>> here are the top stories we are following. fed day is finally upon us. and a big focus on the balance sheet. we will discuss what is next. and talking about the class to revive american manufacturing.

im katie greifeld. taking a look at markets and we are in a little bit of a holding pattern. same story if you look at the nasdaq. then you take a look at the bond market. this will be the market to watch, but for now it is pretty quiet. the 10 year not even down by a basis point but a holding pattern. shares fell as much as 15% after a warning about a steep descent. analysts calling it a worrying single for the luxury goods market overall. joining us is andrea. andrea, what went wrong at gucci?

>> gucci is transitioning from a design that was exuberant. going for a much sleeker look. if you are a customer, there is not much point buying out. it is only just coming into stores. not much demand for the old product and not -- not much of the new product available. >> city is seeing this as a broader sign of worry. do you also take away that signal or is this unique? >> it is a little bit of both. it is going up in the market at the same time it is completely

overhauling its look, but this is a reminder. consumers are cautious. that is a worry. the u.s. was an amazing luxury market three or four years ago. and it has slowed down. absolutely being on a tear since the end of january, so there is a bit of this connect about what is happening on the ground. >> stands alone from what is happening. thank you so much. let's talk about market and talk about that fed decision. it is great to have you with us. you make the point that you have stocks tethered to the bond

market and bond market is beholden to the fed. what are you expecting this afternoon? what does that mean for the market? >> we are not expecting any surprises. we expect them to come out and say that there are different factors in the economy, but we are not there yet. the fed can still be patient. if it takes above in a meaningful way, we think the fed comes between a rock and a hard place because we have not achieved the goal of 2% and are not close enough to start cutting rates. the economy can shift pretty quickly. for the time being, we think that rates are higher for longer as long as the factors can stay in check. >> i know we have had some

hiccups last year but it seems like it has not had much of a dent. >> higher for longer is the new mantra for the equity market. near term, a pullback not surprised us, but we recently changed our price target to 5800. it is about an 8% to 12% bump from where we are today. companies have proven that they can navigate this environment. companies have indicated that they have strong earnings. we feel like there is micro even

of stock returns more so than the broad macro environment. >> for the s&p 500, for those keeping track at home, currently below 5200. what you think the leadership looks like? >> we are not seeing a change in leadership. we think it will continue to be big tech companies that do well, but there is a broadening going on. there are other names that are not the magnificent seven. we think broadening will do well for the market. >> let's talk about small companies, those small caps. a your research.

they are not profitable and are operating on debt. how did they manage through that? >> it is a challenge. they have about 30% of their debt. it is cutting into their profit margin. it will continue to be a headwind. we are being patient. we have not increased our allocation. right now, we still feel like this is where we want to have the bow of our portfolio. >> that is not necessarily a buying opportunity.

>> the can keeps getting kicked down the road. rate cuts at the end of last year. now it is looking like two to three rate cuts. it will be a struggle from companies before we increase allocation. >> before we get there, within that big grouping, what are some of the sectors that you like outside of tech right now? >> there are some areas we are looking at right now. or so than ever, you had to take a bottoms up approach. a strong leverage, good free

cash flow and growing profit margin. this in addition to health care companies, but you cannot by the sector. you have to look from the bottom up to find companies that are going to navigate the environment. >> brooke, stay put. we will put -- we will take a look at the markets. >> close to $20 million in loans. they are trying to bring some of those chip productions here. the second worst performer in the stocks index. close to 80%. talking about a different divergence. there seems to be a bit of

positive news, but you still have to find a way to drive growth and earnings, things that have left intel behind in this ai wave that we have been tracking. >> the stock was really popping today. do you golf? >> i used to. i enjoy it, but if i'm going to spend $100 to hate my life for three hours, i should probably find something else to do. >> a lot of people do golf. to me about top golf. >> one of the biggest brands of companies that creates clubs and such. now the stock is popping after a report that the company could be breaking up and being acquired. one thing to keep in mind, do

not put too much credence into the deal. they are wary about report. an investor could be in the running, but interesting stuff, given all the deals that we follow. three years later or four late -- years later, you undo that deal. >> i remember covering that. let's talk about a company that is not yet public. >> the deal, according to investors is being talked up at the top of the range or above. it has been very divisive.

all those retail clients. this will be watched because it has been debated. but it does seem to be going quite well. >> this is like the perfect story for you because it is a potential meme stock. we will continue to follow that one. coming up, the 737 max saga taking a toll. this is bloomberg. ♪

>> slower output of the 737 max putting pressure on boeing's finances. the cfo coming out saying that the cash flows could be up to $4.5 billion in the first -- in the first quarter. >> the cfo brian weiss came out this morning in a conference at london and develops -- put out some interesting numbers. he said we are looking through the ugly things so that we can learn from the experience. in the short-term, this means a huge cash drain. it will recover as the year goes along but margins will suffer

because they are not building at the rate that they hoped to. there is also compensation. we know that they have had costs of about $150 million, money that they will want back from boeing. but longer-term, they can learn from the experience. >> we heard from the ryanair ceo. what does this mean for the airlines to new -- who need new jet? >> it was a massive year for aircraft orders.

the trouble is that they cannot get them fast enough now. it is not just boeing but airbus. both manufacturers are having issues. it is rippling through the airlines. we have heard from southwest and alaska, all these airlines that are not being able to get the lift that they need. the age of revenge travel is not over yet. michael o'leary has to cut some roots and pullback targets. >> it will be interesting to see how they deal with these issues. always appreciate your time.

let's broaden out. i do want to talk about goldman sachs. goldman is interesting to me because it has been underperforming. what is the catalyst for goldman to catch up? >> that said, most of the earnings came from the advisory business and wealth management business. we have the minute ipo coming up. as well as m&a activity. it will benefit as we see declines. it is only trading at about 1.2 times book value. a relatively cheap price.

we think there will be upside opportunity in the months to come. >> pretty cheap, speaking and relative terms. we are awaiting the m&a. that would benefit the entire sector, not just goldman. but with smaller banks, we are concerned. in addition to the endgame, we do not know what the regulation will look like. and sell, we are hesitant to allocate money to banks.

there are financial services that we like, but they have a little bit too much information that is unknown. >> there are a lot of known unknowns. i'm sure they would love to know what they will end up looking like. we had over to chips. tell us about the semiconductor. most of the conversation centers on nvidia. >> you would not know it if you watched the news, but to sell was down about 9%. for semiconductors, they had economies of scale.

they are treating with expensive. we think that there will be some upgrades. but there is some upside. >> you have earnings reports, but it seems like it is hard to capture the eyeballs. >> the pie is growing and you do not necessarily have to take market share to participate and benefit from transformation going on right now.

they are figuring out and trying to figure out how to utilize. other manufacturers will figure it out. >> on valuations, we were talking about goldman. trading 24 times. it is not too out of line, but when you talk about valuations in the cycle, what is your takeaway? >> they can be elevated and not necessarily see a pullback in the market. other names that have not participated in as much, we are seeing a broadening. as those companies start to grow earnings a little more

aggressive, we will see the multiples catch up with the earnings. we are not overly concerned right now. we could see multiple extension, but we ask acting earnings to catch up. we are forecasting 11% earnings growth. >> we really appreciate your time today. that is brooke counting down to the fed decision. still ahead on this program, we are taking a look at making the most buzz. this is bloomberg. ♪

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making waves on social media this morning. ending service and reducing flying. taking a look at the network as it tries to cut costs. a roughly 10% stake and pushing jetblue. next up is the car tech company. they are deepening their partnership and luxury brands will use the tech and future car models. making the rounds after outperforming. it is showing signs of improvement after nine consecutive quarters. you can follow all the latest was on your bloomberg terminal.

making close made in the usa is harder than it sounds. this is bloomberg. ♪

katie: let's look at how the apparel retail industry is faring as consumers face high inflation numbers. abigail: it is doing a-ok. this has been one of the big paradoxes since the pandemic when would prices get so high consumers would back away. what we are looking at here is the s&p 1500 composite index up 20%. the apparel index in white outperforming a little bit of a dip this year having to do with that hot cpi number and more of an investor call there as opposed to consumers. you can see overall very well supported.

