>> welcome to bloomberg markets. investors come economists, political watchers are assessing the threat of tariffs after donald trump valves to make additional moves on mexico, canada and china. let's see how it is shaking out in terms of market action at least for today. it does appear traders are choosing to look past trumps tariff talk. . you look at the s&p 500. modest moves although the s&p 500 is flirting with a record high. not much of a reaction to consumer confidence which came in at a one year high. you look at the vix and volatility is tamped down. has come way down as the s&p 500 extends gains to the seventh

day. at a 13 handle versus 23 in the election. looking at selling in treasuries. pushing the yields higher on the 10 year. yield goes up to three basis points. bitcoin flipping to the green. it has been in retreat mode after last week getting closer to $100,000. about $7,000 away. let's highlight some midday movers on the equity side. we go to abigail doolittle. abigail: we are looking at a tale of two stories for some of the health care related names. amgen, perhaps its worst day since 2000. flipping between 2000 20 and 2016. down 8.4%. there weight loss shot in a trial that disappointed investors. people did lose 20% weight but 11% of the people dropped out on side effects. apparently the weight loss of

20% not as much as some of the other companies who have the drug such as eli lilly. president biden is proposing medicare and medicaid coverage of the obesity drugs so you can see eli lilly up near session highs the better part of 6%. let's take a look at the shares of rocket lab up for the fourth day in a row. up 30%. today up a healthy and 9.4 percent after they completed two lunches in less than 24 hours. you are mentioning the tariffs. they may not be affecting the broader market on the surface level but the automakers who will be a sexually sensitive to tariffs, the 25% tariff mexico. ford, and gm down. dm has the largest exposure any terms of cars produced from mexico. down eight point sent -- don't 8%. might be worse than the day of june in 2022. the stock keeps going to session lows.

ford come about 400,000. anyway you look at this, there is likely to be some pain. baird saying up to one million vehicles, the vehicle sales of one million vehicles could be cut because of these upcoming tariffs. fantastic round up. the word of the day is clearly tariffs. president-elect donald trump threatening to slap 25% tariffs on all goods from mexico and canada. . that is why abigail was highlighting some of those vehicles. an additional 10% on chinese imports as well. this is a theme he has visited over and over again on the campaign trail. >> tariff, tariff, tariff. i am a tariff man. . the most beautiful word in the dictionary is tariff. . i want to cut taxes on -- build a plant in the united states and you don't have any tariffs. scarlet: pretty consistent

message. from more on how these tariffs the implemented, i am pleased to welcome the veda partners cofounder and director of economic policy research. we are focusing on trading in different regions. let's talk about north america first. funny 5% tariffs on all goods through those two countries. don't we have a trade agreement in place, the usmca that was negotiated during trump's first administration? how would this fit in with that? >> that is not a dumb question at all. it defies logic to think the usmca which the president u.s. trade representative negotiated closely with congress and through excruciating line by line taxed and got agreement with democrats and republicans alike in what is one of the biggest achievements of his administration. what would happen here is the president-elect would decide he would deploy the national security clause in the usmca which allows him to impose

tariffs of whatever level he sees fit. 25% for fentanyl and immigration . that is where the tariffs would come from via executive order on day one in theory. scarlet: this could implement to the minute he gets sworn in to office? >> exactly. this is through other the loophole in the usmca or via the international emergency economic powers act. those executive orders are laid out to customs and border patrol and my conversations for years with them suggest they are able to change the customs they charge at the border within 12 hours. scarlet: within 12 hours of him getting sworn in once they take the executive action. view for us what canada's top exports to the u.s. are it i know it is energy products. abigail mentioned car parts. what does that mean in terms of economic impact? >> my big question is whether

they tariff these items just once or every time they cross the border. on the auto menu fracturing side, our supply chains are so interlinked the same car would cross between the u.s., mexico and canada several times before it is a finished product. it depends if you are crossing the border once for one part and for another part. is that tariff 25% or is it now 50%? on the oil and gas part, it is not just crude and gas and other petroleum products but it is a lot of clean energy. there are 4 million barrels a day that cross the border between the u.s. and canada. 25% tariffs on other -- on all that is going to equal higher gas prices for u.s. consumers. scarlet: we are taking this literally, 25% on tariffs for these items. president-elect trump likes to stake out a big number and use that as the first point of negotiations. is that the going assumption here? >> what i refer to and what we all showed is what has really

happened. section 301 tariffs, he said they were going to go on at 25% and they remain at 25% to the steel aluminum tariffs come he said steel was going to be tariff the 25% and aluminum at 15 to in certain nations that is where they remain. i don't view the number as a starting point. i think often times what we have seen from ambassador lighthizer's efforts is the tariff rates are scheduled to increase in the future. he will provide an additional tariff rate and a basket of tariffs and give us a future date. take those numbers seriously. he is not president yet so there are three months worth of wiggle room should one of my biggest concerns is what kind of delay are you going to give to the business community? is it three months from today or three months from january 20? scarlet: it is interesting the

