>> welcome to "bloomberg markets ." i'm sonali basak. the s&p 500 is headed for its best three-day rally of 2000 24. extending rebounds fooled by the expectations of the fed who cut interest rates earlier than expected this year. let's look at what the market is doing right now. the s&p 500, three-day tear -- .

the two-year yield is hanging out at 481 on the day. the two-year got below 480 last week, it has been hovering around these levels, barely changed on the day. 10-year yield, similarly a one basis point move. we will talk about it later in the show, but there is some interesting news this week on the issuance front when you look at the auctions from the treasury and the 10 year will be tested. data movers on the equity side, shares of micron higher after it was upgraded by baird to outperform. spirit airlines, let's talk about that, hitting a record intraday low after issuing a revenue outlook low analyst estimates. the company noting overcapacity in several key markets like latin america and florida. down 10% on the day. we want to note a huge move for the bitcoin world, marathon digital chairs climbing now on

news that the company is pursuing a strategic organization, overt 70%. the company reports after the bell on thursday. ellen hayes enjoins us to talk about all that is going on in the market. it's rolling higher on the heels of this idea of fed rate cuts potentially moving higher into the year. are you convinced the exuberance can last? >> thanks. no, i don't think it can last. if you look at long-term investment returns for the s&p 500 you are looking at high single digits, maybe low double digits. we are already up 10% this year and earnings are only going to grow 9%. it's really hard to see it growing up a lot from here, it means he would need earnings acceleration that i just don't see or you would need to see multiples expansion, which are already fairly high above the median. we might get rotation under the

surface, we might get choppiness. i'm not saying equities will go down, but it is hard to argue for more upside from here between now and the end of the year, even if the fed cuts a bit sooner. sonali: there's been a question of how much the market can broaden from here. do you have conviction in the starting to put some money outside of those bigger name tech stocks or even the energy sector? >> yes, there are places that you can put money. the first way is if you look by sector and where the earnings growth is set to accelerate later in the year. in the first quarter and even the second quarter, most of the growth year-over-year is concentrated in the tech sectors . consumer discretionary, communications, information technology. looking farther out in q3 and q4, you see earnings growth broadening out, becoming much more equal across the other

sectors in areas like health care, materials and industrials, they look more interesting. for that reason, because the earnings are getting broader, you can see stock performance getting broader. where i don't see that happening is in the small-cap world. small caps are still risky. sonali: is that because of the vulnerability to inflation or two interest rates? >> well, both. first of all, small-cap companies are more exposed to higher rates because they have higher debt levels, over 50% higher than large-cap debt levels are. on top of that, they have more floating-rate that. most of those companies locked in low rates at the bottom, the same as how many homeowners refinanced mortgages at the bottom, large companies did the same thing, turning out their debt at fixed rates. not only do small companies have more debt, on top of that they have more floating-rate debt.

finally, look at earnings. for the first quarter, those earnings for the u.s. large-cap sector was between 4% and 5% so far. not bad, accelerating throughout the year. for the small-cap companies reporting so far, it's -16%. even looking farther out into the rest of the year, large-cap earnings will be up 8% or 9% this year. part of that is because of the higher debt level and part of it is because they are just not as well positioned in this very ai centric economy. sonali: we are almost through with the earnings season. the bulk of it is behind us now. when you think about your favorite wagers, what do you like the most? >> we like lam research. particularly the ones that are exposed to ai.

everyone knows about nvidia, but other companies like lamb and asml are integral, they are chip makers to manufacturing. they sell to tsmc, they sell to everybody. note russian the semiconductor industry as a whole is exiting the downturn, bumping the bottom maybe, but really accelerating. semi cap equipment is a good place to be in addition to a company like nvidia in terms of having exposure to a lot of chip growth. separate from that, we like idiosyncratic names like apollo management, the private equity private company's private. you have covered that for a long time on this show. apollo is well positioned and the stock is trading at 12 to 13 times earnings and we think that looks really interesting here sonali: sonali:. we will be talking more about

those private markets later in the show. that was fl putnam chief market strategist ellen hayes and. thank you for going through these markets, public and private, for us. investors are concert -- cautiously upping bets or rate cuts this year as early as september. since they are in no hurry, they are flocking back to fixed income assets and guggenheim partners says that with the help of their friends at the fed, they put the income back in fixed income and as fixed income investors we are reaping the benefits of higher yield, a good thing. we will discuss this with michael mckee and ira jersey. mike, set up the stage here or -- of what we might see this week. we had this idea of data supporting lower rates moving forward. but it will be tested in the market this week with issuance coming at the 10 year and 30 year end of the curve. mike: first we had the interview

last friday with austan goolsbee and said it's not a question of hawks and doves, it's a question of the data dogs sniffing out what's going on. in terms of the data dogs, a lot of them are barking this week. we have a number of out speaking fed officials. they started with 10 or 15 minutes from richmond and from new york. then earlier this morning we had rafael bostic from atlanta put out a paper. tomorrow, neel kashkari. wednesday, a whole bunch of them. thursday and friday the same. but they are not -- you can see it in the graphic there, the ones in yellow are the ones to pay attention to, they are talking about monetary policy but there is not much data for them to sniff out. consumer credit wholesale, jobless, michigan sentiment, that's about it. the data are not going to drive what the fed is thinking about,

but may the auctions will. sonali: interestingly enough, you saw moves at many parts of the curve here. it was an interesting bid coming into the two-year, the 10 year. are those investors safe at these levels? or could they see some pain ahead? ira: i think that we will continue to rally in the near term. without any data to kind of push us against the rally, i would say stick with near-term momentum. yields are lower maybe trying to find a new range for the 10 year . those are important levels, 4.31%. i know it's very specific, but that was an important resistance level on the way up and it will be there on the way down. third-year auction, you mentioned that a number of times . there is always the risk that you get a buyers strike at these auctions. i do think that if we hold near

4.5%, the auctions will probably come and go. what will be more volatile is what mike was talking about with the fed speak, people parsing every single word of a lot of these speeches. the press q&a after some of them would often generate headlines and create a lot of market volatility. it will be interesting to see how dovish they are compared to jay powell last week. sonali: you gracefully laid it out, but what are you watching in particular? mike: how many of them are following his umbrella through the monetary policy world. he basically set it up that they are not going to raise rates. they may not lower rates unless they feel there is a lot more confidence in what's going on. two things. one, anyone disagree about raising rates? and are there people that think there is a better chance that

they would lower rates than not? that could whipsaw the markets. the thing we won't have his data to support that. they won't be able to say that this tells me x. we will have to wait until next week when we get cpi. sonali: ira, how do you think through what you called a potential buyers strike? there has been a lot of debate covering wall street like i have been, frustration the treasury didn't take advantage of locking in those rates. to your point, will the market take it? ira: given the deficits from a few years ago when they try to be regular and protectable, their mantra, some said they should have issued even more long-term debt. in retrospect you could say maybe. the thing that the government needs to do now is not necessarily worry about how much -- which instruments they are

issuing in terms of debt, but that the deficit and the debt are very high and last week have the refunding announcement and the treasury department said we are not going to raise how much, how much, how big the auction is right now because we are well-funded, but it still implies a one point $8 trillion deficit this fiscal year. that's a very high number. eventually that is going to ea supplies story where you have to continue to have reasonably high savings rates to absorb all of this government debt coming out. you know, eventually you could wind up seeing higher yield, modestly higher yields, anyway, because of the amount of debt that there is an that is what the buyers strike is, where comes in. we used to call them bond vigilantes saying that people will not buy them because there is too much debt out there. that is the kind of buyers strike i'm talking about. you see that, that will manifest

itself first at treasury auctions where you will have less and less -- bidders. you will see that get lower and lower, a sign that there is a buyers strike actually going on and investors don't like the levels. sonali: michael mckee, ira jersey, thank you so much for keeping an eye on all things bond market. reminder, wednesday we are speaking to matt mission, who will be talking about the auctions a little more and reading the tea leaves during a time when the treasury market, some could argue, have us been quite fragile. hamas tells mediators they agree to the cease-fire proposal proposed by qatar and egypt. no word yet from israel or the mediator. we will keep an eye on this for you at bloomberg and bring you more updates as they come. stick with us. more on that, next. this is bloomberg. ♪

sonali: this is "bloomberg markets." breaking news, hamas tells mediators they agree to the cease-fire proposal proposed by qatar and egypt. the proposal set forward. we do not yet know the reaction from israel as well. the news was obtained according to a statement on the military group telegram channel and reported by bloomberg. our editor bobby ghosh is here with me to talk through how to think about what happens next. how do you see the cease-fire playing out, the sides kind of ringing to the surface the agreement here. >> the fact that it has taken

place at all in the usual caveats apply, but if agreed to it's a huge deal. it has taken a long time with complex negotiations and it just overnight it seemed like it wouldn't happen when hamas fired off a series of rockets at israel, killing three soldiers. israel 24 hours ago was warning that they were going to go into rough up with a major military incursion. it looked like the cease-fire was dead in the water. if it has now come through, that is a massive deal. but the devil will be in all the details. how long is it for? how many hostages will be released? over what amount of time will they be released? how much international aid will be allowed in? what is the logistics of that. from the last time that this happened in december when there was a brief cease-fire, we know hamas released some hostages.

