jon: welcome to "bloomberg markets." matt: let's get a check on the markets. we are at session highs on the s&p 500. gaining 1.2% to 4399. a real bounce back, making back everything we lost yesterday and then some. the u.s. 10-year,. little changed. the bloomberg dollar index at

1266. what are you watching? jon: certainly that tech story has played a role in the rally. the i.t. group in the s&p up more than 2%. at lease five of the 10 best performers are tied to tech. microsoft, it's backup today. speaking of the dow, we are seeing some weakness in disney shares. the big story is the better-than-expected quarterly results. that netted a big return in yesterday's session. a little weakness today, plus concerns about having to push out some of their films late. let's look at other earnings stories getting attention and other industries. diageo not inspiring the market of the other for its business, particularly in latin america. the u.s. listed shares are off about 11%. this has pushed down some of the other spirits players. we are seeing weakness for wynn

resorts having to do with the business and macau -- in macau. the good news for those with las vegas exposure is the fact they avoided that hospitality strike. f1 moves on. next week a big event, perhaps without disruption's on the labor side. matt: yeah. absolutely. next weekend, f1 in las vegas if that is what you are talking about. interesting race that will be. a party and a culture around it. let's talk about stocks. we see the equity rally continue on into the afternoon. investors for the moment are defying the recent hawkish comments from fed chair jay powell who suggested it may take more tightening to reach the bank's inflation target. >> u.s. inflation has come down but remains well above our 2% target. my colleagues and i are gratified by this progress. we expect the process of getting

inflation sustainably down to 2% has a long way to go. jon: as we wrap up the week, great to get perspective from liz ann sonders, chief investment strategist at charles schwab. great to have you back with us. should we listen to the fed speak? should we look at the bond market? where do we look for cues on the direction of equities? liz ann: i think at this point in the cycle the bond market and what longer-term yields to was more of a short-term driver of equities than fed speak, for comments were things like the probability adjustments around the december meeting and thereafter. i still think what matters is what currently the market has built into expectations, a pivot to rate cuts starting by midyear this year. if you were to extrapolate the current set of conditions into the first half of next year, that simply does not justify a pivot to rate cuts. it may perfectly justify the fed

staying in pause mode but not cuts. that is where they are still -- there is still a bit of a disconnect. it is not so much yields as a driver up and down. part of today is that you saw volatility come down in the treasury market. that may be as much of a key as a continued decline in heels. matt: is the worry with yields, liz ann, earning seven good. is the worry that it will hit a consumer already tapped out in terms of savings? already running of credit card bills? already facing resumed payments of student loans? is at the big concern? liz ann: i think higher yields and the ripple effects into the economy but not just the consumer. you touched on all those areas. you are seeing a pretty significant increase in delinquencies in the subprime area, whether it is housing or auto loans.

you have to go into the corporate sector. i think the clear reason why small caps in the aggregate have underperformed is because you are looking at a lot of zombie companies. companies that don't have the cash flow to cover interest. they have got maturities coming due. it will be more expensive for them to finance. a whole separate topic is the government and the concerns about interest coverage on the debt, which right around now it looks like interest expense is going to leavefrog -- leapfrog defense. you have debt components, the consumer side, the business side and the government side that i think we have to worry about. the lags have been longer this time. title think we are past the expiration date of those long invariable legs. -- lags. jon: coming in this year a lot of people were nervous. we saw a resilient economy.

given some things you are highlighting it is worth having a conversation around recessionary risk. what is the risk for investors if we keep talking about a recession but don't technically see one in the near future? liz ann: we have been using the terminology rolling recession describing this unique cycle. we've had segments of the economy go into their own recession. manufacturing, housing, consumer oriented good severed big beneficiaries of the early part of the pandemic. we had the later offset by services. a more nuanced approach is important. in terms of officially declaring recession by the nber, to be honest i think sooner rather than later is better across the board. it is better in terms of the fed's reaction function being able to take their foot off the economic brake and move into easing mode. they would be less deterioration in the labor market and it would be better ultimately for the

equity market. this idea if we are pushing recession to the second half of 2024, that is a better case scenario. i'm not sure i agree with that because i think it elongated road to recession could mean the recession is more severe than it would otherwise be if it came rather than later. matt: that's a great point. it makes you worry about the labor market. it looks great. looks great on every report we get. not as strong as it had been at the beginning of the year. now we are hearing attrition has ground to a halt. no one is leaving is that concern? ? liz ann: you can dig inside pretty much any set of labor market data and find some of those important cracks in the subliminal messages they might be sending about the economy. the most leading indicator of the major labor market data is unappointed claims .they are still fairly low . continuing claims are up much

more meaningfully. that suggests people who have been laid off, it is taking longer to find a job. we talked about the slower gains in payrolls. we had a big negative move in household employment. we saw it manifested itself in an increase in the unappointed rate, which is now up half a percentage point from the low. you have a big increase in multiple job holders. unfortunately, you only need to peel about a layer back of the onion to start to see where there is some weakness. i don't anticipate it is going to get significantly worse from here. i think companies have that bias to hang onto labor as much as they can. that time associated with finding a new job is certainly picking up in the difference between continuing and initial claims. jon: before we let you go, do we have to have another reminder of what kind of rally we are seeing right now?

looking at the s&p performance off the october lows, i'm seeing positive performance for the benchmark but i'm seeing at least double that return for the tech stocks that help lead the rally in the first part of the year. liz ann: it is still a magnificent seven driven market. that can go both ways. it is not always the case that they are sitting at the top of the leaderboard in terms of cap or performance. the bear market last year, he saw a significant drawdown in those stocks. that is why last october of 2022 the indexes not only took out there prior june low, they went well below it because it was weighted down by the stocks. we had the opposite phenomenon happened. s&p has not stepped in and said we will do rebalancing right now. almost funding is the fact that if anybody tried to create the s&p 500 right now it probably

would preach security rules and risk manager roles and could not be created. part of the reason why s&p does not step in and say we have to rebalance this is they believe in reversion to the mean. a lot of the stuff right sizes itself at some point. the bias is in the fairly small handful of stocks. matt: great to get some time with you. really helpful context. liz ann sonders, chief investment strategist at charles schwab. wall street is beginning to take note of the labor movement we have seen this year. s&p 500 executives and analysts talked about unions on earnings calls for this year -- more this year than any on record according to data going back two decades. the president of the service employees international union spoke with bloomberg about the strikes. >> we are seeing an unprecedented solidarity season from workers who have collective bargaining to workers who are organizing like it is starbucks

and want to reach a first contract with these companies. i think when the president of the united states goes to a picket line it sent a message to every worker everywhere that the man with the most power in our nation and around the world is willing to stand with workers who want a fair shake with the employer that they sacrifice for. matt: let's bring in matthew townsend. it feels weird to say they are talking about unions and data going back two decades. unions stopped being a thing like three or four decades ago. maybe in the 1960's or 1970's we were talking about them this much. in recent memory what are you hearing on these earnings calls? matthew: it breaks down into three buckets. companies directly impacted. think about auto companies, gm, ford, things like that.

paramount with the actors strike. companies that are indirectly hit. there are questions about that. you think about railroads. a lot of businesses with car companies. travel. l.a. for example being hit by the actors strike. there is this third group where they have unionized labor and there are more questions about how negotiations are going. for a long time unions were sort of on the back foot. they were not as aggressive or striking is often. if they did, they would not get major concessions. that has flipped this year in the past two years and that is showing up in earnings calls. jon: analysts can be a little mechanical. they have a lot of companies they are covering so they have to focus on these core issues that will drive the story. the more labor movements we are talking about, how much more does this become just a daily conversation on wall street? in bloomberg reporting, not that

this came up on earnings calls but the executives are holding more briefings with the wall street community about these issues. matthew: that's a good point. the clip showed this is a resurgence, the labor movement. their targets will keep expanding. the auto workers strike was seen as this revolutionary way to go about a strike. they want major concessions. you are seeing little pockets of labor organizing popping up in all different kinds of companies. big retail, which basically doesn't have any unions is seeing little bits and pieces of stores organizing. starbucks being the biggest and best example of that. your point is correct. we will probably see more of this as a regular part of coverage of a company. where are you in organized labor? either with your current organized workers or ones that might be trying to organize. matt: it becomes a question i ask anytime i interview a

ceo. have these uaw strikes and the concessions they won major employees were interested in unionizing? matthew: for sure. shawn fain, head of the uaw, he talked about and hinted at going after tesla, one of the most richest companies in the world. there ceo is famous very antiunion. yeah. it is hard to think of a company where potential union missions are not going to be something in the future. even walmart, another big example. they have always kept unions out. amazon same thing. matt: really interesting stuff. matt townsend. coming up, a stock that is not joining this equity rally. trade desk plunging, sending a warning about the health of the ad market. this is bloomberg.

