katie: investors are keeping a close eye on earnings with many questioning the durability of the frenzy over artificial intelligence ahead of nvidia earnings. those are due after the bell today. a quick check on the overall markets now. the s&p 500. on the back foot, more so

looking at the nasdaq 100 currently down about .9%. that is the equity side. the bond market is also interesting. a double whammy is coming up with a 1:00 p.m. auction and at the -- two scope to :00 p.m. we get a look at the yields of the fed's january meeting minutes. look at the two year yield up by about four basis or so and the 10 year yield. we will see how that changes as the day progresses. movers on the equity side are not just nvidia. we want to look at mercedes-benz adr. the carmaker announcing a share buyback of up to 3 billion euros. the company will report earnings tomorrow. it will have its profitability outlook in focus. meanwhile the palo alto networks. having the worst day on record after the cybersecurity company cut its

annual revenue forecast sending shares of other cyber companies lower as well. like i said, all eyes on nvidia, at a session low. goldman sachs trading desk called it the most important stock on planet earth. i'm obsessed with that. options positions in signaling a nearly $200 billion move in nvidia stock following tonight's earnings report. joining me is carly one of. we will bring in the bloomberg intelligent senior analyst mandeep singh. carly, on the options side, think about the move implied, 11% give or take on either side. how significant is that relative to what we typically see from nvidia post earnings? carly: relative to the last two prints its are tepid moves on the day after its earnings. relative to the two prince prior is not that big. those were about 24% and 14%. this would not be a blowout as

it was an 11% move. on the basis of general stocks into very large move especially how big the nvidia market cap is on the putting it towards a stork one-day move after the earnings report. katie: it's interesting to see traders bracing for this. to move us closer to 6% or so when you look at what options implied. it looks like the report, the whole world is focused on it. i'm only slightly exaggerating. mandeep; valuation multiples have gotten higher and higher and with higher valuation audibles there is always a risk for revenue growth deceleration. multiples get chopped and that is what we are seeing with palo alto networks. it was not a bad rent -- print. but the stock reaction was like that because it was trading at 15 time sales. that is the risk with a company like nvidia with great fundamentals, everyone is using their chips for training large

language models. the question investors want to understand is, what drives the growth? what keeps the momentum? is it the size of the models? are we feeding in more data? is it more companies training large language models? the drivers aren't very clear. clearly, there is demand about the runway is determined by how stronger drivers are and that is what investors are waiting for. katie: we know they are expecting a big move. but when for example you look at the put and the cost you, what does this tell us about whether people are feeling bullish or not? carly: generally speaking people are willing to pay more for downside projection then upside chasing. that is completely flipped at nvidia. it has been flipped for a while. the put skew is negative signaling the opposite, more so mo. what people have pointed out to me and others is the reason why you would see that innere stadt like this is because it is so

expensive that buying into it obviously takes a lot of capital. but instead you could buy a call that insinuates maybe it will go up without having to actually put down the money for it. katie: when it comes to nvidia overall valuation i feel like the bowls love to tell me it's not that expensive really if you look at the valuations. how are you thinking about that? is it expensive at this point? maneep: four chip co. to trade at over 30 times earnings it's clearly expensive. it's a rich multiple. very rarely do you come across a company of this size growing over 50%. so they are expected to double their datacenter revenue to $100 billion and it's phenomenal if they can do that in two years and the buy side bogey is probably higher. the caution i have ours -- is around pricing. a lot of topline growth is currently driven by pricing on demand. what if there is an alternative? i think that will make a dent in the pricing.

pricing is always a double edged sword. it looks great because it feeds through your topline and margins. but it also tracks competition. there are so many companies out there trying to develop a viable alternative to nvidia chips. we know of that being the case over the history of the ships. katie: the options positioning now is really people chasing upside here. what could this point. this point? does it come down to pricing? maybe them losing their headstart? denitsa: --mandeep: they have set up a president to beat end rates and beat end rates biologically the buy side bogey is higher. any deceleration in topline growth will be a big headwind to the valuation multiples they currently trade at. katie: a potential victim of their own success. we will see at 4:00 p.m. new york time or just after the bell. bloomberg news reporter and

intelligence reporter thank you for the preview. another big story investors are awaiting our fed minutes out at 2:00 p.m. new york time today as richmond fed president thomas barkin said today price pressures in some sectors are still too high. let's discuss this with the bloomberg chief macro correspondent liz mccormick joining us now to talk about the fed minutes. they are always a little stale. think about what happened since january. we have really big data reports especially when it comes to inflation. how backward looking will the minutes be? liz: might you said, they are always -- like you said they are always a little stale. andrew hollinghurst mentioned in a note that even though the meeting took place before, like you said, the blockbuster payrolls and cpr from either -- cpi, there is a delay for

staffers that put together the minutes. they pick goes into the minutes. it feels like it will fit the theme other fed speakers have been saying that they have no urgency to rush and cut rates even though powell is saying everyone is saying rate cuts will come this year. so it will remain that tone. i think people are more so looking at what they have to say maybe about the cutie, the --qt fed balance sheet runoff. chair powell said they will have a conversation in earnest at the march meeting there was some talk. i think people will find tooth comb the minutes to see what individual officials had to say about the minutes lead the feds more lawyer logan came out separately and said he needed to maybe look at this. there is some wonky stuff to look at here. katie: some crumbs to find when it comes to the balance sheet. i want to talk about the possibility of a rate hike. you had a great piece over the weekend.

there is some speculation especially on the heels of some economic prints we got last week that maybe the next move after the pause is not necessarily a cut, but another hike. how seriously are people in the market that you speak to entertaining that idea? liz: maybe it is my walking math background but to me options give a probability and an outlook. different scenarios with how much probability x or y happens. we have noticed that be why folks have mentioned -- by folks have mentioned this saying there is now some probability, say, 10%, that the fed may move to a hike versus it had all been skewed to how many cuts there will be, 1, 2, 6, 7. that's important. larry summers speaking with bloomberg last week kind of came out and said that you have to add like a 15% chance of a hike.

i think that with all the pushback, the hotter inflation, a strong labor market, people are saying we just have to put in our calculus somewhere. traders want to hedge risks. that is what the options are. maybe we should price up some demand for those auctions -- options. i think it is set -- telling we don't have a full skew just for cuts. people are concerned a little with the numbers we have been seeing. katie: the fact that we are even having this conversation, that there is even a 10% chance of a potential rate hike. does that put to bed the idea that maybe the fed will cut in march? liz: i think chairman powell put that better than last meeting. fed officials gave a full court press saying i don't think they like the market pricing that will happen in march. it does not seem likely. let's see if we are both proven surprised.

but that is what it seems to be. katie: that's liz mccormick. coming up stacy with notes of us w retail advisors talks brito earnings and consumer outlook. this is bloomberg -- retail earnings and consumer outlook. this is bloomberg.

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katie: welcome to bloomberg markets. i'm katie greifeld. it's time for the stocks of the hour. shares of etsy and wayfair lower earnings today and tomorrow respectively following muted outlooks from retailers reporting this week including

walmart and home depot. joining us to help break it down is stacey widlitz president of sw retail advisors joining me on set to discuss. let's start with walmart. i think everybody heard the cfo say that consumers are being choice for in spending -- choiceful in spending, still spending but may be trading down three that seems to be good news for walmart. what is it mean for some of its competitors? stacey: not only are current customers for walmart trading down but they are getting the wealthier customer. larl in grocery it's coming from wealthier people may be over $100,000. perhaps that is taking a little from target. if you buy food at walmart you will probably by other things there as well. but absolutely consumers are very value-oriented still looking for bargains, particularly, as food inflation, while getting better, is still up 20% the past two years. katie: specifically to walmart

it seems like in some sense they benefit on the way up and the way down and maybe that is what they are seeing now. stacey: they do. who is better positioned to pass on cost? they dictate, in some aspects, to their vendors, what they will pay. in tougher times, think about retail over the past three years. a lot of the growth for brands and retailers has been coming through pricing because of inflation. now that we don't have the crazy inflation, now that it is kind of like you have to grow units. that's tougher but interesting. walmart grew their traffic. the entire comp was traffic growth. that shows how much sure they are gaining. katie: i think they said they gained in almost every segment, pretty amazing. you touched on a point i've been wondering about, passing on pricing. outside walmart how much pricing power is left for some of the retailers at this point? stacey: that's tough. over the past three years

whether it is luxury or aspirational luxury like ralph lauren prices are up, 30%. a lot of brands have said the customer has voted saying enough already. levi's talked a little bit about that. coors talked a little about that. you cannot grow through pricing anymore. you have to grow through units. it's a tougher environment. you have to separate the winners from the losers as a result. costs have come way down from last year's really elevated everything and all that stuff. now we are looking at unit growth stories. katie: let's talk winners and losers. clearly walmart seems to have emerged as a winner. who are the losers in the environment? in the dynamics you are describing? stacey: you have seen wayfair reporting tomorrow. they have done a great job in terms of not losing customers. their active customers are flattish to down 1%. but the average baskets are way

down because we stayed home during covid and bought a bunch of stuff and head of ton of savings and we don't have that anymore. they are doing the best plan off rightsizing. -- best laying off rightsizing. it is a tough environment for companies that were covid winners looking to the other side now. on the accessories and luxury side, i think we hit peak pricing. there is a bit of pushback. katie: it is interesting we are still talking about the ripple effects of covid. for some of the retailers working out of that. when it comes to wayfair you make an interesting point in your notes that the street as rewarding names that are not going back to promoting, rather looking towards the other side one housing finally does get moving. that i find interesting. you are seeing a lot of retailers go the discounting route, not necessarily the move here. stacey: this time you have a handful of brands that did raise prices that have been able to maintain that. i would include ralph lauren in that.

