>> welcome to bloomberg markets. matt: and i am matt miller. we are seeing red on the screen in terms of yields. investors selling off bonds and that is pushing them ever higher. however, you see the s&p 500 turned into positive territory which is fascinating considering the amount of yields. this is the two-year but the lowest level in the entire curve is like .483. and then you start to climb back up out to 20's which are about

the same as the two-year. we are on 5% watch on the 30 year as well so yields are really the story right now. crude is coming off a little bit. stocks are moving up a little bit but really, it's all about yields today. 48384, among the lowest in the curve. >> the big deal announcement or no deal with them saying thanks, but no thanks, to choice. it has investors thinking about what could happen if you were to see key players and budget hotels come together. a lot of the gains holding for the day so we are up 9%. nvidia shares down 5%. the's latest moves to curb ai chips making their way to china weighing on the company stock. we will have more on that developing story coming up this half-hour and then of course we continue to monitor what is happening with the financials and right now, you have a mixed

story depending on which story of the day you are focusing on. you have been -- you have goldman sachs still struggling. david solomon pleading for patience with the investor base as they focus on their pivot but bank of america, looking at the healthy 2.5% move higher after the companies quarterly results and some of the trading revenue strength as well as net interest income during the quarter. >> net interest income, a huge driver today. many of the major u.s. banks reporting earnings. the ceo told us he is confident in the sector. >> the results we are seeing in these big banks are though double-digit's, handling the environment very well. there is a slowdown underway, no question about that. but my view is if you do not get the worst-case scenario in terms of what plays out, these stocks have 40% upside in them at some point. >> talking to bloomberg surveillance earlier.

catherine doherty and allison williams here to cover the banking sector for us. let me start with you. from the 35,000 foot view, what two earnings look like to you considering what we got today? >> they look good but the looking good is backward looking. we had a fair amount of interest rate change since then and the most positive thing that we got today from bank of america was the net interest guidance for 2024. not only are they guiding up but bank of america has been hesitant, talking about the uncertainty, only wanting to get one quarter out and the fact that they are looking out and saying not only does it look good but next year, it looks strong and that is what is happening shares. goldman sachs trading, in my opinion, i think the strong trading really shows that they are keeping competitive where it counts so this is the business

that they are focusing on. there is a lot of noise in the quarter as they trimmed down the consumer effort. i don't know any investors -- but trading revenue, even though it tends to be a lower multiple, will drive book value and that is awful for goldman we think. >> let's talk about the consumer aspect for the bank of america numbers and you report pretty sensibly on that today. is this a story of resilience consumers? is this the story of bank of america's market share strength, may be a combination of the two? >> it definitely is a combo. executives repeated that the consumer is a position of strength. they are not seeing asset quality deteriorate. they are seeing it stay pretty consistent, spending is lower. they are noting it is compared to previous quarters, we are continuing to guide down and they expect that to continue for the rest of the year but in

general, they are seeing account balances stay elevated compared to pre-pandemic and again, if consumers are still continuing to spend and they have that cash in their accounts for bank of america, they are in a position of strength and i will note their deposits were slightly up compared to last quarter and that is something that will continue -- we will continue to monitor with regional banks starting to report this week. every time a bank is getting towards deposits, either seeing a flight or really seeing consistent, those kind of differences, that is what analysts are looking for and investors are pointing to the strength of bank of america has posits at this point. >> at what point do we start to see higher rates start to hit consumers question rsr bank of america reported the average pico score is very high for their customers as well but those customers are putting more on credit cards. credit card debt is at an

all-time high right now and rates continue to rise as we see things like student loan payments coming back into play. now, the consumer, judging by the retail members we got this morning, doing great but at what point does that higher rates start to bite? >> bank of america talks about its balance sheet as a whole because as rates are going up, they are benefiting from other beds this line -- business lines like lending. if they have cash, that cash is going to more just because of how much they have set aside. it is going to hurt them for the securities they have invested in in the long term. they brought at a significantly lower yield than where we are at today so you really need to step back and think about it from a holistic perspective but honing into what consumers are doing, it is interesting that this quarter, they are not reporting any sort of pressure for paying enough to keep the deposits.

