♪ sonali: welcome to "bloomberg markets." i'm sonali basak let's talk about that u.s. jobs report because employers are add the most workers in a year and wages are jumping a surprise reacceleration in the labor market solidifying that the fed will hold off on rate cuts any time soon. we have a market here really reacting. we have s&p and nasdaq 100 that are reacting to positive earning

surprises here. the s&p and nasdac looking to end the week on gains. the tech heavy nasdac 100 up about 1.8%. we have the yields reacting to the job numbers. nearly 20 basis points here the two-year yield. and the 10 year yield, a drastic move here. 17 basis points higher on the day. well above 4% and here 405. and some midday movers on the equity side. exxon and chevron surpassing as surprise output from shale fields had to cushion the blow on weakening crude prices. we are at 72 poend the week we are dollars lower than where we even started the week and almost 2% lower on the day. we have exxon more than 1% and chevron up more than 2.8%.

shares of meta and amazon are surging and just a stunning move here. you have meta platforms up more than 22% and amazon up more than 8%. apple revenue beat estimates but concerns around china sales growth still wade on the stock. but it's roughly flat on the day. we're going to go to abigail more. >> apple at this point, investors looking at the points. let's recap the high points from some of these quarters. so meta, of course, it's unbelievable. up 22%. the biggest stock move by market cap ever relative to the result that they put up big, big growth, 25% of the top line and put up for the bottom line 48% growth. so you finally have mega-cap tech stocks growing in a big way. they also raised relative to amazon, the best e-commerce quarter for that company going back to the pandemic.

14% sales growth. $170 billion in sales. apple shared their first quarter sales growth in about a year but china slumping about 13% or so. let's dig in on that meta market cap. we take a look at it, it's still going to be more than $200 billion the market cap of $1.23 trillion on the day, adding more than $200 billion that's the biggest single stock market move by market cap, i should say ever, surpassing both apple and amazon the previous big moves on good quarters. so investors cheering the results but the $50 billion buyback that they announced wanting in last year's year of efficiency really paying off this year. while apple, there was that slump and the premarket had been down 3% then one positive thing is after four quarters of thing

growth for sales, we're showing just a little bit of growth there. sonali: abigail, thank you. we're going to talk more about the tech industry. we're going to bring in dan chung. i love talking to you about the tech industry. usually, you stand against the grain but when you are looking about what is going toward the grain here, meta with that more than 20% move today alone. is that as good as it's going to get this year or do you find this an opportunity to see a longer term trajectory here? >> we think meta is undervalued on our 2025 estimates. at the top line, growth is accelerating to a stunning 29% in the first quarter. and meanwhile, they're controlling operating expenses. they're getting expanding margins and strong earnings growth. so hats off to meta. sonali: where do you think that there are relative outliers here when you're willing at such strong numbers posted by meta

and even amazon also seeing their shares soaring on the top of progress being made by management? are there members of the magnificent seven that you see lagging behind? >> yeah, we think the magnificent seven is the -- the herd is thinning a little bit tesla have a transition year. apple is a really high quality company but it's top line and bottom line growth is pretty interesting and it's at a high valuation compared to in particular the other ones we like a lot. amazon results are really strong. earnings, they were 25% ahead of consensus. they are gap earnings, by the way. so really high quality. but the year-to-year growth rates is meaningless with amazon because i don't think many people realize the retail business there hasn't been very profitable. but as a result, we've had 40% year-to-year earnings bill. and business is accelerating there. we see them growing 50% and with a lot of room to go.

the pay ratio is only a one and they're going to post earnings growth all over 33%. so, amazon, great company. lots of opportunities are a.i. meta also, we think strong results. netflix, great results. so maybe netflix joins the magnificent seven. it wasn't consider one. and penaltily, microsoft. -- finally microsoft. benefiting with a.i. sonali: when you look at the big themes, the things that will drive the growth for the next year or so or even the next five years for these companies you think about netflix. you have content. amazon, you have advertising the. microsoft, you have a.i. what is your favorite place to latch on to right now? dan: well, first of all, i think a lot of people have thought

