Just 5 days ago. We had a 50 basis point move in that two year yield seven days, so tremendous volatility in some people data still ahead. The 10 year yield hanging out now below that 4. 60 level. Send midday movers on the equity side, that shows you a little bit of the exuberant under the surface. Qualcomm suggesting that demand for smartphones is increasing after two year swap. The company has been trying to decrease reliance on phone chips by pushing its personal computers, vehicles and other markets. Qualcomm shares rising the most in more than two years. In Apollo Global rose 26 in the first quarter, just shied estimates, but the firm has launched the best performance among of publicly traded peers this year. You see a polish shares up more than 4 . And take a look at peloton also because the ceo announced lance to step down at the Company Looks to another restructuring to reduce annual expenses by more than 200 million. They plan to reduce headcount by 50 . Have a ton shares down now more than 12 on the day. Speaking of jobs, the next big thing that marcus their focus on is the april markets are focused on is the april u. S. Jobs report and more rain says the data is laura rhame says the data is key to her outlook. If you said i would get one Economic Indicator it would be initial claims. Until that moves higher it is hard to get too nervous about the health or the state of the labor market. The broader risk sentiment in the market, you are getting the bed in the equity market. We are not yet done with earnings season. What is most important to you right now . What is more important is the that meeting. You might hear some hawkish from fed chair powell, but that did not occur. But we got was a dovish and instructive message. First of all, as you know, he very explicitly pushed back this notion of rate hikes and i think the markets really needed to see that because the 10 year treasury has been priced sufficiently for a one rate cut. But the fact that we dont have to bake into rate hikes into the scenario i think is a really positive one for treasury yields. The other thing he said that i thought was constructive is that this notion of stagflation that the news article severally pickup is that no, we dont have that scenario, and the data supports strong economic growth. And of course, the last point is core pce is at 2. 8 . That is below three, and he sort of subtly mentioned that, but i think it is really important because weve been waiting to find this last mile of inflation and here we are. I dont think the fed is really willing to break the economy to suddenly get us to 2 . How do you think about this in the context of jobs given that you seen such a drastic movement and yield . Do you look at wage data tomorrow and worry more about inflation, or do you look at the absolute number year and start to think more about the weakening of the economy . I dont expect any big surprises from the jobs data. If we see slightly slower path of job creation that should be constructive fed. I do think that the wage number is going to be the most important one because we do get the employment cost index early in the week which showed this top, and to the extent that the wage number that we get tomorrow in age that, i think that would be constructive for the market. And that is consensus. Yearoveryear wage growth slows, so that is the number unto them to be looking at most. Its interesting because even if you saw some primacy signals and earnings so far you do have some event bearishness under the surface year. We are still down on the week for the s p 500 and the nasdaq how do you think about how to play equities right now, especially getting into Apple Earnings after the lows today . Watching another tech giant come out. Where is the risk . The risk reward for equities is actually improved relative to where we were in april. My price target give or take for the end of the year is 5400 on the s p, and the way we get there is looking at next year earnings and the multiple which is a little bit rich, but i think you can hold so the fact that we are now somewhere between 5000 and 5200 on the s p. The lower the entry point, the better the wristreward the price target becomes. I actually like the opportunity now that weve seen a bit of a pullback and i think you can be selected in the spots that you buy. But the playbook i would continue to stick with his tech. To the extent we see some selloff i would be buying that. You buy semiconductors and you also bison cyclicality because even the many actually number this week was disappointing, i still think inventories are low enough to have a multimonth restocking cycle. So back to the comment about big tech, i think largely big tech has delivered and it is benefiting from of course the solid economy, the solid consumer, but also the aa adoption trend. Speaking of hot topics, once i get all fair the conversation im having is that the Public Markets, for the private ones consistently. The Public Markets are getting smaller, a lot of money moving into private equity, private credit in particular more so. How do your clients think about that movement . Our clients are certainly participating in that and im speaking specifically about the private wealth channel. You have the opportunity to step in and to be able to earn that coupon in private credit which at the moment is quite attractive given with the fed funds rate isnt given where the spreads are. So clients are often looking for yields between 10 and 12 and when you think about equities and equity volatility in the risk reward that we just talked about, private credit definitely stands out. As we look at some of the flows going into some of those spaces, we continue to see very Strong Demand for private credit. Sonali what is driving that demand . You had kkr and apollo this week and you do see investors give them very warm response here in the vehicles doing very well. Private wealth being some of the