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Speaker 1: Good morning.

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Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 2: stories we're following today.

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Speaker 1: The rise in Nasdaq futures comes after yesterday's two percent

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Speaker 1: sell off, and it could be another volatile session as

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Speaker 1: we close out the week. Let's get the latest with

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Speaker 1: Bloomberg's John Tucker.

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Speaker 3: John Nathan, as one market launcher puts it, there may

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Speaker 3: be fireworks. The Nasdaq one hundred is rebalancing. This is

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Speaker 3: a special index rebalance, and we're out of cycle. It's

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Speaker 3: intended to reduce the dominance of tech megacaps, so it's

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Speaker 3: going to boost the presence of smaller members in the

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Speaker 3: index now before it happens on Monday, Investors today, we'll

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Speaker 3: bring their portfolios in line with the benchmark. If that's

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Speaker 3: not all about two point four trillion dollars of options

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Speaker 3: contracts tied to stock and indexes they're scheduled to mature.

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Speaker 3: This is a recipe for big trading volume and maybe

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Speaker 3: violent price wings you New York. I'm John Tucker, Bloomberg.

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Speaker 4: Day Break.

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Speaker 2: All right, John, thanks so well. Among the hardest hit

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Speaker 2: and yesterday's high tech selloff was Tesla. Mad stock dropped

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Speaker 2: almost ten percent and sliced twenty billion dollars off elon

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Speaker 2: Musk's fortune. We get this story from Bloomberg's Charlie Pellett.

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Speaker 5: The drop in net worth to two hundred thirty four

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Speaker 5: point four billion dollars is the seventh largest decline ever

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Speaker 5: among those in the Bloomberg Billionaires Index, and further narrows

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Speaker 5: the wealth gap between Musk and Bernard Arnau, the world's

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Speaker 5: two richest people. Musk's fortune still exceeds that of Urne,

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Speaker 5: chairman of luxury goods maker LVMH, by about thirty three

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Speaker 5: billion dollars. Musk derives his wealth primarily from his stake

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Speaker 5: in the ev manufacturer, as well as his holdings in

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Speaker 5: Space Exploration Technologies and Twitter in New York. Charlie Pellett

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Speaker 5: Bloomberg Daybreak.

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Speaker 1: Okay, Charlie, thank you. Microsoft dropped more than two percent

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Speaker 1: in yesterday's sell off, but the stock is up a

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Speaker 1: half percent in early trading. There are new developments involving

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Speaker 1: its planned sixty nine billion dollar takeover of Activision Blizzard,

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Speaker 1: and we get that story from blue Bergs Jeff Bellinger.

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Speaker 6: The Federal Trade Commission has paused its inhouse trial against

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Speaker 6: the sixty nine billion dollar deal, and that opens the

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Speaker 6: door to settlement talks with the administrative case withdrawn, Microsoft

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Speaker 6: and Activision can try to persuade FTC Commissioners to accept

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Speaker 6: a settlement or even drop their opposition altogether. The commission

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Speaker 6: is appealing a federal court ruling that favored the deal,

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Speaker 6: but the appeals court declined to block the merger while

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Speaker 6: the appeal takes place. Jeff Bellinger, Bloomberg Day Break, All.

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Speaker 2: Right, Jeff, thanks. Meanwhile, Microsoft and other leading AI companies

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Speaker 2: are set to publicly commit to a pledge to responsibly

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Speaker 2: develop and deploy the technology. It's said to happen at

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Speaker 2: the White House today, and we get the details from

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Speaker 2: Amy Morris in our Bloomberg ninety nine one newsroom in Washington.

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Speaker 7: The White House had warned Microsoft, Google and Open Ai

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Speaker 7: that they must ensure the technology doesn't lead to harm.

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Speaker 7: But these commitments are voluntary. There's really only so much

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Speaker 7: the White House can do to steer the most advanced

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Speaker 7: models away from potential misuse. The White House says the

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Speaker 7: agreement will expire once Congress passes a bill, but lawmakers

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Speaker 7: have been holding information sessions for months and might never

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Speaker 7: find consensus on binding legislation, and that leaves the companies

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Speaker 7: for now to police themselves in Washington. I maymy Moore

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Speaker 7: as Bloomberg.

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Speaker 1: Daybreak, mckamie, thank you, staying at the White House. President

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Speaker 1: Biden's ordering the creation of a working group to tackle

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Speaker 1: the repeating debt ceiling congressional standoffs. Bloomberg zed Baxter has

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Speaker 1: the story.

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Speaker 8: The group will be composed of administration officials and will

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Speaker 8: not have any Republican members. The President says the continual

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Speaker 8: games of chicken are not healthy for anybody. He says

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Speaker 8: their task with finding constitutional based solutions. There is no

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Speaker 8: timeframe as of now, and as a matter of fact,

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Speaker 8: there isn't even a date set for the first session.

