>> trump is very clear about what he wants to do and investors need to take that seriously. the market understands tariffs will be part of the agenda and they have digested that already. >> it's a game of chicken. you can see a bifurcation and that to me still raises risk. you and cream market that's priced for perfection. the un-predict ability of it. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: let's get you to a very long weekend. live from new york city, good morning for audience worldwide, bloomberg surveillance starts now coming into wednesday at all-time highs on the s&p 500 a seven-day winning streak equity future shaping up as follows.

down 1/10 of 1% on this thanksgiving eve. down by 0.3%. what a day -- jobless claims, pc and another rare breeze on gdp. we have to begin this morning with the president-elect's men. the team coming together. kevin hassett at fec. scott bassinet treasury. we have a more complete picture this morning. lisa: the focus is on jamison greer who was the u.s. trade rep and this idea that he talks about china as a generational challenge and calls for an entire decoupling with the u.s. from china. i want to read this parade there is no silver bullet in some cases the effort to pursue to td will cause short-term pain. the cost of doing nothing or underestimating the threat posed by china is far greater. that's who is going to be coming into be the trade representative. >> the pain was in the headline

equity market. the s&p 500 another all-time high. in foreign exchange just a little bit to go through some currency pairs. the highest level since 2022. dollar canada had the highest since 2020 a weaker canadian currency and then some single names. gm got absolutely hammered. >> gm and ford will probably see a $3000 increase to the prices on their cards because of tariffs and how they are behaving. let's just be clear. a lot of these companies have tried to get ahead of decoupling from china moving operations to mexico. the question is if mexico is being treated as a backdoor for chinese parts to come into the united states. how much is it sort of a whack-a-mole. where can we move quickly and fast before getting penalized. gm and ford are finding them selves yet again in the crosshairs. >> i'm not sure if you all saw this but some great stats in it.

gm and stellantis import 55 percent of trucks sold in the united states from mexico and canada. >> you look at the pipelines and they've got completely to mexico and canada, here are some statistics about why there was a strong response. u.s. accounting for more than 83% of the export from mexico so it is a direct pipeline and had a huge conference built up. 75% of canadian exports this is a massive account for $1.8 trillion in trade. you look at this and wonder how much can you compete with when he 5% tariffs. jonathan: dropping yesterday by nine percentage points. coming up we will catch up with john of oppenheimer, of the stocks at all-time highs. donald trump completes his economic team and norman of csis on israel and hezbollah's cease-fire deals. stocks at all-time highs following seven straight days of

gains. john stoltzfus remaining positive on equities and sing the broad rotation which began from last year's s&p 500 low on october 27, 2023 has repeatedly deflected volatility. john good morning. once again yesterday deflecting volatility. was that just another data point for you. >> it was put in a series of data points that reflect the change in where we are. in essence what it is his people are beginning to realize this bull market has legs and there is a broadening that is undeniable in terms of the way investors have responded to their appetite for equities. i also say i think from a historical perspective a lot of times the market is perceived as a place, as a hotbed of fear and greed but it also represents need and the need is extraordinary these days in terms of people's planning whether it's for kids education or one's retirement or world in

which the social security may not be any the part of what it's been before. >> these are things forever our lifetime. i want to deal with the last one he for hours and then we can get to this. do not think the threat from donald trump is credible prey does this market not believe it's credible. or is there really some big take away from this to see here and say this equity market can have it. >> a combination of the two in terms of the equity market being able to handle it. but the part of the market really cares ultimately about revenues and earnings. so areas that will be damaged by an aggressive trade policy with tariffs that are extreme would be problematic. that said i think the market is recognizing president trump is essentially known for a pretty wild negotiation procedures. i was like to say when i think -- speak with investors that i

can just imagine if you had a property and this would be a small amount of money in new york but you had something worth 100 million and you want to send it to donald trump, he would say i think it's worth 20 million. he is a hard negotiator and the issues here i think you mentioned at the beginning when you're talking about is the put the cabinet together is what we are dealing with here are genuinely unfair trade situations for the american worker. essentially and for american businesses and the problem is how do you get to right size that with so many countries providing support to their businesses very different than ours where we have high regulation, we have all kinds of -- our labor is much more expensive providing better for our workers. lisa: is it fair to say what you

are indicating is this is more of a market that is not taking it seriously the trumpets can a put through any of this and that's not getting priced in. john: i wouldn't say it's not cutting priced in at all. the traders certainly reflected. as the auto makers yesterday got slammed. when you get to that kind of thing. with volatility inherent in this procedure. it's likely the whole thing the trump ran on was essentially to be beneficial for the u.s.. these are four years he's got. in terms of running again. there's going to be volatility, there always is and there is uncertainty but you have to keep your eye on the ball and it looks like through innovation the process of where we are today and the u.s. is the consumer of choice for every vendor in the world puts us into

a fairly good position, the negotiations may originally start up pretty painful to look at and then things actually work out remarkably better. lisa: some people saying this is the fifth year of his administration, a continuation of policies that have been in place. there are number of people who have begged to differ saying this is a different circumstance economically than 2016. inflation is more of a real risk, there is more momentum. companies are in a good spot. the deficit is a lot steeper and people are worried about bond yields. how much does that temper the ability to implement some of these policies? how much are you watching the bond space to understand how bullish to get in equity land? john: we definitely watch the bond space because everything works on credit. it doesn't matter if it's related to the consumers credit card or what businesses are doing in terms of their borrowing needs, refinance needs.

but what we have to say is i think realistically it is the end of free money and it's a good thing. the bond issuers once again have to wait for the privilege of borrowing money. our projection on the 10 year yield is because of the stickiness that is inherent in inflation when you're coming out of a period like this, 10-year probably in a range being priced to range its yields between 3.4% to as high as five and at five everyone gets freaked out then you get it down to 4.2 where we are now. but historically you go back hundreds of years when it comes to tenure borrowing, a 4% tends to be about it whether you are borrowing for frankincense and myrrh, you've got the peppered corn or whatever. jonathan: we doing the nativity scene? it's thanksgiving first. let's get some price targets the next year or so.

rbc 6600. deutsche bank's at seven k. i was talking about you yesterday. the average forecast on the s&p for this year was 4800. you are at the high of 5200 and you weren't bullish enough. what's the lesson in 2024. what's the lesson been for you. john: it's a good question, the second time you've asked me that . what's the lesson been in the year and it's a great question. jonathan: we did this last year and the year before. john: last december with 5200 by marginally raised to 55 and by july we went to 59 and most recently we went to 6200 for this year. the thing that concerns me the most at this point is the people that you mentioned were mixed of bears and bulls who were at these high targets so everybody's on the same side of the boat which makes the market vulnerable.

the volatility that can come about from any piece of economic data, corporate guidance or anything. the traders will jump on anything and they will throw a perfectly good stop down like a hot potato. meantime creates an opportunity for those need investors who were investing in the intermediate to longer-term for their goals and objectives to pick up babies that get thrown out with the bathwater so you have to measure that. our target won't come out till mid december as usual. we wait until people have gotten pretty crazy and take a look at what happens. but we have to say it is rather disconcerting. people throwing around targets, 7000 it sounds dramatic but when you actually put it to the calculator, the percentage upside based on the innovation that exists, the ability for companies to navigate tougher waters as a result of the experience. managers have learned from the

great financial crisis, the pandemic, the supply chain disruptions and the balance sheets of the consumer, it looks like stocks genuinely go quite a bit higher. >> we talked about this as well. as human beings we are conditioned to overweight downside risk. we can spend all morning talking about downside risk. lisa will no doubt want to do that. what do you think could go right. >> among the things that could go right would be continued resilience in revenue and earnings growth on a broad basis. if you look at the eap drop on a bloomberg right now you've got four sectors in double-digit returns i think it's eight sectors -- i'm sorry for sectors with double digit earnings growth you have eight with positive earnings growth and you have three with negative earnings growth. so the dispersion you see in that tells you it's real.

there are things that are really working, things that are somewhat working and some things that aren't. and in that kind of an environment based on what we have seen, the big surprises could be the resilience continues. as an operative word in the markets. and perhaps that we see when the actual negotiations work out, the countries involved will actually come to terms more readily because of the importance of the american consumer and american business. >> you put that together with something you said when is a bad headline the companies just get dropped like a hot potato i'm thinking of target, best buy yesterday where they came out with expected earnings. what is your lens for knowing when it's a good opportunity when you should actually pick that up. >> when we look at companies and another reason individual companies oppenheimer doesn't like me to pitch my own stocks. when we look at the companies what we are always looking for

is the traditional. it sounds very easy to say this but essentially is good balance sheet, management the tears about their shareholders and their customers and their employees. and good ideas that they are managing through. and hopefully some kind of an upgrade saga in technology. we are all in the upgrade cycle whether we like it or not. ultimately i will have to upgrade both of my -- my iphone 14 recommendation to buy or sell apple stock. and i will also have to update my six asked. -- 6s which is like an old model t. jonathan: john we are thankful for your optimism paid thank you. good to see you. equity futures right now on the s&p down to 10th of 1%. here is your bloomberg brief. a cease-fire between israel and

hezbollah starting early this morning the 60 day truce putting a pause in the conflict that's killed thousands enforced more than one million people to flee their homes. goldman sachs wanted the u.s. consume -- warning u.s. consumers will facing of again consequences from donald trump proposed tariffs on canada. the head of the economic research team said the 25% levy would raise fuel prices in the u.s. imports almost 4 million barrels of canadian crude a day. finally as lisa mentioned shares of dell and hp are falling in premarket trading both company's reporting revenue that missed analyst estimates suggesting a long-awaited recovery for the computer market is stalling. >> this is interesting to me. everyone's talking about how there will be an upgrade cycle whether it's iphones or personal computers after the pandemic. to distract from the fact they couldn't go outside but the fact there is this question of why it's getting delayed. the technology isn't there yet, people aren't interested yet?

that's the key to the expansion of some of the ai adoption. >> i think some people are waiting for apple. >> the pharaoh index is suggesting some people around this table aren't interested yet. jonathan: came close last night. phone battery died. almost missed the show. real deal. almost happened pre-midnight last night. the phone was dead. grant to get the watch and check the time. lisa: you are going to get a text. you -- we are your local apple dealer, join us later today. jonathan: up next on the program president trump making a statement. >> i believe he is stepping up and making this statement to tell both canada and mexico we have got to get our border security in the united states squared away. >> that conversation up next, live from new york this morning, good morning. ♪

