>> you ask the question where did all the bears go? and i think the fed shot them. >> when we look at these markets we are >> priced for perfection. >>let us enjoy the calm because it will get rockier and uncertain. >> the question is does the party stop? most folks think it does not. >> this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. lisa: the year feels over. this is bloomberg surveillance. alongside katie greifeld. tom keene and jonathan there'll thought that the year was over and it is not over considering the fact that we have key data coming up. i am pleased to have you in this seat as we really parse through yes liquidity but some really

big questions into beginning of next year. katie: we are going to get some important economic data. you think about the fed. it will be interesting to see jobless claims on the heels of that. something interesting happened in the equity market. about 2:30 or four -- or so. so the liquidity show that there are nerves under the surface. lisa: just to put numbers over stocks puking, it is still 6:00 a.m. in new york. we are looking at the biggest decline in the s&p going back to september. it was only 19 companies got a gain. broad-based gain on the way up broad-based sale on the way down. some people are looking at options traits and is that the mood on the street? katie: zero day options. there was really heavy put volume in particular which could explain some of the very technical feeling moves.

there was a really clear cattle -- there was not a really keep -- clear catalyst. of course, it was very broad-based and it felt like everything sold off at once. lisa: it is calm her -- calmer this morning. the bond market very much got a bid in with a 92% chance of a march rate cut. it still is the belief that the fed despite all of the pushback will embrace the disinflation by appearing back where rates are and giving an extra katie: leg to markets. katie:it is interesting how higher for longer turned into higher for a little bit and maybe we cut in march. we have seen some pushback about how soon these rate cuts are pushed back. the broad-based consensus is sooner rather than later the next move will be a cut. lisa: higher for a hot second. we got a dip yesterday and my first thought was is is a viable

one. we are looking for some kind of turmoil and volatility so we can buy and have a better entry point. that has been the comments from every person, the latest being scott kroner putting this in the nashville note talking about " the messages to expect pullbacks and buy into them." does that mean we do not get them? katie: they would be short-lived. we talked about zero day options being blamed for yesterday. it is important to note that you think about how overbought we were. you take a look at whatever you like to look at and by some measures the s&p 500 was the most overbought. we have come really far really fast and it makes sense that we would hit turbulence. lisa: given the fact we have a host of issues on the geopolitics side in respect to -- to china and a tit-for-tat between the u.s. and china on the trade side as well as the huti militant regime causing

consternation in the shipping sphere. we are looking for more information on the 2:30 p.m. puke. almost half a percent game -- game -- gain, 4771. getting a little bit of a bid versus the dollar. 10-year yields, this is interesting, they inflict about four basis points but yesterday a sharp rally on the heels of the u.k. inflation print. 3.88%. was this a growth concern starting to creep up into the price action? or was this idiosyncratic technicals? katie: it is a great question what is driving the treasury market. as a that traditional haven bed? or growth concerns or something else. or just a reflection of fed policy. it is known for certain that we

firmly broke below 390 and the question is where's the floor when lisa: lisa: it comes to the 10 year. and where the buyers will come from. this is the latest tea leaf that people look for it for signs of weakness. unemployment has declined over the past month. here is a question, do we start to see a greater sign of weakness as we saw the likes of general mills and others coming out yesterday with warning signs. 1:00 p.m. presidential crafts are you thing -- press briefing takes place along with john kirby, very curious to hear where the administration's mind is when it comes to the houthi militants and the action they are willing to take as well as any updates as how that evolves. and we do get a host of earnings from carnival and aftermarket earnings from nike. to me this is where the rub will come into place because a lot of

people and enthusiasm on the macro level. on the micro level, volatility in terms of signals. katie: it is a nice pairing that we have carnival and nike. you think about people going back into experiences. travel stocks have been on fire may be at the expense of retailers selling physical goods. a really nice juxtaposition to tie a bow on that point. lisa: let us talk to margie. i want to start with is your year over? are you doing anything or just watching and counting the days until you can go on vacation? margie: [no audio] -- [laughter] there is opportunity on days like yesterday to add when the market has a nervous day and take advantage of the volatility. i think the market will return through the rest of the year and finish on a strong note. and i think that 24 will be a surprisingly good year to the market to the frustration of

those many people who have been waiting for a recession. lisa: do you feel vindicated, all of the people calling for gloom and doom you can keep feeling frustrated. is there a sense that people have been warning you and you have been right and you see things that they have not seen. margie: just looking at the fundamentals kept me pretty positive about the market. i continue to feel that way. three quarters of economic growth that have been surprisingly strong. it seems most of the statistics are surprisingly strong. and yet people are still looking for a big recession and correction because that is what history has told us we should have. i think people are rejecting the facts and looking backwards and expecting to have a big drop. we had a quick drop this year and last year, very different call if you are out of the market to jump in.

people are still hoping that we would have another big drop where they can maybe readjust their investments or get into the market. there is a lot of cash out there. katie: against this backdrop with all of the cash in money market funds that the buy the dip mentality is back in the forefront or coming to it. margie: i think that will be the right strategy to do. the reason is that we will continue to have reasonably strong economic growth last year, two or 3%. that would still allow the standard to be up 10 to 12%, something like that which would be a reasonably attractive rate of return especially if the fed will be getting to lower short rates making money markets a little lesson -- a little less attractive. katie: let us talk about the relationship between the equity and bond market. you take a look at the 10-year yields low 390. we were at 5% not that long ago.

the 10-year yields should remain between 425 and 525. it feels like we are far away from the low end. should we get that -- should we get back there. is that a hurdle. how are the two working alongside each other. margie: i think even any higher rate will not be an impediment because when you look at the economy, business and consumers, neither of those big sectors are overleveraged. there is no sector that you look at and say they are very precarious. they are likely to fall and have a cascading effect in the whole economy. business consumers look good and i do not think that we will see a slowdown and -- and a continued modest recovery. lisa: do you still like stocks over bonds in a big way? margie: i do, especially when we had the 10 year go from 5% under

4%. you're talking about the performance in that sector of the market. there are some attractive opportunities in the high-yield sector and that is what people were worried about because as we go into a so-called recession we should have spreads gap out but they never did. they narrowed. with defaults probably remaining 4% or lower for corporate bonds and the fed getting big cut short rates i think 400 basis points over treasuries looks attractive for an income oriented investor. katie: i want to talk more about about the market and where you see opportunity. one of the breakout stars has been the chipmakers. we have micron results after the bell being received well by the market. we look currently at 5% in premarket trading. in that continue into 2024? margie: i think so.

we like the semiconductor sector. it has been a volatile sector but a great total return vehicle. a lot of those names these days compared to previous cycles have dividend yields that are competitive with other stocks. we think they are a good all-around choice. we think there is strong secular growth for that sector. we think that will continue in 2024 even though we have two or 3% gdp growth. katie: that is a good point, you do not think about dividends with semiconductor stocks. pretty robust. does that optimism extend to growth stocks more broadly? margie: yes. with relatively modest growth and particularly, we will be one of the growth leaders. most of the emerging markets in europe look like they will be muted 021%, nothing too exciting. it is really the u.s. economy

that will be one of the best performers. we think that it is a selective market favoring growth stocks over more value oriented stocks has been the theme. lisa: thank you so much for being with us. all dips are viable and yesterday was one of them. katie: that mentality was a hallmark of the pandemic era stock market and maybe it is coming back. she makes a point about talking about the broadening of the rally which has been a theme of the past couple of months. but her view is that growth over value 2024. lisa: we have been hearing that. couple of things have been catching my eye in addition to the geopolitics which is the overhang that a lot of people are watching. it is how different countries are dealing differently with the fact that inflation has caused real decline in sentiment

notwithstanding the consumer sentiment survey that came out. in south korea they have shrink flight should pulley is. this was a story where there are people going around to measure how much is actually being sold at any given time for the price and this comes as the head government is in a whole host of problems that people are going shaking potato chips bags to see if they are half-empty. people are feeling this dissatisfaction that they are paying more and getting less and how different governments are dealing with it. katie: greedflation is top of mind and that is one of my favorite buzzwords and it is real. you think about some of these consumer retailer companies, the level of their prices have gone up so much on their goods, when does that turn into daily -- to deflation and not disinflation. do they ever lower prices? lisa: we saw in the airline industry briefly over the summer

on domestic routes and we have seen in certain goods but that is a good question, when do people start saying companies are doing well and you are having good margins even as we struggle with higher prices. we are going to hear from citigroup which has been pretty bullish. he is key on good news is good news and bad news is bad news and stop having that discussion. we cannot wait to speak with him into a new year. it will bit more of a lift. the s&p futures climate further. this is bloomberg. ♪

>> in the conflict between israel and hamas, we will continue to focus on our priorities. it is clear that the conflict will move and needs to move to a lower intensity phase. and we expect to see and we want

to see a shift to more targeted operations. lisa: that was antony blinken delivering his end of year press conference addressing the israel-hamas war in an escalating time of conflict and real question marks what we can get past given that congress is in gridlock when it comes to a whole host of issues being tied to financing. this is bloomberg surveillance. tom and jon ditched us to get ready for the holidays and katie did not. this is one of the reasons i have been surprised by the optimism because of the geopolitical backdrop is striking and daunting. katie: it feels like it gets more complicated. the red sea is a very intense situation evolving. and you think about the macroeconomic implications. it feels like supply chains have normalized from what we saw from the pandemic.

