>> welcome to bloomberg markets. i'm katie greifeld. higher in the session as we start to hear from fed officials on what their next move might be. a lot of concern about the labor market is what we have heard so far but stocks seem to like it. the s&p 500 currently up to tens of a percent, coming off of two straight weeks of gains but that momentum continuing to build. same thing if you take a look at big tech. nasdaq currently up to tenths of

a percent. interesting movement if you train your eyes on the bond market. yields going higher earlier but now lower now. i'm going to call that unchanged on the 10 year. we had been higher to the tune of about five basis points. for some mid-day movers, on the equity side, let's bring in abigail doolittle. abigail: will start in europe. commerzbank and unicredit and this on the ongoing news around the idea that commerzbank is opposing the unicredit action to potentially boost its stake to 21% which would make its stake in commerzbank larger than the german governments and also set up the possibility of a takeover. commerzbank down 4.3% and you can see unicredit also down about the same. it is not clear if this is a

piece of that action but certainly some tensions for some of these european banks, especially as the german government is really saying they do not want unicredit to have that larger state. to the upside, intel up 2.8% as apollo says they could invest up to $5 billion in the chipmaker. we are not sure if that will happen. intel saying they are considering the plan and this follows last week's qualcomm saying they may consider some type of friendly takeover. finally, the big mover on the day both from a percentage standpoint and a point boost to the s&p 500. tesla up 4%. this move comes as we do have barclays saying deliveries for the third quarter coming in a little bit above what the street is expecting at 470,000 vehicles. that is a small piece of news

for this stock to be going up so much but that is what is happening. maybe folks continuing to buy that debt. katie: shares just about even on the year when it comes to tesla. recovering from that drawdown earlier. thank you so much. as we mentioned, the fed has begun its rate cutting cycle and debate is picking up over the size of the next anticipated move. the atlanta fed president made remarks earlier on where he thinks should go from here. >> momentous as the recent decision to begin removing restriction from monetary policy was, ticking that step does not want us in a cadence for further moves. i think it is important that no one think we have a mad -- to get to some neutral level. given the amount of uncertainty in the economy, being more patient will be valuable. katie: and for more on what the

markets are pricing and for the rest of the year, we are joined now by kelly cox, chief markets are to just over at rit helps wealth management. -- earlier today said he backed that rate cut we saw, that big one, basically saying the balance of risk has shifted away from higher inflation the risk of further weakening of the labor market. where does that leave markets in the midst of this rally? kelly: i definitely think the risk of sitting out this market is still bigger than the risk of buying at peaks. we will go a lot of that this week and over the next few weeks and we might be stuck in this 50 basis points versus 25 basis points cut environment, but we are telling clients that is not the take away you need to have in this market. the economy is still quite solid. the labor market is stalled at

the moment, but we are not seeing unemployment surge. the fed is lowering rates. they seem to be at the curve or looking at what is important. i think we have a set up for more gains into the year-end and next year. katie: let's talk about the composition of those gains. an interesting piece written by our news colleagues basically saying think about the playbook for past rate cutting cycles, maybe it doesn't apply here. you think about the fed cutting into growth rather than into weakening economy, maybe the old playbook of just buying utilities and some of those defensive names does not apply. who do you think is actually going to demonstrate leadership in this market? callie: that is a good observation and it is hard to look at historical analogies for this cycle. i love looking at market history but even i get tripped up at the fact that the fed is cutting into growth, but we have also seen a weird bull market that

started during a fed rate hiking cycle it exceedingly rare. we are looking at small caps, smaller and midsized companies as we head into the end of the year, especially as the economy stays solid. we think these could be good long-term plays and you just talked about defensive parts of the market. they are also sensitive rate sectors. a lot of those stocks are considered defensive because they pay out a dividend and they are considered more stable. i don't think it is necessarily wrong to look at defensive stocks but we don't want to lean too far into those strategies. katie: let's talk about cyclicals and big tech. what is your outlook? big tech has already done so much work this year, even with that hick up we saw in the summer, that weakness we saw after the latest round of earnings. could big tech sustain the rally? could it sustain and build on that momentum that it has already seen through the majority of putting 24?

