>> we need the fed to start cutting. we think that starts in june. >> i think they are sticking to their slow to lower interest rate mantra. >> they are not to pull the trigger in march so by the time may or june rolls around we have a lot more on everything. >> they continue to do nothing and promise they will cut rates. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: good morning.

this is bloomberg surveillance. together with annmarie hordern i'm jonathan ferro. the s&p 500 pulling back just a touch. nvidia makes up about 5% of the nasdaq 100. at around 90% of the enthusiasm to buy equities. lisa: yesterday people getting concerned this too much optimism and shares that have skyrocketed. the worst drop since october. it is insane just to give you a sense of a big this company is paid -- company is. jonathan: let's talk about the upgrades on a single name. ubs, morgan stanley, bank of america goldman boosting their targets on this name later on today. annmarie: i'm waiting to hear about what the company has to say regarding china.

we know this is a big part of their market space. given the latest export controls in the fall, they are ready to downgrade some of their technology to sell chips in china. how do they maintain that market share. at some point chinese competitors say we can get better technology by doing it ourselves because we cannot rely on the united states. jonathan: another dimension on the story in washington. the senator from massachusetts has something to say. you'll never guess. regulators must block it immediately. lisa: who is surprised senator warren came out about capital one and discover. it was pretty much on cue. what will they cut to get through. what is an acceptable deal to get done and how does this transpire in a world where bigger is better. and just general economics. annmarie: senator warren also

tweeted about kroger and the quote was this merger should be stopped. bloomberg is reporting the ftc is poised to sue as soon as next week to block that a merger. if your capital one and discover looking at with the ftc is doing with kroger do you think you have a chance to get this deal through? jonathan: the democrat from massachusetts loves to kick capitalism in the teeth. can we turn to china? the latest news out of china here, china is -- has banned major institutional investors from sharing -- selling shares in the third of -- first 30 minutes in last 30 minutes of trading. the nation stock exchange to monitor shortselling. >> this comes after one of their biggest quant funds was banned for trading for three days after dumping a host of shares within

minutes yesterday -- a couple days ago. to me this raises the question what is their goal. is this can be opening up their market to new people and the way they will manage the underperformance of their stock market? jonathan: talking about addressing the causes of the weakness. we talked what interest rate cuts, doing some and on the fiscal side of things. they are going to ban selling again. that's the approach. lisa: right now it really raises this question of how much will give people confidence to get into a market that is heavily manipulated and controlled. >> creating a lot of confidence because is only one way this can go. lisa: theoretically yes. on the other hand if you don't get that enthusiasm who will be pouring money in if any given time you will be hooked off the stage and saying you are good enough.

jonathan: let's turn to the broader market, equity futures on the s&p 500 negative by 0.1%. yields coming in a couple of basis points. the euro not doing much. coming up on this program, john of oppenheimer asset management, nikki haley vows to stay in the race regardless of south carolina's results this weekend. the former fed economist on why she thinks the fed should already be cutting interest rates. nvidia set to report after the closing bell. looking to justify a market cap beyond $1.7 trillion. john expecting the market rallied to expand beyond the magnificent seven writing in the s&p 500, eight sectors opposing positive returns which shows a continuation of a broad rally that began at the end of october

last year establish addict tech companies likely to approve the key holdings. what is it that you see that's driven some of this but you think will prove to be durable for the year ahead? >> great to be on the show, thank you for having me. one thing is i think investors are getting the idea that there's other values within the market other than technology so a lot of it has to do with sectors that can be served by technology to become more efficient. in addition to that end as we mentioned before in our conversations we do believe a lot of people are getting the idea that social security becomes less of something to rely on that's a core in one's retirement and the -- the need for investments to point to equities in terms of retirement portfolios. we think the market has good support here.

we think the federal reserve is doing a good job with inflation and that's just part and parcel of going through what we are going through, normalization of interest rates. jonathan: can we talk about some of the cyclical issues in front of us at the moment? you like cyclicals over defense, you seem to like energy. what's behind that? >> the reason we like energy is the bridge between a point where the scale in the infrastructure for alternative energy will be achieved to become a major part of energy and the bridge that needs to take us there is traditional fossil fuel energy. i'm certainly not one of the few people to think that. it's a general thought is that before we go green there's definitely a mix between black and gold and greening that needs

to be to get us there. we'd also say oil companies have been known to distribute energy successfully for the last 130 something years. they should probably be given an opportunity to be at the core of the new energy. >> is the optimism about broadening out of the expense of the leaders so far in big tech? john: i don't think so. it's not that i don't think technology remains part of the leadership, just the size of this would tell us that it's important that he keeps running but it just happens to be we thought for quite a while now the technology today is very different from where it was during the tech bubble really reflects that technology is likely when we look back from historical perspective. luckily in a position parallel to where the automobile was in

the early 20th century after henry ford mechanize the assembly plant and brought up the quality and reduced the cost. the accessibility becomes for all sides of business and the consumer. this makes for a much more efficient society on the upgrade cycle. lisa: you used to be the biggest bull on the street. included jonathan gault for ups yesterday. based on your optimism. this is no gains on the s&p to get to your price target by the end of the year does that give you pause? >> i see a lot and i'm not saying the last few names i don't recall particularly where they were. there's been a bear capitulation last year and this year at an extraordinary rate.

it -- everybody comes to our side of the boat. it does look from the perspective of fundamentals if you look at the earnings of q4 earnings and look back at q3 earnings, it just shows that earnings are rising, more earnings are rising. you have double digit earnings growth and cyclical technology sectors. this particular earnings season, utilities join cyclicals and technology. that is curious. thus for our what i'm seeing on the ea page. the fed is doing the job is remaining resilient, jobs postings resilience, the corporate earnings showing resilience. we are not looking for robust here and that tells us this positive attitude we are beginning to see among the strategists that exist it might not be a bad call. we will keep the party hats in

the box for now. dancing in celebration. >> does that mean you are going to upgrade or that you will be happy where you are with respect to the forecast. john: our discipline is that we will not change our target until it is exceeded or the target becomes impractical in terms of where the market would have to be. so we are waiting for the market to take it to a close over 5200. at 5200 or over we will address it. >> talking about globalization it makes me feel like when the u.s. administration talks about the fact they are not bifurcating with china or they are just trying to find other ways to short the supply chain. when you want to read globalization trade, what are you looking at. john: it means diversification

from one country centric global supply chain, that began probably around 2016, slowed some with china basically just eating the tariffs and then later on in the process of coming out of the pandemic became pretty obvious one country supply chain wasn't working well and companies are diversifying their sources on a global basis and we think that's good for latin america, if we can get that in eastern europe that would be good. it should be good for both and emerging markets in asia that are friendly with the u.s. we cannot help but think that it benefits emerging markets, india included. mexico, brazil just for a few. this is a read globalization for the simple reason our trade

deficit has just gotten and stays bad since 1992 it's deteriorated. it shows u.s. businesses and the consumer alike to buy foreign goods because it's competitively priced play. >> great to hear from you. lisa says, back when you've upgraded stocks. no longer the big bowl on the street. jonathan and patrick over at ubs. here's the quote from them. the market sold off on more cpi reports last week, our work indicates these demand driven readings are constructed for future returns so pushing down rate cut calls and the reasons for that is it good or bad. it's about hotter inflation reads. >> basically saying is the demand side of the story and the fact people keep on buying which placed what goldman sachs was saying as well.

this is going to be in earnings driven rally. on the heels of strength that allows the fed to keep rates where they are. it is notable that palfrey lifted the forecast on january 16. the original call was on december 11. this is moving so quickly. jonathan: they've done it twice a couple of days after goldman have done it twice. just ridiculous. lisa: moving faster than people can. >> it's fair to say that's what this is. equity futures right now negative by one quarter of 1%. here's your bloomberg brief with danny bloomberg -- with dani burger. dani: the u.s. plans to unveil sanctions. biden blames pruden for the death of navalny. including a substantial financial penalties the target rushes defense and revenue sources.

hsbc shares are falling fourth-quarter profit plunged 80%. taking an impairment on china's bank communications. the ceo also announced a $2 billion share buyback. hsbc was supported by higher global rates it is still facing headwinds from its key markets. a tie up between two supermarket giants could be in trouble. sources tell bloomberg the ftc and a group of states will suit a block the combination of kroger and alberts. the suit is expected before february 28 when the agreement to not close the deal expires between the ftc and the company sprayed both are prepping to meet with the ftc chair to persuade the agency not to sue. that's your bloomberg brief. >> nikki haley vowing to stick around and stay in the race. >> i refuse to quit. south carolina will vote on saturday.

on sunday i will still be running for president. i am not going anywhere. >> that conversation coming up next. live from new york city, good morning. ♪

jonathan: equity futures on the s&p 500 negative by 0.2%. yields coming down about a basis point. under surveillance this morning nikki haley vowing to stick around and stay in the race. >> the same politicians who publicly embrace trump privately dread him. they know what a disaster he's been and will continue to be for our party. they are just too afraid to say it out loud. that's why refused to quit. south carolina will vote on

saturday. but on sunday i will still be running for president. i'm not going anywhere. >> nikki haley trailing the former president by narrative around 30 points according to the latest polls prayed haley struggling to get of boost from her home state of south carolina. greg writing that despite trumps tom and it's in the primaries he does face challenges into the general writing that the comments on nato and refusal to support ukraine and russian dissidents have concerned moderates who were the key to his reelection process. greg joins us now. let's talk about nikki haley. what is the strategy for her? >> i guess she will stay in. it's not to go very far, she i think will maybe stay in until memorial day but i can see a scenario where she can win the nomination. the intriguing thing is this group which would let her.

