>> from new york city to our audience worldwide, good day. in between the holidays trading

day to you. we are simulcasting on tv and radio. paul, how is your stake last night? paul: it was wonderful. no phone meet last night. caroline: what was the inflationary pressure like? paul: it was $60 last night. caroline: inflation pressures still hot. today, we get the crucial data there. looks like some resiliency even as the fed fights this. also, a tasting over at restaurants. we still see a market with jobs looking strong. we have quite a nice ride on the back of that data. david: s&p up 1.35%. nasdaq up about 1.9%. we have the vix. i will call that out for tom keene. now below 22 on the vix.

some good trading. 15% below recent averages. caroline: it's interesting. the vix at 20 was where the global cohead of ubs wanted to see it go. still sat waiting on the bench for 2023. interesting as we digest the jobs data, i know we are going to discuss throughout the hour the jobs market technology, but also affecting bankers. david: exactly. our good friends at goldman sachs out with news over the past couple of weeks. we want to get a sense of what's going on with our friends at goldman sachs. talk to us about what is going on with our good friends at goldman. >> a couple weeks back, we saw press reports that goldman sachs was going to go deeper than any banking build. there could be up to 4000 jobs

getting cut, or about 8% of their workforce. until yesterday, goldman itself had not confirmed any of that. but in his traditional urine message, the ceo did not come in with the typical holiday cheer. caroline: is he normally filled with that holiday cheer? >> even if it's not cheer, he's usually rallying the troops and congratulating them on the year just past. this message was about headcount reduction. perhaps he is right in doing that. you might as well get them the harsh medicine upfront. he gave us a little bit of news yesterday when he said the job cuts could be coming as soon as the first half of january. that's just a matter of weeks. if they do go ahead that amounts to 3000, 3500, 4000 jobs, you may as well warned them the last week of december. there are a lot of pressures on

the business. he has been talking about, in the past, the pressures they have been facing on their own expense line. and with that increased investment focus on cost, goldman sachs wants to get out ahead of the narrative. it only knows it is unlikely to meet return on equity targets. it needs to show investors and shareholders that it recognizes that and is taking measures and steps to address that. caroline: it cares about margins. but is it because of covid that we have this lack of getting rid of the bottom rung that we all anticipated from goldman? sridhar: many banks said they would not cut through the pandemic. they were not completely true to that pledge. they carried out some cuts late 2020. by a large, it is not typically with a 10 to do. and their workforce in the last

few years, at least since the end of 2018 and 30 and of 2022, has grown about 34% to more than 49,000 people. there has clearly been a lot of growth. there has been inflation in their ranks, perhaps more than the price of your steak last night. david: [laughter] sridhar: there is clearly room to make cuts and become leaner. that is the message they want to send. next month, they come out with earnings. it sounds like with these job cuts and announcements, they will have another investor day. they have never done that. the first time ever was 2019. they met a lot of those targets, but it's unclear how much of that was strategy realignment and how much was pure luck of covid, the pandemic, and the

windfall it unleashed. but three years later, pressures are very different. now, we are going from a windfall era to a more normalized environment, where strategy will help defray from wind to another. that is where goldman sachs is eyeing and they want to go in and give a proper message, giving shareholders some reason for cheer. this is not have the same enthusiasm from investors as some peers. they want to address and correct that. caroline: thank you for taking us through that. perhaps trying to tame any over exuberance stakeholder ring as we had tour -- head toward the new year. goldman sachs has been try to navigate through 2022, wall street got pretty blindsided. we will talk about this with callie cox, an investment analyst over at etoro. a brutal cross s8 year in 2022.

are you looking wounds at this moment, thinking optimistically about 2023? do you stand? callie: i am a cup half full person. it's hard to be these days, but i think it's hard to say that 2022 wasn't painful because of that process, the selloff, the pain we saw across a bunch of different markets. investors are sufficiently anxious and properly hedged going into 2022. -- 2023. the whole talk of this year was whether a recession was coming. i did take comfort in the fact that a lot of us are braced for that. weakness may not catch us offguard. paul: i have a problem with callie cox because she is a proud alum. a lot of people are saying

they're still earning risks in this market. how do you guys think about that? callie: first of all, i respect. it is a great, great school. i think there is a bit of earnings risk there. we haven't seen earning risks come down too much. i think that's partially because of niece have been resilient. and it has been much healthier than expected. but we are still watching fed rate hikes there of the market. companies are responding, like goldman. they're putting it there comes a little bit to make sure they are prepared for more weakness. that's a good thing. i don't think the weakness is quite priced in yet, and that could lead to new market lows if we see some recessionary cuts being priced in. caroline: go global for us. perhaps more weakness in u.s.

stocks. have we seen enough of the pain trade there already in the likes of europe and asia, or no? callie: globally, i think there are a lot of opportunities in the u.s. and europe if they are willing to think outside of their borders. some bright spots, china reopening being the brighter one going into the new year, but the fact that the global economy is out of step with the u.s. economy could allow for some interesting diversification opportunities going into 2023. also, the fact that european and asian markets have priced in a lot more pain does make them right for more of a rebound, especially if we see ourselves come out of this weakness. paul: really since the great financial crisis, what has really been driving this market and large part was technology stocks. what kind of role do you expect big tech to play in the next market move, to the extent we get a little bit of a lift

sometime in 2023? callie: tech is an interesting space right now. the big tech companies look a lot different than the more speculative tech companies. we have seen that in performance throughout this year. as we step forward to a fed pause, most likely, potential rate cuts in the future, because they are insistent on getting inflation down, and i'm talking way far into the future, but as we step forward to that and prepare for a potential global market after this, it could be interesting to look at those more quality tech companies. big tech with strong balance sheets, giving exposure to a market looking ahead. we don't necessarily think rate cuts are on the horizon. tech in a higher interest rate environment, there could be a lot of pain still there for the more speculative companies. but at the same time, you really have to be thinking ahead, and

big tech to be an interesting spot to do that. caroline: the nasdaq currently up almost 2%. go cross asset. we see, and many ways, the correlations this year has been when the market sold off and nasdaq has sold off in said that the. what do you make of the bond market for 2023? are we likely to see yields cap out at some levels or some sort of buying? callie: where in a weird environment. we can all agree inflation is slowing. it will take a lot to get back to the peak we sell the summer. i think that's good news for bond investors, especially if we do see a recession in 2023, which is definitely not out of the question here. we could see bonds returned to their traditional role of being that safe haven asset, especially around the world for global investors. that goes back to the global economy being out of step with the u.s. economy. lots of pain there, but also

