Are at levels above 460 once again where we started last week. The 10 year yield is at 418 and much more Economic Data and this week before the fomc next week. On the equity side, looking at the biggest losers, nvidia, apple and tesla are dragging the index lower. Dollar tree shares are having the worst day in nearly a year after announcing plans to shutter about 1000 stores in an effort to improve profitability. Valero Energy Continues to rise ever hitting a record high yesterday with energy the best performing sector in the s p 500 today. Earlier today, former new york fed president bill dudley gave us his take on where the rate path goes from here. Marches off the table, may is probably off the table, too. We are talking about the fed cutting rates probably sometime this summer and it will be maybe three. Given the inflation data, maybe that will shrink to 2. There is still plenty of time and plenty of meetings this year to cut rates at any time. Sonali ken griffin also spoke this week about the fed and said the bank needs to be more careful. He said pausing and changing direction back toward higher rates quickly would be the most devastating course of action to pursue. We will discuss this now with lara riem. You were early to say inflation could have a sticky path lower and could potentially stay a little higher for longer. Weve seen two months of data upsetting the course. Do you think it could get worse in terms of the inflation story moving forward . I dont think it has to get worse. What we are experiencing is familiar. Every month its like the data looked great but there is one factor the cause the upside surprise. This is what we keep hearing. That is the 3 inflation backdrop, not by 2 inflation backdrop and thats the problem. Thats what the fed will have to wrestle with. I think it will be a lot harder for them to cut rates and markets currently anticipate. Sonali when you say much harder, do you mean the on the first rate cut or even the first one would be difficult . I think they will have to wait until deeper into the Third Quarter then june. I really use this phrase specifically surgical rate cuts. I think markets need to move away from the idea that there will be any easing program where we are cutting on a regular basis. It will be a net and a talk and it will have to be carefully snuck in between markets that are still racing higher today and data across the board that looks really strong. Sonali how do you think about the data ahead . We had Critical Data yesterday when it came to the inflation print and we are drum beating to that fomc meeting next week. What are you looking out for . In retail sales, they will always be important. Beyond that, i think the employment picture still looks really solid. Im also looking at Business Investment. We are seeing an economy firing on all cylinders but the last two quarters, Business Investment has slowed a little bit. I expected to stay really positive but as we look ahead, the economy just remains strong. Its really about inflation. At the margin, when we look at the consumer and saw that the liquid see numbers which bear watching, i think we will get another month of solid consumption. Sonali when you think about what weve seen in the yield curve, the longest inversion on record. What is that telling you . Are you worried that perhaps we havent baked in whats worse to come when you think about a landing . Its a point that is not discussed enough, the yield curve inversion may not be as reliable of a signal of recession but if we think the economy is going to stay robust and not move into recession, that yield curve has got to renormalize. I think its a combination of a couple of rate cuts in the second half of the year and longterm rates moving higher. I think we retest 5 on the 10 year sometime this year. But im not sure its going to have the same consequence the rapid move in the Third Quarter of last year had on broader markets. Sonali you mentioned the idea about inflation being supported around the 3 level. Does that mean rates stay high for longer and what does this mean for you in terms of the discussion in terms of what the true neutral rate might be . I moving away from this higher for longer because i see it as a renormalization back to the 1990s and early 2000. I think we got complacent that rates should somehow be so low even if the neutral rate stays where i think longrun estimates are between 23 and thats a wideband but we really need to have that in the back of our mind because i think there is a lot of uncertainty around those estimates. Thats a world where Interest Rates could easily come to rest with the fed funds rate between three and 4 and longterm rates could be around 5 . That may sound bearish but for asset allocators, thats a rich and bierman with a lot of potential. We need to diverse away from diversify away from traditional assets. Sonali were longterm rates shift toward 5 , that is higher than we are right now. Where do see investments going . The good news about solid fundamental backdrop is that private credit, high yield, private equity really offer a robust opportunity for doubledigit returns. The good news is, we are out of that era where there is no alternative but equities. If you even think equities will go up 10 or 15 over the year, you can counterweight that with real opportunity in your portfolio for other doubledigit returns. I think thats important. We see so much concentration in the mag7, you want to diversify and