sonali: welcome to bloomberg markets. the s&p 500's near session those, set for the worst month of the year. it is its biggest drop since september, one day ahead of the big fed decision. let's check the markets. the s&p 500 hovering around point 7%, lower on the day, near session those as we have been saying. the nasdaq 100 down about .8%. the two year yield has been interesting. we floated past the 5% level and now we are below the 501 we were at a few minutes ago, three basis points higher on the day after data on wages showed strength.

we will talk about that over the rest of the hour. 10 year yields are up about four basis points to just under 466. let's talk about assets. tremendous volatility on other asset classes as well. new york crude down to $81 on the day, just under 82. .8% lower. the dollar is still getting some strength along with yields. the yen is weakening to 157 on the day. remember, there have been accounts by the japanese central bank, reviewed by bloomberg, show and likely intervened in the market monday. you saw strengthening. back now to 157. coco is interesting. you saw it drop as low as 27%. now it is up more than 2.6% on today. what is interesting is extending liquidity in the market shows you how wild you can see this wings leading to one of the worst drops you have seen in coco in decades, just earlier in the day. mid-day movers on the equity

side. ge healthcare reported sales for the quarter missing the average estimates. analyst sees this talk pressured after weak results with the company we are from full-year guidance. ge healthcare technologies now down more than 13% on the day, what are the worst performance in the s&p 500. and molson coors management is incrementally more cautious on its outlook for the year despite first quarter growth across all units reiterating its 2024 guidance despite net sales and eps topping expectations for the first quarter. molson down more than 7% on the day. and lvmh, exploring options for its mark jacobs brand amid interest from potential buyers attracting bids from other consumer companies as well as private equity firms as it restructures the mark jacobs brand. lvmh down about 1% on the day. it has been down even prior to that report. back to the macro picture. u.s. labor costs accelerated first quarter more than forecast signaling persistent wage pressures.

brown brothers harriman had this to say about what fed chair powell's message will be to markets tomorrow. >> i think the fed will deliver a very hawkish message tomorrow. i think we hear that she will have written on his hand, don't say anything written -- anything about cuts. if they stick to that script it will be ok. it will be hard for the fed to deliver anything short of a hawkish message tomorrow. sonali: we will discuss this with anna wong and bloomberg news chief macro correspondent is mccormick. anna, from the data we have seen so far, particularly this morning, how does the chart change the equation from the federal reserve knowing there is pressure under the surface when it comes to pricing? anna: the fed coming into this year is full of hope that the disinflation progress we saw the second half of last year will continue. i think that the ec reading today as well as the cpi, pce reading of the last couple

months decisively rejected that. what we are seeing in the hot eci reading today is enormous catch up. if you see where the pressure is coming from, it's coming from benefits, reflecting rising health care insurance costs. it is coming from state and local government, the sectors that were the slowest to raise wages for folks. i think for the fed, this means that the idea that inflation could come down without losses or a rise in unemployment is increasingly seeing a lower chance of happening. sonali: we saw bond traders react to the data this morning alone finally reaching the five level on the two-year. how are people feeling? so many bets have gone wrong. you have to wonder how the data whipsaw has been changing our psychology and how they put their money to work in the bond market. liz: yes.

i think a big thing is you cannot go too far on positioning. i was talking to a hedge fund manager yesterday. he said you have to shorten the time frame. it is like a one or two day trade despite the big trend followers. i think all of the volatility is making people rein in risk a little. like you said, we were whipsaw them. eci rates went up and then consumer confidence, get into what anna is saying that there are signs on the economy side that consumers were not very confident. that took yields a little off the boil today, but like you said, still up. looking into tomorrow, chairman powell did sound a little more hawkish during the imf meetings. but, can he out hawk himself? the market is already price down to one full cut this year. like you said, wages were six, almost seven earlier in the year. i am interested to see, does he go further than what he said the other time?

that we aren't there yet, we are confident? does he try to be extremely more hawkish? we have to see. sonali: to your point on all of the data releases, tomorrow is a massive fed meeting with a lot of expectations on the table and there are also jobs later this weekend we saw wage data this morning. at this point, what are you looking at more severely? what is it the relationship between jobs and wages at this point? if the labor market cools and wages are up, what is the net effect? anna: there are two dueling narratives know about why wages are hot. is it because of the job market is very tight? this friday we will see a non-foreign payroll monthly change that's very hard. most people expect over 200 k. that would seem to support that narrative. i think that the picture, really, is wage growth is high not because of a tight market. we saw in the consumer confidence survey today that people are in fact getting more

