mark: kevin mccarthy began expanding his support in the 12th speak about gaining some key votes including scott perry and chip roy. the tide was finally starting to turn in favor of --mccartney who was made multiple concessions within his party -- within his party to maintain their votes. matt gaetz blasted the gop

leader on the floor but despite the added support, it appears mccarthy does not have enough votes. the clock has started on the 36 hour cease-fire in ukraine for the russian orthodox christian holiday. ukraine has dismissed the truce as a ploy. air raid sirens sounded across the country shortly after the deadline. u.s. labor secretary says he hopes the u.s. can keep unemployment levels down. speaking to bloomberg today after the december jobs report, the secretary said he believes the tech industry will start to rehire. guest: it means you're looking at how the inflation rate impacts their business and a lot of the folks being laid off in the tech industry are finding jobs in the areas the people are

looking for tech experts all over the country. mark: secretary walsh added we have room to grow in communities of color. the u.s. labor market stayed strong last month and wage gains cooled renewing risks of a recession and giving the federal reserve room to slow interest rate hikes. it is quite literally the calm before the storm in california. the state is getting a brief respite from the battering of wind, rain, and snow before another front arrives to usher in the weekend and what may be a worst storm on monday. forecasters say the stubborn system to last for at least another two weeks. 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'm mark crumpton. this is bloomberg. >> welcome to bloomberg markets. >> you are seeing green on the screen when it comes to the equity markets. a fast and furious rally coming off two data points. it's not the payroll report, it's an easing of the hourly wages plus perhaps the services gauge we were watching this morning is easing. that might create the way for fed step down or less tightening. as the stock rocket goes higher, the bond market rises as well.

the dollar is taking its cue from the 10 year yield. the ripple effect of that is the commodity space. nymex crude is up. jon: sector-wise, it's hard to find losers industrywide. you have seen some encouraging data points. costco had disappointing december sales. the materials group and the rally we have seen is tied to support out of china. iron ore, copper, steel related players have been benefiting. on the other side we continue to watch bed, bath & beyond. is down again today on bankruptcy concerns. we heard from mark about the latest tied to kevin mccarthy and the possibility of less defense spending down the road

has taken a bite out of some of the defense names. right now lockheed martin is down 1.5%. kriti: the main story is the broad basket of inflation. it did start to decelerate but the sticky wage inflation is the main story. >> what the fed wants is lower wage growth. 70% to 80% of the costs of our production in the u.s. is related to jobs and wages. that's going up really fast, it can make it difficult for inflation to come down. this is the immaculate disinflation report. you are starting to get lower

wage growth but low unemployment rate continued high growth in jobs. as i said before, this is never happened before. jon: just to recap, you have the u.s. labor market staying strong last month. the wage gains cooling reducing risks of a near-term recession. let's get perspective from mike mckee. is this the immaculate disinflation report? >> it appears that way and i have to congratulate you because the canadian employment report was very good. in the u.s. it was 200-3000 jobs created in december and it would have been higher if it weren't for the people in the university of california system out of work last month. we also saw the unemployment rate go down. the fed had been trying to push it up. participation goes up, more

people coming into the labor market. then the big one the average hourly earnings month over month fall to 3/10. starting to get closer and closer to 3.5% that the fed thinks is the sustainable level for average hourly earnings. kriti: one of the big questions for the market participants is what does this mean for the next fed meeting? is that an appropriate question to be asking we are still seeing fed officials saying we have to go hard on inflation? >> it's appropriate but it is early. we have the cpr report next thursday. -- cpi report next thursday. if we see further weakening in cpi, the fed will be locked into 25 basis points. if it is a close call, they might want to do 50 because they all say the need to get higher than 4.5% we have now.

some want to go over 5%. it's a question of do you do it right away or spread it out over a couple of months and see how things are going? kriti: we will watching very closely. let's get more insight bring in another expert. a senior international economist at vanguard. is this an appropriate question for the markets to be asking 25 or 50? >> i would agree with what michael said earlier. it is a little bit early to be asking that question. it's appropriate at any time, but in terms of answers we will probably get closer to one with the inflation report next thursday. jon: the bigger question as we roll this year is at what point central banks are in a position where they are able to tame

inflation while looking at the wildcards for the economy and they can say maybe it's time to truly change our tune. there has been the debate in markets for months now but how do you feel about the story of a pivot if we get to the second half of the year customer? >> this week was emblematic of that in that that is approaching. you had strong data in terms of market strength early than today a mixed bag coming out of the mix data report. you also had a strong headline payroll number. combine that with slowdown the unexpected slowdown in the services sector. we're getting close to the point where the fed is going to want to pause rather than pivot where they want to get to the terminal rate which we pegged at up to

5.25% so another 75 basis points then paused to the end of the year. kriti: i wonder if the headline numbers are even relevant if you start see the d sellers -- deceleration and wage growth? >> you have to look at a basket of metrics. we were talking earlier that wage growth is going to take precedent going forward. the unemployment rate is suffering from some longer-term structural issues in terms of demographics. they will completely disregard this, but the focus is mainly going to be on wage growth and inflation in the weeks ahead.

kriti: andrew patterson, thank you as always for your time and insight. coming up, we go from economics to the fundamentals of a different style. concern for tesla is rising as it cuts prices in china. this is bloomberg. ♪

jon: this is bloomberg markets. tesla's shares have been under pressure in the past month. they've bounced back a little bit today but there are renewed concerns about weakening demands

for electric cars and now cutting prices again in china. ed ludlow is doing a masterful job covering ces in las vegas. it used to be apple would not have a big presence but everyone would have to ask questions about apple strategy. now it seems like everyone has to have a comment on tesla in las vegas. ed: there's a lot of evidence that the automotive names are making plays and announcements catch them up to tesla. the stock is higher after having lost something like 8% in the session. there are concerns about demand in china specifically broadly. tesla is not the only company having this issue. in november, mercedes also cut prices significantly. earlier i caught up with the ceo of panasonic north america.

they are the key supplier to battery cells to tesla. >> we're not that concerned about it right now. we're trying to provide the quantity and quality that tesla is looking for. we have 10 years of experience working with tesla which is been wonderful. as a japanese hundred years old company, working with tesla has been a wonderful learning experience. we also have a partnership with lucid and we are diversifying our contribution in ev battery for this market. where not worried, we are very excited. ed: that was a public comment from tesla's biggest so -- cell supplier saying she has other customers. what tesla is experiencing, everyone is experiencing. kriti: certainly something we

are watching and that brought ev space. i have to ask to what extent is tesla indicative of the pain you're going to see in the broader tech index or is it doing its own thing? is it fair to group it with the likes of apple or is it starting to go into the meta category? ed: it's interesting because when declines accelerated toward the end of 2022, the concern was about the demand story. tesla had already cut prices in china, they had brought in that incentive in the u.s. of a tax credit. there was other downward pressure on the stock. elon musk and whether he was spending too much focus on twitter. it's not immune to the higher rates narrative. i don't have a terminal in front of me, but we are still trading at something like 20 times forward earnings.

it is still in that category where there's a discount factor. as we saw yields come up, they got caught up with similar value tech stocks. jon: the fact that we have seen that pressure more broadly speaking on technology stocks, how has it shaped the conversation for a gathering that had been subdued to nonexistent for the last couple of years? here's the opportunity for everyone to come together and it feels like a new landscape broadly speaking for tech. ed: ces is back, kind of. there's high energy, lots of companies making announcements. lots investing heavily in being here particularly like samsung and panasonic. everyone i've spoken to describes it as speed dating. the one week where everyone you want to talk to is in one place.

you don't have to file over the world, you can just do it here in the casinos. they are all talking about the global economy. the layoffs at amazon are being discussed. amazon has a presence here. the devices business is one arm of the company we believe is subject to the cuts. they're giving fighting talk and response saying yes we are having to trim back and places, but we are still committed to our devices strategy and we are still here showcasing our latest products. jon: helpful context. ed ludlow joining us from ces in las vegas. coming up, republicans remain deadlocked over election of a new house speaker. we are live in washington next. this is bloomberg. ♪

kriti: this is bloomberg markets. in washington, kevin mccarthy has lost the 12 vote for house speaker but expanded his support gaining some key votes. this comes on the same day that joe biden is said to hold a ceremony honoring capitol police officers. joe mathieu joins us from washington. what can we expect over the weekend? >> we are in the throes of figuring out what's going to happen the rest of the day. we don't even know our to our what comes. it has to do with everything happening on the floor of the house. they just concluded the 12th round of voting and while kevin mccarthy did not make it, he needs 218 votes to become speaker, he came closer by a longshot and he has at any point yet. he flipped 14 minds.

conservatives are looking for a number of concessions. ralph norma got a massive standing ovation when he announced his sport changing. -- his support changing. chip roy said they lifted the roof off the place. the republicans would really like to go home for the weekend but we don't know if that will happen today. there are still seven holdouts including matt gaetz and lauren boebert. they say they will never vote for kevin mccarthy. how low can he get that number? he can only afford five. every time we have a meeting, he seems to be moving the needle in the right direction or at least in his own direction. there is no one else who at this

moment could come close to 218. things are looking and feeling a lot better today for kevin mccarthy then yesterday. we have no idea how long it will take to twist the remaining arms that are in their. jon: let's talk about the process of twisting arms when it comes to getting to some kind of agreement. are there any highlights we know about what kind of agreement is coming together? >> that's important when you talk about cutting defense spending, that would not go over well with defense hawks in kevin mccarthy's own party. the concern is if you make a promise like that, you might convince some of the holdouts to vote yes but then you lose some moderates on the other end. we have not seen that happen. keep in mind, some of the

republicans who run armed services committee they don't want to see a cut like that and that will more than make up for the money we're giving to ukraine next year. it's really the rules that he can promise to change these members giving one lawmaker the right to challenge the speakership a motion to vacate if you will, that's a big deal. that's down from half the caucus and they have been slowly getting down to a single lawmaker. then there are rules about how much power lawmakers will have to bring a vote to the floor. they want to have regular order with 12 appropriations bills not an omnibus bill. these are all part of the package she's been hammering out.

kriti: we're counting down the minutes to joe biden's meeting with the capitol police officers on the anniversary of the january 6 insurrection. >> amazing to think that it's been two years. there was a moment of silence the took place on the steps of the u.s. house this morning. to see family members read the names of law enforcement who lost their lives that day and in the following days was an important and touching moment and some that we need to watch as we talk politics all day long. kriti: you can listen to joe every day on his radio program. let's get a quick check on the markets. we are seeing green on the

screen and it is a fast and furious rally. the s&p 500 is at session highs. the bond market is catching a little bit of the bid. stick with us. this is bloomberg. ♪ ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo. as a business owner,

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we go again stocks up yields down. all because of a payrolls report. we are kicking you off to the closing bell. >> two-year treasury yields are down. quite a reaction to the earnings figure. >> this is ry