>> 30 minutes into the u.s. trading day on this monday, march 4, here are the top stories we're following. bruised apple, the e.u. hits the world's second largest company with a $1.2 billion euro antitrust fine. that comes after goldman removed apple from its list of top five following underperformance. a last look at retailers this earnings season with target, encamp and foot locker set to report, with analyst predicting a slide in same-store sales. we'll preview what to expect. and taking pulse at the ports, ports of los angeles, executive director joins us to talk about the flow of goods from china as the company's annual kickoff.

katie: welcome to "bloomberg markets," it's a quiet start to the trading week when you look at the bench marks. the s&p 500 behind me, it's slower, just slightly. we're talking about a tenth of a percent there. still really healthily above the 5,000 mark. we'll see how that shapes up. you look at big tech, things are a little worse off there. of course, we've been talking about apple, and you can see the nasdaq 100 currently off about .3%, but it's early. a lot can happen there. and then you take a look at the small cap index, i thought this was fun. the russell 2000 outperforming, currently up .6%. we'll see how long that can hold. let's talk more about apple, because the stock is down after the company was hit by a $2 billion fine from the e.u. over

allegations of silencing music streaming rivals on its app store. here's is what the e.u. competition chief had to say earlier. >> we found that apple's rules result in withholding key information on prices and features of services from consumers. as such, they are neither necessary nor proportionate for the provision of the app store on apple's mobile devices. katie: joining us now is bloomberg's ed ludlow. give us context here. what does this potentially mean for apple? ed: i mean, what it means in the first instance is that the first ever anti-trust fine from the european union, 1.8 billion euros, $2 billion, is also bigger than we expected. what it means, we're going to appeal, and we can expect a years-long battle, frankly, a battle between apple and the commission. the context is it stems from a complaint from spotify.

at its most basic, it's is that apple and its ecosystem doesn't allow app developers to notify consumers that they might get a better deal, a more price competitive deal, outside of ios. this particular case in the context of music streaming. if you look at what the e.u. ordered apple to do, they're basically saying stop doing that, stop preventing developers who want to work within the ios ecosystem from also notifying consumers that if they do a subscription or they sign up for something away from ios, they might get a better price, and that's the action that the e.u. is enforcing today. katie: ed ludlow, thank you so much. we do want to bring you some breaking news right now. we have some headlines crossing the terminal, and that is that the supreme court is ruling that former president trump can appear on presidential ballots, the supreme court ruling unanimously in favor for trump in these ballot cases. we're going to get a little more context now from bloomberg's

white house correspondent, jordan fabian. walk us through what we know so far. jordan: the ruling just came down, it's unanimous. this was a case dealing with the state of colorado, where open officials had blocked trump from appearing on the ballot. the supreme court ruled that the clause of the constitution in question, which was section 3 of the 14th amendment, which says officers of the u.s. who engage inening senior ekes cannot run for office. the court ruled that only congress can enforce that clause on federal candidates. so that certainly puts not only colorado's decision to keep trump off the ballot, it would reverse that, it would also seem to put a maine and illinois decision to do the same in jeopardy. katie: yeah, absolutely. a win for the trump team here when it comes to this decision. and it's the last point that i want to follow up on, because how sweeping is this ruling as far as heading off some of the future challenges that might arise?

jordan: the fact that the justices said that congress, only congress can act here, would certainly decrease the likelihood that donald trump or another candidate who tries to violently overturn an election as he did would be barred from running for office. congress is a divided institution these days. it would seem unlikely that they would act to do that against a presidential candidate from any party. and it also points to another reality, which is that anyone hoping that the courts are going to stop donald trump's march back to the white house, their faith might be misplaced. in this case, we saw what happened, it looks like some of the other trials that he's going through right now could either be delayed or derailed by procedural issues. so it looks like only the election result, a rematch against joe biden could stand between donald trump and the white house. katie: it's the timeline i want to talk about.

trump's legal challenges overlaid with the fact that we have the 2024 presidential campaign going on right now. this decision, it comes a day before super tuesday. walk us through the cadence of the next few weeks and months. jordan: donald trump could have the republican presidential nomination all but locked up tomorrow. there are a litany of states voting in primaries and caucuses tomorrow on the republican side. donald trump is projected to win all of them. he only becomes the nominee, the official nominee after he clinches a certain number of delegates. it's unclear whether that's going to technically happen on tuesday night. but he will certainly have the nomination all but locked up, as nikki haley is projected to go down in each of those states. that puts him on a crash course with joe biden, who is, you know, effectively secured the democratic nomination. he has no serious primary challengessers. all signs pointing to a rematch between donald trump and joe biden in november.

