and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. sonali: welcome to "bloomberg markets." i'm sonali basak. we had some solid u.s. retail sales that spurred bets the fed is in no rush to cut interest rates. we will check on those markets because you are now watching the s&p 500 waiver. a little bit of red. we are essentially flat, but the nasdaq 100 now down 0.2%. we were in the green just about 15 minutes ago, so certainly a change in the markets.

the two year yield now down to 4.93 on the day. a lot of volatility in that bond market. about a 4.9 nine handle earlier on the day. the 10 year now at 4.63. we got as high as 4.6 six. really testing the high of the year. again, that really interesting selloff in the bond market data today. may 8 movers on the equity side. talking about apple shipping 50.1 million phones in the first three months of the year. that is according to idc. falling short of estimates and reflecting flagging sales in china, despite a broader smartphone industry rebound. tesla slashing headcount by more than 10% as the carmaker struggles with slowing demand. on top of that, two senior vice presidents have left the company. we will discuss this with "bloomberg technology" ed

ludlow. what does this mean? ed: i am hearing there is a focus on cost reduction. it was the same analysis in 2022. the difference is tesla's scale is greater, so 10% of workforce is around 14,000 people, based on their headcount, they finish at 140,000. that is the macro level. the micro level is the departure of some very important decorative's -- executives. drew baglino has been at tesla 14 years. what i hear from sources is he resigned and he made the difficult choice to leave tesla behind. sonali: how do you think through what this means for tesla going forward? ed: elon has always procedurally asked teams to focus on shaving cents off every component that goes into a vehicle.

we know, according to elon musk's commentary, that tesla is between two waves of growth, the first wave built on model 3, then y, has been and gone. the next wave will be billed on either a lower price point model or robotaxis. remember the volatility in the market. that is the focus. in the memo elon musk sent to staff globally last night, which bloomberg reviewed, that is what he said -- focus on cost production with an eye on growth. with all big roles, there are duplicitous roles. according to the memo, musk would've wanted to cut that out. sonali: ed ludlow, thank you. we will go back to the treasury market, where there is a selloff underway. most u.s. treasury yield down to new highs after that hot retail sales data hurt investor

confidence that the fed could start cutting interest rates this year. remember, another wave of treasury issuance him with roughly $140 billion worth of short-term bills flooding the market today alone. this has all made bond traders wary, with one third of outstanding u.s. debt set to mature this year. bloomberg has been covering these moves. let's talk about the confluence of what is going on. on the one hand, seeing drastic moves in short-term yields today, how do you take a note from what bond traders are telling you? liz: right now, there is nothing to stop this. we had some concern of escalation in the middle east. we saw rates go down friday. luckily, people feel that is contained, so they are trading.

retail sales are strong. it is like show me the data that makes me think i should raise and more aggressive easing, and it is not there. the economy is running strong. three months in a row, strong cpi. we are pricing less than two cuts now for the fed -- . all that that supply has been bought fairly well with the bills. the longer data that did not go so well. there was a lot of demand. sonali: you think about congress considering a packages as well and the existing financing needs

of the united states. how do you think about this issuance and at what point you do see cracks in it? liz: we have been watching this for a long time. in a few weeks, same time as the fed meeting, we have treasury's quarter lever funding. we have a lot of cross currents going on, depending how the election goes, if there is more fiscal spending then, if there may be a need for more issuance. we also have a positive for the treasury, if the fed tapers the amount of qt, because they are rolling off some of their treasuries every month. they may do less than that, which is a positive for the treasury. if -- i've had investors say a 10 year at 4.5 seems fair, but supply issues, and you see more people pushing back, then you do not know where it is going. sonali: speaking outcome a lot

of this issuance has come at the short end. one source told me it is pretty much like the treasury just issuing cash. we see one 20 year auction later this week. how are people thinking about the possibility of more duration? liz: and the twenty-year has had a lot of problems. it has done better. since they relaunched it a few years ago, it has not been an investor favorite. i would speculate, you never know -- it could go well. but that tens and 30's are not going to well. and rates going up again this week, you wonder if people want to stand in front of this and buy 20. sonali: how much control does the fed have in the long end, given everything you are saying? liz: not a lot. their biggest control on the long end, and it is more forceful on the positive side, when they are doing qe, buying a lot of bonds. studies show that is more impactful. the qt is a tightening of sorts,

