>> we are 30 minutes into the u.s. trading day on this thursday may 2. here are the top stories we are following. post fed pre-jobs, stocks create a bit of footing with powell singh rate hikes are not on the table. earnings after the bell and jobs day tomorrow. in the weeds with kim rivers. we discussed when the dea's decision to potentially reclassify marijuana to a less dangerous category. a demand for weight loss drugs continues to outplace supply. part of our conversation with the novo nordisk ceo in just a bit.

dani: -- katie: welcome to bloomberg markets. you look at markets at the moment and you can see there some green on the screen a high me. you can see the s&p 500 currently up by about 3/10 of a percent. you look at big tech right now the nasdaq 100 even higher paid 4/10 of a percent. small moves overall. a change in direction after a pretty rocky start. taking a look at the philadelphia semiconductor index you can see that sleeving games right now. let's get right to one of the big stories today and that is peloton. the fitness company announcing its ceo is stepping down after two years. it's also cutting 15% of staff as part of its restructuring efforts and among -- bloomberg technology joins us with more

details and i hate to say this was a surprise what was your reaction? ed: the market action is a big surprise. we were climbing steady, session highs 18%. took the resistance off. speed and power now we are at a flat road. completely flat on the stock. it is astonishing trading and the markets trying to understand the severity of the changes so barry stepping down as ceo the board will look for a replacement. another 15% headcount reduction globally. the problem is the big picture hasn't changed peloton. they cheered with this move will do in terms of cash flow but the revenue outlook is worrying and the subscriber outlook is worrying. >> it is interesting you think about what the path forward could look like. even just this week of course the ceo who is now leaving had been behind this effort to bring

peloton into high-end hotels. a bunch of partnerships he had pioneered as well. where does peloton go from here. >> the problem they've got is growth and scale so in the early days of the pandemic it's a well told story everyone was forced to be at home. they bought peloton hardware in large volumes and pay the subscription and as the pandemic disappeared that eased off. they are not finding the channels for scales so hotels has been one thing that's kind of work but not really, go to the outlook for four-year digital subscribers it's now below the 3 million initial forecast parade what they are saying is the hardware trend is responsible for that. they don't see hardware growing so the cost subscription isn't there. revenue growth is missing until the end of the year. this saves at around $200 million annually in part with other stuff for outsourcing and installing the equipment themselves.

it is a stock that lost 90% of its value since the heyday of the pandemic and it's hard to know where the growth comes from going forward and the market changing its mind in the session. >> 80's hard to explain. katie: hard to explain for sure. it looks like the stock hit an all-time low. we will follow this story prayed ed will be focusing on this in bloomberg technology. our big thanks as always to ed ludlow. there's a lot of action in the markets. she is a fund manager who focuses on the consumer luxury industry so let's talk about the consumer. a lot of different headwinds facing consumers now from inflation to the job market, how tight things are. how does that wrap into the luxury segment you cover? >> it's really interesting the

first quarter results we've seen for many of the luxury companies which happen to be based in europe is a mixed picture in that they are definitely seeing aspirational entry-level shopper very challenged and that something that's echoed with other dutch others who cater to that segment as well. the high-end shopper remains quite resilient to in western markets in the u.s. as well as europe and in china the story is very much of a resurgence of tourism where the chinese outbound traveler traveling to japan and europe is finding good deals and coming back to life for the sector following the reopening of that economy. >> i want to talk about china but let's meditate longer on the disappearance of the aspirational luxury shopper. this trade down feels like we've been talking about that for a while of course, shoppers trading down and looking for bargains. is there any sign of that happening at the luxury end, the

high-end of the spectrum or is that still resilient. >> in luxury because these are not essentials you don't really need to buy any of these items that are completely discretionary purchases. rather than a trade down, those consumers are not buying these products. we have to remember in the u.s. in particular the u.s. luxury shopper pretty much doubled in terms of their spend on these products between 2019 and 2022 a lot of that was basically how stimulus checks were deployed. excess savings burning a hold -- burning a hole in household pockets. very down on purchasing power, that meant the shopper no longer had the ability to finance these purchases and simply dropped off the base which is what we are seeing for companies that have a disproportionate exposure to this segment. they have been the ones that have been worse affected. gucci is an example of a company of a brand trying to presently elevate itself which is to cater

to a higher spending customer but historically it's derived more than the sector average in terms of revenues from that entry-level customer that explain some of the specific difficulties it's experiencing at the moment. >> gucci may be suffering from that dynamic. what are some of the companies that are actually positioned well here. brands that can thrive right now relative to some of their peers. swetha: the classics are air mez -- hermes and that's what we've seen in their q1 results. sales up 17% pretty uniform across the board. pointing to a very strong european local consumer. but it's also surprisingly other brands that are also innovating and providing the customer with something new. prada for example is doing well. they're new you brand which caters to a number of audiences 89% year on year.