>> squeezing everything here at a thanksgiving. jobless claims, pce and another read of gdp. equities into that on the s&p 500 down by 2/10 of 1% following a seven-day winning streak on the s&p. under surveillance president trump making a statement. >> i believe he is stepping up and making this statement to tell both canada and mexico we have to get our border security in the united states squared away. and then secondarily i think he is very concerned about imports from other countries that will try to take advantage of the usmca, is also using it as a lever to get serious conversations out of mexico city

with washington. >> donald trump's economic team coming together after doubling down on terror promises. the president-elect naming kevin hassett to lead national economic council. jamison career as trade representative. robert lighthizer -- under the first trumpet administration. mark sheppard joins us from the nation's capital for morbid the teams basically almost complete now. the selections at president-elect donald trump has made so far. >> as congressman hill said yesterday, the president-elect is sending a message but i think the message we are taking from this latest round of appointments which trump in the evening hours on tuesday is he will really follow the tough stance towards china. but picking jamison greer he is someone who is not only known as a hawk which is something that is in vogue in washington, but somebody who falls to the more severe edge of the spectrum

there. at the top of the hour you heard lisa talk about how greer has favored the so-called city to decoupling from the world's second-largest economy. and that's a step even the biden administration's trade architects led by katherine tai the trade representative and commerce secretary gina raimondo have not been willing to say that. they've gone to great pains to say that they still want to do business with china. greer is making the case that china poses this kind of generational challenge and we really need to maybe break away from that a little bit. >> a big debate on wall street is how credible that threat might be. so going over the proposed tariffs and additional 10% on the tariff of imports on chinese products. between 5% tariffs, i think a lot of people in the market just don't believe that's going to happen. what does the conversation sound like an washington preyed is it any different. >> i think a lot of people are

looking at this again as part of a negotiating ploy perhaps the president-elect but there is an important distinction to be drawn with what the president-elect said late monday about canada and mexico and china even when it comes to those specific tariffs. those were aimed at policy goals. curbing the flow fentanyl into the u.s. in doing something about the border. we saw a quick response from canada and even mexico on this. they were totally a bit different and even china responded in kind albeit briefly. by looking at this from jamison greer we are seeing something of the water in the direction of travel in terms of economic times and we talk about strategic decoupling, he also favored revoking china's permanent normal trading status and this is the category that beijing was first awarded in 2010 by the u.s.. this allows them to compete with

most other nations in the world invoking it would mean china would fall back into the category of russia and cuba and north korea and automatically subject its goods to much higher duties and then put china on the back foot with the world's largest economy just as xi jinping is trying to get his own economy in order. >> wall street is a bit confused about just how much this is a negotiating tactic versus very much for real and going to be implemented a lot of people are but adding to that confusion is a lot of people who have been named to a cabinet positions are former wall street acolytes. i'm talking abut the likes of jim o'neill. formerly ceo of the teal foundation. talking about john phelan formerly of della. he is someone who is entrenched in wall street. how much is that at odds with one another. the idea wall street has tended to look for more moderate responses when it comes to trade

especially when it comes to some of these big international companies. >> one important nominee in there is scott who was seen by many as a potentially moderating force when it comes to these confrontational elbows up approach on tariffs and trade and yet with this selection we may be seeing some tension baked into the team when it comes to how the u.s. presents itself economically and relates with the rest of the world economically as well. being that we're going to see from the business community not only wall street, but large manufacturers and especially silicon valley which have enormous ties in the business to china. they will be questioning this and they also have the president's in a lot of ways. tim cook enjoyed a cordial and

open relationship with donald trump during the first trump presidency. so we could see tim cook again but another ceo's trying to gain that access and the president's ear to maybe talk him out of going down the path the of your actions towards china and other restrictions like export controls the we've seen the biden administration roll out. lisa: who is left, who do we want to see. >> i think we've really seen most of the teen filled out to be honest. these are the key positions right now and what we now need to see is what they are actually going to do and while we've leaned into jamison greer's past comments we now need to see them start put some form around what they might actually do in

january. trump wants to hit the ground running. . jonathan: good to hear from you. two names not mentioned. where is ambassador lighthizer? and to, kevin wash. i wonder what happens within the next 12 months. >> especially if you have the fed chair or if that would undermine his own passivity. that was something scott looked at. >> up next the latest in the middle east from new york 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.

jonathan: seven-day winning streak on the s&p 500. we are done .2%. nasdaq 100 down 0.4%. we closed yesterday at all-time highs. why? this is the take on the cio team. the timing and their focus suggests the phenomenal backdrop remains supportive. equities at all-time highs and little pockets of landmines going off. lisa: you talk about auto manufacturers. you see if you price out with this can look like, is this a negotiating tool or just hubris on the part of markets to look past and say this is going to

blow over? i think there is a note of skepticism when you see who is putting cabinet positions. this is ideological. jonathan: this is tariffs, that's for sure. yields have been dropping all week. we are down four basis points. 426.92. two hours from now you will get a ton of economic data. the victory, payrolls, cpi, federal reserve meeting. lisa: pce will be interesting. we are looking at potential for any offset, any potential bad news when it comes to disinflationary path to push fed officials away from cutting rates next month. that is what we heard yesterday. they could cut. they could not. we have to see. we don't know. it could be gradual. what information did we learn yesterday?

jonathan: they have not changed too much just yet. they want to model some tariffs when they have some terrorist model. europe. for the last few weeks it's been america, america, america. in europe, check of the spread between a french 10-year and a german 10-year. the widest since 2012. france has been trading tighter than germany for a while now. the prime minister's ability to pass a budget and cut spending is the big focus at the moment. marine le pen will bring down the government. this reinforces broader worries about the continent. distracted when they really don't want to be. lisa: the bond vigilantes have greater presence over in europe, particularly when it comes to france. it shows a reordering of the economic backdrop. used to be that germany was the powerhouse. france was a close number two.

then you had italy and spain and some of the others out there. note is actually different. those are doing better. people are saying those of the stronger profiles. where is the growth owing to come from? where is the political leadership going to come from when the biggest economies of both in absolute little turmoil? jonathan: what is the ecb sleepwalking into? an executive board member, one of the clearest communicators in central banking anywhere worldwide, but that doesn't mean we can't criticize substance of her recent speech. she was talking about structural issues in europe. europe is struggling, can we address them with low interest rates? is that a waste of ammunition to address that when something should be happening elsewhere? that raised a very real prospect that the ecb of not doing much at all. lisa: this is what she said. "we can gradually move towards

neutral based on the data. i would warn against moving too far, and to accommodative territory when other people are saying this is a region that faces an existential economic threat and ease all the help he can get -- it can get. are they playing again that's been made out of date? jonathan: president-elect, trump completed the bulk of his economic team, naming kevin hassett. canada and mexico responding to trump's tariff threats. canada has plans to boost voter security and pointed to data saying most fentanyl comes from mexico. mexico can respond with tariffs of its own. lisa: mexico says get ready for a trade war that will hurt everybody. canada, we are not the problem. jonathan: canada saying we are not mexico. back get off. lisa: that is the response you get.

this goes into how much we take this seriously versus the tit for tat to get some policy upper ground before starting administration. jonathan: let's get you some numbers. aaa expecting record setting travel numbers for thanksgiving. nearly 80 million people will travel 50 miles or more. lisa: this is a sports game. what is the tally going to be of delays and pain after the fact? we show the lines. we figure out where the breakdowns happened. great. i'm glad everyone had a good holiday. this time in particular i want to hear along the lines are at security. whether it is clear. if people get angry about the fact that clear goes in front of them. if there are gate lice that try to move in front of you to get your boarding number. jonathan: two different issues.

we will start with tsa pre-check. clear coming in front drive me nuts. lisa: i feel anger every single time. when fewer people are signing up for clear, good. it is pay for play. jonathan: you can sign up for everything now. the shorter line now is basically just the normal one. lisa: they give you actual wait times. jonathan: ridiculous. israel and hezbollah reaching a deal for a 60-day cease-fire after weeks of talks. the idf and has below with during -- agreeing to a withdraw from southern --hezbollah agreeing to a withdraw from the southern areas. >> there are a couple of factors that have been can shooting. lebanon indicated they would be willing to agree to a

cease-fire. the same day we had that conversation, the economy mr., an israeli instructor -- airstrike to the leader of hezbollah. for the lebanese part there was an element of war -- 1.2 million displays. you have to think about the broader regional picture. the fact that iran has been on the back foot. we are talking about their made proxy in the region being severely debilitated at the events of the last couple of months with senior leadership being taken out. 80% of military capabilities taken up by the idf. they are on the back foot. not in a position of strength. not willing to sacrifice or make any further sacrifices with their main element of deterrence in the region.

you could say this was the reason they were actually forced to come to the table and would have applied pressure on hezbollah to come to the cease-fire. on the israeli side, you are looking at war fatigue as well. reports of the need to bring in more army recruits at a time when several fronts are going on. you want to take into consideration the terms of the truce is 60 days. that takes you one we captive president will assume office in january. -- one week after president trump will assume office in january. it's weighing on both sides here. i would say also this is a temporary truce. the details of the truce are reminiscent of the 1701 u.n. resolution. it was not implement it. think he will be implementation. jonathan: the timing and

implementation. we appreciate your time this morning. joining us now is norman roule, senior u.s. intelligence official -- former official. welcome to the program. the obvious question is whether this makes it more or less likely we could see a cease-fire elsewhere in gaza between hamas and israel. do you think we can? norman: these are two different areas, two different groups of decision-makers. these are two different military environments. for hamas, the situation is weakening everyday. their leadership has been eradicated. military potential has been essentially destroyed. at the same time, they have hostages including seven americans. they have some capacity to keep leading the israelis. pickup -- bleeding the israelis. it comes down to who is the decision-maker at hamas.