and more pessimistic about the labor market so the thing i would pay attention to in the friday jobs report is the unemployment rate and whether people can get part-time jobs. iteration of being in an unemployment state. the real picture is wage growth is being driven by catch up growth and that would lead to more crosscutting pressure for firms. if that would lead her to a higher unemployment rate eventually. it has nothing to do with the market being excessively tired. sonali: how are traitors position for the slew of economic data we will get this week, both economic data and the fed? liz: we saw shortcomings last week with all the gyrations. i think people put on new traits. our colleague at bolingbrook with the right team was talking about that, that there is a little more positioning. i think the short bios has overarching control here. i don't think, besides long-term

asset managers saying these are high rates and we will grab the coupons, a lot of people are saying, i will come in and take it from the short side. because, so for the data has not just broken in any way that supports any imminent threat cutting. it keeps been encouraged -- getting pushed back. wall street economists are pushing back. we need to see the data. what anna was laying out for friday is for as far as the job that is itself, it doesn't seem like that will be the day. but we have jolts tomorrow and some traders are looking at that. because, that has shown some signs that the labor market is not as hot as it was. but i think that the shorts still have the upper hand in the market now. sonali: hold on tight everybody. there is a busy 24 hours ahead and busy rest of our week. that is anna wong from bloomberg economics and it liz mccormick from bloomberg news. thank you for being here. coming up, another big story. amazon is the next magnificent

seven stock to report earnings with investors looking for details on ai spending. that is our stock of the hour next. st us. this is bloomberg. this is bloomberg.

make a difference?" this is your answer. so many are still suffering. so don't wait. call the number on your screen. or donate now at mercyships.org. that's the number on your screen. ♪

sonali: this is bloomberg markets. i'm sonali basak. the stock of the hour is amazon expected to report sales grew 12% first quarter. fueled by its cloud computing and advertising businesses, investors will also closely watch of the company's artificial intelligence efforts when they report after the bell today. let's discuss with arun sun darun.

you saw of the in swinging with the dividend. you have to wonder, if amazon does not give investors the same type of capital return, does that make them look bad? arun: yes. there's a lot of speculation about whether amazon will either announce its first-ever dividend or potentially a large share buyback. amazon has never given a dividend in the past but given big tech players have recently released their first dividend there is speculation amazon could. in our opinion we don't see them announcing a dividend this upcoming quarter but it could be in store the next 12-24 months. i say this because we are entering a major capex super cycle, not just for amazon, but other big tech players. i think investors would like to see amazon continue to invest in capex especially given all of the opportunities in generative ai. the free cash flow story is very

encouraging for amazon. i think if we do see a dividend it could be in store within the next year or two. sonali: i feel like capex super cycle is a nice way to say race to outspend each other. as an investor do you look at these capital return plans and say, hold onto that money, how to play your competitor. would amazon, if they did something like that and, where that field more rewards, do you think? arun: what is different between amazon and other big tech players is amazon is wrapping up its capex. we expect 15%-20% of an increase in this year versus last year. i don't think that would be viewed negatively by investors and the reason i say that is because amazon is also more profitable than it has ever been. it's margins are growing very attractively and rapidly. so, as you see margins expense, profits grow, while also

investing in capex. i know there are other big tech players out there, especially meta-. when they said they would increase their capex investment that woods viewed -- was viewed negatively by investors but i don't know if that would be the case for amazon given its markets are also extending. sonali: look at the stock going up this year and you don't see as much of a run-up in amazon even after the meta-selloff that you saw after the report this week. is it is a valuation story? how do you think about the entry point for amazon? arun: i still think that shares are cheap. we have a target price of 221 right now. i think the bar is set high for amazon following strong beats from microsoft and google, the two other major cloud providers. but, i think the bar is set even higher for amazon given they are one of the last two report on it is earnings season. the bar is a little higher for them.

aws is the big talking point. that is what everybody will focus on this quarter. in q4 we saw aws grow three etc. rate up 13% from 12% in q1 two and q3 last year. if we can get growth up this quarter it will be viewed positively by investors. we expect about 15% aws growth this quarter that will likely reaccelerate throughout the year. sonali: arun sundaram at cdr ray, thank you. eli lilly boosted revenue guidance for the full year, citing a strong demand for glp-1 drugs. madison muller covers the sector and joins us now. eli lilly earlier today hit a record high. still up more than 5% on the day on a down day as well. what's going well? mattison: it's interesting.