people on both sides, israel and hamas, more or less kept to their word into the schedule. but as soon as the cease-fire ended, the violence returned. so, this time the biden administration, the qatari's, everyone else will be hoping it is longer and that it will not simply be -- well, the day it ends, the violence resumes, but that it will be a platform for talking about a more permanent settlement. sonali: thank you for keeping an eye on that for us there, bobby, keeping an eye on all the moves happening in the middle east. we will keep you updated as we know more. turning back to the market moves, robinhood getting a notice saying the regulator may take action over crypto business . shares were negative but rebounded as traders assessed the news as overblown. the company will have a chance to respond with the chief legal

officer saying that the company firmly believes the assets listed on the platform are not securities. let's discuss with ben bain. this is a wells notice. it's not enforcement action yet. does it become enforcement action? given what we have seen throughout the crypto community, does enforcement action mean that they will see charges ahead? ben: so yeah, that's right, robinhood has a chance to make its case for why the sec should not sue the company. that said, when a company receives a wells notice, it's a good indication that the staff is going to recommend the agency move ahead. when we take a step back to look at the crypto industry overall, it's just the latest firm to be sued -- potentially sued, i should say, nothing has happened yet, but it is under the latest threat to be sued either regulator. keep in mind the sec has already sued coinbase, binance, some of

the biggest names in crypto. robinhood obviously is best known for being a stock trading platform. essentially how people think about it. zooming back a couple of years and you think about the meme stock trading episode, you know, robinhood was front and center in that. what we see here is interesting because the sec is essentially making a warning to a more traditional financial firm, but they have had a significant crypto business over the course of the years and a big message is they are not letting up on their years long crackdown. sonali: this is under the hide and administration sec. are some of these firm saying well if there was a change, in the administration, some of the problems might go away. ben: there's a lot of that in washington but one we get to crypto in the sec, you know, during the trump administration, the sec had a pretty similar view of the crypto industry. at that time it was initial coin

offerings coming out. the sec said that they were unregistered securities and they took a number of enforcement actions. those can take years, to. some of these investigations started years ago. i don't know that just because there is a new president, if that were to transpire that we would see a dramatic shift. however, there are some notable differences. gary gensler's s.e.c. was emphatic about how they viewed ether, the second-biggest cryptocurrency. we will see what happens. it is just one of the things that we will see play out over the next few months for sure. sonali: thank you for keeping an eye on all things financial regulation. coming -- next, pnc and twc teaming up for a middle-market private reddit platform. the hottest new thing on wall street and the details are coming up next. stick with us. this is bloomberg. ♪

sonali: this is this is bloomberg. ♪ -- this is "bloomberg markets." time for the wall street beat in today we look at the partnership between tcw and pnc financial as they look to build out a private credit platform. joining us with more is john sage, one of our key private credit reporters here at bloomberg. you have been very busy on your beat lately. we have seen a lot of these deals popping up recently. how does this one compared to others you have seen? john: what the banks, it similar, because it they need to hang onto fees streams. these smaller banks collapsing, saying that you cannot make as many loans or hold onto as many loans as possible, and instead of saying send the business away they say let's perform the partnerships where we can grab a

balance sheet and bring in and hold on to a lot of these companies and loans where there is more fee generation in terms of m&a, cash management, and hedging, these are the things where the banks make a lot of earnings. sonali: a few small differences i've seen, one is the focus on the middle-market rather than underwriting large-scale sponsor backed deals. isn't the large-scale space kind of crowded right now? john: absolutely, absolutely. one, it's crowded, and it became doubly crowded with the broadly syndicated market reopening. getting back to that regulation, there are so many companies and businesses and areas for private lender companies to play when you think of outside the sponsor back area, one of the keys for this partnership as well. sonali: thank you for keeping that i on private credit, known

for their funds, a quick check on the markets, here, you are still in the green and on a three-day winning streak for the s&p and it is the best three days of the year. stick around for the close. tons of coverage from milk and up ahead. this is bloomberg. ♪ (grunting)

at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley. her uncle's unhappy. i'm sensing an. underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...”

so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

>> from the world of politics to the world of is this. this is balance of powe