dani: 30 minutes into the trading day, here are the top stories we are following. research affiliates found that user-friendly ai is a breakthrough and it's a bubble. he joins in a couple minutes. record highs into the having. fred will walk us through. shares of blank under pressure to deliver when analysts say is conservative guidance. we discussed with the ceo.

i am katie greifeld in new york welcome to bloomberg markets on this friday. you take a look at where the s&p 500 stands in trading. it's a red day so far. you can see the s&p 500 off about .6%, slightly worse if you take a look at big tech. the nasdaq 100 off by about .9%. all the while you can see the volatility rising a little bit if you take a look at the vix. of course, still at pretty depressed levels, under 15 but getting closer and closer. i'm thrilled to say we have a great guest on these markets. we are joined by rob arnott, research affiliates founder. good to see you. rob: good to see you. katie: let's talk about nvidia because you warned in september you saw a big market delusion in

nvidia. it was a great company, he wrote, but christ beyond profession -- perfection -- but christ beyond if it was perfection that it was priced for then, what now? rob: beyond perfection. rather than singling out a single stock, it's interesting to note that back in 2018, we developed a definition for the term bubble that you can use in real time and that definition was simple. you would have to use implausible growth expectations to justify the current price easing and discounted model, and the marginal buyer does not care about valuation models. it fit that definition. so did amazon in 2000.

but isn't it interesting to note the 10 most valuable companies on the planet, zero out of 10 beat the s&p? none. one out of 10. microsoft had one over the next 20. katie: so when we say if perhaps we are in a bubble now, that does not pretend that this is something that maybe it pops and then it stays there. bubbles can reinflate. shouldn't we be scared of bubbles if we are in a bubble? rob: i don't think so. i think they represent opportunities. they represent market volatility. volatility can be our friend. you should never shortselling bubble because it can go up 2,000,000,000% but you can choose not to go for that ride. you can choose to go to the opportunity to pivot into markets that are cheaper, markets that are priced not for perfection but for

disappointment so that, if there's less disappointment than expected -- this is the thing about deep value stocks. they are priced for horrible outcomes and can sort 2,000,000,000% merely by not floundering as badly as feared. katie: so a gazillion is more than a zillion? rob: it is. katie: let's talk about that idea that you don't shortselling bubble. you take a look at what's going on in ai names, not just nvidia but the entire sector if you want to call it that. so you are saying that, ok, that's bubbly. don't short it. rob: right. the best example of a devastating short that i am aware of was zimbabwe during hyperinflatio -- hyperinflation. at the start of the summer of 2008, the currency was crashing. you could look at that and say this economy is in deep weeds.

i want to short that. the first six weeks of summer, the currency fell tenfold, the stock market rose 500 fold, 50 fold in u.s. dollar terms. if you shorted 2% of your portfolio, you are wiped out. eight weeks later, the currency fell one hundredfold for metalevel, the market crashed and -- one hundredfold from that level, the market crashed and stopped trading. katie: a dangerous game. i want to talk about what we are seeing in earnings because you have had a parade of people on this program but also on the sell side saying what we are seeing in earnings, specifically tech earnings, justifies what we are seeing in the share price. curious for your thoughts there. rob: for now, correct. let's take nvidia as a specific example. profit margin north of 50%.

everyone hundred dollars people spend on their product, their outlays, their spending -- they are spending less than $.50 on the dollar on r&d and taxes. and is it plausible that amd, intel, taiwan semiconductor won't see super chips as a potentially interesting market where they can compete? amd has the new chip they claim is 25% faster than nvidia's fastest priced at $13,000 a chip where nvidia's is at $40,000. katie: amd, a lot of people have been pushing that is the next nvidia, but tear your point, pricing matters there -- but to your point, pricing matters there. i want to talk about value stocks. david einhorn was on masters in business podcast and said, due to passive investing, there are