they lost their two leading candidates so they would love to have her on the ticket. i'm not sure she would want to do it but if she says she's not going anywhere that's the only place i could see her going. >> greg asked that question and said they didn't want to talk about it when we spoke to him last week. talk to me about financing. dishy of the funds to stay in this race for as long as she can? -- does she have the funds to stay in this race as long as she can? >> she has changed her tune. for five months ago she was not this moderate but she does have attributes including money. annmarie: what does it look like for the trumpcare? he's using a lot of campaign donations to use -- to pay his legal fees. does the rnc step in and start helping him with legal fees or will they focus on campaign finance? >> since they will be a

wholly-owned subsidiary of donald trump i'm sure he can get some money from them. the big story on money is joe biden. he's in california raising more. he's raised a ton of money. annmarie: does that shock you given the fact the whispers and the democratic party is they do not think he should be the candidate? >> i do think they believe he will not drop out and will run. and if he is going to run he needs a lot of money and he is getting it by the bushel full. annmarie: we want to ask about what's going on in terms of mega mergers and how capitol hill will respond. senator warren has come out and said the capital one discovered deal should not go through. the ftc is prepared to block the kroger deal. how do you see the mood music out of washington in terms of deals going through this year. >> it has clearly become

negative. i think these -- if these are approved it will take a long time. i'm not sure they can get done in time for the november election. lisa: this is one of the biggest places where there's daylight between who may be president? the policy is different if biden is in the white house versus trump. >> there are big differences. the other one is jerome powell. trump would try to dismiss him within days of his inauguration. one of the most intriguing ones is defense. we will see biden spending more. lisa: going back to nikki haley talking about donald trump this sort of full circle here. is there a feeling that one or both of these candidates will drop out with trump being forced to from legal pressures and she staying in long enough to pick up where he leaves off. >> her strategy is clearly to

see if trump struggles if he gets convicted in a trial, if he makes more gaffes like he did about nato. she staying in hoping he might. >> do you really think a trump administration may cap defense spending? >> it would level off, the defense spending increases when -- would clearly slow down in the republican party as you know has become more isolationist and i think that means the glory days. for the defense industry are over for now. >> how popular at this moment. >> i think it's popular and most of the country. you see in the midwest among young republicans they are isolationist. they don't want to support and spend a lot of money on defense. i think the mood on ukraine has

changed significantly in the last 48 hours. i think ukraine will get something. >> i was struck by the j.d. vance editorial in the financial times notably european leaning. where he basically said the united states has provided a blanket of security in europe for too long and talked about how essentially the u.s. funding of their own defense is a tax on the u.s. that benefits the rest of the world. do you expect this to be a popular stance going forward understanding that j.d. vance is more on the fringes than say a mitch mcconnell. is this becoming mainstream? >> you have a divided party. it's vance and many young republicans who don't want to do what mitch mcconnell has wanted to do on defense. that's a big shift. i do think mitch mcconnell and joe biden will get something. >> greg we have to leave it there.

good to hear from you as always. you're all familiar with the meme that has the destroyers, the aircraft carriers and the tech says you're about to find out why americans don't have health care. that is real. we've been talking about this for a long time. for the people outside of america the love to criticize how poor the infrastructure is, the lack of socialized health care, the europeans that could sit on those iu free towers and look down their nose at what happens in the united states on those issues i think the j.d. vance point is an important piece very easy to dismiss. when you think but the big issues for a long time. europeans have been able to get away without screening much on defense. monster bills go through congress spending huge sums of money on american defense which the american taxpayer to some extent has to finance.

that's an issue they are taking on. lisa: we ought to view the money europe isn't spending on defense for what it really is an applied tax on the american people. that said is this the appropriate time to be hammering on this point when ukraine is on the brink of suffering pretty rough amounts of losses. it's a question of what you do with that argument given a lot of europeans are waking up to this and acknowledging it. annmarie: also pew came out with new research and americans think it's important for the u.s. to continue to support ukraine. so to greg's point i think senator mcconnell and biden will get it done but is it the last package ukraine will see. >> coming up on the program the best performance stock on the s&p 500 reporting earnings after the close. ♪

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>> following a couple of days losses, equities down by a quarter of 1%. down on the nasdaq by .5%. the fed minutes, the economic data it's all about the earnings . nvidia after the close. switching in the bond market two-year, 10 year looking something like this. 43635. 45934. fed minutes we can talk about them for a heartbeat a couple of

seconds if you want. i want to understand how together this committee is given the struggle chairman powell appeared to have in the news conference of fruit -- reflecting -- >> do they offer new guidance on thresholds to cut rates. we didn't really get a lot of color on that. a lot of people note after note one way after another saying nothing's got. basically people are saying this is on max right now with respect to the fed minutes. >> you have to think about what's changed in the minutes. hot pay loss report. hotter than expected ppi. >> some people are saying this might even open the door to another rate hike. >> are we talking about one man? >> talking about someone who's -- i'm curious about whether we go forward with the sense of people trying to push back on

the idea basically saying we are aware of the conversation putting a rate hike on the table. other people being more aggressive. as the nature of the conversation. >> a good way of getting yourself in stories so making headlines. the euro looks like this. that could change. for now it doesn't make a ton of sense. the euro, 10798. deutsche bank had this to say could we have the fed battling with sticky inflation this year just as they start to combat more disinflationary forces. that would have currency implications and our fx strategist remain bullish on the dollar. that would make an interesting year. >> that's kind of what's playing out. on one hand you see stickier inflation in europe and elsewhere because of the same dynamics post-pandemic. if that shifts what does that do to the u.s..

that's been echelon of isolationism regardless of who is in the white house with respect to the u.s. consumer. that currency paying by -.1%. chipmaker and ai giant nvidia reporting fourth-quarter results after the closing bell today. they will decide whether this justifies a gain of 40% year-to-date and the market cap to rival amazon. $200 billion which is a few percentage points for nvidia. just the numbers, astronomical and every single time we set the bar high for them they've beaten by double digits. i think expectations what's truly been for nvidia is at the double-digit beat and rates? lisa: the sense that may be the bar is so high and we don't know how high it is that it cannot be good. there's this expectation the stock swings in one direction or another after its earnings so if you're trying to get ahead of

that you try to take some trips off the table or whatever cliche you want to use. that's great. jonathan: stock is down by 1.76%. bloomberg intelligence joining us next with more and just a moment. president biden is set to invoke major sanctions against russia after the death of alexei navalny. the white house is not releasing any details but the commodities surged on the news. a curb on russian mammals -- memo spread -- metals. largely spared this friday. >> the u.k. hinted towards this in december when they were barring individuals from trading in these commodities and we will look for them to take a coordinated action so this is what's left on the table.

you have to think is this administration going to go so far that the repercussions will hit their own economies because what we've seen when it comes to oil and gas which is how putin keeps the economy functioning. how he funds this war is this is concentrated on the price cap. lisa: it hasn't worked. everyone has said the sanctions of not work. it has not discouraged russia, really bringing in that materially. it raises a question is this a messaging effort to say we are taking a hard line and then to come out and signal they will do something harsh on friday. does it raise the bar that they have to disappoint. >> biden sat down with geneva in putin -- putin in geneva. will there be consequences if navalny was to show up dead and he said they would be devastated. but the table and tools left in the toolbox there's not a ton given the fact they used a lot of this when putin invaded ukraine. >> 2024 is shaping up to be the

year of the regulator. fumo tv suing espn and fox sports -- fubo tv suing espn and fox sports. the tv giants are expected to launch a brand-new platform this fall raising contention from sports leagues and regulators alike. shares are falling since the joint venture was announced in the last couple of weeks. unsurprising we will see more of this. lisa: $79.99 is the price, this is expensive considering the other is $50. there than a want some of the streaming sites, they are going to want to push traffic to the new site. i kind of feel bad for them but

i feel like our consumers really benefiting. jonathan: are the leagues going to have something to say about this? lisa: i assume so but maybe the leverage has shifted. from a consumer standpoint, $80 a month, $50 a month. it is much cheaper and also the idea -- annmarie: it is much cheaper and also the idea you can get more. the nfl found out when they were huddled in las vegas for the super bowl that disney, warner and fox were doing this. jonathan: let's just see how the next round of sports tv rights goes and how competitive these institutions still are with each other. they are not going to say it is the motive. i just want to understand what the consequences will be in the years to come. lisa: why else would they do this. they gave an answer. jonathan: absolutely.

i buy everything i'm told by ceos and institutions. every single time. turning back to nvidia. company earnings after the bell. mandeep singh joins us now. this stock is down by 1.2%. it's had a massive run up again, we are trimming those gains. maybe some nervousness around the state because we keep raising the bar and they keep beating by double digits and raising again. what is it mean for nvidia today? just what is a beat -- what is a beat for nvidia today? mandeep: we've gone from skepticism on the run rate to really nothing could go wrong even though there are a lot of

issues when it comes to the china expenditure. any you see headlines like nvidia surpassing alphabet in market cap you have to ask yourself what is the fundamental business nvidia is in versus these other giants. they've got multiple businesses. really, expectations are getting ahead of themselves and there will be a point where it will be hard to manage expectations. i think nvidia is probably at that point. we know every incremental is going towards buying chips. there is literally a shortage of what they are making. lisa: do we have a sense of what the saturation point is for demand for these chips at this point. mandeep: you go back in time with chips, typically there is a

digestion phase. the customer base is incredibly concentrated. these are the biggest customers of nvidia's chips and they are buying because of the cloud business but at some point it has to translate into revenue for these companies and we have microsoft is the only one that's quantified the revenue. they are still developing that capacity because they can afford to keep buying it. i think margin impact is crucial because nvidia's margins have grown 10%. it's coming at the expense of some of their players. and that is where you have to ask yourself how long can they sustain that market and at whose expense is it coming. lisa: what exactly are people looking for and skeptical about with it respect to nvidia sales in that country. >> right now the way they are

trying to sustain that business they are not try to grow that business. it should not be the whole numbers. they are coming up with lower spend a chair to make sure they comply with those regulations. literally the focus on them sustaining that 50% growth is on other regions. their customer base is concentrated so it's really eight or 10 companies doing the bulk of the buying. if the government started to buy them that would be huge. i think the customer base is incredibly concentrated. >> to maintain that presence in china they are coming out with a new chip that usurps these export controls. how long will that last given the fact there's growing competition in china for the higher end chip processors. >> that's a great point.