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Speaker 8: The President has been pushed by the liberal wing of

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Speaker 8: his party to get something like this done. In San Francisco.

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Speaker 8: I'm at Baxter Bloomberg.

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Speaker 2: Daybreak, All right, and thank you to Biden. Administration is

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Speaker 2: moving to raise the cost of drilling on public lands.

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Speaker 2: The new fees proposed by the Interior to Perment would

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Speaker 2: raise royalty rates for oil and gas companies by about

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Speaker 2: one point eight billion dollars from now into twenty thirty one.

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Speaker 2: Interior officials till the New York Times. It's part of

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Speaker 2: a broader shift to address climate change by expanding renewable

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Speaker 2: energy and making it more expensive to drill on public land.

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Speaker 1: Turning to the economy, now, Karen, there's a threat to

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Speaker 1: the fight against inflation that could be coming at the

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Speaker 1: picket line. About three hundred and forty thousand UPS workers

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Speaker 1: could walk off the job in the next ten days

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Speaker 1: as if their Teamsters union doesn't reach a new labor deal.

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Speaker 1: It could mean new supply chain disruptions. UPS ships about

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Speaker 1: nineteen million packages a day, and if competitors like FedEx

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Speaker 1: raise prices to limit those packages, one analyst tells Bloomberg,

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Speaker 1: it could raise inflation by two tenths of one percent.

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Speaker 9: Well.

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Speaker 2: In corporate news, Nathan Blackstone has become the first private

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Speaker 2: equity firm to manage one trillion dollars. It's also the

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Speaker 2: world's largest owner of commercial real estate. Blackstone president Jonathan

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Speaker 2: Gray sees deal volume picking up.

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Speaker 10: The deal market feels like it's unfreezing a bit. If

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Speaker 10: you look at our credit area, our direct lending, our

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Speaker 10: pipeline is up more than double than where was ninety

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Speaker 10: days ago. So I think as people feel better about

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Speaker 10: the overall picture a little more certainty. I think we'll

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Speaker 10: see deal volume pick up as we move forward.

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Speaker 2: Blackstone president Jonathan Gray maybe the comments in an interview

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Speaker 2: with Bloomberg shan Ali Basik. Here more of that conversation

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Speaker 2: in just a few minutes.

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Speaker 1: Time now to take a look at some of the

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Speaker 1: other stories making news in New York and around the

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Speaker 1: world with Bloomberg's Michael Barr.

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Speaker 4: Good morning, Michael, Good morning, Nathan. New York Mayor Eric

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Speaker 4: Adams has doubled down, saying the city has reached its

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Speaker 4: breaking point caring for migrants. Buses of asylum seekers have

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Speaker 4: been showing up across the city for almost a year now,

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Speaker 4: but now they're being turned away. This man says after

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Speaker 4: a four month journey from Venezuela to New York York City,

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Speaker 4: the sheltered doors were slam closed on them.

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Speaker 2: So I'm not going to be Lookaman and Palominama.

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Speaker 1: They're telling us to go find somewhere to go. Where

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Speaker 1: are we going to go with no money?

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Speaker 4: He says, part of the latest group of asylum seekers

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Speaker 4: arriving to the Roosevelt Hotel, A city designated a rival

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Speaker 4: center for asylum seekers, has been shut for the doors

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Speaker 4: of new asylum seekers. If Donald Trump returns to the

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Speaker 4: White House in twenty twenty five, the former president says

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Speaker 4: he'll bar babies born in the US from automatically claiming citizenship,

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Speaker 4: ban transgender people from the military, hold elections for school principles,

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Speaker 4: and swiftly in the war in Ukraine. Trump campaigning the challenge,

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Speaker 4: President Biden also says his plans include ordering the Justice

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Speaker 4: Department to criminally investigate Biden. Republican Senator Chuck Grassley reliefed

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Speaker 4: an FBI document the GOP says his evidence of bribes

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Speaker 4: pade by Ukrainian businessmen to President Joe Biden and his

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Speaker 4: son Hunter. Grassley claims the document is at the heart

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Speaker 4: of allegations that the Bidens took action to aid the

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Speaker 4: energy company Barisma Holdings, on whose board Hunter Biden served.

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Speaker 4: The White House reiterated their criticism of Alabama Republican Senator

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Speaker 4: Tobby Tulverville holding up military promotions. More than two hundred

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Speaker 4: and fifty nominations are currently being blocked by Tuberville, who

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Speaker 4: says he's protesting the Pentagon policy that covers service members'

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Speaker 4: travel costs if they are seeking abortions in states where

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Speaker 4: it is currently restricted. White House Deputy Press Secretary Olivia.

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Speaker 9: Dalton, You've seen the consequences already to our military without

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Speaker 9: a marine commandant for the first time in one hundred years.

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Speaker 9: The ripple effects one hundreds of military families across the

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Speaker 9: system already.

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Speaker 4: In her campaign for the White House, former United Nations

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Speaker 4: Ambassador and governor Nikki Hanley rallied voters in her home

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Speaker 4: state of South Carolina, adding her voice to the red

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Speaker 4: hot debate over military spending policies.

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Speaker 2: We will build a strong military.

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Speaker 1: We will modernize our military.

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Speaker 4: It won't just be land, air, and sea.

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Speaker 2: It'll be land, air, sea, cyber, artificial intelligence, in space.

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Speaker 4: Haley spoke in Greenville. Global needs twenty four hours a

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Speaker 4: day powered by more than twenty seven hundred journalist and

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Speaker 4: analyst over one hundred and twenty countries. Michael Barr, this

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Speaker 4: is Bloomberg.

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Speaker 1: Ninh Thanks Michael. Time now for the Bloomberg Sports Update

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Speaker 1: with John stash Hour.

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Speaker 11: Thanks Nathan. Obviously, there's a brutal road trip for the

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Speaker 11: Yankees coming back from the All Star break, going one

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Speaker 11: and five. The good news they're back home and playing

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Speaker 11: Kansas City. Who's twenty eight and seventy and the Yanks.

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Speaker 11: This weekend will be rooting for the Mets, who play

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Speaker 11: in Boston. Yanks can't think about trying to win a

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Speaker 11: wildcard spot until they at least get back ahead of

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Speaker 11: the Red Sox. They are a game behind first place

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Speaker 11: in the Al East, now belonging to the Orioles. They

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Speaker 11: won four to three, starting a four game series at

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Speaker 11: slumping Tampa Bay. The Rays began the season thirteen and

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Speaker 11: oh they were twenty and three, but they're three and

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Speaker 11: twelve in July and now in can place behind Baltimore

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Speaker 11: the Mets. Before heading to Boston, Loston City field of

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Speaker 11: the White Sox six to two. Jose Kintana made his

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Speaker 11: Mets debut, took the loss of Pee Alonzo error led

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Speaker 11: to a four to one six toning for Chicago. They

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Speaker 11: started the second round of the Open Championship at Royal

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Speaker 11: Liverpool with an unlikely three way lead the brick. Tommy

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Speaker 11: Fleetwood has been a top five finisher in six majors,

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Speaker 11: He's never won one, joined by Emiliano Grillo of Argentina

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Speaker 11: and a six foot eight inch amateur, Crystal Lambreck. Already

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Speaker 11: today the American Brian Harmon birdying three of the first

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Speaker 11: four holes, and he now has the lead. Opening day

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Speaker 11: of Jets training camp, they start with high hoax due

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Speaker 11: to the new QB.

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Speaker 12: Aaron Rodgers, if you want to be a part of

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Speaker 12: a place that has high expectations and there's a lot

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Speaker 12: of positivity around here, which I think is a good thing.

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Speaker 12: But you know, we had a temper expectations early on

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Speaker 12: in camp and focus on the little things to get there.

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Speaker 12: It's a long season's and journey. There's going to be

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Speaker 12: ups and downs. There's going to be peaks and valley.

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Speaker 11: Citing his experience and intellect, Jets coat Rob Salaz said

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Speaker 11: yes that having Rogers is like having another assistant coach.

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Speaker 11: John stash Award Bloomberg Sports.

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Speaker 13: From coast to coast, from New York to San Francisco,

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Speaker 13: Boston to Washington, DC, nationwide on SYRIASXAM, the Bloomberg Business

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Speaker 13: Appen Bloomberg dot Com. This is Bloomberg Daybreak. Good morning.

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Speaker 1: I'm Nathan Hager. Alternative assets are coming of age. That's

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Speaker 1: what we're hearing from the President and Chief operating Officer

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Speaker 1: of Blackstone Group, Jonathan Gray. He sat down with our

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Speaker 1: Chinelle Basset to discuss the firm reaching a trillion dollars

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Speaker 1: in assets under management. They also talked about the outlook

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Speaker 1: for deal making and the economy. Let's go to part

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Speaker 1: of that conversation.

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Speaker 10: Blackstone started by Pete Peterson and Steve Schwarzman in nineteen

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Speaker 10: eighty five with four hundred thousand dollars and a dream,

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Speaker 10: and today crossing a trillion dollars. That's a pretty remarkable achievement.

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Speaker 10: It's a real credit to our people. It's a credit

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Speaker 10: to the performance we've delivered to customers. Nothing matters more

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Speaker 10: than that. And it's also reflects the real spirit of

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Speaker 10: innovation of this firm. We're constantly looking for new ways

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Speaker 10: to serve our customers. What excites us is that investors

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Speaker 10: are increasingly seeing alternatives as a core portion of their portfolio.

