>> welcome to the bnn, bloomberg and bloomberg audiences. a judge put a temporary stop to south carolina's new abortion law until the state supreme court can review the measure. the ruling comes one day after governor mcmaster banned abortion after six weeks. planned parenthood immediately sued, saying it puts patients and abortion clinics in jeopardy. ron desantis raised $8.2 million in his first 24 hours as a presidential candidate, according to his campaign. it comes as the governor accelerates his criticism of donald trump, his chief rival for the nomination.

he told a tennessee radio station trump is attacking him from the left. desantis launched his campaign wednesday in a live twitter discussion plagued by technical difficulties. the vatican says pope francis is running a fever, forcing him to skip meetings today. officials attributed his illness to a busy day in which he had greeted a big crowd at his school foundation. in march the 86-year-old leader rushed to the hospital and was treated for bronchitis. suspected chinese hackers allegedly breached the u.s. navy. the navy secretary said it was impacted by a state-sponsored chinese hacking group. it is accused of targeting government organizations in the commit occasions, manufacturing, and i.t. sectors. microsoft issued a warning on wednesday saying the hackers gained access to the u.s. and guam, which is home to a key u.s. military base. china has denied the

accusations. global news 24 hours a day on air and on bloomberg originals. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. jon: i'm jon erlichman. matt: and i matt miller. gains stemming from various different reasons. tax, ai, growth and economic data as well as progress on debt talks. we have the s&p 500 up 1.2%. this despite the fact inflation came in hotter than expected and that gives ammunition to those saying the fed should hike again. you can see the 10 year yield coming down just a little bit as

investors buy the bonds. still relatively high for the te n-year. the bloomberg dollar index is coming down. we can see oil up $.55 a barrel. jon: sector wide we are continuing to get retail reality checks and it feels like it depends on which company we are talking about. costco shares are up today. the subscription revenue looking relatively strong although the sales numbers, based on expectations, could have been more robust. we will watch that story and certainly watching gap shares up 14%. this has more to do with the bottom line discipline cost-cutting, fewer discounts, helping profitability. that is not getting the lift. you talked about ai. the technology theme of the week. yesterday's big story was nvidia under pressure. it is backup right now and part

of that is the enthusiasm surrounding marvell which is 29%. it's revenue in the chip sector related to ai will be climbing over this year. even workday, a company thought of as a software play, leaning into ai. some analysts liked what they had to hear. you have tech stocks that are up double digit and that enthusiasm is alive and well. matt: definitely something we will be paying attention to. certainly, the chip story. part of the fuel for the equity rally is optimism around debt talks. house speaker kevin mccarthy spoke about the status of negotiations. [video clip] speaker mccarthy: i thought we made progress last night. i'm going to work as hard as i can. as soon as we get a deal, we get the deal, but it has to be worthy of the american people. jon: let's get the latest on the debt ceiling negotiations.

kailey leinz joining us from washington. mccarthy saying progress made but more progress required. what does that look like? kailey: one of those negotiating on mccarthy's behalf is financial services chairman patrick mchenry. he walked out of a meeting earlier today saying there is forward progress but each time there is progress, the issues that remain become more difficult and more challenging. where we understand they are finding alignment according to bloomberg from colleagues may be on raising the debt limit for two years and capex spending for two years. we understand that defense spending will increase 3%, which would be aligned with what president biden requested. all of that to say there is going to be compromise on both sides. republicans may be disappointed with the amount of ground given because this would be, in theory, more limited than the bill they passed. on the democratic side, work requirements has been a challenging one. many have publicly expressed

displeasure about how much president biden may be willing to give. which brings me to the point. even if we get a handshake deal between the speaker and president today or tomorrow, allowing for 72 hours for the house to read actual text and vote tuesday, it is not to say there is not room for error. on both sides of the aisle there may be members that take issue with a deal which is not fully ironed out. jon: you have to watch to see how long it takes to get to that finish line. appreciate it. kailey leinz joining us from d.c. katie greifeld just wrapping up her show and focusing on fixed income. she is back with a look at how credit is taking this debt ceiling drama. what are you seeing right now? katie: it is interesting. we have seen a lot of concern in the treasury bill segment. not too much if you look at the investment-grade credit market. but you have ubs, jp morgan

saying that could change,. if we get past the x date without a deal, you could see ig spreads hit 200 basis points. if you look back to 2011 when we were last there, it was the level that we reached. ig spreads trading around 150 basis points. they have been remarkably contained and not seen 200 since the early days of the pandemic. we will cf that changes. we know lawmakers are working on a deal. the date is drawing ever closer and jp morgan puts the odds of us getting past that date without a deal at 25%. if that happens, the best guess is this blue line will rise. matt: we will watch that carefully. katie greifeld there looking at ig spreads. let's bring in bnp paribas, meghan robson. great to have you in studio. what do you make of this debt