i think with china you know they are buying those machines, they are setting up fast, they want to compete at the manufacturing level in terms of accelerators and custom chips. clearly if you start looking out two to five years it is a hard case to make that nvidia will have the pricing power in chips where everyone is trying to do a better chip that nvidia has. right now they still have the chips no one else can make and that's why you see that in the pricing power. jonathan: i get the feeling -- later this afternoon. mandeep: anytime you see a multiple expansion like that. it generates 70 to $80 billion in free cash flow. yes it is expected to grow to 100 billion for the data center but there is a company that's really gaining cash flow with

lower market cap and that's where investors are starting to think how long can they sustain these kinds of markets and growth and it will be hard to grow. >> phenomenal over the last five months. thank you. looking forward to coverage over the last day or so. that stock is negative again in the free market -- premarket. down again this morning on nvidia into the earnings. let's get you an update on stories elsewhere. dani: the u.s. said two of told allies russia could deploy a mock warhead or nuclear weapon into the space -- into space. developing capabilities to knock out satellites. this would violate the 1967 outerspace treaty to which russia is a signatory. amazon shares up in the premarket. it will be added to the dow next

week. meanwhile in the dow jones transportation average bloomberg -- they will be replacing jetblue. citigroup boosting jane fraser's pay. she is initiated the bill doing the large dutch compelling the firm to serious competitor. that your brief. jonathan: tk has woken up, coming to the office about 15 minutes ago. says this, massive dow analysis today. >> we knew this was going to happen. now we are done. >> bloomberg radio kicking off with tk, massive dow analysis. making the case for the fed's first cut. >> i thought we would have three cuts this year. part of my thesis was the fed

was knocking the cut in september. it looked like me and him -- election manipulation. jonathan: live from new york city, this is bloomberg. ♪

jonathan: tk sending me so much hate mail already. yields are lower by about a basis point. under surveillance this morning making the case for the fed's first cut. >> i thought we would have three cuts this year. i'm probably get a dial back on that. part of the thesis was the fed was not donna, back because it would look like an election manipulation so i think they will have to be very cautious with what they do around the election so they are not portrayed as affecting the a lot -- election outcome. maybe you only get one or two

cuts and that's it. jonathan: hot inflation reads pushback expectations for the first rate cut. this in the financial times per the longer rates stay high now was not the time for central banks to drag their feet on rate cuts. claudia joins us for more. let's get into it, this was a brilliant piece, slightly controversial given the prints on cpi and ppi. why do you think they are at risk of doing real damage to this economy given the strength we saw in 2023. claudia: the best way for the fed to proceed is gradually. it's much easier for them to get into a crisis and have to cut in all -- all in one day. this inflation is here. we made massive progress this year regardless of what happened in one week when we look to january.

2023 was a big step forward and the fed was well into restrictive territory, just do something gradual because they are pushing, they do not necessarily have the luxury of time, it may not stay. >> what gives you confidence we can shrug off the ppi and cpi prince last week. >> there were a lot of anomalies in this data. it was a bad week. chair powell on 60 minutes told us they want more data. the data needs to be good. you are going to have to squint at last week. there are a lot of january effects and a lot of anomalies in that data. we need to see more and yet we should not overreact to one month of data. markets really dead and i don't think the fed did. they looked through a lot of the noise.

>> this is an interesting point given the fact bonds did selloff and you saw yields go higher. if you look at stock analysts they are saying the reason why we are seeing such strengths is consumers keep spending. if you look at the on the ground analysis it backs the strength that might've been underpinning some of those numbers. why do you think that's not an accurate reflection of 2 -- true strength. >> the fed is going to primarily look at how it's working through the interest rates and where and when the cuts are happening. what i .2 last week is the fed -- i point till last week is we saw the probabilities move out for a cut on monday and then they came back on thursday when we had retail sales and went back on the producer index. we should not have those gyrations after the ppi came out

and she was like they talked about the rate -- my thoughts on a rate cut have not changed. it's steady as she goes in many ways and adding a lot of volatility. this disagreements in the last thing we need right now is confusion of financial markets. the data is going to be noisy and the fed is not getting a lot of guidance about how they look at data. they put too much on the markets to interpret. jonathan: let's talk of the communication out of the white house. we've talked about on this program. we talked about it together. sometimes i am shocked that when you get really strong numbers from the economy it is like tumbleweeds at the white house. it's a struggle to get access to someone to talk about how decent these numbers are. even -- you've written biden onyx is an easy sell if presented broadly.

can you give us a better idea of how you think they should be presenting these achievements. claudia: i am a big fan of straight talk. you have to go in on your accomplishments. one important point i made, where is biden talking about his win on gas prices? they did so much to get gas prices down after russia invaded ukraine. they made so much progress to undo opec slow walking the production increases and they also put a green energy policy together. short-term relief, long-term relief and it is absolutely crickets for the white house. take the wins you've got. i really don't get it. >> the one big win was the fact energy prices were so subdued and that's because of gasoline. we talked about communications, a lot of americans don't even

know what the inflation were docked act has in store. if biden himself is not going to be able to sell it, who should be selling that to the american people? claudia: biden has to sell it. you could have people jumping up and down saying that was great policy. not because it's red or blue. they have to go all in on this. i worked on a lot of bloomberg opinion polices -- pieces last year. every time i sat down i learned something. i should not be learning from doing a background briefing. so it is just you will have to set people and argue back you are making it on your own but you are not. if you have facts on your side you ought to get out there and fight with the facts. annmarie: what about the fact of the large federal data. it is not getting better. jay powell says it is an urgent matter. is it something many .2 bidenomi

-- many point two biden phnom x -- bidenomicd. s. >> we know this could be changed some to get their cost growth less under control. just arguing over some number and saying it is unsustainable is not helpful. if you look at the federal debt it has come down ever so slightly for the biden administration. the trump administration were the ones went way in on the covid fight with care's and other measures. but bidenomics has not cranked up the federal debt. facts are great. jonathan: we have to leave it there.

claudia giving us a lot to think about. let's deal with the two issues. coming in yesterday or last month. then the issue around the lack of communication. the fact we don't hear from them often i find really confusing. i think when he was the national council director picking up towards the end and then he laughed. we federal replacement who we've barely heard from whatsoever. let's talk about this with the payrolls report. this is an observation from the last decade or so, they put up someone prominent in the white house to talk about payrolls. every single first friday of the month. then you challenge them in a robust way and they carry on appearing every month to talk about the story. it did not matter how bruising the conversations were, he would be back the following month. i don't get that from this

administration at all. >> i'm not can speculate on why that is. what i find interesting is the split in the democratic party. about what that message will be. recognizing the pay for portions of the income going back decades, things are really good. you guys should be feeling it. this is a tricky thing when there's not much agreement on economic policy in the democratic party. >> he's going out and talking to voters directly. the campaign is getting on tiktok. what it feels like his he campaigned from a basement the last time around and now it feels like he will be campaigning around traditional media. that is my take on the traditional super bowl interview. jonathan: it's your opportunity to talk about lower gasoline prices.

in the next hour, mike schumacher. from new york city, this is bloomberg. ♪ (grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes,

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>> the consumer has been trading down. >> there is some stress on the low-end consumer. >> it is expected to show improvements for all of 2024. >> i think the consumer's stress than they were before. >> i think we go back to talking about recession. >> this is bloomberg

surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: live from new york city, good morning this is bloomberg surveillance alongside lisa abramowicz, i'm jonathan ferro. your equity market down about .2% after a couple of days of losses in the big earnings report later. the last couple of days the upgrades to the previous upgrades. ubs raising the s&p 500 for the second time since november. david at goldman saying it's all about the earnings. ubs looking for 5400 saying they were not bullish enough. >> which is the reason you will get more of the same as we climb past the targets people had previously. is it coming for the rest of the complex. does it really matter that much

with nvidia? everyone's been saying it's the make it or break it stock. it is at this moment but is it going to be ok. >> i love how nervous you are of saying anything about it. lisa: don't call me out on that. jonathan: can just hear it in the voice. you know someone will watch this back this afternoon and say what were you saying about nvidia? lisa: barron's -- annmarie: barron's heather most closely watched report. i am interested about what nvidia has to say maintaining their presence in china. how long can that last given the competition and where's the growth coming from. i got the similar sense he would say today would be a seller of that. jonathan: he said and basically my words not his. it gave an impression for the

stock. we've gotten so used to double-digit raises that you can sense in the market look at the price action softer this morning lower. >> how long can they keep charging premium charges to companies that will be pushing packets at some point. that's the main issue people are looking for. this is basically what people are saying and why i was pushing back. more and more people saying there's a broadening out. does that completely get up ended >>? easy to talk about chinese equities given you know people can sell at certain times of the day. based on some of our reporting china is betting major institution investors from selling more shares than they by during the first and last 13 minutes of trading. they reported a step further, a

task force to monitor shortselling and issue warnings to firms that profit from the wages so it's ok to lose money on shorts you just can't make money on shorts. lisa: the concept is slightly different in china than the united states. people are saying it's on investable. the idea that if you happen to sell suddenly you get banned from trading for three days might raise concerns about the ability to play in this market. otherwise maybe people like this is a trade. jonathan: that was the most diplomatic i've seen in months. good try. equities right now negative by .2% on the s&p 500. yields look like this down a basis point. one away on the euro basically unchanged. coming up this sour just a moment we catch up with cameron looking ahead to nvidia earnings.

later the ceo on the state of the u.s. consumer and a whole lot more. we speak to schumacher on the fed's path forward. why he believes we haven't priced in enough easing, not someone who things with priced into many cuts. he does not think we priced and enough. >> this is a question, why will they start. if they start because of disinflation will they see disinflation boom or something more measured or is there weakness down the pike. >> schumacher later this hour. we begin with the top story. tech stocks lower, nvidia coming up after the close. cameron dawson writing tech anticipating to lose momentum each digestion pulling back to trend and then rebounding higher. cameron, a great to catch up with you. just how important is this release later. >> it is important in the

context of sentiment because we know it has enlivened a great deal of bullish sentiment. they have been extraordinary. every other sector has been flat to outflows whereas tech has gone through the roof. it's also very expensive so it means is a high mark for up surprises. tech is still an uptrend so we've had these selloffs which pullback to trend and then keep marching higher. does this actually lead to a more prolonged periods of digestion where the uptrend might be challenged. jonathan: 99% of the enthusiasm on stocks. does it say sentiment that much for you. >> we would hope not but we hope it is the encapsulation of so many hopes and dreams in the market if we think about it as the effective, it's all about productivity and how much we are

banking on the idea you can see margins moving up so much, a cyclical upswing. so much is being distilled into this one name so clearly if you see a disappointment people might be less willing two on the big upside. lisa: how do you trade around this given the fact you don't want to knock this incredible powerhouse. at the same time you are getting nervous. cameron: we have to be disciplined about chasing the market too much here given the fact of where positioning is. we know into the extreme or stretch territory valuations being stretched, none of these things necessarily mean anything about short-term returns but they are powerful for two or three returns. which says you have to stay disciplined on valuations. there's a lot of opportunity within this market it's just that those very expensive areas or places where you need to ask

is it justified. lisa: how much is this nervousness about going with the crowd? you heard this question about how he gets nervous when everybody comes to him. we know you've been cautious for quite a while and you're saying you can knock some of the valuations and earnings. does it make you nervous that everyone seems to be flowing in the same direction. cameron: we caution -- of the caution the way we expressed it was being neutral equities and focused on quality. so remaining fully invested but focusing on very specific parts of the market. the point of positioning is important because we've seen positioning becomes a risk in and of itself going back to 2018 going to early 2022. when you get to the point of max positioning everyone on the same side the market has a high bar to jump over and does not take kindly to downside disappointments.