loss of opportunity. we see shorter-term bonds following with the fed is doing, and it doesn't look like the fed is going to be hiking much more from here. we could see a return to more traditional asset correlation. paul: callie cox, thank you very much. i guess good luck to the unc tar heels. we appreciate getting your thoughts on these markets as we look ahead to 2023. it has to be better than last year, 2022. let's go to lisa mateo right now. she has world and national news in new york city. what do you have? lisa m: thousands of stranded flyers in the u.s. booked with southwest airlines make it releasing pizza far, the carrier has canceled just over three dozen flights for friday. more than 2300 have been canceled today. about 50% of the schedule. the airline is trying to recover from disruption caused by winter storms and outdated scheduling technology.

another sign of the u.s. lipper market staying resilient, despite the fed's aggressive requirements, we remain nor -- near historic lows. we increased from 9000 to 225 thousand. that was in line with forecasts. in italy, authorities not find any new covid variance among recent arrivals from china who tested positive for the virus. that's a relief for officials worried about fresh health threats. both billy and the u.s. have enjoyed -- have joined a growing number of countries to manning covid tests for travelers from china. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg. caroline: thank you so much. let's have a quick check on the markets. globally speaking, we are seeing a day that is higher. not including asia, who saw a downwind and closed on the red side.

a performance. paul, we've seen s&p 500 up 1.4%. almost 2% higher on the nasdaq. tesla actually managing to get a bit on the day. paul: getting some dip buying, if nothing else. the fundamentals are there for a lot of investors and analysts. but the elon musk risk has been something to really overcome this year. caroline: while said. we will take into all of that, twitter outages, test lock -- tesla having its worst valuation of the year. from new york and worldwide, this is bloomberg. ♪

caroline: welcome back. this is bloomberg markets lift. we are simulcasting across radio and tv.

caroline hyde and paul sweeney. it's interesting as we digest the day. really amazing, considering the resiliency of this jobs market. we start the show talking about goldman sachs likely to see more cuts to come. and the amount of job cuts we have seen in technology and more broadly. paul: you get a sense of how reflective that is of the general economy. silicon valley is not reflective, wall street does not reflective of the general economy. you see that in the rod macro camps. if you are calling for a recession in 2023, you are looking for weakness that we just on see yet. caroline: i think that evolves from the big layoffs we are seeing from tech companies. the talent pool is still so tight. as we see the resiliency overall, some of these tech jobs, we see companies get snapped up by rivals spared what's interesting is it's not technology firms snapping up

other talent. financial companies are doing the same. i had a really interesting conversation a couple weeks back with the hedge fund giant that is millennium management. global head of talent acquisition sat down and really talked about how they are looking to hire the sorts of talent for the technology space. take a listen. >> we put 294 technologist, i think the number is, to work this year, with more than 100 openings still listed on our career site. in the 20 years of me running talent acquisition programs, i have only seen a few of these disruptions. i'm happy to say millennium could be the place for those defined themselves on the job hunt. caroline: job rivals might be doing something similar in moment. what kind of candidates are you looking for and what roles are you filling? >> great question. whether you are beginning your career or you want to be in a

senior global position, we are recruiting across all of those levels peered we also recruit across all technical pump at and sees that i personally think are so attractive. not only software engineering, but security engineering, cloud engineering, these roles that involve unbelievable amounts of data within this industry that makes things really, really exciting. over a fairly typical technology stack, we seek those individuals that can solve problems, that have great, that are scrappy, across a wide range of opportunities. caroline: i can see if i was a technologist being let go of these companies, i can get intellectual stimulation from millennium. what about culture? in an uninformed or naive way, people may believe they are hard-working, so what do you

have to decide and educate people about in terms of your culture? >> i'm happy you said that. what we offer in aggregate is really powerful. it is not only technology opportunity and connection to businesses, not only the impact you can provide, it's respect for the individual and the collaboration on site. that respect in the way we go about working with each other is extremely positive. i would love the chance to talk to those who may think it would be otherwise. caroline: let's just thing about being in the office or not. if i am use to a hybrid culture or a fully remote one, how are you thinking about where the talent is that you can hire? >> from a location perspective, globally, we are building out miami, dublin, tel aviv, bangalore. we also have opportunities in new york, london, singapore. we are also making sure that we are very, very focused on this

talent, knowing there is some flexibility in our model. we are enjoying returning to the office. collaboration is really important to us. we can be flexible, as well as club location flexibility. caroline: when you say miami, i immediately think of crypto. does it matter which sector or part of technology? technology is horizontal, not vertical anymore. doesn't matter what space of technology they come from? >> no. of course it is interesting to us, but whether it is crypto or existing sectors, the domain is not a prerequisite. caroline: i've had a lot of conversations with people in finance, particularly those trying to hire talent, about the need for diversity and pipeline. i imagine tight knology -- technology fights that good

fight, too. how are you thinking about that when you start to hire technologists? >> that's a great question. it's extremely important to a spirit we have seen a really great activity in terms of females in the technology space, going into universities at the greater rates and coming out in greater rates. cultural and racial diversity is also incredibly important to us. it's about diversity of thought, and we get those from all the different pockets. we focus on that through affinity networks, paid network programs, and make sure we are in the right pockets with folks who help us identify where that talent may sit. it's really a that you it's really important to us. it's going to make us better. caroline: what are the ways in which you happen be creative in the ways you higher? i am pretty sure millennium, you are out here talking about this. but some other big asset managers are doing something similar. how do you set yourself apart? how are you looking for alternative types of people to

come to you? >> in my opinion and specific to our organization, we do a really great job of casting a wide net. we need the best talent. whether it is having strategic relationships with search firms, using linkedin, using our vast employee network, inking about where these pools of talent may be that could be attracted to us, then advertising accordingly to those pools of talent, there's nothing you could think of we probably don't do. we want to get the best talent. there's nothing, in terms of strategy, we would not type -- not try. paul: i think wall street, for the last decade, has had the risk of losing its talent to technology companies, not being able to track the talent macy a little reversal. caroline: it ebbs and. paul: let's talk about big auto

