>> will to "bloomberg markets." welcome back to the good news is bad news trade. better than trades on u.s. jobs. that is keeping markets under pressure. let's look at what markets are doing is we are seeing markets broadly lower leading with yes 500 down 1% -- the s&p 500 down 1% on the day. the nasdaq also down. the semi conductor index falling much more meaningfully, 2.3% on the day.

a broader index issuing where those declines are coming from. about 1% down on the day. let's target mike -- let's take a look at macro markets. bonds also getting an interesting set of movements. week 10 year yield up to a 10 basis point move. about one basis point now. about five basis point move earlier. just under the 4.70 level. marcus tried to figure themselves out. new york crude back down below 85 on the day. about a 1.1% move higher would not give me long, that story has been a little higher and is complicated the question about what inflation looks like ahead. between higher rates and more regulation, there is a question if corporations can keep putting money to work as they have been. volume for first quarterly many announcement, 70% higher than the same period last year.

borrowing costs have been expected to drop interest rates. mark mcmaster is with me. it is interesting because you did see for a while borrowing costs below higher, really impacting a lot of markets. it shook off the spheres this year with intense borrowing. do you think that continues with expectations changing around rates? mark: people will continue to borrow. one thing we are seeing is a comeback of all stock transactions. in 2022, they were up 10%. today they are up over a third. if you look at the biggest deals this year, more than half our stock combinations. it is a way to achieve a combination without levering up. you can share this energy between shareholder basis and it is a more effective cost of borrowing. sonali: you look at a market like today and on one hand you feel volatility can be bad. lower stock prices could be

decent for deals. do you look at it that way? mark: i do over the long-term. the s&p is still at or near all-time highs. people's currency is any all-time commodity. sonali: one question has been antitrust. you've seen volumes, do you think the caps of deals we see this year have to be small to avoid that kind of scrutiny? mark: they have to be well-planned. the participants understand the rules for antitrust and a detector on your side and you have high-level confidence, you can get a deal done. i think yet i trust regime is stable and participants know they have to do a bunch of the work up front get a deal done. sonali: the question embedded in there was also about size. do you think by the end of 2024

will be defined by the megamerger or something else? mark: probably something else. there are an awful lot of good deals. big deals can still get done. they will face antitrust scrutiny but there have been a couple of cases that have given issuers and the transact or some confidence they can get things done. sonali: one thing you have them working on is the private capital industry on the financing side and private equity deals. if there's any case to be made, do you think private equity can start playing it better role? mark: private equity is in a jam today. there are a ton of portfolio companies that need to be monetized and a ton of firepower that has not been deployed. the private credit markets are working well but the traditional credit markets are just starting to open up. if we get a rate cut or two and the question is if they shifted,

a couple of rate cuts, we start to see the traditional financing markets competing with private credit and that will open up private equity logjam. sonali: that is fascinating because do you see that happening whether it is one rate cut or three rate cuts? mark: i think it happens after one rate cut or two. sonali: it is not just that they have dry powder, you have seen companies look to do spinoffs or exit certain businesses. does that continue? mark: i think certification will continue. it is a trend that has been going on. i think investors refer your place. -- pure place. you are seeing the kilometers continue to settle five. sonali: how much can it continue? he mentioned some names that are looking to it. do you think you will see nontraditional players enter the

market? mark: i think it will continue for a while. you can always become more focused, more of a pure play. when you think about the acquisition side, you want to grow in core competencies. i think it will continue for a while. sonali: the other thing you mentioned about all stock deals it -- is it implies public companies doing more deals. how have investors been rewarding those deals? do you find more often that they are more receptive to that? mark: i think investors are receptive to deals that make strategic sense for the press makes sense and the synergies are shared between buyer and seller. as long as it makes sense and you structure properly, investors perceive it well. in this environment, a stock deal has the advantage of not leveraging up the balance sheet. sonali: grade you think there is the most opportunity right now as we close out this year? mark: last year this year the