katie: jordan fabian, really appreciate that context. on that breaking news, the u.s. supreme court ruled that trump can appear on presidential ballots, that is overcontinuing a colorado supreme court decision -- overturning a colorado supreme court decision. that decision comes a day before super tuesday. we'll continue to follow that story closely, but we do want to turn back to the markets. joining us is lauren hill, portfolio manager with westwood quality value funds. lauren, let's start with the mood music in markets right now, because you have the s&p 500 down a little bit. the nasdaq 100 down a little bit. of course, still hovering near all-time highs. what is the next catalyst that will push this market forward? lauren: yes, i think all eyes remain on the fed. as we get clarity on the timing of rate cuts, i think that could lift the markets higher. katie: that could possibly lift the markets higher. so it's monetary policy at this point rather than some of the

corporate fundamentals in the form of earnings that we're getting. lauren: yes, earnings season continues. we have a number of consumer names continuing to report, and the fundamentals have been very, very positive. so consumers continue to shop and spend and keep the economy going. for example, we're expecting strong results from ulta beauty when they report on the 14th. beauty has been a real standout for the consumer. and i think that their target shops, checking in customers, their social media is doing the same. and then we continue to see others not doing as well. so department stars, macy's had lackluster results this past week. it's been a mixed bag, but overall, the economy remains on solid footing. katie: it's interesting you highlight ulta beauty in particular. like you said, that really has been a standout. i find that interesting, because a lot of the conversations that we've been having around retailers, around the consumers,

that this is a tired consumer. they're resilient, but tired. some of the retailers have really run out of pricing power at this moment. but beauty, it has to be one of the most discretionary categories out there. so how do you square that outperformance with the macro economic back drop right now? lauren: yeah, so the lipstick effect is very well known that when consumers are looking to cut their budget and not buy an entire new outfit, they will go buy a beauty item, some lipstick, some mascara, you know, as just an exciting purchase that they can make. we're seeing that trend here. the consumer is resilient, as you said, but they're also very picky and price conscious, because inflation has had such a huge effect on them over the past few years. even though inflation is cooling, prices are 15% to 20% higher than they were three years ago. so consumers are still willing to pay full price for their most favorite items, but they're also looking to spend less, trade

down, and go without many items in order to overcome the higher prices. katie: is this typically the playbook? like you said, the lipstick effect, it has a name for a reason. but when you think about past cycles that we've seen inflationary pressures, and then, of course, the fed's response, is this typically how it plays out? lauren: yes, but i would add one nuance to that. i think ulta has done an incredible job on the ground of really tapping into what bargain-seeking consumers want. they have a tremendous amount of new makeup launches this year. going into the target shopping shops, they're reaching all-new customers who want to be able to try makeup and make just the right choice. and at the same time, you have sephora, they had -- they were really off-key over the holidays, in my opinion. they did not offer them

promotions whatsoever on black friday, which is typical for the luxury brands, but i think they really missed the market here in the u.s. for makeup. katie: that's really interesting. it sounds like what you're saying is this is not a blanket buy on beauty, you really have to look at the fundamentals, the different corporate actions that these different competitors are actually taking here. lauren: exactly right. so westwood is a bottoms-up shop, so we focus on the fundamentals of the business over the long term. more than ever, you have to be very, very picky where you invest in consumer discretionary. it remains a tough space, and i think we're going to have a very mixed market this year within those stocks. so it's important to remain very careful where you invest. katie: lauren, stick with us. we're going to go from beauty to the clothes retailers next. let's look at what's moving underneath the markets right now. we're going to do that with bailey. let's start off with jeff, what's going on?

