Index up a fair amount. 2. 2 . What is interesting is how much green you see on the screen. Even with negativity around intel. Bitcoin lower about 1. 6 into the weekend. Looking across assets. The bond market is interesting. The two year yield fluctuating all day. Around 498 on the day, it touched almost 5 . Muted moves right now. A lot of volatility today. 10 year yield around 466. That hit around 4. 70. Youre still looking at three to four basis points. The u. S. Dollar still on the rise. Yen has been weakening drastically. Looking at some movers on the equity side. Tons of earnings have alphabet soaring past a 2 trillion valuation. After a First Quarter revenue that beat expectations with Artificial Intelligence boosting growth in the cloud business. Analysts welcome the companys new dividend and additional 70 billion buyback. Microsoft seeing its biggest jump after signs ai is fueling growth and demand. Analysts were positive about strong commercial bookings and growth of its azure cloud unit. Inflation showed little signs of letting up with core pce sliding rising slightly higher than admitted. And Consumer Confidence. How do we think about them going on at the same time . They might be more interested in Consumer Confidence numbers. They asked people what they think inflation will be. One year, expectations did rise to 3. 1 . Up from what it was last month. The five to 10 year was unchanged. There is still some relative confidence, but a little bit slipped as people look forward on inflation. Looking backwards, the pce numbers, better than expected but worse than expected. In the sense that they came in as expected, which was good news to a market worrying about what might happen after yesterdays quarterly number was higher than anticipated. It came as expected,. 3 for the headline. Incomes and spending were both up than anticipated. The bottom line is the economy is still strong and it does not look like inflation is going down. Not really rising, but not going down. Going to be on hold. Sonali i want to talk about the wall street journal report that Donald Trumps allies are drafting proposals that could erode the feds independence, including a longshot policy the president should not play a role in setting Interest Rates here. What is the conversation around this . Who would be in support of this, breaking with a longstanding tradition on something that would frankly really overhaul the way we think about the economy and the feds role in it . There are conservative republicans who probably would go along with it. Outside of the trump campaign, not many others would think it is a good idea. This is based on Anonymous Sources prayed we dont know who they are. They did not even know whether donald trump was aware of this effort. Obviously he had no love for jay powell when he was in office. It is plausible. But the idea the president should participate in any kind of monetary policymaking would really upset wall street. Because then you bring in the idea of politics. You look at what happened in turkey, when erdogan decided where Interest Rates should go. It is probably a nonstarter. But as with just about anything donald trump, you cannot be sure. Sonali thank you for keeping an eye on the possibilities on what is ahead. We will talk more about the inflation data. Wells fargos senior economist joins me now. If you look at what we got this morning, did anything make you think differently of how you think the bond market can progress from here . I think what we learned today is may be inflation in the First Quarter was not quite as bad as feared, in terms of momentum picking up in march. We saw in terms of why the q1 numbers came in so much hotter yesterday. It was really more a function of january inflation being revised higher. There is good news, we did not see a big pickup and momentum towards the end of the quarter. When you step back, you see core pce at a 4 annualized rate over the past three months. That tells us inflation is going to be rather stubborn, in terms of coming down over the course of this year. Sonali how did you think about this with Consumer Confidence data . How problematic is it that consumers are frustrated with the stickiness of inflation . Even if they did not see a big boost ahead . The current level which we stand right now, how might that impact expectations and behavior . I think overall, the stubbornness of inflation is very much tied to the fact youve seen Consumer Confidence and sentiment really move sideways this year as consumers have not gotten as much relief on the inflation front as they were beginning to see last year. I think as we get into a later stage of this inflation fight, the realization for consumers is prices are not going to go back down to anywhere near what they saw in 2019, even just the pace of price growth still remains pretty hot. I think that is weighing on Consumer Confidence. At the same time, it doesnt seem to be deterring spending. When does it deter spending . You see mixed data from the credit card and banking communities in terms of how much weakness there is in the consumer. The spending information has stayed strong. What would cause it to crack . When im looking at the path for consumer spending, it comes down to the outlook for real disposable Income Growth. Particularly getting further away from all of the fiscal support we saw through covid that allowed consumers to spend, even as inflation was ranging and we saw disposable income. We are returning to the fundamentals which means the strength of the job market where goes from here. With expectations where the job markets are going to flow, we see a slowdown on disposable income because youre not seeing improvement on the inflation front. You see a taste of that looking at the yearoveryear rate with disposable income. Sinking to the lowest we saw since 2022. We are seeing that more than consumers are feeling on the economy. Sonali a good time to set up for jobs data. What is the biggest place there could be the most variability . Is it wages . This idea that it is not just the jobs you are seeing in the market, it is what people are making out of them. The thing that has helped real disposable Income Growth is the fact we are adding so many jobs. We will see another robust print next friday, probably around the order of 250 thousand. Not as good as march, but very healthy. As you are seeing wage growth slow, that will be a limiting factor on how fast Income Growth can continue to rise. From there, we are expecting some further moderation in the trend and average hourly earnings. Even if we get another 0. 