we are seeing the strength in terms of not seeing a deposit flight that you saw from other banks. they are not also having to pay more to make sure those deposits don't leave. they are also saying that those deposits are used -- they are they are not just moving to find the higher yields, searching for hilar -- higher yields, not the hot money. that is the difference here of what is your core deposit base? what is it therefore? how are consumers going to react? you are seeing today, investors are looking at those numbers. they are reacting positively to the deposit base and how the bank is able to produce higher profits that significantly beat analyst expectations today. >> shifting back to dealmaking. catherine talked about brian moynihan highlighting staffing up for possible middle-market

activity. goldman sachs, which you referenced earlier, is hopeful that, you know, maybe some of these recent ipo trends we have seen could translate into a more fruitful period going forward. how close are you going to be watching that part of the business? >> there is a level of optimism and it is building for 2024 and that is because there is a lag between some of the activity that we see and the actual closing of those deals and the positive we saw this quarter is that is spidery -- advisory fees in general are increasing from the second quarter so potentially, that could be a trough in asset activity increases and committed continue to look good for 2024. -- could continue to look good for 2024. relatively more active dealmaking. we heard bank of america talking about the middle-market. that is an expansion goldman has also done in recent years and we also have heard optimism from

some of the boutiques as well as covered by my counterpart, neil sykes, so we think there's a lot of reasons for optimism for m&a next year. the question is, looking at the overall feed picture, even though it's looking better, it is still below -- -- the lower e of history. and are the bank's overall right sized for that environment? >> thanks so much to both of you for joining us. catherine doherty and allison williams talking to us about the bank earnings we were all watching this morning. we will continue to watch how those stocks do. do not miss our interview with brian moynihan, coming up in less than an hour. he will be sitting down with david westin and it will be must-see tv for sure. speaking of must-see tv, republican jim jordan, we saw that he lacks the vote to be elected speaker of the house in

the first round of voting, assuming there's not a slew of democrats who vote for jim jordan which seems terribly unlikely. we will talk about that when we come back. this is bloomberg. ♪

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>> republican jim jordan currently lacks those to be elected speaker of the house. kailey leinz is in washington, d.c. with the latest. they are wrapping up a few people who did not go initially in alphabetical order but they also are not voting for jim jordan. kailey: four of the five who had not voted or said anything the first time have come out and voted for someone who is not jim jordan which brings the total tally i believe to republican

members who voted against him or voted for someone other than jim jordan to 20 and jim jordan could only afford to lose four those from republicans to get the 217 votes he would need. he's not want to get that it seems on the first round. we are waiting finally for the actual gavel for the completion of the first round of voting. it seems that this is not going to happen for jim jordan at this moment and this is a wider margin then we were hearing he might have been working with going into this vote. a number of members said they thought it was only between eight and 10 republicans and it appears to be a larger number than that so we will wait after this vote to see what the next step is jim jordan decides. we have been hearing he may pull some members against him aside for meetings this afternoon before trying another vote later on this evening. we will await word on that. jim jordan does not have the votes to become the next speaker of the house. >> thank you for that update. we will continue to monitor the story. time now for our stock of the hour. nvidia and shares of

semiconductor companies have slumped today after the biden administration said it would tighten restrictions on exports of ai chips to china. nvidia told bloomberg it does not expect near-term impact on financials but these new restrictions are meant to close loopholes tied to measures announced a year ago because nvidia had designed some chips specifically for the chinese market. in many ways to try and navigate some of what we have heard from the biden administration. matt: very interesting. nvidia down less than 3.5%. it is up over 200% year-to-date so they have done pretty well. let's talk about this with mckenzie hopkins. she covers chips for us from d.c. which seems like an appropriate place from which to cover chips because this is really all about trade policy, isn't it? what do we know about the direction of that policy now? mackenzie -- >> we saw the biden administration releasing an

updated round of export controls that makes improvements, they say, on restrictions they announced last october and we saw an overall tightening of restrictions on advanced semiconductor chips to china. these are the critical electronic a. -- components that appear in everything and the u.s. wants to keep the most advanced varieties out of china's hands and what impacted nvidia specifically was they tightened the threshold on the most advanced chips that can go to china, capturing the chips nvidia designs last year after the initial curve specifically for the chinese market. >> and then just reading your story again, and building on what you were saying that, so the new rules also require companies to notify the government before selling chips that fall below the control threshold? mckenzie: that's right. so this appears to be a reaction to nvidia's behavior last year. we have a new threshold that is tighter, saying you cannot send these chips to china. you would have to obtain a

license from the u.s. government to do that. then there is a whole class of sightly inferior but still very advanced chips that could be retooled with a lot of government money as the chinese government has proven willing to spend, and some jerry rigging of chipmaking equipment for the same types of military applications and artificial intelligence applications that concern the u.s. from a national security perspective. for that sort of gray zone of chips, companies will have to let the u.s. government know that we are planning on selling these to a chinese firm and then within 25 days, which is a very expedited review process, they will get an upload down decision on whether they would need a license to sell those chips to china. matt: what does nvidia do about this? if they are going to miss out on some of the revenue, do they look to sell in other markets, do they inform investors they have to lower their targets? how does this look in terms of investor relations? mckenzie: they have said that this is not having a significant near-term impact. nvidia is a massive company and

has significant market cap, but they did designed this chip specifically for china and china sales are a significant portion of many of the biggest chipmaker sales of the world. nvidia is certainly concerned about this and what you will kind of wait to see is whether we see a similar issue with -- when the administration -- tries to draw a line. does a company like nvidia or competitors try and work around that? this gray zone notification is the biden administration's answer to that question but we will be watching to see long-term what nvidia does in china. >> thanks for breaking it down for us. we will be tracking nvidia's stock. coming up, five years after the legalization of cannabis in canada, the industry has struggled to find a footing, and investors seem pretty frustrated. we will dive deeper, next. this is bloomberg. ♪