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jon: this is "bloomberg markets ." a quick update on stocks today. we were talking about the s&p 500 getting to the key 4400 level. the nasdaq with a 2% advance today in a tech-led rally. we see these gains hold, it could be the best day since august for the tech heavy. we were talking with liz ann sonders about the magnificent seven really finding its groove off the october lows. even though a lot of tech stocks have been higher we want to get to our stock of the hour. we are tracking trade desk.

they have not participated in this rally. taking a big hit after the digital ad platform, warning about the revenue outlook. trade desk works with big advertisers. the story has left some uncertainties surrounding some of the social media companies like snap and pinterest. covering this story from san francisco. i thought your piece was helpful to look at the lens of what is happening in the ad market. on some levels it felt like a lot of the uncertainty had been cycled through. here we are again having another conversation through the lens of trade desk. what to the company have to say? >> exactly right. if we have been talking a few weeks ago there would have been optimism. companies that rely on digital advertising beat every -- expectations for ad sales. then trade desk came along and projected revenue for the next

quarter that was a lot lower than analyst expected. there was a couple of factors they attributed to that. a lot of it has to do with this macroeconomic volatility we are seeing now. part of that is the word israel and gaza. part of it is things like strikes. the ceo mentioned some of the strikes in the automotive industry as well as the entertainment contribute in to the advertising pullback in certain areas. matt: what kind of advertising are they doing? while brand advertising has weakened, digital advertising is something they cannot do without. aisha: definitely. there are brands that are spending a lot of vertical dependence. one of the things the trade desk was saying is they have seen certain verticals and slowdowns. automotive, media and entertainment. consumer electronics. there are areas where advertisers are planning.

sports and entertainment is strong as we think about the holidays coming up. a lot of it is vertical dependent. overall several of these digital advertising appended businesses have warned about advertisers pulling back because of this volatile landscape right now. jon: is there a possibility that the biggest players in the sector may be emerging stronger? i think about if you are competing against google search right now. how is that landscape going to play out of it is more competitive for the dollars on the table right now? aisha: i think that absolutely could be the case. advertisers i have been speaking to have said when things get tight they really start to double down and focus on some of those big ad platforms. even meta, advertisers will spend more on meta and pullback from smaller players like snap. spending tends to go towards the

big ones where advertisers have a lot of money they are spending. they have engagement. they have a customer base. i do think we could see that happen as well. jon: pray perspective. joining us from the tray desk story. that stock under pressure but the nasdaq itself having a strong run today. the obesity drug wars continue. spending billions to meet demand. we will talk about that story. this is bloomberg. ♪

>> to the future we will be expanding and bringing more product to the u.s. so we can continue this innovation-based growth strategy. how and when i cannot go into much details about. you can trust more supplies coming to the market. jon: that was novo nordisk's ceo last week. that get assisted today's for what it's worth. novo nordisk will invest more than $6 billion to expand its manufacturing facilities in denmark. the additions will focus on its chronic disease drugs, which include weight loss and diabetes treatments such as ozempic. novo has been dogged by manufacturing problems since facing unprecedented demand for ozempic and the competition in

the market for space. the weight loss market overall expected to hit $100 billion by 2030. we do a lot of these ceo interviews, speaking to an executive in the restaurant industry recently. we keep asking these ozempic questions. he said, i'm taking ozempic. this is really helping the right now. no surprise that there is a lot of fascination. for companies like novo nordisk, with all this demanded almost feels like that. it'during -- that period and the pandemic when you had a search for drugs. matt: as more and more people take it, and truly it is a growing market. i'm not sure $100 billion by 2030 is low or high. there are estimates that are all over the shop. the question is, will he really impact the amount of spending we

do in a larger part on junk food, on alcohol, etc.? will it make a difference the likes of which we are expecting it to now? for jon erlichman, i matt miller. this is bloomberg. ♪ you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh the chase ink business premier card is made for people like sam, who make- everyday products, designed smarter. like a smart coffee grinder, that orders fresh beans for you. oh, genius! for more breakthroughs like that- i need a breakthrough card. like ours! with 2.5% cash back on purchases of $5,000 or more. plus unlimited 2% cash back on all other purchases. and with greater spending potential, sam can keep making smart ideas- a brilliant reality! the ink business premier card from chase for business. make more of what's yours.

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romaine: gains in the stock market. happy friday. i am romaine bostick. katie: i'm katie greifeld. we are kicking off in the u.s. there is green on the screen behind me. you look at the s&p 500, up by 1.3%. that is a strong enough rally that we are positive on the week. big tech, the same story.