balance that in your portfolio. For an asset allocators come its finally good news where they were great or targeted ways to do it. There are great alternative ways to do it. Sonali rates will still be higher than what we see now but do you see Company Start to struggle a little more than they have been in that environment . We are clearly going to see select companies that have been kept afloat by artificially low Interest Rates bearing the difficulty. What has been the problem with higher Interest Rates is that we moved there so fast. Now that we are in a world of higher Interest Rates, i compare it to someone moving from San Francisco to chicago. The first winter is horrible and the second winter is ok and now its chilly but im getting used to it and by the third winter, you understand this is what winter is. Its a long way of saying that with higher Interest Rates, the longer we are here, the more companies will build this into their financing costs and the more that markets and even households will manage through it. Sonali we thank you so much for being with us. We will go from the treasury market to the rest of the bond market. The implied cost of refinancing junk bonds is now at its lowest since may of 2022 and is falling because have spurred a wave of Corporate Bond sales and had pushed back the maturity wall of debt. We get the report now from london. How do you think about this maturity wall and why its finally coming down . The maturity wall is usually not a problem if companies can raise new debt in order to refinance. That wasnt a problem at all in the decade leading to 2022. Everyone knows what changes that Central Banks started jacking up rates in order to tackle runaway inflation. At that point, we had a problem and that spurred concerns among the investors. If companies have to repay a large amount of their debt in a short time, are they able to raise new debt to acceptable levels . In 2022, that wasnt the case and we are concerned that when we make this year and next year, companies will have trouble in big trouble repaying their debt. Thats starting to change now. Refinancing costs are decreasing and that allows the wave of debt we see in the maturity wall is being pushed back to 20252026. Sonali how do you see the problems that could still lie ahead . Rates are being pushed a little lower by the market and its helping out some of these companies wouldve otherwise refinanced at higher rates but what can still happen from here . Everything is falling into place in the credit market. It creates this equilibrium that allows the companies to issue at a relatively cheap rate. The problem is we are pricing in a scenario even a no landing and we have inflows to credit funds on the back of relatively high Interest Rates still. If one of these things changes in the fed for example doesnt cut when we expect and by the amount we expect, if there is some kind of landing and of fund flows start becoming softer than we have now, and the situation could be rather fragile. Sonali we appreciate your time and your reporting. Coming up next, we will talk to oppenheimer on why the Options Market is showing you signs of stress and opportunity. We will talk about why hes keen on which sectors in particular this year. Stick with us, this is bloomberg. The all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh sonali this is bloomberg markets. Its no secret that markets have rallied and a massive weight out of the october lows. Nvidia and bitcoin have been big drivers but whats less known is whats next for stocks and other assets. We will bring in alon rosen from oppenheimer. Also abigail doolittle. When you look at the risk on appetite that has been pervasive across wall street, do you worry that things are getting a bit toppy and some trays look crowded and if anything were to back off that it could have a bigger impact . Great to see you. Its been all about nvidia thats been the driver of the market with a lot of correlation to bitcoin. They been going handinhand on this meteor rise. What we have seen is a little bit of euphoria hit last friday with questions on why the strong reversal and there was nothing fundamental. We are getting technicals in this market and liquidity has been driving it, investors are taking money out of cash and have been putting it into the market finally. What we saw was the relative strength index is very notable. The rsi did an incredible 83 weekly on nvidia friday. This is massively above the 200 day which are levels that are unheard of with not even cisco in the First Quarter of 2000 when it hit its highs. We are seeing a little bit of it to credit situation and the call option volume was massive nest but led to a complete collapse and a rug pull across the semi sector. We are seeing general risk on with e code data being interpreted positively. With ecodata being interpreted positively. If its hotter, maybe they will cut rates sooner, if its cooler than its positive inflation is going lower. Its been a challenging to see what exactly might cause this market to turn to risk off and weve been focused on more underperforming sectors abigail great to chat with you alone. Lets talk more about nvidia. You can substitute the word nvidia for market rally whether it is the october, 2023 or 2022 low, its up more than 600 over a yearandahalf or so. You are saying its a little bit crowded and im looking at the technicals and it looks as though lower highs, less momentum and weaker buying on the recent highs. For nvidia, if the consolidation turn into something more like a crash but a correction, would that just pull the rug out beneath the markets . 