♪ >> welcome to bloomberg markets. i'm smelly but sock. -- sonali basak. nvidia is hitting all-time highs in japan, europe and the united states. we will get a check on those benchmarks. the s&p 500 hit a new intraday high. the sox semiconductor is flying up more than 4.6%.

the nasdaq 100, not hitting a new record high but up 2.4%. the dow jones industrial, average hitting a new high, up 6/10 of 1%. we will talk about the mid-day movers. we will start with nvidia, fresh off of its blowout earnings. it's sitting at a record high. the stock is on track to add more than 200 $50 billion in market cap. it would be the biggest single session increase in history, increasing the gain made by meta at the start of this month. -- eclipsing the gain made by meta at the start of this month. some more big movers here, supermicro, a mover of the year, moving up more than one to 5% on the day. that means a 200 percent increase on the year so far. synopsis, sitting on one of the biggest deals of the year, moving up more than 10.4% on the day. fueling the ai tailwind, up double digits. the software company reporting first-quarter results that beat

expectations. there are decliners. you have ed see, it's outlook pointing to a slow start to the fiscal year. etsy is down more than 9%. at&t is dealing with widespread disruptions across its mobile service and across the united states, down more than 2% on the day. let's continue with what is moving inside the market with abigail doolittle. >> it's all about the nvidia report you are talking about. that is influencing things. not just the sox best day since may. the s&p up 3.7%, their best day since may. it is taking along the other mecca cap tech sectors, consumer discretionary and communication services, not up as much. there is a bit of a rising tide for these mecca cap tech stocks, -- mega cap tech stocks. the two year yield is higher by three basis points the last time i look. over the last six months, it's

starting to round higher, nowhere near the 5% level that we had been at. stocks knew this level and digested it. if we continue to see this rise in yields, it could pressure mega cap tech stocks. today, investors are looking past that. what they are not looking past, this is interesting, while communication services is higher, one stock, a couple of stocks are not higher. at&t is down 2.2 percent. verizon and t-mobile are lower. this is as at&t said some of the service across the country has disrupted including major cities such as new york and l.a. -- i'm not sure about l.a. but certainly houston and a few others. they don't know what was behind it. they are looking to fix it. verizon and t-mobile have not seen outages but there are people on saying they have seen -- on x, saying they have seen outages on their own

phones. let's bring it back to nvidia. what we are looking at is a year today chart. there is nvidia, up 57%. then we have the s&p 500, the equal weighted s&p 500, up between 2% and 7%. the russell 2000, down. we are not seeing it. we are seeing the russell 2000 small caps stocks value underperform while nvidia, a new record high. >> we will talk more about that. thank you to abigail doolittle. sonali: we will discuss it with catherine rooney vera. when you look at the big bid semis are getting, you look at the nvidia options, priced to perfection here with $800 calls through the end of the week. how do you feel about buying into the in spot and options market at this point in time? >> i would say it's a fantastic call but i would not be buying now. when i think about nvidia, i

think about the meme which is atlas. nvidia is atlas with the weight of the world on its shoulders because it is what is carrying mobile markets, if not the global economy. there are some headwinds and i am cautious buying right now, in terms of semiconductors or tech in general, which of course includes a third of the s&p 500, in terms of its market cap wait for the s&p. precisely because there is a very good chance we get a real acceleration in inflation. the fed has piloted this in its minutes this week. i think that we could be in for a very rocky road in terms of risk assets this year. >> you are looking past the days moves but what does it mean for a private taking opportunity if you are sitting on such highs, record highs on some of these indexes, do you decide to sell anywhere? >> i think it makes sense to realize some profits at current levels. we are making new highs many

times in the year to date and i think a lot of it has to do with the perfect landing scenario which has been priced into the market. i would say at the current juncture, it makes sense to me to reduce some exposure and start accumulating those protective positions i've been talking about. i think the markets are under appreciating and underestimating the polar opposite risks inherent in the market right now with one potentially leading to the other. that being namely the potential for the u.s. economy to continue to grow at such a pace that inflation is unable to come down and the fed perhaps has two, dare i say it, hike rather than cut. i think that is one risk on the horizon. the other horizon risk is a recession. if the fed stays high for an extended period of time, longer than many are thinking or even has to hike again, that brings forward the recession risk. there is a lot of underappreciated risks right now. i would not be going for the high flyers at the current juncture. >> how do you feel about the

relationship between interest rates and the market right now? you're looking at the two year yield, you are looking at it flying past 470. certainly the highest level since the year. if you believe markets have been digesting this level, what level does it really start to take a bite out of the gains we are seeing? >> that's a very good point. you have seen bonds take a hit, especially long-duration ones and investment grade. high yields has been outperforming. that's because of this repricing of risks with regard to rate cuts. how much are we going to get this year? that is being repriced to the detriment of long-duration. i think that high yield faces difficulty if we get a recessionary scenario. but right now, it is outperforming those investment grades, which tend to be longer duration bonds. we are starting to get to attractive levels for treasury.

i think we could see some nice pole for short duration paper. -- pull for short duration paper. treasuries start to look attractive here. sonali: i feel like i am beating a dead horse on this question, asking it every other month but i what point do you start to see better gains from the equal weighted s&p as well as the small and mid-cap stocks. -- stocks? >> the equally weighted s&p is a consensus trait coming into this year. under the expectation and it performs under the expectation that we get the soft landing which we have not seen yet. what we have seen is since the december pivot from the fed, we have seen risk on, sentiment robots. u.s. economy growing above potential. all of this is inflationary. stocks making record highs, the wealth effect. housing prices are still high.

all of that is reflationary. we are not there yet. i don't think we are going to be there, unless and until we effectively get that soft landing. we can't get that soft landing by definition, with soft landing, we get economic growth leading to sustained trend. you can't have that when you have this amount of exuberance and economic activity. i think we have to see a rollover in the labor market. i suspect it is coming. you can see google searches on layoffs are rising. i think the seasonal effect of higher and better initial jobless claims numbers, meaning they are on the low side, is going to come in very soon. sonali: our chief strategist, we thank you for your time. i want to bring you some breaking news. over $80 billion of demand for an mna financing. we have seen extraordinary interest for these investment-grade bonds. they were looking at closer to $15 billion for the offer.

you do see eye-popping demand for these financings. they were looking to sell at least 13 billion. we will keep an eye on that story for you. after the break, we will talk to the chief economist of the national realtors association, joining us to talk about housing affordability and the demand on the back of that latest data. all a part of the inflation story. we will be with you, next. this is bloomberg. ♪

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the national association of realtors and contract closings increased 3.1% from a month earlier to a $4 million annualized rate. that's the highest rate since august but still well below the years leading up to the pandemic. we will discuss this with lawrence yun and abigail doolittle. when you look at the demand coming back into the picture, is it sustainable, given we see interest rates starting to increase again on the year, which could lead to higher mortgage rates? >> thank you for having me. it is definitely a good start to the numbers. we saw the home sales last year, essentially at 30 year low. despite the fact that u.s. population rises, so, considering we have 80 million more people, why was the home sales at nearly a 30 year low? just by a simple law of averages, people desired to want a home, the home sales have been

underperforming. the latest increase, definitely more mortgage rate help. another factor that helped was more listings. we have seen more offers are still in the marketplace, which means not all demand is being satisfied. it simply means more home sales. sonali: one of the things that surprised me was the cash offers you are seeing at a 10 year high. is this crowding anybody at the market? >> definitely. the first time buyers are struggling to come up with the down payment. sometimes, they are making sacrifices, not going to a restaurant, getting help from family members to come up with a down payment. suddenly, cash comes in and they are outbidding everyone else. it is cash with less contingency on the offer, much more attractive to the home sailors. cash transaction, 32 percent. that's the highest in nearly a

decade. cash buyers are coming in, pushing away the first time buyers. >> there's been a bit of a boon for homebuilders and a piece of it, having to do with the supply, lack of supply for existing home sales with mortgage rates being so low. any people locked into 3% or 4%. the market is really log jammed. are you starting to see signs that that may fall? sonali was talking about rates starting to go higher and a lot of people think the fed may not be cutting any time soon. how do you factor that into your future outlook? >> the homebuilders last year, they had their third best year for closure crisis in 2008 because builders can create inventory. it's not only mortgage rates but the inventory availability. the federal reserve will do its job in trying to contain inflation. we anticipate that by the second half of the year, the mortgage rate will be a little more

favorable than what it is now. but the inventory is the critical factor. we have to have more supply. right now, three months supply is still applying an edge over the buyers. on the upper hand, you have to do some discounts to attract buyers to unique properties. the segment of buyers lack inventory. we need more inventory. the white house can consider some tax incentive to get this moving again. sonali: that's interesting. that was a crystal ball question. to ask another one, there was a lawsuit around fees. a federal jury in missouri ruled the national association of realtors had conspired to fix prices by setting a standard where -- there was a big award ruled. i'm sure it may not affect

markets for a long time but if it were to come into play, how do you expect that to shift markets? what kind of influence could that have on home sales and prices? >> american consumers are the best in the world. they can do it by themselves, go to discount brokerage or full-service brokerage. the definition of perfect competition is so many players. we have 1.5 million realtor agents. furthermore, there is 100 thousand new members joining the organization. 100,000 leaving because it was difficult. one can consider like a restaurant industry. some restaurants do well and others failed. there is constant flowing in and out. it is a competitive market. conclusion is impossible. american consumers are enjoying the wild choices that are available. sonali: we have the role of

private equity in these investment giants. we are hearing they are buying directly from the homebuilders. it draws the question what that means for home prices. how easily can an american get a new home versus an existing one? and is the price distorted because of all of these large institutional buyers getting in early? >> in 2019, pre-covid, our organization sounded the alarm about housing shortage. the reason why the institutional buyers are in the market is they recognize there is a housing shortage so they want to take advantage of the market condition. to push away the institutional investor is to assure that we have more supply in the marketplace. that means that may be some of the regulation at the local level for the builders to get in would remove some of those obstacles. we have to have better land-use regulation and, furthermore, provide incentive. either tax credit incentive or

part of the infrastructure spending, we need more bridges. but we also need more affordable housing. we need to have a supply to the country so the institutional buyers -- away from the market. sonali: lawrence yun and abigail doolittle, we thank you for bringing us that interview. still ahead, abbvie gathers over $80 million. we will have the details had. this is bloomberg. ♪

sonali: this is bloomberg markets. with m&a making a rebound, -- abbvie is selling $15 billion

worth of funds. they have placed orders for more than $80 billion. we have also seen jumbo deals from cisco and bristol-myers squibb. joining us to discuss is olivia. when you look at the deals, we saw $85 billion in demand for a dozen or so billion wanted for bristol-myers squibb. the spreads are looking slim. talk to us about the abbvie deal, but the pricing looks like and whether this is even remarkable given how much interest we have seen lately. >> right now, the deal is being pitched to investors at 105 basis points over treasuries. that is pretty twice and it has already tightened from what they were discussing at around 130 earlier in the day and it could tighten further from here. it shows how insatiable the demand is and i think this is very strong. we saw 85 for bristol.

we are seeing 80 today. that's an incredibly large amount of orders in a two week span for $30 billion worth of debt. nearly $200 billion worth of orders. sonali: will more mergers and acquisitions push those spreads wider? and what is the expectation for more issuance ahead? >> there is an interesting dance happening right now with supply and demand. with all the supply we have been seeing, basic supply demand dynamics would tell you spreads should be going wider but they are going tighter because the demand has been equally insatiable. you have these two opposite forces going against each other. so far, the demand has been more prolific and is pushing spreads tighter. as we do see more m&a, that's going to challenge that. it's going to challenge spreads wider. sonali: this is in the investment-grade market. i'm curious if the demand is so

intense for investment grade bonds, how intense it might be for the riskier stuff. i'm intrigued by this pimco story, knitting about $150 million on debt done by banks. this is loans back to apollo global management deal. they bought these debts at around $.85 on the dollar. what does this say in terms of the investor willingness to buy debt that looks riskier when they are making several hundred million dollars per deal? >> it shows the success of the tray that pimco did, which at the time was very risky. the success shows how much the broadly syndicated loan market has rebounded. when we look back to when they first made that investment, loans were trading around $.91 on the dollar. they have rebounded to $.96 now. i want to emphasize it was risky. if we go back to when they bought that debt, banks were struggling to offload $40 billion of debt on their balance sheets. they were selling bonds at $.85 on the dollar.

a lot of people did not want to buy this, a lot of investors were not willing to take this risk but pimco did and it paid off well for them. sonali: you do see private credit having jumped into that fray. now, you are seeing that compete more broadly for deals. does that mean that there is just enough limited amount of debt available at this point fighting for the same deals? >> it's interesting, the battles that are heating up between the banks and private credit. when you look at 2022 and a bit of 2023, the banks run in the game as much because they were working on offloading all of that debt on their balance sheets. now that they have more room, we are starting to see that competition heat up. the banks ultimately won. it shows the strength of the rebound and the strength of banks willing to lend today. sonali: is there a dynamic changing? you see the code to be deal, which went away and came back. you saw kkr helping a large

bank, jp morgan, getting back in on this deal at the end of the day. what does that tell you? >> it tells me that the banks are back and they are going to attractive more attractive pricing. that is what won in the end. they were able to lower the borrowing costs for kkr's purchase of co-committee -- cotivity. kkr does private quite it -- credit. when you look at these types of deals, the real winners are the ones who can do it all. sonali: olivia, keep an eye on the markets for us. it's certainly heating up fast and hot. coming up next, we will take -- talk about rivian falling after announcing job cuts. and, we have the s&p 500 that is just about around a session

high, hitting a fresh one at 1.7% higher on the day. the nasdaq 100, still up 2.6%. we will keep an eye on it as well as two-year yields. citi is up 4.71. thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

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sonali: this is bloomberg markets. let's get a check on the market because we are looking at all-time highs on the s&p 500, near session highs on the day as well. the nasdaq 100 is also near session highs. the s&p 500 is looking at gains of more than one .7% on the day and the dow jones industrial average, 0.8% higher. the nasdaq composite is up 2.5% today. a lot of love in the semiconductor indices.

looking at the two year yield, it's higher at around 4.71 on the day on the back of strong economic data. we seen the drift all day. everyone is watching semiconductors but we've seen a bond selloff underway. it's about a four basis point move on the day. on the equity side, not everything is green. electric vehicle makers are falling across the board after rivian had a disappointing production forecast. it's down 26% on the day. this is the most it has ever sold off. tesla is now in the green about 0.6% higher and has been going through gains and losses all day. lucid group is also falling more than 16% on the day. for more on rivian, we're joined by our detroit bureau chief. when you take a look at the selloff in rivian shares, do you

think the worst is over for the company? >> it's tough to say but there was no good news here really. a forecast for production this year that is barely an increase over last year and well short of what the company has been guiding for and what analysts were expecting. it really doesn't look like this company will be able to pop the clutch. not a great analogy but starting to raise production and raises sales and just scale, they are losing money and burning cash. the only way they can get out of that trap is by building more ev's so they can get that are cost from their supply chain and put their economy to scale and that puts them further and further off. they sell a lot of expensive vehicles so they will not be able to do sales that way because they are pricey. this is not good news for a company that's burning cash. sonali: what's the path forward? will they look to more job cuts

or will they look to more price cuts? how do they get themselves out of this trajectory? >> they will probably need to raise more money. they announced a plan to raise some cash in the fourth quarter. they will have to go back to the market and get money because they've got to get cheaper models they can sell in bigger volume so they can get lower costs on battery materials and the other components. despite the tesla success, the ev supply chain is pretty young and companies are struggling, even the big automakers are trying to get the scale they need to get the cost down. it took tesla two decades to get from start up to where they are today and everybody else will have to go on that curved maybe a bit faster because of the trail the tesla blaze but it's still pretty tough. they need to do the same thing that gm and restated in bmw and

volkswagen and ford can do. they need to add more vehicles at lower cost to get more scale and start to make money. cutting a few jobs in here or there, the company doesn't employ enough people to fend off the kind of losses they are showing. analyst were looking at a cash burn of over $4 billion this year. they are not immediately in a tough spot but it's a tough road ahead. sonali: you see the selloff in the stock and immediately, does this become a takeover target? does this company have to sell at some point to navigate the road ahead? >> it could be. they are backed by amazon who owns a big chunk of the shares. will amazon come in and keep funding it may be by a bigger stake and make it award of amazon? i don't know if amazon is

interested in doing that. there are options here. somebody could buy it but i'm not sure it's cheap enough yet to warrant that. once you take it on, the new owner has to deal with the fixed costs and variable costs. sonali: sounds like we are looking for deep pockets. thanks to our detroit bureau chief. coming up, we will talk about a closer look into nvidia earnings and what it means for 2024 tech performance. canids to lift so many boats? stick with us, this is bloomberg. ♪ an ever-changing landscape comes with challenges.

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sonali: this is bloomberg markets. it's time for the stock of the hour. there is no bigger story than focusing on nvidia. shares of the most valuable chipmaker sort after their bullish outlook and it is said to break the one-day move for market cap gains. it is up more than $250 billion in market cap on the day. let's discuss this from san francisco. there are a lot of questions about how you value nvidia. how do you start to price this company anymore? >> it is actually in a much more comfortable level that it has been in the last year. when i create a calm sheet, this name stays at the top so it deserves a premium. you look at revenue growth and gross margins, when you look at

operating income. looking forward, the expected income for nvidia will be larger than the revenues the top largest semiconductor companies make these days. it checks all the boxes when it comes to the fundamentals so it deserves a premium. the multiples are actually at a much more comfortable level than they were before. sonali: given we are at soaring at such great heights today, it's worth asking about the risks in investing at this level. what do you think are the biggest risks to this stock today? >> in terms of near-term and from the earnings print, we didn't see any significant risk to highlight. a couple of risk factors, more of food for thought for long term, definitely china. we saw china revenues dropped by

almost $2 billion mostly from the data center segment. this doesn't impact because they can ship what they would have shipped to china and the u.s. as the supply keeps coming on and within a few years if demand and supply come out of balance, this takes a big fight of what they could've gotten from the china revenues. china is the second-biggest biggest market outside the u.s. the second-biggest risk long-term is its largest customers, the cloud customers are starting to design their own chips. it is too early to say how it will impact their trajectory but it takes a bite out of their long-term projection. sonali: what will this be worth a year from now? >> from a year from now, when you look at the revenue growth, it's still the fastest growing at that scale, something we have not seen in the semiconductor industry. gross margins, operating margins

are definitely at the top area. sonali: we thank you so much for your time today and for following this story so closely. we will discuss this further with the senior vice president dan morgan. when you look at how fast we are rising today when you look at the nvidia stock, how do you think about the entry points moving forward? does it look expensive or is this just the beginning? >> as your previous guest was mentioning, in terms of where it's trading now, it's about 80 times trailing earnings to about 35 times physical year 2025. we are starting the new year for them on this upcoming quarter. it's not really excessive from that perspective. if you look at the growth, obviously on the last quarter, it was over 200% which was massive. if you compare the growth rate

to the curve multiples, it doesn't appear overvalued. we've had companies in the past. amazon used to trade at high multiples and they continue to go higher. i expect nvidia still appears attractive. sonali: if in the following quarter if they cannot show as staggering growth as they have today or last night, what does it mean for any downside risk near-term for the stock? >> that was my biggest concern coming into this quarter. even though they may be the numbers and guide for the upcoming first quarter of 25 above expectations that it wouldn't be enough. you bring up a good point which is as we move forward and these numbers keep getting bigger and bigger which they are. the data center segment which is about 65% projected of where the

ai chips come from, that is expected to grow from about 46-86,000,000,000 in the next year. there's huge growth that's expected coming out of that segment which is a large portion of their overall revenues. as the numbers get bigger, the comparisons year-over-year in the quarter over quarter comparisons get more difficult that could lead to a potential slow down in terms of growth because they been hitting it over the fence the last four quarters. that is obviously a challenge going into the future for nvidia. can they keep that momentum going because the numbers keep getting bigger? sonali: whether you think these are long are medium-term, you think about china and the business there and any potential restrictions you see when it comes to china, geopolitical tensions, much of a risk does that pose? >> china is a big chunk of their business. it's 22% of revenues. in the past, they've been

working around the restrictions. two k.i.a. -- key ai chips are the china products that could get through the restrictions but now they been banned. they came out with three new chips to try to get around it. that was something that was talked about in the conference calls being a concern of nvidia that it's not impacting them now but there is no doubt these restrictions to offer a challenge. revenues were not as great in the data center segment as they could've been. as your previous guest mention, that could eventually catch up to them down the road where they need to have china being a part of all eight cylinders moving the engine down the road. right now, they are doing so well in other geographical regions, they can make up for it. sonali: how do you feel about the people betting on the semiconductor boom?

you have to wonder how much of your portfolio are you willing to allocate toward this sector? >> i believe the chip sector is the best place to play ai. if you look at a lot of the magnificent seven stocks like meta and google and even microsoft to a certain extent, it's hard to figure out exactly how ai is impacting the bottom line profits. you switch over to the chip sector and you look at nvidia or even other competitors like amd, they are expected to double their data center revenue next year from ai. you look at marble technologies and broadcom and even intel has got some chips coming down the road in the ai space. qualcomm has smart phone ai chips they are currently marketing. i really believe that the chip space is probably the best space

to play the ai trend because we can really see those numbers trickling down into the eps. if we look at other segments in technology, it's more difficult to parse out exactly what the direct impact is from ai. sonali: a lot of people are looking at the sector and wondering whether you follow the herd. if you broaden the aperture and think about data centers, some areas that might be more undervalued, do you follow the herd or start to do some analysis on the ones that have not caught up yet? >> that's always challenging. if you look at the chip space, about one third of it is pcs and laptops, servers and smartphones. that's one of the biggest portions. another big part is memory. we know they are just starting to recover. if you look at the unit volumes and the chipmakers that make those specific chips, it's just starting to recover.