but that is a little less impactful. the fed does not have a direct hand on the long end, so they control their short rate, they do their balance sheet stuff, but the long end is kind of worried -- rising fiscal deficits, higher term premiums needed. not a lot of people are telling me i'm looking for the 10 year yield to go to 3% or something. sonali: pretty crazy. it is like the ipo market doing better than the u.s. treasury market. we will talk earnings next get a lot of big banks benefiting from the higher interest rate environment, all that volatility. allman sachs gaining confidence after beating estimates -- goldman sachs gaining confidence after beating estimates. it is our stock of the hour, next. this is bloomberg. ♪

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sonali: president biden meeting with the prime minister of iraq at the white house. this is taping being played back. biden says the u.s. is committed to israel's security and for cease fire. time now for the stock of the hour. talking goldman sachs. the back to basics approach is paying off. the bank reported a 28% jump in interest income. traders are cashing in on a resurgence on dealmaking activity. even bigger is the director of financial is is assumes research at argus research, stephen biggar. the market is reacting

positively today, but is this something you aspect to be a repeat performance? stephen: hi, sonali. yeah, we do. we have been waiting a long time for this type of resurgence in the broad capital market, revenue line items. an equity capital formation in the first quarter was 57 billion, up over 80% order over quarter and over 100% year-over-year, so that strong ipo issuance and secondary issuance. we think that is sustainable. there tends to be a flywheel effect with these, more companies coming to market that do well, more want to come to the market and go public from private. that issuance was near a record in the first quarter as well. of course, that was held some of the narrower that it spreads we have out there, and then announced m&a activity was at a

strong pace, in the high teens in the first quarter, relative to a year ago, and that is revenue they have not banked yet and will not until those deals close, but that bodes well for better revenue in the third and fourth quarters this year. sonali: when i look at your ratings, you have a hold on goldman and a buy on morgan stanley. when you look at the results this quarter, do you prefer one or the other at this point? stephen: the current rating on goldman is a hold. they are much more of a pure play in the investment bank and capital markets generally, so they will do well when we have this type of resurgence. morgan stanley is little bit more all weather. this certainly bodes well for them when they report tomorrow, and the massive wealth management franchise morgan stanley has is a little bit more all weather and still provides fantastic returns, 25% plus r.o.e.'s, and should do well

e ti-ye rebound in capital formation, and that does bode well for goldman. sonali: how do you think through all the regionals at this point? mmt bank, more than 6% gain, doing better than goldman on the day. can we glean anything about mnc about -- about m&t? stephen: as a pure play regional bank, that is good news for the rest of the companies that report later this week. the news we got last week on some of the big thanks, particularly on the lending businesses, was not that stellar. net interest margins kind of

languishing. they did beat modestly but not -- but they did not go higher on the year. i spank analysts, you kind of always year for higher rates, that is because banks are inherently asset sensitive. that is just a term for the fact that their assets reprice faster than their liabilities, and they thus and if it from higher interest rates. at this point, they can be diminishing, and it is really starting to result in anemic long growth. you still have some continued higher deposit costs, and that will remain a headwind, so i think lower rates, or at least flat rates from here, will be much better than higher rates for the regional banks at large. it also helps lower rates with their securities portfolios, which have been under warner, and it also helps on the margin.

folks pay their bills better if rates are not as high or if they can refinance to a lower rate, so that would help credit quality. we are rooting for lower banks right now. sonali: how do you think through goldman's assets and wealth strength year? they beat at core businesses. they did pretty well on the asset manager as well. looking like a $3 trillion asset managers soon. could that help goldman command that morgan stanley premium? stephen: i think they have been trying to move in that direction. certainly broader diversification come away from the capital market sensitive business lines. they try to move into the consumer credit side and that was little ill-fated, so that return to focus to wealth management and will -- working

more to get the recurring revenues -- you do not have the associated credit risk on that side. it is still a cutthroat business. there is a lot of competition to attract all those assets, but they do have what it takes, i think, and if the focus is right, they can start to increase the percentage of revenues that come from wealth and get a little bit less completely susceptible to those capital market lines. sonali: argus research director stephen biggar. thank you. . coming up, former president trump inside a manhattan courthouse right now. his first criminal trial is set to get underway. we will go there live next. this is bloomberg. ♪