>> the troubled deal to acquire spirit air, no more deal. yes, this comes morn a month after a federal judge blocked the deal on antitrust grounds. you're seeing jet blue shares up just under 2%. the big mover is spirit air ticker save, down 10% on a closing basis, would be at a record low. a lot of analysts speculating and kind of debating whether or not spirit air would be able to weather the storm not being acquired, whether liquidation or potentially a bankruptcy would be kind of in the off. spirit air, kind of downplaying that, saying it's not the best they expect. katie: the question becomes, where does spirit air go from here? when it comes to jet blue, i think the message from shareholders has always been clear they don't like this deal. >> yeah, and it's something we've seen play out, whether you talk our view that jet blue was down because of the different trading dynamics, it did seem to get downplayed very much by the bulk of those bigger investors, saying why are you going after spirit air? it doesn't necessarily make a ton of synergy or a lot of sense.

we're not going to see that happen anyway. katie: jet blue up, spirit air down. let's talk about macy's. that's not yet m&a, but some of the activist investors would certainly like it to be. >> an offer is a 14% bump on what they're planning to propose to the retailer. this coming after earlier in january macy's pushed back on that advance, basically saying it did you not lack compelling value and they instead rolled out their own. guy: plan, which was closing a number of stores and trying to focus on growing bloomingdale's and the blue mercury brand. the stock is up 14%, trading just south of $21. that bid raised from $21 is to $24, about a 15% gap between the $24 mark and where shares are right now. investors still very much cautious on whether this is going to be a deal and enough of a sweetener to get macy's to the table. katie: i feel like it's been a great year so far for merger arbitrators. >> i don't know. has it? katie: well, it's fun.

>> well, bill gross likes it. trade out the bonds and go long activision and short microsoft. katie: no one knows what the f.t.c. is going to do. >> you're always on the edge of your seat. biotech, you name it, it seems like they're more than happy to strike down most. katie: speaking of on the edge of the seats, we've had two very clear catalysts. what's going on? >> above $66,000, so back within striking distance of the nearly $69,000 mark, which was that all-time high back in november 2021. different market back then than we are in now. a lot of optimism bubbling around the bull market, overall optimism. katie, you look at the r.s.i., very much overbought, but it does seem like the animal spirits around the e.t.f.'s continue to play out, up more than 50% this year. katie: do you know what the fed funds rate in november 2021 was? it was a big, fat zero. and now it's 5.3%. now you have bitcoin just ripping regardless.

i won't ask you any more questions. bailey, thank you so much. coming up, a number of retail names reporting this week as consumer confidence takes a turn for the worse. we'll preview the week to come next. this is bloomberg. ♪

katie: earnings season isn't over yet, because retailers target, costco and gap are all set to report earnings this week, while consumer sentiments dipped for the first time in four months last month. here with a preview and breakdown is simone. what are we expecting to learn about the u.s. consumer this week from earnings? simone: i think there are going to be some winners and losers this week, and that's what we have seen over the past couple of quarters. there's a busy week, big day is tuesday when we have ross, nordstrom, foot locker, foot locker is on wednesday, and then back to cast coast, gap, burl ton, kroeger on thursday. we've seen some weak innocence those big box retailers, but they have been able to kind of

pull out a little bit more wins over the past couple of quarters than many analysts anticipated. what we really do expect to see is discount, showing some same-store sales gains like burlington expected, gains of as much as 11%, costco also expected to do well, while we see kroeger, target starting to see a little bit more declines. frankly, what we've seen the last couple of quarters has been a lot of confusion around this space. how is the consumer doing? because many of these retail names have consistently outperformed. so i think the jury is out. we see a weakens consumer overall, that's the expectation from analysts. but just how weak are we going to see? katie: hopefully we'll get some clarity this week. on the retailers, outside of earnings, we have to talk about macy's. shares are absolutely flying today, currently up more than 15%, after the offer was upped over the weekend.

is this a bid that actually the company would consider? simone: citi says it has to consider this a little bit more seriously. not just because the offer is higher, the price is better, but because these investors offering a little bit more guidance about exactly how they're going to pay for it. fortress, one investor management going to be part of this. they offer some details about how they'd finance the debt component of this. and that gives macy's just a little bit more of a reason to go and think about this more closely. bloomberg intelligence gives the real estate portfolio alone a $8 billion valuation. arkhouse said make we would up our offer. expect to see more discussion here, more consideration than we saw back in january when this offer was initially reject. katie: of course, more volatility in the shares of macy's. again, take a look at that chart. it's pretty astounding.