if we go under the hood just a little bit and we adjust retail sales for inflation we will see it comes down to earth a little bit but is still very healthy. what we are looking at retail sales nominal. up 29% -- adjusted for inflation. white is nominal. up 51% over the last five years or so. again the retail consumer doing very well. you can see the big pandemic dip but up and away. if we look at employees in the manufacturing of apparel, not surprising given the fact the manufacturing sector has gone down just 20, 25 years ago we had 800 thousand workers in the manufacturing industry now just a little bit more than 60. this is one area where there has been a decline but i'm guessing a lot of that apparel is coming to us from outside the company

and were limited spots within. katie: let's keep this conversation on the retail industry. we are joined by the founder and ceo of american giant. it is an apparel retailer that manufactures its products in the united states and he joins us now from san francisco. american giant founded in 2011. set the scene about the founding mission to be made in the usa. >> that was a good chart you put up there which is at the root of it. i spent time moving american jobs overseas and when you do that enough in your career you confront the reality of the disconnection from the product you're making. more importantly the impact of jobs going overseas has on urban and rural communities. i felt that was a problem needed in the con -- that needed

addressing in the country. finding work for low skilled and lower class and middle-class jobs i wanted to make a point was possible even in this industry that's not well-positioned to remain domestic in textiles and clothing. trying to make great quality clothing here. now 13 years into the mission, but i think it's an important national discussion for us to be having about our plan for future manufacturing and jobs. katie: are your clothes more expensive to make an manufacture in the united states versus if you had outsourced it? bayard: one of the ironies with how we've done trade policy we've said it best accompanies if you're the highest standard that's appropriate, worker safety standards. and at the same time we've let our brands exploit countries

that don't include those standards. i'm supportive very much of those standards but we have to be trading working with countries that are adhering to them. it doesn't make much sense to say we care about the environment and human rights and a living wage and all of our major brands go to places where they don't have those standards so we lose american jobs and those standards we care about as americans. that's an imbalance our politicians need to focus on and fix. it's definitely more extensive -- expensive as it ought to be as or supporting values as consumers and americans. katie: just making clothes in the u.s. of course is more expensive. does american giant eat those cost or do you pass them on to your consumers? bayard: we do a little bit of both. we passed on cost to consumers, that's one way of passing on

those. but one of the ironies is textiles if you basically allow all of our manufacturing to move overseas strangely you retire investment innovation and technology. because of our interest to -- remain domestic. they've allowed us to little by little close down that gap in the cost and so that is encroaching and available and would be great if more retailers and brands got into the mix to help with the demand stick flow but we do a little bit of both. we charge more but we are also investing a lot inefficiencies to keep us more competitive. katie: that message certainly sings with a lot of potential investors. talking about one of the

investors is that we work founder. he paid $10 million for controlling stake in the company in 2022. you lead the day-to-day stations to american giant but he helps with the strategy and branding. can you tell us about some of his contributions since he became part of american giant. bayard: in my judgment he was the sort of spiritual force behind the spiritual concepts of we work with the workplace varmints that were not great for humans. we met through a connection by similar energy and we started talking about how it's great to be spending time on white-collar jobs but its worse problems for blue-collar working-class jobs and we spent very little attention thinking about what it's like to work in manufacturing centers and

facilities across the u.s.. that conversation began as a philosophical one. thinking about how we improve the working conditions of our fellow americans and that really quickly became working around manufacturing jobs. and out of that began to be an alignment of minds and an opportunity for him to apply some of his learnings about the workplace experience in us to benefit in some of that capital to try and make our supply chain a better more interesting one. it's been an amazing partnership and he is an incredibly insightful and bright human. it's been -- he's been a great partner to us and someone who regularly air pretty fundamental questions of how we make manufacturing a great place to work in. always emphasize amazing

four-year college degrees but there are other opportunities and careers for americans who may not want to become an accountant or some other job in the making of things. katie: that partnership has been in place since 2022. they were founded in 2011. the last minute i have left with you would you ever consider taking the company public or our private markets right for you? >> the trick about the public -- the investor dynamic and that's great for shareholders. it doesn't allow you to do things like investing in automation interested manufacturing, it's probably not reflexively supported if it costs five or $.10 more to make a t-shirt domestically. domestic pressure would appropriately be applied to marginal impact of that.