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markets." i'm sonali basak. donald trump comes the first former u.s. president to face a criminal trial. the republican presidential candidate is accused of falsifying business documents to cover up hush money payments to adult film star stormy daniels. joining us now is bloomberg's kailey leinz, live from the courthouse. how do you think through today alone, let alone the next couple weeks, is going to play out? kailey: today is really the beginning of what could be a weeks' long process. the judge already has had to move on a number of motions brought by the defense team, and attempt to recusal, which was denied, and also a question of what could be brought into evidence. there was also a question raised by the prosecution as to whether or not donald trump should be held in contempt of the court for violating a gag order the judge has put in place, barring him from talking about potential witnesses. despite that gag order, we have

seen donald trump posting on truth social, disparaging the likes of michael cohen, his former fixer. they are in a lunch break right now. we could get a ruling on that contempt question, and that point is when they may begin the process of trying to find a jury. they will find 12 jurors and 6 alternates who could be unbiased . they will be asked questions like do they have a truth social account? have they attended trump rallies in the past? once that jury selection process is complete is when the actual arguments and testimony will begin. in total, this process could take 6 to 8 weeks. sonali: how do you think through the reaction? to this point, jury selection alone could take a week or more. we have the former president at the courthouse himself.

how do you see him using this trial as part of the campaign? kailey: on one sense, we have seen a reputed pattern, which is he uses these courtroom appearances to have to factor campaign stops, use the opportunity not just to talk to the press as he is coming in and out of the courtroom, but also to address his base of supporters and others who may consider voting for him. that said, he has to be here physically every day of the trial for the next 6 to a number of weeks, and that will keep them off the campaign trail in other states are not new york. it will also take a great deal of resources. it could factor in editorially -- electorally. bloomberg has done polling -- more than half of voters said they would not vote or trump if he is convicted of a crime. potentially what we are dealing with is 37 felony counts of falsifying business records. it could carry cousin time, if

convicted. sonali: bloomberg's kailey leinz. thank you for your continuing coverage. trump is also the focus of today's wall street beat. his media technology group is plunging after the company registered its shares for potential resale. to know what is going on, here's barry. explain the stock reaction. it has already been four weeks. >> the big news is this is a step towards insiders like donald trump and insiders to sell shares and the warrants that could be swapped for shares. the big thing you mentioned is this is a -- this is trading north of $66 and in the aftermath of its debut on the nasdaq, now closer to 26.75, so just a number of updates. losing momentum. we have watched volumes dwindling. we had seen options that had been a big draw not as active,

so a lot of underlying factors actually mattering, finally. sonali: talk about the payday. even though billions have been wiped out in market value of this company, you see a significant payday for donald trump himself. bailey: as long as he is able to eventually sell the shares. right now, worth on paper, 2.3 billion dollars. it was north of $5 billion. as long as the stock trades above $17.50, donald trump and insiders are in line to get another 40 million shares, just north of $1 billion. a lot of paper money and paper value for the former president. the big thing is he is locked up from selling shares currently until december. depending where the shares move over that timeframe is where it matters. sonali: what is the risk? right now, you have it around $27, $10 away from the price you are talking about. what is the direction of travel? what is the floor? bailey: there is no real floor

for donald trump, it is just a question of how much he could sell it for. almost 2% of the company, as it stands for those additional earn out shares. whether it is trading at $2 or $5, if you can liquidate shares and the stake in september, that is north of a couple million -- a couple hundred million dollars, which is a positive, but a far cry from the billion dollars it was trading at a couple weeks ago. sonali: bloomberg's bailey lipschultz, thank you for keeping an eye on that story throughout these declines. watching a volatile market, both in equities and on markets. the s&p 500 now extending declines even further, almost 0.2% lower. also watching the nasdaq 100 foot firmly into the red at about 0.4% lower on the day. watching the bond market hold steady year through the -- steadier through the hour.

the 10 year at 4.63. i'm sonali basak. that does it for "bloomberg markets" today. this is bloomberg. ♪

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