bloomberg's simone foxman, thank you so much. let's welcome back lauren hill, portfolio manager with westwood quality value funds. lauren, i want to talk more about the retailers, because you were talking about ulta taking share from sephora, but in your notes you point out it's taking share from macy's as well. macy's really in the limelight this morning. how are you thinking about macy's at this juncture? lauren: yeah, macy's is the 800-pound gorilla in the room. you can't ignore macy's when you talk about retail. i was not surprised, but pretty disappointed in their results. they had a comp, the sales were down 2% year-on-year, but inventory rose 2%. you want to see the relationship go the other way. you want inhave noter to to be sold down more than what sales is growing. and so, you know, i think that being in new hands would be healthy for them. i do like the proposal to close

150 stores. they remain over-stored income my opinion. it would be good for all retail in the u.s. if macy's takes some additional steps. katie: that's really interesting, lauren. as we just heard from simone, citi is of the view that this bid from arkhouse and bringing s something they can't ignore, can't brush aside. it sounds like you're saying this is a bid they should consider. lauren: yes. i agree with her. i think it would be a step in a healthy direction for them. we'll have to wait and see. it all comes down to the details and what shareholders think, but i would be supportive of a deal. katie: so far, we've talked about retailers. we talked about department stores. we've talked about beauty and lipstick much let's talk about snacks. because looking down your list, i also see that you highlight pepsi here. talk to me about pepsi and how it fits into the composition of

your market views right now. lauren: yes, along this theme of the bargain-seeking consumer, we love their snack business. it is faster growing and higher margin than their core beverage business, which remains very, very steady. you can just count on that beverage business to always be there. they were at a conference a couple of weeks ago, and they reiterated their typical algorithm, so they expect 4% to 6% sales growth over the long term, and that to translate with the dividend to low double-digit shareholder returns. so that's a wonderful profile, and globally they have a lot of international exposure. we think that they have a tremendous amount of potential to continue to offer, different shapes and sizes with all the snacks going forward. katie: does that same logic apply to some of pepsi's peers or competitors, or in the same way that, of course, you have

ulta beauty benefiting from taking share from sephora? does pepsi stand alone here? lauren: yes, we think pepsi is the standout of the group. they have better snack positioning, which, as i mentioned, was the faster growing margin business. we think that their returns are more dependable than some of thf their competitors. katie: this picture you're painting makes a lot of sense in terms of the names that you're feeling favorably about right now. what are some of the biggest risks, would you say, when you look at your portfolio right now? lauren: yes, the number one risk is unemployment going up. the consumer can overcome pretty much any obstacle, sales for holidays were much stronger than i expected, and i think almost anyone expected. so as long as we have full employment, the consumer can continue to spend. but we are starting to see cracks, especially in the credit

card data. we're seeing delinquencies peck up, which are the late payments. we're seeing that charge-offs missed payments also rise. and so while overall debt levels remain low versus income, if we start to see unemployment tick up, the student loans being back in retainment, higher debt levels as well as higher interest rates, higher home prices, all that's really going to start to show through, and we could see a big pullback in consumer spending, which the consumer is 2/3 of the u.s. economy. all eyes on this. katie: all eyes on unemployment, that is evergreen advice. lauren, really appreciate your time this morning. lauren hill, portfolio manager with westwood quality value fund. it's time now for social climbers, take a look at the stocks making waves on social media this morning. first up, we have lyft making the social rounds. r.b.c. capital markets speculating that the ride sharing company would make a good partner for the food

delivery company doordash. now, neither of the companies immediately responded to a request for comment, but we'll keep an eye out for that one. next, super microcomputer lighting up social chatter after it was added to the s&p 500 index along with decker outdoors. those stocks replaced whirlpool and zion. a spot in the coveted s&p 500, of course, one of the biggest bench marks out there, it boosts a company's profile and adds trading liquidity. and finally, we have whole foods going half foods, sort of. the amazon-owned grocer is opening newer, smaller stores for quick trip urban consumers. the new stores will you offer a slimmer assortment of products without the buffet bars and meat counters, and the first shop will open on the upper east side this fall. of course, you can follow all the latest company buzz on tren go on your bloomberg terminal. now let's check the markets right now. almost an hour into the u.s. trading day, you can see it's

still quiet. the s&p 500 and the nasdaq 500 all off slightly. coming up, boosting confidence in china's flagging economy is at the top of the agenda. we'll talk about that next. ♪ 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 - and the other goals along the way. wealth plan can help get you there. ♪ j.p. morgan wealth management. you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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katie: rates are heading lower, recalibrating from a knee-jerk reaction from shipping disruptions around the world. for more, we are joined by abigail doolittle. abigail: recalibrating but still near highs. these are rates going from shanghai to rotterdam, los angeles to new york, and in perp on the composite. over the last year in a range but on that ritzy conflict, surging higher. a little bit of recalibration coming in.