when you look at eli lilly drug sales across the board they missed revenue estimates for this quarter. on a lot other major key drugs, they also missed sales estimates. the one thing they have going really well is zepbound the obesity drug we have talked about so much on the show that is all over the place. we hear so much about it everyday. but there is some concern because it has been in shortage and their diabetes drug has also been in shortage. going into earnings this quarter there was concern that revenue would miss for zepbound due to supply shortages. the market is reflecting relief from investors that things are going well as well as optimism because eli lilly gave more visibility into what supply will look like the rest of the year and boosted revenue guidance for the full year. so investors were optimistic. sonali: the new guidance, how much of this is supported by

them being able to fix supply challenges, versus another thing we have been talking about a lot, new potential uses for zepbound? matteson: -- madison: eli lilly is looking at zepbound and sleep apnea. that could widen medicare to expand it to even more patients. if they are seeing a significant improvement in supply, at least that is what they are saying, in the second half of the year into early 2025 with more and more plants coming online that will start producing the drugs. part of this is widening access. more insurers covering the drugs, hopefully, and also more supply coming online. sonali: what are the risks at this point? is it a competitive risk or is it a pain for the service risk here? when you think about insurance,

where are the biggest concerns among investors? madison: the biggest concern among investors was the supply challenge, being able to meet the seemingly endless demand for the drugs. eli lilly said they don't actually have manufacturing or supply issues. the problem is, there is just a finite amount of manufacturing capacity for these injectable medicines. so, they are having to build new capacity into the system and if that takes a little time to come on mine one of the risks is if the plans aren't a vote to come on line as quickly as eli lilly would like, that's a problem. the competition is viewed as something that will expand the market. bloomberg intelligence this morning was saying there are billion dollar estimate for sales of anti-obesity medications reaching $80 billion by 2030 looks conservative at

this point. sonali: thank you for keeping an eye on the hot story of the year. a check on markets. u.s. benchmarks are hitting session lows. now the s&p 500 is down more than 1%. same for the nasdaq 100. the dow jones industrial average falling about 400 points on the day. you have all major indices down on the day as well as the bond market also selling off. the two year yield now flying past 501 on the day, three basis points higher, trying to edge to four basis points and at the 10 year yield is just below the 467 mark. that's all ahead of the big fed meeting tomorrow. we will keep our eyes on it for you throughout the day. stick with us. this is bloomberg.

the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.

how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

sonali: this is bloomberg markets. i'm sonali basak. u.s. colleges from coast-to-coast are looking to address pro-palestinian demonstrations on campuses. at columbia and new york city students have occupied a campus building and barricaded themselves inside. joining us from the university is bloomberg's scarlet fu to talk about the escalated tensions being seen. first, start with what it feels like right now. on campus. scarlet: we aren't on campus because the campus is on lockdown mode. the only people allowed on campus are students that live on campus. for everyone else in the campus is off access including faculty. we are talking about students that live on campus at all essential personnel. it is ok because classes have ended for the semester. everybody is studying for finals that begin friday and take place for about a week. the school is preparing for graduation, scheduled may 15. our producer went to check out

the campus and saw a sign that said they are still moving forward with preparations for graduation may 15. now, we are, as you mentioned, on-site and in front of hamilton hall, which has a bit of a storied history as an epicenter for student activism. behind me you can see signs that the student activists unfurled. one says free palestine and another says glory to the martyrs and in front of hamilton hall another sign says. the students data barricaded themselves in their are making demands of the university including financial transparency and divestment along with amnesty for students that have been suspended or arrested by nypd about two weeks ago. sonali: speak to how we got to this point. the escalation happened over a number of weeks and columbia university has been one of the preeminent locations for middle eastern studies in the u.s., so it's a very complicated picture

on campus now. why is it divestitures in particular they are asking for? star pop --scarlet: divestitures are what they are pressing for partly because of 1985 when students occupied hamilton hall and it demanded the university divest from companies that do business in south africa. that lasted about three weeks. while the university did not take immediate action, later that year the trustees did vote to basically sell shares of companies that did business in south africa. so perhaps students are taking inspiration from that. in looking at columbia's endowment, worth almost $14 billion, about 13.5 billion dollars, i was looking through the numbers. it is important to keep in mind the endowment is used in part to operate the university, but only a portion. a portion of investment returns are used for that. in fiscal year 2023 only $632 million was tapped from the endowment and about 31% of that went to faculty and research and

about 25% of that went to student support, presumably, financial aid. in the discussion of whether the endowment should, or can, even divest from companies based in israel or do business with israel, its very complicated. it is easier said than done because endowments don't just invest in company or company bonds. they invest in private equity, hedge funds, hard assets like real estate. it's difficult to untangle all that. sonali: thank you for your reporting on campus in what is a massive national story right now outside the columbia university campus and, many campuses across the country are also facing similar tensions. that does it for bloomberg markets on the day. we are facing a market here also facing pressure, still down more than 1% on the s&p 500. the bond market also selling off to the tune of yields on the two-year being almost four basis points higher. 501. that does it for today for

bloomberg markets. this is bloomberg.

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 business this is balance of power. live from washington, d.c.