>> welcome to bloomberg markets. sonali: let's get a quick check on the markets. the s&p 500 in record territory. 4825 up on the day. 10 year yields. higher this week. we see the pace increases cool

to end the week. u.s. dollar index cooling-off, lower on the day. crude pulling off this friday. john: let's look at individual stock movers. on the deal front, a sizable ir obot selloff continues. bloomberg meeting reporting on the uncertainty around amazon's acquisition of that business particularly due to hurdles in europe, but also the uncertainty in the united states, so investors selling now and asking questions later, i suppose. three days of selling for spirit airlines after the judge said no to the jetblue deal but spirit reaffirming its commitment to getting something done. we have seen a big move higher today, up 20%. we are talking technology, but we have and tracking travelers

insurance as we move through earnings season. here is a company that has put out numbers that were well received up about 5%. we will be talking about the real estate outlook in the program. there is a canadian player in the wreath estate market, a lot of rental properties, tricon acquired today by blackstone which has increasingly focused on growing its real estate sector. that stock up 28%. sonali: ending the week on the positive note with the s&p hitting a new intraday all-time high. here is abigail doolittle. >> it is the first time into years we have seen this and the nasdaq 100 at an all-time high. last time both indexes put in record all-time highs at the same time was in november 2021, at that point the nasdaq 100 peak in the s&p 500 followed

suit in january 2022, but right now, all-time highs. on the year, the equal weighted index down in the russell 2000 down 4.7%, so this points to the strength of big tech carrying stocks higher, not the breadth that everybody had hoped for last year. we will see if it broadens out but right now all-time highs. if we flip the board we put this into the perspective of that january 2022 i was talking about. here we are. one reason to think this hype may not last long, take a look at the rsi on bottom, an indication of momentum. there are a series of lower highs saying this is made unless, not as bullish -- less, not as bullish momentum. that is a bears divergence. something to keep in mind.

the s&p 500, and this was calculated an hour ago on the year, four sectors higher. most are lower. not surprisingly some big tech sectors on top. investors want to see that breadth. let's see what happens going forward but some nuances to pay attention to us we have all-time highs for the s&p 500 and the nasdaq 100 as well. sonali: the semiconductor index feeling a lot of love. the russell 2000 coming for you next? let's talk about the economy. we spoke with david lefkowitz about how he thought equities would be affected by the fed. david: if the fed is not cutting rates because the economy remains strong, i think the u.s. equity market will be pretty much fun with that. if the fed is cutting rates because the economy is very weak, that it's a whole other story. sonali: joining us now is constance hunter.

we have gotten the repricing of expectations and you are seeing equities, in terms of the rate change expectations, what are your expectations going into the next couple of weeks on how volatile the rate environment could be? constance: it could be the year of volatility, but at the end of the day i think we will grind higher in the equity market, and the bond market will respond to the data, because the fed will respond to the data. i don't think our choices are either that the economy is doing well so the fed does not cut or the economy is tanking and therefore the fed has to cut. let's remember that rates are extremely restrictive at these levels and could easily cut 100, 150 basis points, get fed funds down to 4.13% and you would

still have restrictive rates right? so the question is if we will see a soft landing, which is still a landing, then that will need to cut more. if the answer is no landing, in a no landing scenario where we are growing 2.2% on an annualized basis, which is what we expect to see for the fourth quarter, do we need to fed policy that is this restrictive, and we think the answer is no. john: it was good get this is "bloomberg the close." to get -- to get perspective on what the average consumers thinking about on the soft landing front as well to a, constant. i wonder because abigail was showing us that market charts, the nasdaq 100 rallying more than 50% last year and adding another 2% plus this year, so technology stocks easily outperforming areas like value. i wonder if this big pipe story around artificial intelligence,

everybody trying to get their head around how that transforms business, the economy and not wanting to shift away from a big transformational story if there is not necessarily a huge change in the economic data day-to-day. how does that factor into market thinking do you think? constance: absolutely. if were looking at the data and we will be looking at what comes out of productivity in the order number but we had very strong productivity data in the third quarter, and we anticipate we will see probably a decade of outperformance in productivity. this is relate the roaring 20's scenario, and that factor that drives it is the productivity factor, and this feeds into the tech rally. it is not just ai or generative ai, it is all the technological advances being diffused throughout the economy. we are seeing a high number of new business formations, and