$1000 per container for these various numbers. still near the highs. that said when maersk reported, the stock over the last year tumbling in a big way, down 44% at 12-month lows. they said the surge in rates on the ritzy conflict is unlikely to stick around by the end of the year. that is one reason why we have this stock again at 12-month lows. in terms of u.s. ports, one well-known port, the port of l.a., where last year inbound shipment numbers were not very positive, down quite a bit, but starting in august up 7.3%. more recently in january, up 18.7%, so i nice rebound for the port of l.a. katie: for more on that, we have gene seroka, port of l.a.

executive director. you have the annual tpm conference for the shipping industry kicking off in l.a. right now. what is the mood on the ground expected to be when it comes to the health of the economy, also the demand side? gene: good morning. a lot to discuss around the transpacific maritime conference which is being held in long beach. we started meeting with folks last friday coming in from europe and asia, domestic colleagues coming in over the weekend. this is usually the kickoff to rate negotiations in the transpacific theater between shipping lines, importers, and to an extent, exporters. those freight rates look a lot different even several months back. to get to chicago via los angeles, you see a steady stream of cargo and some rate increases, but going over eastern gold coast ports, that rate gap has not been higher in recent memories.

when folks sit down to talk about contracting, it is not just about spot rates, and what will happen over the next business quarter, but the outlook will be over the next year, year plus depending on multiyear contracting. there's a lot that folks are trying to get together with on relative to the economy. here in the states, unemployment is low, job openings continue to be relatively high, and the american consumer is valuing. six consecutive months of year on year gains portend what we think will be a relatively strong 2024 at the port of los angeles. katie: that is a nice snapshot of the u.s. economy but let's talk about china. in addition to that conference, you have the national people's congress picking off tomorrow. give us the lay of the land here. i know that you have come out with a number that trade with china fell to 53% of overall volume, down from 57%.

what does that number look like so far in 2024? gene: hovering right around 50%, still our most dominant trading partner by two and a half old. with every conversation we had, folks at the c suite level saying we have to look at a china plus strategy, reminiscent of 20 years ago, but catching a lot of traction now. a lot of chinese investment also happening in mx. ago, southeast asia. i see over the next couple of years and then our participation with china may drop into the mid-40's but still remain a strong number one. katie: over the next years, dropped to the mid-40's. a few months from now, would you expect to stay around that 50% level? gene: yes, i do. there has been much talk about china's economy, concluded at 5.6% growth last year, but not

to the expectations. with more talk about circular economy, relying on domestic inputs and consumption, there will be changes upfront. it will be interesting to see what the results show the world. katie: you mentioned china's investments in other parts of the world, building in places like peru. the position of the government is that china has moved beyond being an economic partner in global trade to being somewhat of a rival. how are you think about that? gene: the two largest economies in the world need to trade with each other. our inputs on furniture, consumer goods, toys, footwear, clothing, rely on china's manufacturing process and these four decades plus of supply chain relationships. that is not ripped apart overnight. katie: that is good perspective to hear.

you say you are hovering around 50% right now, down from 57%, over the next few years maybe get into the 40's. what are their countries has trade stepped up to fill that void? gene: for us in the transpacific marketplace, southeast asian nations. in vietnam is on the rise, indonesia, thailand. what we are seeing now is continued emphasis on how supply chains can connect. these will be longer transit times, taking longer time to get the vessels back, in rotation with vessels that need to be on a fixed weekly basis. i was in southeast asia in january, along with india, who has eyes on increasing manufacturing, developing further on its infrastructure plan, and be a player in supply chains which is also very important. we will see how continued investment looks but we are positioned very well i believe

right now to make sure the multimodal karma business that runs through the ports of los angeles can reach american factories and consumers better than ever. katie: to meditate on china further, a concern that you are familiar with, that there is an over reliance on cranes made by china. you had a trade official from the department of homeland security testify last week about that issue. you told bloomberg two weeks ago that those cranes are collecting information, data. put that conversation in context. how reliant is america and the port of los angeles on those chinese-made cranes? any u.s. companies or u.s.-friendly companies producing cranes on that scale? gene: this conversation is complex and nuanced. while we rely on china as our largest trading partner, there is a watch on cybersecurity.

