>> the overall market is still ok. >> the fed is more likely to simply remain on the sidelines rather than re-engaging in further rate hikes. >> the longer the policy rates stay elevated the more it will bite into the economy. >> the fed is locked and loaded. if there is a meaningful story on growth i think they will cut rates. >> the market was pricing and seven rate cuts a month ago.

now looking at none to one. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: live from new york city, good morning, good morning. for our audience worldwide, this is bloomberg surveillance with lisa abramowicz and annmarie hordern, i am jonathan ferro. we got to begin with this name. apple. the latest reporting from our colleagues at bloomberg. "apple canceling a decade-long effort to build an electric car." lisa: a decade ago it was building a car would be the next vr headset, the next artificial reality-type of experience. it turns out it is a bad business to build cars. it's a good business to say we have something with ai in whatever form it is and it will transform your life. that will gain more traction. jonathan: there is information what they're moving away from, moving into, and how the market

responded. the stock rallied which tells you everything you need to know. apple imagined the car being priced around 100 k but executives were concerned about a vehicle providing that profit margins apple typically enjoys on its products. this is a clear message. we thought this would be a high-margin business. it's not going to be, so it's not one we want to be a part of. lisa: who is the poster child to learn from? elon musk. he says this is a tech company and everyone else says, are you? building cars is not an easy business and he is learning that the hard way. jonathan: one was a salute and one was a cigarette. he is feeling good about their decision. annmarie: this goes into the narrative about the ev market. the demand is not there for the cars apple is trying to build. domestic ev sales will decelerate to 11% and we are supposed to be close to 50% growth. we are seeing it from gm, mercedes, these companies having

to backtrack. jonathan: a big message from california to michigan. we need to talk about the primary results. biden 81 point 1%, uncommitted 13.3%. annmarie: more than 100,000 voters. more than 100,000 people came out to protest a vote. this will be the issue going into the general election. how many of those who came out for a message, including the representative of his own party in congress, came out for the protest vote. how many can the campaign make sure votes for biden in november and not stay home. we are saying that they are trump voters but when you have tight margins, and remember 2016, 10,700 votes was the margin that trump took michigan and that is how he won the election. they don't want to repeat. they have a lot more work to do. lisa: now we have nine more months of this. it feels like we are in the

general election. now we can be parsing the nuances of the people who are protesting the moment that they can't avoid. that is where i feel like we are at. when obama was running i think that he got something like 10% of the votes being noncommitted. there is some corollary here to people likely to protest with their votes. jonathan: are you committed to election coverage? lisa: because things need to get done and i'm frustrated we are not talking about those things. i will get off of my soapbox now. as a journalist we will have a long stretch. jonathan: another nine months of bramo getting upset with washington, d.c. the s&p pulling back a touch negative by zero point 4% on . yields are lower down a basis point, 4.2895 on the 10-year. the dollar stronger, 1.08 on that currency pair. companies belong past earnings

estimates. kim wallace, hopes a government shutdown could be avoided. and street research as apple drops plans for ev's to gain ground in ai. our top story, wrapping up earnings s&p 500 companies are headed towards their highest quarterly rate since the end of 2021. it is not all about the mag seven, writing, we see headwinds for the group from both our "brave new world regime and from a goldilocks including soft dollar outcome in 2024. overall, this suggests a more selective approach to mag seven allocation can you talk to us about the dispersion, the group of names that has dominated the equity markets over the last 12 months? >> sure. it has been a volatile journey for mag seven. we forget that super aggressive returns last year. this year on average we are

seeing strong performance from mag seven. the remainder plus 2% only. within that we are seeing the fragmentation. stocks on average up 40%. that fragmentation is coming through related to themes. ai you have mentioned. it is also related to earnings delivery. earnings momentum working, the maddox working, but the fragmentation is even during the group. lisa: sports, ai, and the metaverse encapsulates what we have seen this year. you leave it -- lean into the leadership or say now we need to normalize beyond the magnificent 7 because the dispersion suggests tiredness by investors? that conclusion came out of our

work last year. looking at valuation, balance sheets, earnings growth momentum to see which themes had the best mix combination. ai, metaverse, and sports, gaming etc., were in the top seven themes and they performed pretty well this year. one of the snacks for the group and the u.s. market is that we have got over the last two or three years has been sell signals for investors. valuation and u.s. market is back to 21 times 12 months forward, it is only been hired twice in 50 years when we have had liquidity bubbles. second, the technicals are pretty heavy right now. if we follow the playbook over the last two or three years we have taken some risk off of the table and taken some risk out of the mag7 as well. lisa: and put it into european banks? jonathan s,: european banks are

interesting because they are not long ai in the same way that some u.s. tech giants are, but they do trade on six times earnings. so you go from one extreme to the other. there is little priced into european banks. all they need is to retain capital, which they are doing a some of the big tech companies are in the u.s., and they need the european economy to have an improvement out of the sort of stagnation technical recession we have now. we think that european banks did all right this year. for balance, you want to be selective in u.s. tech and european banks if you are running a global portfolio. jonathan: the bar is low for european banks in 2024. we have all-time highs in germany, japan and the last week or so. what does leadership look like in those countries? jonathan s.: leadership the world over has been pretty narrow, pretty narrow in terms of size.

that is a phenomenon where we are seeing a replicated in real economies where we are seeing very strong commitment from government spending supporting growth, but then the tale of the market, looking at small businesses surveys around the world, they suggest we are in recessionary territory. this polarization in leadership and equity markets has been reflected in the real economy. in europe this year, the rest of the world as well, look at the best factors year to date, strong balance sheets and strong momentum. investors are running the same trades that worked well last year and balance sheet quality has become a big thing which is one eye on the very real serious risks that we can see around us, which are political and geopolitical in nature. the markets are being sensible and putting more weight on balance sheet quality. that is what is working so far this year. we would continue to run that balance sheet factors through the rest of the year. jonathan: it's interesting you

suggest taking the hedge from the equity market and not another asset class. is that what you're hearing when you talk to clients? jonathan s.: on a blank sheet of paper, a full asset class, the asset allocation framework has a 25% weight on what i call my liquidity hedge, 25 percent weight on combination of cash, gold, and bitcoin. that is a high hedge but appropriate at this point of time is a mix of assets which is meant to not be correlated with risk assets themselves. if you can only invest in the equity market, we have strategies for that. one is a systematic strategy with buyback momentum and overlays various factors like quality and valuation. with the buyback strategy does is gets you into the companies that are in the habit of likely continuing to buy back shares which gives you liquidity support and a growth advantage. i want to belong liquidity and long growth and running systematic buyback strategy in the u.s. and europe. i think it's pretty sensible and we write reports on that and

screens to clients on that basis. lisa: government bonds, is this the era where 60%-40% doesn't work and that is not a diversifier? jonathan s.: i read about that and i said 60-40 is inappropriate in a post-covid world where inflation is something that investors have to consider more seriously. i have been there and i'm still there in my asset allocation framework that reflects that. one aspect is that the u.s. equity market has added 30 trillion dollars of market cap since 30 trillion. that is the same net increase in u.s. monetary and fiscal support since then. if you add the central bank balance sheet expansion and the increase in that come you see the $30 trillion delta. that is the same increase of the u.s. equity market in terms of market cap terms over that time span. what happens next is a mixture of how much more support we get through the u.s. channel. that is heading aggressively

higher in terms of multi-trillions of dollars and the impact on u.s. risk premium on the dollar, on interest rates, and on the ability of the u.s. economy to generate reasonable growth. that is where the debate is. 60-40 for me is done and we need to be more nimble. i am carrying a pretty heavy hedge against various event risks around the world. lisa: you're talking about how ai and metaverse has controlled the narrative intact. does apple qualify for that bucket now that they've gotten out of their car excursion? jonathan s.: the way that we do this is we look at companies with their existing exposures rather than future exposures. certain companies can accelerate the shift from not having exposure to not having exposure -- from not having exposure to having exposure. those companies that have high ai exposures live will be in those baskets and that is where we calculate our analysis on. jonathan: i remember a few years ago when having an ev plan was

bullish. now, not having one is bullish. have you noticed how that has changed in a couple of years? lisa: i'm old enough to remember when they put bitcoin in the release and overstock rallies and they talked about the different chains of command and the way that they used blockchain and that was it. overstock was a bitcoin stock. jonathan: i want to squeeze in one further question. look at the performance of the last 12 months, you talked about performance over the last 16 years. the last 12 months, nvidia is up, microsoft with a gain of something like 63 or 64 percent higher. for the people who have missed this equity rally who were told over the last two months that this market was priced for perfection and carried on rallying, what are you telling those people to do now? jonathan s.: it is a very important question. we see many investors who may have had three or four the mag7 stocks last year, but that wasn't enough. if you didn't have all seven

your benchmarking against the market and behind the curve from the get-go. there is a very real challenge for investors and that's why think that there's a lot of price momentum strategies which are continuing to win. we think to take a step back and look at valuation and market risks and to run real time today, and every day, strategies that make sense. when we combine earnings momentum and recover with quality and valuation factors, we get some mag7 stocks, not all of them. we get stocks from the rest of the market. we think that balanced approach to investing real time today given the risks is better than closing your eyes and just buying these seven companies. jonathan: thank you, sir. equities are negative by one third on the s&p. stories elsewhere, your bloomberg brief. dani: deutsche bank staff are pushing back after they were told to come back into the office more often. they were told to ask ago they had to be in at least three days a week. that would start in june.

the policy allowed for many employees to work from home as much as 60% of the time. the ceo and coo are now planning renewed talks with labor representatives. lawyers for ftx co-founder sam bankman-fried proposed he serves no more than 6.5 years in prison and pay no financial penalty for the fraud that brought down the crypto exchange. bankman-fried is facing a sentence as long as 20 years for the most serious charges. a court filing sites his charitable work and letters from psychiatrists, including an autism expert. prosecutors have until march 15 to respond before his sentencing . a series of wildfires have ravaged the texas panhandle. governor abbott issued a disaster declaration for 60 counties. residents have been ordered to evacuate or shelter-in-place. a nuclear weapons facility has been forced to shut down. that is your bloomberg brief. jonathan: next, making progress in washington.