100 , think we got a taste of that friday when you saw a big reversal in the market once nvidia turned. It does feel like as nvidia goes, so goes the market but in general, we are seeing a day like today where nvidia is a little weaker and tech is being sold and we are seeing other pockets of strength in the market. If you look at fundamentals which is not my territory that many people still think nvidia is cheap and thanks it goes up two or three times from here. There is a big battleground on where should trade. Bears feel its up and its getting too crowded from what they are able to add versus the potential competition ahead. Even the bears are scared to step in front of this train for now. Abigail what if we were to see this, why would a potential rotation to other styles like smallcap not save the market from nvidia . I think right now the general trend up has been phenomenal. Technical strategists think anything under s p 5400 is cheap. We are seeing investors look for value outside of technology. It feels like a chase here but from what we saw friday, it was a good taste of that potential risk off. Every dip weve had has been a one day wonder and we going right back up so is been challenging to think we should just go straight down and we been saying for the last month and a half that if you are not long, you are short because you are underperforming if you dont have long stuck exposure across different areas. We are promoting to stay long and keep your Long Exposure but we are entering a more seasonal time ahead. We are using etfs again to add Downside Protection and investors are short stock or short futures, we think is a good time to use the cheap implied volatility to add complexity to the portfolio using options as part of your hedges. Sonali you mentioned you were looking outside of big tech names to add some value and investors are doing more of that but how do you define what that means . If you look at the russell 2000, its trying to break out of its current range. We are up against 20 seven. Look at a sector like china, thats become on investable as of late. Nobody as long as been extremely frustrating year to date. It will try to break out of its recent range. We had a very active kweb trade and our desk today. We sold the march 27 calls and but the may calls around 80,000 times which was a notable motion earlier and people are looking for those catch up place in the get u. S. Tech and why cant china catch up to that more than it has . We are seeing people try to find value. Biotech is been in focus. Without a great call from a Research Team specifically viking which is outperforming its 116 price target. Its a massive move from as low as 10 to almost a hundred. It came back to around 63 a couple of days ago we are back pitching that. We think that has a good app side by the end of the month. I think biotech, financials, energy, china, we could see where money rotates out of tech into those areas for further upside. Sonali with thank you so much for your time. He is the head of derivatives at oppenheimer. Also our own abigail doolittle. Quantz is having the best year since 2008. We will talk about those details next. This is bloomberg. Okay yall we got ten orders coming in. Big orders starting a business is never easy, but starting it eight months pregnant. Thats a different story. I couldnt slow down. We were starting a business from the ground up. People were showing up left and right. And so did our Business Needs the chase ink card made it easy. When you go for Something Big like this, your kids see that. And they believe they can do the same. Earn unlimited 1. 5 cash back on every purchase with the chase ink business unlimited card. Make more of whats yours. Sonali this is bloomberg markets. Trend following quantz are rallying back on wall street and having their best year since 2008 and its thanks to the relentless stockmarket gain and sharp moves across commodities. We reported on this. One of my favorite stories on the terminal now. I like to say i was a failed quand to so to see them succeeding is great so whats driving them back . Last year was a pretty tough one. This february, theyre having the secondbest month on record for many of the big names we mention. We mentioned aqr and mulvaney. A big part is equities. The gaming equities have momentum so they dont care about fundamentals. They care about the price and been doing amazing ul and in commodities, there have been more niche markets like sugar or soybeans that have been doing have had specific trends. Thats been a really big driver of the returns as well. Sonali you wrote that aqr has secondbest month on record in february. What about the others . They may not be as large as a qr. They are smaller and they also had the secondbest month for each of them. The best month since 2008. Its another time of high volatility where they managed with commodities which is a slightly bigger driver than equities. We saw some of the biggest durations in 20 years in some of the soft commodities. Writing those trends has been beneficial for them. Theyve had some draw in january as well as a some of the gains we are seeing is like 30 or 45 . An incredible start to the year compared to what we were seeing from all other markets. Sonali how do you think about these returns moving forward . Is there something that