of a relatively small base in the context of larger luxury brands which run multi-billions of euros in size but still it shows you there is still life in the sector. it's becoming much more polarized between winners and losers in a way we haven't been used to for some time because post-pandemic it was a rising tide lifting all about scenario and that's not the case right now. it's very much a dispersion, the divergence of fundamentals between companies it's also relating to a significant dispersion of share price returns. >> some bright spots in the sector. if i, gucci, what do i do, do i try to take a page out of some of the books of the companies you mentioned or do i wait this out. >> i think they are absolutely intent on pursuing this strategy of elevation which is what will allow them to cater to more high spending customers through an expanded offer especially of the

high-end of the range. that's taking place with a new designer on board and a new couple of brand strategy. it will take time to bear out but i would stay the course because the other way you can do is to reduce prices that is typically anathema for companies in the sector because pricing power and maintaining that is very much in the dna of these companies so while the short-term may be rocky they are longer-term pursuing the strategy. >> discount luxury i'm not sure yet. just quickly we only have about a minute left but you write in your notes you need to distinguish between sales to chinese consumers worldwide and sales of luxury goods in china itself. swetha: in 2019, 70 percent of all sales made to chinese consumers in the luxury world were outside of china. mainly other parts of asia and europe because of price differences. when they've not been able to travel now that they're able to travel they are shopping abroad

again which is hurting sales in mainland china actually benefiting the rest of the world so i think looking at the chinese cluster is much more instructive to understand the health of the chinese luxury consumer in mainland china alone. katie: hope to speak to you again soon and that is already missed investment management. let's take a look at what's moving underneath these markets. we will do that with emily. take a look at wayfair. quite an upswing we are seeing in stock. >> the upswing is also the term the ceo used in the earnings call and said the first quarter ended on an upswing and that seemed to please investors the stock was up about 7% right now. this is a furniture company that's typically known as a discount furniture offering prices that are perhaps a little bit more competitive than something like crate & barrel or west elm. they reported first-quarter net revenue of 2.7 3 billion which

beat estimates and they reported year-over-year active customer growth. active customers totaled 22 .3 million. the stock is already up 80% in the last year and this is giving another one >>. quite a move in the shares looking long term. this pop we are seeing today double digits only its best gain since december so very well accustomed to some big moves higher. doordash not exactly having as great of a day. seeing double-digit drops in the other direction for doordash. the biggest intraday fall now since may of 2022 and a lot of investors seem to be focused on the disappointing profit forecast for the food delivery service, 325 million to 425 million below estimates of 394. they also reported a loss of the

previous quarter of six cents and that was slightly below estimates with a loss of about 5.6. when you compare doordash to its other competitors, doordash is the only company that has a company that hasn't had a profitable quarter yet. they are the leader. they have 67% of market share but they haven't reported on an operating basis that profitable quarter. the software has overshadowed an otherwise rosy report. 21% to 60 million but that profit forecast really disappointing people. >> it's all about the outlook and shares absolutely getting punished right now. bring it home with carvana. >> this stock is up nearly 40%. highest level since april of 2022. they reported a surprise profit here. that was first estimates of $160 million loss, carvana is car

delivery. you may see the pictures of that vending machine for cars. i see that all over the internet but the company seems to be doing well with vehicle sales for the first time in six quarters also important to note that there's fairly high shortage in carvana. so we could be seeing a little bit of a short squeeze now that stock is up nearly 40%. >> you have to imagine something funky is going on there. good earnings for a company that was left for dead. emily, really appreciate it. for more on carvana the ceo earnie garcia will join bloomberg television today of 3:30 p.m. new york time. coming up though boeing -- in a historic shift the u.s. moves to reclassify marijuana as a less dangerous drug. we will discuss the potential move with kim, a truly cannabis chairman and ceo and founder. this is bloomberg. ♪

katie: the u.s. justice department may reclassify cannabis as a less risky drug. currently it's a schedule one narcotic. that's the same level as heroin, lsd and ecstasy. this proposal would move it down to a schedule three narcotic on par with anabolic steroids and testosterone. for more on the potential impact we are joined by kim, tree leaf cannabis chair and ceo and founder. great to have you with me i'm hoping you can put this move into context for us because you take a look at your share price reaction it's clear investors aren't sure what to make of it.

you are hired by 38% on tuesday down 17% yesterday i know you're higher by 1%. how meaningful, how significant would this be? >> to put into context the biggest kind of impact that we will have as a plant touching u.s.-based operator is the relief which is our current tax burden as a purveyor of a schedule one drug so even though we are legal in the states in which we operate given the federal classification and we are subject to two ade which is 50% tax burden and to put it in perspective between 21 and 2023 we paid approximately $350 million of extra taxes because of that impact so it will have meaningful cash impact on our business immediately. in addition, what this will do

is open the door for additional research and we also believe will lead to further momentum in congress which we are already seeing as it relates to just congressional action and activity this past week. as it relates to the share price, just a note on that. we are not able to be delisted on a normalized exchange on the nasdaq or any of the others. we are on the csc and we are also on the otc. there's custodial issues that will be resolved as these barriers in congress continue to evolve and be removed and so it's important to note there will be volatility in our stock and in the sector. a lot of that is structural in nature and folks see it as an opportunity to get in early in the early stage prior to the listing event we believe will be on the horizon and this is an

important domino to fall. katie: it's a good point you currently don't have access to u.s. exchanges. you also don't have access to u.s. banking services. the safer banking act it feels like we've been checking in on that one for several years at this point. with this potential reclassification, what can that mean for actually getting the bill through congress. >> safer banking on average it takes about 11 years for a policy change to make its way through our congressional system. and i'm -- and lucky for us this is the 11th year. we have made significant subsequent moves this year and forward progress first state banking. this is elevated to the point where from a cosponsor perspective we have broad bipartisan support in both

chambers. schumer actually last week again noted he is looking for bills to attach safer banking to again and so we remain optimistic and again we believe this move at the executive level will absolutely embolden and further create momentum for safer banking and what that would do is normalize our ability to provide safe harbors for financial institutions to be able to offer lending services to companies like ours. >> part of the thinking is what they put into motion, let's look at the scheduling is to appeal to younger voters and with that in mind i'm curious when you look at your customers on the clients you have currently i know there is the big divide between the federal and state level but how does it skew generally when it comes to the generations? >> when you go into any of our

dispensaries we are the largest cannabis retailer in the world of true cannabis products and so we have just under 200 locations across many markets. we've got a lot of data on consumer behaviors and trends. it tracks alongside a cvs or walgreens. we have a broad demographic appeal and certainly whether it's adult use state or a medical state. in florida we have a number of locations, our average customer is 50 and it's about equally weighted male to female. believe it or not we have a wide demographic that expands all income levels and currently in florida we are on the ballot, of this a lot of polling that's been going on. it's the same or similar we have broad bipartisan support over 50% of republicans support the adult use initiative and a

significant number of democrats as well. this move while i appreciate it was to appeal only to the promoters, there is broad appeal for cannabis reform in this country. the tides have turned. we have 38 states with a medical program. now we have research by the fda there's medical, it has medical uses and so it's just time. >> i have just over a minute left. before i let you go tell me quickly what do you see in the future when it comes to m & a. is that some thing you're considering now. >> this sector is going to always be fast-moving and we are still in the early innings, there is lots of growth ahead of us both organically and through consolidation. again with this cash influx into our business and certainly the

sector you will see a lot of growth opportunities taking advantage of those in the years to come. >> would love to stay in touch on that front. really appreciate your time on a very busy week. our thanks to kim rivers. we will look at the companies making the most social buzz today in her social climber segment up next. this is bloomberg. ♪

♪ ♪ ♪ >> time now for social climbers. a look at the stocks making waves on social media. take two interactive is shutting down to game studios as part of a mass layoff across its divisions. the studios are based in london and seattle. last month a video game publisher said it would layoff 5% of its staff amounts to about 600 employees.