not any natural investors left for value. he concluded markets are fundamentally broken as a result that i want to focus on -- result but i want to focus on the first part of that thesis. do you think there's nobody to bid up value? who is the natural buyter of value? rob: anyone who is not in an index fund and things there cheap -- thinks they are cheap. we have seen that coming. back in 2001, gave a speech at a conference in which i predicted that passive investing would become enormous. that still means 48, 40 9% on the market is engaged in price discovery, and engaging appropriate valuations for assets. the instant they pivot into value, that is a potential natural buyer. when it comes to value, the

thing i think is fascinating is that value stocks have been dreadful for 15 years. 2007, they peaked. it's still 3300 basis points behind. so that's an enormous rout but how have russell value earnings done relative to the russell index? how have their dividends done? their earnings and dividends have risen with russell growth. so the companies have gone -- have done fine. the stocks have not. katie: with that being the dynamic, that you take a look at earnings and it seems not in sync with shares, what would be the catalyst for the stocks to catch up with the fundamentals? rob: catalysts are an interesting topic because any catalyst by definition must be a

surprise to the market, must be unexpected, so i view it as a fun parlor game not necessary to play the game but catalysts could be inflation runs ahead of expectations. they could be the economy softens. people say that there's no hard landing, no soft landing, no landing at all. this booming economy keeps chugging. and it does. but if you look at pmi, its bottom quartile by historic standards. the yield curve slope, worst percentile. rate of change around cost of capital. worst decile ever appeared -- ever. those are good recession predictors. has there ever been a recession that started with a weak economy? no. they start with a strong economy that rules over.

this economic growth is strictly on the back of consumers who are spending more than they can and that has its limits. so the question is will consumers run out of spending power before the other parts of the economy turn? if they do, we could still usually have a recession. katie: in the time that i have left with you, we have to talk about value traps as well. research affiliates put out a paper on that last month. when you take a look at the market now, to your point, i mean, value is cheap, especially relative to earnings. do you see any specific value traps now? rob: there are always scores of value traps. you just don't know which they are. so we have a product suite with pimco. , which takes the fundamental index concept, waiting companies by how big they are and not how

beloved or expensive, and as a quality at momentum filter -- and adds a quality or momentum filter, so if you can take out companies that are overleveraged , that have profit margins that are too skinny, if you take those out and take out companies that are in freefall, those are characteristics of value traps. what we found is that owning roughly 1000 different stocks over the last 20 years that strategy has had zero bankruptcies. katie: interesting. rob: are there any devalue strategies that have had zero bankruptcies? this is one. katie: final word, 30 seconds or so. he said there are scores of value traps out there now. how does that compare to history at this moment? rob: it's normal. katie: that's a good place to leave it. enjoyed this conversation. great to see you. that is rob arnott of research affiliates.

let's take a look at what's moving underneath the markets with denise. >> let's take a look at adobe, which dropped 12% after a disappointing outlook. another thing that's emerging is competition when it comes to ai is something that we see reflected in the stock price. there are a lot of new startups experiment with video and others that are improving. serious competition to adobe. it has implemented models in a lot of its products. we saw some recent demonstration by openai. this is demonstrating some -- this is generating some anxiety when it comes to investors. adobe is expecting 114 million dollars in reoccurring business revenue in the next quarter, which is less than what analysts were estimating. of course, we are seeing the

company implement a lot of bad ai. what we are seeing from investors is pressure to see revenue coming from those businesses. and competition is heating up. katie: clearly not catching a break this morning, off by about 14%. let's talk about makeup. what's going on with ulta? >> it had a good earnings report. it was above what we had in terms of estimates but in terms of outlook things are not looking as great. some analysts are saying people had high, bullish expectations. the price was up 15% year to date. it's hard to get a rally from here. the report was 21% increase in the fourth quarter earnings, which obviously are strong. what we heard from the ceo is actually that they may see a slowing growth, which is probably one of the reasons we see those reactions in the

shares, but in terms of analysts, they are upgrading the target, so maybe that is not much of an issue as of now. katie: ulta shares currently off about 7%. what else do you have on your list? >> did his rally and buy because of the approval of a drug that could potentially treat deadly liver disease. in that field, there's been a lot of competition, and there has been no other companies exceeding into this. the company gets accelerated fda approval. a lot of analysts are putting a price tag on this, something like multibillion, 5 billion, but what is more important, potentially, is this is a drug they could help millions of people world wild -- worldwide with the disease.