memory is still coming out of a hole with micro technology. if you look at auto and industrial, those are two segments where semiconductors are struggling. it's really -- ai has been the place to be within chips. that's been the biggest driver. as you wait for these other, more mature growth segments to start to develop, i think the hotspots are some of these companies we talk about today that have chips in ai that will be in that same market that nvidia is in.that's a hot right now. sonali: when you look at the broader macro factors like higher interest rates and potentially an economy that turns from a soft landing to something harder if we get there. what with these companies be most vulnerable to? >> you are right, this has happened in the past. we've had downturns in the economy like we did in 2008.

if you look at the price-to-book ratio, it dropped to have been three times book. we are at about 5x book right now. the chip sector is very sensitive, it is very much tied to the economy and so forth and if we were to see a downturn which would impact the cios in terms of their spending habits and building out these data centers using ai, they would start to pull back because they are worried about their own revenues. that would have a big impact on the chip sector. the chip sector is one of the most volatile sectors within technology. you just have to monitor on a quarter to quarter basis. we started in a valley in february of 2023 in terms of the socks and year-over-year sales and we been going up. this is a very sensitive sector within technology. sonali: thank you for sticking along for the ride.

>> thank you. sonali: coming up next, a shakeup at goldman sachs, one of their top women calls it quits after 30 years. we will talk about that next. this is bloomberg. ♪

sonali: this is bloomberg markets. i want to show you shares of baidu because it is spiking. that is on the heels of a report saying that i do shares should trade to $210. the shares are spiking more than 2.4% on the day. it remains the most underappreciated name in ai

despite being the clear leader in ai in china, their stock is trading at an historically low multiple. that's according to a tweet from citroen earlier this afternoon. time for the wall street beach. one of the most likely candidates to break into the all-male top-tier goldman sachs is leaving. she's calling it quits after 30 years of the bank and the woman has ever been appointed the role of chair, chief executive officer, president receive in their history. joining us now, we look at the departure of the senior executive at the bank but previously the chair of the treasury advisory committee, how big a deal as it for goldman to lose someone like her and in the context of other prominent women leaving the bank? >> all the reasons you mention, she was the longest-serving chair of tbac. she was known for her work with regulators and government bodies. she was once billed to be the

possible cfo with the bank. this is a 100 55 euros institution and it would've been a big deal. she was fostered for the rolet that time but we were told in 2021 the she is still position for greater things at the firm. it is important because there is clear recognition that goldman needs to diversify its top ranks. it's a real problem across wall street. several situations are grappling with the same issue. it's quite stark at goldman sachs when you look at the top wrong but also some desktop rung but also who they added as their next generation leaders. even there, you're not seeing the type of participation from women coming through the pipeline to the highest levels at an institution like that. sonali: we can see the men and women at goldman sachs and there were top bankers threatening to quit, one being the son of sir martin sarao, cohead of mergers

and acquisitions. what is happening among the top talent? is this a lot of posturing in goldman to become higher in the ranks? >> the posturing is throwing toys out of the crib. we already know it is translated into some action. the cohead of european investment banking has left the firm. we need to take a step back and realize what time of the year it is. we are in february and we are but a few weeks after bonus money has been paid out. there is a lot of shifting of seats and rolls across wall street. some of that happens but some of these changes can be avoidable. based on the conversations we've had with people inside goldman, to lose people of the caliber of these people could have been avoided if they had taken care of their organizational processes. sonali: we know that citadel and goldman talent has led to high

positions elsewhere. another executive moved over to sit and now citadel is now making more than $4 billion from its commodities business. is that a direct translation and does it pose a threat to goldman to see their talent moves into these positions? >> they are clearly making more money than goldman commodities. commodities trading desks across wall street and goldman was strong had been making a lot of money but when you move to the buy side and you moved to citadel a look at their performance, $4 billion and when you're but commodities performance last year was supposed to be weaker than prior years. $4 billion is a big number. $7 billion is what the flagship fund that citadel returns. that group is led by said barrett which also has a strong commodities background. something is going right at that hedge fund. sonali: a brain drain at these banks, thank you very much.

we are looking at markets near session highs them are looking at the s&p 500 roaring and the nasdaq not too far behind. that does it for bloomberg markets. this is bloomberg. ♪

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>> from the world of politics to the world of business, this is balance of power.