we have zillow missing first quarter forecast issuing a disappointing revenue outlook. the real estate company citing cap it first homebuying activity and a recent rise in mortgage rates as drivers of its week shelling. we have novo nordisk raising its outlook and reporting a surge in quarterly profit. despite the beat, analysts are focused on the companies's weaker than expected sales for its will go v drug. it's the most valuable drug company in europe. a quick check on markets at this juncture on a pretty quiet day post fed. you can see the s&p 500 holding on about 4/10 of a percent slightly more so if you look at the nasdaq 100 and the philadelphia semiconductor index. again a quiet day. the fed holding rates steady for the sixth straight time. we will explore what it means for a housing market still struggling to find solid ground.

mark rayfield north america president and ceo joins us next. this is bloomberg. ♪

katie: federal reserve rate cuts looking a little bit more distant and that's unwelcome news for prospective homebuyers. joining us for a look at the housing market is abigail doolittle. >> let's start off with a breakdown of the construction relative to manufacturing because as rates have come off of the lows initially we did have construction manufacturing being very low but more recently this big move higher for the construction manufacturing space. if rates to go higher is there going to be some sort of tumble. in the meantime we look at one

stock in particular sustainable construction materials we see some nice outperformance over the next year relative to its benchmarks up about 14%. so riding that wave of strength for construction manufacturing but to your point on rates if we look at the turn of the 10 year yield we will -- here is the performance in a non-charter form. you can see this gain relative to its benchmark. if you look at the 10 year yield moving higher back here in the pandemic lows it's really fueled the big move up for housing and then close to 5% down now near to 5%. what will this mean for buying construction, housing it will be interesting to see as conditions tightening. katie: let's keep this conversation on the housing industry going. we are joined by the north american president -- tsonga bond more thin american

president and ceo. making materials for construction in the u.s. and canada. let's start with the housing market of course. it really feels like it's been frozen whether you're talking about existing homes or new homes when it comes to new bills how are you thinking about that market? >> first off thanks for having me. we still remain relatively strongly optimistic about the housing market. interest rates are high we have seen this go up and down. the actual activity housing market has been relatively steady. multiple ups and downs, shifting between multifamily and single-family. so we see from a market perspective we have under built environment in the u.s. and canada so there's an underlying fundamental and it's been pushing through these interest-rate variations and

keeping with the large house builders at a relative base. >> it feels like there's an agreement there's a structural under supply of housing both in the u.s. and canada to your point. let's talk about your recent earnings. it was americas that was the standout. you would america's sales higher, the estimate had been for .75%. where is that coming from? what drove that strength? >> the first answer is my fantastic team, who were doing a great job so i could not be more proud of them and they really delivered that. the second answer is fundamentally a strong demand or a solid demand in new construction that's not of a super high level. and a lot of renovation and remodel. although it's not the covid level a lot of activity around remodeling both discretionary and based on weather events and

storms i use an example in 2000 there were about 150 million homes in the u.s. now there's 144 million in the u.s.. that's 144 million homes. so that's given us a robust american market and we've had the broadest offering solutions of anyone in the north american market. we are able to participate at a lot of levels in the organization. >> what's your strategy when it comes to pricing. we are talking about still very sticky very high inflation. have you been raising prices? how if you been thinking about that? >> we've had inflation in labor and transportation. it's moved up and down to some degree. we making sure those prices and cap what we've considered a

positive spread. to do that we need to have innovative products the customer and the product -- and they need. to get those products to market. we've kept inflation above the cost of factors. >> how many more levers you have to pull. if you think about inflation it's been frustrating for the fed and everyone else that's just stayed at these relatively high levels, not as high as we have been compared to the last several years. but well above that 2% level. >> the levers we are pulling israeli investment so i think the market as i mentioned before we are optimistic on the long-term fundamentals of the market so we've invested $6 billion in investment of new ask -- acquisition in north america. tripled the size and canada. and 600 million in new capacity, roofing.