and tech companies. tesla. ed ludlow joins us here. he has been following this saga. i call it a saga in 2022. he is in our london office, i believe. he is in san francisco, then new york, then london. i think he is in london. ed, we seem to have a little bit of a bid for tesla stock. what do you make of it? are folks looking for a bargain? ed: it's interesting. we are up 8%, the biggest jump since july. this is a real rally, a real rebound. gift to point out this is a stock that was deep, deep, deep into oversold territory. most oversold from an rsi perspective. but as he said, there appears to be some support for the stock after that morgan stanley adam jonas move. he cuts the price target, but

maintains his overweight rating. he is basically saying 2023 is the year were supply will overtake demand. there's consent about demand. but he thinks of all the players, tesla is the market incumbent. caroline: talk us through that. everyone is talking about competition. why does tesla still remain out in front? will market share not have peaked in the way analysts have thought? ed: i would say jonas, let's say he is a tesla bowl, just for the sake. leaving out any folder -- any further elon musk reputation and such, he is already saying tesla's many factoring at scale. they can use other incentives and pick backup.

it is the cost of production that is much more competitive. we don't think that volumes will drop, we don't think they will miss existing prediction -- production forecasts. they will miss revenue because they have to cut prices. they have to use incentives. but they are so competitive and the margins are so far ahead of the rest, many analysts are actually arguing that could be the year where tesla jumps further ahead of the competition because they will weather the storm better. caroline: ed ludlow, stay well, our global friend. elon musk likes the number 420. you want to know why? let's talk about marijuana sales. new york kicking off recreational marijuana sales today. this is bloomberg. ♪

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caroline: welcome back, bloomberg markets five. we have a rally on her hand. paul: those have been the leaders in the market, it's interesting to say what role they will play in 2023. after a brutal 2022. caroline: why are we getting this bid today, we are going to ask abigail doolittle. we were worried about covid

uptake, the opening of china. why the bid today? >> people are wanting to buy out of this awful year. the initial jobless claims came in higher than last week. maybe someone taking advantage of the thin volume to take the stocks higher. as we mentioned the s&p 500 up 1.5%. tesla and apple, apple having its best day since july, two days. next year could be a re-rating for some of the stocks. that said, it has been a difficult december it's down about 40% in december so far, even with today's rally. something to think about. evaluation is more attractive here.

some of those metrics that 35 time forward pe. triple digit bottom-line growth. even if they come and it should be still attractive. on the car metrics, a good are a weak, good turnover. maybe next year will be a re-rating. will it be a rewriting for bonds and stocks? hard to know. but this year we have both bonds and stock, bonds down the most since 1999, stocks down since 2008. paul: abigail doolittle covering the markets for us. a big day in new york city for the cannabis business. we will have our first little store opening today. this pot shop aims for one million a year in revenue. big day for new york city for cannabis.

whitney beatty from josephine & billie's joins us. we will go to ken che first because he is our rock star as it relates to covering the business of cannabis. how big is this true new york city? getting its first legal pot shop and how will that evolve in new york? >> it is a big deal. new york is a huge market. it's a highly visible market a lot of other places that have not legalized will watch it closely. new york is a large market and it has highs -- high hopes. new jersey recreational -- legalized recreational marijuana and its up to one billion in sales. you put the map together and you

have a really big industry out of the gate. the demand will be there. the product has been around a long time. around new york, you can get a sense of what is going on. caroline: you do a good job bringing together the issues. the spending bill did not have marijuana banking. to grow this industry they need to be able to get bank loans, easier access to capital. why have we already seen the ability to cross the street and i can get edibles, marijuana related food consumption. what is stored doing now? why has it been able to do that ahead of the legalization? kenneth: new york has taken a different approach than many markets. allowing the social justice theme to allow flexibility to

some operators that one exist in other markets. that has come at the consternation of legal operators. legal operators pay all these taxes, jump through these hoops. help us out by enforcing the laws on the books. you can have someone down the street illegally and avoiding taxes. that will be a key issue going forward. also, discourage entities from getting into the new york market until they enforces rules. caroline: interesting you bring up social equity. we want to dovetail into that point. also interesting, the governor have been trying to think how the people who have been in the past been targeted for cannabis infractions are not able to benefit and they set up a 2

million investment fund. we have seen that in illinois as it started to embrace legalization. how can they foster growth among people of color to make sure that their businesses succeed. it's not always work out as well. let's talk about away. let's speak to whitney beatty. talk to us about your journeying, how have you found yourself able to lead this sort of a business? whitney: it has not been easy to get into the space. particularly, even with social equity being what it is, it is hard for us without having access to that capital to grow our businesses. i applied for social equity in los angeles in 2019.

our program here had a lot of delays and unfortunately, we were required to hold property throughout of those delays which was incredibly difficult for us to sit and pay for two years on a place we were not allowed to sell cannabis out of. that really hurt us, especially when you're talking about a population where the idea of equity is that people of color were disenfranchised by the war on drugs and they deserve prior to rosacea and. that drained our funding. what we are talking about, equity businesses, we don't have that much access to capital as you mentioned. i can go down to bank of america, we have to be able to raise money from angel investors, a lot of people of color don't have in the networks. or bcs, and they are giving 2% of their money to women and businesses and .0006% to women

of color. that makes a hard for us to compete. paul: give assistance of where your businesses now, with the outlook as you look into the new year? whitney: it becomes difficult for us. being able to have raised enough money. we raised $1 million but we need to in order to compete with mso's on the market. it's difficult for us because of the tax structure here. as a legal business, i can't ride anything off. that overhead is sitting on us and competing with the illicit market. they are charging you a hundred dollars and i have to charge you 137 because we have 37% tax. it makes it less attractive for people to be able to buy from the legal market and less attractive for those people in the illicit market to come into the legal market.

we are concerned about what the future looks like as we see the prices of plant fall. we are talking about counts that were going for 3500, 4000, and now $500. building projections, is not what we are seeing now in 2022. caroline: a lot of the obstacles you outline there, what about the help you need? is it about cracking down from the illegal side of the business? is it about having more funds coming from the government to back businesses? is it about education for angel investors. whitney: we have to see taxes go down. a lot of people sold legalization on the back of the tax. but one with the industry to

survive. we have to see capital come into the space and get access to it for these equity businesses. whether this means that the state allows us to have loan programs. i cannot do that, we don't have access to that. we need more education on the bc. businesses run by women, black women, we do have a skill set we just don't have the access to capital in order to compete with someone sitting on millions of dollars who could drop the price of an eight and wait us out as we die and let those licenses. we need those things online and for equity in particular, we need technical assistance. the cannabis industry is highly regulated. i deal with compliance issues on a daily basis. we don't have the skill set, because there is not a role for that.