can throw things off especially when there is the underlying critique in a market that perhaps its these trend followers that are exacerbating the market moves in the first place . This is an interesting and environment. People are saying that the trend forward is doing well when stocks are down by a lot and when stocks are up by a lot. You can argue that at this strong momentum trend continues, they will continue to do well. Whether they exasperate the moves as been a big debate. Its very divided on wall street. Weve seen that maybe they have had some impact but more broadly, a lot of the a lot of them are setting the thesis they are responsible for the big moves. They can operate in a small market like sugar having a big position but they can have some sizable moves. Sonali what are you watching next . Is it the commodity market or the equity market to be watching for these guys . I think the commodity market is interesting. It can continue to show big gains. The way those charges thrive is they need macro certainty so this is a market we know is very sensitive to that. Sonali we thank you so very much for your time. Its very impressive. Lets take a quick check on the markets because we are still watching some red on the screen. The s p 500 is still down, up less than 0. 1 but still down on the day and then the nasdaq 100 is down more than 0. 7 with yields still in the rise. 4. 60 on the twoyear and 4. 18 on the 10 year. More data at this week and a lot of stalling out before we head into the fomc meeting next week. Coming up, well talk to searchlight capital about the private Equity Industry. Stich uhis is bloomberg. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. When i was your age, we never had anything like this. What . Wifi . Wifi that works all over the house, even the basement. The basement. So i can finally throw that party. And invite shannon barnes. Dream do come true. Xfinity gives you reliable wifi with walltowall coverage on all your devices, even when everyone is online. Maybe well even get married one day. I wonder what i will be doing . Probably still living here with mom and dad. Fast reliable speeds right where you need them. Thats walltowall wifi on the xfinity 10g network. Sonali this is bloomberg markets. Weve been talking about how equities are struggling to gain traction today. We are one week away from the feds next Rate Decision and you are watching a lot of uncertainty. Getting a check on the markets, we are still seeing a lot of red on the screen with the s p 500 down more than 0. 1 and the nasdaq 100 down nearly 0. 8 . Cuban youth though you are seeing the two basis point move, we saw the inflation print yesterday. Holding at just under 4. 61 and the 10 year yield is holding up strong, three basis points higher. On the equity side, were watching shares of social media stocks after the house passed a bill to dan tiktok in the United States unlesss chinese owner sells the video sharing app. It now faces a lesser known future in the senate which opposition is based on both sides of the aisle. We are also watching bitcoin for a fresh alltime high and net inflows yesterday top 1 billion for the bitcoin etf. Coinbase rose even more intraday be securities raised the target to a street high of 300 per share. Once topic on a pop this week was paramount on report that apollo receptor the company about a possible takeover of their asset purchase and just as monday, we heard from a large shareholder of pearman who talked about a potential deal. There is so many Large Technology companies as well as Traditional Media Companies that it would be natural to buy paramount local and you can get it we think its selling at a significant undervaluation here and there is so much negativity around it. Everybody hates it. Your me you remember the great john tech John Templeton said to buy when there is maximum pessimism. Sonali another media deal is charter communications. Its looking at a takeover ofaltice usa. There is a lot of talk when it comes to dealmaking in the industry and we will bring in eric zinterhiofer from charter. You look at this industry and you are finally seeing some life breathed back into it. How likely are largescale mergers in this industry, particular with the support of private equity . Thanks for having me. As we talked about earlier, its hard to comment on these things. I am chairman of charter and white alma mater is apollo and i know a lot of the folks there well. We are big shareholders in television. Needless to say, i am close to a lot of people in this world and wont be commenting on any details related to m a. What i will say broadly speaking is that the prerequisite to the kind of largescale mna you were referring to, big strategics coming together really predicated on two things, one is the Regulatory Environment changing and the other is operational excellence. You think about the Traditional Media Companies, they need to prove this transition of streaming and they need to prove that the traditional ecosystem can be rebuilt in a healthy way. As you may know, charter is trying to do that and we are trying to help along those fronts. When that happens, i think youll see larger scale strategic m a. In the interim, i think private equity players can anticipate that. They can identify Companies Moving in that direction and potentially make some good investments. Sonali if you are looking at these massive shifts across industries, from where you are sitting, there is still a private Equity Industry with tons of dry powder but the cost of financing is higher and even if it goes down a little this year its still higher so how does that math work . Way it works as the market is a little bit bifurcated right now. Equity markets are at alltime highs. On the other hand, people are either ai focused or private credit focused in their skew at least among big alligators. There is a big middle in my opinion thats being ignored. There is a lot of public comedies out there particularly if you are less than one billion a market cap where your valuations are much less than the Larger Companies is expensive to be public. You are illiquid and i think thats really opportunity lies for private equity. These companies dont want to be public anymore. Sonali whether you are in that big cap moment or whether you are in the less than 1 million area, there were questions about what your existing debt load looks like. If you look at a company to potentially take it over, how do you feel about companies that are still saddled with potentially too much debt . You are right, the other dynamic going on now is that we are in an era of deleveraging. Despite these buoyed markets, Capital Structures were set up with zero Interest Rate environment so the debt is a multiple of ibita at about six times which is average. Needs to come down to four in the way to do that is to have a deleveraging skill set as an investor. This is something we really focus on. In an industry you know well where you can add value, go to that company and say we will come in with security is still provides real upside to the equity but actually d relevant but actually direct d leverages the company need that skill set in this era we are in. Sonali youve seen a lot of your rivals in the private Equity Community push into private credit either in addition to what they are doing or even instead in some cases. Do you think thats almost an overcrowded space at this point . How do you keep chasing returns in a space like that when the banks are also stepping in . What apollo is doing and others is interesting. I think its very positive for the economy. You are basically taping taking Leverage Bank balance shes that are prone to dislocations and moving all of that private credit to less leverage Balance Sheets at scale. I think that will provide great credit and be a boon to companies over the next 10 years. That being said, those firms are vacating a lot of the equity spaces that are still very necessary as a result of pushing into this credit realm. It creates room for more creative equity players. Sonali does that mean you doubled down on the business of private equity . Yes. Sonali you talk about these deals under 1 billion. You look at where the hurt is in you look at valuations in aim other industries, do you start to go where others are not . What does that look like . Weve always been doing that. For us, its about transforming businesses. You can take great traditional businesses and transform them into Something Special that can excite investors with growth. We took a business called shift for public which is no public company. We partnered with them to do that. It was an incredibly Successful Company and resulted in him leaving the First Mission to space and financing it which is an amazing story. We turned that from a traditional payments business to a Software Business and a highgrowth business. We are doing that with televisa univision. Its the biggest content producer for hispanics on the planet. There is 600 million spanish speakers and we built a streaming platform from scratch which will be profitable this year is growing rapidly. Those are the kinds of transformations you can do with traditional businesses as opposed to buying the perfect highgrowth business at too high valuations. Sonali how do you feel about an exit opportunity for the companies you on currently . Is there a window to take advantage of the ipo market . Does it look attractive and what last . For the right companies, you can do it. If you bond them well enough come you dont need a crazy multiple to sell them. We do a lot in infrastructure and we are the fourth largest builder of fiber across our companies which is a hot area. There is a lot of Public Private partnerships to do this with all of this infrastructure money coming in so i think there will be opportunities for exit in those areas. Sonali the next 12 months, how much will it pick up and how much are you willing to put to work . We are willing to do both. We are kind of balance between buying and selling now. We were like that last year which is which was a tricky year. We made for investments already in a recent fund so i feel pretty good about the investment environment particularly to help companies deleverage. Thats where we been focus. Sonali we thank you for giving us a look under the hood in the deal environment. Coming up, we are looking at unitedhealth because it faces a classaction lawsuit over its Retirement Plan and cancer clinics across the country are suffering from a cyber attack on the insurer. Stick with us, this is bloomberg. Hey you, with the small business. Whoa. Youve got all kinds of bright ideas, that your customers need to know about. Constant contact makes it easy. With everything from managing your social posts, and events, to email and sms marketing. Constant contact delivers all the tools you need to help your business grow. Get started today at constantcontact. Com constant contact. Helping the small stand tall. Sonali this is bloomberg markets. Its time now for stock of the hour. Shares of unitedhealth are slightly higher today despite news of a classaction lawsuit claiming that united prioritizes business relationship with wells fargo over workers retirement savings. Doctors across the country are stretching to keep their practices afloat. A cyber attack on the Unitedhealth Change Health care unit last month, shares of unit health have broadly been under pressure until a three day snapback this year. We reported on his broader story. There has been a lot of impact across doctors across the country. Explain what change health care is and how it was hacked . Change health care operates a system that sits in between the Health Insurers and Health Care Providers and basically helps insurance claims go from one to the other and payments flow back. They said they had a process of about 2 trillion worth of payments each year. Its important for make sure people can get paid. Sonali what happened on february 21 and three weeks later, where do things stand . Change was the victim of a cyber attack that basically force them to shut down their networks as they make sure they were safe and figured out a way for them to come back online. They are in the process of getting systems back up and running but in the meantime, a huge backlog of payments and claims are piling up. Some doctors offices are not getting the cash that they need and are trying to figure out workarounds in the meantime. Sonali what is the government doing and what are other Health Care Companies doing to ease the pain for these doctors and their clients . You have had some dire reporting in this story alone that potentially clients have to be turned away given the stress the doctors are facing . Doctors and practices are running low on cash and needing to go to banks to take out loans , going to their lines of credit. There was one practice i talked to that if things dont get that are in the next 46 weeks was considering asking their owners to maybe put their personal assets on the line to guarantee loans or they might have to consider sending patients elsewhere. In the meantime, the government has been very strongly encouraging unitedhealth to help get the money moving more quickly and to be more open and transparent about their medication. There are other health care entities, one of the Large Health Care costs especially for cancer clinics are drug cost. The drug wholesalers have been offering more flexibility for some of the smaller cancer clinics in order to pay their bills so the cancer clinics can keep treating patients. Sonali thank you so much for taking time to talk to us. Currently its the most read story on the bloomberg terminal today. Make sure you check it out. Coming up next, we will talk about private credit. Charisse clark suarez will join me to talk about a 500 million debt deal. Stick with us, this is bloomberg. upbeat music an everchanging landscape comes with challenges. From our vantage point, we see opportunities. As a topten real estate manager, principal Asset Management harnesses the power of a 360 perspective, delivering local insights and global expertise across public and private equity and debt. Our experienced teams are uniquely positioned to uncover compelling opportunities in todays market, giving our clients an exclusive advantage. Principal Asset Management actively invested. You dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh content is king so if you are paramount global and you own the rights to csi and the got other admission impossible and youve got the nfl in the super bowl and pauls extraordinary grants that are there, all the active 60 minutes and cbs sunday morning and all the Different Things you watch, if that content is valuable however you end up getting it. Sonali that was john rogers the founder of aerial investment speaking about media content which brings us to todays wall street be. If you think private credit is hot, assetbased financing is the new game and tune. They have about 48 billion in assets in 2016. Today, we learned that kkr is leading a have billiondollar finance packaging for harborview equity partners, a money manager thats known for acquiring famous music rights of artists including nelly and Justin Bieber and many more. The founder and ceo joins us now. When you look at this debt package, its interesting because when people think about hard assets, assetbased financing, consumer loans or auto loan, how do you start making music a part of this category . Its so great to be here with you again so thank you for having me. Music is a lifelong asset. Many of us have the soundtrack to our lives. We have titles and songs we been listening to for the last 50 years. We discover new music every single day. Music has been a long stalwart and a part of our lives for a long time. It really allows us to experience that every single day. That translates candidly into cash flow. You heard john roberts talk about it. I have respect for the content platform. Content is queen and the reason for that is because it is such a part of the human experience. Cusick royalties and music cash flows are a royalty on the human experience. You really want to find ways to think about financing those cash flows as we look to acquire them so we can continue to do this work on creating liquidity around this asset class. Sonali the 500 million you recently brought in, you also edit 300 Million Dollar credit line