>> let's talk about the economic data. upside surprises. we were talking about it early this week. whether it's good or bad news for this economy, for this market specifically. jonathan wrote this yesterday. the market selloff on that data our work indicates the demand driven reads for future returns. is that good or bad news for the stock market? cameron: typically higher inflation is better for corporate earnings. higher inflation would suggest better revenue growth. what i say to this earnings driven upside is show me the revisions. we have not seen them be brought. earnings for the mag seven are up 25% over the last months. earnings revisions are flat but for the equal weight, the average stock they are down 5%. we can talk about this great economic data but the market is

narrow not just in its leadership but in its earnings revisions. we like to see that translate to better earnings. lisa: which data do we pay more attention to. retail sales came in really negative. weaker than expected. we will speak to the ceo of marriott. what are you curious to know about the consumer that you see that's been raising some alarm bells for you. >> there's one wrinkle in the consumer data and it is delinquencies. i would love to know if they are a sign of struggle to come. it's very rare you would see those move up as much as they have outside of the recession during a time when the labor market is tight. when we look at the consumer we say still healthy but why -- what does that rising delinquencies say where you see them get pinched. jonathan: does this get easier now?

does everyone sort of bid up things? lisa: is that the response you would do? cameron: there is so much uncertainty from a policy perspective. we've said we are not in the business of catching falling knives in highly uncertain regulatory environments. we do ask the question we are underweight em at what point do we need to reconsider given china is such a big weight in the emerging-market difference. >> you can get in but try getting out. raising this question. jonathan: cameron, thank you. broader equities stateside equity checks anymore. we will carry on doing that. equities right now on the s&p negative five .2% on the s&p 500. people -- look what's going on

over there. lisa: when you talk about markets, there are of breaking market spread there's banning shortselling, there's banning selling. quantitative easing, buying swathes of bonds. there's all sorts. jonathan: let's schedule an update on stories elsewhere. here's your bloomberg brief with dani burger. dani: the u.s. plans to one sale -- unveil sanctions on russia on friday. president biden blames putin for the death of navalny. while the sanctions include a substantial package of financial penalties which target russia's defense and revenue sources. hedge funds with exposure to mag seven -- the firm looked at more than 700 funds. the only mag seven stock that saw an increase was amazon. hsbc shares are falling fourth-quarter profit plunge.

the bank took a $3 billion impairment charge, the ceo announced a $2 billion share buyback which was supported by higher global rates. hsbc is facing headwinds on one of its key markets. that's your bloomberg brief. >> the state of the u.s. consumer. >> the consumer has been trading down. it does not mean it is all bad for the consumer. i think the consumer's choice for is walmart said and is able to spend where needed. >> that conversation around the corner. this is bloomberg. ♪

♪ (captivating music) ♪ (♪♪) the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪) jonathan: equities on the s&p 500, a slight pullback --

negative. nvidia is just around the corner. the number one performing equity on the s&p 500. yields are lower by a couple of basis points on the 10 year. the euro slightly weaker. under surveillance this morning the state of the u.s. consumer. >> the consumer has been trading down. it does not mean it is all bad i do think the consumer is choice for and has been able to spend. 2024 is looking to be the year of normalization. the year starting off probably get a start selling soft and hopefully pick up a little bit as it progresses. jonathan: earnings reports from the retail giants walmart and home depot suggesting weakness in the u.s. consumer. the travel sector showing more optimism. the demand for all types of

travel remains strong even as the rebound from the pandemic has waned. he will be with us through the hour. 8800 properties. you've got a decent line of sight into the global consumer. the story we've heard about, do you see this the other way around in your business? >> i wouldn't say the u.s. is weak. i think they've reached a normalized environment quickly. if you look at the experience we've had in our business last year we saw global revenue per available which is the metric we use to evaluate the strength of the business increased about 15%, a single digit growth here in the u.s., strong double-digit growth internationally. some of that is because the markets move a little bit more slowly so they benefited from easier year-over-year comparisons. even as we look into 2024 we guided on her earnings call

growth this year. disproportionately stronger. jonathan: let's sit in international for a moment. germany arguably in recession, china struggling. you don't see quite the same and i find that interesting. what do you actually see and in which region are you more constructive on. >> asia broadly is strong with travel. we think about asia two buckets. we call asia-pacific excluded and then greater china. greater china has fully recovered to pre-pandemic levels although interestingly largely on the shoulders of domestic demand. if you look across border airline airlift it's only 60 or 70% recovered at pandemic levels. we think there is still a fair amount of upside to the china recovery story as more and more

cross-border travel recovers. i will be in china in two weeks and i'm anxious to see how it feels in terms of the national travel. i was there may be nine months ago and it felt domestic. i was in markets and it felt like i was one of the few international travelers. it will be quite interesting. when you look at the aipac markets, thailand is strong, singapore is strong. really strong from a development perspective and an inbound travel perspective. the last comment i would make, you've seen china create some visa free travel zones across the region and that's really impacting demand. >> we talk about banning iphones is there a problem with staying at a marriott hotel in china? >> it's our second largest market.

we opened our 500 hotel in china. we have another 400 hotels. the vast majority of our portfolio is china owned. the vast majority of our workforce is chinese so we see great strength in our china business. lisa: i'm curious where you see the demand coming in. you've been expanding into midscale. you've seen midscale kite -- types of accommodations. anthony: my view is it's not binary. we have the largest luxury portfolio in the industry, more than 500 luxury hotels globally. another 250 in the pipeline after that. we saw revenue in the portfolio grow 10%. i was listening to the prior segment and hearing about trades down. we are not seeing that from luxury. it continues to be a strong segment for us.

our entry to midscale is opening the aperture. our objective simply is to try and capture as broad a segment of the traveling public is possible and entry into midscale allows us to capture a broader segment of the travel. >> what is the difference between midscale and luxury. what you call the other end of the scale? >> luxury is from a physical product perspective and a service delivery perspective. everything you could hope for. midscale cheap and cheerful. simple high-quality facility but simply delivered, minimal services, great bed, shower, a wi-fi but relatively limited services. annmarie: your competitor was on yesterday talking about the 10 year projections. china's middle class 200 million. when you look at building out

the middle class around the world. is that china? anthony: it is everywhere. you see it in the u.s.. that consumer we want to get them exposed to the breadth of our portfolio early. by entering the midscale's for the first time it gives us the ability to show a segment of travel to the public the breath of the portfolio perhaps isn't rare of the brands that make up marriott today. >> that side of table is the luxury side. this sort of question. anthony: i miss talking about venice with tom. lisa: there is this question about what cameron dawson was saying which is we are seeing

delinquencies move up. we are seeing signs of crack's on the margins. yes because you're offering a wonderful product, but is it partly because people continue to prioritize travel in a way they did not before the pandemic. >> one of the great benefits of our credit card partnerships with jpmorgan chase and american express is we have deep insights into that consumer spending. even prior to the pandemic what we saw with the younger demographics was a shift away from spending on goods to experiences. it appears when we look at that data today the pandemic acted as an accelerant to that trend across demographics. as a result now perhaps the consumer saw or learned during the pandemic, i did not buy any purses or watches or shoes and i did not miss it that much but i sure missed traveling.

so i prioritize that and i am seeking the family reunion, the trip with friends, whatever it might be. so we really do not see that decline in travel spending in the data. we just reported fourth quarter and four-year earnings, the highest ebit in the history of the company. 15% growth, really extraordinary numbers. was encouraging to me is the strength we saw across geographies and across demand sectors. jonathan: i'm talking about hotels in general, you go in, the towels are there they might be on the floor. i don't want to make too much work for people but then discard saying we are going green. i say the same thing every single time in a hotel room are we using going green as an

excuse to provide less service than we use to? anthony: i think that would be a fairview if you do not have optionality. if your view is i want fresh towels every day and my bed to be made. you can absolutely still get it. but we hear from customers more and more is they want the ability to contribute sustainability and have sustainability and be a part of their travel. >> at the high end. interesting. i think when you go and spend that much money. i'm not getting into that. if you go to a hotel, a five-star hotel and spend real money to stay there you want fresh towels, fresh sheets. anthony: how often do you wash your towel at home? jonathan: every couple of days a fresh towel. lisa: i can reuse my towel. i feel like i'm obligated.

jonathan: the conversation i did not expect but ultimate getting to the point about service. don't you think it's pulled back since the pandemic. >> it's been an open not secret because there wasn't the staff which raises this question of whether you can hire enough people and what kind can you retain. it's a good question. anthony: one thing that's been interesting over the last number of quarters. you see hospitality has been a disproportionate contributor as her industry sector. jonathan: staying at my house is not $1000 a night. from new york city, this is bloomberg. ♪

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manus: -- jonathan: this on the bloomberg terminal, you care more about getting a fresh towel than saving our planet, absolutely. but is still to come on this program? s&p 500 negative by two point sent -- 2%. in the bond market, 10-year, 30-year, tons of fed speak, yields on the 10-year, 4.2537,

the two-year, 4.5827. the euro negative by almost 1%, runaway flat, almost unchanged on the session. the number one star of the year, nvidia's earnings are coming after the close today. th, driving it to a market cap of 1.7 trillion u.s. dollars, driving the chipmaker passed sky high expectations for several quarters now and they have lofty estimates, forecasting sales almost tripled in the fourth quarter. we keep raising the bar and they keep beating it. lisa: because who else is the game in town? the reason people say this is the most important stock, he dropped 4.4 percent yesterday, equal to $79 billion, when you talk about a drop like that in a penny stock, it can move any

difference but if you talk about a 4% or 5% swing in a name this big, you are talking about money. jonathan: we are going to talk about ai. how is this changing your business? what has changed for you? >> we have used elements of ai quite a while. what is exciting is the ability to create capacity for our associates, and we are in a business where we have the ability for associates to interact with guests, and ai helps them engage person-to-person, that is a huge advantage. i was in ireland a couple of months ago at one of our centers, and one of the things i did was listen to customer calls , and travelers have become so sophisticated today. some of the calls you listen to, customer calls, they say i would like to go to a beach resort that has japanese and italian

restaurant where i can get two two bedroom suites that is less than a 20 minute drive from the airport, and so for our agents left to their own devices, that is a complex surge for them to do, with the benefits of ai technology, they can do that in an instant and it gives them more time to help cure the experience. how long before a robot cleans your bathroom lisa: jonathan: and washes your towels? >> i hope they don't. i had a group of m.i.t. students visit us in bethesda, and they were so excited about ai, and i was asked, can you imagine a day where you can run a hotel with no employees? i said, i hope not because at the core, we are a hospitality business. i think ai will create capacity and deficiencies, it will allow

us to do a better job of helping guests curate their travel experiences, but we are in the people business. jonathan: i grew up in the hospitality business, i family did, and it would be sad if we displaced workers, and i think that would be horrific. lisa: it raises the question, which workers are the most necessary? what does high touch lien with new tools? jonathan: it is the worry we all have about this technology. 6% pay rise, lifting the salary to $26 million, and it has been described as the biggest restructuring, saying they will cut 20,000 and returns. it falls short. david solomon receiving a 24% race to take on $31 million.