>> do you believe we can get to an agreement on these issues and prevent a government shutdown. that is our first responsibility. >> a productive meeting on the government shutdown. we are making good progress. jonathan: they're making good progress, apparently. that conversation is next. live from new york city this morning, good morning. ♪

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jonathan: live from yields are lower by single basis point. from surveillance this morning, progress in washington. >> are very optimistic. i hope that the other leaders told you the same. we hope that we can get to agreement on these issues and prevent a government shutdown,

and that is our first responsibility. >> it was a productive, intense meeting. productive meeting on the government shutdown. we are making good progress. jonathan: speaker mike johnson willing to kick the can down the road pushing government funding deadlines to march 8 and 22nd according to fundable news. congressional leaders expressing optimism that a shutdown will be avoided after yesterday's meeting with joe biden. lawmakers remain far apart when it comes to international aid and border talks. kim wallace at 22 research joins us now for more. tell me why you believe we cannot avoid the government shutdown. kim: it is in the interest of the vast majority of members of congress. shutdowns are not a good campaign theme. annmarie: when it comes to moving the dates for the shutdowns, fundable news says johnson was only willing if he had an agreement with democrats on the four bills.

do you see an agreement before friday? kim: that is difficult, but possible. the appropriators have been working on routine fy 24 spending bills for the better part of three months and know each other very well. they would prefer to pass all 12 of the bills and do so behind the scenes and not with the drama. my guess is if they are given another week or two they will be able to get it done. the issue of course will be the so-called writers, the public statements of politics. annmarie: what are republicans willing to give up when it comes to the policy writers? kim: nothing until the very end. both sides are starting from the absolutes. democrats don't want any writers. republicans have a long list of them. behind the scenes there is another force that people don't talk enough about, $7 billion in earmarks for members of congress. almost 100 members of the 535 of them do not have an earmark at stake.

my guess is that they will be able to figure out the appropriations come avoid shutdowns, get the earmarks, and campaign. annmarie: the issue becomes foreign aid and the border. president biden and former president trump are due at the border tomorrow. you think biden will have to make an executive action when it comes to assuring outmigration? -- to shoring up migration? kim: executive action is not is what is needed for border policy. both northern but particularly southern border policy in the u.s., we have a multi-decade process that has resulted in a dysfunctional system that doesn't work for many people, especially u.s. citizens. we have a lot of folks in our country who shouldn't be here. not tracked largely because of ineffectual immigration policies over decades, not the last two to three years. lisa: do think speaker johnson is regretting being in that role? kim:[laughter]

if he is not he soon will be. my sense is that he has had some remorse. it is not a bad gig, but he is in a pressure cooker every day with no easy answers on anything. he has the outside force of a presidential candidate attempting to steer his legislative agenda, usually against the interests of most members. from a strategic standpoint donald trump is not known to think of other people's interests and that is showing up in his legislative advice. immigration is a good example. public opinion shows that it is the number one topic. they have achieved that goal but they had a comprehensive bill bipartisan from the senate that they turned down because former president trump didn't want them to bring it up. it is a tough place to begin. it will have to be legislation. if we move on immigration policy in the u.s. it is only through legislation. lisa: what is interesting to me is that even though you talk

about former president trump and how he goes ahead regardless of dissent among other republicans, you see people get in line more than they did six years ago or eight years ago. even mitch mcconnell kind of deferring or walking away from being too critical of the former president. how much do you think they are taking their cues from donald trump rather than going rogue quietly? kim: it is a mix of both but over the last eight years donald trump has been a strong influence in the republican base, people who line up and vote for republicans. most members of congress who caucus in republican circles cannot afford to write off that base. so they have a very difficult balancing game politically. some of them agree with the president of most of his policies, so it's a mix of necessity and politics. that gets the majority of republicans in the house and senate not wanting to upset the former president.

jonathan: can you tell us what you thought of the results of michigan for president biden? kim: i think that the uncommitted side sent a strong message to the president about his policies in the middle east. no question about that. at the same time he came out the victor. this conversation is going to be an element in the election until we no longer have a war in that region or no longer have a presidential election in front of us. i think the addition of the cia director burns at the top of the meeting among leaders yesterday gives you a strong sense of how serious the white house is about aids ukraine. jonathan: kim wallace, on a range of topics. the last one, michigan. it feels like a protest vote in a primary. does it translate to difficulties at the national level in nine months? annmarie: can biden make sure that these individuals vote? they aren't going to vote for

trump but they could stay home. when you look at such slim margins in a swing state like michigan, it goes to show that they made a huge push to bring across their protest. now the campaign needs to explain what they are going to do. i think it is why biden said that when he was in new york yesterday, why he made that comment to the press saying, maybe one day we will get a deal on the cease-fire. lisa: there is a question about how much this speaks to a younger crowd. dissatisfaction with the election overall. who is going to stay home among the younger generation? a lot of polls point to a disenfranchised kind of feeling. jonathan: isn't that why he was eating ice cream, trying to talk to the younger audience? the president likes ice cream, too. lisa: the handlers need to get a handle on the message. annmarie: i want to bring up one point. trump came in at 68.2%, haley at

26.5 percent. there is a caucus to shore up the rest of the delegates. we know he will get the nomination. he has not broke 70% and he is running as a quasi-incumbent. it shows that he has general election issues. jonathan: transition from glucose intake to the former president. annmarie: he should watch his glucose intake too. he is known to eat fast food. lisa: it was 61 degrees yesterday and washington, d.c., why did they have a roaring fire in a room where they were all wearing suits. annmarie: you go to the oval office you have to dress up. i did not check hakeem jeffrie'' shoes. i know that bill burns definitely were dress shoes. jonathan: next, real news. apple putting the brakes on the decade-long effort to build an electric car. pierre ferragu joins us next. ♪

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what about zocdoc? zocdoc? dr. castell has a great bedside manner. so many options. but dr. xichun will take your sketchy insurance. xi-chun! xi-chun, xi-chun, xi-chun! thanks, bro! you've got more options than you know. book now. jonathan: equities are down .3% on the s&p 500, .4 percent on the nasdaq. small caps, negative zero point seven. it is already catch-up almost two months into the year and we have up raids from barclays, ups, and goldman. we will talk about those calls later in the program. oh by 6.5% so far in 2020 four. they told us that we were priced for perfection.

what are we priced for now? a two year yield of 4.67 67. yields down a basis or two. we had a ton of supply come out of treasury this week. it wasn't stellar or amazing, but it was all right. lisa: it came out better than the two-year and five-year option, the seven-year option better than expected. there has been a repricing and it's important to know that the market has come to the fed's view of three rate cuts and your seeing inflation expectations creep up over the next couple of years. what i keep wondering, and i'm excited to hear kaminski later in the program, a completely different message in stocks. jonathan: is the short signal building in the treasury market? let's finish on foreign exchange. i want to talk about one currency pair, the kiwi against the u.s. dollar. core inflation in most measures of inflation expectation have declined and the risk outlook

has become more balanced. that is the reserve bank voluntary policy in new zealand, that is a weaker kiwi. lisa: the key we had been outperforming because some people were expecting a hike at this meeting. it was expected to be a hawkish meeting even with the 5.5% benchmark rate in new zealand. that they came out with a dovish expectations message tells you may believe entered the easing cycle that will have to reverse. jonathan: that is the latest, the excitement in foreign exchange, a slightly stronger dollar against the bulk of g10, much stronger against the kiwi. president biden and donald trump cruising to victory in their party's primaries in michigan. former president trump sweeping primary and caucus contests out of super tuesday next week. president biden facing opposition from his party in the swing state with over 13% of voters were so-called uncommitted cast in protest of biden's handling of the israel-hamas war.

michigan is one of the highest representations of arab-americans in the country. this is going to translate to the national stage, the president has a problem. annmarie: he has more work to do in michigan and we have seen in our polling, not just arab-americans but gen z, more prolific, we see biden lose votes with rank-and-file when it comes to the unions. the campaign needs to get out of michigan. in 2016 trump won and biden was able to win in 2020. small voting blocs are critical in swing states. jonathan: former president donald trump, he had a big influence on the fate of the border agreement that didn't happen in washington, d.c. trying to figure out how much influence he has over the speaker on current issues, a to ukraine and israel, the potential for a government shutdown. how much influence does he have?

annmarie: he has a lot of influence because he has a lot of influence with a hard right flank of the republican party and those individuals have a tremendous amount of influence on whether speaker johnson keeps his job or not. that is where the influence is. for trump the bigger issue is the border.now it has become top of mind for american voters, right with the economy. the monmouth university poll is putting at seven out of 10 voters say this is their number one issue. he and biden are going to the border tomorrow. he has gotten what he wanted out of congress, to make immigration a top issue. jonathan: let's talk about policy, state to state. jamie diamond praising texas in light of a light regulatory touch. j.p. morgan ceo criticized some new york elect officials as being antibusiness and he said that they were the reason amazon chose not to build a second headquarters here. jp morgan's workforce in texas surpassed 30,000 in recent years and new york's total slipped to less than 29 k. was this a jab at the governor or mayor? it sounded like it was directed

at aoc. based on what he said i think that a lot of people might agree with him. lisa: i think a lot of people are moving with their feet. maybe not as much as people thought when it came to the pandemic but you see on the margins the fact that you have more employees for jp morgan indexes to the new york tells you a lot. what i'm wondering is is this something that is addressable with respect to tax rates and policies at a time when there's a cost structure that is unsustainable at the moment and a deficit in new york? jonathan: they are one of the biggest private employers in manhattan. i heard a story a long time ago about how the former mayor, de blasio, never met with some of the ceos of these financial institutions. being antibusiness was a badge of honor for the democrats and some of the people running the city. it is just absolutely remarkable considering what we are coming out of in the pandemic, trying to get people to come back into the city to work. lisa: it goes to the

conversation of anger sells. a lot of people see wealthy people with the division of poor people and say that wealthy people need to pay their share. that has been the message of the progressive flank. what is interesting is how the progressive flank and hard right flank are converging in certain capacities. not necessarily with respect to taxes but certain business policies like tariffs. it is a jumble right now as we face off with a very different political sphere. annmarie: this mayor, eric adams, is courting the business community. he wants all of the high-rises filled, everyone back to work. he says it's a huge issue because it's not just everyone getting back to work using the mta and the subways and buses, like lisa and i, but to make sure that the shops are visited and going to lunches, etc. when you look down the avenues in new york you have real estate that is empty. jonathan: all the way down to cran central -- grand central.

the hotels that close never reopened. midtown west built up and a lot of things moved there. you drive there or walk and you will find things are pretty busy. langston avenue and other places, it has been a problem that predates the pandemic in many places. the blocks that are boarded up with no stores has been a problem for a while. lisa: across the street from us the entire front with the buildings is empty at storefront level. this is a more structural shift with respect to real estate owners and what they are willing to recognize and some of their statements as either tax losses or what rent they are able to charge. jonathan: let's turn to apple. there in thing a decades long effort to make an electric vehicle. looking to make ground in the race for ai. executive stopped nearly 2000 employees working on the project and they will be shifted to an ai division. generative ai is a growing priority as they compete to leave the industry.

covering apple with a neutral rating and $175,000 price target . the first question for you is what was the message that cupertino, california sent to detroit, michigan yesterday? >> good question. i guess it is like, good luck, guys. right? they tried hard and came to the conclusion that they can't make a sustainable good business doing cars. it doesn't mean that apple is not good at doing cars but the marketplace is very tough. i think that the latter makes sense. they pushed the bar very high and now the chinese are coming in and filling the void. jonathan: would you think that this will be in the future? do you think that this will ultimately end up being, and do

we descend into, some because i state-sponsored national winners from region to region in america, europe, china because we don't want to compete with each other because we know what the fate of the auto industry will be if we do? pierre: yeah, i think if you look back at the history of the car industry, the car industry has already been subsidized for decades. the reason is a lot of work for local employees. governments in the west have been protecting car manufacturers from the japanese for almost 40 years.. i think is going to continue for sure. you know where i come from. i used to cover smartphone manufacturers.

you have tesla competing with the best chinese players and it will be hard to make a living outside of these two in the industry. i think they're going to be supported by local forces to survive. lisa: the initial response and apple shares after this came out was a rally because people were may be relieved that they were moving on from something that never seemed to come to the fore. does this make you more optimistic about apples valuation going forward as they start to offset some fears about the lack of ai discussion and invest more there? pierre: the element of positive surprise, positive news here. it means they are going to participate in the $2 trillion market, but no one was super convinced that apple could do such a great job.

the news here is that apple has not lost their mojo. they do things perfect or they don't do them. i think them giving up on cars means that apple still has very positive. is that changing my view on the stock? not really. as a project the car initiative was a drop in the ocean in terms of capital and resources invested in risks taken because apple is a large business. the positive thing that happened is great products. will apple break away from where they are now where it's difficult to find growth drivers to drive revenues? is it going to be the vision pro ? it's still a long shot.

is it going to be a car? definitely not. we are facing a situation where apple isn't a high-growth business and valuation is a bit of a challenge in the circumstances. lisa: we talk about ai as if it was a model f. who would apple be competing within their ai effort? google? meta? pierre: apple is looking at generative ai changing what they do more than anything else. so, when they do ai they have to guess a proposition to users on their devices. to do that to make sure they don't lose their opportunity to have a share around consumers my

direct revenues. they are going to continue to compete against apple. generative ai, google does amazing things with the pixel phone becoming an amazing phone thanks to generative ai. if apple stays behind they are at risk so that is where the company is. they need to invest like everyone else, because we don't know what generative ai is going to be. what generative ai is going to be is, we don't know the next models are going to do. you have to go into that race and invest a lot and make sure when ai starts changing our user experience apple's not out again because they are going to have to compete against everybody. everyone is going to be able to eat their lunch. annmarie: how much damage has

google done with their gemini image failures? pierre: it is hard to say. it is a lot, because chatgpt created a surprise 18 months ago. three months ago google managed to come back and announce with a lot of noise the gemini model. now, the model is really creating very, very bad vibes. it doesn't make people feel like google is on top of the technology. they haven't demonstrated that they have an organization that's able to bring to market the large complex ai model that is more or less controlled. i don't think the consumers really care at that stage, but, you know, if everyone is using google search today it is because that's the best search engine and it was the best to be

available at that level of performance early on. it took years to be able to be in the marketplace. the big race is while they are trying to figure out how do you bring to the market a product like gemini without -- it is a question of striking right balance between the model not being what it is today, afraid of showing a wide history figure wide, and being careful not to create harmful content. while it is struggling with that, the risk is microsoft and openai keeps making progress. jonathan: wonderful to get your thoughts on the apple story. the stock of apple is slightly positive this morning. google, alphabet, negative by .5%. elsewhere, here is dani burger. dani: unitedhealth is facing an

antitrust probe by the doj over their acquisition of health care providers and data companies. unitedhealth is the largest u.s. health insurer. them and the justice department declined to comment. shares are up in the premarket and posted strong results for the holiday quarter adding $2 billion to the stock buyback program. fourth quarter was $1.07 a share beating analyst estimates. they have been losing share to amazon and walmart. last month they announced 1000 job cuts. beyond meat is surging in the premarket up 50 5%. fourth quarter sales beat expectations internationally and in the u.s.. the ceo ethan brown said the company will work towards profitability in 2024, doing things like reducing operating expenses, adjusting prices, and releasing a new, healthier, beyond berger. jonathan: markets falling in line with the fed's view. >> a market that was pricing and

seven to little over a month ago might be looking at none to one. jonathan: what a change in two months. down 11 31 percent. this is bloomberg -- down .3%. this is bloomberg. ♪

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it's waiting for you. mere minutes away. the future is nothing but power and it's all yours. the all new godaddy airo. get your business online in minutes with the power of ai. jonathan: the bond market is shaping up as follows, down two basis points on the 10-year, four point 281 six. markets are falling in line with the fed's view. >> you're looking at potentially being in the high two's possibly low three's through the end of the summer with inflation. if that is what is going to happen, i cannot see the fed declaring victory and cutting rates. a market that was pricing in seven rate cuts a little over a month ago might be looking at

none to one before the end of the year. jonathan: the bond traders no longer see more than 150 basis points of cuts predicted earlier this year with markets pricing and closer to the fed consensus of 75 basis points. "the soft landing is underway. we expect growth to moderate in the first half of 2024 from the second half of 2023's faster than anticipated growth. we expect the fed to have data in hand and that would allow it to cut rates in june." constance, capitulation for the market is not just driven by fed guidance but reinforced by economic data. an inflection point is difficult to distinguish between noise and signal. what is the signal in the data over the last two months? constance: what we had was the january jobs number which i think is what kicked off the

readjustment in market expectations. the fed had begun to speak, had begun to talk about the balanced risks. at the end of 2023 we saw a narrowing of the breath of hiring within the labor market. i think the people were little surprised by the january number. very unwise to judge your entire view by one number. jobs are lagging at best. often a lagging indicator. when we add may be january was the weather but we see a downward trend, we need to see more data to understand what was going on with january. then you layer on the inflation data. there was an upside surprise and oer and we had a wrinkle yesterday sending out an email on our team, our inflation guru who is responsible for our inflation forecasting, that

said that they increased the waiting for single-family over multifamily that may have contributed to the upside surprise. it will be interesting to see what happens with pce today. the bottom line, is even if we get .3% month over month on pce today we expect pce to move down to 2.1% by may. the fed will have the data. it is likely that they will begin to cut in june. lisa: there was a chart from bespoke investment group that stuns me. it showed that the total cumulative easing even with moving sideways the past three months, the total cumulative easing in the u.s. over the past four months ranks as one of the most significant periods of relaxing financial conditions since 1982. how much is the promise of rate cuts moving against the fed's goal of 2% inflation and really putting the goalpost later in the year? constance: great question.

for households i don't think that they are fearing that easing. if you look at mortgage rates they are at historic wide spreads over the 10-year. that is because we have the inverted yield curve and the prepayment risk is high. if you look at credit card rates , those are higher. if you look at auto financing rates, they are coming down slightly but still pretty high. for wall street, you see an easing of some conditions. obviously, the higher stock market helps with wealth effect on the overall impact financial conditions. for main street, you're still seeing a pension. lisa: how long do rates stay at this level before a soft landing looks less likely? constance: this is where the data becomes interesting and were focusing on the february jobs report is going to be widely picked over. we have a scrubbing mechanism that we do over earnings reports

and we look at intentions to hire and intentions to fire. what we are seeing for the first time is that intentions to hire are falling and intentions to fire are rising. that is being made up for in smaller companies. we still have a record number on new business formation that have the intention to hire people. large listed companies, people are moving out of those and getting jobs elsewhere in the economy. but that is a worrisome sign because you're going to start to see weaker and weaker jobs. jonathan: do think the bigger risk is holding too long? constance: i agree with most of the fed officials who said that the risks are balanced? they were not balanced before. they started saying that i think the risks are balanced between weakness on the real economy side and evidenced by jobs data

and inflation possibly not coming down as fast as people hoped. jonathan: they seem to be worried that maybe the progress that we've made with disinflationary trends over the past six months it might be due to one-off factors. you seem to have more confidence back to two percent. what about the disinflationary trends over the past six or so months, constance, from your perspective? constance: we dig into all of the details. there are certain things that each month, one thing will move higher, whether that is medical costs, or that his insurance costs. one of the things that we are pretty sure of is that the housing component is going to start to moderate. we see that in the rent data. we have that disconnect and when that shows up in the cpi and pce and real-time in the market. that is going to be a significant driver. in addition we expect goods

prices to remain soft. there has been some verbalized concern that perhaps the stock prices want to continue and if that doesn't continue that would be problematic for june. jonathan: tomorrow morning 8:30 eastern, the pce deflator, the fed's preferred gauge of disinflation. we will leave it there. constance hunter of macro policy perspectives. back to governor waller, what is the rush? there's a little bit of confidence about the glide path back to 2% but at the moment the economic data that we've had this year, what is the rush? lisa: we heard the same from fed governor bowman saying that the data suggests slower progress bringing inflation down to the 2% target. did you see the page of the fed speakers this week? it looked like the maps of the presidents, the 50 presidents, that used to have that you would have to memorize them. jonathan: is that what you had to do?

scarred. coming up, kaylee kaminski, michael sheppard, and the qualcomm ceo. this is bloomberg. ♪

>> the overall market is still ok. the economy is still ok. >> the fed is more likely to remain on the sidelines rather than reengage in hikes. >> as long as rates remain elevated the more they will bite into the economy. >> the fed is locked and loaded. >> the market was pricing and

seven rate cuts a little over a month ago and might be looking at none to one. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: absolutely nailing it. the second hour of bloomberg surveillance begins now. live from new york city, good morning, good morning. for our audience worldwide this is bloomberg surveillance. the equity market is negative five .3% on the s&p 500, total capitulation started pricing six to seven interest rate cuts for 2024. the dot plot at the federal reserve something closer to three. we have come all the way down to the federal reserve. lisa: even though you have gotten capitulation in the bond market, there has been no change in the stock market. if we eat out again this year -- eek out a gain this week it will be the first time this happened going back to the 1970's. when our stocks going to wake up

to whatever bonds seem to be realizing? jonathan: you nailed it too. it's not how quickly the spread closed, it was less than two months, it is what didn't happen. stocks are elevated, and we are starting to see, annmarie, consumer confidence pick up again. annmarie: consumer confidence picking up slightly though yesterday we saw concern in the data in terms of how people are feeling about their own financial and their family's financial situation and the labor market. dana peterson on the show yesterday came out in a statement yesterday that they are more concerned about the stte situation than the political environment. hunter hit on this, that intentions for hiring are falling and firing are rising. if you start to see consumers feeling concerned about the labor market they aren't going to spend as much and that is a problem for the administration that loves to say that

unemployment has been under 4% for two years. jonathan: we often say on this program that the most important payrolls report since the last one until the next one. this one really is, because for a lot of people the january data, how much weight do we put on it, can we ignore it, is it in-line with the trend over the last six months? if you get a repeat of january we double down and reinforce what we heard at the start of the year, you have a different conversation that emerges about where we are going with fed policy. lisa: would stocks selloff? would that be a black hole in the bond market? are we in isolation of everything in the equity market? you said this morning with the highest quarterly beat rate going back to 2021. you start talking about that. if they're cutting people maybe they are saving costs and margins are going up? bumble overnight cutting a number of staff. jonathan: this one question, how many months like january do you

need to reintroduce the conversation about more hikes of the fed and inject some doubt into the committee that they haven't done enough? lisa: good question. without inflation picking up more materially i don't think that ring induced -- re-introduces that question. if you get the ongoing core pce coming in tomorrow hotter than expected, which it probably will based on ppi and cpi, do you start to have more of a conversation about a reheating? this is not a fed committee that wants to raise rates further. jonathan: just a thought exercise from a bramo, what would be more interesting to discuss, cuts into a general election or hikes into a general election? lisa: more interesting to talk about hikes into a general election, but i don't think that it will happen. we will talk about when will this bite in a more material way? is this the neutral rate? are we at it? that will be the big question at a time when the dynamism keeps

dynamising. annmarie: he said the fed has not enough and they don't need the hike, but i wonder if jay powell came out too soon on the 60 minutes interview. it felt like he was trying to shore up the american people, their confidence on what he needs to cut rates. this isn't political. the data shows that we will have this potential soft landing. did he have that interview too soon if cuts will be pushed down the line? jonathan: was he dynamising as well? love it. foreign-exchange, the dollar stronger today against the g10. coming up on the program, katie kaminski on why signals are building. and qualcomm on the latest and then spent in ai. and mark mccormack on why he is bearish for the u.s. dollar.

bond traders are aligning with the federal reserve pricing and three rate cuts this year after looking for as many as six are seven last month. katie kaminski writing, short signals in bonds continue to grow as the fixed income markets price in the potential for stickier inflation data continuing and further delays in rate cuts. katie joins us now. we have the same question, have you turned short treasuries over again? katie: yes. jonathan: you have to tell us why. katie: if you look at what has happened in the bond market, it looks like the market got ahead of itself. it said that this is over, let's throw in the towel, rates are going to go lower, it is time to buy yields. what happened is we are not there yet and we have seen a very strong movement in yields upward again, which is consistent with the idea that the market went too far and got too excited and we have come

back to a short positioning in fixed income because the moves have been pretty strong and we are trying to figure out what is the equilibrium rate in that environment for hire for longer? jonathan: can we draw a distinction between the conversation for the front end and the longer end of the curve? barclays is asking the right question with regard to what will stop yields from going higher? we have to ask, how much more easing can you price out of the first end of the curve? 4.1% through the lows of last month through 4.70 this month. how much juice is still to squeeze? katie: i think the opportunity is still further out in the sense that there is a lot more leeway on the long end of the curve and on supply and demand in the bond market. i also think that the question you have to ask yourself is, if rates are higher for longer, what is the curve shape that makes sense? if it is a state where yields

need to be higher for longer, maybe we need a premium for longer term debt that has to be more desirable to get there? lisa: why do you say the bonds and stocks are sending divergent signals if they're rallying on the heels of stronger data that's causing the selloff in bonds? katie: the thing is weird about that is if you look at fixed income usually it has been focused on inflation in the same direction as stocks. stocks have been relatively resilient in the face of the fact that data is consistent with stickier inflation. that suggests that the bond market is pricing in higher rates for longer finally. the stock market hasn't moved on that particular realization in the bond market. that is why this week is so interesting. it is going to give us more data to see if the stock market reacts to an upside tick in inflation risk. lisa: we have been talking about

the russell 2000 but on some days people look for bargains. is there another area that needs to be the first to fall in response to higher rates for longer? katie: the magnificent seven and large tech stocks. if you see some sort of wavering in that particular sector, that is going to have a big effect on confidence. you are going to have to watch other sectors, like the commodity sector, as a leading indicator to that reaction. i think that is why people have been concerned about energies this month because it is something that could come onto the radar for inputs to the cpi and economic data that people are watching. jonathan: can we sit on the diminishing rate sensitivity of the equity market for one bit longer? do you think because of this it opens the door to even higher yields? we were talking to socgen about this in the last week or so that

treasury selloffs are usually self-limiting because they cause enough pain somewhere that the rally returns, the bid comes back. given the absence of pain over the past two months off the back of a big repricing of the first end of the curve, happily opened to much higher yields with that in mind? katie: this is something that i think, this is a good question because few people are willing to worry about that. if we had a scenario where we had much higher yields on the long end, that would be a situation where you lost the bond market in some sense. people haven't really thought about that as a risk because they are assuming that there is no chance that we will have hikes again. i think that it's a low probability, but is good to consider extreme scenarios like that, which would be more difficult for the markets and would have a bigger impact on equities than now. jonathan: it is a great thought exercise that we played with for

a couple minutes at the top of the hour. let's play with it for longer. how many months of january-like data would it take to inject uncertainty around the federal reserve's conviction that they are sufficiently restrictive? how many months of january would we need? katie: i think we need a lot of months. we remember how long it took to say that inflation was transitory and how long we waited to act. on the upside i think that there is some asymmetry in the sense that there is less demand for that type of hiking cycle. they have to see pretty extreme reversion in upside risk to inflation and it would have to persist and be dangerous enough to cause central bankers to react. i think that that is a low probability event but is something that you can't ignore considering that inflation is a key driver of asset prices now in the stock and bond markets. lisa: to finish where we began, what is the level at which you think 10 year yields or

-- 10 year yields are fair value? katie: there at 5% of last quarter of last year and it seems like we are creeping towards a level of 4%, 5%. i don't pick tops and bottoms in markets, but there is momentum for the u.s. 10-year to continue up more and that exact level, we will have to wait and see what the data shows. jonathan: the momentum shifted and you are short again. katie kaminski with another change. the 10 year at the moment is 4.28 and down a couple of basis points. looking for 4.50 when it returns in a big way. lisa: it is not 6% or 8%. but that said there is a feeling that this economy can handle a higher rate for a longer time. that is something that i haven't

seen a lot of people grapple with on the corporate side with respect to borrowing. jonathan: we work in 50 basis point increments. you get to 525 and you start worrying about 75 and maybe 6%. lisa: it is like when you tell someone to meet you at a specific time. it is always 10:30, 10:45. why not 10:32? jonathan: it is like the s&p 500 targets. why? i don't know. maybe marketing? here is your bloomberg brief. dani: voters for michigan are bringing the nation closer to a rematch between biden and trump with 98% of the votes that president biden won and 81.1% while 13.3% voted uncommitted. democrats have been trying to send the president a message which is pushing for uncommitted voters to protest the handling of the israel-hamas war. michigan is home to a large

arab-american population. former president trump fetid nikki haley by 68.2% to 26.5%. the kiwi is falling after this bank of new zealand left interest rates unchanged and softened the rate of a hike. the bank said that inflation expectations have declined, that allows them to take a more dovish stance or the central bank doesn't forecast cuts until next year. new zealand's 4.7% inflation rate is well above the 2% target . breaking into america's top 1% is getting harder. it takes a net worth of $5.8 million to join the group, that is almost 15% more than a year ago according to research. the figure leaves the u.s. fourth in the world with a greater net worth needed than monaco, switzerland. jonathan: the race to join the ai rally.

>> the ai party is just getting started. the title wave is coming to the rest of tech. in our opinion, that will fuel the tech market. jonathan: you know what the top of the market looks like. kind of that. he promised me when all is said and done that he will dress in black. from new york, this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a digital money coach in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside -

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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. jonathan: the stocks are a little lower, down 4% on the s&p 500 and yields are lower down 2% on the 10 year. katie kaminski with us moments ago is short again this bond market. the 10-year, or .2796. the race to join the ai rally. >> this is the earnings heard around the world. the most important earnings in

years. this ai party is just getting started. in terms of relative to peak demand. this title wave of spend is coming to the rest of tech. in our opinion, that will continue to fuel this tech bull market. jonathan: nvidia's record surge driving others to chase the rally. among them, qualcomm announcing advancements as it works to integrate ai into computers and smartphones through its processors. the ceo of qualcomm joins us from barcelona. the second time in 2024. we appreciate your time, sir. i went to talk about where we are now and where you think that this is going. the focus seems to be on large linkage models, big language models, and nvidia. >> it is good talking to all of you. a lot of excitement here.

a lot of new phones are being announced with generative ai. the answer is we are in the beginning of this cycle. like everything in computing, you saw that everything starts in the data center, in the cloud, and then goes to be distributed to devices. what we have seen happening in the cloud for the past couple of years and is accelerating now is we are starting to see the beginning of that happening in devices. a lot of new use cases, gen ai is developing on phones, pcs, cars, industrial devices, and alongside the cloud. the use cases are little different. it could create, hopefully, new cycle that people want to buy an ai pcm smartphone and that will be good for the industry. jonathan: are we still in the process of discovery, in the position we are thinking that this could be big but we don't know what it is?

cristiano: yes. this is good. what is interesting as you are seeing use cases being available commercially. some of the devices, you will see things like translation. you can call somebody and you can speak in english and they will hear it in a different language. they speak in a different language and you hear it in english and the large language models do translation in real-time. interesting things on android with cervical to search. some of the consumer applications. there are other implications for productivity. one of the most interesting things that shows the transformation of our company, every year people come to mobile one congress and we talk about a new cellular modem. we did that. the most advanced 5g modem. the most advancement was an ai hub. that gives an idea of how fast this is evolving. 75 models.

models from openai, from open source, video, audio, image. they are available for developers to be integrated into a model into an app and pushed into the app store of android and starting to commercialize those things with devices. that shows that we are at the beginning of something very interesting. lisa: you mentioned android and not apple. they just announced that they are getting out of electric vehicles and will invest in artificial intelligence. will they be a competitor or client in your pathway to adopt a greater ai focus in your chips? cristiano: we have a relationship with apple. we are proud of it. we provide cellular modems to iphones. we don't have a relationship with apple and processors. they have their own processor. all of the android devices in america are supported by qualcomm snapdragon.

we have been working with google and our partners and many other companies, like microsoft and meta, providing some of those capabilities. i think that this is transforming the industry, and we want everyone to join. more companies to join. we think we will see a transition to an ai phone and it will change how we think about utilizing our smartphones. lisa: there is a question about the barrier to entry, especially with nvidia and how long they can have these profit margins. understanding that this is a different type of ai technology, how high is the bar for barrier to entry to be competitive in this space and dominate? cristiano: a lot of respect for what nvidia is doing. i think they provide an inspiration and tell companies like qualcomm what is possible. what nvidia is doing in the data center, when you run inference

at the edge, for example into your phone, into your computer, your car, you need a different type of platform that is in the data center. that they can do this all the time in an efficient way. that is the qualcomm expertise. all of the battery-power devices, that is the area that we always had the best computing platform. it's an opportunity to replicate that model of ai growth in the edge. the ai hub that you saw with all of the models and developers gravitating to it, it is a great starting point. we are excited about that and it's an opportunity for all of the semiconductor companies with an advanced processor to grow with ai. annmarie: how much is the ai hub replication of nvidia? cristiano: it is different. some of the press article said that the qualcomm ai hub, they

referred to it as the equivalent for the edge. i hope they are right. it would be great to be in that position. jonathan: can you talk about how healthy smartphone demand is at the moment and if the developments that we have discussed can influence upgrade cycles as soon as this year? cristiano: that is a very important question. i can tell how we are thinking about it. we are working hard on technology to create that. smart phone right now, it is stable. they suffered in 2023 due to the macroeconomics. people postponed buying a new device. however, we've seen in the beginning of this year that the market has stabilized. while we cannot predict when is the next cycle, what i can tell you right now with precision is that ai is changing how we interact and use our phone.

eventually, if consumers feel that they need to have an ai phone, that will create the new growth momentum for the industry. we can't really have precise timing. we are making sure developers can access the platform and develop new use cases. jonathan: a delicate question. it wasn't only macro, it was geopolitics for the likes of apple, clearly struggling with a return of nationalism in china and competition too. do you think that you have to pick a country to be in, china or the united states? or is it sustainable to say that we will be in both markets? cristiano: we get this question all the time. if you were semiconductor company and do you have a leadership position, your product is highly differentiated, you are not in the commodity business, not only are you going to have a big business in the united states, but you'll have a big business

in china. it's a function of gdp. as the company has diversified and went into phones and pcs and automotive, we saw that expanding our chinese business as well. we have a strong position with the chinese ev market. in one way, that has -- we have seen our business grow in china regardless of geopolitics. everything to do with having a leadership position. jonathan: let's pick up this conversation closer to november. appreciate it, sir. we have to go to the commercial break. the qualcomm ceo. from new york city, good morning. this is bloomberg. ♪

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jonathan: thank lays has a new price tag. it was 4800. several upgrades. equity features this morning down about one third of 1%. some underperformance for the small caps this morning. a lot to talk about in the bond market. sitting on the two-year for a moment. first closing above that level.

last month, close to 4.1%. we price out a lot of rate cuts. the longer and is a little bit more interesting. 30 minutes ago, talking about why the view has changed in the last two months. lisa: they are saying this is enough to get us back to what we were looking for. the trajectory is still positive, so why is it not getting preston? especially given the momentum shift. you have seen equities hold it. jonathan: economic data just reinforced the fed and pricing

at the front end. the dollar is stronger against absolutely everything, including the euro. negative by one third of 1%. our next guest has why they are sure about u.s. dollar. under surveillance this morning, our top stories. confident that they can avert a -- they can make a deal to avoid a government shutdown. the two sides remain at the center of negotiations. chuck schumer describing the talks as the most intense he has ever encountered. it looks intense and it looks like there is no division.

is that because the republicans believe, based on your reporting this legally -- the people you have spoken to, they need to do something about it? anne-marie: you have seen the largely blame republicans. he is just going to kick the can down the road. march 8 and july 2 become the next deadlines. i still think there will be a lot of back and forth. and then the most tense part was less about keeping the government open. it was about aid to ukraine. deliverance coming in was a big part of that to hammer home this point about why the administration it is critical. jonathan: expecting to buy 2

billion. expecting to boost the dividend by 13%. we can talk about the numbers but i mentioned it pretty snuggly. capital return seems to be the way forward. lisa: what is best thing to me is that it is mark's zip to do any kind of finance in the bond market, pushing people more towards equities. they expect that to continue, going forward. it's me, that is fascinating because it caters to the number income family more so. we see that trend on the margins continue. jonathan: that is the range that they are offering this morning. we will pick up on that story in just a moment.

want to talk about tech and one firm in particular. saying the failure of its ai generation feature is completely unacceptable. the ceo of elsa benitez addressing criticism after gemini depicted historically inaccurate scenes. they said structural changes will be made to prevent further incidents. i wonder what he is alluding to. lisa: it seems like there is a real issue here. does he really had to go deeper to say what wrong with the processes, why they did not slow it down and why he was not aware of it? is that how they are adapting? their data sets were projecting something that the end-user did not want to see. jonathan: making an accident

would imply that they were not aware this was not working the way it would be. it is a regrettable mistake, but was it truly an accident? it implies that maybe this was not. that is a problem. lisa: the issue that i think is a bigger issue is, how do you deal with the fact that people are buying. that would generate biases. they get entrenched in social norms. how do you offset that? what are the right parameters for that? these are big questions that we have not established.

anne-marie: what will be the response in washington dc? they called for saying it is long past time that google needs to be broken up. some of these republicans would call it underlined bias. jonathan: i will sound like a free-market libertarian for a moment. at that there is anything wrong with that, necessarily. you said this the other day. we cannot rely on the regulator to do anything about that. i do not know if we could rely on them, even if they were up-to-date. they had to change course and it is not the first time we have seen something like this. lisa: is this actually things working right? did people push and they are

reassessing? isn't this the preferred method to create some of these models? jonathan: counting down to key economic data. after that we will hear from fed speakers. not expecting the fed to cut three times. we can talk about what this means for foreign exchange. the clear shift is in the direction of a growth engine. underscoring that the theme was waning. creating terror when, a weaker dollar. mark, let us get into it. a regime change. >> there has been a dramatic

regime change. we had some outperforming. those currencies are performed, which was quite interesting because this came through a fed tightening cycle. what we have been dealing with was g10 inflation and generally more global. what we have seen the last six months is a bare steepening and the breaking of risk appetites. markets are shifting more towards risk. the regime is changing and we do not know what is on the others. are we going to have high inflation or are we going to see disinflation? g10 itself is pivoting more towards growth. what we see is less focused on inflation.

growth is being upgraded because what the market cares about has changed. jonathan: we will go through to numbers. where do you want to play this story? >> that is what is interesting. the way analyze the markets, b.i. seen them participate to collaborate against the dollar. get out what is high-quality. we had india, mexico, colombia -- you have some high-quality growth story. the key thing that you want to be looking at -- korea is correlated to the global growth story. everyone has been focused on exceptionalism. look at leading indicators and data trends.

everything is participating at the same time. we went through a wave of china and new york underperforming. what we are seeing for the first time is all three regions firing in the same direction. that is positive. that is good for sterling and good for euro. i do not think hero is the best way to trade this. the way we like playing the g10 is the swiss versus the yen. there is too much time listening to what the boj size. they are always going to surprise. we have the wage negotiations coming up and we have a boj meeting. lisa: the biggest wildcard are energy prices. a lot of these areas have

defended from surprisingly low oil costs. how does that play into your call? >> we do not see as much volatility. the interesting part is that there was convergence around commodity. if you thought about what country benefited the most, it was mexico. high energy prices, high yield, foreign direct investment and the be kindling of the supply chain. a super positive for mexico. you want to look at the commodity factor story is not working anymore. the ratio has gone from two years, coming down to negative. this is one of the things that

is very important. the innerworkings are always changing. this is the tailwind that comes from the drop in commodities. this is where korea looks good. you actually what society scaling into some of those country. look at sterling and it should fit again from the reverse. anne-marie: you mentioned mexico. that was a big trade. you think people will take a look at that trade again? >> this is one of the most complicated questions began. you have an analog of one sample and the previous election, and i think it will be very challenging because the dynamics are just so different than 2016.

mexico is interesting because everything we look at still tells you. the one issue is that is overvalued. we know the fed is going to cut. u.s. growth is still doing ok, but it is slowly. i think everything will change once the conventions come and we know who the democratic and republican leaders are. we need to get the conventions to actually trade that. valuations are going to matter and positioning's will matter. what you should do is sell the peso versus the reality. all those on china are coming

back. if you build in that risk premium, the peso will underperform. kathleen: -- jonathan: thank you sir. let's get an update on stories elsewhere this morning. >> lawyers for sam bankman-fried propose he served no more than 6.5 years in prison for the fraud that brought down the crypto exchange. facing a sentence as long as 20 years. prosecutors have until march 15 to respond before his sentencing deadline. the funeral for alexei navalny will be held in must have. the russian opposition leader died in an arctic prison camp earlier this month with a spokesman previously accusing

authorities of interfering. it will take a day -- it will take place a day after vladimir putin gives his annual address. managing the texas panhandle, wildfires -- wildfires have ravaged texas panhandle. a nuclear facility has been forced to shut down. jonathan: this program, regulators cracking down. >> this is how the giants see their way to improve profits. this is not a time for the ftc to say, sure, go ahead and merge. jonathan: this is bloomberg. ♪

jonathan: equity futures are

negative. it yields a little bit lower. under surveillance this morning, regulators are cracking down. >> this is how the giants see their way to improve profits. and looking at ways to improve competition. in the grocery business, we have seen margins increased dramatically. this is not a time for the ftc to say, sure, go ahead and merge. >> urging them to block the acquisition of albertson's. the doj initiating an antitrust investigation into unitedhealth. according to those familiar with the matter. can we start with unitedhealth?

what is happening here? >> unitedhealth is the latest company to face scrutiny over possible antitrust violations. together, they police competition and market competition across the nation. they have grown increasingly concerned over a range of industries and health care is one of them. the real issue is at stake here. we will learn a lot more as it unfolds and what steps the doj might seek as remedies. anne-marie: we have grocery chains that they are not happy with. they are going after unitedhealth, and we heard from

senator warren and j.d. vance about tech. what is their issue right now with the tech industry? >> it is breaking down on a couple of fronts for them. they appeared before senator warren and they are taking aim at the market clout of giants like google, microsoft and amazon. what they are concerned about is the degree to which this might squeeze out smaller competitors. it is more on the free-speech side. he is worried that the conservative voices might be drowned out. senator warren was focused on what the providers could be doing in the area of artificial intelligence because ai is such a promising frontier for big tech companies. it is something may have been

trying to develop. senator warren sees that as a risk. if they do not have restrictions on their use and development underpinning ai, what happens? that will crowd out smaller competitors and it will ultimately have an effect on consumers and the market house -- the market. anne-marie: in this appearance, he thinks -- given that you do see someone like senator warren and senator holly want -- mining up on some of these issues, could congress move on any of this? >> it is something that we will be looking at and reporting on.

between the two parties, there is occasionally a thread of economic populism. that is where you find a little bit of common cause. not only in the area of grocery stores or the area of technology, but all of these issues matter to their constituents. you could see them coming together. we will have to track it, going forward. we are seeing them have such difficulty getting even the basic things like a spending bill completed in time to avoid a government shutdown. jonathan: very true. we always enjoy. good to catch up. let's talk about the politics. you talked about when this gets real.

can we talk about the spread between perception and reality? the perception is that the republican party is generally pro-business. they believe trump will be business friendly. talk about how friendly this iteration might be this year. >> a big part of it will come back to the way -- i think one thing that is clear is whether it is trump or biden, both will spend. the spending is one of the things that whether it is good or bad, the u.s. fiscal deficit pre-covid and the way it is going is not great for the world

's reserve currency. if we take the baseline of republicans, it is potentially business friendly for the u.s., maybe better for the domestic agenda, but not great for the global economy. one of the things that we are seeing, this has been happening for at least 10 years. we are moving into faith dimensional world. when you look at prospects around markets and how these things shake out, geopolitics is one where blocks -- it will be good for certain sectors of the economy or certain equity market but any fracturing of the system is marginally not great for the dollar. i think those are the things that we are looking at rather than last time trump won because the rally looked great.

the context is so different this time. jonathan: the dollar did not selloff in that moment. that was a really important point. if we push out those tax cuts again, that will be one to watch. lisa: you think about janet yellen's comments. how much does that really change it for the broader world versus a russia issue? jonathan: coming up next on the program, and a third hour of bloomberg surveillance, ed ludlow and greg daco. yields are a little bit lower, down native to -- negative two

basis points. ♪

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>> the overall market as still ok. question remaining on the sidelines rather than aging and further rate hike. >> the more they stay elevated, the more they will stay locked. >> if there is a meaningful story, i think it will cut rates. >> they might be looking at none to one. >> this is bloomberg surveillance. jonathan: the third hour begins now. good morning to our audience worldwide. your equity market, priced for perfection. we have heard it was 5%. here is the quote.

they continue to defy even the most bullish learning targets. we have pricing -- lisa: you are seeing more division within those stocks. we have been talking about it all morning. it is the earnings that have been coming and stronger-than-expected. how do you pair this with the normal dose of skepticism? it is difficult not to crack when all of these companies are actually doing pretty well. jonathan: and some of those companies are playing catch-up. it is not just what they are leaning away from but what they are leading into. lisa: it highlights how much the world has shifted. and then you have artificial intelligence exploding in every facet of every company.

how are they going to compete? where are they going to catch up and can apple play the same playbook where they perfected it where they relate but they do it better than everybody else? annmarie: i think the bigger winner was tesla. when it comes to actual dvds, his biggest challenge will be china. whether it is gn in michigan or mercedes, they are talking about the fact that the demand is not there. all those individuals working on that car? a lot of them were ai tech actions. jonathan: that card not have the margins that they wanted. this is not going to be based on to be that high-margin lecturing business that apple thought they could be part of a few years ago. if you are not ferrari, you will

have a difficulty and a problem. this is where i am going. if the market is going to descend in a quasi-state-sponsored champion, and who that is in the u.s. has yet to be decided, but it is going to come up. china is going to try to compete. will they be allowed to compete? lisa: it is not fun to be a carmaker right now. we are looking at a situation where he wants to call himself a tech company as well because it is hard to make cars. jonathan: equities are negative by 4%. bond market yields are lower. talked a lot about dollar strength.

coming up this hour, why market leadership is changing. reacting to the breaking gdp consumption data. we begin with our top story. equities treading water. pushing back on the narrative that stocks are risky here because we have seen a narrow market. yes, considerable heavy lifting has been done, the most impressive sector gains have been from health care, industrials and financials. important take away is that times and leadership are changing. are we seeing that leadership shift beneath the surface? >> i'm going to get in trouble because i will be technical

rather than the fundamentals i was trained in. but health care is in leadership and industrial is in second place. technology is in fifth or sixth. he can sit and talk about the magnificent seven, but we are spending a lot of money getting skinnier. lisa: hold on a second. from the stocks. >> even in health care jonathan: . we are not talking about people's way around this table. i was talking about stocks. >> with the exception of my own way, i went keep having a job. you look through and you see

names such as stryker doing very well. that is definitely not a weight loss trade. people need to get things done. you are seeing major banks. it is interesting because he would think that banks would need a steeper yield curve. we are seemingly getting a flatter yield curve. even when you take out the idea of 80 basis points of rate cuts, that does not get you there. the fact that financials are trading, maybe some deal activity coming back to life and not just being anchored off of what net margins and up doing. we come back to this idea, not to say that the recession will not happen, because it will.

jonathan: he took us to fundamentals eventually. multiples versus earnings. where is the upside in this equity market coming from? >> it has to come from earnings. valuations are not a good short-term timing tool, but once you start pushing 20 plus multiples, heavy lifting has to be done by companies themselves rather than technology. earnings surprises were around 7%. you wind up saying that the news is good. to some extent, stocks shrug that off. despite the size of the earnings. two of magnificent seven managed to call it $480 billion market cap increase.

those two aides might have been 10,000 total. but the reality is, stocks have been working. lisa: do care about bonds? >> i think they have been able to look through that interest rate increase. i think it speaks to the news has been good in the corporate sector and fixed income is not leading. for most of my career, the fixed income has been right. in terms of trying to understand what has. on. as an equity investor, that makes me happier. lisa: does that mean that you can ignore the fed or park the idea of the changing expectations and prioritize fundamentals and technical? >> i do not want to be

pollyanna. if we look within implied equity volatility, it is at 13. they have returned to levels before covid. implied yield volatility is 110. running with fixed income before covid head. if something bad happens, it is most likely going to be reflected in shifting and yields quickly. they will be put on the back foot quickly. now if yields fall, it probably fits into a narrative where they are slowing and we should be more concerned about expectations that we have, but right now -- let's be a little bit humble in terms of my ability to prognosticate.

jonathan: that data is 20 minutes away. we have been captivated by two stories. you alluded to them. a single market cap gains. it is amazing. and then ultimately we have ignored what has happened abroad. all-time highs in japan. can you talk about opportunities beyond the u.s. and abroad? >> the japan story has been impressive and mostly silent. it was really easy to spend the better part of my career saying, run a global portfolio. it to the extent that you have seen structural, it is impressive. they could still generate returns on equity of seven to 9%

but half your balance sheet doing nothing for you. it would suggest that there is actual profitability there. trying to ensure certain technologies, japan has a history of precision manufacturing. they understand these technologies. maybe there should be some interesting capital spending decisions there. jonathan: that is a very good final point. good to see you. very thoughtful, as always. stocks down about one third of 1%. have you read chip wars? it is a fantastic book and it talks about where those plans are and where they should not be. annmarie: they stated a lot of -- more than 90% when it comes to those chips. that is why i see this administration living the places

like china. jonathan: let's get an update on stories elsewhere this morning. >> voters in michigan are ringing us closer to amy match between biden and trump. president biden won with 81.1% and 43.3% voted -- detractors pushing for uncommitted boats to protest the handling of the israel hamas war. as for the republican primary, former president trump defeated nikki haley. u.s. mortgage applications have dropped. according to the mortgage bankers association, they fell by 4.5%. mortgage rates below 7%.

now they are sitting at the highest mark of the year so far. starbucks has agreed to meet with workers. they are expected to set up a framework. they were previously only offered to nonunion shops. they will meet with organizers since the first story voted to unionize and 2021. that is your bloomberg brief. jonathan: next, apple is slamming the brakes on plans. >> good business. jonathan: this is bloomberg. ♪ new godaddy airo helps you get your business online in minutes

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jonathan: about an hour away. equity futures are negative. yields lower by a couple of basis points. economic data about 13 minutes away. apple is slamming the brakes on its plans. >> good business. it has been pushed very high. it will not leave much room to be successful. jonathan: apple and its decade-long effort to build a sustainable car.

shifting members to the ai division as they focus on generative ai. apple saw the writing on the wall to rip the band-aid off. clearly another negative narrative for the industry. ed ludlow joins us with more. what changed for apple? ed: no one was ever really clear about what the end goal was for apple. at one time they were working on -- it was a luxurious point. it is not going to work. it is going to make it more of a consumer product. even if it is an elevated price

point. we report that there are around two dozen people on the team working for apple and many will lose their jobs if they are not shifted. i remember a time when there were 5000 people working on this project and it has not really gone to plan. jonathan: do you think the message is bigger in michigan? >> this reads favorably for tesla is the conclusion they have come to. most people saw that if apple ever brought a product out, you have to question the narrative of whether this is a doom signaled for the ev industry at large. on one hand you are saying, apple's cash balance, the global manufacturing could not get them there. it does speak to the competence

of those that are already out there. many would say, leave it to the specialist, but even from the perspective of the autonomous providers or the lack of waymo, there are those out there who say this stuff is really hard. just because apple is apple, that does not mean that they could pull it off. lisa: how much of a difference is there? ed: they are essentially the same thing. on the train side of the neural network, it is just another example. many competencies on the same. you are training ai to interpret the world around you. it was fantastic yesterday about the energy consumption of the future of autonomy. sustaining itself through a

battery, these are very similar competencies and many people i have met might have worked at nvidia or tesla and interviewed for a position and i can tell you that many were glad they did not take that job. lisa: you have any insight into what the timeline is? ed: why would we see it in earnings? we talked about a shifting, many of them to the ai effort. if you look at the reporting, it is largely developer focused. they help to write code and the generative ai is focused on

making the process more efficient. there is not necessarily an immediate readthrough to the top line. there is a bit of pressure here. what is in common, i think the boy looked at ai and said, start looking at evidence and they have the same conversation around cars, and the product was not there. but it is still not clear. what is the consumer facing? i think i explained they are much more focused on the developer ecosystem. it is reflected on the call. they have a -- they feel they have a long-standing history. jonathan: could we develop a new

iphone this year that leads to enough appetite to get an aggressive upgrade cycle? one that has been absent over the last few months? ed: that is the multibillion-dollar question. you had cristiano on the show earlier. the next phase of this is us using generative ai tools on our phones, even if they are in a certain mode. but the phone is not there yet. samsung has done some of it with the latest localized ai and that is the question. siri is pretty underwhelming at the moment. this is the frustration. when are we going to get this? something more can to chatgpt

does. we should not go through an i/o sap anyways. but that is the hope, that it is not 5g or six g but using the local computer power without using immense amounts of data and battery. jonathan: look out for a later this morning. can you imagine? never mind developing ai. lisa: you have issues with batteries. how is it going with the old one? jonathan: it was tricky for a few weeks, but it has settled down. lisa: the battery change is the real motivator for me. that is basically how it works. jonathan: we have been talking about an upgrade cycle. many people were wrong about

iphone regulator growth. still, they were right about the stock. lisa: and because they have dominated. to me, the fact that galaxy is ahead on the ai front or seems to be talking about it more, does that change the dynamic in any way? annmarie: to ed's point, but they are doing is on the developer side to make them work at her and more efficiently. you said when it came to the board and the car, the car was not there. i argue that the demand is not there in terms of how much. jonathan: you can see that. it has been bad news after bad news. let's talk about ev's. for apple, the biggest story here is apple.

trying to play catch-up. lisa: to me, that is the story and the existential question. how do they adapt before they get overwhelmed with other companies that have adapted better? jonathan: there is some technology here that risks that position. multiple decades in the case of alphabet. breaking data. mike mckee will break down the data for you. we will catch up with the chief economist coming here to react to the economic data. yields just a little bit lower. the 10-year is down two basis points. ♪

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jonathan: negative by one third of 1%. a little bit lower. a little bit of economic data for you. it an update on gdp. 24 hours away from the core deflator. that is coming up tomorrow morning. you look like this. down three basis points. a sprinkle of economic data.

mike: we have the gdp update here. the first revision, 3.2%. a little bit below what analysts expected. this is interesting. personal consumption went up 3%. two point 7% was expected, sabia a little bit more personal consumption than anticipated. it does not get a lot of attention because the number we get tomorrow would be the latest. this is fourth-quarter annualized numbers. it is up .1%. up you take from the original. for more on the breakdown, i do not know if there is any reaction. jonathan: it is like the

appetizer before the big one. equities stacking up. you can see on the nasdaq, basically unchanged from where we were before the data. two-year yields are still lower by a basis point or so. appetite, euro against the dollar physically where it was, but dollar strength on that, about .3%. what we can learn from the fourth quarter and january going into the data tomorrow morning. mike: they will tell us where we were, but a set up for the first quarter. we have seen some good numbers in terms of tumor spending so far. all we have is january, but it tells us we had a higher base going in. looking at nonresidential fixed

investment, 2023 comes in, up .19. business and government spent more money than anticipated. that is interesting. i have not yet gotten to that declining inventories. price numbers are important tomorrow because they tell us what it was in january. close to what the fed once. we do get a couple other numbers that will figure into gdp for the first quarter. inventories up .5%. wholesale inventories were down compared to a .4% rise.

maybe they offset each other, but they show a slowing in inventory build. only january numbers, but the numbers we had yesterday, it was running about 2%. lisa: that is the first time he would see it run pretty consistently a number of quarters going back years. a lot of these surprises are in the same direction. it is all trending with inflation not coming down as quickly. is it giving concern to the fed speakers speaking today and tomorrow? mike: i do not know about concern. they have argued for some time that it will be a bumpy ride. they expected their rate increases to slow growth more than it has been. some conversations about that lately, there is summers and company vote a paper suggesting

that people's attitudes are based on the fact that interest rates are high, but they are spending because they are not taking out loan, they are using what they already have. something similar was suggested. the difference between what people are paying and what people see the cost is is contributing to concerns. the costs are not actually higher, but companies are still spending. the economy keeps going, taking the fed a little bit by surprise. what they say this afternoon will not matter all that much because jay powell weeks wednesday next week at humphrey hawkins. that will be the event where all the bond traders will be sitting at their terminals and to be thinking. jonathan: the fed speak over the

next few days, boston collins -- that is the lineup and it is kind of not. lisa: that is the presidential placemat that you had to memorize all the names. this is the fed version. jonathan: we will get all that data tomorrow morning. greg, noise versus signal. how much was noise and how much is signaling? greg: we had a lot of noise. it is not just one direction. we had an inflation print. a lot of january reset and sector prices. perhaps even some weighing issues. i would tend to take a step back from january inflation data. the report was strong but very noisy.

the data was on the weaker side but also noisy. it is not just one direction. you have to take a step back as to what is happening. we are seeing an economy that is robust. jonathan: are you suggesting that it will not be repeated? greg: there tends to be a little bit of an echo. but i think we have to look at the next couple of months. we have to look at the next couple of months of data before we make a decision. i think that is the better approach. think about the underlying drivers of inflation. we are seeing an environment where there is more price

sensitivity and companies are -- it is a key driver of easing inflation. lisa: maybe inflation is bottoming out here. what gives you conviction that that is not the case? they are going out and spending, maybe with more discretion, but they are still spending. greg: you will see that there was probably a little bit of pullback. they are buying fewer goods and services. cost fatigue is very much part of the picture. more discretion in terms of spending. more on the housing front will come to fruition. we are seeing companies being more careful with how much they

allow for wages. it can carry us through. the last mile does not have to be the most difficult. lisa: i keep thinking about the spoke investment group. it has been easing. this has been applied using a like what we have seen since the 2020 pandemic. how does that work? greg: the key question is what the market will be doing. it has shifted quite dramatically. we had markets pricing in six rate cuts the onset in march and then the pushback from jay powell.

but what did that come from? data. they can have a rapid effect on conditions. i would not be surprised that bc the reverse move weaker data surprising markets and leading to a repricing of more rate cut earlier than june. that would shift the narrative once again. he would have tightening conditions. yes -- annmarie: people are starting to worry about the job market now. i using cracks? greg: we are seeing a softening in terms of momentum. the jobs report was very strong, but we will see what we get in february. we are seeing a slowdown in

demand and job growth. we are seeing hours worked being pulled back. we are seeing the hiring rate at its lowest since 2014. there is a softening in labor demand. we are not seeing the kind of layoffs that we are seeing. but we are seeing some signs of weaker labor demand. jonathan: yields might have peaked. is that right? greg: we think that the data will be the guiding factor in that call. there is certainly a lot of risk , that they wait a little bit longer. they have been burned. they are more likely to air on the side of caution. jonathan: a lot of june guys are writing their reports and getting pushed out.

just one balance of risk, that is all. greg: i think it is being pushed back to june rather. jonathan: what will he get from january into february? lisa: what kind of guy are you? [laughter] jonathan: a lesson from this data, the big takeaway. mike: it was a big drop in inventories, but final sales go up two point 9% from 2.6%, which shows the strength of the economy in the fourth quarter. intellectual property gained quite a bit. he wonder if that is a high, but if that is the kind of spending that we are talking about, then

what greg said about productivity going up is going to come through. jonathan: appreciate it. just a snapshot of what is happening outside of equities. the two-year down a couple of basis points. the euro against the dollar, one way. let's get an update on stories this morning with dani burger. >> and has passed $60,000. the first time in two years. getting more than 40% this year. the search was helped. more than $6 billion has been attracted into the funds since they started trading. bitcoin hit an all-time high in

november 2021. breaking into america's top 1% is getting harder. that is up almost 15% from a year ago according to research. that figure still leaves the u.s. in -- at fourth in the world. a series of wildfires have ravaged the texas panhandle. governor greg abbott has issued a disaster declaration. that is your bloomberg brief. jonathan: next on this program, washington taking big business head on. >> this argument has been used since the beginning of time. let me get bigger so that i can compete with the other giants. jonathan: that conversation, coming up next. ♪

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jonathan:jonathan: equities are negative. it yields a little bit lower. your opening bell about 43 minutes and 29 seconds away. washington taking big business head on. >> this argument has been used pretty much since the beginning of time. do they improve profits by lowering cost? that is not where they are going. they are looking at ways to reduce competition. jonathan: representatives are meeting to get it ahead of an antitrust complaint. bloomberg reporting a report

could be ready by the end of march. mandy, there is a lot of push. google is ahead of this as well because of the failure of gemini . can you tell us from your perspective whether these companies will be trusted with this technology or if we will see a more assertive regulator in washington? >> everyone realizes these companies have to much power. they are drying a lot of focus. in the case of apple, i think it is all about the app store. nobody thinks it is illegal to be a monopoly in the west come about if they are indulging in a certain behavior, these companies have to comply with

markets. as part of that, they have to make changes to the app store. that is a bigger risk for apple then google or anyone else out there because they generate a bull because of their high-margin revenue from the app store. the gemini thing is some thing that they will work on. i do not think regulators are open on that as much, given that it is early-stage technology. lisa: there is another aspect of power. it is relevant. they do. how much is that an increasing concern, as far as protecting data and harboring data as some that is in-house for privacy concerns? how much is that it can iteration?

>> look at the conference. it looks like the telecom providers want to be participants. they do not want everything to be siphoned off. what i have been hearing more and or of is companies do not want to train the gp -- gpt's with their data. they do not want to be in possession of their data. it is getting a lot of momentum. there are different approaches they can use to make sure. that is a big focus of the show. lisa: is it going to be regulators or market? how much are we being discretion being played by investors in

terms of what company are using their power correctly and which are not? >> there is so much innovation going on. i saw was on demos around this. the piece of this is astronomical. it is going to hurt u.s.-based companies that operate in the eu because companies are still trying to figure out what are the best guardrails to put? it will hurt innovation because there are other companies that are trying to move as quickly as possible. annmarie: they said they should not be able to use their size to

dominate a new field. but these companies have the infrastructure and capital to do it. who is it? >> you are right. there are companies that have developed large models. microsoft recently. honestly, openai did that in the early stage. the reason they did that is that they needed the resources. they wanted to provide them with the credit and even if in the case of google, they have the largest language model and infrastructure. there are other instances where a partnership works out better. they have to rely on resources. i think hyper scalars will be

part of the equation. clearly, this is a game and companies that rest in it are those that will have the advantage. annmarie: apple is pushing into ai. what is your reaction to that? >> one of the biggest themes is aia. i cannot tell you how much it is garnering attention. when you think about who should be out there with the ai, it is apple, and i think everyone is waiting to hear about it. they are thinking of doing something relatively quickly, but i can see a lot of the features being rolled out, and some of them, in terms of

personalized assistance and other features, without sending your data to the cloud. jonathan: you just alluded to it. why is it such a big deal? >> think of all the things that you do on your phone. why are there hundreds of apps to make you productive? why can't you talk to your phone in a way that can do things for you in an intuitive way? i do not think it will replace infrastructure, but the way things are working out, it is more about developing workflows and about how you interact with your phone and what makes you productive. that is crucial. you do not want to send everything to the cloud. jonathan: this is happening really quickly.

september is usually a month where they would unveil a new phone. is that too soon to roll some of this out? >> no. got qualcomm. they announced a new processor. they will already have a phone that does something very similar to what apple may end up doing in september, but clearly, it is not early. they should be out there with something that invites -- excites investors. it is all about putting it out there and making sure that it works, unlike gemini and what happened with google. jonathan: difficult. thank you for joining us out of barcelona. the latest with apple. we talked about it earlier. we will talk about the next big phase and all that stuff.

focusing on ai. maybe we look at that technology as soon as possible to. lisa: it is people trying to envision how we live and how we communicate with our devices and how much are we going to go from people doing this to having conversations with their phones. this is what tanger outlets was saying. i do think that people will end up having relationships in a different kind of way. jonathan: actual relationships with their phone. let's leave it there. coming up tomorrow, new data. you have 10 seconds to clean it

up, if you want. lisa: it is true. think about it. this is what he is saying. jonathan: [laughter] ♪

when i was your age, we never had anything like this. what? wifi? wifi that works all over the house, even the basement. the basement. so i can finally throw that party... and invite shannon barnes. dream do come true. xfinity gives you reliable wifi with wall-to-wall coverage on all your devices, even when everyone is online. maybe we'll even get married one day. i wonder what i will be doing? probably still living here with mom and dad. fast reliable speeds right where you need them. manus: a little bit of a dip in that's wall-to-wall wifi on the xfinity 10g network.

these markets. we can discuss. cap to the open kicks dashcam stem to the open kicks in right now. >> this is bloomberg: the open with jonathan ferro. ♪ manus: coming