You the dow s p 500 index and nasdaq all lower, on pace for the worst day since march 21. We so that big selloff two weeks ago. Look at the growth index more than down more than 1 , lacking the other in indexes, suggesting there could be pullback ahead for the larger cap indexes. This is tesla, look at this chart, up over the last few days more than five and a half percent. This is since the end of february, after the Company Announced the march quarter, saying they are going to produce , deliver 25,000 vehicles, beating estimates. Last week there was news about a 5 stake being sought. These shares being propelled higher to a record high. We happen to the bloomberg and take a look at g btv 396 x, this is a longer term between these two lines. A big range of uncertainty between affairs, a wide range. We have the shares breaking right out of the top of this range to that record high. The question is whether the break of israel. Need confirmation considering volatility. Another point to be made, and took out forla relative to market cap. As testatrix higher we have shares of ford trending lower. Not just over this longer. But today we have lots of automakers trading lower, including ford, general motors, honda, cia chrysler. Automakers missed estimates. Truck sales missed. S well, coming in down 7. 2 we are seeing weakness here. And extends to oreilly autozones of the world. When we look at these stocks, we see Oreilly Automotive down 5 , autozone down 3 , effort after Cleveland Research cut ratings on both stocks sank him the doityourself trends are weakening. Brightness here for cars except for tesla, amazing, julia as he pointed out that it has overtaken ford. Julie its amazing giving the relative size of those two companies. Lets take imagery of the retail sector, number one ranked investor jason says, he is betting that the struggle among retailers is here to stay. In an interview with bloomberg earlier, they said they do not miss they did not mince words. Retail is a mess to say the least. Few, these00 foot retailers have had a declining top line for a number of years. This is not a cyclical issue. Good,onomy has been Consumer Sentiment is good, unemployment is coming down, oil prices are low. This is a secular issue, a forever trend. If you think about how things will look 10, 20 years from now, our parents will be dead, our kids we adults. To think more people will shop online or less . The Amazon Effect is here forever. Opportunities to get these trading in there distressed debt world around six times cash flow. Its a multiple of a stable to growing business, not a declining business. Their overvalued in other words . Many say they we are talking about the ones that lots of people should be familiar with . Macys, sears, the list goes on, along the larger ones . Most of these retailers are smaller. He listed the large ones, theres about 50 companies that could file for bankruptcy this year. 50 . American apparels are at that is filed twice, Companies Like rue21, claires. These are reasonably sized companies. Trade,ts to talk about it is hard to short these credits. Why . Cant shortterm loans. Bonds trading at . 50 can because prohibitive, because if you borrow the shot bonded to have to pay the coupon, you also have to pay the primer. Even if you could get comfortable with that risk reward, you cant borrow enough even for a firm that size billion dollars, to take a meaningful shortage over a small credit like rue21, it is a most impossible. The only way to short the sector is to do larger what you just described. We were short of marcus because they were false but markets. These smaller credits do not have defaults. Rue21. Ple market for Neiman Marcus has about 3 billion of term loan. Thats the reference security, defaulted lamarcus. You can shorter term loan by buying insurance. Aroundted that credit 115. Set 80 today. Trade about the mall thats the second derivative, the most interesting stuff element of the short thesis. Retailers a year ago have the same message. They said all of our stores are profiting well, this is my problem, its a merchandising problem. We get merchandise run. We relate to the ecommerce game. If you talk to them today theyre all saying i would describe it as a paradigm shift. Even jcpenney in the Fourth Quarter was saying, we are comfortable, and said in january they were shutting hundred 35 stores down. We think the shut more down. So the way to express that he was from the cbs market . If you think about what happens when every single retailers looking at their footprint simultaneously for the first time ever, if they had to pick which stores they will shut down and they are all looking at the same data, mall traffic data if you have them all here and 10 milestone the street a tear a , theyre going through an exercise now for the first time in the industry where they are talking about sales. Which of the small down, this store down in the small, how much of sales will we recapture and tear a mall . The crushes tear cmd malls. When you have a mall anchored my jcpenney, macys and steered the best sears, they all simultaneously shut down. What energy . Oil has been at 50 for several months, not much of the other either side. Than ity is different was years ago. There are two chapters to the story. The first leg was extreme price by forced selling. 17 of the highyield market was in energy, back up snoop dogg. Values got completely dislocated from reality. At all. Nt bet on oil these were multibilliondollar companies, trading hundred billion that situation is corrected. And now what you do . Trade today in my opinion, a lot of these credits through bankruptcy, rish archer, and came out as private companies. If you look at where public parallels pretty well to these equities, theres a huge gap. I will give you two examples. The province a discount to the public. Favorites should always traded discounts to publix, public, but it is extreme with commodities. The reason, the conspiracy theory, Equity Investors tend to be more optimistic. Credit guys just want to get they are a chromogenic bunch. We are always worried about how we lose the money. A lot of these Companies Come up up traded five or six times current cash flow. They equity markets are talking about recovery earnings. There is an extreme gap. Scarlet that was jason muttered, spoke with bloomberg. Was checked bloomberg first word news with mark crumpton. Mark subway bombing in st. Petersburg russia has killed at least 10 people and injured dozens more. The device filled with shrapnel detonated inside a train between two central hubs. Officials called the blessed and planning of a more powerful bomb that was later defused at a nearby station, an act of terrorism. Investigators are cautioning that other attacks cannot be ruled out. President trump had this reaction. Terrible thing. Happening all over the world, absolutely terrible. Russian Police Searching for two suspects they believe planted those two devices. Senate democrats appear to have enough votes to block the confirmation of Supreme Court nominee neil gorsuch. You are looking at a live picture of the senate committee. The vote for against is now up to 41. According to a new stash after Democratic Senators became the latest to confirm their opposition. Current goals require 60 votes to advance to a final vote. The gop controlled senate might change the rules to enable them to confirm a nominee with a simple majority of 51 votes. Anraltar has now become issue in the brexit talks. British foreign secretary Boris Johnson says only the territories restaurants and british citizen best citizens can change its status. Overinsist they get a veto any agreements involving gibraltar, look it up spains southern tip. Spain is wanted gibraltar back more seizing it to britain than three centuries ago. Global news 21st at a powered by more than 2600 journalists and analysts them are 120 countries. I mark crumpton, this is bloomberg. Scarlet . Scarlet coming up, President Trump prepares to meet the chinese president at the end of the week after months of rhetoric. President trump play hardball . This is bloomberg. Scarlet this is bloomberg markets. Operations are underway for the chinese president to visit florida later this week, meeting with President Trump for a summit at maralago on thursday. Its a critical encounter as the two leaders seek Common Ground on a number of issues. For more to expect, lets check washingtons,ief kevin cirilli. Will not startey off in washington then make their way to florida. Should we read into this in any way . Kevin yes. Heres why. Toughent trump has a calls, notably on the campaign trail but also in recent days against chinese and the chinese government, in particular over the weekend. In an interview with the financial trump times, trump saying he would take on china with how they are handling north and south koreas relationships, perhaps the u. S. Will have to do it themselves. The you think back to transition trails, it was President Trump also having tough talks on how they are dealing with taiwan. This could be a particularly tense meeting to say the least. That is Light Sources im speaking with inside a President Trumps political orbit so midair speculating that that is why they are opting to go to maralago instead of the white house. Lessons can we take any from the world leader meetings we have seen with trump thus far , comparing his premeeting rhetoric with them how the meetings went . There has been no word as to whether there will be an actual press conference for the ability for journalists to ask questions. The optics of this will be quite different, in the sense there will not be an official state thet, any ruling out of guards on pebble beach of the white house. No welcoming reception. That said, i am certain that there will be a fence down at maralago for these two World Leaders who have had a tense relationship and talks to say the least. This will all come down to trade. President trump said as much for that interview over the weekend. Donald trump despite his tweets and interviews has pushed back on naming china a currency manipulator. That has run for feathers significantly. Getting to other ruffled feathers in washington, lets talk about neil gorsuch. Sounds like democrats have the votes to block his confirmation. What are the next steps . Kevin a to chris coons, the latest chris coons was the latest to block judge gorsuchs nomination. I was told the other day some senators would not be able to get on board they remember what happened on republicans in the Previous Congress blocked former president Barack Obamas nominee to the Supreme Court. Senator kunz is a democrat from delaware. Nowblicans will likely invoke the socalled political, Nuclear Option, to allow them to bypass procedural hurdles in the senate and fall simply toward a majority vote. That will streamline the executive branch is political appointees in the senate. However, it could have implications. Critics of this say that this is something that would bypass a check and balance. Scarlet thank you. And our coverage of the trump meeting, we will focus as they are on trade, currency, and geopolitics. We will get you inside only you can get on bloomberg. We will tell you next. This is bloomberg. Julie this is bloomberg markets. Scarlet turning to south africa, the currency tumbling from being warned that the deterioration of their Economic Performance could lead to further downgrades. South african bond yields on the moved, surge before s p discussing the importance of the nations Credit Rating and its political turmoil. The South African president spoke. The rating agents are important. They determine the premiums that we pay. Our government is in debt. That is by its is important. For investors it could be a catalyst to sell. I want to ask you whether it is a cap was for the current president zimmer who stepped down from office. Is the big deal to the current