jp morgan is top of the pile, second place is citi. lisa: they have cut a lot of jobs and try to streamline the units in five sections. it is interesting that goldman sachs raised david solomon salary 24% even though profit dropped the same percentage. there is a question about pay equity, and we are not going to ask tony about this in any way, shape or form, but try to put in perspective 26 million dollars, $31 million for david solomon, james gorman, 37 million, and then brian moynihan at 29 million, what are we talking about? jonathan: you know who might have something to say? elizabeth warren. she had this to say on the capital one one discovery deal, the $35 billion one, the senator saying "regulators should block the deal, it threatens financial stability, reduces competition,

and would increase fees and credit costs for americans." mike shephard joins us for more from washington, d.c., deal would be allowed in washington, d.c., these days, given the amount of data says it will not be allowed? mike: great question. in thinking about our conversation, i looked at our research in the newsroom about what enforcement activity by antitrust officials here in washington has been. in 2023, they set a record for merger engagement activity, going as far as trying to block deals. it is a great question about what could get through, not only what could get past enforcers but what ultimately could get through the courts. elizabeth warren was not the only u.s. senator voicing objections. we heard from another progressive, sharad brown, calling for a strict review. he is up for reelection this

year. he did not call outright to block the deal immediately, but they did call regulators out to do their jobs and get this new deal, the largest announced this year at $35 billion, to give it a tight scrub. lisa: it felt like daylight between sherrod brown and elizabeth warren. annmarie: he said they need to ensure the financial system stay strong and elizabeth warren flat out says should not go through, but that wasn't the only deal she talked about. she talked about. she also talked about kroger and "this merger should be stopped and what we reported overnight is that the ftc is planning to do that." mike: i am glad you asked about our scoop yesterday. he reported that the ftc is preparing to sue to block the kroger-albertsons deal, tie up

of these two giant grocery store chains, and the concern is that it will hurt workers and unions have voiced their objections about what it means for their workforce, but they are also saying that could hurt consumers , that the pricing we have seen at grocery stores over the past few years, concerns about eggs, milk, everything else costing so much, that we are not going to see any break in the prices because the supermarkets will not have any competition incentive to lower those prices for consumers when they are looking at the shelves. jonathan: mike shephard, good to catch up. tony is still with us, let's talk politics. this will be the worst of the conversation. choice hotels is after windham, saying that they should not trigger antitrust because big plans are going down market. what would you say to that? anthony: i know what you know

about what is reported about the potential acquisition. i think about the report we just listen to, the wind tumbled -- thew wyndham board reported concerns about a deal like this. you can trust that deal with the one we did with starwood, which was a global deal across multiple quality sectors, a choice-wyndham deal would be more concentrated domestically and much more concentrated in all the tiers, so given the current environment for them and a deals, it is a fair assertion from the wyndham side to question regulatory changes. lisa: there is a question how much you factor in in the revelatory environment when coming up with expansion plans, how much you prefer to go organically rather than make acquisitions as a result of the fact that not a lot of things are getting through.

anthony: all the big global brand companies have a different point of view about how to expand the portfolio. ours has been a hybrid view, and i think time will prove that has been the right strategy. we have talked a little bit about the fourth quarter earnings call, when i look back over the past decade, set aside starwood, which was a transformational deal, but when i look at brands we have added through acquisitions like ac hotels, and laded that we did the small m&a deals, and then i think about the launch of autograph collection and moxie hotels, organic platforms we added, the combination of those two strategies served us very well, and i think that will continue to evolve going forward. annmarie: mike shephard mentioned that it was a record in terms of breaking up antitrust enforcement. do you expect the regulatory environment to change if we were

to see a new president? anthony: good question. if president trump comes back, i think the expectation broadly in the business community is it would be a pro-business environment, but it is anybody's guess. jonathan: pro-business at home but tougher abroad, which introduces china. i think we need to go back to that deal, and 2018, the website in china was shut down, and it was a mistake, and it sent out an online survey, and the government was in hot water. sometimes you have to be a diplomat. is it getting harder to be a ceo of a multinational company given the political backdrop at the moment? anthony: i wish i could tell you the world was getting simpler to navigate. we are in 130 nine countries and another 20 some odd countries in the pipeline coming shortly, so it is complex to navigate.

the good news is that the company will celebrate its 97th anniversary this year. our founders foundered the company on five core values, the values that guide us. one of them is acting with integrity, and i think if we follow those core values, but the most part, that will help us navigate this ever increasing complex world, but it is certainly challenging. lisa: i love your view, speaking of china, we talk about how is don't have the conviction to go there and expand. we see this in the financial and tech spaces. why is it different from marriott? anthony: it's funny. i had the opportunity to spend a lot of time with secretary remove the -- secretary raymundo , and i was thinking of your prior guest with history in ballet, my wife and i were the chairs of the washington valley gala, and we had the secretary as a speaker at our event, and

she talked about the importance of countries finding common ground to keep the dialogue going. she talked about the arts and travel. as relatively noncontroversial areas, where they can continue to talk. you likely saw when she came back from her official visit to china that she announced a joint u.s. china tourism summit that happened earlier this year, so i think travel is an area where there is some common ground between countries, despite the complexities of the relationship, and that creates real opportunity. annmarie: when it comes to geopolitics, before the covid-19 pandemic, you were caught up in this chinese espionage infiltration, where is industry now in terms of cybersecurity? it is not just china but russia and actors in the middle east. anthony: it is a top priority, and we make significant

investment in doing every thing we can to secure our cyber environment, we have correlated with law enforcement, we are investing, and we work and do everything we can to hard that environment, but as you have talked about, there are a lot of bad actors in the world that are doing everything they can to try to penetrate those environments, and our objective is to secure our own data for our associates and customer data because we collect an extraordinary amount of customer data. jonathan: you are going to stick with us and talk about interest rates. anthony capuano. here is your bloomberg brief with dani burger. dani: the u.s. incentive told its allies that russia could deploy a mock warhead into space as early as the year, moscow is developing a space capacity to knock out satellites. a nuclear warhead would violate the 1967 outerspace judy, to which russia is a signatory.

just as it has no plans to deploy nuclear weapons in space. a steep drop was reported in annual profit for glencore as commodity markets eased. it also flashes dividends 1.6 billion dollars for the first time in several years and did not announce a new share buyback program. amazon shares are up in the premarket. they are being added to the dow jones average next week, replacing walgreens in the index. another change, jetblue will be replaced in the transportation average. jonathan: fede minutes, coming up. >> the best way for the fed to proceed is gradually. do something gradual because they are really pushing. they do not necessarily have the luxury of time given the strength of the economy. it may not stay. jonathan: that conversation next. live from new york city this morning, good morning. ♪

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jonathan: another day of losses potentially on the s&p 500. down about .25%, yields down by a single basis point, fed minutes are coming up. >> the best way for the fed to proceed is gradually. it is much worse for them to get into a crisis and have to cut 200 basis points in one day. 25 basis points every other meeting. do something gradual because they are pushing and do not necessarily have the luxury of time given the strength of the economy. it may not stick. jonathan: the minutes from the fed's january meeting at 2:00 p.m. eastern as investors look for guidance on when the central bank will reduce interest rates. traders see little chance of the fed cutting before june after

harder than expected inflation data. wells fargo thinks the market is pricing into little easing. when the fed starts easing, we think the market will price and 200 basis points over the subsequent year. mike schumacher joins us now. this is refreshing. you don't think we have priced enough e-zine. why is that? mike: what happens is we are not sure when the fed goes the first time, but i think people are too fixated on that, is it may, june or july? for most viewers, it doesn't matter. once the fed does at the initial time, i think people in the market will say that they are an easy mode, it is a cycle. they usually go 200 basis points and we should price that in. today, the market is priced for 120 basis points from june of this year to next year, just not enough. lisa:lisa: are you more cautious

on the economic outlook and optimistic the fed will meet that weakness with more aggressive rate cuts? mike: the team is fairly positive and thinks the u.s. economy has been underestimated for some time now. the data have been scary with payrolls and cpi. maybe they are quirky or not, we don't know, but the forward-looking trend for the economy is pretty good. the fed has fed funds above 5%, real yields that are high. the fed is going to push back and say we need to take out insurance against future economic damage, so it is not so much we worry about the economy today but about in 12 months time if the fed does not come in fairly aggressively. annmarie: does this mean you think the inflationary pressures really were -- i hate to use the word transitory, but basically they are dissipating and we are going back to a pre-pandemic inflationary regime? mike: probably of bit more

aggressive than pre-pandemic. people talk about near shoring, on ensuring, and your guest could speak to it better than i can, that will drive the trend higher than it had been pre-covid, but going back to something closer to pre-covid levels, so maybe it is 2.5% for core inflation, something like that. jonathan: you set him up, so we will go straight to him. mike schumacher of wells fargo. anthony capuano, let's talk about interest rates. what share of hotel owners now are struggling or facing difficulties when financing properties because of interest rates? mike: -- anthony: when we reported earnings, one thing we highlighted, signed more organic rooms and 2023, 164,000, than in any year in our history. that might suggest it is a vibrant growth environment.