biggest of engines. What our clients really looking for at this point, especially thinking he rate cut is coming . Why buy the credit . The reason i think private clients are embracing private credit is because it is increasingly accessible in a semiliquid. The fact that you can participate in still have core liquidity, that is really driving some of that interest. The other issue is that if you look at the history of credit over the last 17 years, 16 of them deliver positive returns. So theres only one year in 2008 when private credit was down Something Like 5 were 6 . So looking at that history and these higher for longer Interest Rates and the ability to earn that coupon of tempers and12 , i think that is why clients continue to stick with that. Sonali we thank you so much for going around the Investment Universe for us. The pioneer total return strategy in the 1980s revolutionized the bond market. But now he is saying that approaches dead. This mccormick joins with the details here, going from private credit the public credit. What is so data total return investing in the bond market right now . My colleague has the story about philip, and he is saying something that i will say and a lot of other investors are saying, that you are not going to be able to bank on yields on these bonds plunging. And then you get this huge capital gain, which was kind of an extra kicker for bonds which are usually thought to be boring. Bill gross thinks rates are going higher, the 10 year is going to 5 . But overall many investors say even the ones that like bonds say im really looking for the income im going to get every half year. Im not banking on capital gains, so bill is kind of Going Forward to say forget total return. I think he even ended insane dont dont summon so you a bond fund that is his view, but i think many people say rates are very attractive. I like fixed income because of the coupon payments, but im not expecting a big bang as far as rates falling substantially. Like your guest laid out about the fed yesterday, indicating no hikes but higher for longer is going to be here for a while. Sonali its interesting because he says that those who argue for lower rates have to counter the upward climb in treasury supply. How does the thinking change given the rate environment that investors are expecting going into next year . Coupled with that treasuries five. You saw yesterday and the socalled quarterly why the expected they kept all the coupon bearing debt issue unstable, and the kind of indicated we are going to sit there for the rest of the year, maybe the next few quarters. But lets just say a lot of the forecasters i here say beyond that, the next move is more supply. A bond. I think Stephen Stanley was saying next year you are seeing more issuance. Others are. So looming in the background is fly is not going down there a lot of supply to digest. Sonali i always like to get your sense on how people are feeling the you say so close to the trading world now that we have finally seen that come back to the market on the hills of powell yesterday, how are people feeling today . You know, we have this diverging camp, a lot of shorts in futures, the Asset Managers keep saying yields are attractive. But i think the net of all of this is that people feel like ok, we got that tail risk of a hike out yesterday but it is really all about the data. There is no rest for the weary. Every data point like youre talking about tomorrow, im always worried, boring would be nice that there are always surprises. So like the fed is going to have to still be dictated by data markets, every kind of key data point is a window for yields to really move up or down. So i think volatility, i keep saying that, but i think that if the name of the game for now. Sonali we have some incredible interviews for the next 24 hours. Stick with us, everybody. Thank you so very much for keeping an eye on that market for us. Coming up next, we are going to talk about discussing more pain to come for the commercial real estate industry. After all, rates are still high. Stick with us, this is bloomberg. Hey you, with the small business. Whoa. Youve got all kinds of bright ideas, that your customers need to know about. Constant contact makes it easy. With everything from managing your social posts, and events, to email and sms marketing. Constant contact delivers all the tools you need to help your business grow. Get started today at constantcontact. Com constant contact. Helping the small stand tall. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh sonali this is Bloomberg Markets. Youre going to talk about real estate disorders are grappling with allout from higher borrowing costs and a shift in demand for properties such as offices. We are going to discuss this with josh, cofounder and principal at Madison Realty capital as well as our own birds Abigail Doolittle josh, can you describe the pain you are still seeing under the surface and the commercial real estate world . Thanks for having me, first of all. They challenges one Interest Rate environment that is brought a huge amount of uncertainty is challenging the Investment Sales market. That coupled with the banking crisis about a year ago still leaves people with ptsd, depositors in particular, and thanks traditionally lend borrow short and lend long, and that model is rogan. So it kind of start with the Banking Sector in terms of challenges and capital available. While it is a very slow Investment Sales market, we have a huge opportunity in making loans to real estate developers, owners and operators. We have the opportunity to buy performing and nonperforming loans from banks that need to clear the Balance Sheet and one interesting major opportunity that we added on the last three years lending to other lenders you have this huge private credit industry that has evolved and we started this business about 20 years ago, just to give you some scale. The challenges that