>> we are in much more uncharted territory than markets believed today. >> we have seen some volatile movements in the market. it is likely we will continue to see them in 2024. >> what i do see is a broadening out of performance. >> we would say volatility provides an opportunity for investors to get involved. >> we might have a more boring market than you think in 2024. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. carol: global shares on track for their best since 2019. the dollar poised for its worst year since the onset of the

pandemic, oil not doing so well. a lot to talk about. for our audience worldwide, this is bloomberg surveillance live on bloomberg radio and tv alongside manus cranny and katie greifeld. pulling up the superlatives, there are a lot of them. manus: they are marching out at me. will we get the record high? will we get the last moment of exuberance in the equity market? you have the dollar making multiple record highs. the s&p 500 is just shy. 47 -- carol: 479656. are we asking so much? katie: it would be poetic if we get it on the final trading day of 2023. you think about all the sentiment shifts. a bang in january. summer sentiment was bad. manus: don't forget consensus

calls was recession, china was going to fly to the moon. carol: are you reminding those strategists of what they got wrong? manus: i got a lot wrong to be fair. you have to try to make your prediction. the question is not is this exuberance or irrational exuberance. carol: in a year where we had so much volatility, to see the vix at 12, things have calmeded down so much. katie: volatility draining out of the equity market. it seems like it is not been a volatile year. the bond market has been a basket case. for all the strategists with forecasts we've been making fun of, the fed story was right. the fed was more aggressive than expected. the thing that did not feel right is the economy held up and corporate earnings held up. it did not make sense. manus: if you look at what

bloomberg economics put out, what could next year look like, the core pce inflation accelerating above 3%. this is your risk into 2024. not so much from the oil markets but other commodities. the fed will have to hold rates higher for longer and that is what this equity market is not discounting. carol: then you have ai driving the nasdaq and the tech trade this year. the best run since 1999. what is the momentum pull coming in 2024 question mark we don't know. katie: will we start to look at fundamentals? carol: you don't think there will be a fed narrative? katie: i imagine there would be. we have spoken to a lot of people hoping it into existence. manus: you just went to the first week of this year. they will look at the listing of

financial conditions. to what extent will they look at the into brinson equity markets? this is the mix they do not want into the first quarter. carol: the fed is very good at keeping investors and check. even though they are not watching financial markets. let's get to the markets on this final trading day of 2023. s&p 500 futures little changed. we have been saying this every morning. up about 2.5, call it flat. euro-dollar, it will cost you $1.10 for the euro. just a little bit of movement. manus: fourth strongest currency against the dollar. the euro payment number four against the dollar this year. carol: expectations of eventual rate cuts putting pressure on the u.s. currency. u.s. 10 year, 3.88. katie: a quiet rise in yields.

it feels like the gravitational pull of 4% is strong. manus: may the force be with you. there is a lovely line. katie: are you yoda? am i yoda? manus: darth vader got stuffed yesterday afternoon on the seven year option. the dealers got left with a lot of paper. a little bit of indigestion. katie: we are all tired. carol: i know i got about 14 hours of sleep. can you tell? let's see a much sleep same got. joining us on this friday. there is so much to talk about as we get ready to wrap up a wild year. as you sit here on this december as we get ready for the last trading day in the united states, how are you thinking about the year that was in the year that might be?

sam: rain. -- good morning. i am looking to 2020 being a good year. history tells us that great years are followed by good years. that gains in excess of 20% in one calendar year lead to double-digit gains in the second year, basically a 300 basis point improvement over the long-term average with a 10% increase in the frequency of advanced. basically you are letting your winners ride from one year to the next. manus: every day we have to come up with a new way to ask you if you want to be long relative to the breath. therefore hundred 93 other stocks. if you think you will get a double-digit return, the question is they are expecting to see earnings growth rise 22% next year. that is twice the s&p 500. there is an irrevocability about having to have a portion of your

equity exposures. is it still overexposed to max seven or do you go for breath? sam: you go for breath but you brought an out within those sectors that have done so well. going back to 1990, if you were to be holding onto the three best performing sectors into the new year, you ended up beating the market 70% of the time. the focus being net out you drift down into the second or third tier level. semiconductors having 105% improvement on a sub industry level within the s&p 1500. you would stick with that group, but instead of looking at nvidia you might look at broadcom, you might look at marvell technology. you stick with the winning sectors but you might brought an out to the second and third tier companies. carol: why not stay with nvidia. i feel like if we talk about ai chips, that is still the company

everyone says has to be there. ian king was saying we are waiting for their accelerator chips. why not go with the leader? sam: we still recommend nvidia. our tech specialist is saying this is a company that is likely to be a leader for quite some time. what i was saying is we are also going to see others. maybe we turning into the magnificent 14. we basically brought an out of those groups that are likely to benefit. manus: it is interesting you say tier three. i get your point. how much exceptional breadth would you take. we caught up with alliancebernstein yesterday and they talked about the sweet spot. how much risk do you want to put into portfolios next year? how much breadth? what is the equivalent for you in the equity world?

sam: when you deal with risk, it depends on the individual. i like to say i am so conservative i wear a belt and suspenders. when you look to historical precedent and you see we are in an election year for a first-term administration, the market has gained 100% of the time since world war ii with an average total return of 15.5%. we are in the second year of able market, up 12.5%, rising 85% of the time. whenever we are in a year following a 20 plus percent advance. the market has done exceptionally well in that second year. i would tend to say if you have added to the risk in this fourth quarter, stick with that higher risk. if you do believe there is more risk potential for 2024, i think we are a bit overbought right now. once we get into the new calendar year when people can

take their profits and deferred taxes for another year, i would say look to buy on those steps. manus: let's talk -- katie: let's talk about this from a sector perspective. you write following up years it is best to let your winners ride. do you let your losers continue to lose? you look at utilities, energy, staples leading losses. do you stay away from them in 2024? sam: we have recommendations in all three of those sectors, but from a waiting perspective we would recommend under weighting these groups, mainly because there is a lot of overhead resistance and if there is emphasis towards growth, towards risk, investors will continue to focus on those growth leaders. i would tend to say that while you could see drifting higher some of these groups from a relative strength perspective, they are likely to be

underperformers. katie: i want to get specific and run through some names. i want to look at the stocks you have specified. charles schwab is an interesting name. it was one of the babies thrown out with the bathwater and it has not recovered. you take a look at shares down 16% for 2023. what is the three king -- what is the thinking around charles schwab? sam: fundamentals tell you what but technicals tell you when and how far. i would like to combine cfa analyst recommendations along with our research technical assistance areas. seeing where the momentum relative strength happens to be. charles schwab is an extreme undervaluation situation, almost trading at half of what normally trades. also we are looking at an environment in which the concern is totally overblown.

with the prospect of another good year in the marketplace benefiting the investment banks and brokers, one that is oversold and has not reached its potential, it is charles schwab. carol: our most read story on the bloomberg put together by a bunch of our reporters says wall street's best and brightest flopped in 2023, saying that at the end of 2022 everyone was game planning for the recession they thought was coming. a lot of things came out of nowhere. regional banking. russia-ukraine. the middle east conflict. as you look ahead, what are the things we must keep on our radar that could come out of nowhere? sam: as man s was saying, when will the fed start to cut and by how much? our believe is they will cut three times because the fed does

not want to make the mistakes they did in the late 1970's. they want to ensure that inflation is fully doused before they start to cut interest rates. our belief is only if we end up with a hard landing rather than a soft landing will the fed be more aggressive from a rate cutting perspective. also adding geopolitical issues should we find there is a broadening of the middle east tensions and conflict, and the total shutdown of the red sea. we are still having some shipping firms willing to venture in there, but a total shutdown, a jump in oil prices. those could have been the year ahead forecast. carol: a full plate for the new year. happy new year. appreciate all of the time you give. full plate it feels like as we get ready for the new year. manus: interesting he says he

only sees three rate cuts. you will see pushback from the investment community. six was maybe irrational exuberance. the fed have gone to three. the last voice calling three rate cuts in 6:00 a.m. unless something bad happens. katie: interesting to see how pricing changes between now and february. carol: inflation is doused like a campfire. coming up, broke may of evans may well. this is bloomberg. we are just getting started. ♪

introducing the disney princes collection from blendjet. six enchanting designs inspired by some of the most beloved disney princess characters of all time. blendjet 2 is portable which means you can blend anytime, anywhere. recharge quickly via usb-c it even cleans itself. just add water, a drop of soap, and blend. make your princess dreams come true. order yours now from blendjet.com. >> this is more complicated because the houthis are distant, they are backed by iran. they are the only entity that has launched a short range ballistic missile towards israel.

deterrence may involve american strikes on targets in yemen, but nobody wants that. carol: aaron david miller talking to us yesterday on bloomberg surveillance. middle east tensions front and center. a quick check on the markets. s&p 500 futures up to .25%. will we hit a record on the s&p? we are watching that level? 47.96. we will see a friday is the day. taking a look at the 10 year. we get ready to wind up this year. you are crude, watching that very -- new york crude, watching that very closely. concerns over escalation in the middle east. up $.35. oil, we keep a watch on it. manus: this oil market, we will

have amrita sen on later. opec-plus has their work cut out for them. this market is still limping along. you look at the supply. the national numbers show a draw for the first time. it is not been that cold in this country. you both will tell me i'm in for that experience. carol: it has not. oil headed for the biggest annual drop since 2020. katie: when you think about the last years, to manus support about supply, that is been the dominant story, even with geopolitical tensions. carol: s&p down 4.6%. manus: one thing to keep in our minds is jeff currie this time last year was evangelizing a super cycle in oil and commodities, something we can bring up with the guests through the morning but oil so no sense of wavering. carol: let's talk about the

potential of escalation overseas. senior advisor for the transnational threats project joining us on this friday. i cannot keep track of the days. they are blurring. norman, nothing blurry when you watch what is going on overseas and what feels like an escalation. what struck me with some of our guests yesterday was not just a handful of attacks, but more than 100 attacks in the region happening at this point. little things are happening and you wonder does it add up to something much bigger? how do you strategize that? norman: good morning. i ran and its major proxies outside hamas have no strategic drivers to involve themselves in a conflict in a way that would risk a significant escalation that would undermine their own equities and stabilities. at the same time they have multiple incentives to continue to curve the pace of attacks

throughout the area of operation to keep israel under sees, to show defiance and weakness of the west, particularly the united states. we should expect these attacks to continue, perhaps with the quantity and intensity increasing as these actors believe they have normalized their behavior or they have passed what were previously perceived to be redlines. manus: good to happy with us this morning. the pentagon is daily engaged with shippers in the red sea. they have said they are engaged with the industry on a daily basis to provide reassurance to the national community there is help with safe passage. is this the near-term flashpoint of where we really need to be focused? there seems to be a reluctance to cover the maritime needs. what you make of the pentagon reassurance in the red sea? norman: the number and quality and capacity of the naval assets

the united states and europe has put into the red sea, the iranian see is extraordinary. there are hundreds of offensive missiles and air defense missiles. we have more than enough capacity to launch a significant and powerful strike. manus: is that what i ran wants to prompt? that is the flashpoint risk for us. norman: it is. at the same time it would not be unreasonable to think iran is not -- understands the west is not interested in a certain level of conflict and they continue without breaching a redline. what you look for is a strike that would unfortunately had the bridge of a ship or killer u.s. seamen that would provoke a strike by the united states. unless that happens, history has shown we will play defense. that is something that allows the houthis continue their

behavior. manus: let's move to the hamas-israel conflict. you would say militarily the idf has succeeded or finished its focus in the north of israel. how far are we from any cessation because the battle runs hard and long in the south. your assessment of the idf's desire to ramp off? norman: the idf would like this conflict to end as soon as possible but that is a long time from happening. they are in holding operations. very difficult urban environments. a challenging series of operations. the tunnel structures are massive. the leadership of hamas remains, though on the run. this is a difficult ground

operation for israel's military. katie: let's talk about what is going on in north gaza. you mentioned the shift from attack to a holding pattern after the idf achieving most of its military goals. what does holding look like? what does that mean for civilian casualties? norman: suffering is going to be a constant for the palestinian populations. it is a stain on our generation. for north gaza, hamas's capacity has been eroded. there are elements of hamas that are still active but they have very little command and control. this is an inch urgency -- this is an insurgency in a sea of rubble design for guerrilla warfare. the numbers are comparatively small and this allows the israeli defense forces to shift their power to the center of gaza and to concentrate on

lebanon or syria. carol: we talk so much about israel and hamas. when i think about the economic impact, we have talked about the shipping impact. there is more nervousness with the red sea. you and the notes you share with us talk about the houthis continuing to exert an outside pressure on the global economy and to impose hundreds of billions of dollars of cost on the u.s. in dozens of countries. it sounds like our focus needs to be on the houthis because they seem to not be willing to stand down. they understand the pressure they can impose. norman: that is correct. iran has always intended to have an influence against the west in general. they have a capacity to touch global supply chains, global energy, impose a cost on western economies as a way of asymmetric

sanctions on their adversaries. carol: 30 seconds. what am i going to be talking about -- what are we going to be talking about a year from now? do you believe this conflict will be top of mind 12 months from now? norman: the impact, certainly. we need to look at what is happening in lebanon. more than 60,000 israelis have been moved from the lebanese border, they must return home. more than 75,000 lebanese have been moved. at some point the israeli government and the international community will grapple, how do you convince hezbollah to stop firing to allow these people return to their homes? if that does not happen this conflict could spread. carol: thank you so much. happy new year. let's hope it is a happy new year. i look at wti crude up .5%. manus: i think what norman had

to say about the quality -- we have questioned this prosperity guardian in the red sea. as he made clear, he said the quality of what they've got is very high but they will play defense rather than offense. that is what the houthis want to push. carol: it gets more complicated as we watch all of these groups doing different attacks in different regions. you wonder what will it all mean going forward and out of the u.s. and the rest of the world react? coming up, amrita sen of energy aspects. this is bloomberg. ♪

carol: this is bloomberg surveillance live on bloomberg radio and television. i am carol massar. to the markets we go. pretty quiet. s&p 500 futures flat. up 2.5 points. nasdaq futures up .1%. a little bit of momentum. katie: i am speechless looking at these futures. carol: welcome to the world of sarcasm. russell 2000 flat as well. that has been in outperformer. let's flip it and take a look at what we are seeing long the curve in the united states. a 10 year come a little bit of movement to the upside. katie: a quiet rise in yields.

