sonali: welcome to bloomberg markets, i'm sonali basak. traders dealing with geopolitical, economic earnings factors. there is a lot to chew on. at the overall picture as we had noon wall street time, the s&p 500 is up .4%. even more so in e nasdaq 100, where the chip stocks are helping to drive the nasdaq 100 eire, up .8 percent. looking at the 10-year yield, it's pretty stunning, save -- seven basi pints higher. just flirting with the 4.1

percent level. once again keeping an eye on new york crude, up .2%. just above the 70 handle. under the hood now we are taking a look at mid-day movers. we are bringing and abigail do for that. abigail: chips are out waiting the indexes with more on the tech heavy index doing the tx adr taiwan semiconductor beating profits and a big way. they hiked to the full year view for sales and looking at growth over 20%, a significant difference. the ceo talked about it being driven by a i demand and it is just the beginning. a stark contrast to what we are hearing out of asml the other day. on the downside we do have elephants falling in a serious way. the health care insurer is down 12%. it's a real nosedive down. they cut the forecast and one

analyst says it's an unprecedented challenge to its medicaid business. something that we are hearing around a lot of these insurers, the reimbursement rates and that sort of thing, down 12%. finally, a bit of a mixed move here, but expedia, we can see it higher, up 3.8%. this is a strong look at investors saying they are hearing the possibility of uber being in early talks for a poible takeover of expedia, the investor way of saying that they like it for expedia but not for uber. td cowan saying they could offer some synergies, but it sounds like it's early in those talks, so stay tuned, there might be more to this story ahead. sonali: thank you so much for taking a look at the movers for us. u.s. treasury yields are jumping because they trimmed their bets on fate -- fed rate cuts this year. the more we are joined by mark at rbc asset management.

looking just as interestingly, the 10 year is moving, but the front-end is not moving as much. traders are still really looking at less than a chance of a 25 basis point rate cut this year, still thinking there could be another 25 you are. what do mark: you think? mark:it looks like the u.s. economy is doing extremely well, doesn't it? all of this talk of growth slowing down and recession risk, i don't see that. i've been in the u.s. on those research items for a couple of days but this economy feels like it's really going, nothing like europe where everything is bumpy, stagnant, quite depressed. the economy is doing well. but when it comes to interest rates, the fed did 50 in september and i think they will go and follow it up with 25. if they don't do a 25 now, it almost feels like the 50 was a bit of a mistake. sonali: there are certainly

investors who think that 50 was a mistake to begin with. i spoke with billionaire stanley miller the other day and he thought it was a mistake. do you think that if they come another 25 they risked creating another environment where inflation could start to grow again? mark: look, i think that when you look at the outlook over the course of the coming year, there is every chance that the economy as it continues to move ahead, if we saw trump in the white house imposing tariffs, which we would see as an inflationary impulse, there's every chance that when rates come down we could be talking about them going up later next year. after all, there were many new parallels between this economic cycle and what we saw in the 1990's. both of those situations saw rates coming down before they went back up again. sonali: your view, based in london, doing a tour in the

united states, you were just in washington, d.c. as well, what were your observations and how does it change your view? mark: feels like the momentum is for the trump team at the moment. elections, a lot of it, is about momentum and at the minute it feels quite difficult to see what harris can do to actually switch the momentum back in her direction. the betting markets have really moved to price in a trumpet win over the course of the past week. that is the way we have been leaning. from that point of view, we have been adding to positions, looking for a steeper yield curve. we want to be short at the long end of the bond market, we see that as more in fate -- inflationary. we liked the break even under trump and the positions over the course of the past week. i think that if we see a trumpet victory, it will tie in with a stronger dollar. i know that donald would like to see a weaker dollar but i don't think that he will get one,

markets will move to strengthen the dollar. normlat a time when we see ongoing u.s. growth exceptionalism, why shouldn't the dollar on sonali: absolutely fascinating. i'm wondering how much you think that could take off, how short would you go at this juncture? mark: from my perspective you have to start where the fair valuation of interest rates should be. what i'm really looking at is the long end, the 30 year. i reckon that could go to 5% and i think the curve needs to be steep. until it gets steeper materially, there is no incentive for policymakers to do anything about the rising debt levels in this particular country. at the moment, everyone loves tax cuts, don't they? we all love them. but at some point if the yield curve gets really steep, at that point you kind of want to ink about fiscal responsibility to bring down mortgage rates but at

the moment we have an inverted yield curve that is just a green light to policymakers to carry on cutting taxes and spending. it's happy days. sonali: it's interesting, looking at what the bond market has been doing, we saw that reaction to the retail sales data this morning with strong economic data. i'm wondering if you see a trump trade building in the bond market right now. mark: i think we are seeing a bit of one. you can see it in the price of bitcoin and the dollar, other assets that could be more vulneruner a trump administration. there has been a weakening of the mexican peso, for example. we are starting to see that priced in. bear in mind, what is going on is actually this economy is kind of powering ahead. we have looked at the fed delivering a 50 basis point cut in september at a time when it looked like the economy was growing around 3%. this is strong data and if you

look at the supplies index on surprises, it's -40 seven from back in july and now up at plus 15, plus 16. the momentum is solid. sonali: it's interesting seeing how far the dollar has to run given what we have seen already. mark: when you look at the dollar relative to the euro, for example, i could see a situation where you are targeting parity. after all, the ecb today actually accelerated its interest rate cuts because the economic downside is really struggling. i was in brussels recently and it felt like the tone from policymakers was it as about as depressed as i have known it for years, but the contrast here is pretty stark. the fundamentals suggest a somewhat stronger dollar and if you get a kick from trump winning and the policy on tariffs there that he is threatening to enact, why not look at that as a possible target? sonali: a couple of days ago

another person i spoke to was the ceo of apollo global management, mark rowing, and the point he made was that risk premiums are not baked in almost anywhere. not in bond markets, not in stock markets. i know you are watching the geopolitical situation closely as well. where are investors ignoring the risk the most? where is it biggest? mark: it's interesting, the question of complacency. what i would say to you is that i think investors have been fearful for 18 months and over that time we have seen markets climb a metaphorical wall of worry. in a way, people have been looking for a recession in the economy since the beginning of last year and one hasn't shown up, has it? from that point of view looking at investor positioning, it feels like many investors are running quite cautious when it comes to investing in credit relative to benchmarks. or they haven't been sort of fully engaged in the market upside. although it might seem that the market is complacent with the

s&p targeting all-time highs at a time when you have political risk, economic risk, geopolitical risk, the reality is we are in a backdrop where the economy is growing, earnings are growing, and the underlying fundamentals are pretty strong. i would say yes, you can always look at what could go wrong in the world, but at the moment here in the united states, quite a lot is going right. sonali: mark, thank you for joining us on your trip to new york. that was mark downing. coming up, a special report showing citadel employees, including the founder, ken griffin, have seen their investment in flagship hedge funds surging over the past several years. we give you those exclusive details, next. this is bloomberg. ♪

sonali:sonali: "bloomberg markets." we have a new report from bloomberg showing that employee cash makes up a quarter of the citadel assets. it is a part of their investmn in a4billion dollar flagship hedge fund that has absolutely soaredn he past several years . the fund peomance is partly driven by robut eturns and lockups that the firm imposes on a big chunk of their employee annual compensation. for more we are joined by a reporter on this story, miles weiss, who comes to us from d.c. and has his eye on every filing out there. miles, when you look at what was going on here with citadel, i love what you wrote, it's a high-class problem. what's the problem with making more money? miles: i wouldn't say that

there's a problem with making more money. it's for the outside investors that there might be a problem, because their profits are -- the employees in the fund, a big piece of their bonuses are deferred for 3.5 years. so, they have been able to earn the returns that the fund has produced, 26 percent annualized over four years. the outside investors have gotten their profits returned, so they, they haven't been able to bring those returns on profits. they are still earning capital. abigail: what -- sonali: what does this mean for citadel in particular? does this bring eat what you kill to a new level? you are sharing in the gains of the investors. investors like that kind of alignment. there's been a lot of agitation around hedge funds recently, but when investors are getting paid back and employees are sharing

with it, do employees like this model at the end of the day when it can look like this? miles: i think that they like it as long as the fund returns are going up. if they were to go down, you know, it would of course work against them. sonali: what do we know about the details of employee compensation when it comes to citadel itself? miles: annual employee pay is deferred and citadel does that in part two aligned themselves with outside clients and it works well as a retention device. if -- there has been a lot of competition around places like citadel, wellington, over the past couple of years. if somebody leaves citadel wellington to go to a rival firm , generally they lose the

deferred compensation in the fund. therefore, the new hire has two kind of make them whole for that and it gets pretty expensive when, you know, the amount of deferred compensation is rising as much as it is. sonali: miles, we have to leave it there. thank you for your reporting. this is the number one read story on the terminal today. please, check it out. coming up, private credit. blackstone sees an influx of investor cash and becomes the biggest business by asset. will hear more from my conversation with john gray a little bit latr. first, our weekly money under segment where our guest says private credit is growing faster than the capital coming in. this is bloomberg. ♪

sonali: this is "bloomberg markets," time for bloomberg

money undercover. our weekly segment where we cover the unique challenges and opportunities facing alternative investments. lisa abramowicz joins us now with a special guest. lisa? lisa: we talk a lot about private credit living in a golden era and the money seems to ratify that. you interviewed john gray earlier, once known as a private equity behemoth, but the credit union is now the biggest by asset so the question is, how much longer can the golden era continue and how much room is therefore growth? joining us now to discuss, vivek matthew. thank you so much for being here. i want to start there. you estimate the private credit market is something like $1.7 trillion. how big could it get?

vivek: that number is a big number, 1.7 trillion, but we think that the market is even bigger than that, bigger than most people think. that's ok, the growth the market has seen and the growth that we expect the market to continue to have is really healthy overall to the u.s. economy. i will give you a couple of examples. larger companies that use public credit markets for financing, the private credit market has actually grown to where it can offer those companies and other option, right? if larger companies have other options in addition to the private public market solution as well, that's good for them and from a private credit standpoint that is an opportunity for continued growth, but the other place to look would be on the private equity side. we lend money to companies owned by private equity firms. private equity has been successful in raising capital and they haven't spent it, right? they haven't really spent it and they will, it is when at not if and when they spend it it will

be increased opportunity for private credit to grow. we feel like it is pretty underpenetrated in the middle market. that's where we play. if there is more debt and equity capital flowing to the middle market of the country, that's a positive. for all of those reasons we think that private equity will move beyond that but it is healthy. it's a competitive market, everyone is trying to get in, but what's more difficult, fundraising or sourcing deals that are viable in good? -- vivek: great question. raising those relationships with those firms and seeing those opportunities, m&a has been slower, so what has really been keeping us busy is we already have a portfolio of 70 billion in companies that we lend to and as they become successful, grow, and make more acquisitions, we are making loans to companies we

already like. those are key areas of sourcing, having the most opportunities possible. that's on the investor side. so, investors have really looked at this as an accumulation opportunity. they are not saturated, but they come at it in different ways. it's a global investor base. investors in the middle east, right, they have always thought about alternatives mainly as buyouts and real estate. we and other players in the market have educated the merits on private credit, right, so this is kind of like fixed income, you get paid for it, let me make it a permanent space in my asset allocation where i continue to make money g and diversify, so i spend more demand in that region. people are in need of private credit investment, but they want to add. so, they are getting educated about the different forms and it adds up to more accumulation. sonali: is it a good or bad

thing that the pool of investors is expanding to include wealthy individuals and other investors? vivek: there is this concept we have all talked about, the democratization of investment opportunities. why should only institutions get the benefits of alternative investments? there are a lot of benefits to that theory of what you have, something like 2% to 5%, depending on where you look. only 2% of that is alternative, that's too low. we feel that we can really add something to the investor portfolio there. wealth investors really like evergreen structures, right? the reason for that is, what we do is we take the base product, private credit, we put a wrapper around it to make it individual friendly, right? liquidity, tax forms, access to the market making it better. sonali: hold on one second, real question about the mismatch. typically institutions have some sort of longer amount of time.

is that a problem? does it raise concerns for you, even if it isn't your own structure, but the structure of other companies with individual investors? vivek: i think you definitely have to pay attention to that. one, structure provides some form of liquidity. there is usually a liquid component of the structures offering liquidity, but you have to make it clear to a wealthy individual that this is semi-liquidity. this isn't liquidity with high-grade corporate. this is liquidity where if you see something else that you want to do with your money, not a global calamity and i want my money back. sonali: in july the headline was "has the private equity market golden age ended? a more competitive market being a less profitable one? " vivek: does that ring -- sonali: does that ring true to you? vivek: golden age, we don't like that term. the reason why is -- look,

there's not a lot of new market participants and i think a lot more people are looking at this now. we have been in the private credit industry for 30 years and seen a lot of times that are good to lend, this is just one of them. i prefer more of like a goldilocks zone, which is i think a form of that where rates have been very high speaking relative to recent history where we can lend to floating rates for our investors, and that's good, but not so high that it causes widespread problems. that's a real goldilocks zone. i think that that will continue and extend, because, because, you know, talking about rates, obviously there was a rate cut, but now the jobs report that came out maybe complicates the fed's job a little bit. probably in a good way. but let's say that rates come down a bit. the most important aspect of the success of what we are doing and private credit is the success of the u.s. economy.

the rationale behind rates coming down a little bit, whatever the path of the fed winds up being, we have a handle on inflation that m&a picks up a bit, banks are healthy. with that backdrop, we think that is the most important reason for success and i think we will see that. sonali: what's the most popular or exciting region to be investing in right now for you? vivek: the u.s.. it's not an exciting answer, but the u.s. clearly for every reason we described it. we are on a nice glide spot. we don't need earnings to be ripping. we like a stable environment and i think that's what we have. sonali: vivek matthew is the president of iteris capital advisors. sonali: coming up, you will hear a part of my conversation with john gray, blackstone president, plus exusive with steve wise at carlisle. he just took the job.

we will see where he is at. 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.

sonali: welcome to "bloomberg markets." we are higher on the day, looking at the s&p 500 up a the nasdaq 100 is holding onto tho gains. thanks to those chipmakers you are up .7. very interested in the bond market selloff getting closer to the 4.1% level oncegin. now about eight basis ps higher on the day, new york crude is still downthe day, down .2%. standing at around 70.25. we are turning from public

markets to private markets with steve wise in a special interview, he became the cohead of the carlisle private equity group and we will get his view on what is changing at the iconic private equity firm. you have been at carlisle for a long time, but you just became the cohead of this business. what is different, if anything? steve: thanks for having me here, it's great to be here in my new role with my partner, brian, whom i have known since the late 1990's, he's a great partner. the portfolio is strong. we have a lot of exit activity as well at scale and we are very active on the new deal front, having done several new deals very recently. sonali: i want to pull up a recent deal, standard aero, it really was one of the vite -- early private equity firms. to see the public -- the private

markets at that scale, soaring at day one, what has not shown you about the environment for exits? is it open to everybody or a select few? steve: is beginning to open for strong companies. this is a best in class company, aerospace aftermarket services. it has been a strong performer for us. we bought the company in 2019 and we lived through the dark days of covid when no one was flying, but we reinvested in double down on the business and it is soaring. $11 billion market cap company now, range of 20 to 23 for the ipo, it traded up 30% and it tells you that the market is really starved for growth that is not tech. it is starved for really high quality businesses. sonali: with a pop like that, does it make you want to take more companies public or look

for sales? how does the calculus look to you under the surface? steve: equity and ipo activity are up this year and i think the window is going to open up even more next year, i think. the reason for that is the economy is in very good shape. we are seeing strong gdp growth, strong productivity with inflation coming down, interest rates coming down, people are having more confidence. the s&p is obviously at an all-time high and i think them up markets are going to be more open for those businesses. you know, sometimes strategic sales are a better option for us as well, so it is nice to have the optionality. sonali: it's interesting, people are looking at the exits but they are also looking at capital deployment opportunities. m&a has been an important part of private and public markets. what are you seeing in terms of large corporations and potential spinoffs?

steve: we have been actually very active in the corporate carveout arena, we've done two of them this year. you have seen a lot of large strategic's when interest rates were high, they needed to really rethink how they deployed capital in reinvested in their businesses. it led to a point where they wanted to either do spinoffs or carve out some businesses. that is an area of expertise and specialization for us. we just did one with a business that was a carveout from baxter, 4.3 billion dollars, 65% market share in core business. but it is a global business and a complex carveout. there is a lot of nuance in the asian business, so you really need expertise in those areas. you need a global private equity franchise and a management team that you can bring to bear in areas with supplemental management resources. we will -- we were able to do that in a unique position of partnering with baxter on that.

sonali: how robust is this trend, would you say? are there a lot of these headed into 2025? steve: yes, we just did one with world pack and we have spinoffs in a number of other industry verticals. sonali: you said that the economy is still strong and you see it in the economic data. what does it mean for your portfolio companies to the extent that they are still seeing challenges in inflation, labor, supply chain issues, where are they seeing the most trouble in this strong economy? everything that you mentioned, -- steve: everything that you mentioned, we had those concerns year ago. tight labor market, supply chain issues with labor costs, but

those things have really reversed themselves and we are seeing a moderating labor inflation market. supply chain challenges that we think are largely behind us. those costs have come in a lot and we are seeing really strong earnings in the portfolio with margin expansion and a lot of tailwind. sonali: say you want to put this money to work, are there specific industries attracting more for you at this moment? steve: we have a proactive approach. we have certain segments in industries that we consider power alleys, like health care, industrials, government and financial services. in those alleys, the teams spent years developing relationships and surrounding themselves with the right teams and advisors to find the right opportunities for

enduring tailwinds. that is where we find our opportunities. what we are doing right now, we are seeing a ton in that area. sonali: steve, thank you for joining us, that is steve wise, cohead of the private equity carlyle group just as deals are ticking back up. bringing you some breaking news, we are hearing from "the washington post," confirming from an israeli official that hamas leader yaya sinwar, the october 7 architect, has been kiled in gaza. this has of course been a developing story that we have been keeping an eye on all morning and we will bring you more news as we getit. we will keep an eye on all of the establishments and what it means for the latest in the conflict between israel, hamas, and the broader middle east as it comes. back to the markets, blackstone released third quarter earnings this morning and the stock is at a record high after reporting earnings. i was able to speak with the

blackstone president john gray about the outlook for the company in the coming year. >> clearly it's been a great time for credit, right? spreads were quite elevated and base rates were elevated. both of those are normalizing, so there is some excess return obviously coming out of the system. but the real question is -- can private credit deliver a durable premium over liquid fixed income? to me, the answer to that is yes. that is because of the farm to table model. the ability to bring investors right up to borrowers and give that holistic experience, deliver a higher return to those investors. so, you look at what we are doing in private investment grade credit, primarily for insurers, on average we have delivered 180 five basis points on higher returns on a rated credit. to those insurers they say --

that's really attractive. that is why you see the insurance area growing 24% year on year to $221 million. in credit overall, this 432 billion dollars between corporate and real estate credit . it is an area with a lot of momentum and i think, secularly, you will see big investors around the world continue to allocate to not only non-investment grade credit but also this investment grade area in the private space. sonali: we have a market that has been waiting for a faster pace on realizations and i'm wondering what your expectation is for sales to pick up and for the ipo market to open up at scale. steve: we are seeing a pipe -- >> we are seeing a pipeline opening up momentum that is double where it was 6, 12 months ago. we are having real-time discussions on ipo's. they have gone from a sort of theoretical to the practical. should we do this in february or

april? it is natural, because as equity markets go up, it's like a magnet pulling companies into the public market. so, i think we are starting to lay the foundation for a much better realization. it will happen. it takes time. you tend to plant seeds first and then harvest, but we are starting to move in that direction. sonali: can you give us a sense of how big 2025 might be? 2025, will it be the best year? since when? how many companies do you have in your pipeline? what is the scale you are looking at? >> it can ramp up over time and debt costs are coming down. if you look at the costs, it's probably 300 basis points less

than it did at the height. or if you were talking about a real estate deal, it could be as much as 300 to 400 basis points lower. i would say that overall it feels like it will be a meaningfully better environment next year, but hard to put an exact number on it. sonali: that was john gray on a day when their market cap reached above $200 billion for the first time. now, we are bringing you updates on the conflict in the middle east. remember, "the washington post does quote reporting th hamas leader was killed by the israeli military in gaza. bloomberg also confirmed this report we will bring you updates as they come. remember, he was the senior most official and hamas at this point in time, following the assassination in tehran in july. his marks a milestone in the conflict between hamas and the

greater middle east. we will be waiting on word from bibi netanyahu as well and we will bring you that commentary as we get it. thi bloomberg. ♪ when you automate sales tax with avalara,

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sonali: bringing you back to that breaking news and what we know at this juncture, the israeli foreign minister has said that yahya sinwar, hamas chief, was killed in the most recent round of attacks in gaza by the israeli military. soon we will hear from prime minister benjamin netanyahu. we will bring you the comments as we get them.

it of course marks a significant milestone in the latest conflict between israel and hamas. we will bringt we know as we ge, including more analysis. switching gears back to the markets, after the bell today we have the stock of the hour, netflix, because of their earnings after just a rally of the stock this year. we are going to keep an eye on what there is to look at of these earnings. very highly anticipated programming just around the corner. we are going to bring in our bloomberg intelligence correspondent for more analysis. the bar is high, given the run-up that we have been talking about. what are you looking for? >> consensus is expecting 4.5 million new subscriber additions for this quarter. we think that netflix can beat it comfortably. remember, subscriber growth has been strong for this company ever since they introduced two new initiatives.

one, the password sharing crackdown and a much cheaper price on the advertising based tear. subscriber growth has been strong, but at some point it is going to run out, they will hit a wall. i think that investors in the company have to get ready for that shift in the narrative and the question really is going to be where is the next leg of growth going to come from? it has to be revenue. we are looking for commentary on all possible levers, whether it is raising prices or growth in advertising, you know, and the other initiatives. sonali: what do you make of that subscriber growth? how much sensitivity does the stock have to the number? >> very sensitive. it's been the number one growth driver for the stock for so many years now, more than 20 years now. but it is going to become less and less important as a part of the narrative going forward. remember from the first quarter of the next year they will stop

disclosing subscriber metrics altogether, signaling to us that they are really moving into this mature growth phase coming at a time when they have hit almost 300 million subscribers globally. they are by far the biggest streaming service. now, really, the narrative is shifting to the financial metrics part of it, right? revenue growth, sustaining double-digit revenue growth with growing margin and this year they are growing margin by a really substantial 500 basis points. it will be interesting to see if they will be able to kind of keep up the momentum on those financial operating metrics. sonali: at the end of the day when investors look at netflix in the amount of money they are willing to spend on these initiatives, how much patience do they have? >> most investors understand at this point that netflix has been the winner on the streaming game and it comes down to valuation, right? the stock is trading way above

all the other media legacy companies and revenue growth is obviously going to underpin. doug jewell double-digit revenue growth will underpin that valuation and for it to be sustainable, it's really important that netflix announces new initiatives. whether it is a price hike that has been long overdue for their standard plan or whether it is a take off in a big way of the advertising business, those are going to be critical. if they don't do that, investors are going to run out of patience. sonali: netflix has been on a tear this year. thank you. bringing you back to the breaking news israel said they had killed the leader of hamas, the architect of the palestinian attack on southern israel that triggered a year long war in gaza. prime minister netanyahu will speak soon and our bloomberg news national security reporter,

nick, is with us now. what do we know of the latest and what happens from here, given the pivotal milestone? nick: this is the big question moving forward, does this mean that netanyahu is allowed to declare victory and push israel again towards a cease-fire that would end the fighting that began a year ago? the other question, though, is who can they now speak to on the ideof hamas? who has the power within the organizat to be able to coalesce around and into the conflict and a cease-fire, if that is what they want to do? what is clear is th the organization is severely weakened, it has been decimated over a year of figh an has lost itsost senior leader. you can expect the biden administration to exert a lot of pressure on netanyahu to essentially say hey, take a win, time to put an end to this thing.

importantly, looking back to a note this morning from sigmund global, this is the critical piece, his death does not unlock the end of the gaza war at it in fact raises questions about whether it could unlock a cease-fire and peace deal. what is the tone? nick: clearly that is the question that has been there all along. you can eliminate the leadership of hamas and essentially decimate gaza, but can you destroy the idea? the group remains popular. it has substantial backing from some in the gaza strip. so, when prime minister netanyahu essentially says that we won't stop until the group is eliminated, you cannot destroy every single fighter and every single supporter of the group. so, at what point does he have

the cover to essentially say -- ok, we are done here, and then what are the risks that hamas could reconstitute once the fighting is over? you can be sure that israel and the u.s. is conversations, but clearly for joe biden who wants this thing over as quickly as possible, there is going to be a lot of pressure on netanyahu, who is set to speak in about an hour to declare victory. sonali: two major hamas leaders killed in a matter of months, but another question is how they might respond and what might successor look like? nick: what capability does hamas still have? they still maintain the capability of maintaining a campaign, but one of the big issues about who succeeds them, as you mentioned, and where is that person? there are not a lot of hamas leaders in gaza anymore who would have this way, the authority to be able to shape

the organization. a lot of them are based overseas, particularly in qatar. the theory is that they will be more susceptible to pressure from qatar, egypt, the u.s. and others, to steer into a deal and say listen, essentially your entire leadership structure is destroyed, your organization's sin -- severely hobbled. time to agree at long last to a cease-fire. whether or not that person has the authority to let them coalesce and abide by it, that's another question entirely. sonali: that's another question, what's the goal when it comes to gaza at this juncture? nick: it's a question the administration has been asking all along, saying that if you are essentially reducing the entire area to rubble, what is your long-term strategic goal? you cannot just essentially empty out the gaza strip.

when do you say the operation is done? prime minister netanyahu has always said that w n't stop until we achieve total victory. ethe other thing he adds to that isssntially we don't want a situation where hamas is allowed to reconstitute. the challenge is,f israel leaves gaza, stops the campaign, does that and gives them oxygen to reconstitute, something they have never been able to square, but what you can be sure we will see now is a lot of pressure from the u.s. side to define the terms of the strategy and the terms for ending the war and looking through on the day for how to rebuild without hamas. sonali: what do you make of the response so far from israel? when you mentioned earlier that we expect bibi netanyahu to speak shortly, within the next hour, what do you expect from him? nick two things i'm looking out for, is he essentially going to say hey,didit?

it's now time to end the campaign? job is not done and we willour connue to press ahead? the other ques obviously, you have hamas, hezbollah, and lebanon. israel has only stepped up that campaign and shown no indication, despite killing a lot of the top leadership, that they are willing to let up on that fight. so, while there might be easing off or even a declaration of victory over hamas, they are going to continue to press against -- press on against hezbollah. obviously, there is the other question of iran and what israel does there. sonali: we only have a minute left. that's another important aspect, where israel standards with other neighbors as well and where it stands in lebanon at this moment. its response to hezbollah. nick: you can expect israel is going to keep up those attacks. they have given no indication

that they are willing to let up there. the question we are all waiting for is israel has threatened to retaliate against iran after that ballistic missile barrage on october 1 and we are still waiting to see what the response looks like. is this a situation where israel is able to take a step back and stop, or do they say that now we are turning our attention to what they described as the real head of the snake, iran. what do they do about that and do they turn their full attention to iran? sonali: nick, thank you for your analysis. throughout the show we will bring you more breaking information from that presser here from bibi netanyahu. before we let you go, of course, last check on the markets. you have markets generally shaking off geopolitical conflict. the s&p 500, still higher on the day, .4% higher. the same goes for big tech. safety in the bond market? not so much, still selling off

on the 10 year. that does it for "bloomberg markets." this is bloomberg. ♪ ♪ ♪ 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. hi, i'm rashod and i've lost 118 pounds on golo. the highest i've seen on the scale was 417. it was a real reality check, it was really scary. diabetes and high blood pressure runs in my family.

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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: israel says it has killed the leader of hamas. welcome to the faster showing politics as israel's foreign minister confirms the death during an operation in gaza. i am joe mathieu alongside kailey leinz. thank you for being with us on "balance of power." we expect to hear from benjamin netanyahu. kailey: already we have gotten a statement from the foreign ministry confirming the leader has been eliminated. as part of the statement released, they called him a master murderer responsible for october 7. to quote the statement it says it could lead to the immediate release of inductees and lead to a new reality in gaza. that is the question. what is the new reality? . joe: