>> welcome. i am john hyland with the first word news. president biden says vladimir putin made a "big mistake" in suspended a landmark treaty by addressing the bucharest nine in warsaw today, reiterating the need to stand against russian aggression. he also said the u.s. will defend "every inch of nato territory". congress is facing another warning to do something about the debt ceiling. congress needs to take action by the summer or early fall to avoid default. the budget office flight july to september as the potential. a vast winter storm is pummeling the central new -- central u.s.,

coating roads with ice. storm warnings and advisories stretch across almost the entire northern part of the u.s. with blizzard warnings in place in minnesota and dakotas which are getting the brunt of the storm. more than 1000 flights have been canceled. ohio biotech entrepreneur vivek has rallied against woke investing and has his eyes on the white house. he is strongly considering a run in 2024 and has filed paperwork with the federal election commission. he wants to return america to a system of meritocracy. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am john heilemann to, this is uber. >> i'm jon erlichman.

welcome to bloomberg markets. kriti: we kind of have a low volume but not a ton of conviction in either direction. with the s&p 500, hired by 0.4%. a waiting game for the fed minutes we are getting at 2:00 p.m. new york time. this is important because the bond market is pulling away from the 4% level that it was getting close to. lower by five basis points. in less than 30 minutes, all of this could change. get this could affect the dollar as well which is later -- is lately trying to affect his cue. the resurgence between yields and the dollar could really kickstart with the dollar will do in 2023. and we have the 74 handle on new york crude. >> we will see how the market reacts to the fed minutes. the jobs market is being so closely monitored. it is interesting to see zip recruiters getting crushed

today, down by 25%. palo alto networks is getting a knight -- nice pop, up by almost 12%. a reminder that cybersecurity remains strong. as for apple, we are watching closely. we are reporting on perhaps the future of the company and your smartwatch could monitor glucose as a new area of growth for the business. staying with the text theme, in dividends, so many investors trust which is why intel's made so many news headlines, slashing its payoff is the company looks to keep a lid on costs. kriti: we are going to keep an eye on the dividend story. 66%. i cannot wrap my head around it. mandeep singh a bloomberg intelligence joins us.

talk to us and put this into context of the broader intel story. a turnaround plan has been in work. how successful has it been? mandy: he started last year -- mandeep: he started last year and now what has happened is that pcs have been going through a deep inventory correction. it does not have the diversification that nvidia has. because of its high exposure to pcs, it is struggling to generate any operating cash flow. on top of that, it is investing in to catch up to tsmc. i think that investors were skeptical about the dividend when they were to last quarter result. this kind of explains why they would have a tough time paying

their dividends, given all the challenges they have to their business right now. jon: you alluded a little bit to it but if they are looking to conserve cash in the most effective way, what on the capital spending side is the way to turbocharge this turnaround? mandeep: i think they have been delaying their plans in terms of rolling out three millimeter or five millimeters technology which tsmc already has. a lot of companies go to tsmc for manufacturing of those chips. they really need is to catch up. we know there are issues over the last three or four years. i think that has not changed yet. time's a motel in whether they can catch up. for now, we have to figure out what to do on the pc side when the market will recover.

kriti: 30 seconds, we are going to put you on the spot. we are getting nvidia earnings after the bell. it feels like the story for tips broadly is diversification. does nvidia have that part of the qualification nailed down? mandeep: i think they are at company most exposed to capex. i think that is where the demand will continue to be robust. i expect there will be a ingestion phase where you will see some tapering of growth even for the video. jon: of course, we will be watching this later today. mandeep singh from the bloomberg intelligence team joining us. investors are bracing for the upcoming fed minutes coming out at 2:00 p.m. eastern time. for perspective of what has been happening in the markets ahead of that, anastasia amoroso. great to have you with us.

it is interesting with the tech group is they had a huge run to start this year. continued talk of interest rate hikes seems to leave us jittery. i know that you have been thinking about whether we will have a deeper conversation of the ability or the markets and the economy's ability to handle rates for longer. anastasia: the markets probably are starting to come to grips with the fact this economy cannot actually handle 5% rate. i think that is why we are seeing a more meaningful correction. the reason i say that the markets and economy can handle 5% rates as this is a different economy versus what we have been before the pandemic. if you look at one big chunk of the economy, which is the consumer, the amount of wealth that husband -- that has been accommodated over the last 10-12 years, we still went for 112

trillion dollars in household network to 140. that is a significant increase. if you look around, most consumers are gainfully employed and getting paid more in terms of wages. that is constructive. then, there is a positive factor of rising interest rates because there is $17 trillion of cash on consumer balance sheet. that $17 trillion was yielding nothing at the end of 2021. today that is a huge step function in terms of what you get in income on that cash. you put these things together and i think you get a good backdrop for the consumer. this is why the economy can actually process these 5% rates. the question becomes does the fed reset the bar and move the goalpost modes -- once again and say we are going to 6% were higher than that?