>> this is bloomberg markets. recreational cannabis became legal in canada. while it is a growing business, investors have been on a rocky ride. it awaits clarity on operating in the u.s. market, building up another component of its business, american and beer operations. the ceo spent more than a quarter of a century building up the consumer company before shifting to cannabis and he joins us with more on the state of the industry and it is an interesting one. five years ago, there was so much excitement, so much hype, and certainly, the legal business in canada has grown but you constantly talked about some of the challenges in operating

in it today so what are your reflections five years later here? >> it is amazing what has happened in five years and it's amazing, i sit here today, and canada is the only country in the world where recreational cannabis is legal. you were just asking me about what cannabis products we sell in the u.s. -- we don't sell any recreational cannabis products in the u.s. because it is not federally legal and that is why, you know, i have taken the path to build out our spirits business in the u.s. and our medical cannabis business in europe because we could not sell cannabis in the u.s. and i don't know when we would be able to, but i got to tell you, you know, what is interesting is five years later, a lot of good has come out of the cannabis industry in canada. there's been a lot of investors hurt, market capitalization evaporated, but i see lights at the end of the tunnel. >> is that light in the form of

safe banking? do you expect the u.s. congress at some point to make it easier for cannabis business to operate federally in this country? >> i hope they look at what is happening in canada and canada has probably brought in, you know, 700 million dollars in excise taxes, created a lot of jobs, infrastructure, and what it has helped to is really to bring candidates from a revelatory standpoint into the marketplace and has brought good, healthy -- clean products. in regards to the u.s., we are confused. we are still talking about that. we are talking about the scheduling even though, you know, we all live in new york city, walked down the streets, smell it on every corner. this probably only five legal shops in new york. i think the consumer is confused upon legalization and ultimately, something has got to happen, you know, in the u.s.,

in regards to some type of regulatory. canada and the u.s. from a scheduling standpoint is scheduled the same as heroin. cocaine is scheduled -- so from that standpoint, something has got to happen in the u.s. jon: you are waiting to see what happens there. we talked about how you have expanded into other product lines and craft beers. coming back to the canadian market where you have been pretty active playing a role in some of the consolidation, there was a pretty strong belief out there that we could see more of that action. could you give us a sense of how aggressive you are going to be within the canadian marketplace over the next 12 months depending on how that all plays out? irwin: when i became executive chairman and ceo in late 2018, 2019, you know, it was a $50 million business. today, you know, with all its acquisition worldwide, it is

close to $1 billion in sales. in regards to our cannabis sales in canada, they were to her 35 million dollars u.s. business. we have a 13.4% share. as i said before, we pay about 150 million dollars in excise tax. we acquired a company and a beverage business. there's over 1000 lps in canada. there's still way too much capacity. today, this 5 million square feet of growth in canada. we have enough grow to supply all of canada today with its cannabis and probably well over one billion plus dollars that was spent in infrastructure. so there's been a lot of mistakes. there's been a lot of misfortunes. but what we have got to look at, what happens in the next five years in regards to the canadian cannabis market, it's a $5 billion market today at retail. they are projected to go to 10.

with that, i see some big opportunities out there. but you are right. i'm going to see a lot of consolidation out there which is going to happen because a lot of these companies cannot raise money. we are losing money out there from a bunch of them and how do you stay in business with those kind of economics? jon: it will be interesting to see and a lot of it ridess on what they u.s. congress it does in the u.s. as well as the dea. the scheduling is pretty insane but it is what it is. thank you for joining us. i hope we can get back to you soon. they make weed for canada and some other craft beers for us in the u.s., and maybe one day, they will cross the board or down. i want to remind you to stick around for an interview we have coming up with another ceo. brian monahan joins bloomberg's david westin to walk him through the earnings that we saw and what he expects coming forward in terms of the outlook at 2:15

new york time. by the way, the public and jim jordan did not get elected house speaker in the first round of voting. we will see after a pause if they come back to vote some more. this is bloomberg. ♪ you bring a lot back to civilian life. leadership skills. technical ability.

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and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> the weakness of the u.s. consumer has been greatly exaggerated. from studio two in new york, i am romaine bostick. >> i'm katie greifeld kicking you off to the closing bell here in the u.s. you take a look at the u.s. stock market. we are seeing stocks fall. the s&p 500, the nasdaq 100, off. they got back to positive territory and now they are in the red. big tech, not faring much better. worse actually,