that is a troubling issue. if it was difficult in the past to get decisions done between delhi and gaza, imagine now where you have a fragmented leadership -- doha and gaza. if you are hamas, you have fewer allies. iran is not there. now is the time for diplomacy because you surviving can be rebuilt. jonathan: what will you be looking for over the next 60 days? norman: there is no such thing as a cease-fire that is perfect. we will see tests early on. the israelis need to withdraw and we will see how efficiently the lebanese armed forces replace them in these areas. we will see lebanese hezbollah continue to assert itself within lebanon. there has been much discussion that maybe this is the time for the lebanese government to finally demonstrate the capacity to run the entire country. i don't think it has that capability at present. we will see that in the coming weeks. one of the drivers for hezbollah

to accept the deal is that it was weakened to the point where perhaps its capacity to push back on the lebanese government would be severely tested. we will watch those dynamics. lisa: let's say this is coming to some sort of close. let's hope it is in terms of the conflict and the bloodshed. how different is the political -- geopolitical order now of this region than before october 7? norman: it is a region in turmoil. it is the most contested -- the region is more contested than any time since 1945. no american administration has left office with the middle east in such confusion. you have the proxies who remain alive and gaza -- in gaza, iraq and lebanon. the houthis are more powerful than ever. iran needs to come up with new tactics and weapons and by time

to see how that is done. we have some positive elements. the saudi's and, righties -- emiratis have artificial intelligence. this requires some very serious thinking about a u.s. approach to how we will work with a complicated minefield of issues. lisa: what is your sense of what the trump administration will do when it comes to their approach, what they will try to accomplish, and how this could look in a year? how the alliances are shifting? norman: we have some good sense of where this will be. the administration will not want to be involved in a conventional war. they will not want to run the test u.s. resolve as aggressively as iran and their proxies did under the current administration. the trump administration will be more willing to tolerate aggressive israeli action but only if it into a conflict in

the short-term. the trump administration will support the technological -- the high-tech engagement with the gulf states who are bringing in artificial intelligence to an extent never seen before. the trump administration will maintain interview discussions with the gulf to ensure stability and price protection within the energy market. i don't think we will be looking for dramatic changes in that environment. maximum pressure will return on iran. that will be a china discussion as much as an iran discussion. if that were to occur, although the gulf is on like you to participate in actions that would lead to their exposure to iranian missiles and drone attacks, i'm confident they would support oil production to take advantage of any loss of iranian production. jonathan: forgive me for asking questions about mistakes key personnel might have made but jake sullivan, secretary blinken, are there obvious

mistakes the incoming administration needs to learn from? norman: diplomacy is difficult. each administration prioritizes where it will put its attention. it is very important that we establish credibility as a deterrent factor in the region. it surprises me the united states and nato itself have not attempted to defeat the houthi threat to the red sea. that's a situation that has not occurred in modern times. to give you an example, the multiple nato ships involved in red sea activities are under fire. during the nato conference that took place in washington there was no significant discussion of a combat zone involving nato navies. on a critical artery for european trade and economic security. more attention needs to be devoted to that and showing iran they will be a powerful price to

pay for its aggressive activity and terrorism against the united states. jonathan: do you think that will change with the incoming administration? norman: yes. i think we need to recognize the administration will need time to pull itself together. it reminds me of the apocryphal story of a british prime minister who laid out his foreign policy objectives and plans and was asked what my through this off and he said events, dear boy. events. lisa: we talked about who's going to be in the key ambassador roles. the incoming administration is talking about disrupting the old and getting rid of the deep state as they have labeled it. how much is it important to have certain career diplomats in key positions to help with continuity, or is important to get new blood, new personnel in the region? norman: new perspectives are always important. it is critical.

you need experience to explain very complicated environments. there's a lot of history behind them. in fairness, in the previous trump administration we saw jared kushner, who came into the area admitting his background was limited but he drew upon the intelligence community and they did achieve the abraham accords. you need a blend of experience and thinking. do thinkers also iconoclast and that's important. people who worked the middle east tend to say it is tough. we will keep doing the same thing for the next 100 years. that frustrated the first trump administration. i'm a big believer in new blood. relying upon people with long-term expanse. jonathan: we are think the you and your contributions. have a wonderful thanksgiving. norman roule, former senior u.s.

intelligence official. annmarie has talked about that. houthi rebels almost setting, key channel for trade and we have done little about it. lisa: this is one of the key questions. , which will this come under control in the near term? there was a real feeling this disruptive freedom of the seas -- you saw shipping routes that were extended, prolonging some of the length of time things got shipped as well as increasing the cost of the shipping. you have to wonder, can we start to go back to the way it was before or is this truly the new order? jonathan: comments will things change under donald trump -- how much will things change under donald trump? an update on stories also this morning here is your living brief. smartphone sales rebounding after two years of decline. a study by market tracker idc showing android-based rivals

gaining ground in china and emerging markets with iphone edging over .04% higher. amid pressure from investors related to possible human rights abuses in the region. the company's local venture with domestic carmaker saic will sell a small car in the province. delivery hero boosting the size of its middle eastern unit two is much as $2 billion, plan to sell a 20% stake in the company with the market cap estimated at $10.2 billion. that is your bloomberg brief. up next, soaring costs straining holiday shoppers. >> strong spending this year is expected. the problem is, we are on and knife's edge when it comes to wage growth versus inflation. as prices are going higher wages are keeping up -- mark keeping up.

-- wages aren't keeping up. jonathan: you are watching bloomberg tv. ♪ ♪ to go further, you need to be ready for what's down the road. as energy demand continues to rise, we're harnessing breakthrough innovations to increase production in the u.s. gulf of mexico. our latest deepwater development, anchor, produces previously inaccessible oil and natural gas, allowing us to deliver the energy we all need today

so everyone can follow their own road. that's energy in progress. ♪♪ the black friday sale is now on. visit sandals.com or call 1-800-sandals

jonathan: welcome to the program. equity futures a little softer. under surveillance, soaring costs straining holiday shoppers. >> strong spending is expected but the problem is we are on the knife's edge when it comes to wage growth versus inflation. as prices are going higher, wages aren't keeping up. we are in this purgatory, if you will, in terms of consumer balance sheets. they are getting by but living paycheck-to-paycheck. they are not putting away savings the same rate they used to. jonathan: holiday shopping expected to break records this year as high prices continue to

weigh on sentiment. christina boni writing, "we expected to go a fairly anemic 1% to 3% in the united states. consumers balance the wish to shop against ongoing high cost essentials." welcome to the program. looking through retail earnings, we have had some bombs this quarter. cole's being one and target the other. what is the takeaway this quarter? christina: the consumer is being very purposeful in their spending and the consumer is suffering. it is a tale of two consumers out there. you are seeing the low to middle income consumer under pressure -- jonathan: i think we lost connection with christina boni. we are running out of time to reestablish that connection. my apologies to the team at moody's. we have seen some bombs so far this quarter. one from target and kohl's. we have not seen bombs everywhere.

walmart, a reminder that some are executing and getting it done. lisa: there is this larger question over the earnings season this season. how much are we just witnessing the cannibalization of market share by walmart on all the other retailers? it is not just that higher income shoppers are downshifting to walmart. walmart is actively catering to those clientele. they are increasing their inventories of higher in electronics, higher end retail goods, their online consumer platforms are selling shoes. some of the big sneakers. you start wondering how do you gauge this from a macroeconomic perspective when there is some very specific industry trends going on? jonathan: let's talk about interest rates. interest rates might not be coming down. we were talking about surviving until 2025. the hope was interest rates would be down somewhere near

3.5% by the time we get to the end of next year. there are banks that are still predicting that might happen. deutsche bank introduced a new risk for the consumer. interest rates are not coming down if you believe manus on deutsche bank. the fed will be on pause for 2025. the backdrop for growth will be better at policies might encourage growth and that might come with more inflation. there are consumers that need low interest rates. borrowers that need lower interest rates. they may not get them. lisa: this is why neither richardson -- neila richardson was right when she was talking about the knife's edge. companies that employ a lot of people need lower borrowing costs. at the same time, should the fed lower borrowing costs too much and inflation expect up, that destroys buying power even more of these consumers. it is this push-pull right now. you can feel the anxiety among fed officials. very nuanced message -- frankly muddied message in the meeting

minutes. it is difficult to know with the bigger risk is now. jonathan: each meeting for chairman powell will get harder in the next several months. december will be complex. the march meeting will be so difficult. you will see real policy changes. you might have a better idea for the appetite for deficit spending in washington. lisa: you might have a sense of the appetite to disrupt business as usual at the federal reserve. the shadow fed policy. jonathan: a new fed chair. lisa: there are a lot of question marks for next year. jonathan: coming up, we catch up with matt miskin, isaac boltansky, michael swanson and the former fed president bill dudley. this is bloomberg. ♪

>> i don't think we can look at the consumer through a monolithic lens. >> really looking for someone who provide the ability to stretch their dollar. >> the consumer is sensitive to price. >> we are in this purgatory, if you will, in terms of consumer balance sheets. they are getting by but living paycheck-to-paycheck. >> the consumer has been softer. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: for many of you closing out the month of november. the s&p 500 up around 5% this month, the best month of gains for the year so far.

over the last week we added some way to the rally -- weight to the rally. on the nasdaq 100, down by .3%. tons of economic data. jobless claims, pce at another read on gdp. lisa: you nailed it when they said -- you said they are trying to cram everything in so everyone gets a four-day weekend. why is it also included in the u.s. holiday? pce. we cannot underscore enough how important it is for the pce print to come in at expectations or below for the fed to go 25 basis points next month. they have said they are data dependent, bordering on data point pendency. -- dependency. that is the gap between potentially moving and potentially not. jonathan: they will be policy dependent for 2025 and beyond.

president-elect donald trump naming the economic lineup. jamison greer at ustr. scott bessent, treasury secretary designate. howard lutnick. that is your team. lisa: the reason it's been confusing to get a message from the team name to because they don't totally correlate when it comes to unified vision. it feels like there will be some arguments between how much pain the u.s. will accept in return for the decoupling from china. it is unclear how this will shake out. that is why markets have not been taking this seriously. it is clear on three fronts this is a president that cares about markets. scott bessent. a president serious about increasing the tariffs and increasing the gap for between -- between china and the u.s..

this is someone who also really cares about immigration and really cares about making a point on a couple of things he things have gone wrong since he left office. jonathan: we touched on this. kevin warsh. i think kevin warsh is in the picture. i would at what point they name a new fed chair because it will not be jay powell. lisa: kevin warsh is a hawk. he wants to keep rates higher to keep inflation lower. that runs exactly opposite to this president's goal, which is to get interest rates lower and wall street running again. it is hard to bring this all together. it is hard to understand how this is going to work. maybe the devil is in the -- there's a reason people are not taking it too seriously. how do you game this one out?

this is game theory that will twist your mind. jonathan: volatility for 2025. equity futures on the s&p down about .1%. coming up, we will speak with matt miskin as u.s. stocks mark another record high. michael swanson on food inflation. bill dudley on the biggest challenges facing donald trump's treasury pick. we begin with stocks coming all time highs, the 52nd record so far this year. matt miskin saying the market's muscle memory has been driving process of performance. the market regime has gone into full risk on mode. overweight to u.s. large and mid-caps. welcome back to the program. i will start this hour the way we started the previous hour. we have the terror threats in than stocks closed at a record. what you take away from that?

matt: it goes back to the muscle memory of 2016. we are in the honeymoon phase of the new administration where a lot of the more beneficial policies are looked at, the regulation, small caps do well but you're not seeing any of the negative elements of the potential administration be influencing the markets. into next year if you follow the same 2016-2017 parallel, it becomes more about fundamentals. we remove the political influences and go back to what the economy is doing and what earnings are doing. we would fade some of the recent price action. we are in a repricing. at the end of the day the best fundamentals are still in u.s. large caps. cheaper stocks with high quality attributes are still in caps -- mid-caps. jonathan: let's talk about small caps.

small caps in november of 2016 up double digits. november of 2024, up double digits. any reason to believe this continues? matt: regional banks are the biggest driver. it is the deregulation. in 2016, the earnings revisions for small caps were already improving. they actually rose into 2017. there was a fundamental story in 2016 and 2017. we were checking the stats. s&p 600 small-cap index, the earnings revisions are hooking down. earnings growth for q3 were down -9% for the russell 2000. the s&p 500 earnings are up 6%. there is not the fun of in a backdrop yet. yes, you can get the multiple re-rating. p/e ratios reached off a massive move higher. we are seeing a huge rise in the multiple in the s&p 600.