markets are not reacting but you are seeing an impact on the currency market with the mexican peso and the canadian dollar weaker. the issue at hand for president-elect trump is migration and fentanyl. and it comes to china, i am curious what the catalyst is for his talking about a 10% tariff increase. you have spoken with bob lighthizer, the former u.s. trade ambassador about the trump trade agenda when it comes to china. what is the trump team at this point trying to achieve when they are talking about a 10% tariff on chinese goods? > i had the opportunity to hear from bob lighthizer last month. what was relayed was labeling them in violation of the phase one trade deal which was reached before the 2020 election. everyone will recall that meeting in the oval office between the vice premier and ambassador lighthizer and donald was there as well. they shook hands on a deal that was supposed to yield $80 billion per year in additional

agriculture purchases by china from the united states. that never happened should over the last 5 -- that never happened. over the last five years, that never serialized. the argument is labeled china in violation of phase one. i have come through what young in violation of phase one entails and it walks you through a series of meetings scheduled 10 days here, 20 days there and yields a time horizon where tariffs would increase on china via this avenue around late april, may or june. that is the window if you follow the phase one enforcement mechanism by the letter of the law. what the president is proposing is something that seems different. it seems we are not going to use the enforcement mechanism in the trade one deal. we fail to comply and we are going to slap these 10% tariffs on. scarlet: a very comprehensive assessment of what is happening. thank you very much.

coming up on bloomberg markets, retail therapy not working for certain stocks today. we are going to take a look at kohl's and abercrombie and fitch after their latest results. this is bloomberg. ♪

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scarlet: this is bloomberg markets. time for the stock of the hour. a string of retailers reporting earnings but we are going to focus on two names. first up is kohl's. shares dropping to the lowest since 2020 after the department store cut its full your outlook. kohl's naming a new ceo this week. then you have a book on the and fitch care the fashion retailer lower sheer -- retailer lower.

mary, it feels like kohl's has been in turnaround mode for years now. 2022 was a banner year. it has been consistently posting annual declines of revenue growth since 2020. this latest bout of weakness, is this more than a difficult -- a difficult operating environment? you are absolutely right. this is more than a difficult operating environment. it is miss execution in the quarter pit the company as you pointed out is in turnaround mode and has been. with some of the initiatives in the quarter the company has been employing which means they brought in 200 babies "r" us shops into the stores. they have expanded home decor. they brought in impulse items. all of those things were doing better. sephora has been the bigger part of the story. it was up 9%. the overall business was down 9.3% and that means the core

apparel categories were down in the double digits and that is sounding alarms and for good reason. what the company missed was private label. their core customer is the lower to middle income consumer. they were low in those open price points within private label. they did not have enough there that is because assortments were down 20% in the quarter. toward the end of the quarter, they started to bring some of the newness in and they started to see comp sales improved by 500 basis points. this is why we got the new ceo. ashley buchanan, he is at michael's crafts retailer. he is joining effective january 15. he has a track record of generating higher profits and cash flow in and he really turned that business around and he had stints at walmart.

he was the chief merchant for walmart's econ business and also the ceo of that business. that could be encouraging going forward. he scarlet: has his work cut out for him. leaking of ceos who have their work cut out for them, friend horowitz at abercrombie & fitch has done an incredible job. the company is a bit of a victim of its own success. the stock is up more than 500% since 2023. how much disappointment was there in this latest quarter? >> it was not disappointing at all. if anything, i would say they are continuing to hit the ball out of the park. if you look at most retailers reporting, they are talking about the weather. even burlington, there comp sales were up one push soient -- 1%. they said that was a 500 basis point hit because of the weather. but abercrombie, when the weather came up on the call, we think it is important to have balanced inventories.

we are a global business. we know how to manage in any given weather environment. that is why they were able to post a 16% increase in comp sales with hollister up 21% beating analyst 11% estimates. november sales are up to a strong start. we think the fourth-quarter should bode well. they raised their guidance. we think they probably beat it. we think they are hitting on all cylinders at abercrombie and it is just volatility with earnings report in terms of the stock action to scarlet: their was a slight miss in the comp sales i hear what you're saying about the increase. when you have so much excitement and hype around one individual stock, you tend to see an immediate reaction if the company is not deliver as it had been delivered -- as it had been expected to. mary ross gilbert with bloomberg intelligence. coming up, booming microstrategy etf's are streaming limits with

prime brokers. this is bloomberg. ♪

>> microstrategy has a very deep options book and until the launch of the spot bitcoin short , the etf short that was recently launched, there was no good way to trade options around bitcoin. people like levered strategies. microstrategy rate is a levered play on bitcoin. scarlet: earlier this hour onoot the trading on microstrategy which leads us to our etf report or would check in on news, trends tied to exchange traded funds. you can see how the defiance elite target two times long and