that large gap means mega-cap leaders would be underperformed. it's the opposite. our analysts are seeing multiple growth trends fundamentally, especially with the mega-cap, large cap leaders like meta, amazon, microsoft, netflix. and we see some broadening out in terms of the consumer the consumers have been pretty strong. decker and uggs seems to have two legs of growth right now in both of those products. other examples in health care, for example, which has been a growth this year after a difficult 2023. health care and increased utilization. we see a broadening out of the market but a continued strength in some of america's best e-commerce and tech companies. so these leaders. sonali: you made some news earlier in this year frankly

about buying another asset manager, focusing on small caps. you look at just the performance of the nasdaq 100 and you compare that to the russell 2000. when do you see the market breath really broadening out here? dan: it's trickling down from largest to medium to small. small caps really haven't had their day yet we do think that will happen. and really, part of it is because the u.s. at least, the economy really appears to be in our view, in a soft landing or even a goldilocks scenario. the fed is on pause and it's ready to cut. maybe not in march. i've never expected that. but all things are going well. and eventually that strength in u.s. economy will translate into

consumer confidence. we're seeing little signs of it here. but i will trickle down as the markets realize the pessimism about u.s. growth in particular has been incorrect. and that's what we'll see it improve the u.s. ultimately, you will see a broadening out to other markets sort of develop international markets. again, we are most innovative economy in the world and it's showing the corporate earnings amongst our leading corporate companies. sonali: dan, you take a look at some of these stock price increases that are reporting, are you finding profit taking even selling opportunities anywhere? dan: you know, in the kind of market that we're in right now which is really -- let's dive back this bull market is only a year and a quarter old. it bottomed in october of 2022.

there was a retest the third quarter of 2023 and now we're higher than we were basically just five, six months ago. but it's a new bull market. i've been saying so for a while. we spoke about it about a year ago. bull markets usually last four to five years they're much longer than bear markets. and the best course is hold on to what you have. it's going to be a good multi-year ride. sonali: dan chung, c.e.o. and cio of alger on a big day for a lot of big companies. nvidia is hitting all-time highs today. we spoke with the c.e.o. about how a.i. will impact destroys and countries. stick with us. this is bloomberg ♪

sonali: this is "bloomberg markets" and i'm sonali basak. it's time now for the stock of the hour. nvidia is sitting at an all-time high as tech carries the market. investors are rallying behind the company believing in the long-term adoption of generative a.i. for growth. >> the vast majority of the computing market has been united states and to a much smaller degree, china. for the very first time, every industry would be -- every single country would become a computer industry and every industry will become a technology industry. and so artificial intelligence or the automation, the

production as scale of intelligence matters to every single country and matters to every single industry. and so for the very first time, last whole new computer market that is going to be in every single country and every single market. and it starts with, of course, the native computer industry itself. but you're saying a great adoption in health care, great adoption in logistics, in transportation, of course, in manufacturing, the large industries, the heavy industries. for the very first time because of generative a.i., computer technology is going to impact literally every single industry in every single country. sonali: i want to bring you some breaking news. reddit, one of the hotly anticipated ipo's of the year plans to pick the new york stock

exchange for its ipo and bloomberg's own reporting is showing that the company has been advised to target at least $5 billion in its valuation into the ipo. now in private markets, we know that the valuation has been below that. according to potential buyers on the rainmaker securities platform the value has been between $4.5 billion and $4.8 billion. we have seen a few companies already fined targets are hitting ipo values below what nay initially targeted. though rid dit is one -- reddit is one of the most hotly anticipated of the year. next, we're going to dig into the the jobs report and we're going to see how companies are faring, particularly financial companies when it comes to hiring and cutting jobs. this is bloomberg. ♪

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the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪)

sonali: this is "bloomberg markets." i'm sonali basak. and it's time for wall street beat. because it wasn't all good news on the job front this month. just this month, we saw multiple banks cutting jobs, announcing job cuts. bloomberg's katherine outry joins me now. >> we saw a number of european banks this week talk about the ways that they're managing their expenses and moving forward, that looks like for example, at future bank, a -- deutsche bank, over 3,000 of jobs being cut over the next few quarters. and they're really trying to demonstrate to their shareholders that they're keeps costs in line with expectations pulling back a little bit and

that means shareholders are looking for a period where the profit will be returned to them in some form. so we had deutsche bank. we've had bnp talking about how they're keeping expenses down as well. a lot of this does come down to which businesses are the most profitable and that's where you're going to see more investments. and then for the businesses that might have more expenses but aren't producing the same type of revenue at least the growth over time. that's where you're going to see some cutbacks. sonali: you think about citigroup cutting jobs amid reorganization. businesses are really shuffling things up to meet the environment here. citigroup was a big announcement on its own. so how tough does this feel for a market? katherine: absolutely. we had u.b.s. and their integration that they're still working through. you have to think about the macro backdrop.