20 times will be hard to do. the biggest difference between now and 2016, rates are higher. in the last couple of years that small-cap trade went into a higher rate environment. we would not be surprised if that is what we see in the near term here. lisa: you said that we are in the sixth inning of a pricing. what game are we playing of what it looks like? i'm not sure what the ending looks like at the end of the ninth. are we talking about the recession with the rowing 1920's? that's roarin -- roaring 1920's? matt: this is a three month window. that is how quick this was in terms of the administration repricing of the equity market. it is the same exact playbook. almost kinda scary how closely it has been. it is short-term. it is the broader trends of the market.

the more secular trends, whether it is earnings, innovation, the macroeconomic backdrop. we are saying if you are going to try to be tactical short-term in terms of trade, it's already been a big move. we might get a little more but after that we would fade it. into next year we see disinflation, a bit weaker growth, earnings growth that isn't going to hit the bar of 15% next year, elevated equities, elevated bond yields. you put that together, we are tilting more conservative. we are getting enough on the ball with the u.s. equity overweight. it might be a year of a comeback trade in terms of bonds and more defensive parts of the equity market. lisa: let's say pce comes out at 8:30 today, 90 venice time, at -- 90 minutes time at .4%. a little more than current they specked it. bonds sell off. the shortened spikes higher.

you are buying aggressively, is that correct? matt: we take the back up and bond yields as an opportunity. the fed did not help us a lot with those minutes yesterday. they are saying december is a coin flip. we will see what happens. this is -- everything will be hypersensitive for the december cut or just hold. in our view we could see in inver -- re-inverting of the curve. the 10-year falls because the fed will not be the point anywhere. the market is like, ok, you have the fed put in the fiscal put. the fed put will be coming off. the market thinks it is the fiscal put. that's a bit of a leap of faith. at the end of the day the fed might be cutting in december. the more intermediate part of the curve could actually rally on it.

lisa: even though fed officials don't seem to have conviction, you do have conviction on disinflation one that data has been confusing. u.s. consumer confidence rising to the highest in 16 months but the new home sales fell to the lowest since november of 202022. where -- 2022. where are you getting the confidence? matt: it is all about housing. he spoke to new home sales dropping off a cliff. housing prices have been moderating. we are starting to see a change in the housing dynamics. inventory is starting to rise. a lot of it is in the hotspots of the country that saw the biggest house and price appreciation. florida, texas, colorado. other hotspots saw huge influx of people and housing price appreciation. that is starting to come off. two thirds of the inflation dynamic has been housing or shelter, equivalent rent. if you take that out, inflation

is 1.3%. cpi ex shelters is 3% year-over-year. mortgage rates just went back up recently. that will probably weigh on it. stronger dollar is disinflationary. buying stuff abroad with a stronger dollar means a lower price abroad. that's good. we see weaker oil prices. increase production will be increasing supply. that decreases gas prices likely. that is disinflationary. there is more disinflationary forces than the market thanks and that is why we look at this backup and bond yields as an opportunity for high-quality investors. jonathan: a quick survey throughout this morning so far. how credible a threat the terror threat actually what -- tariff threat was in the last 24 to 40 hours. the 25% on product from mexico and canada. do you believe the president-elect would go through with that? matt: it usually starts as a

negotiation tactic. we are using the playbook of the last term in terms of 2016 and 2017. this is not new. this is not our first rodeo here as a relates to tariff talk. we have to be careful. the last sample was in that 2016 to 2019 period. it did not create as much inflation because it actually decreased demand. they created a weaker real gdp growth. there could be more nominal but a little bit weaker real. a little bit weaker real gdp growth would cause disinflation in our view because the consumer will balk at the higher price. we don't know policy yet. we are focusing on the fundamentals. jonathan: thank you, sir. matt miskin of john hancock. look at the backdrop, not the politics. interesting to hear from a range of guests. do they believe it is credible

or not? that is what market participants thank. i hear negotiation. that is what we have heard repeatedly this morning. you put certain stocks in the penalty box, certain currencies and the penalty box. for the broader market there seems to be this comfort with the idea that this is the start of a negotiation. what you heard in the last few days probably will not translate to reality. lisa: as we were just hearing from matt, this is not the first rodeo. the market has dealt with this before. it is three weeks from the election. he has not taken office yet. i understand what people are not responding to what the this maturely -- what the ramifications are this prematurely. jonathan: delegates selling bloomberg opec+ is discussing another delay increasing oil output.

the meeting this weekend facing slowing demand in china and rising supplies in america. shares of hello kitty parent sanrio tumbling. the company saying in a statement shareholders will echo as many as 26 million shares at a price to be determined later. the l.a. daughters signing -- dodgers signing blake snell to a contract worth $182 million. lisa: i'm less interested in that than the hello kitty story. i have tried this port. -- the sport. i want to do hello kitty. never engage with hello kitty? jonathan: i never personally engaged with the product but i'm aware of the product. lisa: you didn't have a little kids with the cute little notepads in the hello kitty shape?

jonathan: it is not what i reached for on the shelf. lisa: i did. i was into that. the dodgers continued to dominate. jonathan: i went to tokyo a couple of years ago and she was obsessed with the store. that is why she is not here. she is so upset with what is happening with the stock. the trump agenda taking shape. >> it is three stages. the initial risk on reaction to the election, then nominees and policy proposals. then you have phase 3, actually policy implementation. jonathan: we will talk about that last piece of that up next on the program. this is bloomberg. ♪

at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

jonathan: equity futures, no drama here.

we are down by about .1%. a rally in the bond market. 10-year, 426.53. the trump agenda taking shape. >> the election is three stages. the initial risk on reaction, then the nominees and policy proposals. then you have phase 3, actually policy implementation. u.s. markets are still benefiting from the risk on repositioning part. if there is one thing a trump administration is focused on, domestic growth. jonathan: president-elect donald trump's economic team coming together. isaac boltansky highlighting this is year five, not year one. trump is moving quickly and avoiding some of the potholes that slowed and narrowed his first administration's policy agenda. isaac, good morning to you. i want to pick up on the phrase from stuart kaiser. policy implementation.

the president-elect is moving quickly. how quickly will congress move in the coming months? isaac: i think there is an undeniable sense of urgency on the hill. when you talk to congressional republicans, they realize they have an opportunity here to capitalize on the momentum from the election but they have a wafer thin majority in the house. they want to move as quickly as possible. they know it is going to be difficult over time to keep that majority together. jonathan: that speed, and aggressive timeline. let's talk about size. what is your idea of how big the appetite is for deficit spending on the hill? isaac: this is the question everyone in d.c. is having now. how much will the republicans put into these budget reconciliations? what number are they looking to in terms of deficits? it is noteworthy that the chairman of the senate finance

committee has said he does not think we need to pay for extending the tax cut and jobs act, which is $5 trillion. there is still some of the caucus who blew the whole thing should be paid for. we are going to see a very permissive gop caucus willing to spend anywhere from $5 trillion to $7.5 trillion in deficit finance cuts over the next decade. that is where we are right now given that ultimately their goal is to get something done. you are starting with a price tag of $5 trillion. that is where we are starting. lisa: you said it's important for the administration to move quickly. markets seem to be working out what the priorities are. some of the appointments seem to be at crossodds with each other. how much infighting will there be in the cabinet we just mentioned? isaac: if we look at the economic team, they are pragmatic. i think that is positive. we look at these pictures and we

think about it ideologically, it is cacophonous. there's a chance it could be contentious. we will have a lot of noise coming from commentary from each of these different camps that run to counter one another. i feel as though the president yesterday chose that time, that moment to announce these tariffs because he wanted to say hold my diet coke. i'm going to show you who is still in charge of the economy. my aids are here to aid me. i am multiply going to be the decider of the economic policies. the timing was noteworthy for that reason. lisa: that is what you saw slight move in currencies but no recognition. equity markets aside from a couple of pockets. there is a question of if it is more than that, especially with jamison greer being named to be the potential u.s. trade representative. he's a protege of robert lighthizer and talked about a decoupling from china regardless of the potential pain near-term to the u.s. economy.

how does that pair was some of the other economic policymakers in place? kevin hassett has been a big supporter of tariffs. what about scott bessent, what some people believed was moderating, which is what you are saying donald trump was responding to saying hold my diet coke, not so much. isaac: i think we have to go through and understand some of the process easier and the political motivations. on the process, it is meaningful that it appears as though president trump is embracing his power under the international emergency economic powers act. that lets them act on day one on some of these tariffs. there will be an effort under section 301 which takes longer, six to eight months to go through the process. these are dual track at the same time. i think ultimately what we should take away from yesterday is in order to prove something

is a negotiating tactic you have to demonstrate a willingness to go through with that threat. i think the president is going to go through with his threat on the chinese tariffs. i think that is the low hanging fruit. there is political backing forward on both sides of the aisle. that is something that we are going to see on day one. i do not think we are going to see an across-the-board tariff on mexico and canada, at least at the start in part because i think there are clear concessions that can be made to demonstrate they are willing to negotiate, which is what the president wants as he reenters the oval office. lisa: as a game theory trade negotiations of what will happen with tariffs this minute very clear message in health care. you have seen the real response and health care stocks. one person after another is either a vaccine skeptic or somebody who really pushed back against some of the masking procedures, just named as the

director of the national institute of health. how much of a wrecking ball will be taken to the health care industry? how much change can you expect to see? isaac: there are a number of acute areas where you will see meaningful changes. things like skilled nursing facilities, health savings accounts. you can see meaningful shifts. in terms of what we see at the alphabet soup in health care, i think my main takeaway so far as i think there will be a fair amount of natural attrition that these entities. the fda in particular. that in turn will have an impact on things like approval timelines for drugs and medical devices and other things. that's a concern for me. we are going to see a movement of rhetoric at the top which is

going to lead to some attrition in the staffing levels, which pushes out timelines. that is one thing when you survey the waterfront has not been accounted for in the market yet. jonathan: is that mckenzie? are a lot of people going to resign? isaac: is exactly that. they will be a return to the office. an executive order on day one or day two. part of that is meant to catalyze natural attrition in resignations in the federal workforce. shrink the federal workforce. there are big fights that have to be run through the courts on things like schedules. there is a hope within team trump that if you state you have to come back to the office five days a week, you will have those resignations. jonathan: good to see you. have a happy thanksgiving. isaac boltansky. we have seen this at the corporate level. now may be at the government level. lisa: the people who voluntarily

quit, are they the people you want to lose? is that the game plan? see how many people quit and then string the government. is there going to be a more systematic way of understanding which people you want to keep and what to quit. -- want to quit. jonathan: coming up, michael swanson on food inflation as americans prep for thanksgiving. from new york, this is bloomberg. ♪ ♪ awkward question...

is there going to be anything... -left over? -yeah. oh, absolutely. (inner monologue) my kids don't know what they want. you know who knows what she wants? me! with empower, we get all of our financial questions answered. so you don't have to worry. empower. what's next. ♪ ♪ ♪ something has changed within me ♪ ♪ it's time to try defying gravity ♪

♪ ♪

jonathan: two hours away from the cash open. equity futures down by .1% on the s&p 500. some outperformer's on the russell. small caps up by .3%. here is manus cranny. manus: small caps i responded. -- are resplendent. you can pick up you need pc. you didn't. the refresh cycle for the individual is lagging. not convinced on the ai that they need to refresh. they are pushing that the 2025. the revenue for the pc side dipped 1% to $12.1 billion. on the ai side, yes. corporate are spending larger. citi said there was a lumpy ai revenue. the pipeline is strong.

we have a disconnect between what you and i might think we need and what the corporate believe they need to move forward. morgan stanley saying this is overdone. now is your chance to buy. overdone reaction. hewlett-packard, the biggest drop since august of 2023. a miss on the pc side of the business. it's about the guidance, the fiscal first quarter. way wider at $.86. the issue was component costs are rising. that is a warning shot in terms of the supply chain and attack. a snapshot -- into tech. a snapshot of crowdstrike. they have recovered. they made over $1 billion this quarter. in the third quarter they made over $1 billion and they raised guidance for the year. why are they lower? slippage on the guidance. $.84 to $.86.

the market is looking for $.86. the slightest fissure in your guidance is ruinous. the glass is half-full. a target up to $400 from $365. jonathan: happy thanksgiving, sir. appreciate your time. president-elect donald trump randy got his economic team, naming kevin hassett as nec director. jamison greer is u.s. trade representative. hassett will likely lead the tax policy with greer focusing on tariff agendas. i spoke with annmarie. what do we need to know about greer? the answer was a mini lighthizer. lisa: he was the protege of the hardliner on china. some of his previous commentary is worth repeating. there is no silver bullet, talking about the generational challenge with china. the cost of doing nothing or esther admitting --

underestimating the threat is greater than suffering potential pain near-term. it raises the question how much infighting there will be between him and scott bessent. they want to massage the message to market. the mark richards think it will be fine. -- the market is saying it will be fine. jonathan: general motors got hammered yesterday for step lisa: mexico was being targeted and this does raise the specter of supply chains that already have gotten rejiggered in response to the potential decoupling of the u.s. and china. how these companies deal with it with the added bonus of detraction of the fact that elon musk is the year the president and is a direct competitor. that has the ear -- elon musk has the ear of the president. jonathan: product from china is 1/5 of mexican imports. a goes only 50 companies. a good chunk of those companies are american companies in

aerospace and auto making. lisa: which is why donald trump has talked about mexico essentially being a backdoor for chinese imports into the united states. it is the reason why we saw mexico saying to china hold off on the byd factory. it makes us look bad. mexico saying we will tariff you. canada saying how do we get roped into this? jonathan: candida and trudeau. it is quite personal. lisa: that will be a thing. it is the mexico threat with how much people have production. jonathan: your point about byd, mexico has been upfront about this. they also want to reduce dependence on china. lisa: when i was down in peru there was a feeling among a lot of manufacturers in south and central america that ultimately they would rather have a closer relationship with the united states and even with europe. money is money.

china is pouring a ton of it into the region. they are trying to take over market share in the backyard of the united states. it puts in between a rock and a hard place if there's a real lack of clarity in terms of u.s. policy. jonathan: i think china is helping countries build railroads and the u.s. is giving them secondhand trains. lisa: china just built one of the most modernized ports in peru and opened it up saying this will reduce shipping times to china. are they supposed to say no thank you, we don't need it when they do. jonathan: if you going to have an isolationist america, who will fill the void? in key places china has been doing that for a while. lisa: we have not talked about that jamison greer talked about subsidizing industries in the united states to try to offset some of the pain to this isolationist policy. a lot of the policies run counter to each other. it will be a cat in the bag

approach. jonathan: lisa has already repeated it's only three weeks yesterday that we have the election in america and things are moving so fast. israel and hezbollah agreed to a cease-fire after weeks of talks. egypt, qatar and turkey are joining in a new push for a cease-fire between israel and hamas in gaza. another example of things moving quickly. lisa: it is different to see whether we get something between gaza and israel. it is a complicated situation in terms of hill fills the vacuum of power and a host of questions. you are correct. norman roule came on the show an hour ago and said this is a completely reordered region. you are looking at a region more influx in the late 1940's when it comes to where power lies. that is what the new administration is walking into. jonathan: if you missed that conversation, the incoming administration needs to reestablish deterrence in the region. he was targeting a story around

houthi revels in the red sea. lisa: there needs to be ratcheting up intentions. that is why volatility keeps coming up. people don't believe you if you don't show that you are serious. that is what we are probably going to be seeing. jonathan: mentioned it earlier, global smartphone sales rebounding after two years of declines. apple continuing to miss out. a study shows android-based rivals gaining ground in china and emerging markets with iphone volumes edging over .4% higher. there is a struggle at apple. lisa: this is an issue globally but in particular china where local brands are cannibalizing them. that's why support for them to get on board and get ahead of the ai trend and convinced jonathan ferro it's important have personal assistant on your phone when your battery dies in the middle the night and you cannot sleep. jonathan: thank you. that was last night. it turned off at 1245 time when i checked my watch.

12:45. it was getting paranoid about the alarm going off. my sleep anxiety is that bad. lisa: get a new phone. jonathan: sleep deprivation. i just need to go old school and have the clock that makes the massive noise. wake up the whole apartment. it will go down well. shoppers may struggle to find deals at a grocery store this holiday season. wells fargo's chief agricultural economist michael swanson writing, "budgeting for thanksgiving might be challenging to consumers still activating to historic food price increases." what a special conversation we can have with you. let's talk about how expensive this thanksgiving dinner will be compared to last year and the year before and the year before that. michael: nothing like the comment board like putting out a budget for thanksgiving. nobody believes you.

we pulled the data for the nielsen skin and looked at the average price. we put together the average budget. $90 for name brands, $73 for going private label. that is down half a percent for the national brand and up to .7% for storebrand. interesting dynamic going on. jonathan: you can save money on name brands this year? michael: yes, you can. in some categories the point is they are offering the premium of the name and a savings. like in cranberries. there are some dominant cooperatives out there that are very aggressive on the pricing. lisa: is a region that is driving this? is it because the agricole -- agricultural backup means more cranberries produced, more turkeys produced? what is driving it? michael: about 85% of food pricing -- it's about the

labor. we are seeing a supply chain heal and transportation costs come down with diesel pricing and competition. you cover the markets well. you know that walmart, target and the rest are just beating each other up to try to get one more shopping trip each week if they can get it. lisa: the wind take away from some of your analysis was essentially you will have a relatively benign inflationary backdrop for your thanksgiving dinner. if you want to actually have spirits of any sort, forget it. that goes out the window. basically alcohol inflation is outpacing every thing else? michael: it has. you look at the ecosystem of what you could drink, from altar premium wines to more affordable lines, you can set your budget differently. that is a wildcard. that is why we did not want to put that in the budget.

jonathan: let's put coffee in the budget and say lisa drinks lots over the next few days, which is likely. the following morning wants a strong cup of coffee. coffee futures extended the rally, hitting the highest level since 1977. what is going on with coffee? michael: it speaks to the thing about labor costs throughout the supply chain. i will assure you at the farm level they are not making a ton of money. what we see is really to transportation that has been so prevalent in the last couple of years. jonathan: that is getting more expensive fisher. have a wonderful thanksgiving with the family. michael swanson of the wells fargo food institute. lisa: you are in a tryptophan induced coma. you are feeling like you cannot have another conversation about

whatever your granduncle has to say. suddenly no coffee because it was too expensive. it is just not fair. jonathan: it is not just the year over your comps. it is the last four years. the inflation of the last four years. what michael said about consumers struggling to akamai to what's been happening, the market of the last four or five years, not the last 12 months. lisa: that is why consumer sentiment has gone down. there is a theory a takes a number of years for people to feel like they are not being left behind and real wage gains. we have not gotten to the point or just getting to the point which is why neither richardson says it is -- nela richardson says it is fragile. does anyone like turkey? jonathan: what you mean? have a different dish? lisa: at our house there is not a desire to make turkey. it is always a discussion. jonathan: i did it with tk a few times.

you showed up for the end of it. you missed out on all the food, which might have been wise. there was a smoked turkey. which he got from rome schneider at pimco. lisa: it was lovely. just a little chaotic so i don't member the food part. there was a lot of stuff going on. jonathan: a lot of chaos at tk's. here is your bloomberg brief. donald trump tapping private investor john feeling as secretary of the navy. a stanford professor who called covid lockdowns the biggest public health mistake we have ever made. shares of crowdstrike trading lower. the software firm issuing an earnings forecast that fell short of expectations. the report is the company's second since a flawed update crash millions of devices on microsoft windows systems earlier this summer. a record number of people are respected to travel this holiday

weekend. aaa expecting nearly 80 million people to travel 50 miles or more between yesterday and this coming monday. that is 1.7 million more than traveled last year. i believe lisa will be one of them. lisa: just a couple of hours. jonathan: 50 miles plus. lisa: i understand it. i do get road rage. jonathan: this is live tv, not a therapy session. if you want to do this, we can. talk to me. what happens when you're driving? lisa: everything feels infinitely longer when there is traffic. the stop and go can make it seem longer. let's move on. jonathan: d feel yourself losing control? lisa: i'm always a perfectly will machine. jonathan: up next, scott bessent 's biggest challenge? >> the equity side has been excited about trump since the

win. the secretary treasury to come is concerned about the deficit. that is welcome news. jonathan: that conversation is up next. you are watching bloomberg tv ♪ . ♪

(♪♪) ♪ well i was raised by careful hands ♪ ♪ yeah, they made me who i am ♪ ♪ so i'm off to see... ♪ we invent them. we design them. we build them.

