sonali: welcome to bloomberg markets. we'll talk about what investors are doing, digesting the latest comments from federal reserve speakers with loretta mester suggesting she is not in a rush to begin cutting interest rates. you're the move in the market with yields surging a little bit lower. the 10 year yield is hanging out around 4.10. the two year showing a leg downward, hanging around 4.40 or so. the nasdaq 100, decline of one

half of 1%. we are in the middle of a messy earnings season. newark route on a tear higher. -- new york crude on a tear higher. s&p 500 looking for a direction. you have to love it when there is some action under the surface. ge healthcare forecasting adjusted earnings-per-share for 2024 will top analyst estimates, now up more than 11%, almost 12% on the day. palantir posting its first annual profit with the ceo saying he does not know what to do with the onslaught of demand. we had kkr come out with a fourth quarter profit that beat wall street as the bits -- that beat wall street estimates. credit and insurance becoming sources of strength during the high interest rate environment. love when we are seeing higher for longer. kkr recently bought the part of

its ensure that it did not already own. more to come from alternative asset managers. moving to fed speak, the comments from loretta mester earlier this hour. abigail doolittle has the details. abigail: she did comment on the timing of rates and seem to reiterate what jay powell has said recently in terms of the idea that 2024 will likely be the year when the fed starts cutting, but it will be later rather than sooner. she said "if the economy evolves as expected i think we will gain the confidence later in the year and then we can begin moving rates down." she cautioned about doing it too early. they really want to see inflation around 2% on a sustained path. what does that do for the bats for march and may? they are already higher. what we are looking at in white is the potential cuts in march. earlier this year and late last

year it had been 100% chance we would see a cut -- an 80% chance. now it is closer to 821% chance. for may it had been 100% chance. now it is 61%. minutes ago it had been 58%. some may think her comments were not enough to take the odds of. in any case the probability of cuts in the first half of the year are lessening. what does this mean for the 10 year. year to a wild ride between 390 and 420. her comments bringing the 10 year yield down just a little bit. sonali: that fed speak has been creating volatility in trading and affecting the business of many financial platforms. today it was reported 2023 was the 24th consecutive rear of -- trade web reported 2023 was the 24th consecutive year of revenue growth.

the platforms are record volume with volumes topping $42 trillion. billy halt is the ceo of trade web. you see your stock reaction. do you think investors all records in january and said this is as good as it will get? billy: first of all, thank you for having me on the screen with you. i think i did my first ceo interview with you last january. i must've done a pre-good job to get invited back. my goal is to keep getting invited back. thanks so much. we had great earnings in the fourth quarter. our stock did well. we are up almost 40%. expectations for our performance are high. we keep executing as a business. you are talking about the 10 year. the reality is we are in a real rate of 4%, 4.10%.

that is great for our business. government debt keeps growing. the central banks are playing a lesser role in the marketplace. that is good for the private sector and our business. thanks very much. sonali: how do you think about where you will keep seeing volatility. it makes for a bumpy ride for investors but we have seen massive numbers come out from the nonbanks of the world. if you headed into 2024, wearable will that money keep coming from? billy: we will see the natural cadence of volatility in the rates market. we will see significant volatility in the high-yield market. the big interesting market that is waiting for a lower rate environment is the mortgage market. it has been a sleep your market the last couple of years. that market is looking to take off as rates go lower into 2024. that will be a very interesting market to watch for. kailey: we've been talking about

-- sonali: we've been talking about how all of this volatility is great for you and your rivals. one question i have. you have jp morgan saying one major concern they have is liquidity. to the extent liquidity is a concern, where are you most worried? billy: i think liquidity is the most important thing. we describe the search for liquidity. one of the things we've been investing in is our aix functionality, which allows more machine learning approach, a more sophisticated approach to finding liquidity in the marketplace. no major areas of concern overall. the high-yield market i would highlight as the most important piece around liquidity, and maybe i would describe a little bit of the more off the run aspect of the treasury market, where there is a need for more market makers in that space, for that market to keep functioning the right way. in general the markets feel good. they are functioning well. you can see the volumes that are

business they're showing how well the markets are functioning. we are feeling good about where we are going into 2024. sonali: the sec is coming out with these rules in the industry has contested them from the idea that hedge funds need to become dealers in the treasury market, there has been a lot of concern about liquidity in the treasury market. do you think the sec made the right move? billy: i saw that this morning. i was going to maybe drop a note to our friend mr. gensler and remind him to not release the news during our earnings call because i've not had the perfect ability to digest all of that. i think there is a high level of sensitivity around the issue you just described, liquidity in the government bond market. all of the adults understand how important that market is. my instinct is there's an understanding for how important firms like citadel and flow street art to the ecosystem.

