sonali: welcome to "bloomberg markets." scarlet: a record rally, big bank earnings lifting the s&p 500 to a record high. as i mentioned, the s&p 500 is at the highest level ever for now, the 45th record close this year. nasdaq 100, gaining .1%. we should mention that within the s&p 500 is the big banks leading the way out. for the 10-year yield, moving up just slightly, at one point it roseo as high as 1.5% and we had a higher-than-expected

consumer inflation report this week with the latest wholesale data showing prices unchanged compared to a month ago. oil prices taking a bit of a breather after yesterday topping $76 per barrel. traders remaining on edge, expecting retaliation between israel and iran, also waiting for more chinese stimulus, the chinese foreign minister will be holding a briefing tomorrow and we have a preview on what to expect from that. equities, checking out the mid-day movers, let's bring in our senior equities reporter for more. jess: looking at worse on the s&p 500, tesla on the back of the robotaxi event last night. they were looking for more details here. looking at the opposite side of that, the best performer in the s&p 500 today, with a lack of details, it won't hurt the competition if you are looking at uber and lyft, both on pace

for their best in two months, tesla on pace for its worst. overseas, european automakers were low today. polestar released underwhelming numbers to investors with the new ceo thinking about potentially having more cars sold at delivery dealerships instead of just online. other stocks, stellantis had a big shakeup when it comes to executives, ceo expected to retire in 2020 six, just ousted, that stock lower. analysts think that the new builds might come in lower than expected and volkswagen just got a downgrade from moody's to negative. they are not optimistic about the outlook when it comes to the european automakers. coming off of those lows for earlier, we had a ton of different bank earnings this morning. jp morgan net interest came in stronger-than-expected, stock up

6%. wells fargo also moving higher here. jp morgan is also up to close to 5% here. wells fargo, what you think about the metrics that came in stronger-than-expected. and of course, blackrock, records on the net basis with new york bank melon, not beating on the top line, down 1.5%. more is coming up next week the jp morgan, goldman sachs coming out next week. morgan stanley as well. scarlet: good stuff, thank you so much, jess, with the recap on midday movers. when you look at the latest fed decision to cut interest rates, markets have been more optimistic than not. but there is caution as geopolitical tensions flare in the u.s. election looms. should markets be more concerned that we are on the edge of a so-called black swan event? the original author of that phrase is here with sonali basak

for an interview. sonali: i am sitting by with nassim here. good to see you. a couple of weeks ago, we spoke to your colleague at mark spitz naegele. he had been voicing concerns. how do you feel about where we stand right now? nassim: formally market line, let me say. we've got our own opinions. the idea that the market sentiment was a big deal hedge when it came to competition, because the market rally, you know, allows you to have a larger position, the tail let's you have a larger position. that was his position. now we have a lot of risks building up, ok, whether it's the first one, ok, of course, we still have to pay for that. year after year, taking a larger

portion of the budget. so, it is not out of control yet . here is worse than us. you know, when we have debt, you need to grow fast. we are growing, but we should grow up faster to be able to control the debt. that's the big thing. the second one, really, if someone asked me what the top two biggest financial mistakes made in the 21st century, one of them would be the confiscation of assets by, you know, after the ukraine war, of people, because this kind of thing could go on. the united states believe you're up to participate in the confiscation of assets of some relevant people who have vague links to the russian regime. it may make sense, may be, from a justice standpoint, but if you

remember, it's not going to encourage people to invest in the system, ok? transactions are still conducted in u.s. dollars. but we are seeing, more and more, storage in gold. whether it is central banks or the unusual's, people want out of that system. i'm really afraid of a progressive loss of the role of the dollar in, you know, in global transactions. scarlet: -- sonali: dollar fears have been real for investors, but you think it is still raining? 1 people conduct -- >> that is where the problem is. sonali: you mentioned oil for just a moment. with all of the geopolitical

risk we are seeing, particularly in the middle east, rent has gone above $80 -- brent has gone above $80. where do you think it goes? nassim: it's surprising, with its small probability and big geopolitical events, small probability. not very high. should the event happen, it would be way above 80, as you can expect. we would have the worst since 1973, you would have more fragile systems then in 1973. markets are pricing more than what is justifiable. people are aware of the possibility, but are not putting too much trust in such a forecast. sonali: you mentioned gold, how much are you willing to buy gold at this moment and do you see it as the answer to your concerns? nassim: i am not a gold buyer.

i would say my focus is more on being hedged against essential market collapse. we are more fragile than we were , you know, probably at any poin in the last 20 yeas if not 30 years. we are very fragile. also, you've got to realize that the, the big rally in the s&p 500 over the past 12 months is attributable to a small number of firms linked to ai ai will probably be the best investment. but, maybe not. it may not be as representative of the growth because, remember, when the internet started, everyone was using altavista. one of the pioneers before they switched to google.

some existing firms have use capitalization, you know, to gain in trillions, owing to the promise of ai, and someone else might come in and, and, and, and take the business away from them. sonali: you have navigated some of the most significant market moments in history. black monday, 2008. how do you see this moment? the market has shrugged off almost everything this year. nassim: these crises happen when you expect to them the least. beyond that, there is no protection, you are overexposed to the market. very similar to the environment we had in previous collapses. the market becomes complacent, people are used to it. you know, they may have some kind of precaution in the beginning, but then they throw that to the wind.

that is why vulnerability will be at its maximum. sonali: are we in a bubble? are there still animal spirits jumping around? what is causing it? nassim: i think that we are coming out of an environment of very low interest rates that taught people to avoid conservative investments and go into assets that could gain value. so, so people are used to investing in the market, like investing in the market. at this point it is attracting more and more people it has more of the reasons they got in, you know? they are there, ok? that is it, actually. it is just a small change in perspective to expose the fragility of it. valuations are not crazy, built on a lot of hope.

the economy is very confusing, you see? you hear stories here, you hear stories there. will they be off today? we don't have a, we don't have a classical environment for us to make judgments. this is why i would say that one has to be extremely schizophrenic and bullish although i think that mark, as you said, is less bullish than he was. he may even be waiting for the first so-called shoe to drop? sonali: the other thing that mark mentioned is that we are really open and vulnerable to black swan events. as long as i have known you, you have been reticent to call those out.

nassim: we have a system shored up during covid around the economy. we had more authorization as we speak. more dependence between economies. in other words, something collapses, it causes feedback loops. we have in the western world, relative to goals we can't handle, but it's bad here is that, sad, as you get richer, typically, you start having no debt. but your incentive to grow isn't there anymore. so, we are now probably the richest we have ever been in the government bought that, which makes no sense, you have to grow out of it. sonali: do you think the u.s. will be able to continue to issue the way that has?

will there be urged to purchase u.s. debt? nassim: that's what i'm afraid for in the current administration, 2022, when they confiscated assets, it doesn't encourage people to invest in your currency, because the first geopolitical problem, let's say you are a citizen of countries that are in, you know, in the middle east or asia, or you know, in, even in eastern europe . you don't want to be, you know, you don't want to let your money away from you. did you see, once you do it once . it's not the ki so, that is harming the dollar and harming the united states enormously. i think that president trump mentioned that. he said we shouldn't be freezing

assets. sonali: we have to leave it there, unfortunately. that was, scarlett. scarlet: we have a lot more to cover, you guys mentioned the banks. results shares are higher right now. details ahead. this is bloomberg. ♪ at t. rowe price we let curiosity light the way. asking smart questions about opportunities like clean water. and what promising new treatment advances can make a new tomorrow possible. better questions. better outcomes. thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

scarlet: this is "bloomberg markets." with investors digesting the start of earnings season, we are kicking things off with jp morgan, shares jumping after a net interest income increased last quarter.

however, ceo jamie dimon temper the outlook for next year. >> it's a nume but all things are never equal. i think ha we spend too much time on relevancy, so we get this model and you model the number and it will be less than 87 next year. probably not a lot, we don't know the requirement. scarlet: jamie dimon, getting punchy there. for more on this we are joined by cheryl, who owns j.p. morgan debt. great to speak with you. a beat and a raise for the third quarter and for the current quarter. j.p. morgan morning that net interest income will miss analyst estimates. does this set the bar as a dar for what other banks need to deliver this earnings season? cheryl: i do think it was certainly [no audio] scarlet: we are having technical

difficulties with cheryl there, hopefully we can get her back online, even as she just started. be sure to to a later, where we will be speaking with the cfo of wells fargo, later on. ♪

scarlet: all right, cheryl is with us from oak capital. to recap quickly, raising net income for the third and fourth quarter, the outlook for 2025 is a bit rosier than what -- or i should say that analysts are rosier than what is likely to happen. my question to you is -- does this set the bar or standard for what other banks need to deliver this earnings season? cheryl: it does, to some extent.

we were positively encouraged. broadly speaking, we expect, moving into a rate cut environment should help thanks broadly with deposit data slowing and competition fading to some degree. that is the expectation, broadly , though i think the stocks could still work in lower expenses and better credit as well. scarlet: jamie dimon had a cautious nbot the overall environme, backed up by provisions for loan losses coming up higher than expected. are you comfortable with the picture that this paints of the u.s. economy? is this consistent with a soft landing? cheryl: i think it is. we have been looking for credit normalization for several quarters now. particularly on the consumer side. i think that what we are encouraged by is a couple of things. number one, guidance on card losses looks like it will be on the lower end of that, when we

fully phase in 2024, but also looking at data points like the credit card master trusts, which showed that the second derivative had been slowing for the last five months. healthy normalization and seasoning going on, but not necessarily stress. we are a little concerned about the lower end, but overall we think the consumer is healthy. scarlet: lower rates should be to pick up in the mortgage business. is this business that wells fargo cannot capitalize on because of the asset cap imposed on it? cheryl: i think they are in a slightly different situation in the other banks, because of the asset cap, but we did see strength in the fee income line. a lot of the mortgage product tends to be agency product, which is sold off to fannie freddie. i think that puts them in an ok position to capitalize on the refi rates coming down as well. scarlet: really appreciate you

joining us there, cheryl. transitioning to china, a bloomberg survey shows investors and analysts are expecting the company -- country to announce fresh fiscal stimulus tomorrow. the finance minister is set to outline the plans, which could have subsidies for goods, family support, and more. is it enough? for more, let's bring in our correspondent from washington. this briefing is coming on a saturday, but earlier in the we had different unit, the state economic planner, disappointed the market with its unveiling of additional spending. why are investors counting on this company briefing on saturday to make a difference? >> because government spending has been the missing part of the jigsaw puzzle so far. the expectation tomorrow is that when the finance ministry takes the podium, they will have a material announcement.

it is expected to be about putting money into the economy now. the question is, will it be new money, or will they be accelerating using up this year's budget? a lot of economists pointed out that spending for this year is behind schedule, so they could speed up what they are, which isn't necessarily new money or major stimulus. they might signal bringing forward spending from 2025, signaling that they are willing to go deeper into debt as they go forward. questions over what comes through there. the second part of it will be -- where willt mney be going in the first instance? we don't have much by way of detail on that, but the explanation is they wanted to get people spending again and get some big projects finished as well. scarlet: how much feedback from investors, big finance, even consumers, is the government likely taking into account with its current what i can only

describe as a drip drip approach. >> it has been a confusing reaction given the markets, but the analysis has mostly been change of tone from the authorities and a sense of urgency that they need to tackle deflation and get consumer spending again. the rest of the world has been looking towards china for some time now, wondering when they will get going. there is a sense that the authorities are responding to its happening in the market and on the ground. the question, though, is how much money will they be willing to put on the table? that's the big unknown tomorrow. broadly speaking, authorities are less concerned with what is happening in the markets, but are concerned with living standards. scarlet: and whether they can get confidence back up among consumers. always appreciate you joining us. i'm scarlet fu and that does it for "bloomberg markets."

"real yield" --"balance of power up next. ♪ ♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month.

>> from washington dc, this is "balance of power." joe: 2 million are still without

power and now the recovery begins in florida. welcome to the fastest show in politics as president biden prepares to address the nation after being briefed himself on the response to hurricanes helene and milton. i'm joe mathieu alongside kailey leinz. welcome to the friday edition of "balance of power." this has brought up a lot of big questions about funding for fema, sva, and other organizations trying to help people in the storm zone. kailey: out of money by next week? fema for seeing rapidly depleting resources because of the two massive storms that require massive responses. president biden said he thinks congress should return to washington immediately to address funding needs, but no sign that that is actually going to happen. joe: we did hear that from speaker mike johnson last evening.