staying private is a better plan and we're in this for the long haul. as much of the values based at -- as it is a moneymaking venture. we are pretty focused on trying to build and set an example for the rest of the apparel industry that it doesn't always have to revolve to the cheapest way to make things. we have responsibilities beyond that. we set an example for them to follow. katie: really appreciate your time speaking about it this morning. american giant founder and ceo. let's broaden out and get a check on these markets. we will do that with abigail doolittle. abigail: we don't have much going on for markets but it is something to report on because take a look at the very small moves mainly to the downside but a little bit to the upside. futures up -- down just fractionally treading water out of the fed to see it's widely

expected they won't be doing anything officially with policy but will something color wise, out of that timing given the fact fed swaps are pricing in a chance of a june cut then with the election later this year it becomes difficult given december and november. the timetable is pretty tight here. check out chipotle mexican grill up a very healthy 6%. boeing, earlier they had been down and this of course on the report to the cfo said in terms of cash flows going out could be for $.5 billion on that door plug incident in terms of a slowdown in factories and greater regulatory scrutiny. nvidia down half a percent. it was down yesterday in the morning and then turned around. given the fact we have this massive parabolic uptrend they may be waiting on the fed because this is the kind of

uptrend they are growing gangbusters and the potential of ai. this is a short parabolic uptrend. there is an area of congestion here that almost suggests we could see a breakout to the upside. take a look at the rsi it is no longer overbought. they are suggesting these recent highs unless bullish momentum it will be interesting to see what happens to nvidia in these chip stocks on fire for so long now. katie: coming up we will hear from bloomberg senior washington correspondent. but the biggest challenges facing treasury secretary janet yellen. this is bloomberg. ♪

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abigail: you are looking at a live shot of the principal room. coming up an interview with bill dudley at 3:00 p.m. eastern. this is bloomberg.

>> it's time for wall street week. wall street week host david westin spoke with celaya moz and and honor -- author of paper soldier. how the weaponization of the dollar change the world order and what it takes to make a great treasury secretary. >> professional experience in markets whether it's wall street or some other way. you have experience in the financial regulatory sphere, in how markets work, the plumbing that's all really important. we saw that test recently in 2020 when covid blew everything up and we had an economic crisis in hand and we needed people to know how the treasury market works and how businesses run because businesses and airlines needed help. so have steven mnuchin understanding all of that is really important. these days it's really changed

since bob rubin was treasury secretary compared to now you need to have a lot of national security and foreign policy interest. no one person can have all the expertise you need to be treasury secretary today from markets to budgets, to regulation, the national security. knowing what you don't know is powerful. being able to speak with gravitas is powerful. david: goldman sachs is a recurring theme through your book. hank paulson, steve mnuchin, will we continue to have goldman sachs represented in the treasury secretary? abigail: -- saleha: there is this theory about government sacs, they promote -- produce the most. you can look to mario draghi and malcolm turnbull in australia respectively.

there is pushback and that's led from elizabeth warren and the liberal wing of the democratic party saying we need to watch this revolving door and what that does in terms of groupthink and making sure there are a wide variety of ideologies that are brought to the treasury department. david: the treasury sectors of the stars in one sense. in another sense the stars the u.s. dollar itself. its strengths and sometimes it's not so strengths. has that will roll of the u.s. dollar evolved over time reporting. >> the role of the u.s. dollar has changed a lot. if you want to look at one point in time where overnight the dollar was the focal point without people necessary realizing it and it shifted historically i would say 9/11. the global war on terror the

george w. bush launched did not start with military boots on the ground or tanks, or any kind of ammunition. it started to treasury. because george w. bush at the end of september in 2001 signed a set of executive orders that gave treasury the authority to start following the money to figure out how that terrorist attack was financed in order to stop other attacks. so that's the moment and it was in the wake of that the whole new unit a treasury was established. the terrorism financial intelligence unit which is celebrating its 20th anniversary it was established in 2004. everything coming out of the patriot act after 9/11. david: the strength of the dollar really exists in its use. but there are at least a couple of uses. when others for transactions. i believe those two have

diverted to some extent. reserve currency is still coming not as much as it was in terms of transactions and trade. abigail: at some -- saleha: at some point they diverged but they will meet in the middle whether they want to or not. the last transaction you have in dollars, the less powerful the dollar as a weapon. to protect american interests or hurt american interests. depends on which topic we are talking about and which side of the coin you are on is going to affect that. david: in politics this a you can't beat somebody with nobody. is that true in currency? there has to be something to replace the dollar and who the likely candidate b. abigail: particularly toward -- saleha: the start of the book is february 26, 2022 and that's the moment the u.s. levied enormous

and historic sanctions against russia cutting off the country from swift and also essential bank. it's a huge deal. a g20 economy. cut off from the dollar. that triggered a global re-think from both friends and foes, are we to reliant on the dollar. is dollar dependency going to cost us if someone in the white house disagrees with our policies? so i drive it this toward the end because d dollarization and abandoning the dollar or the dollar losing its sheen and shine as the world reserve currency has been talked about for decades. pretty much since it was crowned as the reserve asset. this is the first time in 80 years but we are seeing action behind that. we are seeing the central bank holdings of the dollar as a

reserve asset level off and drop a bit. we are seeing active conversations from countries that are supposed to be friends of the u.s. and also enemies were adversaries talking about ways to work without the dollar. katie: that was david westin speaking with the author of paper soldiers, how the weaponization of the dollar change the world order. she has been covering for nearly a decade rate 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

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katie: just about four hours away from the march rate decision and everyone's expending applause for now but eyes will be on any further hints of future rate cuts. we are joined by mike mckee from d.c.. walk us through this.

mike: everyone wants to see what the dot plot shows whether the fed is now going to cut back on the number of rate cuts it plans for the year. we can take much of a move to that. the markets think they will stay with three when you look at with the future markets are predicting it's a tie between june and july for first rate cut but then rate cut priced in for september and one for december. the market is leaning against that idea. we will find out when that comes out. they will also be looking at what they say in the summary of economic projections. will they raise their inflation forecasts for this year or next? inflation is been coming in hotter. that would make a difference perhaps in the way wall street thinks about what the fed might be doing even if they don't change the dot plot today the higher inflation target might lead people to believe the fed

will be more conservative as it goes ahead. we will also see no real changes to the statement today. i don't think along with the fact they don't change interest rates and you and i were talking before in the break, they will discuss it today or at least they did yesterday. but are they going to say anything about it? probably not. we will see if jay powell has any kind of information he can expand on on what their conversation entailed. katie: only have about 45 seconds but that's the 2:00 p.m. numbers and then the 2:30 p.m. press conference. what kind of tone do you think jerome powell will take? mike: powell has alternated between being hawkish and dovish at his press conferences and tend to change as the day goes on. we will see if he can retain a

neutral outlook this time and keep people from reacting too much to what they think he might've said. katie: a busy man, i'm sure you will be peppering today. let sick a quick look at some of the stocks hitting highs and lows and we kick off with chipotle hitting a high after they hit a stock split. it would be the first in the company's 30 year history and one of the biggest stock split in the history of the new york stock exchange. international paper hitting highs after reporting kkr's andrew silverdale as ceo. meanwhile take a look at the downside, a burberry hitting lows off a lot of the leather luxury names after a steeper than expected kleiman asian sales. the principal asset management chief global strategist joins bloomberg technology next. this is bloomberg. ♪

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caroline: i'm caroline hyde at bloomberg's world headquarters in new york. ed: this is bloomberg technology. caroline: we will talk all things ships as intel wins incentives from the u.s. government. ed: the biden administration ways sanctions on huawei's secretive chip network. caroline: we have to talk ipo's.