Grown diamonds and what is next for debeers as it faces a potential spinoff. I matt miller on this monday here in new york city, welcome to Bloomberg Markets to kick off the week. Irans president has been killed in a helicopter crash. The foreign minister also died in the accident. Iran has entered five days of mourning and an election will take place in the next 50 days. Bobby joins us with more details. I guess the most important question is how did this happen, who was involved . Bobby we do not know anything to suggest this was not an accident. This was a three helicopter convoy flying from the northwest of the country. Its a mountainous part of the country. There was bad weather, fog and rain. Remember iran has been under economic sanctions now for decades but they have not had the access to parts of technologies. Theyve not been able to buy so this is a very old craft in quite treacherous weather. There is no indication to select or suggest foul play was involved. This is a part of the world with a lot of people in different groups of people wouldve liked to have seen president Ebrahim Raisi dead. Of course this does not mean the death it doesnt mean some liberal new leader will come in and they will get along great with israel, tensions in the middle east will die down. It could get worse but most likely you were saying earlier we will retain the status quo. Although he is called the president he was not really the man in charge. That would be the Supreme Leader. He pulls all the strings and controls everything. He is the guy who pretty much handpicked raisi to be president and there was a good chance he would be his successor when the Supreme Leader passed on. The Supreme Leader is still there. He will try and stage manager was behindthescenes to make sure the next president is also someone who conforms with his hardline worldview. He is the guy who calls the policy shots. Who decides israel is the country that will be regarded as irans enemy. He is the one who has so i dont expect any change in policy. Certainly not in foreign policies. In 50 days there will be a new election in iran and iranian elections are not really free and fair but they do throw up some interesting the open some windows into iranian political life and we are looking carefully to see if there any fissures or gaps between the Supreme Leader and the rest of the regime. My bet is none. Thank you for joining us. Bobby talking to us about the death of Ebrahim Raisi in a helicopter accident. Joining us to discuss, Rbc Capital Markets head of derivatives strategy. Thank you for joining us on set. Lets talk about the records. We continue to reach new records not only in the u. S. Stock market. Last week was great for largecap. But overseas as well in stocks and in commodities we see new record prices for copper and gold. What you make of this seeming everything rally . Weve been watching this very closely in the Derivatives Market and the one thing we are not seeing is the same sentiment being echoed in options. In the past when we reach this cycle you also saw that in exuberance and this time we just simply do not see it. Thats interesting because it is a reflection for past cycles. Why do you think its not being reflected. I think one really simple point is just a lot of people are more along weve talked about last summer people had to dip their towel in the water with these call options. Theyve jumped in the pool so to speak so when you have positioning thats a little bit more long theres not as much of this need to participate and we are all holding our breath with nvidia coming up but we dont see that chase that weve seen in past quarters really even move the market further up the last few times. We are seeing more brats obviously last year was all about the magnificent seven and stocks like nvidia, the other giant Cap Tech Companies led everything. Runs up and profitability. Are you seeing more of a spread out of sort of long bets or positivity in the options market. We also do not see that in the sense we do not see that demanded Something Like but thats not to say the downside is rising its just that we dont see the upside being managed the way it has in the past. The other thing i would say thats interesting is if tech goes the market still goes so we have this Healthy Breath of the market where we get poorer than expectations proof from nvidia you Better Believe that concentration will come rushing back. The frenzy that we saw last week and a couple of years ago dominated by options trade as well. What you see this time around . It was sort of like a storm in a teakettle in the sense you saw the same indications but they all kind of dissolved more rapidly. And then you did not see the level of exuberance get nearly as high so its interesting to me we had probably 400 or 500 implied volatility levels. Thats a 50 to 60 magnitude move. We didnt see gmc get to those levels for an options perspective although we saw that demand. The velocity down was much quicker than during the actual original frenzy. Really subdued exuberance in the options space it doesnt its not naturally seen in the equity indexes or the metals on commodities. Could nvidia earnings change all of that . Isnt there potential for wednesday after the bell to move the markets . Our strategist did a poll of by side clients saying what are your expectations. It is still overwhelmingly positive. The fact we do not see that echoed in the Derivatives Market is perhaps an opportunity. One thing that happens is you see spot up and volatility up but when you see that come up fast it takes volatility along for the ride so Something Like nasdaq calls are little bit underpriced if we believe there could be this Inflection Point to the upside. Is anyone guarding against the potential on the downside . Is anybody out there hedging. It seems a guy would be