our global pipeline has over 570,000 rooms in it, another all-time high. but there are a couple of caveats. two thirds of those 570,000 rooms do not necessarily need financing, either they are already under construction, they are conversions of existing properties so they don't require financing, or they are in a part of the world where they don't require conventional financing. here at home, we are about 90,000 of the 64,000 signed rooms -- 64000 rooms are located, it is less about interest rates, a higher interest rate environment squeezes the yields on new construction projects, but the biggest impediment, if i had been with you year or two ago, i would have talked about supply chain interruption, the construction cost environment. those are still issues but they

have faded a little bit. it is about the availability of debt financing for new construction. most of our owners are long-term owners. they are not trying to time there construction within over quarter-point move in interest rates. he will hold the assets for years, if not decades, but it is just the availability. in the regional and some national banks, there is a concern about what regulatory requirements might be coming down the pike in terms of balance sheet requirements, and there is a reluctance for origination as a result. lisa: which means you are in a great position when it comes to setting prices for rooms because it means there will not be a lot of other competition that will be built and brought to market. how much pricing power do you still have at a time where we really don't have a sense of what inflation is going to normalize to? anthony: in general, if you look over a long time, average daily rates relatively track with inflation.

it depends on booking windows, so who tends to book a little further out, so there is little bit of lag with inflation, but in general over the long haul, we track with inflation. average rates are part of that calculation, so we think we have good pricing power. what was interesting, during the recovery, we enjoyed historic low levels of supply growth, particularly here in the u.s., and as a result, particularly leisure destinations, we have had remarkable pricing power. jonathan: one more question, how are you helping those owners struggling to refinance debt? are you allowing them to do fewer repairs? anthony: in the heat of the pandemic, we really came to the other side of the table with the franchise community and did everything we could to help them navigate this existential threat

to our collective business. we allowed in some cases, and partnered with them to talk to lenders about tapping into their reserves for furniture and furniture fixture and equipment replacement, to use that to help sustain them. we help them negotiate extensions with their lenders. now that business has recovered, we helped navigate many properties need capital reinvestment, and we -- i wish i could tell you there is a formula to approach but it is more bespoke. we are looking at the circumstances with each owner and franchisee, what their track record has been and trying to come up with a byproduct. jonathan: the future of cities and the post-pandemic reality for some of them, downtown san francisco, parts of new york city, and some people might consider them to be crime-ridden.

we will not get into the politics but talk about the reality. is it getting harder for state in certain locations now? anthony: i stayed here in new york last night and it was tough to get a room. new york is booming and back. what we tend to see in urban markets, the markets that can bend -- excuse me, benefit from this idea of blended trips, where folks are tacking on a couple of days pre-or post business travel for leisure pursuits, those are the urban markets that have recovered most quickly and are thriving. those markets that are really sort of traditional core business destinations that tend to get pretty quiet during the weekend, they have a longer run. jonathan: this was great. anthony: i will bring breakfast next time. jonathan: we would love that. thank you, anthony capuano, the ceo and president of marriott international. coming up, bankim chadha, vijay

rakesh, stephanie roth and david welch. this is bloomberg. ♪

>> we need the fed to start

cutting. we think that starts in june. >> we thought there would be three cuts. we probably will dial back on that. >> i think they are sticking to their slower entre. >> i don't think they will pull the trigger in march, so by the time june rolls around, we will have more data. >> the reality is they continue to do nothing and promise they will cut rates. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: primetime chatter in the commercial break. deutsche bank's bankim chadha with us in a moment. good morning, good morning. equity futures on the s&p 500 lower by .3% and nvidia is coming up later. it is the fed minutes that nobody is talking about, literally, nobody, so we will talk about it. they come at 2:00 p.m. eastern. a lot has changed since they last met. we had a hot cpi, ppi reports and a strong jobs report.

lisa: we also had about 25 fed speakers, so what more could they tell us that would be different? that is going to be the balance sheet. i will not get into that now. is the fed out of the driver's seat? it is in the driver's seat for the likes of nvidia, and earnings take front and center for investors who are website by 80 to $100 billion by basis point's. jonathan: we talked about this a few times and you are on the money. we have spent so much time talking about fed policy, pushing back interest-rate cuts, yet, equity markets are still doing ok. we have question from march to june. risks are skewed towards a delay . still, stocks like nvidia are up 40% your to date after a monster gain last year. lisa: nvidia has a secular shift, so people are saying these are the hopes and dreams of the entire market, pinned on one company, with respect to

generative ai. then there is the question about the other 499 stocks and the question of the hopes and dreams of individual consumers on how much they will keep spending. does it matter if the hopes and dreams of nvidia blinds us to anything else? annmarie: they have something that there is not enough of and that people are desperate to get a handle on. once that becomes more normal, then where does the stock go? jonathan: it is now the s&p 491. let's check out the s&p 500, equity futures negative by .3%, yields in the bond market down one basis point, the euro unchanged, a .0807. coming up, bankim chadha of deutsche bank, vijay rakesh on why he thinks nvidia will remain the ai leader, and stephanie roth looking ahead to fed

minutes, later this hour. we begin with stocks and she lower ahead of nvidia outings. bankim chadha saying this, earnings growth this quarter is not really mixed. despite the q4 weakness, they have added up very well and point to a return to growth. wonderful to catch up. let's talk about the s&p 499, do you think the stock market is down to just one name? binky: it is a question of time of horizons. there are themes playing out and at this stage, it makes sense that we focus on basically the most prominent member or contributor of that, but, you know, what we are really looking for is for the rally to widen out as what i would call

basically this cyclical overhang that starts to lift, so if you think about this cyclical overhang, the macro consensus is calling for a recession for a year and a half, now lifting its forecast gradually. there is no forecast that still matches the average growth we've had the last year and a half, so i would argue that it still has some ways to go. macro consensus, you know, very, vagary negative, groomed -- very negative, grim consensus that at this point has been a big cloud on corporate guidance, so companies, many companies see improvement of demand but do not want to step in front of what is a train at full speed. jonathan: you went through all of this guidance from companies and, ultimately, your take away is that they are reluctant to

offer any forecast on the global economy, even though they see things improving. binky: look at it from their perspective. there is macro consensus with lodge of phd's, for a year and a half, and it isn't just the consensus. it has been pretty close to unanimous, i would argue. it is not easy to step in front. things are changing, if you look at various measures of ceo confidence. the story has been for the last year and a half, two years that, in our industry, things are fine, but prospects for the economy are terrible. and that is now picking up. i would argue if the confidence continues to improve, then you are going to start to see even guidance come in. this is more widely speaking, if you look at any soft indicator, the pmi's or the gdp graph.

so, you know, the survey has been filled out somebody in the data has been collected by somebody, and the gaps have been huge. lisa: our hotel guy has been talking about there is quite a bit of demand. jonathan: he is the ceo now. lisa: there is the question, the marriott ceo talked about travel demand, even in china, places coming back, given the optimism, you have a range of potential s&p forecasts, are you kicking out the higher end one? the 5500 target? binky: i think it is important to keep in mind that the equity markets already rallied quite a lot, so i would not say equities are hugely expensive or anything like that, but there is doubt valuations are pretty full. so we remain constructive but we think the upside comes from earnings, and earnings penned on

macro forecast, which remains fluid. 5100 target we have that we put out late last year's predicated on house economics, including a mild u.s. recession but we laid out three scenarios that cover the range from a mild slowdown and recession in the u.s. to what the consensus was, and then there is, of course, what i mentioned, average growth we had the last six quarters. that seems like a rather simple forecast to have. but it has been more right than any of the other two so far, so if you have the growth we've had the last year and a half, instead of $250 for the s&p 500 eps that we have, we are talking closer to 270. i would say the macro consensus

has now moved up and is probably more consistent with the middle of the range. i would argue it probably has room to get upgraded. so if 250 is 5100 and 270 is 5500, it will move in that direction. lisa: there is a question of after the bell and nvidia earnings watching, and how you gauge the momentum that gives, not just the tech sector, but everything else read how are you going to look at these earnings? can you give us a sense of what you are looking for and how you shift accordingly? binky: there is the fundamental aspect of what we will learn from the earnings, and then there is the fact that while all of this is priced in, the market is very long, and i would say that you have growth in tech as a whole, so a few months ago, we moved to neutral.

we liked the fundamentals, but we think more than enough is priced in, and we are looking for the rally to go elsewhere and that is about the cyclical overhang. jonathan: let's talk about the rest of the world and the overhang. i get that the markets don't have to correlate with the gdp of the country that the indexes is located in, but u.k., german and japanese gdp is negative. what does that make of the international bank trope and where does it put u.s. at the moment? binky: let's take europe as example. growth has been down, a year, a year and a half, and a point i would make is equities tend to bottom basically about halfway through the slowing, so you have to think about it from the risk and reward point of view, if the data is bad and the pmi's are at 40, is the risk moved up do we continue to go down? i would say that the slowdown is

in the price, and the market is going to look forward, so if u.s. growth is better, then you would -- then the cyclical parts and the parts that, you know, reliant on the u.s. -- jonathan: if i was at home, i would be nervous about the international story pricing in a recovery because i would be rate about if it ever bottomed. the dax was up 20% last year, when does it pricing the economy? binky: dax gets a remarkable proportion relative to germany. jonathan: interesting. binky: keep that in mind. so we are interconnected, yes, the german economy does matter for the dax, but other things matter, too. you look at japan basically, it is one of the markets that has been more cyclical, but i would argue that it has a cautionary

tone on japan -- jonathan: on the economy? binky: on equities because japan, like most of the major regional equity markets gets a very large share of earnings compared to the rest of the world. and the dollar-yen matters a lot for japanese earnings, and, so, you know, at 150, where is the risk-reward? i think it is clear, so i would be neutral to underweight japan. jonathan: thank you, bankim chadha of deutsche bank. last year, up 28%. u.s. stocks with the big gain, japanese equities were a big part of the story. lisa: japan saw real growth, after decades of oppression, and then there was optimism but now there is the debate on whether it was priced in and if there would be a global hangover, but a lot of people are saying that

is the new pricing. jonathan: maybe some asymmetric risk, the dollar-yen at 150, his downside risk larger than the currency but? lisa: it would be interesting to see how many people would go into the -- jonathan: dollar-yen just about unchanged on the session. here is your bloomberg brief with dani burger. dani: rio tinto is sliding in the london trade, profits down 12% last year on commodity prices, and a disappointing recovery in china put pressure on industrial metals. the ceo told me earlier this morning that he is optimistic about the world's second-largest economy. >> there is a lot going on in infrastructure, and in a number of industrial sectors, and in electrical vehicles, so the

demand has actually grown the past year, so we are facing a global economy. dani: despite rio tinto's results, the are boosting their dividend per share. the biden administration is wiping out another 1.2 billion dollars in student loans, hundred 50,000 borrowers are expected to benefit from the announcement, helping those who enrolled in the government's save plan and wipes out debt for those who are less than $12,000 and have paid at least 10 years, pushing the amount of student loan relief under president biden to nearly 138 million dollars over 3.9 million borrowers. jeff bezos is selling more of his stake in the company. he unloaded another 14 million shares, bringing the cash out to 8.5 billion. he announced his plan to share

earlier this month and finished the transaction in nine trading days. jonathan: next, the biggest earnings report of the quarter. >> artificial intelligence with the production and skill of intelligence matters to every single country and industry. jonathan: the latest on nvidia, next. ♪ hey you, with the small business...

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jonathan: live from new york city, one hour and 50 minutes away from the opening bell. slight weakness, pulling back by one quarter of 1%, down on the 10-year, 4.2596. one thing under surveillance, the biggest earnings report of the quarter.

>> every single country will become a computer industry, and every industry will become a computer technology -- technology industry, so the production at scale of intelligence matters to every single country and industry, and how technology will impact every single country, so some of the markets will be affected. jonathan: nvidia results are due after the close, investors waiting to see if the 40 year to gain is justified. vijay rakesh saying we continue to see nvidia as the best ai play, pushing the tip of the spear and ai training performance. we expected to maintain significant market share. semiconductors and ai, vijay rakesh joins us now, we have a lot to catch up on, particularly on a big day for the company.

speak as you might as you would to a golden retriever, this stock seems to be the one everyone talks about but one that few understand. we talk about this h 100. what is it and how big is the market currently around the company? vinjay: thank you for having me on. --vijay: thank you for having me on. we are basically looking at the whole training process and the ability to take data out of large datasets and look at new sets of predictions. it is basically a mega gpu that they have, and they have the be 100 coming out this year, but that is driving this fear and ai training globally, so they will dominate that market. jonathan: and the demand has been phenomenal. at the start of last year, we

talked about ai as the story for the future, and with this company, it became real. every single earnings report was beat and raise, double digits. we have tried to figure out what is a real beat today for the company, given how much it has run up the past 12 months? vijay: i think you can look at the quarter where the investors are focusing on, we are looking at the top line, but expectations are probably running closer to 25 billion, so that is where expectations are. the one thing i would say is that equity for ai is almost 90 to 100%, and that is about 80 billion plus in revenue. so very big market for private equities. lisa: gpu, a graphics processing

unit, i am trying to understand how these things are made where you can have a really rapid mathematical calculation at high speeds. where is the barrier to entry? how high is it for other companies to come up with other mega gpu's that nvidia is turning out? vijay:vijay: it is very high. it is not just the software but hardware, as well. nvidia has built a very broad training retainer, which can basically use data from anywhere from cloud to any of the mega clouds, they can use the data and train it, and they have big supply trains, and they can optimize it faster, so that, plus the hardware, the h 100 and the be 100 coming up, -- b 100,

coming up really drive the platform. anybody coming in, yet, the hardware part maybe you can do it, and try to gain some share there, but really, you don't have the software training development or the breadth or experience or the presence of the markets that nvidia has, so they really have been dominating the market. even if you look at calendar 2024, nvidia will go to 98, pushing 90 billion this year. if you look at their peers, some are under 4 billion, so they are ahead by 10 x, 20 versus their peers. lisa: we have talked about margins and how they charge high prices to cloud providers because there is no other game in town. what about materials? how do they source things when we talk about a time with

lithium coming from china, is there a similar supply chain underpinning nvidia? vijay: the manufacturing part is in taiwan, but really had a bottleneck was on course, the type of packaging done with gpu, so that has been a little of a restrained but that is getting resolved. and urc new entrance with intel, and you probably will hear from them, but all of that is tried to resolve that bottom length and include the supply to the customers. lisa: the age 20 -- annmarie: the h 20 chip is the most powerful one they can sell to china. what makes it different from the

most powerful chip they can sell to anyone else? vijay: the h 20 performance is a little more constrained because of the restrictions that have been put in place, so it is kind of geared more to the china market, but it is definitely not at the same trading performance level as the b 100s coming up. it is basically constrained. jonathan: we would like to talk about tesla, as well, forward had to cut the price of its electric mustang -- ford had to cut the price of its electric mustang, is this a problem for everyone? vijay: i think it is a little bit of a problem for everyone. we had a big note on this earlier in january, when we looked at the markets in the ev place, a lot of the low hanging fruit has been taken by tesla,

and they have done a good job of carpet bombing the space, taking that ev share, so not to get to the next level, you have to drop pricing. as you look at tesla, they are doing it with a new model coming out, or they can start cutting, but forf somebody likeord -- but for some buddy like ford they have to go to full optimization. they need to get the volumes, drive the story forward, and either way, you are in a bad spot, bad starting spot, so that is the challenge for ford and gm, they have to complete with tesla, which is a massive manufacturing grab, with huge operating metrics compared to smaller scale and starting off. but i think gm, as we have noted before, has done a good job

building out their battery platform i'm trying to get the cost down. there is definitely a challenge. jonathan: tesla is a different beast at the moment. wonderful to hear from you derek cash on nvidia -- from vijay rakesh on nvidia and tesla. quite an upgrade. we will talk about tesla with david welch later. others are struggling, like gm and ford, on strategy and execution. lisa: and cutting prices. tesla has done that, too. how far will they have to go, even without having chinese auto manufacturers selling in the u.s.? jonathan: next, stephanie roth looking ahead to fed minutes. they are coming later this afternoon. from new york city, this is bloomberg. ♪

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jonathan: stocks down the last couple of days. good morning. on the s&p 500, negative point 3%, down 0.6% on the nasdaq. fomc minutes out today at 2:00 p.m. after the release of stronger jobs and it should reinforce their public calls for rate cuts to be pursued carefully. it is what you basically said, all on the calendar.

the list gets longer. lisa: ultimately, they have nothing to lose to keep the status quo because the status quo seems to be moving in that direction. jonathan:jonathan: yields lower by two basis points, on the 10-year, unchanged at 4.27. the euro unchanged through much of the morning, -- 1.0804. nvidia vases skyhigh earning expectations and investors will decide whether their earnings and forecast justify a gain of 40% year-to-date and a market cap to rival amazon. adding almost $500 billion of market value since january. not bad. lisa: it is 2.5 disney's. jonathan: basically. lisa: that is what. we are talking about jonathan: in a single day.

which speaks to how insignificant the other stories are for the s&p 500. lisa: which is the reason why people don't even care if it broadens out. with people saying it does not matter, this is the most important stock on earth that will determine the direction of everything else. does it really or is this harbinger of strength that comes on the heels of this as companies adapt to similar technology? jonathan: i do think that it is built differently, nvidia. we are down now by almost 2%. lisa: basically cashing in before you get the relief and find out what will happen. jonathan: how many double digits can you get lisa: lisa:? the conversation we just had was fascinating. if you think about it, if it is a high barrier to entry and every cloud computing company needs this to be cutting-edge, people cannot get enough, you have to think that is why people are so busy. jonathan: inches light was the number one performing stock on the s&p and again this year on

the s&p 500 or the s&p one versus the 499. nikki haley, second-place gop candidate, vowing to stay in the presidential race, a godless of the south carolina primary result, and says she will not buckle pressure from donald trump. >> i refuse to quit. south carolina will vote on saturday, but on sunday, i will still be running for president. i am not going anywhere. jonathan: struggling to get a boost from voters in her home state, trump is leading by more than 25 percentage points. if this was anyone else and we had a candidate 30 points behind , who had been dominated in the primary the way she had been, would we be talking about it? annmarie: no, she probably would drop out or cozying up to get the vp spot, but a candidate is

dealing with 90 indictments, with the potential he will be convicted depending on the timeline, before the election, and when she got up yesterday, everybody thought she was going to say i am losing, but she is sticking around. so this morning, 63-35, and she says she will continue. jonathan: so, ultimately, what is the strategy? is it to be the last person standing and see if he is forced to drop out? annmarie: an alternative if it cannot be him. lisa: i think people are holding their breath and hoping we don't do a repeat of 2020, and it is. jonathan: without a doubt. which is why i think they still entertain this story so much. big things can happen, but, ultimately, this is it. and the reason people keep entertaining someone who was 30 points behind in the race when in any other race they would not, it is what you are describing, the dissatisfaction

who simply -- from people who simply do not want it to be these two facing off again. lisa: we talked economists and analysts every day, and they would like to talk about policy and understand what drives better economic conditions and quality of life. that conversation is nowhere in washington, d.c. it is a lot of messaging and spin, but not trying to get to the bottom of it, and people are frustrated. jonathan: politics or monetary policy? lisa: politics. jonathan: let's get to monetary policy, fed minutes due at 2:00 p.m. this afternoon, with investors looking for insight into their confidence in disinflation before they cut rates. it suggests officials are ready to discount recent results. we will get insight. mike mckee is in washington, d.c., with the preview. what are you looking for later this afternoon? michael: i have to tell you, we are really honored here on the bloomberg fed came to be the opening act for nvidia this

afternoon. it may last about two hours between us and their release and that may be enough time for people to react to what we get, which may not be much. we expect the fed to lay out the conditions under which they might cut rates, but, remember, this was three weeks ago, so they will be talking about the minutes pushing back against markets that have already repriced for when the fed might move. they will also restate their view, three cuts, and they will give us economic outlook on what they saw at the time. this was january 31. at that time, we did not have higher cpi or the stronger labor market news. if we get something out of it, it might be some idea of conditions under which they might cut. but since that meeting, we have moved on a bit, both in the economic assessment and what people have told us. jonathan: citi called it

carefully crafted minutes. how carefully crafted edited will these be given the meeting and the release? michael: good question. i don't know as they have to edit it a whole lot because market perceptions have already changed. if you tried to push back on something, then you might try to push the minutes one way or another to give market participants an idea of what you would like them to do. in this case, the markets have already done with the fed wanted them to do, what jay powell talked about at the news conference. i am not sure they have to carefully add like other circumstances. jonathan: thank you. looking forward to the appetizer, mike mckee and washington, d.c. stephanie roth is with us for more now. good morning. you have been dead on the economy, saying that the potential of the economy continues to do ok, how does that shape your fed call now? stephanie: we have been

