>> welcome to bloomberg markets. >> let's check the markets. we are trying to hold on to some green on the screen but we are roughly flat on the day, investors pouring out o the market even with the pair down in the yield, five days straight that yields moving lower, and eight-point move on the day, does not show you the volatility, 17 basis points on the two year yield, but looking

at bitcoin how it has moved in the span of $5,500 peak to trough this week alone, nell still hanging out below 44,000 count -- yeah, $44,000, i'm sorry. down almost 6% on the day as the etf started trading for it second day. >> a sectors story we are attracting today, we as an airlines, a couple of factors covering the continuing unsettled situation in the middle east so oil prices were higher typically hurting carriers but dealt trimming profit outlook so that has weighed on stocks in the u.s., air canada in this country. staying with the earnings picture, united health care under pressure at this hour, navigating higher medical costs come of that weight on their performance. those shares are off 4% at this hour. blackrock shares higher. you just talked about the big

wek for bitcoin and certainly for them as an etfpvider a big week as well however in terms of the rvue story not exactly watwall street was looking for exactly they also have a deal on the global infrastructure partners that we will continue to watch that as well. >> a check on the economic data because u.s. producers continue to retreat in december prompting traders to increase bets on just how aggressively the federal reserve will cut interest rates this year. markets are pricing in six great cuts may be more maybe seven. mohamed el-erian is not convinced that euphoria will last as the fed seeks a 2% inflation rate. >> i suspect we will see inflation at the cpi level at 3%. this notion that this immaculate inflation will continue as something i find hard to reconcile with actual data. >> we will discuss the markets now with the founder and managing partner anthony

scaramucci at skybridge capital. when you look at how much rates have dropped this year and have little the market has moved on top of it and the fact up late last year the nasdaq 100 hit a brief record high, do you think that there is still much too much euphoria in this market? >> listen, it ebbs and flows, as we know, and the anticipation of the rates coming down is what really led to the run-up last year, so we are profit participants taking profits. other institutions are establishing positions and we are seeing the same in the cryptocurrency space, but it would be hard to fight the fed here. i would not be in the position if rates are going to trend lower through the year to get bearish on this market, so it is not historically too expensive, and there are a lot of good things happening in the market

related to technological innovation, so we are generally bullish for 2024. >> a lot of questions about technological innovation and market innovation and bitcoin etf's and you're seeing bitcoin trade meaningfully lower. what do you think is happening here? >> they are are three things we can see happening from the skybridge desk. number one, there seems to be a lot of selling of great sale -- grayscale, loss taking. that would be people who bought the grayscale bitcoin trust in the 50's up to $69,000, they are taking profits or losses i should say in booking those losses and swapping into lower prices in grayscale, of course grayscale priced at the high end of those 11 etf's. the second thing we are seeing is the bankruptcy estate for ftx is unloading into the

announcements that there is heavy volume of selling of bitcoin right now. we see that is temporary. i don't think you can have 160% rise in an asset over let's say a year and a half a month and then expected to go straight up after the announcement, so i do expect that supply overhang to be done over the next six days to eight trading days and then you will see the trend start upward again for bitcoin, because the demand is out there. one last thing, there has been a quiet period for wall street where it has been not able to market the ctf, and that will start in eight days as well. >> do you think there is a robust market for all the spot bitcoin etf's that were approved a lot of people said? that when you think of gold etf's you>

in the weeks ahead to you think? >> probably two dominant names, blackrock and fidelity be the two dominant names. they have the largest sales forces and you know this about financial services, gravity, the gravity and financial services, those are two of the big players in the etf space, so i suspect they will be the two winners. i think you are asking about a good question about long-term demand for bitcoin. i would pose the question back to you. i want you to imagine the number of people told by wall street financial advisors, wall street salespeople wall street consultants that they need to hold a 1% to 2% position in bitcoin. the last point, think of these portfolio managers at big laces like fidelity and blackrock and they are all diversified macro funds, where they hold 1%, to

present, 3% of these etf's? i think the answer is yes. i think this is the first etf with a fix to supply and bouts and lots of demand if not endless demand. >> you and i have talked about this before, if 1% to 3% is a wider swath of investors saying they are willing to commit to it in the bullish pundit and some bitcoin are correct on bitcoin are correct and the price continues to rise, and subsequently it has a larger stake in one's portfolio, what happens at that point in time? >> well, i will be very happy at that point in time, let me just point that out. [laughter] i think what happens is it trends to the market capitalization, so bitcoin right now at these lower prices probably a $700 billion market cap. gold is roughly $14 trillion

market cap. let's say we are half right and bitcoin can get to a $7 trillion market cap. will that happen immediately? i don't think it will happen immediately, but will it happen by the end of the decade? i think that is likely so you have a 10x moved by the end of the decade, what happened with web one and web two stocks as they got adopted and we are only at a 4% global adoption for bitcoin, which is consistent with web one in 1998. in 2030, bitcoin has a $7 trillion market capitalization, i don't think that is to aggressive and that is a 10x number from here and makes it a great long-term investment story. >> icq are in switzerland and have a big event in davos as well but before that there is something big in iowa, the iowa caucuses.

i am wondering how you see the iowa caucuses changing the narratives heading into and out of it around the republican party. >> well, listen, it looks like mr. trump is unstoppable. don't go by me. you can look at the polls on the prediction markets. his numbers have only gone up over the last three or four weeks, not down. governor christie dropping out of the race may help governor nikki in new hampshire. certainly if mr. trump wins or the president wins in iowa he will carry some momentum into new hampshire. i will take a contrary view here. i think the legal problems for president trump could derail his candidacy. i know other people don't think that but i want you to imagine what happened to al capone or john gotti. everybody thought they were untouchable until of course they were touchable, and he has four major indictments, 91 counts he

is faced with, and remember this last point, mark meadows, he is his former chief of staff and ran the most conservative part of the house, the freedom caucus, is the chief witness for the prosecution as it relates to the insurrection case, so i think there is a lot of legal trouble ahead for mr. trump. i could be wrong, and if i am wrong he looks to be headed to the nomination for the republicans. >> still a lot of head -- more ahead. and garbage in switzerland. conversations about the u.s. elections. we are watching the banking sector which just reported the most profitable year in u.s. banking history. we will talk about that next. stick with us. this is bloomberg. ♪

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>> this bloomberg markets. time for our stock of the hours segment. we have been tracking the banks with a flood of our. jp morgan closed up the most profitable year in banking history with its second consecutive quarter of record net interest income. citibank planning 20,000 of job cuts to boost shareholder value. wells fargo surprised analyst predicting a 9% drop in that metric or 2024. joining us now is the director of financial research at argus. let's start with the collective story. it sounds like based on the commentary from the likes of jp morgan and wells fargo that the peak in net interest income has come and gone. is that your assessment based on

what you heard today? >> yes, and that is basically the forward guidance as well. still quite a bit of weakness into the first half of this year. the lending businesses under pressure. muted loan growth based on the higher interest rates and some continued net interest margin interest pressure for higher deposit costs and even beyond that we had some higher loss provisioning is banks are setting aside more as they think delinquencies will increase a bit moving into 2024. the better news is we will see an improvement in the second half of the year as those lower rates make start to encourage some lending growth, but you know, the era of high interest rates appears to be over and that has been a nice bump in net interest income for most of the banks. >> speaking of bumps, i wonder if we have to factor in a lot of these stocks had been in rally

mode and the last few months to get a better assessment of how the market is interpreting all this? >> i agree with the re-rating higher in bank stocks, and most of it in the second half of the last quarter. our bullish base case for banks is the economy avoids a recession and that avoids the big spike and loss provision so credit quality does not deteriorate much further in the lower rates are second-half 2024 type stimulus from lending growth and eases pressure on deposit costs and also we don't hear about it much today now because of the results, but the portfolio was under stress is rates went toward 5%, so that has been a big help as well. and then of course the wildcard in the second half is do we get some rebound in the capital market side of the banks,

investment banking, ipo/m&a activity. we are at a downturn here so we should get some improvement in the second half. sonali: even beyond the investment banking figures i want to stick with jp morgan and citigroup in particular would jp morgan guiding to less than 3.5% and the charge-off rates was citigroup saying they could go as high as 4% and we have a bunch of regional banks and cards coming out. how much is credit quality weakening this year?it looks like they're going past pre-pandemic levels. stephen: yes. the so-called normalization, i think we are passed that in terms of where we were pre-pandemic. yes, it is a solid concern in the differential is angrily the book of business what were seeing the most weaknesses in credit cards and in the lower or middle income spectrum as well.

people have been having paying off bills, given where inflation is, given the rising cost of living, food, fuel, so forth, so it comes down to the book of business. jp morgan has a higher income consumer and a better base of business density bank and that is why you are seeing that differential. sonali: is there peak nii given that consumers are so extended on the credit cards already? stephen: well, no, i think the good news is most banks have provided pretty generously to law's provisions in filling the reserves in the last several quarters, so they have not taken it lightly. we have had the last year has been one in which they thought the economy was going to slow materially because of higher rates. they thought unemployment would move up higher than it has, so they are pretty well reserved at this point, so i do not think

the impact will be as meaningful on earnings. of course if we get a spike in unemployment, all bets are often -- often that is why there are expectations for the fed to lower rates starting in the second quarter. that kind of needs to come to fruition for the bullish banks case to work out. john:john: a lot of people have been wondering about the size and scale of the biggest players especially in light of what was happening really a year ago and jp morgan is a name you have been bullish on aura very long time. i believe that is one name that you have personally owned as well. what does the future hold for jp morgan versus the rest of the industry in your opinion? stephen: well, one of the hallmarks of jp morgan is there diversification. they always seem to be running on seven cylinders ahead of

eight, a weakness in one area, strengthen another. it is rare to see a quarter where they have material weakness in several divisions at one time, so i think the diversification aspect helps. they have the national banking franchise, strong on the consumer side whether mortgages, credit cards, automobile loans, etc. they are high in the table so when capital markets do well, they capitalize on that. trading revenues tend to be strong. this quarter was an exception with reduced volatility throughout the year, so it is more of a well managed bank, jp morgan, with return on equity in assets, and you know, that is where you look for investments in this space. john: we appreciate the time as always. the director of financial research at argus break and gum quarterly results from the big banks. coming up, a preview of

bloomberg's next big risk series where we interviewed 3 twelve st players about their long-term outlooks. thss bloomberg. ♪ ♪ (upbeat music) ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww. -nope. ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, anow. constant contact. helping the small stand tall. hey, brent! if you had to choose,

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sonali: this is a bloomberg markets. as part of the next big risk

series, we asked prominent leaders about how they and king about the long term challenges not yet on the financial world's radar. retirement is on top of mine for one who is assessing longevity risks. take a listen. >> the burden of retirement for americans was really dealt with by the government after the creation of social security and by corporates through the defined benefit pension plans. the burden of that has switched to the individual. and if you look at that number today, only 3% of americans have access to a defined pension benefit plan. 60% have access to rear entire mid savings, not all americans, but the ones that do, it is in a defined contribution land, with risk shifting from government and corporates to the

individual, and at the moment that burden transfers to individuals, we think we will continue to see a migration of some of the most attractive income producing assets from public to private markets. john: what does this mean for the ability of the average american to access income producing assets? is it almost impossible these days? >> there are a lot of solutions to these challenges around retirement good first, people could in fact, work longer. the second is we have to reimagine defined contribution plans for those participants. the third challenge and solution around is it that we have to hunt more for these income-producing assets and incorporate some of the things that have gone to private markets into retirement portfolios for clients. as you know, i work for a long time in public equity markets and those markets over the last 20 years were massively disrupted by private markets,

and i think we are at the early stages of fixed income being disrupted in a movement of these income-producing assets from public to private markets. john: the next big risk premieres tonight at 8:00 p.m. new york time, saturday, january 13. that is on bloomberg television. sonali: it is interesting, this movement to private markets, tcw and blackrock have some ideas. on one hand, etf's. on the other hand, alternative assets to do with a camphor savers in these environments. john: the longevity issue is universal. in canada, we have a universal care system. it has put stress on the system. the retirement story, these are big issues. even the geopolitical realities, election cycles, decisions dealing with the health situations coming out of the

elections. we will look forward to those interviews. this is bloomberg. ♪

>>. new york, and scarlet do. katie: i'm katie greifeld. we are kicking off the u.s. you look at equity markets on this friday, pretty quiet. you take a look at the s&p 500, currently up about 0.1%. same thing if you look at big tech with the nasdaq 100 up about 0.1% as well. that is coming off this morning's ppi release. the bond market pretty much unchanged. the 10 year yield currently hove