so to be able to have technical assistance that will allow people to be compliant and successful in their businesses is what it will take for equity businesses to succeed. paul: it sounds like a challenging outlook. is there any relief? what keeps you going? kenneth: what keeps me going is the people that i am helping at the end of the day. i came to cannabis because i had a doctor who suggested i try it to deal with anxiety. i did not use it when i was younger. it took me a while to come to the space and i had to do a lot of research on the plant. learning about how to use it effectively and why i felt so negatively about it. i did not want the next person to have to do that much research or have such a hard time because what we know for sure, when we are talking about our demographic, women are more

stressed than men and women of color are the most stressed cohort and with the least access of health care. we know the doctors are not necessarily listening to us. we might not have money to cover that. public health has been able to offer that to people with anxiety, ptsd. waking up and knowing that i'm offering that a my community and giving them education that is not available elsewhere is what keeps me motivated within the space. paul: we wish you the best of luck. whitney beatty, no safina billy's cannabis speakeasy joining us on zoom from los angeles. let's get world and national news from lisa matteo. lisa: russia is rolling out peace talks and they say they won't give up despite setbacks. sergey lavrov said the kremlin will not discuss ukraine's

demands that it withdraw from occupied lands and play -- pay reparations. taiwan's semiconductor factory kicked off next generation chips. it remains the center of critical technology fought over by the u.s. and china. it was one of the more significant disruptions to twitter, the platform has restored service hours after thousands of users reported glitches and other issues. musk said that twitter had rolled out changes to its server architecture. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa matteo, this is bloomberg. caroline: let's check on the markets because the rally is extending, we are up 2.4 percent. volumes are muted but there is

some juice to this. 1.6 higher on the s&p and the dallas up a percentage point. europe, we are seeing the dax up. spain is managing to gather a little bit as well as italy. asia did not have such a pleasant day of trade. the japanese yen, is doing particularly well. the dollars week on the back of that. paul: on the u.s. equity markets, two days of decline. caroline: tells you where the key concern is, your travel plans. what about southwest? the stranded passengers? we will have the bh w hotel group ceo. that's up next. ♪

caroline: welcome back to bloomberg markets live. we are cross-platform with paul sweeney, and carolyn hyde.

we see most industry groups, but especially technology. the world is trying to understand how china's reopening story affects economic growth but our ability to start to see the chinese buyer come back to the u.s., new york, london and whether it is safe to do so. paul: i was in midtown, a lot of international tours. the europeans are back, now the world has to assimilate the chinese travelers back into the global market. caroline: what does that do for your coffee steak? paul: let's bring in madison mills, she joins us on our

bloomberg radio/studio. stocks are up today 3.4%. a little bit of butter news coming into southwest? >> a little bit of correction in the markets. but for theelers, still some bad news. flights canceled by southwest today. i spokerebook her flight. she was not able to get a new one until february on southwest. she paid $1500 to get out on delta. caroline: are we starting to see reprieve until financial outlay? medicine: there is some hope heading into the weekend that the warmer weather will lead to a little correction with all of these flights. it points to this bigger issue with southwest of how their systems are run. this will be the big story in the big question for ceo bob

jordan heading out of this issue. southwest continues to run on the point-to-point system which helps them keep costs down but it's difficult to run when there is unforeseen circumstances like extreme weather. caroline: we can't control the weather. we may not be able to control the reopening of economies but we think madison mills. let's talk about when you are on your airplane, you make it to your destination of choice, how are you feeling? how are you spending and where will you spend it? we are happy to welcome larry cuculic from the bwh group. you have 18 brands, are they awful and where are you seeing the most exuberance in the new year? larry: we are seeing exuberance

across all of our markets and segments. the demand for travel is robust. we are experiencing a tremendously successful 2022 holiday season. we anticipate and are projecting her moist successful new year's weekend as well. paul: talk to us about the day-to-day operations. i will go a something that i've noticed. no service to service to the room for 3-4 days. what we get daily housekeeping back into the business model or has the industry moved on that is something every 2-3 days? larry: we encourage our leaders to offer everyday service. guests have the option to request that they don't have that service if they have personal concerns. we understand that guests have

diverse requests and requirements with regards to overnight service. it's not just the covid result. you are also seeing the hotel industry having labor challenges which is also influencing that overnight service being offered. we encourage our hotels to offer overnight service. paul: one of the things as we think about travel is the leisure travel has come back pretty darn quickly. business travel less so, what do you see in your perspective for business travel in 2023? larry: we are focused on midweek business, it has lagged. leisure travel could be back. we are seeing that businesses recognize the importance of face-to-face meetings, conferences and while it is been lacking, we are looking forward

to it coming back in 2023 to pre-pandemic levels. you also have to consider there is this push for international travel as well which plays an important role. caroline: let's talk about the news that is so fresh this week. china has done a massive u-turn and going against its covid zero policy. they want to be issuing passports, showing the ability to enter china but also for the chinese people back in the skies and visiting new york, london. are you excited? trepidation? what is that mean for you and your business? larry: we are excited about it. asia is a tremendous opportunity for the rebound in the chinese travel plays a major role in that. we understand that china has less invasive restrictions but while you can be optimistic, there will be some compression

associated with lessening those restrictions and you see that happening in the united states, india, japan, putting in place testing requirements with inbound chinese travelers. you have to be cautiously optimistic because there will be countries that are concerned with regards to the health, and welfare of their citizens. caroline: what is number one on your consumers concerns or hopes right now? are they worried about covid? is it the inflationary pressures? how do you expect that to impact post-new year? will would be as desirous to spend as the inflation starts to buy? larry: we think there is that pent-up demand post-pandemic that has not been unleashed. we are optimistic about travel in 2023.