consistently calling for the fed to be cutting in june. our base case is we think a lot of the inflation data we saw a recently was seasonal, and will reverse the next months, which will put the fed on path to cut in june. the risks are that it has to be later and then you run into election timing, so it gets complicated, what we think the picture will look different. jonathan: when you say seasonal, what does that mean? stephanie: i would call it this january effect, and we saw a more severe prints than expected. in the month of january, you tend to have annual price increases that go into effect. and what we believe happened this past month was we caught up to a year of strong inflation, so the price inflation was more significant, and that is what we think is the main driver hind the strong ppi and cpi, we should get a reversal the next month. lisa: the fact that some

companies increase prices as much as they did raises alarm. a really good graph was put out today, talking about how sheriff private consumption spent on services is 2 percentage points below where it was, so there is still ammunition to be poured into the consumer economy. how do you factor that in when you expect that disinflation to take hold in more significant ways? stephanie: we probably are settling in on a new trend. consumers' income growth is running at a more normal pace, so we probably will not get hike back to that pre-pandemic level and we will set off a new trend, which will stabilize the inflation outlook. lisa: you think people have found discipline? stephanie: well -- lisa: what do you make of the idea of credit card spending and the delinquencies, which does not scream incredible discipline? stephanie: it is not, the fourth quarter of last year, but it card spending picked up, and are

bases is that it will slow down the first quarter because we are probably tired of the spending. outside of that, we don't have the excess savings anymore. they probably will not spend it, so now it is about income growth because credit card rates are so high. you have buy now, pay later, which concerns me a little bit, but generally speaking, the consumer will probably spend in real terms, close to 2%. jonathan: why does that concern you, the buy now, pay later? stephanie: there's not that much rigor in the process in terms of looking at whether these people are really able to borrow. it is a lot less stringent of a policy. right now it is not that large, but it is possible as it grows that it could become a source of negativity. jonathan: could you give scenario analysis, if the

federal reserve went into conflict, if unemployment started to pick up and inflation were still sticky, guides you and gives you an idea to what the fed would prioritize at that point if that happened later this year? stephanie: my base cases they will prioritize the unemployment side. if you get to unemployment rising above 4%, and if we are just above it, they won't react, but if we are well above 4%, they will look ahead to what happens to inflation, and it is an indicator with the expectation of rising unemployment slowing down inflation in the future. lisa: you talk about unemployment holding the key to consumer strength, how much is the hot labor market reports a function of people getting multiple jobs? stephanie: there is an element of that, and that is one reason why you see significant strength in the establishment payrolls report. i think that is one factor that is explaining some of that. but i also think some of that

was seasonal, so going back to the seasonal problemsin january, we tend to get seasonal strength in that particular month because we tend to lose less jobs than seasonals are looking for. so let's look to the february print and see how much was sustained. lisa:lisa: how much are you going to hinge your call based on nvidia earnings? stephanie: not much, but what i would say is what we are seeing is a legitimate investment in the tech space and this is important for productivity looking forward. not necessarily today, but in the next couple of years, this could be important and put pressure on inflation if it picks up. jonathan: good to see you, stephanie roth of wolf research -- wolfe research. here is your bring bird brief -- bloomberg brief. dani: the u.s. announced sanctions on russia on friday, after blaming put in the death

of an imprisoned -- of a prisoner in the arctic, and they targeted russia's defense and revenue sources. goldman sachs says hedge funds were looked at in the fourth quarter, and the only mag 7 stock that's on increase was amazon. a tie up between two supermarket giants could be in trouble. sources tell bloomberg that the ftc will sue to block the combination of kroger and albertson. it is expected before february 28, when an agreement not to close the deal expires between ftc and companies. kroger and albertson are prepping to meet with the ftc lead to persuade the agency. jonathan: we asked this question earlier this morning, what kind of deal will they make down in washington? annmarie: you look at kroger, and they say, how do you expect us to keep up with walmart and

amazon? they say this will help boost wages. well, the ftc and people like senator warren say it will hurt workers in be bad for unions, but if you look at why can't albertson and kroger get through, how will capital one have a chance? jonathan: what company would senator warren like or is there any consolidation she would approve? lisa: maybe one deli on one side of the street and the other one on the other side of the street but then they could jack up the price of coffee. jonathan: hard to say, it is the year of the regulator in washington. next, ev demand and focus. >> we are developing a low cost ev platform so that we can be a big part of this s-curve when it comes time, and that is, i

think, coming in a couple of years from now. jonathan: that is next on the program. live from new york, this is bloomberg. ♪

jonathan: big afternoon around the corner, nvidia earnings after the close, looking out for equities, pulling back, down .3% on the s&p 500, two day losing streak that could become 3, 3-day losing streak for nvidia. we will see how that shapes up this afternoon. yields lower by a basis point or two. the euro is doing absolutely nothing through much of today. under surveillance, ev demand and focus. >> we are developing a low cost ev platform so that we can be a big part of this s-curve when it comes time, and that is, i think, coming in a couple of years and i think it is going to

be a big inflection point for the industry, when more affordable ev's, online. jonathan: ford cutting prices for its electric mustang 50 will -- after sales fell 51% in january, and ev sales down 11% overall. this after both startups had to contend with a slow down in ev demand. bloomberg's david welch joins us for more. is the big struggle infrastructure, anxiety, the lack of tax incentives, what is it? david: all of it. there is one ev on the market that sells for under $40,000, it is the nissan, with 200 miles of range. everything else is pretty pricey, and the luxury buyers, they are full on their ev's and

at this point, they are not buying that many to fill the garage. and we are trying to reach the last market, which is difficult because the charging infrastructure is not there. people are pretty happy with their gasoline powered vehicles. you have got to give them a reason to trade up. we just are not seen it yet, and that puts a lot of these companies looser on revenue and in a tough spot. the forecast this year is 66,000 vehicles for rividia, 60,000 vehicles is tiny in terms of a margin of profitability. jonathan: some manufacturers are leaning towards hybrids. general motors has been reluctant to do that. they think that ev;s are going to take off and that will be the right place and time. you get a sense that maybe that has changed the last month or so over at general motors. the question we asked at the

time is how easy is it to make that shift on the production line and develop hybrid vehicles to really get to where this market is currently, not where it will be in seven years time? david: they have the hardware. they have sold plenty of hybrids in china, and they still have the technology, but you still have to go and reengineer the vehicles, giving assembly lines to do it. you notice gm has not said they are going to do this in nine months, but probably more 2026 sort of thing. it will not be up and down the lineup. i think you will probably see general motors do it in a high-volume segment, with the chevy equinox, maybe their large pickup trucks, and then kind of getting a big suv like chevrolet traverse, getting customers that option, but it does have

favorability because you talk about having an electric system and then you still have gasoline engine exhaust systems and all that sort of thing. so they are expensive vehicles to build, and that is why a lot of companies in hope they can go straight to the ev transition but consumers are not coming along. lisa: his inflation reduction act and the administration policies hurting or helping in the electric vehicle transition? david: it is not helping yet because the consumer credits are just getting underway, and a lot of money goes straight to the automakers, but they have to sell vehicles. you have two problems, sales have slowed down, and other's companies have had a tough time building them and getting them out the door at the price that consumers want. so you will not get this incentive money from the ira until sales are stronger. so it is the chicken and the egg

problem right now. another challenge they have is meeting all the requirements, getting the batteries, all the parts from friendly trade partners or from domestic production so they can qualify for that money, so that is all you have seen so many looser credits, and then the $7,500 a big difference for buyers. annmarie: if they started to loosen some rules, would it improve the market and help the ev glut? david: probably, but it was such a big fight to get all these government incentives approved, and there was a desire by senator manchin and a lot of republicans to make sure that the incentives did not just help china continue to grow its ev supply chain. i just don't see the flexibility coming in because it was such a battle to get this approved in the first place. jonathan: is this uniquely

american problem for these manufacturers? do you see the same in europe, china with the adoption rates? david: china and european buyers are buying a lot more ev's. the governments there have a lot more restrictions on where you can buy internal combustion vehicles, incentives or higher. they pushed us a lot harder than the u.s. government. america is a different market, too. you don't have people who are just living in urban areas having access to charging. it is a big country, and people who needs hundreds of miles of charging, or at least they think they do, in order to use an ev for everyday lives, there is pushback on that. americans are happy with the vehicles they are driving right now. until we can solve some of these

problems, i think it is going to be slower to get the aggressive sales approved. jonathan: the demand for traditional vehicles is skyhigh in some places. can we finish on what you are looking for as the next up for manufacturers? we saw the price adjustments for certain vehicles, talked about gm, flirting with the possibility of their next up, what are you focused on? david: i am watching to see who will be looking at hybrids because it gives us a clue to as what they think the transition will be like. the other part is the only way you raise ev demanding and is by fundamentally changing the vehicles available on the market. we have seen general motors coming out with usable, lower-priced vehicles like the chevy equinox, and that is gm's family car on the gasoline side of the portfolio. that is a test whether or not the mass-market or your consumer

has one vehicle that is ready to go electric, if it is going to hit, that is the kind of vehicle people are going to want, so maybe ford will come out with a more priced ev, and tesla says we need to see vehicles in the $35,000 range and we will see if consumers really want that once they hit the market. jonathan: david, good to hear from you, david welch of bloomberg out of detroit and the latest difficulties they are having. the fed minutes unveiling later this afternoon, and what are you looking for? lisa: i am excited that nvidia is the main topic. it is the transition and question of height versus reality, the reality on the ground for a company that has dominated so much of the narrative the past 18 months. to me, that is more interesting than fed policy.

annmarie: i will take the other end of the fact that i was reading a studies report last night, mag companies -- seven companies, apple, nvidia, amazon, 90% of what they need to get done in taiwan, nobody talks about this geopolitical incident and this major cloud over what is lifting our stockmarket. jonathan: which takes me to my final thoughts, china, china, china. it is amazing to see this country struggle and to put a fall under its equity market. i think that they are basically banning large, major institutions from net selling to start and end the session, and it speaks to how nervous we are on the fundamentals on the ground. lisa: we heard from anthony capuano on the demand to travel, conflicting signals. it is so strange. how do you get a real read on something that is fuzzier? jonathan: follow the policy. coming up, the moderna ceo, dan

ivan, all of that and a whole lot more, live from new york city, happy nvidia day. ♪

>> center new york city. it is nvidia results day, the most important stock on earth, according to goldman sachs. stocks are lower. they're nervous. a little bit emotional. countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg the open" with jonathan farrow.