short etf's have performed along with microstrategy. for more on this we are joined by the defiance etf ceo and cio. talk a little bit about how demand and flows have looked in the last couple days as bitcoin has gotten close to $100,000 and microstrategy being a shortcut for a lot of investors who invest in bitcoin because it has become a proxy for that cryptocurrency. sylvia: great to be here today. the answer is as you might expect. the prices of that coin have gone up. . the demand for microstrategy stock has skyrocketed. the reason for that is if you look back historically and you track the price of bitcoin and some of the other bitcoin related etf products out there, microstrategy can be three to four times that at any moment. even on a simple stock level, it feels like a leveraged proxy for bitcoin. we launched ms tx which has the two times leverage on micro shut

edgy which gives the short-term tactical traders some volatility and daily beta-2 bitcoin. scarlet: in ennis -- and analyst regionally downgrade of the company microstrategy saying bitcoin etf's are a more direct way to get exposure to bitcoin. you don't have to go through the company itself. i'm curious what that means for the leveraged microstrategy etf's. did you see any kind of concern around that? sylvia: we have not seen any concern around that. what i would argue is it is hard to make that argument if you just run the performance of bitcoin versus microstrategy year to date. the performance is multiples ahead of what bitcoin is doing. with the levered micro to gtf, these are short-term tactical trades. we are not interested in with a long-term analyst outlook is for microstrategy and bitcoin. these are short-term tools that allow you to boost your exposure and gain leverage to an asset performing right now. the day you are looking at and each day you make the decision

in terms of the path you are going on. we launched the short version of the fund. things turn the other way come investors can look at the short i strategy etf. scarlet: what are you seeing in terms of demand for any bitcoin plus etf's. things that are adjacent to or derivatives or somewhat linked to bitcoin in the vein of a microstrategy? sylvia: i think bitcoin has come out of the gates strong. we can agree there is so much interest in bitcoin and it has become a little more commercialized. some of the ether funds have not picked up with the same level of excited wild experience and things like this. they are not trading as much as bitcoin is. time will tell. there are a lot of cryptocurrencies out there investors look at you have solano. you have dogecoin. we will see how it all goes. the underlying issue is you have to get exposure to the

underlying crypto asset to build these funds. scarlet: thank you so much. sylvia jablonski is defiance ceo and cio. other fund capturing our attention is -- former shan just calmly. it lies on november 7 and has already had better returns than the s&p 500. isabel leak is here with more. the name of this fund, what is that? >> it is interesting. he said it is inspired by an unconventional free-throw style and basketball which may not be the most pretty or coolest to look at but it does have the highest chances of success and that is what he likened to their strategy. thematic, systematic stockpicking. this comes at a time when active managers have underperformed the s&p 500. for 14 out of 15 years. we are seeing outflows. is inching to see his fund is doing well. two weeks in the messed $400

million. scarlet: renee shots is based on four longer-term themes. are they? isabel: it is based on seven. four longer-term and three shorter-term should three shorter-term our seasonality, style and the longer-term is lineal's and global financial conditions, supply chains. he says a stock has to fit at least two of those for it to be included in the fund. meta fits five of the themes. alphabet fits four. he said the whole premise of this is the transparency. he says that his way investors love it. it is not a black box process. scarlet: he runs his own firm now but he has never been a fund manager. he is a strategist. isabel: i'm not exactly sure what he did at jp morgan but fund strat is an investment firm and grainy shots launched five years ago. they would email client their stock picks. if you follow it according to people familiar with the matter, it be the s&p in those track records. . the etf is the convenient way. you can just buy through one

click. you do not have to rebalance yourself. he says client demand is what spurred the lunch. they had to make sure all of their ducks were lined up. they hired a person to lunch the etf. it is seeing success so far. scarlet: i guess i'm showing my age. are meant to him as a strategist from jp morgan. that is where he made his name for being more bullish. always a pleasure. isabel lee come across asset performer at -- across asset reporter a bloomberg news. you have gains for the s&p 500 and the nasdaq. 4/10 of 1% for the s&p. giving back some ground. losing have of 1%. it did get within's putting distance of a record high yesterday. not quite there yet. you can see yields moving up across the curve. the 10 year at 4.30%. the two-year at 4.27%. the yield curve steepening. on the whole it has been flattening the last few days. that does it for bloomberg markets. this is bloomberg.

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>> from the world of politics to the world of business, this is balance of power. life from -- live from washington, d.c..

>> president-elect trump is using his favorite word in the dictionary, tariffs. all come to balance of power on tv and radio. donald trump makes threats to mexico, canada and china when it comes to higher levees placed on goods. we will have more with democratic congressman jake often because of massachusetts. he is a member of the house china select committee. . we have our eyes on the middle east with is really prime minister netanyahu set to speak in televised address with a cease-fire deal with hezbollah in lebanon potentially within reach. have more with evelyn farkas of the mccain institute and christopher smart, a former special assistant to the president for international economics during the obama administration will be with me as well alongside our signature political panel. we have to check on how all of this news is filtering through financial markets. charlie pellett has a look charlie: we ha