we came from period 2021 was that lower interest rates and then as interest rates started to creep up, we saw less deals. and the banks, we're only just starting to see all of that work through. and i expect talking to a number of analysts in the industry that 2024 is going to be more of that. we haven't seen it all work out in a way. and now, that rates, there's this expectation that the cuts will not be coming until much later this year. then, it's really going to keep coming. it's more cuts potentially to come. sonali: that's a tough part of the market. let's talk about the hot part of the market. we have long-awaited idea here of j.p. morgan getting into private credit. they've been hiring and paying what does j.p. morgan's entrance into this world start to do in a world that's been known to be so secretive? katherine: it is. it's an opaque market. and really the major players that have been operating in it, they like it that way. because they can do their due

diligence and they can go behind the scenes and make trades that ultimately express what they view as the value but they don't always have to market and it doesn't have to be broadcast to the wall street at large. and what that means is that sometimes they can hold on to valuations for a longer period of time. what j.p. morgan's entry means is that the prices might become more transparent and you're going to see a lot more transactions, specifically if there's more volatility. if trading is picking up and j.p. morgan is stepping in to facilitate those trades, you're going to see lot of those players have to potentially work faster and also the prices are going to be a lot more volatile over the period of time. sonali: i love what troy rorbaugh told bloomberg which is that it can't continue forever as is a transparency will increase over time.

it begs the question. what do the apollos and the other private leners of the world feel about j.p. morgan's entrance? katherine: i think that all of the major players will adjust. we haven't even talked about technology. i think that this market is going to transform not just because of new entrance, new players like j.p. morgan, but as the technology, the trading, if it's facilitated in a more electronic way, the way that equity markets are, then you're going to see continued price improvement. and really, what j.p. morgan is saying is transparency is a good thing for the market and it's ultimately going to lead to more efficiency and they want to just be a player to facilitate that trading. sonali: it comes in a year where non-banks, private credit have certainly been the hot word of this season. but you are seeing leverage credit markets starting to pop back open slowly albeit some big deals even canceled watch.

does this mean about a bank which is able to offer both things? go they regain control of the market by having the opportunity to do both? katherine: they are building up their balance sheet in a way that is defensive and also serving their clients on the trading end. so i expect that over time, they're just going to become an even bigger player in this market, that they're just entering now. so it remains to be seen of what this actually means for smaller entrants too. if you have these bigger players that transform the market, does that mean only the apollos of the world can compete because they have the scale already? that's a big question that we'll be tracking. sonali: for for your time, katherine. back to the overall labor market. wall street had a tough market. u.s. added the most workers in a year. and we are recalibrating

expectations for the full year. joining us is anna wong at bloomberg economics. when i was reading through the research coming from you and your team, one thing that struck me was not just about the idea of rate cuts going away, but the volatility around the idea of later this year. at what point does wage inflation in particular become too strong for the fed to really start to throw in a wrench for this tightening cycle? anna: i think the key data point will be wage growth, it needs to be adjusted by productivity and we saw that productivity was very strong the fourth quarter. so for the fed, they would discount the wage growth for that productivity growth. so right now, if you do that adjustment, in fact, wage growth is approaching a consistent level that the fed deems

consistent with 2% inflation. but i think from today's payroll report, the most important signal for me is the backward revisions of 2023 and it shows that the momentum of the labor market going into 2024 was stronger than what we even thought in real time back in 2023. so what that means for nominal wage growth is that maybe that they're being forward looking. the nominal wage growth could continue to be a pressure if this data is real. i mean, but that said, i think today, we also saw that the survey response rate of the non-farm payroll is extremely low which means it's very hard to take a signal from today's data. sonali: anna wong, a busy week ahead for you for sure. we're watching the s&p 500 barrel towards a height of the day. we are watching strong markets on the back of these earnings. a two-year yield flying so high.

we are flying above 16 basis points alone for that 10-year yield. i'm sonali basak. that does it for "bloomberg markets." have a great weekend this is bloomberg. ♪

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