it is not in every single story anymore. but obviously entering the forefront again. lisa: it raises the question, is the economy going to be a main issue and is this inflation helping when prices go up. we have a politician -- a policy director joining us. with the latest poll, showing biden and trump basically in net in a dead heat with a potential third party candidate, a kennedy gaining an increasing amount of the share. how much angst is there among democrats that trump is looking more and more likely to be the president? >> i think they are both d.c. and the market, slowly coming to terms of the fact that despite everything that they might've hoped or thought it is looking like it is going to be a biden versus trump rematch in a true head nod to the government. and it looks like it will be

those two against one another despite many people hoping that there would be support coalescing around another republican candidate or president biden would step aside and point to someone else to take over. it looks like it will be those two and that is meaningful because the last election was decided by about 40,000 folks in three states. you put those two back on the ballot against one another and then you have the third party candidates. and this becomes an incredibly close election as evidenced from my seat by the seven swing states that will decide this all showing trump ahead in the most recent round of wall street journal polls. lisa: can we write the obituary on the idea of another candidate taking former president trump's place given the fact that donald trump widened his lead to 67% among republicans compared to about 11% with ron desantis as well as nikki haley. isaac: when we think about the

structure of our political system you think about areas that are ripe for reform. i think the primaries are one of them. because the primary skew to the far left or the far right. within the republican primary voter base, about one third of those individuals are with trump forever and will stick by him through thick and thin as shown by the indictments. and since a lot of the primaries are taking to a winner take all structure, he should be able to cruise. you have seen that with the democrats with the further left ideas gaining more traction. it is the primary structure in and of itself that holds parties to the extremes. katie: i want to talk more about third-party candidates. there are some of them in every single presidential cycle. it does feel this time that we are hearing more about them. the likes of robert f. kennedy, jr. really making waves.

but do third-party candidates become anything more than a conversation point in 2024? isaac: my overall framing for this is about one in 10 democratic voters say that they are open to considering a third-party candidate. but look where we are the calendar. you have a lot of road between here and november. and i think that that number will be reduced. my cautionary point is let us not focus on the broader polls or the aggregate. it will matter in certain states. i want to see how rfk is playing in georgia, pennsylvania and any other swing states. those -- that is where it will matter and that is where a third-party candidate could have an impact at the margin overall and influence who takes the electoral college own. katie: let us talk about colorado. the news this week, former

president trump being kicked off the ballot in colorado. it seems like each one of trump's legal challenges thus far have only served to galvanize his base so to speak. will that be the case here as well? isaac: this is the broader point we should keep hammering home. every indictment showed president trump's polling get a small boost depending upon which one you look at. with this colorado decision that we should highlight was 4-3 in colorado relating to the 14th amendment. that is something that we will even -- that will further galvanize the trump base. from a practical perspective it is pretty limited. this is something that will be heard by the supreme court. most of the folks i talked to think that colorado's reasoning will be rejected. but the supreme court will have a very political year. we have to keep in mind that they will hear this, and they are hearing a case relating to

whether president trump was immune because he was president. they will hear cases relating to the january 6 the rioters. the supreme court is in a politically precarious skillet -- situation and that will only intensify. lisa: how can people trade this given that we have no idea how it will transpire and people say there is political risk. what does that mean? isaac: the year ahead exercise we have to do is such a silly exercise. beginning of october kevin mccarthy was speaker and we were talking about israel and hamas war. who knows what will change in three months let alone nine months. but we try to frame the winners and losers at the highest level from a republican white house and a democrat white house. and there are acute seems that you can sync your teeth into if you believe that republicans have a decent shot. things like seeing more m&a activity because he will move away from antitrust thinking

that the ftc and the doj will rollback some of the big bank capital proposals. things like getting fannie and freddie out of conservatorship. there are certain themes that are worthy of consideration. as we get ready for a long and exhausting campaign season. lisa: did you say hipster antitrust, what is that? isaac: what do you ki -- what to call new brand antitrust, the expanded school of thinking around antitrust and competition policy that has been advanced by the ftc chair among others. it is basically a broader framing of how they should think about this and trying to move away from the consumer harm standard. that has really been the backbone of consolidation theory since the 70's. lisa: thank you so much with hipster antitrust which it is a

popularized idea of an inherent will when companies get too dominant and this is coming at a time when you have the big getting bigger. that has been the story of the past couple of years. katie: the ftc has made some really interesting moves and taken some big losses but also had some big wins. i like to see how global politics seems to come for everything. woke antitrust. lisa: i do not think of it is woke, but there are popular spheres. coming up we will deal with some of the economic data. you mentioned the pce data could come tomorrow especially on thin markets and that could be interesting given how much will markets lean into inflation. katie: if it is a surprise in either direction given how firm the market seems to be in the belief that it is march that we will get the first cut from the fed it could make waves.

we saw what happened yesterday afternoon. we know that volume is thin. lisa: do you buy this whole zero day conspiracy? katie: it seems like a convenient bogeyman. i want to read academic studies. lisa: all of those people who are buying have a lift in the market as you see people buying the dip. 4771 yields really interesting remaining below 3.90, 3.88. ♪

the power goes out, and we still have wifi to do our homework. and that's a good thing? great in my book. who are you? no power? no problem. introducing storm-ready wifi.

now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up. plus, now through december 31st, eligible xfinity rewards members can get 25% off a storm ready wifi device.

lisa: three hours into the start -- until the start of the u.s. trading day and we can see a lift in the selloff which was aware selloff since september. the rod braced increase is a broad-based decline. the by the dip moment at about .5%. you can see across the board that left russell 2000 getting the biggest left. katie is alongside me. jon and tom took the day off and they will be off through the end of the year. i am interested in the fact that the russell 2000 out performs with the hope that it will be the one that leads things off. katie: we will see. we look at the chart over the past two months and it has been parabolic.

i will say on the s&p 500 even with the uke technical -- puke technical move lower. we are in spitting distance of a record high. the nasdaq 100 has gotten there. the s&p 500 is in -- is inching closer and closer. lisa: there is a lot of bodily functions going on. i know. it is true. in the early morning we try to keep people's breakfast. we are sitting in a bond market. it has seen a bid in and they lived with yields going higher. you pointed this out, the 10-year yield is still solidly below 3.90. two year yields up four point 37. people are pricing in a 92% chance that beds -- that the fed will cut rates starting march tells you how much the mood has shifted. katie: and then you think about the dynamic of the curve and the two year yield above the 10-year

yield. if we do get those rate cuts and they are pulled forward to march maybe that is a dynamic that leads us back to positive territory. lisa: or maybe we worry about the deficit again considering that washington, d.c. will become front and focus next year and the election season. in currencies we see dollar weakness with everything gaming including the euro. really flirting up against 110. this comes to a time when the ecb says they do not plan to cut rates and hold things said he -- steady as the data does not confirm that. u.s. officials are embracing the idea of rate cuts. under surveillance a possible media merger. bloomberg reporting that warner bros. discovery and paramount held talks to combine world -- combined two of the world's biggest media companies. the ceo's met in new york. warner bros. shares up about 1.1%. paramount global unchanged.

a very interesting tie up. hbo on one hand and all of the cnn -- a whole host of other media outlets. is it the content? katie: that is the big question. that seems like the motivation of a massive tie up. and given the size of these two companies and the combined entity how large that would be, the knee-jerk reaction is what kind of regulatory scrutiny will this run through. is it pointless to even talk about and really get off the ground, those are some big questions. lisa: honestly it is something that everyone has been talking about. there needs to be consolidation at a time where people are looking at streaming bills and saying what happened to the bundle. we liked it. how may subscriptions do you have? katie: at least 10. lisa: if you are paying eight dollars a month? katie: i do not want to think about it. lisa: this is a reason why they keep doing it that when the price increases come down the

pike. china set to halt exports of a number of real or -- rare earth technologies ramping up the competition. it is used for wind turbines and electric vehicles. china accounted for two thirds of the right -- of the mind rare-earth spirit it holds 85% of global mining capacity and coming at the same time that the u.s. is talking about the mother of all sanctions if china were to attack taiwan in some capacity. at the same time we are hearing reports that biden is thinking about increasing tariffs on electric vehicles from china. katie: and you think about from where these tensions are playing out in the flow of goods, but also the flow of raw materials such as rare metals. and even have the u.s. side of things, this is china's move today. president joe biden has been trying to generate the supply

domestically but you think about the huge role that china plays, it is a long time deal. lisa: especially if they have the raw materials. where else will you get them and who is a worthy partner as u.s. tries to shift more electric vehicles and some of these renewable energies. after a week of pushback at the rate cut trajectory. patrick harker saying that the central bank should cut interest rate saying "it is important that we move rates down. do not have to do it too fast, and we are not going to do it right away." basically we are in coming at latest look at the u.s. labor market. they are trying to push back, no one listens and they try to push back again and they are like you are right, we are going to cut rates. katie: harker will not vote on policy next year but in this environment with conviction so high in one direction everything bill scrap of fed speak is being parsed. lisa: doesn't really matter if

they caught -- if they cut in march, april, or may. if they cut the same number of times or having the same parameters in terms of disinflation, doesn't really matter how much or when? are people getting a little carried away and is the fed trying to push back on that? does it matter to the price action? if the fed is showing a willingness to adjust the restrictiveness to allow for a soft landing, doesn't that change the paradigm for the people who are worried about the fed killing the rally? katie: what is the difference between a month or two and will rate cuts really matter for this market? it feels like rate hikes did not matter. we are looking at potential records on the s&p 500. will rate cuts matter? or is not an excuse to rally? lisa: let us ask that to an investment manager. you agree that rate cuts really matter in terms of easing

financial conditions considering on the way up each hike did not tighten financial conditions? giles: i will take the questions whether this is happening too fast. i did market pricing for 10 years in the u.s. and in some instance they are barely 2% minimum. the spread of corporate bonds has tended to narrow recently. maybe it took more time than usual for financial conditions to get to where they should be to tame inflation, with the speed at which they are correcting makes me think that the market is getting a bit of head of things the point where it could make it harder and not easier for the fed to manipulate it next year. if the market goes too far on its own the question will be a lot more does the fed need to do

to make the conditions normal. there is a dialogue between the market in the fed and a lot of the time i am wondering if the dialogue is getting us to a reasonable position. katie: i want to talk about financial conditions and how one should measure them. you have these market-based measures of financial conditions showing significant easing over the past two months from this risk asset rally. i feel like we have heard from jerome powell and others that the thing to watch is real yields. what do you look at to judge financial conditions? giles: a very simple diagnostic that i have been using for a long time is to look at where the yields are in real terms relative to what is probably the u.s. potential gdp growth rate with consensus. that is around 1%.