alternative lenders and private credit really needs leveraged to provide the returns they once did. And if they cant get leverage from banks, that is a challenge. So weve seen this huge void in we have a pretty big business in providing it to other alternative lenders in the form of warehouse lines, financing and notes. Sonali sounds like conditions a relatively tight and you just mentioned the original banking crisis or at least, sort of implied it from last year. Is that over, is there more to come . Some people we have been interviewing thinks theres not too much more of the crash were any sort of the crash with commercial real estate you think the worst is over . I think we are very early innings. The beneficiaries have been the largest banks such as the jp morgans of the world and private credit, but the challenges that banks dont have the they once had for deposits, and they are saddled with a portfolio that is a lot of times longterm financing that they provided at some 4 rates. And loans are taking a lot longer to pay off, so that coupled with a lot of office loans is a real challenge. Weve been hearing also about so much dry powder on the sidelines to provide some sort of a floor. Do you not think there is all that money there the people are talking about . I think theres a lot less capital than you would expect. The real problem around the Interest Rate volatility right now, typical equity buyers of real estate are not really there. Many of the institutional equity funds want to provide more structured credit they dont want to take common equity, they want to provide preferred equity, some sort of structure capital. And that is a challenge. So again, its very hard to make a market in real estate with a year treasury volatility between four and five in change. That is the problem right now. When people think about the distress starting to form, the kind of make this discrepancy. Theres office and this other types of commercial real estate as well. Where are the most concerns in office in particular . Either areas with an office you would be most comfortable putting your dollars toward . Even if you are an aclass office that has just been built, you have a difference of valuation. Second, i would say b , a Quality Office buildings, the demand just isnt there the way it once was. Wasting commissions, and a lot of Capital Outlay from an order, and who is providing that capital today . You see a lot of institutional owners handing over the keys to banks and there is a back and forth between the bank not wanting to take the keys and owners wanting to hand over the so the question is where will capital come into an office deal and what will that mean over . Theres been a lot of talk about repositioning for other asset classes. Easier said than done. The real reason is zoning constraints, cost to improve. Just sort of cost of carry to actually vacate the office building. That is a real challenge right now. You just mentioned rates with all eyes on the fed and yesterday to the relief of a lot of people it seems like they are not going to hike this year. The jamie dimon says he thinks he could see Interest Rates going to 8 . Theyve already backed up 50 to 100 this year. Have you seen an effect on all of your different businesses and if we did go to a percent or anywhere near it, would that be absolutely devastating to commercial real estate . It would be devastating but at the same time i think spreads have come in a bit. Where are we in the context of spreads and base rates . The Capital Markets have opened up. See mds has opened up a bit more than it was in the recorder of last year and that is because spreads have come in. They have all this money that does want to come into sector, and some of it is going from what would be Equity Investments into credit. So that naturally leads to tightening of spreads because you have demand and very little deal volume going on right now from the Investment Sales standpoint. So we dont want to focus on all doom and gloom. What is the next opportunity with the eyeing . Right now we are seeing interesting opportunities to provide capital to complete deals that were broken that needed to finish but had cost overrun. We are a very big construction lender. One of the largest private instruction lenders in the u. S. That is an area that banks have not been able to provide capital because of regulation. And again, lender finance. A huge opportunity to provide credit to other private capital lenders, that is a very big opportunity in the form of financing and warehouse funds. We thank you so much for keeping an eye on this market for us. On a very granular level, that is josh zegen as well as Abigail Doolittle who is so very well versed in the Real Estate Market for us at a very critical time. Still ahead, we are going to talk about carvana because shares climbed after a jump in sales and surprise profit spurring an upgrade. Stick with us, that conversation up next. This is bloomberg. Sonali this is Bloomberg Markets. Carvana shares are on a tear today. The online used car retailer reported a surprise profit with analyst positive about the companys growth acceleration david welch cover the auto sector rate joints me now. Anybody that has no wanting the story knows that has been a wild ride over the last couple of years of the latest earnings so put the latest earnings into perspective. They had a good quarter by any stretch, compared to where theyve been. I would call it progress. One thing with carvana, every quarter there are sort of one time or unrepeatable boost to the earnings. In this time, and ensure actually push them into the black, otherwise it would have been a net loss. Give them credit where its due, the net loss would have been way left in the street expected their unit sales, they did much better than everybody expected. So they are selling more cars. We are any period where they spent the last year restructuring, cutting costs, and they want to