what that means is that new businesses tend to adopt newer technologies and do not start with legacy systems, so that helps to defuse technological advances throughout the economy. sonali: one of the things you have done and macro policy perspectives is take a look at the risks. as we sit here at a record high on the s&p 500 what, do you think investors are not taking into perspective? constance: look. we have a very tricky geopolitical situation in front of us. that could very well lead to some negative surprises this year. since they are surprises, i can think exactly what they would be, but we have different alliances coming together in sort of conflicting ways as we see this middle east crisis continue. most of the goods that are shipped through the gulf is

where the rebels have been most active targeting ships, so china has a relationship with iran and will put pressure on them to try to stop that activity. meanwhile, we see questions about funding for ukraine and what that my dude not only to the ukraine war, but how that might inch closer to the nato border. these are obviously important factors, and then of course at any given time, we have a 20% chance of recession based on that. if you think the scenarios are precession, her landing, soft landing, mild recession or slow down, or no landing, i would say they are evenly split between the three of those. john: constance, just to wrap things up, we did not really

talk about the employment picture but as you talk about the economic outlook it would seem to be an important part of the conversation especially since were talking about tech site meant, but in silicon valley we have seen companies cutting their workforces year, so how closely are you watching the job story? constance: very closely, and so is the fed, which you heard from officials looking at a set of balance risks, not just focusing on inflation, but the job situation. the breadth has narrowed of jobs hiring, and while we don't see layouts because companies are doing labor forwarding, if we see layoffs, we would be worried about the soft or hard landing scenario. sonali: we thank you for your time and happy friday. coming up next, forward announcing job cuts as demand weakens for the f-150. it is our stock of the art next. this is bloomberg. ♪

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john: this is bloomberg markets. time for our stock of the hour segment. we have been watching four today. forward and said it will have less people working on the f-150 truck. it was reported it would cut 2024 production goals. the demand for electric vehicles has been weaker than expected. sonali: and no better voice to talk about that with those is ed ludlow. if you think about the ramifications for forward just with the lightning, how does that span across ev's, frankly? ed: it is the poster child of

what is happening in the u.s. ev market. /from a 1% decline at the open to a 1% gain, but it is taking action on the outlook they gave us last month which we know production in the f-150 lightning will be down in 2024. we expect growth in ev demand globally and the u.s., but lower growth, that ford is responding by taking 1400 jobs away from the electric vehicle center in going down to one shift on the line for the f-150 lightning. they are adding 900 new hires and 700 roles shifted to the michigan facility which handles bronco for example because there is still demand for the combustion engine vehicles. john: it always felt like we would have this kind of point. it will not surprise anyone to

know that americans and people around the world still love traditional trucks and for the traditional automakers and the prophets that come with them, the prophets are nice compared to the ev story, but what point do they have to make a specific decision on the direction they will go in, not necessarily the 2024 demand picture, but the demand picture for the next decade? ed: what the sell side thinks about is they like what jim farley plans to do. you have this dedicated ev division. they just think it will take time for forward to get there. they have two models, the lightning and marquee. they have had to pull back production on both of them and when we first reported the story around the f-150 lightning this morning and this is anecdotal, loads of buyers flagged the price point, that there is still an issue of the ev you want

given that 75% of vehicle sales in this country art light truck category, being too high, and ford in response to tesla in the more mass-market model, would have used as a price cuts as a lever to unlock demand, but they also have to address the supply a portion of the equation to match demand. that is what they say they are doing in response to the demand they see in 2024. sonali: how do you read across rivals here? ed: the other thing is what they offer. there are only two models and a big question for forward as well , gm has all these other models coming. do those unlock demand in the pockets of brand loyalty? tesla is the key one to watch. tesla has earnings next weekend target 50% annual wrote in their own production and deliveries. but we are in a 2% environment. the demand is not growing at 50%

annual growth rate. tesla gives us the first and best, on that, so there is a worry. in summary, global ev demand is growing in a slow way but our expectations on the low single-digit author being aired back further in the rates environment has something to do with that as well. john: to your point, we will see what tesla has to say when it reports results midweek next week. ed ludlow joining us with the electric vehicle story. time for a quick break. coming up, the housing market coming off of one of its worst years since the 1990's. we will walk you through that next. this is bloomberg. ♪

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time ford today's what it's worth segment. that was the total number of existing home sales in the u.s. last year, the weakest showing since 1995, 4.0 9 million. there were fewer people in the country. housing is sensitive to interest rates and the rapid rise in our in cost took a big bite out of activity. sonali: i remember a conversation and i asked if it was a housing crisis. it is certainly an affordability one. we are joined by a bloomberg senior strategist. if you look at the pressures on the housing market, how bad is it relatively and wind does it get better? >> those are key questions. it is a strange market because so many people are sitting on these homes they purchased in 2021 with low rate mortgages, so

the high rates are having an effect on those homeowners as well because it is making her to relocate -- hard to relocate or take equity out of their homes, that we say they are house rich but cash poor. if you look at traditional metrics, it looks fine, but if you look at credit card debt, that has been rising and has reached new levels telling us people are relying on credit cards for spending and cannot tap equity like they have in previous cycles. sonali: oh, what about the idea here that you can't tap your home for equity here comes the wood is the home really worth? erica: that is a good question. you can sell it and move to a smaller home. some rents have moved to apartments. it is worth what you worth when you sell it. some people are taking out home equity loans. we saw a pickup in refinancing, but that is not most people who own the 2%, 3% rates at these

points. john: earlier in the program, we were talking about the outlook for the economy. when you put this together, how does that play into the outlook for the economy from here? erica: i think housing will continue to be a drag and there is a very long, long lag between when you see the decline in home prices, which have started to turn up a little bit, hit the cpi numbers, for instance i was so from that perspective, there is the 15-month lag between when home prices turned and that hits the traditional inflation metrics. the fed says they are aware of that and i am sure they are and that will factor into when they can ease rates little bit, but the other thing showing is for new homebuyers are stretching further than ever, and so while the current home prices in the housing market have remained in ok spot in the economy, we are

seeing delinquencies rising from the new homebuyers because they are stretching. the average debt to income of new mortgages taken out is above 40% now, which is the highest since the 2008 financial crisis, so i am concerned we are putting some people in homes that will have a tough time affording them unless they can refinance. john: yeah, well, i mean, we spend a lot of time trying to determine where interest rates go from here but assuming we don't see rates outbound to where they wererthey were befor, that idea of a stretch buyer, does that become the new reality? erica: i don't think that people are calling for mortgage rates much below 6% over the next year , which will help some of the people who took out 8% mortgage rates, for instance, and we are already seeing the refinancing

indexes picking up a little bit. it is small relative to the size of the mortgage market, but to the size of the new mortgages, that is significant, so if they can save 2% that should help a little bit, but it is hard to expect mortgage rates go back to the 3% level are in an unforeseen economic catastrophe, which i don't think is anybody's base case, hopefully. sonali: what are delinquencies telling you about the state of homeowners today? erica:erica: rising delinquencies, the number i had today was for the 50% to 60% new debt to income borrowers and which are 17% of the new borrowers, they are already missing a payment within the first 24 months, so that tells me people are stretched, that nobody wants to lose their homes, but at the same times you know sometimes you have to make a decision,, going to buy that medicine this month or pay my

mortgage? that tells me it could be a drag that weakens consumption, which has been a high point for the economy keeping growth relatively strong. john: and briefly, because obviously we are watching the mortgage market in canada as well as the banking sector has to watch it. i am assuming this is something wall street has to keep tabs on as well? erica: yeah, there are quite a few mortgage backed securities sitting on big balance sheets. i am not a regulation expert, but i will say, reassuring bases that most loans on bank balance sheets that aren't securitized are the highest credit borrowers, but if you are seeing weakness and that, it could flow through and some regulations are focused on trying to assess that risk more actively, but that is still bad pike. john: we will continue to watch it. as we had to break, a reminder

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>> in search of a record high. live in new york, i'm romaine bostick. >> i am vonnie quinn. as you can see, we have already had a high on the s&p, a great day for the team at bank of america can talk about how the magnificent seven and the narratives of last year still count and at least for today it is true.