you expanded at the end of last year. What does all this extra capital really do for you . The extra capital fuels our business. We are a young firm and are excited about the momentum over the last three years since our inception. Our focus is to be focused on all things in the media, entertainment and sports arena by focusing on being a trusted partner into the creator economy and the creative ecosystem. We started with music and started to do some things outside of music which we are excited about as well. We made two investments in film and production companies, building our ecosystem around the Broader Media sports and entertainment platforms. The recycling of capital helps us to continue to do a great job for our stakeholders and ensure air limited partners around the world including her big partners like the team at apollo. It helps us recycle capital to continue the mission of investing in these great assets and be a partner to the overall creative economy. Sonali you kind of have the fun part of the finance job we get to be close to these really large names in society these days. Something thats interesting in the financial world is how much you brought in apollo and nowkk r these, massive credit giants. Its worth explaining how these royalties have almost credit like qualities. Absolutely, we are targeting high single digit unlevered yields in a date by day basis. You think about our own lives, the wonderful thing about being in noncorrelated investment space over the last few years despite many of the lifechanging events weve all been through whether its a the pandemic or inflationary periods for deflationary periods, the one thing that is consistent is that our cash flows have grown. We have created a portfolio Construction Methodology that allows us to have really stable cash flows against a pool of seasoned assets. Then you talk about folks like apollo for kkr, that allows them to create great product investments for their clients which are obviously lps like ours but also Insurance Companies those who participate in the insurance ecosystem which is much of the american population. These are good, highquality assets. They are fun but they are good highquality assets to deliver yield that is not correlated to the broader economy in the broader economics we see happening every single day. Sonali from what i understand is what drives yields is how you pick the catalogs themselves, how those communities are developing around artists. We are showing some of the ones you are involved with. When you look at artists to essentially invest in, how are you picking what has staying power . Its a combination of a lot of things. We talked about this in the past. Because there is so Much Technology that allows us to see how are our audiences are identifying who they want to spend time with, how they want to listen and what they are listening behavior is, we dont hose hold ourselves out as the purveyors of culture. We believe the audience is the purveyors of culture. We really are following the audience and we see the audience in a variety of different places where we are fans and some places where we are emerging fans. Thats the most important to us is by identifying audience. The reason why that dovetails to stability of cash flow is because you can basically find music and content that resonates with an audience and that audience shows up and listens on a continuous basis. Its measurable and therefore investable and you can see those cash flows and have the ability to forecast into the future. Thats a big piece of how we think about our thesis. Its very data intensive and thats partly because we are very passionate investors in the broad media and entertainment space but also with a strong credit background. Thats the team we built. Sonali we have to leave it there but thank you so much for being with us. Back on the heels of a have billiondollar debt deal today. Shares of u. S. Steel are taking a turn. The Biden Administration will voice concerns about a merger with japans nippon steel. On april 12, u. S. Steel will hold a special meeting of shareholders in connection with the proposed agreement to be bought by nippon steel. This has certainly been a very highly watched deal, one of the largest steel deals in many years. According to people familiar with the matter, u. S. Officials and lawyers have drafted a statement and that the white house is privately informing the japanese government about the president s decision. We will keep an eye on that as we have more updates about that deal. Lets take a check on the markets because we are still watching markets trade lower on the day. The s p 500 is trying to be flat, down about 0. 1 and the russell 2000 is the one place you are getting a bounce back from the job factor data yesterday, up about 0. 6 . Semiconductors are still down more than 2. 5 . That does it for bloomberg markets. Stick with us through the close. This is bloomberg. Youre probably not easily persuaded to switch mobile providers for your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless bill versus the big three carriers . You can get two unlimited lines for just 30 each month. All in the most reliable 5g mobile Network Nationwide wireless that works for you. Switch to comcast business mobile and save big with up to 500 off an eligible samsung device with a qualifying tradein. Dont wait call, click or visit an xfinity store. From the world of politics to the world of business, this is balance of power