we'll see if that has any steam. carol: all quiet at this end of the year. looking out of the 30 year, 4.03. let's look at what is going on in the currency trade. in a year where we are seeing the dollar set for the worst year since 2020, the swiss franc rising to its highest level. what does it mean when we look at the euro-dollar cross? we have talked about parity. right now $1.10 to the euro. that is your market set up on this friday. let's look at other headlines. a second state ruling donald trump cannot run in its republican primary, with main the latest to bar the former president. colorado also barred trump, both siding trumps evidence -- efforts to overturn the 2020 election results. trump is back on the ballot in the appeal of that decision.

there is uncertainty of how this ends but there will be a lot of court rulings. manus: this will bubble time and again throughout the start of 2024 until we see how the supreme court rules on some of these things. the trump campaign made this statement. we are witnessing in real time -- the language reminiscent of the language around the election -- we are witnessing the theft of an election and the disenfranchisement of the american voter. katie: a lot of court drama coming up, a lot of lawyering, also a lot of campaigning. trump trying to capitalize on this. the biden administration, the biden campaign saying having trump returned to office would threaten the country's democratic institutions. carol: that sounds a little political. katie: matching the trump campaigns level of drama. carol: there is a great story in

bloomberg. he says he expects the supreme court not to decide whether trump engaged in insurrection but who has the authority to decide whether such an act bars him from holding office. when he would argue keeping him off the ballot will get his base more excited. is that problematic in keeping him off? manus: there's been some pushback from democratic judges in terms of how the law is being interpreted and what is happening. this is not a slamdunk politicized situation. the supreme court will have its hands full in 2024. carol: you talk about slamdunk's. chinese stocks said to record their lowest ever foreign inflows in 2023 as the country's economic struggles way on investors. foreign funds brought just over $6 billion worth of onshore

stocks this year. in better economic times investors would buy that amount in a month. you keep reminding us, you look at emerging markets. back out of china, they have done well. katie: e.m. ex-china seems to be the phrase of the year. it is interesting to put those numbers. just $6 billion a year for the chinese stocks. i am thinking about my u.s. friends watching. we talk about investor confidence. this uncertainty over beijing policy, what they will do. we just saw that with the gaming situation, the rules there, and then the u-turn. manus: everybody was full bull on this. carol: absolutely. manus: the only analyst we will quote is goldman but they were so bullish. cap -- they were not in

isolation cap. -- they were not in isolation. katie: i believe they call this the decade of e.m.. maybe e.m. ex-china, but china is a pretty big portion of it. carol: the granddaughter of the founder of french cosmetics company l'oreal is the world's first woman to amass a $100 billion fortune according to the bloomberg billionaires -- the bloomberg billionaires index. her wealth past the century mark this week on the back of a strong year for the company. shares of l'oreal rising more than 35% this year. we will have more in the next year. carol: go women. every time we do a list or a poll, it is like finally one woman gets there. manus: even if you going to

rescission next year, the lipstick index was founded by leonard lowder. not that you two have ever had a hard time, but apparently the lipstick index is you by yourself smaller things, small luxury. katie: that was a theme for the consumer. maybe it was not lipstick, maybe it is buying starbucks call group. carol: katie sounds like she is talking her book. katie: i don't know if i am talking from personal experience. carol: anytime we do a coffee order it is like and i have a cold brew? manus: we talk more with our investment managers as the morning continues. bill gates was at cop 28 and said the world will probably not meet its paris agreement goal of giving the temperature rise below two degrees. francine lacqua spoke to bill gates and begin by asking him

the role of fossil fuels going forward. bill: we have to outcompete fossil fuels. to do that properly, they should not get subsidies and a carbon tax over time should be put on so the new electric car or the plane that uses hydrogen, the fact that it does not emit carbon, you are helping it get adoption. those companies have skills. if you want to sequester carbon or nuclear waste, there is a lot of skills if you want to make biofuels. some of those companies will take the skills they have. i will not say ok i wish they were not there. people still, there is no country that can say we have zero emissions. people want to drive to work.

the excess supply when russia cut off its supply, the world was glad that was available. oil and gas needs to be outcompeted and those companies need to join the effort. francine: i know you look at a lot of technology and innovation, but is there one thing you've been most excited about in the past five years or you are most excited about for the future? we talk a lot about the really big exciting stuff. what are you excited about? bill: i love all of my children and i have these 100 companies. i never knew we would get a new way to make steel or cement or beef. it is fair to say if we can get nuclear fission or fusion to be safe and broadly accepted and very economic, because it is not

weather dependent, it would be complementary to the amount of solar and wind we are putting into our electric system. i am biased, i am a huge investor in fission and fusion and hoping it comes in time. we cannot count on it. fission has been too expensive and fusion does not exist yet. francine: fusion 15 years from now? i know it is a gas. bill: of the four companies i'm invested in, one of them, commonwealth fusion, has a credible path. in the late 20 30's they could be making electricity and start to scale it up. that is an aspiration but it is a great company and we have three others that are not quite that early but are within five to 10 years of that. francine: we are in a strange

place in the plant. there are a lot of unknowns. it is ai, technology, climate change. defined leaders distracted or are they still put in climate change as their top priorities? bill: we cannot have it as our only priority. we still need to buy vaccines and when there is a war that properly demands attention. even the eight budget for those refugees. i wish there had not been a pandemic or a ukraine war or middle east unrest. those are going to take away from the amount of tension we have on continuing to make health progress and climate change. those are bad developments. if you would only seen 10,000 people versus 35,000 you might have said we are getting distracted. instead twice as many came,

including a lot of the big businesses. the signs i am seeing is that while we have to deal with those things, and we have limited resources, climate progress is moving ahead even though it will not meet our highest aspiration. francine: how does ai fit into her vision? bill: ai is such a powerful technology in this recent advance where ai can read and light. that will affect every human activity. we are using ai to find new drugs, we are using ai to look at climate change. all of our companies are going to move faster because ai helps them explore different solutions and move on better.

certainly for challenges like this, ai is very much our friend. manus: ai is very much your friend. bill gates speaking with francine lacqua. it was a historic cop for a host of reasons, not least because it was the first time there was an agreement to move away from fossil fuels. gas will be the transition. the consensus seems to be gas will be the transition. carol: they had to fight to get that. manus: is up losses of a man and he moved away from the formal processes and took it into his own uae house and coalesced them around. an agreement he said is only as good as its implementation. carol: thinking about where it was held. the event was held in the middle east. you know what is so important to their economy. what i thought was interesting

that bill gates had to say, talking about fusion and fission and nuclear power. i feel in some of the energy conversations i've had this year, that has been a focal point. we have seen it reduced from the mid-1990's to today about 10% of world electricity is produced by nuclear power but climate change is making everyone take another look. katie: i feel like the timeline issue is still real. we were talking about these deals that had been agreed to and the promise of the technologies you talked about. the here and now, trying to heat a country, how do you keep the urgency up on such a long time frame is a question for a lot of these leaders. manus: you are right to say the irony of where it is held, learn the fox into the chicken coop. that is where the accusation was. the uae has agreed to restrain themselves. they have the capacity to get to 4 million.

you are not looking at oil and gas going away. it is just a question of the timeline to transitioning away from fossil fuels and the reality of that pointed out. carol: the u.s. approving a new kind of nuclear reactor for the first time in 50 years. you are seeing so much momentum. we'll continue talking energy and fossil fuels. amrita sen on the oil market. curious what she has to say about the timing of backing off fossil fuels. it feels like we are still all in. this is bloomberg. ♪ give the gift of convenience the blendjet 2 portable blender is perfect for everyone on your list. even that picky relative who hates everything. and dont forget the accessories! theyre all on sale! dont wait! our most popular colors and patterns will sell out! go to blendjet.com and take advantage of our holiday sale now.

>> i would not be surprised if it is more than $700 a barrel. i think the fact that u.s. supply and you know opec is holding so much oil off the

market is negating the geopolitical risk at the moment. carol: above $80? manus: she is pushing. >> i will not say no. manus: ellen wald joined us yesterday from the atlantic council. oil trade this morning, 72.02. up one third of 1%. that is not what you would call a premium. carol: we also talked about stockpiles. when you're looking at the energy and what is going on in terms of the amount of oil. katie: we talked about supply all week. where is the demand? that is one of the big consensus calls that went wrong. carol: i am filling up my tank. manus: the u.s. pumping over 30 million barrels and exporting eight. amrita sen is our guest on the

oil market, closing the agenda. you probably started the agenda and you will close the agenda for bloomberg on oil. war premium is being subsumed by inventory built. will that continue and are we mispricing oil? is there is there a sufficient lack of war premium in your view in this market? good afternoon, good morning. amrita: good afternoon, good morning wherever you are. it is different parts of the world. in terms of war premium, there is no geopolitical risk premium in the price right now. that has as much to do of the notion that demand is weak. if anything demand has been growing at over 2 million barrels a day. it should be slowing. we are expecting it to slow given the higher interest rates and the lagged effect of that on the economy. it will be growing 1.2 million barrels per day.

the bigger challenge has been a lot of traders and speculators have been hit this year because trading has not been easy, it has been choppy. we do not have the confidence to come in strong. we need sustained stock draws. we had baked stock draws in the numbers yesterday. if we see a continuation i think confidence will come back and that is when you see geopolitical risk premium come back. manus: you still have an inventory built. there is a trigger event at the beginning of the year. we have these voluntary cuts of 900,000 barrels we spent agonizing days debating whether they are robust or not. take us to the cuts opec-plus will implement. continuing with a unilateral cut of one million barrels. take me through the deficit for q1. when will it materialize and what size will it be? amrita: q1 in early q2, i would

say the cuts go towards offsetting what would have otherwise been seasonally bills because this is when refineries go down for maintenance. oil products will be strong. gasoline and diesel. opec has been clear -- we could see a small drop down. i think from the later half of the second quarter once refineries are back from maintenance you will see crude drop very sharply. in the meantime the product markets will tighten. overall hydrocarbons will look tighter. the product markets will be a lot stronger and crude as its weakest period anyways. opec, if they manage to keep inventories and check, that will be an impressive feat. usually we built the first half and we trawl the second half. carol: you've talked about europe moving away from russian

oil. we get that. you guys work with consult, or people rely on your research, utilities, governments. what about moving away from fossil fuels? the energy transition? what is the conversation around that you are telling them? amrita: great question. i would hope for our conversation there is little more pragmatism seeping through, particular after the war. at the end of the day energy transition can exist as long as we all except that it will not happen across the world at the same time because we still have billions of the population in africa, asia, and latin america below the poverty line and energy is at the epicenter of any economic growth. i keep saying it is a nice western concept where we can tell people that by the way you're going to grow. it does not work like that.

that does not happen at the same time at the same pace. the second is the true cost. we cannot move away from fossil fuels. renewables are not reliable enough. certainly you need gas. there is an enormous man of investment required. one of the challenges i find in energy transition as everyone talks about being for energy transition but nobody wants to pay for it. the key things i say when we talk about energy transition is about coding in on decarbonizing hydrocarbons to say we are not going to require fossil fuels is to the detriment of the industry because we have seen oil demand and gas demand continues to grow and we have not been investing enough. that is where we should be very careful about talking about transition away. it needs to be a transition with or including fossil fuels but a low carbon fossil fuel. carol: if we have the time. katie: i want to stick with the

transition conversation and bring this to a longer timeframe. we were talking about cop 28, the fact that for the first time you saw fossil fuels made it a global climate deal, agreeing these countries to curb their consumption and production of fossil fuels. you talk about that this will be a drawn out process. over what time frame does that transition become bearish for oil? amrita: on our numbers we do not have oil demand peaking into the 20 30's. gasoline peaks towards the end of this decade, diesel peaks in the early 20 30's. one of the reasons i do not like using the word peak oil demand's peak implies it is a mountain, it goes up and goes down. even by 2050, oil demand is barely below 100 million barrels. it peaks in the early 20 30's

but that it is a plateau and gradually plateaus out to slightly declines. i go back to april 2020 and the peak of covid, we were all at home, not flying and not driving. we still consumed 18 million barrels a day. that is a staggering number and we should remember that is how inelastic oil is. even when none of us travel. i do not know what we were doing. manus: a lot of cooking and a lot of heat. we are in the closing minutes. i want a price of oil and q1 on the squeeze and the draw, and in the second angola has gone from opec, do the iraqis raise their swords, will there be more angst at opec? amrita: i would say second question first, i know not at all. unity is fine. does not affect anything. they would not raise production.

the second question in terms of prices, confident needs to come back. we hover around $80 for brent in the first quarter. second quarter onwards i think prices will be in the 80's and probably $85 or above. carol: that is big from here. manus: it is good to see you got the message that there is no angst. we have the capacity to produce four but we are find sticking around the threes. amrita sen, i will see you somewhere in an alleyway in vienna doing in report on vienna this year. amrita sen, probably one of the most sporting analysts. she gets up early in vienna, she loves it, she does toetapping dances. $80 and above. quite a punchy call. carol: we have a viewer writing in insane climate change will be exponential. i listen to the use of fossil fuel and it will continue as temperatures continue to rise.

we saw it in new york over the summer and terms of fires out of canada. can we afford to continue to drill, drill, drill? katie: i like her phrasing about how to talk about that. peak oil demand, it is not a peak and then a mountain. it is a plateau. i thought the tieback back to the pandemic was telling. manus: what were we doing during the pandemic? cooking? carol: and buying from amazon who had trucks to get to us. katie: we were all baking bread. manus: i was in dubai. katie: i was in new jersey. carol: our next guest says to break -- will need better performance out of the other names. brooke may, we will see her argument. this is bloomberg. ♪ l?

run payroll, no question. you know how tough payroll can be, right? no. we switched to gusto, and paying my team couldn't be easier. gusto gives me unlimited payroll runs, next day direct deposits, and automatically files my taxes. ooh, taxes! sounds like you know the drill. good one! can i run payroll too? sure, after this. choose payroll without the pain. that's working with gusto.

the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. i'm a little anxious, i'm a little excited. i'm gonna be emotional, she's gonna be emotional, but it's gonna be so worth it. i love that i can give back to one of our customers. i hope you enjoy these amazing gifts. oh my goodness. oh, you guys. i know you like wrestling, so we got you some vip tickets. you have made an impact. so have you. for you guys to be out here doing something like this, it restores a lot of faith in humanity.

>> we are in more uncharted territory than the markets believed today. >> we have seen some incredibly volatile movements in the market. we will continue to see that in 2024. >> what i do see>> in 2024 is a broadening out of performance. >> volatility provides an opportunity. >> we might have a more boring market than you think in 2024. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. manus: from new york city for

our audience worldwide, this is bloomberg surveillance. alongside me, carol massar, katie greifeld. warm welcome. you will work with the print team on this the rest of the day. we get a headline. fingers crossed. it's probably the dollar. we talk about volatility in bonds and equities. the start of this year started with a bang, pumped up 6% in equities, china was going to open, luxury would be the holy grail, and equities continued to outperform. it was the year of a silent recession rather than a slow die of that dying of the equity market. katie: the big recession did not happen for a 70 year in a row -- for a second year in a row.

you look at the bloomberg dollar index over this year. if you have not been paying attention since october, you would be confused, because think about how dominant and strong the dollar was. it feels like the whole game changed since the end of october. carol: a year ago, what were we feeling it expecting for 2023? what are we thinking about? sorry, everybody, but it's a reminder that keeps us humble, that recession we keep calling for. is this the year we see china start to come back and we see investors move into that area. we have had mixed views. katie: i'm thinking about breakfast. manus: these two have already ordered the breakfast. katie: yesterday we ordered it. long eggs, bacon, juice,

cappuccino. manus: we are living the dream on bloomberg surveillance on the last trading day of 2023. let's give you a snapshot of markets. if you were not in nvidia and tesla, you were not in the winning trades. there is the s&p 500, 4834 .75. euro-dollar came in number four against the dollar this year, down 3% on the index. yields did not break through to the low of this year. 3.74% was the low, but you say there's a gravitational force in the bond markets. katie: at least when it comes to the 10-year, the 4% level is where it wants to be. you see that even amid thin volume. this quiet rise we have seen. manus: the quiet rise.

they got left holding the baby yesterday in the seven year auction. maybe that backed things up a little bit. carol: we are done. katie: have to wait until next year. carol: i told you i did not know what day it was. manus: keep making eggs. let's take it to our next guest, brooke made, managing partner at evans may wealth. to break the five thousand level, we will need better performance. here's a shocking statement of 2023. of the other 493 names excluding the magnificent seven, so this is a question of breadth, but our last guest said your winners. how do you define breadth? brooke: good morning.

i would define it as the other 493 names, but in addition, dipping into small cap and fixed income that's rallied. we are seeing broader participation across the board, names that did not necessarily sore early, like the big tech names. we are seeing some cyclicals rally in addition to some names that have been beaten up starting to recover. carol: a lower rate environment is often so great for those hot tech names, so having said that, if we got that lower rate environment, aggressive in terms of the fed, of course, you have to counter that with does the economy start to fall apart, but could we then see those magnificent seven continue to rally? brooke: i think so. we have not cut our allocation. we have taken some profits but we still like the big tech names. they have profitable growth. these companies are growing.

they have earnings and we expect them to do well -- to continue to do well but see broader participation among the other assets, small-cap, fixed income, etc. katie: reading through your notes, you have $6 trillion in money market funds. you right there will be a rotation out into equities, but you also write that if investors did not transition from money markets to bonds, as is unlikely, they will make the move now. basically, the cash that is in there is pretty sticky. brooke: 5%, 5.25%, it's comfortable to sit there and have peace of mind that you will have that price stability and earn a little bit, the yields will come down. we will see money market returns come down and they are not as attractive. if investors did not go out and lock in corporate bonds at 5.5%

or -- or municipals at 3.5%, it will be hard to stomach when rates have declined. as people are just satisfied with the lower returns out of the money market, they will look for better opportunities, and i think that's going into the equity market. manus: we had someone so you could not give away bonds at 5.25%. we were wracked with fear. we will extend that thought may into some of the bonds that sit side-by-side the equity names. you have a call in charles schwab -- on charles schwab that is bullish. this one is down 16% year to date. why such an opportunity and that? it did get swept away and thrown out with the bathwater during the first republic debacle. what is the health of charles

schwab relative to the other names in that sector? brooke: schwab has its earnings come from two sources, revenues and fees they generate on the advisory retail side, and the other from net interest. and it's hard to make money in net interest when you have the inverted yield curve. as we return to a traditional sloping yield curve, there's going to be an earnings pickup for charles schwab. in addition, they just completed the merger with td ameritrade. there will be additional revenue growth, cost synergies, and some opportunities to capitalize on that broader base, so there's a lot going well for schwab and it's cheap at this point and we feel like, over the next few years, there will be great return. manus: a lot of that is locked in. really pushing that through. when you look at house builders and that ecosystem for next year, if we going to rate cutting mode, do you see higher

house prices and more momentum in the housebuilding peripherals around that? brooke: i do. there's pent-up demand. we look at household demographics. we are creating more and more households that need homes and apartments -- households and homes and apartments. it's been a challenge. so a lot of people are waiting on the sidelines hoping rates will come down and we are still in a situation where we have low inventory, so if they come down, and it loosens things within the market, people will jump back in, and demand will probably continue to lead supply. therefore, prices will go higher. katie: i have to wonder how much pent up demand is there on the other side of mortgage rates being as high as they are? once they drop, i have to imagine, maybe speaking from personal experience, there's a lot of people that would like to buy. how are you thinking about some of those factors in the housing

market in that call? brooke: yeah. you can only stay in your current that's in your parents basement for so long -- in your parents basement for so long. there are reasons people will buy a home. studies essay at one point this year we had 6 million too few homes in the country, a combination of single and multifamily, but there is demand there, and when demand exceeds supply, you get price appreciation, and lower mortgage rates will help. carol: one more name i want to squeeze in before we wrap up. netflix. you like this one. sitting near a 52 week high here. what is this story? so many people go home and they are like nothing to watch and yet there is. what is it you like about netflix specifically? brooke: we like dominant players in their space and netflix fits the bill there. when we look at their q3

earnings report, it was amazing. really, their subscriber growth is what has us excited. the street was expecting them sat about 6 million new subscribers in the third quarter and they added 8.8 million, driven by a few things. they have cut down on pass were channeling at have scaled their ad supported to your and their content. it is superior in our belief to some other competitors out there. they went from a company that had a 4% profit margin in 2016 to we think 22% next year. they are growing profitably, not just at any cost, and think they will continue to do well. carol: it is all about bridgerton. manus: you just finished the crown. you just finished back him. carol: there you go. manus: brooke may, thank you. some punchy calls, netflix and

charles schwab both in your portfolio for 2024. the opportunities are there. if you are just joining, this is what we have for you i markets. the s&p 500 attempting to have us last hurrah, 4832.75. will the hurrah continue into 2024? a pretty bullish set of calls. carol: i think so, especially when it came even to the magnificent seven. she said we need to see the market broadening and should expect it in the new year but said that does not mean you will see big tech getting investor attention. katie: who knows if one week of conversations makes a trend but it feels like we have spoken to people with varying degrees of bullishness but not an outright bear. the opposite of bull saying the best days are behind us for the s&p 500. manus: the most we have had is may be a drawdown at the start

of the week. we have this weaponized fomo. that is the phrase we started with. what does that mean for the consumer? there's nobody calling anything more aggressive than maybe a 5% drawdown. katie: there is a temporary -- carol: there's a tempering feeling of expectations in terms of how addresses -- how aggressive the fed will ultimately be. i know it is data dependent. we will run from data point today to point to get a feel of do we ultimately see some soft landing or recession or even a minor recession? that will determine how things play out. katie: you think about where we were this time last year -- i want to talk to all of you but think about the expectation for 2024. for the first time in 20 years, the consensus was that you were going to see the s&p 500 decline if you put together all

the targets. at this point, people are just shy about saying i'm bearish. manus: the brave make brave calls. someone said i have never seen consensus as wrong as it was in 2023. carol: if you are a client of one of those managers, you say, how did you miss this? manus: that's where i would be. i love a discount. i love a bargain. we will talk with terry haynes from pangea policy. what is it we are misunderstanding about geopolitics? (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

it still does. what can you do with spy? ♪

>> the west is not interested in such a conflict. they can continue a certain level of activity without reaching a redline. is there a strike through that unfortunately would hit a bridge of his ship?

this would provoke a strike by the u.s. against the who these -- against the who -- against them. that allows him to continue. manus: a former senior u.s. intelligence official and advisor for the transitional threats project at csis and made clear that the coalition of forces helping to reinstate some of the flow of maritime traffic in the red sea is a force to be reckoned with and a from edible force at that -- and a formidable force at that. carol: it affects companies. you think about how that will trickle down throughout the global economy. you think about what this means in terms of growing escalation and where this goes from here so we have to pay attention to this. katie: you also think about confidence. it's a formidable force but half

the red sea container fleet is avoiding that route. obviously there's a big reluctance to go on the offensive here, actually strike the houthi bases, and caution on the part of the shippers. manus: there's a question of whether the pentagon can convince them to return to that lane. let's bring these discussions to the next guest. terry haynes is the founder of pangea policy. good morning to you. you laid it out very punctually -- very punchily. they have not funded ukraine and they are reluctant to fund israel. they have two hot wars but you say this. "washington's lazy bare minimum approach on everything, border security, foreign aid or the building fiscal crisis, won't cut it in 2024, not for the markets, not for the u.s. national and international interests." markets have essentially ignored

these faux pass thes -- faux pas. is it folly and what is the biggest risk? terry: this is a situation you have not seen in 50 years where you have a combination of probably the highest geopolitical risk and probably the highest domestic risk as well. those things combined, i think what markets ignore is that, going into ticket before with that -- into 2024 with that combination is they tend to see political issues by and large as one way or the other, things that are not fundamental to the markets but provide some minor up or down action, when what they should consider is that lower geopolitical risks and lower domestic political risks in the united states are both foundational to the markets and, you know, we have not really had

a conflict in the united states that shook markets since the second world war, but when it did, you know, the markets went down by 20% in the first six months after pearl harbor and i'm talking about a conflict that happened almost 80 years ago, in which -- more than half of the u.s. citizens are invested in the markets, so the foundational risks i think generally, and the volatility -- carol: let's get more specific. if markets are ignoring geopolitical risk, what might likely happen in 2024 when it comes to those risks? we have kind of laid them out throughout the week. obviously we continue to watch what's going on in the middle east, concerns about escalation. you still have russia and ukraine. we are looking at china and taiwan. you have an election coming up. there are concerns there.

play out specifically what you think could happen that investors have to be wary of? terry: there will be a temptation to think that the three major conflict areas geopolitically that you just pointed out, ukraine, israel, taiwan, are going to be somehow handled, when in fact they are going to continue on for months. i mean, there's no easy end to the ukraine more. the israelis say the hamas war will go on for months and i don't see anything there to stop it. and there's a lot of volatility around taiwan, which is underappreciated by markets, who think that biden and xi jinping have some sort of agreement after their recent summit when in fact what china is doing is pushing on kind of undeterred and probably has more rather than less incentive to act

thanks to their more parlous economic situation, so there's all that, and he will have a lot of points and domestic politics with the primaries coming up over the next several months, who will be the nominee, will or continue to be rising third-party challenges, as i have thought and think will continue to be. what is the direction of the u.s. both domestically and in terms of its own foreign policy? those will play out in specific points at least once or twice a month through the year and i think have the opportunity to put additional volatility into the markets. i'm unsure about the future direction of the united states. carol: i do not want to be inflammatory. i just want to be smart for our audience. when we talk about a third world war, when i look at the

bloomberg intelligence team research when it comes to what we need to watch on the global economy, and, on top of the line, the headline, is about war, so how do we need to think about the possibility of a third world war? terry: you know, in some ways, and i'm not trying to be inflammatory either. i will give you a different way of thinking about it, though. in a lot of. ways, we already are there are at least three regional conflicts, a cyberwar. there's concerns about how the contending parties move into space. there are concerns about how they move around even in the arctic, for example, so, you know, you have kind of a slow moving conflict right now and i'm not trying to be inflammatory or push it too far either but what i will say is that anybody that's looking at the current three hotspots as

solely regional conflicts and not representative of a larger conflict is not thinking about this enough and the economic consequences alone, as you all just noted, on supply chains and in the red sea and many other things, could be very substantial, so we are in a very volatile situation already even though markets don't fully understand, realize it or appreciate it. katie: a lot to worry about on the global front. let's go back to domestic because you talk about washington's out-of-control fiscal spending, increasing debt service costs. maybe we saw some of those concerns play out in the treasury market, but looking at the state of play, and seems like that's a blip we look at the fiscal side of the equation. terry: washington always thinks they understand the markets in the markets are responsive to

washington. i never thought that was true and we probably have the biggest gap between washington and the markets in some time. increasingly, the markets are asking when and whether the u.s. government is going to be able to get its fiscal spending under control, and there's no movement at all to do that. you have a situation in washington now where, you know, the most -- the people are banging their fists on the table the most are ironically to some extent conservative republicans, but really what they are talking about is taking as much as 1% out of 30% of the discretionary part of the overall federal budget, and that's a blip and by no means when anyone expects, so the discrepancy between what markets went in terms of a more sustainable fiscal policy and what washington can deliver,

there's a huge gap and there's no indication that washington even understands what markets want or expect there. manus: we will have to see how these negotiations go down to the wire this month in regards to the potential risks. there was a great disconnect between markets in washington. terry haynes of pangaea policy joining us there. coming up, angela stent of the brookings institution on bloomberg. ♪

manus: for our audience worldwide, good morning. this is bloomberg surveillance. alongside me, carol massar and katie greifeld. if you are not an, do not worry. you are not the only one who got it wrong in terms of equities. wall street got it wrong and they are paying money. the s&p prevaricating, 4831, a bit of an unfair pop. nasdaq was up 55% this year and if you were not in nvidia you simply were not in it. tesla 105% relative to the rest of the automakers. a look at the bond markets. do you go for breadth on the

russell 2000? carol: that's what everyone is saying. katie: small-cap value. manus: you have been converted. carol: well, they have been left behind. everyone has been talking about them for some long time. katie: but how much of that was pulled forward? carol: all of it, right? not just small caps. katie: exactly. manus: how do we finish? you are possibly tempted to the auction. you left it off the paper. one final auction. the seven your paper did not go according to plan. we have not retouched the lows of the midyear point. we moved and pivoted. carol: no 6%. manus: corporate communications need to rein in the exuberance of jamie dimon.

carol: jamie, you can say whatever you want. manus: you believed mr. curry on the oil market and $100 oil did not happen. and rita sent as well. so we know you are listening. katie: i did not know he was tracking those that closely. we are learning a lot about you. manus: we could use you to join our booking and research team. katie: he has some talking points to share. manus: that is the first moment we have made katie blush this week. there you go. keep the notes coming in. we will take calls at any time. let's get to under surveillance. nvidia is selling a less powerful version of its best graphics chip to china to comply with the u.s. restriction. the version sold in china has 10% less processing cores. the u.s. is cracking down on the export of powerful chips to

china. the faa is monitoring inspections of 737 max airplanes after the airline found a bolt defect in the rudder control system during maintenance. boeing is asking all the operators to check newer, single aisle airplanes for the issue. airlines across the world are also ramping up inspections of spare parts tied to aog technics after falsified records. no immediate safety issues have been reported in either case. pacific has canceled some year end plates, coming 11% of departures from hong kong. flights have also been cut as pilots had their -- pilots hit their annual flying limits. services affected span pacific, including sydney, taipei, shanghai and singapore. carol: everyone is getting sick. manus: there is no sickness on this show. carol: multiple people have had

covid. manus: you are looking healthy. carol: makeup and hair. katie: some professional help coming through for all of us. but normally we would chat a little bit but all these but we have some news to get to and that's 2023. it was the year of taylor swift and her version of doing things has been different. she has innovated takes on anything from record deals to touring but just how rich is taylor swift? bloomberg did the math. >> it's official. taylor swift is a billionaire. >> welcome to the aris tour. >> her heiress tour alone is a party generating hundreds of millions of dollars. it's a multinational conglomerate with the world's most devoted customer base and an ultra charismatic ceo. >> never before have we seen an artist put on multiple stadium shows on sale in the same city and blow them all out. >> but how much of the money has

gone into that ceo's pocket? we have crunched the numbers to come up with the most definitive account yet of taylor swift's wealth and here it is. bloomberg has a team that tallies of how much the world's wealthiest people are worth. it's based on careful calculation and analysis of all their income and assets. >> taylor has become a billionaire not just because people like her songs but because a lot of smart business decision -- decisions she's made. >> she is not the first billionaire in the music industry. there is the record label psion david geffen, jay-z, rihanna, the late jimmy buffett and others. while they used their fame as the foundation for other business ventures, swift has made her fortune almost exclusively from her music. >> she has really come out openly about the importance of controlling and owning your music as an artist. >> so where exactly does her

wealth come from? let's start with streaming. the rise of spotify, apple music and others has created a resurgence in the recording industry. >> we estimate her total income from streaming is $175 million. >> clearly nothing to sniff at but one reason it's not bigger is because of the way royalties are distributed. >> typically, what happens is artists don't own the masters of their music but they get royalties from it. >> the owners of the masters generally keep some portion of the royalties while the copyright holders, composers and lyricists keep the rest. >> so it taylor has done recently and it has been a smart business decision is to rerecord her albums and own the masters of those. so this rerecording exercise, she's taking back control of her music. she's reclaiming ownership of it but also diluting the value of the masters of the first six

albums that are out there. >> she took the battle to the streamer themselves also. >> in 2014, taylor swift pulled all her music off spotify. she did it in protest of what she said was unfair compensation from the streamer. >> they gave her the upper hand when she renegotiated her race to join spotify again in 2017. >> she has done a great job in promoting physical album sales online through twitter, instagram, other social media networks so fans have an incentive to buy physical records. she leveraged social media and connecting to the fans and getting to know them on a personal level, sharing information about themselves, creating this intimacy, which has created this powerful fan base to connect with her. >> bloomberg estimates swift has made $125 million over the years from record sales. she also made strong strategic choices at the negotiating table. >> and 2018, she left her longtime record label, big

machine, to go independent. she negotiated a new contract with universal music group in 2018 that allows her to take a larger share of the royalties. >> the biggest part of her earnings is undoubtedly her concert revenue. >> taylor swift's concerts have generated at least $1.6 billion and that is only ticket sales, not including merchandise. she's done six tours over the years since 2009, most recently the aris tour. it came as everyone was starved for live events. people were coming out of the pandemic and wanted a chance to gather in person and celebrate. >> there are people willing to spend anything and everything to get a chance to see your. >> a splurge for sure but we are glad to do it. >> we have been trying without mortgaging the house. >> of course, she does not keep all of that money. >> we estimate taylor gets about 35% of the ticket sales to

profit about $500 million from touring over the years. >> her tors, record sales and streaming royalties are all earnings, but she also has assets, including her reporting catalog. >> there's the masters rights and publishing rights. the catalog is a collection of songs grouped under one artist. every time a song in this catalog is played, it generates a royalty, which goes back to the owner. >> swift does not actually on the first six albums of her catalog. it's now owned by a fund called shamrock capital. she's rerecording is albums, meaning she will get more streaming revenue. >> we estimate the catalog is worth about $400 million. >> then there is her actual property. >> that includes a condo and an estate in nashville, an estate in los angeles, a large apartment in tribeca in new york city, as well as a home -- as

a summer house in rhode island. the rhode island property is interesting because it's not a typical haunt for celebrities or pop stars. it's an old world, old money part of the country, but it's in keeping with taylor swift's of this sort of girl next door, a homebody. she oxley has hosted -- he actually has hosted fans there in the past and has baked cookies for them. >> making bulk batches of chocolate chip and toasted coconut cookies. >> the value of her properties is about $110 million. >> subtract are expensive -- subtract her expenses and so on and you get a net worth of $1.1 billion. this was a huge year for taylor swift that put her in a new ashland -- new echelon. with the international leg of her tour getting underway she may only be getting started.

♪ katie: you can find more original stories streaming and the bloomberg app and online. more on the world's wealthiest people coming up later in the show, but let's talk about taylor swift, because even if you are not a fan of her music, and i am, for what it's worth, what an incredible businesswoman. carol: and waking up the industry in terms of standing up for musicians rights. the people who create the music. you go through decades and people write songs and people would lose the access or rights to it easily and it was the record companies and so on that were in charge and she has changed the dynamics, though you remind us of george michael. manus: probably because i just watched it on netflix. if you go back to the 1980's, he called his contract with sony affectional slavery. it was a huge court case that he

lost but then refused to record for sony. it's a poignant moment. he reflects the conflict but it set the stage for artists like taylor swift to be more savvy, smarter, more aggressive about owning the rights to your music. the world has changed. now we are in a streaming world. but george michael in many ways set the precedent of understanding what did you sign, why did you sign it, and what do you own yourself when you sign your life away to a record company? katie: kayla's -- careless whisper, one of my favorite songs. interesting how taylor swift has capitalized on this, buying back her masters and rerecording her songs. we hear these songs 10 or 15 years ago. every release of these albums has been huge and she has also been releasing new tracks along with it and it's become hysteria. carol: it just gets longer and longer. manus: the barista at

starbucks told me he paid $1000 for the aris tour. $400 million on the music released since 2019. you like the properties, carol/ she knows how to buy real estate. the property in rhode island is impressive, beautiful. katie: did you look inside? carol: no but my daughter and i did stand in front and take a picture -- and took a picture as the security guy said move along. not just those who love taylor swift order music with the broader economic community looked at her impact that she had. sales of her tickets or -- manus: like an earthquake physically. carol: they moved actual companies in live entertainment that sold tickets.

talking about her, beyonce, barbie and oppenheimer. $8.5 billion added to u.s. growth in the third quarter. we really took notice of this. katie: someone made the point, i don't know if it stands up, but that when the taylor swift tour come through town, it's like the super bowl. manus: it helps employment numbers, inflation. it was a global phenomenon. coming out, we will talk more with rich kleinman of lists all investment. did he have the winning ticket on advising taylor swift on some of her property deals?

in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

>> i love the fact that you have been using this term fomo because it describes perfectly how investors have been russian like mad -- been rushing like mad in one direction and then the other. personally, i don't feel things are getting cheaper.

inflation is great but it's getting more expensive, just not as fast as before. manus: keeping it real. there may be disinflation according to the central bank data but do you feel your life is getting cheaper or not? one thing we are keeping an eye on is whether we can take one last line in the sand and make a record on equities, 4796.5 is where we want to go. futures dipping slightly. the euro-dollar is flat, the number four performer against the dollar this year. treasuries 3.88%, incrementally this week, just incrementally taking higher through the week. we have a lot of options, which went well. katie: that seven-year auction not living up to what we got earlier in the week but you know. carol: is it just something with

the seven-year or the week coming to an end? katie: mostly the week coming to an end. we got decent deman year and people took that as a good signal. manus: you have the richmond fed end of the dallas fed services later on. unlikely to really rock the bond market. let's talk about rocking the world of the rich. it's the comeback year for the world's wealthiest people. christine is with us. she put the list together. this was the comeback year for the rich. elon is there on a daily basis. is he the winter of 2023? how did it stack up? good morning. christine: good morning. thank you. it's safe to say elon is the winter of 2023. he was actually not the world's richest person at the end of

2028 -- of 2022. the owner of lvmh was. he surpassed elon musk because of tech stocks and that did not last long. he quickly retook first place. they were net connect for a while but now back to first. he has about $95 billion added in wealth this year alone. that sounds like a tremendous amount of money and it is but last year he lost about $140 billion so he's not back to where he was at the end of 2022 despite the rebound in the stock market. carol: and i love the headline of the combined network of the 500 richest people surged by $1.5 trillion in 2023, so they rebounded from a $1.4 trillion loss the prior year, so they are even. i'm happy. let's talk about jeff bezos as well. you cannot talk about billionaires without wanting to know how he did this year. kristine: kristine: it is almost

like -- kristine: it is almost like 2022 never happened. they regained all the wealthy lost in the market wipeout of 2022. jeff bezos has been another big winner. he is vying for second place with arnaud. he briefly took second place earlier this month. he added about $70 billion in wealth this year. pales in comparison to musk's $75 billion but i think he will be happy to look back at 2023 and say we are $70 billion richer. for him, it was purely the rebound in amazon, and this is kind of the story across the board. as we talk about all the time, the nasdaq has been strong this year. tech stocks are back to records more or less so they have all benefited from that. mark zuckerberg is another one. if you look across the board at all the tech billionaires, they added about $660 billion of wealth this year, so nearly half of the gain in total wealth

across the 500 richest people in the world was protect -- was for tech. carol: who would have first seen that maybe if it had not turned out to be such that have foreseen -- who would have foreseen that it might have been a more difficult year? let's look into dickie -- into 2024 because there's a lot of scenarios that could play out and that will play into the some billionaire wealth in the new year. who should we be keeping on our radar? kristine: i don't think anyone at the beginning of 2023 would have guessed that the world's wealthiest people would have regained all the wealthy lost in 2022. we were worried about a recession, inflation, high interest rates. looking ahead, course, it is so difficult to predict, as it was for 2023, but when you think of some essential theme to watch in

2024, one that comes to mind is a woman who reached $100 billion in net worth for the first time yesterday, the heir to the l'oreal fortune. her father founded l'oreal. her mother passed away and passed the fortune onto her. she's a private person and not seen in public much. she does not do the red carpet circuits but she is the world's first woman to hit $100 billion. even though we have seen a bit of a slowdown, l'oreal has outperformed. they closed at a record highs so she's been a major beneficiary of that. another woman to watch as marion abelson. she recently bought a majority of the dallas mavericks this week, actually, from mark cuban.

she's the first woman to own a major sports team and she's clearly stepping up her involvement. she has been talking about nikki haley and the 2024 election and is clearly getting more involved in politics and spending her money. she is the las vegas sands fortune. she inherited that from her husband, sheldon, who died in 2021. katie: interesting to see steve ballmer on this chart of some of the richest people. he's the owner of the los angeles clippers and the former ceo of microsoft and unlike some of the other people included in this chart, musk, jeff bezos, bill gates, i feel like we hear from them a lot, but not as much from steve ballmer, yet has growth -- he had his wealth has grown steadily for the past year. kristine: he is the fifth

richest person in the world and not some we talk about nearly as often as other tech billionaires. his net worth is about $130 billion. he owns the l.a. clippers but the majority of his wealth comes from his microsoft shares. he's no longer at the company but still owns about 319 million shares of microsoft. that has been another tech stock that's really benefited from the rebound this year. in fact, microsoft, the rebound has been attributed to be around the hype around ai and microsoft was involved with openai, the creator of chatgpt, so they arguably have been one of the biggest beneficiaries of that hype cycle. steve ballmer had nothing to do with that but by owning these shares he benefited. manus: obviously cross assets, we talked a lot about tech, but there's a flipside of that, which is a lot of boats rose this year.

bitcoin was one of those, crypto. there was one name, the ceo of binance, who pleaded guilty to money laundering, but we saw his wealth continue to rise. kristine: the conversation i have had with reporters on my team about how we should be thinking about him -- the point is binance is still doing well. the trading volumes are still high. we will see if that changes but despite the fact that he pleaded guilty to money laundering and violating sanctions and maybe heading to jail in 2024, his net worth rose in 2023, and that, arguably, is not because of anything he did personally but because of the pickup in crypto markets. he was a beneficiary of that.

even though he has a criminal record now, he is getting richer. manus: as we go into the election year, when then we did not cover is donald trump. since he left the white house, his wealth has grown by $500 million since 2021, a total of $3.1 billion. which does he want, power or money? carol: i would say both. not me, him. katie: sounds good. carol: katie is all in. manus: it is the perfect combination. what more do you want? heiress tour -- kristine owran, thank you for being with us. next, chuck lieberman joins us for what is in store for 2024 and to reflect on 2023. carol: money gives you power. manus: a symbiotic relationship. ♪

(sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

(aidyl) hi, i'm aidyl, and i lost 90 pounds on golo. what can you do with spy? i struggled with weight loss and weight gain my entire life. with all the yo-yo dieting i did in the past, i would lose 20, 30, 50 pounds just to gain them over and over again. thanks to golo, i've been able to steadily go down the sizes in my closet and keep the weight off. for the first time in forever, i feel in control. (announcer) change your life at golo.com. that's golo.com.

it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> i think rates are going to continue to decline as the fed normalizes policy. >> risk is to the downside and overplaying the spent cut expectations. >> fed cuts do not start until later in the year. >> it is difficult to justify.