i would include coach in that. tapestry. it is very difficult if you are one of these brands that can't keep that pricing. a great example is williams-sonoma. they aren't promoting. everybody in the home space is giving away stuff like, we have to get stuff moving, revenues moving, wayfair included. williams-sonoma is holding the line on pricing and pottery barn was down 17% with their comps last quarter but raised their operating guidance and the stock is up 75% in six months. some of these stocks are really getting rewarded as we look to the other side. gauge applications are down 13% year-over-year and new housing starts down 15% month over month . investors are starting to say, when we get relief, which are the companies that we want to own that can hold the operating margins and get revenue? katie: the frozen housing markets was a big conversation with depot earnings yesterday suffering.

you point out in your notes that you see retail m&a perhaps picking up. m&a is interesting. we have seen it in certain sectors, energy, for example. about in the retail space? stacey: we have the capri tapestry deal on the table waiting for that are close but you are waiting to see companies pick up smaller brands. you are also starting to see more activity in the space in terms of the macy's deal that did not pan out. you had children's place the other day. i think there will be additional names weakening and losing as we talk about there is no more pricing power. what happens to them? i think a lot of smaller brands will be picked up that activists think they can do a better job of. there's lots of conversation in the space. katie: it will be fascinating to watch create stacey, we enjoyed this conversation as we headed into the real meat of retail earnings season. stacey widlitz that is -- that

is stacey widlitz. boaz weinstein bulking his position across different u.k. trusts. we look at his investments next. hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall.

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but your odds of falling victim to online crime are 1 in 4. you need aura. you, your family, all protected from scary online stuff. [ laughs ] protect everything your family does online with aura. katie: welcome to bloomberg markets. i'm katie greifeld. let's look at what is buzzing on wall street in the world of banking and finance. today we are looking at boaz weinstein's $5.4 billion bet on closed-end funds and joining us to break it down is justina lee joining from london. when i think about the boaz weinstein closed end fund campaigns i tend to be pretty u.s. focused, exposing my own bias there. but a lot of that also comes back to the u.k..

justina: from what he has told me out of his $5.4 billion exposure to closed-end funds 25% of that is in the u.k.. that makes sense because the u.k. is home to one of the largest closed-end fund markets in the world even larger than the one in the u.s.. fun fact. it was where the structure originally came from. he had good things to say about the u.k. trust market. he said unlike the u.s. where he has had to go to court against blackrock and nuveen come here the governance is actually better. he has been able to engage a bit more constructively. katie: when it comes to the u.s. some of his big targets have been of course blackrock. he has been very vocal about campaigns against blackrock when it comes to the u.s.. who are the targets and issuers of the closed-end funds when it comes to the u.k.? justina: in the u.k. also blackrock. j.p. morgan asset management.

also local players like schroders and baillie gifford. these massive asset managers that are big in this part of the world. in particular he has targeted one fund he has gone activist against. and every u.k., as the u.s., it is a similar narrative where he thinks there is good arbitrage here where you can get these funds to close their discounts and because you know the underlying asset values of the assets they invest in a few close the discount, to him, he benefits and the retail investor also benefits. katie: great details in this piece include that going along with this the fact that 25% of their bets are in the u.k., they actually saw a reopened office in london, it looks like. justina: they closed their office in 2017. now they have reopened an office. behind that is the fact they have launched a new fund around late last year focusing specifically on the u.k. fund. i think this really shows his

shift to this part of the world. he came to london last week. he spoke to me. he spoke to a lot of students. it is not just the u.k. in terms of closed end funds. he has looked at funds in australia and even one fund in europe as well. this shows he sees at this point and interest rate cycle for the closed end fund market that is a big opportunity here that's not just about the u.s.. katie: a great story. great to get time with you. that is justina lee reporting on the boaz weinstein closed-end fund campaign overseas. let's get a quick check of the markets. we have big risk events starting at 1:00 p.m.. we have a bond auction of treasuries. at 2:00 p.m. we have the release of the fomc meeting minutes from their january meeting. a lot has happened between now and then. still it is important to watch. the big one is nvidia reporting after the bell.

a lot of hopes and dreams are built upon ai and in videos promised there. we will have to see how that goes. look at the markets. we are a bit on the back foot. that is it for bloomberg markets. i am katie greifeld. this is bloomberg.

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