the cheapest time to put on protection. Protection is laughably inexpensive. I was listening to you guys speak about the geopolitical news out of a ran in saudi arabia we have seen these geopolitical risks bubbling. Absolutely not. Geo bullock risk hasnt been affected all when you look at Russia Ukraine what is now two years old. The war in israel and palestine or in gaza when you look at whats going on in iran, nothing is happening in terms of market responses. Amy when i push chief risk officers on this, what they say is the last two times we put on this protection all thats happened is that protection is gone away. Whats to say this time will be different. That always makes me thanks he but they are not wrong in the postcovid war these geopolitical risks have not taken the market with them so its harder to deploy those hedges. What about the political side of the equation . Election coming up in november. Republicans may be touting their own book saying the reason weve seen this runup is everyones optimistic crumple win this election. Its really interesting this is something i worked closely on with our chief equity strategist on. When you see past election cycles is you get this runup in the market in particular to Something Like financials or cyclicals. I think the unknown here is whether we will have an election its clear cut the end. We could get a situation like 2000 where its not clear cut thats something that could take thats not being priced in either of the structure or the s p markets now. Thank you for joining us. Quick programming note we will have an exclusive interview with the cleveland fed president today at 2 00 p. M. New york time. You definitely need to tune into that. Lets look at whats moving markets right now in terms of stocks. We go to bailey. Want to start with norwegian cruise boosting their expectations for the full year driven by bookings and overwhelming demand the Company Received shares rallying a higher as we see more than 5 leading the rallies and the likes of Royal Caribbean and carnival as well as the newly Public Company viking. It seems like people are going back to taking cruises. Wanting to keep in mind that the companies have broadly benefited in the market so far this year and thats one of the issues holding back the company. Always interesting to look at. I saw a story i thought was interesting today. Hymns, which makes a reptile erectile problem pills and stuff to grow your hair will also give you a wegovy like shot to lose weight. Bailey a discount to the actual won by 85 so this is another potential drive on the forehand. Keeping an eye on that 40 level. The stock trading at a three year high which continues to build out their portfolio. We seen a number of companies try to lean into the weightloss trend and we saw that with the likes of weight watchers. They are breadandbutter being erectile dysfunction pills, discreet packaging that have that has been how they cater to a younger audience but giving that shot at an 85 discount will not only help outpatients but expand their ability to grow market share. Matt a stock, lee auto. Bailey missing expectations in the quarter talking about how their deliveries were well below what wall street was looking for. Trading at a more than one year low continuing to see matters in the ev space, the car space struggling not only here in the u. S. But especially over in china. Its interesting looking car that really fell short of what analysts were looking for in continuing to see issues with profits and their margins and the ability to grow delivery so maybe one lesserknown name to keep our eyes on this week. And especially keeping an eye on those ev makers. Matt to me it looks a good dodge durango. I dont know if that was that but it looks like an extended previous a look sick they slapped on a back row. Matt bailey, thank you so much for joining us. Bailey lipschultz talking about a couple of the stocks moving in the markets just about 40 minutes into the session. Headlines in the leverage loan market we are they were dominated by private credit but they flipped as syndicated loans make a comeback. We will speak to kramer 11 the tollison frankel partner next. This is bloomberg. How am i going to find a doctor when im hallucinating . What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. Matt lesters leverage loan headlines were dominated by private credit taking a lot of market share from syndicated loans which has been up until then the only game in town. This year the trend has reversed. Syndicate loans making a comeback in the leverage loan market. Here to discuss is someone who works on both kinds of deals. Richard farley in his role as partner advises banks and private clients on syndicated financing transactions and direct lending so its great to get someone with your knowledge and experience here. What do you think. Is it fair to say the syndicated loans are making a comeback because private credit was everything in 2020. Both sides of the fence of never really gone away and the rise of private credit has been sort of driven over the past decade by the regulatory changes and the regulated banks being subject to more scrutiny and there are differences in execution. If you are in the private credit space youve got a fixed rate at the time you sign your commitment letter. You dont have to get a rating. You also do not get the benefit of any market improvement between the time you sign your commitment and when the deal comes to market. And in times like these where the banks are more active there has historically been a more favorable Interest Rate attainable in the syndicated market. Thats all changing and i think the sort of clearcut lines between the market in the syndicated market might blur over time as each finds a way to work with the other. You may get a better rate with the syndicated loan, but