when you get real 10-year yields getting closer to that, it is getting hard to say across the curve if we are still in risk trajectory. we are flirting with neutral functions if you use this very simple diagnostic. katie: if we are flirting with neutral financial conditions, what does that translate into in terms of rate cuts. does the fed have to ease so aggressively if we are indeed near neutral territory? giles: that is my point. i think there is something that is hard to reconcile and that is how the market is pricing because for the fed to do what it is doing right now. you need to be in a position where you can relay the risk. and it could be much worse than

the consensus but there is something that does not add up. you probably need to be in a situation where there will be a concession in the markets. if you believe that there is a little bit of a concession than the current monetary policy is still too restrictive. but it will still be a stop landing. and, as i said -- lisa: you do not believe the transitory story? that really inflation actually was transitory it just took longer than expected and it will continue to go down as a year-over-year comp and supply chain resolution issue? giles: i am possibly over correcting because i was in the transitory cap what i took the

time to acknowledge that we were faced with persistent inflation which probably will make them reluctant to say that inflation will know relies on its own. -- normalize on its own. we all learn from our past mistakes. i still believe that the burden of proof should be on making sure that inflation will not go all the way to 2%. it is not that clear today. i know it is a very simple view, but, if you dig into and focus on core inflation on the u.s. between goods prices and service prices you still have an acceleration in prices excluding rent and that is still an impression. it is not enough to say that all the engines of inflation are switched off and engines will

glide towards 2% without much additional effort. it is possible. my own forecast is that we will get to 2% inflation. but not with the current financial positions that are currently priced and by the market. because if we go that fast into re-creating the traction, i am not sure that we will have the slowdown in creation that we see for prices to really decelerate. lisa: this is why a lot of people are worried about deflation. thank you so much for taking the time as markets do run away with the idea of rate cuts now pricing in sick -- six rate cuts. i do wonder when you look at the disinflationary narrative, how much is secretly driven by low -- by lower oil prices? katie: there are plenty of ways to strip out the impact of oil,

all of the various measures. you think about how people feel inflation and what informs them. food prices and oil prices and how much it costs to fuel your car and heat your home. that just feeds into everything. lisa: that is transportation costs and driving to work. that is the goods disinflation side although that said we did hear from general mills and others yesterday that they are seeing less demand. it is just a hard economy to understand where the drivers come from. katie: you go back to the walmart ceo going to say expect deflation next year especially when it comes to the big segment of the goods that walmart is selling. it would be interesting to hear from more of the c-suite at some of these big-box retailers and beyond about what they are expecting in terms of own pricing. lisa: definitely something that we keep talking about. coming up we will speak to richard fishman on talks between

paramount and warner bros. discovery. we want to bring this to you that china does plan to halt the export of a range of rare earth technologies coming as a tit-for-tat escalates. we have that conversation coming up as we understand what the implications are in a time that is fraught with geopolitical conflict. oil prices are lower and stable with a lot of people wondering why they are not responding more to the houthi militant attacks on carriers going through the red sea.

is $14.63, please. $14 girl, what is you doing? but making smoothies is such a hassle. not with blendjet. what's going on? shhhh. hold that thought. just pour in some milk, throw in some frozen fruit, and in 20 seconds you've got yourself a nutritiou and delicious smoothie. mmm! tastes just like the ones they sell here. and for a whole lot less. i'm ruined. awww. kick your expensive smoothie bar habit to the curb. order yours now at blendjet.com. >> there will be consolidation and media among the streaming names. in the next few years. you have the ftc which is allergic to consolidation but that might change but it is inevitable. lisa: that was chris of cappelli funds can -- predicting consolidation when he joined us a month ago.

the media industry is consolidating. we learned that warner bros. and peer melt held talks about a merger. the deal putting the studios together and putting hbo and cbs under one roof. robert fishman at moffitt nathanson writing this morning " we hesitate to see the upside in any transaction for the paramount company has a whole especially at its current premium valuation given the pressure on the linear tv business. ." robert is joining us to discuss. that is my key question, what is the advantage to tying up cnn and cbs? robert: good morning and thank you for having me. i think the answer to the question is the desperate times in media landscape. and the companies are facing significant challenges from a linear tv perspective given the increasing rates of court cutting, linear advertising is in secular decline. all of these companies are

really looking to cut back. back to your conversation, trying to figure out how to get to the other side of the streaming pipit that they are making, but it is a challenging time. lisa: do you think this is a viable deal or basically the ceo's throwing in the towel and saying we will talk to whoever we can to potentially make this work? robert: every company is trying to figure it out. and i do think that combinations are likely to happen. do i think that anything will happen in the very near term? we have skepticism because of the regulatory landscape just reference. katie: something that i've been thinking about is how warner bros. what actually pay for this. as i understand it they have a hefty dead load. to think back to that massive merger between discovery and warner media from 2021. i would they fund this if it happens? robert: we are still waiting to

learn more details in terms of the actual terms and how it will be structured. clearly that they would likely look for some sort of stock component if not a significant stake in the combined company. we still need to figure out the exact combination. to your point, all of these companies are in a challenged position because of the debt loads that they have. and that has limited the flexibility that the companies have as they come through the streaming pivot that they are looking to make and trying to get the other side with the pressures of the linear ecosystem going against them. katie: if i were at the c-suite in lakes or apple streaming, should i be worried, not particularly just about this potential tie up, at the present -- but the potential consolidation? robert: from the digital company perspective in terms of streaming specifically, clearly

i have flipped the question around and say that the media companies should be worried to see how much bigger and stronger the digital companies are getting in streaming, especially with public reports that amazon continues to look to go more in sports. but i think the whole sports angle is an interesting angle because what warner bros. discovery does not have is a broadcast network and what we know they are looking to do a big deal coming up in 2020 to four will be the nba renewal. sports is a critical piece to all of this consolidation question and how that plays out and what oh -- and who owns what assets will have a significant impact on the future of the sports landscape. lisa: that was where i was going to go with cbs and wonder if that idea, the idea to get in before amazon.

if amazon was to get a hold of some of the rights to the sports teams with football in particular, would that be the death knell for the cable channels? robert: to some degree it is already happening. amazon does have the thursday night package and they have succeeded. we have seen real momentum in terms of viewership. this is a trend for sports. sports is going over the top. espn remains the pivotal piece to the sports ecosystem. and there has been a lot of discussion in terms of the timing of when they will take their flagship network over the top as well. all of these sports rights are critical piece -- ari critical piece to the landscape and the critical players play a part of that. lisa: it does not sound optimistic for a lot of the streaming channels that are not

amazon or netflix. i am wondering if the best game plan according to you is to put all of the repertoire and different shows together, give it as a streaming offer that is only one bundled stream and offer it like that rather than trying to complete -- compete with the content and pocketbooks of other players? robert: we do think that re aggregation is inevitable. it will take some time to play out. but this potential consolidation or whatever permutation that you want to throw out is one step closer to the end goal. katie: let us talk a little bit more about paramount. it was interesting to see this news yesterday about warner bros. when you think about what else you have heard and learned about. holding talks once again about a sale of the black entered -- television entertainment network and we will see if buyers emerge there.

