sonali: welcome to "bloomberg markets." i'm sonali basak. we will look at the stock rally. losing steam after a powerful rally driven by artificial intelligence. we will get a quick check on the markets. s&p 500 off of session highs for the day. still near the 5100 level. still up about .1%. that is a hefty rally as we saw just a day ago. nasdaq 100 losing steam.

down about .2%. sox semiconductor index down .8%. three threes, three indexes. hit record highs yesterday. we are seeing some of the selling pressure today. russell 2000 come again on the day. this is down on the week. the small to mid-caps not seeing the same kind of love you see in the larger indexes. we will bring you over to the equity side, some midday movers. booking holdings plunging after a disappointing forecast, travel reservations and bookings disappointing. down 9.3% on the day. palo alto shares rebounding after its worst day on record. it is up about 4.6% on the day. nvidia is the first semiconductor firm to hit a $2 trillion market cap. another milestone after blowing out earnings. it cements nvidia's position as the fourth most valuable company.

when it comes to options markets, -- of rbc says there is fear of missing out. >> a lot of the options relationships we are use to have broken down. we see some spot volatility up. this started during the meme craze when people were reaching for the upside. 12 in the pool and saying i'm ready to jump in. this is a way of expressing fomo on an institutional scale. sonali: nvidia's options interest is booming as well. they said share volume is up 25% this week among retail traders. it is down for the broader market. we will discuss what is happening with this dynamic with --, who follows the spot in options markets very carefully. it was interesting to see this kind of resurgence of the meme stock trader not really looking at memes anymore, but looking at

single stocks. how much are you seeing that interest? >> we see retail traders coming back. what is interesting is they are very concentrated. it is a reflection of the broader market. everyone super focus on the ai driven rally. everything outside of it has not been doing well. for example, around 73% of the s&p actually advanced on thursday despite the big gains in nvidia. similar things from retail traders. they are focusing on the big names. if you see the co-options volume in nvidia, we see close to the highest we have ever seen in history. this is kind of what we saw after march 2020 when retail traders were really at their peak in terms of activity in certain stocks. sonali: you wrote the story, this idea about people searching for yield, ponying up for these options income etf's with promise of 169% yields. how much interest are they

getting and how concentrated are they? >> i think it goes well with what we were talking about. those products actually focus on those big names. on nvidia, tesla. but they have a twist. the twist is generating huge income. all of those names are obviously very volatile. thanks to that, we can buy options on them and generate crazy income. some of them for 169. you don't get that income at the end of the day. this is just one of the numbers. but some of the annual numbers get to 60, 70. that is a big gain. the twist is also you may be in for big losses. if you follow tesla, and we know year to date the gains have been losses. sonali: denitsa tsekova, certainly a lot of anxiety sitting at the top of the market. potential for losses on top of the gains. we will discuss the markets even further with carly garner and abigail doolittle. when you look at the options activity, the bullishness, where

is the worry? >> at the moment, nobody seems to be worried. i am a little bit nervous. this remise me of late 2021. a similar euphoria around electric vehicles. tesla stock went parabolic and drug the market with it. and we are seeing something very similar with nvidia. i've got some red flags waving. i think people are complacent on the long side and call option buying is euphoric for my taste. abigail: talk about the short positions on nvidia and what it caused investors to do in terms of a possible gamma squeeze? has it unwound? if not, what are the implications if it does? >> it is hard to say it fitfully unwound. the bulk of it is. everyone is talking about the earnings report blew out estimates. i agree that the earnings were good. but i have seen stocks selloff sharply on better numbers. or at least relative better

numbers, we will put it. i think this was a positioning story. there are too many shorts. the shorts are trading with scared money, in my opinion. we have seen a rally from october through basically now that has ripped the heads off of a lot of the bears. and it is more prone to panic. by definition, a short squeeze. it is indicative of a trend exhaustion, something that is sustainable. abigail: maybe it helps to his plane something we have been talking about. the fact you had higher highs, record highs on a lower rsi momentum than even last year. suggesting to your point they are buying. but we see some other red flags in the nasdaq 100. if the sellers really do step up at some point with this weak buying fading away, what kind of action to the downside you see? a correction in the market?

>> the nasdaq chart, if you draw a trendline from the dot com bubble through the 2021 highs two today, it comes in around where we are now. i feel like there is a lot of resistance here. rsi, relative strength index is overbought but showing divergence on a daily, weekly, and monthly chart. a lot of science this rally is impressive, but maybe not healthy. i'm not doom and gloom, i don't think we will see anything like 2021 and 2022 with the massive correction. a healthy correction is to be cautious. sonali: we were talking about the difference here between these single stock names and the breadth of the market. how do you think about what people think about not just the names who have flown out the window? >> i follow the indices very closely. unfortunately, what it has become if you are trading the s&p 500 or nasdaq 100 futures,

you are basically trading nvidia. that is a sign of froth in unhealthy market. they will come to light like we saw in 2021. tesla has never regained its highs. nasdaq 100 barely regained its highs from late 2021. i think 2024 is going to be a positive year overall. all of the easy money has been made, and i think we will see some rough waters from here. abigail: speaking of easy money, we saw the hot cpi, ppi, pce next week. it seems traders are thinking the fed will not cut quite as quickly. they might hike in the future. that could be a real inflection point or game changer. what are you seeing? i know you love to take a look at bonds, treasuries, and yields. do you think we are going to be higher for longer at this point? >> that seems to be the consensus. markets get things wrong all the time.

and the fed gets things wrong. treasuries are very difficult trade. treasuries used to be a boring market. there used to be grabbing and picking at straws to find something to talk about. the last couple of years have been the opposite. i think we are going back to boring treasury markets where things trade logically. i don't know what the fed is going to do, the yields are relatively attractive. if you look at dividend yields versus the s&p and 10-year note. like i said, i think stocks can be frothy. if that is the case, treasuries are a good place to be. seasonal low is due in treasuries. and the chart looks good. we have pulled back almost 50% of the recent rally. it is a good time to consider playing the upside in treasuries. abigail: may be bonds higher, stocks lower, that would be class of risk off. we do have oil on the week. the u.s. did launch sanctions against russia, against 500

individuals and entities. but not against oil, metals. i'm sure you recall in 2018, aluminum went up 39% in a couple of days because of the sanctions. thoughts on the fundamentals around oil and what you would offer from a trading perspective? >> oil seems to be comfortable in the mid to low 70's. i think we are probably -- the path of least resistance is probably higher in oil. those things we talked about with oil at 100, they will probably matter at $70 a lot more than at 120, 130. the froth has been taken out. i think rallies going forward will probably be disappointing for those that remember the last couple of years. instead of 5, 10, $20 jobs, we will probably get three dollar or four dollar steady rallies. i think we will see at least 90, upwards of 100 by the end of the year. sonali: what is your favorite

trade? looking at the unloved pieces of the market, what do you think you should be flocking to? >> thank you for answering that. and natural gas is something people should stay away from. if you have the risk tolerance and financial means to do it, 1.5 years ago to one dollar 50, that is an amazing feast and famine market, boom or bust, it always has been. we have not stayed below two dollars for any long time. the seasonal low in natural gas happens to be about now. this is the time to consider playing the upside. sonali: certainly a lot of traders with a lot of stomach. carly gardner and abaco doolittle, we appreciate you bringing us the interview. warner bros. discovery having its worst intraday record following concerns over sales weaknesses. stick with us. it is our stock of the hour up next. this is bloomberg. ♪

an ever-changing landscape comes with challenges. from our vantage point, we see opportunities. as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt. our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested.

how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now. and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

sonali: this is "bloomberg markets." i'm sonali basak. it is time for stock of the hour. that is warner bros.. shares are having the biggest intraday loss since november after reported fourth quarter revenue and profits that fell short of wall street forecasts and declining tv advertisement sales. weakness also in its studios business. felix gillette covers the industry and joins me. let's start with the ad part of the equation. how hard is it for one are brothers discovery to turnaround the trajectory? >> the problem with advertising

is the cable industry is hemorrhaging viewers. the ad sales word terrible -- were terrible in the fourth quarter. tnt, tbs, cnn. that viewership especially among viewers that are younger is going to tiktok, youtube, migrating elsewhere. it is a tough market. sonali: talk about how the election cycle might impact it. >> i think they are hoping to get some bump from political spending as the election keeps heating up. the surprising thing was in addition to the decline on linear tv channels, you also had this weakness at their studios business. but that is really coming on the heels of dual strikes last year. we now see the impact of that slow down sharpen the fourth quarter numbers. they did not have a great lineup at the end of last year. the color purple lost a ton of money for them.

you look at their big franchises, where is harry potter? it is nowhere to be seen. that hurts them also. >> how do you think about the way of pivoting to the legacy business here and into the exciting stuff? he was pitching macs across the world. >> i think they were playing up today, the one silver lining is the direct to consumer streaming business was profitable on an annual basis, made about $100 million in 2023 after losing $1 billion the year before. that is good news. they also have the sports streaming service. with disney and fox, it is going to be launched sometime later this year. a lot of questions about how that will work. there is positive news there. that supported version of macs and various markets around the country, they think there could be real growth in terms of the

streaming advertising market. >> how much promise is there in sports given the big deal they have been talking about? they have been sued about this already. the price point seems interesting, if not high. >> there are so many questions about this. at the same time, the sports rights are getting more expensive. they have to renegotiate the deal with the nba. the streaming sports venture has so many different questions about it. today he said on the call it is not going to hurt their linear tv business, it is a product for people who don't have a cable package. but there's also skepticism about that. it will accelerate the decline of people who are paying for a cable and satellite tv package just to see sports. sonali: sports, cable, streaming. it feels like zavlov is fighting a war on all fronts. if someone outlines the strategic challenge for him given investors are driving his stock to an intraday low, what does he have to do to turn the

ship around? >> i think they tried to make some noise about some upcoming projects are have tom cruise, they will make his next movie, i'm sure everyone is excited about that. but they are thinking there has to be more consolidation among these legacy media conglomerates. paramount, warner bros. discovery, nbc, how are these pieces going to fit together? something has to happen because netflix is cleaning everybody's clocks. sonali: i've never seen the first "top gun," only the second. i don't know who does that. felix gillette, thank you for sticking to the business. we are going to talk about the big bank ceos with large pay hikes. but the rank-and-file workers are not seeing the same bonuses. their bonuses are quite meager. more on today's wall street beat. stick with us. this is bloomberg. ♪

>> this is "bloomberg markets. i'm sonali basak. time for the wall street beat. what is buzzing on wall street and the world of banking and finance. jp morgan ceo jamie dimon and his family selling $150 million worth of the bank stock for last year's announcement that it would begin selling shares for the first time taking the role 18 years ago. katherine doherty to talk about what is going on at the top ranks of jp morgan. why is it such of interest? >> even though the announcement was made months ago, this is the actual action of it coming through. this is the first time we have seen dimon sell the shares in his company. it is also coinciding at a time when shares are at record highs. they keep matching 1.2% surge in the shares just this afternoon.

and this continues to build on the momentum we have seen from jp morgan since they bought first republic almost a year ago. it is the action coming through, but still the company release is coming forward. he is seemingly still willing to be able to stay on and leading the company and continuing with this momentum they are really building on. but i do think that today with this 150 million dollars worth of jp morgan shares, the first sale is going to be a big deal for folks. even if they announced the intent to do so in the past. sonali: jp morgan shares up on the day. they dropped a little on the announcement. beyond jp morgan, the guy is allowed to sell some stock finally. but there are other things going on in the competition packages

of wall street leaders. talk through who had gotten large bonuses and how that compared to what the staff was seeing given the large stock awards make up so much of their conversation. >> across wall street in the industry, we were seeing tepid bonuses. mostly because of muted deals and revenue growth subsiding from what we saw in 2021 and 2022. the bank ceos, these leaders are having to steer the banks through some tumultuous moments. we have jane fraser working on the reorganization of citigroup and her pay package was boosted across the board. you are seeing almost every bank ceo get a bump in pay, except for brian moynihan at bank of america. i would say that was a 3% drop compared to last year.

roughly in line with the banks revenue, which also dropped. this was their profit, about 3% compared to a year ago. it is very much in line with the banks performance overall. sonali: it is fascinating. you saw the meager bonuses come at a time where there was a worse deal market, but deals have been coming back fast and heavy at the beginning of this year. it is bonus season. how does this sit with employees to watch ceos get paid like this and be given so much less? >> for the bank ceos and anyone getting bonuses, you are getting it now. it is reflective of the month last year. 2023 was a period of muted deals. we have seen an uptick in issuance in m&a and some ipos. that might bode well for what the new year has in store for folks to pay.

but you have to continue that momentum through the entire year in order to get the pay package, which they will not see until a year from now. >> let's hope the party keeps going. thank you and happy friday to you. that is katherine doherty. let's get a check on the markets. watching a cooling of yesterday's exuberance. some markets still in the green on the day. some feeling pain. we are watching a flat nasdaq 100 less then .1%. the s&p still up a less than .2% on the day. we were watching the two-year yield getting relief. a bit of a bid in the bond market. it is interesting flying past 471 yesterday. now back down about three or so basis points the day. but again, we have some critical economic data coming up next week. the 10 year yield hanging around 420 five. six basis points of a change.

a little bit of relief for the bond market after a bullish day in equities. i am sonali basak. that does it for "bloomberg markets." a lot more coverage coming up on a historic week in markets. this is bloomberg.

when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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