again, you have to be cautious with regards to the impact of ukraine. inflation, the fear of a recession which can influence consumer confidence. supply challenges, labor challenges. there are a lot of unknowns that can influence outcome but we are optimistic because what we have seen by way of example, january, february and march exceeding pre-pandemic performance. with regard to occupancy and with regard to daily rate average. while we are confident that we have early signs of a tremendous 2023, you have to continue to monitor the pressure on that confidence. paul: you mentioned labor before, love to get a sense of what you are experiencing with your hotel rooms? are they moderating or is this something you are baking into your model for 23? larry: we are not baking it into

our model but what we are doing is trying to help our hotel iers to deal with those challenges by providing them training. we have a because you care program that recognize the importance of being good citizens in their communities. as a result of that, they can become that employer of choice that can sexily overcome challenges. caroline: what hotel will you be up for new year's? larry: i'm going to be home thankfully. caroline: have a wonderful time at home celebrating this year and one that seems optimistic. larry: thank you so much, happy holidays to you and yours. caroline: let's talk about these

markets, with optimism from market and from larry, people wanting to put money to work. we are up 2.64 on the market today. paul: we will see how people are setting themselves up for 2023. i think people want to find -- to feel cautiously optimistic. the fixed income markets were routable in 2022 with unprecedented losses. it's time to dip your toes into the bond market. caroline: the strategist, not many of them have been right. i wonder how they will reclaim their battered egos. we will talk about that take later. in europe, cat open .9, the dax is a .9. volumes are off by half. ftse is up by 10.

we anticipate the european close in the morning. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

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caroline: from new york city to our audiences worldwide. we welcome you to a simulcast.

paul sweeney is a long side me. some optimism, volume is muted but it is ripping up 2.5 on the day. paul: tech stocks are winning on the day. a lot of people are questioning the role of tech stocks will play in the market. we have had weaker earnings and discretionary concerns. the question is how will tech behave in this market? caroline: the jobless claims came in exactly had been anticipated. paul: is the machines, the algorithms that i don't get. caroline: it's a technology talking. we are seeing the continued evolution around narrative -- the opening of china's narrative. what does it mean to these new

desirous population not want to get out and spend and inflationary pressures it as to the u.s., u.k. in europe. we know that they are eyeing ways that testing is still necessary for the chinese traveler. let's talk about all of this, the covid testing, chinese travelers and what it means for hotels and shops in retailing that could be upon us in this new reopen world. over in london talking about all of this for us, what are the latest news tidbits we have in terms of how countries are addressing a very pent-up chinese consumer right now? >> it feels like a blast from the past. we have seen headlines about country in the u.s. requiring covid tests from chinese travelers again. at the same time, the eu health officials have taken another

path by saying they are opposed to these traveler restriction. i think this is a big question for the global economy right now. a lot of investors were looking for china to reopen. but there will be no gain without pain first. chinese consumers are not going out of their house and there have been new supply chain disruption from people falling sick. chinese people are worried about catching the virus. paul: not surprising, i wonder the role of the chinese government is playing here? if i were a u.s. official responsible for immigration i would pick up the phone and call my counterpart in china and help us out and maybe require people who are traveling outside of your country to be vaccinated? do we know what the communication is? the dialogue between china and other countries?

justina: we know very little about that and there have been strong concerns about the situation in china because the data coming out of their don't seem to be comparable. they are no longer requiring pcr tests so it's no longer easy to get a of who's getting infected each day. they change the definition of covid fatalities. even the death numbers are not easy to compare versus history or other countries. china cdc said today that they will start calculating excess test. hopefully, we will get more clarity around the number of deaths out of china. paul: we appreciate you getting back to us with their bots. we will keep and, because that is a fluid situation.

let's switch gears, was take a look at the u.s. and european economy as we head into 2023. a lot of challenges that are common in other parts of the world but they have geopolitical issues in ukraine that are impacting forecast for 2023. we check in today with dean turner, he is the u.k. economist for ups -- ubs. thank you for joining us here, i guess the economic discussion is recession, no recession? what's your call for the eurozone in 2023? dean: we don't expect to see a recession and the eurozone zone or the u.k.. we will be expecting a recession of 1% but that said, a couple of things have changed in the last

few weeks. the first being that incoming data that has been a bit better than what we were expecting. that places some upside risk to the fourth quarter numbers. the war in ukraine and the impact that has had on our economies via the energy price. if you look at the charts for gas prices, how far they have fallen in recent weeks. if that is continued, that places a little bit of upside risk in terms of the growth forecast. as things fair, i will be looking for a slow down but we have to accept that it may be more shallow than we thought. caroline: tell us about the european economy is getting a grip and soothing as gas prices

fall. we have seen labor tension, most acutely in the u.k. but also in europe as well. we are starting to see here in the u.s.. strike action, is this something more that grabs media headlines than impacting economies? dean: we have to save the economic impacts have been limited. it would be my expectation that going forward we will see more industrial action. i think that is a given. will it be enough to cause a shock to the labor market? this is not the 1970's. the percentage of workers that are unionized is much less today. moreover, the bargaining position of workers seems to be relatively weak. the reason i say that, we are

seeing wage increases coming through in the data. workers are negotiating pay rises but they are negotiating a real term pay cut. until that changes, i am to change my outlook in terms of the impact will have in the medium-term. i want expected to build into something a problem long-term. paul: the bank of the japan through in the towel and said we are willing to let rates go higher following the rest of the central banks around the world. the bank of england, ecb, what's your outlook for their actions going into the new year? dean: i think we should be expecting central banks to increase rates as we go through the first quarter. certainly from the ecb's perspective, they provided with a number of surprises there if you take them at their word. interest rates are going up to

3% in the euro zone. i would argue in the u.k., we are looking at rates going up to 4%. that said, we are against this backdrop of economic growth is slowing, inflation pressures are easing. two factors are driving that. the first are the base effects we are seeing in terms of higher prices from last year are starting to weigh down on headlines. weaker demand, when they are looking at some of the survey data, i find it interesting companies are flogging a reluctance on the behalf of consumers to accept further price rises it current rates. that week outlook will compound the downward pressure on inflation.

we are closer to the peak then the end of the hiking cycle then beginning. i think market pricing is probably a little too aggressive for the eurozone in u.k.. we expect the ecb stops closer to 3%. caroline: we talked about the mandate of the central banks, inflation pressures, labor and anywhere you see the central banks going. what about the resilience, the feeling in the market that you get in terms of opportunities in putting money to work and whether the economy will weather the storm? will people see value at the time or is it sentiment and still on the floor? dean: if you check the surveys, the investor surveys at face value it does seem most

investors are still pretty cautious. our own positioning is quite a cautious one. defensive, focused on value, focused on protective for the down saga. as things stay on the current level, there is quite a high chance that we do see further volatility. that said, what is starting to come through is sentiment is likely to turn sooner rather than later. caroline: our companies looking a strong? do they have the right balance sheets and place to whether? dean: across-the-board, i am looking at macro data and my sense is that corporate leverage is not particularly high or worrisome levels. profit margins are holding up and being far more resilient than most people were expecting. perhaps there is a bit of upside risk there, but it is short-term we believe it's better to be

positioned more defensively in these markets. paul: we appreciate you taking the time. dean turner, chief economist at ubs. let's go to lisa matteo. lisa: the u.s. and italy have joined a number of nations requiring a covid toes from china. they are responding from the surge of infections. italy did not find any new covid mutations. that's a big relief for health professional. russia is ruling out peace talks and says it won't give up despite setbacks on the battlefield. foreign minister also told the state run news service the kremlin will not talk ukraine's demands that it dropped back from lands and pay reparations. in the, consumers bowed to cut back on take-out meals and

nondiscretionary spending. it found that people feel they need to save on spending. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. caroline: let's have a check in on these markets. among saw the changing knows whether you can travel or can't, buoyancy turns into buying into stocks and common conditions on the bond market. paul: looking at the yields here, pulling back we have the tenure off by three points. compare that to the two-year, you have meaningful inversion there on the twos intends but it has been there for so long.

i believe it's predictability is losing steam. when i listen to the bond geeks, when you get that to 10 inversion you get a recession. and i'm still waiting for it. caroline: the amount of calls for some sort of recession, i'll be at a shallow one are starting to build. i am looking at an fx market that's a dollar weaker on the day. job claims are picking up but in general, we have such resiliency in this jobs market. the japanese yen is outperforming against the dollar. we have so much more to come in terms of those dog cuts at goldman. from new york, this is bloomberg. ♪ puts you first. godaddy. tools and support for every small business first.

caroline: 11:16 a.m. in new york.

we are expecting the european market close. paul sweeney and caroline hyde. the trade is higher overall in the european market. the taxes up to similar levels. this is we continue to try and understand how difficult the year 2020 two was every part of your asset class. paul: bonds had some really unprecedented underperformance in 20 22. caroline: let's have a look at what is happening in terms of what the market participants are into spinning. what you're seeing the ceos of big banks that are seeing volatility in the market and have dined out on it. they had a spectacular gear amid the volatility. david solomon says job cuts are

on the way. the firm is working on a round of reductions available in weeks. earlier, we caught up with the ceo and he was at a financial services conference. let's hear about discussion then. >> we are in an uncertain time, we are giving -- changing monetary conditions quickly and that is slowing down activity. if you are running financial services, you have to assume that we have some bumpy times ahead and you have to be more cautious with their financial resources. i think you have to expect activity levels will be more constrained in a tougher economic environment. we have businesses that are correlated to economic growth, we expect economic growth 1.9%

growth. the big question is as central banks tighten to try to control inflation can they orchestrate some sort of soft landing? that is uncertain, there's a possibility of that. we could see a recession in 2023 so you have to be cautious and prepare. >> how you prepare your staff around all of this? people are worried about their jobs, thinking about pay as well. it is bonus season coming up. we reported that you were thinking about having lower bonuses at businesses that have higher revenues this year. what's your decision-making process and what are you telling your staff right now? >> we operate a business where every single year we have to pay our most important asset, the people. it should not be surprising for

people watching the performance the 2021 was a sensational year. 2022 is a different year and naturally compensation will be lower. we are early in the process making those decisions. every year, we pay for performance and we will pay people who performed. >> how do you balance also, you reintroduced to headcount, the bonus discussion is everywhere on wall street. how do you balance that with the talent where we saw, the booming market for people in what's happening this year going into tougher times. how do you balance for tension? >> we take a long-term view with everything we do. you have to adjust to the environment so you make changes

around the market. at the same point, you take a long-term view and think about your business over time. we are focused on serving our businesses and clients. our clients have been active so it's important for us to strike the right balance in protecting our franchise and making sure that her people are paid for performance. on the other hand, we are in a tougher environment. so we balance that but we take a long-term view. i just made some comments in the financial services forum where i said i'm surprised by how competitive talent is. labor is still tight. talent war, there are some headwinds given changing economic conditions. the competition for talent is very strong. if we have a slower economic environment it will have an

effect you can see across all industries and not just tech. people are thinking about headcount size of making 20 cuts or adjustment because they feel margin pressure coming. financial services is not immune to that. if we make the right long-term decisions for our shareholders and customers. >> do you think goldman is going to have to pursue another round of costs cuts in any fashion, where could you see that? >> we always looked at the environment and size the firm to the environment. if the environment gets tougher we will make those decisions. that can come from slowing down hiring. that could also come from printing areas. -- pruning areas. >> last years, city tech, crypto firms were booming. does the collapse of ets's have

you thinking differently about crypto and the ability to invest in some firms, by some assets here? >> i have been very clear on my view on the space. the underlying technology of block chain is interesting. there are enormous opportunities for block chain to play a role in evolving the infrastructure of our financial system. i think there is an enormous amount of friction in the way money moves in a variety of ways this technology could be used to allow inclusive participation in financial activities. it could break down barriers. that has nothing to do with bitcoin or cryptocurrency. i don't offer a view on cryptocurrency. i think they are highly speculative. i am interested in the technology and how that technology will serve our clients and take friction out of the financial system and make it more accessible. paul: that was david solomon,

chairman of goldman sachs. talking about rightsizing the firm that is goldman sachs for what has been a difficult 2022. we have had some more news subsequent to that discussion about calling some of their ranks. listening to mr. solomon, it sounds like the normal course of business. we see the environment we are in and we will size are from accordingly? >> they are very good at using agricultural terms, pruning, trimming. the first smoke signal that they were taking serious measures and undertaking as serious review of their headcount.