-- majority of 2024? callie: i think ai is a very compelling story, but at this moment with valuations so high and with rates not coming down as quickly as the market expects, i would take a little money off the table and look at the cyclicals and rate sensitive areas of the economy. real estate, financials, and then dividend stocks. that brings you to those more defensive sectors. katie: i like that thinking that maybe tech is a victim of its own success. using a a bout the clumps those companies are going to have to compete against and it is a tall order but we have to talk about ai. i want to hear your thoughts on how much attention you have to pay to ai because you think about typically defensive sectors such as utilities, you can make the argument that a lot of the gains to look a stocks have made this year come back to

ai and basically the linkage is there, both to the upside and the downside when it comes to disappointments. how much does ai factor in? callie: we serve long-term clients at ritholtz. we say ai is a long-term story. if you are an investor and you are trying to play ai over the next month or two, i'm going to tell you that is really hard to trade. in tech where it is trading right now, a lot of the names that ai investors have looked toward are those big tech names. at this moment, ai might not be the most compelling the -- compelling narrative but what we have seen in terms of r&d spend, in terms of advancement within the space, productivity gains that we can see in the economy, we still think ai is quite compelling but at the moment, we have a call back on tech holdings, just to position ourselves correctly. katie: it is an investment, not

a trade. let's bring that logic to politics. we are six weeks away from the u.s. presidential election. we talked about the trump trade and the harris trade but i want to know how you are approaching this election and a change in administration from the perspective of a long-term investor right now. callie: i like what you said. it is an investment, not a trade. politics don't matter for the majority of investors out there. thinking one person can control the entire economy or stock market is pretty ludicrous. we remind clients of that. we also tell them there will be a lot of volatility around the election. there are a lot of headlines, this is an emotionally charged event. we have seen that in the past four or five election cycles. there are ways to position around certain potential policy changes but for the most part,

if you are a long-term investor, you just need to ride the wave into the election and digest the policy changes that could come afterward. katie: ride the wave, that's a good place to end it. really appreciate your time. callie cox of ritholtz wealth management. coming up, the largest u.s. nuclear reactor operator is reigniting three mile island. we will speak with joe dominguez, ceo of constellation energy next. this is bloomberg. ♪

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katie: this is bloomberg

markets. time now for the stock of the hour and constellation energy has been hitting highs after announcing it would invest $1.6 billion to bring three mile island in pennsylvania back online. microsoft will purchase the energy for two decades. this is the latest sign of surging interest in the nuclear industry as power demand for ai soars. joining us now is joe dominguez, ceo of constellation energy. it is great to see you. joe: thanks for having me on. katie: let's talk about the tick-tock of this deal. microsoft agreed to purchase two years of enter -- two decades of energy. i'm curious how long this deal had been in the works. joe: we started thinking about 20 months ago, that the right thing was to figure out a way to restart the machine.

from inside constellation, discussions with our board, the conversations started 20 months ago but for a long time, it was just how do we do it, can we do it? what other critical pieces of equipment but we have to buy -- would we have to buy? earlier in the year we started talking to microsoft about it. we had partnered with microsoft on different products before, so they made sense as a client. katie: so the relationship was there and we see the culmination of that now. when it comes to the nuclear industry, you have bipartisan support, you have heard from a lot of academics and thought pieces that nuclear makes a lot of sense but there is still that reputation hanging over it. when you think about the industry now, versus when you were spun out of exelon in 2022 has it changed? joe: it feels like 10 years.

it is 31 months that we have been and back then, the thought was there wasn't going to be a catalyst. it is always one of these things where in retrospect, you think the pieces are coming together. electrification, home heating, on showing a lot of industry to deal with supply chain issues -- on shoring a lot of industry to deal with supply chain issues. ai drove a lot of it. katie: did that surprise you, the fact that you had ai come along be such a theme? it feels like it is almost in every part of conversation you could have right now and you are seeing the power demand tick up as a result. joe: i wasn't focused on that, but that nuclear was going to be important, it was absolutely clear to me for a long time, and i spoke about this for a long time, that if we are going to run a full-time economy on

emission free energy, we couldn't just run it on part-time power. we had to have resources we could dispatch and would run all the time, especially as we transition away from fossil fuels. the fact that nuclear was going to be relevant and important again, that was no news to me or anyone else in the industry, especially folks who had grown up planning the business. the catalysts and when they would happen, that was a surprise. i knew nothing about it. katie: let's talk about the balancing act because ai, tech companies, they get a lot of the headlines when it comes to power demand. how do you plan to balance their needs with the needs of regular customers and industrial demand? joe: the markets in which we operate our so-called competitive markets, so we don't have a regulator that says what we are going to build, these five powerplants. we use price signals in our market to drive investment, much like you would for wheat farming

or natural gas or any other commodity. as prices increase and supply demand tightens, we would expect people to come in. our markets, people have put private capital to work building powerplants when needed, and i expect that will happen here. katie: and of course we are about six feet -- six weeks away from the presidential election. you think about nuclear, it has a support from the right and the left but that being said, how do you anticipate a change in administration potentially affecting your business? joe: you have to be cognizant of it, but in our business, if you are known to change the strategy every time there is a new occupant in the white house or every time something changes in congress in terms of which party is in control, you are going to do nothing. your strategy is never going to work. for us, we look at the long-term needs of america. here is what is clear to me.

ai is here to stay in the country has to be successful from a geopolitical security perspective. the climate crisis, we may change our focus over a period of time is going to be something that we are going to have to deal with. i think about our assets and our strategy around those pillars and drivers and the third thing being reliability and affordability. that is what we are working to solve and we can't redesign it every four years. katie: i want to bring this conversation to your share price. you and i were speaking before the segment about how i often ask ceos about their share price and they say i don't want to but your shares have doubled over the past year so theoretically you have plenty of money to spend. how might you plan to spend it? joe: we think the best investment we could make is in constellation. we don't see a growth

opportunity like the one we have with microsoft, we have and will continue to invest in constellation through share buybacks. i will say this because i do want your show and i have seen ceos say they don't watch their stock price and i wonder if they are bored -- if their board buys into that. you bubbly endure the pains of the down more than the joy of the up. i keep a pretty good eye on it. katie: if i had a real-time report card telling me how i was doing, it is the only thing i would look at. shifting away from just nuclear, i'm curious what is going on with your hydrogen program. joe: we are looking for final regulations out of treasury and at this point, i'm anticipating we will see those final regulations after the election, given everything that is on treasury's plate in terms of ira

rules. we are at a stalemate right now. the treasury rules do not permit existing nuclear to participate in making hydrogen. we think that is a mistake that is contrary to the law. we've been outspoken about this. i think we have advanced a very good case to explain why treasury should change its thinking in the final regulations and i'm cautiously optimistic they will do that. then we will get into it because here is the important thing. while we want to transition away from fossil fuels, keep in mind that roughly 83% of industries still rely on fossil fuels for their processes. only 17% electrified. we are going to need replacements like hydrogen to replace some fossil fuels in those operations. katie: i have to ask, the human element of what we are talking about, reopening three mile island.

a lot of people, their first thought was and thinking about that partial meltdown in 1979. how do you answer those fears? you have all the benefits of nuclear but there is that emotional element. joe: you have to remember, that was the worst black eye we ever had as an industry but it was something else for us that we were inside of it, it also began this conversation about how do we get better all the time? the thousands of process improvements and equipment improvements and construction improvements all began, like our personal lives, where you have a hiccup, a bad thing happens, you learn and grow from it. to us in the industry, that was the beginning of figuring out how to do it better and i'm proud that the world health organization scores nuclear as the safest technology, tied with solar. a lot of people don't talk about this, but in the 50 plus years since eisenhower's famous speech, more people have been

killed falling off rooftops installing solar panels than have ever been injured in industrial accidents at nuclear plants. it is a good safety record but we understand the critical importance of this compact we have. communities and safety will always be number one. katie: that's a good place to leave it. appreciate you taking the time. that is joe dominguez, ceo of constellation energy. this is bloomberg. ♪ the best ai assistant isn't one

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katie: back to our top company story of the day. intel potentially being approached with a deal. this one would be a multibillion dollar investment from apollo. let's bring in technology cohost ed ludlow. intel shares up by more than 3%, a great week yesterday, a lot of speculation yesterday about qualcomm and now apollo. what are these companies see in

a potential investment in intel? ed: intel needs cash. it has a plan and that plan orients toward foundry but it is capital-intensive. they have history with apollo. qualcomm is a surprise. katie: it is interesting like you said, intel needs cash. just how badly do they need cash? if we don't see qualcomm or apollo or someone else step up, but would that potentially mean for this company -- what would that potentially mean for this company? ed: the design side of chips is 70% of their revenue. they have scaled back where the losses are but they still have to grow it, you need scale and their aim is to win third-party customers. they have to be selective and where they build new factories, how they handle capacity for clients and i think these two stories are competing against another -- one another to answer

how they move forward in that respect. katie: great stuff. i know you've been all over this. that does it for bloomberg markets. this is bloomberg. ♪ where ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management

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>> look politics to the world of business -- from the world of politics to the world of business, this is "balance of

power." live from washington, d.c. joe: just one week till a possible government shutdown. welcome to the fat tissue and politics, as the speaker of the house -- fastest show in politics as the speaker of the house announces plan b. extra money for the secret service, i guess that is new. it is likely setting us up for a big budget standoff this christmas. are you ready? kailey: i think we have to be ready. unfortunately the holidays will bring a spending five. the resolution will only going to december 20, assuming it passes both chambers of congress. the rules committee in the house includes hard-l