out of 82 of these big cranes at the port of los angeles, 39 are manufactured in china and by zpmc, a strong company in this marketplace. the call is for diversification and more competition, hopefully better pricing in this area. on the cyber front, the port of los angeles in 2014, in partnership with the department of homeland security, started the first cyber operations center of a port in the country. last year, that stopped 750 million cyber intrusion attempts. that awareness helped us create, along with ibm, one of the world's first cyber resilient centers. this brought in the private sector for the first time. think of railroads, trucking companies, even dockers from

the long shippers union. we have stopped six intrusion attempts to private sector interests they were unaware wires coming. we have to heighten that look at cyber and resiliency across the country at the nation's ports. that is the nation the executive order from the president put out. katie: that number of cybersecurity attacks in 2023 is a staggering figure. what have you seen so far in 2024? gene: early days. averaging about 60 million attempts in january, february will be the same. the bad guys are out there and we have to stay ahead of them, making sure our communication systems are very tight. that the awareness of our staff, colleagues, and service providers along with customers, is trained up to the max. the folks that manage these centers for us are trained with

ongoing education. that awareness level has to permeate throughout the country. katie: really appreciate your time on this monday morning. that is gene seroka from the port of los angeles. really wide ranging conversation especially when it comes to china, both on the cybersecurity front and on the train reliance front. let's get a check on the broader u.s. markets right now with abigail doolittle. abigail: looking at small declines in the s&p 500 and other major indexes. let's see what has happened over the last week. nice gain for the s&p 500, last monday through friday, up for a second week in a row, similar to many of the other indexes. bitcoin over the last week up 21%, above $60,000. quite a continued rally there, helping crypto stocks. the 10-year yield down, a little

bit of a bid for bonds. bitcoin higher and crude oil is up 2.7%. most of this board is definitely risk on. let's put the crypto rally in perspective. another stock that has really captured the attention is nvidia. super micro should be on the board because it is up 820% over the last year. huge gains in nvidia, up 262%. bitcoin also up triple digits. digital gold very much better than regular gold, which is of ever so slightly over the last year. nvidia's big rally means it has a market cap of over $2 trillion, putting it above saudi aramco. parabolic uptrend for nvidia. let's see if that can hang on.

sometimes these trends tend to reverse lower. katie: great roundup, really appreciate that, abigail doolittle. coming up, we will hear from mary daly about why tech still reigns in her district. this is bloomberg. ♪

abigail: this is bloomberg markets. coming up, bnp paribas's head of u.s. and a strategy join bloomberg surveillance tomorrow at 6:00 new york time. this is bloomberg. ♪ katie: it is time for wall street week. oregon is one of the states overseen by fed bank president mary daly. earlier, david westin spoke with skip newberry about the tech industry outside of silicon valley. >> oregon is really well known

for having a lot of semiconductor manufacturing. over many decades, that has continued to grow. starting with intel's largest operations in the world based in oregon, they employ over 20,000 people here, do a lot of r&d. intel, plus the supplier network for semiconductors, accounts for $30 billion for gross regional product here in the state, employs over 100,000 people in terms of the tech sector broadly defined. in terms of the proliferation of tech outside the silicon valley, we have a robust startup ecosystem here in oregon, a lot of companies developing business applications, software, consumer facing applications as well. >> it is not just silicon valley. you can go to oregon, the home of chip manufacturing for several years. even in northern california,

l.a. has a considerable amount of tech. boise, idaho is building itself up as a tech center. they do different things but to suggest silicon valley is the only thing out there is really a misnomer. >> what is the reason why you have such a concentration of tech in your district? we think of silicon valley being close to berkeley, stanford. is it the education system, critical mass? >> i think there is a bit of critical mass. research studies say these network effects are large. you see this anywhere in the country really. people might start in silicon valley, may start in austin, texas, boston, but then they move. family takes some other places. we have a lot of lovely stay so live in, so people live in other places. then they build those tech centers around them because they

have those expertise. >> as strong as the tech sector is, commercial real estate has been struggling a bit, as it has been another urban areas. >> i was in new york recently and it seemed more animated than certainly part of downtown san francisco. but i think the venture money is here. we have a highly educated population, so it's a labor market that literally no one can compete within in the bay area. that force or what the future is with some of this new technology is what is going to animate these large conglomerations. san francisco, boston, new york, los angeles, houston, miami, because of what is going on in financial services, relocations in miami. i think these cities are going to recover. there is going to be pain. there are defaults, losses,

