miserable at the end of the day, but our belief is the world is sort of getting quite cloudy. Why is that . There are multiple transitions going on in the world, whether the energy transition, geopolitical transition which is not just about the wars we are doing with today, but broader than that about national security, supply chains, etc. , so there is more complicity. That does mean the future path of inflation is complicated. If governments are spending all of this money, creating all of these jobs, that is helping the economy. Interest rates are going up, trying to calm down the economy. That is a contradiction, so it is more complicated, and that makes the job of central bankers more complicated as well. I sympathize with the cloud metaphor. Guy the cloud metaphor is better but i think you have to combine them both. Great to see you. Thank you. Lets check with the european markets where they have finished. The standout story was poland by some country mile but the rest of the european markets have had a good day. We have seen one stock standing out, shell. That company hitting a record high with Rising Energy prices and a change in tactics boosting investor interest in this stock. We will have details next. This is bloomberg. Guy this is bloomberg markets. Coming up this thursday, fed chair jay powell in conversation with weston. It is live on Bloomberg Television at 12 00 p. M. Eastern. This is bloomberg. Guy so shall shares hitting a record high. This as Rising Energy prices and the companys new ceo putting a strategy in place that seems to be bringing investors back. Laura follows the company for us and joins us. To what extent is this move to the record high to do with the new strategy or to what extent is it due to Higher Oil Prices . This is a company that wanted to get back on u. S. Star multiples. Is this evidence the strategy is finally delivering . There is someone i spoke to who said you have to be careful about the ceo and you cannot put it down to one person. If you look back, oil prices and gas prices recovered from the pandemic lows that suppressed shows share price, but i think investors are taking to this new strategy, which is focusing more on gas, which is shows bread and butter even though it is turning to renewables. That is helping right now. Alix shell got rid of its u. S. Shale assets. Do they need to go back into them, particularly when exxon made the big that with pioneer last week . Are they going to have to do that . Laura it is a good question. It would probably be in the difficult for them to go back into shale having pulled back with the deal not that long ago. To be honest, they have been prioritizing other assets. Gas is a big part of their portfolio. It is not necessarily true that because exxon is back in and doubled down that shell will follow. Alix shall cannot go too far down into a new blender jupiter needs to balance. Speaking of balance, bp is far from its own 52week high and i am wondering, are we going to get a consistent strategy . When will bp catch up to show . Maybe that is a better question. Laura that is a good question. A lot of it is hanging in the balance right now because they have an interim ceo their ceo departed very abruptly with a lack of disclosure of relationships, so it remains to be seen whether bp will turn around its strategy, bringing a new ceo that is external or someone else from within the company, or they will stick to their Current Interim ceo who was previously the cfo who was there with Bernard Looney from the beginning. Until we know what will happen at that level, it is really hard to say. Alix in the meantime, shell is smoking the competition to some extent at a record high. Thank you so much. Coming up, u. S. Stockmarket looking at rite aid filing for bankruptcy as it tries to rework a debt load of about 4 million. We will have more details and analysis with our guest. Do not miss that conversation next. This is bloomberg. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates, exemption certificates or filing returns. AvalarAhhh Ahhh Ahhh ahhh alix every monday, we are bringing you money undercover, a look at less visible parts of global markets. They are attracting more and more money. Today, we are exploring a distressed debt. Here with us now is Lisa Abramowicz and steve. Lisa . Lisa thank you so much. One of the Big Questions as we keep hearing about potential stress in the corporate debt market. Lastly for hours, we heard about right filing for chapter 11 bankruptcy. The question is, who is next . Joining us as someone on the front lines of that. Thank you so much for being with us. I want to start there. His rite aid the beginning of this date of bankruptcies and defaults a lot a people have been talking about . There is no doubt there is more distress in the market today than existed 12 to 18 months ago. We are not involved in the rite aid situation so i dont know but right it has been in the composition of distressed markets for a long time fundamentally around the Business Model, providing retail operations, and a portly, the opioid potential claims that might exist. I think anybody is surprised by rite aid filing, but i think it it self portends a trend because rite aid is just fine. Lisa some people were will argue the people have been circling and hovering but there is a question given how many Interest Rates have gone up and highyield Interest Rates paying 10 out of their coupons for the implication of that based on market pricing. How vulnerable to a rash and increase and defaults are some of the corporations you are dealing with . Steven those are exactly the fundamentals we are looking at. Rates were arbitrarily low for a long time. They have now crept up in a manner people have nothing. People have not seen this for a long time. What people look at with leverage levels, they fail to realize coverage levels are as important, what the operation cash flow is to debt service, and with rates up, for real rate resulting in increased costs to companies and maturities now coming from a those are the exact fundamentals we look to to find out where the next round of distress might come. So