this is good news not just for shareholders. katie: nice to end on an up note. thank you. bitcoin minor marathon digital buying a new data center in texas. we will get the details with fred teal. this is bloomberg. ♪

thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh katie: marathon digital is increasing its bitcoin footprint, announcing it will buy a data center in garden city, texas. all the while, bitcoin retreating from its latest record highs. risk appetite wobbles heading into the weekend. joining us is fred thiel, ceo of

bitcoin miner marathon digital in sunny miami. you acquired that data center. that was a purchase price of about $87 million. it was interesting to see this happen because people have been telling me for over year that you will see more consolidation in the bitcoin mining space. walk us through why you bought this data mining center in particular. fred: so marathon started back in early 2017, 2018, using a strategy where we hosted our miners with third-party operators. that works well in a bull market . now that we have reached scale, we are focused on vertically integrating so we have gone from late last year owning only about

30% of our total mining capacity relative to the infrastructure to 53%. that has a direct impact of our cost to mine, which has an impact on our breakeven point, which is important with respect to the halvening. we are looking at -- looking forward very much to this site. we already had miners running here so this gives us expansion capacity. katie: you have been busy because this is your second acquisition in about four months or so. are you looking for more targets at this point or do you feel set? fred: i think if you look at the guidelines we gave regarding the amount of mining breaks we had in our pipeline, ordered or optioned, you could force gas that we have -- you could forecast that we have a need for more capacity but we

will continue to be acquisitive in this space. there will be some minors who profitability may be challenged or maybe looking for an exit as their revenues will drop because of the price, the amount of bitcoin being awarded will drop, so i think you will find there will be further consolidation. we are focused on capacity increases. that will come from a mix of buying existing sites like these two acquisitions as well as greenfield sites. we are getting started and that's where we are taking biomass from landfills and other places and generating energy from that. so we are excited. katie: let's talk about the halving. is taking place in april and that's when the reward for miner s will halve.

what would you anticipate your breakeven price post halving would be? fred: simple math would be if the industry average breakeven point was around $23 for bitcoin it will go up to around $43. part of the costs to mind bitcoin don't double. what does double is the amount of energy you have to expend to generate the same amount of bitcoin. you have to do twice as much work. so essentially if somebody's marginal cost is $20,000, their new marginal cost will be $40,000. katie: have you put in place any specific preparations ahead of april's halving? fred: we have one of the most

energy-efficient fleets in the industry. our energy efficiency across the current fleet is just under 24 joules or watts per terahash so that gives us an efficiency gain, which means we use and consume less electricity to generate the same amount of computing power as the industry does on average. as we continue to deploy the new machines we have on order, the number will drop further, somewhere in the high 21 joules to 22 per terahash in the next 18 months. some of the things we are doing relative to new emerging technologies later this year will further drive those efficiency gains downward. so we are excited about what the future brings. we think this will help the industry focus on those miners that have unique business models and scale. i think we are the only american miner of scale operating on three continents.

we have a large site in the middle east. we are actively working to develop sites in africa and latin america. we have a small site running in paraguay. we will continue to grow into the u.s.. katie: hoped to catch up with you after that halving. that's fred thiel. thank you. we will take a look at the companies making the most social buzz today in our social climbers segment up next. this is bloomberg. ♪

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♪ j.p. morgan wealth management. investment opportunities ♪ are everywhere you turn. do you charge forward? freeze in your tracks? or, let curiosity light the way. at t. rowe price, we ask smart questions about opportunities like advances in healthcare and how these innovations will create a healthier world tomorrow. better questions. better outcomes. katie: it is time for social climbers, the stocks making waves on social media. first, the golden arches. mcdonald's has been hit by a systemwide outage affecting restaurants from japan to germany.