retail closure. i think a mix of real estate, especially in downtown san francisco where we have very little housing, so it is very dependent on the workforce for animation. without that workforce, return to work, san francisco will be challenged, whereas new york has a good mix of housing and office space within the urban core payment boston to the same degree. san francisco will have to figure this out with housing to reanimate part of its downtown. >> commercial real estate is a big name for a lot of different segments. if you are in industrial and warehousing, you are feeling very good about things now. if you are in retail space or even multi family housing in suburban areas, you are feeling good, confident. the place where you are seeing weakness, and everybody knows

it, is in the urban cores of particularly cities like seattle, portland, san francisco. l.a. is doing a little bit better but you can find pockets of this in l.a. that has to do with a lot of people still working from home in those communities. those big office complexes that were built for those individuals are not billed, so there will be a resettlement. we have known this was coming for a while. i see private equity money, venture money sitting on the sidelines, ready to come in when the price is right. there will be some repricing, loss of valuations, for sure, but it doesn't seem to them to be a disorderly adjustment that you would worry about. it is something that is more orderly, even though it will be painful for those involved, is likely to be as disruptive. katie: that was federal reserve bank of san francisco president

mary daly and david westin, who is sitting to my left ear. that is fascinating. a wide-ranging conversation but i didn't know that oregon was something that she also had eyes on. david: you make me feel better because i didn't know either until we asked about it. substantial tech sector there. she is very enthusiastic, things ai may be a promising productivity enhancer. it is a big driver for her region, unlike commercial real estate. katie: let's talk about commercial real estate. that was a fascinating point, you think about downtown san francisco. there is not any residential housing, not like new york, where you have plenty of places to live. that is a problem. david: you heard them say it is not a doom loop. not sure that is a ringing endorsement, but there will be some pain coming out of it.

i asked about regional banks because we are having the issue with regional banks and commercial real estate. she says they are watching it carefully. thus far, she doesn't think it is a systemic problem. katie: about one year since the collapse of silicon valley bank. she took a lot of heat in the aftermath of that. david: they were not as aggressive as they should have been, a dispute if that was at the regional or national level. but she think they have learned their lesson, at least they know it is coming when it comes. katie: what does the outlook look like right now in her view? david: one of the things that she says, others say, commercial real estate covers a lot of things. things that are very successful like data centers, warehouse, multi family dwellings. it is specifically the office

area, and there will be some pain. you are seeing some of that already. katie: you are seeing that on the cre and regional banks side. that was the conversation with mary daly. who do you have coming up? david: the editor of the economist. we will talk to her about an interesting cover, saying that a market may be overstated, may be headed for more troubles for structural reasons. that is coming up on friday at 6:00 eastern time on wall street week. katie: really looking forward to that conversation on wall street week at 6:00 on friday. this is bloomberg. ♪

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katie: let's take a quick look at some stocks hitting highs and

lows on this monday morning. amazon hitting a 53-week high on news it will open smaller whole foods foods stores in large u.s. cities including the upper eastside in new york city. amazon up .9%. you also have nvidia hitting highs, another milestone. the chip giant overtaking saudi aramco in value. currently up 3.6%. on the other side, you have paramount hitting a 52-week low on continued advertising lows. bloomberg intelligence out with analysis highlighting a bigger challenge for the company, renew was with charter and dish, and a new sports bundle that may intensify cord cutting. paramount currently down by more than 6% for the past two trading days. coming up, you have the citizens financial group chair and ceo. you'll be joining bloomberg

technology with caroline hyde and ed ludlow. that does it for bloomberg markets. this is bloomberg. ♪ j.p. morgan wealth management knows it's easy to get lost in investment research. get help with j.p morgan personal advisors. hey, david! ready to get started? work with advisors who create a plan with you, and help you find the right investments. so great getting to know you, let's take a look at your new investment plan. ok, great! this should have you moving in the right direction. thanks jen. get ongoing advice; and manage your investments in the chase mobile app. sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

>> this is bloomberg technology with caroline hyde and ed ludlow. ♪ caroline: i'm caroline hyde. ed: i'm ed ludlow. this is bloomberg technology. caroline: apple get slapped with a 1.8 billion euro fine by the eu for abusing its position in the distribution of music streaming apps. ed: