>> welcome to bloomberg markets. let's get started with a quick check of the markets mymy nhan seems green on the screen. only breaking two days of declines. almost flat on the day. pulling some of its gains, up less than 1/10 of 1% -- .1%. also getting a little bit of love on the day. this is the sector that had fallen behind a little bit relative to the others. the nasdaq 100 having a rough

start to 2024. we were watching the nasdaq down more than .1%. a little bit more than that on the day so far. the cross asset movement is the incredible as well. it is six basis points higher on the day ending its increase on the year. the 10 year yield flirting with 4%. up on the day. brent crude taking a leg lower after a few days, down almost 1% on the day. the dollar index also finally cooling. let's take a look at some economic data. 154,000 last month. initial jobless claims for the last week of december drop below survey estimate.

encouraged by recent data points. >> i think we have to pay close attention to that or and what markets are seeing in terms of easy. we are gradually moving -- losing momentum. the number turns out to be slightly low distances forecast and i would watch for some slack in the unemployment rate. >> let's talk about the data. read is in washington dc. what have they told us about the state of the job market? >> the three main reports in terms of what we have got was that we got job openings data that showed job openings while still elevated continue to create down. and then we get 80 p.m. job

claims data. a relatively broad based gaming and then we saw them falling lower. it is important to think about those numbers but still, we are looking at a labor market that is really showing a lot of signs of normalizing at a steady scenario that is the type of thing that you want to see when you think about a labor market that can hold up to high interest rates that we have. >> what are people expecting for tomorrow? also on wages and participation. >> people i expecting to see a continuation of the hiring that we have been seeing, but no going off a cliff. he still seeing employers hiring and not really laying folks off. you have seen this reluctance

among employers, even if they are pulling back on hiring, they are hesitant to let go of those workers that they worked so hard to attain in the first place. there is some concern about how concentrated these job gains are. we have seen a concentration in the job gains with leisure and hospitality, health care, which is almost always hiring and government hiring. it will be interesting to watch that dynamic tomorrow as well, that in terms of what we are seeing for participation, things will stay relatively steady there. participation has seen a pretty miraculous recovery over the last year or so, which is a big part of why the federal reserve has been able to see this pullback in inflation and be more confident about the

picture, going forward. >> given the steep expectations for decreases this year, what is the risk that the job market does not slow down enough? >> there is the general risk of the economy has surprised us time and time again. if you speak to any economist having to do forecasts in this period, it has been a humbling experience. the fed is expecting a pretty significant slowing in economic growth without seeing any big increase in unemployment. right now the atlanta fed gdp, a tracking forecast of gdp is showing growth in the fourth quarter. a slowdown is still pretty good. >> thank you so much for your time. looking forward to tomorrow.

talking about the outlook after his team got deals last year, making them the number one advisor. this is bloomberg. ♪

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>> this is bloomberg markets. in a year way -- the top anchors are betting on a rebound. at the top of the list is goldman sachs.

the cohead of global mergers and acquisitions joins me now. when you think about the exuberance, just alaska police of the year, they came out swinging with a couple of mega deals. >> it was quite remarkable. after multiple years of it being relatively quiet, you saw renewable energy being quite active through that period, but this was classic energy. it really drove the fourth quarter. >> you think big deals out there. the question is, how many are left? >> we look at a lot of statistics. if you look at it as a percentage of gdp, it has been running two to three over the last year to year and a half.

25 years, it runs in the 25% range. there has been pent-up demand. we will talk about private equity. but when you think about what really drives the future, we think there is a lot of pent-up demand. there has been relatively little consolidation. there is a little bit of ed and flow. >> what does the pipeline look like now? it is interesting when i talk to you and your peers, everyone has been very busy. i talked to a lot of people working out of hawaii and other countries, even this week.

what does the pipeline look like? >> i wish it had been a little bit quieter over the holiday. it is interesting. the pipeline is as robust as we have seen. the challenge has been meeting on transactions. the imperative strategic desire to get things done and reposition companies has not changed. the desire of boards and support from shareholders reposition companies has not changed whatsoever. valuation, whether it is interest rate or better has made getting deals harder. we have very balanced about it. if 2021 was a 10 and 2022 was an eight, 2023 was a four -- we are

at a five or a six, from my perspective. >> what brings us from a four to an eight? >> private equity was between 35 to 38% of the market. both of those dropped dramatically. what brings it from a five to an eight? we think there are multitrillion dollars sitting inside the private equity firms that will take you. >> a large private equity investor was very dour. the idea was a reckoning,

finally an acceptance that maybe they will not be selling things. how much is that seeping into the industry? >> private equity has been quieter than they wanted it to be. it is not just classic equity. but the definition of private capital has broadened dramatically. think about middle east sovereign funds and offices. all of those looking to lead transactions. the challenge has been that there have not been opportunities put -- to put that to work. the number has been at record levels. it has been very active but the multitude of transactions had not existed. they make money by investing and

monetizing portfolios and from our perspective, it is not that you need a perfect crystal ball in the future. you need some degree of stability so that financing sources and sellers can price deals. >> how do you answer the big valuation question? >> if you are sitting in a boardroom and you say my earnings are good and my sales are good -- when you look at north america, valuation performance has been quite good. interest rates have gone up. from a theoretical cash flow, i am worthless, so i should tell phyllis -- that is hard for boards. typically it takes about six months for that realization. here it has been closer to 18. at some point, as you are headed

into 20 for income use evaluation and recovery. you see private equity under more pressure to realize returns, so they are getting closer. that is why i optimistic. i market -- i'm optimistic that it lies between buyers and sellers. >> you mentioned family offices. if you are sitting there looking at this wide range of buyers, it is more money on the sidelines. how are they competing with the sovereign wealth funds in the world? >> they have a range of equities. they operate largely on their own. they have operating teams and synergies across the portfolios.

you are seeing an evolution towards value added equity where there has to be more than capital. there are immense amounts of capital throughout the world. can you bring insurance businesses that companies have put in place? what can you improve in companies? how do you change from a classic business? we had ascending markets for a long time and a lot of people made any. now you see an evolution to what is your angle in terms of an operational benefit. >> even if you believe that rates are going to drop dramatically, they are still not at zero. financing is more expensive. wondering how that changes the equation. >> there are always cycles.

the returns in private equity have been appreciated to the positive. everyone thought, if you look back at different cycles in the being and hedge funds was what you needed. private equities return. it attracted immense amounts. the ability of private equity, whether with creative capital in preferred structures or minority structures, i think it is still there and still a great investment vehicle. the are always going to be cycles. >> another big challenge has played out in an interesting way, regulatory hurdles. you are part of the deal and it worked out in the end. you have another deal that had to unravel under the weight of regulation. how strict is the environment

shaping up this year? >> throughout cycles, regulatory has always in one of the many consideration. we spend time talking about what is the certainty? it is not just regulatory, it is financing. it is always going to be an important factor. what has happened over the last several years is the process. this is why esau less activity on some boards. i do not want to go through a protracted process, even if i think it -- i can get it done. there is the cost of financing going up. people, the effectively -- the cost got hired. we are spending a lot of time on it. it is not just the u.s. but level. one of many important considerations, but something that we are spending time on.

>> is it a tougher environment in the u.s. or europe these days? >> i would say it is both. it is not just europe. they have different jurisdictions. it is an important consideration. there are always new factories. all those considerations. there are many great law firms that this is what they do. frankly, we give clients the best advice on whether it is the right time or the right situation. >> just this morning, your colleagues were listed as an advisor on an ipo. you think about the technology companies thinking about going public or selling. how does that they should work out today?

did a favorite one or the other? >> a classic exit path is what we have called dual track. i have said for a long time that the best thing for a recovering market is a vibrant ipo market so that they feel confident in testing the market, to see if there is an exit. they support each other. trying takes time and effort. we do not take it lightly when private businesses pursuing ipo or a sale. a capital flowing to these businesses is essential. >> how do you think about investing in the future? seventh year in a row. we were all watching.

over the last seven years, you widened your lead. when you are thinking about investing for the next five to 10 years, what do you invest in to get there? >> we think in 10 years cycles. we think about the structure. people are everything. having the most experience, the most client focused people -- i think about goldman sachs as a highly integrated network and matrix of boutiques that are super collaborative with each other, very immense and capable financing business. we think leading businesses that partner together to deliver. think about that and the complexity that we were talking about, whether it be geopolitics or regulatory, having that global network of market

exposure and experience, financing advice, we put all that together in addition to our industry specific, boutique like groups to give clients the best advice. we think about people, who are the best people internally and externally, whether it be the chemicals business or the energy business. you have to invest in cycles. you have to have the best people leading that business for many years, staying focused and staying in front of the clients. it is about clients succeeding over time, when they decide it is the right thing to do. it is about having the right people in those seats. >> this idea of a knitted together boutique bank -- you mentioned something like that before. the boutiques have gained shares this year. are they the ones that are the

biggest competitors these days? >> there are great people everywhere. we look at certain people at boutiques to have relationships that are critical. it is about trust and confidence in your advisor. we look at all of those as a competitive set. but we think very strongly that give the best advice, what is the most important thing for the client? having the best advisory teams in the industry, having the financing because it is critical when you are buying a business and having people in the markets to deliver holistic advice. we think that is the right way and the best way to make decisions. >> it has been a strange market. on one hand you have boutiques bidding hard and on the other

you have seen tens of thousands in the industry. you have seen banks merge and let people go or the way. what does that mean for the leverage of an investment banking talent? >> i look at a lot of cycles. you can look at the financial crisis. there have been ebbs and flows. we think in decades. i think about our partners and i have worked with almost all of them for 20 years. many of them come from other firms to join goldman sachs. it is going to be a market of ebbs and flows. it is much like the flow of capital.

they are going to find places and firms where they can do that. our strategy is having the most experienced people focused on the client not on a specific transaction. >> i'm sure bankers are bothering you every day about bonus season. what do those conversations look like right now? >> our ceo pays for performance. we all do well when the firm does well. we are part of the firm, when the firm does not do as well. we do not think about compensation in any specific year. that is not how we operate. what value have you brought to clients? as partners, we care a lot about the firm. i care about how the investment

bank does. how does the firm perform? >> biggest theme for 2024. brady think the biggest driver will be? >> one, private equity. two, recovery and technology. i think we will see transactions that will exemplify that. what specific industries, natural resources. there will be more. there is a tremendous number of they want -- there is a large number that they once acquired. >> coming up, we will talk to any challenger to discuss the jobs report. that is ahead of a big job stay. stick with us.

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>> welcome to bloomberg markets. >> let's click check on the market and see what is going on. s&p 500 is back in the green after a few days of declines. we are also watching yields drifting higher. the air watching the 10 year flirt with that level. about seven basis points higher on the day. getting a little bit of a lift here. a couple people dropping their

bullish stance on the dollar including morgan stanley. crude is looking at a decline in oil prices after a strong day yesterday. >> i am watching a couple of individual stocks under pressure after revealing a sales forecast that was below expectations. we had tracking and they are announcing that the ceo is out after they found serious misconduct in response to regular payments and through the whistleblowing channel. they were investigating his personal conduct with colleagues. this information just coming out right now. this coming out just moments ago. we are tracking the reaction.

a couple of tech stocks that we are watching. a second downgrade in a week, this time coming from the analyst at peloton, up nearly 15% as they signed an exclusive partnership with tiktok, hoping to get those younger demographics on their machines but those younger people have younger metabolisms. >> very finicky younger people are ruining everything these days, are they? we will talk about where else the young people matter in the job market. it sparked doubts about how soon and how deeply they could cut interest rates. that the unemployment rate keeps moving lower, we should not be talking make cuts at all but whether or not they will have to restart the cycle.

everyone has coalesced around this idea and that the rate is only important if you are worried about a soft landing scenario. it is a little bit misguided. >> that is a really big side and one that you might want to dismiss, given that we are going to get these rate cuts. what do you think about this thought that he put forward? >> i think what the market is missing, in terms of their understanding of what the members i thinking is that the fed has two to be of band-aids, both in inflation and jobs growth. but from the fed's perspective, they are starting to be worried

about nonlinear deterioration and we see that the evidence of surveys and an codes that are provided by the federal reserve districts. we thought that was a very strong signal for how the fed thinks about the jobs market. they are worried that the unemployment rate will persistently rise and that was one of the few that we were able to predict that he would be pivoting back in december. >> what you expect from tomorrow? not just the data about labor but what about wages that could potentially change the conversation? >> we expect some pockets of strength. a lot of it is driven by hiring in two to three sectors. the bigger story is that there are more diffused.

that is why i think in the data in the next month or two, it will be quite noisy. in the beginning of each year, usually they reset wages and adjust inflation to people's wages and minimum start to rise. withhold judgment on the trend growth but we will see a softening play out in 2024, i think. >> tomorrow is a busy day. thank you for your time. releasing the annual jobs cut for. within 700,000 announced job cuts in 2023 and more than 90% compared to 2022.

falling more than 20% year-over-year. let's discuss it with any challenger. what is interesting to me is that even with so much talk of a strong labor market, we see individual companies cutting by the tens of thousand. how do you pair those releases with what we are seeing in the broader economy? questionnaires seeing an upward trend compared to use prior. to us, that is a continued sign of what we are seeing in the labor market, which is cooling. you aren't going to see a higher level of layoffs compared to those years prior. we have not seen it spiking to the degree that is indicative of a recession but clearly, for a

few months of the year in particular, we saw big spikes in a off announcements from technology, retail and finance. >> may be hiring slows or the number of job openings. how do you marry the layoff data with some of those other indicators? >> we continue to see layoffs at an ambient level higher than it was two years ago. companies are still considering their cost and the cost of labor has become a significant one. it came out of a period of a lot of hiring. they were willing to pay really high wages to get the number of employees that they needed.

as the labor market has cooled, we see in a few sectors those layoffs increase. we have seen hiring announcements fall off pretty dramatically as compared to earlier this year. it just looks like a less volatile labor market coming into the new year. >> obviously the tech sector was a key area early on. when you look across the industry, is it acute in the tech sector or is it starting to spread out? >> it has spread out and we have checked increase layoffs as opposed to a year prior and we announced every industry that we look at. there were a few that stood out. technology, retail, warehousing, but we saw increases across the

board, which is a sign that the entire labor market is not just concentrated to a few. >> how do you think about the difference of cuts versus hiring? what would flit the tide the other way? >> we know that companies are concerned right now. we are hearing that from hr leaders across the country that they are seeing downward trend in the economy putting pressure on the labor piece of equation in their organizations. we are seeing increased layoffs. we are not seeing that spiking anymore at the end of the year, but we are seeing hiring starting to fall. companies -- look at it with two different levels, how many different people they need at any point in time, but also how

many they are planning to hire. all of that activity seems to have slowed, which is indicative of a labor market that has cooled to a point where it is really studying right now, which is different than what we saw for 70 years coming out of covid. >> justin keep an eye on the market, where are you seeing the most softness? the people that are cutting jobs, what are the biggest reasons they are cutting? >> the number one reason we are hearing about is cost-cutting. they can no longer pass along some of the increased labor costs that they have acquired on to consumers via the mechanism of increased prices without being able to do that with in nation, starting to ease, they are having to look at layoffs.

we are still expecting to continue seeing this elevated level of layoffs into q1, just based on where we are at right now. we expect to see that increase at a more dramatic level. >> we thank you for your time, especially ahead of that jobs are tomorrow. seeing the biggest day since 2020. we will talk about those details, next. stick with us. this is bloomberg. ♪ how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

>> this is bloomberg markets

three time first stock of the hour. shares are tumbling after the news ceo announced plans to almost have its quarterly dividend and make changes to increased cash flow. retail comparable sales for a fiscal year to decline in those single digits. let's bring in the analyst. an in-line meeting with the price target which is basically where the stock is trading right now. elizabeth, i would love to get your take because i do not think the dividend cut was the surprise. the conference call took place. what happened? >> absolutely. the dividend cut was more than we talked about. we talked about the downgraded rating. we knew that this was something that was likely to happen in some point in time.

what happened on the conference call was an increased focus on the core challenges. we had some conversations about the potential reimbursement but there are some current challenges. as well as the number of people getting prescriptions. also the flu season was not as severe as it was last year. they both had a negative impact. >> we have seen investors react today but we also have the ceo with more changes ahead. what would start to change the trajectory of this firm and how much of an overhang is there

given so much uncertainty? >> what we are looking for is to see that gross margin in the retail business stabilized. stop going down and potentially stabilize before going back up. we have heard conversations from walgreens and other pharmacies out there that they are looking to change the model and instead of seeing this consistent pressure, is there a way that there can be either some value-based component or quality metrics, or compensation for some of the additional services they provide to community members? that could potentially provide some improvement and could be helpful to walgreens' earning trajectory. >> let's focus on primary care. if we do that, we are vertically integrated.

i got the sense on the call that it would be less of an investment priority. do you have an understanding of where that strategy sits right now? >> absolutely. we do not have a formal -- a fully formed plan. but we did have a step up from the prior ceo. i think what we are seeing now is that period of large investments transitioning into a period of moderate growth. it is something that walgreens has definitely emphasized that we should start to see over the course of their current fiscal year. i'm not thinking that it is going to be as much of an area of emphasis, but it is bounding it out. how can they marry those

businesses together? >> how do you think of certain drugs as a engine? i'm thinking about these drugs, the diabetes and obesity drug. for covid, people came into the drugstore, which was a boost, but now you have producers announcing come of your just going to go direct to consumers. how do you see that filtering into walgreens? >> absolutely. on the pharmacy side, they are helpful from a revenue perspective not very profitable, perhaps slightly unprofitable. it has not really been the traditional drugstore model that we have seen. that was another issue with the profit from this quarter. as we are looking forward, we have to see him much more

traction they end up getting. you have to continue to track that. it will be interesting to see how those profitability metrics come through. it is likely over the short term that we continue to put pressure but it is something that we will look forward to seeing if they make any changes to see if they are compensated. >> thank you for joining us. we will take a quick break. posting another year of double-digit returns. we will explain how they did it. this is bloomberg. ♪

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>> this is bloomberg markets. now it is time for the wall street be. we are looking at the world of banking and finance. bridgewater's flagship hedge fund lost over 7%. there were a lot of gains among the funds. bridgewater had a management change. put all of this into perspective in terms of how tough it is. >> it is a striking number. they lost all of that really in the last two months. the last two months they lost 14% alone. mostly on bonds and stocks as we

saw a change in how they were treating. a strikingly bad number, been down nearly 8% per bridgewater, which was up for much of the year until then. really, it makes them one of the losers in the pact that we are seeing safari. >> it is interesting you said that a lot of that was taking place recently, which is when we got that sharp rally to the upside. it sounds like they were not necessarily positioned for that. >> yes, that took them by surprise and they were probably positioned the other way around, but it is interesting because they were a number of funds that made money in the last quarter from the stock rally that we saw. a fund that has not performed very well. just a few percent. but the money that they did make, they mostly made it in the latter half of the year.

>> let's talk about the winners now as well. they did trail. when we talk about the performance, almost up 19%. how do you think about the strategies fueling the most performance? >> a lot of them did good. they did well. less than they have in the past but still pretty good, maybe middle of the pack. good numbers but we did see some outperformer is. some of the stock pickers are up alive. i would say they did ok. s.e.c. the multi-strengths and some of them did well. how much potential consolidation

in the space? what's that is something that a lot of people are talking about and it is on the minds of a lot of people. there was this grab for talent. it largely includes snapping up other terms. industry experts tell us this may not be the first attempt at consolidation. i would say discovery but a pretty striking return. to your point earlier, if you invest in stock market, you would have done better get a lot of them are making a high watermark. >> thank you for your time. certainly a very interesting year in active management. tomorrow we will have a qr principal jordan brooks at 1:00 p.m. eastern to talk about this very volatile market.

stick with us on bloomberg television. slightly green on the day. this is bloomberg. ♪

romaine: awake for that jobs report. live in a dark studio, i am romaine bostick. scarlet: and i am scarlet fu. the s&p 500 clawing its way back, clinging onto its first gain of the new year. do we have the screen up? it is on track to end a three-day decline, up by .1%. u.s. treasuries are pushing yields up across the curve. climate jobs showed u.s. companies continue to hire last

month, raising the stake fo