ceiling drama? do you have to make contingency plans? meghan: our base case is that we will get a resolution and i think we could see a bit of relief rally in credit around that. as was pointed out, there was not much risk premium priced in around getting no resolution in credit. for us, we have focused on the medium-term implications. the fact that we have gotten so close to the x date means the treasury will have to refill their general account. that will require the issuance of t-bills and that will be a drag on liquidity. matt: massive issuance. do you expect -- meghan: we are looking in the $600 billion to $800 billion range into the early fall as the treasury would refill coffers. which would be a drag when we have quantitative tightening on autopilot. jon: does that mean with each day that we get closer to the x

date it gets more complicated within the credit market? meghan: i think that is a fair assumption, but for now, there is a lot of anxiety in credit markets. but we have been shaking it off. credit has been trading range bound year to date and even back over the last 12 months. volatility is still low. that tells you there is complacency among investors that we will get a solution and that this range can hold. our broader view is that ultimately, we will get wider spreads. we expect to test the wider end of the trading range we have been in as these tighter credit conditions feedthrough into markets. jon: we have got the storyline, the central bank storyline. i would imagine the fed is watching what is happening with the debt ceiling drama. we got data today that suggests the fight against inflation needs to continue. and yet, we have had uncertainty

in the banking market as well. when it comes to what the fed ultimately does, are there actions taking place in the market that would help the fed do its job if it is continuing to raise rates? meghan: i think definitely. the fed told us they have in the last press conference they are outsourcing the fed's job to the bank sector and credit markets. i believe the fed is on a conditional hold. we think they will hold but are watching markets closely. they have said there forecasting tighter credit conditions ahead. if we do not get tighter conditions, we believe the fed will continue to hike. there is a negative asymmetry for credit spreads. matt: what is your strategy assuming the base case comes true throughout the next month and the summer? meghan: we have two investment themes. the first is positioning for decompression. as all of this tightening starts

to play out, we expect lower quality spreads to widen out and for cyclical sectors to be more vulnerable. our second theme is in recognition that this is happened very slowly. fundamentals are deteriorating at a slow pace. we like carry and credit like single-a investment-grade. it is a great opportunity to add to earning more yield. matt: what is the worst case scenario? what do you expect in terms of default? especially if we do not get a deal. meghan: i think that, you know, if we do not get a deal, the main risks we are watching would be underperformance of financials. financials are more intertwined. i think the front end of the yield curve is vulnerable in the events of not getting an outcome or seeing a bumpy road. those are two places we are more

cautious in the case that the resolution does not come immediately. but our base case is that we will get a deal soon. matt: excellent. thank you for joining us. appreciate having you with us. head of u.s. credit strategy, meghan robson. coming up, ford and tesla striking a rare partnership over electric vehicle charges. we bring you the details, next. this is bloomberg. ♪ this is ge vernova, helping generate and move the energy that our world needs. ♪ welcome to a new era of energy.

jon: this is "bloomberg markets." time for the stock of the hour. ford has struck a deal with tesla to give drivers access to the tesla supercharger network,

a rare deal between rivals meant to simply simplify recharging across the industry. that is driving stocks higher. the biggest move for ford in a single section in a year. matt: pretty amazing deal for ford drivers. the coveted supercharger network. there is like 45,000 supercharger plugs across the country. cathie wood, famously, big investor in tesla was on bloomberg tech. listen to what she had to say. [video clip] cathie: the company that gets a person in an autonomous vehicle from point a to point b as quickly and safely as possible is probably going to get the lion's share of the market and that will be, in the u.s., we believe, tesla. matt: she is betting on robo taxis. something for the future but we are focused on the here and now.