and one day, we have to let them soar. ♪ i'm always coming home ♪ jonathan: equity futures on the s&p 500 just a little softer, down .1%. in the bond market, yields are lower. the euro bouncing back to 105.33 . scott bessent's biggest challenge. >> the equity side has been excited about trump ever since the win. this is good news for the bond market. the secretary of the treasury to come is concerned about the deficits, which is welcome news. >> he is likely to be focused on fiscal sustainability. not getting the deficit down to

zero but a more sustainable level. >> bessent will be responsible for trying to drive some of the president's tax agenda. jonathan: scott bessent's to do list is piling up. bill dudley wishing him luck, writing "the response suggest this is what investors expect, yet there often is in contrast sharply with the difficulties he will encounter in managing the treasury market, the country's physical trajectory and the broader economy." welcome to the program, sir. . let's get to the point you make managing the treasury market, the physical trajectory on the broader economy. which is the biggest task? bill: managing the fiscal deficit. the treasury secretary does not have response ability for tax and spending policy. -- responsibility for tax and spending policy. it is 6% of gdp deficits as far as the eye can see.

president-elect trump is proposing things that will expand the deficit as opposed to contract the deficit. i think the fiscal outlook is the most challenging thing he faces. jonathan: he gets some say on the maturity profile of u.s. treasuries. what is your take under what developed undersecretary yellen and what changes would you anticipate in the years to come under bessent? bill: the maturity structure shortened a little bit. the treasury doesn't want to move around the treasury issuance calendar a lot because it unnerves market participants. i would be surprised if bessent did anything that changed the structure of the treasury debt. the biggest problem is to convince his colleagues and administration we need more tax -- to control spending. that requires making difficult choices. lisa: if you were still in the

fed, how would you think about the policies and personnel that have been of limited or announced so far? factor that into your outlook for next year. you have to come up with a forecast and make a dot next month. how do you begin to do that? bill: the fed has been silent about president-elect trump. nothing about the election and the new policy mix. to the extent things get priced into financial markets is hard for the fed to ignore them. if you have prices embodying a certain expectation, how do you not include this prices in your forecast? back in december of 2016, the fed staff put a big fiscal stimulus and the forecast for 2017. when powell says we don't speculate, we don't guess, if the markets start to judge something is highly likely the fed has to take that on board in terms of their thinking. the biggest issue in the short-term is what will happen

to tariffs. if tariffs are raised to the degree that has an electronic is talking about, give will be inflationary, better growth, better productivity. president-elect trump is talking opening tariffs on china, canada, mexico one daythe fisca. the tax cuts don't expire until the end of 2025. bproly more of a 2026 story. lisa: you said tariffs will be inflationary. we have heard disagree should -- disagreement around this table. there's a one-time price increase but longer-term tariffs have been shown to be disinflationary time and again. why do you think that is not the case? bill: they are disinflationary to the extent the people who are buying these more intensive goods don't have as much real income. they cannot buy as much. that hurts the growth rate of the economy. there is an effect on growth.

the key question is when prices go up do they get into wages? the first trump term, the increase in tariffs was well advertised but the magnitude was quite small. 1.5% to 3% of imports. the magnitude of this type is much larger. the price effect will be much greater. i expect some of that will get into wages. if it gets into wages, it keeps going. lisa: do you think because of the uncertainty around policy and potential for some policies to be inflationary, do you think mbers to really want to gothe fy restrictive dual mandate objective of employment and inflation imbalance. we need to head towards neutral. there is a trajectory to go towards neutral. as i said recently, carefully.

december is not a done deal. it is more likely than not at this point. it depends on the economic data. the fed is basically data dependent. that is why bessent's idea of putting in a shadow governor to make pronouncements as powell's heir apparent makes little sense. what the fed does will be driven by events. jonathan:, messy would that be if we had a shadow chair? bill: i think is an absolute terrible idea. i don't think it would do much. number two, it would annoy all the other members of the federal reserve. you would have this shadow person coming into be chair after he's probably annoyed everybody else in the federal reserve system by undercutting the current chair. that does not sound good recipe for excess. when you think about the chairman's power, gets his ability to move the committee in a consensus. giphy did what bessent implies --if he did what bessent implies

what he would do, he would annoy people in the fed. jonathan: bill dudley, have a wonderful thanksgiving. interesting if they chose someone inside the henhouse and nominated them ahead of time. lisa: mean girls, right? any idea what that looks like in the meetings if jay powell is trying to get the coalescing of the whole group and this other person is saying i don't know? jonathan: interesting few months. dave really begins in december. -- it really begins in december. lisa: is it the idea of trying to moderate the message how it is interpreted by markets or getting through policies that are harder for the markets to handle, because some pain is necessary for this decoupling as a nominee for the trade representative has said. jonathan: a lot of redistribution and realignment. a lot of customer spending. a lot of decreases to taxes.

we will see some increases to tariffs. there are a lot of crosscurrents the fed has to grapple with. lisa: that the companies have to grapple with, as well as the existing economy and where we are coming from that people cannot agree on. is it a stronger -- is it stronger than people inspected or weaker? you can get the deutsche bank coming out and saying it is much stronger. it is a muddle which is why people think i'm going to go have turkey and maybe skwe will. up next, venu krishna, lindsay piegza andrew -- and drew matus at metlife. ♪

♪ ♪ 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.

>> trump is it very clear about what he wants to do and investors need to take that seriously. >> i think the market understands tariffs will be part of the agenda and they have digested that. >> there is still weakness within the economy. you can see the bifurcation and that to me raises risk. you have an equity market price for perfection. >> the hard part is the unpredictability of it.

jonathan: he saw the headlines, an additional 10% tariffs on china and also tariffs on china and canada. the market closed at an all-time high. equity futures a down by .1% following a seven-day winning streak on the s&p 500, outperforms on the russell, up .7 percent. on the month, up more than 10%. a blowout month of november for small caps. a ton of economic data, another read on u.s. gdp, jobless claims and core cpe. lisa: can that put a damper on some of the holiday spirit that we feel? not that i am looking for it but if pce comes in hotter and suddenly that could shake up market expectations for the fed. that is the one fly in the ointment. if anyone believes inflation is

picking back up again, the whole thing of year turkey it, feel good and by stocks is wobbling a little. jonathan: the calls for 2025, in a word, bullish. 6500, morgan stanley. likewise, goldman stacks -- goldman sachs. deutsche bank, seven k. lisa: people are looking at a policy mix of yields coming down and a fed easing and frankly fewer regulations that will unleash financials. i can find one person after another on financials and looking at the potential of some sort of ongoing tax cuts and the baking in of possibly additional stimulus and it paints a picture at a time when the economy is strong and that is what i think a lot of people are leaning into an saying this is a great time. we feel good. how high can we get the levels. jonathan: get ready for the

cyclical infernal at the bank of america. price target 6666. it got the attention you wanted. a red sweep, fed cuts, accelerating profits, reassuring. lisa: this is essentially by america and american exceptionalism and you look at the pockets within it. they also say by stocks and not the index and we have seen certain areas have gotten beaten up by the auto manufacturers and health care names. coming to a policy mix where those exposed to international could get hit harder in certain specific ways. jonathan: the index softer by put 1%. coming up, venu krishna of barclays. we will speak to sucharia kodali on why department stores could see a rough black friday. and lindsey piegza, looking ahead to the december fed position. stocks at all-time highs after the s&p 500 set the 52nd record

so far this year. venu krishna sabre u.s. the macro positives outweigh the positives next year. uncertainty has been resolved, oil prices have shrugged off work. jobless rates remain low. venu: to like? every thing seems to be going the way you want it to go. but i think there are some significant uncertainties and i would just probably point out that we try to bake into the bull and bear scenarios. will the build out pan out the way people expect? will it be monetized at the pace the market expects? and will that continue with investment with the tech companies. jonathan: i want to pick up on the last point.

do you think next year is the test question mark there has been a degree of patients shown by investors is next you're going to change? venu: i think we are still very bullish on that part of the market. certainly we have always seen that. the market is increasingly paying attention and the scrutiny is on and monetization. that is why 2022 the peak multiples were 27 times for big tech. this year at the peak was 34 times. now we are trading at 30 times. the way the market is expressing the expectation saying, now is the time that i want to pay more attention to the multiple i'm paying and sure you could deliver that in earnings. the good news is, they are still having numbers out of the park and delivering more than expected. lisa: just to build on this and sorry to cut in but we are talking about ai and big tech

but it goes beyond big tech. we are talking about, are we getting to the point where people want to see the broadening out of use cases of ai to the likes of pc's and hp and dell still struggling to get the upgrade cycle? do you need to see that trickle into the rest of the complex to get to the lofty targets? there is the big tech monetization but broader. his next year where the year that has to be proven out? venu: absolutely. our view is that on the earnings front it is very clear that if you look at earnings moderating, the pace of moderation continues to be much slower than expected. they are still killing it. the second point on expectation, while they deliver 19% in growth, 33% is --. that is the reason why we keep wanting people in the multiple part of it and that leaks -- links to the question that you

need to see tangible benefits and you need to see improvement in productivity. there are certain applications where it will work. it has promise. people talk about health care, education. but it is not fully there. i think as we keep heading every six months, three months forward, increasingly the focus will be on all the money spent and all of the hype, where are the tangible results. lisa: so a headline that was not ai, from 666 26666. is that the reason why people are up on financials? you have efficiencies with large language models that can be applied in very real ways in ways that they can't with predicted models in education or

health carefully? venu: i think it is maybe there are some examples. i could see that. i don't have tangible examples of where and financials it is shoring up. but it has a lot to do with the regulation, the expectation that the regularization -- the regularization -- d eregulization. the yield curve steepen's at the front end gets cut. the deregulation is the bigger driver and not ai. jonathan: that is why we can't find a single guess that doesn't

like financials. what don't you like on the s&p 500? which sector gets left behind? venu: we are not fans of financials. we are neutral. we think it is too expensive an already priced in. unless there is a significant ramp up in earnings it is tough to justify. we are neutral on that. we are negative on staples. we downgraded staples because there is ongoing target -- market pressure. they are that one of the few that benefit and they were telling us that demand has become elastic and we were skeptical. demand is elastic. you are seeing the concern about margins. we are negative on commodities, energy, materials. jonathan: on energy, why? venu: demand is slowing. the oil market has shoved

geopolitical risk. oil is still relatively flattened down. the big story for energy, last year it the fact that it was about the return of capital and less about capital spending. right now the earnings momentum is downwards. the commodity is not going up. global demand is moderating, especially outside the u.s.. energy is not the hardest place to be even though they and the administration are saying that road to pump up oil. there is excess supply and you want to pump more? lisa: that is what the exxon ceo said that the drill wasn't going to happen. you are talking about risks and you are saying the tail risks have gotten wider and energy used to be to hedge against

inflation. is it no longer the correct hedge for inflation? venu: it depends on the source of inflation. i would still think that if you have energy being a reasonable hedge, but there is gold. why would you not go there? at least it is a finite, fixed commodity and has its own dynamics. there are different hedges. thinking about inflation, what happens in the rest of the world. you can have a situation where you have high inflation but the treasury doesn't react because it is still seen as a safe haven. lisa: we have been talking about tariffs and proposals and why markets have event responding more and we haven't mentioned it once talking about your outlook. how do you take the proposals

and threats and bake it into some sort of outlook for next year? how do you do that or say i'm than ignore until something comes up. venu: we have tried hard and i must confess that it is extremely difficult because there are saying is it posturing or a starting point. how serious are you? so all of that. so first we figured out what can we quantify. we said forget about anything else and if they go ahead with the policies, we used macro economic data. companies don't tell you what the exports and imports are so we use macro data and we estimated that if they do that in the world retaliates, the earnings will be about 5%. if you have 50% of that, it will be around 2% but quite high but not bad.

what we are struggling to capture is the secondary effects . and that is what happens to inflation, economic growth. our economists believe that if they go full throttle with the scenario tariffs, inflation will go up 90 basis points in u.s. real gdp will decline 1.4%. china's gdp will be negatively impacted, your, 0.7% if i remember the numbers. that is pretty serious. but i would like to believe the administration is smarter than that. this is part of a bigger game plan on how they want to address the issues. it is the second order effect that is extremely difficult to quantify grade but we are expecting economic growth to moderate next year.

last year we were expecting 3% now we are more around two-ish percent. if anybody tells you that they've got it. jonathan: it is good to see you. 6600 on the s&p next year? venu: yes. jonathan: let's get an update on stories elsewhere. as cease-fire between israel and hezbollah started early this morning for the 60 day truce putting a pause in the 14 month conflict that has killed thousands and force more than a million people to flee their homes. shares of dell and hp falling, revenues missed suggesting a longer recovery of personal computer market stalling. get ready to pay more for your morning cup of coffee. coffee futures hitting the highest price since 1977. global supply worries have push

prices up so far this year. lisa: that is depressing. you can even enjoy your coffee. i know you are not a coffee drinker. i love a good cough -- cup of espresso. it is well brewed and everything. i come from a household where it is religion. and also a little machine to make sure you have the right number of grinds. jonathan: you are speaking directly to individuals at home. lisa: dad. jonathan: coming up, the calls and also on the winners and losers this holiday shopping season. that conversation is coming up next. this is bloomberg. ♪

jonathan: the opening bell one hour and 12 minutes away. equities recovering. down not even .1%. yield lower by five basis points . the 10 year 4.25. upgrading dick's sporting goods goods. the second call, downgrading neutral bit in baird. the stock unchanged. hammered yesterday following numbers. upgrading urban outfitters in their stock is higher by 13%. during of her black cashing gearing up for black friday --

gearing up for black friday in retailer. department stores will struggle again as will some of the mall merchants who have been facing heavy competition like the gap. sucharia kodali joins us for more. walk us through it. what hasn't been addressed? i think we've got a problem with the microphone. hopefully we can reestablish that connection. we will fix that. we talked about this earlier when we had the same problem talking about retail numbers. walmart is doing well and everyone else seems to be struggling. lisa: how much is a product mix and cannibalization of the biggest players in the key question is are we moving into a slower growth era that is fine

on a macro level but will pick winners and losers and create negotiating haft for the largest especially with the possibility of tariffs. jonathan: a story we talked about head of numbers and potential we would have problems. something you pushed back on almost immediately was any conversation because walmart is doing well the rest of the country is struggling. what has changed at walmart? lisa: they are catering to a more higher end consumer and have a million different offerings. is walmart still a retail company? yes, the staples company, groceries, and marketplace similar to what we see over at amazon. we see a shoe brand, higher end merchandise and advertising, media and the e-commerce aspect

to it. you put it together and it gives them leverage and ability to maneuver at a part -- time where the base can be fickle. jonathan: we get the second chance to speak with sucharia kodali of forrester research. so department stores, it has been a struggle for a long time. what are they doing it right and what do they need to fix and is it fixable? sucharia: it is really a sector issue and i don't know it is fixable. it is widespread because consumers have not been shopping as much particularly in some of the most were a lot of the stores have heavy concentration, macy's, kohl's, jcpenney, these are the anchor stores that thrived in the 1980's and even before but essentially since 2000 they have been on a down. a ton of competition certainly from e-commerce and higher and

stores and brands that have decided to go direct to consumer. that has been some of the biggest challenge and i don't know that it is fixable but a shift in the retail landscape altogether. lisa: what does it mean in terms of how much the land could shift going forward so if the whole model of a strip mall is outdated and there is more courage to come. sucharia: we have talked about the transformation of retail venues for a long time and a lot ofitt switching out the real estate with other anchor tenants are breaking up the anchor tenants into smaller plots or you have perhaps smaller tenants in them. we have seen anchor tenants switch to everything from grocery stores to gyms and fitness facilities and in some cases it could be mixed-use where you transform it into some sort of office space and in

really distressed areas we've seen some of the anchor tenants become churches or schools are things completely unrelated to retail. lisa: i provide some research regarding retail up with some of my family members and i hear a lot about drops of different types of products in different influences doing said drops. is the entire model of retail fundamentally changing in the way that some of retail's are aware of like the gap for others are struggling to get on board with? sucharia: there is no question that the internet has absolutely changed it. we were talking about amazon earlier and that is the biggest player but definitely the social media players are also impacting how people discover goods and where they shop for goods and what we are seeing with e-commerce is a lot of fragmentation, particularly with smaller, lesser-known players that are able to gain some

traction because they are able to get some influence or credibility for a short period of time. if they are lucky, some will get purchased on some of those like some of those beauty companies but that is usually the dream exit strategy for a lot of the companies. in it many cases they simply may go away and other influences come in and take over. jonathan: january 15, port discussions, january 20 president donald trump comes in with a big promise to hike up tariffs. what do the companies do with inventory? how much do they need to stock ahead of time and are they conditioned by the mistake that target date? sucharia: the truth is that it is probably, if you are looking for what is going to happen in january, it may be a little too late already. these are key issues that the retail industry has been

grappling with since the first trump administration and what we started to see was diversification away from some of the tariff markets like china over time. i expect that will continue to happen. the good thing is that q1 tends to be a soft quarter in retail and it doesn't seem like it makes a ton of sense to stock up inventory for that, especially because you don't know what the demand will be like in 2025 without better signals because it is such an uncertain economy at this moment in time. i think what we will continue to see his diversification and continue to see changes to supply chain and questions around whether or not latin america and mexico are in fact good places to be near shoring versus if they will have tears particularly on some of the soft goods. jonathan: if you get it wrong, you get targeted, quite literally.

sucharia kodali of forrester research. lisa: that was well done. jonathan: what is that number of 65 hundred on s&p next year? jp morgan coming out with a price target for next year, 60 500. next, a ton of economic data. that is next. this is bloomberg. ♪

jonathan: the opening bell 60 minutes away. equity futures, s&p negative by 0.05%. the nasdaq 100 down by .2%. nice outperformance on the russell, so far this month up by 10%, adding another .8% to the rally. the bond market, 10 year yields lower by almost six basis points, just short of 4.25. a ton of economic data, mike mckee, where do you begin? mike: let's start with initial jobless claims, 213,000, down from a revised 215 thousand. so basically no change. the forecast was for 215,000, so we come in still low and note laughs and everyone can give thanks. one million 907,000 continuing claims and shows people still

having trouble getting jobs. the durable goods orders coming in up .2% after a .4% decline the prior month. take up the numbers from boeing and you get 0.1. capital goods, what we call the core, down .2% after a .7 rise before. that is not good news for gdp. that is the first number for business spending in the fourth quarter. events trade goods down 99.1 billion. that is on the good news side for the fourth quarter gdp. third quarter gdp was given the adjusted or revise number 2.8 percent, no change from the initial three point 5%. lower in terms of personal consumption for the quarterly price index, one point 9%, the core 2.1%, the headline up a

little bit in the core down a little bit of my two favorite numbers i am going to be watching, wholesale inventories up .2%, retail inventory up .1% after .8% rise the month before caused by people stocking up for the port strike. now are we going to be stocking up for tariffs ahead? that is something to watch going forward. jonathan: equity is just about unchanged on the s&p. bond yields lower by six basis points points. i wanted to pick up on your point because it is important, two key dates, middle of january, the second date really to go over the port strike issue, january 20 you have president elect trump coming into power with the very real threat of much bigger tariffs on china, canada and mexico. what do we expect the data to be? how disruptive will it be? mike: you have left over hurricane damage it appears,

initial jobless claims may be because people are still without work in that area. the trade data will be hard to know. we will have to watch the inventories and see if they start to rise. we don't know how serious it trump is our whether he is going to impose them in when you take it apart, trying to impose tariffs on canada and mexico would be extremely difficult, but it still could have an impact on things. you might see business spending go up if companies are trying to pulse it forward. lisa: if feel like 2020 is a black box so let's focus on the hearing now -- here and now. looking through the numbers, i will pick back a word we haven't used in a while, goldilocks. unemployment not taking up at least based on the jobless claims and not seeing inflationary pressure, how much

does this speak to the idea that we are in the sweet spot that can allow the fed to cut rates, even as the labor market has signs of weakness? michael: we are in a goldilocks situation as far as what you would hear from a macroeconomists or from a member of the biden administration. the problem is people don't feel that way because they are still paying the higher level of prices and that bothers them and they are seeing things in the inflation numbers go up, like insurance and you were talking about coffee earlier. that is the kind of thing that bothers people. we will see with the mood or vibe is as we get closer what you are talking about what people's forecasts are for 2025, all forecasts are valid until january 20 and then you have to start all over again.

jonathan: i agree they could change quickly. let's bring in lindsey piegza. the jobless claims number still tremendously low. payrolls on december -- in december. are we on the verge of a pause? lindsey: this plays into the fed's assessment that we saw in the meeting minutes at the conserve that drove the 50 basis points in september is dissipating. the threat of emerging weakness in the labor market is not materializing. yet the fed while acknowledging the improvement in inflation from earlier peak levels has not continued on the disinflationary trend back to 2%. so the risks do appear to be leaning in the direction of staying focused on inflation, keep the focus and take a more tempered and patient approach to additional policy easing as clearly this is not an ailing economy you need a policy support.