>> this is "bloomberg surveillance" with jonathan ferro, tom keene and lisa abramowicz. >> 90 minutes away from the start of trading in the united states. will we see a record for the s&p 500? one-week form -- from today, the monthly jobs report from the u.s. that will set off and carry on into 2024. before that, global shares on track for their best annual performance since 2019. a very good morning from new york city for our audiences worldwide. alongside manus cranny and katie greifeld, i am carol massar. starting about the year ahead, fed minutes, that jobs report. manus: it is maybe the first week back.

i do not know if it is going to be a rerun of 2023. we did 16 -- 16% by the middle of the year and it was all eyes on china, oil, we have what sam had to say. wrong you longs are doing well. katie: let your winners win. big tech back on top. take a look at the underperformers. utilities, energy. staples. some of those were defensive plays that maybe would have thought would have done well. maybe around the summer, especially. but, those are your biggest losers. carol: let your winners run. at the same time, we are hearing our guest say, continue to let it round. there are great opportunities among the s&p 500 and other names that have been unloved or underload. manus: it is interesting how we had --

carol: perspective. manus: if you have tesla ellet tip to gm and ford, tesla -- the disparity between the haves and the have's not is monstrous. katie: abercrombie is a sleeper hit this year, up 300% this year alone. that is more than -- carol: that is craig craig. -- cray cray. manus: i actually need lights in stores when i walk in them. once you walk past the front door, your light, that t-shirt is not going to look like that on me. katie: it has been amazing to watch abercrombie. there are a ton of sleeper hits, underappreciated, undercover companies stories. the magnificent seven, they are out there. carol: dare i say the stock

picker seven? manus: this was what it was going to come down to. we have talked about it. $6 trillion in money market funds. how much gets pivoted into active management or fund tracking, the etf's? carol: we are seeing more introduction of active etf's. katie: you are, actually. take a look at the inflows and new etf launches this year, a lot more active management. a lot of that is going toward passive like active management. manus: proactive. what is passive like? carol: is that like being a little pregnant? katie: maybe putting in options over light strategy. carol: you are either one or the other. katie: i will work on analogies. carol: while you work on that and i get air and oxygen for manus, last trading day of 2023. no surprise, pretty quiet. seeing a move into the downside

when it comes to s&p 500 futures, down three points. quick check when it comes to the 10 year, 3.87. just up a hair on this friday. you've got your markets set up. it is another quiet day. chuck lieberman is with us. chuck, nice to have you here. you are not expecting a wood session in -- expecting a recession in 2024. i do not see one on the horizon into 2024. most of the economy is doing too well. carol: happy new year. it -- almost happy new year. what does that mean for fed policy where we have had a fair amount of guests who seem to be dialing back their expectations for a very aggressive fed this year? how do you see it?

chuck: i also would suggest they are not going to do anywhere near as much as the market is price for. as long as the economy is doing really well, they can sit back and wait, let inflation come down and data come in to show the inflation rate is coming down. they still have the 2% target. we are not there. it has every reason to expect inflation will be harder to bring down if the economy is doing well. the unemployment rate is low. job growth is still very solid. labor market is not getting any looser. wage inflation is not going to dissipate. it is hard to see inflation coming down as much as the fed means to justify a whole series of rate cuts, which is what the market is priced for. manus: just one pillar of your thesis is that wage inflation will remain high. corporate profits are high. there has been enough pushback

from employees to get those wage rises. with that in mind, the jobs of the fed in the near term is to reinforce higher for longer in the consequence of that would be what? will you be the one person to come on this show this week and say you expect the s&p 500 to drop? i'm not talking a correction. could we see a slight drop down? chuck: well, the market is volatile. it is a roller coaster. it takes very little to trigger a downdraft. you look back historically, there are downdrafts multiple times every single year. that would not be a surprise. he did not need data to justify it. you just need a little concern for any reason whatsoever in the market has done that. that will happen. it will happen multiple times in 2024. my sense of it is, with rates staying where they are, no

change in policy for the first half of the year, with the economy doing well, all of that justifies higher stock prices, especially since the s&p 493 is unloved. it is really good value. katie: not to sound too negative, but if there were something to worry about, what would it be? you talked about the fed, the economy, still on solid footing. it is your expectation it will continue to be. what is the risk out there when it comes to sentiment, then? chuck: the major risk in almost every case is that the market gets disappointed. a big disappointment to the market, given how it is priced, would be if inflation does not come down and even worse, if it ticks up a bit. that would send out a fear signal that may be the fed needs to raise rates at some point in 2024. i would not dismiss that possibility. i think that is a real possibility. i think there is every reason to think the market will get frightened at some point over

solid, economic growth. for a while, solid, economic growth was considered good news. at some point, it is going to be considered bad news. katie: a risk the fed could raise rates. interesting to hear you say that since consent seems to be the fed's next move no matter what will be a move lower. with that in mind, those risks in mind, what is your all weather bet? what do you think will perform well in any environment when it comes to sector levels? chuck: i am one of those guys who things that with technology having done spectacularly in 2023, the real value is elsewhere in the market. there are a lot of companies that are cheap. when you look at the s&p multiple, that includes the magnificent seven. those are in the ballpark of 30. everything else trades a couple of percentage points lower in multiple. so, that is where the real value is. if the economy does what i think it will do, corporate earnings will do well.

those companies will do well. those are the cheap stocks and includes things like financials. the banks got pummeled because of silicon valley and the ripples of that market. that is a very cheap sector. energy is cheap. the world still needs energy, a solid economy in the u.s.'s means pressure on oil prices. those companies will do fine. i naturals in general, the insurance companies are all cheap. real estate, the world is worried that higher interest rates are going to pummel the real estate sector. but, housing is interesting because this past year, we have seen rates go up earlier in the year and the housing market stayed below. manus: some people would say that was possibly a inflation hedge. a lack of supply. a myriad of issues, let's see what happens in the new year. we have one minute left. i want your call on bonds.

we have had quite a dramatic drop in yield. you are right that we may see a riate -- rate hike this year. do you expect some kind of retracement in sovereign yields, given the outlook you have just given us? chuck: precisely. if inflation does not come down very much, 10 year treasuries are too expensive, yields are too low. you are not earning very much of a return. i think they will see some negative price movement, but probably not enough to upset -- offset the coupon. i think investors will earn a positive but minimal return. the market expects the fed to ease monetary policy. if it does not happen, they will push that forecast out in 2025. i do not see bonds as a great place to be. i think they are a safe place to be, but not a great investment. carol: do you think the money we have talked about with katie and

sidelines is going to go to equities, ultimately? chuck: i think most of it will. the stock market, there are many values in the stock market that are exceptional. you can buy good companies i'm a good earnings growth at 10 times earnings. that is the place to be. carol: so appreciate it. happy new year. chuck lieberman of advisors capital management. be well. let's get a check on how the market is setting up for this last trading day in the united states. futures have been quiet all morning. a print of 4831. that means it is down .01%. having said that, i do not know if we will get a record. i do not know if anybody is around at this point. it has been quiet all week. i feel there is momentum during the middle of the week. it does feel -- it has trailed off. manus: interesting call. a contrarian call.

i haven't had anybody on that says the fed may well have to hike. the more potent -- the more important part is, delayed. delay starts through 2025. that was a key risk bloomberg economics put out, core pce could bump out higher and that could destroy big rate bets that we are going to get monster cuts. katie: you think what could upset the apple cart. everyone has piled to one side of the boat, all in on the fed having to cut and cut multiple times. if you get that inflation tick up, the fed either has to hold steady for longer than expected or raise rates again. that would cause drama. carol: we talk about the lag effect and policy is not exact in terms of what the fed does in the impact it has on inflation and the economy. this is something that is tricky towards the tail end of this cycle. is the fed going to be willing to risk a deeper recession or economic impact to make sure inflation is done in the united

states, versus may be starting to cut rates and start to see it tick higher? manus: we call got so excited with core pce, annualized pce. katie: that was exciting. manus: do you get excited about core pce? carol: yes, of course we do! manus: bond bulls do. katie: that is true. carol: 90 minutes away from the open in the united states. counting it down, it is coming. rich kleinman, we are going to talk real estate coming up. this is bloomberg. ♪

>> i think the fed is going to be losing that risk in terms of a few cuts first. in the u.s., a soft landing, definitely. overall, i think we need to focus on the fiscal site in europe. it is difficult to justify based on the data. carol: that iscarol: bny senior

market strategist talking to us in terms of a soft landing and looking at europe specifically. we want a quick check on the markets as we get ready to wrap up the year of trading. s&p future down .07 percent. looking at the euro-dollar, 1.10. on the u.s. currency 10 year note, a little uptick throughout the curve, the u.s. curve. 3.87 on that 10 year note. way off levels we were talking about earlier. in the year, 5%. here we are at 3.87 on this last trading day of 2023. new york crude up higher, .7%. 72.26 a barrel. we want to talk about real estate. this has been front and center coming off the pandemic, especially when it comes to

commercial properties, how do we use real estate? curious to hear what richard thinks. rich, good to have you here with the team. you guys are a big, global company. 13 countries. you have been around for a while. this real estate environment could go back to 1968. this commercial real estate environment, how would you describe it? where is the strength, where are the weaknesses? >> as we end 2023, it has been quiet on the commercial side. not a lot of trades happening. hopefully into 2024, things will pick up. in terms of where things are more exciting, it tends to be in the residential sectors, as well as industrials. retail has had a nice come back in 2023 as investors circled the better properties. office remains the one that grabs the headlines with challenges over the last year plus now at this point. just with occupancy challenges

and how investors are staying away from that space. carol: staying away from that space. are we still waiting for some shoes to fall for some dramatic fallout, or do you think that has been overdone? rich: i think we are waiting for some shoes to fall. just the process of distress playing out in the office market has been slower than i would have expected, slower than i think any would have expected. you kind of guest there were negotiations going on behind closed doors between lenders and borrowers the u.s. office market right now. perhaps in 2024, we will start to see some of that bubble up to the surface and see more trades, some of which could be at attractive pricing. but, i think time will tell in terms of whether that plays out in the coming year. manus: you say this distress level that will come in 2024 can provide high risk and high reward. we talked earlier in l.a., it

went lower than the asking price. are we going to see some kind of bloodletting in the commercial property market? is that a canary in the coal mine or idiosyncratic to l.a.? i have never been to l.a., i have no idea where the geography of that. but, it is down 52% and that strikes me as brutal. with price adjustment next year across commercial property be anything like 20%, 30%, or is that too much? rich: it is too much if you look at real estate overall, commercial real estate overall. there is some property types that are holding steady, or steadier. i think everything is down with higher interest rates if we look back to two years ago. but, situations like that, of an office building in a market like l.a., that does not surprise me that it is down that much. obviously, i think we are going to focus on the stories that are

the most eye-popping numbers. l.a. office, that is one of them. i was in new york a couple weeks ago, there was a lot of talk about what is going to happen with new york office. that is another segment that is going to grab headlines. manus: what kind of price declines do you think we will get in new york? let's hone in on my new home city. are we going to see a step up in conversion from commercial into residential, which is one of the big feeds on my instagram, which is get ready to sign onto this new apartment block? price and restructure. rich: i think the convergence is overdone when we look at it at a macrolevel across real estate. it is hard to convert office buildings to residential, especially downtown office buildings, those built between 30 to 20 years ago. that has been overdone. in terms of price declines in new york, the interesting think about real estate, every

building has its own unique story. 50% off of peak pricing might be nice landing spot for average commodity buildings. there will be those that decline much more in pricing. there are buildings that are top of the market that are seeing still strong demand. i think investors are going to go into those first if they find an opportunity to pick up at attractive pricing. there are those that might be obsolete and you have to go down to land value, which is that conversion pricing. that is going to vary depending on what those alternative uses might be for any specific corner, any specific building or structure in a market like new york. katie: quick tangent. the first apartment i rented in new york had been converted from an office you opened up the closets, you could see the original office floor. carol: did you like it? katie: i loved it. that was on the upper west side, not the financial district where there is different constraints.

we talked about office, let's talk within the umbrella of commercial. what is going on with retail? it is the holiday season. we have been talking about the shift from rick and morty shopping to online shopping. dish from brick and mortar shopping to online shopping. rich: it feels the retail market withstood the most of the stresses. the pandemic was a shocking terms of everyone shopping online. before the pandemic, there was a question mark of, are people going to grocery shop online? i think we saw a widespread experimentation with it and people went back to the stores. we saw a lot of retailers realize they did not need seven stores in a market. they can get away with three. they consolidated to the three best centers in the market. once we enter 2024, we are in this place where investors and retailers know which centers are strong and which they do not want to be at. those strong centers are positioned to do well in the

coming year. there is no oversupply in that market and demand is there. tenants are willing to pay to be in the right center for them. katie: put some more detail there. where are you seeing that strength? rich: for us, the number one space we are seeing that strength is grocery centered retail. maybe a starbucks, a chip ole. fitness establishments. hair, nails. those are e-commerce resistant. investors have been trying to target those. as you get into big cities in the u.s., there might have been eight, 10 malls in the market. it is going to come down to maybe three. the best malls are well-positioned now whereas the ones that are at the bottom are not doing well. carol: go ahead. rich: i was going to say in that in between space, power centers, big-box retailers, the better

centers are well-positioned. there is strong demand. earlier this year, bed, bath & beyond went under. a lot of those stores are getting backfilled if in the right center. if not, you will still see them empty. carol: the bloomberg mall index, we have seen a bounce back. really quickly, a lower rate environment will be very, very helpful for the real estate are year? rich: certainly. we have seen rebounds, you mentioned the mall rebound as interest rates came down from those peaks in october. the market went up. in the private market, there is always a light. into 2024, we are optimistic that the rate declines is going to help ring a much healthier market than what we might have expected a couple of months ago. carol: we will be watching it closely. thank you so much. happy new year. we have seen a bounce back, feels like every asset class

since early or late october. it will be interesting. i think the office property is still a big question out there. i keep waiting for something to come undone. manus: i think when i arrived, it was peak new york rent values. peak rent. i paid it. no incentive. peak manus rent. carol: coming up, bloomberg's on the outlook for ev's. this is bloomberg. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989!

anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. c'mon, we're right there. c'mon baby. investment objectives, risks, charges, expenses it's the only we need. go, go, go, go! ah! touchdown baby! -touchdown! are your neighbors watching the same game? yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs.

i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with t-mobile 5g home internet. catch it on the xfinity 10g network.

carol: a very good morning. this is "bloomberg surveillance" live on bloomberg television and radio. i am carol massar. a quick check of markets, little lower on the s&p 500, trying to see if indeed we can see the s&p came close to a record yesterday. i do not know today. it is very, very quiet. unchanged, a little lower on the downside. 4831 on the s&p futures. yields higher on the 10 year, 3.87. new york crude pulling off some earlier games. call it pretty much unchanged. katie: i would call that flat. i have an exciting size of scope. carol: what?

i'm still thinking of the abercrombie & fitch story. katie: s&p 500 if we finish today higher, at least a little higher, this would be the ninth straight week of gains for the s&p 500. carol: that is a momentum line. katie: exactly. manus: the big criticism is that, you have to think of the other 493 stocks apart from the magnificent seven. the magnificent seven are going to see and earnings bump next year over 20%. it justifies the environment, very much part of that. carol: let's get to other headlines on this friday. under surveillance this morning, man group considering -- according to man group's head of discretionary, the hedge fund plans to expand into different credit strategies to meet rising demand from clients and capitalize on the shift of corporate borrowing habits.

this could be come a we are talking about private credit. every time we go to milken, the global initiative on the west coast that happens every spring, i think, public markets. no, it is about private credit and private lending. katie: you wonder, the returns when you look at private versus public, good returns in public markets right now. you have to think you see these stories, is it worth it to go private if you are an investor? manus: the whole world seems to be piling into private. it was this evangelist moment with schwarzman. the one who runs man group, she is formidable. this is what she said to francine. the next five years are going to look a lot a friend. it is a massive opportunity. she wants to make her mark. that pullback is going to impact. she is on a mission to put her stamp across man.

we would like to find the asset and do the deal. carol: big banks copying from private credit playbook. on the political front, a story main secretary of state ruled donald trump cannot run in the states republican primary. it marks the latest attempt by opponents to keep trump off the ballot for his part in the january 6 the rights of the capital. trump campaign saying the decision is politically motivated and is planning to appeal. we talked about this earlier. there is uncertainty as to how these play out. what can, who decides that he can stay off the ballot? i feel there is going to be legal wrangling to figure that out. katie: a lot of legal wrangling. we have a blueprint when it comes to colorado. he is on the ballot in colorado during this appeals process. we will see how this shakes out in maine. manus: the trump campaign saying this is the intended theft of an election. the language is very normative

from the trump campaign. that is where we are going to go. there is going to be a series of these challenges. the supreme court is going to be busy in the first quarter of 2024. carol: it is different territory for us in the united states. following this closely. watching closely what happened to the dollar in 2023, set for its worst year since 2020. much of the decline came about in the fourth quarter as investors increased bets the fed would cut interest rates next year. yes, indeed. the bloomberg dollar index set to close down nearly 3% this year, it's steepest annual drop since the pandemic. we understand why the move is happening, but there are implications. katie: big time. think about the readthrough to commodities. also, fx is fun because it is a zero-sum game. you have the dollar having a terrible year, you have the pound having a great year. the frank, up the most since

2010. manus: we have to see whether the snb will tolerate that level. they move the language last week, up 10.3%. that is what you call significant gain. katie: for fx, we often do not see that. manus: we need our own fx show. carol: producers, are you listening? manus has a pitch. manus: let's talk about this year. the united auto workers remember that? it was against gm, ford and stellantis. this was as president biden pushed the u.s. towards its climates goals through the inflation reduction act. the electric vehicle revolution will transform the market and the role of labor itself. it will face competition from the likes of tesla and china. the carmakers alike are fighting for their future. [video clip] >> it is time to stand up against corporate greed. >> that is shawn fain, the head

of the united auto workers. he is not happy. why? well, his members are worse off and there are fewer of them then a few years ago. a new threat is looming in the form of a technology that is crucial in the fight against climate change, which unions fear will lead to fewer jobs and lower pay. electric vehicles. >> if you think about an electric vehicle, it is a simple five vehicle. >> an internal combustion engine can have as many as 2000 moving parts while an ev powertrain has as few 20. >> it takes 40% less labor to assemble. that means there will be fewer jobs in those areas. >> they want to go all electric and put you out of business. >> evey's in the united states still account for fewer than 1 in 10 auto sales. that is expected to change dramatically. by 2030, president biden would like half of the vehicle sold in america to be electric.

biden is walking a tight rope between his self-declared most labor friendly president ever and his green agenda. electric vehicles and alternative fuels will be pivotal in humanities struggle to lower emissions. the fight now is over how long the transition will take and who will pay the highest price. manus: you can find more on bloomberg original stories, streaming on bloomberg app and online. let's continue that conversation with steve mann. we spend a lot of time this week talking about elon musk, his wealth. we have talked about the various companies that cathie wood is backing. tesla, still very much part of that. steve, talk us through where tesla is in pricing. month after month or quarter after quarter, we spend time reporting about price cuts at tesla. is that to sustain market share?

is that to build market share, or is that a company running in year? >> i think it is not to build market share. i think tesla's market share will continue to decline as more competition comes into the market. for example, gm is launching a slew of new ev's next year. ford, less so. stellantis, if you. if you look at the luxury automakers, they are launching new ev's. inevitably, market share is going to decline. i think what they really want to do, what tesla wants to do is maintain that scale. they have invested a lot in their factories. you talked about increased labor cost. they have invested a lot of robots. they have invested in autonation. -- automation. they are trying to drive capital efficiency. at the end of the day, what elon

musk is trying to do is keep scale and maintain a steady profit margin. katie: let's talk about demand for ev's. it is not just tesla. you have traditional automakers coming in. ford cutting back, scaling back ev production. is the demand therefore ev's in the way that some of these automakers thought it would be last year, a couple years ago? steve: definitely demand has come off. if you look at the prices of ev's, it is on average priced above a full-sized pickup truck. it is relatively more expensive today. i think the ira, the inflation reduction act, i think the whole purpose of that is to reduce the cost of ev's. that is unlikely to come through until 2026 and beyond. right now, what the u.s. needs to do is build up the battery supply chain.

the battery is the most expensive component in an ev. right now, it is about a third of the cost of the ev. if we are not going to use chinese batteries, there is really nowhere else to go. the only option is for the u.s. to build up their own battery supply chain. that will not come through until 2027. katie: ev's are expensive. batteries are expensive. range anxiety is really real. if i'm going on a long car trip, and i going to be able to charge? to that point, how much time do you and your colleagues at bloomberg intelligence think about hybrids? steve: hybrid is a good option. i think this whole transition is in evolution. it is not an overnight thing. hybrid is a very good option. it does not only address the range anxiety, but also affordability.

that is a big issue with interest rates higher than what they were before covid. ph ev's, or plug-in hybrids, are relatively on par now with the internal combustion engine vehicles. affordability is an issue. i think it will be a good transition to 100% battery ev's. carol: we are going to leave it on that no. thanks so much, steve mann of bloomberg intelligence. i was looking at statutes, ev land grab is on. i thought it was interesting when you were talking about china, steve brought up batteries. china, standout leader. 80% share of the world's lithium ion at re-capacity. huge leads and other critical components. how do you come up against it? this landgrab is going to change things dramatically globally because every country is

fighting for their position and their companies within those countries are fighting for their position. katie: chinese ev's in general, you can't get them in the u.s. and i would imagine having that entire market out of the u.s. is one thing that is decreasing competition. carol: it means, american, maybe they will have the same access. manus: it is about adoption. if you look at growth in global ev sales, 14 million, up 35%. you are looking at a formidable lift. china is where the adoption, more aggressive than it is in the united states or in europe. carol: i think price points are going to be important. let's check prices when it comes to how the market is setting up. 9:30 p.m. -- woah, that would be a long day. i will be asleep.

s&p 500 futures, 4831. down .02%. having said that, very quiet. it is interesting, i love the eeev space. every time we talk about a new car, the price points are rough. you worry about plugging in, where you charge it. manus: she said range anxiety. katie: i just signed a new lease. i have to say, and it dated. ev's do not cross my mind. i did not even look. it is too expensive. i park my car in the city. i parking garage has one ev charger. that does not seem feasible. manus: pick yourself and as you seven. the new one from -- it has a range of 800 kilometers. carol, 500 miles. carol: not bad. he is my own converter.

manus: do not ask me yuan two dollars. 800 kilometers. that is a lot. maybe not in this country. not besides of this country. katie: like our bond market. carol: my six brothers and sisters. you can't get a word in. it is rough. next, can't wait to talk with angela of the brookings institution. someone who understands vladimir putin so well. this is bloomberg. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

it still does. what can you do with spy? ♪

carol: a few hours ago, seeing a story on bloomberg russian forces hitting civilian targets in ukraine largest drone barrage of the 22 month invasion. killing at least 18 people, days after moscow blamed kyiv for striking a military ship in crimea. angela stent is here with us, non-resident senior fellow at working institution. she understands vladimir putin so well. she has done national intelligence for russian eurasia.

really understands a lot when it comes to geopolitics. good to have you as we get ready to wrap up 2023. this latest barrage back russia -- by russia shows what to you, this war is long from over? angela: oh, yes this war is going to continue into 20 foreign -- 2024. putin being willing to negotiate, he has defined this as an existential issue for him. the survival of his regime. as we talk today, this was the deadliest attack of hitting civilian targets. the ukrainians were able to destroy this amphibious russian warship in crimea this week. it was a major gain for the ukrainians, but they are fighting hard to maintain that position. katie: i wonder geopolitically, there is a lot going on around

the world, that is an understatement. i wonder how global allies are preoccupied with so much and how that might impact their support of something like the russian war in ukraine. angela: right. for putin, the israel-hamas war has been a godsend. attention has been diverted away from russia and ukraine. of course, you have within the united states, our congress could not agree on a $60 billion aid package for ukraine that went away. they may be able to agree on it in january. it is tied to these issues of border security. the european council was unable to vote on a 50 billion euro financial support because victor or bond, the hungarian prime minister, vetoed it.

allies are distracted. there are domestic issues and the outlook for ukraine for the next year is sober. manus: good morning. when you talk about the lack of robust support from the u.s. and viktor orban, the spoiler in that narrative, does this embolden putin to deliver a killing blow as he has today? it is one of the record missile barrages, killing 18. he has attacked kyic, odessa -- kyiv, odessa under attack. do you think this provocation under the united states and europe in part emboldens putin? angela: it certainly does. if you watch the nightly russian tv shows, they are gloating about the debates within congress and the republicans who do not want to give more money to the ukraine.

they are gloating about this united european union. of course it emboldens them. putin's calculation is if he waits this out, western support will further erode and he is waiting for donald trump to be reelected next november. and hoping the u.s. -- >> can i ask you, this is projection. this is projection. i want you to reflect on certain moments in the previous administration when trump was in power. he went to meet kim jong-un. he got on planes. he got grandstand and did a great eel of theater. is that a risk if there is a shift of politics in the united states of america, is this campaign, this russia war going to play in the polls for trump towards the campaign later this year? angela: i think it will. trump has said he could in this war in 24 hours. i would be interested to understand how he is going to do that.

it is clearly going to come to play in the election campaign in the united states. the question, how important it is to support ukraine and how important he has said in his presidency to have a good relationship to russia. katie: before we get to the 2024 u.s. presidential election, we have to get to winter. in your notes, winter will be challenging for the ukrainians. walk us through the reality on the ground as the calendar year flips. angela: the ukrainian counteroffensive began in june, did not achieve what the ukrainians and i think what we and the europeans hoped. they were able to take back a significant amount of territory. they need to mobilize more soldiers. their generals have said that now. they need more u.s. weapons. if they do not get the weapons from the u.s., which is possible given they have made risks, it will be difficult to push back. if they do not get financial

assistance from the u.s. and european union, their economic situation will deteriorate. russia still has millions of people that could mobilize. so far, putin, who is running for reelection in march, has said there will not be another mobilization. maybe there will not be until at least after the election. the russians that have survived the sanctions, the sanctions have not had the impact that the west hoped that they would. russia appears to be in the stronger position now. ukraine is very challenged to keep pushing back against the russian forces. katie: on the aid conversation, on the u.s. side, we have been talking about a compromise needed when it comes to the southern border. the expectation seems to be that will be achieved in january. when it comes to the e.u., you mentioned victor or bond's opposition. is there a path for the e.u. around hungary's veto? angela: i think there is in the

e.u. have been discussing this and have said they hope in january they can have, avoid having orban vote on this and get another way of getting money to ukraine. i think the other thing we should realize is, right now, the g7 countries are seriously thinking about how they can deploy the frozen russian assets. $300 billion, maybe not the principal, but the interest, to help. this is a conversation that has now gained momentum. that might be a way around some of this in the next year. carol: got about 30 seconds left. there is a way to peace, but maybe after the presidential elections? angela: i mean, there is always a way to peace. the question is, are the russians interested in negotiation? how much with the ukrainians have to agree to give up if there were to be peace

negotiations? they have to be clear that as long as putin is in power, even if there were peace negotiations, they would probably only be temporary because he has not given up his goal of trying to conquer all of ukraine. carol: going to leave it on that note. angela, thank you. angela stent of the brookings institution. this adds layers onto the geopolitical that we talk about for 2024. this is still two years in now, going into a third year for this war. hard to believe. some initially thought this would be a quick, over, if you will. it has not turned out this way. manus: fatigue of the coalition, fatigue of the willing, fatigue of nations, for of europeans, fatigue of the united states of america. it is tragic to say it. sending money to ukraine is not a vote winner in this country. it is just not, nor is it in europe. carol: not a vote winner.

when you look back geopolitically, who are our allies? manus: what happens as putin encroaches further and you have a nato encroachment? carol: he has already and there was not enough pushback. here we are talking about a war that has gone into its third year. if he is a winner in this, what is next? katie: fatigue when it comes to sending more money, we are heading into that presidential campaign. we know u.s. voters tend to vote on domestic issues. winter is going to be rough here. carol: if you are putin, you get along with donald trump. if he is in the white house come november, maybe wait a bit because you know the u.s. will play a big role in that. coming up, 30 minutes away from the open and the united states. next, nancy tengler is going to join us with her thoughts on the market. she says tech names are the new defensive names. we are going to get her to explain that.

i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app. can i sleep over at your new place? can katie sleep over tonight? sure, honey! this generation is so dramatic! move with the xfinity 10g network.

>> rates are going to continue to decline as the fed normalizes policy. >> the risk is to the downside in overplaying these fed rate cut expectations. >> we will probably get three or four rate cuts next year, but they don't start until later. >> --

>> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. >> it is bloomberg surveillance live on bloomberg tv and radio. alongside me, kitty grayfield and carol massar. where have the balls gone in terms of taking these equity markets higher? what have you done to the bull run? katie: they are tired, it has been quite a run, we are limping to the finish. carol -- carol: you could take a day or two off. >> alec with sam said, run your lungs, run your big beasts if you're making money on them. this is the best line of all, ago from --

carol: you love this. >> tier three is broadcom. brutal. this is about expanding brett -- breadth. carol: we still think the big tech names are going to continue their run in the new year, but give some love to the other names that have been ignored by the market. we did see the uptick here in the year. katie: i get the concept that the rally needs to broaden but i think it is interesting with their all weather sector is, what they think is going to perform in any environment. most people have been saying big tech. carol: again. >> let's talk about the dollar because you have been on a trip. carol: london was expensive. >> the worst year since 2020. that is probably because you are shopping at the high end.

carol: it was cheaper in paris and cheaper in prague. >> travels of the into limping surveillance team this week. let's talk about 2024 because our next guest is nancy. the equity markets are flat-footed. be careful what you short, that was the message yesterday. the dollar has its worst year since 2020. we did not break through to the dying side. there is choking on the auction last night, mild indigestion. oil has no sense of privilege. you may into the mid-80's, a stretch and a push at energy aspects. nancy is our guest, the cio at -- good to have you with us. you put framework around the

franchising of this a b 500 come up on the year. he said 15 -- you said 15 times 20 -- it is at 17 times the earning. do i just buy the index because that is a justification? does it just makes sense by the index? nancy: it is 15 point times fang. i don't think this is a time when you want to buy the index. if you are an active manager, we provided significant outperformance relative to the market and that matters over time as you compound it. i feel like this is a stock pickers market. i think there are companies you to be in and companies you don't when to be in. our investing come and has been companies embracing the fourth industrial revolution. that is digitization at a high

computing, and supplier of those tools. i gave a speech recently on this subject in florida and other tech companies that embraced -- economy -- walmart versus kohl's , mcdonald's versus wendy's. the outperformance by companies that have embraced is remarkable. we think that continues. carol: that is interesting. i wonder some of the names we don't talk about it today that are popping up on your radar, you are the author of women's guide to successful investing. what does successful investing look like in 2024? you gave us just a few names and strategy. other names that have not been on people's radar? nancy: you for that shout out -- thank you for that shout out. one of the things i talk about is having discipline but also having perspective. it is time out of the market

versus time in the market. you were talking about hedge fund performance. it is not just this year, it has been decades. part of that is because of the churning. women tend to be more investors, they tend to do more research, we will patient, and not be as competitive with the index. i caution people, we are going to volatility in the first half of the year. it is going to be downside volatility. you need to see stocks pullback. volatility is the friend of the long-term investor. i am quick to use them myself to add to high-quality names. carol: i interesting to note you shared with us that you do not believe the fed has to be cut to be bullish about the outlook next year. why is that?

nancy: i was not only alive in the 90's but i was managing billions of dollars. one thing we identified and i'm hearing others talk about is this market is analogous to the 1990's. you have a 10 year yield between five and 7%, inflation above 3%, you had any inverted yield curve, soft landing, a war in the middle east, a recession early on in the decade. yet the nasdaq was up over 800% and the dow and s&p were up 440% each. you can coexist stock outperformance with higher rates. we think that will continue albeit with some choppiness in the first quarter. katie: we saw that in big tech, coexisting with higher rates. i want to talk about amazon. going through your calls, a lot of interesting facts. may be your biggest call has to

do with amazon and the potential that a dividend could be in amazon's future. walk us through that. nancy: i thought we would see one from google a few years ago and i was wrong. the first's's 15 years of amazon's existence, i did not get it because there were no earnings. once i adjusted my perspective, the stock became attractive. if you go back since the ipo, the stock is up 178,000%. when you are in the right place -- that was may 1997. when you are in right place with a smart management team, that would be microsoft which is up not quite as much but materially , and/or apple, you have to stand back and say what am i missing as an investor? cloud is expected to grow 17% next year versus 13% this year.

online stores, 11% versus 9% this year. free cash flows expected to hit $100 billion in 2026 after they spend $50 billion a year in capex. this is where you want to be. i am not even factoring in health care which i think they're going to be dominant in. logistics, they are the biggest package delivery system in the world. there is a lot to love about this. andy jassy got tim cooked. he is no jeff bezos, but when you look at the fact that tim cook was no steve jobs, since that time apple is up 1600%. maybe being tim cook is a good thing. that is what we were paying attention to. andy jassy has grown into position. he is focused. he was the initiator and the ceo of the cloud business. we think this company continues to outperform for a lot of

reasons. katie: amazon shares up 83% in 2023 alone. a fantastic run. let's talk about tech more broadly. i am obsessed with the idea of all weather sectors. tech stocks are the new defensive names. does that make sense when it talks about interest rates up, down, economy bad and good, these are the companies that are going to perform? nancy: if you think about what i want to own in a slowing environment, you want reliable earnings growth. even in the tech bear market of 2022, you had a company like service now delivering 20 to 25% earnings growth each quarter. the stock would run up and then everything sold off again. these are not the kinds of companies -- higher interest rates have been good for these

companies. look at microsoft, they issued their debt as pre-pandemic levels. their debt servicing requirements have remained flat. the interest income on the balance sheet drove cash in the second quarter from 500 million dollars to $900 million. these are companies that are beneficiaries of higher interest rates. we think you want to be focused here where the name of the game is reliable earnings growth. service now, they are taking i.t. spend away from others. that has been a great stock for us. we have liked all of these first and second tier names and you can brought a note in technology without joining the magnificent seven. manus: you two other calls, brookfield -- would you talk about commercial real estate,

properties in l.a., taking a headline haircut. what do you like about brookfield relative to its peers? nancy: we added brookfield in our clean energy infrastructure strategy -- the management team has been very savvy. i think that is the new trend. they have better regulatory requirements. we initiated it across our equity strategies. we will continue to add to it. they are more noble and flexible. we own a jp morgan and pnc. we like brookfield for the next three to five years. manus: let's keep an eye on those calls. that is nancy. if you are just turning the

program, this is what we have got for you. the s&p 500 traits down three tix with 0.6%. to nancy's point, we can live in a world where she takes us back in time, we have higher rates and the equity markets can perform. what a brilliant comparison between tim cook and steve jobs. he is a great cost cutter but he is no -- carol: an iconic company so identified with the company's founder. that was the case for apple and amazon. manus: we had one of those founders yesterday, cathie wood. katie: when it comes to apple, she makes the point maybe they don't get the name recognition. destocked has done fantastically. carol: no one would argue that apple has suffered under tim cook. manus: definitely not.

she says the tech names are the new defensive play. this goes to the balance sheet and to the debt levels. that is where we will pick up. carol: i thought you would add about broadcom. she said she will continue to add in her notes. manus: no. i thought we would go for the broader call. we will talk about apple little bit more. we will pick it up with mark. you want to belong apple in 2024. the stock is under just 49% for this year. indiscernible] josh ♪ -- ♪

the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining 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.

(adventurous music) ♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia. >> they are good to have issues on health care but there is a renaissance of growth on iphone units, service is double digits. that is why the bears are deep in those caves. a week from no -- from now we have a $1 trillion market cap on

apple. carol: that is dan speaking to us on tuesday. talking about apple being a $4 trillion stock. apple has had a good here. the stock is up shy of 50% in 2023. a lot of stories and concerns in terms of litigations, stopping sales of the apple watch but coming back on board. i would love to talk to you but i really want to talk to mark about it, bloomberg correspondent and apple expert. good to have you here. we know it is early. we think you are on the west coast so it is early. talk to us about the watch in terms of the back-and-forth, pulling it off of the market, back on the market. patent when it comes to litigation, it is kind of a given. how should we think about it for the investment side? mark: thank you for having me.

the apple watch, one of apple's most premier products, being pulled from sales is unprecedented. when the itc said they would have to pull the watch from shelves after a review period, that is how we ended up with this happening between christmas and new year's, a lot of people believed there would be no way apple would get to this point. either apple would figure out some settlement, they would issue a software update, convince the biden administration to veto the order from the trade commission. it was very surprising when these got pulled from store shelves. the band only lasted a few days because apple a couple of days ago got an emergency order through an appeals court in d.c. that got them to put the watch back in market. this is temporary. apple has to put a software fix in place. that fix is being reviewed by

the u.s. customs agency. there was a hearing yesterday, we don't know how the hearing might because it is closed-door stuff, but by mid-january we should have some answer on whether or not to be fixed software is sufficient enough to no longer in their view violates the patents from a company that says apple infringed and got the itc to pull the watch from stores. carol: are we to naive -- to assume that apple will just figure this one out and keep watch on their shelves? mark: we are naive to believe this didn't happen, we are less naive to think apple is on the verge to figure this out. there will be a resolution in january. -- this watch is back on sale, they will go after applicant.

the two companies have been in court. they have around two -- a round two in late october of 2024. they sued apple in 2020 over infringement. for this type of trial, you needed to wrist to be in agreement. they both lost. manus: they have history and form on that. those legal grounds are going to continue. . we headed dan with us and he evangelized a fortune in dollars valuation on apple. how quickly do you think it could make that? how important is china to that

because there is regulator sniping from the chinese on the ownership of iphones and iphones are 70% of the revenue lineup for apple. mark: you are going to be successful by betting apple will be good long-term and their market cap will keep growing. i see every scenario that apple gets to $4 trillion. i am not sure it will happen in 2024 but it will happen eventually and it is a bad bet to go against apple. in terms of china, there have been these reports from us and others about the government banning the iphone and other non-chinese made devices in certain offices. it is going to take until apple reveals its first quarter results at the tap end of january or february to see what revenue is like to get a full scope of that impact. the last revenue results we got

for apple, the fourth quarter, they did okay in china. they did not decline much. it was solid overall. the issue for us trying to determine what that means is it only incorporated very few days of iphone 15 sales in the overall q4 earnings. it is difficult to know until apple puts those numbers out. otherwise we are guessing. manus: detractors of apple with safety scale and the speed of radical innovation, radical development has slowed down. what does apple need to get to $4 trillion? does it need multiple refreshes or does it need something more? mark: the pace of device redesigns has slowed down to an incredible degree. if you look at the iphone 15 pro , it has pretty great new materials.

it has a very advanced processor to ship in volume. if you put the thing in case or even if you don't, it is for the most part going to look and feel almost the same as an iphone you bought three or four years ago. that is not necessary matter. it is the ecosystem, the lock-in, the attached services like the airpods, apple tv, and others which has created smoke for the company that will help continue to grow. for 2024, you have some cool products. the apple vision pro go on sale in about one month. that is not going to drive a lot of revenue but it is going to add for the next two years between $2 billion and $5 billion revenue. on a quarterly basis, that can be the difference between a couple of percent growth and a couple percent decline. that can be important in

short-term but critical in long-term. you are going to see larger iphones in the fall, moving to a 6.3 inch on the smaller phone and to 6.9 inches on the bigger phone. to your questions about china, that is important because a lot of consumers are shifting to one device. instead of having an iphone, a lot of people are buying phones, they want the biggest one. the 6.9 inch iphone 16 promax is a big market. katie: i don't understand the desire for a larger phone but i want to talk about the vision pro. i am sure you are never the video of when they unveiled it and they readily price and the audience gasped. it was pretty funny. who is going to buy these? is it just people who love apple? are we going to see the price tag come down from several thousands of dollars?

mark: you're going to see software developers who want to develop for the platform, mixed reality enthusiasts. early adopters are the people who buy the new iphones the first day they come out. i think you are going to see early early early adopters, the even more niche audience. i am not expecting lines outside of apple stores. they believe over the course of a year they're only going to sell a couple of these a day in each of its retail stores. this is a niche product probably in the spectrum of people who would buy a mac pro all. you are talking $3500 plus $500 in tax. carol: not for the small pocketbooks. we always appreciate it. is it time for me to upgrade? that is who i talked to, mark gurman.

a must hear and bloomberg. manus: he concurs that we can they get to the $4 trillion mark and it will be a litigious year for apple going forward. a quick snapshot, there is a turnaround in the global bond yields. equities are flat. euro-dollar is 1.10. will the ecb be forced to cut more aggressively than the fed? that is the debate. global bond yields, we will look at that. ♪

stitch fix. -my stylist curates unique personal looks that are just for me. kind of nice. i like that. give them your size, your style, your budget. i keep what i like and send back the rest. -what can i say? my stylist gets me. they get me. and they'll get you too. ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. hi, i'm katie, i've lost 110 pounds a bank that knows your business grows your business. on golo in just over a year. golo is different than other programs i had been on because i was specifically looking for something that helped with insulin resistance. i had had conversations with my physician indicating that that was probably an issue

that i was facing and making it more difficult for me to sustain weight loss. golo has been more sustainable. i can fit it into family life, i can make meals that the whole family will enjoy. it just works in everyday life as a mom.

manus: this is a special edition of "bloomberg surveillance." we are moments away from the cash train here on this last trading day of 2023. we are moments away from -- we are going to roll it over, stocks can coexist in a high interest rate environment. 4828, the market is open. trades at -- a dollar has at weakest year since 2020. the euro is the fourth best-performing currency against the u.s. yankee. yields traded 3.88. there was indigestion on the seven year option with toluse getting left with more than they

had anticipated. while is higher. -- her call is to $85. oil premium is underappreciated and underpriced. what is moving in equities? we will get to abigail doolittle. she joins the team around the desk. abigail: good morning and happy new year. the stock i wanted to look at was one we looked at yesterday, not up as much as it had been earlier on the session. i'm talking about out his usa -- altice usa. we talked about the report that they may be selling cheddar to a pe firm. they did sell cheddar. to a different firm to looks like a positive for the company. we have one analyst saying that the general activity around european assets is creating a stir. it is up 1.7%.

fisker, they are sorting right now. -- soaring right now. they produced final year more than 10,000 people is, they produced -- delivered 4700. there is a shortage on this stock. bit of a squeeze. any guesses on what the best stock of the year is? carol: nvidia. abigail: you got it. it's best year since 2001 on the blood guides we have seen. katie: a long time. it is amazing that is not a record. abigail: i thought the same thing. in one year it was up more than 300% which is incredible. crash strike is also one of the top four stocks -- crowd strike is also one of the top four stocks. we have meta, the best year since going public in 2013.

i wanted to look at the two worst stocks. it seems to have paid off. m phase energy is heading for its worst year and fmc, its worst year since 1986. you have heard the dow of the dog -- the dog of the dow theory. maybe m phase energy and fmc are going to be the dog. they say they have low requirements. manus: if you ask katie where she is going to shop -- katie: i am not going to abercrombie but the teenagers are out in full force. 300% higher. carol: carnival is in the top 10. we have the ceo coming up so it will be interesting to see the outlook for you new year. manus: abigail, thank you. happy new year. enjoy wherever you are.

let's bring in the cio of bmo wealth management. good to have you with us. i like that you take a contrarian view. you talk about value equities rather than those in get cap companies will be the shining example of good wealth management. expand on that because everybody has come on the show and evangelized that they will be over 20%. you put this forward about value versus growth. yung-yu: it is great to be here. we don't want to exclude growth in 2024, but we like our value is positioned. growth, there is a lot priced into it and value has been underappreciated for some time. the same with small caps and the intersection of that small-cap value is treating low valuations. the fact that you see a low

market bottom. we think these areas will be gradually more appreciated in 2024 and have better multiples. we think the market will be balanced. we don't think the value -- think value is going to outperform growth. we were to take a balanced approach -- we want to take a balanced approach given how much value has been underappreciated. manus: to deliver on those value trades, this is something you brought up, carol. you made the point that the catch up trade with the russell 2000. what needs to be the lay of the land? does it need to be this fabled soft landing disinflationary environment with multiple rate cuts? what is it that will give the value in the russell and the broader church decoder -- good foundation to outshine? yung-yu: we have seen more of

the same. we have seen a great backdrop that will help value stocks and healthy the rally to remain broad which has been very welcomed. if we continue to see expectations for interest rates to come down in 2024, for the fed to cut a couple of times, we don't need four or six times next year, even three or four times would be welcomed to help small-cap stocks. inflation continuing to stay low, a stable labor market we see excess inflation. all of these things help the broader economy to do well and reaches down to the mid-caps and small caps and the five segments of the market. katie: we were talking to michael purves what feels like a year ago. carol: it is just a week. katie: if we do actually get the

magnitude of rate cuts priced in , that would make him less bullish on equities because six rate cuts means this has gone beyond normalization. maybe we are talking about it downturn. does that hold water with you when you think about what is priced in and the reality of what would it take to materialize? yung-yu: i don't think we will see six rate cuts next year, i would be surprised if we see four or five. what is most important is the trajectory the fed takes. if we see economic softness to the degree that the fed needs to cut, that would be unwelcome. i don't think we're going to see that. we think the elements of stabilization and re-acceleration of growth in the second half looked pretty good. we don't think we're going to see that many rate cuts. we think we will see if you. we think the market will be able to digest as it has been able to the higher interest rates we have had over the past year.

we think that will continue and the trajectory is more important than the number of 4, 5, or six, the trajectory that we are going to continue to be down for the fed in terms of short-term rates. it really is going to be what supports the market. katie: let's take this conversation to the bond market and what we are expecting. if your base case plays out, what does this mean for the treasury market which has been the problem child of 2023? yung-yu: it has been a difficult spot for traders, investors. we are trying to think about where to position. we think the 10 year yield is a pillow. -- is a bit low. we don't think it given our scenario of economic acceleration and growth resuming the second half of next year supports or enables the tenure yielded to stay below 4%.

we don't think now is the time to add duration. we recommended to clients adding duration closer to 5% on the 10 year yield. we think there will be a better time in 20 to add duration. we are saying about bob in yields the past couple of days but we think as the economy be accelerates in the second half of the year we will see yields back above 4%. carol: having said that, one year ago there work three calls on wall street. that was sell u.s. treasuries and by chinese stocks. that did not play out. how are you thinking about the year that was and how you and your team are humbled? a lot of people got it wrong. i am curious how you are thinking about how the year played out. yung-yu: a year ago at this time , we were expecting a soft landing in the u.s. economy.

certainly not everything we expected went as planned. china did not have the type of growth we were expecting. we have been talking about a soft landing over a year now and that is in the latter innings. we think that is still in place and the elements of a stable market and recalibration to higher interest rates has been pretty well digested. we are seeing a stable labor market, real wage growth, and good spending and areas such as construction and infrastructure. we think ailments are in place. carol: construction -- what is one risk that is on your radar? yung-yu: the one big risk underappreciated right now is that the 10 year yield is back below 4%. if we get a resumption of growth and acceleration growth in the second half, we are going to see

a former rep of longer-term -- a firming up of longer-term yields. that could leave a little bit of disappointment for where the ultimate end point is for the fed in terms of rate cuts. we think the market will be able to digest that but we think it might take enthusiasm out of the market to have a strong rally toward the end of the year next year. we think the backdrop looks good. toward the end of the year, some of the forces that have been concerning can resume with reacceleration of growth. manus: thank you so much for being with us. our outlook for 2024. carol: is that the second person to say we have to worry about an uptick in inflation? yung-yu: the risk is that core pc you could break above 3% and

that could unseat the confidence in the federal reserve. certainly the assumption that it will come -- if you are joining in, this is what you have got at 9:41. the s&p 500 treats up 2.5 takes, zero point -- .05%. it does not look as if the medical balls have stepped in for the last day of trade. board approval -- where do people in new york ago to for vacation? katie: i am going to florida. [laughter] a well-worn path from new york to florida. carol: katie greifeld, our snowbird. manus: one price we need to check in is the global bond. we talked about this monster rally, that has turned around slightly in this last trading day. we were on track for one of our

best record runs a couple of months. it is not a monster move but it is slight picking, the rally you see. carol: who would've thought global bonds are in sync. we are sing and move to the upside. to see that is how we are wrapping up this year is impressive and unexpected. katie: a gift for 60/40 portfolios which have been their own trials and tribulations. the last two months has been the place to be. manus: the new was active etf -- quasi-active etf. we have got a lot of monikers for the team when they come back. we can explain it to john, tom, and lisa. we did not break anything yet. we are going to have a great conversation with josh weinstein, the economist ceo.

he joins us next -- the carnival ceo joins us next on the show. ♪

(adventurous music) ♪ ♪

♪ be ready for any market with a liquid etf. get in and out with dia. was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com >> this cycle this and dies the consumer and the consumer has been surprising with spending strength throughout his expansion. we are still going to have a healthy consumer, healthy jobs market. we are not going to get the consumer in contraction but

you're going to have a consumer that is more moderate and maybe decides they can wait a little bit order for some joy instead of taking it all. manus: the chief economist at sf investment. a quick snapshot at equities, bonds, and fx as they go into the last leg of 2023. crude is the only thing moving higher at 72.25 and equities are flat on the day 4076 on the s&p 500 -- 4786 on the s&p 500. carol: shares in the carnival corporation are up on the date and we are delighted you have with us carnival's josh weinstein, ceo and chief climate officer joining us on set. almost happy new year. josh: thanks for having me. carol: how are you thinking about the new year?

you had a great run, you are working on a lot of things. he reported earnings last week. some pricing power. talk to us about the business environment. josh: 2023, we wrapped on november 30 and we -- the one word we like to use is record demand. record pricing, record bookings, record on board spending levels. across the board, our business has thrived in 2023 and we expect more in 2024. carol: you are such a great gauge of how customers are feeling. you have several brands but you speak to the everyday u.s. consumer. you have a great read on it. are they continuing to spend? by they continuing to advance bookings? josh: that is what we see. our q4 from a pricing standpoint

with the highest all year. it is accelerating, not decelerating. when we look forward, we are two thirds booked for all of 2024 already. carol: that is nasa's ability. josh: we are 10 points higher than last year. on top of ticket bookings, we have started pulling forward. we have more or less about one third of our on board spend being prepaid. we have a really good amount of visibility and those booking trends have not slowed down. every quarter this year, people expect it has got to slow down. we are going to see something. the consumer is going to be impacted. with our business, we have not seen it. it is record after record. we added two weeks of cyber monday and black friday -- ended two weeks of cyber monday and black friday. it is not coming from one brand, not from the u.s., it is global,

from our global portfolio. manus: do you think we are moving from many ceos that start with global airlines and global businesses who have said we have lived through a period of revenge tourism? we have this parabolic reopening and you had a parabolic rebooking. you say there's no end in sight. if we have and it revenge tourism, how would you describe the next evolution? josh: we don't think this is revenge anymore. this is not pent-up demand. it is two years on. this is people who have decided what is meaningful for them. how do i want to spend my life? experiences are what they're looking for, unforgettable memories. that is what cruising has to offer. manus: i sat down with our ceo and he said i have not got enough hotel rooms and high end

staff to help me run this business which then takes me to the cruises the high end hotel. to what extent are those packages are shipped and onshore additional spends? i they critically important to the turnaround you have had? do they add incrementally or significantly? josh: we are a little bit different from when you are looking at hotel companies. i am staying at a hotel in new york but i can tell you the service is not very good. we have learned how to live with that as a society. manus: should we? josh: we should not. our brands did not deviate from service level. our guests have high expectations and we aim to exceed them. we do not close off floors. we do not shut areas down. we do not skimp on services we use to offer. it is full steam ahead. that is what willing -- people

are willing to pay for. katie: let's talk about the fact that you are a global company. that goes many places in the world. i don't need to tell you that the geopolitical landscape is fraught. two wars, conflict in the red sea, has that impacted where you can go? are you seeing any inflationary pressures from the things we're talking about? josh: the second question is no. we pay attention to crude prices it is a good barometer of a lot of things. with respect to the impact on our business, we had less than 1% of our business touching israel in one way or another. it might be one printed stop unable to cruz -- one transit stop on a world cruz. we don't have any ships transiting the red sea for several months. safety first. we have mitigation plans should

we need to adjust to those ships will be transiting. as of now we are going to watch and learn. katie: let's talk about your bond book. it was interesting seeing last week s&p coming out and upgrading carnival. not back to investment-grade territory but you are getting closer. two notches higher. the chief financial officer of carnival said there is a possibility carnival will come back to the debt markets in 2024. what is your current thinking? what would bring you back to the debt market? josh: the only thing that would bring us back is if there is opportunity to refinance on more favorable terms. carol: lower rates? josh: lower rates. we are not looking to lever up. we have managed to cut down our duck boat by $5 billion -- our debt load by $5 billion and we expect more of that.

that is priority 1, 2, and three. carol: one of the things that ties together geopolitical and what you are sitting in that growth, i saw a story today that the first domestically built ship in china getting ready to hit the high seas. it is a joint venture. you are involved in this. i think about how important china is for you, but also concerns about china and its ambitions with taiwan and whether or not there will be problems down the road. josh: we are happy for the folks at the china jv. we unwound the jv earlier this year. we have been providing shipbuilding expertise for them and we were happy to do this. carol: the story says you guys are involved. josh: that could be how we are involved. from our perspective we got a portfolio of world-class brands all over the world and that is where our focus is. it is great for the cruz

industry that china has opened up and will be open for cruz companies. we are not going to be one of them going back in. we have our assets we want them. we changed our asset strategy, we changed to different brands. they are doing very well. we will take a wait and see approach on that. carol: but not a market you need to be in. josh: definitely not. carol: we appreciate it. great to get you. josh: happy new year. manus: i hope the new york hotel -- you should be getting any upgrade. carol: i have had is an experience. they do not have the workers. josh: they do not. manus: do you have the workers you need? josh: we have all the workers we need. bouquet cruz before we run out of -- book a cruiseship before we run out of inventory. carol: we appreciated. manus: we will be back to normal

tuesday morning but this is what we have, a fairly flat a set of markets for ust moment. you can keep equity markets on the up with higher rates according to nancy. s&p 500, 4786. whenever meadow to the highlights. carol: a few hours to go. carnival is up. manus: solid performance on the index run by the men to my left. will the dollar have another tortured year in 2024? carol: happy almost new year. really fun to spend the morning with you guys. manus: coming up on bloomberg tv at 11:00 a.m., torsten slok of apollo global management. ♪

an ever-changing landscape comes with challenges. from our vantage point, we see opportunities. as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt. our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested.