katie: welcome to "bloomberg markets." i am katie greifeld. this would be the 46th record on the s&p this year. let's get a quick check on the markets. a pretty good start to the week. both higher to the tune of .7 to .8%. continuing the record run we have been on. i cannot say the same for crude. crude currently below $74 a barrel, down about 2.3% on the day. totally different story if you look at bitcoin. risk appetite back in a big way when it comes to the crypto space. bitcoin higher by 4.6%.

let's get midday movers on the equity side with abigail doolittle. abigail: we will be looking at one of the individual stocks at a record high. right now, let's look at this soaring up 26%. the beleaguered financial firm trying to cut debt. as a result, they have sold the bulk of their holding in great american holdings to oaktree known for buying distressed debt and other pieces of the capital stock. for this, they received $203 million. they will also receive a 47% stake. to the downside, we have weakness in the industrial space. boeing is down. it seems the airplane maker cannot catch a break. those shares are down 1.5%, off the lows down 1% after announcing a 10% global workforce cut. they also took a $5 billion charge amid a painful strike. caterpillar down 1.7%.

let's end on a bright spot, wells fargo trading at an all-time high up seven days in a row gaining 15% over this time, the longest streak going back to make. last week, they put up a good quarter where they missed sales slightly but beat earnings. clearly, investors liking what they are seeing in wells fargo. katie: abigail doolittle, thank you so much. a shakeup is brewing over at southwest airlines. elliott management has called for a special shareholder meeting at southwest officially kicking off the first u.s. to fight since 2017. it is calling the meeting so fell investors can vote on new board nominees. they have nominated eight directors to the southwest board seeking to replace eight incumbents. we are joined by crystal see.

it seems aggressive. what is the southwest response? >> southwest put out a statement . this is hot off the press. they say they have made every effort they can to reach a constructive resolution with elliott. i am sure elliot would probably say the same thing. investors do not want to fight in the company does not want to fight. we have reached this point where there is going to be a vote. elliot called a meeting for december 10, which is an out of cycle meeting. they are trying to get eight directors on the board and replace eight existing directors. katie: if you go back to july, we note southwest had gone forward as a poison pill to prevent elliot from launching the proxy fight.

that did not work. what can southwest duke between now and december 10? -- what can southwest do between now and is over 10? >> when southwest puts in the poison pill, it is to prevent elliot from buying more shares to prevent a hostile takeover but also prevent elliot from gaining more control and more of the company. what is going to be interesting is if we look at the top 10 shareholder registry, you see a lot of passive investors. they don't tend to make their voices known until the very end of any given battle. fom now on, what they say or signal in the background wille interesting to watch. katie: shares are down a little today, about 1.7%. elliot said southwest has shown years of underperformance. looking at the stock market, they are exactly right.

over the past five years, down 41% on a total return basis. the s&p 500 for context up 114% over that time. there are the numbers. what went wrong at southwest would you say? >> the more important thing is looking at the rivals like delta, jetblue, united. united and jetblue are up 50% in the past year. southwest is up moderately like 20% which is a big underperformance compared to peers. southwest had a buyback and is ending the free seating policies which is one of the hallmarks of southwest airlines. these are moves to cap into -- tap into more business travelers and give a different price point option. i think that is to try to maximize profit but also elliot

has been there since june so whatever they do is now under a microscope from now until when the meeting is going to be. katie: i know you will be one of the reporters follow it closely. appreciate you taking the time to speak with us, crystal tse. earlier today on "bloomberg surveillance," the ceo of stellantis spoke at the paris show. he spoke about the ev sales slowed down north america -- slow down in north america. >> we have an operational problem. in north america, we got trapped by a marketing plan on the second quarter of 2024 that was very audacious and daring and did not work, it failed. we got trapped by the marketing plan. we needed time to rebound with u.s. dealers.

i did it personally in august of this year. now we have a new more conventional plan that is active. it is working very well. over the last few months, we could reduce u.s. inventory by 52,000 vehicles. before christmas, we will be below the ceiling of three hunter 30,000 vehicles which we consider is the ceiling -- 330,000 vehicles. the problem is fixed. it is not rocket science. i think we have the right dynamics right now. we expect it to be fixed this year. that is what happened. regarding the brands, the brands are very healthy. the jeep brand, the dodge brand. also, the new chrysler models. i think they are very healthy. we just need to do the proper operational work in terms of collaboration with dealers. i think we have the capability to do that. i believe ram and jeep are

already leading the way in market share recovery as we improve market share. market share is up. inventories are down. it will be normalized by christmas. i think we are back on a nice trend. now, we need to deliver results. this is what investors expect. >> are you open to selling any brands? >> not necessarily. i am not necessarily open on that. of course, we consider any proposals like any open-minded business team as we consider we are. if there are proposals, we will study. but we are not seeking any sale of any of our brands right now. that is very clear. >> last time we spoke, you spoke about corrective action. you have a mandate until the end of 2026 as ceo. i shared some stats on overcapacity in the european auto manufacturing sector.

maybe a third are producing the capacity they have to make. when are we going to make the corrected decisions that need to take place? either you cut capacity or european governments will come out with the right demand-side incentives to buy the vehicles, because that is not there right now. when do we face the reality check? this year, next year? how long can we hold off with excess capacity? >> it is quite clear right now we only ask two things to the government, specifically european governments. we ask for stability of the rules. we do not ask for any postponement because we are ethically committed to contribute to fixing global warming. we do not ask for any postponement. from the other side, we ask governments to stimulate demand

which is to help the consumer so the consumer can buy ev's at an affordable price. katie: that was the stellantis ceo speaking with bloomberg television earlier today. coming up, major banks reporting earnings tomorrow. will markets like what they hear? our preview is next. this is bloomberg. ♪

katie: welcome back to "bloomberg markets." i am katie greifeld. time for our stock of the hour. great news. we are looking at major banks broadly. the kbw bank index rising over the past week.

we have wells fargo leading the upward move in the index which is at its highest level since 2022. for more, i am pleased to say we are joined by sal martinez who covers the big names. i want to start with net interest income. i want to talk about j.p. morgan. i thought daniel pinto told me nii is not going to be so great. j.p. morgan surprises on the upside. are you expecting more of the same and it comes to its peers? >> thanks for having me. i think it is about expectations. j.p. morgan on friday did not say anything different from a month ago. they did suggest analyst estimates of $80 billion is a

material contraction. there is light at the end of the tunnel. i think that is what is going to be the results of the other banks. in the case of j.p. morgan, there is more pressure compared to other banks. jeremy indicated they do expect net interest income could drop in the second quarter of next year. i think what you saw with wells fargo, it performed very well. they had a tough net increase -- net interest income quarter. a couple of things are driving it forward. the deposit pricing pressure does seem to be moderating. there is less yield seeking activity from depositors so you are seeing less pressure on deposits. think about auto loans, securities invested at very low rates. those are repricing at higher rates so you are getting the tailwind from the medium to the

long end of the curve. i think that will be expressed in the result of the other banks who start to report tomorrow. katie: among them is goldman sachs. this is another case where you had ceo david solomon morning it was on track for a 10% drop for the quarter. he did suggest stronger banking gains could offset that. when it comes to goldman and the trading picture, what are you expecting? >> we are expecting something similar to what david indicated about a month ago, down 10% sequentially and year-on-year. we have seen good engagement in the businesses. equity prices have been performing well. j.p. morgan did outperform on friday relative to the expectations they gave about a month ago for markets. we would not be surprised if

that trend continued with the other investment banks as well. for nowwe are expecting about a 10% sequential decline which is a little worse than we were expecting for some of the other investment banks. for investment banking, we are expecting a little better owth. j.p. morgan strongly outperformed relative to the expectations they gave. to the extent you saw late quarter activity helping, perhaps that could translate into goldman's results and the other banks as well. katie: something to keep an eye on as we look to goldman. let's talk about citi. think about all the job cuts. if you look at the guidance, basically set to report lower personnel expenses for the second quarter in a row. how does that fit into the broader picture of citi?

>> citi is a self-help story. it is an investment story that relies on them improving profitability across their businesses materially a really important part of that is the expense line. therexpecting expenses closer to $54 billion. they have indicated the medium-term target in 2026 is in the $50 billion range. expenses are going to be probably higher than we anticipated prior to them giving guidance. are they showing progress? are the cost cuts and personnel

reductions in simplifications showing up in a better run rate expense figure? what will the outlook be for the fourth quarter and into 2025? that will be important for the story in terms of whether they can get that profitability improvement and do the things they can control to get that profitability higher. katie: you have a busy couple of days coming up. appreciate you taking the time to speak with us today. that is saul martinez. coming up, rising rents and anxiety about the cost of living have been a major issue in the u.s. next, a closer look at why housing may be a problem that takes years to solve. this is bloomberg. ♪

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most recent edition of markets magazine is covering one of the biggest conversations in the u.s. economy today, housing. housing values have stayed stubbornly hunt. sonali basak reports. sonali: there is a housing affordability crisis decades in the making. home prices are skyhigh. affordability in 2024 dropped to its lowest level since at least 2006 according to the national association of realtors data that just before the global financial crisis popped the housing bubble. experts target two key reasons. one is a supply problem building since the 2008 prices. the u.s. is estimated to be anywhere between 4 million and 7 million homes short according to a report by the urban institute.

a second concern is the most dramatic surge in interest rates in a generation has made it hard for homeowners to borrow. even with the drop in interest rates, the affordability crisis would still be an issue given the extent of the housing shortages. in fact, the bloomberg opinion columnist points out returning to the kind of housing affordability americans enjoyed in 2018 overnight would require home values to drop 30% or for mortgage rates to decline to 3%. needless to say, this is not very likely. the problem is the centerpiece to election campaign promises. kamala harris has promised to address the housing shortage in several ways. >> we are going to cut red tape. we are going to work with the private sector. we will build 3 million new homes by the end of my first term. [applause] sonali: it ia problem donald trump is also looking to fix. >> young people will be able to buy a home again and be part of the american dream.

we will eliminate regulations that drive up housing costs with the goal of cutting the cost of a new home in half. we think we can do that. sonali: trump is also looking to open federal lands for new housing. the big issue for both parties is all of these plans have significant complications. >> when you run through the practical abilities of all of this, i am not sure it is going to be the game changer we would hope it to be. sonali: the problem is hard to fix. she believes the market will be able to work itself out. sonali basak for bloomberg news. katie: for more on this, we are joined by the reporting covers bloomberg news. how did we end up in the housing crisis? >> home buyers today are faced with a bunch of different factors that make it unaffordable. we are short 4 million to 7

million homes in the market. the high demand over the available homes has driven prices up to nearly $400,000, some of the highest levels in u.s. history. on top of that, raising mortgage interest rates means the cost to get a home loan have increased so it has put home ownership out of reach for a lot of people. katie: you have that structural under supply of housing coupled with superhigh mortgage rates. no one is happy here. who is hit hardest by that dynamic? >> i think when we think about housing affordability, we are seeing gen z and millennials who have not had the chance to buy are hit the hardest. this cohort are more likely to meant at a time -- to rent at a time when the cost to get an apartment has also hit record highs. we have seen inflation rise at the fastest pace in decades. they are also feeling the financial burden from every other cost-of-living making it

that much harder to save up for a down payment. katie: we have heard about the under supply of housing. there are not a lot of homes available. how did we end up here with this housing deficit? >> it all started with the great recession. that ushered in a decade of under building leading to the shortage we have now. at the same time, millennials came to prime homebuying age. there was a lot of competition over the few homes available. then we saw the pandemic where record low interest rates catalyzed a homebuying frenzy that pushed prices really high. now that so many homeowners have locked in a low rate, they do not want to sell. that is contributing and exacerbating the housing shortage. katie: we appreciate you walking through it. that is paulina cachero. that does it for "bloomberg markets." i am katie greifeld and this is bloomberg. ♪

it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people.

>> from the world of politics to the world of business, this is balance of power. live from washington, d.c. joe: it is the first significant

deployment of u.s. troops to israel since the war in gaza began. welcome to the faster show in politics as the biden administration sends a new missile defense system along with about 100 american troops as israel prepares its for troops -- it's response to iran. i'm joe mathieu alongside kailey leinz . this conflict still in our view, unclear what israel's next move will be. kailey: we are still waiting in the aftermath of iran's attempted attack on israel. missiles largely accepted through israel's arrow system. with the u.s. is providing to israel is intended to supplement that. it is operated by 95 american troops. obviously we have known there are american assets in the region, this is literal american boots on the ground. joe: boots on the ground in israel, you need those 90 or so troops to operate the system. they c