can paramount stand alone. if it is not warner bros., do they need to be acquired at this point? robert: yes. i think the challenges at hand are real and growing. we hosted a conference a couple of weeks ago in terms of the future and the impact of the charter deal, the disney charter deal on the rest of the ecosystem. we believe in it has been reported that a charter deal with paramount is coming up but all future renewals given what we say essentially back to sports, the fact they are leaking premium sports rights including nfl. she will be a significant challenge going forward for paramount. and we think that renewal is going to come under pressure because of that. and that will be another way of the risks coming back to the company. going back to the advertising

story it is a difficult time and clear to us that television is in secular decline in terms of advertising it will put another significant challenge ahead given how high-margin these dollars are and the exposure that the tv networks and media business is and generating essentially all of their profits. katie: the talks between warner bros. and paramount are preliminary and might not lead to an agreement. let us say that it did that these two companies did combine. on the surface there is a lot of overlap. what could that mean for restructuring and layoffs? robert: i mean, there would be significant cost synergies involved in the combination, but in the report that we publish this morning we allude to the fact from an overlap perspective that the cable network business would be something with high

concentration. that is clearly something from a regulatory standpoint that we would imagine is reviewed at the very least. again in this potential speculative combination. and then you have the question what ends up with the two different studios, whether or not warner bros. discovery would be forced or opportunistically look to get rid of the paramount studio as well. lisa: thank you so much for being with us. katie, i thought you brought up a great point about the debt and why this is a key issue an obstacle to getting a deal done, how do they pay for it given that they have significant debt loads. i am looking at rauner -- at warner bros. and it is something like $45 billion. katie: that is a chunk of change and then some. this is really his ammo, growth by acquisition. surprising that we are pursuing another huge acquisition two years after what we saw with

discovery. but at a certain point think about how much debt, 45 billion dollars, it will create really interesting thought exercises about how this works. lisa: considering they need each other to get critical mass to be able to survive. we will be talking more about that landscape coming up considering this year was the first year in a very long time that the total of acquisition amounts was something under $3 trillion and it was a sluggish year. it should be more active as companies realize that it is now or never into the next phase of the cycle. coming we have citigroup with some really interesting thoughts on how to play a rally that has been turbocharged. ♪

>> you asked the question, where did all the bears go? >> i think there is optimism coming up. >> we are priced for perfection. >> i think it will get a lot more rocky and uncertain. >> most people do not think it stops. lisa: how did we understand a pause in the rally?

this is bloomberg surveillance from new york city. tom and jonathan are both off today. they started their year end activities early. really, how much can we really glean from yesterday's selloff? katie: you do not see any reaction in the bond market. that obviously tells you something, the fact that we were very overbought on a number of measures. it happened december 20 and that tells you something. there were not a lot of people around to be trading. lisa: if there is a dip -- that is something that you hear over at citigroup, expecting some volatility. does this set up a case of

people? katie: we get some data points in the next 24 hours or so, but i found a reason to care about what we saw. the s&p 500 is actually down. seven straight weeks of gains. premarket trading, there is some optimism coming back. lisa: you found the reason to care. going back to 2021. definitely it has been a streak to be broken. you did really good. we did get some initial jobless claims coming out. before the market, we get

earnings from carnival and aftermarket earnings from nike. this is what i am watching, but the corporate commentary is. a number of companies born about the landscape. we heard fedex talk about that and general mills talk about that. at what point d start to listen to them just as much as you have listened to all the other indicators? katie: we are talking about data when it comes to some of these big ceos. the state of spending in this economy, i am very excited about carnival. there is a lot of optimism that has been priced in and it is just amazing. lisa: carnival, the cruise line. it seems -- stewart kaiser at

citigroup joining us now. i want to start there. do you worry that you are not getting bullish enough? >> that is a good question. we have been kind of bullish the last few months. the fed feels like they have extended that window by being more respectful of the dual mandate and being quicker to come to the rescue. i think -- i do not know if we are more bullish, but it has a wider window to perform in. lisa: essentially, you're not talking about that big of a gain. you are expecting the economic data to come and strong. what would it take for you to boost that year end target? >> from my perspective, we have

a modest recession, so does that continues to get pushed out like it did through much of 2023? if the fed does insurance cuts, the market will be much higher by the year end. recession, and we get it or not, and what is the calculus for the fed? i would have said that the fed might be too slow to act because they want to loosen up the economy, but it might just add a little bit of juice to your point. katie: are you saying that the fed put is back or coming back? >> that would be the initial takeaway. my view would have been, they are not going to hike if it goes higher. the december suggested that maybe there is this third option where they could be doing insurance cuts.

i think that is extremely bullish for equities. equities are going higher. katie: we have been tussling with how much rate cuts will go higher. maybe a little bit of indigestion, but not at all this year. we had some turbulence over the summer. rate cuts. does the y matter when it comes to this equity rally? >> if they are cutting because they see real weakness in the economy, that is different. they decide, we are too restrictive. i think it matters significantly. lisa: there is a question about earnings. have we really gotten such good news on that front?

year on year, s&p earnings barely grew. a lot of what we have seen are pricing in year's gains that are expected to be robust. >> we are tracking down about 2% for s&p. if you asked us last december, people were throwing around 200 numbers. year in growth is not great, but relative to expectations, it has been very positive. we came into the year with people throwing around 185 200 situations and now we are going to print more like to 20. scott is at 245 for next year. not too worried. if i had to describe 2023, better than feared. not only eps growth, but a

broadening out to a large number of sectors. lisa: other people sticking with what has worked, including big tech. but you are taking a different tone. >> next year, if you get broader earnings growth, after a year, i think there is a fair argument to say that relative, it would make a lot of sense. they massively outperformed, so growth might be better than expected and the fed may cut without a recession. i have done a lot of stocks and i think that theme has legs. definitely s&p relative.

we think it makes a lot of sense into next year. katie: you are talking about longer teams. let's talk about 2:30 p.m. yesterday. a lot of people pointing to zero day options and the heavy put volume that we saw there. what you make of that? >> just talking on a regular basis, everybody was searching. maybe it is just low volumes late in the month. people throw options out there. it is always possible that a low-volume day can get you going. it does feel like once a direction is determined, we are going to go that way because there is not a lot of volume to push it back. could it be one of a few things that got listed?

some people said delayed reaction to fedex numbers. others said zero date options. we evaluate a lot and take some risk off the table. katie: that would be quite the delayed reaction. >> they are looking for anything. what has been bad news, that could have done it. equities move but other assets did not. i think that is why people were confused about it. it might just be risk reduction. we kind of rallied the first few weeks in december. maybe we are having that again. lisa: were you out there yesterday, trying to get excited?

>> i think it makes sense, if you believe the narrative that we have here. lisa: all the volatility, there is a high risk of it not happening. >> it is possible. if you get told that rates are going lower, you just missed a 20% rally. if you believe we are not going into a recession, there is the potential for money to start to bleed into the market. i think it improves the risk and reward. you just want to continue to run equity risks. you need to be really cautious. lisa: happy holidays and happy new year. i do wonder, especially as we

are watching economic data come out, given the fact, if you are looking for a bogeyman, that could do it. katie: you can find one in a little over an hour. but it really hinges on the labor market rate. we get them every single week. maybe takes some of the excitement out of them, but as we try to map out this labor market, it is very important. lisa: a lot of people have been trying to understand them, but every week they come out. taking a look at markets, you can see a little bit of a lift. on the s&p coming units are where they were all morning. crude is a little bit lower. that is despite some of the concerns in the red sea.

what i am watching right now are some of these earnings coming in and trying to understand what is going to pass as some kind of weakness. we will see carnival coming out later. we will see nike at a time where it has been mixed. katie: has been hard to get one narrative. they have been particularly important as we stare into 2024. if you have been missing on your guidance, you have been punished in this market. lisa: the used car industry is so interesting to me. whether this is the deflation that you are talking about -- it

has not played out numbers the way i expected. katie: it feels totally broken, but hopefully that changes. lisa: are you hoping to buy a house? katie: always. he said: a market that is incredibly optimistic. we brought forward the forecast for the s&p. ♪ (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

it still does. what can you do with spy? ♪

>> the arab states seem fairly reluctant to join in on the american effort to suppress a group that is actually even more -- watching a short range missile.

this will be a huge problem because our option are not great . in terms of deterrence, we are past that lisa: speaking with us yesterday with a fascinating point, talking about the connection between the red sea and recent attacks. the lack of involvement to try to squelch some of these attacks. we are trying to parse through the geopolitical risks. senior advisor at the center and former senior u.s. official. i want to start there. how much do you see this as a real issue? >> good morning. i believe that is true, but at

the same time, saudi arabia is unwilling to engage in a conflict that could lead to further escalation against saudi arabia cell. they did not support saudi arabia or the emirate with defensive weapons when they were last under attack from this organization. lisa: how do you see this ending ? at the same time, the militants have pledged to continue the attacks for the foreseeable future. >> they are likely to assess what they see terms of the maritime coalition and how they can interpret will and fortitude. they pertaining nbc led by a senior officer in yemen, and he is providing counsel, likely on how to handle the west, but they

are not going to seek a catastrophic risk bonds. hundreds of missiles and hundreds of air defense missiles and extraordinary array but inevitably, they will seek to test our fortitude. katie: we will talk about that little bit more. less is considering strikes. lisa mentioned the reluctance there, but when you think about what the west can do, do you think going on the offense is the right tactic to take? >> if a drone or missile is fired and shot down, no retaliation is taken but if it strikes a ship and there is significant damage or deaths occurred, proportional attacks would take place. there have been proposals, but in order to deter these attacks,

multiple attacks what happened to be set. i think there is concern that would risk upping the letter. katie: let's talk about iran. they continued to escape any retaliation but in this scenario, what would that retaliation look like? >> against iran, very little. for iran, it has launched its proxies throughout the region and they are seeking to place israel and the u.s. under siege and to demonstrate their strength and iran just needs to stand back and watch this play out.

lisa: we still have the war going on. antony blinken said it is clear that the conflict will move and needs to move to a lower intensity phase. can you expect what you expect to see this conflict? >> they are likely up negotiations and focusing on the central area. this remains a difficult challenge. lower the intensity, the longer the conflict. but inevitably, there will be a pressure to drop intensity, given the catastrophic damage. approximately 1.9 million of the 2.3 million people who live in gaza are now displaced. katie: let's talk about how what is happening in the red sea

plays into what we are seeing. does this threaten to prolong the conflict there? >> i believe the conflict has already widened. it has brought in all iranian proxies. the economy has shifted throughout the region. countries are spending millions of dollars on defense and shipping adjustments. this is now a regional conflict, whether we are willing to categorize it as such. katie: china saints of president biden that there are plans to unify with taiwan, but how do you think china is watching the development in the red sea right now? >> approximately six vessels. but they generally only protect chinese related shipping.

there is evidence that at least three of their muscles received sos cause from those under attack. i think they will avoid being drawn into what they would see as a military engagement in the region. russia has a smaller presence and will most likely follow the same path. lisa: do you have a sense of how much has been eroded given some of the messages we have heard? >> we are in a situation where an iranian proxy has received a vast amount of support. they received only condemnation,

so there is a sense that we get to pick and choose situation. it is an opportunity to reset the dynamic, but i'm not sure they are eager to engage in the involvement. lisa: if the u.s. does not have the ears, what is the evolution of this? how does this evolve into something other than a humanitarian mess? >> there is no such thing as an after scenario. it will take months to constitute an israeli government that is willing to deal with the palestinians. it will take months. we have to come up with a security force and a humanitarian the day after.

it will take time to see how that proceeds. even if the violence were to end today. lisa: thank you for taking the time to speak with us. this is heading into next year. the u.s. has not always been able to speak with one voice. the fact that all washington lawmakers have gone home for holidays. katie: radiant back to that pole , it found that it is quickly deteriorating.

they are concerned with the numbers. lisa: it is a high-frequency view. whether there have been any cracks, the answer is no. trying to get a sense of if there is any bearishness left. this is bloomberg. ♪

what 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. c'mon, we're right there. c'mon baby. it's the only we need. go, go, go, go! ah! touchdown baby! -touchdown! are your neighbors watching the same game? yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs.

i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with t-mobile 5g home internet. catch it on the xfinity 10g network.

lisa: we are still trying to figure out what jay powell was thinking when he changed his tune. was it him being tired, him being real and not realizing it would cause a market reaction? we are parsing through the fence speak over and over again. we are about an hour away from some key economic data. we tracing some of the losses yesterday. pretty much everything down. nasdaq even more. the rest of 2000, honestly, this has been one of the stories underpinning all of this.

katie: that is the poster child. with the year maturities valuing out the wazir. we did have a little bit of a hiccup. it is rated at about 1400. lisa: we will see if we get there. even with the stock space, we did not see it in the bond space. two-year yields, 4.36%.

we still see a severe curve. when does that start to shift? people expect the fed to cut rates but we are not there yet. this implies a more inflationary picture. katie: it looks like it was the 10 year going up that would drive us back to positive. lisa: trying to understand the landscape heading into 2024. a megadeal could be in the works. warner bros. holding talks with paramount. the deal still in a preliminary stage.

that is what we heard from axios. warner bros. i up. it is basically a meeting of disparate companies. katie: it has been a rallying cry. maybe we are truly seeing it happen. think about how it has been muted. we are seeing it in a big way. maybe we are going to see it. lisa: we will see if they can actually pull the trigger. a pursuit of higher returns. this is coming on the heels of another announced. meanwhile, the other side of the same coin, morgan stanley

discussing a potential move into a private credit fund that would include capital from external investors. the reason why i say two sides of the same coin, how much is it? either you are all in or you are all out. on a regulatory standpoint, it is just not economic. katie: i think it is so interesting watching jean frazier in action. last week, it is not like they were bit players. it is also big for these asset classes. lisa: considering raising tariffs.

reports saying that the white house and other agencies are set to hold a review. roughly $300 billion of chinese good by next year. it would serve to insulate the industry. this could make it more economic but it also makes biden the tough on china heading into the election. katie: that is tough to do. maybe this is revealing something about myself, but you forget how dominant china is when it comes to the global market. look at some of the market for next year. they are expected to count 60% of the new ed sales. it is already kind of hard.

lisa: they took a look at china addition and said, they are really ahead of us. understanding how much everyone has grown in the towel. joining us now, the fixed income cio. saying let's wait and fully understand where everyone's minds are at. are you throwing it in, in terms of going full bowl? >> i really am not. a month ago, powell told us that he might not need to raise as much. i think the market needs to recognize that they are easy for him right now. we have eased a lot in the economy is going to respond to that. the fed is likely to cut year.

right now we are anticipating 50% of rate cuts next year. i'm not sure that the data once that yet. i am a little puzzled. he threw caution to the wind. he announced, mission accomplished. so yeah, i'm not throwing it in an. i'm not going all in. i think that the speed of the move has much more sense of markets trying to predict the reaction function rather than market trying to predict what is happening in the economy. katie: i asked you about that reversal and you said you were baffled. i liked that comment because it was so candid. has the fed speak helped to

clear anything up? what is the communication message of the central bank right now? >> what is not clear is what the fed is trying to do. after the last three years or 15 years, did he not know what the market reaction was going to be? i'm not sure the fed -- that subsequent fed speakers have had the impact that they wanted to have, but at this stage, i'm not sure what impact they wanted. they clearly wanted a rally. are they trying to fine-tune the extent of the rally? this has been deep into market and way out side what i think markets need to be doing. katie: the fed is penciling and

75 basis points of cuts. that seems like a recession to me. where do you land? >> i am going to go on what the fed is saying. 50 to 75, i can see that. there is enough uncertainty to make that reasonable. for 150, setting as quickly as the market anticipated, you need to have serious recessionary signals. i would really question the massive rallies that we have in and risk asset writing credits and so on in fixed income markets. there is some cognitive dissonance that we are seeing. this feels -- the fed -- they

are just going to cut rate. lisa: how much conviction do you have to lean against some of the euphoria we have. >> another massive rally. we are simply not chasing this round. lisa: thank you for being with us and for your realspeak. have a wonderful new year and holiday. this is according to some consternation. you are seeing a response. katie: the latest meeting was delayed.

interesting to see crude reacting to this. it will be interesting. maybe some reasons why we can draw our own conclusions. these are all questions i would like answers to. lisa: these are some of the members of opec-plus. if they keep producing more, it could potentially flood a market. it has been a supply story.

katie: all the geopolitical tensions in the world. supply cuts, all of this is playing out. lisa: take a look at what we have been doing in the u.s. taking a look at gasoline prices, this is an interesting litmus test, given what came out yesterday. that is from close to four dollars earlier. if you are joining the program, following the worst one-day selloff going back to september.

yields were lower. just marginally higher but still well off season highs. a lot of pushback with rate cuts. this will be a question whether it is sustainable. the philosophical difference is people who are saying that it is in response to inflation. even without weakness, we can cut rates. it is the battle of transitory all over again. katie: this has been challenged. just looking at what is motivating these rate cuts and what we are going to get. six for cuts. that looks like a recession. that looks like more than normalization.

six rate cuts in one year would be something to behold. lisa: it was very confusing but jay powell said and then john williams said, there were not really talking about rate cuts. it raises this question of what message are you trying to send? coming up, not in a tussle, steve's speaking to us after we get the initial jobless claims. ♪ (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

it still does. what can you do with spy? ♪

>> the where it is that they expect a better 2024 even though half of the average level -- we were in a. , and it did not. it feels like we keep waiting

and waiting. lisa: mergers and acquisitions down roughly 25% from a year ago. bankers confronting a bleak season. it is likely to pick up. that is what we are seeing right now with some deals being promoted and floated. a senior partner on sent. what makes you optimistic that we are going to get some kind of resurgence? some sort of resurgence at a time when people cannot borrow as easily. >> they can borrow, the question is just at what cost? interest rates were going up and you did not know where the top

was. a lot of boris and ceos were not prepared to make the leap, but now you say this is the top and it is likely to go down a few cuts next year. i think you're going to see a lot of companies, many that have plenty of cash on their balance sheet. they are not borrowing all that much. they are going to go back into the market. lisa: is it going to be across the board? >> it will be more board in geographies. i think it will be a lot of sectors. obviously, media can validation, but the energy and natural materials sector, and health

care. even in the worst of times, you see health care transactions happening. with so many pharmaceuticals coming off of patent and going generic, the big pharmaceutical companies have to constantly refill their pipeline. there are -- the pipeline is limited, so they have to go out and acquire these companies. that is what you saw with pfizer acquiring siege and. katie: you mentioned that it will not just be the u.s. you take a look across the globe , falling under the $3 trillion mark. the reason we keep hearing is that there was a lot of uncertainty in the world, but looking at 2021, there was quite

a lot of uncertainty. what is the difference between 2021 and 2023? is it just interest rate? >> it'd different. not knowing how high interest rates would go. second was the fact that there is so much regulatory scrutiny. deals are getting done but it is taking longer. the biggest our ukraine and gaza. there are other conflicts around the world, all of which depress the need and the interest in doing further consolidation. to some extent, they are factored in now.

i think we are going to see more deals and a number of sectors and geographies. katie: you have a unique perspective on this next question, but given the antitrust, it feels like the ftc has been when, but also losing. how are potential merger combinations -- how is that conversation involving? maybe you would just go for it and take your chances versus we are only going to do this if we know we can get it through the active >> a lot of boards and ceos were saying, we do not want to do it unless you know we can do it and do it quickly. now, people have seen whether it is pfizer see jen or microsoft activision that it is going to take longer.

they factor that in. they will go forward, knowing that they might have to litigate , but with a sense that in most cases, they will prevail. while the ftc would like to change the laws, the federal courts have been pretty good at pushing back on them. lisa: is there a new urgency to merge? the economy have allowed them to arrive and they have been rewarded much more. >> you are hitting on a very good point. with generative aia, competitors will have a hard time doing that level of investment. they needed to put in

infrastructure. i think we are going to see a lot of industries looking to invest in technology, and that will be expensive. lisa: i have to ask you this question. there is a big debate about whether chatgpt will take away long hours of associates that have to go through all these deals and whether that could make it bigger experience. and if that is the path forward, do you see that happening? quest we have seen that in litigation, but in terms of document review, technology makes it easier. the reality is, clients do not pay as significant fees because of drugs work. they want the creativity.

they want the expertise. the more you can devote your attention to dealing with issues, dealing with problems and advising them, the better it will be. it is a better existence for particularly the younger lawyers do not have to spend 16 hours a day with -- doing not very interesting work. katie: have you heard of hipster antitrust? i am a little obsessed with it at the moment. do you think it is a new way of thinking and a new approach? >> they might be, but i am not convinced yet. lisa: do you like this idea that there is some sort of philosophy? i do want to get your sense of what you think we'll have the biggest deals this year, given the fact that it seems like we had to more activity than we got this past year.

>> number one will be energy. i think that is where we will see the consolidation. long-term outlook is not that good. did companies need to consolidate. lisa: thank you so much for being with us. with us on studio. we did get a number of deals, including another one that we did not mention just crossing. blue origin and cerberus are bidding. opportunities may be in the space consolidation space. katie: i do not know how much opportunity there is there, but it felt like bull market behavior when we had all these billionaires launching their rockets into sub-orbital's case. lisa: some of the spacex expiration and satellites have been a raging success and have

led to a lot of dominance with potential ipo. i'm sure a lot of bankers are looking forward to a more active year, going back to 2013. coming up, we will be speaking with securities to understand what happened. a year that will be pocked with uncertainty, political disruption and geopolitical risk. in markets, you are not seeing that geopolitical pressure or other uncertainty anywhere in sight. up about .5%. lower after that news on angola. this is bloomberg. ♪

(sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

the power goes out, and we still have wifi to do our homework. wand that's a good thing? great in my book. who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up. plus, now through december 31st, eligible xfinity rewards members can get 25% off a storm ready wifi device.

♪ >> with the fed taking it slow for brick there was the risk of re-inflation emerges. >> i don't see any meaningful catalyst that could break us out of it really sluggish growth backdrop. >> we might ultimately get a mild recession categorized as a

soft landing but i think it is really dangerous landing at this point. >> we don't need the consumer to be in recession for the u.s. economy to be in recession. >> we think we ultimately end up having a mild recession. announcer: this is "bloomberg serveillance: early edition" with tom keene, jonathan ferro and lisa abramowicz. lisa: everyone starts to wander ok, is the labor market really all that strong? good morning, this is "bloomberg surveillance." tom and john are both off on a well-deserved break into the new year. i'm so lucky to be alongside katie this morning as we get you through the day. we are about 30 minutes away from initial jobless claims that his key at a point were 70 people are hinging there on a soft landing. katie: when consensus is so one-sided, when the market is so one-sided, meaty we got a 1% move lower yesterday. feels like every single data point takes on more importance and when you think about how

finn that it is right now it could definitely lead to some of these charts. lisa: stocks fell off a cliff to have their work daily loss going back to september at a time where there wasn't a catalyst. you heard talk about the need to cut rates, but is it delayed reaction which is what we were hearing? at what point are we seeing some kind of disruptions under the surface that give some people --? katie: it is interesting to see how broad-based it was. it was broad-based on the way up and on the way down but overall the fact that you have seen this rally brought note -- broaden out over the past two months, it is not just those top seven names. that has been a rallying cry saying this one has momentum. lisa: yesterday we heard from

fedex, weaker than expected forecast on volumes. people aren't sending as much and aren't able to charge as much on the express offering. you also heard from general mills. i guess lucky charms sales are down so there is a question it the appetitive people. today we get nike. katie: i will say everything about this economic cycle, about this market cycle has been strange. consumer sales are lower on the year. you think about how much of the conversation has been dominated by inflation, really conscious of how high prices are right now and yet you with inky would be a winner. not this year. lisa: can see the s&p up about half a percent right now as we head toward the open, yields

just marginally up but definitely the bid coming into the bond market as time goes on. solidly below 3.90, thinking about some of the peaks that we saw in late october of nearly 5% on a closing basis. just shocking to see. more than 1% decline on that 10 year yield. we did see that selloff accelerate after news angola was planning to exit from opec amid that spat over oil quotas this according to the local newspaper there. we have more reporting on this and we are seeing a response in market as people anticipate more supply coming to the floor. we set the fed shot all the bears. not all of them, one still remains, and peter hasn't been bearish but maybe starting to get more so. you're starting to feel more negative. why? >> i thought this could run a

little bit longer. i haven't like how the markets have traded very much. you continue to have this rally in the small caps, small banks, it has been a phenomenal rally. nasdaq 100 has not done much since early december, and the way things are traded, i think yesterday was a precursor that instead of buying the dip i think you're supposed to sell into this. a little bit of pressure on the big caps coming into the new year. lisa: do you think this is going to come from people worried about recession? do you think this is some sort of pressure selling that is overwhelming any of the narrative that people are trying to come up with on the back end of them? >> as you said come all the bears got shot so that money got fourth in the market people are already anticipating the year-end closure they are going to get, and i think that is just

overdone. people got too excited. if there are selling pressure, the market caps are so large it is very difficult to form them. one thing that the triggered me, i kept reading how yesterday everybody wants options for why we sold off. if you go back, three of the last four days, we have these weird spikes which are largely due to expiration options. it tells me everything is wrong and looking for an excuse why they were wrong yesterday and that is why there is more staying power to selling pressure right now. katie: just a joy line under the point you're are making, are zero day option just a convenient excuse or is this something that maybe we should be worried about? >> i think something is there every single day. as always when people are bullish they are going to ignore why things might have happened i

talked to a lot of clients about for a while, we had this weekly option trade. people would come in monday morning to buy individual stocks , and it would rally into friday. but that was really difficult to do from a put side. i think it is just as easy to push things lower as higher and that is what people forgot and i think that is what we are looking at right now. >> i haven't heard eight stocks for a while, that is a splash from the past. let's talk about the bond market and what is going on at the long end of the curve because they understand what is happening at the front end with two-year yields, really just a proxy for monetary policy expectations, but like lisa mentioned, 10 year yields, 1% lower than october, what is being priced into the long end of the treasury curve right now?

>> the fear of missing out, almost. i think right now people are like, well, i could buy my 5% or whatever it is and make some money, but what happens if yields go all the way down? you seen that, i like closed-end funds and immunities, and we are seeing that really shrink. people are saying what if we go back to sub 3%? i'd better bison yield right now. so again, it is something i want to start. we should be back about 4% on tens. i think it is foam a. what happens if we are back to 3%? i will smack my head and say i miss that one chance to own a 4%. lisa: see you are leaning against this why? is this a fear of reigniting inflation on the heels of war,

did a financial conditions, or because of supply chain disruptions and other potentially inflationary catalysts? >> i think the inflation argument is still somewhat there. i was in the deflation camp all last year and now people seem to have gotten a little too comfortable. i am worried about the supply chains, the panama canal is an issue. now the suez canal is potentially an issue. and then i really fought back on the argument about two months ago about treasury supply and the cost to the government of higher yields. i said that is not a today type event, those things take a long time to play out. that's one reason i got very comfortable being bullish. but these things are happening. it doesn't change the trajectory of how big a part of the deficit that spending is going to be, maintaining interest payments. i think people get back to

focusing on that. d.c. will do a good job reminding us of those issues. lisa: such optimism that they will be able to remind us comfortably. you say you are leaning against both the bond and the stock rally. how much so? is this going to be a top blow off that people are expecting to start the year, or is this something deeper? >> it is more that. you want to be cautious, maybe take advantage. i don't see much more than a 5% drop, and i am looking for things to own. i really want to own energy stocks. i don't love oil itself but energy stocks are really encouraging when your last guest saw that is being a top candidate for m&a activity. i want to be leaning heavily. unless it does yes to get about the banking side of things, less enthusiastic about russell 2000. i do like the energy and a still lie commercial real estate, to be honest.

katie: some really brave, interesting predictions. when it comes to energy, really interesting sector, down 4% this year, following two years of double-digit gains. just to meditate a little bit longer on the bond space, you mentioned that this grab for duration is a little bit misplaced. are you more comfortable with credit risk or duration risk at this juncture? >> i'm very comfortable with credit risk. on the investment-grade side of things there is an ongoing thesis that people are going to overweight investment grade credit versus treasuries. you are getting much better signal to me a lot of these u.s. companies that they did such a good job of issuing long debt. the other end of the spectrum, people have been so bearish especially in the leveraged loan that money is going to start coming into the market. i think a lot of money got allocated to distressed investors. those distressed opportunities aren't coming up so they have to change that market. you get this really nice squeeze on credit, you get the high

quality doing well. i think there are signs that is going to happen. i actually like credit risk better than duration risk. lisa: thank you so much for being with us, have a wonderful new year, happy holidays. if you are just joining the program we do see a lift across the board as people retrace from yesterday's loss. we saw the worst losses going back to september and it was broad-based. today we have seen broad-based gains, the s&p up half of 1%. i do want to just follow up on the story about angola leaving opec. you ask the question, katie, was this the first opec country in a long time to leave? a friend of this program puts out on twitter not a huge surprise given how it has been going for angola. indonesia left opec in 2017 right after the formation of opec-plus and qatar left a year or so after that so it is not unprecedented in terms of just

the absolute exit. we are seeing crude continuing the decline down 1.7%. reportedly, angola is leaving opec following 16 years of membership over a disk over production quotas, so having to do with wanting to produce more. >> with angola finally leaving or announcing they are going to leave, membership in opec will shrink to about 12 nations. like you said, this is been a really tense time for opec trying to figure out where they want production to be, what they wanted to look like as crude seems to only respond to supply right now and we know that demand hasn't exactly been there in the way that it was expected coming into 2023. lisa: and is it demand from china at it doesn't even need any of the oil from overseas?

the folk of the imports from the opec-plus nation will be from china. we are going to keep an eye on this especially given that oil has been one of the biggest surprises this year. coming up, we've got steve or should a reacting to jobless claims -- steve ricchiuto. talking about the dovish pushback. his comments help confirm that fed officials are anxious to cut as they are increasingly worried the economy will enter recession. from new york, this is bloomberg.

♪ >> i think the notion that xi jinping is determined to pursue reunification with taiwan is not new. beijing continues to exercise what you could call strategic patient on this issue and that is important because if that changes, it does, i, increase the risks around taiwan.

for now, those near-term risks are manageable. lisa:lisa: that was a reacting to an nbc report that chinese president xi jinping told president biden that china plans to reunify with taiwan. lindsey graham having some fiery words about that commenting on the report saying he would draft preinvasion sanctions from hell to impose on china if they take action to seize taiwan. we are hearing about potential sanctions from this administration this morning. joining us now is the senior fellow at the china gail. i just want to get your sense of how much of a threat the nbc report on what he asian pink told president biden really was. >> i think this is really a tempest in a teapot. the things xi jinping said are absolutely not new. the chinese have repeated it on almost every occasion that

taiwan will be reunified at some point, so i don't think anything that the chinese would have set on this issue would be considered new by people who watch this issue. maybe by people who don't watch this issue they would have been surprised, but i do think the chinese are kind of reflecting some concern that u.s. policy is shifting toward a support for a kind of permanent separation with taiwan, and that would be may be something that would be causing them a little bit of alarm and may have added some um ph to this statement. lisa: they added a lot when you talk about the potential prohibition of exports of certain rare earth metals that are really crucial at a lot of electric vehicles. this comes as reports to the administration in the united states are thinking about possibly increasing the tariffs on imports of certain goods having to do with electric vehicles from china. is this a really material

increase in the trade war that we saw a really heat up a couple years ago between china and the u.s.? >> the chinese have already announced in a couple of other occasions some selected restrictions on exports of rare earths, trying to show that they have cards that they can play in this trade war. i think what we are seeing from the biden administration is a desire to adjust some of the tariffs that the trump administration had imposed on china and which the biden administration left on, so ev's are a regular concern because of the desire to ramp up manufacturing in the u.s. of course they are also a big concern in europe so i think that is what we are looking at. certainly this is a hugely successful sector for china so they don't want to see this tariff in position happen. probably they are resigned to it at this point in this is probably just a lot more signaling than something that is unexpected. katie: what about when it comes

to sanctions? to go back to it senator lindsey graham said, saying that he is intent on drafting preinvasion sanctions to impose on china take action is taiwan, i with the sanctions be received, and with that actually deter china in any fashion? >> i think it is really important that we try to separate the taiwan issues from the trade war issues because they are very different and people have a tendency to try to lump all these things together, especially up on capitol hill. the issues around trying to draft preinvasion sanctions has been talked about up on capitol hill for a while. it didn't work with russia and those sanctions were probably much more dramatic than anything that could be imposed on china in terms of trying to get the rest of the countries in the world to go along with it.

of course, sanctions regime only works to the extent that you can also be other countries to join in, so this is an effort five people to try to show the chinese that we really don't want them to do this. but again, the summit was very successful, the summit in san francisco between president biden and president xi in trying to tamp down this issue and it seems now like there is a desire in some orders to try to ramp it up again and i think that is unfortunate. we really do need to see some stability on this issue going into what is going to be a pretty tumultuous year in u.s. china relations, i think. katie: to that point, the summit was perceived as going well and i think that is part of the reason why there was surprised to see this report from nbc yesterday when it comes to china's intentions with taiwan. you made the great point that this is necessarily new rhetoric from china when it comes taiwan. >> absolutely. the summit on taiwan, my

understanding is the two leaders didn't really spend a lot of time on that issue and that there was a tacit agreement to try to work to manage this difficult issue. we have the taiwan election coming up on january 13, that is going to pose tensions and some difficulties in the relationship. there will be an inauguration in may and there is always a lot of back and forth between the u.s. and china on how these issues will be handled, and i think what we are trying to get from the summit was that these issues will be handled carefully, and that was the message that was trying to be conveyed and now we've sort of got back to this increased hype around a possible military action, which i agree with michael hersen, i don't think is imminent. lisa: given the fact that we are dealing with a very political year heading into the election at the end of the year, how can

there be any kind of diplomatic discussions between china and the u.s. with any conviction if it is not clear who is going to be in the white house in 2025? >> this is an issue for diplomats working on relationships with pretty much every country in the world right now. all countries are kind of looking at our political situation and wondering what is going to have an wondering what kind of commitments they can make with us in the coming year, so it is difficult. probably especially difficult china. the only thing i would say about the u.s.-china relationship is that it is less likely probably to turn on a dime with a republican president, be it trump or anybody else because there is this kind of bipartisan approach to china which is quite hawkish at the moment and probably won't change no matter who comes into the white house. i think the chinese do know that, so they are looking at the coming year and then the years

after at sort of how to manage what is going to be a pretty difficult time, i think. katie: you bring up a question that i think about all the time, a lot of these issues go back years and years, they outlast any one administration. being hawkish on china is very bipartisan at the moment, and with that in mind, how much does it truly matter, how consequential is that who is actually in the oval office? susan: you mentioned that being hawkish on china is bipartisan. i think it actually goes a long way back to almost every issue we have today with china being around for decades, especially on taiwan. if you go back, i've been looking at historical records lately from the carter administration and every single issue was talked about at the time of normalization between the u.s. and china in 1979. we are 45 years on from that and

i think it is just going to be two big countries, huge economies, important players in the world and it is just going to be so difficult to figure out how to manage all of these issues. i think the most important thing is that whoever is in the white house should be expressing confidence about the future of the united states, our ability to be resilient and maintain our competitive edge. i think that is the most important thing. lisa: we have been hearing a lot of the tit for tat and one person after another set this is showcasing the intentions that have been in place for a long time. katie: i can't decide if it is comforting. to go back to that question of how much does it matter who is in the oval office, a lot of these issues outlast anyone president.

i bipartisan it is, the approach to china, it is going to be a very interesting presidential cycle but a lot of this is outlasting them. lisa: we are about four minutes away from a key initial jobless claims. there is a lien's of u.s. economy labor market continues to hang in there, we could see the lift maintaining 48 basis points. 47.72, yields marginally higher. oil declining on the prices of angola.

(aidyl) hi, i'm aidyl, and i lost 90 pounds on golo. i struggled with weight loss and weight gain my entire life. with all the yo-yo dieting i did in the past, i would lose 20, 30, 50 pounds just to gain them over and over again.

in one year, i've lost five sizes, and i'm on my way to lose another three. with golo, i can do it. (announcer) change your life at golo.com. that's golo.com.

lisa: just minutes away from -- just seconds away from key data. setting up the rocket action, you can see a lift ahead of that as people we think. about .5%. what i am looking for here is a sense of initial jobless claims coming in. they are below expectations once again. that is marginally from a month before. that is the unrevised number. we also get a slew of other data

coming in a little lower than expected. the actual was 4.9%. not much change on individual components. s&p futures continue their lift. nasdaq futures up. paring some of the earlier gains and really edifying this idea that the economy is strong. you are not seeing a slew of people filing for initial jobless claims at a time when the economy is still doing well. katie: the market has been teflon strong. they are deciding where they want to go, but we keep talking about the resilient silver and labor market, and it does not seem like opinion that is really budging.

lisa: the business outlet came out lower than it acted versus the expectation of the declining. how much is this? maybe something that different sectors are seeing. katie: it feels like you can paint the economy with the same brush and there are pockets of different strength. maybe we do not see it on a broad economy wide level, but we have to to look at specific sectors to see the effect of those rates. lisa: to talk about specific sectors, one of the red sessions has been in the shipping area.

i want to touch base with lee, a senior analyst. i want to understand how much we could be dealing with supply chain deception again. >> i think it will be more of a hiccup. rates are rising. they are up about 9% sequentially. a lot of that is driven by singapore -- from china to europe. that has been up pretty significantly over the last week and up around 50% since october, but we need to remind people that in 2021, it used to cost $14,000 and was a. rates are down significantly,

but we are seeing a pounds. what is going on in the red sea? guessing and will not be long-term in nature and there will be a resolution in the coming months. katie: if you see -- does this touch the consumer at all? >> absolutely. they will try to push that cost onto the consumer, but there are a lot of teachers that go into a container. we are talking about shipping certain items. a lot of stuff is usually lower value stuff where usually it is shipped via air freight. lisa: thank you for being with us. i want to get to the economic data. people economist at mizuho securities.

jobless claims came in below expectations. you are seeing a real man for manufacturing. is that of concern? >> there are people talking about the grassroots sentiment that tells them that is a problem in the underlying fabric. i think it also gets to the fact that expectations are an issue. when i talked cfos and ceos, i get the same message over and over again. the economy is not going to do well, but my business is doing really well. timeout. everybody tells me the exact same thing all thing the world

will not do well, but maybe that is a disconnect. and moving lower. everyone says, we are laying off workers but then you see that they had repositioned their workers into different parts of the business. lisa: so the risk is actually tuning celebration in the economy that people are not expecting? >> look at the blue-chip average. 0.5%. that is the closest you will get numbers to ever say negative gdp before you print negative gdp. recession is priced in to the structure.

this is exactly what happened after the regional bank situation. then we had that major summer selloff. there certainly needs to be a correction in some of these markets to reflect the fact that this economy is not rolling over and playing dead. eventually, they have to adjust to reality. katie: 2023 was definitely going to happen and then they cited abandoning them altogether. this is the story on the terminal right now. some of the last remaining who are still calling for a recession, but does the idea that rolling recession are what we are seeing -- is that how we should be thinking about the economy? >> i think the economy is

relatively healthy. i think the fed is somewhat uncomfortable moving below 4%, but the fair value trading me, if you assume the 2% target, it is three and three quarters. no one is going to be selling this market into the end of the year. what you are seeing happening, continuing claims going lower. i do not have the details, but i'm assuming because of inventory. better growth going forward. we latch onto the one thing. by the end of the day, we will realize it was not worth pushing. katie: we have seen inflation coming down from one generation highs.

everyone seems to be abandoning their recession because. is it safe to say that they have just about landed and have pulled it off? >> we were never going to have a hard landing. with the equity market corrected , you had company is being forced to lay off workers and that never happened because the fed kept saying that we were going to cut rate. you never had that adjustment taking place. the adjustment in terms of the macroeconomic story is why the fed did that through forward guidance. in terms of whether they will achieve inflation numbers, that is still open. when the average inflation target -- given the concept of the fed and not wanting to get back, they are willing to accept 3%, but the problem is that it

is much too expensive. the reality is that the fed might get us to a hotter landing, but the markets time to adjust to that, and they have not. lisa: why are you bearish if you see the economy doing better than expected? do you think there is this inflationary underlying pressure and that there will be a meaningful selloff in bonds as people understand that? >> there is a global deflationary force that is incredible. there is an inflationary force that is incredible. markets never took on board the 9% hike in inflation. the fact that we have come down to these levels -- have to ask a question. that is the critical question and determines whether you want to be in the bond market.

you saw that in 2018 and during the soft landing. they took ease insurance rate cuts. we did not have the cyclical tightness that we have. today, we do. we had a disruption of markets. i think if the fed were to take insurance rate cuts right now, the dollar would collapse. you would get into a situation where the story no longer helps out the inflationary numbers. if the dollar collapses -- at that point in time, goods prices no longer go down. service prices are fully reflected and that becomes the rub for the fed.

with things goes too far the other way, they have to push the other way. sophia far, they have been able to pull it off. lisa: we got the numbers showing fewer jobless claims you see a lift to a market. what we saw out of the jobless claims, yields are lower. by about .5%. 3.8, the lowest going back to july. katie: how low can we go? it is at the forefront of the market right now.

some interesting movement here after those jobless claims. i think it is more of the business outlook that is driving things right now. much worse than expected. lisa: people likely to the negative, even though there is a positive. coming in with low expectations. a reason to lean into bonds and stocks. it gives you the sense that people are searching for the weakness. katie: they are supposed to find the negative. finding the positive, currently up almost 1%. talking about what happened yesterday with the selloff, it aims like a distant memory.

lisa: it means that you can actually cool down the inflation enough to that restart cycle. are we talking about a different inflationary regime or do you just buy wholesale into the transitory story? right now, coming up a conversation as we look to the credit outlook. this is bloomberg. ♪ what 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.

>> right now, i think what is not clear is what the fed is trying to do. they have not had the impact, but at this stage, i'm not sure what impact they wanted. they clearly wanted a rally. are they trying to fine-tune the extent of the rally that they wanted?

this is now getting deep into markets and way outside what i think central bank was meant to be doing. lisa: trying to push back a little bit on how much the market has gone. right now, markets are not worried about me inflation risk but are very much risk on, retracing some of the losses. katie: i think we are going to be ok. lisa: leading up to those record highs, 10 year yields are lower on the day after being hired earlier. i wanted to mention two names that i am watching. , eckstein out with their earnings and beat expectations even though sale volumes were down. again, this goes to the question of deflation in certain areas that maybe is not as deflationary as we thought.

katie: lower volumes has been a trend across a lot of retail mean, but higher pricing is still saving the day. i wonder how much. lisa: the fact that they were able to sell at higher prices may be dems that narrative a little bit. gaining as a result with better-than-expected earnings. i want to get right to our guest. this is one of the key questions , given the fact that we just heard from peter scheer that everyone loves credit, hidden including. things look pretty good and the economy is strong. currencies and commodities research. i want to start there. who is bearish on credit now?

>> we talk about the outlook to a lot of clients and it is hard to find that person that is very bearish. there are scenarios where credit can ride. but, if we go back -- a lot of it is justified by the economic data. if we go back when we were in the thick of that not everything was perfect. what you are seeing is environment where rates have moved a lot higher and the cost of financing moves a lot higher. if the company misses earnings, the chance of accidents due to increased. we look at what happened in the high-yield market. we look at the dispersion over how different bonds treated. it is actually pretty low and it is sensible.

they actually increase quite a day to a normal type of environment. i think that shows you that not everything is perfect for every company, but i get the bullish narrative. lisa: that is basically where it is going to live. is that the story now? >> it does have these implications about what it means for normal markets or a high-yield bond market. both of those markets had actually shrunk this year. they have shrunk and private credit has taken some of that. if we look at private credit from if you are an investor, it is a positive.

the estimates are over 20 billion loans. they were lower rated or refinanced in 2023. a chunk of those would have been defaulted. katie: with that in mind, so long this year i've been hearing that this is a quality world. you want quality names when it comes to investing and who said euphoria is justified. are you feeling safe with the risk spectrum? question i do not think you can categorically go that way, but if we look at the high-grade market today and look where single bonds are, those triple b

bonds are wide with the level of risk in the market today. i think you have to go down in quality there. if you look at the high-yield market, a different approach is appropriate there. you have to do some of that, if you want to get it going forward. katie: the rally into year and will limit performance. we have been talking about how tight's friends are. it is about more than clipping coupons and enjoying high-yield. >> i think so. we get the christmas present of extra return, but it has to come from somewhere and i think it comes from -- there are always

two components to returns when you're talking about fixed income. you are talking about spreads and rates, and both of them have gone lower recently. if you think back to the fixed income markets, that is how it goes. you probably wind up looking at a slightly lower return. nothing dramatic. lisa: are you concerned that because of the euphoria that there will be a second leg of elation? some of the verbiage might work against them. it leads to a sticky inflation. >> i think higher yields is something that we are thinking about. i do not think we see inflation come down as quickly.

we look at the rates market today and we do not really see any term limit with what we have seen the last month. if the economy is going to hold that at her, that the neutral rate should be higher. he put that altogether and i do not even think you need inflation to kick back up. rates do not come down and once again, that is not a tale into what we have seen recently for returns the market. lisa: i want to be ending with where we began. how much harder is it for you to do so when there is such a huge transformation going on with a huge portion owing to private market? the banks are getting in on it but a lot of it is less visible than the traditional mainstays.

>> it is definitely harder, but when i am coming out with an outlook, i still have the information on those securities. as i said, when you factor in, we come up with default forecasts and they might be a little bit too high. everyone who does a default forecasts, what do they base it on? one is always the survey. everyone is obsessed with it. but when you think about that, it has been a nice chart historically. but if a lot of the financing for the more difficult situation is moving to the private credit market, then there is going to be a breakdown in that correlation because it is not about bank lending only. some of that stuff is really

difficult when we are thinking about returns. i think it is a positive. lisa: thank you for being with us and have a wonderful holiday. we will see you in the new year, in new york. if you are just joining us, we are seeing a lift to markets after better-than-expected data on the s&p. a little bit of a decline. oil prices, 1.5% lower after angola is reportedly leaving the opec union. katie, this was fun. we will see you then. this is what it is. coming up, from new york, this is bloomberg. ♪

i'm a little anxious, i'm a little excited. i'm gonna be emotional, she's gonna be emotional, but it's gonna be so worth it. i love that i can give back to one of our customers. i hope you enjoy these amazing gifts.

oh my goodness. oh, you guys. i know you like wrestling, so we got you some vip tickets. you have made an impact. so have you. for you guys to be out here doing something like this, it restores a lot of faith in humanity.

lisa: i am lisa abramowicz, eight straight weeks of gains, the longest streak going back. the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading, this is "bloomberg the open" with jonathan ferro. lisa: investors pile into rate cut bets. u.s. china trade tensions reignite and warner bros. and paramount to discuss a possible merger. we begin with the big issue, the buying frenzy runs out of gas, maybe. >> this selloff yesterday. >>