as such, the fed may try to push through a third round rate reduction in december. as we look out to 2025, i do think the fed is very much on the verge of a policy pause sooner rather than later. jonathan: you have been out front on this issue on the program talking about it. when they sit down on december 18 and come up with a new summary of economic projections, what will influence outlook more, the prospect of a policy change in 2025 or the realization that incoming information has gone against the grain and against what they have expected? lindsey: it is the lack of evolution of data formulated within the fed's expectation that inflation will be down to the 2% level on a sustainable basis by the end of 2025. we are just not there yet. we are seeing ongoing sticky price pressures. as the fed looks to give new purse -- perspectives and dot plots, committee members will revise higher their expectations

for longer-term rates. by 2026, the fed said 2.9% is a terminal rate. i think we get to that materially advised by 25 or 50 basis points, really lessening the outlook for additional rate cuts next year, under the present -- premise that inflation is moving sideways more than anything and not adhering to the earlier forecast of the more pronounced decline back to 2% on a sustained basis. lisa: where is the inflation coming from other than policies people point to hear we are not seeing an acceleration in wages, housing prices, this was met miss can's point from earlier. where is it coming from? lindsey: we still are seeing pressure from housing come one of the largest components, not just at the pce around 20% but if the cpi at 40%. shelter costs are up 5% on an annual basis. not necessarily gaining traction

from the long-standing level, but is making it incredibly difficult for the fed to get the top line number back in the range of 2% target. we also continue to see upward pressure on wages. not an acceleration and we have come down from earlier peak levels, but we have been sitting around the 4% mark for some time which is continuing to add the stationary floor to inflation that the fed is desperately trying to break through to get us back to a period of price stability, the lower level of price growth. lisa: it strikes me that has been a real shift over the past couple of months that back in jackson hole when jay powell was speaking, he said it would not welcome any downward momentum or weakness in the labor market from any further weakness. in the meaning -- meeting minutes, some judge downside risk to economic activity or the labor market had diminished. are we entering a new paradigm where inflation readings are

going to be more important in some ways than even the employment report? lindsey: i think they are still very important, but it comes down to the risk factor of that evolving data and incoming data points. right now because the risks of the labor market showing emerging signs of weakness has diminished as you mentioned from that language the fed used in the meeting minutes, they will focus on the inflation data because that is where the risk lies in where the risk against this policy pivot decision in september it will come from. if we don't see further disinflationary pressure as the fed had consumed and we continue to move sideways or worse come see a real acceleration in some aspects of inflation -- a re-acceleration in some aspects of inflation, the fed will be pushed back. they are shifting the focus back toward the reality that price stability is far from a foregone

conclusion, which i think many committee members had signed off on too early as we approach that september outsize rate cut of 50 basis points out of the gate. jonathan: is good to hear from you. have a wonderful thanksgiving. michael mckee with us. you had 10 minutes, what jumps out? michael: i am looking at the events chain numbers and does not give us a breakdown by country but exports were down 1.4% while imports were up by eight points -- by 3.5%, food was of a plate 6% in terms of imports. this is what donald trump doesn't like. if this is what is going to happen, we will probably see some tariff action, a stronger dollar will weigh on exports and demand in the u.s. and the strength of the economy is going to weigh on imports and pull in more stuff. something to keep an eye on now

that we haven't watched so much in recent years is trade numbers. jonathan: let's continue the conversation we were having with lindsay. welcome to the show. lindsey believes we are on the verge of a pause at the federal reserve. do you agree? >> i do. i don't think we will get a cut out of the fed in december and if we do, looking for a total of 75 basis points out of the fed before they stop the cycle. so well above where the market consensus is at the moment. lisa: this is a time when people are focusing on inflation because of policies, if it were for some of the policies that the red sweep would bring income talking about president-elect trump and a republican congress, how much would we see the same inflationary pressures lindsey was talking about that your assumption for only 75 basis points for cut seems to bake in?

drew: if you look at long-term inflation expectations, five-year inflation forwards, there has many significant move puts the election. i think if you look at the policies, everyone is focused on the terrace but you also have an energy policy which may be there won't be more drilling but at the same point, what we saw in the last time we had a u.s. energy renaissance, it cap crisis so the average price then was lower than it otherwise would have been. if you throw in the price impact from less regulation, which if the president does the same thing he did in 2016 and 2024, we should expect a lower regulation growth environment, which is also good for growth and good for inflation. i think if you look at the totality of the policies holistically rather than individually, in my mind the

kind of behavior of long-term expectations makes a lot of sense. lisa: i know you're hot on the balance sheet and composition and i don't want to get too far into it because it is the day before thanksgiving and the price of coffee is going up significantly, but a large question of whether the technicals will be the main driver a bond yields next year versus some of the inflationary expectations. i say this not only with the fed balance sheet with potential issuance, treasury secretary who has talked about lengthening the duration of the total treasury profile. drew: my guess is the treasury will stick with regular, predictable option sizes and migration, but i do think a lot of people up until very recently have forgotten that the fed had announced that they want to move to a treasury only portfolio. once you get to the appropriate size of the balance sheet, the transition has to be away from

mortgage backed securities and into u.s. treasuries. that will be happening probably at some time this year with the fed actually begins to buy u.s. treasuries because they have reached where they want on the balance sheet but now they have to continue to allow mbs to roll off and replace it with u.s. treasuries. there is going to be a positive dynamic for may demand perspective for u.s. treasuries coming from the u.s. central bank next year. we will have to see how other central banks play out and what happens with other users of treasury use, but at least from the u.s. central bank effective, the added pressure from kind of the role of is going to come to an end and probably reverse itself. jonathan: do expect the changes at the leadership of the federal reserve in the next 18 months? drew: i don't. i don't. when we think about the post powell fed, i think there are a lot of people in this administration who are basically going to be auditioning for the

job. i think it is way too early to pick like a favorite there but there are people who are going to be offering the president advice and usually those are the people who get the closer look. jonathan: thank you. drew matus of metlife. the conversation of whether they are inside the federal reserve or outside. lisa: and also not about the pulses that are most friendly to trump. it means he may not be as amenable to cutting rates which is always with somebody who works in real estate seems to want. jonathan: someone who might be the incoming president of the united states. lisa: i'm just saying. jonathan: let's get an update on stories. president-elect donald trump filling out more of his administration, naming the director of the economic council and greer as the trade chief. and also picking the leader of

the national institute of health. goldman sachs morning consumers will face significant consequences from the proposed terrace on canada. the head of commodity research said the 25% levy would raise food prices in the united states which imports 4 million barrels of crude from canada a day. the sports business journal say the sports scott o'neill is in talks for the ceo of liv golf. the saudi backed off laying has -- golf league has been eyeing a new ceo and commissioner. i will save you from more. i saw your face. lisa: the experience you get from basketball to golf. you cannot come up with two more diametrically opposed results. jonathan: content and

distribution. you knew that anyway. up next, setting you up for the week ahead and your thanksgiving holiday in just a moment. this is bloomberg. ♪

i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday.

thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

jonathan: equities at the moment just about unchanged on the s&p 500 as we calm you down to the opening bell. the trading diary, u.s. markets closed tomorrow for thanksgiving. monday, s&p global manufacturing pmi and fed speak. tuesday jobs numbers, when state adp private payrolls. pmi, factory orders, some services plus the trade balance and another round of jobless claims. and then the big one around the corner, payrolls friday.

not too far away, just over 30 to 40 minutes away from the opening bell. with their morning movers, here is manus cranny. manas: the lag arrived in tech this morning, the dow crushing by 12% -- dell crushing by 12%. the corporate's at morgan stanley say this is way over done and what actually happened, a microsoft windows release and we were supposed to refresh and believe in the power of ai and we need a new pc. the ais server business is lumpy revenue, record high at 3.6 billion dollars for the divergence between the individual and corporate is starting. hp, another reflection of the same story but they missed on the pc demand up 2% but later than expected. and also component parts, the cost of components rising in the manufacturing process.

workday, the stock down nearly 12%, slowing fourth-quarter subscriptions. the revenue up 15%, later than the market expected. this is the 10th quarter in a row where quarterly subscriptions are slowing. that is a more benevolent morning surprise. happy thanksgiving. jonathan: thank you very much peer aaa expecting 6 million people will fly domestic for the thanksgiving -- thank you very much. aaa expecting 6 million people will fly domestically for the thanksgiving holiday. stephen trent is joining us. what is behind the call? stephen: we look at premium consumers are doing and who is traveling today, it happens to be relatively wealthy people are doing the trips and we continue

to see for the network airlines what i would characterize as a very constructive push and revenue generation. so premium loyalty. we will see the earnings while they shift in direction. lisa: does that mean higher prices or more layers of premium business, premium economy, at premium economy? is that what we are looking for that will pad costs so they can keep it down for the rest of you are just in economy so get back there? stephen: we will see some shift and i would see mixed shift, in terms of the amount of generator -- revenue they generate, the waiting will shift to the verticals. it doesn't mean, for example, basic economy at the back of the

planes you will suddenly have prices skyrocket but i absolutely think you will see a shift. lisa: can we talk about what to expect over the next couple of days given that a lot of people are going to the airport and waiting in long lines. who is set up for this? how do airlines set up for the mass crowds and angry people who will be waiting, delays? jonathan: some anger in the household. we were talking about road rage on. stephen: geography will play a role in the weather will play a role. if you -- jonathan: on the angrier in new jersey? is that would you are suggesting? stephen: i am not going to comment on that. certainly geography, west people are watching winter storms in the rocky mountains. you do have the faa with the limitations, air traffic control

capacity has been a question mark. are you going to have some hiccups here and there? i think it is impossible to avoid with the volumes going up as they are. i still think it is really good and constructive for the whole group that we are seeing such good flow. people want to travel. i think the underlying demand picture looks great. jonathan: topic for next year? which airline? stephen: delta airlines help is to be our favorite. on it three month basis, we are called out american airlines as having upside. they took grief from the previous strategy of pushing too much towards being kind of a discount airline. they have now turned the speak it -- spigot back on. american has everything it needs

to grow the premium. the next three months that is one to watch. jonathan: good to see you. happy thanksgiving. stephen trent of citi. i say this every year and i mean it, truly you at home make up the smartest audience anywhere on the planet and i can say on behalf of the whole team here at bloomberg surveillance, we are incredibly grateful. happy thanksgiving to all of you and have a special time with your families. if you are the set, maybe you are throwing things. from new york, thank you for choosing bloomberg tv. this was bloomberg surveillance. ♪

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 dad: to charge yohey boss. you okay? son: i said i'm fine. ♪ dad: you can talk to me. son: it's been really, really hard for me.

matt: we are sitting at yet another record high on the s&p and the bullishness doesn't stop. katie: bloomberg open interest starts right now. matt: investors digesting a heap of economic data before thanksgiving while trump's tariff agenda gains momentum. bell and hp plunging in the premarket, both companies reporting results that suggest a recovery in the pc market is stalling. a wall street heavyweight joins the crowded race for new york city mayor, whitney tilson will join us on the program in the next hour. let's take a look at where markets are trading. in terms of futures, not a lot of movement. a drop