customers have been on -- have been unable to order at stores or on electronic platforms. they noted the outage is not a cybersecurity attack. uber and lyft says they will shut down operations in minneapolis after an ordinance required them to increase wages. this makes minneapolis one of the few areas that mandate minimum pay rates for ride-share drivers. we do have home depot. it is staying where other retailers are not, namely major u.s. cities. the ceo says the retailer will remain committed to areas like oakland, california, detroit and philadelphia despite rampant theft that striven rivals out. home depot spent heavily on technology designed to prevent organized retail crime. you can follow all the latest company buzz on your bloomberg terminal.

coming out, blinked charging betting big on u.s. manufacturing, set to triple its production capacity. we will speak to brendan jones, the ceo, of next. this is bloomberg. ♪

katie: one sock we are keeping an eye on is linked charge, shares down after the ev station reported fourth-quarter results that expectation but in the list note that the outlook may be conservative. joining us now is abigail doolittle. abigail: we do have the stock down on this report. they did a preannouncement in february but the stock up 50% from the time. some of those gains are coming off today relative to what they reported. the outlook is seen a little bit

light but most in the list are saying it's conservative. that's good news. for the opportunity ahead for this electric vehicle charging station company, take a look at this work on electric vehicles and growth expected. if we bring ourselves to current times, 2020 2, 20 23, turning 24 were looking at 17 million vehicles potentially. a big marketing opportunity there and maybe the outlook will prove conservative. katie: bloomberg's abigail doolittle and for more on the ep landscape we are joined by brenda jones the ceo of blink charging. let's talk about that outlook you are targeting 165-170 million for 2024 compared to the 170 million expected by analysts.

how did you get to the outlook? brendan: looking at and see trends, our previous performance in the growth rate moving forward through next year. the u.s. is expected to go from 8% up to 13% this year and growth rate is predicted off of that in the need for chargers particularly electric chargers. we are right in line and are predicted increases with where that is. they want us to over perform but over the past several years we have continued to over perform and you will eventually get to a plateau where we get our unfair share but not those gigantic exponential's where we were well over the industry average. we have doubled that even more at 140 million. katie: i think someone is

calling you on skype but don't go anywhere just yet. i want to talk about the broader ev industry because we have seen traditional carmakers venture into evs scale back their plans. bloomberg intelligence wrote in december a revival of plug-in hybrids could cut the revenue pool by 20%. as you are watching this potential slow down and ev demand what would that mean for your business? brendan: we remain very bullish. if we look at the report one in five vehicles in the world that are sold are ev's. if we look at what happened in february, the fiscal year 2023 we came in well over 9% in february already.

the space continues to grow. there might be some retraction from some auto oems but it continues to grow. for blink, we are not the u.s. east company. 20-30% of our revenue comes through europe and if you look at a company in germany with 82 million they are headed to the 30 percentile with an ev concentration rate. the trend is moving from china, europe to the united states. you might see ebb and flow's and contractions but overall we are expected to see in our industry and need for 28 million chargers by 2030 and those will be level two chargers. there might be some small retraction but overall it's a good bet that ev's are here to stay. katie: that's an interesting

point when it comes to the global landscape. looking at the likes of europe and asia we might have lost rented which is a bit of obama because this global ev landscape there is a lot of questions about whether the u.s. ev market will see this same type of penetration you will see overseas when you think about germany and broader asia and i think we do have brendan back. when you think about your growth opportunities do you think markets outside the u.s. present a bigger potential for the likes of light? brendan: markets outside give us the same upside potential as we've seen in the u.s.. overall the u.s. accounts for 75% of our revenue and the rest of the world is 20%. we will see additional growth in europe but it is going to be commensurate as we expanded the

