>> welcome to bloomberg markets. let's get a check on these markets because we are looking at the s&p 500 still in the red for a second day. 3/10 of 1% lower. nasdaq hundred also around the same decline. philadelphia semiconductor index even a day after nvidia hit a new record high feeling a client of 1.3% across the index and a two year yield seeing a bid hanging nice and low below 480. even at 477. four basis points lower on the

day after another declined we saw on monday after economic data justified some of a greater probability for a rate decrease by the end of september. we are going to get to midday movers because we are still watching nvidia and tesla after elon musk told the chipmaker to ship aia chips originally intended for tesla to his other company, x. the move would delay tesla's receipt of over 500 million in processors by months and musk has touted tesla as a potential leader in ai and robotics. cloud computing provider core we've has offered 575 per share to acquire core scientific. core scientific is pivoting its this -- it strategy from bitcoin mining to ai operations. last month it raised $6.6 billion. when we think about the sectors in the s&p 500, real estate is

one of two sectors in positive territory on the s&p 500. we're going to bring in the center square senior investment strategist talking about the rate impact. we saw the massive move down in yields, short-term and long-term. how does that play through real estate markets as you see it and where will we see the most impact? >> exactly as you mentioned. we have been waiting on lower interest rates in terms of a catalyst for the rate sector in general and it does seem like we are seeing several it appoints whether it be what we saw last week in terms of the pce consumption, savings or what we have been seeing so far this week in terms of the pmi report that came out yesterday as well as the job openings report we saw this morning. all kind of pointing not to things falling off a cliff some cracks appearing in the economy. that is what we are seeing in terms of the reaction across the rates in terms of lowering rates. we are seeing that across the

yield curve. a sector like real estate which is so rate sensitive is seeing some good upside on the back of that compared to the other areas in the s&p 500. in terms of where we see opportunities coming you have spent the last you missed talking about the impact of ai, chips. data centers is a great area within the real estate pays to capture some of that demand. sonali: this is such a confusing dynamic you can see how lower interest rates would be a boost to the real estate sector but if you are worried about the strength of the economy or any weakening, wouldn't that be a negative for real estate as well? uma: and there is a great balancing act. looking through underlying fundamentals, understanding what is happening from the perspective of supply and demand is super important from a real estate perspective. other area we are bullish about is housing. it is an area where you are seeing demand that is needs based as we are seeing a lot of the population age into senior

housing requirements. at the same time new development of senior housing facilities is effectively nonexistent to we are seeing strong rate growth in the senior housing space and that is happening at the same time as we are seeing great margin expansion because we are seeing some easing from the labor front. you are seeing that on top of strong rate growth so we are seeing strong and a why growth across senior housing. something that we are highlighting is fantastic. sonali: we are talking about a month of gains, date of gains. in real estate it is the best performer on the day. it is the worst performer, the only performer in the s&p 500 that is still down on the year, about 5%. our people just starting to buy the dip at this point? part of the idea the sector may be sold off too far or are there still losses to be had? uma: one of the things that has

changed over the course of the last few months is the expectation in terms of rate cuts. timing as well as degree of rate cuts to be seen this year. at the end of last year, we saw a big rally in some of the sectors like real estate because the expectation was we were going to see more rate cuts and have them happen earlier in the year. that expectation has been reset as the past the lower inflation has been bumpy to start the year. the resetting environment from the perspective of expectations for rate cuts is what has been dragging down the rate sector. that being said, based on the economic data we are seeing, we think rate cuts are in play and towards the end of the year. that is going to be a great catalyst for the rate space which is trading at a material discount as we think about where we are seeing transactions taking place under the private market for the underlying real estate. at the same time from the rates you're getting access to the best quality real estate

portfolios that are out there today. we talked about something like multifamily. we have been getting updates from across multifamily rates over the last few days preparing for the industry conference happening this week. we are seeing fundamentals holding up a lot better than expected in these rates in the multifamily space are trading at a material discount to where we are seeing transactions taking place in the private market. there is opportunity for investors looking to access real estate and get in on a great price across the rate market. sonali: you look at fed swaps and their pricing in through the end of january 2 rate cuts. is that enough to ease the pain on the system given how far and fast rates have risen and given we may only see one or two. you have to ask where will the rest of the pain keep being? uma: one of the things we have been focusing on at center square is not only what is happening across the short end of the rate curve and a terms of what the fed might do from a policy rate perspective but

where do we think the long end of the yield curve will be from a 10 year treasury perspective? we think rates are going to be in the 4% range for the foreseeable future. there are some structural issues impacting this. take about the amount of uncertainty we are seeing in the world. investors are asking to be compensated for investing their capital today which we have not seen in a long time. as we think about where real estate goes, we are focused on the 10-year treasury yield and what that means for real estate pricing. i think the rate market has been repriced for the 10-year treasury yield. we are not seeing the same across the private market. that is where some of the pain will continue to be as we see assets across the private market getting a repriced into this new reality of debt costs. sonali: we thank you so much for walking us through a view on the rate environment as well as hot sector on the day. we are also keeping an eye on india. indian stocks down after

narendra modi vowed to continue as india's prime minister even after it is party -- even after his party lost the majority in the parliament. he claimed victory for his coalition in post on x. here is what the former reserve bank of india governor told bloomberg earlier. >> we have an election. the results have been coming out. i think it is a splendid result because it tells the government it needs to change course. the old course was unviable. we can talk about that. markets seem to be disappointed. we can talk about that also. why markets are reacting negatively. i think what is happening today is in the long run good for india because it forces india to choose a different course from the one it has been on. a course which has led to much wider unemployment and distress then needed in the country. >> is this an election result

you see will bring the technocratic and elite south together with the more emotional and historic north? does it bring the polarity of india together or do we have a more separate india in 2006 -- 2026? >> it is a win for democracy and that is good for india because what democracy does is it allows the different paths to express themselves and to negotiate. the problem earlier was india was trending towards a more -- a country with one leader who was a larger-than-life image. that unfortunately meant that the leadership was not listening to the economic news on the ground. that people were suffering hardship. was not listening to the broader sense that the weaponization of various instruments of the government to put opposition

party leaders in jail. was simply not gelling. it would have let india down a course which was ruinous in the longer run. that is why the market is reacting adversely. sonali: coming up next, we are going to talk about a big merger at a play. boston beer is being pitched a merger by cannabis producer green thumb. we are going to talk about the details next. this is bloomberg. ♪

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sonali: it is time for stock of the hour. boston beer has been the center of m&a speculation since friday

when there was a report that centauri was in talks with them should since then centauri has denied the report but today another report says cannabis producer green thumb has expressed interest in boston beer. the wall street journal reporting the ceo of green thumb sent a letter to boston beer to discuss the idea. green thumb says its policy is not to comment on rumors. we're going to discuss this idea with tiffany kerry. the idea of green thumb versus centauri is a massive different direction for boston beer then you would have thought. what would this mean for the future of the alcohol industry let alone for boston beer? tiffany: there is a lot of concern cannabis is taking market share away from alcohol. that has been a concern for a wild. we have seen other attempts to merge alcohol and beer businesses have not gone that well so this would be interesting if it did bring something successful. boston beer has stuck its foot

under the water. it has a product called teapot in canada. a state -- to the state there's not been a successful union of those two worlds. sonali: does it signal future product innovation means of liquid cannabis, by means of trackable options? tiffany: i think there is a lot of innovation that has been done over the past couple of years. i still hear a lot of reports people are not happy with the way some of these cannabis drinks taste. something taste better. earthy regress he is a slightly kind term to put the way some of the way they taste there is a lot of the way the financial synergies a cannabis company and alcohol company could have in terms of distribution reads and some of these cannabis companies like to list on the major stock exchanges. a dealer this could help them do that. sonali: let's talk about boston

beer still down more than 1.2% on the day. it was down yesterday as well. do they need a deal? tiffany: that is not clear and obviously centauri has approached as well. people are circling. it remains to be seen whether were not the controller is going to be open to doing deals. sonali: we thank you for keeping an eye on this industry. a fascinating development for one of america's well-known beverage companies. we are going to turn to a different industry. we are going to turn to etf's. a growing number of stuck pickers betting on look at of companies across america to outperform broader index funds defying wisdom on wall street that diversification is key. katie greifeld poking into the logic of portfolio management. you see what investors are doing and some of the statistic struck me. the story of the most read on the day. katie: basically it is go big or

go home that is what you are seeing when it comes to the etf industry. there are two ways to look at concentration. when it comes to equity etf's that have less than 50 holding so a very small portfolio, 88 of those etf's lunch to last year. you think about the 2010s, the average was 19 new lunches of less than 50 holdings. if you look at the average number of holdings in new equity etf's, super concentrated measure, the average number of holdings in equity etfs is around 136. that is the lowest level since 2010 or so. portfolios when it comes to equities, they have been getting smaller. sonali: is this so much of the evolution you are seeing away from mutual funds to stockpicking coming in the etf wrapper? it used to be by an index fund, let your money sit there and let it ride. putting a lot of faith in people . i katie: think it is an interesting stat for people who

think about etf's as being largely passive. largely index based. etf's have been getting very active and this goes to prove that. you see a lot of active managers coming to the etf wrapper and that has been selling. you take a look at flows into active etf's for the past couple years. they have been taking a record share of overall flows and they have been coming at the expense of mutual funds. it is a continuation of that trend. sonali: what does performance look like at who are some of the best performers in this new world? katie: when it comes to concentrated equity etf's, it is pretty interesting. you can have higher highs and you can have lower lows. that is with the bloomberg intelligence stat shows us. over the past three years 35% of the most concentrated equity etfs did beat the s&p 500. take a look at the least consultative group, only 17% dead. when you did miss and you

underperformed, it was more painful to the worst-performing high cuts treated etf's trailed by 20% in 2023. that compares about 10% for the least concentrated funds. it is go big or go home. you have pretty good odds of outperforming but you have high odds of having more painful this as well. sonali: feels like it is at the end of the rally where you had all the big names performing well at once and no we are seeing market breadth. katie greifeld, thank you very much. exciting to talk to about one of your bigger stories this year. we are going to talk about the stock market rally squeezing out short-sellers. we will take a look at that next on today's wall street teacher. this is bloomberg. ♪

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sonali: this is bloomberg markets. it is time for my favorite beach, the wall street beach. we're looking at the issues facing short-sellers in the industry in today's relentless stock rally. it is also the big take for bloomberg joining us as sentences takeover who wrote the story. you spoke to everyone from jim chanos to andrew left. are they all throwing in the towel at this point? >> we started looking at the s&p member. the short interest was down to

2001 lows. we certainly the number of hedge funds. it is down to 14 constituents according to one of the indices. we went to the big names. we went to jim chanos. he said it is hard to raise capital. you can imagine if he is struggling to find money in shortselling. a lot more players probably find it more difficult to went to andrew left. he called them a dying breed. that reflects a lot of the industry. there are closures. there moves to loan only funds. that focused shortselling funds is disappearing very fast. sonali: throwing in the towel but not completely even though andrew left said it is a dying breed of shortselling. he was also the person who bet against gamestop as it was soaring just a day ago as he told you guys. to what extent are people

starting to step back from this industry even there are opportunities? >> we have to acknowledge there are a lot of young people coming into it. they releasing a lot of reports that have a strong impact on the stocks. the amount of money you get into those funds as smaller. talking about andrew left, we do the story about him yesterday but his bet is much smaller in size. that is an interesting theme because a lot of the short-sellers struggled in 2021. there is this -- a bottle with retail traders. for andrew left, he got burned in 2020 12 he potentially incurred more losses in may but he continues to bed under those stocks. he has reduced the ammunition he puts in the short bets. sonali: is there a structural reason shortselling would become more difficult for any reason? denitsa: on a simple level, the

relentless 30 trillion stockmarket market rally makes it impossible. people have been talking for so long. interest rates are higher. the speculative bubbles will disappear. that has not happened. the big retail name sold their shares and dropped back to pre-pandemic levels. we have not seen a massive selloff in a broad market selloff. sonali: what about financial watchdogs? are the reasons that would scare people away from the market that are nonfinancial and are there more financials besides this one? are people getting stopped out? is this becoming a losing trade? denitsa: people are like is it really worth all the pressure, the fact investigators may show up at your door tomorrow and say you are doing something. we are investigating market manipulation. andrew left had a good quote about it. he said i wish i bought tech stocks.

i didn't want my family to be worried. there are the regulators. there companies suing you. there are traders million saying you are shorting their stock. there are government bands. if we look at china and south korea, there have been recent restrictions to shortselling. but in much any side of the financial markets has turned against them. they are an easy victim and it is easy to say it is their fault for certain selloffs. sonali: short-sellers fear extension in every let the stock market. check it out on the bloomberg terminal and bloomberg.com. checking in on the markets. another down day on the s&p 500 as well as the tech heavy indexes. nasdaq 100 and the philadelphia semiconductor index just a day after nvidia hit another record high but we are seeing a bid sustained under the two-year now at 476. i love watching the yield lower

during the show. everyone is buying bonds throughout the day. the tenure at 432. that does it for bloomberg markets. stick with us through the close and for balance of power. this is bloomberg. ♪ people couldn't see my potential. so i had to show them. i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. today i'm the ceo of my own company. it's the way my mind works. i have a very mechanical brain. why are we not rethinking this? i am more... i'm more than who i am on paper.

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

live from washington, d.c. joe: president biden issues an executive order today to keep migrants who cross the border illegally from receiving asylum. welcome to the fastest show in politics. i'm joe mathieu in washington alongside kailey leinz. it is not the first time we have heard this idea of shutting down the border when illegal crossings reach a certain level. we are going to hear from joe biden. kailey:kailey: he is set to speak from the white house at the 2:00 p.m. hour. the level we are talking about is 2500 crossings per day. we are well above that. as a result of this executive order today, the border will shut down for migrants seeking asylum. it is already can glow from progressive democrats and it is likely to face legal challenges. joe: we have been down this road before. this is a previously aired proposal now in the form of an executive order we did tell you was coming. if you are with us