>> welcomes a bloomberg markets. a day after the fed decision and we are right in the middle of the earnings season. markets are searching for direction. let's get a quick check of where we stand right now. a couple days of losses here. 5.5 trillion worth after the

close today. before that, 1.5%. about two points lower on the day. a 25 basis point move. back up a little bit but still lower on the week. lowest level since june. investors are thinking that is the sweet spot. we will keep that. we are focused on the banks. at least 5 wall st analysts. they put the credit -- it can be dangerous for regional banks. you see that in the bank index

about a 5% decline. down another 11% or so on the day after a steep selloff. planning to cut 3500 jobs with a plan for a buyback. lowering performance targets, nearly an 80% drop on the day abigail doolittle has more. >> jay powell indicated that they are planning on cutting this year but it is not happening in march. investors not like that we are looking at a gain but on that

message, more than 1.5%. disappointment again that liquidity -- we are not going to get back cut. it may suggest more consolidation is ahead. it had everything to do with the expectation that the market would be cutting six times. let's take a look at what we will see coming in. cut but not as quickly. earlier, at one point earlier this year, there was an 80% likelihood that we would see a cut in march.

investors are we working their bets and what it means for stocks in 2024. >> when it comes to the fed, delivering a clear message. >> we want to see more good data. it is moving sustainably. we believe it is at its peak. it will likely be appropriate to dial back restraint. i would tell you that i do not think it is likely that they will reach a level of confidence. we plan in-depth discussions at our next meeting in march. we think we have a ways to go.

>> let's bring in george, the ceo who was close during the inflation crisis. a lot of talk about not repeating the 1970's again. what is pushing chair powell through the next couple of months? >> paul was on the board when i worked there. i remember clearly him saying that it is like a snake. you have to cut the head off the snake and carry it through once, twice or three times before they are convinced that inflation is dead. powell is an advocate of the

school of inflation and i think it is no surprise that he would intend to say higher for longer than most people would expect. paul cured inflation by sending it. at least he will keep his foot on the neck of inflation for longer than people anticipated. >> there much conversation about progress but at the same time, there is a conflict that could create volatility in oil prices. there are a lot of questions about wages. do you think that there are still some places where there could be hiccups?

>> i would hate to be very agitated, but paul believed that it was the economy that drove the fed, not the fed that drives the economy. he said often in meetings and over cocktails that if the business community had a roadmap ahead of what the rules would be that business could prosper almost regardless of the other backdrop. i think that there will be a higher for longer phenomenon. i think that if the next cut is

driven by expectations that the economy is weakening, there could be a kick up in stock prices but also concerns about earnings that might be more negative for the market than not. it may not be good for equities moving forward. >> we are looking at expectations being cut. this idea of higher for longer seems to continue. but they have not calculated is higher interest costs are lower revenue. how messy could this start to get you think about corporate earnings in relation to the macro that we are seeing out there? >> the economic outlook is very

uncharted were uncharted bull -- unchartable. i think they could exceed 240, which would justify higher stock prices. we are getting towards a point in conversations with executives where you'll see layoffs and unemployment rates will go up. simply because things have been good. that may weigh on stock prices >> how you handicap the kind of recession we might versus high-yield particular?

does it mean that it could be an all clear for the market? it begs the question of how much that would impact asset. >> i think there is a high probability that we will get a soft landing, but what happens after that? i would say we get a soft landing and things are good for the time being. profits are good. after that, the notion of a cyclically acceptable -- expectable recession are quite high. i think that the decline in regional bank shares reflecting realistic concerns may backward looking rather than forward-looking.

>> people are talking about that return to the office more and more. still ahead, technology and are back near all-time highs, putting pressure on companies to satisfy. we will discuss that, next. this is bloomberg. this is bloomberg. how am i going to find a doctor when i'm hallucinating? what about zocdoc?