where will lisa lisa so where will it come from and how has business increased . Steven we look into the camera of the next three to four years. We see it kind of across the board but in the near term we are seeing it in retail, consumer, tech, media, cable and satellite. Many capitalintensive industries with debt maturing the next few years with significant need for new money, that is where we are seeing it. How busy have we been . It has been a good run for us and that is important due to the changing dynamic in the marketplace. Our business which people may look at uniquely as a companys going bankrupt, that is not what our Business Model is. The majority of our businesses focuses on companies that may have lost access to Capital Markets. They are years away from eating capital, but there is another Capital Market that can be tapped, whether it is private credit, hedge fund capital, or the investors who are already in cap structures, and that is where we spend our time. Lisa basically, if you have investors coming have a company they invest in that needs to extend maturities out and keep low interest payments, bondholders will agree to do it or an Equity Investor will agree to do it for concessions, whether assets or guarantees. Steven that is a perfect scription. Lisa can you quantify how much busier things have gotten as companies grapple with a runway of an indeterminate amount of time with rates that are unsustainably high for a significant proportion of the existing corporate debt structure . Steven companies have very much been focused on this. They believe in the fundamental Business Model. The models have shifted, but they are becoming more open to the conversation that if the markets are failing me, what are my options to avoid the draconian downside of a chapter 11 . Whether it is an private equity, which has been the early adopter of this product to now public in place expressing more of a willingness to do what they have not considered in the past. We have been busy in those conversations. Lisa a skeptic might say in the private equity space, are you getting runway as an investor to a company or an operation that is hinging on rates going back down and need weights to go back on the next couple years to be viable . How do they insure against not . How do they immunize against that or is it just kicking things out longer without that it will go down to lower rates . Steven hope is a stretch of a word. There is always fundamental analysis whether the business in and of itself a private equity firm has invested in or the markets have supported for years has the strong Business Model. It is a casebycase basis, but we have a general view that if there is a belief and fundamental belief and well researched belief that we can get through the nearterm cycle, whatever disruptions are happening in the market, the other side will bring the growth and opportunity and profitability, so it is very rational for companies to sit here and say, why should i turn over the keys at this moment in time . We saw this a lot during the covid crisis. Good companies, temporary dislocation. Companies navigated through the markets, bailed them out. We now have a different market to address those issues. Lisa what types of investors are the ones coming out with these workouts to try to prolong the runway for companies and private equity firms . Steven it can be a mutually beneficial trade. You have investors who are not looking to Default Companies and go through what can be an expensive and complicated process. You have companies and boards who are comfortable making concessions and providing concessions to avoid just that process so we are seeing it across the clo community, across the public bond community, and the private investor community. Lisa how much do you, expect defaults workouts how much do you expect defaults, workouts to increase in the next 12 months . Steven it is a 3 trillion market. I think some 100 dollars plus are now trading in distress levels or on negative watch. Half of those credits need some kind of a workout. The file needs some kind of a workout. That is only growing. As stress builds into the system operationally and from a rates standpoint, i think we will see defaults increase, but we will see conversations continue to increase to avoid a bad outcome. Lisa thank you so much for taking the time. Back to you, guy. Guy thank you very much indeed. Very nice. Talk about what is coming up next Bloomberg Technology. I guess well be joining Bloomberg Technology with Caroline Hyde and ed ludlow, this as we wait and watch and see exactly what this week is going to be about. We are still paying a great deal of attention to what is happening in israel. We have an awful lot of fed speak and data coming up and the earnings story will be getting into gear as well, so all of that still needing to be priced in. If you numbers to give you 90 a what is happening. The nasdaq up by over a percent. The s p up by over a percent as well. I selloff picking place at the long end of the market. This is bloomberg. Its easy to get lost in investment research. Introducing j. P. Morgan personal advisors. Hey david. Connect with an advisor to create your personalized plan. Lets find the right investments for your goals okay, great. J. P. Morgan wealth management. So, youve got the power of xfinity at home. Now take it outside with xfinity mobile. Okay, great. Like speed . Its the Fastest Mobile Service around. With the best price for two lines of unlimited. Only 30 bucks a line per month. Thats hundreds in savings a year when you wave bye to the other guys. All on the most reliable 5g network nationwide. You really shouldnt walk out the front door without it. Switch today at xfinitymobile. Com. This is Bloomberg Technology with carolyn hyde and ed ludlow. Caroline im carolyn hyde at bloombergs World Headquarters in new york. Ed and i am ed ludlow in san francisco. Caroline the u. S. Plans tighter measures against china to chip technology. We will break down the details. Ed in the latest updates from the israelhamas war and the role social media plays in delivering uptodate inaccurate news. Caroline