kriti: so that is the macro side. a stark about the micro-side. this earnings season, we are trading back to levels we had at the start of earnings season. to what extent how we learned anything from this earnings cycle? anastasia: i am not sure we have because we have reset expectations lower and we have marginally met lower expectations. there is not a big surprise. i was surprised was lower than it was. guidance was not particularly great but that is the reason we did not learn anything because we knew that gdp productions -- projections were down. what is interesting is that since the earnings season, economic growth for q1 for the u.s. this year has been updated. consensus was looking for it to be -.1%. now forecast is 2.5% gdp growth. what i think could happen after

the conservative guidance on behalf of corporations as we might be poised for upside surprises because the economy is performing better than expected. this is part of the reason i say the markets may not need a drastic pullback because if we are not only headed for a recession because the economy can stomach these rates, than we do not need to have a 13 or 14 pe multiple on the s&p and may not be cut back multiples. jon: before we go, that means you are going to be opportunistic in some parts of the equity market but you are keeping an eye on cash and cash equivalents. anastasia: it is a barbell approach. we continue to focus on cash and cash equivalents. there valuations have reset a lot, they are in the 19% of chief is over the last 15 years. i do like that space. if we were talking a couple weeks ago when the market was

pushing 4200, i would have said this was not the time you want to chase the market. now do i think we may correct to 3900 or so, as you correct to the bottom of the range, you can start dollar cost averaging in things like semiconductors and cybersecurity software. kriti: icapital's managing investment chief strategist anastasia amoroso. coming up, wide critics of elon musk may be missing the point. we discussed that why despite his antics he has turned has them from failing to winning. our coverage ahead. there is a global rates for resources that power these be rules. earlier, bloomberg spoke to be ceo about the situation. >> my assumption is that what the economy wants is lead fuel. you also have the competences of

something minor so maybe there is something that can be done together and that is what we are doing right now. the -- we are the miners of it because that is what we are looking for. we are not going to go into car making or battery making but we want to extract the process with lithium.

kriti: disses bloomberg markets. i am critique group to alongside jon erlichman. time for stock of the hour. we are focusing on tesla for losing 600 something -- 600 plus billion dollars last year. editor-in-chief of emeritus matt

winkler is taking on the critics of elon musk and says that elon musk has turned tesla's failing into waiting. explain that. >> it can be answered in two ways. for the past 10 years, no one in the auto industry including the top 10 automakers in the world have had sales for tesla. number two, more important, tesla is the most profitable vehicle company in the world, again leading to the top 10. when you put those two together, that is a winning combination. jon: it is interesting. there is a common narrative out there that everybody is in bev business right now and that increases the competitive threat, but you were looking at the numbers that bloomberg has compiled of the percentage of vehicles on the road in the the market today versus where they were in 2017.

get tesla has seen an increase in market share, correct? >> guess that is correct. in 2000 17, it was around 13%. today it is around 20%. even with everyone joining bev market, tesla has increased market share. . kriti: you said you are comparing the profitability to other automakers. look at the s&p 500 and it is the eighth largest company in the index. are we officially closing the book on tesla is a tech company? >> it is a tech company because it has given people the opportunity to look at vehicles in a way they never did before. the company went public in 2010. today, it turns roughly $100 of sales into $26 of profit, after

expenses and production costs. that is an unbeatable result right now. there is every indication actually that it will continue. that is why the stock is actually worth more than just about everybody else in the top 10 combined. if you include ford, gm, toyota, honda, tesla is bigger than them all combined. jon: those are all massive brands. some companies are seeing through the lens of the brand. but this one, in many ways, is seen through the personality of elon musk. you talk about that in your piece as well. the critics and skeptics who have been zeroing in on elon musk's antics. >> if you focus on antics, you get what you think you will get, which is a circus. if you focus on the performance

of the vehicle, in financial terms but in sales, you get a completely different result. that is what we do at bloomberg. there is a prevailing narrative. we go to the data and say, what is the data's best? -- the data suggest? kriti: what is so striking is the idea that you look at factories in austin, berlin, and shanghai and they are placed next to their --. it into lead to the stock during the supply chain crises in 2021 and 2022. is that still the >> for sure, has loose commitment to batteries before anyone else was thinking about it has made a big difference. when covid-19 disrupted the global supply chain, the way it did, tesla was in a much better

position and china was in a much better position than the u.s. and more recently, a better position than europe. that has been the strategy all along. to be closer to what it needs to produce its vehicles. jon: an insightful piece. thank you very much craig and wilbert editor-in-chief emeritus matt winkler, joining us on the tesla file. coming up, the federal reserve is set to release the minutes at the top of the hour which could reveal how many officials consider a 50 basis point rate hike. more details next. this is bloomberg. ♪ if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee.

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jon: this is bloomberg markets. i am jon erlichman with critiquing tub. time now for two days for what it's worth.

5.25% is where the terminal fed funds rate may peak according to an economists surveyed by bloomberg. seven high inflation has the streets calling for more rate hikes. meanwhile, we will get more insight at the fed minutes at the top of the hour. let's bring in gina martin adams. for more on what the market is going to be watching for, what is your best assessment? n --gina: i would say the equity market is were vulnerable to be news coming out today. when we get the details of the minutes to get the equity market is looking for the fed sensitivity to inflation. how much are they looking at job strength as potentially problematic? will it still higher rates going forward? then not only will the federal funds rate peaked out but what is the terminal rate?

is the fed considering where the terminal rate is going and what are the thinking about for 2024? kriti: we were talking with our producers today. economists are saying 5.2 5%. the market is pricing in some are like 5%. anastasia amoroso saying earlier that even 6% is being considered. in the extremely hawkish position, does that mean that the equity of 2022 is not over? gina: this means the equity rally of 2023 is not over. we didn't have the boom in january that is partially solidified by the idea that the fed will likely stop hiking's -- hiking so high. it is certainly deeply embedded in valuations that we do get some peak and slightly reversal in fed policy over the course of

2023. any questions on that notion as they pop-up leave the equity market vulnerable, particularly on the valuation side of things. we have a fundamental understanding of where earnings are headed and it is the multiple that we are going to contribute to earnings a continue to argue about. jon: given the fact we have been having this dialogue as companies have been reporting, what are the biggest takeaways on margin pressure among corporations that might influence where some of the sentiment goes throughout the year? gina: it is a great question and something we have been following carefully. margins are forecast by the analyst community to form some sort of near-term bottom with the fourth quarter. first quarter and fourth quarter earnings season, they do see that is the worst of the worst point for margins. what we are hearing from companies is some acknowledgment in this forecast as critical to their outlook.

certainly, across the tech space and communications. even some in the consumer space. we have heard companies start to acknowledge this margin problem as acknowledge this through cost-cutting and some cuts to capex. we have a dividends cuts but as of this morning, we also had a love companies talk about margin pressures and those expected to alleviate over the course of the year due to inflation. it is definitely still a high topic and -- hot topic in the incredibly essential to earnings outlook because analysts are already anticipating margins to -- and recover into 2024. kriti: it is a dealbreaker or dealmaker for a love companies. gina martin adams a bloomberg intelligence who is co-anchoring in the next hour and will walk us through the fed meetings -- fed minutes with michael mckee.

the s&p 500 is higher by 0.3%. some outperformance from the nasdaq. for market coverage ahead. this is bloomberg. - i ended up spending less money my entire time at snhu than i did in just one year at my other university. - my time at snhu has given me more confidence. now i can go for that promotion. - if you're ready to go back to school, you can do it. southern new hampshire university has changed my life and it can change yours too. - [n- [announcer] imaginedu. having fuller, thicker,

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this is "bloomberg markets: the close". two hours left on the trading session. we are waiting on minutes from the last fomc meeting. i am here with gina martin adams and we want a quick look at markets before these minutes. as you can see, some gift back from yesterday. a downdraft yesterday, reverse and slightly today. but there is trepidation before the minutes. the s&p 500 of 0.3%. nasdaq of 0.5%. let's get straight to michael mckee live from the federal reserve. michael: at our february 1

meeting, federal reserve officials