3 in terms of month over month reading, it would bring it down to 4 . The slowest pace we have seen since mid2021. You are seeing a downward pressure in terms of wages even as you see robust headcount hiring. Sonali what do you need to hear from the fed in light of their meeting . We will be listening for what the right path looks like. We are not going to get a summary of economic projections, but we will have to see jay powell, hawkish, given how sticky inflation has been in the First Quarter. We could see that in terms of the statement. Maybe they make some adjustments around their recent characterization of inflation. A lot of it is going to be have to tease out through the press conference through with the fed needs to see to regain what was somebody confidence about the path of inflation ahead. Sonali wells fargo senior economist sarah house, thank you. It has been a busy week of economic data. Another busy o coming up, we will talk about intel. It has been dropping on a lackluster outlook for the chipmaker. It is against the grain when it comes to tech stocks. It is our stock of the hour. We will talk about that next. To me, harlem is home. But home is also your body. I asked myself, why doesnt pilates exist in harlem . So i started my own studio. Getting a brick and mortar in new york is not easy. Chase ink has supported us from studio one to studio three. When you start small, you need some big help. And chase ink was that for me. Earn up to 5 cash back on business essentials with the chase ink business cash card from chase for business. Make more of whats yours. [female narrator] they line up by the thousands. Each one suffering with a story that breaks your heart. Like 10 year old zakael. He had a growing tumor on his neck. His need for surgery was urgent. And ravette, who needed help, because every step brought her pain. 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But so many are still waiting and praying for surgery they could never get without your help. So dont wait. Call the number on your screen. Or donate now at mercyships. Org thats the number on your screen. Sonali this is bloomberg markets. Im sonali basak. It is time for the stock of the hour. Intel still struggling to return to the top tier of the chip industry. Sales in the Second Quarter will be about 13 billion below analyst estimates. Today is the biggest laggard in the s p 500, and the only one in the fence Philadelphia Semiconductor index. Earlier, pat kelce under spoke to bloomberg about the results, heres what he had to say. We delivered a solid q1, we met revenue, beat on earnings. Put temp in in the first half. But we see a lot of improvement as we go through the year. With that, the foundry business, we are going to see progress on the foundry business. Every quarter from now until the end of the decade. Sonali ed ludlow joins me now. It begs the question it raises the question, i get in trouble for saying it that way why are there such standouts in terms of performance . Ed the story is a turnaround plan. The turnaround plan has been in process for a number of years. It is not yet showing fruition. That is really the question the street has. Intel is interesting among chipmakers. It has products, largely cpus that go into personal computers. Also cpus, gp used for data centers. At the same time, it wants to have a foundry business. In other words, a Contract Manufacturing business where it builds semiconductors for others, much like tsmc. The reality is if i took you around the world where intel has a facility and showed you what they are making, they are not making anything for third parties just yet. Just for themselves. They are stuck in this moment where neither part of the business is where we promised it should be. Sonali if you see the stock reaction, clearly intels management has not portrayed its story to investors that could signal when the turnaround would be. What do investors need to hear from them at this point . Ed it is basically name dropping customers and showing evidence they show up in the financials. On the foundry side at least. You heard the sound bite from Pat Gelsinger. He said we will see progress every quarter through the end of the decade. On the product side, there are signs of progress. Particularly in ai pce chips where they will exceed their guide of 14 million units. You thing about the story of our lifetime, ai accelerators, the reality is intel is telling us this year they will make around 500 million on their a. I. Accelerator. Amd, which came out with its latest generation mi 300, will do 3. 5 billion this year. And nvidia has a 40 billion topline market for its a. I. Accelerator. The 500 million from intel shows how far they have to go to catch up in what is the most important market in the server and data center contacts right now. Sonali are they just too far behind on a. I. At the moment . Ed the difficulty is those two arms of the business. Foundry and making foundry profitable is a really difficult exercise. It requires a lot of cost in the first instance. Because they are not doing well on the product side, that is where they need to make money to pass over to the business. They talk about this 50 billion backlog of business. They have some names like microsoft that they will make chips for. It is a backlog because it is not yet real. These are technologies on the production side that come into force next year. And every quarter is a similar story. Like many ceos, the message from Pat Gelsinger is trust me and bear with me, it is coming. Sonali we will bear with you, we hope youre bearing with everyone else. That is ed ludlow. Very busy week for that man. More tech earnings next week, as well. Coming up on todays wall street beat. We go to the Mining Industry. Elliott boosted stake in Anglo American after they dropped a takeover bid. We will talk about that. This is bloomberg. Everis spent on golf . Life nah. Sinking putts . The only thing sinking is my savings. Theres the kids braces and my parents to care for. Im gonna caddy forever. With empower, i get all my financial questions answered, so i dont have to worry. Empower. Whats next. Sonali basak this is bloomberg markets. Im sonali basak. It is time for the wall street beat. Were looking at blackstone. They have set a goal to grow total credit assets to 1 trillion in the next decade. To do so, they have made sweeping changes atop the unit. Sandy berger had an exclusive sit down with the new head of credit and insurance at blackstone. Ultimately, what we do, we are always going to coexist with banks. We are great partners with them. We announced q1, a number of partnerships with barclays, keybank, winwin situations where what we brought to the table with highly complement three, solve the need for them. We will do more types of those partnerships. You are competing at the same time. There might be situations. For the most part, we borrow from them, pay them a lot of fees, we see opportunities and source risk for them at large. Certain borrowers will come to us directly. That is what you will see. That is what i think ourselves and some of our competitors have gone through. We dont think this is a model where one needs to beat out the other. There is enough opportunity to finance, broadly defined the markets and coexist with one another in a very constructive way. The imf wrote a paper earlier this month, you will not be unfamiliar with their hypothesis. The idea being private credit remains untested. Untested in its current size. Not necessarily it opposes a systematic risk, but to the individual investors who have invested and perhaps more risky but overleveraged and illiquid and nontransparent type assets. Do they have a point . We have always seen slightly nuanced are different ways. Lending in itself is not risky. You should have the right protections and do the lowlevel underwriting work. Our performance ultimately speaks if you look at our default rates, we have seen zero defaults in our private credit portfolio over the last 12 months, in our noninvestment grade portfolio where we see an advance, we have seen less than 40 basis points. That is a fraction, 90 lower than in the public market. If you have the right expertise and position your book defensively, and that is what we have done you can persist. You may see some bifurcation of performance. You have started to see a little bit earlier in q1. You have seen some slightly more elevated default performance in the lower middle market. Where you invest ultimately matters. Our focus has been we like to finance Large Companies that are better positioned to weather the cycle, advance them in cycles i have strong tailwinds, growth, high Free Cash Flow generation. Sectors like software, business services, the energy transition, Renewable Energy arena. If you do that well and stay away from things that may be more capitalintensive or cyclical in this part of the environment, you build a resilient portfolio. That is what we have done. Sonali that was geo dillard of blackstone with dani burger. We are going to talk about elliott. They have built a roughly 1 billion stake in Anglo American. People with knowledge of the matter have told bloomberg. It adds pressure on the british miner after it rejected a takeover from australias bhp. We are going to talk about this with crystal. You also had broken the deal news as well along with our team. What is the latest . Why does elliott have this position now . The elliott news came this morning that they have about 1 billion worth of stock in the company. It puts them in the top 10 shareholder. What exactly they are pushing for, especially in the context of the bhp approach is unclear. We are still doing more reporting on it. It is clear when an activist comes in, they believe the company will be undervalued. It would not be surprising if they think there needs more to be unlocked with Anglo American. An interesting story. They are not the only investor that has showed up. There are other investors who have spoken out. Bluebell has also amassed a stake in Anglo American. Other investors are speaking out against this bhp deal. Sonali how do you think through Anglo American bhp as it stands, giving you had followed this deal to the deal talks and reported outcome of that, and everything that happened since and the resistance against this deal, how do you explain what the state of play is . What is such a big deal, it was sitting at about 40 billion. Theres always going to be multiple steps in negotiation. The bhp approach is an all stock approach. It had been rejected. It would be interesting to see whether this draws out other pot