my feeling is however these rules wind up getting digested, these type of firms will continue to be important players in the market. there is a high level of understanding the government bond market is the most important market around all of this in terms of how it functions. sonali: you think if we take the market maker pushback, the new rules could impact liquidity at a time we are seeing massive issuance of new treasuries? billy: i don't think so is my short answer. it remains to be seen. i know there's a lot of regulations in the mix around this latest news. i think the sensitivity and the understanding of how important this marketplace really is in terms of how it functions is too high level. my instinct is these firms played too big of a role and they are here and they are real and they are the more important players in the ecosystem. kailey: -- sonali: philly --

billy hult, happy one year anniversary. we should say that bloomberg lp competes with reuters in providing information to the financial industry. coming up, we will talk about the obesity drug battle as eli lilly estimates stronger sales of its shot, more than wall street inches abated. stick with us -- more than wall street anticipated. stick with us. this is bloomberg. ♪ (♪♪) we're lucky to have this team working for us. our therapists give their all each day,

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sonali: this is "bloomberg

markets" and i'm sonali basak. time for the stock of the hour. shares of eli really -- of eli lily are rallying after 2024 topped expectations. excitement for the weight loss business has made it the -- madison muller covers the industry and joints me now. it is interesting to see what the cfo said to investors, that is taking on the most ambitious expansion agenda in the company's history. how expensive will that be? madison: that was the focus of today's call especially after the deal was announced yesterday with novo nordisk for $11 billion. novo nordisk said it would buy these production facilities to expand ozempic production and there are lots of questions about the day on eli lilly's call as investors want to know how lily is ramping up supply.

both companies have invested billions already. lily has already invested billions. the question is how long it will take for those new plans and that supply capacity to, online. that is what investors and analysts are wanting to know today. the answer is it does take time so we will not get immediate supply like we would like. sonali: there was a little bit of shade thrown on the call, this idea they intend holding catalan accountable to their contracts. how do you see the dispute playing out? madison: it is interesting. we were trying to figure out what this deal is going to entail. catalan is a huge contract manufacturer, i think they are the world's biggest contract manufacturer for gene therapies, they have deals with a lot of big drugmakers. there the biggest producers for obesity and diabetes drugs. we are try to figure out how

this will affect other drugmakers and that is something lily brought up on the call. they are making our drugs at their sites and we have contracts with them. we need to make sure they are held accountable in those contracts can be fulfilled. sonali: you do see an interesting range as they have guided from 1220 to 1270 atioin. what is the downside risk? madison: there is still downside in terms of insurance coverage. that is the big one. the uptake of the drugs will not be as high as investors would like. that is something brought up on the call. the uptake of the drugs in obesity is happening or slowly than in diabetes because insurance is happening slowly. the coverage is not coming online as quickly as it did for diabetes. insurers are not convinced that need to cover weight loss drugs

and so this employee opt in question is still looming. that could affect them. sonali: we thank you for your analysis. another earnings story is palantir because shares are searching after posting its first annual profit and giving a higher-than-expected outlook on 2024. bloomberg technology cohost ed ludlow joints me from san francisco. i could talk to about ai all day. when you look at palantir's profit how sustainable is it as it looks for share? ed: that is the concern on the sales side. palantir is saying at the high end $850 million in 2024. it is a company that has always used some form of artificial intelligence, but in the context of data analytics. its most recent product is artificial intelligence platform , which is basically a generative ai tool that gives insight based on an enterprising

customer's own data and that a sustainability that goes to the enterprise customer. currently most of palantir's businesses is with governments, but what the ceo told us in an interview is they cannot keep up with the private demand right now. the street looks to that forecast and says that is really big, how will you on board all of this business? sonali: how are they going to on board all of this business? ed: it is an amazing story with irony. before this ipo they were so disinterested in sales reps. they did not have a built out sales organization and this is classic for the software industry. sales engineers help companies understand how the user product. now what the ceo is saying is we are 85% focused on building out the u.s. business because there is less corporate interest in europe. they are working on operations to serve the private sector on a

company built on doing deals with government. sonali: what is the competitive threat? it had 167% increase in the stock, another 20 some this year already. where if any does that party stop? ed: the battleground is cloud-based computing. palantir has over apps with the hyper scalars, google cloud platform in offering access to large language models and other data analytics tools through a cloud package. through a same time, the unique selling point is how they safeguard the data there in old dix are built on and how they've been so successful -- the data analytics are built on and they have been so successful. they are agnostic and will take other people's technology as well as their own to try to make it a one-stop shop for anyone who uses software or data.

they were a $48 company now but look at the chart in go back a couple years, it has taken them a while to get credit from the street. sonali: are never when every financial services company in the world wanted to be a one-stop shop. it is not always work that well. coming up, the story that got everyone's attention. adam neumann is potentially back at we work as he looks to buy the company out of bankruptcy and he has a powerful investor on his side. the details are up next. this is bloomberg. ♪

sonali: this is "bloomberg markets." time for the wall street beat where we look at it what is buzzing on wall street. what is buzzing today is adam neumann and other investors are exploring an offer to buy wework

out of bankruptcy. joining us is bloomberg's amelia pollard who has been all over the bankruptcy beat when it comes to wework. is we work really up for sale? amelia: they have a deal where the lenders are slated to own the company on their side, but it seems like if the bid is high enough, a bankrupt company is to maximize the value of the estate. even though it is not for sale, the company has an obligation to consider bids. the question remains, how serious is this bid, its potential. it still remains to be seen. sonali: what you did see is the letter they sent to work -- they sent to wework's lawyers. what were the allegations?

amelia: the big allegation is that adam neumann and his lawyer had not gotten access to the information they needed to make a formal bid. he said in the letter he was sent an nda from the company but has not signed it yet. he send back revisions. things are per limitary. he is key -- things are preliminary. he is keen on making a formal offer. until there is a number on the table it is hard to consider seriously. sonali: how do you consider the role of dan loeb and third point given the talks of only been preliminary? amelia: in the letter newman's attorney invoked dan loeb's third point very high in the letter suggesting he is working with other investors. i think that since the letter was sent yesterday dan loeb's firm has sent the tops have been preliminary, there is no official agreement of financing

a deal. i think it will become clearer in the coming weeks. are there other investors involved? it seemed like there was some allusion other funds might be there but we are hoping to find out who. sonali: that is the question for adam neumann and his real estate startup flow. we have seen the story wework has gone through and we have seen the valuation go from skyhigh to bankrupt. how do you think about what he can do with wework? amelia: the argument is there is still demand for flexible work and the business model is valuable and customers are clamoring for it. the question for wework is whether they are able to renegotiate leases with all of the landlords. they need to break down the cost of the real estate footprint. when they filed for bankruptcy they canceled around 70 leases,

40 of which were in new york city. since then is has been a tug-of-war for who has negotiating power, and wework as withheld postpetition rent payments which is a rare removing bankruptcy, which has reflected the level of tense negotiations happening between the two. it has been a game of chicken at this point. sonali: why would adam neumann or any investor want these assets given the struggles around commercial real estate? amelia: adam neumann cofounded the company and there is a degree to which he sees this as his creation. i think that cannot be extricated from the potential bid. at the same time i think given the right business model, and if enough debt is shed, bankruptcy is a powerful process. you are able to shed so much debt and put creditors at bay. the phrase we always year is

"get breathing room" to turn the company around. there is hope the company can do that. adam neumann must think it is worth potentially buying out of bankruptcy. sonali: what is the state of play for the bankruptcy currently for the company? amelia: renegotiating leases. whether the company can get the leases at a place they can afford to pay a better deal. amelia pollard, we knew you would be all over this wework story and the financing. let's get a quick check of the markets. s&p 500 searching for direction. an onslaught of earnings. wavering between gains and losses on the s&p 500. trying to get out its second day of gains. the 10 year yield reacting after loretta mester had spoke earlier in the hour talking about how she is not in a rush to cut rates. the 10 year yield is seeing a move of six basis points lower.

well above 4%. nearly four points in percent. that doesn't for mark -- nearly 4.10%. that does it for markets. i am sonali basak. this is bloomberg. ♪

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