you may not be able to get that kind of loan . Banks have a look at so many risk concerns so thats why private credit has been easier if more expensive. A segment of the market you get to an elevated leverage level of six or seven or higher times. Theres clearly a situation of the banks can play but what weve seen now is competition between the two products and the private Equity Community in particular has arbitrage them against each other from areas where they can get better execution depending upon the deal and the market. Matt if we get higher Capital Requirements out of basel three. Does that make any of it harder for the banks or syndicated loans, does it make it easier for private credit . I think you will see a consolidation of those institutions that can afford to reserve the capitol at higher rates to play in the more risky segments of the market. I think you will see fewer competitors. It doesnt mean it will be less competitive or have an impact on rates but again you would think if you were not large enough to absorb that you would not be as competitive compared to say a jp morgan or citigroup. You advise clients on multibillion dollar deals so you get the inside track on a lot of their views. Do you think the fed will be able to cut rates this year. Does it make sense to you with inflation still at 3. 5 percent be able to take it down . I think everyone was optimistic there would be three or four cuts at the beginning of the year. Thats now looking completely off the table and we are looking at one or zero. And my feeling is sort of in line with that. I would not be surprised if there was no cut this year. In Company Cases in individual cases when you look at the big picture federal deficit does it make sense you would be able to hold rates this high and certainly make servicing pretty expensive. At some point our status as the reserve currency of the world will run out in terms of the ability to use that privilege. That will be the breaking point when the servicing of the federal Government Debt gets so high that it crowds out other competitors. We are not seeing that. I think what we are seeing is the opposite. We are seeing too much capital in some respects to the asset class which will result in consolidation and instead of seeing literally scores of onestop shops that serves all industries i think you will see a consolidation of those. Blackstone and apollo, those folks will be successful. And then you will have niche plays that have sophisticated robust industry expertise in different areas and shopping at break while capital in terms of the energy space, Hercules Capital enterprise and Software Space and places that play in complex Capital Structures in the middle market. Thats always going to be in place for where the private credit will have an advantage. Shops like a. S. Birch grove. I think you will see that segmentation and consolidation and that will be the response. After the popularity of last year do you still see capital flowing into these private credit funds. You mention some of the big players a lot of them of turn from private equity to private credit. Do you still see the popularity of that . When you are now at a baseline rate in the five handle, the asset class is very competitive. If you have the combination of low growth and lowering Interest Rates i think you will see a migration out of that sort of risk into other asset classes. But until then i think the party is on. Matt thank you so much for joining us. Richard farley there talking to us about the leverage loan market and rates. We will take a look at the Companies Making the most social buzz today. Social climbers is next, this is bloomberg. So, what are you thinking . Im thinking. speaking to self about our honeymoon. What about africa . Safari . Hot air balloon ride . Swim with elephants . Wait, can we afford a safari . Great question. Like everything, it takes a little planning. Or, put the money towards a downpayment. On a ranch. In montana. With horses lets take a look at those scenarios. J. P. Morgan Wealth Management has advisors in chase branches and tools, like wealth plan to keep you on track. When youre planning for it all. The answer is j. P. Morgan Wealth Management. Matt time for social climbers, a look at the stocks making waves on social media. First up red lobster floundering , the Seafood Restaurant chain filing for chapter 11 bankruptcy thanks in part to a disastrous allyoucaneat shrimp promotion. The Company Changed its 20 ultimate endless shrimp deal from a limited time offer to a permanent promotion and thats a move the cost the company 11 million as diners scarfed down expensive plates of shrimp at a rapid pace. A big win for airbus, the u. K. Plane maker the european plane maker secured an order for over 100 narrow body jets, saudi arabias flagship carrier. The deal is the largest in saudi arabias history. If the kingdoms latest effort to turn the country in to an aviation and tourism hub. Grayscale announcing the ceo has stepped down after 10 years. Hell be succeeded by Peter Mintzberg in august. At his peak the Grayscale Trust had over 40 billion in assets under management recently however the fund has been going through challenging times as investors pull out billions of dollars after it was converted into an etf fund in january. You can follow all the latest company buzz on tre and tren go after the record highs that we hit on fridays trade the s p at 5320 so still at an alltime high the same is true for the nasdaq 100. The u. S. Two year yield right now for 83. 4. 84. That yield curve is inverted. Coming up, the diamond industry is less than dazzling these days. We speak to the founder and ceo of angara. This is bloomberg. Lifes daily battles are not meant to be fought alone. Were not powerless. So long as we dont lose sight of whats important. Dont be afraid to