government, or it is something he can sidestep and continue . We do not have a president ial the president is elected by members of parliament. Where the motion of confidence stables, as to how members of parliament there is a potential for a noconfidence folk. The aim might block of four times as well as a call from mr. Zuma. As the tide turned against him . Ships version seismic shifts not seismic shifts but they seem to indicate that anything is possible. When the vote of noconfidence you think he should step down . Yes. Why . Court judge him to have breached an oath of office. I believe that makes it difficult to command the kind of respect which would be able to various sections of the South African population. If mr. Zuma stepped down, what would come after him and with the should they be encouraged by whats in line . Yes. Investors should be encouraged. , members of parliament willamette next elect the next president. Important to elect someone who is honest and has integrity and is not encourage book. Are there specific individuals who could step in and prepare, who have the expertise to run this economy more effectively than mr. Zuma has done . Comes current president from the private sector, he is an effective president. In the earlier days he was a general of the biggest trade union in south africa, the International Union of mine workers. Hes also been the secretarygeneral of the government department. He brings with him good experience. Those former president of south africa speaking of bloomberg daybreak americas today. Time now for the Bloomberg Business flash, a look at the biggest business stories in the news. A range of Strategic Options after receiving a trust about a potential takeover. Today one option is a potential sale. Bread isry chain panera said to be working with advisers, shares already trading at a record, they took a leg up. We will have more on this story later. Hedge fund manager bill ackman used this weekends annual tennis tournament to poke fun of his billion loss from his pharmaceuticals company. Among fellow investors, he joked that his career fell apart after he quote, made the mistake of losing the tournament. Added nervous laughter from the crowd he added, this year we will come back, he was right on the court. The u. S. Team won this years cup 92. Thats your business flash update. I should note, the team one, but 61, 61ctually lost that includedduo included Christopher Dark cardell. He played hard. Have read about him throughout this whole situation, whether you are talking about that are passed investments, he and ahly competitive fighter. Whether it is tennis or cycling or investing. Still ahead we have the commodities close, resumption of production in one of the big one of the big reasons crude is getting hit. From new york this is bloomberg. Frombloomberg world headquarters, in midtown manhattan, this is carlet bloomberg markets. Lets take a look at some of the movers. Wti is lower. Libyas biggest oilfield has reopened after a disruption last week. Is production from libya offsetting cuts from opec. You have the opec attorney general saying that he is cautiously optimistic that the market is rebalancing. All right, lets look at gold now. Futures bouncing around, but did move higher towards the end of the trading session as the day wore on. Uncertainty over the trump agenda and political discord overseas think venezuela and ecuador fueling that demand. Take a look at this, what it shows his net long positions in gold. As you can see, it has been rising over the past week to the second highest level of the year. People finding reason to seek safety in that safe haven. Clean moving on to energy, scarlet, tesla shares shot up over 5 today after the smallest u. S. Carmaker reported deliveries that exceeded analysts estimates. Analysts estimates. Earlier today, vonnie quinn asked the detroit zero chief, david welch, how it was possible. David tesla said that sales than25,000, a few hot more a few more than they said, but any good news from tesla tends to send the shareholders into rapture. They see this as confirming that the brand is still strong and as they wait for the cheaper model three to come out, if they can boost sales for the older models, thats good for tesla. Detroit automators automakers are showing month of march sales that are softer and analysts would have thought. Then analysts would have thought. We are at peak auto, we are not going to see a lot of growth. There are more incentives out there to keep the sales growing, inventories rising. Its not a bad market, but it is sort of headed south. Vonnie right. I wanted to speak more about the detroit automakers. But one more question on tesla, first. Does the fact that it exceeded forecast deliveries mean that it can continue to do that . Or was this one outstanding quarter . David they have generally been growing sales pretty well at tesla. There is a lot of enthusiasm for the brand. Remember, its different from the mass market of automobiles that everyone else is selling into. These are expensive luxury cars. They have been doing quite well. Taking some buyers away from the likes of porsche, bmw. They continue to do that. Its not huge growth, but its stable and sustainable. Vonnie lets talk about the detroit automakers. Wow, did we get numbers that we were not disappointed anticipating. Dig into the numbers, retail sales are up more than overall sales. Players like ford pulled way back on selling fleet vehicles to rental car agencies and that sort of thing, so that explains it in part, but the reason that stocks are still down even the retail is up is that you had Healthy Incentive spending in the month. By healthy, i mean more. That has been consistent over the past few months, with inventories creeping up. The general consensus is that you will see automakers pulling back on production even more. The good news is they are still selling suvs and pickup trucks, which make a lot of money. You will see it