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>> we are looking at s&p 500 reaching an all-time high or

highs of the day and trying to snap to be days of declines before major earnings after the bell. your all-time highs and it is putting large expectations on those giants to deliver with the results. we have $5.5 trillion alone. >> the trouble is that expectations have risen some much that they are almost impossible to match. even consensus. have seen them expand for this group with a tremendous amount of capital concentrated in the group. it seems like there is a lot of

pressure on these entities. the earnings season is on track for an incredible be. they were expecting only one. expectations are high but they can still be the consensus forecast. >> can this kind of trajectory continue into the season, knowing that we are in the thick of it? >> this is actually the toughest part of the season. not a lot of expectation for energy companies and consumer companies. i think what we will find our that the bar becomes lower

through the earnings season. expectations were so low that it was easy to be expectations and we reached a stall over the last week or so. the other thing that has happened is determining how much price action is determined in the shift of tone because of that guidance, commentary and what is happening. >> if you see yields dissipate, how much i rates going to be taken away from the equity story? >> it is a great story. when mates are going higher, it clearly suppressed activity and risk tolerance in the market. it is not the same as rates going higher.

we once acknowledge the fact that valuations are sustained. they probably sustain and the market becomes more sensitive to economic trends, as a result of that. just because mates are going lower, it does not mean that the market has to take a dive. they just might lose some upside potential. >> are you seeing the narrative change order staying the same coming out of the season with a tougher time for some of these sensitive areas? >> it should be a year of broadening where other segments start to gather little bit of attention and earnings stability.

the index continues to struggle but i will say that you watch for signs of the and there are no signs of that. it does seem to be relatively isolated but luckily for us or unlikely for the banking sector itself, it is a much smaller impact than it had been two years ago because of what we went through when we started to price very potential defaults to emerge in this space. the downside risk in the equity market is a little bit more limited because we have already gone through this. that said, at-large, it seems very unlikely that the mega cap stocks will be able to sustain all of the s&p 500. we do need participation.

it does put the overall -- it does put a dampening effect on the overall gain. >> we wish you luck for the rest of this busy earnings season. we will talk about the retail trader and how they claim etf's have been received on the platform. stick with us. this is bloomberg. ♪ high taxes can erode returns quickly, so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

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>> this is numbered markets. just surveyed a number of users to see what they say about cryptocurrencies. many we mean -- remain confident in the market. the ceo joins me. traders have more options.

how are they thinking about how this fits into the bitcoin space? >> they are thinking about it differently. it is still excitement that they have met. this is one of the main ways. there is that excitement that the thesis is well and alive. they are still holding crypto and interestingly enough, we see women holding more than men. crypto is still one of those. >> there was a sense when it came along that regular investors would ditch the traditional weight and go towards the etf instead.

>> a younger investor base, they were already crypto natives. it might be something that allows them to access it where potentially the raw material was not available, but the older demographic, this would be an interesting means of engagement. >> i think the age thing is interesting as well. more than half had been receptive. it drops off after age 35. why is there such a big difference there? >> it is the adoption that we have seen across the board. the average investor is a millennial or younger. when you look at the graphic, they have been the before and

under generation that has adopted a. in addition, they know it better so the understanding is that 59% feel like they know it very well. it is a different relationship with the raw materials that they have. >> we are not that far off from the meme stocks frenzy. what is the appetite right now? >> it is still very much there. looking at what the fed might be in the policy, there is an appetite. if that monetary policy starts easing, to up their risk.

like any technology asset, it is responsive to interest rate. people anticipate that will be something that will raise their risk appetite for. >> how do people feel about keeping their money in cash still? you are still seeing yields that are much higher than what they have been. >> for sure. 17% say cash is where they will start planting their assets. they are not fools. they are still capturing that for the money at rest. >> fixed income is starting to become king again. you think they understand that tree? >> yes and no. it is less complicated than

fixed income and more appealing to this generation. fixed income is the second tier. cash is one of them. >> thank you for your time across all asset. taking a quick look at the markets now. flirting with highs of the day. a very large and heavy day of earnings. the 10 year yield looking at hanging around 385 or so. a lot of that has come into the portion today. yields continue to cool and crude is coming full circle on the week. a 76 level, trying to reach 77. tremendous volatility.

we will keep an eye on that and more. some lenders are just beginning to see the pain from the real estate market stick with us. this is bloomberg. ♪ anging tax rates or filing returns. avalarahhh ahhh

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♪ sally: let's check the markets. the s&p 500, the nasdaq are up almost .7% or more looking to stop the two day losing streak. still down on the week with a big day of earnings i had created the two year yield and the five-year still on the decline in getting a bid across different parts of the curve. shares of new york community bank at the lowest level since 2011 after it's stockpiled cash, cut its dividend and contents

with lending risk sparking broader concerns over issues facing commercial real estate. bloomberg's abigail doolittle looks at the sector. abigail: yesterday it came as a bit of a shock, back in 2023 there were concerns around regional banks commercial real estate and the idea that loans could default and create problems. it did not come to pass a much as the year went on but did yesterday. newer community bank today lows off more than 13% down now about 6% following a 37% plunge on the shock of loan loss provisions being 12 times expected. more than $.5 trillion and cutting the dividend to build the reserves. the company mentioned it had to do with both office and multifamily. the idea may be some of the loans would sour. it is weighing on the entire space. something makes this super interesting. in the bloomberg terminal we had church of new york community

bancorp trading higher in white, not suffering as much as other regional banks on the silicon valley blowup last year. at one point going well above those levels into yesterday. still above its silicon valley blowup levels. now we have it underperforming all the banks, down 34% over the last year. all banks basically down 20% or more. there is fear there could be contagion. it is not clear if it will only be this one bank. commercial real estate under tremendous pressure, office, having to do with the pandemic and rising rates creating pressure for some loans. according to greene street office is 25% in terms of the drop in value. apartment are multifamily 12%. self storage, industrial mall, 11%. mall is up 1%. in new york it's regional. in new york when property start trading again, values could be

$.25 on the dollar for some nonclass a. as for office rates, today over the last week down significantly, down more than 10%. boston properties, pour nato, and slg are all down. this is a topic that is front and center with regional banks holding 80% of the cmb asked dubai 2025. what does that mean for commercial real estate rates? >> there is a lot of money behind the cmb asked -- cmbs. we will discuss this further with hermann shannon and sally bakewell. on one hand, you have the $560 billion number in terms of what will mature over the next year or two years. the other thing you are seeing is a massive sell. every bank to in the kbw index is down on the day. hermann provide context as to why the western alliance and

zions are set up to 2%, 8% when you are seeing a heavily exposed radical. hermann: western alliance and zions are two banks that last year had more issues dealing with the higher rates and a outflow following the svb and signature bank failures. it is more of a contagion factor. the market automatically seems to punish some of these banks. i would say zions and the others have really fortified and rebuilt their balance sheet over the past three quarters following the march and april episode. sonali: sally, how do you put this into perspective? i know your team has been watching the commercial real estate pain the banks are feeling. how often are using problems come home to roost? will they be on the watch for the next two years in fits and starts? sally: the commercial real estate exposure issue has been a problem for a number of years and came up during the regional

banking turmoil less than one year ago. this has reignited those years now. when we went through the regional bank earnings season, a lot of banks seemed to be fairly well reserved against whatever losses they expected. the big question will be on the whole how well our banks reserved against expected losses in the commercial real estate sector? we have an interesting situation. we have new york community bank that has these idiosyncratic issues. it has a high exposure to the multifamily rent-stabilized industry that has been very problematic and it also has a regulatory issue whereby because of the deal it struck last year in order to rescue signature bank it into a new category that wired to shore up more capital and so it had to cut its dividend to take other action. it's not the same the put it issue we saw during the regional banking turmoil last year. sonali: talking about contagion risk, bark mesh back to banks

selling off more. seeing contagion risk as it now pertains to commercial real estate, you think the market is getting rid of the baby with the bathwater here? herman: i think overall the banking system has really shored up its capital and reserves against problematic exposures and has had time to do that and will continue to do that over the next coming years. and he lost content coming from areas like commercial real estate and office in particular will be absorbed over a number of years as the loans matured. -- loans mature. it won't be a big event in one particular quarter. banks can manage the process at work with their borrowers to really rebuild their reserves, as sally mentioned earlier. sonali: you mentioned the new york community bank issue pertaining to commercial real estate. is there enough private capital in the world now to help these banks out and take assets off

their balance sheet? sally: we saw them sniffing around the moment regional banks in march of last year began to face turmoil. absolutely i think they will be there again as a banks like new york community bank, what actions will it take from here to make investors comfortable with its situation? what actions will other banks take in cre, commercial real estate portfolios? a lot will be likely to be selling them. some have already done that. private equity will be right there as it always is. sonali: if you see new york community bank selling off the way it is, the lowest it has been in several years in terms of stock market trading, how much trouble is there for a bank like this and other regionals exposed to the sector? sally: there are different tiers of regional banks. we saw a more stable names pretty well reserved against whatever losses they expect. regional banks by their very nature are more connected to local property markets with better relationships. are they absolutely have more

regional banking exposure. smaller banks have about 28% of assets in commercial real estate compared to 6.5 percent for bigger lenders. it will definitely be a factor and for smaller banks that probably overexpose themselves in this regard it will be more of a problem. a lot of those banks are below the radar in many regards. sonali: think about the moody's warning that they might cut new york community bank to junk. what risk does this create for that bank? are you very worried about other banks and if so, what are they? herman: it is a negative headline for the bank for sure. the risk is their depositors see negativity within the stock and then the rating agency potentially downgrades leaving their -- moving their deposits somewhere else. i would point to the fact that banks like new york community will be required to issue more long-term debt as a part of tougher capital rules for regionals going forward. so, higher potential funding costs are ahead for new york

community in the event of our. sonali: how do you see the issues playing out over the next 6-12 months? is it real estate at this point that is the brunt of the problem? herman: if you look back at the fourth quarter earnings season everybody was pretty much in the perspective that loans are not really growing and net interest margins are stabilizing with fed rate pauses. there is optimism in the back half of this year with loan worth potentially returning. and better net interest margins improving the topline picture. then, credit quality was not that big of a story across the board until we came to new york community. that has really offended the narrative for regional banks. sonali: there could be more pain to come. thank you both for your time. coming up, the ceo of amyris ports -- aimer sports.

the shares are indicated to open between 1325 and 1350. it priced its ipo at $13 per share. stick with us. this is bloomberg. as the head of hr, i help lead a successful home security firm. our teams work hard to secure our customers' most valuable assets. and while they do that, i work hard to secure ours... ...our people. that's why we chose principal to provide the benefits and retirement plan that show our people just how much we appreciate them. benefits help us keep top talent. —hey mom. benefits help us grow.

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joining us now is bloomberg technology's coanchor ed ludlow from san francisco. how higher the expectations? how fragile are the companies going into the season? ed: they are sky high and we go based on results from microsoft and the investor response. we know microsoft put a lot of money into ai and there was a high degree of confidence that would materialize in the topline on the bottom line and it did and they told us how it did commit six percentage points of contribution to cloud growth from generative ai. but the stock still had a negative reaction. there are important idiosyncratic nuances between each of the three names reporting after the bell today. what they have in common is a high bar. i suppose ai links to them as well. sonali: looking at the numbers that come out today, are there clear winners and users -- losers in the categories we are looking at? where are investors putting most of their money coming out of

today? ed: i think they are rewarding bottom line performance. they are very worried about bottom line miss or sluggish growth in both. apple will be a really interesting case. it is set up for her problem. if they do not meet their soft guidance -- and when i say self guidance, apple does not give a firm outlook, they just give a narrative about sequential progress -- they guided us sales would be flat in the holiday quarter. the streets in some sense i say may be slight growth 1% topline. if they miss that it would be the fifth consecutive quarter of sales declined. that has not happened for more than 20 years with apple. there is just a fundamentals risk. there is also excitement. apple could do really well. we want to hear more about ai. we love the vision pro. but what is going on in china? that's where investor

sentiment is now. sonali: meta has had the biggest bid this year so far. what are investors looking at there? ed: how are you using the work you have done in artificial intelligence to support your core business of advertising? there is evidence they are doing that. an explanation of how add traffic or advertising value has been boosted by ai could have the big impact here. we move from social media to the metaverse to meta being nai company and it's hard to keep track of. it is also an election year. google's core search business missed the mark and were punished for that. go back to the fundamentals. you love talking to me about tec and take a school with hardware and software but it all comes back to fundamentals of your core bread and butter business. still look for medicament here he on advertising. sonali: that's bloomberg technology coanchor ed ludlow. you will have a busy day tomorrow. coming up we talked to the ceo

of amer sports as the company goes public in the biggest a listing since birkenstock with shares set to open $13.25/$13 50 cents after pricing the ipo at $13 per share. can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about.

sonali: this is bloomberg markets. i'm sonali basak. at any moment amer sports the company behind brands like wilson and louisville slugger goes public on the new york stock exchange under the ticker a s. joining me is amer sports ceo james zheng. let's talk about the ipo. a lot of investors have been waiting for the dam to open in the ipo market. we have seen a few come to market already including yours last night, the initial public offering. the pricing was lower than initially expected.

take us behind the process. james: i think it is all about the market dynamics. for us, we build up a very solid foundation the past four years. basically that has helped those -- helped us to have a good moment in the future. i think internally our company still has very high confidence to continue to grow our business at the right level. the price point, i would say it is a bit frustrating, with the starting point. but it is just a short-term view. my management team and i still have a very low high-level -- a very high level of confidence to drive the best value for the company and create the best value for our investors in the future. sonali: what made the ipo and attractive option to reduce debt and fund fewer operations rather than doing that privately?

james: we grow the business more than 20% over the past four years. we have built a strong foundation. today from now, we still are also building a very aggressive vision for future growth. ipo will unleash the potential for us by leveraging our overall debt situation and give us more cash flow to fuel our brands at the pace we want. it is a kind of engine for was to really speed up the whole progress of growth in the future. sonali: one companies go public it is well-known they now have equity. they have stock to potentially pursue more acquisitions. our ui in more acquisition opportunities after buying such namesake brands? what are the criteria?

james: basically we have a good level of portfolio brands in our company. these three brands just exceeded one billion u.s. dollars. they are still medium to small players in the market so we see tremendous potential to be explored in the future for these three major plans. for the coming three years we will really focus on where we are at this moment and after three years we may see some opportunity outside. sonali: how do you think about the consumer both in the u.s. and china? are you seeing any softnesses in certain areas and how would you navigate that? james: in terms of the overall consumer patterns in the united states, i think it is still positive. we grow the business must faster, actually, in the past 12 months. we see huge demand from consumer sectors, especially in premium

segments. premium sports. people really looking for high-tech innovative products. china has a similar pattern in the sports industry. china right now it is a really hot consumer pattern. a lot of people go for the money mass-market approach. still a significant amount of consumers are sitting in the premium segment looking for high-tech quality products with relatively little price sensitivity. sonali: speaking of price sensitivity, promotions, price wars has been the name of the game in the u.s. and when it comes to the chinese consumer. do you think onto or you will have to start or are planning to start more discounts under

certain brand names to attract more consumers? james: in the chinese market i wanted to say a different brand had a different proposition. i represent here, amer sports, and our brands. they are all sitting on premier segments. at the expense of our overall brand positioning. the pricing has come for all the three brands and controls very well under the markets. they all grow extremely good in china's markets in the previous -- premium segment. sonali: $13 per share ipo. where do you think amer sports will be trading a year from now? james: i hope we can double the share. the share price. sonali: we will have to have you back on the anniversary. amer sports ceo james zheng

thank you for your time. we are waiting for amer sports to open, and ipo a lot of people are looking at, a big consumer brand expected to have a little bit of a pop. let's check the markets. still a good day to ipo. it's green on the screen. looking at the s&p 500 of now 1% near session highs. we are watching a cooling of the 10 year yields down four basis points to 386. u.s. dollar followed in conjunction and new york crude at $74 60 three cents down 1.6 on the day was so much volatility in the oil markets. we were looking at a wet sign between almost $77 and now down to 74.70 on the date. looking at the u.s. dollar and crude also now at 79. gold futures back on the rise at about .3%. the dollar-yen as well.

look at the s&p 500. we are watching the tech companies taking the lead here in particular. the nasdaq 100 is also near session highs. on the heels of a busy busy earnings season. today is the big day in the middle of the earnings season. we are getting apple, meta, and amazon results after the market today. tomorrow is yet another day. we are watching the s&p still down for the week even with today's games. that does it for number of markets. send time same place tomorrow. stick with us. this is bloomberg.

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>> from the world of politics to the world of business, this is balance of pow