u.s. especially with their brand-new manufacturing facility. katie: let's talk about the competitive landscape, you are not the only charging operator you are the opener for the tesla network. what does that mean for the field? brendan: not just the opening for the tesla network but the standard is becoming widely available. for a company like link we make connectors and cables for our fast trackers and level two equipment. our chargers are capable of charging every car. the number one plug-in vehicle into our network is tesla. that is going to continue to increase. it takes more than one company to satisfy the needs of the ev driving public and blink will be a leader in that space for the for siebel future. katie: the high is growing and

new product level two charging a little bit earlier. report lots, apartment grudges, how quickly are using multifamily housing getting charging? brendan: it's a great question because we have to redefine home as it relates to evs. home is a single-family home. but an apartment is a multi family dwelling. next of blink, the next stop and his market family dwelling but we define that as condos, apartments and the charging opportunity some variability. we need to penetrate him in individual level, share charging to really satisfy those needs. we are selling more chargers into those situations that we

have ever before and we will see that rate increase throughout 2024 as well as the whole industry is doing a good job at beginning to penetrate the market. you wake up every morning and you are fully charged. katie: that would give a lot of comfort to people who still have that range anxiety. i want to talk about your production, your onshore production capacity to maryland will deliver tax incentives but how much does it risk raising the cost structure relative to building chargers and a low cost country like india? brendan: to service the u.s. market, the first objective is to make sure we have the requisite requirements for by america. the federal government and other agencies we have customers like the post office which awarded us the biggest -- at 45,000

chargers. we can produce up to 50,000 out of the boat we facility. globally we will be able to produce out of our factories located in india to service other ends of the market as well. the u.s. market, by america chargers, our cost standards are competitive. every company who wants to apply for nebi you have to be by in america compliant. katie: really enjoyed this conversation and our thanks to brendan jones the ceo of blink charging. let's get a look at our broader markets. abigail: on the week we look at a small gain. earlier we were looking at a loss on the s&p 500.

before we were looking at a decline. it will be right down to the wire at the end of the day and it could be a volatile day. we have lots of options expiring more than 3.5 trillion in the s&p rebalancing. the bloomberg index getting a nice bed .4% with warm ppi number and take a look at the two-year guild up 25 basis points at four point 72 helping out the dollar. this board is somewhat inflationary let's see if that plays into the next week and the fed meeting. triple witching one thing a breeze to volatility, along with the volume take a look at the spikes of volume we have. typically doubled than what we get on a normal basis. the oneness is out to me is in march 2020, they saw a drop of

50% but that was the bottom to the s&p 500, the move higher after the pandemic. one reason we have volatility, that 25 move up for the two year yield at 4.72. this is one of the fastest tightening cycles for the fed ever in pink here this is 2022. these are the moves higher, that hiking, the tightening. whether or not we get some of the cunning there has been this divide, this debate between wall street and the fed. wall street thinking it could be as many as seven cuts in the fed saying no it's three. we will get more on that next wednesday. katie: fascinating chart we will see how that comes together next week. bloomberg's abigail doolittle thank you so much.

navigating the markets in an election year we will speak with ken rogoff that wall street week conversation coming up next. this is bloomberg. ♪ the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality.

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abigail: you are looking at the live shot of the principal room. coming, chris richards marathon acid management ceo. coming up at 12:00 eastern time. this is bloomberg. katie: time now for wall street week and david westin sat down with ken rogoff harvard economics professor and asked him what the u.s. election could mean for the economy. >> trump put in his tariffs and biden has doubled down on it. legal immigration is really hard under biden and became a charter

under trump. i won't speak of the over -- open border policies. they both in that respect were trying to shut out the outside world and trump is talking about expanding his tariffs and biden inflation reduction act is very protectionist and the europeans are livid about it. he does things like by american. i'm sorry you asked about the debt. washington in general has a very relaxed attitude towards debt that i think they will be sorry about. biden speaks about blowing up the dead and we have no idea of what donald trump will do. that is what he did last time he was president and a good guess that he will do it again. i have talked about it for

years, you can't count on real interest rates being ultra low anymore. i think they're not going to be. the idea that it's a free lunch is passed inking. david: let's talk about tariffs for a second because president trump talked about 10% tariffs for all countries across the board and he might increase them if anyone reciprocated against tariffs and against china 50-60% tears. 10% tariffs don't make that much of a difference? ken: 10% tariffs would push up inflation, interest rates, back when trump put in his tariffs in 2019 the fed had to do an about-face because of the uncertainty and stress that cost. is one thing to talk about over

a 50 year horizon does it better that much if he put in tears but when you do it out of the blue it is dislocating for the economy and i think it tends to be inflationary, discretionary and other -- if other countries choose to retaliate. david: we had mary daly on that said she thinks it's around 2.5% of long-term neutral rate composed of various components. larry summers has come on inside his much higher than that. you have said you think it is higher. ken: i've studied the most the 10 year rate, the long-term date , -- data, it's more in the range of 1.5, 2% than in the 0% that it was from 2012-2020 one.

short-term rate, it's possible the term premiums change. look at the economy? it doesn't feel like we have a tight monetary policy. if we were 3% above a neutral rate you would think something would've had faster and harder. i would agree with my colleague larry summers, we are probably more like a person or 1.5 what would be a neutral rate. if you're aiming for 2.5 i think he will stop a long time before you cut there. david: bring us back to that question of biden or trump next year, either one of them will have to deal with the consequences of it. assumptions of the budget are much more modest when it comes to budget. ken: there are two ways they could go a kid in-depth --

in-depth and inflation. that's why inflation is stuck at a high level because we just experienced this inflation burst. one possibility is that there is inflation we ratchet up to higher and higher interest rates. if the fed were to stick to its guns and not allow that, you are really not seeing interest rates come down. i think we are in an environment where there are so many demands on the government even if neither candidate quite realizes it. katie: that was ken rogoff, a harvard university professor of economics and conversation with david westin. on wall street week we will hear from michelle mckay cushman and wakefield ceo, that is at 6:00

p.m. eastern time. this is bloomberg. ♪ hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact.

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katie: it is time now for my favorite segment of the weekend that is etf friday. today we are talking about ai and robotic etf. the names capturing traction in the market, bloomberg's emily griffey always following this for yes -- is. how much staying power is in the same? >> the ai etf's ever since 2016 have had several boom. it's because usually there is one chance for to work and it dies out and even the next time the market does well the flows are quite there.

in total for ai etf's we've seen 2 billion in the past year following into the etf's. if you look at tf from round hill introduced last year and it has already seen success. he says is impressive to see a new entrant, of later in trent, this one is only a year old and it still has that a um and price appreciation which is a good sign. katie: it's not just the incumbents in the market. chat has 130 million in assets. what are some of the biggest ai assets out there? >> bots, the robotics and -- etf is outperforming the nasdaq year to date it has nvidia, a 9%

holding and intuitive surgical, smc court. global x also has another offering a iq which has your more traditional ai linked names, nvidia, meta, netflix, oracle, qualcomm. you have to look under the hood when you're picking out an etf because some of them have different names and waits. katie: what differentiates these different ai etf's because there's quite a handful of them? >> some of them are more diversified, a iq has a lot more names, some of them to have just a 2%. depending on the s&p 500 exposure because that has a holding to nvidia will determine which one you pick in summer linked to these chip names or

robotic place like intuitive surgical. katie: tune into etf iq every monday at 12:00 p.m. that's hosted by me and eric out tunis. was take a quick look at the stocks. let's start off with valero it was raised to abide from bank of america up 4%. bank of america sees upcoming catalyst to lift shares higher and you can see investors heating that. on the other end we see mars with the 52 week low. president biden saying he will review shipbuilders subsidies. david greene from the electronic frontier foundation he joins

bloomberg technology with caroline hyde next. 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.

>> from the heart of where innovation, money and power collide and beyond. this is bloomberg technology with caroline hyde and ed ludlow. ♪ caroline: i am caroline hyde in new york, above though is off today. all earnings coverage ahead as adobe falls the most since 2002. bitcoins slide from its record high continues. bubble talk escalates we