we have auto reporter keith naughton with us out of detroit. talk about what this means for ford. it seems like a great deal for drivers of the ev's that they can charge at the supercharger stations. keith: absolutely. it is a big win for ford. clearly, that is what investors are saying. ford started the week with an investor day that did not move the stock at all. this deal has moved the stock a lot. we are kind of at the betamax, vhs moment with electric car charging this country and ford chose tesla. this could open the floodgates. jim this morning was saying it is now on general motors and others to make the choice. jon: simplicity always helps, i think, in storylines. i think jim farley said he was on a vacation with his family at

lake tahoe and the kids were seeing superchargers and he had to acknowledge they could not use them. he basically acknowledged this is hard to build but there is a lot of players trying to build right now. keith: and the tesla supercharger is the cream of the crop. it was number one in the jd power survey of car chargers. getting access to that 12,000 network in the u.s. and canada gives ford a competitive edge. you have to believe that others will follow. charging has become the biggest roadblock to adoption of electric vehicles. so, if you can smooth that out for consumers, more of them will buy ev's which is why tesla and ford struck the deal. matt: tesla's pumping out a surprising number of vehicles. it will be half a million this year. when is ford expected to pass tesla in terms of ev production? keith: well, it will be a long

time because tesla has 60% of the u.s. market for electric vehicles. ford was number two last year, but distant. fortis planning to be at a 600,000 ev production rate by the end of this year. they said they will get to 2 million by the end of 2026. there is skepticism about that in the investment community, but that is where ford said they are heading. they have three ev's on the road, the f-150 lightning pickup truck, the mustang mach-e, and a commercial vehicle, the e- transit van. jon: a breakdown on the vehicles to be watching and how those networks are getting used. appreciate it. keith not in, the auto team working hard on this friday. coming up, an agreement to raise the debt limit could be the tailwind for noble energy. this is bloomberg. ♪

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jon: this is "bloomberg markets." we are getting a quick update on what is happening in washington as the debt ceiling discussions continue. the republican negotiator making comments to reporters right now. acknowledging progress has been made, but saying major issues remain. in many ways building out what we heard from kailey that there are many outstanding issues. matt: we continue to get updates from different people involved on both sides of the aisle. just looking at comments across the wire from patrick mchenry, pointing out everything is complicated. clearly, that is the case. but it looks like it is the work requirements in order to give

people government assistance that is causing problems. democrats are against, even though president biden voted for it when he was in the senate. he has changed his opinion or his constituency is no longer for it. jon: we are going to wait for more details on what all of the stakeholders are discussing in d.c. bloomberg news is reporting one of the things in the deal are measures to upgrade the nation's electric grid to accommodate renewable energy. scott drury, socal gas ceo, pushing for renewable hydrogen. thank you for your time. a lot on the go with your business but i imagine you are watching these headlines. what is going through your mind? scott: i am watching those like everyone else. definitely a complex issue but i am an optimist and i would expect something that's done. matt: we are glad to have you. one of the things that we expect could be in the agreement is

more assistance for clean energy, renewable energy. i think that is something you are focused on today. talk about the pipeline and your move on renewable hydrogen. scott: yeah. we are deeply focused on helping the country and helping california specifically decarbonized its ecosystems. we think if a structure and innovation -- we think infrastructure and innovation are reflected in the angeles proposal, which is contemplated to be a green hydrogen pipeline that decarbonizing the l.a. basin. matt: you are holding a conference as well with the nudc. the utility diversity council? scott: that's exactly right. it is the national utility diversity council. when we think about the magnitude of investment that is going to be required to modernize america's energy grid, we are going to need an

increasingly deep and diverse bench of suppliers. nudc's focus in l.a. has been the position and diverse suppliers for success in pursuing economic opportunity that comes with that investment. i would note this is an area that socal gas has a long legacy of leadership in. in 2022, we spent over $1 billion, or 43% of total procurement, with diverse suppliers. that made us an attractive host for the nudc conference as well as the innovation and energy happening in california. jon: in terms of the customer story, obviously, there has been stress on customers in terms of their bills overall. a storyline you know well. how are you going to help with that part of the story? scott: that is a great question. we are deeply focused on

managing and supporting energy affordability for our customers. this is why i go back to the points i made earlier about infrastructure and innovation. one of the most important things we can do to enable the energy transition in an economically efficient way is to ensure that we have ample infrastructure to deliver a diverse source of energy. clean electrons from new transmission infrastructure on the electric system as well as pipeline infrastructure. importantly, there is a really significant opportunity to decarbonizie using existing infrastructure. with the scale we have and the ability that we have, we think we are the most economically efficient method of decarbonizing california. matt: great having you on. thank you for joining us. scott drury, ceo of socal gas.

we are looking at markets that continue to rally on optimism around a debt ceiling deal. this despite higher inflation numbers that came out this morning. we will continue to watch these markets. this is bloomberg. ♪ like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones. make a sound decision. call 1-800 miracle now, and book your free hearing evaluation. ♪ ♪

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romaine: investor frenzy around ai and investor relief around the promise of the debt deal. romaine bostick in new york kicking after the close. katie greifeld riding shotgun. back-to-back gains for the s&p and nasdaq. the semiconductor index up 5%. some concern about fraud