and to add capacity but also to decarbonize our existing approach where we have gypsum board and a path towards that same cooperation in north america. we think the next step is to make sure we have the capacity to support future growth in housing as the market continues to grow not a rapid rate but consistently. >> we are of course talking about residential but it's not just residential were also active when it comes to commercial as well. when you think about those two markets what are the trends that have sort of arisen there. >> commercial is been more challenging. you've had less fit outs, less changing of hands on rebuilds so some things we are seeing being converted to residential and that's very business for us. but it's definitely a different

market still holding up stronger if you look at those results tied to the market. it's certainly not as strong as we see in the residential market today. >> it certainly lines up with what i'm hearing from commercial real estate investors for example. is that just broad brush strokes or is that until -- particular pronounced when it comes to certain regions. >> i think your larger metro areas having the bigger impact on it, certain areas where if you follow the population the southeast southwest to some of those other areas you see more activity as well as residential it follows where the people are moving but broadly off this base a construction perspective is more challenged. >> before i let you go, we have jobs day to look forward to tomorrow and i'm curious from your perch what is labor availability like now? >> lever availability has gotten better.

you still have to have a reason for people to work but we've noticed people are coming in to the organization not just looking for a job anymore but they are kind of in the driver seat looking for a job they feel strongly about. there's a lot of desire for making up the world a better home and being involved. so you need to have this full package for them as far as what they are looking for. so were able to attract and contain to get talent but they are looking for the full package. >> really enjoyed this conversation. let's get a check on these markets now about an hour into the u.s. trading day. we will do that with abigail doolittle. >> a modest gain from some of the other indexes about 3/10 of 1% after the fed meeting and fed chair jay powell indicating the most part it's unlikely the fed will be hiking anytime soon.

the two year yield down about four basis points. the yen up against the dollar just a little bit. take a look at bitcoin which is drifted back down below $60,000 per bitcoin. it's up to .9%. we take a look at the technicals on bitcoin it seems likely this risk asset other times people call it a haven so it's hard to categorize. i would categorize it more as a risk asset. this is the 10 year yield you can see going right to the top of the range suggesting maybe we will see it go back down. let's go to the last board of movers and we have the shares of carvana up, a short squeeze here. they did put up a survive -- surprise profit. the short squeeze could be underhand. qualcomm the guide was great. androids in particular and

finally everyone's waiting for apple after the bell at 1.6%. revenue expected to decline. earnings up a little bit. people want apple to start growing again what will they say. >> all eyes on apple pay focus will be paid on what they have to say about china. abigail doolittle thank you so much. opportunities in private credit. we will hear from joshua easterly. copresident and cio 6th street about the -- about this. this is bloomberg. ♪

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abigail: you're looking at a live shot of the principal room. kkr partner and head of global macro balance sheet and risk joints bloomberg tv and radio. this is bloomberg. katie: time for our daily wall street week conversation. today we are focusing on the growth in private credit.

joshua easterly copresident and cio 6th street. he spoke with david westin earlier this week. >> when we think about private credit we think there's a lot of growth areas and it started in the lower market noninvestment grade market and now it's expanding to the upper market. at some point we are at the beginning continuing on the sports talk in the first or second inning on the noncorporate lane so think about asset base -- asset based finance. david: let's talk about that. starting in the middle market, some riskier lending. why is that. why is it you can take that away from banks. >> i'll argue with the premise as riskier. i don't think it is riskier. we look at the loss rates they are on par with the leverage loan market historically and it's actually better loss rates

than the high-yield market. about 50 basis points less on the high-yield market. and it offers better spread. i think when we think about private credit and where private credit has come from this was the intended consequence of the regulation that came out of the financial crisis which was to move risk out of banks for -- where taxpayers had written protection. and move it to a safer place. i would argue private credit is a safer place. >> how big is this, see numbers as close bike -- at $2 trillion. i sing this is corrective growth we are seeing overall. i've heard it said it will be run 50%. joshua: i think private credit is somewhere on the noninvestment grade corporate sides. but there's all these growth aspects in private credit

outside of noninvestment grade corporate including investment-grade noncorporate so think of it as consumer receivables. think of it as credit cards, mortgages, and the noninvestment grade tranches. those growth rates seem right to me. but there's very large areas that credit continues to expand in. >> what about the risk factor you're saying it's a mistake for others. >> i think this has been a little bit the narrative from banks who are trying to protect their syndicated business, but i think when you look at private credit, it is unique compared to banks. we study business models as a living. and private credit have match funding. so banks quite frankly they went long, they flew short with deposits in moments of crisis

deposits, out of the system. private credits match funding. so that it is more durable than those same loan sitting in the banks. >> there can be a run on your bank so to speak. depositors can come in and say i want that now. >> look i have an silicon valley bank. that was a lot of their assets were high quality assets. a lot of them are government guaranteed mortgages. we can all agree those did not have risk on the asset side but they had a business model issue which was a funding issue which was the funding ran. >> it's not a secret anymore. eddie given day there is an expansion of private credit. that must mean there's more competition in the sphere. does that actually push you to take bigger risks because people are willing to do things maybe you otherwise wouldn't be. >> when i think about our business or we think about our

business, we have a way of thinking about credit. we will continue to be investors first. that's how markets work and so what i'm saying is on the competition side there's been more competition. the total adjustable market has grown significantly. so at the same time there's more capital the just will market is grown so i don't know if that competition issues fills us as acute as one would think. >> there's some credit -- criticism requesting from the banks. raising questions for jay frazier. when it comes to the insurance part of it at least. are you taking market share every day from banks and as that what regulators want? >> this was the intended consequence for the regulation which is to diffuse the risk when the taxpayers had written they put can room the $700

billion in tarp that had to recapitalize banks. what i would say is i think there's a little bit of protectionism of the bank model. we are students of business models and in the noninvestment grade banks are moving business not the storage business. so they have a lot of fees in that business. and users of capital rather go to the end-user provider of capital that have to go through an intermediary which has been historical leverage loan model. >> there is i think a certain lack of transparency. we saw the imf say there are risks which we don't necessarily know the values there. they don't get mark to market is often. it may not be what you have an open public market. is there riskier. his the imf right that there is a problem. >> i would argue with the premise.

that bank account on the other hand usually don't mark their loans. and they have a historical funding model. i don't think you can look at the asset side without the liability side. private credit has a much secure a business model so again i don't see it. when you look at the overall business model there's much more durable business model for investors. katie: that was joshua easterly copresident and co-cio 6th street and wall street week host david westin. don't miss david on wall street which airs tomorrow night at 6:00 p.m.. this is bloomberg. ♪

katie: a mixed bag for novo nordisk as the drugmaker reported results weaker than expected for its weight loss drug. sales of its ozempic drug beat expectations fueled by u.s. demand. earlier i spoke with the ceo

about the resultant what's next for the company. >> we were down to some five or six patients on a weekly basis. that has now increased to 27,000 on the weekly basis. so that's really the proof we are scaling up the number of products we bring to the market. we have a policy of making sure that when we bring patients up to treatment they can also stay in treatment and show we also have the higher doses available to connect with patients. this is what has happened through the first four months of the year so to say. we will be expanding manufacturing throughout the year and also into coming years. we are committed to bringing this to more patients on a regular basis. katie: obviously this year you purchased cattle and to help your -- boost your purchase

there. you're also doubling manufacturing capacity to about $6.4 million. i'm curious where that money will be spent, whether the final finish stage or boosting capacity and manufacturing of your active ingredient. where do you see the biggest constraints now? lars: we are doing both so over the past few years we've made a couple of commitments to expand our api, that's primarily done here in denmark. and then to complement that we are adding the finished capacity third we do that on all of our system sense. and it's in this context are acquisition from low hold -- noah holdings is an important transaction for us. that's really part of this

capacity brand we are excited about what this brings up with opportunity to trade millions of patients in the coming years. >> that was novo nordisk ceo. of course after the drug giant reported results. we want to bring you some breaking news that his president biden will address protests at college campuses later today. we will follow the timing and bring that to you live once those remarks have started. dramatic scenes on college campuses across the country. we will hear it from president biden himself. we have mgm resorts ceo william horn buckle who joins me on bloomberg markets this afternoon. make sure to watch that one. we are in the heart of earnings season. mgm reporting yesterday pretty solid performance. you can see that in the share price today. do not go anywhere. this is bloomberg. ♪

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>> the heart of where innovation, money, and power collide in silicon valley and beyond, this is "bloomberg technology" with carolyn hyde and ed ludlow. caroline: and met bloomberg world headquarters in new york. we push ahead to apple's results after the bell as investors anxiously await iphone sales numbers. ed: and we sit down with the ceo of qualcomm.

caroline: