en you show generosity of spirit to someone. and you want people to be saved 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. >> good morning. welcome to bloomberg markets, u.s. markets are closed for the thanksgiving holiday. property push, country garden leads after beijing's biggest move to shore up the troubled sector. the far right leader secures a shocking win in the dutch election promising a referendum on leaving the eu. oil slides as discord within opec-plus force them to delay a

crucial meeting. happy thanksgiving if you are watching from the u.s.. maybe you should stop and prepare the stuffing or watch this while you are preparing the stuffing. we are seeing a trade on the markets. it is the hawkish readings from yesterday, a little bit of data we got before the data mitt -- affecting markets more than usual. jobless claims you in a hotter inflation expectations, declining from in the curve. euro is also seeing some strength. throughout the euro zone and for germany, u.k. in france. germany topped expectations lending itself to some strength in the euro. also u.k. higher pmi's lending itself to strength. brent crude falls for a second day more than 1.5% after that surprise delay to the upcoming opec-plus meeting.

manus cranny gets his trip to vienna delayed. it has been a strong november. we are almost a double digit gains for the entirety of this month for the s&p. cash markets are closed. there's only one other time in the past decade we have seen double-digit gains in november. jp morgan points out you have this huge move into equity products. the highest weekly inflow since april 2022. meanwhile, support for the property sector lifting up asia equities. japan has its own day so that's not trading. bloomberg's exclusive reporting has learned beijing may allow banks to allow short-term loans for qualified developers for the first time. another push to ease the property crisis in the world's second-largest economy. sophia, another measure, how

much of this is trying to draw a line versus another act of desperation. sophia: this is a pretty significant one. allowing developers to take on unsecured loans normally developers when they want to get loans they need to have collateral in the form of assets so it really limits how much cash they can get. it is the last in a string of support measures from beijing and we don't really know if the measures are approved the implementation is quite difficult because at the moment if a banker offers a loan to -- a creditor or banker offers a loan to a developer they are on the hook if that loan turned sour. also what will developers use this cash for? if you are an offshore

bondholder it doesn't mean you will get your debt anytime soon but it does mean beijing is serious about making sure those homes are completed. making sure there is more funding access. right now they are struggling to sell properties. dani: revealing the tv magic you have in your piece that was giving you trouble. sofia: the silver bullet would be something that would fix homebuyer confidence and at the moment it's hard to see what that would be because we saw data last week that showed property prices are still falling. they are still worsening slumping property prices and if you are a homebuyer are you really going to be buying into a dropping market because the risk you are not really at the bond market. there needs to be some kind of

broad change in consumer assessment. property is a huge chunk of that because it's 20% of chinese gdp and if you add the rest of it that's linked to the property sector, it goes up. dani: is there not some irony in trying to support the property sector which is good for metals but also trying to curb. sofia: with china it's always a give-and-take. this is what it was trying to do with them property market. trying to get rid of that and controlling the way down. when you are trying to pop a bubble or deflate it it's really hard to do that, china tends to look at regulation and loosen the strings.

what it is doing right now with the property market is trying to control the way down after it became more severe than perhaps beijing authorities had anticipated. dani: our other top story, continues to be today is opec-plus decision to delay its upcoming meeting by a week. it's struck the market lower. 80's cool speculation of further production cuts by the group. joining me is bloomberg's will kennedy. i don't know if you're ever planning on going, what is behind this. is this clear discord behind the scene -- behind the scenes? >> they weren't able to get to a place where they felt confident having the meeting this weekend and having a deal. it's not entirely clear where all the sources of this will live. the background to the meeting was looking quite tough for opec.

the prices had fallen in october when you look at the demand and supply balances next year they were looking a little bit worrying. there is an expectation saudi arabia would have to extend its cut and maybe they would ask others to help contribute. we don't know where the discussions got to but along the way it seems a couple of members who under the terms of the last meeting were bound to have those reviewed were unhappy with the results of the review and weren't able to accept them and that appears to be -- that appears to be one of them that is in dispute. clearly they had the meeting yesterday is currently scheduled for the first of next thursday. interestingly the same day as the copper meeting in dubai.

a very fluid situation. >> last time you joined us we were talking about the swelling supply from the auto -- non-opec-plus members. what does it mean for 2024 where there seems to be crack's in the opec-plus community. >> early next year looks tricky for opec if it's determined to keep them in the range, the 80 to 90, a little bit higher. we've seen strong supply this year. we've seen that from the united states, you had them on the television talking about that. we've seen good supply from latin america and brazil and we've seen a lot of oil, out of iran. some of those strengths will taper off but the other thing

we've seen is very strong demand especially coming out of lester's covert restrictions and it's not clear the demand will be a strong next year so you put that together and it is tricky going into early next year. dani: thank you so much for joining us on that, will kennedy from our energy team. coming up we will speak to investment strategist at blackrock as laura and team turn more risk neutral versus risk-averse for 2024. this is bloomberg. ♪ ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo.

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dani: welcome back.

we have continuing week data from europe, a strong data from the u.k., stronger from germany. put it all together, what are the numbers telling you? >> we are worried the economy will suddenly fall off a cliff and we will end up in a deep recession. so far we do not see any evidence of that. if anything the outlook looks like we are stabilizing. germany looking ever so slightly better. a big surprise there generally it's steady as she goes. the economy is bumping along the bottom but we are not looking at a deep recession environment. there are some positives to take from the data. dani: because it was surprisingly strong and it comes

after the autumn statement and budget were more tax cuts came in is this the boe's worst nightmare at this point? maybe laster was was their worst nightmare. >> it obviously does not help and it will create more inflation pressure. i think overall the economy approaching with more resilience. the bad news or pain is that's the plan. they want the economy slowed, and wants pressure to ease. it makes the job harder. does it change the rates outlook? we have more of a reason to stay the whole time. >> we had most economists expect them to hike. instead they held. i know the folks on your team did get this one right. why not just hike? why hold and say there's a big chance we hike next year. >> the point is the economy is

weakening quite fast in sweden. the krona has we can -- has weakened a bit. it was obviously a finely balanced decision. there's a good reason to hold that. if you look at sweden's economy they don't have the wage pressure we have elsewhere. there isn't as much need to act. dani: thank you very much. joining us is laura cooper, a senior investment strategist at blackrock. you are looking for something like jamie was saying is the data bumping. do you agree we are in that -- bumping along the bottom. is that where we are? >> it appears to be the case. does that signal that's the chain -- that will further risk.

it's really been driven by momentum strategies, the case going forward is probably a little bit more subtle stash selective looking where some of that economic damages in the price. for example cyclicals of really participated in this rally over the past few months. we would lean against that towards the defensive towards a little bit of quality tilt and it's about looking for key sectors. >> bloomberg also spoke saying there's a little bit of wishful thinking, it sounds like what you're describing for the european stock market. could i extend that metaphor to the entirety of the western stock market now. you look at what happened in the u.s.. we are almost double digits for november for the s&p 500. >> when we think about what markets are anticipating for central bank policy. if anything it's probably the case as we start to see greater

signs of economic deterioration that we could actually see central banks maintain this hawkish rhetoric because we've seen a material loosening and financial conditions over the past several weeks that will probably push back against that. i think markets will have a bit of a wake-up call. if anything the fed, even the ecb are unlikely to cut rates into the second half of next year which is a clear mispricing looking at market expectations. >> there is exactly what we are talking about. we have undone all the tightening and financial conditions in the prior two months. the markets got the ecb and the fed going in june. the u.k. in september. i wonder what you think not just of that timing, but in terms of sequencing does that make sense for the fed and europe to be going if the economy is looking

weaker. >> if we look at what the economic environment suggests inflation is easing back to that 2% target, that does suggest the ecb could go ahead of the fed but it is not our base case. we think despite the conditions the ecb will continue to maintain this hawkish rhetoric and weight until the fed. we think the sequencing will be the ecb will cut more materially so in terms of portfolio positioning it's one of the reasons why we are seeking exposures and european government bonds versus treasuries. we think there is a attractive entry points whereas in the u.s. we have seen a material rally in treasuries we struggle to see that. dani: one of your other calls is this implicit preference for high yield over credit in the

near term. it's a little bit risky there. what's behind that? laura: when we've had discussions with clients recently they are seeking u.s. high yield exposure largely because currently on historical basis they tend to have fairly favorable returns over the next 12 months so it is not a bet on compression but an opportunity. we are looking at investor positioning and etf flows for example. this month of november is on pace to be the record month for buying of u.s. high yield. there does suggest there is this optimism towards that but certainly looking at further in 2024 and the wall of maturity coming through. it's a really tactical near-term play. dani: this comes up very frequently but i have to say if the market pricing is even remotely right where we are going to get some cuts from the fed.

how big of a deal is that maturity wall? if we are not going to be at 5.5%. is 4.5% still a problem for corporate's? laura: it will be a case of being very selective in those corporate exposures so i think at that point we start to see this material easing cycle i think we expect maybe 150 basis points cumulatively from the fed. there's probably better entry points and opportunities looking at u.s. equities. that could -- that has some potential upside next year looking at earnings resilience but it's about finding those other areas like energy, it's probably a better place to get that alpha then may be looking at some of the corporate credit space. >> you've liked tech for some time which has been an excellent call this year. nasdaq 100 continues to hit multiyear highs. when you look at some of the ai

space. i don't want to get into the individuals of openai. to some of the sort of discord within ai when you look at the richness priced in, to some of that need to filter through when you have these corporate issues happening in ai? >> if we see this multiples expansion unlikely to be the same momentum we saw this year. if we think about what are the structural drivers of the artificial intelligence boom those will be in place for a long period of time and that might not be in the price. we look at global semiconductors we have seen an exceptional rally surpassing those year-to-date highs. you can argue that's cutting too far but if you think about the broader backdrop where chips will be a key input into this renewed to digitization space there is still upside particularly given some supply demand constraints.

we like to get our selective approach may be not fully going into the ai space but even looking at the s&p 500 equally you still get that tech exposure if it does persist. a lot of the recession risk in the u.s. are in that may be taking on that as a bit of a hedge we don't see more of that material tech upside or some of that start to be priced out. >> thank you very much for joining. on this thanksgiving markets edition. let's get a quick check on currencies this is it affecting how we started the conversation on europe. the strength from the german pmi may be bottoming out of growth. the euro much stronger versus the dollar as is sterling after stronger u.k. pmi's. also mentioning some inflation and the potential for wages to move higher. swedish krona weakens.

aussie dollar foal -- fueled by hawkish comments alongside the china stimulus. we will also have a quick check on commodities headings a break. considering the oil continues to fall. down on wti and crude. nat gas a bit weaker as golden years $2000. more next on bloomberg. ♪

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dani: welcome back to bloomberg markets.

u.s. markets are closed for the thanksgiving holiday. we have very light volume. you have cash equities in the u.s. in treasuries closed. japan markets closed for the labor thanksgiving holiday. future sticking lower in the past 30 minutes. the move was lower off of the back of some hawkish type data on very thin volumes. euro strengthening thanks to germany that came in above expectations. that data came in above expectations fueling also sterling to move higher. brent crude drops for its second consecutive day hurried it ended down yesterday. today it is down about 1%. it is the delay of the opec-plus meeting. is there a discord over supply cuts? at a time when non-opec supply is swelling. a strong november it is shaped up to be. you are not far from double-digit returns.

this is only happened twice in the past decade. the last was november of 2020 when there was good news over vaccines. european equity struggled to hold onto gains. msci doing well about a third of 1% thanks to china property measures and we spoke to laura cooper in the past half hour saying they are turning more risk neutral from being risk-averse. in the short term you want to move to some of the risky assets because there does seem to be appetite there. yesterday we got a couple of bits of data which all turned into a session at the front end of the curve in the u.s.. it's been a big dovish run in november. some of it started to come back. this is the real piece of data and at university of michigan we have the final reading on it. short term inflation expectations are at a seven month high in the longer run prices expectations are at a

2011 high. that curved some of the cut and some of the dovish enthusiasm. sovereign credit analyst at pimco. if you look at something like that and it has the reaction on volume heading into thanksgiving has the dovish run, has the rally throughout this bond market just gone too far? >> i don't think it's gone too far. if you look at the u.s. treasury notes yielding 4.4% implied in that there is a real rate in the above 2% between two and 225%. i think that's a pretty healthy real rate that investors can earn on a u.s. treasury note. especially if you take the view that the neutral rate in the economy have not changed substantially over the past few years. we think rights in the u.s. remain pretty low in the 021%

area. in the near term there is a decent amount of rate cuts priced in for central banks like for the fed almost 100 basis points for next year similar for the ecb. i wouldn't bet necessarily on more cuts than what's priced in the market but if we look at the curve as a whole we are still evaluating induration. >> you say the market is not pricing and enough recession expectations so does 100 basis points of cuts reflect a recession in that case? >> i think the market is pricing what you could call an immaculate disinflation scenario where growth remains pretty solid and inflation falls to target. we think what has been supporting growth is a fiscal sugar rush which is set to fade and we also think the impact of monetary tightening will

accumulate and be felt in 2024. i think if you look at risk assets via equity markets or credit spreads i think they are signaling a pretty benign economic outlook we would probably be more cautious than that. >> that makes sense and you would be more cautious on some of that riskier outlook but can you define what type of downturn you are exactly looking for because we lost the meaning of soft landing and hard landing. none of it makes any sense anymore. what exactly are you expecting for 2024. >> for 2024 we expect sort of mild recession type of environment between stagflation and mild recession. a very healthy pace shifting down toward 0% or slightly negative growth as we go into

2024. that's not a deep recession but it is still a recessionary-type environment. whenever the unemployment rate grows on a sustained basis by more than half a percentage point in the past, the so-called dutch would suggest that at that point normally a recession has been called so that we think the unemployment rate will rise from here and that will be a recessionary-type environment. there are risks and the reason why -- go ahead. dani: what are the risks of the deeper downturn. >> there's a risk of a deeper downturn of course because often we don't know when there is a sharp tightening cycle like we've seen something breaks in the financial system. there are some areas of weakness some areas of the private markets that we are watching closely. but deep downturn is not our central expectation because a

corporate household balance sheet starts from a healthy position. the financial stability policy makers have been very active so whenever there was a risk of a breakage generally speaking we had an intervention. so it's not our expectation. >> it all squares with our view of perhaps high yield spreads have come into much in this recent rally even more. the morgan stanley estimate default rate on junk bond is likely to peak at 5%. where do you see this default cycle going to something like 5% for junk bonds sound about right to you? >> i don't have a precise level in mind. what appears to be the case is credit spreads especially in the higher risk parts of the market like high yield seems quite compressed relative to what we

should expect. but the point i would make also is it is not just about default realized of what's priced in. the market prices and more defaults than what actually happens. it is the mark to market losses that you are subject to when credit spreads widen. even if defaults don't end up being much higher than what the market is anticipating i think from a mark to market perspective the widening and credit spreads is something you want to protect yourself against. >> especially considering where we are now. thank you so much for joining us. let's turn to europe where far right politician has come first in the dutch elections in a shock result that will resound across europe. the year -- the leader will have to forge a coalition.

how big of a surprise was this? what are the takeaways from this? >> as you said the far right populist party was the surprise winner next -- last night. and a surge in the final days of the campaign saw the party rise to the top of the polls and his party's anti-muslim, has tough policies cracking down on immigration and has spoke about sending so much aid to ukraine. his party is set to gain 37 seats more than doubling representation in previous governments where as we saw the green left alliance coming in second place with just 25 seats in the current ruling party gains just 24 seats. we did see the rise in recent days i think the wide margin was

quite a surprise. >> what will it look like now as a new government is attempting to be formed? >> the netherlands is a coalition country and even though it is the biggest, the party has about 25% of the vote. in order for them to become prime minister of the netherlands he will need to form agreements with some of the rival parties and those coalition discussions can take weeks or even months so it could be sometime before we know who will become the prime minister of the country but it is usually the biggest party which takes the lead in those discussions. only once in recent dutch history has the biggest party not become prime minister of the country. >> thank you very much. turning now to emerging markets, mark mobius says dollarization would be -- provide a huge lift

to argentina's economy. he spoke to kailey leinz and guy johnson. >> if you go into a place like argentina where there is inflation we were investing when there was about 2000% and it was very difficult. we had to buy companies on the basis of their book value rather than anything else. at the end of the day it's been a dangerous place to be with the currency the way it is and with inflation in that situation. so now if they -- if they go ahead with that it will be an incredible boost for the economy and for the country. we will see inflation down dramatically. if they get rid of the central bank that would be another step in the right direction and i think the outlook is terrific under the circumstances but we have to wait and see if the new president can implement those changes. dani: are there enough -- >> are

there enough dollars to do that? >> it's not a matter of the quality -- quantity of dollars it's a matter of taking the economy to the u.s. dollar. argentine people have lots of dollars offshore. you better believe they protect themselves from this incredible inflation. so there are plenty of dollars and it's a psychological impact. it's not a matter of them using dollars every day with cash transactions. there are days with paperless transactions as long as you've -- then you are going to see incredible return of confidence. >> what about others if you are looking at china for example which has raised question marks in terms of that fragility. is that somewhere you see

opportunity or danger? >> there opportunities in china. it's a big economy. but we think it is a better idea if you want to look at china, a look at it through taiwan. there's a lot that takes place between taiwan and china. many taiwanese companies are in china. foxconn is probably the best example. there are many companies like that so we prefer to go into china through taiwan. >> emerging markets investor speaking earlier on bloomberg. the hostage deal between israel and hamas is facing a delay. details for you on that next. this is bloomberg. ♪

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>> this is bloomberg markets, i'm dani burger in london. israeli officials signaled a release of hostages from gaza and a pause inviting would be delayed. negotiations with hamas are continuing. this had been slated to start

today but israel now says it won't happen before friday. paul, while i had this been delayed? >> we don't think it's anything major at least to the extent the deal would break down and not happen at all. we think it's just to do with all the complications surrounding this. it's not an easy deal and it essentially involves three elements, the release of 50 hostages held by hamas, of the release of about 150 palestinians held in israeli jails and the truce. all of those have to come together. what we are being told by israeli officials they have to happen at the same time before the hostages are released. the latest from the israelis and hamas is it won't happen before tomorrow.

the expectation is we will get the release of hostages and the start of fighting beginning tomorrow friday. >> of course the u.s. president biden has been very active in these talks. what exactly has his role been especially as he faces this road bump? >> the u.s. was pretty deeply or very deeply involved in the talks that led to this deal being announced wednesday morning. qatar was the main meaty -- mediator. it was dealing with hamas and israel. president biden said he was deeply appreciative of qatar and egypt which helped to getting this deal agreed to. we still have to see it being implemented. biden did warn it is important we see more parts of the deal actually being carried out and i

think that underscored how complex this is. when you take a look at the 50 hostages meant to be released, we don't know yet whether they will be freed in one go or if hamas will do it in batches. all of this remains an open question and it just highlights how complicated this is. all the while fighting continues in gaza and hamas and israeli forces are engaging in heavy battles in the north of the strip. >> netanyahu really cleared this week that the release of hostages would not mean an end to the war. coming up we will bring you our interview with opentable ceo debbie sue. this is bloomberg. ♪ an ever-changing landscape comes with challenges. from our vantage point, we see opportunities.

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dani: welcome back to bloomberg markets. as the holiday season ramps up, the opentable ceo sat down to speak about the demand and

dining trends. >> we are seeing dining demand remaining flat and i think that's incredible if you think about the macroeconomic uncertainty we've seen this year. i think it's a win but restaurants are coming out relatively flat and a testament to how important restaurants are to all of us. i think it's actually good. we are seeing some really bullish signs for the holiday season. we are expecting to see the same for the holiday in december. >> is this traditionally a time where we traditionally see people going out to restaurants. it's kind of that time where we all spend with each other at home. >> people are definitely going out.

hosted a restaurant. this is typically a busy time for restaurants. a lot of restaurants do thanksgiving meals, all of the year-end parties leading right up to the first of the year actually. we are expecting a big increase from a year-over-year standpoint. i would definitely go do that. but this is a big dining moment in the year. >> people are going out and outside of just the holidays. people are going out alone. talk about what you are seeing in solo dining. i was a bit surprised to see that uptake there? >> solo dining has been up 4% year-over-year. it is the party size that has increased the most this year and i think the reason we are seeing that is there has been renewed focus on self-care, dating

yourself. i'm based in san francisco and this wednesday i happen to have a free block open for lunch. i walked to neiman marcus and dined by myself and it was glorious. i am not terribly surprised to see this stat. i think more people are happy dining alone. dani: would not mind for a thanksgiving dying out today. debbie speaking with romaine bostick. in other text sagas, sam altman has been dominating the headlines. he was fired and then rehired in less than five days. alex webb has been helping us track it all. is it over? now that he is back in openai. >> he is back. it happened very quickly. the thing we will see now it looks really reading the tea

leaves. they're going to be more board members announced, the diversity , the three men who have been appointed so far. bloomberg has reported there could be two seats held on the board looking for as many as nine new directors. don't know whether they will have a vote but at least observers. one of the things is he didn't like surprises. this sort of palace coup that looks to have been about preventing some of the direction of travel. chasing some money in order to fund these things. accelerating the pace of development. we don't one know that is true. this may have achieved the inverse effect. again one important caveat. not saying that microsoft is

unsafe but microsoft is making money. >> we only have about a minute but just before this hour ends i really want to talk about the thanksgiving day box office. i wish i was eating turkey somewhere even though it is 10:00 a.m.. we have this new disney film it seems like there is disappointment around what the box office will look like. >> there are three things kicking in. the actors strike meant they could not really promote the film. second, the film does not appear to be very good. there is a lot of criticism on social media. thirdly they might -- in previous years in the past few years they've been putting it straight onto streaming. particularly kids animated films. that might have reduced a little bit of the enthusiasm. dani: why go through hauling your kids to the movie theater when you can just wait a couple of weeks.

popcorn is a rip off this -- these days. thank you very much for joining us. coming up in the next hour i am sticking around. we will be speaking with the chief economist allianz with the pmi numbers in the past two hours. this is bloomberg. ♪

dani: good morning. welcome to bloomberg markets. it is a special edition with u.s. markets closed for the thanksgiving holiday. property push. country garden leads china's developer after beijing's biggest move yet. far right leader kurt wilder's secures a win in the dutch parliament. an open -- and opec-plus forces

the group to delay a crucial meeting. let's get to your market check. we should have a central bank decision shortly. i lied, we have it. turkey has raised their one-week repo rate by 500 basis points. this is more than market was expecting. the estimate was for 37.5%. again, 500 basis points. the expectation was that it would at least be above 36%. that is where the expectation for year end inflation in turkey is. that means for the first time in two years the one-week repo rate in turkey is higher than the expected inflation. this is tighter policy off the back that the lira is extending gains. again, turkey's central bank to slow down monetary tightening is at some of the language coming out of this decision. we also got a rate decision from

riksbank two. they held instead of moving, as many expected them to do. u.s. equities, the futures are up in trading. volumes are extremely light. but it is a more hawkish day than yesterday. at the same time you are also looking at a euro that is stronger off the back of pmi's in germany, with strength more than expected. we are talking with economist jamie rush. u.k. pmi's are also stronger. up about .4 versus the dollar. brenda's down about 1%. it is that opec-plus delay. let's look at equities again. if you are in the u.s., navy help your friends toughing or turkey. it has been a strong november at

the same time we are looking at retail investors buying up u.s. stocks. they are buying the most since april 2022. and some of the property moves out of china helping to support asia equities. japan is off-line for the labor thanksgiving holiday, but at the same time asia's pacific up about .3%. bloomberg has learned that china may allow banks to offer unsecured short-term loans to qualified developers for the first time. it is part of a package of measures to backstop the real estate industry. regulators are considering allowing banks to give working capital loans to some developers. this comes as beijing embarks upon a push -- joining us now is sofia horta e costa. can you put this in the context of what we have from china

support? >> it is the latest in a string of measures to prop up the property market. this one is targeted at the biggest problem right now, which is how do developers get their funding? to rely on homes sales, and they are not selling as many homes as before. there is a problem with confidence there and it is unlikely to be resolved anytime soon. what this means is that if approved this mechanism would allow developers to access funding not from the bond market, not from the equity market, from banks. so, kind of shifting the responsibility away from the capital markets. if you are a developer trying to sell a bond, good luck. essentially they can get bank loans without needing collateral. this is incredibly important and really big news because it frees up capital, that working capital, potentially them to

finish their homes, but also potentially to repay debt. dani: is this the silver bullet? sofia: i think you need to separate the silver bullet for developers when it comes to funding. will we get more defaults? this lessens the likelihood of that, at least to stabilize his things on the financial side. but you still have what i was talking about, the confidence side of things. the downturn in the property market is only accelerating. the data we had last week showed home prices fell in october, despite the measures we have seen this year. there is still in a downturn there, and homebuyers do not feel confident this is going to stop you are unlikely to get them buying more. i think this measure announced today, if it is confirmed, be a step in the right direction for sure. dani: thank you very much. joining us now to talk all things eco is ludovic subran.

is this going to draw a line under the crisis or is this just another active desperation? -- act of desperation? ludovic: we know that china has bottomed out in many ways. for me this is the sign that they think the real estate sector has happened. we thought maybe they are ok with this credit crunch in real estate, because that was a massive bubble. now i think they are trying to make sure the social consequences are not there. they tried to circumscribe whatever second-round effect should have on the sector. -- effect this could have on the sector. as he know, china is in a structural adjustment phase and they need to find sophisticated coliseum making to make sure they do not create a bubble.

and they do not have this japan ification or strong depression coming from this crisis. it is going to take 10 years to absorb this crisis. this movie is a decision to make sure they feel ok maybe with new credit coming in without having another wave of defaults. dani: does that mean if this is a slow-moving thing, to find that fine line between finding support and causing a bubble, that the pace has to be this slow drip of measures? ludovic: it is very hard, because i think they are not sure that what is left is as secure as they would like to think about what happened with the u.s.. -- the u.s. we expect more in the fiscal side. i think they are really trying to make sure they do not completely kill the economy.

they have to triangulate the second and third round of a real estate crisis. most of it is already there. now it is a question of restarting on a good basis. the chinese consumer does not trust the policymaking. the savings rate in china is going to 36% of gdp. when you talk to chinese consumers they tell you, we don't know where to put the money because we are not sure we are done. that is what china is trying to do now, re-create trust. most chinese lost their pension. that is what happened with this real estate crisis. now they need to go back to a form of secure investment into something. maybe these types of measures are helping. but i think they will need much more. dani: there is always this massive contrast between the chinese and european consumer. which has this propensity to

save versus the american consumer. we can speak ill of them because they are not watching, but you do see things like the new york fed for example had this study and went around and asked people, if you had to come up with $2000 in the next two months could you? the lowest people said they could since they started the -- started collecting the data in 2013. there do seem to be cracked in the consumer. when does it turn from a crack to something that could lead to the next downturn? ludovic: that is an open question. that is why you see the most dispersion in the analysts in the way they look at 2024. we have been falling -- calling it for quite some time. we thought the savings from covert would melt into the sun by 2023. we see now the net positions of american households back to where they were in late 2007, so before crisis times. i'm particularly worried about the suffocation of the american

consumer for 2024. the indebtedness and affordability of this debt is really a question. your wage effect. you have real wage growth and less inflation, so that should be a positive effect on disposable income of households. i think what is working in the favor of consumers also, wealth effects are not so bad. they are getting wealth effects from the housing market correction. you see that markets are doing better than what they were doing with the high volatility bond market. i think the risk is to the downside. i'm worried about the cost-of-living crisis morphing into this idea where you start to have a form of de- consumption. dani: i have to say, what you are telling me, especially given that the covid savings drying up or starting to dry up didn't

seem to affect anything, who is to say if there was a downturn you wouldn't just have americans spend their way through it? ludovic: the cost of i guess the bank lending centers and financing is the ultimate pole -- pull factor. for me 2024 in the u.s. is going to be another 2016. a very polarized year where u.s. elections are coming up, so this is going to be a wait and see mode. you are going to have flashing signs of corrections and flashing signs that it is ok all through the year. in our forecast we have two or three consecutive quarters of no growth in the u.s.. recession afterwards, but i'm quite confident that there is in a way a restriction in the making. also because people want to see what is going to happen on the tax issues. dani: stay with us.

we have much more to discuss. warning investors against wishful thinking on the strength of the euro-area economy. he spoke to alex webb her yesterday. >> this is one of the main risks. the outlook that markets are taking with respect to the evolution of the economy, you know, i would say it is a little bit sanguine. there is a little bit of wishful thinking. if, you know, growth is below what markets are expecting now, if you have any sort of additional geopolitical risk, that is something we have to take into consideration. the conflict in the middle east,

the impact on markets has been subdued. well, that kind of situation, when you have a very low risk premium for both corporate bonds and equities, is something any sort of deviation with respect to this scenario could give rise to surprises, negative surprises and reactions in markets. calix: what about expectations for the first interest rate cut? is that too optimistic? >> i think it is premature to talk about that. we have increased interest rates. as you have said before. we have kept rates on hold. we will continue with discontinuation. let's see what happens in 2024, and i think that we are data-dependent.

we will see how the inflation involves -- evolves over time. we think this inflation process will continue over the next two years. even though because of base effects you can have some optics of inflation in the short term. but in the medium term we expect at the level of interest rates our monetary policy will give rise to an important reduction in inflation and eventually inflation will converge to our objective of 2%. dani: coming up, a surprise victory. a far-right lawmaker wins the dutch elections. we will have the details for your next. this is bloomberg. ♪ 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.

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i'm dani burger in london. a reception in the euro area is looking more likely. economic downturn is persisting. the latest pmi data came in showing just that. joining us now is bloomberg economics chief economist jamie rush. how bad was the data? especially given a gloomier outlook? jamie: i think it comes down to what sort of recession we are talking about. if we are talking about a recession where gdp growth is negative for a couple of quarters i don't really regard that as a serious problem. it's not going to put a dent in the labor market. i think what we are looking for is the possibility that output starts to suddenly sour. because that is the risk. we have had 450 basis points of rate hikes. this should be leading to a recession, really. it has not happened, so we are on the lookout for signals. when we look at the data today

that is not what we see. what we see is a stabilizing outlook. yes, bumping on the bottom, but not something troubling. dani: is a stable outlook consistent with pricing of market cuts in june for the ecb? jamie: i think so. what people are forecasting is more of the same and then things getting better in the middle of next year. if we stick with that outlook and believe that inflation is going to fall away, as we are expecting, then cuts are reasonable in june. if we see evidence of the paid -- that the pace of deceleration is gathering momentum i think we could start to see that pricing move a bit closer. dani: makes sense. thank you. that is jamie rush. elsewhere far right politician geert wilders has come first in the dutch elections. it is a result that has been resounding across europe. the freedom party leader will

have to forge alliances. joining us for more is april roach. april, how surprising was this? april: as you say, is far right populist party is the surprise winner of the dutch elections. to an extent this was to be affected. he had been rising in the polls in the final days of the campaign. however, i don't think people expected him to win by such a large margin. his party isn't set to gain 37 seats, more than doubling its representation in the government. in second place we see the green-left alliance with just 25 seats. in third place the current ruling party with 24 seats. dani: what will the path now look like for geert wilders to become the new pm and former government?

april: the netherlands is a coalition country. even though geert wilders' party is set to be the biggest, it has just a 5% of the book -- of the vote. in order to be prime minister he will have to form agreements with some of the rival parties in order to be able to form a government. those coalition discussions could take weeks. could even take months. it could be a while before we know who will become the prime minister of the country. just once in recent dutch history has the biggest party not become the prime minister of the country. dani: thank you very much. that is april roach. still with us is ludovic subran, the alliance chief economist -- allianz chief economist. we now have this move very right in the dutch government. the market seems nonplussed. maybe that is because there is lighter trading. at what point should we care?

should market participants care about a move further right in european governments? ludovic: you win one, you lose one, right? poland, spain were good examples of the forces of progress winning. now we have the forces of darkness. i'm a bit worried, because i think it is really the abu dhabi of the cost-of-living crisis. when you know the state of the housing market in the netherlands you can understand why people could get frustrated and vote extreme. i think the european elections are going to be a massive playground for anti-european parties. i'm a little bit worried about the european elections resulting in the largest proportion of anti-european people at the parliament. blocking substantial safeguarding policies and the type of stuff europe needs to move forward to make sure that our industrial policy and fighting climate change and so forth.

dani: it is not even just europe, it is half the worlds population is going to have an election next year. do you think it is even foreshadowing that to a larger scale, of the way the world is moving with this discontent over cost-of-living crises? ludovic: 2024 is half of the world going to the polls. of course, american elections will be watched, will be under a lot of scrutiny. the european election also. taiwan, indonesia, russia. there is definitely an election that is happening after a cost-of-living crisis. so of course there are going to be sanctions of leaders in power then. after covid confirming the idea that the people who manage the crisis would stay in power. that shows the fact that people

during covid -- created a lot more dead, a lot more inflation, and now they are being sanctioned for that. that is a measure of fact as we need more collaboration for the big challenges thrown at us, including open conflicts and so forth. dani: i've got to apologize to you, because before we went to the commercial break we played tape and made you sit silently while he spoke. i know you probably have some thoughts. he talked about there is wishful thinking on the part of the european economy. what do you take from what we heard? ludovic: i don't know. i want to be nice, but i think those central bankers should not be ringing alarm bells about the europe. i think we have enough of those. the second part of the interview is about how independent they

are. -- about how data-dependent they are. you should avoid the recession. that is part of your job. i was a bit aggravated. we know already the situation. the question is how do you manage? every policymaker should have hands on deck. that is what they should be doing right now. doing the hard work to make sure they stay afloat. there is still the possibility to avoid something a lot more negative on the contraction in europe. dani: that was an incredibly nice critique. you could teach him, but it was nice. don't worry about it. before we let you go i want to talk about your new research note that you flagged to me. i'm just going to say the title and leave the rest to you because this is so excellent. gravy for corporate's, leftovers for consumers. it is making me hungry, but what

do you mean by that? ludovic: we in europe want to be part of the celebration. we looked at turkey prices. turkey is interesting. prices for consumers went up. prices for producers went down. why? labor shortages. people are down-trading because food costs are so high, and then we see margins in the food sectors that look like there is profiteering. the food packaging sector. margins are going to 15%. that is a big profitability gain for some of these sectors, and people are consuming less. in the u.s. over the past 12 months food consumption went down. we want to be a bit provocative with this idea that the food sector is going to be a, you see the political ramifications of this. the normalization of the food sector among the most vulnerable

among us. dani: that is so fascinating. this is why you have american friends like me. next time come to london. i will host you. i will get you into the thanksgiving -- american thanksgiving joy. ludovic subran. coming up, we are going to be speaking with colin graham, head of multi-asset strategies at rebel. -- roberto -- robeco. stronger pmi's coming out of germany and the u.k.. surprise hold from riksbank. weakness in the kroner, waffling back and forth, just slightly stronger versus the dollar. a stronger aussie after rba comments and support from china. ♪

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dani: welcome back to bloomberg markets. i'm dani burger in london. u.s. markets are closed for the thanksgiving day holiday. even so, we do have a treasury trade in the futures session. it has been looking weaker after yesterday's week is -- weakness off of job claim data. slightly undoing the cuts that had been priced in and the rallies in this bond market. the euro and a sterling strengthen off the back of stronger pmi data. we were just speaking with ludovic subran, who was gloomy

on europe and the u.k., but perhaps not as gloomy as you again does. i would say keep in mind with all of these the thanksgiving day holiday, not only is the u.s. close, but japan is also closed. volumes are going to be weak and be more volatile. as soon as i say that i'm going to show you what u.s. futures are doing. so, a grain of salt with all of this. s&p futures are flat. you have had this huge move from retail investors. jp morgan points out they have had the biggest weekly inflow into u.s. stocks since 2022. msci asia pacific -- without japan, because it is closed for a labor thanksgiving day holiday -- higher led by property stocks, which at one point were up 9% with more measures coming through china. we are now back flat for treasuries on the year in terms of their performance, and we

also have s&p 500 up 8.6% for november. what do make of this move? colin graham writes that we think recent equity and yield moves are more about positioning squaring rather than a new outlook. immaculate disinflation is market consensus and we expect higher yields and equities to go nowhere from this knee-jerk reaction. collin joins us now, who is the head of multi-asset strategies at robeco. what do you do after these moves? colin: i think you still look for those opportunities in the world. i think you can see that. you can look to various lenses in terms of valuations, and terms of the macro and the technicals. the recent moves have been driven by the technicals. if you look at the macro -- and we have heard some of your other commentators talk about the downbeat european outlook, but this is one area you can see

politics prizes. also valuations are cheaper in the euro zone. from that perspective you can think the bonds and equities within europe as being reasonable value, and then you have to figure out what is going to happen over the next three to six months to change the market consensus on that outlook. dani: at least for the end of the year there is no really huge catalyst, but i have to wonder, when it comes to european bonds for next year we were speaking with laura cooper earlier, and part of the reason she said she likes them is there is a higher likelihood you get ecb cuts before the fed. that that accommodation comes sooner. would you agree with that? colin: as a team we were talking on the desk about that yesterday and we don't think that is the case. we think the ecb will follow the fed. i think it will take something catastrophic or something out of the ordinary that we can't

predict in order for the ecb to go first. we are talking also about a china connection here. china starts to get the property in terms of the control and becomes more investable from a return perspective. then you will start to see europe should start to pick up due to the connections in the economy with china. china has been in the doldrums, and that is one of the reasons europe has been lagging behind the u.s. you also look at the energy complex as well, and with the opec-plus meeting being delayed and further cuts, discussion has been pushed out. they could also lead to -- for europe as energy prices come down. dani: what about in the u.s.? you have closed your underweight in equities, and now you start to buy back hedges on u.s. stocks. what has brightened your outlook? colin: i think it was the

extreme pessimism here. we still think that goldilocks is not the right outcome for next year. we think there is going to be surprises on inflation. we think rates are going to have to be higher for longer. so, we are still cautious, but we just realized that that actually you can still make returns being cautious on equities. therefore closing up that underweight in an environment where you can see the markets, where all catalysts for a short-term balance were in place, then that seems like the sensible thing to do in order to protect our clients' performance. dani: if we are going to be higher for longer do you want to push back against what the american bond market has done over the past month, to price in 100 basis points of cuts by the end of 2024? colin: totally. we are short duration in our portfolios at the moment, and looking to use the japanese duration and u.s. duration to go

shorter. one thing we have done is on target prices for u.s. 10 year treasuries have come down. so we are looking at 4.5% to 4.75 percent for the u.s. 10 year as a point we would start thinking about longer duration. we think if treasury yields fall further into the year and that would be an opportunity to actually sell those, because you have to look at where short-term rights are and where cash rates are. those are becoming more attractive as long-term yields fall. dani: while we are talking about bond markets we might as well do the u.k. too. i know you have removed your u.k. guilt position. -- gilt. you have s&p talking about strong wage inflation, need to

pass on higher fuel costs to consumers. that is what pushed up average prices in november. does something like that make you may be re-think where this gilt market is going? perhaps now is not the time to belong gilts? colin: i think so. the reason we have long gilts is the yields were tracking all of the other economies. it was all being driven by the u.s. the u.k. was in such a different place from an economic perspective and policy perspective that it did not make sense for u.k. gilt yields to track the u.s. the are seeing more balance. we saw the budget yesterday. we still have not digested everything that means in the short-term or the long-term. but we will come back to this and reassess it once we get this

new information and understand what is going on. dani: ok comic-con. thank you very much for joining us this morning. that is colin graham. israeli officials are signaling that a release of hostages from gaza and a pause in fighting would be delayed. that is as negotiations with hamas continue. the four-day pause in fighting had been slated to start today but israel says that will not happen before friday. why has the truth been delayed? >> as he said, the deal for a truce and release of hostages has been delayed by at least a day. based on what israelis have said so far today. that highlights how fragile and dynamic this was for the deal. there are two sides locked in a bitter battle and obviously they are not talking to each other, so it is up to the mediators, led by qatar, and to a lesser

extent by the u.s. and egypt, to mediate the distrust between the two parties. they are doing everything they can to make sure this deal comes to fruition, it looks like it has been delayed. we know that mediators on both sides are trying to secure the release of hostages held by hamas in exchange for 150 palestinians held in prisons in israel. dani: if you look at some of the messaging coming out of iran, for example, had the iranian foreign minister on telegraph issuing a statement to the hezbollah leader, saying the truce deal between israel and hamas is the result of the resistance and a steadfastness of the palestinian nation. is this persistent fear of escalation, of even more involvement than we have seen so far from the borders of lebanon, from hezbollah, in terms of that fear where did we stand?