he was saying that they would carry out job cuts. subsequently we've heard that they were thinking of a plan that could result into as many as 4000 jobs being cut. the full numbers have not been decided but david solomon say in its year end message, he said that while they are undertaking the review they expect to have an announcement of the first half of january. that's in a couple of years you will be undertaking a very serious push. that might not sound like a lot a bank, but in the last several years, it has not played out that way. it was this much smaller amount than before. if they take an 8% cut it will appear larger than what would be

considered normal. even if they underplayed it, it would be hard to see how it will not rattle their workforce if it ends up being the 4000 job cuts which is not set in stone. caroline: updating with him as those actual job cuts occur later in january in which part of the business they occurring. let's switch gears and look at is what happening in the broader networks. 2.4% higher on nasdaq. we are seeing europe, a key close for this market on this penultimate day of trade. from new york, this is bloomberg. ♪

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caroline: it is almost 11:30 in new york. that means it is 4:30 in u.k. trading. when it comes to these holiday days of training. caroline hyde is on here on our simulcast. we are down by 51%, but we see some relatively healthy gains. we are up a point on the bench

-- german and french benchmarks. we are looking at the bond market the ties of trade and yields are down. we saw a bid into the bond market. paul: everything i know about european stock markets i learned from bloomberg strategist in london. low exposure tech technology, less higher highs and less lower lows. the swings, less five flotilla d and the european markets. caroline: technology is outperforming on the day. it's up to .76%. and automobiles are down on the hopes of china's reopening. we have so much more to be discussing and we have only been talking about equities, bonds or cross assets. paul: the strategist on

wall street. a tough year for them. equities are down 20%, fixed income down double digits. emily joins us here, she covers that here for us. talk to us about some of the big stars on wall street, some of the people who get paid to predict markets, it's a tough year for them. emily: my colleagues and i for our bloomberg news story took a look at the outlooks that a lot of the south side strategist, fund managers were making in the beginning of 2022 in the end of 2021. what they really got wrong was the call on inflation. the consensus was not that inflation would persist. we had jerome powell saying inflation would be transitory. that trickle down at the forecast that we would only get a few interest rate hikes. the consensus was that maybe we

would get 4, 25 basis point hikes. we got 17. that led to the losses in stocks. paul: that term transitory will live for a while. caroline: what is so wonderful about your story, you do a brilliant job at naming and shaming because there are some key players who got it so wrong. to be fair to them, there were a lot of other areas that upended whether it was the russia/ukraine invasion. what some of the best quotes are the ones who called it right. emily: the wall street journalists has been online,

decades long periods of low interest rates means you could always buy the dip inequities. stocks will always go up, that reflects seemed like it was hard to shake for a lot of the strategist this year. even as the fed said we will be really aggressive, inflation state hyde. this reflex to buy the dip and hope for a pivot persisted. paul: daniel booth, she comes on a lot. she said the fed went into the year with the intent of killing the fed put. she felt that this was a fed that was intent on being very aggressive against inflation and that is what the street got wrong that they did not gauge how intent this federal reserve was to get rid of that fed put after all. emily: we see markets understanding that the fed put's

dead. if you look at the sell side for what the s&p is going to do, for 2023 is for decline. that's the first time we have seen the consensus expectation for decline since 1999. the sell side is getting more bearish on stocks. where you look at the swap markets to place for the rate to be, they expect a rate cut next year. the fed has been stern saying that they will not cut rates. there is a misunderstanding between the feds messaging and what the market wants to think. caroline: what i also think was so eloquently put, many in the professional trade pointed and laughed at what happened in 2021. the retail investor that got it so wrong. are we seeing a lack of schadenfreude coming from the

professional side of the business? emily: i saw the parallels between the ultra low interest rates that propped up the mean stocks, the crypto coins, everything that went crazy in 2021. those rates, that environment help prop up to buy the dip, reflex that the sales side had even in the summer of 2022 right before jackson hole. there was still this opinion on wall street that the fed is going to go slowly, we are almost at the end of the cycle. we are closer to the end in the beginning. just buy the dip and then of course, a rally in that it failed. caroline: was it for so-called pivots we like to make up in the space, we thank you so much. it is a great read, check out the big take on your terminal if you're lucky enough to have one. let's talk about these markets, what do you expect for 2023?

nancy davis is with us from quadratic capital management. always great to have you on. talk about the offending that the federal reserve, going so hard, so strong. what do you anticipate in 2023 and will we see a dialing back soon? nancy: the fed was the first of most aggressive of the central banks. you have seen the ecb trying to catch up. the fed's started the balance sheet reduction with quantitative tightening in the ecb has not. going into 23, we should expect the ecb to announce some sort of quantitative tightening. something other than hitting the gas over and over again with policy rate hikes which is been the primary tool so far. paul: i was told there would not be math on this test.

what do you think of the argument that we have seen peak inflation, it's behind us, prices are coming down. this is a fed reserve that can pause. are they there or are they very much trying to keep this thing under control? nancy: the market is convinced inflation will fall dramatically. realized inflation which is what you were saying with lagging indicators like the cbi. the cbi is double digits in most of europe. in the u.s. it is well above the 2% target. but see tran expectations are around 2%, even one year forward. the fed has been effective convincing the market that they have this and they will dramatically reduce inflation and a disconnect between

future data. i think it is a question of whether investors believe the fed has got this, whether the policy rate hikes will be effective. the market is pricing in inflation to fall dramatically. caroline: i feel like i've said all of those words, volatility, inflation, what about hedging, how popular is it trending to be? nancy: i've all is long interest volatility. interest rate ball has been performing well in 2022. it's one of the few pockets of things that are trending up

because inflation expectations have been falling all year even though it is that a 40 year down. the inverse yield curve is even lower than it was in the late 80's. i do think interest rate volatility will continue to be well bid as the fed continues to allow their balance sheet to rolloff and bonds to mature. i think the strong dollar could potentially be a catalyst to have the yield curve normalize and the bank of japan recently came out and widened their band for yield curve control. that's a step in the right direction to get things more normal. the thing i love so much about the i've all etf, the recession is priced and if we have a recession that would make bonds bid. it was deep in the yield curve

once the fed prices and hikes on the front and make volatility increase. it's just a nice normalization environment because if we see people go rest gone and 23 because the consensus is so wildly negative, that could make the yield curve steep and as investors come out of hiding in their 10 year treasuries and add more risky assets. it is unique because it is not a one way view of recession or a risk on and can do well in multiple environments. that is why a love it so much. thank you for all your support with high volume. paul: do i go by bonds here? nancy: i would say look at

i vol, it's just a different type of spread risk. paul: nancy davis, quadratic capital management. all i did was predict earnings. that was a good story, that was my career. we appreciate getting thoughts from nancy. with our news from new york city, here is alisa mattea. lisa: servers have removed barricades against an ethnic albanian government. they are trying to avert a balkan combat -- conflict. italy's prime minister says europe's 2035 ban on combustion

engines does not make sense for italy and hurts their business. so into is one of the biggest manufacturers and agreed on the band earlier. taiwan semiconductor factory has kicked off mass production of next generation chips. that ensures the island remains a vital part of the technology. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa matteo, this is bloomberg. caroline: we think he was always. the check on these markets, we are continuing to see a high pressure. s&p up 1.77%. it's been a torrid year, if

you've been a billionaire on the block. it's been quite some mulch was. paul: it's been a tough year for our billionaire friends. some of it is market related and some of it is self-induced when you think about who was once the richest man on the bloomberg index. caroline: he lost a cool $16 billion. and what happened? the rich go. it would prove. we will continue to question that. from the offices of bloomberg. ♪ as americans, there's one thing we can all agree on. the promise of our constitution and the hope that liberty and justice is for all people. but here's the truth. attacks on our constitutional rights, yours and mine are greater than they've ever been.

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hell -- hide. a little bit of calm among a storm of 2022. a little bit of buying in the tech stocks today. paul: it's up 1.8%, tech is leading the way. let's see the action under the hood. abigail doolittle joins us here in the studio. abigail: i love that you just called me abs. that s&p 500 is up 1.8%. the tech index, outperforming more than 2%. you have yields up a little bit, oil down. that inflation story, it may be created a bad news is good news scenario. maybe that's why you see some of the spine. paul: can i call out elon musk.

he would have beaten on, tesla is up and that's a welcome reprieve from what has been steady selling. abigail: it's having its best day since july, it had been down 70% on the year. people are taking a look at the story, the company and separating some of the twitter drama from the tesla drama. if you strip out the numbers on tesla you can make the case that they are attractive. they have 60% topline growth, the car metrics, are a wii very good. there are some people putting the pencil to the sheet and saying this is a good company and maybe some of the elon musk factor has been stripped away. technically, it also looks great. caroline: let's talk about elon

musk. yesterday he made $2 billion to the upside because tesla rallied yesterday. overall, he's down 138 billion on the year. paul: that's a real money is in it? caroline: it's real fictitious money. we worry about that in our 401(k)s, what on earth is he feeling like right now? let's talk about billionaires because across-the-board it was a difficult year. for these founders and companies that have been forcing higher some of the wealth of these businesses. devon pendleton is with us who writes about the bloomberg billionaires index and can tell us a little bit about how much we saw elon musk fall from the top spot. is he them person where really focused on in terms of wealth erosion?

devon: you saw elon musk because he was down so dramatically. which was such a reverse from the past two years. he had a fortune of historic proportions at the end of 2021. more than all of those gains were a race this year. you saw all of the tech billionaires whose fortunes are concentrated in their businesses. they had incredible losses. before i mention this there, 400 92 billion in personal fortune gone. paul: who is bernard arnaud? he is number one? devon: he has quietly become the richest guy in the world. it happened this month. he has been around a long time, he is the head of lv mh.

he's a top of a luxury empire. and under scores how about it is this year because he's the richest guy in the world but he still lost money. paul: a lot of fraud on the screen for this year except for number three. watt taunted tommy, he's number three. devon: this is an indian industrialist, a cold tycoon. it is a sign of how the ukraine more really shifted energy markets that someone's fortune who originated in coal has shut

up. he is in highways, green energy, his wealth just skyrocketed this year to become the first asian to rank among the world's three richest people. caroline: another person out of mining is adam friede. you mention cz of finance. one of the most stunning falls from grace is sbf. how did his fortune evaporate overnight? devon: thus the punctuation mark here, sbf's wealth was added peak of 26 billion. it was down to around 16 billion when ftx imploded. that fortune vanished in less than a week. that was probably the most drastic wealth loss ever in history. absolutely gone, all of that

money. paul: and how quickly he vanished was just extraordinary. it is a story made for the bloomberg terminal and the rich go function. devon pendleton joining us and giving us the latest there. a lot of red for rich go. following up on the salmon friedman discussion, let's bring in hannah miller. i guess is it relates to sam bankman-fried. went to see enter a plea and when do you think it will be? >> he's expected to enter a clean next tuesday. we already know his ftx co-founder has filed a guilty plea as has alameda ceo caroline ellison.

they are cooperating with authorities. it seems prosecutors have a strong case that may put pressure on sbf to enter a guilty plea. caroline: otherwise, how is the coverage continuing? in the crypto space, whenever i go to crypto twitter it's a lot of people hurling abuse on the new york times. how are we seeing the narrative change for the people who are left building and the space and those who have been robbed of wealth in the space? emily: it's still very wrong right now. there are ftx customers not knowing whether they will get their money back. there are people who are angry at the shadow sam bankman-fried has cast over the industry. 2023 will be a big opportunity for them. how can they turn this area around? how can they prove the

usefulness and safety of this technology. paul: you mentioned finance, -- binance, what is their position and cz in the sector right now and as we think about next year? hannah: finances the biggest name in crypto right now. there is a lot of scrutiny on both binance and cc. they are looking to see if the same thing could happen in a different exchange. people are scared right now. it will be interesting to see how binance works to build a vision of trust. caroline: tell us how they plan to do that? some of the publicly traded

names are throwing up their hands in glee because regulation will come to bear. how do they self regulate void of lawmaking? hannah: cz is saying they are willing to work with lawmakers all around the world. for some, they are trying to be more public and transparent whether it is in the twitter spacer interviews. they are trying to show that there may be more hope in both than ftx. caroline: we think you always hannah miller, keeping us up to speed on the latest in crypto. these two hours really flyby. paul: we had some upward movement can the market. let's see if we can continue that momentum. we will be watching. caroline: balance of power is up

next. from new york, this is bloomberg. ♪ and expertise you need to bring out the innovator in you.

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>> from the world of politics, to the world of business, this is "balance of power" with david westin. ♪