big sectors have been technology, health care, industrials. in addition to those, we are seeing an increase in consumer and in financial institutions. those sectors will be more active this year than last year. sonali: what do you think is driving that? mark: fundamentally it is growth. investors require growth and whether it is organic growth or inorganic, investors are going to reward it as long as it is consistent. sonali: is there something defensive about this space? you think about the consumer and they are finally having some troubles in the market. do you think companies are looking to bulk up? mark: i am not seeing that yet. i am not seeing the defensive nature so i will stay tuned. sonali: when you think of those deals, do you think they are mostly strategic or is that were private equity steps in? mark: it is going to be both. as the bigger companies simplify, private equity can

compete with other strategic's. they will still be a lot of strategic combinations. sonali: you have strategic buyers and finally it looks like after a rate cut, private equity. buyers coming into the market. when you are in process, how competitive our deals becoming? you find these option processes are finally coming back to the surface in meaningful ways? mark: private equity is still disappearing and it is hard to get through a commitment committee. particularly if their fundraising. private equity is focused more on add-ons to their existing portfolio company as a way to bring the multiples down and are more hesitant to do it on a platform acquisition. theocritus our competitive. people are playing --. . are paying competitive prices it not like 2021. sonali: how much is activism playing a role here and pushing these transitions to the surface?

mark: activism is as busy as it has been and m&a is a theme in half of the campaigns. that is not always pro m&a. activism is one of the drivers of m&a as we look forward. sonali: thank you so much for your time. that is mark ms. esther -- mark mcmaster. global sports company endeavor has announced have entered into an agreement to be acquired by silverlake by 27.50 per share. endeavor physically investor in -- tko is not party to the transaction and will remain a public entity and they expect to close by the first quarter of 2025. endeavor stock has been halted. we will talk about the miss on deliveries in the first quarter putting blame on early production ramp-up's of its model three. it was r-star of the hour.

-- it was our stock of the hour. this is bloomberg. ♪

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sonali: this is "bloomberg markets." it is time for the start of the hour. because the reported its first seles drop since the early days of the pandemic. the carmaker turned over 86,000 cars in the first quarter, much lower than the 449,000 estimated. we discussed this with ed ludlow who knows more about electric vehicles than anybody i know. when you look at the numbers that have come out, what you think of the direction of travel for tesla? ed: everyone is rethinking it. this was the biggest miss on

record. there are a lot who are redoing their models to work out what went wrong. we are focused on the deliveries myth -- deliveries missed. in a statement, tesla leaned on supply-side factors. the majority of pieces and reaction say this is a demand problem. we knew all about higher rates and the impact on the consumer and the u.s.. there is this bigger picture question, that the days of the model three and model y have been and gone and the next wave is not quite here. we are stuck in the middle. sonali: who doesn't matter for the most beyond tesla -- does it matter for the muscular tesla? ed: bev market story is that we still have great tv sales in most markets. it is decelerating growth.

the addressable markets are consumers who want to buy an ev growth of 40,000 u.s. dollars has been and gone. that is what is the fits within that story. higher rates is a big factor. if you look at the vehicles that did well, they were combustion cars that are cheap. ponded very well. tesla is finally gets identity. the next ev is at least a year away. tesla still did what it always does, incentivize consumers in the final days of the quarter. i leased a model y last week because the deals were incredible. tesla than raised prices. still a huge deliveries myth. why was that? the market for that price point is not there. sonali: when we think about tesla and a warning shots, the dribs and drabs of bad news, how does this fall into --? ed: it was a tough quarter for

tesla. diverse shipments from the component level and the finished goods level, brandenburg was paused because of a fire and introduced a fresh model. it had a production ramp. the reason is that you cannot escape macroeconomic headwinds. right now the price premium over a combustion engine and the difficulty in accessing policy support and incentives is really showing as competition is ramping up and that is no more true than in china. sonali: thank you for keeping an eye on it. coming up, agl announcing a new partnership with barclays to enter $1.7 trillion private credit world. we will speak to the agl ceo and coo up next. stick around for that composition. this is bloomberg. ♪