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Speaker 10: Alternatives are really coming of age, and as results, we're

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Speaker 10: seeing insurance companies, individual investors, pension funds who've been added

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Speaker 10: for some time increase their allocations and that gives our

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Speaker 10: business a lot of runway as we look forward.

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Speaker 14: Are the financing markets becoming open enough for you to

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Speaker 14: do something big? At what time when we see Blackstone

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Speaker 14: doing multi billion dollar deals perhaps deals along with partners

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Speaker 14: again at that scale.

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Speaker 10: Well, we've done a few large deals this year. We

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Speaker 10: announced at the end of last year Emerson's climate technology

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Speaker 10: business for fourteen billion dollars. We privatize Seevent and online

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Speaker 10: event management business, a multi billion dollar transaction. We're looking

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Speaker 10: at a number of things of scale. Obviously, the financing

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Speaker 10: markets make it a little bit trickier, and you've got

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Speaker 10: to be creative and trying to pull transactions together. So

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Speaker 10: this takes some time. But the good news is we've

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Speaker 10: got two hundred billion dollars of dry powder, and that

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Speaker 10: dry powder allows us to move when opportunities arise. I

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Speaker 10: think we'll see more of those opportunities over the next year.

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Speaker 10: It's hard to put our finger on it exactly when

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Speaker 10: it will happen, but I just feel across our platform

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Speaker 10: there'll be some interesting things and scale is a real

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Speaker 10: advantage for us.

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Speaker 14: Let's talk about the macro environment for a second, John,

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Speaker 14: Is some of that uncertainty clearing, particularly as it comes

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Speaker 14: to inflation.

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Speaker 13: Yeah.

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Speaker 10: I think the good news on inflation is it's trending down.

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Speaker 10: The FED is really winning this war. They're not ready

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Speaker 10: to clear victory. But what we see in our portfolio companies.

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Speaker 10: Is input costs really coming down now to less than

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Speaker 10: two percent. We see wages which were running higher than

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Speaker 10: seven percent mid last year to growing it less than

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Speaker 10: five percent. Forward indicators and hiring and vacancies are also positive.

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Speaker 10: So the labor market is starting to soften. It's still

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Speaker 10: pretty strong, but I think that's going to be helpful

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Speaker 10: as the FED looks forward. Now, what do I think happens.

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Speaker 10: I think they're going to raise rates. It sounds like

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Speaker 10: one more time, and then they're going to hold them

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Speaker 10: here for a longer period of time to try to

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Speaker 10: slow the economy, and we expect they'll be successful in

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Speaker 10: doing that. We don't think this is eight oh nine

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Speaker 10: in terms of a slowdown, but you do have to

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Speaker 10: anticipate some slowing of economic activity, some increase in unemployment.

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Speaker 10: But we have at this point gone through an inflation shock,

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Speaker 10: We've gone through an interest rate shock, and now we've

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Speaker 10: got a bit of an economic slowdown. But we're getting

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Speaker 10: through this, and I think that's one of the reasons

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Speaker 10: why we see some enthusiasm in the market.

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Speaker 14: There are still a lot of concerns, and you see

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Speaker 14: it in the write downs Already for certain companies. When

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Speaker 14: it comes to commercial real estate, I know that your portfolio,

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Speaker 14: you've leaned out of office for a while. Now, how

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Speaker 14: do you feel about the direction of travel for the

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Speaker 14: property industry moving forward? What are the pitfall falls that

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Speaker 14: some investors might be falling into here?

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Speaker 10: Well, I think there are continue to be big challenges

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Speaker 10: in traditional office buildings in the US, particularly older buildings.

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Speaker 10: Vacancy levels are very high, rents are under pressure. But

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Speaker 10: where you invest matters. So if you are deployed today

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Speaker 10: in stronger areas like logistics and student housing data centers,

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Speaker 10: which we talked about, the fundamentals there are very strong

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Speaker 10: and geographically, obviously some cities are under significant pressure. Let's

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Speaker 10: use San Francisco as an example, and yet we see

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Speaker 10: a lot of strength in Texas and Florida, And so

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Speaker 10: where you invest that is key. I think our team

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Speaker 10: in real estate has done a terrific job. And then

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Speaker 10: looking forward, the positives are are coming down or at

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Speaker 10: least are no longer going up at the short end

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Speaker 10: like they were, and the long end seems to have stabilized,

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Speaker 10: and that is helpful for commercial real estate values. Also,

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Speaker 10: new supplies coming down, which is another positive. When you

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Speaker 10: think about commercial real estate. So both of those things

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Speaker 10: give us some confidence as we look over the intermediate term.

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