has it grown? onur: it is very important where iran stands and what kind of message it sends. as you said, there was a cryptic message out of the iranian foreign minister, who is traveling to the region today. but elsewhere in israel today when we look at the north there have been about 50 launches of rockets by hezbollah, which is a militant group backed by iran and currently based in lebanon. those rocket launchers came after what hezbollah said was an attack by israelis and a post inside lebanon, where five members of the group were killed, including the person who was believed to be the son of hezbollah's own block in the lebanese parliament. that seems to have triggered a very strong retaliation by hezbollah. elsewhere in the region we have seen signs of a possible escalation, including launches

of drones by iran-backed rebels in yemen. those drones were intercepted by a u.s. navy destroyer that was in the red sea on patrol. but obviously that itself shows the risk of outside threats to this pause in fighting that would materialize if the deal goes through. dani: next for joining us for the latest on that. that is onur ant in this temple. let's pivotal oil. the decision by opec-plus to delay ed's upcoming meeting by a week is dragging oil markets lower for a second day. it has cold speculation of further cuts by the group. joining me now is will kennedy. is that airfare take away? do we look at the delay and say less supply cuts are coming? will: i think it is too early to say that. what we can say is that a proved hard for opec to reach a deal in

time for the meeting this weekend and it became clear this week that that was not going to be possible, and that they had to delay a while, which suggests not everything is well within the group. what the problem is, we have no public statement from opec or any of the ministers, but we understand that some of the african members of opec, nigeria and angola for example, were unhappy with the terms of the deal negotiated earlier in the year, that they would have their quarter reviewed by independent analysts, and the outcome of that review is back and they don't like it. that has caused disagreement within opec. that is in a broader context where the outlook remains uncertain for next year and they may feel that bigger cuts are required, and how those cuts should be shared. dani: if there is this discord among members and coming from the african members is that put into the threat that saudi is less willing to be that swing

producer? that perhaps they do not want to take on this role if there cannot be a wider agreement among members? will: i think that is a reasonable supposition. clearly going into this meeting saudi was doing a lot of work. it's production is down at 9 million barrels a day. quite low by historical standards. it had topped up the agreement to cut production this year with a voluntary one million barrels a day cut. it would extend that into next year. it may well be that saudi arabia feels if there is more work to be done here, if production cuts need to be steeper they need to be shared more broadly throughout the alliance. we don't know the details of that conversation, but that may be at the heart of the problem here. and as you say, in saudi eyes, a more equitable sharing of the burden. dani: how high is the bar to have a meeting where they are able to push up prices, that is able to have a positive price reaction? is that bar higher now? will: it is difficult to know.

perhaps a selloff has not been as dramatic as it might've been. we live in a time where very volatile one move -- one-day moves in oil are common. we are talking about 4% swings. we had a selloff yesterday. at the end of the day we have had this surprising delay, and we are still holding above $80 a barrel. it might suggest the foundations of the market are not as bleak as people think. you will not know until we get a result at the meeting. dani: even the bond market swings more than oil. thank you for joining us, will kennedy. we are going to ring you are interview with the jcpenney ceo mark rosen next. this is bloomberg. ♪

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u.s. markets are closed for the thanksgiving day holiday. this is typically one of the busiest holiday seasons for spending. perhaps you are gearing up to take on some black friday shopping. but even as inflation takes its toll on the consumer the ceo of jcpenney, marc rosen, says they expect holiday spending to be similar to previous years. he spoke to bloomberg tv. take a listen. marc: but we are seeing is half of consumers are saying they are going to spend more this year. i think what you're going to see is consumers are much more focused on value than they have ever been before. we are seeing that in shopping behavior this year. >> we have had some earnings reports that seem to show that trend certainly in place. it is not just low income consumers. we have had higher income consumers trading down as well. i'm wondering if you have actually seen that in your stores as well. marc: i think if we step back for a minute and talk about our

consumer, the consumer in our store is, we say our customer is america's diverse working families. if you think of our customer, it is the teachers who are teaching our children, it is the medical workers taking care of us and our families. for that consumer inflation has definitely, definitely been a challenge. but we are seeing is the consumer is looking more for value, the consumer is more focused on price. we are seeing more responsiveness to when we are offering promotions and things like that. and we have been really successful by doing what we are saying we are doing, which is taking inflation out of the holiday to our customers. have gone back and taken hundreds of items we had last year and offering the same prices last year or lower. and we have thousands of gift items under $15 for our customers. romaine: those low prices, are

they the full retail price, or is that the price you get to after taking into account a discount or coupon? marc: i'm talking about the black friday price. our black friday prices are the lowest prices we offer. romaine: how are you going to get people to buy? is this about getting them physically into your store locations, or is this going to be much more of an online strategy? marc: i think it's going to be a bit of both. we have seen success across both online and in store. we launched our black friday early and we saw great success. we saw a big increase in our store traffic and also saw a really strong buying online. if you think about the event we are going into, tomorrow, thanksgiving day, will be an online day. black friday morning is going to be an in-store day. to encourage that in-store experience on black friday morning we are going to have events throughout the day.

we have events starting at 5:00 a.m., 1:00 p.m., and 5:00 p.m. to see a couple of examples of what we are going to be doing, some customers will get $500 off of a $500 purchase. in other words, we will pay for their entire purchase. at 1:00 we are going to be giving away diamonds. there is a diamond pendant necklace in each one of our stores. and 30,000 diamonds across our stores. that is going to keep the excitement going throughout the day. dani: who doesn't love some free diamonds? that was the ceo of jcpenney's, marc rosen. black on black friday. caroline hyde is going to be speaking to the ceo of macy's at 7:00 a.m. eastern. she will get a read on just how much that black friday spend is going to shape up to be. while thanksgiving spending may be in line in previous years when it comes to close it does

appear that the hollywood boxer office is feeling the pinch. this is usually one of the most lucrative periods for the film industry. you have the family together, you go see a movie. but disney's latest animated film is confronting a shrinking thanksgiving boxer office. alex webb joins us more -- joins us for more now. i don't really go and see animated films in the cinema, but i love an animated film. why aren't people going out to see this? why is there disappointment? alex: a number of different things. animated films are targeted toward kids. taking the family out is expensive. we are in a bit of a cost-of-living crisis in large parts of the world. if you want to spend $60 to take a family with two kids out to the cinema is clearly not an insubstantial amount of money. you have a number of factors playing into this. first of all, the film has not had good reviews.

secondly, you're coming off of the back of an act strike where they were not able to promote it. usually it would have the full disney promotional machine cracking up. and third, you have been teaching her audience to watch the stuff on streaming. this has been the case for much of the past two and three years. they have been putting stuff on streaming first or within two or three weeks of being in the cinema. why spend $60 to go to the cinema when i could watch it at home in three weeks? you put those things together and it starts to become unhappy for disney. dani: if you have taught consumers that they have -- that they can wait and watch a film. in my head i like, at some point this is going to go on the streaming network. how did they dig themselves out of a hole like that? alex: that is why you start putting less on streaming. that is something disney is doing. what we have seen is a huge pivot at disney where they moved away from issuing growing

dividends towards trying to be a growth stock. now we are seeing a pivot back toward the dividend. the growth stock was about investing billions of dollars in content for disney plus and trying to chase a valuation similar to netflix. it did succeed. until interest rates went up and people were not sitting at home as much as much as they were during the pandemic. you will see a pivot back to the previous model. that means bigger windows, perhaps, between release in the cinema and release on your streaming platforms. but that is still very early days. maybe it will take a little time for that to start coming back into the popular consciousness. dani: hollywood just is not making big-budget offerings for the holiday season. we are talking about 2018 where they released "ralph breaks the internet" "the grinch" i haven't seen any of those movies, but why is there -- does this have to do with the actors strike or writers strike? did they just get the holiday

slate wrong? alex: it would not have ever -- have an effect on this thanksgiving, the strikes. the promotional stuff as part of it. the mid range stuff, the $50 million budget, those are the ones that tend to go straight to the streaming platforms. they don't get a cinematic release. the assumption is you have to have the big-budget spend. to go with that you need a big-budget marketing spin. if you are spending $150 million on a film you are spending $150 million globally to promote it. those funds have not been made for quite a while. at least not percent a month. you would have to go back decades now. 1987 is the one hour college writes about in his story. that is when "three men and a baby" came out. you do see some of them start to come out. a 24, the independent studio has really carved a niche in doing

these things effectively. but on the whole those are the films going direct to streaming. dani: i take it you are not going to go see "wish" in the cinema? alex: i will wait for to come to sin to streaming. dani: let's get to some of the other top stories that are trending on the terminal this morning. warren buffett says his will is going to be simple, and the donation of his fortune to philanthropic causes will be public. the 93-year-old says he still feels good. he is worth $121 billion and he donated more than $868 million to four foundations. the governor of new york says there is no sign of terrorism so far in the vehicle explosion that killed two people at the rainbow bridge. it is a busy crossing between the u.s. and canada. kathy hochul says a suspect with ties to western new york has been identified. an investigation will determine

if it is intentional or accidental. novo nordisk is to invest in production in france, creating at least 500 jobs. the ozempic drug manufacturer has been facing supplied bottlenecks, mainly due to high demand for its weight loss medicines. ubs ceo sergio ermotti is calling for stronger regulatory measures for swiss banks. he says it should be easier for the bank or regulator to go after people that demonstrated great negligence in their duties , adding that accountability needs to be strengthened. as we head to the end of the hour let's look at this more quiet training for the day. it is all about a weak dollar, as it has been. is the pivot finally in? you are looking at a stronger euro and sterling versus the dollar. data coming in from pmi's above expectations. meanwhile, the opec-plus meeting is delay.

coming up we are going to hear from berenberg's chief economist. hopefully you can get out there and enjoy some turkey on this thanksgiving. ♪ at do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

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the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> welcome to a special edition of "bloomberg markets". happy thanksgiving to everyone across the pond. we will see how things are looking in europe because we know there is a bit of low-volume. s&p futures doing virtually nothing.

if you look at the 10-year bond features, starting to see a bid. whatever you see in today's session will show up again tomorrow. it is going to be weighing on the dollar. the dollar weaker by 0.2%. brent crude still in line with light risk sentiment, down 0.8%. we will dive into the opec+ delayed conference. in europe a different story. the dollar weakness is fueling the currency trade. even when you look at the actual stock market stocks in europe virtually unchanged. ftse 100 actively lower, down 0.2%. no major moves in either direction.

did i say it was thanksgiving? this would explain everything. we are not getting a ton of action but plenty of action in the world of geopolitics, specifically europe. far right lawmaker's freedom party has the dutch seats. april rhodes is joining us from amsterdam. walk us through the story when it comes to this surprised turnaround. six weeks ago someone else was in the lead. how did we get here? april: that's right. the far right party will become the majority in the netherlands. there was a late surge in the final days of the campaign. his party has some tossed policies on cracking down on -- tough policies on cracking down

on immigration and sending aid to ukraine. they are going to gain 37 seats, double in its previous representation. the left aligned has only 25 seats. we did seem rise in the polls in those final days but i do not think people expected such a wide margin win for this party. kriti: it comes amid the larger backdrop of the netherlands known to be this liberal country in broader europe. really starting to lean toward closing their borders, leaning on the fact they are dealing with budget concerns the way every other country is. can you tie in the broader economics? why this push now? april: immigration was one of the big topics in the lead up to these elections.

there is also a housing crisis going on which gets tied in with immigration. the dutch people were really looking for a change in leadership. those themes have had a big impact. there was also the issue of immigration which collapsed the government earlier the su mmer. kriti: it is a really interesting dynamic because we have seen not only the immigration conversation, we have seen flights cut, foreign tax incentives cut. in terms of this change in leadership, he is in the running for being the helm at nato. what happens next in amsterdam when it comes to dutch politics? april: the netherlands is a coalition country.

he will be the next prime minister. it could take quite a while before we find out -- even though his party is set to become the biggest -- he still needs to make agreements with some of the rival parties to be able to form a government. those talks can take a long time. it could be weeks or months before we find out who the next prime minister is. just once in recent dutch history has the biggest party not become the prime minister. and it is the biggest party that will take the lead in those discussions. it could be a wild before we get a clear picture of what will happen next. kriti: this is something we will be watching closely. the markets are. april roach joining us from amsterdam. we thank you for that insight. i want to continue the conversation on that far right lawmaker winning the dutch elections. we are joined by sandra phillipen, chief economist at

abn amro. walk us through your initial reaction of those election results. sandra: it was quite a surprise to start with. what is going to happen now as a first step it remains to be seen whether and how fast a new coalition will form. what we have seen in the last week is in the election campaigning period a number of parties from the right to the far right have put out restrictions working together. but since the moment of winning the campaign he basically saw a different tone in the other parties. it looks like they are more willing to get into a coalition with the pvv and that means we

get a coalition ranging from right to far right. we have been looking at what that might mean for policies among forward. kriti: it feels like from a fiscal perspective, specifically for the netherlands, there was an interesting market call basically saying dutch debt looks better is within the constraints of immigration, they are talking about pulling back on fiscal spending and that might be a positive when it comes to how much they issue in the bond market. let's talk about the dutch budget. what is the readthrough? sandra: we actually think it will go the other way. the four key areas -- if you look at the election programs -- sorry for the dutch jargon --

you look at the programs it is a hard juggle because they only have a one-page program and no budgetary consequences. that is a hard guess. but if you try and make sense of what is in there, you see four key areas shifting. when a social spending. the personal contributions to health care are in -- they are severely going down toward zero that is a big consequence of around 6 billion euros for health care. there is also a lot about minimum-wage because this is the far right but on social policies, they are far left. minimum-wage and social welfare

spending might go significantly up. and then there is the potential peddling back of policies but whether that turns out to be good or bad for the deficit depends on what those policies mean for the budget. the carbon tax is an upside for the budget. the subsidy is a downer. the dutch government has been rather neutral on budget spending on climate. it is mostly a combination of pricing, subsidies, and regulations, and it is not clear that peddling back is going to be an upside to the budget. we think the policy areas i mentioned but also the policy reforms, so, the pensions. we had a huge pension reform in may in the netherlands. the question is -- and if you look at the parties -- the

programs of the farmers party -- they are actually vocal about moving back to defined benefit system instead of defined contribution. that could have severe budgetary consequences. it is very uncertain where this is going to go, so you cannot put a number on it yet, but i think this is something to watch carefully. all in all, we think if you look at it from the budget deficit side, it is more likely the budget deficit will be higher than lower in this coalition. kriti: another thing we are watching very closely in addition to the budget is the labor conversation. if i can bring you breaking headlines from the major chip equipment maker in amsterdam. the headlines saying they are calling on the dutch government to take measures to boost the dutch talent pool.

asml says workers are undesirable and the ex-pat tax cut change may have a serious impact. in terms of attracting the knowledge pool they need in terms of building out their business and the global demand, the immigration policy and the budget concerns we both discussed are actually working against them. your initial take on the readthrough into the corporate side. sandra: that is another worrying feature. the general tendency that we are seeing from the parties' programs -- except for the labour party, green left -- is the tendency to turn inward. in all kinds of hard to quantify elements, such as ex-pats, are disincentivize to be in the netherlands.

students in their colleges are to be taught in dutch instead of english. this will have consequences for teachers because a lot of academics do not speak dutch. if they are not able to teach, the question is will the dutch speaking academics take all the teaching burden? or will something start shifting? and then you are talking about slowly eroding your knowledge economy by looking inward and putting the world outside, which is a remarkable phenomenon for the netherlands which has built all of its wealth on its international openness. it is very worrying feature. kriti: we have about a minute left in this conversation. talk us through how much pressure that puts on the inflationary pressures that already exist. if you are limiting the talent pool further, doesn't that create more worries on the inflationary front, from a wage

perspective and also supply chain issues going into the netherlands? sandra: well, what this is going to mean -- inflation is too early to call because we do not even know what policies are going to look like. but one thing i think is relevant is if you look at climate policy, so, what is going to happen if we pedaled back on our climate policies is we are still going to have our legislative commitments. we will still be within the euro zone and we will still be facing the green deal. what you will get is a divergence between execution of activities in the netherlands on climate and legislations that we have committed ourselves to. that divergence might, in a very short run, seem less costly. in the medium to long run you will see this divergence may lead to lawsuits and these

litigation cases may lead to more disruptive scenarios for the transition in the netherlands, and that is inflationary. kriti: certainly, a scary concept for those trying to push down those pressures. sandra phillipen we thank you for breaking down not just the election results but the inflationary story as well. there is plenty more to digest because what she was talking about is not just a dutch story. i would argue global. coming up after the break, new data shows a u.k. recession is looking increasingly likely. we will hear from holger schmieding next. this is bloomberg. ♪ card. like ours! with 2.5% cash back on purchases of $5,000 or more.

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kriti: welcome to "bloomberg markets". i am kriti gupta in london.

activity survey showing a recession in the euro area is more likely. walk us through what we learned today. >> we got flash pmi's this morning from germany, france, and the euro area. all of those numbers have been bad for months. the important number to look at is 50. any reading above 50 will be growth and those below are contractions. here we had another set of contractions. in germany, the number did tick up, but still in that contraction area. similar in the euro area. france actually stayed the same. all of those economies are in trouble. germany we actually know from the central bank that germany is likely to be in recession already.

france had a third quarter growth. even if this fourth-quarter should be bad, and the pmi numbers suggest that, france is not in that situation yet. the euro area contracted 0.1% in the third quarter. the fourth quarter the european commission told us they were expecting growth. but the pmi's would suggest that is not the case which means the euro area is in recession and that is a problem for the ecb here in frankfurt. kriti: in terms of the ecb, i wonder, are they going to be following the federal reserve's lead in terms of a dovish pivot? to what degree does this change the pricing?

zoe: the ecb after record tightening of 10 consecutive rate hikes finally paused. they cannot exclude another hike but markets do not believe that. markets believe they will be cut as soon they grow. that is something hawkish governments but also more dovish ones have pushed against, saying it is too early to discuss cuts. but if there are very bad economic and gdp readings, that might change the narrative and that might have some of the councilmembers say, ok, we need to start talking about cuts. kriti: final question. as we talk about the cuts how much of it is in response -- to the broader euro area and they would never go on record to say this -- but perhaps in response

to the issues you are seeing in germany. we have been talking about whether it is the sick man of europe. is germany not only the sick man of europe but is the fiscal crisis you are seeing putting even more pressure on the ecb? zoe: it is obviously very bad news for the euro area. the biggest economy which has been the driver of growth for so many years doing badly. that said, contractions in germany have not always led to contractions in the entire euro area. the issue is the sick man term is one we like to use. it evokes all kinds of images. the difference to when we use this in the 1990's is that this time the labor market is holding up. when we used that in the past it was after reunification of germany when there was vast unemployment. now unemployment is actually very tight. employment is very tight and

that means that sick man moniker is not as apt. both politicians and central bankers have been strong to push back against that. for the euro area, it does mean there is an issue and it is something they keep a close eye on. kriti: something that we know you will be monitoring closely. zoe joining us to walk us through those dynamics. i want to get more insight and bring our next guest. holger schmieding, chief economist at berenberg. welcome to the show. expand on what zoe was talking about. germany is the largest economy in europe. having all of these issues but they still seem to be better than some of their other counterparts. what do you make of the fiscal crisis in europe? holger: first of all, germany definitely is not the sick man of europe. it was in the 1990's when it had record unemployment and the

worst fiscal position in terms of the deficit. now germany has one of the strongest labor markets among all advanced economies. it has by far the best fiscal position among almost all advanced economies, that is, germany is in a situation where it can deal with a number of short-term issues. as to the pmi releases this morning, i would put a positive spin on them. yes, germany is in a mild recession and we will probably see a contraction in fourth-quarter gdp. having said that these pmi readings were less bare than the month before, especially in germany, which was leading the downturn. german manufacturing is actually easing. the numbers suggest that fourth-quarter is probably the bottom and that the downturn

will give way to stagnation early next year and probably an upswing over the course of next year. i would say the data support the call that we are at the bottom. from now on things will get a little better. having said that, the european central bank is still far too optimistic in its call for growth over the winter. the ecb is certainly at the peak in rates. kriti: i have to say it feels like you are the contrary it in that call -- contrarian in that call. what keeps that momentum going? you said the ecb is too optimistic. if we are going to see moves from a horizontal perspective. what holds the euro area stable? holger: we have seen a serious

downturn in manufacturing. companies produce less than they sell. we have seen this bad news spreading to consumer confidence and demand for services. what we are now seeing is the correction in manufacturing is starting to fade, especially in germany. the source of the problem, correction in manufacturing, is easing and it is likely that a few months from now we will also see consumer confidence finding a bottom. consumer incomes are rising faster than prices are increasing. the purchasing power is going up. consumers are saving because they are unhappy about the overall situation but, easter when manufacturing, will be on

the rebound, the overall situation is not as bad anymore and will probably edge toward the overall upswing by opening their purses more. despite german fiscal concerns, across the eurozone, we have modern fiscal stimulus which will likely support demand. in germany, i trust the government to find a few ways to dampen the impact of this fiscal policy. kriti: it is an interesting dynamic especially when you're talking about a potential cut going into next year. but that requires some massive deterioration for even the ecb to change their tune. i remind our audience both the fed and the ecb, neither one admitted to this devilish tilt. i wish i could pick you are brain for the next hour. we thank you so much for joining the program. still ahead, how do you price in the dynamics that holger was

talking about? brooke may is going to join us next and talk about that long term positioning not just in europe but around the world. we do not know what a dovish pivot looks like. a really interesting dynamic hopping into the currency space. s&p futures amid light volume virtually unchanged. the bloomberg dollar index down about 0.2%. treasury futures pushing the european currencies higher. we're going to break it down, next. this is bloomberg. ♪

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>> we promised to half inflation and we have. it will fall to the 2% target in 2025. the economy will grow not 0.6% this year. after that growth rises to 1.4% in 2025 and 1.9%, 2%, and 1.7% in 2028. we reduced taxes and reward work. i will increase the local housing allowance rate to the 30th percentile of local market

rents. this will give 1.6 million households an average of 800 pounds of support next year. i have decided to freeze all alcohol duty until august 1 next year. that means no increased in duty on beer, cider, wine, or spirits. i will invest 500 million pounds over the next two years to fund further innovation centers to make us an ai powerhouse. i am to cut the main rate of national insurance by two percentage points. that will help 27 million people. it means someone on the average salary of 35,000 pounds will save over 450 pounds. the economy has grown. rather than falling as predicted real incomes have risen. our plan for the british economy is working but the work is not done. kriti: that was u.k. chancellor

of the exchequer jeremy hunt announcing a stimulus package worth $26 billion in the run-up to the next election. there is a lot to digest in terms of fiscal conversation. the u.k. is one part of that story. continental europe is another. i want to bring you some headlines as we get these ecb minutes. ecb members see more economic uncertainty now than they did in september. they are publishing their account of the october meeting. we are actually getting headlines from the central bank chief speaking in dublin. he is saying we are near the top of the hiking ladder saying it is too early to discuss cutting rates altogether, but you cannot rule out another hike. i thought the commentary was significant. not only is he saying that this is basically not going to happen anytime soon. but he is saying another hike may be on the agenda. let's get more insight. marcus ashworth knows everything about all things rates in both

sides of the english channel. no pressure. is he right? is another hike still in the works for the ecb? marcus: no, and he knows he is not. there was no way the ecb will grow rates again. there is more uncertainty in september. obviously, the world is in a much worse place. they are steadily slipping into recession across much of the euro area. inflation has come down sharply. it is all about trying to make sure they do not get pushed into a rate cut before they are comfortable. it will happen probably the first half of next year. i suspect pressure will build by then and it will be the decision of when they finally go. we will see. but as far as the pmi earlier,

we do see some signs that may be the worst is over for europe. it is at the bottom. i do not think it is anywhere close to thinking about another rate hike. they have to see how much this monetary tightening has affected. kriti: that is exactly what the ecb is saying as we get more headlines from that policy minute discussion. there is clear evidence policy is working as intended, but most of the impact of past hiking has yet to materialize. what does the lag look like for the ecb? marcus: we don't know and no one ever knows. but they know we could guess at one third has come through. it is having clear effects on bank lending and manufacturing

has collapsed, particularly in germany and france. there is not a lot of hope out there but the economies are flatlining. i think the ecb knows they are in recession. there was fiscal stimulus coming through which might keep it from being too dramatic, but i think recession is for sure happening. kriti: it feels like we are at a deja vu moment when we say, for a second, we were all on the same page pausing rates. now it looks like going into 2024 and the meetings we have, you are starting to see more policy divergence. the fed taking a dovish town. the ecb likely following their lead basically saying there is no more room to hike. the boe saying maybe there is.

it is not the first time we have been here where he is the most hawkish central banker in the room. to be start to see that divergence form again? marcus: maybe. the u.s. is a much stronger fiscal and financial situation than europe. u.k. is not dissimilar. marginally better but bailey is saying one thing. the market pricing is probably fair but that is not the message the central banks are trying to sell us constantly. it is not time to talk about rate cuts and maybe there is another hike. it is all performance a nonsense. they are trying to buy as much time as possible to hope and pray the economy does not collapse in front of their eyes, which i think it will into the first quarter of next year. they need to be very careful of how much tightening they do

because this monetary effect is yet to fully show it full shape. inflation is falling away as quickly as it went up. i think they have done enough, they know they have done enough, they are just trying to buy some time but nobody is buying it. we are all expecting a rate cut next year. kriti: which brings us to the question of what the markets are actually pricing in. when you look at some of the pricing the fact we are seeing such a dovish pivot from the dollar in terms of these dollar long positions against asian currencies is creating this tailwind under the euro. i feel almost silly talking about how weak the european economy is when we have a cable rate of 1.25. is that a massive market disconnect? marcus: it always has been and always will be about the dollar. whatever the euro or the pound

is, it is powerless. you may see a stronger pound or euro. a weaker dollar is what everyone needs, emerging markets particularly. japan and the yen. you strip out the dollar and it is actually very strong. a strong euro is definitely happening. it is just not churning up so much against the dollar. kriti: we are seeing, as part of the policy minutes, they are saying a weakening euro is a headwind to fight against inflation. the strength perhaps helping. they are arguing to keep the

door open for possible future rate hikes, again, as we talked about with you, may or may not materialize. they are saying the talk of any early end of reinvestments are seen as premature. we have to leave the conversation there with you. we thank you for your insights this morning. let's talk about positioning. brooke may, managing partner at evans may wealth joins us now. markets through a ton of cold water on this hiking narrative in the ecb, but arguably, in the united states as well. what is your positioning going into the market narrative that you hear? brooke: how are you? thank you for having me. we think we are in line with consensus for the first half of the year. we think the fed is going to be on hold, but a 25 basis point increase in june or july is improbable. we are looking out to the second half of next year before we see rate cuts.

from there we think we will continue to see cuts based on how the economy is doing. kriti: but what kind of deterioration might we see for those caughts to materialize -- cuts to materialize? it feels like this higher for longer is being met with resilience in the economy. even if we do not see growth, we are seeing stabilization. for a cut to happen it has to be in response to some data point or wage price spiral or summing along those lines. where do you see the weak point in america's economy? brooke: the fed has a dual mandate -- price stability but also maximum employment. once we see on employment start to tick hire, we think that is the signal to start cutting rates. one employment ticks higher it can exasperate a slowdown in the economy. that is what we are looking

toward to signal rate cuts are coming. kriti: how do you position for that? does that mean you are in the bond bull camp? brooke: we are. we have been equity biased for 15 years. it did not make sense with a dividend stock with appreciation. we are starting to increase those allocations. we think interest rates have peaked and started to come down. we may not see 5% again on the 10-year treasury. we are locking in corporate bonds and municipals. high quality muni can get 4.25% tax-free. the yield is over 7%. kriti: certainly, it almost paves the way for the yield hunt people were looking for as a

zero yield environment. come back to the part of the dividend stock you were talking about. when we are talking about the earnings story it still feels like some of these companies, big tech in particular, posting very strong earnings. even though you are decreasing your allocation to them do you think you're missing out in terms of entry points for big tech? brooke: while we are shifting somewhat it is not significant. we still like equities but we think you have to be selective. you cannot just buy the broad market like you could the last few years. we are looking for companies that have very strong balance sheets, good free cash flow, and low leverage. but we like equities. we like the big tech. we think it is one of the best places to be for the foreseeable future. kriti: last 60 seconds. where in big tech? do you have any names?

brooke: we like the magnificent seven, but in addition, we like companies like netflix. their earnings report was stellar. when we look at where the company has changed, they went years ago from being growth at any cost to now profitable growth. it showed up in earnings. they beat earnings by quite a bit but what was most impressive was their net subscriber growth. the street was expecting about 6 million and they had 8.8 million. the ad-supported tier is growing but they also have superior content. we think they are going to be the dominant player in that space for quite some time. kriti: it is certainly something people are grappling with. you are seeing these good numbers but do you actually hot in now? brooke may, we thank you for your insight. the conversation cut too short but there is plenty to digest,

especially when she is talking about whether this is the right entry point. i will give you the bull and the bear case. if you were to look at the valuations of some of these come is, if you look at the valuation of even facebook back in the day, it would not make sense but you would have missed out on facebook. let me give you the bear case. the fact that because of their cash flow and disinflationary environment, as a liquidity play in terms of a trading vehicle, it is not hold that same appeal the way a bond market might. a lot to digest in line with some of the things we are getting in the openai story. sam altman returning to openai. we wil mor from vinod khosla. this is bloomberg. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf

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it has been a whirlwind week for sam altman and openai where he was fired, rehired by microsoft, and then hired again by openai. ed ludlow spoke to the node coastal -- vinod khosla. vinod: i am happy to see sam back. he is uniquely positioned for this very important company. it is much more than just a company. it is the benefit of ai to humanity in a larger way over the next few decades, and i think he restored the path. ed: mr. khosla, you outlined a thesis that when the board on friday fired sam altman they setback artificial intelligence. why was that the conclusion he reached? vinod: mostly because sam is

uniquely qualified to shepherd this and he has a vision over the next decade or two of what ai can do. i cannot imagine somebody else being able to step in those shoes easily and without a lot of risk to the mission of what openai was. ed: when i posted on x you were coming on the show there was a lot of interest. you were the first venture investor in openai and there was a very specific question posed for you. forgive the framing of the question but this is what the audience asks. what happens if sam altman gets hit by a bus? what happens if sam altman is discovered to have had some wrongdoing? what happens to openai in that scenario? vinod: there are other people at openai who are very qualified to do that.

i think they should derisk this by adding more people to the team who can do this. but if he gets hit by a bus, i think we would have to do with greg brockman who is of the same vision and mission. ed: what we are talking about is key man risk. i have been reporting on this story since friday lunchtime considering what is happening. but the takeaway has been the value of openai seems to be the intellectual capital of its people. when microsoft reacted to the news the idea was that those people would simply go and join microsoft. i wondered what you thought about that eventuality which, to some extent, is academic but there is a close tie between the two. vinod: i think the close tie helps make progress in ai

because it needs a lot of resources. frankly, i am pleased openai is there, google is there, and there are a few others put incredible efforts into the ai industry. i think microsoft's supporting openai helps it move along and more competition is generally a good thing. more ai will make progress move faster. i am very happy with that. i will not comment on openai becoming part of microsoft ai. i always believed we would find a resolution. it was only a matter of time. i had complete faith in the solution. my conversation with sam at noon on friday is that i do not think it is over was my first comment. ed: you did not think it was

over friday lunchtime. it seems like an eternity ago that was friday lunchtime with the headlines broke. it is an issue of the board and corporate governance. what we know is that brett taylor, at least on an interim basis, joins the board for larry summers -- as well as larry summers. larry summers is a paid investor of bloomberg. you know those names in silicon valley. is this addressing the corporate governance issue enough? vinod: i have been on the board with larry summers at square, now called block. i admired larry. i think the board will build up to more governance and i think three is a small board, but over time, there will be better process.

i thing we have learned an important lesson on governance here. frankly, i did not in my imagination imagine that something like this could happen or the board would do this. there were some errant people on the board who misinterpreted their own religion around affected altruism. kriti: vinod khosla speaking to our own ed ludlow. he is also an investor in openai. alex webb joins us now to continue the conversation. let's talk about vinod's response. alex: i do know the name and do not ask me to recite them all. his attitude toward it, the proximity to microsoft he sees

as a good thing. you need lots of resources, monetary but also in terms of computer power. it is something that google has or the deep mine, which is the research arm. the difference with openai's it is not owned by microsoft. the structure is very complicated. its board is not beholden to any investors. it is to work in the interest of humanity. that is where things get complicated. it was essentially founded as a non-profit. kriti: walk us through where microsoft's 49% stake falls. alex: at the top you have the board beholden, in the documents, to humanity. below that you have investors and the employees have a stake. that in turn owns or controls

the operating company. microsoft has a 49% stake in the operating company, not the holding company. it historically has had no say in the running of openai. the truth is a little more complicated given the fact they are dependent on microsoft for so many resources. that is also why when we saw, for example, the microsoft ceo on bloomberg tv saying he was seeking governance changes. he wants board seats. it is reported by bloomberg that microsoft is likely to get some seats. they might just be observation seats but it would mean microsoft is not going to be surprised if there is another attempt to oust the ceo. i hope that sheds light on the matter. kriti: not only are they vouching for a board seat but who is on the board. ed walk through it but brett taylor. not only was he the chairman at twitter before it became x but he was also the co-ceo of salesforce. adam d'angelo is the ceo of

cora. there is an effort to make a little diversity and inclusion push. they are also looking for senior women. what does that tell you? there has been speculation about whether or not stocking the board with those kinds of names, including nadella or other microsoft representation, would push openai to be more than a non-profit. alex: i think the challenge was it was relatively small. essentially four people voted out sam altman. we are looking out for a board that could be three or four times as big as that. it is seemingly going to be leaning more on the silicon valley luminaries that make up the composition of these boards. they lost that heft because reid

hoffman used to be on the board. he dropped off in order to found his own ai startup, which is probably going to be competing. the board consisted of one external business figure and two academics. that is maybe a little bit of a problem. it might have been why this coup did not work very well, because the strategy did not seem well thought through. it was very rushed and it did not work. sam walked back to the door. kriti: i wonder now that he is back what kind of changes he will make. alex webb on the top of that coverage. we thank you for walking us through it. as he mentioned even the deep mind part of the equation, microsoft shares were pitted against each other as major competitors. coming up, paul christopher of wells fargo joins us next. burning his take on how you

trade all the drama in the macro and the micro. stick with us. this is bloomberg. ♪

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kriti: welcome to a specialization of "bloomberg markets." home kriti cuba -- i am kriti gupta, live in linda. -- london. european markets are alive and well. virtually unchanged, again, extremely light volume, so not exactly that surprising. meantime, you are seeing a bit into bond futures. the actual treasury market is closed, but the way international players actually traded is by contract, basically, down by two basis points. i think it is pressuring the dollar as well. interesting, brent crude, trading on the $81 handle. meanwhile, a little bit of a

different picture, email, like volume, we don't have the u.s. counterparts to trade with at this time. we also see the stoxx 600 higher by .1%. the ftse in the u.k. is underperforming, down by about the same margin. bloomberg dollar indices reflecting in interesting ways when it comes to the currency picture. euro-dollar hovering at about $1.09, the cable rate at $1.25. breaking headlines in the emerging-market space, south africa, inflation averaging about 4.5% in 2025, 5% in 20 when he for, so they are putting out there kind of forecast -- 2024, so they are putting out their forecast. we are waiting to get context on core numbers. it is not necessarily moving the

markets that substantially, especially when you look at the south african rand. the liquidity story in the currency pair is something we are watching closely, especially against other emerging markets, how much exposure you actually want. when we get more information around that decision, we will bring it to you. i want to stick with emerging markets. we had amazing -- major news in the last two weeks, mobius investment consulting president mark mobius says it will be a huge boost to argentina's economy, and he talked about china, said he prefers it in a investment lens rather than taiwan. he spoke earlier in the bloomberg space. take a listen. mark: when you go to argentina, we were investing at one point when it was about 1000%, and it was very difficult. we had to buy companies on the basis of their book value is that of anything else. at the end of the day, it is a dangerous place to be.

with inflation in that situation. so now, if they go ahead with that, it will be an incredible boost to the economy and to the country. you will see inflation dramatically, as they get what of the central bank, it will be another step in the right direction, and i think it is terrific under these circumstances, but we have to wait and see. if the new president can actually implement those changes. guy: mark, good afternoon. are there enough dollars to do that? mark: yes, there are plenty of dollars. it is not a matter of the quantity of dollars, it is a matter of picking the economy to the u.s. dollar, because argentine people have lots of dollars offshore, and you better believe that they have protected themselves from this incredible

inflation by having dollars. so there's plenty of dollars, and there's a psychological impact, which is so important. it is not a matter of using dollars every day cash transactions. nowadays, paperless transactions, as long as you are pegged to the dollar, then you will see incredible return of confidence. >> what about others, if you are looking at china, for example, which has raised a lot of question marks as far as the fragility and introductory. is that an opportunity or a danger? mark: it is a huge market, as you know. we think it is a better idea, if you want to look at china, look at it through taiwan. you must remember, a lot of trading takes place between taiwan and china. many taiwanese companies are in china, so of course foxconn is

probably the best example. maybe not a good example this stage of the game. we prefer to go into china through taiwan, particularly now with the incredibly increased emphasis in china on technology, and particularly semiconductors. as you know, psmc, taiwan semiconductor manufacturing in taiwan, is the leader in the world in high-value semiconductors. so that is where we want to be. guy: you are not at any way concerned, therefore, geopolitical tensions around the island? there are many people concerned 2024 could be the year tensions are activated -- are ratcheted higher peer we don't know what is going on in the mind of the senior leadership in beijing. your confidence in us that we will not see any trouble, that we will not see that kind of an event presenting itself in order

to make those investments? mark: there will not be anything happening in the short-term. when i say short-term, i mean the next two or three years. the reason for that is china is not going to benefit from the military invasion of taiwan. in fact, they won't get what they want. they want a handover which is peaceful where they can take over and began to benefit from the companies in taiwan, if you have a war, that is not going to happen. kriti: mobius investment consultant mark mobius with bloomberg's guy johnson in kailey leinz. we will turn back to the market and push that question to our next guest. he said hi wait -- high rates and inflation uncertainty is not going away anytime soon. paul christopher, global markets strategist at wells fargo, happy

thanksgiving to you and your family. paul: thank you. kriti: let's talk a little bit about the way this market functions. emerging markets used to be such an attractive place in a zero interest rate environment, because there was no yield to be had anywhere, so you have to take on that extra risk. now it feels like that trade is really pared back, macro investors may be hopping back into traditional g10 market that not taking on that extra risk premium. where do you stand in terms of that call? paul: it comes down to liquidity really, kriti. if you have a lot of liquidity being pushed out of the fed and the g10 central banks, that liquidity will find a home, and a lot of money will go to emerging markets simply because of the yield differential. and if the rest of the world is growing, then you will see some dollar weakness, and that will make it even easier to go to emerging-market but never mind, even if you set aside the geopolitical piece of it, we do

not think the fed goes back to that. we do not think qe is in the cards anytime soon. that means liquidity will be hard to get, so emerging markets are going to struggle a little more to find a capital. without that, you are better off sticking in the u.s. kriti: so let's go there then and talk about the future of the dollar, because it feels like, at least from a currency perspective, there seems to be a race to the bottom, if we can talk about which central bank is going to cut the most and fastest and therefore weaken their currency even faster than that. your dollar call, paul? paul: that race is sort of on call. what you are seeing is the giveback of a steep runoff that we saw in the last several months, but i would not get too excited about that just yet. we don't think the fed is ready to cut right now, and that is going to do some things to keep the dollar, let's say come a

little bit stronger for longer. it may giveback some of the latest push higher, but don't expect brought weakness in the dollar anytime soon. that is probably a six month to eight month call in the future. we need to get past the period of u.s. economic weakness first, and then we can talk about what happens to fed rate cuts and vent to the dollar. kriti: talk to us about the economic weakness, then, because shorting the dollar long-term is not just the monetary policy anymore, it is fiscal deficit going into 2024 and arguably 2025 as well. one of my favorite fun facts of this conversation is as soon as the presidential election is over in 2024, whoever the new incumbent president is, whether it is joe biden or any of his gop adversaries, the very first thing they do january 2025 is deal with the deficit again and the debt ceiling. paul, is that a reason to

not buy american assets going into the next two years? paul: not all, but you need the economy to turn higher first. it is almost inevitable that they will come up with another deal in congress. if they don't do anything, they see the budget cut by 1%, and that is going to be a difficult thing, especially in defense, for some of the hawks in congress to deal with. so what has always happened in the past is that they come to agreement, some sort of a compromise, where spending is higher than the previous years but maybe not as high as some people wanted it. at this point, that is important, because the cbo, congressional budget office, already sees a 1.5 trillion dollar deficit for each of the next three years, and if you add on top of that one in 2024 and 2025, that will increase the size of the deficit. it may cost the treasury a

little bit more to issue debt. by the way, don't expect them to simply issue treasury bills forever and ever in order to avoid paying a higher yield. they'll have to go with some of the longer duration sorts of assets. bottom line is congress has not fixed the problem yet, and so the economy is going to slow down here, so you are starting to see yields fall a little bit. two you're very good point, again, we will see this problem be revisited. it is not one that rails markets, especially in a recovery, but it is one that come in the meantime, between now and say the middle of next year, is another one of those factors we think is a headwind for investors, and should keep the focus on quality in the u.s. markets. kriti: paul a final question to you,, you mentioned at the start of the segment is a liquidity story, extra supply conversation, perhaps affecting

the long term. let's talk about the short-term and the lack of deduction we have seen in the bond market. does that concern you at all when it comes to how much liquidity is actually offered in the bond market? paul: [laughs] that is exactly right. the 10-year treasury was at 5% a few weeks ago. now it has lost 50 basis points in a very short period of time. that is a big move. why? treasuries issuing shorter-term debt. can they do that forever? no, they can't. we will have to have some sort of a -- another reason to buy stocks. we think this comes after the slow is is over, probably in the second half of next year. at that point, you might have a really good opportunity to buy stocks broadly as well as treasuries. kriti: that is something we will keep a very close eye on. paul christopher of wells fargo investments, thank you so much, and we wish you and your family a happy thanksgiving for breaking news the south african reserve bank leaving their mark

rate at 8.25%. the estimate was also 8.25%, so centrally holding the rates on hold. the decision was unanimous. on those headlines, you are seeing some weakness in the south african rand not only against the dollar but emerging-market currencies. so weakness on the back that the rate decision was on hold as the market is largely expected. coming up after the program, we are sticking with the em space. china may allow banks to a offered unsecured short-term loans to qualified vectors -- developers. what does that mean? we have our very own tom mackenzie. stick with us. this is bloomberg. ♪

kriti: welcome to "bloomberg markets."

i'm kriti gupta in london. for the first time, offering unsecured short-term learns to qualified directors. surging on the news, let's walk through it, bloomberg's tom mackenzie, our resident china expert is all over that story. what does that mean? tom: if this comes through the chinese officials are going for it policy of short-term unsecured loans, the first time they would have done this, which speaks to if not their desperation, then their sense of urgency around addressing this problem. they will not be backed by collateral and the idea is it will allow the developers as they wrestle with these bond payments they have to make to also ensure that they have liquidity for day-to-day operations, because the priority from the government is to ensure at this stage that they are building out and completing millions of projects across china that people have put deposits down on because they don't want to see the social

risk and the rest of protest on the back of that. they want to ensure these developers have the short-term liquidity to get that done, and then given the space and breathing room to paydown the debt. you see chinese markets rallying and we spotlight on the back of proposed ledgers. kriti: we know the pboc in particular has been trying to do this in various shapes and forms, not all well-received by, the markets right? how does this work? tom: so far, the measures have not put a floor on the property prices in china. uc a3-year slow down in an across the real estate sector -- you see a three-year slow down in an across the real estate sector in construction. developers will get access to financial conditions.

country garden is one of the biggest real estate companies in china. potentially $140 billion u.s. for funding, for what is called social housing and renovation of cities and towns across china. a number of measures they are putting through, this would be a big step in that direction. the hope of course at this package of measures will come over time, help move the real estate in the right direction, and rebuild confidence amongst the developers but also amongst homebuilders and consumers and house owners in china who so far has seen the property prices falling for at least the last 18 months. kriti: what is ironic of the country garden story, although it is a massive piece of the china property story. it is a penny start in the -- penny stock in the market. bear with me, this is me noting out, back in 2009 when you saw

the climbing out of the global financial crisis, the chinese a structure bill, global commodities, etc. does this stimulus for the property sector happens same global readthrough? tom:tom: you make a good point, because it all goes back to 2009, two that massive stimulus, post great financial crisis that listed not just the chinese economy but the global economy, and china has been wrestling with the consequences of that ever since. the reason they have gone hard on the real estate sector in the first place, starting three or four years ago, was precisely because of the buildup of debt that was a legacy of that generosity and that largess that came in into thousand 8, 2009. that is why they put these measures in place to restrict these developers from extending their leverage, but the consequences of that is that you see this rapid slowdown in house prices, construction, and that

impact local governments facing the shortfall in terms of the funding to build out other projects and spending at the local government level. but you're right, it ties back to 2009. the hope is that they can get back to a happy medium, muddle through, address the debt, get the real estate sector back on its feet, and the question overleveraged has been addressed, at least on some level. kriti: something we are monitoring very closely, and covering the commodity sector, stocks in europe and the united states, bloomberg's tom mackenzie, thank you so much for breaking that crucial story down to us. another story we are monitoring is the hostage deal coming out of israel. the hostage deal with hamas is facing delays, with the head of israel's national security council saying that it will not happen before friday. let's bring in bloomberg's paul waul listed in dubai data feels like a truly historic moment in terms of the fallout since the october 7 attacks.

paul: as you say, kriti, it would be a big deal here while israel says this by no means will end the war, it would be the first significant lull in fighting since the conflict erupted october 7. it is a complicated deal and has three major components, one is the release of 50 hostages held by hamas in gaza. the other is a release of about 150 palestinian women and children held in israeli jails and also this four-day cease-fire. it was meant to kick in today. that was the expectation. we thought we would have a gap of about 24 hours after the deal was announced in the early hours of wednesday, but we will have to wait until at least tomorrow. it's is really officials are implying that something is going on with hamas.

they are not exactly sure what it is. they also say hamas is trying to put in further demands before and agrees to release hostages, but we don't know. however, it is important to note as far as israeli public comments are concerned, the deal looks like it is ahead at this stage. we don't seem as if we are facing a total breakdown. kriti: really interesting, that prime minister benjamin netanyahu has made in this band of these hostage negotiations is that the second stage of this could see the halt in fighting, one day by the release of every 10 additional hostages. how many hostages are left after this initial deal? paul: israel says that just under 240 people are held hostage at the moment in the gaza strip. so we are going to be left with about 190 after the first phase of this deal is implemented.

some of those are soldiers, we just don't know how many, and presumably, they would be the last of the people that hamas would release. it is starting with women and children, as we understand, the 50, to be freed at first, all women and children. so we still have a long way to go, and it is pretty clear that hamas is going to continue to use those hostages as leverage to seek out some demands from israel. kriti: paul, walk us through the global reaction here, specifically when it comes to the players in the middle east. a great piece in the economist said a lot of regional powers in the gold in particular do not necessarily want to see hamas -- the gulf in particular do not want to see hamas succeed, a terrorist organization named by many organizations in the world here walk us through what the middle east are thinking about

this hostage deal. paul: a lot of leaders would not mind seeing the back of hamas, even if they are not saying that as publicly as western countries and some of israel's closest allies. but what they are arguing is that -- based say what israel is doing in gaza, this massive bombardment and ground offensive, is either not going to achieve that or that it is only going to achieve it at the cost of huge numbers of palestinian civilians. and we have already seen more than 14,000 people killed in the gaza strip, many of them children. that is according to the hamas-run ministry of health in the territory. the other thing that they are very worried about, and to be fair, i think you can include the u.s. in this group, too, is israel does not seem to have a postwar plan and gaza. it does not seem to have the military plan to go alongside

its military operation, and that is a huge worry for regional years. kriti: and certainly the dire humanitarian situation within gaza itself. bloomberg's paul wallace, we appreciate you giving us that update on a historic moment again coming off of the october 7 attacks. it is not finalized yet, but when it is, we will bring you all the details right here on bloomberg television and radio. as well as some of the commentary we are getting not only from the white house but powers in the gulf and europe as well. stick with us. there's plenty more ahead on this thanksgiving program. this is bloomberg. ♪

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kriti: welcome back to "bloomberg markets." i am kriti group london. -- kriti gupta in london. u.s. data shows a pretty hefty runs in stockpiles, so how do you digest all of this? let's bring in bloomberg senior executive editor for oil and commodity, will, let's start with the opec piece of the equation first? what is the story? will: we were expecting a

meeting, as you know, but opec felt it was in a position to go ahead with the meeting. i think we take them that there was some this point about what to do next and specifically our understanding is that there has been a review of the quota of some african members, particularly nigeria, which was agreed at the last meeting, and they did not seem to be keen on the outcome and what is being asked of them after. so it seems that they were refusing to sign up to what was proposed, so the mission was to delay it by a few days so that they can resolve this. kriti: do you foresee any kind of massive changes being made, given the countries being named are dealing with quotas in the first place? will: i don't know what we can say about policy for next year right now, but i think it is a very fluid situation. if we look at the context of this meeting, clearly prices have come down through 30 october.

demands have held up remarkably well this year, but supply is also very strong. . we have the hedge fund manager here on bloomberg television yesterday, and he pointed out supply to the united states has been much stronger than people had expected. kriti: yeah. will: that is why prices had not gotten the traction expected, but as we look into next year, the demand growth is not as strong as it has been this year, and the balance may not be quite good for prices. so the fed may have to act. we don't know when an action looks like but the saudis have done most of the heavy lifting, and they may the asking other people to share the burden. kriti: the stockpile is where i want to go next. united states, i felt like 12, 18 months ago, even 24 month ago, we will call it, one of the concerns from the u.s. shale players is they did not have physical capacity but also did not happy labor, the resources they needed to actually ramp up

some of their production. have those issues dissipated now? is that why we are seeing this bill? will: shale demand is expected to come in really quite well this year, and i think that is due to a few things. they got on top of the cost problems that they had. prices rose quite strongly this year, until recently, and that allowed them to produce. they managed to hedge higher prices around them to keep producing, and shale always tends to outperform people's expectations. i suspect it is because of ingenuity of the shale industry. the question is whether that continues next year. i think a lot of people don't think the prospects of the shale industry will be quite as bright in 2024. kriti: we have not seen the demand yet, but when you look at it from a macroeconomic perspective, the calls for the federal reserve and its global

peers, summer cutting rates going is a 2024. i'm wondering if there is a projection in the commodities market, which i always felt was more of a real-time indicator of where the demand is, not just in the u.s. but globally. do you see that lining up with what participants are thinking, some deterioration of the spring or summer of next year? will: i think this is the most a question right now, how strongly demand grows next year. i don't think anyone thinks we are getting into position where demand falls, but it could happen basically in recessions like a covid crisis or financial crisis in the 2008, but when the economy slows, demand growth slows. demand growth has been very strong this year, partly because china was still emerging from covid. people don't see the same demand next year. the question is how much is slows down and making a huge difference to the balances going forward next year. i think people want to look to the metro picture and see how

strong the economy is. kriti: let's talk about trade a particular, because again, i'm old enough to remember six weeks ago. it's 100 still be line in the sand on the outside? will: i think we are a very long way from a hundred dollars now. it's hard to make that push toward $100. a key psychological level, but i think it may be this level where people start on the demand, people start using a little less oil. i think that is a concern for people. but i would say then, the reason is, one, people were pricing and significant disruption, which is clearly dissipated, at least for now. kriti: yeah. will: second, supplies have been relatively abundant, and the

growth in demand has been matched by supply, and that happening at levels well below $100, i think that tells you something. kriti: we are looking at brent crude at about an $81 handle, which i believe is the breakeven rate for the saudis. will: people measuring different ways. kriti: right. at the same time, you are seeing some weakness in the nymex contract as well, a five dollars for a difference. we are getting really dirty here. this is what happens -- we are getting really nerdy here. this is what happens on thanksgiving. [laughter] the geopolitical situation is quieting down, but massive in terms of iran and sanctions against them. can you give us more insight in terms of iranian output moving the oil market? is this something that should be a people's radar? kriti: i talked a lot about abundance supply, and one of the biggest sources of supply in recent times has been increased

shipments from iran, they've been able to produce more and place holds onto the market. there are speculations as to why that happened, but many speculated because the u.s. was not quickly keen to enforce think is -- sanctions on iranian exports due to the oil market. i would make two points. one, any additional iranian oil to come, i think they are probably producing pretty close to their maximum, but we also need to think about the oil markets in the context of the american election. if the biden administration was willing to do all sorts of things to keep oil low this year, perhaps go easy on iran, though they would deny that, perhaps go easy on the russian oil, though they would deny that, do a deal on tensions with venezuela, you can see a pattern here. if they are willing to do all of those things in 2023, i don't think many people would expect them to do it any differently in 2024, when they are going to go

into a very difficult direction and the price of gasoline is key to american politics. kriti: i was about to let you go, but the fact that you brought up the presidential election, i have to ask, you brought up venezuela as well, and this has been a key sticking point in some of the invited policy agenda as well. how much do we actually expect out of venezuela? will: i don't think it will be a game changer. i would say a couple of things. i would say a couple of things. first, in the situation, countries often surprise on the upside. it goes back to the engine oily -- ingenuity that i mentioned with shale. they are good at getting it out of the ground, and, you know, there's no doubt that the venezuelan oil industry is a pale shadow of what used to be, but there are still people in venezuela that have to do this, and it may have surprised on the

upside, but also in a finely balanced market, that may be enough to really make a difference. so it is definitely something to watch next year. yeah. kriti: for me, how much do exxon and chevron, which have been dealing with sanctions exposure through venezuela, have pressure almost relieved. thank you so much for your additional content on that story. let's get a true expert's insight here and build on what will was talking about here. nadia martin wiggen, director at svelland capital, this cut -- this output, i should say, from iran, from venezuela, how much should we be think it into to it? put some numbers on it for us. nadia: thank you for having me. i think it is super important, and i actually disagree a little bit. i think iran is able to produce more, maybe 400,000 barrels a day next year, if they were given a blind eye to it i think

venezuela, as he says, 150,000 barrels a day. the more important point is that as iran and venezuela are normalizing to market, and also russia, it means that countries like india and china no longer get a discount for that crude. as a result, it means that u.s. crude and opec crude, you know, when you think of a refiner buying all those crudes together, if you are not getting a discount all part of your crude slate, then you cannot pay as much for the other part. this is why i think we hit the price ceiling when we were above $500 a barrel, when you add in the differentials of more than $100 a barrel, that we could not stay up there. refiners are starting to reject cut and run. kriti: how much of that, and you did put a number on it for us, some 400 million -- nadia: 400,000. kriti: 400,000 come excuse me.

it's thanksgiving. i will give myself a pass there. talk about how much that can change based on the developers of the geopolitical conflict, or is that something that is more pegged to the white house and biden's election campaign. how are you thinking about that? what are the signals we need to watch out for? nadia: yeah. u.s. has continued after everything is squared off in israel and the gaza strip, but it won't be taking such a blind eye on iran, also that price cap to russia will be reinforced. we don't expect production to come online. i think we need to be prepared that that is something that could potentially come online, and when we think about this opec meeting, when they are thinking about resetting all the levels, you know, iran right now is not subject to any cuts. eventually, if they are normalized into market, they would be subject to some cuts. this is why i think it is very

important what happens to the under producing nations, you know, in terms of nigeria, angola, congo, that are not able to make those numbers, in terms of how we think about the members of opec. venezuela as well, you know, they are not subject to things, i think venezuela is not going to be as quick, because it requires more investment. once that investment comes, then we can see ramp ups, you know, 500,000 barrels per day within a year, but i think that is a little bit late coming ahead of the u.s. election, because any promises made to venezuela may not be kept if the administration changes, right? i think iran is really this opportunity or tricky point. it will depend on the oil price and how things are versus how the geopolitical pressures are in terms of venues. kriti: nadia, in our last minute, we talked a little bit about supply coming from everywhere outside of the united states, as well pointed out as

well, but we see some stable prediction coming out of the united states as well. how much momentum do you think that has going into next year? nadia: i think we will continue to see growth, because opec has protected as $80 price the best they could, right? we drop down to the $60's, but still we had long, strong prices, and opec has been focused on having these deep, long cuts that create stability. u.s. production will continue to be steady when we are trading above, you know, $70 a barrel. when we think about what happened, i think last year, one thing that confused the market is we had a shortage of personnel. we had a shortage of ability to bring back production. we know longer have that sort of tightness, so things can take a lull. i don't think things will be skyrocketing higher, but we could see the additional 150,000 barrels a day, 200,000

barrels a day. canada is producing more as they have a big pipeline opening to china. that is something opec also has to consider is not opec is coming and is taking market share. kriti: certainly something that will be the opposite of music to someone's ear when it comes to those middle east players. nadia martin wiggen of svelland capital, thank you so much for joining the program and bringing us crucial insight. the consumer story is where we go next. bargain hunters getting ready to pounce on black friday deals. we hear from marc rosen, the ceo at jcpenney, a massive american retail department store. stick with us. this is bloomberg. ♪

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and she would just walk right past them, (laughs). she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i could hear everything. unlock our best deal of the year during the miracle-ear black friday sale. call 1-800-miracle now. kriti: welcome back to "bloomberg markets." i am kriti gupta in london.

guess what i'm missing right here in london? the thanksgiving parade in new york city, which has just gotten underway. a really fun parade to my a lot of the flows as well, not to mention the bands. it is underway, it is one of the government's experiences. though i do here it is windy on the ground. i'm sure we will have more that covers right here on bloomberg television. with that parade, sponsored by macy's, comes the black friday sales tomorrow, which was a lot of focus on the consumer this holiday season. jcpenney ceeo marc rosen, however, says some of that inflation is taking a toll on the consumer. maintaining the price of holiday items from 2022. rosen says we can expect a holiday season similar to previous years. the ceo joined us this week to discuss the state of the

consumer. take a listen. marc: what we are seeing is consumers are saying they are going to spend more this year. i think what you are going to see is the consumers are much more focused on value than they have ever seen before, and we see that in shopping behavior. romaine: we had earning report from places like burlington which shows that trend, even the higher income consumers trading down as well. i'm wondering whether you have actually seen that in your stores as well. marc: yeah. so, i think, if we step back for a minute and think about our consumer, the consumer in our store is, we seek our customer is america's diverse working family, a 75 thousand dollars median household income. if you think of our customer, it is a teachers teaching our children, the medical workers taking care of us and our families, and for that consumer, inflation has definitely been a challenge. so what we are seeing is the consumer is looking more for

value, the consumer is more focused on rice, we are seeing more responsiveness to when we are offering promotions and things like that, and, you know, we have been really successful by doing what we are seeing we are doing, which is taking inflation out of the holiday for our customers. we have gone back and taken hundreds of items that we've had last year, and we are offering the same rice as last year, -- price as last year or lower. romaine: i'm curious how your pricing, when you stay at the low prices, the full retail price, if you will, meaning that low price, or is that the price you get into after taking into a discount or coupon? marc: so i'm talking about the black friday price. our black friday prices are the lowest prices that we offer. romaine: how are you going to get people to buy? is this about getting them physically into your store locations, or is this going to be much more than online,

e-commerce trends? marc: i think it will be a bit of both, and we have seen success both online and in-store. we launched our black friday early. we launched november 3 through fifth, and we saw a great success. we saw a big increase in our store traffic, and we saw a really strong buying online. if you think about the event we are going into you tomorrow, thanksgiving day, will be in on my day, and friday -- on my day, and black friday will be and in-store day. we will have events throughout the day, starting at 5:00 a.m., again at 9:00 a.m., 1:00, and 5:00 p.m. to see a couple of examples of what we are going to be doing, some customers will actually get $500 off a $500 purchase, and other words, we will pay for their entire purchase, and it will be by a stamp pack bay received that will have -- that they receive when they come into our store.

at 1:00, there is a diamond pendant necklace, so that will keep excitement in-store throughout the day. kriti: jcpenney ceo marc rosen speaking to bloomberg's romaine bostick, quite the spread for black friday, but really all in the effort to keep the american consumer engaged with the continuing to spend. is that something you see around the world? i want to get more insight here. bloomberg's eric pfanner joins me on set. you do not wind up at sales, do you? eric: i will be in the office, unfortunately. kriti: there you go. eric: it is a different story in europe, where you don't have the physical day off to go shopping, so black friday becomes more of a weeklong or month-long experience and/or promotions but it is not as concentrated maybe as it is, you don't have the retail excitement that the

jcpenney ceo was talking about, diamond giveaway and that kind of thing. kriti: let's take the consumer conversation region by region. we will start in the u.s., because that is where a lot of the black friday pizzazz happens. in terms of pricing an inflationary setback, we heard the jcpenney ceo saying it, he is not changing holiday prices from a year ago. but then again, a year ago, they had already kind of baked in a lot of the price increases. i'm curious your take on the inflation impact on the american consumer. is that something we should be worried about this holiday season? eric: yeah. we have had really quite pronounced inflation for the past year. that said, you know, there are signs that inflation is easing in recent weeks in recent months. walmart ceo, they talked a little but about the possibility of deflation, now obviously you're talking about prices that

have gone up and now has started to come down to it we are not really seeing that yet, so, you know, that could provide some possibility, if people think, well, things are going to get better after this really tough time. but i think that underlines, you know, the really cautious outlook that exceeds a lot of these companies and recent earnings. kriti: what is tricky on that is a lot of the price hikes that were a lot of consumer driven companies had put out in the last couple of years, they don't exactly discount, they don't say, you know, inflation has dropped x percent, let's bring our prices down expert. sticky prices as our wages, which i think is why it is so significant. is that the same that emmett here in your, specifically in the u.k., where we had jeremy hunt yesterday talk about trying to decrease the tax burden, when that seems very limited. eric: i think that is right. one of the surprising things in europe is the consumer has been fairly resilient this year. there was a lot of concern earlier this year about where

things would go, especially in the u.k., which had some of the, you know, most pronounced inflation in europe, probably in the developed world, and, you know, certainly on apparel and things like that, it has actually held up fairly well. a lot of the retailers had been aggressive on price earlier. there's a lot of competition, and you are coming out of the pandemic and all of that, but some of that is maybe normalized that now. i think people are cautious, too. kriti: when we talk about consumption, the united states, europe is well, let's talk about asia as well, especially with e-commerce businesses, singapore, alibaba in china of course, not to mention all the folks there that shopped from american companies as well. in terms of the global consumption story, where is the biggest hesitation? eric: well, i think probably the u.s. is the biggest question, certainly. these are the regions, first of all, they are not as tied to, you know, a black friday event.

is more drawn out, right? all eyes for the next few days certainly will be on the u.s. consumer. everywhere else, you have a bit of a different dynamic. china, big questions they are over the state of the consumer. that affects luxury companies, certainly there have been some softening demand for the european luxury companies exposed to china. we will have to watch that going forward. do long-term outlook is still very positive. it is just more of the midterm, where that unfolds next year or two. kriti: 30 seconds, do you think people will dive into luxury this holiday season? eric: except for those giveaways from jcpenney, i'm not sure. i think everybody is very cautious, you know, even at the high-end, as people are flagging discretionary spending, i think it will be interesting to watch. people will be cautious, i think. kriti: this is quite the litmus test to see how resilient the economy is around the world. bloomberg's eric pfanner

bringing us that global consumer story could we will talk retail in the next hour as well. marshal cohen will be joining our very own guy johnson, whether or not the consumption story in the next six weeks or so actually sticks around. that is just one piece of the equation. meantime, you are seeing market is very sanguine, limited market trade here. a bid into the bond market, down about keeping -- about 2 basis points, a tailwind to those european currencies as well. folks, to the americas were the well, i want to wish you a very happy thanksgiving, to your family, i hope you have a very good holiday. we will see you tomorrow, although we expect the trading may be limited then as well. in the meantime, you have to enjoy the scene of the macy's thanksgiving day parade, a new york city tradition to watch. you can see bandmembers coming down and pushing against what i hear is a very windy day in the city. stick with us.

more markets ahead. this is bloomberg. ♪

guy: happy thanksgiving. welcome to bloomberg markets. the americans are cooking turkeys and watching parades but in europe there's a lot going on we need to talk about. let me walk you around the european map. i am guy johnson. good afternoon in europe. there's a lot going on. there's a lot of things we need to focus on. we will break it down. today, you have had turkey raising rates to 40%, a more aggressive hike than anticipated

from the central bank in and kara -- in ankara. there was an anticipation the reichsbank would lift rates and did not. what does that signal and that economy? you have an election story in the netherlands that's really worth focusing on, so far right candidate geert wilders wins the election. he now has to figure out how to form a government, but this is a far right government in power in europe, at the center of europe, one of the founding members of the european union. what does that signal about the direction of travel? will he become the next prime minister? we have a few stock stories floating around. you also have the pmi story. we will come onto the pmi's in a moment. there's a glass half-full narrative around the purchasing index. amsterdam, the market is soft. we are up by a little bit but names like asml are softer out

of the dutch market as we get uncertainty. the british pound up versus the dollar by .3%. why is the pound trading higher today? the pmi data came through better than anticipated but rather than taking that as a good thing, the market seems to be viewing this as an inflationary story, so potentially the greater risk of inflation means we won't see the rate cuts we have priced in. that in a moment. brent crude continues to soften. that's another narrative we need to fold in as well. busy day in europe. we need to break it down. where are we going to start? we will start with the pmi data. a brief snapshot of what the data are telling us this morning. this is the latest read. euro area november, composite pmi up a little bit, maybe not as bad as anticipated. the estimate 46.8, but as we know, anything below 50 signals contraction.

the u.k. data, pma -- pmi rising to 50.1. that's a good number. that's why the pound is rallying. what shall we make of this data? let's figure out the answer. chief european economist at bloomberg joints me on set for analysis. jamie, there's a glass half-full , half-empty narrative around the eurozone pmi. it could be better and it could be worse. is that where we are? are we stuck basically with bad data that we are worried could get worse but actually is not improving either? jamie: i think so. when we think about the risks, what are we worried about? the economy bumping along at -.1 or falling off a cliff? that's my concern because we are thinking the ecb has hiked enormously. the economy should be in a deep recession and is not so that's what we are looking for.

what we are seeing is the pmi's are showing the outlook is stabilizing. it does not seem to be getting worse. so i think we should be slightly -- guy: you used the word slightly about three times. how big is the risk it falls off a cliff? jamie: economists don't know the answer. you have two things you know about. you know the economy ought to be extremely weak because of the hikes. it's displayed surprising resilience. that is why everyone's forecast looks like stagnation. they could break either way. we will find out over the next couple quarters. either the -- either there will be the steep recession or we escape. guy: why are the models not producing the result they normally would anticipate? >> a couple possibilities. one is the economy was stronger going into the hiking cycle than everyone realized. more scope after the pandemic. for example, savings were high. so it's kind of blunted the

impact of policy. the other possibilities we are so focused on short-term interest rates that we are not paying attention enough to long-term. where we think -- when we think about where we are relative to neutral, policy is maybe not as restrictive as we think. qe is still there, still squeezing yields and stimulating the economy. guy: how will the ecb view this data? >> what is their job now? to prevent markets from pricing in cuts to soon. so pretty much that's what you are hearing from the ecb's we will get that in the coming days. they will be pushing back on that dovish market pricing. guy: the interpretation of the u.k. dated today, bit of a surprise, is that that confirms the economy is more resilient and we need to be more concerned about inflation. is that the correct interpretation? jamie: it is certainly surprising to us. we have a recession in the forecast. that was a surprise.

it does challenge that view. so we don't get a recession, that impact on the labor market, inflation will be higher for longer. the ecb response? i don't think they will hike further. more likely as they will double down and interest rates will have to be where they are now. guy: in all of this, recessions are sort of retrospective beasts. do you think the eurozone is in recession? jamie: i don't think you can say that. it's typical in europe for us to describe it as two quarters of negative growth, but when you look at the labor market, it's strong. unemployment is still low. so i don't think we can call it that. guy: great to catch up, jamie rush setting us up with the pmi data. the investment case around this is a global market strategist. ben, the euro zone's bumping along the bottom. what do i do with that as an investor? ben: nothing for now. you watch and wait and do your

research and get ready for what's probably going to be the biggest investment quarter next year, which is that big rotation out of the teddy bear assets, big tech in the u.s., which probably will work for longer, but at some point next year, the closer we get to rate cuts, it's going to be looking at all these globalized laggards like emerging markets, real estate. i don't think we're there yet. first out of the slow down, first out of the recovery. that will be europe. guy: do you think the ecb cuts earlier than the fed or the fed cuts earlier than the ecb? ben: the ecb should probably cut before the fed. i think they will be nervous about doing that for the impact it might have on the euro, but interest rate expectations in europe have been pulled dramatically forward. this combination of a weak economy, a plunging inflation,

has given massive policy flexibility back to the ecb, and from the investor standpoint, that's a huge insurance policy, so if i'm wrong and we get a hard landing and a deep recession, the cuts can come now. six month ago, they could not. guy: let's kind of continue along the teddy bears. at the moment, the soft landing feels like a landing on a teddy bear. it feels like everything's going to be ok, inflation coming down, central banks can cut. jamie was here a moment ago talking about how his big risk is actually that we do see the data cratering from here, that the model suggests it should crater from here, that we should get a harder landing. what you just described in terms of the investment case, does that work in that scenario? ben: a little bit. the interest rate put is now bear -- now there. it was not six months ago. the markets are forward-looking.

that would be a bit of a cushion on the market side. on the macro side, as you alluded to earlier, labor markets are still pretty strong. consumers are now getting real wage increases. these are massive buffers, especially in places like the u.k. and the u.s., where the consumer just dominates the economy. guy: it feels wrong to be talking about santa on thanksgiving but let's do it. the santa rally has come early. do you fade it? ben: maybe a little bit. this feels a little bit -- the same thing as last year. we had a november rally, gave some of it back in december, traditionally the strongest month of the year, and started off again in january. it feels like that. you know, it gets earlier and earlier every year because everybody knows that statistically it's coming, but i think the fundamental driver here is that 2024 looks good,

double digit earnings growth, interest rate cuts coming, and investors are too cautious today and are allocating into the. that is the real driver. that's what keeps us going. guy: how big -- how hard will it be to get people -- a, why are tech stocks teddy bear assets, but we will dwell on that may be in the moment. firstly, how hard is it going to get for people to let go of their teddy bears? how big of a challenge do you think that will be? everyone is concentrated in this risk. i can understand why. how hard will it be to let the market -- to get the market to let go? ben: it will take some time and rightly so. we still have the economic slowdown in the u.s. to come. it printed 5% growth last quarter. we have barely seen the u.s. slowdown you. and into the bulls, we have seven months to go before interest rates start being cut. so hold onto them for little bit

longer, but the closer we get to those cuts, the more you are going to see that, and i think we saw a prelude to that last week when we had that surprise inflation number. solar stocks, small caps, real estate. that was too early, but that, i think, is a prelude to what you will see closer to the rate cuts next year. guy: where could you be wrong about 2024? and if you get it slightly wrong, are you going to get it very wrong? ben: i mean i guess i'm holding out hope, the insurance policy of the central bank puts. so where this goes wrong, the most important number in markets is inflation. if inflation is not coming down, if it goes back up again, $100 oil, whatever it may be, that changes the narrative completely. this is dependent on inflation continuing to drive lower, being pulled down by weakening economies.

if that does not happen, the interest rate cuts get pushed back and the market is ahead. guy: great to catch up. thank you very much indeed, ben: -- indeed, ben laidler. surprise victory for the far right candidate, geert wilders, in the netherlands. he has to form a government. will he become prime minister is an open question. we will figure that out next. this is bloomberg. ♪

guy: let's turn to what's happening in the netherlands. the far right geert wilders freedom party claiming 37 seats in the dutch election out of 150. still a surprise, still a shock resounding across europe. for more, let's go to amsterdam, figure out what's happening. we are joint from our bureau. april, does he become prime minister now? april: yes. you cannot answer that question just yet unfortunately. the netherlands is a coalition country and even though geert wilders' party is set to become the biggest he still needs to get a majority of 76 seats to get a majority to be exact. if you want to be prime minister. so whether he will lead the country will depend on whether he's able to form agreements with some of the rival political parties, and those coalition talks could take weeks or even months. we know some of the biggest parties will start these discussions friday, tomorrow, but it could be a while yet before we can say if he will

become prime minister. guy: seeing some very high migration numbers coming out of the u.k. the data here certainly supporting the idea that we are seeing high levels of migration. was immigration the big issue in this election? is that how he got elected? april: that was definitely one of the key themes and one of the main topics that a lot of the parties were focusing on. it's also the issue that collapsed the government in july when the coalition failed, so it's definitely top of mind. when you speak to the dutch electorate, a lot of them mention the cost of living crisis, social care and housing as being part of the big issues, but immigration definitely plays a key role here, and you can say it's been one of the driving factors that's led to geert wilders' party becoming the biggest in the netherlands. guy: if he does become the next prime minister, what is the policy impact going to be? where is it likely most to be felt?

april: yeah, i mean, for 13 years now we have had the same ruling party in power. geert wilders' party is anti-muslim. he has spoken out against sending aid to ukraine. he has tough policies on immigration. he's also euro skeptic. his manifesto calls for a referendum on the netherlands participation in the european union. having said that, none of the other political parties want to leave europe, so it does not necessarily mean we will see an exit, but this is a radical shift towards the right that we are seeing in dutch politics, which is really -- which has potential to transform the political landscape as we know it. guy: in terms of the relationship with e.u., though, where is this going to put the netherlands? the netherlands are a founding country. in some ways, the fact that it is a founding country and is doing what it's doing and becoming more anti-european is seismic. how does this change the

netherlands' place within the european union and its relationship with its surrounding countries? april: yes, i mean, as you said, it's quite surprising when you think about the netherlands taking this direction considering the fact that it has a reputation for being so open and liberal. however, with wilders' party being the largest, that critical eu stance is going to come to the fore. because he does need to rely on a coalition and some of the other parties he could form a coalition with won't have such a harsh e.u. stance, it will depend on whether -- on where it goes, and he has been seen on softening his stance on some of his policies, so it's one to wait and see and watch what happens with those coalition discussions. guy: april, what does it mean for climate policy? air france, for instance, having issues in terms of the ability

to take off and land. the netherlands has led in other areas of climate. is that going to be reversed? april: yeah. that's another one. wilders' party has been pushing for the netherlands to withdraw from some of its international climate agreements and some of the other parties as well have been taking a more critical stance on some of the steps netherlands -- the netherlands has taken, so that some of the key theme people will be keeping an eye on asta, you know -- on as to, you know, what are these pledges? we will see what he's put forward in his campaign and what will come forward in terms of changing policies. guy: april, we appreciate everything you have done today. continue with the great work. thank you very much. april roche joining us out of amsterdam. still ahead, bloomberg exclusive reporting on beijing's biggest push yet to shore up its troubled real estate sector.

details to follow. this is bloomberg. ♪

guy: taking you to the qatari minister of foreign affairs in doha. we are getting an announcement relating to the hostage release we have been anticipating. they are now saying the first batch of hostages will be handed over on friday at 4 p.m., assuming that's local time in israel, 2:00 p.m. in london, 9:00 a.m. in new york. that looks like when the first hostages will be released. we are waiting for details on exactly how that process will unfold. it looks like the israeli-hamas truce will start friday -- will stop at 7 a.m. local time tomorrow morning, so 6:00 a.m.

gmt. we will continue to monitor what's happening but this is the announcement that's happening as we speak from the qatari foreign ministry in doha. as we get more details, as we understand how this process will unfold, we will bring those details to you. i know a lot of people are following this very carefully. i want to turn our attention away from what is happening in doha to what is happening in china. shares and bonds jumping earlier and significantly of country garden on news that the distressed builder will make it onto a draft list of firms eligible for financing support. authorities have been taking more forceful steps or are looking to take them to end the nation's property crisis, which has obviously engulfed a significant number of names. the expected inclusion of country garden on the so-called white list showing beijing's pivot toward helping the biggest troubled lenders effectively. some details on what is

happening and the impact. sophia joins me now on set. walk me through what's happening. what are the chinese authorities doing that they have not done before and why is it having such a big impact on names like country garden? >> the white list is an expanded white list so before beijing was only looking at systemically important builders and now it's expanding the list, looking at state backed property developers and private developers like country garden. that was once china's biggest developer by sales so it's a well-run company that's fallen into distress because of what's happening in the property market, not necessarily because it was overleveraged like evergrande, so you are seeing a reaction in the shares. this is a penny stock. it's valued at less than one hong kong dollar. that is what constitutes a penny stock in hong kong. there's a significant amount of short interest in the stock so i went to see how the market opens tomorrow, see if that's

continued, because it is kind of a pain trade in the market. guy: what kind of financing is going to be available? sofia: let's another key question. once you are on the white list, what does this look like? our colleagues are reporting this could come in the shape of unsecured bank loans, and this is unprecedented. it has not happened before in china. this essentially means developers like country garden -- if this is approved, course, because it still has to go through approval and implementation -- means these companies actually can get bank loans without collateral like land sales. guy: that does not sound good for the banking sector. sofia: it sounds like, for example -- before developers relied on capital markets, mainly offer bondholders, and the equity market to raise funds, so now you are shifting that responsibility to the banking sector to say you need to be in charge of basically fixing this and taking the charge. guy: taking the risk. sofia: taking the risk. one thing, though.

when bankers lend to companies in china, the banker himself or herself takes on the personal risk if that loan goes bad, so the reporting suggests to us they will start -- they will have to exempt that to make this work because the risk is so high. guy: the ultimate objective of the chinese authorities is what? is it to stabilize the financial system or get the millions of unfinished properties that are currently kind of halfway through being built finished? sofia: i think it is both. the last one, reviving sentiment , homebuilder sentiment, is probably the most important, because that is really what will kick the recovery into gear. right now, you have homebuyers who don't believe that projects will be finished, that even if they buy a home that they won't get it delivered, so fixing that confidence problem is the hardest to fix. the funding one is perhaps easier because you can tell banks to lend. guy: yeah.

sofia, great stuff. coming up, we will be talking about what is happening with the retail story in the united states. marshall cohen will join us next. 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 you want to be able to provide your child

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guy: making his way down the west side of the park. you can see his shoes going past the camera. it is thanksgiving day. here's a little windy. that can cause some issues for some of the larger inflatable elements of the parade but it looks all right at the moment. looks like a nice day in new york if a little chilly. this kicks off what's going to be potentially a huge amount of spending over the next couple of days.

thanksgiving today, black friday tomorrow, cyber monday monday. the u.s. consumer has been battered in some ways by what's been happening with the inflation narrative over the last year or so. how much money is going to be spent? let's try and find the answer that. marshal cohen, industry advisor at circana joins us. in terms of what we are going to learn about the u.s. consumer over the next 48 hours, what is it and how useful is it? are the next few days an idiosyncratic story? i'm trying to wonder what the signal will be here. marshal: you are asking the right question because this is what i call a complex christmas. this year is a little bit different with the calendar, christmas falling on a monday. that gives retailers a sunday, an additional weekend day of holiday, as they ramp up to the big blitz at the end, but what makes this challenging and the reason why you are asking the

right question is the consumer is telling us this year they plan on spending later than normal, and that means that december, the latter part of december, will be even bigger than normal. the early part of december, starting in the next couple days after black friday and cyber monday, will go into a lull. that will make some retailers nervous. black friday will do well. the deals have been plentiful but the challenge for black friday this year has been sales have been going on for some retailers since mid-october, certainly since november 1. guy: what -- the u.s. consumer is pivotal to the u.s. economy. we continue to be confounded by the strength of the u.s. consumer. what is your -- and i know this is a multilayered question, but what is your current assessment of that strength? marshal: don't ever sell the resilience of the american consumer short. it is amazing how even in a

recession year, 2008-2009, the consumer managed to find ways to spend and make sure their kids had gifts. this year is different. it does not mean they will not find ways to spend but they have already maxed out credit cards to some degree. we have record debt on the credit card levels. we have also got some of the student loan payments that started to come due october 1. we have several people with kids that have to start paying back those student loans if they have decided to do that. then you have got just the absence of new and exciting merchandise in the mix. so this is a holiday where the consumer is saying, if i don't need that item, maybe we can put it off, but they will make sure they give gifts. their kids are still going to have toys under the tree, but it's going to look different than what we normally would see, so the consumer will spend. remember, we have inflation in there. we have higher costs for the meal.

even thanksgiving dinner is costing more again this year. that will erode some spending power from a human perspective. guy: in terms of where the priorities lie, is it stuff? is it food? is it travel? how do you sequence out where retail fits into the kind of bigger services side -- bigger service side economy. marshal: frequency, discretionary product versus frequency product. consumers clearly prioritized. when we look at where they tell us they are going to be spending, they will do some experiences. they certainly are going to basically go out and say we are going to eat and get the essentials first and then the discretionary product next, so the areas that are feeling the pain more so this holiday are the general merchandise areas. food is still doing well from a growth perspective, not as well as its doing -- as it has been doing. units have been declining at a

greater rate than the dollar has created growth, but from a general merchandise perspective, from a gifting perspective, and even from a self gifting perspective. when we would buy for somebody else, we would buy for ourselves. this year, that's missing from the equation. when you take out new and exciting product, the sense of urgency and the self gifting, growth will be hard to come by for the overall holiday market. guy: marshall, have a great thanksgiving. thanks for stopping by. we appreciate it. enjoy the day. marshal cohen, industry advisor, thank you. here's another question. are turkeys going to be safer this thanksgiving because of the new products from novo nordisk? i'm talking about ozempic and we go view -- and wegovy. they have an impact on diet. will the turkeys be safe?

let's bring in sam for more on this. safer turkeys? sam: i never thought i would get this question in my life. safer turkeys. let's put it this way. 1% of the population that currently are approved -- the drugs are approved for our taking it. so i don't think we need to do much more than that. you have the maths already. i don't think it's going to save too many turkeys. in any case, what they will do is still cook them, hopefully not with a deep fryer, and then just not eat it as fast or keep it for sandwiches, pie, so that -- i don't think the turkeys will be safe. guy: is this a trend over the next few years? the numbers are relatively small at the moment. the reason for that is they are having issues with production

but that will be solved. sam: it's not issues. it is that the demand is so high. yeah. so i don't think you will be necessarily looking at things changing seismically in the next few years, like next year or the year after, not because of manufacturing but because it will take time for people to take more, for more people to get on it. come 2028, 2029, 2030, it will go generic and you have orals, suddenly that becomes a reality that maybe 10% or 20% of people are on it. guy: at the moment, you have to inject, and one of the big steps forward that novo nordisk has made -- i understand the french president has visited the new facility they will be producing at. walk me through what this french facility will be doing, how big is it, is it a game changer? what's the maths here? sam: with that sort of

investment, it will be enough to make a meaningful dent in the required manufacturing capacity, but let's not forget these things take a while to come on stream, and i suspect it's in france because they did some kind of deal as opposed to germany or denmark. who gave the most subsidies? we know the answer there because it's in france. so you're not going to see this really impact in 2024. that would be really amazing if it managed to. guy: it would be remiss of me to let you go without asking about what's going on in china. we are hearing reports of a new respiratory disease potentially amongst younger people. what do we know? sam: is it new? you remember, as our reporting has said, this time last year, china was locked down. so this rapid rise -- and remember, when you get locked down, everyone was worried about more flu. this is a bacterial infection of the lungs, one that gives you

weeks of hacking cough, and i don't know if it's anything different apart from simply much more contact and lack of immunity from the past and just a rebound, if you like. guy: we know you will be keeping an eye on it. thank you very much indeed. coming up, the decision by opec-plus to delay its upcoming meeting, dragon crude markets lower. what's going to happen next? we will find out. this is bloomberg. ♪

for 2023, so the years almost over, and after this court ruling-- guy: a few days ago, the constitutional court said there's this pot of money, an authorization to borrow. you are not allowed to use that. chad: germany created a bunch of special funds and used those to go around the regular budget to borrow money and the

constitutional court said you cannot do that. that is not constitutional. now they are trying to come up with a plan for how they fund these things, the climate transition, the military, all these things. so it's a small piece of the solution that they will announce at the top of the hour. it's $37 billion to plug the budget gap in 2023. we don't know what they will do for 2024. the special funds. they have not done anything for that. this is just to say we have a shortfall of $37 billion because of this ruling indicative three -- ruling in 2023. we are going to borrow the money to plug the gap. guy: presumably the courts will have a look at this. you are not allowed to get rid of the debt break unless it's an emergency. is this an emergency? it probably is for the german government but is that the reality? chad: that's the question and invariably we are likely to see

more lawsuits. the reason why this started was there was a lawsuit from the opposition christian democrats, the party that chancellor merkel used to be part of, now the opposition. they were the ones who challenged what the government was doing, so maybe they'll let this go through, but this is why they are only going to suspend this debt break and allow this added borrowing for just 2023 for the rest of the year because they know there will be likely court challenges and the more you try to say this is an emergency and it's going out five years into the future, the higher likelihood the court will say no. guy: some people in america watching this now will think this looks like a government shutdown. is there any silly mentor -- any similarity between what happens in d.c. and what is going on now in berlin? this will be an ongoing problem bond markets will have to think about. chad: we are not on the edge of a classic u.s. government shutdown at this point, because the government still has money.

they don't need to authorize more money as such at this moment, but they do -- they don't have a budget for next year yet, so if they are unable to come to an agreement within this coalition on a new budget, you will be facing that cliff edge, say, at the end of the year. now, the coalition says they are working on a revised budget and have every intention of getting that done before the end of the year. i mean, the difference here is that they -- you know, you have the chancellor as part of the coalition. you have a parliamentary system so if they can agree within the coalition, then they move forward, and it goes to the bundestag. but you have parties that don't always agree. guy: and down the road you have someone who can make things difficult at a moments notice. thank you for stopping by to explain what's happening germany. gets more complicated by the moment. chad thomas, bloomberg's managing editor for western europe. to what's happening now in qatar

and israel. qatar saying a short truce in the war between israel and hamas now will begin friday morning. now, that's a day later than initially dissipated. we now anticipate as well we will see a hostage release starting around 4 p.m. local time. we are joined from his -- from istanbul. walk us through what we now know. >> after the delay that we now know about to the deal between israel and hamas, they have announced the truce between the two warring parties begins at seven local time and 10 or 11 hours later the first batch of israeli hostages will be released to probably the red cross in the gaza strip, after which israel will also release palestinians, both women and people under the age of 19 that

are currently in is really prisons. now, unlike what we knew before today's announcements by qatar, which is the main mediator in this conflict into truce deal, it looks like the release of israeli hostages will take place in four batches along the truce, the four day long truce. that is what the qataris and israeli defense ministry have said over the last few minutes. guy: is there any expectation that we could see more hostages being released, that this program could run for extra days, the idea being that we also get extra days of truce as well? onur: that idea has already been built into the current truce agreement, so if, after the release of 50 israeli hostages, hamas decides to release or agrees to release more, for 10

hostages, gets another day of extension, so that idea is also there. obviously, it was one of the main driving forces when qatar and others mediated the steel, because they are hoping to create -- mediated this deal, because they are hoping to create some diplomacy. they were looking at the idea of a cease-fire very warmly a couple weeks ago, but now that they have this idea, the mediators are hoping they can work something out by giving diplomacy more time. as things stand now, the chances for that kind of return looks slim, but that is what the mediators are hoping for, and the key to that would be for hamas to release more hostages every day and get an extension, more time for diplomats and mediators to work something out for the longer term. guy: thank you very much indeed for updating us. we will be following this with interest. we hope more details will follow. onur ant.

let's return our attention to the opec story. oil very volatile over the last one before hours. opec saying for the meeting we thought we would be happening this weekend will now be held online on november 30 after we saw this delay. now, what's going on behind the scenes is critical here. will kennedy joins us now, if editor covering energy and commodities. when i spoke to you yesterday, you were trying to figure out what was happening, what were the saudis after, what was the communication between the saudis and the rest of opec-plus? what do we know now? will: one of the major sticking points is this issue with two of the african members, angola and nigeria. under an agreement they made earlier in the year, they agreed to have their quota reassessed based on current production and capacity intimately verified by some oil and gas agencies.

that process appears to have happened and the african countries have not liked the result. they are balking at what is being asked of them and it appears it became such a problem that it was easier to delay the meeting to resolve it. that is why it's happening next week. where that dispute is and how bad the problem is is not entirely clear. there was some chatter it might involve angola leaving opec. the angolans went on the record to say no. it's not going to happen. so that is it. so it seems like a bit of an impasse but, you know, chances are they will work something out before next week. guy: the concern was that if the saudi's did not get what they want, they would basically pull back on their unilateral decision. how big a risk is that? will: we don't know and i think we will not know exactly how this plays out until we get to the end of the process next week. if you look at the market

reaction, we had a big selloff yesterday and a little bit more today, but brent is still holding above $80 a barrel, and i think that tells you that the market expects a resolution that does not take us to far away from where we are now, i.e., it's not the main expectation this leads to that. saudi arabia wants to continue with a current policy, once to keep supply under control, and keep things more or less where they are now, but it just once more help perhaps doing that. guy: great stuff. will kennedy on what's happening in the oil market. we will be tracking this story carefully. more details will emerge as we work our way to that. this is bloomberg. ♪

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>> time here. one second. guy: wish, disney's latest animated film, meant to be big this weekend, apparently may not be. it's bombing at the box office --it could be bombing of the box office, which would be embarrassing. thanksgiving used to be a massive weekend for movies. it has become less and less important. classics came out around this time of the year ended well. not so much anymore. alex webb has been following this story carefully. this is the main event of the weekend. why is this bombing? why will this not go down well? alex: be careful what you wish for. it's a threefold problem.

firstly, film does not seem to be very good --firstly, the film does not seem to be very good. rotten tomatoes gives it 40 7%. secondly, you are coming out of the actors strike, which means they have not been able to promote the movie. usually have the full disney apparatus promoting this. that has not happened. thirdly, and this is the more structural issue, is by pushing people towards streaming platforms for the past two or three years, has a program to the audience to wait? guy: all these movies come out, you give them two weeks, and you have them on one of the main platforms. alex: exactly. the whole push from disney over much of the past two or three years was double down on disney plus, become a growth stock. as you saw, the interest rates increased. people are not stuck at home as much. that story changed. they are now looking at it to

become a dividend issuing company again. but you have people now, because if you take your family to see the film, you are spending $50. guy: much cheaper to stay at home. thank you. alex will be back. this is bloomberg. ♪

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guy: happy thanksgiving. welcome to the show. this is bloomberg markets. i'm guy johnson in london. if you are in the united states, probably time to get the turkey on, time to get cracking. while you are doing that, there are things going on in europe you want to pay attention to. it's turned out to be a busy day. let's figure out what is going on. sweden did not raise rates today. everybody thought they might and did not.

turkey, did get it big rate rise, 40% in terms of where rates are in turkey, a bigger than anticipated hike. in the netherlands, a far right candidate winning the election there, geert wilders won 37 seats out of 150. could he be the next prime minister? that could be a big impact their second have a big impact on the netherlands' relationship with the you. we have pmi data. could have been worse and could have been better. let's figure out what's going on. i will show you the pmi numbers. amsterdam underperforming little bit today, up .2%. dutch stocks not taking the political news very well. the pound rallying today. why? better than anticipated pmi data. i will show you the numbers in the moment. that seems to have caused some concern that the u.k. economy has not slowed down as much as anticipated and maybe inflation will be a bigger problem.

crude remains low. we're down nearly 2%. we have a delayed opec meeting. will kennedy will come back later to update us. that is the market narrative. still time to get the turkey on. let's talk about the pmi data and show you what's happening there. this is a glass half-full, glass half-empty story. basically, the s&p global numbers for the euro zone in at 47.1. the estimate was 46.8. they are both full of 50 and this is telling us the eurozone economy is not getting worse but is not cutting better. kind of stagflationary environment. the estimate 48.7. does that mean inflation will hold up? that's a critical question. let's pull this together. the key question a lot of the markets are trying to ask at the moment is, after the recent rally in the bond market, particularly in the equity market, is that enough?

do you now turn tail? has santa come early and do you sell the rally? straightforward -- do you sell the rally? let's get an answer to that. michael joining us to discuss. what do you think? you foretold it. i remember standing next to you saying a few weeks ago there's momentum building, it looks good, the stars are aligning, things are going to take off. you were right. what happens next? >> thanks. it's a tough question and it's tempting to sell the rally after a month like that. you would think you would take profits. we are at the end of november. it's not a time to increase risk, definitely, because a lot of firms will close the books in december. that said, is it time to sell? not necessarily sure. i mean, you can take profits on some of your holdings and maybe

go to see if you can buy some cheaper stocks. that might be the case in the u.s., especially when you look at the differential between the pricey tech and magnificent seven and the rest of the market, so there's rebalancing that can be done, but is there any reason to sell it? probably not. guy: any reason to sell the market? what do you think? >> i am not so sure. i would not go along here. i think it will be overheated in the short term. i'm in favor of looking at risk-reward and going long. there's a lot of risk and little reward towards the end of the year. that's one thing that makes me curious. we think back a year ago, everybody was sure about getting a recession and everything is going to be bad and 2023. then we got this massive rally. then we have something in reverse. everybody is happy about the 2024 outlook. recession will probably be coming but it will be shallow and fine.

what if this narrative is not coming through and everybody's on the same page again, being optimistic into 2024? if that does not materialize, everyone wants to go out the door at the same time again. that makes me skeptical. guy: i'm also seeing year end targets 2024 being published now. i'm seeing a lot of numbers around 5000. the market seems to think the worst is behind us. 5000 is some decent headroom. what gives people confidence to believe that this time next year we will be significantly more elevated than where we are now? >> i sometimes wonder about where they get the confidence and some of the building blocks they are using to tell that narrative. we have the cycle behind us, rates are coming down, inflation is tamed, corporate earnings look ok, the majority of earnings revisions are behind us, and that is all well and good, but then again, managing

this soft landing for central banks will be very difficult because, again, they are using a lot of data that's backward looking, so finding that perfect timing for them to ensure the soft landing will be difficult, and i don't feel that confident about it, as others do. guy: jp is not confident. let's talk about the downside risk. if we do get anything other than a soft landing and it starts to become more bumping -- more bumping, how mispriced is the market? >> that is the big issue. next year, at least three or four rate cuts are priced in by bond markets. if we don't get that -- guy: there's two ways of thinking about this. if you get a soft landing and the rate cuts come through, that's a good thing. if inflation is coming down. that is the soft landing narrative. you don't get any kind of

serious economic hit. when does a rate cut go from being a good thing to a bad thing? >> when your economy is really diving. we have seen it in 2008. the fed started to get very aggressively because the economy was nose diving. so immediately they had the impact later on. we are not in that type of situation obviously. but yeah. the whole market, and there's a consensus of a soft landing, of a rate cut, because the fight against inflation is won, investors believe that. now, if we start to have a different narrative building up because inflation stops going down or the fed speech starts to be shaking, than the market will get hit. guy: jp, this is where life gets

interesting. we are trying to work out a rate hike that would not be perceived as good for risk assets or what it? wouldn't the rate hike take off the risk of a hard landing? if the fed and central banks still believe they can hike in this environment, does that imply the economy is more robust? i'm wondering how the market is going to take the various narratives? because there seems to be three. you get a rate hike, which in some ways is bad for risk assets, because of the discount rate story, but the underlying economy is more robust and that is a positive. you get a rate cut in a soft landing environment, inflation is coming down, you can cut rates to keep real rates static, or you get rate cuts because of a hard landing because the economy is nosing over. i am trying to understand how the market reacts to those

scenarios, how equity markets react. >> it will be impossible to predict. as you said, a lot of if and when and what and circumstances to a lot of that, and that is why i am not -- not skeptical, but not optimistic drawing out the scenario because it's a tricky thing to do, especially when you say we go back in the hiking instilled -- clicking instead of cutting. the other way is if inflation comes back and that helps margins again, as we have seen with corporate earnings, it is this a good thing again, or will they go crazy, will we get this scenario of 1970's inflation coming back? on the other side, the same thing. if those cuts are fast and furious because the economy is nose diving, then it's a bad thing, and that leaves only the middle scenario, which is the economy is softening but

corporate's are doing ok and we cut rates to help them. inflation stays muted. it's a lot of if and when and all these things going in this scenario to get those predictions. you really need to be a believer. guy: you definitely have to be a believer. it will be fascinating to watch how this one plays out. between now and christmas, maybe people don't take quite as much risk. santa seems to have come early. thank you very much indeed, gentlemen. we will pose our question of the day next. this is bloomberg. ♪

guy: american markets are closed. thanksgiving. maybe time to reflect on what are we thankful for and what do we do next. the question we are asking today about what do we do next is do we sell the rally? equities have had an incredible month. is it time to fade that? steen jakobsen, saxo bank's cio joins us.. what do you think what do you think. do you fade the move? steen: there is no hurry to do that. one of the best indicators over the last 24 months has been the number of stocks below their 200 day moving average. basically 57% are above 200. you need to go to 70 before we get into territory where we need to catch the rally. having said that, this valuation is driven entirely by the short

covering. i don't think a lot of people know but we have had the biggest short in july since 2011. we have brought that position back to neutrality. so to move the file path into the christmas rally, we would need a little bit more confirmation the fed is done and we probably need no negative surprises, but i'm pretty confident there's more legs to this rally. guy: ok. are you in the soft landing camp? michael: i think you -- steen: i think you know the answer to that. you have known me for many years. soft landing is not an economic turn. the way i see it is that you always get to a soft landing before you get to the hard landing. so, no, soft landing is not something i believe in. the data is deteriorating significantly. i think the data is confused because if you take a jobless claims week by week, we have an analogy.

it made the number 20% smaller. next, 30% larger, which means we are in a state where large is neutral, but we need new data to confirm that we have some additional ability to rally on the basis that it's coming down. guy: so let's combine the first answer with the second. you don't believe in a soft landing. the rally we have seen recently is basically a position on want. it will be harder to move things higher from here. why not sell the rally? if the upside is capped, it strikes me there's only downside. steen: i would probably say my gut feeling is to sell the market. if i was looking at it from an economic concept, i would do the same thing, but the fact is the way you make money is excepting the rules of the game, and the rule of the game is the market

is going up because of seasonality, because of reverse repo adding additional liquidity to the market. sometimes you don't have to make it very complicated, and as you know as well as i, the smartest people in the world are not exactly the best traders. guy: not always the case. what about the bond market, steen? that's had a decent rally. do they stick down here or do you think, actually, they have potential to go back up again? has the best entry point to buy duration already past? steen: i think if we can manage to get back there may be another opportunity because one data point only lasts for less than 48 hours. we need the data points to be more conclusive. net, i still like the two-year sector everywhere in the world,

u.k., germany, u.s., a little bit of a pullback over the last 24 hours. i like that. sitting on the role down and that the expectation the market has 150 basis points over the next two years, probably the maximum you will see because inflation is still there. if there is one trade left in the year, it is the fact which i privately have said, no one has duration. most institutional investors are short duration, so if we have a rally going to for 35 or something, i see some acceleration in terms of buying. guy: what is the trade for 2024? steen: the trade for 2024's first and foremost to accept it's an election year. and the number one thing you need to solve for is the fact that the u.s. right now has a real rate of 225 basis points in

a situation where the deficit is going to increase, where the issue is going to increase in size and frequency. and that means you are paying 2.5% real rates to a problem you cannot afford. so in other words, what we need to solve for next year is whether we will have high inflatio get real rates down or nominal rates down? i think most importantly now is to get nominal rates down from the federal reserve. the backdrop of that will be inflation down, so from q1, high valuation as we come into 2024, economic slowdown the other one, but you need to solve for the real rates, guy, and like your other participant you had on your panel, i don't have the ability to see, but we will not get less fiscal in an election year. we will not get new reforms going on. if anything, a slowdown in fiscal, but i will come into the

year aggressively, the new year with little risk on to exactly handicap all the things you talked about. guy: in terms of the risks, how substantial is the risk that inflation -- that we are going back to that kind of 1970's re-acceleration of inflation, that inflation does not deliver what everybody anticipates? because that seems to be at the heart of everybody's call at the moment, that inflation is well and continues to dis-inflate the way it has been. put your economic hat back on again. how big a risk is there that we are going to have to see a full crew moment, that central banks -- ca voelker moment, that central bank will have to come back in and hit inflation hartigan? steen: significant but probably not before the election in the u.s. i take your point.

i attended a conference in switzerland and 80% of the conversation was about the fact they believed inflation would come down pretty hard this year and next year. they sort of said the fight against inflation was over. i happen to remember i had the same conversation in 2021, 2022 and 2023. so it is the consensus trade so that is the bigger risk. you are right. i think food inflation is a big risk. i think it's very likely, 70% likely, that we have a peace deal between russia and ukraine, which is going to at bare minimum mean some additional resources going on, so for me, the new floor is 3%. the new ceiling is 6%. and the volatility of that is going to pick up significantly, probably pretty much like what happened in the 1970's. guy: ok. that is a scenario that no one is counting on. steen, always a pleasure.

steen jakobsen, saxo bank's cio. we need to get back to this germany story. germany has a fiscal crisis underway at the moment. it's been started. it's now rippling through berlin. further details in a moment. this is bloomberg. ♪

guy: 20 minutes ago, 22 minutes ago, 23 minutes ago, the german finance minister makes a statement, confirming what bloomberg had been reporting, which is that germany is going to suspend its constitutional limit on net new borrowing. that's the fourth year it will have done that. it's what's called a debt break.

it's a constitutional requirement. you can break it in emergencies. is this an emergency? zoe, why is he having to do this? >> so this is the follow-up to that court decision last week and in a way it was inevitable he would have to do that. normally germany has the debt break. it can suspend that in special circumstances and did suspend that in 2020 and the following years because of the pandemic but the finance minister is a fiscal hawk and said in 2023 we are going back to the debt break. that all would have been fined if it had not been that the way germany was -- been fine if it had not been that the way germany was spending that had not been outside the normal budget. that constitutional court decision last week said that is not ok, that you cannot function like this. it's unconstitutional.

so that means they've spent this money for 2023 and its late november. at this stage, you cannot get the money back in any other way, so getting rid of the debt break before 2023 had to happen. guy: so they had a pot of money here that was coming from -- that was left over from the pandemic. it was borrowing they could have used and cannot now because of the constitutional ruling, so they need to borrow elsewhere, which is why they are getting ready if the debt break. so that is clear. what happens next year? zoe: that is the big question. for 2023, too late. for next year, they have not yet made a decision. one of several different options here that they could go with. first of all, these extra funds they have, extra money, they could put those into the constitution. they did that with the extra military spending. for that, they need a two thirds

majority in parliament, and for that they need the votes from the conservative faction. that is the party that actually went to the constitutional court and said this is not ok. so while they were willing to do this on the military, they actually would jump over their own shadow and do this. so what is the other option? the government massively cuts down on spending. that now is something that -- it's a three way coalition -- both the social democrats in the social democrats and the greens are unlikely to do that. the third option is to the debt break for 2024. here we have the issue because he is a fiscal hawk and the debt break is one of those things he's promised to voters and he probably will not be willing to do that, so germany is in a mess. guy: germany is certainly a mess. and we are all going to watch

with a great deal of interest to see how this unravels. zoe, bloomberg news western europe leader joining us from frankfurt, thank you very much indeed. it is thanksgiving. back to what's happening with the spending story stateside. we will do that next. this is bloomberg. ♪ (aidyl) hi, i'm aidyl, and i lost 90 pounds on golo.

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>> inflation lead in a challenge. what we are seeing is the consumer is looking for value. the consumer is more focused on price. we are seeing low responsiveness to when we are offering promotions and things like that. and, you know, we have been really successful by doing what we are saying we are doing, which is taking inflation out of the holiday for our customers. guy: mark rosen, the jcpenney ceo, talking to bloomberg. let's talk about what's happening in the retail environment the next few days.

important. how important remains an open question. black friday, cyber monday. the president of retail at j. lo -- at jll joins us to discuss. it feels to me as if holiday spending started weeks ago. what are we going to learn over the next few days, therefore? >> good morning and happy thanksgiving. in some ways, we saw thanksgiving spending starting in october. that tells me the u.s. consumer was looking for bargains as early as october and the halloween season. that to me also says that i am actually quite bullish on the combination of black friday and small business saturday and cyber monday. all the other retailers were saying the sales were softening, home depot talking about big-ticket items being down 5%, 6%, year-over-year, consumers are waiting for promotions. that is why people seem much better following black friday and small business saturday and

cyber monday than maybe people expect. guy: i forgot small business saturday. i listened to the calls. i listen to what retailers are saying. they are telling me that inventory is tighter, that they don't have the big overhang they once had. how big are the promotions going to be? what can we learn about promotions that are being delivered? >> the items -- most people when they shop these days are looking for soft goods. that drives christmas holiday sales. if you don't find it at ross dress for less, you find it at macy's, at nordstrom rack. you will find a way to get the product you want. inventory available, i think the biggest thing we are thinking of right now is whether u.s. consumers continue their spending shift from hard products to experience. that is the big question. live nation stock is up significantly year-over-year because people start shifting their spend on products to taylor swift tickets or u2, or beyonce. that is something to watch for the holiday season. guy: it is something you see in

the airlines as well, softness in the domestic story, but international remains pretty strong. do you think that trend is more embedded? going forward, what do you think is going to happen there? naveen: right now, air travel is fairly affordable for most people. i have heard stories like finding bargains to fly to italy or spain cheaper than flying to colorado for a ski trip. airlines have gotten smart with international airlines finding ways for people to get on a plane and travel, now. it will be an obstacle during the holiday season when the planes are full, but i don't expect that to change. u.s. consumers shifted the way they think about dollars. they look for experiences more often than they did in the past. that is a healthy thing for one or two years. guy: in terms of kind of what happens now, if the labor market holds up -- you saw the claims take it -- claims data at this week's adjusting it probably is. if the labor market holds up,

what kind of trajectory are we on with the consumer? if the labor market holds up, inflation is coming down, i would have thought that would be good for the consumer. naveen: it is good for the consumer. one thing we can't ignore is that we have a couple of wars going on in europe and the middle east. we notice the reaction to consumers. post october 7, there was a consumer pullback. we are also seeing an election cycle coming in 2024. typically, we see consumers holding back their dollars to see which way the wind blows in the election cycle in the u.s. those things would moderate our consumer spending, first half of the year. when the labor is tight and labor dollars are going up, costs are going up, we would likely see muted growth in 2024 until the first half of the year is over. we expect a better second half because at that time interest rates will start going down, and everybody is paying attention to

interest rates as they think about the retailer. guy: how much spending currently do you think is being done on credit? naveen: i think we have all seen that the numbers say that the credit card balances are at pandemic-level highs. that tells me people are looking towards ways to extend their dollar. like tuition payments and those other elements they were not thinking about back in 2020 two and 2021, that is going to head back. guy: the last question i have -- i'm trying to figure out how you put the pieces together. interest rates are relatively high. people are spending on credit. student loans are about to kick in as well. that is another factor i'm worried about. i don't see much evidence of impact into the retail story. when does that happen? naveen: i think q1 and q2. the culmination of student debt, having to pay that back, put it card numbers on interest rates are still high, and we have the election cycle. i see the first two quarters of

2024 as being a muted retailer cycle. good news is, even today, looking at your email box, we saw a lot of promotions. retailers are getting very aggressive promotions. the promotions are so heavy and so high. guy: have a great thanksgiving. really appreciate you stopping by to see us. jll president of retail. we will get more insight into what is happening on the ground. caroline hyde is going to speak to the macy's ceo, jeff janet. that conversation tomorrow morning. i'm going to take you next to what is happening in china. one of china's leading developers higher this morning. beijing announcing a big push to try to shore up this troubled sector. more exclusive reporting, next. ♪

(adventurous music) ♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia.

guy: scenes of jubilation yesterday in the netherlands as the far right party of geert wilders came first in the dutch election. 47 seats out of 150 was the win. the question now is, does he become prime minister? the freedom party leader is going to have to forge alliances in order to form a government. how is that going to work? sarah jacob joins us now from amsterdam. that is the question everybody is trained to figure out. discard wielders, -- does gear at wilder's -- does wilder's

become president of the netherlands? sarah: we don't know. he has 37 seats but he needs 76 to get an absolute majority in the dutch parliament. and for that, you have to sort of make alliances with the other parties. at the end of the exit, he said he was open to a center-right coalition. that would include peter on zach -- onjek's party. a lot of talks will start today in terms of the party hunkering down with their own members of parliament, taking stock of what happened, strategizing with how they want to go forward tomorrow. the parties meet together. the coalition talks really start kicking off tomorrow. it is going to be a long process. we don't expect it to happen immediately at all. the last time this happened, it

took about nine months, the longest on record, for the coalition to be formed. have to wait and see. guy: what impact would his party's involvement in government have on policy? what impact would it have on climate change? what impact would it have on immigration? how would this change the direction of travel for the netherlands? sarah: so, geert wilders has had pretty anti-islamic policies and his point of view. he has lived under police protection since about 2004 because he has received death threats. his policy plank has really been about cracking down on immigration. so that is one of the key things. he has talked about withdrawing the netherlands from a lot of climate policies. he has talked about reducing or stopping aid to ukraine.

in his manifesto, he has also spoken about a referendum to remove the netherlands from the e.u. but at the same time, he did see over the past few days, that to form the next administration, he is willing to compromise. he has said he is willing to take a softer stance on a lot of the controversial policies that he had. the other thing to point out is that a lot of the other parties he could potentially form a coalition with do not want to leave the e.u. that is also something important to keep in mind. they will have to come together to agree on a lot of policies. but immigration i think would be something that would be important. guy: why did the dutch vote for him? sarah: well, i think the freedom party has been focused on immigration, and there are three really big reasons for campaign issues -- the rising cost of

living, a severe housing shortage in the netherlands. if you remember theoalition that collapsed in july because of infighting over the migration issue -- that theme has stayed in the entire election campaign. yesterday, we saw a lot of parties campaign on the same topic. dear wilder's -- gert wielder -- geert wilders sort of got a leg up because the bvd party refused to rule out partnering with him. that sort of is expected to have helped the ppv get 37 seats. people were expecting them to get a rise in seats after the pre-election polls, but not by this much, or the difference

between the first and second parties. the left alliance got about 25 seats. that is a 12 seat difference between the two parties. guy: sarah, think you very much indeed. we really appreciate the update. we will watch with interest. let's turn our attention to what is happening on the u.s. canadian border. officials say there is no sign of terrorism after a big rig explosion killed people at busy crossing between the countries yesterday. jon erlichman joins us with the latest. they have ruled out terrorism, but what do we know about what happened? jon: it is good to be with you. authorities are still piecing together the entire story here. you mentioned the fact that one thing authorities have said is that there are no links to terrorism. we started to get that messaging late yesterday. the new york governor held a press conference. we have to reiterate the focus on no terrorist links because of the fact that this became an

international story. it has been almost 24 hours since the fiery crash which ultimately led to the death of two individuals, and injuries or a border patrol agent. given that it was all unfolding as the u.s. thanksgiving holiday was beginning, and this is a busy travel spot, and you had images and video of the fire crash on social media -- very quickly, lawmakers and officials at all levels are forced to react and respond. there have been reports. still working off of reports that a man and a woman were in the vehicle, they were reportedly initially planning to go to a concert in canada that was ultimately canceled. they may have been visiting a local casino on the u.s. side. all of this unfolding before the

images we obviously -- which some people have seen online. highly unusual to see a car literally moving almost through the air. the eyewitness accounts, very dramatic ones. we did see some headlines just crossing, based on commentary from the mayor in the local niagara falls on the canadian side about the likely need for that particular border crossing to remain closed, possibly upwards of another couple of days. timing obviously complicated at a busy point. very quickly after terrorism worries were ruled out, we saw other border crossings in the area open up, and those were back to business, it seems. guy: very briefly, what is this crossing mainly used for? jon: this is going to be a combination of tourism, guy. we want to get a look at what is happening on the canadian and u.s. sides, so that is pretty

common. in a province like ontario or a state like new york, there are a lot of people working on both sides. for context on an average day, you might see upwards of 6000 crossings. certainly, if you look at the thanksgiving period a year ago, it would have been about double that. there is another border crossing in the area that would have on average more traffic per day, and over the course of a year. you are going to get a combination. the fact that this is that such a tourist this duration, -- tourist destination, niagara falls, this is part of why so much international attention quickly shined on this area. it is a heightened security period. people are uncertain what those headlines mean. now, getting more clarity and trying to get the finer details of unfortunately what led to this tragic death of these two individuals. but you have continued to see messages from lawmakers. the new york mayor telling people to be on alert in new

york on this thanksgiving. we will continue to watch the story closely. guy: thank you for the update. greatly appreciated. bloomberg's jon erlichman. slim pickings for the thanksgiving box office weekend. we think the latest disney film, "wish," is probably not going to deliver on expectations. gone are the days of magical disney stories. that is next. ♪ (adventurous music) ♪ ♪ ♪ be ready for any market with a liquid etf.

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>> 3, 2, 1. i'm here. i'm here. just one second. me catch my breath. guy: don't worry. we don't need to catch her

breath. "wish," disney's latest animated film, apparently running the risk of being something of a box office bomb. its performance in some ways may be a sign of the fact that we have moved on, post-pandemic. moviegoing is very different. thanks giving used to be a really big story for movies, now, give it a couple weeks and you can watch it at home. you can spring it -- can stream it. alex for joining us now. why are people saying it is so bad? alex: the film itself? guy: we can talk about that. alex: if you go on social media, on tiktok, you see content saying, i do we go from this classic disney content -- beauty and the beast, pinocchio, old stuff -- to this, and excerpts of some of the lyrics and things in "wish." there is not a groundswell of support for this film, at least not yet. guy: is that because it has not been written well? is the writer's strike -- start putting what is going on in this

industry in on this story. there are lots of other elements coming together here. i think wish almost perfectly encapsulates it. alex: the quality of the film -- the writer's strike had nothing to do with it. this would have been scripted 3, 4 years ago. i think there is a bit of a creativity problem at disney. they have not had that many new original content breakout hits in a while. they are leaning heavily into marble. those films have been doing -- have not been doing well either, if you think of the recent marvel release. big talent they lost. john lassiter was in a bit of a scandal surrounding "me too." he was a creator in the disney animation department. piercing films that have come well after his time, and may be suffering a bit from the lack of creativity. but for the weekend itself, you are starting to encounter slightly different dynamics to do with actors not being able to promote the films because of the

actor's strike, and crucially, the way the audience has maybe been programmed over the last few years. they are used to watching things on streaming. if you are taking a family -- this is a family film -- out to the cinema, that is going to cost you maybe $60 with popcorn and everything. it is a lot cheaper to stay at home in a few weeks and watch it on disney plus. guy: increasingly, there is enough coming through -- i will wait a few days. there are two or three movies floating around. at some point over the next few weeks, they will come to streaming. you don't have to wait that long. how do they counter that? alex: i think you have to reprogram audiences. it is interesting when you look at the return on investment capital perspective. you think about the recurring revenue from disney plus, $10 a month, depending where you are. you are getting 120 dollars in revenue over the course of the year. you have got to be constantly feeding new content to get that revenue. if you have one family going out and spending that $60, you made

one piece of content and have half the revenue. your cut from that is less, but you have to add up -- that is what disney is starting to realize. the topline revenue growth takes a little bit of dilution, or a lot of dilution. they have been cannibalizing their own business. there is now that realization in hollywood that this growth story they have been tracing is not all good news. i'm trying to retrench a bit to where it was before. guy: they lengthen out -- alex: the window is the way they talk about it. so you have a bigger window between going to the cinema and going to the streaming services. there is another benefit of that. if something has been a cinematic release, does it have more appeal when it goes on to streaming? this was on the cinemas, and i you can get it in streaming. if you lead that a little bit longer, you could still get the cinema audience. it is interesting to think about

some of the hits we have seen recently. "barbie" is not something that has gone onto a platform. we had to buy it in order to see it. that window is something that is happening more and more. guy: in terms of the future, are we about to see a load of movies coming through post strike? are we about to see a dilution of movies coming through? alex: there is going to be -- the release schedule is planned out a year ago. we will start to see a fallow period in maybe a years time. 18 months, two years -- we will not see as many blockbusters coming in that timeframe. nonetheless, there is so much stuff and production. overproduction, perhaps.

that could probably push some stuff out in order to fill this gap. guy: thank you very much. alex webb. we will see how "wish" does this weekend. coming up, the european close. we are about to wrap up the day in europe. fairly high-volume with the u.s. out. elise badoy joining us next. ♪

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guy: thursday, the 23rd of november. european stocks climb into positive territory, but volume is light. after all, it is thanksgiving. the countdown to the close starts now. >> the countdown is on in europe. this is bloomberg markets: european close, with guy johnson and alix steel. guy: so, while the americans are cooking their turkeys,