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sonali: i am sonali basak and it is time for the wall street beach where we are looking at a new partnership in private credit and that is barclays and agl credit management making a push into the $1.7 trillion space with a backing from the abu dhabi banking authority. running us is peter gleysteen. unlike many people in this business, you have been doing private credit for a long time. there are a lot of new entrants in this space. i'm curious what a deal with a large bank gives you. especially because we have seen for -- we have seen so few of these partnerships. peter: this is unique. barclays has a huge origination footprint. they have hundreds of bankers covering multiple clients.

first it is an incredible sourcing aperture. second, we are deeply integrated inside of barclays. we will be involved in opportunities their breaker service works on at inception. we will have awareness, involvement, and information about every opportunity weeks and months before financing is considered and decided upon. sonali: one of the big questions we have is that like -- unlike the other partner should is not committing balance sheet to this partnership. how do you see that evolving? why where the decisions made in these ways? peter: from barclays, they want to offer a menu of every possible financing option for their clients. banks have been encumbered to offer what we know as a private credit solution which is typically more leverage than a bank regulated loan would be.

we aren't limited by the structure that relations approach a private credit opportunity. we do is believe -- independently. barclays was their plans to have the best financing option and for the client to make the choice and for that to include the best they can offer with us working alongside them. sonali: there have been questions about private credit versus banking industry dynamic will keep playing out. how do you see that competition playing out? do what extent do you see private credit having an it vantage? peter: is continuing evolution. -- it is continuing evolution. leverage credit has been evolving, changing for decades, starting with leverage financed

ruling in the 1980's. this is harry, metairie. thanks on not a good long-term holders of capital, whether it is deposits capital, long-term as additional capital, or for the regulatory reasons, they are highly efficient from a return on equity standpoint. to be able to source capital at scale managed by fiduciaries like agl which in our case because of this integrated involvement, we can do a better job as a lender and asset manager by the full all of the information that a gigantic global bank can bring us. sonali: given how big the private credit markets are becoming, how much money is coming at his system and how much they are increasingly starting to not just to deals but more and more the american economy if not the european one. do you think regulators will play a bigger role in terms of

handicapping some parts of the system? peter: i don't think so. we are talking about most of this capital as long-term institutional capital. this capital is committed long-term. some people would use the term lock up. it is permitted long-term, there is no risk of it suddenly being withdrawn. it has the opposite. it is what in the ideal bank would be. most private credit have short baggage lies, two worth this -- lives, two or three years. this is talk to him five to 10 years. it is something regulated welcome. sonali: speaking of who is

investing in this asset class, one interesting thing is abu dhabi's investment authority. do you have had relationship with them. is that they suffered both fund putting dollars into the private credit world from the middle east? peter: no, it is everyone. paul institutions locally. get ranges from insurance companies, endowment foundations, and sovereign wealth funds. with the new cyclical, big -- maybe structural changes from the 10 year rate compression period we had, the rich component of returns is really high so is attracting capital in a way that has never done before. credit has always been a risk adjusted -- but with higher interest rates, it has changed the return dynamic favorably. sonali: given the private nature

of these markets, do you worry about the discrepancy? peter: that is an accounting question. accounting and understanding valuations is important but it is just a methodology. it is not necessarily reflect true fundamental value. credit products are not based on bud selig tomorrow at what price can you get--not based on let's sell it tomorrow and what price can you get? this is about long-term returns and having the money earned interest which can compound which is something that long-term investors benefit from. congratulations on the announcement deal. we have been a long time coming. that is peter gleysteen. a very real deal in a private credit world. breaking news, endeavor has resumed trading after not seeing agreed to be acquired in a $13

billion buyout by silverlake which already owns a controlling stake. tko will remain a public company and that is the unit that owns debbie wb -- wwe and ufc. it is up after being halted in the wake of the announcement. and ever and silverlake have had a long-standing relationship. a natural pairing. a lot of dealmaking over there at endeavor this year alone. we are going to take a check on markets. endeavors against the grain, markets broadly down. the s&p is down .9%. the nasdaq down more than 1.1%. a two year yield hanging out below 4.70. a lot of face speak today and a lot of economic state ahead. stick with us for the busy day in the markets. i am sonali basak and that does it for "bloomberg markets" today. this is bloomberg.

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